diff --git "a/China/15.Sinopec_$104.55 B_Energy/2015/results.txt" "b/China/15.Sinopec_$104.55 B_Energy/2015/results.txt"
new file mode 100644--- /dev/null
+++ "b/China/15.Sinopec_$104.55 B_Energy/2015/results.txt"
@@ -0,0 +1,23595 @@
+the year
+(9,473)
+4,722
+(7,557)
+(259)
+3,288
+(3,288)
+870
+(786)
+5,386
+403
+60
+78
+261
+183
+of the year
+on the profit
+The influence
+Changes
+1,189
+End of
+12,279
+14,859
+(1,437)
+868
+10,326
+Available-for-sale financial assets
+(34,705)
+90,831
+56,126
+Accounts receivable
+(%)
+578.8
+(2,108)
+58,457
+Increase/(decrease)
+Amount Percentage
+2014
+RMB million
+10,100
+68,557
+Cash at bank and on hand
+RMB million
+Items
+As of 31 December
+2015
+The table below sets forth reasons for those changes where the fluctuation was more than 30% during the reporting period, or such changes
+which constituted 5% or more of total assets at the balance sheet date or more than 10% of profit before taxation:
+RMB million
+Short-term loans
+Beginning of
+the year
+(31)
+125
+112
+826
+RMB million
+2013
+2014
+RMB million
+1,622
+721
+RMB million
+245
+2015
+(5) Significant changes of items in the financial statements
+Total
+Embedded derivative instruments of convertible bonds
+Cash flow hedging
+Derivative financial instruments
+Available-for-sale financial assets
+Items
+(4) Items measured by fair values
+Attributable to: Equity shareholders of the Company
+Minority interests
+For the year ended 31 December
+(Income)/expenses
+Unit: RMB million
+(5,002)
+(943)
+(2,368)
+(67)
+(415)
+(521)
+(4,192)
+(3,306)
+(552)
+(4,259)
+(3,721)
+(3,165)
+(4,680)
+184
+1,060
+(736)
+(5,679)
+(4,781)
+771
+419
+331
+(210)
+1,420
+Total
+74,729
+9,458
+(91,959)
+90,642
+95,052
+65,504
+56,277
+Profit before taxation
+105,530
+98,662
+96,785
+104,565
+73,487
+Operating profit
+2,505,683
+2011
+2012
+2,786,045
+2013
+2,880,311
+For the year ended 31 December
+2014
+2,825,914
+2,018,883
+Turnover and other operating revenues
+57,028
+2015
+Profit attributable to owners of the Company
+46,466
+6.05
+5.24
+Return on capital employed (%)
+0.625
+0.545
+0.534
+0.397
+0.268
+32,438
+Diluted earnings per share (RMB)
+0.566
+0.570
+0.398
+0.268
+Basic earnings per share (RMB)
+73,225
+63,879
+66,132
+0.650
+166,688
+Items
+2 FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH IFRS
+52,612
+110,253
+Net assets attributable to minority
+Mainly due to the decrease in purchasing price of feedstock
+Mainly due to the capital injection to Sinopec Marketing Co. and
+conversion of Sinopec CB
+(34.2)
+145.2
+70,705
+48,703
+119,408
+57,641
+Capital reserve
+198,366
+130,446
+Accounts payable
+Mainly due to the acquisition of equity interest in Sibur Holdings
+Please refer to Note 21 to the financial statements prepared in
+accordance with ASBE
+(38.2) Mainly due to intensified collection of outstanding accounts and price fall
+of products
+Improved operating cash flow and increased cash reserve in response to
+market fluctuations; in addition to capital injection of Sinopec Marketing
+Co., Ltd (Sinopec Marketing Co.)
+Reasons for change
+1.089.6
+(55.2)
+(67,920)
+Unit: RMB million
+109.6
+Operating Costs
+3
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+Mainly due to the capital injection to Sinopec Marketing Co. and the
+increase in profits of holding subsidiaries
+(34.4) Mainly due to price fall of feedstock and efforts on cost cutting
+(117.7) Mainly due to fair value changes of derivatives embedded in Sinopec CB
+47.5 Please refer to Note 46 to the financial statements prepared in
+accordance with ASBE
+Mainly due to the capital injection to Sinopec Marketing Co.
+652.6
+9,659
+1,480
+interests
+11,139
+4,886
+2,235
+4,710
+6,945
+(4,151)
+735
+Gain/(Loss) from changes in fair value
+Non-operating income
+(836,246)
+2,429,017
+Net profit attributable to minority
+interests
+8.02
+Tax effect
+Other non-operating expenses, net
+RMB
+RMB
+%
+RMB
+Basic earnings per share
+0.266
+0.406
+(34.5)
+Items
+0.579
+0.266
+0.406
+(34.5)
+0.543
+Basic earnings per share (excluding extraordinary gains and losses)
+Weighted average return on net assets (%)
+0.239
+0.370
+(35.4)
+Diluted earnings per share
+0.574
+2013
+2014
+%
+2013
+RMB million
+1,451,368
+(0.6)
+804,273
+(18.2)
+675,370
+594,483
+Change
+13.6
+759,656
+570,346
+121,071,210
+118,280,396
+2.4
+116,565,314
+For the year ended 31 December
+2015
+1,382,916
+Change
+5.04
+(3.10)
+%
+RMB
+Net assets attributable to equity shareholders of the Company per share
+Liabilities to assets ratio (%)
+5.588
+5.089
+9.8
+4.912
+45.56
+2013
+55.41
+54.93
+percentage
+points
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+3
+Principal Financial Data and Indicators
+4
+Principal Financial Data and Indicators
+(9.85)
+8.14
+Change
+RMB
+12.24
+Percentage
+points
+Weighted average return (excluding extraordinary gains and losses)
+on net assets (%)
+4.52
+7.42
+(2.90)
+12.15
+2014
+RMB
+Percentage
+Net cash flow from operating activities per share
+1.372
+1.270
+8.0
+1.308
+As of 31 December
+2015
+Items
+points
+Subtotal
+2014
+RMB million
+RMB million
+For the year ended 31 December
+2015
+RMB million
+2014
+Change
+2013
+RMB million
+%
+RMB million
+(2) Principal financial indicators
+2,018,883
+(28.6)
+2,880,311
+52,081
+65,481
+(20.5)
+96,453
+55,959
+66,481
+2,825,914
+(15.8)
+Total equity attributable to equity shareholders of the Company
+Total number of shares (1,000 shares)
+Total assets
+Gain on holding and disposal of various investments
+Government grants
+Donations
+Net loss on disposal of non-current assets
+Items
+(3) Extraordinary items and corresponding amounts
+PRINCIPAL FINANCIAL DATA AND INDICATORS (CONTINUED)
+(1) Principal financial data
+Total liabilities
+Items
+Operating profit
+Profit before taxation
+Net profit attributable to equity shareholders of the Company
+Net profit attributable to equity shareholders of the Company
+excluding extraordinary gains and losses
+Net cash flow from operating activities
+Items
+Operating income
+Net profit attributable to equity shareholders of the Company
+Net profit attributable to equity shareholders of the Company
+excluding extraordinary gains and losses
+Net cash flow from operating activities
+Items
+Operating income
+1,443,129
+657,506
+96,982
+47,430
+482,046
+2,018,883
+1,685
+22,742
+1,421
+6,359
+32,207
+1,336
+496,475
+22,095
+4,224
+28,901
+6,682
+60,760
+49,151
+49,225
+165,818
+As of 31 December
+2015
+1,246
+32,207
+562,121
+RMB million
+(32.1)
+67,179
+28,901
+43,238
+(33.2)
+66,658
+165,818
+148,347
+478,241
+11.8
+For the year of 2015
+First
+Quarter
+RMB million
+Second
+Quarter
+RMB million
+Third
+Quarter
+RMB million
+Fourth
+Quarter
+Total
+RMB million
+151,893
+9.09
+1,592,771
+Return on net assets (%)
+11.49
+7
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+Inclusive of 553,150,000 H shares held by
+Sinopec Century Bright Capital Investment
+Ltd. (overseas wholly-owned subsidiary of
+China Petrochemical Corporation) through
+HKSCC Nominees Limited.
+Sinopec Corp.
+71.32%**
+China Petrochemical
+Corporation
+*.
+Share Capital and
+(4) Diagram of the equity and controlling
+relationship between Sinopec Corp. and
+its de facto controller
+(3) Basic information of the de facto
+controller
+(2) Other than HKSCC Nominees Limited,
+there was no other legal person
+shareholder holding 10% or more of the
+total issued share capital of Sinopec
+Corp.
+17.23%
+912,886,426
+Shipping Co., Ltd
+58.73%
+270,270,000
+65.22%
+China Petrochemical Corporation is the
+de facto controller of Sinopec Corp.
+9,224,327,662
+Shareholdings of Principal Shareholders
+CHAIRMAN'S STATEMENT
+RMC: Oil and Natural Gas Reserves Management Committee of the Company;
+Sinopec CB: RMB 23 billion A share convertible bond issued by Sinopec Corp. in 2011;
+CSRC: China Securities Regulatory Commission.
+Conversion:
+For domestic production of crude oil, 1 tonne = 7.1 barrels, for overseas production of crude oil. 1 tonne = 7.21 barrels;
+For production of natural gas, 1 cubic meter = 35.31 cubic feet;
+Refinery throughput is converted at 1 tonne = 7.35 barrels.
+2
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+8
+PRINCIPAL FINANCIAL DATA AND INDICATORS
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+Chairman's Statement
+During the year, the Company has been
+committed to value creation driven by
+continued corporate social responsibility.
+We invested in the Clear Water and Blue Sky
+Campaign and actively promoted the Energy
+Conservation Plan. The Company did not have
+any material safety incidents in 2015. The
+energy intensity decreased by 1.6%; industrial
+water consumption dropped by 1.0%; COD
+in discharged wastewater was down by 4.1%;
+supporting the Company's efforts to become an
+integrated service provider. Sinopec Marketing
+Co. completed its restructuring and capital
+injection, with a new governance structure
+established. We made breakthroughs in technical
+innovation. The proprietary, high-efficiency,
+and environmentally friendly aromatics
+technology was commercialised and granted
+the National Science and Technology Progress
+Award. The Company obtained a total of 3,769
+patents in 2015. The Company chartered new
+courses for its international operations by
+expanding overseas presence in midstream and
+downstream businesses. The YASREF refinery
+in Saudi Arabia was officially on stream and
+inaugurated under the witness of the State
+leaders of China and Saudi Arabia. A number
+of chemical projects were well under way in the
+Far East and the Middle East. The international
+trading arm achieved reliable resource security
+and cost effectiveness. And sound financial
+management and capital operations effectively
+supported value creation in our main businesses.
+In 2015, we improved our corporate governance
+and management efficiency. The Board
+of Directors and its four committees were
+optimised. The directors of the Board are
+leading professionals in their respective fields,
+with each complementing the strengths of the
+others. The independent directors also played
+constructive roles. The Company amended
+and standardised its Articles of Association
+with a focus on shareholders returns, and
+the shareholders approved the continuing
+connected transactions over the next three
+years. In the meantime, the Company carried
+forward the rich legacy and culture in China's
+energy petrochemical industry, including
+rigorous, detail-oriented and efficient business
+ethics, down-to-earth practice in competence
+building, strong devotion in accountability, and
+effective motivation initiatives for employees.
+The Company took steps to strengthen the
+internal control system and ensure its effective
+implementation. As a result, we saw no incidents
+of material risks in 2015.
+During the year, the Company's upstream
+business successfully addressed the difficult
+market conditions through its flexible
+arrangement of investment and production
+and substantial reductions in costs and
+expenditures. In exploration and production
+of shale gas, we achieved strong growth in
+both reserves and production. The production
+capacity of the first phase of the Fuling shale
+gas field reached 5 billion cubic meters per
+year. The refining and chemical businesses,
+thanks to continuously optimised production
+and structure, recorded significant performance
+results as an important contributor to the
+profits of the Company. The upgrading of oil
+products was completed on schedule, with
+the mix of high-value-added products further
+increased. We optimised our oil product sales
+portfolio, and the non-fuel business grew rapidly,
+On behalf of the Board of Directors of Sinopec
+Corp., I would like to express my sincere
+gratitude to all of our shareholders and the
+wider community for your interest and support.
+The year 2015 was marked by a weak recovery
+in the global economy, a slowdown in Chinese
+economic growth, record lows in global oil prices
+and weak demand for petroleum and chemical
+products in China. Despite of the extremely
+challenging environment, we took full advantage
+of our integrated business model, implemented
+effective measures to drive new resources of
+growth while cutting our costs, continued to
+make structural adjustments and technology
+innovation, and managed to make progress on
+many fronts.
+Dear shareholders and friends:
+Mr. Wang Yupu, Chairman
+1 FINANCIAL DATA AND INDICATORS PREPARED IN ACCORDANCE WITH ASBE
+Sinopec group: China Petrochemical Corporation and its subsidiaries;
+65.67%
+Name of Company
+Sinopec Engineering
+(Group) Co. Ltd
+Sinopec Oilfield Service
+Corporation
+Sinopec Oilfield Equipment
+Corporation
+China Merchants Energy
+1,787,647,233 (L)
+4.60 (L)
+1,175,388,643 (L)
+0.57 (L)
+0.31 (S)
+2.62 (L)
+(H Share) (%)
+percentage of Sinopec
+Corp.'s issued share capital
+7.01 (L)
+Approximate
+Number of
+shares interests held
+or regarded as held
+Investment manager
+(L): Long position, (S): Short position
+Schroders Plc
+BlackRock, Inc.
+the substantial shareholder
+Interest of corporation controlled by
+Custodian corporation/approved lending agent
+670,090,733 (L)
+80,000,138 (S)
+147,682,700 (L)
+2,907,856,000
+3,287,000 (S)
+1,275,857,318 (L)
+5.00 (L)
+Shares of other listed companies directly
+held by China Petrochemical Corporation
+Number Shareholding
+of Shares Held Percentage
+The controlling shareholder of Sinopec
+Corp. is China Petrochemical Corporation.
+Established in July 1998, China
+Petrochemical Corporation is a state-
+authorised investment organisation
+and a state-owned enterprise. The
+legal representative is Mr. Wang Yupu.
+Through re-organisation in 2000, China
+Petrochemical Corporation injected its
+principal petroleum and petrochemical
+businesses into Sinopec Corp. and
+retained certain petrochemical facilities.
+It provides well-drilling services, well-
+logging services, downhole operation
+services, services in connection with
+manufacturing and maintenance of
+production equipment, engineering
+construction, utility services including
+water and power and social services.
+(1) Controlling shareholder
+There was no change in the controlling
+shareholder and the de facto controller of
+Sinopec Corp. during the reporting period.
+CHANGES IN THE CONTROLLING
+SHAREHOLDERS AND THE DE FACTO
+CONTROLLER
+As at the end of the reporting period,
+there were no employee shares.
+(3) Existing employee shares
+(2) Changes in total number of shares and
+equity structure and the consequent
+effects on asset-liabilities structure
+The terms for conditional redemption of
+Sinopec CB were triggered on 26 January
+2015. On the 22nd meeting of the fifth
+session of the Board of Sinopec Corp.,
+the Board reviewed and approved the
+proposal of the redemption of Sinopec CB
+and decided to exercise its redemption
+right. As of record date of redemption (11
+February 2015), a total of 4,623,769,047
+A shares has been converted from
+Sinopec CB, leaving a balance of RMB
+52,776,000 Sinopec CB registered at
+China Securities Depository and Clearing
+Corporation Limited Shanghai Branch.
+On 17 February 2015, the total value of
+redemption payments and the current-
+period interests accrued paid by the
+Company was RMB 53,348,948.28,
+and Sinopec CB was delisted from the
+Shanghai Stock Exchange at the same
+date. The conversion of Sinopec CB had
+a positive effect on optimising the asset-
+liabilities structure of the Company.
+0.01 (S)
+Amount approved for listing
+200,000,000 units
+Issued amount
+200,000,000 units
+Issuing price
+RMB 100/unit
+19 November 2015
+Issuing date
+Types of securities
+Corporation Bonds
+(1) Issuance of securities in reporting period
+ISSUANCE AND LISTING OF SECURITIES
+3
+Listing date
+11 December 2015
+China Petrochemical Corporation: our controlling shareholder, China Petrochemical Corporation;
+Company: Sinopec Corp. and its subsidiaries;
+In this report, unless the context otherwise requires, the following terms shall have the meaning set out below:
+Sinopec Corp.: China Petroleum & Chemical Corporation;
+lopec
+lopec
+OPEC
+Πορεί
+A A A E E E E E
+中国石化
+lopec
+B B B
+中国化
+OPEC
+lopec
+OPEC
+SINOPEC CORP. 2015 ANNUAL REPORT AND ACCOUNTS
+(Stock Code A Share: 600028 ; H Share: 0386; ADR : SNP)
+lllopec
+CONTENTS
+236
+Company Profile
+Principal Financial Data and Indicators
+OPEC
+Changes in Share Capital and Shareholdings
+中国石化
+中国石化
+lopec
+DEC
+OPEC
+中国石化
+中国石化
+中国石化
+ορεί
+lopec
+中国在化
+lopec
+OPEC
+Πορεί
+D D
+DE
+Πορεί
+中国石化
+中国石化
+中国石化
+中国石化
+of Principal Shareholders
+Chairman's Statement
+Business Review and Prospects
+Corporate Information
+201
+Documents for Inspection
+202
+Confirmation from the Directors and
+Senior Management
+This annual report includes forward-looking statements. All statements,
+other than statements of historical facts, that address activities, events or
+developments that the Company expects or anticipates will or may occur in
+the future (including but not limited to projections, targets, reserve and other
+estimates and business plans) are forward-looking statements. The Company's
+actual results or developments may differ materially from those indicated
+by these forward-looking statements as a result of various factors and
+uncertainties. The Company makes the forward-looking statements referred to
+herein as at 29 March 2016 and unless required by regulatory authorities, the
+Company undertakes no obligation to update these statements.
+Company Profile
+COMPANY PROFILE
+200
+IMPORTANT NOTICE: THE BOARD OF DIRECTORS, THE BOARD OF SUPERVISORS, DIRECTORS, SUPERVISORS AND SENIOR
+MANAGEMENT OF SINOPEC CORP. WARRANT THAT THERE ARE NO FALSE REPRESENTATIONS, MISLEADING STATEMENTS OR MATERIAL
+OMISSIONS IN THIS ANNUAL REPORT, AND JOINTLY AND SEVERALLY ACCEPT FULL RESPONSIBILITY FOR THE AUTHENTICITY,
+ACCURACY AND COMPLETENESS OF THE INFORMATION CONTAINED IN THIS ANNUAL REPORT. THERE IS NO OCCUPANCY OF NON-
+OPERATING FUNDS BY THE CONTROLLING SHAREHOLDERS OF SINOPEC CORP.. MR. ZHANG JIANHUA, DIRECTOR AND MR. JIANG
+XIAOMING, INDEPENDENT NON-EXECUTIVE DIRECTOR, DID NOT ATTEND THE FIFTH MEETING OF THE SIXTH SESSION OF THE BOARD
+DUE TO OFFICIAL DUTIES. EACH OF MR. ZHANG AND MR. JIANG AUTHORISED MR. WANG ZHIGANG, DIRECTOR AND MR. ANDREW
+Y.YAN, INDEPENDENT NON-EXECUTIVE DIRECTOR, TO VOTE ON HIS BEHALF IN RESPECT OF THE RESOLUTIONS PUT FORWARD AT THE
+MEETING. MR. WANG YUPU, CHAIRMAN OF THE BOARD OF DIRECTORS, MR. LI CHUNGUANG, DIRECTOR AND PRESIDENT, MS. WEN
+DONGFEN, CHIEF FINANCIAL OFFICER AND HEAD OF THE FINACIAL DEPARTMENT OF SINOPEC CORP. WARRANT THE AUTHENTICITY
+AND COMPLETENESS OF THE FINANCIAL STATEMENTS CONTAINED IN THIS ANNUAL REPORT. THE AUDIT COMMITTEE OF SINOPEC
+CORP. HAS REVIEWED THE ANNUAL RESULTS OF SINOPEC CORP. FOR THE YEAR ENDED 31 DECEMBER 2015.
+AS APPROVED BY THE FIFTH MEETING OF THE SIXTH SESSION OF THE BOARD OF DIRECTORS OF SINOPEC CORP., THE BOARD
+PROPOSED A FINAL CASH DIVIDEND OF RMB 0.06 (TAX INCLUSIVE) PER SHARE FOR 2015, COMBINING WITH THE INTERIM CASH
+DIVIDEND OF RMB 0.09 (TAX INCLUSIVE) PER SHARE, THE TOTAL CASH DIVIDEND FOR 2015 WILL BE RMB 0.15 (TAX INCLUSIVE) PER
+SHARE. THE DIVIDEND PROPOSAL IS SUBJECT TO THE SHAREHOLDERS' APPROVAL AT THE ANNUAL GENERAL MEETING FOR THE YEAR
+2015.
+Exploration and Production
+Refining
+Marketing and Distribution
+Chemicals
+COMPANY PROFILE
+Sinopec Corp. is one of the largest integrated energy and chemical companies in China. Its principal operations include the exploration and production,
+pipeline transportation and sale of petroleum and natural gas; the production, sale, storage and transportation of refinery products, petrochemical
+products, coal chemical products, synthetic fibre, and other chemical products; the import and export, including an import and export agency
+business, of petroleum, natural gas, petroleum products, petrochemical and chemical products, and other commodities and technologies; and research,
+development and application of technologies and information.
+DEFINITIONS:
+THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015 OF THE COMPANY PREPARED IN ACCORDANCE WITH THE
+PRC ACCOUNTING STANDARDS FOR BUSINESS ENTERPRISES (ASBE) AND INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)
+HAVE BEEN AUDITED BY PRICEWATERHOUSECOOPERS ZHONG TIAN LLP AND PRICEWATERHOUSECOOPERS RESPECTIVELY. BOTH
+FIRMS HAVE ISSUED STANDARD UNQUALIFIED AUDITOR'S REPORT.
+Financial Statements
+73
+Controlled Subsidiaries
+Management's Discussion and Analysis
+8
+11
+19
+29
+Significant Events
+39
+Connected Transactions
+43
+Corporate Governance
+50
+Report of the Board of Directors
+58
+Report of the Board of Supervisors
+60
+Directors, Supervisors, Senior Management
+and Employees
+72
+Principal Wholly-owned and
+Investment manager
+Beneficial owner
+Changes in
+Name of shareholders
+JPMorgan Chase & Co.
+Shareholdings Share Capital and
+of Principal Shareholders
+6
+Principal Financial Data and Indicators
+5
+LO
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+MAJOR DIFFERENCES BETWEEN THE AUDITED FINANCIAL STATEMENTS PREPARED UNDER ASBE AND IFRS PLEASE REFER TO PAGE 193 OF
+THE REPORT.
+CHANGES IN SHARE CAPITAL AND SHAREHOLDINGS OF PRINCIPAL SHAREHOLDERS
+4.172
+4.841
+4.191
+472,328
+510,914
+4.527
+568,803
+4.880
+593,041
+5.014
+4.950
+5.567
+5.500
+674,029
+4.476
+35,016
+1 CHANGES IN THE SHARE CAPITAL
+Unit: Share
+25,513,438,600
+Overseas listed foreign shares
+Domestically listed foreign shares
+Percentage (%)
+78.93
+Number
+95,557,771,046
+Sub-total
+2,790,814,006
+2,790,814,006
+Others
+Before change
+from reserve
+Percentage (%) New shares issued
+78.43
+92,766,957,040
+RMB ordinary shares
+Numbers
+Items
+After change
+Increase/(decrease)
+Conversion
+Bonus
+shares issued
+21.57
+37,122
+52,536
+Total equity attributable to owners of the Company
+Non-controlling interests
+Non-current liabilities
+Net current liabilities
+Non-current assets
+Items
+Unit: RMB million
+1.336
+Net assets per share (RMB)
+1.262
+1.270
+1.372
+Net cash generated from operating activities per share (RMB)
+15.50
+12.50
+11.63
+7.84
+4.81
+1.308
+52,823
+Adjusted net assets per share (RMB)
+2015
+110,190
+185,594
+196,535
+189,468
+201,534
+196,268
+101,485
+148,358
+As of 31 December
+198,812
+892,929
+1,009,906
+1,091,224
+244,113
+1,110,724
+130,237
+2011
+2012
+2013
+Status of shareholders
+794,423
+25,513,438,600
+2014
+Others
+A share
+0
+39,150,086
+76,637,780
+0.06
+A share
+中國工商銀行-上證50交易型開放式指數證券投資基金
+華夏人壽保險股份有限公司‧萬能產品
+0
+0.05
+76,681,610
+0.06
+A share
+香港中央結算有限公司
+0
+(158,353,930)
+134,537,906
+0.11
+A share
+76,933,232
+62,817,900
+62,817,900
+0
+21.07
+(2) Information disclosed by the shareholders of H shares in accordance with the Securities and Futures Ordinance (SFO)
+4
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+We are not aware of any connected relationship or acting in concert among or between the above-mentioned shareholders.
+Statement on the connected relationship or acting in concert among the above-mentioned shareholders:
+Note 2: Sinopec Century Bright Capital Investment Limited, an overseas wholly-owned subsidiary of China Petrochemical Corporation, holds 553,150,000 H shares,
+accounting for 0.46% of the total issued share capital of Sinopec Crop.. Those shareholdings are included in the total number of the shares held by HKSCC
+Nominees Limited.
+Note 1: As compared with the number of shares held as of 31 December 2014.
+0
+42,065,922
+42,065,922
+0.03
+A share
+0
+47,105,824
+47,268,824
+0.04
+A share
+長江證券股份有限公司
+國泰君安證券股份有限公司
+0
+東方匯智資產-中信銀行-安富1號特定客戶資產管理計劃
+322,037,900
+State-owned share
+China Petrochemical Corporation
+Percentage of
+shareholdings %
+Nature of
+Shareholders
+中國證券金融股份有限公司
+HKSCC Nominees Limited²
+Name of shareholders
+Unit: Share
+70.86
+The shareholdings of top ten shareholders as of 31 December 2015 are listed as below:
+As of 31 December 2015, the total number of shareholders of Sinopec Corp. was 748,210, including 741,935 holders of domestic A shares and 6,275
+holders of overseas H shares. As of 29 February 2016, the total number of shareholders of Sinopec Corp. was 748,856. Sinopec Corp. has complied
+with requirement for minimum public float under the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (the
+Hong Kong Listing Rules).
+Note: During the reporting period, a total number of 136,471,210 units of Sinopec CB had been converted into A shares of Sinopec Corp., resulting in a total increase of
+2,790,814,006 shares.
+2,790,814,006 121,071,209,646
+100
+2,790,814,006
+100
+118.280.395.640
+Total Shares
+(1) Shareholdings of top ten shareholders
+Total number
+of shares held
+85,792,671,101
+2 NUMBER OF SHAREHOLDERS AND THEIR SHAREHOLDINGS
+0
+0.27
+A share
+中央匯金資產管理有限責任公司
+1,496,675,457
+1,764,832,313
+1.46
+322,037,900
+Unknown
+A share
+25,374,341,620
+20.96
+H share
+0
+72,000,000
+of shareholding¹ pledges or lock-up
+Number of
+shares subject to
+(27,994,089)
+Changes
+for the year ended 31 December 2015
+8 OTHER RECEIVABLES
+Amounts due from subsidiaries
+Amounts due from Sinopec Group Company and fellow subsidiaries
+Amounts due from associates and jointly controlled entities
+Amounts due from others
+Less: Allowance for doubtful accounts
+8
+Ageing analysis of other receivables is as follows:
+Within one year
+Between one and two years
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+Between two and three years
+Over three years
+Total
+Financial Statements (PRC)
+2015
+20,975
+97
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+At 31 December 2015 and 2014, the Group and the Company had no individually significant accounts receivable that aged over three years.
+During the year ended 31 December 2015 and 2014, the Group and the Company had no individually significant write-off or recovery of doubtful
+debts which had been fully or substantially provided for in prior years.
+During the year ended 31 December 2015 and 2014, the Group and the Company had no individually significant accounts receivable been fully or
+substantially provided allowance for doubtful accounts.
+37.6%
+37.0%
+At 31 December
+2014
+34,363
+At 31 December
+128
+97.5
+117
+Total
+17.8
+Financial Statements (PRC)
+Within one year
+725
+Over three years
+29,251
+0.1
+1,392
+21,452
+1,695
+202,550
+2,029
+65,883
+30,724
+22,844
+27,328
+19,842
+94
+978
+2,229
+4
+1,473
+308
+2,671
+2,694
+199,783
+61,621
+2014
+RMB million
+At 31 December
+At 31 December
+2015
+RMB million
+At 31 December
+2014
+RMB million
+RMB million
+2015
+At 31 December
+The Company
+The Group
+Total
+Between one and two years
+Between two and three years
+3
+0.5
+100.0
+to accounts
+receivable
+balance
+% RMB million
+accounts
+receivable
+Allowance
+Percentage
+At 31 December 2015
+5250
+29,650
+138
+7.2
+2,125
+9.5
+82.8
+24,578
+2,809
+RMB million
+Amount
+to total
+The Company
+1--6
+99.6
+32.1
+25
+3.1
+12263
+530
+469
+0.5
+0.1
+0.8
+1,263
+64,620
+Percentage
+of allowance
+to accounts
+receivable
+balance
+At 31 December 2014
+of allowance
+Percentage
+Percentage to the total balance of accounts receivable
+Allowance for doubtful accounts
+Total amount (RMB million)
+At 31 December 2015 and 2014, the total amounts of the top five accounts receivable of the Group are set out below:
+-
+76250
+100.0
+25,159
+0.5
+120
+89.9
+124
+138
+0.2
+%
+10.6
+0.1
+2
+0.4
+12
+88.7
+22,326
+-
+Allowance
+RMB million
+%
+receivable
+Amount
+RMB million
+%
+to total
+accounts
+Percentage
+2,668
+45
+1,316
+201,234
+The Group
+At 31 December 2015
+1,903
+65,883
+0.3
+7.3
+91.6
+%
+to other
+receivables
+balance
+of allowance
+Percentage
+Percentage
+At 31 December 2014
+Allowance
+RMB million
+%
+to total
+other
+receivables
+Amount
+RMB million
+185,534
+14,792
+573
+2
+22.4
+14,787
+1
+8.1
+5,341
+-
+66.6
+43,852
+%
+balance
+to other
+receivables
+% RMB million
+Allowance
+RMB million
+2.9
+1,260
+66.2
+1,651
+68159
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+98
+At 31 December 2015 and 2014, the Group and the Company had no individually significant other receivables that aged over three years.
+During the year ended 31 December 2015 and 2014, the Group and the Company had no individually significant write-off or recovery of doubtful
+debts which had been fully or substantially provided for in prior years.
+During the year ended 31 December 2015 and 2014, the Group and the Company had no individually significant other receivables been fully or
+substantially provided allowance for doubtful accounts.
+Within one year
+40.8%
+Within one year
+35.4%
+At 31 December
+2014
+12,522
+2015
+8,095
+At 31 December
+Allowance for doubtful accounts
+Percentage to the total balance of other receivables
+Ageing
+to total
+other
+receivables
+Total amount (RMB million)
+1,316
+154
+79.4
+1,311
+0.5
+3
+2
+-
+6338 O
+100.0
+202,550
+1,263
+100.0
+0.8
+At 31 December 2015 and 2014, the total amounts of the top five other receivables of the Group are set out below:
+The Group
+Amount
+Percentage
+90.2
+27,717
+2
+87.9
+20,066
+%
+RMB million
+%
+Allowance
+to other
+receivables
+balance
+Percentage
+of allowance
+Percentage
+At 31 December 2014
+receivables
+Amount
+RMB million
+%
+RMB million
+%
+RMB million
+balance
+Allowance
+other
+to total
+to other
+receivables
+to total
+other
+receivables
+Amount
+of allowance
+Percentage
+Percentage
+484
+2.1
+9
+1.9
+Percentage
+At 31 December 2015
+The Company
+1,473
+100.0
+30,724
+1,392
+100.0
+22,844
+352
+71.2
+1,401
+6.4
+1,968
+of allowance
+65.6
+9.1
+2,083
+10.5
+55
+1.7
+525
+6.6
+14
+0.9
+211
+3.3
+17
+1.7
+514
+1,367
+800008
+6.1190
+471
+91,361
+Revenue from the sales of goods is measured at fair value of the considerations received or receivable under the sales contract or agreement.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+93
+Financial Statements (PRC)
+Financial Statements (PRC)
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+3 SIGNIFICANT ACCOUNTING POLICIES (Continued)
+(17) Revenue recognition (Continued)
+(b) Revenues from rendering services
+The Group determines the revenue from the rendering of services according to the fair value of the received or to-be received price of the
+party that receives the services as stipulated in the contract or agreement.
+At the balance sheet date, when the outcome of a transaction involving the rendering of services can be estimated reliably, revenue from
+rendering of services is recognised in the income statement by reference to the stage of completion of the transaction based on the
+proportion of services performed to date to the total services to be performed.
+When the outcome of rendering the services cannot be estimated reliably, revenues are recognised only to the extent that the costs incurred
+are expected to be recoverable. If the costs of rendering of services are not expected to be recoverable, the costs are recognised in profit or
+loss when incurred, and revenues are not recognised.
+(c) Interest income
+Interest income is recognised on a time proportion basis with reference to the principal outstanding and the applicable effective interest rate.
+(18) Government grants
+Government grants are the gratuitous monetary assets or non-monetary assets that the Group receives from the government, excluding capital
+injection by the government as an investor. Special funds such as investment grants allocated by the government, if clearly defined in official
+documents as part of "capital reserve" are dealt with as capital contributions, and not regarded as government grants.
+Government grants are recognised when there is reasonable assurance that the grants will be received and the Group is able to comply with
+the conditions attaching to them. Government grants in the form of monetary assets are recorded based on the amount received or receivable,
+whereas non-monetary assets are measured at fair value.
+Government grants received in relation to assets are recorded as deferred income, and recognised evenly in profit or loss over the assets'
+useful lives. Government grants received in relation to revenue are recorded as deferred income, and recognised as income in future periods as
+compensation when the associated future expenses or losses arise; or directly recognised as income in the current period as compensation for
+past expenses or losses.
+(19) Borrowing costs
+Borrowing costs incurred on borrowings for the acquisition, construction or production of qualified assets are capitalised into the cost of the
+related assets.
+Except for the above, other borrowing costs are recognised as financial expenses in the income statement when incurred.
+(20) Repairs and maintenance expenses
+Repairs and maintenance (including overhauling expenses) expenses are recognised in profit or loss when incurred.
+the Group does not retain the management rights, which is normally associated with owner, on goods sold and has no control over the
+goods sold.
+(21) Environmental expenditures
+Revenue from the sales of goods is recognised when all of the general conditions stated above and following conditions are satisfied:
+the significant risks and rewards of ownership and title have been transferred to buyers; and
+Revenue is the gross inflow of economic benefits arising in the course of the Group's normal activities when the inflows result in increase in
+shareholder's equity, other than increase relating to contributions from shareholders. Revenue is recognised in profit or loss when it is probable
+that the economic benefits will flow to the Group, the revenue and costs can be measured reliably and the following respective conditions are
+met.
+When the Group terminates the employment relationship with employees before the employment contracts expire, or provides compensation
+as an offer to encourage employees to accept voluntary redundancy, a provision for the termination benefits provided is recognised in profit
+or loss under the conditions of both the Group has a formal plan for the termination of employment or has made an offer to employees for
+voluntary redundancy, which will be implemented shortly; and the Group is not allowed to withdraw from termination plan or redundancy
+offer unilaterally.
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+3 SIGNIFICANT ACCOUNTING POLICIES (Continued)
+(15) Income tax
+Current tax and deferred tax are recognised in profit or loss except to the extent that they relate to business combinations and items recognised
+directly in equity (including other comprehensive income).
+Current tax is the expected tax payable calculated at the applicable tax rate on taxable income for the year, plus any adjustment to tax payable
+in respect of previous years.
+At the balance sheet date, current tax assets and liabilities are offset if the Group has a legally enforceable right to set them off and also intends
+either to settle on a net basis or to realize the asset and settle the liability simultaneously.
+Deferred tax assets and liabilities are recognised based on deductible temporary differences and taxable temporary differences respectively.
+Temporary difference is the difference between the carrying amounts of assets and liabilities and their tax bases including unused tax losses and
+unused tax credits able to be utilised in subsequent years. Deferred tax assets are recognised to the extent that it is probable that future taxable
+income will be available to offset the deductible temporary differences.
+Temporary differences arise in a transaction, which is not a business combination, and at the time of transaction, does not affect accounting
+profit or taxable profit (or unused tax losses), will not result in deferred tax. Temporary differences arising from the initial recognition of goodwill
+will not result in deferred tax.
+At the balance sheet date, the amounts of deferred tax recognised is measured based on the expected manner of recovery or settlement of the
+carrying amount of the assets and liabilities, using tax rates that are expected to be applied in the period when the asset is recovered or the
+liability is settled in accordance with tax laws.
+The carrying amount of deferred tax assets is reviewed at each balance sheet date. If it is unlikely to obtain sufficient taxable income to offset
+against the benefit of deferred tax asset, the carrying amount of the deferred tax assets is written down. Any such write-down should be
+subsequently reversed where it becomes probable that sufficient taxable income will be available.
+At the balance sheet date, deferred tax assets and liabilities are offset if all the following conditions are met:
+the taxable entity has a legally enforceable right to offset current tax assets and current tax liabilities; and
+they relate to income taxes levied by the same tax authority on either:
+-
+the same taxable entity; or
+different taxable entities which either to intend to settle the current tax liabilities and assets on a net basis, or to realise the assets and
+settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to
+be settled or recovered.
+(16) Provisions
+Provisions are recognised when the Group has a present obligation as a result of a contingent event, it is probable that an outflow of economic
+benefits will be required to settle the obligations and a reliable estimate can be made. Where the effect of time value of money is material,
+provisions are determined by discounting the expected future cash flows.
+Provisions for future dismantlement costs are initially recognised based on the present value of the future costs expected to be incurred in
+respect of the Group's expected dismantlement and abandonment costs at the end of related oil and gas exploration and development activities.
+Any subsequent change in the present value of the estimated costs, other than the change due to passage of time which is regarded as interest
+costs, is reflected as an adjustment to the provision of oil and gas properties.
+(17) Revenue recognition
+(a) Revenues from sales of goods
+(c) Termination benefits
+Environmental expenditures that relate to current ongoing operations or to conditions caused by past operations is expensed as incurred.
+Liabilities related to future remediation costs are recorded when environmental assessments and/or cleanups are probable and the costs can
+be reliably estimated. As facts concerning environmental contingencies become known to the Group, the Group reassesses its position both with
+respect to accrued liabilities and other potential exposures.
+Research and development costs are recognised in profit or loss when incurred.
+whose operating results are regularly reviewed by the Group's management to make decisions about resource to be allocated to the segment
+and assess its performance; and
+― for which financial information regarding financial position, results of operations and cash flows are available.
+Inter-segment revenues are measured on the basis of actual transaction price for such transactions for segment reporting, and segment
+accounting policies are consistent with those for the consolidated financial statements.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+95
+Financial Statements (PRC)
+96
+Financial Statements (PRC)
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+4 TAXATION
+Major types of tax applicable to the Group are income tax, consumption tax, resources tax, value added tax, special oil income levy, city construction
+tax, education surcharge and local education surcharge.
+Consumption tax was levied based on sales quantities of taxable products, tax rate of products is presented as below:
+Products
+Effective from
+1 January 2009
+(RMB/Ton)
+Effective from
+29 November
+Effective from
+13 December
+2014
+(RMB/Ton)
+(RMB/Ton)
+Effective from
+2014 13 January 2015
+(RMB/Ton)
+Gasoline
+Diesel
+Naphtha
+engage in business activities from which it may earn revenues and incur expenses;
+(22) Research and development costs
+Reportable segments are identified based on operating segments which are determined based on the structure of the Group's internal
+organisation, management requirements and internal reporting system. An operating segment is a component of the Group that meets the
+following respective conditions:
+(I) an entity which is under control, joint control of principle individual investor, key management personnel or close family members of such
+individuals.
+(23) Operating leases
+Operating lease payments are charged as expenses on a straight-line basis over the period of the respective leases.
+(24) Dividends
+Dividends and distributions of profits proposed in the profit appropriation plan which will be authorised and declared after the balance sheet
+date, are not recognised as a liability at the balance sheet date and are separately disclosed in the notes to the financial statements. Dividends
+are recognised as a liability in the period in which they are declared.
+94
+94
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+3 SIGNIFICANT ACCOUNTING POLICIES (Continued)
+(25) Related parties
+If a party has the power to control, jointly control or exercise significant influence over another party, or vice versa, or where two or more parties
+are subject to common control, joint control from another party, they are considered to be related parties. Related parties may be individuals or
+enterprises. Where enterprises are subject to state control but are otherwise unrelated, they are not related parties. Related parties of the Group
+and the Company include, but not limited to:
+(a) the holding company of the Company;
+(b) the subsidiaries of the Company;
+(c) the parties that are subject to common control with the Company;
+(d) investors that have joint control or exercise significant influence over the Group;
+(e) enterprises or individuals if a party has control, joint control over both the enterprises or individuals and the Group;
+(f) jointly controlled entities of the Group, including subsidiaries of the jointly controlled entities;
+(g) associates of the Group, including subsidiaries of the associates;
+(h) principle individual investors of the Group and close family members of such individuals;
+(i) key management personnel of the Group, and close family members of such individuals;
+(j) key management personnel of the Company's holding company;
+(k) close family members of key management personnel of the Company's holding company; and
+(26) Segment reporting
+1,388.00
+Employees of the Group participate in the social insurance system established and managed by local labor and social security department.
+The Group makes basic pension insurance to the local social insurance agencies every month, at the applicable benchmarks and rates
+stipulated by the government for the benefits of its employees. After the employees retire, the local labor and social security department has
+obligations to pay them the basic pension. When an employee has rendered service to the Group during an accounting period, the Group
+shall recognise the accrued amount according to the above social security provisions as a liability and charged to the cost of an asset or to
+profit or loss in the same period.
+The Group classifies post-employment benefits into either Defined Contribution Plan (DC plan) or Defined Benefit Plan (DB plan). DC plan
+means the Group only contributes a fixed amount to an independent fund and no longer bears other payment obligation; DB plan is post-
+employment benefits other than DB. In this reporting period, the post-employment benefits of the Group primarily comprise basic pension
+insurance and unemployment insurance and both of them are DC plans.
+Financial Statements (PRC)
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+3 SIGNIFICANT ACCOUNTING POLICIES (Continued)
+(11) Financial Instruments (Continued)
+(d) Hedge accounting (Continued)
+Fair value hedges
+A fair value hedge is a hedge of the exposure to changes in fair value of a recognised asset or liability or an unrecognised firm
+commitment, or an identified portion of such an asset, liability or unrecognised firm commitment.
+The gain or loss from re-measuring the hedging instrument at fair value is recognised in profit or loss. The gain or loss on the hedged
+item attributable to the hedged risk adjusts the carrying amount of the hedged item and is recognised in profit or loss.
+When a hedging instrument expires or is sold, terminated or exercised, or no longer meets the criteria for hedge accounting, the Group
+discontinues prospectively the hedge accounting treatments. If the hedged item is a financial instrument measured at amortised cost, any
+adjustment to the carrying amount of the hedged item is amortised to profit or loss from the adjustment date to the maturity date using
+the recalculated effective interest rate at the adjustment date.
+Hedge of net investment in foreign operation
+A hedge of a net investment in a foreign operation is a hedge of the exposure to foreign exchange risk associated with a net investment
+in a foreign operation. The portion of the gain or loss on a hedging instrument that is determined to be an effective hedge is recognised
+directly in equity as a separate component until the disposal of the foreign operation, at which time the cumulative gain or loss
+recognised directly in equity is recognised in profit or loss. The ineffective portion is recognised immediately in profit or loss.
+(e) Convertible bonds
+-
+Convertible bonds that contain an equity component
+Convertible bonds that can be converted to equity share capital at the option of the holder, where the number of shares that would be
+issued on conversion and the value of the consideration that would be received at that time do not vary, are accounted for as compound
+financial instruments which contain both a liability component and an equity component.
+At initial recognition, the liability component of the convertible bonds is measured as the present value of the future interest and principal
+payments, discounted at the market rate of interest applicable at the time of initial recognition to similar liabilities that do not have a
+conversion option. Any excess of proceeds over the amount initially recognised as the liability component is recognised as the equity
+component. Transaction costs that relate to the issue of the convertible bonds are allocated to the liability and equity components in
+proportion to the allocation of proceeds.
+Subsequent to initial recognition, the liability component of a convertible corporate bond is measured at amortised cost using the effective
+interest method, unless it is designated at fair value through profit or loss. The equity component of a convertible corporate bond is not
+re-measured subsequent to initial recognition.
+If the convertible corporate bond is converted, the liability component, together with the equity component, is transferred to share capital
+and capital reserve (share premium). If the convertible corporate bond is redeemed, the consideration paid for the redemption, together
+with the transaction costs that relate to the redemption, are allocated to the liability and equity components. The difference between the
+allocated and carrying amounts is charged to profit or loss if it relates to the liability component or is directly recognised in equity if it
+relates to the equity component.
+Other convertible bonds
+Convertible bonds issued with a cash settlement option and other embedded derivative features are split into liability and derivative
+components.
+At initial recognition, the derivative component of the convertible bonds is measured at fair value. Any excess of proceeds over the amount
+initially recognised as the derivative component is recognised as the liability component. Transaction costs that relate to the issue of the
+convertible bonds are allocated to the liability and derivative components in proportion to the allocation of proceeds. The portion of the
+transaction costs relating to the liability component is recognised initially as part of the liability. The portion relating to the derivative
+component is recognised immediately as an expense in profit or loss.
+The derivative component is subsequently remeasured at each balance sheet date and any gains or losses arising from change in the
+fair value are recognised in profit or loss. The liability component is subsequently carried at amortised cost using the effective interest
+method until extinguished on conversion or redemption. Both the liability and the related derivative components are presented together
+for financial statements reporting purposes.
+Financial Statements (PRC)
+If the convertible bonds are converted, the carrying amounts of the derivative and liability components are transferred to share capital
+and share premium as consideration for the shares issued. If the convertible bonds are redeemed, any difference between the amount
+paid and the carrying amount of both components is recognised in profit or loss.
+89
+When a hedging instrument expires or is sold, terminated or exercised, or the hedge no longer meets the criteria for hedge accounting,
+the Group will discontinue the hedge accounting treatments prospectively. In this case, the gain or loss on the hedging instrument that
+remains recognised directly in shareholders' equity from the period when the hedge was effective shall not be reclassified into profit or
+loss and is recognised in accordance with the above policy when the forecast transaction occurs. If the forecast transaction is no longer
+expected to occur, the gain or loss on the hedging instrument that remains recognised directly in shareholders' equity from the period
+when the hedge was effective shall be reclassified into profit or loss immediately.
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+3 SIGNIFICANT ACCOUNTING POLICIES (Continued)
+(11) Financial Instruments (Continued)
+(b) Disclosure of financial assets and financial liabilities
+In the balance sheet, financial assets and liabilities are not offset unless all the following conditions are met:
+the Group has a legally enforceable right to set off financial assets against financial liabilities; and
+the Group intends to settle the financial assets and liabilities on a net basis, or to realise the assets and settle the liabilities
+simultaneously.
+(c) Determination of fair value
+If there is an active market for a financial asset or financial liability, the quoted price in the active market is used to establish the fair value
+of the financial asset or financial liability.
+If no active market exists for a financial instrument, a valuation technique is used to establish the fair value. Valuation techniques include
+using arm's length market transactions between knowledge, and willing parties; reference to the current fair value of other instrument that is
+substantially the same; discounted cash flows and option pricing model. The Group calibrates the valuation technique and tests it for validity
+periodically.
+(d) Hedge accounting
+Hedge accounting is a method which recognises the offsetting effects on profit or loss of changes in the fair values of the hedging instrument
+and the hedged item in the same accounting period(s).
+Hedged items are the items that expose the Group to risks of changes in fair value or future cash flows and that are designated as being
+hedged. The Group's hedged items include fixed-rate borrowings that expose the Group to risk of changes in fair values, floating rate
+borrowings that expose the Group to risk of variability in cash flows, and a forecast transaction that is settled with a fixed amount of foreign
+currency and expose the Group to foreign currency risk, and a forecast transaction that is settled with an undetermined future market price
+and exposes the Group to risk of variability in cash flows, etc.
+A hedging instrument is a designated derivative whose changes in fair value or cash flows are expected to offset changes in the fair value or
+cash flows of the hedged item.
+The hedge is assessed by the Group for effectiveness on an ongoing basis and determined to have been highly effective throughout the
+accounting periods for which the hedging relationship was designated. The Group uses a ratio analysis to assess the subsequent effectiveness
+of a cash flow hedge, and uses a regression analysis to assess the subsequent effectiveness of a fair value hedge.
+- Cash flow hedges
+A cash flow hedge is a hedge of the exposure to variability in cash flows. The portion of the gain or loss on the hedging instrument that
+is determined to be an effective hedge is recognised directly in shareholders' equity as a separate component. That effective portion is
+adjusted to the lesser of the following (in absolute amounts):
+the cumulative gain or loss on the hedging instrument from inception of the hedge;
+the cumulative change in present value of the expected future cash flows on the hedged item from inception of the hedge.
+The portion of the gain or loss on the hedging instrument that is determined to be an ineffective hedge is recognised in profit or loss.
+If a hedge of a forecast transaction subsequently results in the recognition of a non-financial asset, the associated gain or loss is removed
+from shareholders' equity, included in the initial cost of the non-financial asset, and recognised in profit or loss in the same year during
+which the non-financial asset affects profit or loss. However, if the Group expects that all or a portion of a net loss recognised directly in
+shareholders' equity will not be recovered in future accounting periods, it reclassifies the amount that is not expected to be recovered into
+profit or loss.
+If a hedge of a forecast transaction subsequently results in the recognition of a financial asset or a financial liability, the associated gain
+or loss is removed from equity and recognised in profit or loss in the same period during which the financial asset or financial liability
+affects profit or loss. However, if the Group expects that all or a portion of a net loss recognised directly in shareholders' equity will not
+be recovered in future accounting periods, it reclassifies the amount that is not expected to be recovered into profit or loss.
+For cash flow hedges, other than those covered by the preceding two policy statements, the associated gain or loss is removed from
+shareholders' equity and recognised in profit or loss in the same period or periods during which the hedged forecast transaction affects
+profit or loss.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+Basic pension insurance
+90
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+91
+Financial Statements (PRC)
+92
+Financial Statements (PRC)
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+3 SIGNIFICANT ACCOUNTING POLICIES (Continued)
+(12) Impairment of financial assets and non-financial long-term assets (Continued)
+(b) Impairment of other non-financial long-term assets
+Internal and external sources of information are reviewed at each balance sheet date for indications that the following assets, including fixed
+assets, oil and gas properties, construction in progress, goodwill, intangible assets and investments in subsidiaries, associates and jointly
+controlled entities may be impaired.
+Assets are tested for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.
+The recoverable amounts of goodwill and intangible assets with uncertain useful lives are estimated annually no matter there are any
+indications of impairment. Goodwill is tested for impairment together with related asset units or groups of asset units.
+An asset unit is the smallest identifiable group of assets that generates cash inflows largely independent of the cash inflows from other assets
+or groups of assets. An asset unit comprises related assets that generate associated cash inflows. In identifying an asset unit, the Group
+primarily considers whether the asset unit is able to generate cash inflows independently as well as the management style of production and
+operational activities, and the decision for the use or disposal of asset.
+The recoverable amount is the greater of the fair value less costs to sell and the present value of expected future cash flows generated by the
+asset (or asset unit, set of asset units).
+Fair value less costs to sell of an asset is based on its selling price in an arm's length transaction less any direct costs attributable to
+the disposal. Present value of expected future cash flows is the estimation of future cash flows to be generated from the use of and upon
+disposal of the asset, discounted at an appropriate pre-tax discount rate over the asset's remaining useful life.
+If the recoverable amount of an asset is less than its carrying amount, the carrying amount is reduced to the recoverable amount. The
+amount by which the carrying amount is reduced is recognised as an impairment loss in profit or loss. A provision for impairment loss of
+the asset is recognised accordingly. Impairment losses related to an asset unit or a set of asset units first reduce the carrying amount of any
+goodwill allocated to the asset unit or set of asset units, and then reduce the carrying amount of the other assets in the asset unit or set of
+asset units on a pro rata basis. However, the carrying amount of an impaired asset will not be reduced below the highest of its individual fair
+value less costs to sell (if determinable), the present value of expected future cash flows (if determinable) and zero.
+Impairment losses for assets are not reversed.
+(13) Long-term deferred expenses
+Long-term deferred expenses are amortised on a straight-line basis over their beneficial periods.
+(14) Employee benefits
+Employee benefits are all forms of considerations and compensation given in exchange for services rendered by employees, including short term
+compensation, post-employment benefits, termination benefits and other long term employee benefits.
+(a) Short term compensation
+Short term compensation includes salaries, bonuses, allowances and subsidies, employee benefits, medical insurance premiums, work-
+related injury insurance premium, maternity insurance premium, contributions to housing fund, unions and education fund and short-term
+absence with payment etc. When an employee has rendered service to the Group during an accounting period, the Group shall recognise the
+short term compensation actually incurred as a liability and charged to the cost of an asset or to profit or loss in the same period, and non-
+monetary benefits are valued with the fair value.
+100.0
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+Impairment loss of available-for-sale debt instrument is reversed, if the reason for the subsequent increase in fair value is objectively as
+a result of an event occurred after the recognition of the impairment loss. Impairment loss for available-for-sale equity instrument is not
+reversed through profit or loss. Impairment loss for available-for-sale financial assets measured by the cost cannot be reversed in the
+following period.
+When available-for-sale financial assets measured at fair value are impaired, despite not being derecognised, the cumulative losses
+resulted from the decrease in fair value which had previously been recognised directly in shareholders' equity, are reversed and charged
+to profit or loss.
+for the year ended 31 December 2015
+3 SIGNIFICANT ACCOUNTING POLICIES (Continued)
+(11) Financial Instruments (Continued)
+(f) Derecognition of financial assets and financial liabilities
+The Group derecognises a financial asset when the contractual right to receive cash flows from the financial asset expires, or where the Group
+transfers substantially all risks and rewards of ownership of the financial asset, or where the Group neither transfers nor retains substantially
+all risks and rewards of ownership of the financial asset but the Group gives up the control of a financial asset.
+On derecognition of a financial asset, the difference between the following amounts is recognised in profit or loss:
+the carrying amounts; and
+the sum of the consideration received and any cumulative gain or loss that had been recognised directly in equity.
+Where the obligations for financial liabilities are completely or partially discharged, the entire or parts of financial liabilities are derecognised.
+(12) Impairment of financial assets and non-financial long-term assets
+(a) Impairment of financial assets
+The carrying amount of financial assets (except those financial assets stated at fair value with changes in the fair values charged to profit or
+loss) are reviewed at each balance sheet date to determine whether there is objective evidence of impairment. If any such evidence exists,
+impairment loss is provided.
+Objective evidences of impairment include but not limited to:
+(i) significant financial difficulty of the debtor;
+(ii) a breach of contract, such as a default or delinquency in interest or principal payments;
+(iii) it becoming probable that the debtor will enter bankruptcy or other financial reorganisation;
+(iv) due to the significant financial difficulty of the debtor, financial assets is unable to be traded in active market;
+(v) significant changes in the technological, market, economic or legal environment that have an adverse effect on the debtor; and the cost of
+investment may not be recoverable; and
+(vi) a significant or prolonged decline in the fair value of an investment in an equity instrument below its cost.
+Receivables and held-to-maturity investments
+Receivables are assessed for impairment on the combination of an individual basis and the aging analysis.
+Held-to-maturity investments are assessed for impairment on an individual basis.
+Where impairment is assessed on an individual basis, an impairment loss in respect of a receivable or held-to-maturity investment is
+calculated as the excess of its carrying amount over the present value of the estimated future cash flows (exclusive of future credit losses
+that have not been incurred) discounted at the original effective interest rate. All impairment losses are recognised in profit or loss.
+Impairment loss on receivables and held-to-maturity investments is reversed in profit or loss if evidence suggests that the financial assets'
+carrying amounts have increased and the reason for the increase is objectively as a result of an event occurred after the recognition of the
+impairment loss. The reversed carrying amount shall not exceed the amortised cost if the financial assets had no impairment recognised.
+Available-for-sale financial assets
+Available-for-sale financial assets are assessed for impairment on an individual basis. Objective evidence of impairment for equity
+instruments classified as available-for-sale includes information about significant but not temporary decline in the fair value of the equity
+investment instrument below its cost. The Group assesses equity instruments classified as available-for-sale separately at the end of
+each reporting period, it will be considered as impaired if the fair value of the equity instrument at reporting date is less than its initial
+investment cost over 50% (including 50%) or the duration of the fair value below its initial investment cost is more than one (including
+one) year, if the fair value of the equity instrument at reporting date is less than its initial investment cost over 20% (including 20%) but
+below 50%, other related factors such as price volatility will be taken into consideration to assess if it is impaired.
+When available-for-sale financial assets measured at cost are impaired, the differences between the book value and the discounted present
+value with the market return of similar financial assets are charged to profit or loss.
+1,554.56
+(b) Post-employment benefits
+2,109.76
+5,290
+1,980
+2,161
+34,245
+65,883
+2,771
+1,494
+56,651
+91,361
+29,650
+3,734
+25,159
+530
+90,831
+138
+29,512
+128
+25,031
+Amounts due from subsidiaries
+Amounts due from Sinopec Group Company and fellow subsidiaries
+Amounts due from associates and jointly controlled entities
+Amounts due from others
+Less: Allowance for doubtful accounts
+Total
+Ageing analysis on accounts receivable is as follows:
+525
+56,126
+1,587
+677
+20,188
+Deposits at related parties represent deposits placed at Sinopec Finance Company Limited and Sinopec Century Bright Capital Investment Limited.
+Deposits interest is calculated based on market rate.
+At 31 December 2015, time deposits with financial institutions of the Group amounted to RMB 733 million (2014: RMB 745 million).
+At 31 December 2015, structured deposits with financial institutions of the Group amounted to RMB 25,380 million.
+6 BILLS RECEIVABLE
+Bills receivable represents mainly the bills of acceptance issued by banks for sales of goods and products.
+At 31 December 2015, the Group's outstanding endorsed or discounted bills (with recourse) amounted to RMB 5,352 million (2014: RMB 4,427
+million).
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+7
+ACCOUNTS RECEIVABLE
+The Group
+The Company
+At 31 December
+2015
+At 31 December
+2014
+RMB million
+At 31 December
+2015
+RMB million
+At 31 December
+2014
+RMB million
+24,222
+19,917
+18,672
+RMB million
+Within one year
+Between two and three years
+Over three years
+Total
+55,369
+97.8
+7
+750
+1.3
+59
+0.1
+473
+0.8
+56,651
+100.0
+23180
+35
+4.7
+90,069
+743
+98.6
+23
+39.0
+78
+460
+97.3
+525
+1,943.20
+%
+10,100
+to accounts
+receivable
+balance
+Percentage
+Within one year
+Between one and two years
+Between two and three years
+Over three years
+Total
+At 31 December 2015
+Percentage
+Percentage
+of allowance
+to total
+Amount
+accounts
+receivable
+to accounts
+receivable
+Allowance
+balance
+RMB million
+% RMB million
+%
+Amount
+RMB million
+to total
+accounts
+receivable
+Allowance
+% RMB million
+At 31 December 2014
+Percentage
+of allowance
+68,557
+Between one and two years
+21
+The resources tax rate has been raised from 5% to 6% from 1 December 2014, the mineral resources compensation fee of crude oil and natural
+gas has been decreased from 1% to zero at the same time. Land-use tax has been zero before 1 July 2015, and it has decreased by 50% compared
+with its original tax rate afterwards.
+In accordance with PRC new rules and regulations, the threshold above which special oil income levy was imposed (with the five-level progressive tax
+rates varying from 20% to 40% remaining) has been raised from USD 55 per barrel to USD 65 per barrel from 1 January 2015.
+5 CASH AT BANK AND ON HAND
+The Group
+At 31 December 2015
+Original
+At 31 December 2014
+Original
+currency
+million
+Exchange
+rates
+RMB
+million
+currency
+million
+Exchange
+rates
+RMB
+million
+Cash on hand
+Renminbi
+Cash at bank
+Renminbi
+16
+30
+40,921
+5,064
+US Dollars
+1,495.20
+1,412
+1,370.60
+1,116.50
+940.80
+0.7889
+1,105.44
+1,293.60
+1,411.20
+1,385.00
+1,551.20
+1,939.00
+2,105.20
+Solvent oil
+Lubricant oil
+Fuel oil
+1,282.00
+1,435.84
+1,794.80
+1,948.64
+1,126.00
+1,261.12
+1,576.40
+1,711.52
+Jet fuel oil
+812.00
+996.80
+954.10
+1,171.24
+1,218.00
+6.4936
+Value added tax rate for liquefied petroleum gas, natural gas and certain agricultural products is 13% and that for other products is 17%.
+9,168
+5755
+50,254
+5,879
+Deposits at related parities
+Renminbi
+14,290
+2,247
+US Dollars
+Euro
+Total
+609
+65
+6.4936
+321
+6.1190
+1,968
+4
+7.0952
+30
+1
+7.4556
+6
+25
+0.8378
+3,962
+52
+Hong Kong Dollars
+70
+Others
+643
+Hong Kong Dollars
+96
+0.8378
+80
+0.7889
+55
+Japanese Yen
+0.0539
+141
+145
+0.0514
+Euro
+1
+7.0952
+9
+2
+7.4556
+15
+8
+105
+Amortisation of the intangible assets of the Group charged for the year ended 31 December 2015 is RMB 3,923million (2014: RMB 3,035 million).
+51,044
+49,136
+78,681
+Balance at 31 December 2015
+Balance at 31 December 2014
+Sinopec Beijing Yanshan Petrochemical Branch ("Sinopec Yanshan")
+(8)
+(2)
+16
+114
+604
+567
+24
+831
+1,932
+1,525
+2014
+RMB million
+1,404
+1,378
+81,081
+16 GOODWILL
+Goodwill is allocated to the following Group's cash-generating units:
+Name of investees
+Principal activities
+At 31 December
+2015
+At 31 December
+RMB million
+Sinopec (Hong Kong) Limited
+Sinopec Zhenhai Refining and Chemical Branch ("Sinopec Zhenhai")
+483
+26,097
+26,075
+194
+(197)
+(6)
+(127)
+(64)
+Multiple units without individual significant goodwill
+Total
+(6)
+Balance at 31 December 2015
+12,081
+3,123
+1,975
+8,196
+2,155
+27,530
+Balance at 31 December 2015
+Net book value:
+Provision for impairment losses:
+200
+483
+24
+107
+18
+832
+Additions for the year
+7
+-
+7
+Decreases for the year
+Balance at 1 January 2015
+Manufacturing of intermediate
+petrochemical products and
+petroleum products
+348
+1,157
+31 December 31 December 31 December 31 December 31 December 31 December
+2014
+2015
+RMB million RMB million
+Deferred tax liabilities
+At
+At
+Net balance
+At
+2014
+RMB million
+Current
+Receivables and inventories
+1,755
+2,883
+At
+1,755
+Accruals
+Cash flow hedges
+Non-current
+413
+258
+413
+258
+887
+(98)
+Decreases for the year
+250
+2,883
+1,157
+RMB million
+RMB million
+Manufacturing of intermediate
+petrochemical products and
+petroleum products
+Trading of petrochemical
+products
+4,043
+4,043
+853
+853
+218
+228
+6,271
+6,281
+Goodwill represents the excess of the cost of purchase over the fair value of the underlying assets and liabilities. The recoverable amounts of the
+above cash generating units are determined based on value in use calculations. These calculations use cash flow projections based on financial
+budgets approved by management covering a one-year period and pre-tax discount rates primarily ranging from 10.7% to 11.3% (2014: 10.0%
+to 10.9%). Cash flows beyond the one-year period are maintained constant. Based on the estimated recoverable amount, no impairment loss was
+recognised.
+Key assumptions used for cash flow forecasts for these entities are the gross margin and sales volume. Management determined the budgeted gross
+margin based on the gross margin achieved in the period immediately before the budget period and management's expectation on the future trend
+of the prices of crude oil and petrochemical products. The sales volume was based on the production capacity and/or the sales volume in the period
+immediately before the budget period.
+RMB million
+17 LONG-TERM DEFERRED EXPENSES
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+18 DEFERRED TAX ASSETS AND LIABILITIES
+Deferred tax assets and liabilities before the consolidated elimination adjustments are as follows:
+Deferred tax assets
+At
+At
+2015
+2014
+2015
+Long-term deferred expenses primarily represent prepaid rental expenses over one year and catalysts expenditures.
+4,114
+34,407
+1,636
+Total
+RMB million
+Others
+RMB million
+rights
+RMB million
+RMB million
+RMB million
+technology
+Patents
+Operation
+Non-patent
+Land use
+rights
+RMB million
+The Group
+Cost:
+15 INTANGIBLE ASSETS
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+Financial Statements (PRC)
+106
+Financial Statements (PRC)
+105
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+34
+51%
+1,687
+999
+688
+for the year ended 31 December 2015
+3,316
+Balance at 1 January 2015
+Additions for the year
+887
+10,525
+Balance at 1 January 2015
+Accumulated amortisation:
+109,442
+3,575
+3,931
+4,210
+63,319
+Balance at 31 December 2015
+(2,181)
+59,861
+(75)
+(2,045)
+Decreases for the year
+8,497
+429
+1,720
+103,126
+3,221
+32,748
+3,237
+694
+4,059
+151
+5,503
+(61)
+to Jiujiang Corporation
+financing
+Corporation Multiple Tracks Yizheng
+Tianjin LNG Project
+357
+Bank loans & self-
+financing
+45%
+7,962
+3,429
+4,533
+17,775
+Guangxi LNG Project
+RMB million
+%
+Bank loans & self-
+31 December
+2015
+Percentage of
+Completion
+Balance at
+3,009
+1,688
+6,566
+1,825
+23,613
+Additions for the year
+1,683
+114
+287
+Source of funding
+17,404
+1,488
+1,899
+Bank loans & self-
+Yizheng-Changling Crude Oil Pipeline
+172
+financing
+96%
+937
+(3,469)
+4,406
+7,094
+Quality Upgrading Project
+Bank loans & self-
+Jiujiang sour Crude Oil
+169
+financing
+70%
+1,285
+(472)
+1,757
+10,716
+Bank loans & self-
+Shandong LNG Project
+11
+financing
+19%
+3,387
+394
+Fixed assets
+Balance at 31 December 2015
+7,752
+Others
+Total
+43
+50,739
+43
+8,926
+(159)
+(3,445)
+77
+56,138
+The reasons for recognising impairment losses are set out in the respective notes of respective assets.
+21 SHORT-TERM LOANS
+7,657
+The Group's short-term loans represent:
+- Renminbi loans
+- US Dollar loans
+- Euro loans
+Short-term loans from Sinopec Group Company
+and fellow subsidiaries
+- Renminbi loans
+- US Dollar loans
+- HK Dollar loans
+Euro loans
+Total
+At 31 December 2015
+At 31 December 2014
+Short-term bank loans
+Original
+7,657
+Goodwill
+653
+(1)
+4
+677
+Fixed assets
+13
+36,310
+4,375
+(304)
+31 December
+2015
+RMB million
+(13)
+16
+40,368
+14
+221
+Intangible assets
+15
+832
+111
+7
+(112)
+220
+(1)
+(7)
+831
+Construction in progress
+currency
+million
+Exchange
+rates
+5
+1
+7.0952
+4
+262
+6.1190
+0.7889
+102,773
+9,628
+93,126
+5
+7.4556
+14
+74,729
+0.8373
+166,688
+At 31 December 2015 and 2014, the Group had no significant overdue short-term loan.
+22 BILLS PAYABLE
+Bills payable primarily represented bank accepted bills for the purchase of material, goods and products. Bills payable were due within one year.
+At 31 December 2015 and 2014, the Group had no overdue unpaid bills.
+23 ACCOUNTS PAYABLE
+At 31 December 2015 and 2014, the Group had no individually significant accounts payable aged over one year.
+24 ADVANCES FROM CUSTOMERS
+At 31 December 2015 and 2014, the Group had no individually significant advances from customers aged over one year.
+25 EMPLOYEE BENEFITS PAYABLE
+At 31 December 2015 and 2014, the Group's employee benefits payable primarily represented wages payable and social insurance payables.
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+10
+At 31 December 2015, the Group's interest rates on short-term loans were from interest 0.23% to 6.16% (2014: from interest free to 6.89%). The
+majority of the above loans are by credit.
+6
+15,219
+32,878
+RMB
+million
+Original
+currency
+million
+Exchange
+rates
+RMB
+million
+31,036
+63,915
+11,357
+22,805
+1,821
+6.4936
+11,824
+6,649
+6.1190
+40,685
+1,107
+7.0952
+7,855
+57
+7.4556
+425
+43,693
+10,806
+5,063
+6.4936
+21
+8,209
+12
+4,402
+The consolidated elimination amount between deferred tax assets and liabilities are as follows:
+Deferred tax assets
+Deferred tax liabilities.
+Deferred tax assets and liabilities after the consolidated elimination adjustments are as follows:
+At 31 December
+2015
+RMB million
+At 31 December
+2014
+RMB million
+9,237
+9,237
+8,650
+(841)
+8,650
+At 31 December
+2015
+RMB million
+7,469
+8,259
+At 31 December
+2014
+RMB million
+6,979
+7,820
+At 31 December 2015, certain subsidiaries of the Company did not recognise deferred tax of deductible loss carried forward of RMB 19,338 million
+(2014: RMB 17,085 million), of which RMB 4,080 million (2014: RMB 6,996 million) was incurred for the year ended 31 December 2015, because
+it was not probable that the related tax benefit will be realised. These deductible losses carried forward of RMB 3,299 million, RMB 3,777 million,
+RMB 2,634 million, RMB 5,548 million and RMB 4,080 million will expire in 2016, 2017, 2018, 2019, 2020 and after, respectively.
+Periodically, management performed assessment on the probability that future taxable profit will be available over the period which the deferred tax
+assets can be realised or utilised. In assessing the probability, both positive and negative evidence was considered, including whether it is probable
+that the operations will have sufficient future taxable profits over the periods which the deferred tax assets are deductible or utilised and whether the
+tax losses result from identifiable causes which are unlikely to recur. During the year ended 31 December 2015, write-down of deferred tax assets
+amounted to RMB 75 million (2014: RMB 114 million).
+19 OTHER NON-CURRENT ASSETS
+Other non-current assets mainly represent prepayments for construction projects and purchases of equipment.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+107
+Financial Statements (PRC)
+Deferred tax assets
+Deferred tax liabilities
+108
+(790)
+40
+(17,340)
+(16,387)
+(9,131)
+(8,635)
+Tax value of losses carried forward
+5,883
+3,474
+5,883
+3,474
+Embedded derivative component of
+the convertible bonds.
+7
+282
+Available-for-sale securities
+7
+(4)
+3
+Others
+Deferred tax assets/(liabilities)
+98
+16,706
+86
+15,629
+(58)
+(17,496)
+(79)
+(16,470)
+282
+Financial Statements (PRC)
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+(83)
+(57)
+10
+1,392
+Prepayments
+9
+49
+4
+(29)
+(1)
+23
+49
+2,052
+(125)
+(96)
+16
+1,940
+Inventories
+10
+3,603
+3,687
+(34)
+(2,931)
+77
+93
+1,473
+8
+Other receivables
+20 DETAILS OF IMPAIRMENT LOSSES
+At 31 December 2015, impairment losses of the Group are analysed as follows:
+Note
+Balance at
+1 January
+2015
+RMB million
+Provision
+for the year
+RMB million
+Written back
+for the year
+Written off
+for the year
+Other
+(decrease)/ 31 December
+Balance at
+increase
+2015
+RMB million
+RMB million
+RMB million
+RMB million
+Allowance for doubtful accounts
+Included: Accounts receivable
+7
+530
+40
+(13)
+(38)
+6
+525
+Long-term equity investments
+Net change
+for the year
+RMB million
+20,010
+RMB million
+2014
+2015
+2014
+2015
+RMB million
+RMB million
+RMB million RMB million
+CIR(vi)
+2015
+2014
+2015
+Mansarovar
+Taihu
+BASF-YPC
+YASREF
+Year ended 31 December
+2015
+Summarised income statement
+2014
+RMB million RMB million
+29
+8,366
+1,821
+3,781
+1,876
+18,183
+RMB million
+10,725
+15,430
+31,823
+13
+Interest income
+Turnover
+RMB million
+RMB million
+22,191
+26
+9,004
+2,184
+4,587
+4,771
+Share of net assets from joint ventures
+Other (v)
+102
+111
+minority interests
+5.526
+Net assets attributable to
+6,088
+4,367
+2,846
+3,106
+14,628
+13,814
+16,776
+3,129
+5,851
+1,395
+RMB million
+2,251
+5,851
+5,526
+4,587
+4,771
+1,522
+Carrying Amounts
+85
+814
+729
+8,388
+3,044
+2,184
+616
+12,231
+9
+64
+income/(loss)
+Total comprehensive
+63
+(3,164)
+24
+290
+492
+(5,373)
+738
+income/(loss)
+Other comprehensive
+(245)
+503
+(256)
+(2,633)
+(2,180)
+158
+89
+1,287
+112
+63
+(92)
+from joint ventures
+Share of net (loss)/profit
+279
+933
+Dividends from joint ventures
+(182)
+(2,661)
+(232)
+(1,890)
+(3,168)
+470
+31
+2,205
+279
+3,455
+373
+214
+(259)
+(Loss)/profit before taxation
+(20)
+3,014
+(15)
+(119)
+(356)
+(239)
+(721)
+Interest expense
+8
+(54)
+2,722
+(1,847)
+870
+158
+(246)
+(Loss)/profit for the year
+(252)
+(367)
+(897)
+641
+(333)
+(733)
+(94)
+(56)
+13
+Tax expense
+7
+(809)
+1,043
+12,723
+Net assets attributable to
+5,879
+4,765
+1,446
+5,965
+Other current assets
+4,873
+2,243
+580
+117
+78
+1.112
+488
+2,662
+4,171
+262
+Cash and cash equivalents
+2,886
+328
+49,222
+54,027
+Non-current assets
+6,754
+908
+1,021
+759
+3,003
+6,991
+5,253
+4,108
+10,136
+Total current assets
+1,881
+2,321
+15.543
+Current assets
+RMB million
+CIR(ii)
+Mansarovar
+Taihu
+BASF-YPC
+YASREF
+At 31
+December
+Summarised balance sheet and reconciliation to their carrying amounts in respect of the Group's principal joint ventures:
+At 31
+December
+(b) Major financial information of principal joint ventures
+for the year ended 31 December 2015
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+Financial Statements (PRC)
+102
+Financial Statements (PRC)
+101
+12 LONG-TERM EQUITY INVESTMENTS (Continued)
+RMB million
+2015
+RMB million
+RMB million
+RMB million
+2014
+2014
+At 31
+December
+At 31
+December
+2014
+At 31
+December
+2015
+At 31
+December
+At 31
+December
+2015
+RMB million
+2014
+RMB million
+At 31
+December
+At 31
+December
+2015
+RMB million
+RMB million
+2014
+owners of the company
+17,209
+7,995
+(40,192)
+Total non-current liabilities
+(1,253)
+(3,662)
+(3,320)
+(2,175)
+(37,939)
+(1,337)
+(978)
+Other non-current liabilities
+(680)
+(2,905)
+(26)
+(4,019)
+(910)
+(3,113)
+(3,113)
+(1,363)
+16,776
+6,088
+4,367
+2,948
+3,217
+14,628
+(4,019)
+13,814
+12,723
+Net assets
+(1,933)
+(3,662)
+(3,320)
+(5,080)
+12,231
+5,662
+(37,029)
+Non-current financial liabilities(iv)
+(3,160)
+(7,886)
+Other current liabilities
+(272)
+(1,228)
+(2,315)
+(1,864)
+(3,318)
+(3,362)
+Current financial liabilities (iii)
+Current liabilities
+13,078
+9,702
+7,433
+(2,005)
+(39,214)
+(2,235)
+(1,742)
+Non-current liabilities
+(1,123)
+(860)
+(767)
+(2,970)
+(3,403)
+(1,088)
+(5,553)
+(3,160)
+(11,248)
+Total current liabilities
+(851)
+(860)
+(767)
+(3,869)
+(1,090)
+(128)
+252
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+(viii) The summarized statement of comprehensive income represents the operating result for the period from the date when the Group reclassified the investment in
+joint ventures to interest in associates to 31 December 2015 (note 12(ii)).
+(vii) The main asset of Zhongtian Synergetic Energy was under construction during the year ended 31 December 2015.
+Note:
+The share of profit and other comprehensive loss for the year ended 31 December 2015 in all individually immaterial associates accounted for
+using equity method in aggregate was RMB 1,114 million (2014: RMB 1,229 million) and RMB 632 million (2014: RMB 57 million) respectively.
+As at 31 December 2015, the carrying amount of all individually immaterial associates for using equity method in aggregate was RMB 14,255
+million (2014: RMB 14,838 million).
+(2,009)
+103
+(249)
+(45)
+65
+84
+318
+495
+1,236
+14
+1,707
+Financial Statements (PRC)
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+Decreases for the year
+Reclassifications
+Transferred from construction in progress
+Additions for the year
+Balance at 1 January 2015
+Cost:
+Financial Statements (PRC)
+and others
+RMB million
+and gas
+properties
+RMB million
+Oil
+Plants and
+buildings
+RMB million
+The Group
+13 FIXED ASSETS
+for the year ended 31 December 2015
+Equipment,
+machinery
+Exchange adjustments
+Share of profit/(loss) from associates
+Share of other comprehensive income/
+(loss) from associates
+16
+219
+687
+1
+1
+115,725
+1,097
+2,248
+170
+2,522
+Profit/(loss) for the year
+78,623
+2,706
+2,533
+Turnover
+2015
+RMB million
+3,484
+11
+(90)
+income/(loss)
+309
+336
+Dividends declared by associates
+(4,107)
+170
+1,097 - - 219
+Other comprehensive
+2,248
+3,512
+(4,017)
+(508)
+28
+income/(loss)
+Total comprehensive
+2,014
+2014
+RMB million
+Balance at 31 December 2015
+Balance at 1 January 2015
+Provision for impairment losses:
+Balance at 1 January 2015
+-------
+826,197
+430,818
+354,181
+41,198
+Additions for the year
+(6,694)
+1,440
+1,339
+40
+(6,357)
+(64)
+(273)
+87
+61
+(602)
+2,777
+32
+5
+5
+Exchange adjustments
+(327)
+(251)
+(3)
+15,959
+(73)
+(164)
+164
+Reclassifications
+36,310
+4,375
+17,574
+130
+4,213
+Decreases for the year
+Accumulated depreciation:
+515
+Exchange adjustments
+(79)
+(863)
+(772)
+(1,008)
+1,780
+3,727
+119,282
+(8,835)
+1,483,440
+74,405
+39,949
+4,928
+813,178
+560
+569,172
+2,899
+101,090
+268
+Total
+RMB million
+Balance at 31 December 2015
+112
+107,315
+Decreases for the year
+Reclassifications
+743,645
+87,806
+44,078
+40,200
+3,528
+2,201
+Additions for the year
+313,308
+37,388
+1,599,142
+(9,777)
+2,470
+157
+878,693
+613,134
+392,949
+2015
+RMB million
+2014
+CIR(viii)
+8,240
+108,999
+154,437
+Current assets
+RMB million
+RMB million
+13,816
+RMB million
+2015
+2014
+2015
+At 31
+December
+At 31
+December
+CIR(ii)
+RMB million
+Shanghai Chemical
+At 31
+December
+10,168
+2,487
+(147,952)
+Current liabilities
+7,768
+3,263
+3,111
+15,849
+6,833
+37,571
+5,220
+14,992
+15,739
+Non-current assets
+4,826
+2,466
+4,996
+(105,289)
+At 31
+December
+2014
+2014
+RMB million
+The share of profit and other comprehensive loss for the year ended 31 December 2015 in all individually immaterial joint ventures accounted
+for using equity method in aggregate was RMB 4,306 million (2014: loss RMB 122 million) and RMB 324 million (2014: RMB 239 million)
+respectively. As at 31 December 2015, the carrying amount of all individually immaterial joint ventures accounted for using equity method in
+aggregate was RMB 28,586 million (2014: RMB 23,694 million).
+32
+(1,582)
+12
+145
+(2,541)
+Note:
+(1,245)
+-
+277
+joint ventures
+income/(loss) from
+Share of other comprehensive
+(123)
+-
+At 31
+December
+2015
+RMB million
+(iii) Excluding accounts payable, other payables.
+(v) Other reflects the excess of consideration transferred over acquiror's share of net fair value of identifiable assets acquired and liabilities assumed as of the
+acquisition date.
+At 31
+December
+China Aviation Oil
+At 31
+December
+2015
+RMB million
+At 31
+December
+2014
+RMB million
+RMB million
+2015
+Sinopec Finance
+At 31
+December
+(iv) Excluding provisions.
+Zhongtian Synergetic
+Energy
+(c) Major financial information of principal associates
+12 LONG-TERM EQUITY INVESTMENTS (Continued)
+for the year ended 31 December 2015
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+(vi) The summarized income statement of CIR represents the operating result for the period from 1 January 2015 to the date when the Group reclassified the
+investment interest in CIR from joint ventures to associates (note 12(ii)).
+Summarised balance sheet and reconciliation to their carrying amounts in respect of the Group's principal associates:
+(4,717)
+(11,051)
+(16,536)
+Carrying Amounts
+5,004
+1,212
+1,281
+4,958
+6,121
+10,834
+1,998
+9,113
+10,834
+associates
+Share of net assets from
+877
+984
+2,157
+minority interests
+9,113
+1,998
+Shanghai Chemical
+Synergetic Energy(vii)
+2014
+2015
+RMB million RMB million RMB million
+China Aviation Oil
+2015
+RMB million
+2014
+RMB million
+RMB million
+Sinopec Finance
+2015
+2,157
+Zhongtian
+Summarised income statement
+5,004
+1,212
+1,281
+4,958
+6,121
+Year ended 31 December
+Net assets attributable to
+10,007
+4,046
+(1,282)
+(1,043)
+(981)
+(2,348)
+(15,407)
+(227)
+Net assets
+(321)
+(114)
+Non-current liabilities
+(1,305)
+(640)
+(404)
+(7,538)
+(104)
+22,110
+18,598
+8,422
+4,213
+12,796
+15,796
+6,657
+7,438
+18,598
+22,110
+owners of the company
+Net assets attributable to
+10,007
+4,046
+4,213
+12,796
+15,796
+7,534
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+(ii) In August 2015, one of the subsidiaries of Sinopec Group Company completed the acquisition from LUKOIL OVERSEAS WEST PROJECT Ltd. a 50% equity interests
+in CIR and revised CIR's Articles of Association subsequently. According to the revised CIR's Articles of Association, the Group retained significant influences over
+CIR. As a result, the Group reclassified the investment interest in CIR from joint ventures to associates.
+2,209
+(i) Pursuant to the resolution passed at the Directors' meeting held on 31 October 2014 and the purchase agreement entered into with relevant vendors, the
+Group completed the acquisition from the Sinopec Group Company a 37.5% equity interests in YASREF for a consideration of approximately USD 562 million
+(approximately RMB 3,439 million) and also injected capital of approximately USD 199 million (approximately RMB 1,216 million) to YASREF on 31 December
+19
+50
+66
+86
+1,091
+690
+47
+2014
+RMB million
+At 31 December
+2015
+RMB million
+At 31 December
+2014
+RMB million
+RMB million
+2015
+The Company
+At 31 December
+At 31 December
+The Group
+105
+2,809
+The Group
+14
+1,962
+1,296
+3,780
+2,919
+16
+1
+49
+865
+1,976
+1,312
+3,829
+2,942
+572
+3,658
+23
+At 31 December 2015
+Ageing analysis of prepayments is as follows:
+Less: Allowance for doubtful accounts
+239,905
+402,655
+703,485
+The Company
+Plants and
+buildings
+RMB million
+60,925
+Oil
+and gas
+properties
+RMB million
+machinery
+and others
+RMB million
+Total
+RMB million
+Cost:
+Balance at 1 January 2015
+Additions for the year
+Equipment,
+Total
+Balance at 31 December 2014
+430,417
+Amounts to others
+Amounts to associates and jointly controlled entities
+Amounts to Sinopec Group Company and fellow subsidiaries
+Amounts to subsidiaries
+9 PREPAYMENTS
+for the year ended 31 December 2015
+732,577
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+17,458
+40,368
+Net book value:
+Balance at 31 December 2015
+63,217
+238,943
+2,900
+Transferred from construction in progress
+Percentage
+of allowance
+At 31 December 2014
+42
+2.7
+102
+75.9
+3.4
+5
+41.2
+3.8
+16.7
+122
+100.0
+1.0
+1.4
+1
+147
+1.8
+23
+100.0
+balance
+Allowance
+Amount prepayments
+prepayments
+to
+Percentage
+3,829
+to
+Percentage
+of allowance
+Percentage
+of allowance
+At 31 December 2014
+At 31 December 2015
+The Company
+49
+Percentage
+to total
+to
+69
+1
+62010
+2.8
+%
+96.0
+Percentage
+to total
+2,942
+29
+08200
+6
+Over three years
+Total
+Between one and two years
+Between two and three years
+Within one year
+RMB million
+Amount prepayments
+Percentage
+of allowance
+2,825
+82
+-
+0.2
+to
+91.7
+3,511
+%
+balance
+Allowance
+RMB million
+%
+Percentage
+RMB million
+prepayments
+Amount
+prepayments
+to total
+prepayments
+balance
+Allowance
+RMB million
+%
+Amount
+Reclassifications
+Decreases for the year
+for the year ended 31 December 2015
+13 FIXED ASSETS (Continued)
+Impairment losses on fixed assets for the year ended 31 December 2015 primarily represent impairment losses recognised in the exploration and
+production ("E&P") segment of RMB 4,213 million (2014: RMB 2,436 million) on fixed assets and for the chemicals segment of RMB 142 million
+(2014: RMB 917 million) of fixed assets. The primary factor resulting in the E&P segment impairment losses was unsuccessful development drilling
+and high operating and development costs for certain oil fields. The carrying values of these E&P properties were written down to recoverable
+amounts which were determined based on the present values of the expected future cash flows of the assets using a pre-tax discount rate 10.80%
+(2014: 10.13%). The assets in the chemicals segment were written down due to the suspension of operations of certain production facilities.
+At 31 December 2015 and 2014, the Group and the Company had no individually significant fixed assets which were pledged.
+At 31 December 2015 and 2014, the Group and the Company had no individually significant fixed assets which were temporarily idle or pending for
+disposal.
+At 31 December 2015 and 2014, the Group and the Company had no individually significant fully depreciated fixed assets which were still in use.
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+14 CONSTRUCTION IN PROGRESS
+Balance at 1 January 2015
+Additions for the year
+Disposals for the year
+Transferred to subsidiaries
+Dry hole costs written off
+Transferred to fixed assets
+Reclassification to other assets
+Exchange adjustments
+Balance at 31 December 2015
+Cost:
+Provision for impairment losses:
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+The additions to oil and gas properties of the Group and the Company for the year ended 31 December 2015 included RMB 2,899 million (2014:
+RMB 3,309 million) (Note 31) and RMB 2,954 million (2014: RMB 2,834 million), respectively of the estimated dismantlement costs for site
+restoration.
+Net book value:
+Balance at 31 December 2015
+Balance at 31 December 2015
+1,288
+16,971
+12,673
+104
+30,932
+Balance at 31 December 2014
+25,902
+210,764
+211,228
+203,196
+215,231
+439,477
+452,361
+25,517
+(224)
+Balance at 1 January 2015
+Decreases for the year
+(548)
+90
+152,496
+72,763
+221
+111
+(112)
+(5,600)
+220
+72,763
+100,543
+Accumulated
+interest
+capitalised at
+Project name
+Budgeted
+amount
+Balance at
+1 January
+2015
+152,276
+177,667
+Additions for the year
+(76,109)
+(6,095)
+Balance at 31 December 2015
+Net book value:
+Balance at 31 December 2015
+Balance at 31 December 2014
+At 31 December 2015, major construction projects of the Group are as follows:
+The Group
+RMB million
+(119,282)
+The Company
+RMB million
+100,543
+106,620
+58,496
+(1,121)
+(3,524)
+(6,099)
+177,888
+Transferred to subsidiaries
+(165)
+(56)
+(79)
+47,882
+530,446
+(4,970)
+469,966
+(5,513)
+1,048,294
+19,777
+(464)
+272,040
+Additions for the year
+Reclassifications
+Transferred to subsidiaries
+1,662
+2014.
+23,215
+250,381
+542,198
+57,737
+(48,729)
+(4,019)
+Balance at 31 December 2015
+Accumulated depreciation:
+Balance at 1 January 2015
+47,345
+232
+497,163
+2,954
+478,380
+353
+(42,139)
+2,271
+38,403
+1,022,888
+3,539
+76,109
+1,069
+(1,008)
+(61)
+(2,571)
+35,435
+(3)
+500
+102
+28,329
+Additions for the year
+30
+3,473
+70
+3,573
+12,768
+Reclassifications
+(164)
+Transferred to subsidiaries
+(516)
+(230)
+(746)
+Decreases for the year
+164
+(602)
+13,895
+Balance at 1 January 2015
+(682)
+(1,523)
+(15,459)
+(17,664)
+Decreases for the year
+(180)
+1,666
+(64)
+21,077
+302,711
+(4,142)
+254,097
+(4,386)
+577,885
+Provision for impairment losses:
+Balance at 31 December 2015
+to total
+prepayments
+32,860
+% RMB million
+(a) Principal jointly controlled entities and associates
+Principal jointly controlled entities and associates are as follows:
+12 LONG-TERM EQUITY INVESTMENTS (Continued)
+for the year ended 31 December 2015
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+Registered
+100
+Details of the Company's principal subsidiaries are set out in Note 53.
+For the year 2015, the Group and the Company had no individually significant long-term investment impairment.
+219,230
+(7,657)
+13,987
+13,840
+Significant restriction of long-term equity investments of the Group's cash does not exist.
+199,060
+capital
+equity/voting
+right directly
+or indirectly
+held by the
+BASF-YPC Company Limited
+("BASF-YPC")
+ΝΑ
+Saudi Arabia
+Saudi Arabia
+Company
+RMB million
+Percentage of
+Principal
+activities
+Legal
+Register
+location
+Principal place
+of business
+Company Ltd. ("YASREF ") (i)
+Yanbu Aramco Sinopec Refining
+Name of investees
+1.Jointly controlled entities
+representative
+PRC
+Balance at 31 December 2015
+222
+172,056
+30,394
+Share of profits less losses under the equity method
+Additions for the year
+Balance at 1 January 2015
+Investments
+in associates
+RMB million
+Investments
+in jointly
+controlled
+entities
+RMB million
+13,319
+71
+1,590
+Investments in
+subsidiaries
+RMB million
+(656)
+(656)
+(677)
+40,329
+43,318
+(321)
+(188)
+82,970
+(222)
+11,913
+479
+1,781
+Total
+RMB million
+Investments transferred to subsidiaries
+(3,612)
+(3,612)
+Disposals for the year
+(1,118)
+(200)
+Provision for
+impairment
+losses
+RMB million
+(7,657)
+(918)
+14
+14
+Change of other comprehensive income under the equity method
+3,371
+30,944
+189,631
+Dividends declared
+(133)
+Jiangsu Province
+Petroleum refining
+and processing
+Manufacturing and
+PRC
+Shanghai Chemical Industry Park
+Limited ("Zhongtian Synergetic Energy")
+Li Fuyou
+Inner Mongolia
+PRC
+Shanghai
+Zhongtian Synergetic Energy Company
+distribution of refined
+Limited ("China Aviation Oil")
+29.00%
+3,800
+Marketing and
+Sun Li
+petroleum products
+Beijing
+Wang Zhiqing
+("Shanghai Chemical")
+All the jointly controlled entities and associates above are limited companies.
+RMB million
+Note:
+50.00%
+10,000 USD
+38.26%
+Development Company Limited
+2,372
+16,000
+Manufacturing of coal-
+chemical products
+Planning, development
+and operation of the
+Chemical Industry Park
+in Shanghai, the PRC
+Crude oil and natural
+gas extraction
+ΝΑ
+British Virgin
+Islands
+The Republic of
+Kazakhstan
+Caspian Investments Resources Ltd.
+("CIR") (ii)
+38.75%
+Wang Jingyi
+PRC
+services
+49.00%
+Crude oil and natural
+ΝΑ
+Cyprus
+Russia
+Taihu Limited ("Taihu")
+Mansarovar Energy Colombia Ltd.
+products
+distribution of
+40.00%
+12,547
+USD
+37.50%
+1,560 million
+petrochemical
+China Aviation Oil Supply Company
+Colombia
+NA
+banking financial
+("Sinopec Finance")
+49.00%
+10,000
+Provision of non-
+Liu Yun
+British Bermuda
+Beijing
+Sinopec Finance Company Limited
+2.Associates
+50.00%
+12,000 USD
+gas extraction
+Crude oil and natural
+gas extraction
+("Mansarovar ")
+PRC
+5,394
+25,000 USD
+(267)
+1,202
+10 INVENTORIES
+Percentage to the total balance of prepayments
+Total amount (RMB million)
+2014
+2015
+40.9%
+At 31 December
+At 31 December 2015 and 2014, the total amounts of the top five prepayments of the Group are set out below:
+14
+100.0
+1,976
+16
+100.0
+At 31 December
+1,312
+757
+19.8%
+Raw materials
+22,728
+22,736
+95,298
+59,313
+RMB million
+RMB million
+The Group
+At 31 December
+2014
+At 31 December
+Total
+Less: Provision for diminution in value of inventories
+Spare parts and consumables
+Finished goods
+Work in progress
+2015
+66,300
+Total
+9
+10.7
+141
+92.2
+1,821
+81.7
+1,072
+80
+Between one and two years
+prepayments
+balance
+Allowance
+RMB million
+%
+(5,394)
+RMB million
+%
+Within one year
+90.0
+4.0
+43
+7.7
+5
+035
+10
+26.8
+15
+Between two and three years
+4.3
+Over three years
+3.3
+65
+2.3
+1
+3.3
+56
+71,959
+0.5
+1,841
+32,140
+Investments in
+associates
+RMB million
+RMB million
+48,474
+113
+4,726
+Investments
+in jointly
+controlled entities
+The Company
+Balance at 31 December 2015
+Provision for
+impairment
+losses
+RMB million
+(21)
+Movement of provision for impairment
+Reclassification(ii)
+Disposals for the year
+Dividends declared
+Other equity movement under the equity method
+Change of other comprehensive loss under the equity method
+Share of profits less losses under the equity method
+Other movements
+Additions for the year
+RMB million
+3,480
+(117)
+(150)
+(2,703)
+1,551
+(1,108)
+(1,595)
+80,593
+6
+(5,356)
+(2,627)
+(2,729)
+8,081
+3,355
+3,593
+6
+Balance at 1 January 2015
+Total
+12 LONG-TERM EQUITY INVESTMENTS
+2014
+At 31 December
+At 31 December
+2015
+RMB million
+11 AVAILABLE-FOR-SALE FINANCIAL ASSETS
+for the year ended 31 December 2015
+4,402
+145,498
+Financial Statements (PRC)
+Financial Statements (PRC)
+99
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+Provision for diminution in value of inventories is mainly against work in progress and finished goods. For the year ended 31 December 2015, the
+provision for diminution in value of inventories of the Group was primarily due to the costs of work in progress of the refining segment and finished
+goods of the marketing segment were higher than their net realisable value.
+188,223
+191,826
+The Group
+3,603
+149,900
+RMB million
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+Other investment, unlisted and at cost (i)
+Note:
+Equity securities, listed and at quoted market price
+The impairment losses relating to investments for the year ended 31 December 2015 amounted to nil (2014: nil).
+Other investment, unlisted and at cost, represents the Group's interests in privately owned enterprises which are mainly engaged in oil and natural
+gas activities and chemical production.
+868
+10,326
+29
+(i) The Group acquired 10% share of Public-Stock Company Sibur Holdings ( [Sibur]) for a consideration of USD 1,338 million (approximately RMB 8,725 million) in
+December 2015. Sibur is registered in Russia, mainly engaged in business of natural gas processing and petrochemical products.
+897
+714
+183
+261
+10,094
+10,355
+Less: Impairment loss for investments
+Total
+29
+95,558
+Total
+RMB million
+92,767
+2014
+At 31 December
+At 31 December
+2015
+RMB million
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+Registered, issued and fully paid:
+The Group
+33 SHARE CAPITAL
+for the year ended 31 December 2015
+Financial Statements (PRC)
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+111
+Financial Statements (PRC)
+95,557,771,046 domestic listed A shares (2014: 92,766,957,040) of RMB 1.00 each
+25,513,438,600 overseas listed H shares (2014: 25,513,438,600) of RMB 1.00 each
+25,513
+During the year ended 31 December 2014, the Company issued 1,715,081,853 listed A shares with a par value of RMB 1.00 each, as a result of
+exercise of conversion by the holders of the 2011 Convertible Bonds.
+121,071
+There were no changes in the management's approach to capital management of the Group during the year. Neither the Company nor any of its
+subsidiaries is subject to externally imposed capital requirements.
+The schedule of the contractual maturities of loans and commitments are disclosed in Notes 29 and 54, respectively.
+121
+33,115
+112
+Management optimises the structure of the Group's capital, which comprises of equity and debts and bonds. In order to maintain or adjust the
+capital structure of the Group, management may cause the Group to issue new shares, adjust the capital expenditure plan, sell assets to reduce
+debt, or adjust the proportion of short-term and long-term loans and bonds. Management monitors capital on the basis of the debt-to-capital ratio,
+which is calculated by dividing long-term loans (excluding current portion) and debentures payable, by the total of equity attributable to owners of
+the Company and long-term loans (excluding current portion) and debentures payable, and liability-to-asset ratio, which is calculated by dividing
+total liabilities by total assets. Management's strategy is to make appropriate adjustments according to the Group's operating and investment needs
+and the changes of market conditions, and to maintain the debt-to-capital ratio and the liability-to-asset ratio of the Group at a range considered
+reasonable. As at 31 December 2015, the debt-to-capital ratio and the liability-to-asset ratio of the Group were 17.1% (2014: 20.2%) and 45.6%
+(2014: 55.4%), respectively.
+Capital management
+All A shares and H shares rank pari passu in all material aspects.
+During the year ended 31 December 2015, the Company issued 2,790,814,006 listed A shares with a par value of RMB 1.00 each, as a result of
+conversion by the holders of the 2011 Convertible Bonds.
+During the year ended 31 December 2013, the Company issued 114,076 listed A shares with a par value of RMB 1.00 each, as a result of exercise
+of conversion by the holders of the 2011 Convertible Bonds.
+In June 2013, the Company issued 21,011,962,225 listed A shares and 5,887,716,600 listed H shares as a result of bonus issues of 2 shares
+converted from the retained earnings, and 1 share transferred from capital reserves for every 10 existing shares.
+On 14 February 2013, the Company issued 2,845,234,000 listed H shares ("the Placing") with a par value of RMB 1.00 each at the Placing Price
+of HKD 8.45 per share. The aggregate gross proceeds from the Placing amounted to approximately HKD 24,042,227,300.00 and the aggregate net
+proceeds (after deduction of the commissions and estimated expenses) amounted to approximately HKD 23,970,100,618.00.
+During the year ended 31 December 2012, the Company issued 117,724,450 listed A shares with a par value of RMB 1.00 each, as a result of
+conversion by the holders of the 2011 Convertible Bonds.
+During the year ended 31 December 2011, the Company issued 34,662 listed A shares with a par value of RMB 1.00 each, as a result of conversion
+by the holders of the 2011 Convertible Bonds.
+During the year ended 31 December 2010, the Company issued 88,774 listed A shares with a par value of RMB 1.00 each, as a result of exercise of
+188,292 warrants entitled to the Bonds with Warrants.
+In July 2001, the Company issued 2.8 billion listed A shares with a par value of RMB 1.00 each at RMB 4.22 by way of a public offering to natural
+persons and institutional investors in the PRC.
+In October 2000, the Company issued 15,102,439,000 H shares with a par value of RMB 1.00 each, representing 12,521,864,000 H shares and
+25,805,750 American Depositary Shares ("ADSS", each representing 100 H shares), at prices of HKD 1.59 per H share and USD 20.645 per ADS,
+respectively, by way of a global initial public offering to Hong Kong and overseas investors. As part of the global initial public offering, 1,678,049,000
+state-owned ordinary shares of RMB 1.00 each owned by Sinopec Group Company were converted into H shares and sold to Hong Kong and
+overseas investors.
+Pursuant to the resolutions passed at an Extraordinary General Meeting held on 25 July 2000 and approvals from relevant government authorities,
+the Company is authorised to increase its share capital to a maximum of 88.3 billion shares with a par value of RMB 1.00 each and offer not more
+than 19.5 billion shares with a par value of RMB 1.00 each to investors outside the PRC. Sinopec Group Company is authorised to offer not more
+than 3.5 billion shares of its shareholdings in the Company to investors outside the PRC. The shares sold by Sinopec Group Company to investors
+outside the PRC would be converted into H shares.
+The Company was established on 25 February 2000 with a registered capital of 68.8 billion domestic state-owned shares with a par value of RMB 1.00
+each. Such shares were issued to Sinopec Group Company in consideration for the assets and liabilities transferred to the Company (Note 1).
+118,280
+25,513
+(599)
+16,721
+2,899
+for the year ended 31 December 2015
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+83,506
+83,253
+(11,000)
+(4,868)
+77,785
+88,121
+30 DEBENTURES PAYABLE (Continued)
+30,000
+RMB million
+At 31 December
+2014
+At 31 December
+2015
+67,426
+56,493
+37,038
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+45,508
+RMB million
+Note:
+(i) The company issued 180-day corporate bonds of face value RMB 10 billion to corporate investors in the PRC debenture market on 23 September 2015 at par value of
+RMB 100. The effective cost of the 180-day corporate bonds is 2.99% per annum.
+The company issued 182-day corporate bonds of face value RMB 16 billion to corporate investors in the PRC debenture market on 14 December 2015 at par value of
+RMB 100. The effective cost of the 182-day corporate bonds is 2.90% per annum.
+29,613
+The Group
+RMB million
+Other non-current liabilities primarily represent long-term payables, special payables and deferred income.
+32 OTHER NON-CURRENT LIABILITIES
+Balance at 31 December 2015
+Exchange adjustments
+Utilised for the year
+Accretion expenses
+Provision for the year
+Balance at 1 January 2015
+Provisions primarily represent provision for future dismantlement costs of oil and gas properties. The Group has established certain standardised
+measures for the dismantlement of its retired oil and gas properties by making reference to the industry practices and is thereafter constructively
+obligated to take dismantlement measures of its retired oil and gas properties. Movement of provision of the Group's obligations for the
+dismantlement of its retired oil and gas properties is as follows:
+31 PROVISIONS
+As at 31 December 2015, the 2011 Convertible Bonds have been fully converted or redeemed (2014: liability component RMB 13,433 million, derivative component
+RMB 3,288 million).
+The changes in the fair value of the derivative component from 31 December 2014 to 31 December 2015 resulted in an realized loss of RMB 259 million (2014:
+realized loss of RMB 1,613 million and unrealized loss of (RMB 2,997 million), which has been recorded in the "gain from changes in fair value" section of the
+consolidated income statement for the year ended 31 December 2015.
+As at 26 January 2015, the terms of conditional redemption of 2011 Convertible Bonds of the Company have been triggered for the first time. As at 27 January 2015,
+On the 22nd meeting of the fifth session of the board of the Company (the "Board"), the Board has reviewed and approved the proposal for the redemption of 2011
+Convertible Bonds, and decided to exercise the right of redemption and to redeem all of the outstanding 2011 Convertible Bonds registered on 11 February 2015.
+From 1 January 2015 to 11 February 2015, the 2011 Convertible Bonds with a total value of RMB 13,647 million were converted into 2,790,814,006 A shares of the
+Company with a conversion price of RMB 4.89 per share. As of 11 February 2015, the total share capital of the Company has been increased to 121,071,209,646
+shares. The unconverted convertible bonds amounted to RMB 52.78 million (527,760 convertible bonds). As at 17 February 2015, the company has redeemed and fully
+paid the unconverted portion at RMB 101.261 per convertible bonds (including the accrued interest and interest tax accrued thereon).
+During the term of the 2011 Convertible Bonds, if the closing price of the A Shares of the Company is not lower than 130% of the conversion price in at least fifteen
+trading days out of any thirty consecutive trading days, the Company has the right to redeem all or part of the 2011 Convertible Bonds based on the nominal value
+plus the accrued interest ("the terms of conditional redemption").
+During the term of the 2011 Convertible Bonds, the conversion price may be subject to downward adjustment that if the closing prices of the Company's A Shares in
+any fifteen trading days out of any thirty consecutive trading days are lower than 80% of the prevailing conversion price, the board of directors may propose downward
+adjustment to the conversion price subject to the shareholders' approval. The adjusted conversion price shall be not less than (a) the average trading price of the
+Company's A Shares for the twenty trading days prior to the shareholders' approval, (b) the average trading price of the Company's A Shares on the day immediately
+before the shareholders' approval, (c) the net asset value per share based on the latest audited financial statements prepared under ASBE, and (d) the nominal value
+per share.
+(ii) These corporate bonds are carried at amortised cost. Including RMB 22,621 million (2014: RMB 21,285 million) are guaranteed by Sinopec Group Company.
+(iii) On 1 March 2011, the Company issued convertible bonds due 2017 with an aggregate principal amount of RMB 23 billion in the PRC (the "2011 Convertible Bonds").
+The 2011 Convertible Bonds are issued at par value of RMB 100 and bear a fixed interest rate of 0.5% per annum for the first year, 0.7% for the second year, 1.0%
+for the third year, 1.3% for the fourth year, 1.8% for the fifth year and 2.0% for the sixth year, payable annually. The holders can convert the 2011 Convertible Bonds
+into shares of the Company from 24 August 2011 onwards at an initial conversion price of RMB 9.73 per share, subject to adjustment for, amongst other things,
+cash dividends, subdivision or consolidation of shares, bonus issues, issue of new shares, rights issues, capital distribution, change of control and other events which
+have an effect on the issued share capital of the Company (the "Conversion Option"). Unless previously redeemed, converted or purchased and cancelled, the 2011
+Convertible Bonds will be redeemed within 5 trading days after maturity at 107% of the principal amount, including interest for the sixth year. The initial carrying
+amounts of the liability component and the derivative component, representing the Conversion Option of the 2011 Convertible Bonds, were RMB 19,279 million and
+RMB 3,610 million, respectively.
+The company issued 180-day corporate bonds of face value RMB 4 billion to corporate investors in the PRC debenture market on 31 December 2015 at par value of
+RMB 100. The effective cost of the 180-day corporate bonds is 2.75% per annum.
+1,081
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+RMB million
+34 CAPITAL RESERVE
+(641)
+778
+2,268
+2,268
+2,268
+2,268
+(5,356)
+(5,356)
+137
+(5,356)
+62
+(4)
+66
+Other comprehensive income
+Subtotal
+Translation difference in foreign currency statements
+Share of other comprehensive loss in associates and jointly controlled entities
+Subtotal
+Subtotal
+(5,356)
+2014
+Before-tax
+amount
+Tax effect
+RMB million
+973
+12,969
+(5,458)
+Subtotal
+3,871
+(839)
+4,710
+other comprehensive income during the year
+832
+(181)
+1,013
+Less: Adjustments of amounts transferred to initial carrying amount of hedged items
+Total amounts transferred to profit or loss from
+218
+(47)
+265
+Effective portion of changes in fair value of hedging instruments recognised
+during the year
+Cash flow hedges:
+RMB million
+Net-of-tax
+amount
+other comprehensive income during the year
+for the year ended 31 December 2015
+62
+66
+Cash flow hedges:
+(a) Each item of other comprehensive income and the influence of the income tax and the process of change to profit or loss
+THE GROUP
+35 OTHER COMPREHENSIVE INCOME
+Capital reserve represents mainly: (a) the difference between the total amount of the par value of shares issued and the amount of the net assets
+transferred from Sinopec Group Company in connection with the Reorganisation; (b) share premiums derived from issuances of H shares and
+A shares by the Company and excess of cash paid by investors over their proportionate shares in share capital, the proportionate shares of
+unexercised portion of the Bond with Warrants at the expiration date, and the amount transferred from the proportionate liability component and
+the derivative component of the converted portion of the 2011 Convertible Bonds; (c) difference between consideration paid for the combination of
+entities under common control and the transactions with minority interests over the carrying amount of the net assets acquired.
+119,408
+129
+326
+2015
+56,224
+48,703
+RMB million
+Balance at 31 December 2015
+Others
+Transaction with minority interests
+Exercise of conversion of the 2011 Convertible Bonds
+Contributions to subsidiaries from minority interests
+Balance at 1 January 2015
+The movements in capital reserve of the Group are as follows:
+14,026
+Before-tax
+amount
+Net-of-tax
+RMB million
+Changes in fair value of available-for-sale financial assets recongnised during the year
+Less: Total amounts transferred to profit or loss from
+3,163
+(637)
+3,800
+Subtotal
+(1,818)
+455
+(2,273)
+other comprehensive income during the year
+1,131
+(223)
+1,354
+Less: Adjustments of amounts transferred to initial carrying amount of hedged items
+Total amounts transferred to profit or loss from
+2,476
+(405)
+2,881
+Effective portion of changes in fair value of hedging instruments recognised
+during the year
+amount
+RMB million
+Tax effect
+RMB million
+(4)
+10,467
+- Japanese Yen loans
+8,988
+54
+54
+0.0514
+1,051
+0.0539
+6.4936
+8
+163
+5,559
+8
+million
+RMB
+Exchange
+currency
+million
+RMB
+million
+Exchange
+rates
+At 31 December 2014
+Original
+Original
+currency
+million
+At 31 December 2015
+rates
+Non-current liabilities due within one year
+6.1190
+5,613
+11,277
+430
+560
+11,000
+4,868
+460
+5,849
+192
+51
+236
+6.1190
+18
+186
+6.4936
+29
+80
+50
+268
+112
+Others
+Debentures payable due within one year
+Long-term loans due within one year
+3,417
+7
+1,091
+1,048
+16,392
+20,491
+2,019
+4,432
+213
+RMB million
+At 31 December
+RMB million
+At 31 December
+2015
+The Group
+26 TAXES PAYABLE
+for the year ended 31 December 2015
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+(4,485)
+2014
+515
+6,282
+32,473
+5,243
+- US Dollar loans
+- Renminbi loans
+and fellow subsidiaries
+Long-term loans from Sinopec Group Company
+- US Dollar loans
+- Renminbi loans
+Long-term bank loans
+The Group's non-current liabilities due within one year represent:
+28 NON-CURRENT LIABILITIES DUE WITHIN ONE YEAR
+At 31 December 2015 and 2014, the Group's other payables primarily represented payables for constructions.
+At 31 December 2015 and 2014, the Group had no individually significant other payables aged over three years.
+27 OTHER PAYABLES
+Total
+Other taxes
+Mineral resources compensation fee
+Special oil income levy
+Income tax
+Consumption tax
+Value-added tax
+28,677
+11,890
+At 31 December 2015 and 2014, the Group had no significant overdue long-term loans.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+109
+The maturity analysis of the Group's long-term loans is as follows:
+Total
+and fellow subsidiaries
+Long-term loans from Sinopec Group Company
+Less: Current portion
+112
+6.1190
+18
+Between one and two years
+186
+29
+Interest rate was 1.93% per annum
+at 31 December 2015 with maturity
+in 2016
+US Dollar loans
+43,225
+24,281
+(268)
+44,350
+12,193
+6.4936
+Between two and five years
+After five years
+Total
+RMB million
+RMB million
+At 31 December
+2014
+At 31 December
+2015
+67,426
+43,145
+(192)
+44.300
+56,493
+(236)
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+Total
+Less: Current portion
+2011 Convertible Bonds (iii)
+- Corporate Bonds (ii)
+Debentures payable:
+Short-term corporate bonds (i)
+The Group
+30 DEBENTURES PAYABLE
+Long-term loans are primarily unsecured, and carried at amortised costs.
+(5,613)
+8,949
+Interest rates ranging from interest
+free to 6.15% per annum at 31
+December 2015 with maturities
+through 2021
+Long-term loans from Sinopec Group Company
+Original
+Original
+At 31 December 2014
+At 31 December 2015
+31 December 2015 with maturities
+in 2023 (Which has redeemed in
+January 2015)
+- Japanese Yen loans Interest rate at 2.60% per annum at
+Interest rates ranging from interest
+1.08% to 6.15% per annum at 31
+December 2015 with maturities
+through 2030
+- Renminbi loans
+currency
+million
+Long-term bank loans
+Interest rate and
+The Group's long-term loans represent:
+29 LONG-TERM LOANS
+for the year ended 31 December 2015
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+110
+Financial Statements (PRC)
+Financial Statements (PRC)
+final maturity
+Exchange
+rates
+RMB
+million
+currency
+million
+Long-term bank loans
+Less: Current portion
+1,103
+6.1190
+180
+461
+6.4936
+71
+Interest rates ranging from interest
+1.30% to 4.29% per annum at 31
+December 2015 with maturities
+through 2031
+- US Dollar loans
+445
+0.0514
+8,662
+0.0539
+23,001
+17,345
+RMB
+million
+rates
+Exchange
+and fellow subsidiaries
+- Renminbi loans
+Changes in fair value of available-for-sale financial assets recongnised during the year
+Less: Total amounts transferred to profit or loss from
+17
+(146)
+653
+4,375
+3,428
+7
+179
+111
+12
+8,767
+6,839
+2015
+2014
+RMB million
+RMB million
+478
+7
+(259)
+(4,611)
+509
+369
+3,191
+7
+735
+3,653
+RMB million
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+43 IMPAIRMENT LOSSES
+The Group
+Receivables
+Inventories (Note 10)
+Long-term equity investment (Note 12)
+Fixed assets (Note 13)
+Intangible assets (Note 15)
+Others
+Total
+44 GAIN FROM CHANGES IN FAIR VALUE
+The Group
+Changes in fair value of financial assets and financial liabilities at fair value through profit, net
+Fair value loss on the embedded derivative component of the convertible bonds (Note 30(iii))
+Unrealised gains from ineffective portion cash flow hedges, net
+Others
+Total
+45 INVESTMENT INCOME
+2015
+2014
+RMB million
+(32)
+29
+116
+84
+(4,151)
+2014
+2,322
+Investment income from holding/disposal of financial assets and
+liabilities at fair value through profit or loss
+392
+7
+(Losses)/gains from ineffective portion of cash flow hedge
+(344)
+1,891
+(760)
+60
+8,573
+247
+8,137
+1,175
+463
+13,417
+Others
+Total
+46 NON-OPERATING INCOME
+The Group
+2,391
+The Group
+2015
+60
+Investment income from holding/disposal of
+RMB million
+RMB million
+The Company
+2015
+RMB million
+2014
+RMB million
+Income from investment of subsidiaries accounted
+for under cost method
+25,779
+5,839
+Income from investment accounted for under equity method
+8,081
+3,630
+3,371
+1,999
+Investment income/(loss) from disposal of
+long-term equity investments
+324
+(22)
+1,010
+2,794
+available-for-sale financial assets
+Financial Statements (PRC)
+Financial Statements (PRC)
+115
+2014
+RMB million
+136,718
+6
+22,187
+18,195
+13,753
+13,684
+10,210
+4,853
+7,245
+851
+1,089
+236,343
+191,202
+The applicable tax rate of the sales taxes and surcharges are set out in Note 4.
+40 FINANCIAL EXPENSES
+The Group
+2015
+RMB million
+RMB million
+198,754
+2014
+RMB million
+Total
+Resources tax
+2015
+RMB million
+819,593
+25,692
+845,285
+609,596
+2014
+RMB million
+1,186,548
+35,775
+1,222,323
+972,685
+The income from principal operations represents revenue from sales of crude oil, natural gas, petroleum and chemical products. Operating costs
+primarily represent the products cost related to the principal operations. The Group's segmental information is set out in Note 56.
+39 SALES TAXES AND SURCHARGES
+The Group
+2015
+Consumption tax
+Special oil income levy
+City construction tax
+Education surcharge
+Other taxes
+Accretion expenses (Note 31)
+Interest expenses incurred
+Less: Capitalised interest expenses
+Exploration expenses (including dry holes)
+Other expenses
+Total
+42 EXPLORATION EXPENSES
+Exploration expenses include geological and geophysical expenses and written-off of unsuccessful dry hole costs.
+2015
+RMB million
+1,492,926
+2014
+RMB million
+2,334,399
+56,331
+57,233
+96,368
+90,097
+10,459
+10,969
+65,899
+64,062
+1,721,983
+2,556,760
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+Depreciation, depletion and amortization
+Personnel expenses
+Purchased crude oil, products and operating supplies and expenses
+The operation costs, selling and distribution expenses, general and administrative expenses and exploration expenses (including dry holes) in
+consolidated income statement classified by nature are as follows:
+Net interest expenses
+Interest income
+8,273
+11,929
+1,221
+1,719
+7,052
+10,210
+1,081
+Gain on disposal of non-current assets
+Government grants
+1,008
+(1,779)
+Net foreign exchange loss
+3,862
+179
+Total
+9,017
+9,618
+The interest rates per annum at which borrowing costs were capitalised during the year ended 31 December 2015 by the Group ranged from 2.6%
+to 5.9% (2014: 0.7% to 7.1%).
+41 CLASSIFICATION OF EXPENSES BY NATURE
+(2,978)
+Others
+Total
+47 NON-OPERATING EXPENSES
+Decrease/(increase) in operating receivables
+Decrease in operating payables
+Net cash flow from operating activities
+(b) Net change in cash:
+2015
+RMB million
+2014
+RMB million
+43,346
+48,910
+8,767
+6,839
+87,069
+82,156
+9,299
+7,941
+6,099
+5,587
+721
+Safety fund reserve
+1,622
+Decrease in inventories
+Increase in deferred tax assets
+Pursuant to the shareholders' approval at the Annual General Meeting on 9 May 2014, a final dividend of RMB 0.15 per share totaling RMB
+17,519 million of the year ended 31 December 2013 was declared.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+117
+Financial Statements (PRC)
+Financial Statements (PRC)
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+50 SUPPLEMENTAL INFORMATION TO THE CASH FLOW STATEMENT
+The Group
+(a) Reconciliation of net profit to cash flows from operating activities:
+Net profit
+Add:
+Impairment losses on assets
+Depreciation of fixed assets
+Amortisation of intangible assets and long-term deferred expenses
+Dry hole costs written off
+Net loss on disposal of non-current assets
+Fair value (gain)/loss
+Financial expenses
+Investment income
+Increase/(decrease) in deferred tax liabilities
+(735)
+4,151
+10,692
+(5,691)
+Cash balance at the end of the year
+Less: Cash at the beginning of the year
+Net increase/(decrease) of cash
+(c) The analysis of cash held by the Group is as follows:
+2015
+RMB million
+Cash at bank and on hand
+- Cash on hand
+- Demand deposits
+Cash at the end of the year
+118
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+16
+67,808
+67,824
+2014
+RMB million
+30
+9,325
+9,355
+659
+15,046
+9,355
+67,824
+9,355
+58,469
+RMB million
+8,596
+(8,525)
+(6,246)
+(1,982)
+(1,510)
+639
+(282)
+39,072
+28,540
+Pursuant to the Company's Articles of Association and a resolution passed at the Directors' meeting on 22 August 2014, the directors authorised
+to declare the interim dividends for the year ended 31 December 2014 of RMB 0.09 per share totaling RMB 10,512 million.
+191
+40,866
+(28,654)
+(69,701)
+(8,210)
+165,818
+148,347
+2015
+2014
+RMB million
+(1,093)
+The Company
+Pursuant to the shareholders' approval at the Annual General Meeting on 27 May 2015, a final dividend of RMB 0.11 per share totaling RMB
+13,318 million of the year ended 31 December 2014 was declared.
+(b) Dividends of ordinary shares declared during the year
+112
+125
+1,880
+1,572
+3,067
+3,710
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+48 INCOME TAX EXPENSE
+The Group
+Provision for income tax for the year
+Deferred taxation
+Total
+Under-provision for income tax in respect of preceding year
+2015
+2014
+RMB million
+RMB million
+13,677
+110
+18,341
+90
+985
+The Group
+Loss on disposal of non-current assets
+Fines, penalties and compensation
+Donations
+Others
+Total
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+2015
+2014
+RMB million
+RMB million
+264
+281
+5,002
+3,165
+1,679
+1.264
+6,945
+4,710
+2015
+2014
+RMB million
+RMB million
+1,903
+(1,343)
+279
+12,613
+(1,792)
+1,022
+17,571
+Reconciliation between actual income tax expense and accounting profit at applicable tax rates is as follows:
+(27)
+Tax effect of tax losses not recognised
+828
+1,595
+Write-down of deferred tax assets
+75
+114
+Adjustment for under provision for income tax in respect of preceding years
+279
+1,022
+12,613
+17,571
+Actual income tax expense
+Note:
+(i) The provision for PRC current income tax is based on a statutory income tax rate of 25% of the assessable income of the Group as determined in accordance with the
+relevant income tax rules and regulations of the PRC, except for certain entities of the Group in western regions in the PRC are taxed at preferential income tax rate of
+15% through the year 2020.
+(ii) It is mainly due to the foreign operation in the Republic of Angola ("Angola") that is taxed at 50% of the assessable income as determined in accordance with the
+relevant income tax rules and regulations of Angola.
+49 DIVIDENDS
+(a) Dividends of ordinary shares declared after the balance sheet date
+Pursuant to the Company's Articles of Association and a resolution passed at the Directors' meeting on 29 Mar 2016, the directors authorised to
+declare the final dividends during the year ended 31 December 2015 of RMB 0.06 per share totaling RMB 7,264 million.
+(235)
+Tax effect of utilisation of previously unrecognised tax losses and temporary differences
+622
+391
+2015
+2014
+RMB million
+RMB million
+Profit before taxation
+55,959
+66,481
+Expected income tax expense at a tax rate of 25%
+13,990
+Pursuant to the Company's Articles of Association and a resolution passed at the Directors' meeting on 26 August 2015, the directors authorised
+to declare the interim dividends for the year ended 31 December 2015 of RMB 0.09 per share totaling RMB 10,896 million.
+16,620
+836
+444
+Tax effect of non-taxable income
+(2,518)
+(1,097)
+Tax effect of preferential tax rate (i)
+(1,033)
+(1,722)
+Effect of difference between income taxes at foreign operations tax rate and the PRC statutory tax rate (ii)
+Tax effect of non-deductible expenses
+2,429,017
+30,582
+Statutory
+surplus reserve
+RMB million
+37 SURPLUS RESERVES
+Balance at 31 December 2015
+Utilisation for the year
+Provision for the year
+Balance at 1 January 2015
+According to relevant PRC regulations, the Group is required to transfer an amount to specific reserve for the safety production fund based on the
+turnover of certain refining and chemicals products or based on the production volume of crude oil and natural gas. The movements of specific
+reserve are as follows:
+(9,153)
+(1,169)
+(7,984)
+(703)
+(838)
+114
+(6,557)
+860
+(723)
+1,630
+3,219
+(5,589)
+(9,290)
+(2,029)
+(7,261)
+(2,333)
+(4,057)
+97
+(968)
+(9,266)
+(1,598)
+(7,668)
+(274)
+Movements in surplus reserves are as follows:
+(4,485)
+The Group
+RMB million
+4,126
+(4,005)
+612
+2,825,914
+44,273
+2,781,641
+2014
+RMB million
+2,018,883
+1,592,771
+42,471
+1,976,412
+RMB million
+The Group
+2015
+Total
+Operating costs
+Income from other operations
+Income from principal operations
+38 OPERATING INCOME AND OPERATING COSTS
+for the year ended 31 December 2015
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+(b) After the transfer to the statutory surplus reserve, a transfer to discretionary surplus reserve can be made upon the passing of a resolution at the
+shareholders' meeting.
+(a) 10% of the net profit is transferred to the statutory surplus reserve. In the event that the reserve balance reaches 50% of the registered capital,
+no transfer is needed;
+196,640
+193,552
+3,088
+Total
+RMB million
+The Articles of Association of the Company and the PRC Company Law have set out the following profit appropriation plans:
+117,000
+The Group
+Discretionary
+surplus reserves
+RMB million
+117,000
+76,552
+3,088
+79,640
+Balance at 31 December 2015
+Appropriation
+Balance at 1 January 2015
+491
+(1,225)
+137
+(24)
+114
+Financial Statements (PRC)
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015 113
+(i) The Group sold its shares of China Gas Holdings Limited in August 2014, which was accounted for as available-for-sale financial assets prior to the transaction
+and the accumulated unrealised gain in other comprehensive income of RMB 2,317 million was reclassified to the investment income at the completion of this
+transaction.
+Note:
+(9,266)
+1,406
+(10,672)
+Other comprehensive income
+(514)
+(514)
+Subtotal
+(514)
+(514)
+Translation difference in foreign currency statements
+(1,684)
+(3,042)
+(3,042)
+(3,042)
+Share of other comprehensive loss in associates and jointly controlled entities
+Subtotal
+(1,225)
+433
+(1,658)
+Subtotal
+1,738
+(579)
+2,317
+other comprehensive income during the year (i)
+513
+Financial Statements (PRC)
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+(3,042)
+35 OTHER COMPREHENSIVE INCOME (Continued)
+for the year ended 31 December 2015
+(431)
+407
+(2,059)
+428
+1,322
+RMB Million
+RMB Million
+Subtotal
+statements
+RMB Million
+RMB Million
+foreign currency
+Translation
+difference in
+Cash flow hedges
+RMB Million
+RMB Million
+The share of other
+comprehensive
+income which
+being reclassified
+to profit and loss
+in the future under
+equity method
+RMB Million
+716
+36 SPECIFIC RESERVE
+31 December 2015
+31 December 2014
+Changes in 2015
+Changes in 2014
+31 December 2013
+income
+Total other
+comprehensive
+THE GROUP (Continued)
+Minority interests
+Equity Attributable to shareholders of the company
+(b) Reconciliation of other comprehensive income
+Changes in fair
+value of
+available-for-sale
+financial assets
+2015
+The selection of critical accounting policies, the judgements and other uncertainties affecting application of those policies and the sensitivity of
+reported results to changes in conditions and assumptions are factors to be considered when reviewing the financial statements. The significant
+accounting policies are set forth in Note 3. The Group believes the following critical accounting policies involve the most significant judgements and
+estimates used in the preparation of the financial statements.
+(a) Oil and gas properties and reserves
+Engineering estimates of the Group's oil and gas reserves are inherently imprecise and represent only approximate amounts because of the
+subjective judgements involved in developing such information. There are authoritative guidelines regarding the engineering criteria that have to
+be met before estimated oil and gas reserves can be designated as "proved". Proved and proved developed reserves estimates are updated at
+least annually and take into account recent production and technical information about each field. In addition, as prices and cost levels change
+from year to year, the estimate of proved and proved developed reserves also changes. This change is considered a change in estimate for
+accounting purposes and is reflected on a prospective basis in related depreciation rates.
+The Group's financial condition and results of operations are sensitive to accounting methods, assumptions and estimates that underlie the
+preparation of the financial statements. The Group bases the assumptions and estimates on historical experience and on various other assumptions
+that it believes to be reasonable and which form the basis for making judgements about matters that are not readily apparent from other sources.
+On an on-going basis, management evaluates its estimates. Actual results may differ from those estimates as facts, circumstances and conditions
+change.
+Future dismantlement costs for oil and gas properties are estimated with reference to engineering estimates after taking into consideration
+the anticipated method of dismantlement required in accordance with industry practices in the similar geographic area, including estimation
+of economic life of oil and gas properties, technology and price level. The present values of these estimated future dismantlement costs are
+capitalised as oil and gas properties with equivalent amounts recognised as provisions for dismantlement costs.
+The accounting for the exploration and production segment's oil and gas activities is subject to accounting rules that are unique to the oil and
+gas industry. The Group has used the successful efforts method to account for oil and gas business activities. The successful efforts method
+reflects the volatility that is inherent in exploring for mineral resources in that costs of unsuccessful exploratory efforts are charged to expense.
+These costs primarily include dry hole costs, seismic costs and other exploratory costs.
+52 PRINCIPAL ACCOUNTING ESTIMATES AND JUDGEMENTS
+2014
+RMB thousand
+8,009
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+8,510
+5,735
+501
+RMB thousand
+5,225
+510
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+Despite the inherent imprecision in these engineering estimates, these estimates are used in determining depreciation expense, impairment
+expense and future dismantlement costs. Capitalised costs of proved oil and gas properties are amortised on a unit-of-production method based
+on volumes produced and reserves.
+for the year ended 31 December 2015
+(b) Impairment for assets
+The Company's principal subsidiaries have been consolidated into the Group's financial statements for the year ended 31 December 2015. The
+following list contains the particulars of subsidiaries which principally affected the results, assets and liabilities of the Group:
+(c) Depreciation
+Sinopec Catalyst Company Limited
+122
+Sinopec Yangzi Petrochemical Company Limited
+(a) Subsidiaries acquired through group restructuring:
+China Petrochemical International Company Limited
+China International United Petroleum and Chemical
+Company Limited
+Full name of enterprise
+53 PRINCIPAL SUBSIDIARIES
+for the year ended 31 December 2015
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+Financial Statements (PRC)
+Financial Statements (PRC)
+123
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+If the costs of inventories become higher than their net realisable values, an allowance for diminution in value of inventories is recognised.
+Net realisable value represents the estimated selling price in the ordinary course of business, less the estimated costs of completion and the
+estimated costs necessary to make the sale. Management bases the estimates on all available information, including the current market prices of
+the finished goods and raw materials, and historical operating costs. If the actual selling prices were to be lower or the costs of completion were
+to be higher than estimated, the actual allowance for diminution in value of inventories would be higher than estimated.
+(e) Allowance for diminution in value of inventories
+Management estimates impairment losses for bad and doubtful debts resulting from the inability of the Group's customers to make the required
+payments. Management bases the estimates on the ageing of the accounts receivable balance, customer credit-worthiness, and historical write-
+off experience. If the financial condition of the customers were to deteriorate, actual write-offs would be higher than estimated.
+(d) Allowances for doubtful accounts
+Fixed assets are depreciated on a straight-line basis over the estimated useful lives of the assets, after taking into account the estimated residual
+value. Management reviews the estimated useful lives of the assets at least annually in order to determine the amount of depreciation expense
+to be recorded during any reporting year. The useful lives are based on the Group's historical experience with similar assets and taking into
+account anticipated technological changes. The depreciation expense for future years is adjusted if there are significant changes from previous
+estimates.
+If circumstances indicate that the net book value of a long-lived asset may not be recoverable, the asset may be considered "impaired", and
+an impairment loss may be recognised in accordance with “ASBE 8 - Impairment of Assets". The carrying amounts of long-lived assets are
+reviewed periodically in order to assess whether the recoverable amounts have declined below the carrying amounts. These assets are tested for
+impairment whenever events or changes in circumstances indicate that their recorded carrying amounts may not be recoverable. When such a
+decline has occurred, the carrying amount is reduced to recoverable amount. For goodwill, the recoverable amount is estimated annually. The
+recoverable amount is the greater of the fair value less costs to sell and the present value of expected future cash flows. It is difficult to precisely
+estimate the fair value because quoted market prices for the Group's assets or cash-generating units are not readily available. In determining the
+value of expected future cash flows, expected cash flows generated by the asset or the cash-generating unit are discounted to their present value,
+which requires significant judgement relating to sales volume, selling price and amount of operating costs. The Group uses all readily available
+information in determining an amount that is a reasonable approximation of recoverable amount, including estimates based on reasonable and
+supportable assumptions and projections of sales volume, selling price and amount of operating costs.
+Retirement scheme contributions
+Total
+Sinopec Lubricant Company Limited
+Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the
+Group, directly or indirectly, including directors and supervisors of the Group. The key management personnel compensations are as follows:
+3,524
+9,050
+40
+25,476
+22,405
+2
+4,221
+17,759
+18,303
+RMB million
+2014
+2015
+At 31 December
+Other related companies
+2,825,914
+At 31 December
+RMB million
+14,935
+5
+13,211
+(5) Key management personnel emoluments
+As at and for the year ended 31 December 2015 and 2014, no individually significant impairment losses for bad and doubtful debts were
+recorded in respect of amounts due from Sinopec Group Company and fellow subsidiaries, associates and jointly controlled entities.
+Amounts due from/to Sinopec Group Company and fellow subsidiaries, associates and joint ventures, other than short-term loans and long-term
+loans, bear no interest, are unsecured and are repayable in accordance with normal commercial terms. The terms and conditions associated
+with short-term loans and long-term loans payable to Sinopec Group Company and fellow subsidiaries are set out in Note 21 and Note 29.
+Note: The long-term borrowings mainly include an interest-free loan with a maturity period of 20 years amounting to RMB 35,560 million from the Sinopec Group
+Company through the Sinopec Finance. This borrowing is a special arrangement to reduce financing costs and improve liquidity of the Company during its initial
+global offering in 2000.
+43,337
+102,773
+Long-term loans (including current portion) (Note)
+43,693
+44,536
+6,470
+8,226
+21,989
+18,616
+15
+2,687
+1,793
+20
+16,842
+Short-term employee benefits
+2,018,883
+Refining
+42,471
+External sales
+Inter-segment sales
+Corporate and others
+External sales
+Inter-segment sales
+Elimination of inter-segment sales
+Consolidated income from principal operations
+Chemicals
+Income from other operations
+Refining
+Marketing and distribution
+Chemicals
+Corporate and others
+Consolidated income from other operations
+Consolidated operating income
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+2015
+2014
+Exploration and production
+RMB million
+Inter-segment sales
+Inter-segment sales
+127
+128
+Financial Statements (PRC)
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+56 SEGMENT REPORTING (Continued)
+(1) Information of reportable segmental revenues, profits or losses, assets and liabilities
+Marketing and distribution
+External sales
+The Group's chief operating decision maker evaluates the performance and allocates resources to its operating segments on an operating income
+basis, without considering the effects of finance costs or investment income. Inter-segment transfer pricing is based on the market price or cost
+plus an appropriate margin, as specified by the Group's policy.
+Reportable information on the Group's operating segments is as follows:
+Income from principal operations
+Exploration and production
+External sales
+Inter-segment sales
+At 31 December
+2014
+External sales
+Assets and liabilities dedicated to a particular segment's operations are included in that segment's total assets and liabilities. Segment assets
+include all tangible and intangible assets, except for cash at bank and on hand, long-term equity investments, deferred tax assets and other
+unallocated assets. Segment liabilities exclude short-term loans, short-term debentures payable, non-current liabilities due within one year, long-
+term loans, debentures payable, deferred tax liabilities, other non-current liabilities and other unallocated liabilities.
+RMB million
+57,740
+71,019
+69,550
+141,544
+782,203
+1,308,837
+(1,263,234)
+(1,889,105)
+1,976,412
+2,781,641
+9,894
+587,663
+16,503
+5,317
+17,512
+12,770
+8,390
+8,284
+1,671
+1,399
+5,004
+345,454
+721,174
+436,749
+128,759
+211,094
+120,650
+175,534
+800,962
+1,092,244
+921,612
+1,267,778
+1,086,098
+3,056
+1,089,154
+1,458,390
+5,446
+1,463,836
+275,175
+356,993
+42,743
+62,208
+317,918
+419,201
+44,273
+15221
+Net loans (repaid to)/obtained from related parties
+1
+Operating lease charges for land
+Ancillary and social services
+Production related services
+Exploration and development services
+Transportation and storage
+Purchases
+Sales of goods
+Operating lease charges for buildings
+Other operating lease charges
+The Group
+2015
+(3) The principal related party transactions with Sinopec Group Company and fellow subsidiaries, associates and jointly controlled entities, which
+were carried out in the ordinary course of business, are as follows:
+51 RELATED PARTIES AND RELATED PARTY TRANSACTIONS (Continued)
+for the year ended 31 December 2015
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+Financial Statements (PRC)
+120
+Financial Statements (PRC)
+Note
+119
+Agency commission income
+(i)
+(vi)
+10,306
+10,878
+(v)
+49,399
+37,444
+(iv)
+Interest income
+1,606
+(iii)
+134,424
+92,990
+(ii)
+305,044
+2014
+RMB million
+RMB million
+211,868
+1,299
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+Note: Sinopec Finance is under common control of a parent company with the Company and is also the associate of the Group.
+Mansarovar
+Wang Yupu
+State-owned
+No. 22, Chaoyangmen North Street, Chaoyang District, Beijing
+Exploration, production, storage and transportation (including pipeline transportation), sales
+and utilisation of crude oil and natural gas; refining; wholesale and retail of gasoline, kerosene
+and diesel; production, sales, storage and transportation of petrochemical and other chemical
+products; industrial investment and investment management; exploration, construction, installation
+and maintenance of petroleum and petrochemical constructions and equipments; manufacturing
+electrical equipment; research, development, application and consulting services of information
+technology and alternative energy products; import & export of goods and technology.
+Ultimate holding company
+China Petrochemical Corporation
+10169286-X
+Registered capital
+Authorised representative
+Types of legal entity
+RMB 274,867 million
+Relationship with the Group
+Registered address
+The name of the company
+Organisation code
+(1) Related parties having the ability to exercise control over the Group
+51 RELATED PARTIES AND RELATED PARTY TRANSACTIONS
+for the year ended 31 December 2015
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+Sinopec Pipeline Storage & Transportation
+Company Limited
+Principal activities
+Sinopec Group Company is an enterprise controlled by the PRC government. Sinopec Group Company directly and indirectly holds 71.32%
+shareholding of the Company.
+(2) Related parties not having the ability to exercise control over the Group
+Related parties under common control of a parent company with the Company:
+Taihu
+BASF-YPC
+YASREF
+Jointly controlled entities of the Group:
+CIR
+Shanghai Chemical
+Zhongtian Synergetic Energy
+China Aviation Oil
+Sinopec Finance
+Associates of the Group:
+Sinopec Petroleum Storage and Reserve Limited
+Sinopec Century Bright Capital Investment Limited
+Sinopec Engineering Incorporation
+Sinopec Assets Management Corporation
+Sinopec Zhongyuan Petroleum Exploration Bureau
+Sinopec Shengli Petroleum Administration Bureau
+Sinopec Finance (Note)
+6,754
+6,753
+(vii)
+10,618
+(e) The Company has entered into a service station franchise agreement with Sinopec Group Company effective from 1 January 2000 under
+which its service stations and retail stores would exclusively sell the refined products supplied by the Group.
+(d) The Company has entered into agreements with Sinopec Group Company effective from 1 January 2000 under which the Group has been
+granted the right to use certain trademarks, patents, technology and computer software developed by Sinopec Group Company.
+(c) The Company has entered into a number of lease agreements with Sinopec Group Company to lease certain lands and buildings effective
+on 1 January 2000. The lease term is 40 or 50 years for lands and 20 years for buildings, respectively. The Company and Sinopec Group
+Company can renegotiate the rental amount every three years for land. The Company and Sinopec Group Company can renegotiate the rental
+amount for buildings every year. However such amount cannot exceed the market price as determined by an independent third party.
+(b) The Company has entered into a non-exclusive "Agreement for Provision of Cultural and Educational, Health Care and Community Services"
+with Sinopec Group Company effective from 1 January 2000 in which Sinopec Group Company has agreed to provide the Group with certain
+cultural, educational, health care and community services on the same pricing terms and termination conditions as agreed to in the above
+Mutual Provision Agreement.
+where none of the above is applicable, the price to be agreed between the parties, which shall be based on a reasonable cost incurred in
+providing such services plus a profit margin not exceeding 6%.
+•
+where there is neither a government-prescribed price nor a government-guidance price, the market price; or
+Pursuant to the Equity Transfer Agreement relating to the Transfer of 100% Equity Interest of Jingtian Co. entered into by the Company and
+Sinopec Baichuan Economic and Trading Company (Baichuan Co.) on 26 August 2015, the Company transferred 100% equity interest of
+Sinopec Beijing Jingtian Engineering and Construction Co., Ltd. (Jingtian Co.) to Baichuan Co. in December 2015, which was directly and
+wholly owned by Sinopec Group Company. The preliminary consideration of this transaction was RMB 1,869 million, which was based on
+the fair value of Jingtian Co.'s net assets as of 31 March 2015, adjusted by the subsequent changes to Jingtian Co.'s net assets between 31
+March 2015 and 31 December 2015 according to the audited financial statements of Jingtian Co. as of each date.
+where there is no government-prescribed price, the government-guidance price;
+the government-prescribed price;
+•
+(a) The Company has entered into a non-exclusive "Agreement for Mutual Provision of Products and Ancillary Services" ("Mutual Provision
+Agreement") with Sinopec Group Company effective from 1 January 2000 in which Sinopec Group Company has agreed to provide the
+Group with certain ancillary production services, construction services, information advisory services, supply services and other services and
+products. While each of Sinopec Group Company and the Company is permitted to terminate the Mutual Provision Agreement upon at least
+six months' notice, Sinopec Group Company has agreed not to terminate the agreement if the Group is unable to obtain comparable services
+from a third party. The pricing policy for these services and products provided by Sinopec Group Company to the Group is as follows:
+In connection with the Reorganisation, the Company and Sinopec Group Company entered into a number of agreements under which 1) Sinopec
+Group Company will provide goods and products and a range of ancillary, social and supporting services to the Group and 2) the Group will sell
+certain goods to Sinopec Group Company. These agreements impacted the operating results of the Group for the year ended 31 December 2015.
+The terms of these agreements are summarised as follows:
+(3) The principal related party transactions with Sinopec Group Company and fellow subsidiaries, associates and jointly controlled entities, which
+were carried out in the ordinary course of business, are as follows: (Continued)
+51 RELATED PARTIES AND RELATED PARTY TRANSACTIONS (Continued)
+for the year ended 31 December 2015
+•
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+121
+Financial Statements (PRC)
+-
+Short-term loans
+Other non-current liabilities
+Other payables
+Advances from customers
+Accounts payable
+Other non-current assets
+Prepayments and other current assets
+Accounts receivable
+Cash and cash equivalents
+RMB million
+The ultimate holding company
+At 31 December
+2015
+RMB million
+(4) Balances with Sinopec Group Company and fellow subsidiaries, associates and jointly controlled entities
+The balances with the Group's related parties at 31 December 2015 and 2014 are as follows:
+51 RELATED PARTIES AND RELATED PARTY TRANSACTIONS (Continued)
+for the year ended 31 December 2015
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+Financial Statements (PRC)
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+34
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+(x) Interest expense represents interest charges on the loans and advances obtained from Sinopec Group Company and fellow subsidiaries.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+Net deposits (placed with)/withdrawn from related parties
+Interest expense
+135
+207
+(ix)
+132
+(x)
+116
+274
+302
+(vii)
+497
+462
+(vii)
+10,531
+(viii)
+1,194
+1,421
+(ix)
+(ix) Interest income represents interest received from deposits placed with Sinopec Finance and Sinopec Century Bright Capital Investment Limited, finance companies
+controlled by Sinopec Group Company. The applicable interest rate is determined in accordance with the prevailing saving deposit rate.
+(viii) Agency commission income represents commission earned for acting as an agent in respect of sales of products and purchase of materials for certain entities
+owned by Sinopec Group Company.
+(vii) Operating lease charges represent the rental paid to Sinopec Group Company for operating leases in respect of land, buildings and equipment.
+(vi) Ancillary and social services represent expenditures for social welfare and support services such as educational facilities, media communication services, sanitation,
+accommodation, canteens, property maintenance and management services.
+(v) Production related services represent ancillary services rendered in relation to the Group's operations such as equipment repair and general maintenance,
+insurance premium, technical research, communications, firefighting, security, product quality testing and analysis, information technology, design and engineering,
+construction which includes the construction of oilfield ground facilities, refineries and chemical plants, manufacture of replacement parts and machinery,
+installation, project management and environmental protection.
+(iii) Transportation and storage represents the cost for the use of railway, road and marine transportation services, pipelines, loading, unloading and storage facilities.
+(iv) Exploration and development services comprise direct costs incurred in the exploration and development of crude oil such as geophysical, drilling, well testing and
+well measurement services.
+(ii) Purchases represent the purchase of material and utility supplies directly related to the Group's operations such as the procurement of raw and ancillary materials
+and related services, supply of water, electricity and gas.
+(i) Sales of goods represent the sale of crude oil, intermediate petrochemical products, petroleum products and ancillary materials.
+Note:
+As at 31 December 2015 and 2014, there was no guarantee given to banks by the Group in respect of banking facilities to Sinopec Group
+Company and fellow subsidiaries, associates and jointly controlled entities, except for the disclosure set out in Note 55(b). Guarantees given to
+banks by the Group in respect of banking facilities to associates and jointly controlled entities are disclosed in Note 55(b).
+Included in the transactions disclosed above, for the year ended 31 December 2015 are: a) purchases by the Group from Sinopec Group
+Company and fellow subsidiaries amounting to RMB 112,449 million (2014: RMB 138,170 million) comprising purchases of products and
+services (i.e. procurement, transportation and storage, exploration and development services and production related services) of RMB 93,421
+million (2014: RMB 118,968 million), ancillary and social services provided by Sinopec Group Company and fellow subsidiaries of RMB 6,754
+million (2014: RMB 6,753 million), operating lease charges for land and buildings paid by the Group of RMB 10,618 million and 462 million
+(2014: RMB 10,531 million and RMB 497 million), respectively and interest expenses of RMB 1,194 million (2014: RMB 1,421 million); and
+b) sales by the Group to Sinopec Group Company and fellow subsidiaries amounting to RMB 78,418 million (2014: RMB 98,620 million),
+comprising RMB 78,184 million (2014: RMB 98,479 million) for sales of goods, RMB 207 million (2014: RMB 135 million) for interest income
+and RMB 27 million (2014: RMB 6 million) for agency commission income.
+The amounts set out in the table above in respect of the year ended 31 December 2015 and 2014 represent the relevant costs and income as
+determined by the corresponding contracts with the related parties.
+(57,881)
+53,690
+(xi)
+2,319
+(14,082)
+(xi) The Group obtained or repaid loans from or to Sinopec Group Company and fellow subsidiaries.
+The segments were determined primarily because the Group manages its exploration and production, refining, marketing and distribution,
+chemicals, and corporate and others businesses separately. The reportable segments are each managed separately because they manufacture and/
+or distribute distinct products with different production processes and due to their distinct operating and gross margin characteristics.
+⋅
+(iv) Chemicals - which manufactures and sells petrochemical products, derivative petrochemical products and other chemical products to external
+customers.
+(i) Pursuant to the resolution of the Company's Meeting of Board of Directors held on 19 February 2014, the Company's business under its marketing and distribution
+segment of the Group was injected to Marketing Company, a subsidiary of the Group on 1 April 2014.
+On 12 September 2014, Marketing Company entered into the "Capital Injection Agreement relating to Marketing Company" with a number of domestic and foreign
+investors, pursuant to which the investors shall subscribe for equity interest in Marketing Company in cash upon the relevant approvals for this capital injection being
+obtained, an aggregate capital contribution of RMB 105.044 billion was made to the Marketing Company by 25 investors, representing 29.58% equity interest in the
+Marketing Company on 6 March 2015. The difference between the contributions from and the net assets acquired by investors has been credited to capital reserve
+in amount of RMB 56,224 million and to other comprehensive income in amount of RMB 446 million of the equity attributable to the shareholders of the Company,
+respectively.
+(ii) The Group consolidated the financial statements of the entity because it is exposed to, or has rights to, variable returns from its involvement with the entity and has
+the ability to affect those return through its power over the entity.
+Summarised financial information on subsidiaries with material minority interests
+Set out below are the summarised financial information which the amount before inter-company eliminations for each subsidiary that has minority
+interests that are material to the Group.
+Summarised consolidated balance sheet
+Fujian Petrochemical
+At 31
+December
+2015
+At 31
+December
+2014
+Shanghai Petrochemical
+At 31
+December
+2015
+RMB million RMB million
+Note:
+RMB million
+2015
+Sinopec Kantons
+At 31
+At 31
+December December
+2014
+SIPL
+At 31
+December
+2015
+At 31
+December
+2014
+RMB million RMB million
+RMB million
+RMB million
+Marketing Company
+At 31
+At 31
+December December
+2015
+RMB million
+2014
+Zhonghan Wuhan
+At 31
+December
+2015
+At 31
+December
+2014
+RMB million
+53 PRINCIPAL SUBSIDIARIES (Continued)
+for the year ended 31 December 2015
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+Sinopec Qingdao Petrochemical Company Limited
+(d) Subsidiaries acquired through business combination not under common control:
+Manufacturing of intermediate petrochemical
+RMB 3,986
+RMB 2,990
+75.00
+1,540
+products and petroleum products
+Manufacturing of intermediate petrochemical
+RMB 1,595
+RMB 6,822
+100.00
+products and petroleum products
+Sinopec Zhanjiang Dongxing Petrochemical
+Company Limited
+Manufacturing of intermediate petrochemical
+products and petroleum products
+RMB 4,397
+RMB 3,225
+75.00
+461
+*
+The minority interests of subsidiaries which the Group holds 100% of equity interests at the end of the year are the minority interests of their subsidiaries.
+Sinopec Qingdao Refining and Chemical
+Company Limited
+Except for Sinopec Kantons and SOIH, which are incorporated in Bermuda and Hong Kong, respectively, all of the above principal subsidiaries are
+incorporated and operate their businesses principally in the PRC.
+124
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+At 31
+(c) Subsidiaries acquired through business combination under common control:
+Sinopec Hainan Refining and
+December
+RMB million RMB million RMB million
+(1,756)
+628
+14,763
+13,029
+(53,080)
+(148,998)
+(8,499)
+(11,299)
+Non-current assets
+5,487
+4,050
+(2,975)
+19.878
+13,025
+12,622
+40,075
+47,623 240,312
+229,281
+15,815
+16,874
+Non-current liabilities
+(831)
+(996)
+(160) (1,819)
+21,636
+418
+212
+67
+Current assets
+140
+436
+8,144
+9,510
+1,732
+1,777
+20,231
+15,416
+102,948
+131,012
+1,386
+1,724
+Current liabilities
+(73)
+(224)
+(7,726)
+(12,485)
+(3,488)
+(1,149)
+(5,468)
+(2,387)
+(156,028)
+(280,010) (9,885) (13,023)
+Net current assets/(liabilities)
+2014
+(3,384)
+Chemical Company Limited
+2,561
+RMB 4,585
+100.00
+3,218
+Production and sale of catalyst products
+(v) Corporate and others - which largely comprise the trading activities of the import and export companies of the Group and research and
+development undertaken by other subsidiaries.
+RMB 1,500
+100.00
+174
+Manufacturing of intermediate petrochemical products
+and petroleum products
+RMB 13,203
+RMB 15,651
+RMB 3,000
+100.00
+Pipeline storage and transportation of crude oil
+RMB 12,000
+RMB 12,000
+100.00
+Production and sale of refined petroleum products,
+RMB 3,374
+RMB 3,374
+100.00
+46
+lubricant base oil, and petrochemical materials
+Production and sale of polyester chips
+RMB 4,000
+60
+Trading of crude oil and petrochemical products
+26
+100.00
+Sinopec Yizheng Chemical Fibre Limited
+Liability Company
+Sinopec Marketing Company Limited
+("Marketing Company"”) (i)
+Sinopec Kantons Holdings Limited ("Sinopec Kantons")
+Sinopec Shanghai Petrochemical Company Limited
+("Shanghai Petrochemical")
+Fujian Petrochemical Company Limited
+("Fujian Petrochemical") (ii)
+(b) Subsidiaries established by the Group:
+Sinopec International Petroleum
+Exploration and Production Limited ("SIPL")
+Sinopec Overseas Investment Holding Limited ("SOIH")
+Sinopec Chemical Sales Company Limited
+Sinopec Great Wall Energy & Chemical
+Company Limited
+Sinopec Beihai Refining and Chemical Limited
+Liability Company
+Actual
+investment
+Percentage
+of equity
+Principal activities
+Registered
+capital/
+paid-up capital
+million
+at 31
+December
+2015
+interest/
+voting right
+held by
+Minority
+Interests
+at 31
+December
+the Group
+2015
+million
+%
+RMB million
+Trading of petrochemical products
+RMB 1,400
+RMB 1,856
+RMB 6,491
+ethylene and downstream byproducts
+100.00
+RMB 28,403
+Marketing and distribution of petrochemical products
+Coal chemical industry investment management,
+production and sale of coal chemical products
+Import and processing of crude oil, production,
+storage and sale of petroleum products and
+RMB 1,000
+RMB 20,125
+RMB 1,165
+RMB 20,135
+100.00
+47
+100.00
+340
+RMB 5,294
+RMB 5,240
+98.98
+32
+63
+Manufacturing of intermediate petrochemical
+RMB 5,000
+RMB 4,250
+85.00
+619
+products and petroleum products
+Sinopec-SK(Wuhan) Petrochemical Company Limited
+("Zhonghan Wuhan")
+Production, sale, research and development of
+RMB 6,270
+RMB 4,076
+65.00
+petrochemical products
+100.00
+USD 300
+USD 300
+RMB 20,000
+70.42
+59,504
+HKD 248
+HKD 3,952
+60.34
+3,147
+RMB 10,800
+RMB 5,820
+50.56
+10,106
+Marketing and distribution of refined
+petroleum products
+Trading of crude oil and petroleum products
+Manufacturing of synthetic fibres, resin and plastics,
+intermediate petrochemical products and
+petroleum products
+Manufacturing of plastics, intermediate petrochemical
+products and petroleum products
+RMB 5,745
+RMB 2,873
+50.00
+2,362
+Investment in exploration, production and sale of
+petroleum and natural gas
+RMB 8,000
+RMB 8,000
+100.00
+16,187
+Investment holding
+and polyester fibres
+(3,386)
+RMB 1,500
+Net non-current assets
+350,022
+363,974
+At 31 December 2015 and 2014, the capital commitments of the Group are as follows:
+At 31 December
+2015
+RMB million
+At 31 December
+2014
+RMB million
+Authorised and contracted for (i)
+Authorised but not contracted for
+113,017
+47,043
+138,795
+102,386
+Total
+297,425
+160,060
+These capital commitments relate to oil and gas exploration and development, refining and petrochemical production capacity expansion projects,
+the construction of service stations and oil depots and investment commitments.
+Note:
+(i) The investment commitments of the Group is RMB 4,089 million (2014: RMB 4,030 million).
+Commitments to joint ventures
+Pursuant to certain of the joint venture agreements entered into by the Group, the Group is obliged to purchase products from the joint ventures
+based on market prices.
+Exploration and production licenses
+Exploration licenses for exploration activities are registered with the Ministry of Land and Resources. The maximum term of the Group's exploration
+licenses is 7 years, and may be renewed twice within 30 days prior to expiration of the original term with each renewal being for a two-year term.
+The Group is obligated to make progressive annual minimum exploration investment relating to the exploration blocks in respect of which the license
+is issued. The Ministry of Land and Resources also issues production licenses to the Group on the basis of the reserve reports approved by relevant
+authorities. The maximum term of a full production license is 30 years unless a special dispensation is given by the State Council. The maximum
+term of the production licenses issued to the Group is 80 years as a special dispensation was given to the Group by the State Council. The Group's
+production license is renewable upon application by the Group 30 days prior to expiration.
+The Group is required to make payments of exploration license fees and production right usage fees to the Ministry of Land and Resources annually
+and recognised in profit and loss. Payments incurred were approximately RMB 372 million for the year ended 31 December 2015 (2014: RMB 408
+million).
+Estimated future annual payments of the Group are as follows:
+At 31 December
+2015
+At 31 December
+2014
+241,181
+284,300
+13,063
+12,430
+for the year ended 31 December 2015
+54 COMMITMENTS
+Operating lease commitments
+The Group lease land and buildings, service stations and other equipment through non-cancellable operating leases. These operating leases do not
+contain provisions for contingent lease rentals. None of the rental agreements contains escalation provisions that may require higher future rental
+payments.
+At 31 December 2015 and 2014, the future minimum lease payments of the Group under operating leases are as follows:
+Within one year
+Between one and two years
+Between two and three years
+Between three and four years
+Between four and five years
+After five years
+Total
+Capital commitments
+At 31 December
+2015
+At 31 December
+2014
+RMB million
+RMB million
+13,737
+13,909
+13,265
+13,480
+13,199
+13,113
+13,091
+12,984
+RMB million
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+RMB million
+Between one and two years
+2014
+RMB million
+RMB million
+703
+168
+Financial Statements (PRC)
+6,010
+6,713
+5,552
+5,720
+The Group monitors the conditions that are subject to the guarantees to identify whether it is probable that a loss has occurred, and recognises
+any such losses under guarantees when those losses are estimable. At 31 December 2015 and 2014, it was not probable that the Group will be
+required to make payments under the guarantees. Thus no liabilities have been accrued for a loss related to the Group's obligation under these
+guarantee arrangements.
+2015
+Environmental contingencies
+Legal contingencies
+The Group is a defendant in certain lawsuits as well as the named party in other proceedings arising in the ordinary course of business.
+Management has assessed the likelihood of an unfavourable outcome of such contingencies, lawsuits or other proceedings and believes that any
+resulting liabilities will not have a material adverse effect on the financial position, operating results or cash flows of the Group.
+56 SEGMENT REPORTING
+Segment information is presented in respect of the Group's operating segments. The format is based on the Group's management and internal
+reporting structure.
+In a manner consistent with the way in which information is reported internally to the Group's chief operating decision maker for the purposes of
+resource allocation and performance assessment, the Group has identified the following five reportable segments. No operating segments have been
+aggregated to form the following reportable segments.
+(i) Exploration and production
+-
+which explores and develops oil fields, produces crude oil and natural gas and sells such products to the refining
+segment of the Group and external customers.
+(34,320)
+(ii) Refining - which processes and purifies crude oil, which is sourced from the exploration and production segment of the Group and external
+suppliers, and manufactures and sells petroleum products to the chemicals and marketing and distribution segments of the Group and external
+customers.
+(iii) Marketing and distribution - which owns and operates oil depots and service stations in the PRC, and distributes and sells refined petroleum
+products (mainly gasoline and diesel) in the PRC through wholesale and retail sales networks.
+Under existing legislation, management believes that there are no probable liabilities that will have a material adverse effect on the financial
+position or operating results of the Group. The PRC government, however, has moved, and may move further towards more rigorous enforcement
+of applicable laws, and towards the adoption of more stringent environmental standards. Environmental liabilities are subject to considerable
+uncertainties which affect the Group's ability to estimate the ultimate cost of remediation efforts. These uncertainties include (i) the exact nature and
+extent of the contamination at various sites including, but not limited to refineries, oil fields, service stations, terminals and land development areas,
+whether operating, closed or sold, (ii) the extent of required cleanup efforts, (iii) varying costs of alternative remediation strategies, (iv) changes
+in environmental remediation requirements, and (v) the identification of new remediation sites. The amount of such future cost is indeterminable
+due to such factors as the unknown magnitude of possible contamination and the unknown timing and extent of the corrective actions that may be
+required. Accordingly, the outcome of environmental liabilities under proposed or future environmental legislation cannot reasonably be estimated at
+present, and could be material. The Group paid normal routine pollutant discharge fees of approximately RMB 5,813 million for the year ended 31
+December 2015 (2014: RMB 5,352 million).
+At 31 December
+At 31 December
+(b) At 31 December 2015 and 2014, guarantees by the Group in respect of facilities granted to the parties below are as follows:
+Between two and three years
+Between three and four years
+283
+312
+125
+160
+32
+32
+22
+22
+Between four and five years
+After five years
+21
+19
+834
+811
+Total
+1,317
+1,356
+The implementation of commitments in previous year and the Group's commitments did not have material discrepancy.
+126
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+55 CONTINGENT LIABILITIES
+(a) The Company has been advised by its PRC lawyers that, except for liabilities constituting or arising out of or relating to the business assumed
+by the Company in the Reorganisation, no other liabilities were assumed by the Company, and the Company is not jointly and severally liable for
+other debts and obligations incurred by Sinopec Group Company prior to the Reorganisation.
+Within one year
+Financial Statements (PRC)
+Jointly controlled entities
+Others
+Total
+125
+2015
+2014
+Zhonghan Wuhan
+2015
+2014
+RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million
+RMB million RMB million RMB million RMB million
+Turnover
+5,532
+7,322
+80,803 102,183
+Marketing Company
+1,642
+1,456
+(745)
+3,282
+(700)
+Total comprehensive income/(loss)
+1,456
+(750)
+3,282
+(700)
+Comprehensive income/(loss)
+g8
+Profit/(loss) for the year
+16,337
+2014
+2014
+3,054
+19,718
+4,656
+Financial Statements (PRC)
+19,817
+9,641
+9,236
+5,755
+(35,877)
+11,746
+(1,628)
+238,684
+2015
+227,825
+16,874
+Summarised consolidated statement of comprehensive income and cash flow
+Year ended 31 December
+Fujian Petrochemical Shanghai Petrochemical
+Sinopec Kantons
+SIPL
+2015
+2014
+2015
+2014
+2015
+15,815
+6,557
+(1,456)
+1,103,934 1,472,232
+7,755
+930
+30
+608
+48
+Dividends paid to minority interests
+Net cash (used in)/generated from
+operating activities
+10
+271
+40
+39
+7,356
+(179)
+197
+5,143
+4,040
+1,185
+88
+4,059
+5,383
+33,196
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+1,467
+4,223
+9,038
+44,337
+18
+(1,218)
+880
+120
+825
+247
+805
+(222)
+3,046
+22,914
+1,738
+137
+14,077
+302
+622
+(4,257)
+23,684
+24,391
+(338)
+1,641
+(375)
+(106)
+28
+728
+18,365
+attributable to minority interests
+137
+22,934
+1,738
+Equity shareholders of the Company
+Minority interests
+134
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+2015
+2014
+RMB million
+RMB million
+721
+112
+(5,002)
+1,622
+125
+(3,165)
+(943)
+(4,680)
+(3,721)
+419
+(4,781)
+(5,679)
+1,060
+(4,259)
+1,420
+331
+58 EXTRAORDINARY GAINS AND LOSSES
+Total
+The fair values of the Group's financial instruments carried at other than fair value (other than long-term debts and unquoted security
+investments) approximate their carrying amounts due to the short-term maturity of these instruments. The fair values of long-term debts
+are estimated by discounting future cash flows using current market interest rates offered to the Group for debt with substantially the same
+characteristics and maturities ranging 1.08% to 4.90% (2014: 0.33% to 6.15%). The following table presents the carrying amount and fair value
+of the Group's long-term debts other than loans from Sinopec Group Company and fellow subsidiaries at 31 December 2015 and 2014:
+At 31 December
+2015
+Carrying amount
+Fair value
+(3,306)
+RMB million
+105,927
+103,482
+At 31 December
+2014
+RMB million
+115,767
+112,362
+Attributable to:
+The Group has not developed an internal valuation model necessary to make the estimate of the fair value of loans from Sinopec Group Company
+and fellow subsidiaries as it is not considered practicable to estimate their fair value because the cost of obtaining discount and borrowing rates
+for comparable borrowings would be excessive based on the Reorganisation of the Group, its existing capital structure and the terms of the
+borrowings.
+Except for the above items, the financial assets and liabilities of the Group are carried at amounts not materially different from their fair values
+at 31 December 2015 and 2014.
+Pursuant to "Explanatory Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public-Extraordinary Gain
+and Loss" (2008), the extraordinary gains and losses of the Group are as follows:
+Extraordinary (gains)/losses for the year:
+Net loss on disposal of non-current assets
+Donations
+Government grants
+Gain on holding and disposal of various investments
+Other non-operating loss, net
+Tax effect
+Other unquoted equity investments are individually and in the aggregate not material to the Group's financial position or results of operations.
+There are no listed market prices for such interests in the PRC and, accordingly, a reasonable estimate of fair value could not be made without
+incurring excessive costs. The Group intends to hold these unquoted equity investments for long term purpose.
+(4,192)
+Net profit attributable to equity shareholders of the Company (diluted) (RMB million)
+Weighted average number of outstanding ordinary shares of the Company (diluted) (million)
+Diluted earnings per share (RMB/Share)
+(67)
+117,242
+0.406
+The calculation of the weighted average number of ordinary shares (diluted) is as follows:
+The weighted average number of the ordinary shares issued at 31 December (million)
+Effect of the convertible bonds (million)
+Weighted average number of the ordinary shares issued at 31 December (diluted) (million)
+2015
+120,853
+2014
+116,822
+420
+120,853
+117,242
+60 RETURN ON NET ASSETS AND EARNINGS PER SHARE
+In accordance with "Regulation on the Preparation of Information Disclosures of Companies Issuing Public Shares No.9 - Calculation and Disclosure
+of the Return on Net Assets and Earnings Per Share" (2010 revised) issued by the CSRC and relevant accounting standards, the Group's return on
+net assets and earnings per share are calculated as follows:
+Weighted
+average
+return on
+Diluted
+earnings
+2015
+2014
+(ii) Fair values of financial instruments carried at other than fair value
+net assets
+(%)
+47,564
+(415)
+2014
+Diluted earnings per share is calculated by the net profit attributable to equity shareholders of the Company (diluted) and the weighted average
+number of ordinary shares of the Company (diluted):
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+59 BASIC AND DILUTED EARNINGS PER SHARE
+(i) Basic earnings per share
+Basic earnings per share is calculated by the net profit attributable to equity shareholders of the Company and the weighted average number of
+outstanding ordinary shares of the Company:
+Net profit attributable of equity shareholders of the Company (RMB million)
+Weighted average number of outstanding ordinary shares of the Company (million)
+Basic earnings per share (RMB/Share)
+The calculation of the weighted average number of ordinary shares is as follows:
+2015
+32,207
+120,853
+0.266
+2014
+47,430
+116,822
+0.406
+Weighted average number of outstanding ordinary shares of the Company
+Conversion of the 2011 Convertible Bonds (million)
+Weighted average number of outstanding ordinary shares of the Company at 31 December (million)
+2015
+118,280
+2,573
+120,853
+2014
+116,565
+257
+116,822
+(ii) Diluted earnings per share
+2015
+32,205
+120,853
+0.266
+During the years ended 31 December 2015 and 2014, there were no transfers between instruments in Level 1 and Level 2.
+4,496
+18,990
+•
+Level 1 (highest level): fair values measured using quoted prices (unadjusted) in active markets for identical financial instruments.
+Level 2: fair values measured using quoted prices in active markets for similar financial instruments, or using valuation techniques in which
+all significant inputs are directly or indirectly based on observable market data.
+Level 3 (lowest level): fair values measured using valuation techniques in which any significant input is not based on observable market data.
+At 31 December 2015
+The Group
+Level 1
+RMB million
+Level 2
+RMB million
+.
+Level 3
+RMB million
+Assets
+Available-for-sale financial assets:
+- Listed
+Derivative financial instruments:
+- Derivative financial assets
+261
+4,235
+3,640
+3,640
+Total
+RMB million
+261
+•
+(i) Financial instruments carried at fair value
+295
+Basic
+earnings
+per share
+per share
+(RMB/Share) (RMB/Share)
+16
+Japanese Yen
+17
+Other than the amounts as disclosed above, the amounts of other financial assets and liabilities of the Group are substantially denominated in
+the functional currency of respective entity of the Group.
+132
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+The following table presents the carrying value of financial instruments measured at fair value at the balance sheet date across the three levels
+of the fair value hierarchy. With the fair value of each financial instrument categorised in its entirely based on the lowest level of input that is
+significant to that fair value measurement. The levels are defined as follows:
+for the year ended 31 December 2015
+Market risk (Continued)
+(b) Interest rate risk
+The Group's interest rate risk exposure arises primarily from its short-term and long-term loans. Loans carrying interest at variable interest rates
+and at fixed interest rates expose the Group to cash flow interest rate risk and fair value interest rate risk respectively. The interest rates and
+terms of repayment of short-term and long-term loans of the Group are disclosed in Note 21 and Note 29, respectively.
+At 31 December 2015 it is estimated that a general increase/decrease of 100 basis points in variable interest rates, with all other variables
+held constant, would decrease/increase the Group's net profit for the year by approximately RMB 91 million (2014: RMB 1,199 million). This
+sensitivity analysis has been determined assuming that the change in interest rates had occurred at the balance sheet date and the change was
+applied to the Group's loans outstanding at that date with exposure to cash flow interest rate risk. The analysis is performed on the same basis
+for 2014.
+(c) Commodity price risk
+The Group engages in oil and gas operations and is exposed to commodity price risk related to price volatility of crude oil, refined oil products
+and chemical products. The fluctuations in prices of crude oil, refined oil products and chemical products could have significant impact on the
+Group. The Group uses derivative financial instruments, including commodity futures and swaps, to manage a portion of such risk.
+At 31 December 2015, the Group had certain commodity contracts of crude oil, refined oil products and chemical products designated as
+qualified cash flow hedges and economic hedges. At 31 December 2015, the net fair value of such derivative hedging financial instruments is
+derivative financial assets of RMB 7,875 million (2014: RMB 12,622 million) recognised in other receivables and derivative financial liabilities of
+RMB 2,750 million (2014: RMB 18,990 million) recognised in other payables.
+At 31 December 2015, it is estimated that a general increase/decrease of USD 10 per barrel in basic price of derivative financial instruments,
+with all other variables held constant, would impact the fair value of derivative financial instruments which would decrease/increase the Group's
+profit for the year by approximately RMB 1,951 million (2014: decrease/increase RMB 1,167 million), and decrease/increase the Group's other
+comprehensive income by approximately RMB 3,052 million (2014: increase/decrease RMB 2,206 million). This sensitivity analysis has been
+determined assuming that the change in prices had occurred at the balance sheet date and the change was applied to the Group's derivative
+financial instruments at that date with exposure to commodity price risk. The analysis is performed on the same basis for 2014.
+Fair values
+57 FINANCIAL INSTRUMENTS (Continued)
+7,875
+8,136
+Liabilities
+Derivative financial instruments:
+- Embedded derivative component of the Convertible bonds
+- Other derivative financial liabilities
+Level 1
+RMB million
+Level 2
+RMB million
+Level 3
+RMB million
+Total
+RMB million
+183
+Liabilities
+183
+3,068
+9,737
+9,737
+-12,622
+12,805
+1,920
+1,920
+3,288
+17,070
+20,358
+3,288
+2,885
+- Derivative financial assets
+Derivative financial instruments:
+- Listed
+Derivative financial instruments:
+- Other derivative financial liabilities
+305
+2,445
+2,750
+305
+2,445
+2,750
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+133
+Financial Statements (PRC)
+Financial Statements (PRC)
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+57 FINANCIAL INSTRUMENTS (Continued)
+Fair values (Continued)
+(i) Financial instruments carried at fair value (Continued)
+At 31 December 2014
+The Group
+Assets
+Available-for-sale financial assets:
+22,278
+Diluted
+earnings
+19, 20
+(%)
+(12,613)
+(17,571)
+43,664
+47,933
+32,438
+46,466
+11,226
+1,467
+43,664
+10
+47,933
+0.268
+0.398
+0.268
+0.397
+The notes on pages 144 to 192 form part of these consolidated financial statements. Details of dividends payable to owners of the Company
+attributable to the profit for the year are set out in Note 13.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+137
+Financial Statements (International)
+Financial Statements (International)
+15
+138
+Diluted
+Profit for the year
+28(iii)
+Net finance costs
+(259)
+(3,862)
+(9,276)
+(4,611)
+(179)
+(14,229)
+Investment income
+444
+2,616
+Earnings per share:
+Basic
+Share of profits less losses from associates and joint ventures
+3,630
+Profit before taxation
+56,277
+65,504
+Tax expense
+Profit for the year
+Attributable to:
+Owners of the Company
+Non-controlling interests
+8,081
+CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
+for the year ended 31 December 2015
+(Amounts in million)
+Profit for the year
+3,163
+62
+(4,485)
+(1,225)
+(5,356)
+(3,042)
+2,268
+(514)
+137
+(9,266)
+14
+137
+43,801
+38,667
+31,715
+38,798
+12,086
+(131)
+43,801
+38,667
+Euro
+(9,266)
+47,933
+43,664
+RMB
+Other comprehensive income:
+Items that may be reclassified subsequently to profit or loss
+(net of tax and after reclassification adjustments):
+Cash flow hedges
+Available-for-sale securities
+Share of other comprehensive loss of associates and joint ventures
+Foreign currency translation differences
+Total items that may be reclassified subsequently to profit or loss
+Total other comprehensive income/(loss)
+Total comprehensive income for the year
+Attributable to:
+Owners of the Company
+Non-controlling interests
+Total comprehensive income for the year
+The notes on pages 144 to 192 form part of these consolidated financial statements.
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+Note
+Year ended 31 December
+2015
+2014
+RMB
+Loss on embedded derivative component of the convertible bonds
+Foreign currency exchange losses, net
+1,779
+2,978
+Interest income
+羅兵咸永道
+We have audited the consolidated financial statements of China Petroleum & Chemical Corporation (the "Company") and its subsidiaries set out on
+pages 137 to 192, which comprise the consolidated balance sheet as at 31 December 2015, and the consolidated income statement, the consolidated
+statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then
+ended, and a summary of significant accounting policies and other explanatory information.
+DIRECTORS' RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL STATEMENTS
+The directors of the Company are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with
+International Financial Reporting Standards as issued by the International Accounting Standard Board and the disclosure requirements of the Hong
+Kong Companies Ordinance, and for such internal control as the directors determine is necessary to enable the preparation of consolidated 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 these consolidated financial statements based on our audit and to report our opinion solely to you, as a
+body, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.
+We conducted our audit in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants.
+Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the
+consolidated financial statements are free from material misstatement.
+An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The
+procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial
+statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation
+of consolidated financial statements that give a true and fair view 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 entity's internal control. An audit also includes evaluating the appropriateness
+of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the
+consolidated financial statements.
+We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
+To the shareholders of China Petroleum & Chemical Corporation
+(incorporated in People's Republic of China with limited liability)
+OPINION
+PricewaterhouseCoopers
+Certified Public Accountants
+Hong Kong, 29 March 2016
+PricewaterhouseCoopers, 22/F, Prince's Building, Central, Hong Kong
+T: +852 2289 8888, F: +852 2810 9888, www.pwchk.com
+136
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+(B) FINANCIAL STATEMENTS PREPARED UNDER INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS")
+CONSOLIDATED INCOME STATEMENT
+for the year ended 31 December 2015
+(Amounts in million, except per share data)
+In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Company and its subsidiaries as at
+31 December 2015, and of their financial performance and cash flows for the year then ended in accordance with International Financial Reporting
+Standards as issued by the International Accounting Standard Board and have been properly prepared in compliance with the disclosure requirements
+of the Hong Kong Companies Ordinance.
+Independent Auditor's Report
+pwc
+REPORT OF THE INTERNATIONAL AUDITOR
+Basic
+earnings
+per share
+(RMB/Share)
+per share
+(RMB/Share)
+5.04
+0.266
+0.266
+8.14
+0.406
+0.406
+Net profit attributable to the Company's
+ordinary equity shareholders
+Net profit deducted extraordinary gains and
+losses attributable to the Company's
+ordinary equity shareholders
+4.52
+0.239
+0.239
+7.42
+0.370
+0.370
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+135
+Financial Statements (PRC)
+Financial Statements (International)
+Note
+Weighted
+average
+return on
+net assets
+Year ended 31 December
+2015
+2014
+RMB
+Other operating expense, net
+Total operating expenses
+819
+6
+(56,331)
+(57,233)
+(236,343)
+(191,202)
+(98)
+7
+(153)
+(2,752,427)
+Operating profit
+Finance costs
+57,028
+73,487
+Interest expense
+9
+(8,133)
+(11,218)
+(1,961,855)
+Taxes other than income tax
+Personnel expenses
+(10,969)
+Turnover and other operating revenues
+Turnover
+3
+Other operating revenues
+4
+1,976,412
+42,471
+2,018,883
+2,781,641
+44,273
+2,825,914
+Operating expenses
+Purchased crude oil, products and operating supplies and expenses
+(1,492,926)
+(2,334,399)
+Selling, general and administrative expenses
+5
+(69,330)
+(68,374)
+Depreciation, depletion and amortisation
+(96,368)
+(90,097)
+Exploration expenses, including dry holes.
+(10,459)
+RMB
+1,923
+Debentures payable
+US Dollars
+452,404
+Short-term loans
+74,729
+166,688
+Non-current liabilities due within one year
+11,277
+11,890
+Long-term loans
+56,493
+404,935
+67,426
+83,253
+83,506
+Deferred tax liabilities.
+8,259
+7,820
+Other non-current liabilities
+13,673
+11,549
+Other unallocated liabilities
+Debentures payable
+Total liabilities
+Total segment liabilities
+104,193
+1,254,794
+1,336,942
+68,557
+10,100
+82,970
+80,593
+7,469
+29,339
+1,443,129
+6,979
+16,754
+138,928
+1,451,368
+100,548
+58,578
+67,328
+118,476
+118,161
+Chemicals
+26,963
+27,439
+Corporate and others
+96,725
+4,887
+657,506
+2,990
+804,273
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+2015
+2014
+RMB million
+RMB million
+54,710
+80,196
+15,132
+27,957
+22,115
+Corporate and others
+26,989
+15,850
+2,821
+3,648
+112,249
+154,640
+52,155
+48,902
+16,557
+15,015
+17,471
+Chemicals
+Marketing and distribution
+Exploration and production
+Refining
+129
+Financial Statements (PRC)
+Financial Statements (PRC)
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+56 SEGMENT REPORTING (Continued)
+(1) Information of reportable segmental revenues, profits or losses, assets and liabilities (Continued)
+Segment capital expenditure is the total cost incurred during the year to acquire segment assets that are expected to be used for more than one
+year.
+Capital expenditure
+Exploration and production
+Refining
+Marketing and distribution
+Chemicals
+Corporate and others
+Depreciation, depletion and amortisation
+Exploration and production
+Refining
+Marketing and distribution
+Chemicals
+Corporate and others
+Impairment losses on long-lived assets
+147,015
+108,921
+162,685
+150,577
+Add: Non-operating income
+Less: Non-operating expenses
+Profit before taxation
+Assets
+Segment assets
+Exploration and production
+Refining
+Marketing and distribution
+Chemicals
+Corporate and others
+Total segment assets
+Operating profit
+Cash at bank and on hand
+Deferred tax assets
+Other unallocated assets
+Total assets
+Liabilities
+Segment liabilities
+Exploration and production
+Refining
+Marketing and distribution
+2015
+RMB million
+Long-term equity investments
+Gain/(loss) from changes in fair value
+Financial expenses
+Total segment investment income
+288
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+56 SEGMENT REPORTING (Continued)
+(1) Information of reportable segmental revenues, profits or losses, assets and liabilities (Continued)
+Operating profit/(loss)
+By segment
+Exploration and production
+Refining
+Marketing and distribution
+Chemicals
+Corporate and others
+Elimination
+Total segment operating profit
+Investment income/(loss)
+Exploration and production
+Refining
+Marketing and distribution
+Chemicals
+Corporate and others
+Elimination
+2014
+RMB million
+14,075
+(18,511)
+19,423
+(9,618)
+735
+(4.151)
+52,081
+65,481
+6,945
+4,710
+3,067
+3,710
+(9,017)
+55,959
+At 31 December
+2015
+RMB million
+At 31 December
+2014
+RMB million
+447,307
+453,060
+297,884
+283,416
+276,298
+66,481
+8,137
+8,573
+(822)
+(1,982)
+27,299
+29,753
+19,691
+(2,164)
+(678)
+(2,982)
+4,566
+2,179
+51,790
+71,113
+708
+1,118
+754
+(854)
+1,910
+1,292
+3,081
+811
+2,942
+5,770
+46,309
+12,491
+264,573
+12,130
+Other payables and employee benefits payable
+Total
+At 31 December 2014
+More than
+More than
+one year
+but less than
+two years
+RMB million
+two years
+but less than
+More than
+Accounts payable
+five years
+RMB million
+RMB million
+166,688
+167,488
+167,488
+11,890
+11,949
+11,949
+67,426
+77,483
+five years
+1,725
+Bills payable
+Within one
+year or on
+demand
+RMB million
+130,446
+87,502
+342,736
+41,640
+50,432
+59,678
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+131
+Financial Statements (PRC)
+Financial Statements (PRC)
+Debentures payable
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+57 FINANCIAL INSTRUMENTS (Continued)
+Liquidity risk (Continued)
+Short-term loans
+Non-current liabilities due within one year
+Long-term loans
+Carrying
+amount
+RMB million
+Total
+contractual
+undiscounted
+cash flow
+RMB million
+for the year ended 31 December 2015
+10,240
+15,226
+50,292
+Included in short-term and long-term debts denominated are the following amounts denominated in a currency other than the functional currency
+of the entity to which they relate:
+The Group
+Gross exposure arising from loans and borrowings
+US Dollars
+Euro
+Japanese Yen
+Hong Kong Dollars
+At 31 December
+2015
+million
+HKD 6
+Currency risk arises on financial instruments that are denominated in a currency other than the functional currency in which they are measured.
+The Group's currency risk exposure primarily relates to short-term and long-term debts denominated in US Dollars, Euro, Japanese Yen and
+Hong Kong Dollars, and the Group enters into foreign exchange contracts to manage currency risk exposure.
+At 31 December
+2014
+million
+A 5 percent strengthening/weakening of Renminbi against the following currencies at 31 December 2015 and 2014 would have increased/
+decreased net profit for the year of the Group by the amounts shown below. This analysis has been determined assuming that the change in
+foreign exchange rates had occurred at the balance sheet date and had been applied to the foreign currency balances to which the Group has
+significant exposure as stated above, and that all other variables, in particular interest rates, remain constant. The analysis is performed on the
+same basis for 2014.
+The Group
+At 31 December
+At 31 December
+2015
+2014
+million
+11,996
+million
+USD 8,382
+EUR 57
+JPY 8,662
+HKD 6
+Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates. The objective of market risk management is
+to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.
+(a) Currency risk
+Market risk
+Management believes that the Group's current cash on hand, expected cash flows from operations and available standby credit facilities from
+financial institutions will be sufficient to meet the Group's working capital requirements and repay its short-term debts and obligations when they
+become due.
+83,506
+96,474
+2,865
+7,472
+54,629
+31,508
+4,577
+4,577
+4,577
+198,366
+198,366
+198,366
+104,141
+104,141
+104,141
+636,594
+660,478
+491,111
+17,712
+69,855
+81,800
+130,446
+87,502
+494,486
+477,266
+USD 1,181
+EUR 1,108
+87,502
+RMB million
+1,579,364
+439,519
+2,018,883
+At 31 December
+2015
+RMB million
+1,027,070
+56,081
+1,083,151
+2,062,775
+763,139
+2,825,914
+At 31 December
+2014
+2014
+1,003,521
+64,589
+1,068,110
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+57 FINANCIAL INSTRUMENTS
+Overview
+Financial assets of the Group include cash at bank, equity investments other than long-term equity investment, accounts receivable, bills receivable,
+available-for-sale financial assets, derivative financial instruments and other receivables. Financial liabilities of the Group include short-term and long-
+term loans, accounts payable, bills payable, debentures payable, employee benefits payable, derivative financial instruments and other payables.
+The Group has exposure to the following risks from its uses of financial instruments:
+credit risk;
+RMB million
+2015
+RMB million
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+130
+1,559
+Total
+1,585
+96,368
+90,097
+4,864
+2,436
+9
+19
+40
+142
+1,106
+112
+8
+5,146
+3,619
+(2) Geographical information
+The following tables set out information about the geographical information of the Group's external sales and the Group's non-current assets,
+excluding financial instruments and deferred tax assets. In presenting information on the basis of geographical segments, segment revenue is
+based on the geographical location of customers, and segment assets are based on the geographical location of the assets.
+External sales
+Mainland China
+Others
+Non-current assets
+Mainland China
+Others
+liquidity risk;
+market risk;
+29
+The Group's risk management policies are established to identify and analyse the risks faced by the Group, and set appropriate risk limits and
+controls to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market
+conditions and the Group's activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and
+constructive control environment in which all employees understand their roles and obligations. Internal audit department undertakes both regular
+and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Group's audit committee.
+30,000
+30,486
+30,486
+Long-term loans
+56,493
+58,156
+703
+83,253
+97,611
+Short-term debentures payable
+3,314
+10,930
+39,502
+37,157
+22,521
+Bills payable
+3,566
+3,566
+Other payables and employee benefits payable
+Accounts payable
+The Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework, and developing
+and monitoring the Group's risk management policies.
+130,446
+9,366
+32,274
+11,405
+3,566
+11,277
+11,405
+Liquidity risk
+The carrying amounts of cash at bank, trade accounts and bills receivables, derivative financial instruments and other receivables, represent the
+Group's maximum exposure to credit risk in relation to financial assets.
+At 31 December 2015, the Group has standby credit facilities with several PRC financial institutions which provide the Group to borrow up to RMB
+297,997 million (2014: RMB 302,570 million) on an unsecured basis, at a weighted average interest rate of 2.50% (2014: 3.51%). At 31 December
+2015, the Group's outstanding borrowings under these facilities were RMB 32,991 million (2014: RMB 78,983 million) and were included in loans.
+The following table sets out the remaining contractual maturities at the balance sheet date of the Group's financial liabilities, which are based on
+contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on prevailing rates current
+at the balance sheet date) and the earliest date the Group would be required to repay:
+Carrying
+amount
+Total
+contractual
+undiscounted
+Credit risk
+RMB million
+cash flow
+RMB million
+Within one
+year or on
+demand
+RMB million
+Liquidity risk is the risk that the Group encounters short fall of capital when meeting its obligation of financial liabilities. The Group's approach to
+managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal
+and stressed capital conditions, without incurring unacceptable losses or risking damage to the Group's reputation. The Group prepares monthly
+cash flow budget to ensure that they will always have sufficient liquidity to meet its financial obligation as they fall due. The Group arranges and
+negotiates financing with financial institutions and maintains a certain level of standby credit facilities to reduce the liquidity risk.
+75,314
+Non-current liabilities due within one year
+At 31 December 2015
+More than
+one year
+but less than
+two years
+RMB million
+75,314
+74,729
+Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations,
+and arises principally from the Group's deposits placed with financial institutions and receivables from customers. To limit exposure to credit risk
+relating to deposits, the Group primarily places cash deposits only with large financial institution in the PRC with acceptable credit ratings. The
+majority of the Group's accounts receivable relates to sales of petroleum and chemical products to related parties and third parties operating in
+the petroleum and chemical industries. No single customer accounted for greater than 10% of total accounts receivable at 31 December 2015,
+except for the amounts due from Sinopec Group Company and fellow subsidiaries. The Group performs ongoing credit evaluations of its customers'
+financial condition and generally does not require collateral on accounts receivable. The Group maintains an impairment loss for doubtful accounts
+and actual losses have been within management's expectations.
+RMB million
+five years
+More than
+Short-term loans
+More than
+two years
+but less than
+five years
+RMB million
+Investment and dividend income received
+(113,047)
+Exploratory wells expenditure
+(7,203)
+(11,334)
+Purchase of investments, investments in associates and investments in joint ventures
+Proceeds from disposal of investments and investments in associates
+19, 20, 21
+(23,421)
+3,353
+3,874
+Proceeds from disposal of property, plant, equipment and other non-current assets
+Decrease/(increase) in time deposits with maturities over three months
+454
+1,020
+12
+(690)
+Interest received
+(16,387)
+Net cash used in investing activities
+RMB
+Capital expenditure
+141
+Financial Statements (International)
+Financing activities
+Financial Statements (International)
+CONSOLIDATED STATEMENT OF CASH FLOWS
+for the year ended 31 December 2015
+(Amounts in million)
+Note
+Year ended 31 December
+2015
+2014
+RMB
+Net cash generated from operating activities
+(a)
+165,818
+148,347
+Investing activities
+(95,454)
+Proceeds from bank and other loans.
+(1,212)
+Contributions to subsidiaries from non-controlling interests
+(21)
+9,310
+(21,421)
+58,176
+(5,707)
+9,355
+15,046
+293
+16
+67,824
+9,355
+The notes on pages 144 to 192 form part of these consolidated financial statements.
+142
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+NOTES TO CONSOLIDATED STATEMENT OF CASH FLOWS
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+for the year ended 31 December 2015
+(9,789)
+(8,145)
+(1,674)
+(28,031)
+Dividends paid by the Company
+Distributions by subsidiaries to non-controlling interests
+Interest paid
+Transaction with non-controlling interests
+Net cash generated from/(used in) financing activities
+Net increase/(decrease) in cash and cash equivalents
+Cash and cash equivalents at 1 January
+Effect of foreign currency exchange rate changes
+Cash and cash equivalents at 31 December
+2,196
+Repayments of bank and other loans
+1,619
+2,312
+(116,952)
+(132,633)
+1,090,241
+(1,152,837)
+1,128,447
+(1,114,481)
+105,477
+4,128
+(24,214)
+3,111
+The notes on pages 144 to 192 form part of these consolidated financial statements.
+48,807
+(d) The capital reserve represents (i) the difference between the total amount of the par value of shares issued and the amount of the net assets transferred from Sinopec
+Group Company in connection with the Reorganisation; and (ii) the difference between the considerations paid over the amount of the net assets of entities and related
+operations acquired from Sinopec Group Company and non-controlling interests.
+Others
+Balance at 31 December 2015
+Note:
+16,817
+16,817
+(13,318)
+(13,318)
+(13,318)
+(10,896)
+(10,896)
+(10,896)
+3,088
+(3,088)
+56.224
+446
+56,670
+105,477
+Total transactions with owners
+_ that do not result in a loss of control
+Total changes in ownership interests in subsidiaries
+Transaction with non-controlling interests
+(Amounts in million)
+12,532
+43,801
+Other comprehensive income (Note 14)
+Total comprehensive income for the year
+Transactions with owners, recorded directly in equity:
+Contributions by and distributions to owners:
+Conversion of the 2011 Convertible Bonds (Note 28(iii))
+(3,389)
+2,791
+Final dividend for 2014 (Note 13)
+Interim dividend for 2015 (Note 13)
+Appropriation (Note (a))
+Contributions to subsidiaries from non-controlling
+interests (Note 37(i))
+Distributions to non-controlling interests
+Total contributions by and distributions to owners
+Changes in ownership interests in subsidiaries that
+do not result in a loss of control:
+14,026
+(e) The application of the share premium account is governed by Sections 167 and 168 of the PRC Company Law.
+(3,389)
+56,224
+(121)
+120
+30
+150
+121,071
+26,173
+55,850
+79,640
+117,000
+(6,781)
+281,076
+674,029
+110,190
+784,219
+(a) According to the Articles of Association of the Company, the Company is required to transfer 10% of its net profit determined in accordance with the accounting policies
+complying with Accounting Standards for Business Enterprises ("ASBE"), adopted by the Group to statutory surplus reserve. In the event that the reserve balance reaches
+50% of the registered capital, no transfer is required. The transfer to this reserve must be made before distribution of a dividend to shareholders. Statutory surplus reserve
+can be used to make good previous years' losses, if any, and may be converted into share capital by issuing of new shares to shareholders in proportion to their existing
+shareholdings or by increasing the par value of the shares currently held by them, provided that the balance after such issue is not less than 25% of the registered capital.
+During the year ended 31 December 2015, the Company transferred RMB 3,088 million (2014: RMB 3,215 million), being 10% of the current year's net profit determined
+in accordance with the accounting policies complying with ASBE to this reserve.
+(b) The usage of the discretionary surplus reserve is similar to that of statutory surplus reserve.
+(c) As at 31 December 2015, the amount of retained earnings available for distribution was RMB 167,825 million (2014: RMB 166,481 million), being the amount determined
+in accordance with International Financial Reporting Standards ("IFRS"). According to the Articles of Association of the Company, the amount of retained earnings available
+for distribution to owners of the Company is lower of the amount determined in accordance with the accounting policies complying with ASBE and the amount determined
+in accordance with the accounting policies complying with IFRS.
+94,691
+45.092
+49,599
+(27,302)
+14,026
+3,088
+446
+(27,302)
+49,273
+45,418
+94,691
+326
+2,791
+326
+326
+326
+(326)
+2,791
+56,550
+120
+14,026
+3,088
+446
+121
+(326)
+(a) Reconciliation of profit before taxation to net cash generated from operating activities
+146
+2014
+An associate is an entity, not being a subsidiary, in which the Group exercises significant influence over its management. Significant influence
+is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
+The investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and
+obligations each investor has rather than the legal structure of the joint arrangement. A joint venture is a joint arrangement whereby the
+parties that have joint control of the arrangement have rights to the net assets of the arrangement.
+Investments in associates and joint ventures are accounted for in the consolidated financial statements using the equity method from the
+date that significant influence or joint control commences until the date that significant influence or joint control ceases. Under the equity
+method, the investment is initially recorded at cost and adjusted thereafter for the post acquisition change in the Group's share of the
+investee's net assets and any impairment loss relating to the investment (Note 2(j) and (o)).
+The Group's share of the post-acquisition, post-tax results of the investees and any impairment losses for the year are recognised in the
+consolidated income statement, whereas the Group's share of the post-acquisition, post-tax items of the investees' other comprehensive
+income is recognised in the consolidated statement of comprehensive income.
+When the Group ceases to have significant influence over an associate or joint control over a joint venture, it is accounted for as a disposal of
+the entire interest in that investee, with a resulting gain or loss being recognised in profit or loss. Any interest retained in that former investee
+at the date when significant influence or joint control is lost is recognised at fair value and this amount is regarded as the fair value on initial
+recognition of a financial asset (see Note 2(k)) or, when appropriate, the cost on initial recognition of an investment in an associate (see Note
+2(a) (ii)).
+In the Company's balance sheet, investments in associates and joint ventures are stated at cost less impairment losses (Note 2(o)).
+(iii)Transactions eliminated on consolidation
+Inter-company balances and transactions and any unrealised gains arising from inter-company transactions are eliminated on consolidation.
+Unrealised gains arising from transactions with associates and joint ventures are eliminated to the extent of the Group's interest in the entity.
+Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
+Financial Statements (International)
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
+(b) Translation of foreign currencies
+The presentation currency of the Group is Renminbi. Foreign currency transactions during the year are translated into Renminbi at the applicable
+rates of exchange quoted by the People's Bank of China ("PBOC") prevailing on the transaction dates. Foreign currency monetary assets and
+liabilities are translated into Renminbi at the PBOC's rates at the balance sheet date.
+Exchange differences, other than those capitalised as construction in progress, are recognised as income or expense in the "finance costs"
+section of the consolidated income statement.
+The results of foreign operations are translated into Renminbi at the applicable rates quoted by the PBOC prevailing on the transaction dates.
+Balance sheet items, including goodwill arising on consolidation of foreign operations are translated into Renminbi at the closing foreign
+exchange rates at the balance sheet date. The income and expenses of foreign operation are translated into Renminbi at the spot exchange rates
+or an exchange rate that approximents the spot exchange rates on the transaction dates. The resulting exchange differences are recognised in
+other comprehensive income and accumulated in equity in the other reserves.
+On disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation is reclassified from
+equity to the consolidated income statement when the profit or loss on disposal is recognised.
+(ii) Associates and joint ventures
+(c) Cash and cash equivalents
+The particulars of the Group's principal subsidiaries are set out in Note 37.
+When the Group loses control of a subsidiary, it is accounted for as a disposal of the entire interest in that subsidiary, with a resulting gain
+or loss being recognised in profit or loss. Any interest retained in that former subsidiary at the date when control is lost is recognised at fair
+value and this amount is regarded as the fair value on initial recognition of a financial asset (Note 2(k)) or, when appropriate, the cost on
+initial recognition of an investment in an associate or joint venture (Note 2(a) (ii)).
+The preparation of the financial statements in accordance with IFRSS requires management to make judgements, estimates and assumptions
+that affect the application of policies and reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date
+of the financial statements and the reported amounts of revenues and expenses during the period. The estimates and associated assumptions
+are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which
+form the basis of making the judgements about the carrying values of assets and liabilities that are not readily apparent from other sources.
+Actual results could differ from those estimates.
+The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in
+which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both
+current and future periods.
+Key assumptions and estimation made by management in the application of IFRSS that have significant effect on the consolidated financial
+statements and the major sources of estimation uncertainty are disclosed in Note 39.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+145
+Financial Statements (International)
+31,269
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+2 SIGNIFICANT ACCOUNTING POLICIES
+(a) Basis of consolidation
+The consolidated financial statements comprise the Company and its subsidiaries, and interest in associates and joint ventures.
+(i) Subsidiaries and non-controlling interests
+Subsidiaries are those entities controlled by the Group. The Group controls an entity when the Group is exposed to, or has rights to, variable
+returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
+The financial statements of subsidiaries are included in the consolidated financial statements from the date that control effectively
+commences until the date that control effectively ceases.
+Non-controlling interests at the balance sheet date, being the portion of the net assets of subsidiaries attributable to equity interests that
+are not owned by the Company, whether directly or indirectly through subsidiaries, are presented in the consolidated balance sheet and
+consolidated statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-controlling
+interests in the results of the Group are presented on the face of the consolidated income statement and the consolidated statement of
+comprehensive income as an allocation of the total profit or loss and total comprehensive income for the year between non-controlling
+interests and the owners of the Company.
+Changes in the Group's interests in a subsidiary that do not result in a loss of control are accounted for as equity transactions, whereby
+adjustments are made to the amounts of controlling and non-controlling interests within consolidated equity to reflect the change in relative
+interests, but no adjustments are made to goodwill and no gain or loss is recognised.
+In the Company's balance sheet, investments in subsidiaries are stated at cost less impairment losses (Note 2(o)).
+Cash equivalents consist of time deposits with financial institutions with an initial term of less than three months when purchased. Cash
+equivalents are stated at cost, which approximates fair value.
+(d) Trade, bills and other receivables
+Trade, bills and other receivables are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method,
+less impairment losses for bad and doubtful debts (Note 2(o)). Trade, bills and other receivables are derecognised if the Group's contractual
+rights to the cash flows from these financial assets expire or if the Group transfers these financial assets to another party without retaining
+control or substantially all risks and rewards of the assets.
+(h) Lease prepayments
+Lease prepayments represent land use rights paid to the relevant government authorities. Land use rights are carried at cost less accumulated
+amount charged to expense and impairment losses (Note 2(o)). The cost of lease prepayments is charged to expense on a straight-line basis
+over the respective periods of the rights.
+(i) Construction in progress
+Construction in progress represents buildings, oil and gas properties, various plant and equipment under construction and pending installation,
+and is stated at cost less impairment losses (Note 2(o)). Cost comprises direct costs of construction as well as interest charges, and foreign
+exchange differences on related borrowed funds to the extent that they are regarded as an adjustment to interest charges, during the periods of
+construction.
+Construction in progress is transferred to property, plant and equipment when the asset is substantially ready for its intended use.
+No depreciation is provided in respect of construction in progress.
+(j) Goodwill
+Goodwill represents amounts arising on acquisition of subsidiaries, associates or joint ventures. Goodwill represents the difference between the
+cost of acquisition and the fair value of the net identifiable assets acquired.
+Prior to 1 January 2008, the acquisition of the non-controlling interests of a consolidated subsidiary was accounted using the acquisition method
+whereby the difference between the cost of acquisition and the fair value of the net identifiable assets acquired (on a proportionate share) was
+recognised as goodwill. From 1 January 2008, any difference between the amount by which the non-controlling interest is adjusted (such as
+through an acquisition of the non-controlling interests) and the cash or other considerations paid is recognised in equity.
+Goodwill is stated at cost less accumulated impairment losses. Goodwill arising on a business combination is allocated to each cash-generating
+unit, or groups of cash-generating units, that is expected to benefit the synergies of the combination and is tested annually for impairment
+(Note 2(0)). In respect of associates or joint ventures, the carrying amount of goodwill is included in the carrying amount of the interest in the
+associate or joint venture and the investment as a whole is tested for impairment whenever there is objective evidence of impairment (Note 2(o)).
+(k) Available-for-sale financial assets
+Investments in available-for-sale securities are carried at fair value with any change in fair value recognised in other comprehensive income
+and accumulated separately in equity in other reserves. When these investments are derecognised or impaired, the cumulative gain or loss is
+reclassified from equity to the consolidated income statement. Investments in equity securities, other than investments in associates and joint
+ventures, that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are recognised in the
+balance sheet at cost less impairment losses (Note 2(0)).
+Investments in securities held for trading are classified as current assets. Any attributable transaction costs are recognised in the consolidated
+income statement as incurred. At each balance sheet date, the fair value is remeasured, with any resultant gain or loss being recognised in the
+consolidated income statement.
+(I) Derivative financial instruments
+Derivative financial instruments are recognised initially at fair value. At each balance sheet date, the fair value is remeasured. The gain or loss
+on remeasurement to fair value is recognised immediately in the consolidated income statement, except where the derivatives qualify for cash
+flow hedge accounting or hedge the net investment in a foreign operation, in which case recognition of any resulting gain or loss depends on the
+nature of the item being hedged (Note 2(n)).
+Financial Statements (International)
+148
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+Management estimates future dismantlement costs for oil and gas properties with reference to engineering estimates after taking into
+consideration the anticipated method of dismantlement required in accordance with the industry practices and the future cash flows are adjusted
+to reflect such risks specific to the liability, as appropriate. These estimated future dismantlement costs are discounted at pre-tax risk-free rate
+and are capitalised as oil and gas properties, which are subsequently amortised as part of the costs of the oil and gas properties.
+The Group uses the successful efforts method of accounting for its oil and gas producing activities. Under this method, costs of development
+wells, the related supporting equipment and proved mineral interests in properties are capitalised. The cost of exploratory wells is initially
+capitalised as construction in progress pending determination of whether the well has found proved reserves. The impairment of exploratory well
+costs occurs upon the determination that the well has not found proved reserves. The exploratory well costs are usually not carried as an asset
+for more than one year following completion of drilling, unless (i) the well has found a sufficient quantity of reserves to justify its completion as
+a producing well if the required capital expenditure is made; (ii) drilling of the additional exploratory wells is under way or firmly planned for the
+near future; or (iii) other activities are being undertaken to sufficiently progress the assessing of the reserves and the economic and operating
+viability of the project. All other exploration costs, including geological and geophysical costs, other dry hole costs and annual lease rentals,
+are expensed as incurred. Capitalised costs of proved oil and gas properties are amortised on a unit-of-production method based on volumes
+produced and reserves.
+(g) Oil and gas properties
+2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
+(e) Inventories
+Inventories are stated at the lower of cost and net realisable value. Cost includes the cost of purchase computed using the weighted average
+method and, in the case of work in progress and finished goods, direct labour and an appropriate proportion of production overheads. Net
+realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs
+necessary to make the sale.
+(f) Property, plant and equipment
+An item of property, plant and equipment is initially recorded at cost, less accumulated depreciation and impairment losses (Note 2(o)). The cost
+of an asset comprises its purchase price, any directly attributable costs of bringing the asset to working condition and location for its intended
+use. The Group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when
+that cost is incurred, when it is probable that the future economic benefits embodied with the item will flow to the Group and the cost of the
+item can be measured reliably. All other expenditure is recognised as an expense in the consolidated income statement in the year in which it is
+incurred.
+Gains or losses arising from the retirement or disposal of an item of property, plant and equipment, other than oil and gas properties, are
+determined as the difference between the net disposal proceeds and the carrying amount of the item and are recognised as income or expense
+in the consolidated income statement on the date of retirement or disposal.
+Depreciation is provided to write off the cost amount of items of property, plant and equipment, other than oil and gas properties, over its
+estimated useful life on a straight-line basis, after taking into account its estimated residual value, as follows:
+Buildings
+Equipment, machinery and others
+The accompanying consolidated financial statements are prepared on the historical cost basis except for the remeasurement of available-for-sale
+securities (Note 2(k)), securities held for trading (Note 2(k)), derivative financial instruments (Note 2(1) and (n)) and derivative component of the
+convertible bonds (Note 2(r)) to their fair values.
+Estimated
+usage period
+12 to 50 years
+4 to 30 years
+residuals rate
+3%
+3%
+Where parts of an item of property, plant and equipment have different useful lives, the cost of the item is allocated on a reasonable basis
+between the parts and each part is depreciated separately. Both the useful life of an asset and its residual value, if any, are reassessed annually.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+147
+Financial Statements (International)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+Estimated
+In addition, the requirements of Part 9 “Accounts and Audit" of the new Hong Kong Companies Ordinance (Cap. 622) come into operation
+during the financial year ended 31 December 2015, as a result, there are changes to presentation and disclosures of certain information in the
+consolidated financial statements.
+(c) New Hong Kong Companies Ordinance
+IFRS 16, 'Leases', provides updated guidance on the definition of leases, and the guidance on the combination and separation of contracts.
+Under IFRS 16, a contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time
+in exchange for consideration. IFRS 16 requires lessees to recognise lease liability reflecting future lease payments and a 'right-of-use-asset'
+for almost all lease contracts, with an exemption for certain short-term leases and leases of low-value assets. The lessors accounting stays
+almost the same as under IAS 17 'Leases'. Management is still assessing the impact of adoption IFRS 16 to the Group's results of operation
+and financial position. An entity shall apply IFRS 16 for annual reporting periods beginning on or after 1 January 2019. Earlier application is
+permitted if IFRS 15 is also applied.
+Interest expense
+8,133
+11,218
+Loss/(gain) on foreign currency exchange rate changes and derivative financial instruments
+Loss on disposal of property, plant, equipment and other non-currents assets, net
+Impairment losses on assets
+3,085
+(662)
+721
+1,622
+8,767
+6,839
+Loss on embedded derivative component of the convertible bonds
+Net charges from:
+Accounts receivable and other current assets
+Inventories
+Accounts payable and other current liabilities
+Income tax paid
+Net cash generated from operating activities
+(1,779)
+(2,978)
+Interest income
+(2,616)
+RMB
+RMB
+Operating activities
+Profit before taxation
+Adjustments for:
+Depreciation, depletion and amortisation
+Dry hole costs written off
+56,277
+259
+65,504
+90,097
+6,099
+5,587
+Share of profits from associates and joint ventures
+(8,081)
+(3,630)
+Investment income
+(444)
+96,368
+Year ended 31 December
+2015
+4,611
+176,791
+The Company was established in the PRC on 25 February 2000 as a joint stock limited company as part of the reorganisation (the "Reorganisation")
+of China Petrochemical Corporation ("Sinopec Group Company"), the ultimate holding company of the Group and a ministry-level enterprise under
+the direct supervision of the State Council of the PRC. Prior to the incorporation of the Company, the oil and gas and chemical operations of the
+Group were carried on by oil administration bureaux, petrochemical and refining production enterprises and sales and marketing companies of
+Sinopec Group Company.
+As part of the Reorganisation, certain of Sinopec Group Company's core oil and gas and chemical operations and businesses together with the
+related assets and liabilities were transferred to the Company. On 25 February 2000, in consideration for Sinopec Group Company transferring such
+oil and gas and chemical operations and businesses and the related assets and liabilities to the Company, the Company issued 68.8 billion domestic
+state-owned ordinary shares with a par value of RMB 1.00 each to Sinopec Group Company. The shares issued to Sinopec Group Company on 25
+February 2000 represented the entire registered and issued share capital of the Company on that date. The oil and gas and chemical operations and
+businesses transferred to the Company were related to (i) the exploration, development and production of crude oil and natural gas, (ii) the refining,
+transportation, storage and marketing of crude oil and petroleum products, and (iii) the production and sales of chemicals.
+Basis of preparation
+The accompanying consolidated financial statements have been prepared in accordance with all applicable IFRSS as issued by the International
+Accounting Standards Board ("IASB"). IFRS includes International Accounting Standards ("IAS") and related interpretations ("IFRIC"). These
+consolidated financial statements also comply with the applicable disclosure provisions of the Rules Governing the Listing of Securities on the Stock
+Exchange of Hong Kong Limited. A summary of the significant accounting policies adopted by the Group are set out in Note 2.
+(a) New and amended standards and interpretations adopted by the Group
+The IASB has not issued any new and amended standards and interpretations that are first effective for the current accounting period of the
+Group. The Group has not adopted any new standard or interpretation that is not yet effective for the current accounting period.
+(b) New and amended standards and interpretations not yet adopted by the Group
+The following relevant IFRSS, amendments to existing IFRSS and interpretation of IFRS have been published and are mandatory for accounting
+periods beginning on or after 1 January 2016 or later periods and have not been early adopted by the Group. Management is in the process of
+making an assessment of what the impact of these amendments, new standards and new interpretations is expected to be in the period of initial
+application and has so far concluded that, except for IFRS 16, the adoption of these amendments, new standards and new interpretations is
+unlikely to have a significant impact on the Group's results of operations and financial position.
+IFRS 9, 'Financial instruments', addresses the classification, measurement and recognition of financial assets and financial liabilities. The
+complete version of IFRS 9 was issued in July 2014. It replaces the whole of IAS 39. IFRS 9 introduces a new model for the recognition of
+impairment losses the expected credit losses (ECL) model, which constitutes a change from the incurred loss model in IAS 39. IFRS 9
+applies to all hedging relationships, with the exception of portfolio fair value hedges of interest rate risk. The new guidance better aligns hedge
+accounting with the risk management activities of an entity and provides relief from the more “rule-based" approach of IAS 39. IFRS 9 is
+effective for annual periods beginning on or after 1 January 2018. Earlier application is permitted.
+Amendments to IFRS 10 and IAS 28 on sale or contribution of assets between an investor and its associate or joint venture. The amendments
+address an inconsistency between IFRS 10 and IAS 28 in the sale and contribution of assets between an investor and its associate or joint
+venture. A full gain or loss is recognised when a transaction involves a business. A partial gain or loss is recognised when a transaction involves
+assets that do not constitute a business, even if those assets are in a subsidiary. The amendments were originally intended to be effective for
+annual periods beginning on or after 1 January 2016. The effective date has now been deferred/removed. Early application of the amendments
+continues to be permitted.
+Amendment to IFRS 11 on accounting for acquisitions of interests in joint operations. The amendment requires an investor to apply the
+principles of business combination accounting when it acquires an interest in a joint operation that constitutes a 'business' (as defined in IFRS 3,
+Business combinations). Specifically, an investor will need to: (1) measure identifiable assets and liabilities at fair value; (2) expense acquisition-
+related costs; (3) recognise deferred tax; and (4) recognise the residual as goodwill. All other principles of business combination accounting
+apply unless they conflict with IFRS 11. The amendment is applicable to both the acquisition of the initial interest and a further interest in a
+joint operation. The previously held interest is not remeasured when the acquisition of an additional interest in the same joint operation with
+joint control maintained. Amendment to IFRS 11 is effective for annual financial statements for a period beginning on or after 1 January 2016.
+Earlier application is permitted.
+Financial Statements (International)
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+1 PRINCIPAL ACTIVITIES, ORGANISATION AND BASIS OF PREPARATION (Continued)
+(b) New and amended standards and interpretations not yet adopted by the Group (Continued)
+IFRS 15, 'Revenue from contracts with customers', establishes a comprehensive framework for determining when to recognise revenue and
+how much revenue to recognise through a 5-step approach. IFRS 15 provides specific guidance on capitalisation of contract cost and licence
+arrangements. It also includes a cohesive set of disclosure requirements about the nature, amount, timing and uncertainty of revenue and cash
+flows arising from the entity's contracts with customers. The core principle is that a company should recognise revenue to depict the transfer
+of promised goods or services to the customer in an amount that reflects the consideration to which the company expects to be entitled in
+exchange for those goods or services. IFRS 15 replaces the previous revenue standards: IAS 18 'Revenue' and IAS 11 'Construction Contracts'
+and the related Interpretations on revenue recognition: IFRIC 13 'Customer Loyalty Programmes', IFRIC 15 'Agreements for the Construction of
+Real Estate', IFRIC 18 'Transfers of Assets from Customers' and SIC-31 ‘Revenue-Barter Transactions Involving Advertising Services'. IFRS 15 is
+effective for annual reporting periods beginning on or after 1 January 2018, with earlier application permitted.
+Amendment to IAS 27, 'Method to measure investments in subsidiaries, joint ventures and associates', allows entities to use equity method
+to measure investments in subsidiaries, joint ventures and associates in their separate financial statements. IAS 27 currently allows entities
+to measure their investments in subsidiaries, joint ventures and associates either at cost or as a financial asset in their separate financial
+statements. The amendments introduce the equity method as a third option. The election can be made independently for each category of
+investment (subsidiaries, joint ventures and associates). Entities wishing to change to the equity method must do so retrospectively. The
+amendment is effective for annual period beginning on or after 1 January 2016. Earlier application is permitted.
+Organisation
+China Petroleum & Chemical Corporation (the "Company") is an energy and chemical company that, through its subsidiaries (hereinafter collectively
+referred to as the "Group"), engages in oil and gas and chemical operations in the People's Republic of China (the "PRC"). Oil and gas operations
+consist of exploring for, developing and producing crude oil and natural gas; transporting crude oil and natural gas by pipelines; refining crude oil
+into finished petroleum products; and marketing crude oil, natural gas and refined petroleum products. Chemical operations include the manufacture
+and marketing of a wide range of chemicals for industrial uses.
+Principal activities
+1 PRINCIPAL ACTIVITIES, ORGANISATION AND BASIS OF PREPARATION
+40,866
+(28,654)
+39,072
+28,540
+(68,327)
+(6,777)
+179,817
+169,900
+168,206
+(13,999)
+165,818
+148,347
+The notes on pages 144 to 192 form part of these consolidated financial statements.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+143
+Financial Statements (International)
+144
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
+for the year ended 31 December 2015
+(21,553)
+32,438
+(1,545) (1,545)
+137
+604,257
+130,237
+244,113
+980,487
+847,111
+27
+2223
+28
+95,446
+107,787
+28
+44,300
+43,145
+8,259
+7,820
+31
+33,186
+462,642
+29,715
+1,091
+Equity
+102,965
+130,446
+198,366
+30
+3,566
+212,136
+4,577
+222,075
+Income tax payable
+Total current liabilities
+Net current liabilities
+Total assets less current liabilities
+Non-current liabilities
+Long-term debts
+Loans from Sinopec Group Company and fellow subsidiaries
+Deferred tax liabilities
+Provisions
+Other long-term liabilities
+Total non-current liabilities
+1,048
+15,077
+13,067
+196,268
+Li Chunguang
+President
+The notes on pages 144 to 192 form part of these consolidated financial statements.
+Wen Dongfen
+Chief Financial Officer
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+139
+Financial Statements (International)
+Financial Statements (International)
+CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
+for the year ended 31 December 2015
+(Amounts in million)
+Balance at 1 January 2014
+Profit for the year
+Other comprehensive income (Note 14)
+Total equity
+attributable
+Share
+Capital
+(Legal representative)
+Chairman
+Approved and authorised for issue by the board of directors on 29 March 2016.
+645,577
+201,534
+784,219
+645,577
+Share capital
+Reserves
+32
+121,071
+118,280
+43,929
+552,958
+Total equity attributable to owners of the Company
+674,029
+593,041
+Non-controlling interests
+Total equity
+110,190
+52,536
+784,219
+474,761
+75,183
+71,517
+22222
+Deferred tax assets
+Lease prepayments
+Long-term prepayments and other assets
+23
+278602222
+17
+152,276
+177,667
+6,271
+6,281
+39,652
+32,119
+43,318
+48,474
+10,326
+868
+7,469
+21
+Available-for-sale financial assets
+Interest in joint ventures
+19
+CONSOLIDATED BALANCE SHEET
+As at 31 December 2015
+(Amounts in million)
+Note
+31 December
+2015
+31 December
+2014
+RMB
+6,979
+RMB
+Property, plant and equipment, net
+Construction in progress
+Goodwill
+16
+732,577
+703,485
+18
+Interest in associates
+Non-current assets
+Share
+51,044
+67,791
+188,223
+26
+51,275
+57,027
+Total current assets
+332,405
+360,144
+Current liabilities
+Short-term debts
+28
+Loans from Sinopec Group Company and fellow subsidiaries
+28
+Trade accounts payable
+29
+Bills payable
+29
+Accrued expenses and other payables
+145,498
+13,963
+10,949
+24
+66,215
+Total non-current assets
+1,110,724
+1,091,224
+Current assets
+Cash and cash equivalents
+Time deposits with financial institutions
+67,824
+733
+49,136
+9,355
+Trade accounts receivable
+Bills receivable
+Inventories
+Prepaid expenses and other current assets
+2222
+24
+56,126
+90,831
+745
+(1,169)
+surplus
+to owners
+276,061
+63
+593,041
+111
+174
+52,536
+645,577
+The notes on pages 144 to 192 form part of these consolidated financial statements.
+140
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
+for the year ended 31 December 2015
+(Amounts in million)
+Balance at 1 January 2015
+Profit for the year
+Total equity
+attributable
+Share
+Capital
+(6,179)
+capital
+76,552 117,000
+118,280
+3,216
+3,216
+(2.877)
+339
+Total transactions with owners
+1,715
+3.216
+8,477
+3.215
+(31,246)
+(14,623)
+(267)
+(14,890)
+Others
+Balance at 31 December 2014
+(1,002)
+1,065
+(30,497) 41,824
+reserve
+Share
+premium
+surplus
+RMB
+RMB
+RMB
+RMB
+RMB
+(6,179)
+276,061
+593,041
+52,536
+645,577
+32,438
+32,438
+11,226
+43,664
+-----(1,169)
+(1,169)
+1,306
+RMB
+equity
+interests
+Company
+Statutory Discretionary
+surplus
+to owners
+Non-
+Other
+Retained
+of the
+controlling
+Total
+that do not result in a loss of control
+RMB
+RMB
+118,280
+(30,497)
+41,824
+reserve
+RMB
+76,552 117,000
+reserve
+reserves
+earnings
+RMB
+Total changes in ownership interests in subsidiaries
+339
+(2,877)
+RMB
+RMB
+RMB
+RMB
+(33,713)
+33,347
+73,337
+117,000
+2,491
+259,776
+568,803
+52.823
+621,626
+46,466
+46,466
+1,467
+47,933
+RMB
+RMB
+RMB
+RMB
+Non-
+Other
+Retained
+of the
+controlling
+Total
+capital
+reserve
+(7,668)
+premium
+reserve
+reserves
+earnings
+Company
+interests
+equity
+RMB
+116,565
+RMB
+reserve
+Statutory Discretionary
+surplus
+(7,668)
+(9,266)
+(17,519)
+(10,512)
+(10,512)
+(10,512)
+3,215
+(3,215)
+4,155
+4,155
+8,477
+3,215
+(31,246)
+(17,839) 2,610 (15,229)
+Changes in ownership interests in subsidiaries that do
+not result in a loss of control:
+Transaction with non-controlling interests
+3,216
+3,216
+(17,519)
+(17,519)
+10,192
+10,192
+(7,668)
+46,466
+38,798
+(131)
+38,667
+Total comprehensive income for the year
+Transactions with owners, recorded directly in equity:
+Contributions by and distributions to owners:
+(1,598)
+Conversion of the 2011 Convertible Bonds (Note 28(iii))
+8,477
+Final dividend for 2013 (Note 13)
+Interim dividend for 2014 (Note 13)
+Appropriation (Note (a))
+Contributions to subsidiaries from non-controlling interests
+Distributions to non-controlling interests
+Total contributions by and distributions to owners
+1.715
+1,715
+Wang Yupu
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+Provisions for future dismantlement costs are initially recognised based on the present value of the future costs expected to be incurred in
+respect of the Group's expected dismantlement and abandonment costs at the end of related oil and gas exploration and development activities.
+Any subsequent change in the present value of the estimated costs, other than the change due to passage of time which is regarded as interest
+cost, is reflected as an adjustment to the provision and oil and gas properties.
+125
+175
+175
+175
+175
+300
+300
+300
+300
+││││」│││」││││- │------]]][གླུ[གླུ[གླུ|
+111118
+67
+249
+170
+67
+252
+170
+67
+252
+170
+67
+272
+186
+Total
+RMB'000
+RMB'000
+Supervisors' fee
+Directors'/
+2015
+Retirement
+scheme
+contributions
+RMB'000
+Bonuses
+RMB'000
+125
+125
+125
+125
+Kang Mingde (iv)
+Total
+Independent supervisors
+508
+19
+408
+81
+Chen Mingzheng (iii)
+Zhou Shiliang (iii)
+Li Xinjian (iii)
+257
+552
+552
+552
+[1]][1]8 8 8。1「11[1
+37
+RMB'000
+102
+62
+288
+202
+62
+288
+202
+62
+288
+202
+Yu Renming
+Wang Yajun (iii)
+Xu Bin (iii)
+Geng Limin (iii)
+Zou Huiping
+Jiang Zhenying
+Zhou Hengyou (iii)
+Liu Zhongyun (iii)
+125
+118
+1,501
+benefits in kind
+Salaries,
+Adjustment of prior years
+Write-down of deferred tax assets
+17,571
+12,613
+1,022
+279
+114
+75
+1,595
+828
+Tax effect of tax losses not recognised
+(27)
+(235)
+622
+391
+Effect of difference between income taxes at foreign operations tax rate and the PRC statutory tax rate (ii)
+Tax effect of utilisation of previously unrecognised tax losses and temporary differences
+(1,722)
+(1,033)
+Tax effect of preferential tax rate (i)
+(1,126)
+(2,549)
+Tax effect of non-taxable income
+717
+788
+Tax effect of non-deductible expenses
+65,504
+16,376
+2014
+RMB million
+RMB million
+56,277
+14,069
+Expected PRC income tax expense at a statutory tax rate of 25%
+Actual income tax expense
+Note:
+(i) The provision for PRC current income tax is based on a statutory income tax rate of 25% of the assessable income of the Group as determined in accordance with the
+relevant income tax rules and regulations of the PRC, except for certain entities of the Group in western regions in the PRC are taxed at preferential income tax rate of
+15% through the year 2020.
+(ii) It is mainly due to the foreign operation in the Republic of Angola ("Angola") that is taxed at 50% of the assessable income as determined in accordance with the
+relevant income tax rules and regulations of Angola.
+subsidiary
+undertaking
+or receivable in
+respect of a
+person's services
+as a director,
+whether of the
+Company or its
+Emoluments paid
+Emoluments paid or receivable in respect of
+director's other services in connection with the
+management of the affairs of the Company or its
+subsidiary undertaking
+Liu Yun (iii)
+Supervisors
+Guoming (ii)
+Chen Xiaojin (ii)
+Ma Weihua (ii)
+Bao
+Fan Gang (ii)
+Tang Min (ii)
+Andrew Y. Yan
+Jiang Xiaoming
+Independent non-executive directors
+Cao Yaofeng (i)
+allowances and
+Zhang Yaocang (i)
+Jiao Fangzheng (i)
+Wang Yupu (i)
+Li Chunguang
+Zhang Jianhua
+Wang Zhigang
+Dai Houliang
+Zhang Haichao (i)
+Directors
+Name
+The emoluments of every director and supervisor is set out below:
+(a) Directors' and supervisors' emoluments
+11 DIRECTORS' AND SUPERVISORS' EMOLUMENTS
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+Financial Statements (International)
+156
+Financial Statements (International)
+155
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+Fu Chengyu (i)
+2,399
+510
+1,325
+(ii) Mr. Chen Xiaojin, Mr. Ma Weihua and Ms. Bao Guoming ceased being independent non-executive directors from 27 May 2015; Mr. Tang Min and Mr. Fan Gang were
+elected as independent non-executive directors from 27 May 2015.
+(i) Mr. Fu Chengyu, Mr. Zhang Yaocang and Mr. Cao Yaofeng ceased being directors from 27 May 2015; Mr. Wang Yupu, Mr. Zhang Haichao and Mr. Jiao Fangzheng were
+elected as directors from 27 May 2015.
+7,643
+1,500
+456
+-
+598
+540
+560
+553
+300
+300
+300
+300
+300
+300
+300
+300
+300
+300
+969
+975
+975
+973
+3,408
+2,279
+57
+329
+212
+(iii) Mr Xu Bin, Mr. Geng Limin, Mr. Li Xinjian, Mr. Zhou Shiliang and Mr. Chen Mingzheng ceased being supervisors from 27 May 2015; Mr. Liu Zhongyun, Mr. Zhou
+Hengyou and Mr. Wang Yajun were elected as supervisors from 27 May 2015. Mr. Liu Yun ceased being director and was elected as supervisor from 27 May 2015.
+(iv) Mr. Kang Mingde ceased being independent supervisor from 27 May 2015.
+(v) Mr. Wang Tianpu ceased being non-executive director and vice chairman from 27 April 2015, and received no emoluments from the company during the year 2014
+and 2015; Mr. Cai Xiyou ceased being Chairman, member of Strategy Committee and Senior Vice President from 24 October 2014, and emoluments received from the
+company during the year 2015 and 2014 were RMB nil and RMB 867,000, respectively.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+157
+158
+Pursuant to the shareholders' approval at the Annual General Meeting on 9 May 2014, a final dividend of RMB 0.15 per share totaling RMB 17,519
+million in respect of the year ended 31 December 2013 was declared and paid on 19 June 2014.
+Pursuant to the shareholders' approval at the Annual General Meeting on 27 May 2015, a final dividend of RMB 0.11 per share totaling RMB 13,318
+million according to total shares of 18 June 2015 was approved. All dividends have been paid in the year ended 31 December 2015.
+17,519
+13,318
+RMB million
+RMB million
+2014
+2015
+approved and paid during the year of RMB 0.11 per share (2014: RMB 0.15 per share)
+Final cash dividends in respect of the previous financial year,
+Pursuant to a resolution passed at the director's meeting on 29 March 2016, final dividends in respect of the year ended 31 December 2015 of
+RMB 0.06 (2014: RMB 0.11) per share totaling RMB 7,264 million (2014: RMB 13,318 million) were proposed for shareholders' approval at the
+Annual General Meeting. Final cash dividend proposed after the balance sheet date has not been recognised as a liability at the balance sheet date.
+Dividends payable to owners of the Company attributable to the previous financial year, approved during the year represent:
+Pursuant to the Company's Articles of Association and a resolution passed at the Directors' meeting on 26 August 2015, the directors authorised to
+declare the interim dividends for the year ending 31 December 2015 of RMB 0.09 (2014: RMB 0.09) per share totaling RMB 10,896 million (2014:
+RMB 10,512 million). Dividends were paid on 23 September 2015.
+23,830
+57
+18,160
+10,896
+7,264
+RMB million
+RMB million
+2014
+2015
+Dividends declared and paid during the year of RMB 0.09 per share (2014: RMB 0.09 per share)
+Dividends declared after the balance sheet date of RMB 0.06 per share (2014: RMB 0.11 per share)
+Dividends payable to owners of the Company attributable to the year represent:
+13 DIVIDENDS
+For the year ended 31 December 2015, the five highest paid individuals in the Company included nil directors and five senior management. The
+emolument paid to each of the five senior management was below RMB 1,000 thousand. The total amount of the five senior management's salaries,
+wages and other benefits was RMB 2,877 thousand, and the total amount of their retirement scheme contributions was RMB 307 thousand. For the
+year ended 31 December 2014, all the five highest paid individuals in the Company were directors whose emoluments were disclosed in Note 11.
+12 SENIOR MANAGEMENT'S EMOLUMENTS
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+Financial Statements (International)
+Financial Statements (International)
+10,512
+13,318
+284
+199
+41
+Chen Mingzheng
+Zhou Shiliang
+Zou Huiping
+Li Xinjian
+Geng Limin
+Xu Bin
+Supervisors
+Bao Guoming
+Andrew Y. Yan
+Jiang Xiaoming
+Ma Weihua
+Chen Xiaojin
+Independent non-executive directors
+Liu Yun
+Jiang Zhenying
+Dai Houliang
+Fu Chengyu
+Zhang Yaocang
+Li Chunguang
+Zhang Jianhua
+Wang Zhigang
+Directors
+Name
+The emoluments of every director and supervisor is set out below: (Continued)
+(a) Directors' and supervisors' emoluments (Continued)
+11 DIRECTORS' AND SUPERVISORS' EMOLUMENTS (Continued)
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+486
+489
+489
+525
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+5,735
+Cao Yaofeng
+Profit before taxation
+Yu Renming
+Kang Mingde
+327
+192
+57
+284
+212
+61
+61
+1212221
+542
+366
+548
+366
+548
+366
+Independent supervisors
+546
+Total
+RMB'000
+RMB'000
+Supervisors' fee
+Directors'/
+2014
+Retirement
+scheme
+contributions
+RMB'000
+Bonuses
+RMB'000
+RMB'000
+benefits in kind
+Salaries,
+allowances and
+subsidiary
+undertaking
+Emoluments paid
+or receivable in
+respect of a
+person's services
+as a director,
+whether of the
+Company or its
+Emoluments paid or receivable in respect of
+director's other services in connection with the
+management of the affairs of the Company or its
+subsidiary undertaking
+Notes:
+Total
+366
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+2015
+17,571
+When a hedging instrument expires or is sold, terminated, exercised, or the entity revokes designation of the hedge relationship but the
+hedged forecast transaction is still expected to occur, the cumulative gain or loss at that point remains in equity until the transaction occurs
+and it is recognised in accordance with the above policy. If the hedged transaction is no longer expected to take place, the cumulative
+unrealised gain or loss is reclassified from equity to the consolidated income statement immediately.
+(ii) Fair value hedges
+A fair value hedge is a hedge of the exposure to changes in fair value of a recognised asset or liability or an unrecognised firm commitment,
+or an identified portion of such an asset, liability or unrecognised firm commitment.
+The gain or loss from re-measuring the hedging instrument at fair value is recognised in profit or loss. The gain or loss on the hedged item
+attributable to the hedged risk adjusts the carrying amount of the hedged item and is recognised in profit or loss.
+When a hedging instrument expires or is sold, terminated or exercised, or no longer meets the criteria for hedge accounting, the Group
+discontinues prospectively the hedge accounting treatments. If the hedged item is a financial instrument measured at amortised cost, any
+adjustment to the carrying amount of the hedged item is amortised to profit or loss from the adjustment date to the maturity date using the
+recalculated effective interest rate at the adjustment date.
+(iii) Hedge of net investments in foreign operations
+The portion of the gain or loss on re-measurement to fair value of an instrument used to hedge a net investment in a foreign operation that is
+determined to be an effective hedge is recognised in other comprehensive income and accumulated separately in equity in the other reserve
+until the disposal of the foreign operation, at which time the cumulative gain or loss is reclassified from equity to the consolidated income
+statement. The ineffective portion is recognised immediately in the consolidated income statement.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+149
+Financial Statements (International)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
+(o) Impairment of assets
+(i) Trade accounts receivable, other receivables and investment in equity securities that do not have a quoted market price in an active market
+are reviewed at each balance sheet date to determine whether there is objective evidence of impairment. If any such evidence exists, an
+impairment loss is determined and recognised.
+The impairment loss is measured as the difference between the asset's carrying amount and the estimated future cash flows, discounted at
+the current market rate of return for a similar financial asset where the effect of discounting is material, and is recognised as an expense
+in the consolidated income statement. Impairment losses for trade and other receivables are reversed through the consolidated income
+statement if in a subsequent period the amount of the impairment losses decreases. Impairment losses for equity securities carried at cost
+are not reversed.
+For investments in associates and joint ventures accounted under the equity method (Note 2(a) (ii)), the impairment loss is measured by
+comparing the recoverable amount of the investment as a whole with its carrying amount in accordance with the accounting policy set out
+in Note 2(o) (ii). The impairment loss is reversed if there has been a favourable change in the estimates used to determine the recoverable
+amount in accordance with the accounting policy set out in Note 2(o) (ii).
+(ii) Impairment of other long-lived assets is accounted as follows:
+The carrying amounts of other long-lived assets, including property, plant and equipment, construction in progress, lease prepayments and
+other assets, are reviewed at each balance sheet date to identify indicators that the assets may be impaired. These assets are tested for
+impairment whenever events or changes in circumstances indicate that their recorded carrying amounts may not be recoverable. When such
+a decline has occurred, the carrying amount is reduced to the recoverable amount. For goodwill, the recoverable amount is estimated at each
+balance sheet date.
+The recoverable amount is the greater of the fair value less costs to disposal and the value in use. In determining the value in use,
+expected future cash flows generated by the asset are discounted to their present value using a pre-tax discount rate that reflects current
+market assessments of the time value of money and the risks specific to the asset. Where an asset does not generate cash inflows largely
+independent of those from other assets, the recoverable amount is determined for the smallest group of assets that generates cash inflows
+independently (i.e. a cash-generating unit).
+The amount of the reduction is recognised as an expense in the consolidated income statement. Impairment losses recognised in respect
+of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit and then, to
+reduce the carrying amount of the other assets in the unit on a pro rata basis, except that the carrying value of an asset will not be reduced
+below its individual fair value less costs to disposal, or value in use, if determinable.
+Management assesses at each balance sheet date whether there is any indication that an impairment loss recognised for a long-lived asset,
+except in the case of goodwill, in prior years may no longer exist. An impairment loss is reversed if there has been a favourable change in the
+estimates used to determine the recoverable amount. A subsequent increase in the recoverable amount of an asset, when the circumstances
+and events that led to the write-down or write-off cease to exist, is recognised as an income. The reversal is reduced by the amount that
+would have been recognised as depreciation had the write-down or write-off not occurred. An impairment loss in respect of goodwill is not
+reversed.
+(p) Trade, bills and other payables
+Trade, bills and other payables are initially recognised at fair value and thereafter stated at amortised cost unless the effect of discounting would
+be immaterial, in which case they are stated at cost.
+(q) Interest-bearing borrowings
+Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-
+bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the consolidated
+income statement over the period of borrowings using the effective interest method.
+Financial Statements (International)
+150 Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+For cash flow hedges, other than those covered by the preceding two policy statements, the associated gain or loss is reclassified from equity
+to the consolidated income statement in the same period or periods during which the hedged forecast transaction affects the consolidated
+income statement.
+If a hedge of a forecast transaction subsequently results in the recognition of a financial asset or a financial liability, the associated gain
+or loss is reclassified from equity to the consolidated income statement in the same period or periods during which the asset acquired or
+liability assumed affects the consolidated income statement (such as when interest income or expense is recognised).
+If a hedge of a forecast transaction subsequently results in the recognition of a non-financial asset, the associated gain or loss is reclassified
+from equity to be included in the initial cost or other carrying amount of the non-financial asset.
+Where a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognised asset or liability or a highly
+probable forecast transaction or the foreign currency risk of a committed future transaction, the effective portion of any gains or losses on re-
+measurement of the derivative financial instrument to fair value are recognised in other comprehensive income and accumulated separately
+in equity in other reserves. The ineffective portion of any gain or loss is recognised immediately in the consolidated income statement.
+7,634
+49,599
+RMB million
+2014
+2015
+Other
+Resources tax (iv)
+Education surcharge
+City construction tax (iii)
+Special oil income levy (ii)
+Consumption tax (i)
+7 TAXES OTHER THAN INCOME TAX
+48,496
+7,835
+RMB million
+for the year ended 31 December 2015
+Contributions to retirement schemes (Note 35)
+61
+49
+44
+40
+87
+64
+2014
+RMB million
+14,052
+RMB million
+14,382
+for the year ended 31 December 2015
+2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
+(m) Offsetting financial instruments
+Financial assets and liabilities are presented respectively in the consolidated balance sheet, without any offset. However, they are offset and
+reported in the balance sheet when satisfied the following: (1) There is a legally enforceable right to offset the recognised amounts. (2) There
+is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be
+contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of
+the Company or the counterparty.
+(n) Hedging
+(i) Cash flow hedges
+Salaries, wages and other benefits
+56,331
+2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
+(i) Convertible bonds that contain an equity component
+Income tax comprises current and deferred tax. Current tax is calculated on taxable income by applying the applicable tax rates. Deferred tax is
+provided using the balance sheet liability method on all temporary differences between the carrying amounts of assets and liabilities for financial
+reporting purposes and the amounts used for taxation purposes only to the extent that it is probable that future taxable income will be available
+against which the assets can be utilised. Deferred tax is calculated on the basis of the enacted tax rates or substantially enacted tax rates that
+are expected to apply in the period when the asset is realised or the liability is settled. The effect on deferred tax of any changes in tax rates is
+charged or credited to the consolidated income statement, except for the effect of a change in tax rate on the carrying amount of deferred tax
+assets and liabilities which were previously charged or credited to other comprehensive income or directly in equity.
+The tax value of losses expected to be available for utilisation against future taxable income is set off against the deferred tax liability within the
+same legal tax unit and jurisdiction to the extent appropriate, and is not available for set off against the taxable profit of another legal tax unit.
+The carrying amount of a deferred tax asset is reviewed at each balance sheet date and is reduced to the extent that it is no longer probable
+that the related tax benefit will be realised.
+(bb)Dividends
+Dividends and distributions of profits proposed in the profit appropriation plan which will be authorized and declared after the balance sheet
+date, are not recognised as a liability at the balance sheet date and are separately disclosed in the notes to the financial statements. Dividends
+are recognised as a liability in the period in which they are declared.
+(cc) Segment reporting
+Operating segments, and the amounts of each segment item reported in the consolidated financial statements, are identified from the financial
+information provided regularly to the Group's chief operating decision maker for the purposes of allocating resources to, and assessing the
+performance of the Group's various lines of business.
+3 TURNOVER
+Turnover primarily represents revenue from the sales of crude oil, natural gas, petroleum and chemical products.
+Financial Statements (International)
+152
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+4 OTHER OPERATING REVENUES
+Sale of materials, service and others
+Rental income
+5 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
+The following items are included in selling, general and administrative expenses:
+Operating lease charges
+Auditors' remuneration:
+- audit services
+Impairment losses:
+- trade accounts receivable
+- other receivables
+6 PERSONNEL EXPENSES
+2015
+RMB million
+2014
+RMB million
+41,508
+963
+42,471
+43,611
+(aa) Income tax
+Termination benefits, such as employee reduction expenses, are recognised when, and only when, the Group demonstrably commits itself to
+terminate employment or to provide benefits as a result of voluntary redundancy by having a detailed formal plan which is without realistic
+possibility of withdrawal.
+The contributions payable under the Group's retirement plans are recognised as an expense in the consolidated income statement as incurred
+and according to the contribution determined by the plans. Further information is set out in Note 35.
+Operating lease payments are charged to the consolidated income statement on a straight-line basis over the period of the respective leases.
+(z) Employee benefits
+Convertible bonds that can be converted to equity share capital at the option of the holder, where the number of shares that would be issued
+on conversion and the value of the consideration that would be received at that time do not vary, are accounted for as compound financial
+instruments that contain both a liability component and an equity component.
+At initial recognition, the liability component of the convertible bonds is measured as the present value of the future interest and principal
+payments, discounted at the market rate of interest applicable at the time of initial recognition to similar liabilities that do not have a
+conversion option. Any excess of proceeds over the amount initially recognised as the liability component is recognised as the equity
+component. Transaction costs that relate to the issuance of the convertible bonds are allocated to the liability and equity components in
+proportion to the allocation of proceeds.
+The liability component is subsequently carried at amortised cost. The interest expense on the liability component is calculated using the
+effective interest method. The equity component is recognised in the capital reserve until the bond is converted or redeemed.
+If the bond is converted, the capital reserve, together with the carrying amount of the liability component at the time of conversion, is
+transferred to share capital and share premium as consideration for the shares issued. If the bond is redeemed, the capital reserve is
+transferred to share premium.
+(ii) Other convertible bonds
+Convertible bonds issued with a cash settlement option and other embedded derivative features are accounted for as compound financial
+instruments that contain a liability component and a derivative component.
+At initial recognition, the derivative component of the convertible bonds is measured at fair value. Any excess of proceeds over the amount
+initially recognised as the derivative component is recognised as the liability component. Transaction costs that relate to the issuance of
+the convertible bonds are allocated to the liability and derivative components in proportion to the allocation of proceeds. The portion of
+the transaction costs relating to the liability component is recognised initially as part of the liability. The portion relating to the derivative
+component is recognised immediately as an expense in the consolidated income statement.
+The derivative component is subsequently remeasured at each balance sheet date and any gains or losses arising from change in the
+fair value are recognised in the consolidated income statement. The liability component is subsequently carried at amortised cost until
+extinguished on conversion or redemption. The interest expense recognised in the consolidated income statement on the liability component
+is calculated using the effective interest method. Both the liability and the related derivative components are presented together for financial
+statements reporting purposes (Note 28(iii)).
+If the convertible bonds are converted, the carrying amounts of the derivative and liability components are transferred to share capital and
+share premium as consideration for the shares issued. If the convertible bonds are redeemed, any difference between the amount paid and
+the carrying amounts of both components is recognised in the consolidated income statement.
+(s) Provisions and contingent liability
+A provision is recognised for liability of uncertain timing or amount when the Group has a legal or constructive obligation arising as a result of a
+past event, when it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made.
+When it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is
+disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only
+be confirmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability
+of outflow of economic benefits is remote.
+(t) Revenue recognition
+Revenues associated with the sale of crude oil, natural gas, petroleum and chemical products and ancillary materials are recorded when the
+customer accepts the goods and the significant risks and rewards of ownership and title have been transferred to the buyer. Revenue from the
+rendering of services is recognised in the consolidated income statement upon performance of the services. No revenue is recognised if there are
+significant uncertainties regarding recovery of the consideration due, the possible return of goods, or when the amount of revenue and the costs
+incurred or to be incurred in respect of the transaction cannot be measured reliably.
+Interest income is recognised on a time apportioned basis that takes into account the effective yield on the asset.
+(r) Convertible bonds
+A government grant that becomes receivable as compensation for expenses or losses already incurred with no future related costs is recognised
+as income in the period in which it becomes receivable.
+151
+Financial Statements (International)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
+(u) Borrowing costs
+Borrowing costs are expensed in the consolidated income statement in the period in which they are incurred, except to the extent that they are
+capitalised as being attributable to the construction of an asset which necessarily takes a period of time to get ready for its intended use.
+(v) Repairs and maintenance expenditure
+Repairs and maintenance expenditure is expensed as incurred.
+(w) Environmental expenditures
+Environmental expenditures that relate to current ongoing operations or to conditions caused by past operations are expensed as incurred.
+Liabilities related to future remediation costs are recorded when environmental assessments and/or cleanups are probable and the costs can
+be reliably estimated. As facts concerning environmental contingencies become known to the Group, the Group reassesses its position both with
+respect to accrued liabilities and other potential exposures.
+(x) Research and development expense
+Research and development expenditures are expensed in the period in which they are incurred. Research and development expense amounted to
+RMB 5,648 million for the year ended 31 December 2015 (2014: RMB 5,623 million).
+(y) Operating leases
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+57,233
+2015
+RMB million
+198,754
+9 INTEREST EXPENSE
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+(ii) Impairment losses on long-lived assets for the year ended 31 December 2015 primarily represent impairment losses recognised in the exploration and production
+("E&P") segment of RMB 4,864 million (2014: RMB 2,436 million) and for the chemicals segment of RMB 142 million (2014: RMB 1,106 million) (Note 16), most of
+which are impairment losses on property, plant and equipment. The primary factor resulting in the E&P segment impairment losses was unsuccessful development
+drilling and high operating and development costs for certain oil fields. The carrying values of these E&P properties were written down to recoverable amounts which
+were determined based on the present values of the expected future cash flows of the assets using a pre-tax discount rate 10.80% (2014: 10.13%). The assets in the
+chemicals segment were written down mainly due to the suspension of operations of certain production facilities.
+(i) Government grants for the years ended 31 December 2015 and 2014 primarily represent financial appropriation income and non-income tax refunds received from
+respective government agencies without conditions or other contingencies attached to the receipts of the grants.
+(153)
+(98)
+(225)
+(193)
+(3,619)
+(5,146)
+(110)
+(90)
+(125)
+(112)
+7
+870
+3,281
+(1,622)
+2,260
+165
+2014
+RMB million
+RMB million
+5,129
+(721)
+2015
+Note:
+Others
+Impairment losses on long-lived assets (ii)
+Fines, penalties and compensations
+Net realised and unrealised gain on derivative financial instruments not qualified as hedging
+Donations
+Loss on disposal of property, plant, equipment and other non-currents assets, net
+Ineffective portion of change in fair value of cash flow hedges
+Interest expense incurred
+Less: Interest expense capitalised*
+Accretion expenses (Note 31)
+Interest expense
+12,613
+(1,792)
+(1,343)
+18,341
+1,022
+13,677
+279
+RMB million
+RMB million
+2014
+2015
+11,218
+0.7% to 7.1%
+1,008
+10,210
+2.6% to 5.9%
+8,133
+Government grant (i)
+1,081
+(1,221)
+(1,719)
+11,929
+RMB million
+RMB million
+8,273
+2014
+2015
+Deferred taxation (Note 27)
+- Adjustment of prior years
+- Provision for the year
+Current tax
+Tax expense in the consolidated income statement represents:
+10 TAX EXPENSE
+* Interest rates per annum at which borrowing costs were capitalised for construction in progress
+7,052
+OTHER OPERATING EXPENSE, NET
+8
+(iv) The resources tax rate has been raised from 5% to 6% from 1 December 2014.
+Effective from
+29 November 2014
+RMB/Ton
+Effective from
+1 January 2009
+RMB/Ton
+Solvent oil
+Naphtha
+Diesel
+Products
+Gasoline
+(i) Consumption tax was levied based on sales quantities of taxable products, tax rate of products is presented as below:
+Note:
+7 TAXES OTHER THAN INCOME TAX (Continued)
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+154
+Financial Statements (International)
+Financial Statements (International)
+Effective from
+13 December 2014
+RMB/Ton
+153
+191,202
+236,343
+1,089
+851
+7,245
+4,853
+10,210
+13,684
+13,753
+18,195
+22,187
+6
+136,718
+2014
+RMB million
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+Reconciliation between actual income tax expense and the expected income tax expense at applicable statutory tax rates is as follows:
+Effective from
+13 January 2015
+1,388.00
+(iii) City construction tax is levied on an entity based on its total paid amount of value-added tax, consumption tax and business tax.
+(ii) In accordance with PRC rules and regulations, the threshold above which special oil income levy was imposed (with the five-level progressive tax rates varying from
+20% to 40% remaining) has been raised from USD 55 per barrel to USD 65 per barrel from 1 January 2015.
+1,495.20
+1,370.60
+1,218.00
+1,116.50
+954.10
+1,171.24
+812.00
+996.80
+1,711.52
+1,576.40
+1,261.12
+1,126.00
+Jet fuel oil
+Fuel oil
+RMB/Ton
+Lubricant oil
+1,794.80
+1,435.84
+1,282.00
+2,105.20
+1,939.00
+1,551.20
+1,385.00
+1,411.20
+1,293.60
+1,105.44
+940.80
+2,109.76
+1,943.20
+1,554.56
+1,948.64
+662
+44,273
+2015
+Zhongtian Synergetic
+Energy (ii)
+2015
+2014
+RMB million RMB million
+Development Company
+Planning, development and Equity method
+operation of the Chemical
+Shanghai
+PRC
+Limited ("Shanghai Chemical")
+Industry Park in
+Shanghai, the PRC
+Caspian Investments Resources
+50.00
+Ltd. ("CIR") (i)
+Crude oil and natural gas
+extraction
+Equity method
+British Virgin
+Islands
+The Republic
+of Kazakhstan
+38.26
+Shanghai Chemical Industry Park
+("Zhongtian Synergetic Energy")
+chemical products
+("Sinopec Finance")
+financial services
+China Aviation Oil Supply Company
+29.00
+Limited ("China Aviation Oil")
+Marketing and distribution Equity method
+of refined petroleum
+Beijing
+Sinopec Finance
+PRC
+Zhongtian Synergetic Energy
+38.75
+Manufacturing of coal-
+Equity method
+Inner Mongolia
+PRC
+Company Limited
+products
+Summarised financial information and reconciliation to their carrying amounts in respect of the Group's principal associates:
+Zhongtian Synergetic Energy
+China Aviation Oil
+4,996
+37,571
+15,849
+2,693
+2,819
+7,768
+Current liabilities
+4,826
+(147,952)
+(4,717)
+(11,051)
+(16,536)
+(7,538)
+(404)
+(640)
+(1,305)
+(105,289)
+PRC
+2,466
+6,833
+Shanghai Chemical
+31 December
+2015
+RMB million
+Current assets
+Non-current assets
+154,437
+15,739
+2,487
+31 December 31 December
+2014
+2015
+RMB million RMB million
+108,999
+8,240
+14,992
+5,220
+31 December 31 December 31 December
+2015
+2014
+RMB million RMB million
+31 December
+2015
+RMB million
+2014
+RMB million
+CIR (i)
+31 December
+2015
+RMB million
+13,816
+10,168
+31 December
+2014
+RMB million
+Non-current liabilities
+Beijing
+Provision of non-banking
+177,667
+As at 31 December 2015, the amount of capitalised cost of exploratory wells included in construction in progress related to the exploration and
+production segment was RMB 16,772 million (2014: RMB 19,286 million). The geological and geophysical costs paid during the year ended 31
+December 2015 were RMB 4,347 million (2014: RMB 5,028 million).
+18 GOODWILL
+Cost
+Less: Accumulated impairment losses
+Impairment tests for cash-generating units containing goodwill
+Goodwill is allocated to the following Group's cash-generating units:
+Sinopec Beijing Yanshan Petrochemical Branch
+("Sinopec Yanshan")
+Sinopec Zhenhai Refining and Chemical Branch
+("Sinopec Zhenhai")
+Sinopec (Hong Kong) Limited
+Multiple units without individually significant goodwill
+Principal activities
+Manufacturing of intermediate petrochemical
+products and petroleum products
+Manufacturing of intermediate petrochemical
+products and petroleum products
+Trading of petrochemical products
+5
+(1,058)
+(10)
+(111)
+(1,009)
+90
+152,276
+149,830
+Transferred to property, plant and equipment
+Acquisitions
+Dry hole costs written off
+Reclassification to lease prepayments and other long-term assets
+Impairment losses for the year
+14,162
+31 December
+2015
+(6,099)
+(119,282)
+(130,151)
+(5,600)
+(10,154)
+Disposals
+Exchange adjustments
+Balance at 31 December
+(5,587)
+RMB million
+13,928
+(7,657)
+6,271
+Financial Statements (International)
+Financial Statements (International)
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+19 INTEREST IN ASSOCIATES
+The Group's investments in associates are with companies primarily engaged in the oil and gas, petrochemical, and marketing and distribution
+operations in the PRC.
+The Group's principal associates are as follows:
+161
+Principal
+Name of company
+Sinopec Finance Company Limited
+interests
+49.00
+Principal activities
+Measurement
+method
+Country of
+incorporation
+place of
+business
+% of ownership
+Equity method
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+Goodwill represents the excess of the cost of purchase over the fair value of the underlying assets and liabilities. The recoverable amounts of the
+above cash generating units are determined based on value in use calculations. These calculations use cash flow projections based on financial
+budgets approved by management covering a one-year period and pre-tax discount rates primarily ranging from 10.7% to 11.3% (2014: 10.0%
+to 10.9%). Cash flows beyond the one-year period are maintained constant. Based on the estimated recoverable amount, no impairment loss was
+recognised.
+31 December
+2014
+RMB million
+13,938
+(7,657)
+6,281
+31 December
+2015
+RMB million
+31 December
+2014
+RMB million
+1,157
+Key assumptions used for cash flow forecasts for these entities are the gross margin and sales volume. Management determined the budgeted gross
+margin based on the gross margin achieved in the period immediately before the budget period and management's expectation on the future trend
+of the prices of crude oil and petrochemical products. The sales volume was based on the production capacity and/or the sales volume in the period
+immediately before the budget period.
+1,157
+4,043
+853
+853
+218
+6,271
+228
+6,281
+4,043
+106,620
+(114)
+(321)
+(98)
+887
+348
+Cash flow hedges
+258
+413
+258
+413
+Accruals
+2,883
+1,755
+2,883
+1,755
+Receivables and inventories
+Current
+250
+887
+Non-current
+Property, plant and equipment
+(4)
+282
+282
+7
+Available-for-sale securities
+Embedded derivative component of
+3,474
+5,883
+RMB million
+(8,635)
+(16,387)
+(17,340)
+7,752
+3,474
+5,883
+the convertible bonds
+Tax losses carried forward
+8,209
+(9,131)
+2014
+2015
+RMB million
+Net balance
+31 December
+2015
+Derivative financial instruments
+Value-added input tax to be deducted
+Advances to suppliers
+Receivables
+26 PREPAID EXPENSES AND OTHER CURRENT ASSETS
+for the year ended 31 December 2015
+RMB million
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+Financial Statements (International)
+167
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+The cost of inventories recognised as an expense in the consolidated income statement amounted to RMB 1,565,205 million for the year ended
+31 December 2015 (2014: RMB 2,404,093 million). It includes the write-down of inventories of RMB 3,687 million (2014: RMB 3,327 million) and
+the reversal of write-down of inventories made in prior years of RMB 34 million (2014: RMB 136 million), which were recorded in purchased crude
+oil, products and operating supplies and expenses in the consolidated income statement. The write-down of inventories of RMB 2,931 million for
+the year ended 31 December 2015 (2014: RMB 1,327 million) was realised primarily with the sales of inventories. The write-down of inventories is
+mainly related to the work in progress in the refining segment and finished goods in the marketing segment, which was mainly due to decline of
+petroleum products price at the end of the year.
+(3,603)
+188,223
+(4,402)
+145,498
+Less: Allowance for diminution in value of inventories
+Financial Statements (International)
+3
+31 December
+RMB million
+Deferred tax liabilities
+31 December
+2015
+RMB million
+31 December
+2014
+RMB million
+31 December 31 December 31 December
+2014
+RMB million
+Deferred tax assets
+Deferred tax assets and deferred tax liabilities before offset are attributable to the items detailed in the table below:
+27 DEFERRED TAX ASSETS AND LIABILITIES
+31 December
+2015
+RMB million
+2014
+57,027
+7,875
+51,275
+22,684
+20,299
+3,780
+2,919
+17,941
+20,182
+12,622
+(104)
+Others
+98
+16,706
+7,438
+6,657
+15,796
+12,796
+3,795
+3,602
+10,007
+Net assets attributable to
+non-controlling interests
+984
+877
+Share of net assets from associates
+10,834
+9,113
+2,157
+18,598
+22,110
+of the Company
+Net assets attributable to owners
+(227)
+(15,407)
+(2,348)
+(981)
+(1,043)
+(1,282)
+Net assets
+1,998
+22,110
+8,422
+7,534
+15,796
+12,796
+3,795
+3,602
+10,007
+18,598
+6,121
+4,958
+1,121
+2014
+RMB million
+RMB million
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+168
+Periodically, management performed assessment on the probability that future taxable profit will be available over the period which the deferred tax
+assets can be realised or utilised. In assessing the probability, both positive and negative evidence was considered, including whether it is probable
+that the operations will have sufficient future taxable profits over the periods which the deferred tax assets are deductible or utilised and whether the
+tax losses result from identifiable causes which are unlikely to recur. During the year ended 31 December 2015, write-down of deferred tax assets
+amounted to RMB 75 million (2014: RMB 114 million).
+At 31 December 2015, certain subsidiaries of the Company did not recognise deferred tax of deductible loss carried forward of RMB 19,338 million
+(2014: RMB 17,085 million), of which RMB 4,080 million (2014: RMB 6,996 million) was incurred for the year ended 31 December 2015, because
+it was not probable that the future taxable profits will be realised. These deductible losses carried forward of RMB 3,299 million, RMB 3,777 million,
+RMB 2,634 million, RMB 5,548 million and RMB 4,080 million will expire in 2016, 2017, 2018, 2019, 2020 and after, respectively.
+Sinopec Finance
+2015
+(841)
+(16,470)
+7
+40
+(79)
+(58)
+(17,496)
+15,629
+86
+(790)
+Deferred tax assets/(liabilities)
+Year ended 31 December
+19 INTEREST IN ASSOCIATES (Continued)
+1,043
+5,004
+Carrying Amounts
+10,834
+9,113
+2,157
+1,998
+Summarised statement of comprehensive income
+6,121
+1,121
+1,043
+5,004
+162
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+4,958
+191,826
+160,630
+RMB million
+177,667
+133
+After tax effect of net loss on embedded derivative
+components of the 2007 Convertible Bonds and the 2011 Convertible Bonds
+After tax effect of employee share option scheme of Shanghai Petrochemical
+Profit attributable to ordinary owners of the Company (diluted)
+1
+(2)
+32,436
+46,600
+(ii) Weighted average number of shares (diluted)
+Weighted average number of shares at 31 December
+Effect of conversion of the 2007 Convertible Bonds
+Weighted average number of shares (diluted) at 31 December
+2015
+Number
+of shares
+120,852,547,200
+2014
+Number
+of shares
+116,822,487,451
+419,909,259
+120,852,547,200 117,242,396,710
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+46,466
+32,438
+RMB million
+RMB million
+778
+(641)
+137
+(10,672)
+1,406
+(9,266)
+Note:
+159
+(i) The Group sold its shares of China Gas Holdings Limited in August 2014, which was accounted for as available-for-sale financial assets prior to the transaction and
+the accumulated unrealised gain in other comprehensive income of RMB 2,317 million was reclassified to the investment income at the completion of this transaction.
+The calculation of basic earnings per share for the year ended 31 December 2015 is based on the profit attributable to ordinary owners of
+the Company of RMB 32,438 million (2014: RMB 46,466 million) and the weighted average number of shares of 120,852,547,200 (2014:
+116,822,487,451) during the year.
+The calculation of diluted earnings per share for the year ended 31 December 2015 is based on the profit attributable to ordinary owners of the
+Company (diluted) of RMB 32,436 million (2014: RMB 46,600 million) and the weighted average number of shares of 120,852,547,200 (2014:
+117,242,396,710) calculated as follows:
+(i) Profit attributable to ordinary owners of the Company (diluted)
+Profit attributable to ordinary owners of the Company
+After tax effect of interest expenses (net of exchange gain) of the 2007
+Convertible Bonds and the 2011 Convertible Bonds
+2015
+2014
+15 BASIC AND DILUTED EARNINGS PER SHARE
+Financial Statements (International)
+160
+Financial Statements (International)
+Reclassifications
+Contribution to joint ventures
+440
+2,984
+3,424
+390
+(6)
+Acquisitions
+(384)
+(190)
+(242)
+Reclassification to lease prepayments and other long-term assets
+(1,822)
+(13)
+(18,854)
+(20,689)
+(52)
+Other comprehensive income
+130,151
+50,130
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+16 PROPERTY, PLANT AND EQUIPMENT
+Plants and
+buildings
+RMB million
+Oil and gas
+properties
+RMB million
+Equipment,
+machinery
+and others
+RMB million
+Total
+RMB million
+Cost:
+73,857
+Balance at 1 January 2014
+Transferred from construction in progress
+96,787
+40
+515,701
+3,309
+768,102
+579
+1,380,590
+3,928
+6,164
+Additions
+Disposals
+(514)
+2,268
+(47)
+218
+Amounts transferred to initial carrying
+amount of hedged items
+(1,354)
+223
+(1,131)
+(1,013)
+181
+(832)
+Reclassification adjustments for amounts transferred
+to the consolidated income statement
+2,273
+(455)
+1,818
+265
+2,476
+(405)
+2,881
+for the year ended 31 December 2015
+14 OTHER COMPREHENSIVE INCOME
+2015
+2014
+Before tax
+amount
+RMB million
+Tax
+effect
+RMB million
+(4,710)
+Net of tax
+amount
+RMB million
+Tax
+effect
+Net of tax
+RMB million
+amount
+RMB million
+Cash flow hedges:
+Effective portion of changes in fair value of hedging
+instruments recognised during the year
+Before tax
+amount
+RMB million
+839
+(3,871)
+Net movement during the year recognised in
+(1,738)
+Net movement during the year recognised
+in other comprehensive income
+66
+(4)
+62
+(1,658)
+579
+433
+Share of other comprehensive loss of associates
+and joint ventures
+Foreign currency translation differences
+(5,356)
+2,268
+(5,356)
+(3,042)
+(3,042)
+(1,225)
+(514)
+(2,317)
+Amounts transferred to the consolidated
+other comprehensive income
+3,800
+(637)
+3,163
+(5,458)
+973
+(4,485)
+income statement (i)
+Available-for-sale securities:
+66
+(4)
+62
+659
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+(146)
+513
+Changes in fair value recognised during the year
+RMB million
+(863)
+(12,924)
+4,213
+130
+4,375
+Reclassifications
+679
+(766)
+87
+Contribution to associates and joint ventures
+(4)
+(4)
+Reclassification to lease prepayments and other long-term assets
+(68)
+(2)
+(86)
+(156)
+32
+Impairment losses for the year
+87,806
+44,078
+69
+4
+75
+Balance at 31 December 2014
+40,165
+329,267
+410,523
+Written back on disposals
+779,955
+40,165
+329,267
+410,523
+779,955
+Depreciation for the year
+3,528
+40,200
+Balance at 1 January 2015
+(278)
+(65)
+(6,518)
+402,655
+703,485
+Balance at 31 December 2015
+63,217
+238,943
+430,417
+732,577
+239,905
+The additions to oil and gas properties of the Group for the year ended 31 December 2015 included RMB 2,899 million (2014: RMB 3,309 million)
+of estimated dismantlement costs for site restoration (Note 31).
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+17 CONSTRUCTION IN PROGRESS
+2015
+2014
+Balance at 1 January
+Additions
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+2
+60,925
+669,595
+(6,861)
+Exchange adjustments
+40
+1,344
+66
+1,450
+Balance at 31 December 2015
+Balance at 31 December 2014
+44,098
+448,276
+866,565
+Net book value:
+Balance at 1 January 2014
+59,107
+227,107
+383,381
+374,191
+(69)
+Exchange adjustments
+(11,441)
+4,928
+39,949
+74,405
+3,727
+119,282
+Reclassifications
+1,780
+(1,008)
+(772)
+Contribution to associates and joint ventures
+(4)
+(8)
+(12)
+Reclassification to lease prepayments and other long-term assets
+(380)
+(1,170)
+Transferred from construction in progress
+560
+2,899
+268
+(13,856)
+Exchange adjustments
+6
+120
+8
+134
+Balance at 31 December 2014
+(1,550)
+101,090
+813,178
+Balance at 1 January 2015
+101,090
+569,172
+813,178
+1,483,440
+1,483,440
+Additions
+569,172
+Disposals
+(479)
+(79)
+Impairment losses for the year
+21
+2,436
+971
+710,995
+83,129
+3,428
+Reclassifications
+130
+41,513
+(2)
+Reclassification to lease prepayments and other long-term assets
+(317)
+(8)
+(5,117)
+Written back on disposals
+(732)
+(57)
+(128)
+(5,442)
+(12,230)
+38,235
+Depreciation for the year
+(7,657)
+(8,215)
+Exchange adjustments
+112
+2,201
+Balance at 31 December 2015
+107,315
+3,381
+613,134
+2,470
+1,599,142
+Accumulated depreciation:
+Balance at 1 January 2014
+37,680
+288,594
+384,721
+157
+878,693
+2014
+RMB million
+149,900
+1,551
+(3,662)
+(3,320)
+(5,080)
+(1,363)
+(4,019)
+(3,113)
+(37,939)
+(40,192)
+Total non-current liabilities
+(1,253)
+(3,662)
+(3,320)
+(2,175)
+(1,337)
+(910)
+(1,933)
+Net assets
+12,723
+12,231
+4,367
+2,846
+3,106
+14,628
+13,814
+12,231
+12,723
+(978)
+of the company
+16,776
+6,088
+4,367
+2,948
+3,217
+14,628
+13,814
+Net assets attributable to owners
+Other non-current liabilities.
+(680)
+(2,905)
+(1,742)
+(1,088)
+(2,235)
+(1,864)
+(3,160)
+(7,886)
+Other current liabilities
+(767)
+(272)
+(2,315)
+(3,318)
+(2,005)
+(3,362)
+Current financial liabilities (ii)
+Current liabilities
+13,078
+(1,228)
+6,088
+(860)
+Total current liabilities
+(26)
+(4,019)
+(3,113)
+(37,029)
+(39,214)
+Non-current financial liabilities (iii)
+Non-current liabilities
+(851)
+(1,123)
+(767)
+(2,970)
+(3,403)
+(5,553)
+(3,869)
+(3,160)
+(11,248)
+(860)
+9,702
+16,776
+non-controlling interests
+22,191
+15,430
+31,823
+Turnover
+RMB million
+RMB million
+RMB million
+RMB million
+RMB million
+RMB million
+RMB million
+RMB million
+RMB million
+2014
+CIR (v)
+2015
+10,725
+18.183
+1,876
+3,781
+9
+26
+29
+13
+Interest income
+(2,632)
+8,366
+2014
+1,821
+(1,248)
+(782)
+(1,501)
+(1,279)
+(15,649)
+(2,312)
+(1,915)
+Depreciation, depletion and amortisation
+(1,870)
+2015
+2014
+2015
+85
+814
+729
+Other (iv)
+8,388
+3,044
+2,184
+616
+1,395
+5,851
+5,526
+4,587
+4,771
+Share of net assets from joint ventures
+102
+111
+1,522
+Net assets attributable to
+Carrying Amounts
+4,587
+2014
+2015
+2015
+Mansarovar
+Taihu
+BASF-YPC
+YASREF
+4,771
+Year ended 31 December
+9,004
+3,129
+2,184
+2,209
+2,251
+5,851
+5,526
+Summarised statement of comprehensive income
+31
+7,433
+5,662
+(ii) The main asset of Zhongtian Synergetic Energy was under construction during the year ended 31 December 2015.
+(i) In August 2015, one of the subsidiaries of Sinopec Group Company completed the acquisition from LUKOIL OVERSEAS WEST PROJECT Ltd. a 50% equity interests in
+CIR and revised CIR's Articles of Association subsequently. According to the revised CIR's Articles of Association, the Group retained significant influences over CIR. As
+a result, the Group reclassified the investment interest in CIR from joint ventures to associates. The summarized statement of comprehensive income represents the
+operating result for the period from the date when the Group reclassified the investment in joint ventures to interest in associates to 31 December 2015.
+The share of profit and other comprehensive loss for the year ended 31 December 2015 in all individually immaterial associates accounted for using
+equity method in aggregate was RMB 1,108 million (2014: RMB 1,209 million) and RMB 632 million (2014: RMB 57 million) respectively. As at
+31 December 2015, the carrying amount of all individually immaterial associates accounted for using equity method in aggregate was RMB 14,415
+million (2014: RMB 15,007 million).
+Note:
+(2,009)
+(249)
+14
+Share of other comprehensive income/(loss)
+from associates
+(45)
+85
+90
+318
+495
+1,236
+1,707
+20 INTEREST IN JOINT VENTURES
+The Group's principal interests in joint ventures are as follows:
+% of ownership
+Name of entity
+and distribution of
+petrochemical products
+Crude oil and natural
+49.00
+Taihu Limited ("Taihu")
+("BASF-YPC")
+PRC
+PRC
+Equity method
+11
+Principal
+place of
+business
+Saudi Arabia
+Measurement
+method
+Equity method
+Principal activities
+Petroleum refining and
+processing business
+Manufacturing
+40.00
+BASF-YPC Company Limited
+Company Ltd. (“YASREF”) (i)
+interests
+37.50
+Yanbu Aramco Sinopec Refining
+Country of
+incorporation
+Saudi Arabia
+16
+309
+336
+115,725
+78,623
+2,706
+2,533
+Share of profit/(loss) from associates
+Total comprehensive income/(loss)
+Dividends declared by associates
+Other comprehensive income/(loss)
+1
+Profit/(loss) for the year
+RMB million
+RMB million
+2015
+2014
+2015
+RMB million
+CIR (i)
+Shanghai Chemical
+Turnover
+gas extraction
+1
+3,484
+(4,107)
+222
+236
+1,097
+2,248
+2,014
+3,512
+687
+(4,017)
+28
+(90)
+222
+236
+1,097
+2,248
+2,522
+(508)
+7,995
+Mansarovar Energy Colombia Ltd.
+Crude oil and natural
+5,879
+4,765
+1,446
+5,965
+Other current assets
+4,873
+580
+262
+117
+78
+1,112
+488
+2,662
+4,171
+Cash and cash equivalents
+2,243
+2,886
+759
+328
+17,209
+15,543
+49,222
+54,027
+Non-current assets
+6,754
+908
+Current assets
+1,021
+2,321
+6,991
+5,253
+4,108
+10,136
+Total current assets
+1,881
+3,003
+RMB million
+RMB million
+RMB million
+31 December
+2014
+2015
+31 December
+YASREF
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+Financial Statements (International)
+20 INTEREST IN JOINT VENTURES (Continued)
+163
+gas extraction
+("Mansarovar")
+Colombia
+British Bermuda
+Russia
+Cyprus
+Equity method
+Equity method
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+50.00
+Summarised balance sheet and reconciliation to their carrying amounts in respect of the Group's principal joint ventures:
+31 December 31 December
+2015
+RMB million
+RMB million
+RMB million
+RMB million
+RMB million
+RMB million
+2014
+BASF-YPC
+31 December
+31 December
+2014
+31 December
+2015
+31 December
+2014
+31 December
+2015
+2014
+Taihu
+Mansarovar
+CIR
+1,841
+64
+Interest expense
+32,748
+RMB million
+RMB million
+2014
+2015
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+166
+Bills receivable
+Trade accounts receivable, net
+Less: Impairment losses for bad and doubtful debts
+Amounts due from Sinopec Group Company and fellow subsidiaries
+Amounts due from associates and joint ventures
+Amounts due from third parties
+24 TRADE ACCOUNTS RECEIVABLE AND BILLS RECEIVABLE
+Net book value at 31 December
+Balance at 31 December
+15,840
+1,720
+17,038
+(61)
+31 December
+2014
+RMB million
+2015
+31 December
+6,673
+26,075
+26,097
+8,310
+Decreases
+(17)
+4,477
+1,643
+2,213
+6,673
+32,748
+34,407
+(130)
+(6)
+Additions
+Balance at 1 January
+Accumulated amortisation:
+31 December
+RMB million
+31 December
+2015
+Note:
+Balance at 31 December
+Others (i)
+Long-term receivables from and prepayment to Sinopec Group Company and fellow subsidiaries
+Prepayments for construction projects to third parties
+2014
+Operating rights of service stations
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+Financial Statements (International)
+Financial Statements (International)
+165
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+49.136
+23 LONG-TERM PREPAYMENTS AND OTHER ASSETS
+RMB million
+RMB million
+26,075
+Balance at 31 December
+Decreases
+Additions
+Balance at 1 January
+Cost:
+Operating rights of service stations
+The cost of operating rights of service stations is charged to expense on a straight-line basis over the respective periods of the rights. The movement
+of operating rights of service stations is as follows:
+26,097
+(i) Others mainly comprise prepaid operating lease charges over one year and catalyst expenditures.
+67,791
+20,261
+20,946
+4,944
+2,989
+14,935
+17,759
+66,215
+10,725
+34,245
+18,672
+525
+(16)
+6
+(57)
+(38)
+(15)
+(13)
+44
+40
+574
+530
+RMB million
+2014
+2015
+RMB million
+104,794
+530
+Sales are generally on a cash term. Credit is generally only available for major customers with well-established trading records. Amounts due from
+Sinopec Group Company and fellow subsidiaries are repayable under the same terms.
+Trade accounts receivable and bills receivables (net of impairment losses for bad and doubtful debts) primarily represent receivables that are
+neither past due nor impaired. These receivables relate to a wide range of customers for whom there is no recent history of default.
+25 INVENTORIES
+71,959
+66,300
+22,728
+22,736
+95,298
+59,313
+RMB million
+67,075
+2014
+2015
+31 December
+31 December
+Spare parts and consumables
+Finished goods
+Work in progress
+Crude oil and other raw materials
+RMB million
+2
+13
+53
+24 TRADE ACCOUNTS RECEIVABLE AND BILLS RECEIVABLE (Continued)
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+104,794
+67,075
+13,963
+10,949
+The ageing analysis of trade accounts and bills receivables (net of impairment losses for bad and doubtful debts) is as follows:
+90,831
+(530)
+(525)
+91,361
+56,651
+5,290
+3,734
+20,188
+56,126
+65,883
+31 December
+2015
+RMB million
+2014
+36
+720
+715
+104,019
+66,311
+Balance at 31 December
+Written off for the year
+Others
+31 December
+Written back for the year
+Balance at 1 January
+Impairment losses for bad and doubtful debts are analysed as follows:
+Over three years
+Between two and three years
+Between one and two years
+Within one year
+RMB million
+Provision for the year
+8
+12,275
+51.044
+Balance at 31 December
+(182)
+(2,661)
+(232)
+(1,890)
+(3,168)
+89
+279
+158
+492
+China Aviation Oil
+2015
+RMB million
+(3,164)
+24
+290
+(5,373)
+(2,633)
+Dividends declared by joint ventures
+470
+933
+Share of net (loss)/profit from joint ventures
+12
+145
+(2,541)
+(1,245)
+277
+income/(loss) from joint ventures
+Share of other comprehensive
+738
+(123)
+(128)
+(1,090)
+1,043
+1,287
+112
+63
+(92)
+252
+(245)
+503
+(256)
+870
+641
+(1,847)
+3,014
+3,455
+373
+214
+7
+(259)
+(20)
+(15)
+(54)
+(119)
+(356)
+(239)
+(721)
+(Loss)/profit before taxation
+(1,582)
+Tax expense
+Other comprehensive income/(loss)
+(2,180)
+2,205
+2,722
+279
+158
+(246)
+(252)
+(Loss)/profit for the year
+(367)
+(333)
+(809)
+(733)
+(94)
+(56)
+13
+Total comprehensive income/(loss)
+(897)
+Net book value:
+32
+164 Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+Balance at 31 December
+10
+(247)
+(1,509)
+(1,324)
+(536)
+4,408
+543
+4,693
+3,125
+904
+1,835
+51,417
+59,861
+Exchange adjustments
+63,319
+59,861
+Accumulated amortisation:
+Balance at 1 January
+3
+Exchange adjustments
+(22)
+(20)
+Written back on disposals
+(186)
+(113)
+Disposals
+Reclassification to other assets
+111
+Transferred from other long-term assets
+1,504
+1,572
+Amortisation charge for the year
+8,147
+10,725
+1,279
+Reclassification to other assets
+Transferred from other long-term assets
+Transferred from construction in progress
+RMB million
+261
+10,094
+Equity securities, listed and at quoted market price
+Other investment, unlisted and at cost (i)
+2014
+31 December
+31 December
+2015
+21 AVAILABLE-FOR-SALE FINANCIAL ASSETS
+(v) The summarized statement of comprehensive income of CIR represents the operating result for the period from 1 January 2015 to the date when the Group reclassified
+the investment interest in CIR from joint ventures to associates (note 19(i)).
+RMB million
+(iv) Other reflects the excess of consideration transferred over the net fair value of identifiable assets acquired and liabilities assumed as of the acquisition date.
+(ii) Excluding trade accounts payable and other payables.
+(i) Pursuant to the resolution passed at the Directors' meeting held on 31 October 2014 and the purchase agreement entered into with relevant vendors, the Group
+completed the acquisition from the Sinopec Group Company a 37.5% equity interests in YASREF for a consideration of approximately USD 562 million (approximately
+RMB 3,439 million) and also injected capital of approximately USD 199 million (approximately RMB 1,216 million) to YASREF on 31 December 2014.
+Note:
+The share of profit and other comprehensive loss for the year ended 31 December 2015 in all individually immaterial joint ventures accounted for
+using equity method in aggregate was RMB 4,306 million (2014: loss RMB 122 million) and RMB 324 million (2014: RMB 239 million) respectively.
+As at 31 December 2015, the carrying amount of all individually immaterial joint ventures accounted for using equity method in aggregate was RMB
+28,586 million (2014: RMB 23,694 million).
+20 INTEREST IN JOINT VENTURES (Continued)
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+(iii) Excluding provisions.
+Financial Statements (International)
+183
+10,355
+Additions
+Balance at 1 January
+Cost:
+2014
+RMB million
+RMB million
+2015
+22 LEASE PREPAYMENTS
+714
+(i) The Group acquired 10% share of Public-Stock Company Sibur Holdings ( [Sibur]) for a consideration of USD 1,338 million (approximately RMB 8,725 million) in
+December 2015. Sibur is registered in Russia, mainly engaged in business of natural gas processing and petrochemical products.
+Note:
+Other investment, unlisted and at cost, represents the Group's interests in privately owned enterprises which are mainly engaged in oil and natural
+gas activities and chemical production.
+868
+(29)
+(29)
+10,326
+Less: Impairment loss for investments
+897
+The impairment losses relating to investments for the year ended 31 December 2015 amounted to nil (2014: nil).
+63
+178
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+17,345
+2014
+RMB million
+31 December
+31 December
+2015
+RMB million
+4.29% per annum at 31 December 2015
+with maturities through 2031
+Interest rates ranging from 1.30% to
+Interest rates at 2.60% per annum at 31
+with maturities through 2030
+6.15% per annum at 31 December 2015
+RMB denominated
+Convertible bonds
+USD denominated
+Corporate bonds (ii)
+RMB denominated
+USD denominated
+JPY denominated
+23,001
+445
+461
+17,806
+Long-term loans from Sinopec Group Company and fellow subsidiaries
+Total third parties' long-term debts
+Less: Current portion
+Convertible bonds with maturity
+in 2017 (iii)
+77,785
+88,121
+21,285
+22,621
+Interest rates ranging from 1.08% to
+with maturities through 2043
+Fixed interest rates ranging from 1.25% to
+56,500
+65,500
+with maturity through 2022
+5.68% per annum at 31 December 2015
+Fixed interest rates ranging from 3.30% to
+1,103
+24,549
+4.25% per annum at 31 December 2015
+RMB denominated
+Third parties' debts
+Long-term bank loans
+Interest rate and final maturity
+EUR denominated
+5
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+for the year ended 31 December 2015
+27 DEFERRED TAX ASSETS AND LIABILITIES (Continued)
+Movements in the deferred tax assets and liabilities are as follows:
+Balance at
+Current portion of long-term loans
+1 January 2014
+income
+statement
+RMB million
+Recognised in
+consolidated
+Recognised
+in other
+comprehensive
+income
+RMB million
+Others
+RMB million
+RMB million
+RMB denominated
+4
+236
+28 SHORT-TERM AND LONG-TERM DEBTS AND LOANS FROM SINOPEC GROUP COMPANY AND FELLOW SUBSIDIARIES (Continued)
+Long-term debts represent:
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+170
+The Group's weighted average interest rates on short-term loans were 1.7% (2014: 1.9%) at 31 December 2015.
+102,965
+178,148
+14
+115,446
+112
+186
+80
+50
+USD denominated
+RMB denominated
+192
+43,929
+16,721
+105,927
+119,055
+2,868
+130,446
+181,519
+13,575
+31 December
+2014
+RMB million
+10,348
+117,230
+RMB million
+31 December
+2015
+3,272
+Between 1 month and 6 months
+Over 6 months
+The aging analysis of trade accounts and bills payables are as follows:
+Trade accounts and bills payables measured at amortised cost
+Bills payable
+Amounts due to Sinopec Group Company and fellow subsidiaries
+Amounts due to associates and joint ventures
+Amounts due to third parties
+29 TRADE ACCOUNTS AND BILLS PAYABLES
+As at 31 December 2015, the 2011 Convertible bonds have been fully converted or redeemed (2014: liability component RMB 13,433 million, derivative component
+RMB 3,288 million).
+Within 1 month or on demand
+The changes in the fair value of the derivative component from 31 December 2014 to 31 December 2015 resulted in realised loss of RMB 259 million (2014: realised
+loss of RMB 1,613 million and unrealised loss of RMB 2,997 million), which has been recorded in "finance costs" section of the consolidated income statement for the
+year ended 31 December 2015.
+198,366
+4,577
+202,943
+Interest payable
+Salaries and welfare payable
+30 ACCRUED EXPENSES AND OTHER PAYABLES
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+172 Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+202,943
+3,566
+134,012
+134,012
+5,030
+115,300
+13,682
+13,138
+184,697
+31 December
+2014
+RMB million
+RMB million
+31 December
+2015
+5,108
+Balance at
+31 December 2014
+RMB million
+From 1 January 2015 to 11 February 2015, the 2011 Convertible Bonds with a total nominal value of RMB 13,647 million were converted into 2,790,814,006 A shares
+of the Company with a conversion price of 4.89 per share. As of 11 February 2015, the total share capital of the Company has been increased to 121,071,209,646
+shares. The unconverted convertible bonds amounted to RMB 52.78 million (527,760 convertible bonds). As at 17 February 2015, the Company has redeemed and
+fully paid the unconverted portion at RMB 101.261 per convertible bond (including the accrued interest and interest tax accrued thereon).
+During the term of the 2011 Convertible Bonds, if the closing price of the A Shares of the Company is not lower than 130% of the conversion price in at least fifteen
+trading days out of any thirty consecutive trading days, the Company has the right to redeem all or part of the 2011 Convertible Bonds based on the nominal value
+plus the accrued interest ("the terms of conditional redemption").
+(192)
+112
+186
+(236)
+Less: Current portion
+annum at 31 December 2015 with maturities in 2016
+Interest rates of 1.93% per
+USD denominated
+44,300
+43,225
+with maturities through 2021
+6.15% per annum at 31 December 2015
+Interest rates ranging from interest free to
+107,787
+95,446
+(11,268)
+(10,481)
+44,350
+As at 26 January 2015, the terms of conditional redemption of 2011 Convertible Bonds of the Company have been triggered for the first time. At the 22nd meeting
+of the fifth session of the board of the Company (the "Board"), the Board has reviewed and approved the proposal for the redemption of 2011 Convertible Bonds, and
+decided to exercise the right of redemption and to redeem all of the outstanding 2011 Convertible Bonds registered on 11 February 2015.
+43,145
+150.932
+During the term of the 2011 Convertible Bonds, the conversion price may be subject to downward adjustment that if the closing prices of the Company's A Shares in
+any fifteen trading days out of any thirty consecutive trading days are lower than 80% of the prevailing conversion price, the board of directors may propose downward
+adjustment to the conversion price subject to the shareholders' approval. The adjusted conversion price shall be not less than (a) the average trading price of the
+Company's A Shares for the twenty trading days prior to the shareholders' approval, (b) the average trading price of the Company's A Shares on the day immediately
+before the shareholders' approval, (c) the net asset value per share based on the latest audited financial statements prepared under ASBE, and (d) the nominal value
+per share.
+(iii) On 1 March 2011, the Company issued convertible bonds due in 2017 with an aggregate principal amount of RMB 23 billion in the PRC (the “2011 Convertible
+Bonds"). The 2011 Convertible Bonds were issued at par value of RMB 100 and bear a fixed interest rate of 0.5% per annum for the first year, 0.7% for the second
+year, 1.0% for the third year, 1.3% for the fourth year, 1.8% for the fifth year and 2.0% for the sixth year, payable annually. The holders can convert the 2011
+Convertible Bonds into A shares of the Company from 24 August 2011 onwards at an initial conversion price of RMB 9.73 per share, subject to adjustment for,
+amongst other things, cash dividends, subdivision or consolidation of shares, bonus issues, issue of new shares, rights issues, capital distribution, change of control
+and other events which have an effect on the issued share capital of the Company (the "Conversion Option"). Unless previously redeemed, converted or purchased and
+cancelled, the 2011 Convertible Bonds will be redeemed within 5 trading days after maturity at 107% of the principal amount, including interest for the sixth year. The
+initial carrying amounts of the liability component and the derivative component, representing the Conversion Option of the 2011 Convertible Bonds, were RMB 19,279
+million and RMB 3,610 million, respectively.
+Note: (Continued)
+28 SHORT-TERM AND LONG-TERM DEBTS AND LOANS FROM SINOPEC GROUP COMPANY AND FELLOW SUBSIDIARIES (Continued)
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+Financial Statements (International)
+139,746
+Financial Statements (International)
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+(ii) These corporate bonds are carried at amotised cost. US dollar denominated corporate bonds are guaranteed by Sinopec Group Company.
+The Company issued 180-day corporate bonds of face value RMB 4 billion to corporate investors in the PRC debenture market on 31 December 2015 at par value of
+RMB 100. The effective cost of the 180-day corporate bonds is 2.75% per annum.
+The Company issued 182-day corporate bonds of face value RMB 16 billion to corporate investors in the PRC debenture market on 14 December 2015 at par value of
+RMB 100. The effective cost of the 182-day corporate bonds is 2.90% per annum.
+(i) The Company issued 180-day corporate bonds of face value RMB 10 billion to corporate investors in the PRC debenture market on 23 September 2015 at par value of
+RMB 100. The effective cost of the 180-day corporate bonds is 2.99% per annum.
+Note:
+Short-term and long-term bank loans, long-term other loans and loans from Sinopec Group Company and fellow subsidiaries are primarily unsecured
+and carried at amortised cost.
+171
+Payables for constructions
+Current
+5
+31 December 2015
+RMB million
+RMB million
+RMB million
+income
+Balance at
+Others
+in other
+comprehensive
+income
+statement
+RMB million
+RMB million
+1 January 2015
+Balance at
+Recognised
+Recognised in
+consolidated
+(841)
+(182)
+Current
+Receivables and inventories
+Accruals
+Cash flow hedges
+3,474
+Tax losses carried forward
+(383)
+(113)
+(8,635)
+Property, plant and equipment
+Non-current
+1,385
+250
+887
+413
+1,755
+3
+(1,131)
+155
+258
+2,883
+(637)
+1,792
+(3,836)
+Net deferred tax liabilities
+(21)
+(42)
+(8,390)
+Property, plant and equipment
+Non-current
+887
+973
+(182)
+(86)
+(99)
+357
+2,883
+(432)
+3,315
+Cash flow hedges
+Accruals
+258
+2,398
+(8,635)
+2,261
+7
+(6)
+13
+Others
+3
+433
+6
+Tax losses carried forward
+(436)
+282
+1,152
+(870)
+convertible bonds
+Embedded derivative component of the
+3,474
+1,213
+Available-for-sale securities
+11
+(9,131)
+5,883
+Embedded derivative component of the
+USD denominated
+11,000
+4,868
+Current portion of long-term corporate bonds
+51
+54
+54
+4,868
+163
+268
+5,613
+425
+7,855
+40,685
+11,824
+22,805
+5,559
+11,357
+RMB denominated
+10,481
+93,126
+32,878
+HKD denominated
+USD denominated
+9,628
+10,806
+RMB denominated
+11,000
+102,773
+Short-term loans
+Loans from Sinopec Group Company and fellow subsidiaries
+75,183
+71,517
+30,000
+Corporate bonds(i).
+11,268
+43,693
+Receivables and inventories
+63,915
+USD denominated
+(282)
+(1,010)
+40
+33
+1,343
+(841)
+Net deferred tax liabilities
+7
+(790)
+Others
+1
+3
+Available-for-sale securities
+(282)
+-
+282
+convertible bonds
+(4)
+31,036
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+Financial Statements (International)
+Japanese Yen ("JPY") denominated
+RMB denominated
+Current portion of long-term bank loans
+Euro ("EUR") denominated
+US Dollar ("USD") denominated
+RMB denominated
+Short-term bank loans
+169
+Third parties' debts
+31 December
+2014
+31 December
+2015
+RMB million
+Short-term debts represent:
+28 SHORT-TERM AND LONG-TERM DEBTS AND LOANS FROM SINOPEC GROUP COMPANY AND FELLOW SUBSIDIARIES
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+Financial Statements (International)
+RMB million
+Other payables
+December 2015 with maturities in 2023 (which has
+redeemed in January 2015)
+Taxes other than income tax
+302
+(vii)
+497
+462
+(vii)
+10,531
+10,618
+274
+(vii)
+6,754
+(vi)
+10,306
+10,878
+(v)
+49,399
+37,444
+6,753
+(iv)
+(viii)
+132
+The directors of the Company are of the opinion that the above transactions with related parties were conducted in the ordinary course of
+business and on normal commercial terms or in accordance with the agreements governing such transactions, and this has been confirmed by
+the independent non-executive directors.
+At 31 December 2015 and 2014, there was no guarantee given to banks by the Group in respect of banking facilities to related parties, except
+for the guarantees disclosed in Note 33.
+Included in the transactions disclosed above, for the year ended 31 December 2015 are: a) purchases by the Group from Sinopec Group
+Company and fellow subsidiaries amounting to RMB 112,449 million (2014: RMB 138,170 million) comprising purchases of products and
+services (i.e. procurement, transportation and storage, exploration and development services and production related services) of RMB 93,421
+million (2014: RMB 118,968 million), ancillary and social services provided by Sinopec Group Company and fellow subsidiaries of RMB 6,754
+million (2014: RMB 6,753 million), operating lease charges for land and buildings paid by the Group of RMB 10,618 million and RMB 462
+million (2014: RMB 10,531 million and RMB 497 million), respectively and interest expenses of RMB 1,194 million (2014: RMB 1,421 million);
+and b) sales by the Group to Sinopec Group Company and fellow subsidiaries amounting to RMB 78,418 million (2014: RMB 98,620 million),
+comprising RMB 78,184 million (2014: RMB 98,479 million) for sales of goods, RMB 207 million (2014: RMB 135 million) for interest income
+and RMB 27 million (2014: RMB 6 million) for agency commission income.
+The amounts set out in the table above in respect of the year ended 31 December 2015 and 2014 represent the relevant costs and income as
+determined by the corresponding contracts with the related parties.
+53,690
+(57,881)
+(xi)
+116
+2,319
+(ix)
+1,421
+1,194
+(x)
+135
+207
+(ix)
+(14,082)
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+1,606
+(iii)
+Exploration and development services
+Transportation and storage
+Purchases
+Sales of goods
+The principal related party transactions with Sinopec Group Company and fellow subsidiaries, associates and joint ventures, which were carried
+out in the ordinary course of business are as follows:
+The Group is part of a larger group of companies under Sinopec Group Company, which is controlled by the PRC government, and has significant
+transactions and relationships with Sinopec Group Company and fellow subsidiaries. Because of these relationships, it is possible that the terms
+of these transactions are not the same as those that would result from transactions among wholly unrelated parties.
+(a) Transactions with Sinopec Group Company and fellow subsidiaries, associates and joint ventures
+Production related services
+Parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control or jointly control the party or exercise
+significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to
+control or common control. Related parties may be individuals (being members of key management personnel, significant shareholders and/or their
+close family members) or other entities and include entities which are under the significant influence of related parties of the Group where those
+parties are individuals, and post-employment benefit plans which are for the benefit of employees of the Group or of any entity that is a related
+party of the Group.
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+176
+Financial Statements (International)
+Financial Statements (International)
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015 175
+The Group is defendant in certain lawsuits as well as the named party in other proceedings arising in the ordinary course of business. Management
+has assessed the likelihood of an unfavourable outcome of such contingencies, lawsuits or other proceedings and believes that any resulting
+liabilities will not have a material adverse effect on the financial position, operating results or cash flows of the Group.
+34 RELATED PARTY TRANSACTIONS
+1,299
+Ancillary and social services
+Operating lease charges for buildings
+134,424
+92,990
+(ii)
+305,044
+RMB million
+RMB million
+211,868
+(i)
+Operating lease charges for land
+2014
+Note
+Net loans (repaid to)/obtained from related parties
+Net deposits (placed with)/withdrawn from related parties
+Interest expense
+Interest income
+Agency commission income
+Other operating lease charges
+2015
+Legal contingencies
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+34 RELATED PARTY TRANSACTIONS (Continued)
+24,711
+20,458
+16,847
+13,216
+43,977
+49,249
+14,935
+8,226
+17,759
+9,084
+25,478
+22,406
+31 December
+2015
+RMB million
+Long-term loans excluding current portion from Sinopec Group Company and fellow subsidiaries
+Total
+from Sinopec Group Company and fellow subsidiaries
+Short-term loans and current portion of long-term loans
+3,564
+Other long-term liabilities
+6,470
+102,965
+The Group participates in various defined contribution retirement plans organised by municipal and provincial governments for its staff. The
+details of the Group's employee benefits plan are disclosed in Note 35. As at 31 December 2015 and 2014, the accrual for the contribution to
+post-employment benefit plans was not material.
+501
+8,510
+RMB'000
+8,009
+2014
+2015
+RMB'000
+5,225
+510
+5,735
+(c) Contributions to defined contribution retirement plans
+Short-term employee benefits
+Retirement scheme contributions
+43,929
+Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the
+Group, directly or indirectly, including directors and supervisors of the Group. The key management personnel compensation is as follows:
+As at and for the year ended 31 December 2015, and as at and for the year ended 31 December 2014, no individually significant impairment
+losses for bad and doubtful debts were recognised in respect of amounts due from Sinopec Group Company and fellow subsidiaries, associates
+and joint ventures.
+The long-term borrowings mainly include an interest-free loan with a maturity period of 20 years amounting to RMB 35,560 million from the
+Sinopec Group Company (a state-owned enterprise) through the Sinopec Finance. This borrowing is a special arrangement to reduce financing
+costs and improve liquidity of the Company during its initial global offering in 2000.
+Amounts due from/to Sinopec Group Company and fellow subsidiaries, associates and joint ventures, other than short-term loans and long-term
+loans, bear no interest, are unsecured and are repayable in accordance with normal commercial terms. The terms and conditions associated
+with short-term loans and long-term loans payable to Sinopec Group Company and fellow subsidiaries are set out in Note 28.
+194,138
+130,129
+43,145
+44,300
+(b) Key management personnel emoluments
+for the year ended 31 December 2015
+Accrued expenses and other payables
+Total
+The Company has entered into a non-exclusive "Agreement for Mutual Provision of Products and Ancillary Services" ("Mutual Provision
+Agreement") with Sinopec Group Company effective from 1 January 2000 in which Sinopec Group Company has agreed to provide the
+Group with certain ancillary production services, construction services, information advisory services, supply services and other services and
+products. While each of Sinopec Group Company and the Company is permitted to terminate the Mutual Provision Agreement upon at least
+six months notice, Sinopec Group Company has agreed not to terminate the agreement if the Group is unable to obtain comparable services
+from a third party. The pricing policy for these services and products provided by Sinopec Group Company to the Group is as follows:
+(1) the government-prescribed price;
+•
+•
+In connection with the Reorganisation, the Company and Sinopec Group Company entered into a number of agreements under which 1) Sinopec
+Group Company will provide goods and products and a range of ancillary, social and supporting services to the Group and 2) the Group will sell
+certain goods to Sinopec Group Company. These agreements impacted the operating results of the Group for the year ended 31 December 2015.
+The terms of these agreements are summarised as follows:
+(xi) The Group obtained or repaid loans from or to Sinopec Group Company and fellow subsidiaries.
+(x) Interest expense represents interest charges on the loans and advances obtained from Sinopec Group Company and fellow subsidiaries.
+(ix) Interest income represents interest received from deposits placed with Sinopec Finance Company Limited and Sinopec Century Bright Capital Investment Limited,
+finance companies controlled by Sinopec Group Company. The applicable interest rate is determined in accordance with the prevailing saving deposit rate. The
+balance of deposits at 31 December 2015 was RMB 18,303 million (2014: RMB 4,221 million).
+(2) where there is no government-prescribed price, the government-guidance price;
+(viii) Agency commission income represents commission earned for acting as an agent in respect of sales of products and purchase of materials for certain entities
+owned by Sinopec Group Company.
+(vi) Ancillary and social services represent expenditures for social welfare and support services such as educational facilities, media communication services, sanitation,
+accommodation, canteens, property maintenance and management services.
+(v) Production related services represent ancillary services rendered in relation to the Group's operations such as equipment repair and general maintenance,
+insurance premium, technical research, communications, firefighting, security, product quality testing and analysis, information technology, design and engineering,
+construction of oilfield ground facilities, refineries and chemical plants, manufacture of replacement parts and machinery, installation, project management and
+environmental protection.
+(iii) Transportation and storage represent the cost for the use of railway, road and marine transportation services, pipelines, loading, unloading and storage facilities.
+(iv) Exploration and development services comprise direct costs incurred in the exploration and development such as geophysical, drilling, well testing and well
+measurement services.
+(ii) Purchases represent the purchase of materials and utility supplies directly related to the Group's operations such as the procurement of raw and ancillary
+materials and related services, supply of water, electricity and gas.
+(i) Sales of goods represent the sale of crude oil, intermediate petrochemical products, petroleum products and ancillary materials.
+Note:
+(a) Transactions with Sinopec Group Company and fellow subsidiaries, associates and joint ventures (Continued)
+(vii) Operating lease charges represent the rental paid to Sinopec Group Company for operating leases in respect of land, buildings and equipment.
+Trade accounts payable
+(3) where there is neither a government-prescribed price nor a government-guidance price, the market price; or
+The Company has entered into a non-exclusive "Agreement for Provision of Cultural and Educational, Health Care and Community Services"
+with Sinopec Group Company effective from 1 January 2000 in which Sinopec Group Company has agreed to provide the Group with certain
+cultural, educational, health care and community services on the same pricing terms and termination conditions as described in the above
+Mutual Provision Agreement.
+Long-term prepayments and other assets
+Prepaid expenses and other current assets
+Trade accounts receivable
+31 December
+2014
+RMB million
+Amounts due from/to Sinopec Group Company and fellow subsidiaries, associates and joint ventures included in the following accounts captions
+are summarised as follows:
+(a) Transactions with Sinopec Group Company and fellow subsidiaries, associates and joint ventures (Continued)
+Pursuant to the Equity Transfer Agreement relating to the Transfer of 100% Equity Interest of Jingtian Co. entered into by the Company and
+Sinopec Baichuan Economic and Trading Company (Baichuan Co.) on 26 August 2015, the Company transferred 100% equity interest of Sinopec
+Beijing Jingtian Engineering and Construction Co., Ltd. (Jingtian Co.) to Baichuan Co. in December 2015, which was directly and wholly owned
+by Sinopec Group Company. The preliminary consideration of this transaction was RMB 1,869 million, which was based on the fair value of
+Jingtian Co.'s net assets as of 31 March 2015, adjusted by the subsequent changes to Jingtian Co.'s net assets between 31 March 2015 and 31
+December 2015 according to the audited financial statements of Jingtian Co. as of each date.
+34 RELATED PARTY TRANSACTIONS (Continued)
+(4) where none of the above is applicable, the price to be agreed between the parties, which shall be based on a reasonable cost incurred in
+providing such services plus a profit margin not exceeding 6%.
+for the year ended 31 December 2015
+Financial liabilities carried at amortised costs
+Financial Statements (International)
+177
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+The Company has entered into a service stations franchise agreement with Sinopec Group Company effective from 1 January 2000 under
+which its service stations and retail stores would exclusively sell the refined products supplied by the Group.
+The Company has entered into agreements with Sinopec Group Company effective from 1 January 2000 under which the Group has been
+granted the right to use certain trademarks, patents, technology and computer software developed by Sinopec Group Company.
+The Company has entered into a series of lease agreements with Sinopec Group Company to lease certain lands and buildings effective
+on 1 January 2000. The lease term is 40 or 50 years for lands and 20 years for buildings, respectively. The Company and Sinopec Group
+Company can renegotiate the rental amount every three years for land. The Company and Sinopec Group Company can renegotiate the rental
+amount for buildings every year. However such amount cannot exceed the market price as determined by an independent third party.
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+Under existing legislation, management believes that there are no probable liabilities that will have a material adverse effect on the financial
+position or operating results of the Group. The PRC government, however, has moved, and may move further towards more rigorous enforcement
+of applicable laws, and towards the adoption of more stringent environmental standards. Environmental liabilities are subject to considerable
+uncertainties which affect management's ability to estimate the ultimate cost of remediation efforts. These uncertainties include (i) the exact nature
+and extent of the contamination at various sites including, but not limited to refineries, oil fields, service stations, terminals and land development
+areas, whether operating, closed or sold, (ii) the extent of required cleanup efforts, (iii) varying costs of alternative remediation strategies, (iv)
+changes in environmental remediation requirements, and (v) the identification of new remediation sites. The amount of such future cost is
+indeterminable due to such factors as the unknown magnitude of possible contamination and the unknown timing and extent of the corrective
+actions that may be required. Accordingly, the outcome of environmental liabilities under proposed or future environmental legislation cannot
+reasonably be estimated at present, and could be material. The Group paid normal routine pollutant discharge fees of approximately RMB 5,813
+million in the consolidated financial statements for the year ended 31 December 2015 (2014: RMB 5,352 million).
+Financial Statements (International)
+Management monitors the conditions that are subject to the guarantees to identify whether it is probable that a loss has occurred, and recognises
+any such losses under guarantees when those losses are estimable. At 31 December 2015 and 2014, it was not probable that the Group will be
+required to make payments under the guarantees. Thus no liabilities have been accrued for a loss related to the Group's obligation under these
+guarantee arrangements.
+In October 2000, the Company issued 15,102,439,000 H shares with a par value of RMB 1.00 each, representing 12,521,864,000 H shares and
+25,805,750 American Depositary Shares ("ADSS", each representing 100 H shares), at prices of HKD 1.59 per H share and USD 20.645 per ADS,
+respectively, by way of a global initial public offering to Hong Kong and overseas investors. As part of the global initial public offering, 1,678,049,000
+state-owned ordinary shares of RMB 1.00 each owned by Sinopec Group Company were converted into H shares and sold to Hong Kong and
+overseas investors.
+The Company was established on 25 February 2000 with a registered capital of 68.8 billion domestic state-owned shares with a par value of RMB
+1.00 each. Such shares were issued to Sinopec Group Company in consideration for the assets and liabilities transferred to the Company (Note 1).
+Pursuant to the resolutions passed at an Extraordinary General Meeting held on 25 July 2000 and approvals from relevant government authorities,
+the Company is authorised to increase its share capital to a maximum of 88.3 billion shares with a par value of RMB 1.00 each and offer not more
+than 19.5 billion shares with a par value of RMB 1.00 each to investors outside the PRC. Sinopec Group Company is authorised to offer not more
+than 3.5 billion shares of its shareholdings in the Company to investors outside the PRC. The shares sold by Sinopec Group Company to investors
+outside the PRC would be converted into H shares.
+118,280
+92,767
+25,513
+121,071
+95,558
+25,513
+RMB million
+In July 2001, the Company issued 2.8 billion listed A shares with a par value of RMB 1.00 each at RMB 4.22 by way of a public offering to natural
+persons and institutional investors in the PRC.
+31 December
+2014
+95,557,771,046 listed A shares (2014: 92,766,957,040) of RMB 1.00 each
+25,513,438,600 listed H shares (2014: 25,513,438,600) of RMB 1.00 each
+Registered, issued and fully paid
+29,613
+6
+121
+33,115
+(714)
+(599)
+31 December
+2015
+RMB million
+1,008
+During the year ended 31 December 2010, the Company issued 88,774 listed A shares with a par value of RMB 1.00 each, as a result of exercise of
+188,292 warrants entitled to the Bonds with Warrants.
+During the year ended 31 December 2012, the Company issued 117,724,450 listed A shares with a par value of RMB 1.00 each, as a result of
+conversion by the holders of the 2011 Convertible Bonds.
+There were no changes in the management's approach to capital management of the Group during the year. Neither the Company nor any of its
+subsidiaries is subject to externally imposed capital requirements.
+The schedule of the contractual maturities of loans and commitments are disclosed in Notes 28 and 33, respectively.
+Management optimises the structure of the Group's capital, which comprises of equity and debts. In order to maintain or adjust the capital
+structure of the Group, management may cause the Group to issue new shares, adjust the capital expenditure plan, sell assets to reduce debt, or
+adjust the proportion of short-term and long-term loans. Management monitors capital on the basis of the debt-to-capital ratio, which is calculated
+by dividing long-term loans (excluding current portion), including long-term debts and loans from Sinopec Group Company and fellow subsidiaries,
+by the total of equity attributable to owners of the Company and long-term loans (excluding current portion), and liability-to-asset ratio, which is
+calculated by dividing total liabilities by total assets. Management's strategy is to make appropriate adjustments according to the Group's operating
+and investment needs and the changes of market conditions, and to maintain the debt-to-capital ratio and the liability-to-asset ratio of the Group at
+a range considered reasonable. As at 31 December 2015, the debt-to-capital ratio and the liability-to-asset ratio of the Group were 17.2% (2014:
+20.3%) and 45.7% (2014: 55.5%), respectively.
+Capital management
+All A shares and H shares rank pari passu in all material aspects.
+During the year ended 31 December 2015, the Company issued 2,790,814,006 listed A shares with a par value of RMB 1.00 each, as a result of
+conversion by the holders of the 2011 Convertible Bonds (Note 28(iii)).
+During the year ended 31 December 2014, the Company issued 1,715,081,853 listed A shares with a par value of RMB 1.00 each, as a result of
+conversion by the holders of the 2011 Convertible Bonds.
+During the year ended 31 December 2011, the Company issued 34,662 listed A shares with a par value of RMB 1.00 each, as a result of conversion
+by the holders of the 2011 Convertible Bonds.
+During the year ended 31 December 2013, the Company issued 114,076 listed A shares with a par value of RMB 1.00 each, as a result of
+conversion by the holders of the 2011 Convertible Bonds.
+32 SHARE CAPITAL (Continued)
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+Financial Statements (International)
+Financial Statements (International)
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015 173
+On 14 February 2013, the Company issued 2,845,234,000 listed H shares ("the Placing") with a par value of RMB 1.00 each at the Placing Price
+of HKD 8.45 per share. The aggregate gross proceeds from the Placing amounted to approximately HKD 24,042,227,300.00 and the aggregate net
+proceeds (after deduction of the commissions and estimated expenses) amounted to approximately HKD 23,970,100,618.00.
+In June 2013, the Company issued 21,011,962,225 listed A shares and 5,887,716,600 listed H shares as a result of bonus issues of 2 shares
+converted from the retained earnings, and 1 share transferred from the share premium for every 10 existing shares.
+33 COMMITMENTS AND CONTINGENT LIABILITIES
+1,081
+2,899
+85,312
+27,647
+23,892
+55,400
+58,778
+1,695
+1,457
+85,581
+839
+2014
+RMB million
+31 December
+31 December
+2015
+RMB million
+Derivative financial instruments
+Receipts in advance
+Environmental contingencies
+1,185
+3,309
+31,425
+92,649
+26,004
+2014
+RMB million
+RMB million
+29,613
+2015
+32 SHARE CAPITAL
+Balance at 31 December
+Exchange adjustments
+27,586
+Utilised
+Balance at 1 January
+Provision for the year
+Provisions primarily represent provision for future dismantlement costs of oil and gas properties. The Group has mainly committed to the PRC
+government to established certain standardised measures for the dismantlement of its oil and gas properties by making reference to the industry
+practices and is thereafter constructively obligated to take dismantlement measures of its oil and gas properties.
+Movement of provision of the Group's obligations for the dismantlement of its oil and gas properties is as follow:
+222,075
+212,136
+18,990
+2,750
+89,918
+Accretion expenses
+Operating lease commitments
+31 PROVISIONS
+At 31 December 2015 and 2014, the future minimum lease payments under operating leases are as follows:
+160
+125
+312
+283
+RMB million
+RMB million
+2014
+32
+31 December
+Between four and five years
+Thereafter
+Between one and two years
+Between two and three years
+Between three and four years
+Within one year
+Estimated future annual payments are as follows:
+The Group is required to make payments of exploration license fees and production right usage fees to the Ministry of Land and Resources annually
+which are expensed. Payments incurred were approximately RMB 372 million for the year ended 31 December 2015 (2014: RMB 408 million).
+Exploration licenses for exploration activities are registered with the Ministry of Land and Resources. The maximum term of the Group's exploration
+licenses is 7 years, and may be renewed twice within 30 days prior to expiration of the original term with each renewal being for a two-year term.
+The Group is obligated to make progressive annual exploration investment relating to the exploration blocks in respect of which the license is
+issued. The Ministry of Land and Resources also issues production licenses to the Group on the basis of the reserve reports approved by relevant
+authorities. The maximum term of a full production license is 30 years unless a special dispensation is given by the State Council. The maximum
+term of production licenses issued to the Group is 80 years as a special dispensation was given to the Group by the State Council. The Group's
+production license is renewable upon application by the Group 30 days prior to expiration.
+Exploration and production licenses
+31 December
+2015
+Pursuant to certain of the joint venture agreements entered into by the Group, the Group is obliged to purchase products from the joint ventures
+based on market prices.
+32
+22
+5,720
+The Group leases land and buildings, service stations and other equipment through non-cancellable operating leases. These operating leases do not
+contain provisions for contingent lease rentals. None of the rental agreements contains escalation provisions that may require higher future rental
+payments.
+6,713
+5,552
+6,010
+168
+703
+22
+Joint ventures
+Others
+31 December
+2015
+RMB million
+At 31 December 2015 and 2014, guarantees by the group in respect of facilities granted to the parties below are as follows:
+Contingent liabilities
+1,356
+811
+19
+21
+31 December
+2014
+RMB million
+Commitments to joint ventures
+834
+1,317
+for the year ended 31 December 2015
+12,430
+12,984
+13,091
+13,113
+13,199
+13,480
+13,265
+13,063
+13,737
+31 December
+2014
+31 December
+2015
+RMB million
+At 31 December 2015 and 2014, capital commitments are as follows:
+Capital commitments
+33 COMMITMENTS AND CONTINGENT LIABILITIES (Continued)
+Between one and two years
+Between two and three years
+Between three and four years
+Between four and five years
+Thereafter
+Within one year
+RMB million
+284,300
+13,909
+350,022
+174
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+297,425
+(i) The investment commitments of the Group is RMB 4,089 million (2014: RMB 4,030 million).
+Note:
+These capital commitments relate to oil and gas exploration and development, refining and petrochemical production capacity expansion projects,
+the construction of service stations and oil depots and investment commitments.
+113,017
+47,043
+160,060
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+241,181
+31 December
+2014
+RMB million
+363,974
+2015
+RMB million
+31 December
+Authorised and contracted for (i)
+138,795
+102,386
+Authorised but not contracted for
+107,787
+More than 1
+year but less
+than 2 years
+RMB million
+More than 2
+years but less
+than 5 years
+RMB million
+75,183
+75,794
+75,794
+4,328
+Within
+1 year or
+on demand
+RMB million
+129,849
+More than
+5 years
+RMB million
+cash flow
+RMB million
+Bills payable
+amount
+Carrying undiscounted
+Total
+contractual
+31 December 2014
+Accrued expenses and other payables
+Trade accounts payable
+fellow subsidiaries
+Loans from Sinopec Group Company and
+59,678
+16,411
+Short-term debts
+Long-term debts
+RMB million
+63,221
+660,478
+146,110
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+186
+50,432
+Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates. The objective of market risk management is
+to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.
+Market risk
+Management believes that the Group's current cash on hand, expected cash flows from operations and available standby credit facilities from
+financial institutions will be sufficient to meet the Group's working capital requirements and repay its short-term debts and obligations when they
+become due.
+81,800
+69,855
+17,712
+104,571
+491,111
+636,594
+45,889
+104,571
+4,577
+4,577
+4,577
+198,366
+198,366
+198,366
+35,911
+6,634
+1,301
+103,475
+147,321
+104,571
+41,640
+Total
+88,062
+494,486
+More than 1
+year but less
+than 2 years
+RMB million
+Within
+1 year or
+on demand
+RMB million
+cash flow
+RMB million
+RMB million
+contractual
+undiscounted
+Carrying
+amount
+31 December 2015
+The following table sets out the remaining contractual maturities at the balance sheet date of the Group's financial liabilities, which are based on
+contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on prevailing rates current
+at the balance sheet date) and the earliest date the Group would be required to repay:
+At 31 December 2015, the Group has standby credit facilities with several PRC financial institutions which provide borrowings up to RMB 297,997
+million (2014: RMB 302,570 million) on an unsecured basis, at a weighted average interest rate of 2.50% per annum (2014: 3.51%). At 31
+December 2015, the Group's outstanding borrowings under these facilities were RMB 32,991 million (2014: RMB 78,983 million) and were included
+in debts.
+Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group's approach in managing
+liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed
+conditions, without incurring unacceptable losses or risking damage to the Group's reputation. Management prepares monthly cash flow budget
+to ensure that the Group will always have sufficient liquidity to meet its financial obligations as they fall due. The Group arranges and negotiates
+financing with financial institutions and maintains a certain level of standby credit facilities to reduce the Group's liquidity risk.
+Liquidity risk
+38 FINANCIAL RISK MANAGEMENT AND FAIR VALUES (Continued)
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+Financial Statements (International)
+Financial Statements (International)
+185
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+The carrying amounts of cash and cash equivalents, time deposits with financial institutions, trade accounts and bills receivables, derivative financial
+instruments and other receivables, represent the Group's maximum exposure to credit risk in relation to financial assets.
+Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations,
+and arises principally from the Group's deposits placed with financial institutions and receivables from customers. To limit exposure to credit risk
+relating to deposits, the Group primarily places cash deposits only with large financial institutions in the PRC with acceptable credit ratings. The
+majority of the Group's trade accounts receivable relate to sales of petroleum and chemical products to related parties and third parties operating
+in the petroleum and chemical industries. No single customer accounted for greater than 10% of total accounts receivable at 31 December 2015,
+except the amounts due from Sinopec Group Company and fellow subsidiaries. Management performs ongoing credit evaluations of the Group's
+customers' financial condition and generally does not require collateral on trade accounts receivable. The Group maintains an impairment loss for
+doubtful accounts and actual losses have been within management's expectations.
+Credit risk
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+The Group's risk management policies are established to identify and analyse the risks faced by the Group, and set appropriate risk limits and
+controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market
+conditions and the Group's activities. The Group, through its training and management controls and procedures, aims to develop a disciplined and
+constructive control environment in which all employees understand their roles and obligations. Internal audit department undertakes both regular
+and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Group's audit committee.
+More than 2
+years but less
+than 5 years
+RMB million
+More than
+5 years
+RMB million
+Short-term debts
+71,517
+477,266
+88,062
+Accrued expenses and other payables
+3,566
+3,566
+Bills payable
+35,560
+8,795
+464
+44,439
+130,446
+130,446
+3,566
+88,062
+342,736
+130,446
+89,258
+88,229
+fellow subsidiaries
+Loans from Sinopec Group Company and
+24,118
+41,637
+41,176
+72,476
+3,747
+72,476
+110,678
+95,446
+Long-term debts
+Trade accounts payable
+for the year ended 31 December 2015
+7,875
+Currency risk
+Level 1
+2,750
+2,750
+8,136
+261
+2,445
+305
+2,445
+305
+3,640
+4,496
+3,640
+4,235
+261
+Total
+RMB million
+RMB million
+RMB million
+RMB million
+Level 3
+Level 2
+Level 1
+At 31 December 2014
+- Other derivative financial liabilities
+Derivative financial instruments:
+RMB million
+Level 2
+RMB million
+Level 3
+RMB million
+Total
+RMB million
+The Board of Directors has overall responsibility for the establishment, oversight of the Group's risk management framework, and developing and
+monitoring the Group's risk management policies.
+12,622
+12,805
+183
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+188
+During the years ended 31 December 2015 and 2014, there were no transfers between instruments in Level 1 and Level 2.
+│| | |
+20,358
+17,070
+3,288
+1,920
+1,920
+Liabilities
+9,737
+9,737
+2,885
+183
+- Other derivative financial liabilities
+- Embedded derivative components of the convertible bonds
+Derivative financial instruments:
+Liabilities
+- Derivative financial assets
+Derivative financial instruments:
+Available-for-sale financial assets:
+- Listed
+Assets
+3,068
+- Derivative financial assets
+Derivative financial instruments:
+- Listed
+16
+1,923
+288
+295
+2014
+RMB million
+2015
+RMB million
+31 December
+31 December
+USD
+EUR
+A 5 percent strengthening/weakening of RMB against the following currencies at 31 December 2015 and 2014 would have increased/decreased net
+profit for the year of the Group by the amounts shown below. This analysis has been determined assuming that the change in foreign exchange rates
+had occurred at the balance sheet date and had been applied to the foreign currency balances to which the Group has significant exposure as stated
+above, and that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for 2014.
+JPY 8,662
+HKD 6
+USD 8,382
+EUR 57
+JPY
+2014
+RMB million
+HKD 6
+USD 1,181
+EUR 1,108
+RMB million
+31 December
+2015
+HKD
+JPY
+EUR
+USD
+Gross exposure arising from loans and borrowings
+Included in short-term and long-term debts and loans from Sinopec Group Company and fellow subsidiaries of the Group are the following amounts
+denominated in a currency other than the functional currency of the entity to which they relate:
+Currency risk arises on financial instruments that are denominated in a currency other than the functional currency in which they are measured. The
+Group's currency risk exposure primarily relates to short-term and long-term debts and loans from Sinopec Group Company and fellow subsidiaries
+denominated in USD, JPY and HKD. The Group enters into foreign exchange contracts to manage its currency risk exposure.
+31 December
+38 FINANCIAL RISK MANAGEMENT AND FAIR VALUES (Continued)
+17
+Interest rate risk
+Available-for-sale financial assets:
+Assets
+At 31 December 2015
+Level 3 (lowest level): fair values measured using valuation techniques in which any significant input is not based on observable market data.
+•
+Level 2: fair values measured using quoted prices in active markets for similar financial instruments, or using valuation techniques in which
+all significant inputs are directly or indirectly based on observable market data.
+.
+Level 1 (highest level): fair values measured using quoted prices (unadjusted) in active markets for identical financial instruments.
+•
+its entirety based on the lowest level of input that is significant to that fair value measurement. The levels are defined as follows:
+The following table presents the carrying value of financial instruments measured at fair value at the balance sheet date across the three levels
+of the fair value hierarchy defined in IFRS 7, ‘Financial Instruments: Disclosures', with the fair value of each financial instrument categorised in
+Other than the amounts as disclosed above, the amounts of other financial assets and liabilities of the Group are substantially denominated in the
+functional currency of respective entity within the Group.
+(i) Financial instruments carried at fair value
+38 FINANCIAL RISK MANAGEMENT AND FAIR VALUES (Continued)
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+Financial Statements (International)
+Financial Statements (International)
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015 187
+As at 31 December 2015, it is estimated that a general increase/decrease of USD 10 per barrel in basic price of derivative financial instruments,
+with all other variables held constant, would impact the fair value of derivative financial instruments, which would decrease/increase the Group's
+profit for the period by approximately RMB 1,951 million (2014: decrease/increase RMB 1,167 million), and decrease/increase the Group's other
+reserves by approximately RMB 3,052 million (2014: increase/decrease RMB 2,206 million). This sensitivity analysis has been determined assuming
+that the change in prices had occurred at the balance sheet date and the change was applied to the Group's derivative financial instruments at that
+date with exposure to commodity price risk. The analysis is performed on the same basis for 2014.
+The Group engages in oil and gas operations and is exposed to commodity price risk related to price volatility of crude oil, refined oil products and
+chemical products. The fluctuations in prices of crude oil, refined oil products and chemical products could have significant impact on the Group.
+The Group uses derivative financial instruments, including commodity futures and swaps, to manage a portion of this risk. As at 31 December 2015,
+the Group had certain commodity contracts of crude oil, refined oil products and chemical products designated as qualified cash flow hedges and
+economic hedges. The fair values of these derivative financial instruments as at 31 December 2015 are set out in Notes 26 and 30.
+Commodity price risk
+As at 31 December 2015, it is estimated that a general increase/decrease of 100 basis points in variable interest rates, with all other variables held
+constant, would decrease/increase the Group's net profit for the year by approximately RMB 91 million (2014: RMB 1,199 million). This sensitivity
+analysis has been determined assuming that the change of interest rates was applied to the Group's debts outstanding at the balance sheet date
+with exposure to cash flow interest rate risk. The analysis is performed on the same basis for 2014.
+The Group's interest rate risk exposure arises primarily from its short-term and long-term debts. Debts bearing interest at variable rates and at fixed
+rates expose the Group to cash flow interest rate risk and fair value interest rate risk respectively. The interest rates of short-term and long-term
+debts, and loans from Sinopec Group Company and fellow subsidiaries of the Group are disclosed in Note 28.
+Fair values
+market risk.
+for the year ended 31 December 2015
+The Group has exposure to the following risks from its uses of financial instruments:
+Marketing and distribution
+Refining
+Exploration and production
+Depreciation, depletion and amortisation
+Corporate and others
+Chemicals
+Marketing and distribution
+Refining
+Exploration and production
+Capital expenditure
+Chemicals
+(1) Information of reportable segmental revenues, profits or losses, assets and liabilities (Continued)
+Segment capital expenditure is the total cost incurred during the year to acquire segment assets that are expected to be used for more than one
+year.
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+Financial Statements (International)
+Financial Statements (International)
+181
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+805,791
+14,966
+18,916
+658,910
+Total liabilities
+36 SEGMENT REPORTING (Continued)
+Other unallocated liabilities
+Corporate and others
+Exploration and production
+48,902
+52,155
+154,640
+112,249
+3,648
+2,821
+15,850
+17,471
+26,989
+22,115
+Impairment losses on long-lived assets
+27,957
+80,196
+54,710
+RMB million
+RMB million
+2014
+2015
+Corporate and others
+Chemicals
+Marketing and distribution
+Refining
+15,132
+16,557
+7,820
+Deferred tax liabilities
+100,552
+96,773
+- Refining
+- Exploration and production
+Segment liabilities
+Liabilities
+1,451,368
+1,443,129
+Total assets
+15,886
+58,578
+19,013
+68,557
+Cash and cash equivalents and time deposits with financial institutions
+Other unallocated assets
+868
+6,979
+7,469
+Deferred tax assets
+10,326
+Available-for-sale financial assets
+80,593
+82,970
+Interest in associates and joint ventures
+10,100
+8,259
+67,327
+118,897
+146,110
+88,229
+Loans from Sinopec Group Company and fellow subsidiaries
+107,787
+95,446
+Long-term debts
+1,091
+1,048
+Income tax payable
+75,183
+- Marketing and distribution
+41,517
+452,834
+405,495
+Total segment liabilities
+138,930
+104,194
+- Corporate and others
+27,532
+27,053
+- Chemicals
+118,493
+Short-term debts
+15,015
+14,075
+12,491
+RMB 3,000
+China International United Petroleum and
+100.00
+RMB 1,000
+Sinopec Chemical Sales Company Limited
+100.00
+RMB 1,595
+Sinopec Qingdao Petrochemical Company Limited
+100.00
+RMB 3,374
+100.00
+100.00
+100.00
+RMB 12,000
+Sinopec Lubricant Company Limited
+Liability Company
+Sinopec Yizheng Chemical Fibre Limited
+Company Limited
+Sinopec Pipeline Storage & Transportation
+100.00
+RMB 20,125
+Principal activities
+RMB 4,000
+Interests
+held by
+by the non-controlling
+Company % interests %
+100.00
+Chemical Company Limited
+USD 300
+petroleum products
+petrochemical products and
+Manufacturing of intermediate
+petrochemical materials
+products, lubricant base oil, and
+Production and sale of refined petroleum
+and polyester fibres
+Production and sale of polyester chips
+Pipeline storage and transportation of
+crude oil
+Investment in exploration, production
+and sale of petroleum and natural gas
+Coal chemical industry investment
+management, production and sale of
+coal chemical products
+Manufacturing of intermediate
+petrochemical products and
+petroleum products
+Sinopec Overseas Investment Holding Limited ("SOIH")
+Limited Liability Company
+98.98
+RMB 5,294
+Sinopec Beihai Refining and Chemical
+100.00
+RMB 1,400
+China Petrochemical International Company Limited
+100.00
+RMB 1,500
+Sinopec Catalyst Company Limited
+100.00
+1.02
+(million)
+RMB 8,000
+Interests held
+100.00
+Mainland China
+Others
+External sales
+The following tables set out information about the geographical information of the Group's external sales and the Group's non-current assets,
+excluding financial instruments and deferred tax assets. In presenting information on the basis of geographical segments, segment revenue is
+based on the geographical location of customers, and segment assets are based on the geographical location of the assets.
+(2) Geographical information
+3,619
+5,146
+8
+112
+1,106
+142
+Non-current assets
+Mainland China
+40
+29
+9
+2,436
+4,864
+90,097
+96,368
+1,559
+1,585
+12,130
+11,996
+19
+Others
+182
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+RMB 13,203
+Sinopec Yangzi Petrochemical Company Limited
+Sinopec Great Wall Energy & Chemical
+Company Limited
+Particulars of
+issued capital
+Sinopec International Petroleum Exploration and
+Production Limited ("SIPL")
+Name of company
+At 31 December 2015, the following list contains the particulars of subsidiaries which principally affected the results, assets and liabilities of the
+Group.
+37 PRINCIPAL SUBSIDIARIES
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+1,068,110
+1,003,521
+64,589
+RMB million
+2014
+31 December
+2,062,775
+763,139
+2,825,914
+1,027,070
+56,081
+1,083,151
+2015
+RMB million
+31 December
+1,579,364
+439,519
+2,018,883
+RMB million
+2014
+2015
+RMB million
+1,336,942
+1,254,794
+Total segment assets
+147,015
+800,962
+175,534
+120,650
+211,094
+128,759
+141,544
+71,019
+69,550
+57,740
+RMB million
+1,092,244
+RMB million
+2015
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+180
+Turnover and other operating revenues
+Other operating revenues
+Corporate and others
+Marketing and distribution
+Chemicals
+Exploration and production
+Refining
+Other operating revenues
+Elimination of inter-segment sales
+Turnover
+2014
+Inter-segment sales
+921,612
+1,086,098
+3,056
+1,089,154
+5,317
+5,004
+16,503
+9,894
+2,781,641
+1,976,412
+(1,889,105)
+(1,263,234)
+1,308,837
+782,203
+1,267,778
+587,663
+721,174
+436,749
+419,201
+317,918
+62,208
+42,743
+356,993
+275,175
+5,446
+1,463,836
+1,458,390
+345,454
+External sales
+Corporate and others
+Inter-segment sales
+(ii) Refining, which processes and purifies crude oil, that is sourced from the exploration and production segment of the Group and external
+suppliers, and manufactures and sells petroleum products to the chemicals and marketing and distribution segments of the Group and external
+customers.
+(i) Exploration and production, which explores and develops oil fields, produces crude oil and natural gas and sells such products to the refining
+segment of the Group and external customers.
+In a manner consistent with the way in which information is reported internally to the Group's chief operating decision maker for the purposes of
+resource allocation and performance assessment, the Group has identified the following five reportable segments. No operating segments have been
+aggregated to form the following reportable segments.
+Segment information is presented in respect of the Group's business segments. The format is based on the Group's management and internal
+reporting structure.
+36 SEGMENT REPORTING
+As stipulated by the regulations of the PRC, the Group participates in various defined contribution retirement plans organised by municipal and
+provincial governments for its staff. The Group is required to make contributions to the retirement plans at rates ranging from 17.0% to 24.0% of
+the salaries, bonuses and certain allowances of its staff. In addition, the Group provides a supplementary retirement plan for its staff at rates not
+exceeding 5% of the salaries. The Group has no other material obligation for the payment of pension benefits associated with these plans beyond
+the annual contributions described above. The Group's contributions for the year ended 31 December 2015 were RMB 7,835 million (2014: RMB
+7,634 million).
+35 EMPLOYEE BENEFITS PLAN
+state-controlled.
+These transactions are conducted in the ordinary course of the Group's business on terms comparable to those with other entities that are not
+uses of public utilities.
+(iii) Marketing and distribution, which owns and operates oil depots and service stations in the PRC, and distributes and sells refined petroleum
+products (mainly gasoline and diesel) in the PRC through wholesale and retail sales networks.
+⋅
+lease of assets;
+•
+rendering and receiving services;
+•
+sales and purchases of goods and ancillary materials;
+•
+Apart from transactions with Sinopec Group Company and fellow subsidiaries, the Group has transactions with other state-controlled entities,
+include but not limited to the followings:
+The Group is a state-controlled energy and chemical enterprise and operates in an economic regime currently dominated by entities directly
+or indirectly controlled by the PRC government through its government authorities, agencies, affiliations and other organisations (collectively
+referred as "state-controlled entities").
+(d) Transactions with other state-controlled entities in the PRC
+34 RELATED PARTY TRANSACTIONS (Continued)
+• depositing and borrowing money; and
+(iv) Chemicals, which manufactures and sells petrochemical products, derivative petrochemical products and other chemical products mainly to
+external customers.
+(v) Corporate and others, which largely comprises the trading activities of the import and export companies of the Group and research and
+development undertaken by other subsidiaries.
+The segments were determined primarily because the Group manages its exploration and production, refining, marketing and distribution,
+chemicals, and corporate and others businesses separately. The reportable segments are each managed separately because they manufacture and/
+or distribute distinct products with different production processes and due to their distinct operating and gross margin characteristics.
+External sales
+Chemicals
+Inter-segment sales
+External sales
+Marketing and distribution
+Inter-segment sales
+External sales
+Refining
+Inter-segment sales
+External sales
+Exploration and production
+Turnover
+Information of the Group's reportable segments is as follows:
+Assets and liabilities dedicated to a particular segment's operations are included in that segment's total assets and liabilities. Segment assets
+include all tangible and intangible assets, except for interest in associates and joint ventures, investments, deferred tax assets, cash and cash
+equivalents, time deposits with financial institutions and other unallocated assets. Segment liabilities exclude short-term, income tax payable,
+long-term debts, loans from Sinopec Group Company and fellow subsidiaries, deferred tax liabilities and other unallocated liabilities.
+The Group's chief operating decision maker evaluates the performance and allocates resources to its operating segments on an operating income
+basis, without considering the effects of finance costs or investment income. Inter-segment transfer pricing is based on the market price or cost
+plus an appropriate margin, as specified by the Group's policy.
+(1) Information of reportable segmental revenues, profits or losses, assets and liabilities
+36 SEGMENT REPORTING (Continued)
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+Financial Statements (International)
+Financial Statements (International)
+179
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+17,512
+Marketing and distribution of
+12,770
+8,284
+208
+19
+71
+70
+17
+(8)
+Profit before taxation
+Net finance costs
+Aggregate investment income
+- Elimination
+350
+- Corporate and others
+- Marketing and distribution
+- Refining
+1
+835
+- Exploration and production
+3,630
+8,081
+Aggregate share of profits from associates and joint ventures
+Investment income
+1,818
+2,282
+- Chemicals
+Corporate and others
+2,319
+444
+(9,276)
+56,277
+108,921
+- Corporate and others.
+162,685
+150,577
+276,298
+283,416
+297,884
+264,573
+453,060
+447,307
+(822)
+- Chemicals
+- Refining
+Exploration and production
+Segment assets
+Assets
+(14,229)
+65,504
+2,616
+2014
+RMB million
+At 31 December
+2015
+RMB million
+At 31 December
+- Marketing and distribution
+603
+3,062
+- Chemicals
+- Corporate and others
+- Chemicals
+- Marketing and distribution
+- Refining
+· Exploration and production
+-
+By segment
+Operating profit/(loss)
+Result
+2014
+RMB million
+Elimination
+RMB million
+(1) Information of reportable segmental revenues, profits or losses, assets and liabilities (Continued)
+36 SEGMENT REPORTING (Continued)
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+2,825,914
+2,018,883
+44.273
+42,471
+1,399
+1,671
+2015
+Total segment operating profit
+(17,418)
+47,057
+963
+1,379
+(871)
+725
+- Marketing and distribution
+- Refining
+1,117
+633
+- Exploration and production
+-
+Share of profits/(losses) from associates and joint ventures
+73,487
+57,028
+2,179
+4,566
+(1,063)
+384
+(2,181)
+19,682
+29,449
+28,855
+(1,954)
+20,959
+8,390
+credit risk;
+liquidity risk;
+petrochemical products
+Investment holding
+(375)
+28
+728
+non-controlling interests
+Dividends paid to
+interests
+attributable to non-controlling
+Comprehensive income/(loss)
+137
+1,738
+1,655
+22,934
+(106)
+(4,257)
+622
+302
+(676)
+(750) 3,310
+1,456
+Total comprehensive income/(loss)
+137
+1,738
+24,391
+22,914
+(326)
+247
+Year ended 31 December
+Summarised statement of cash flows
+37 PRINCIPAL SUBSIDIARIES (Continued)
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+184
+48
+88
+608
+120
+30
+32
+39
+40
+40
+271
+10
+930
+7,755
+18
+(1,218)
+7,356
+Fujian Petrochemical
+23,684
+(222)
+Sinopec Kantons
+2014
+2015
+2014
+Fujian Petrochemical Shanghai Petrochemical
+2015
+Year ended 31 December
+Summarised consolidated statement of comprehensive income
+1,951
+2,561
+6,126
+2015
+59,504
+16,187
+3,931
+3,147
+8,429
+10,085
+1,633
+2,362
+Attributable to non-controlling interests
+3,624
+4,755
+17,405
+3,046
+2014
+2014
+805
+825
+(676)
+(745) 3,310
+1,456
+Profit/(loss) for the year
+18,365
+14,077
+9,038 1,103,934 1,472,232
+6,557
+SIPL
+2015
+16,337
+RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million
+RMB million RMB million RMB million RMB million
+7,322 80,748 102,126
+5,532
+Turnover
+2014
+2015
+Zhonghan Wuhan
+2014
+2015
+Marketing Company
+1,642
+Shanghai Petrochemical
+2015
+2014
+Sinopec Kantons
+2015
+2014
+Effect of foreign currency exchange
+337
+2.878
+2,682
+2,468
+1,327
+1.279
+630
+133
+279
+rate changes
+222
+at 1 January
+Cash and cash equivalents
+337
+(58)
+(219)
+11,599
+(1,159)
+644
+(654)
+238
+380
+46
+18
+71
+Financial assets of the Group include cash and cash equivalents, time deposits with financial institutions, investments, trade accounts receivable,
+bills receivable, amounts due from Sinopec Group Company and fellow subsidiaries, amounts due from associates and joint ventures, available-for-
+sale financial assets, derivative financial instruments and other receivables. Financial liabilities of the Group include short-term and long-term debts,
+loans from Sinopec Group Company and fellow subsidiaries, trade accounts payable, bills payable, amounts due to Sinopec Group Company and
+fellow subsidiaries, derivative financial instruments and other payables.
+Overview
+38 FINANCIAL RISK MANAGEMENT AND FAIR VALUES
+337
+260
+2,682
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+1,327
+2,042
+630
+5
+886
+279
+1,077
+380
+101
+at 31 December
+Cash and cash equivalents
+(19)
+23
+633
+18
+88
+146
+798
+158
+76
+Net cash generated from/(used in)
+investing activities
+1,467
+4,223
+44,337
+5,383 33,196
+4,059
+880
+1,185
+3,662
+(303)
+4,933
+(179)
+Net cash (used in)/generated from
+operating activities
+2015
+2014
+RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million
+2014
+Zhonghan Wuhan
+2015
+2014
+Marketing Company
+2015
+2014
+2015
+SIPL
+197
+(439)
+(910)
+(504)
+(279)
+cash equivalents
+Net (decrease)/increase in cash and
+1,513
+588
+1,584
+(42,777)
+1,740
+637
+(414)
+(443)
+(2,606)
+(3,696)
+264
+(176)
+Net cash (used in)/generated from
+financing activities
+(2,643)
+(4,869)
+(46,140)
+21,180
+(8,282)
+(4,052)
+(1,120)
+72,701
+126,100
+7,370
+4,331
+Set out below are the summarised financial information which the amount before inter-company eliminations for each subsidiary that has non-
+controlling interests that are material to the Group.
+Summarised financial information on subsidiaries with material non-controlling interests
+(ii) The Group consolidated the financial statements of the entity because it is exposed to, or has rights to, variable returns from its involvement with the entity and has
+the ability to affect those returns through its power over the entity.
+On 12 September 2014, Marketing Company entered into the "Capital Injection Agreement relating to Marketing Company" with a number of domestic and foreign
+investors, pursuant to which the investors shall subscribe for equity interest in Marketing Company in cash upon the relevant approvals for this capital injection being
+obtained, an aggregate capital contribution of RMB 105.044 billion was made to the Marketing Company by 25 investors, representing 29.58% equity interest in the
+Marketing Company on 6 March 2015. The difference between the contributions from and the net assets acquired by investors has been credited to capital reserve
+in amount of RMB 56,224 million and to other comprehensive income in amount of RMB 446 million of the equity attributable to the shareholders of the Company,
+respectively.
+(i) Pursuant to the resolution of the Company's Meeting of Board of Directors held on 19 February 2014, the Company's business under its marketing and distribution
+segment of the Group was injected to Marketing Company, a subsidiary of the Group on 1 April 2014.
+Note:
+37 PRINCIPAL SUBSIDIARIES (Continued)
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+Financial Statements (International)
+Summarised consolidated balance sheet
+Financial Statements (International)
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+49.44
+50.56
+Except for Sinopec Kantons and SOIH, which are incorporated in Bermuda and Hong Kong respectively, all of the above principal subsidiaries are
+incorporated and operate their businesses principally in the PRC. All of the above principal subsidiaries are limited companies.
+Manufacturing of plastics, intermediate
+petrochemical products and
+petroleum products
+petroleum products
+petrochemical products and
+Manufacturing of synthetic fibres, resin
+and plastics, intermediate
+products
+50.00
+183
+50.00
+Fujian Petrochemical
+At
+RMB million
+RMB million
+2015
+2014
+2015
+2014
+2015
+2014
+2015
+2014
+Shanghai Petrochemical
+At
+2015
+2014
+At
+At
+31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December
+2015
+At
+Zhonghan Wuhan
+At
+At
+Marketing Company
+At
+At
+SIPL
+At
+At
+Sinopec Kantons
+At
+2014
+RMB 5,745
+("Fujian Petrochemical") (ii)
+Fujian Petrochemical Company Limited
+25.00
+75.00
+RMB 3,986
+Sinopec Hainan Refining and Chemical
+Company Limited
+petrochemical products and
+petroleum products
+Manufacturing of intermediate
+25.00
+75.00
+RMB 4,397
+Sinopec Zhanjiang Dongxing Petrochemical
+Company Limited
+Manufacturing of intermediate
+petrochemical products and
+petroleum products
+Manufacturing of intermediate
+15.00
+85.00
+RMB 5,000
+Sinopec Qingdao Refining and Chemical
+petrochemical products
+oil, production, storage and sale of
+petroleum products and
+Import and processing of crude
+Trading of petrochemical products
+Production and sale of catalyst products
+Company Limited
+Sinopec Marketing Company Limited
+RMB 28,403
+70.42
+Limited ("Shanghai Petrochemical")
+RMB 10,800
+Sinopec Shanghai Petrochemical Company
+("Sinopec Kantons")
+Trading of crude oil and petroleum
+39.66
+60.34
+HKD 248
+Sinopec Kantons Holdings Limited
+downstream byproducts
+development of ethylene and
+Limited ("Zhonghan Wuhan")
+Production, sale, research and
+35.00
+65.00
+RMB 6,270
+Sinopec-SK(Wuhan) Petrochemical Company
+Marketing and distribution of refined.
+petroleum products
+petroleum products
+petrochemical products and
+("Marketing Company”) (i)
+29.58
+RMB million
+Trading of crude oil and petrochemical
+products
+RMB million
+RMB million
+9,236
+9,641
+19,746
+19,676
+3,054
+4,656
+Net non-current assets
+(1,456)
+(1,628)
+(35,877)
+5,755
+(34,320)
+(3,384)
+(1,649)
+(996)
+(831)
+Non-current liabilities
+16,874
+15,815
+229,281
+240,312
+47,623
+(3,386)
+40,075
+11,746
+227,825
+5,933
+4,738
+8,342
+10,009
+1,633
+2,361
+Attributable to owners of the Company
+5,575
+7,316
+78,827
+238,684
+185,604
+20,518
+9,864
+7,885
+16,771
+20,094
+3.266
+4,723
+Net assets
+16,874
+15,815
+24,775
+12,622
+13,025
+21,395
+(224)
+(73)
+Current liabilities
+1,724
+1,386
+131,012
+102,948
+15,416
+20,231
+1,777
+(7,726)
+1,732
+8,144
+436
+140
+Current assets
+RMB million
+RMB million
+RMB million
+RMB million
+RMB million
+RMB million
+9,510
+(12,485)
+(3,488)
+(1,149)
+19.676
+4,050
+5,487
+Non-current assets
+(11,299)
+(8,499)
+(148,998)
+(53,080)
+13,029
+14,763
+628
+(1,756)
+(2,975)
+418
+212
+67
+Net current assets/(liabilities)
+(13,023)
+(9,885)
+(280,010)
+(156,028)
+(2,387)
+(5,468)
+RMB million
+14,914
+22,278
+3,288
+18,990
+11,118
+55
+54
+17
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+In 2016, the Company will leverage the
+opportunities arising from favorable
+national policies and economic growth
+in China to drive quality upgrading and
+efficiency growth. By stimulating the
+endogenous impetus through reform
+and innovation, we continuously aim
+for sharpened competitive edge and
+will speed up the transformation and
+structural adjustment of the Company.
+Synergetic coal chemical project, the
+Jinling propylene oxide and LPG project,
+and the Maoming ethylene oxide project.
+The corporate and others will account
+for RMB 4.3 billion, mainly for R&D
+and IT projects.
+Capital expenditures: In capital
+expenditures, we will make greater efforts
+to optimise our investments in line with
+market changes. Capital expenditures
+for the year are budgeted at RMB 100.4
+billion, down by 10.6% from 2015,
+of which the exploration segment will
+account for RMB 47.9 billion, mainly for
+domestic oil and gas exploration projects,
+for development projects in the Fuling
+shale gas field (Second Phase), the
+Pingbei and Huangyan gas field and the
+Daniudi gas field, and for the first-phase
+pressure boosting project to transport
+gas from Sichuan to Eastern China. The
+refining segment will account for RMB
+19.5 billion, mainly for revamping the
+Zhenhai and Maoming refineries as well
+as quality upgrading for gasoline and
+diesel. The marketing and distribution
+segment will account for RMB 17.9
+billion, mainly for revamping service
+stations, improving the pipeline network
+and building non-fuel business facilities
+that promote integrated services. The
+chemicals segment will account for RMB
+10.8 billion, mainly for the Zhongtian
+R&D: In research and development,
+we will continue to implement our
+strategy of development driven by
+innovation, improve and create new
+R&D mechanisms, and move scientific
+and technological achievements into
+production more quickly. The exploration
+and production segment will focus on
+technological breakthroughs that help
+us increase oil reserves and enhance
+conventional and unconventional
+exploration and development and oilfield
+services. In refining, we will undertake
+activities in such areas as heavy crude
+processing, the quality upgrading of oil
+products and adjustments to the product
+slate. In chemicals, we will focus on
+adjustments to the product mix along
+with R&D initiatives in basic chemicals,
+coal chemicals, fine chemicals, bio
+chemicals and synthetic materials. We
+also expect to make progress in energy.
+conserving, environmental and low-carbon
+technologies as well as prospective
+and fundamental research to improve
+innovation capabilities and to support
+and drive the sustainable growth of the
+Company.
+Chemicals: In chemicals, we will stick
+to our policy of structural adjustments,
+further optimise our feedstocks to
+lower costs and operate our facilities
+at reasonable utilisation rates based on
+market conditions and profitability. We
+will tighten the links among production,
+sales, research and client, continue to
+cut costs of commodity products and
+raise the added value of differentiated
+products, and increase the output of
+products with the greatest market
+acceptance and profitability. Meanwhile,
+we will enhance our marketing strategy,
+improve customer service and offer our
+customers products and services that
+cover the whole value chain. In 2016,
+we plan to produce 11.20 million tonnes
+of ethylene.
+Marketing and distribution: In marketing
+and distribution, we will intensify the
+analysis of our marketing strategy and
+actively respond to competition. We will
+take measures to optimise our sales
+structure, expand retail and per-station
+pumped volume, improve our logistics
+system to reduce costs and drive our
+non-fuel businesses by improving
+mechanisms to facilitate the synergy
+between our fuel and non-fuel businesses.
+China's Internet+ economy presents
+new opportunities for us to establish an
+Online-to-Offline service platform, create
+new business models, and advance our
+transformation to an integrated service
+provider. In 2016, we plan to sell 171
+million tonnes of oil products in the
+domestic market.
+Refining: In refining, we will continue
+to embrace a strategy that is market.
+oriented and driven by profitability,
+increase output of products with high
+added value and optimal market potential,
+and speed the quality upgrading of oil
+products to ensure the supply of clean
+fuels. We will optimise resource allocation
+of crude oil, lower crude costs and adjust
+our production plan to ensure safe and
+reliable operations. We will actively
+enhance the marketing of lubricants, LPG
+and asphalt for better profits. In 2016,
+we plan to process 238 million tonnes of
+crude oil and produce 149 million tonnes
+of oil products.
+Business Review and Prospects
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+Exploration and production: In
+exploration and production, we will
+continue to focus on investment returns
+and maintain domestic exploration
+activities at a reasonable level in a bid to
+lower development costs. In exploration,
+we will reinforce risk management,
+optimise evaluation of projects, and
+focus on key projects with strong reserve
+potentials, thus improving the success
+rate of exploration. In oil development, we
+will press ahead with implementation of
+dynamic decision-making and operating
+mechanisms and cut low-efficiency
+production and high-cost enhanced
+oil recovery activities to optimise our
+production structure. In gas development,
+the second phase of the capacity building
+project for the Fuling shale gas field will
+be in full swing. We will advance the
+shale gas resource assessment in the
+Sichuan Basin and nearby blocks,
+striving for new commercial discoveries.
+In 2016, we plan to produce 332 million
+barrels of crude oil, of which 58 million
+barrels will be overseas production. We
+plan to produce 865 billion cubic feet of
+natural gas.
+55
+Puguang
+net
+4,581
+4,606
+2,778
+51,378
+Equity accounted entities
+Total
+Items
+As of 31 December
+2015
+In 2016, the Company will focus on
+improving development quality and
+profitability. We will work hard to create
+market opportunities while controlling
+costs and risk. In the meantime, we will
+deepen reforms, strengthen innovation
+and implement rigorous management
+programs. We will make special efforts in
+the following areas:
+2014
+gross
+net
+gross
+China
+4,758
+4,727
+Natural Gas Production Wells
+7,102
+55,719
+(2) Operations
+(1) Market analysis
+8,383
+1,315
+8,994
+1,282
+(10.2)
+960
+939
+843
+9,227
+2.9
+2014 to 2015 (%)
+2013
+9,980
+13,726
+14,639
+15,065
+2014
+10,698
+54
+3.9
+7.3
+1,392
+(2.5)
+BUSINESS PROSPECTS
+Our reserves estimation is guided by
+procedural manuals and technical
+guidance. Initial collection and
+compilation of reserves information are
+conducted by different working divisions,
+including exploration, development,
+financial and legal divisions, at
+production bureau level. Exploration and
+development divisions collectively prepare
+the initial report on reserves estimation.
+Together with technical experts,
+reserves management committees
+at subsidiary level then review to
+ensure the qualitative and quantitative
+compliance with technical guidance
+and accuracy and reasonableness
+of the reserves estimation. The
+RMC is primarily responsible for the
+management and coordination of the
+reserves estimation process, review and
+approval of annual changes and results
+in reserves estimation and disclosure
+of our proved reserves. We also engage
+outside consultants who assist us to be
+in compliance with the U.S. Securities
+and Exchange Commission rules and
+regulations. Our reserves estimation
+process is further facilitated by a
+specialised reserves database which is
+improved and updated periodically.
+Our RMC is chaired by Mr. Wang Zhigang,
+one of our senior vice presidents, and is
+co-led by other senior vice presidents,
+experts and director general of Sinopec's
+exploration and production segment. Mr.
+Wang holds a Ph.D. degree in geology
+from Geology and Geo-physics Research
+Institute of the China Academy of Science
+and has over 30 years of experience in
+the oil and gas industry. Our RMC also
+consists with other members who are
+senior management members in charge
+of exploration and development activities
+at production bureau level. A majority
+of our RMC members hold doctor's or
+master's degrees and our RMC members
+have an average of 20 years of technical
+experience in relevant industry fields,
+such as geology, engineering and
+economics.
+(8) Oil & gas reserve appraisal principles
+We manage our reserves estimation
+through a two-tier management system.
+Our Oil and Natural Gas Reserves
+Management Committee, or the RMC,
+at our headquarters level oversees the
+overall reserves estimation process and
+reviews the reserves estimation of our
+company. Each of our Branches has a
+reserves management committee that
+manages the reserves estimation process
+and reviews the reserves estimation
+report at the branches level.
+In 2015, the Company focused on
+investment quality and profitability
+and optimised its asset portfolio and
+investment projects. Total capital
+expenditures were RMB 112.249 billion,
+down by 27.4% from the previous year.
+Capital expenditures for the exploration
+and production segment were RMB
+54.710 billion, mainly for development in
+the Fuling shale gas field (First Phase),
+the liquified natural gas terminal projects
+in Guangxi and Tianjin, and construction
+of long-distance gas pipelines such
+as the Jinan Qingdao gas pipeline
+(Second Phase), as well as for overseas
+projects. Capital expenditures for the
+refining segment were RMB 15.132
+billion, mainly for gasoline and diesel
+quality upgrading projects and refinery
+revamping. Capital expenditures for the
+marketing and distribution segment were
+RMB 22.115 billion, mainly for revamping
+service stations and building oil product
+pipelines, oil depots and storage
+facilities, as well as for hazard retification
+and vapour recovery facilities. Capital
+expenditures for the chemicals segment
+were RMB 17.471 billion, mainly for
+equity acquisition in Sibur Holding, the
+East Ningxia and Zhongtian synergetic
+coal chemical projects, and the Zhenhai
+ethylene revamping project. Capital
+expenditures for the corporate and others
+were RMB 2.821 billion, mainly for R&D
+facilities and IT application projects.
+(7) Capital expenditures
+BUSINESS REVIEW AND PROSPECTS (CONTINUED)
+Business Review and Prospects
+16
+Business Review and Prospects
+15
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+vigorously implementing its energy and
+environmental management system,
+the Energy Conservation Plan, the Clear
+Water and Blue Sky Campaign, and its
+carbon assets management system.
+According to the relevant standards
+implemented by the state environmental
+protection authorities, the Company is in
+the high-pollution level industries. Within
+the reporting period, the Company strictly
+treated the gas, water and solid wastes
+from our operations and monitored and
+controlled the noise level. As a result,
+the concentration of pollutants and the
+total amount of emissions both met the
+standards required by the government.
+Compared with 2014, energy intensity.
+was down by 1.6%, industrial water
+consumption was down by 1.0%,
+chemical oxygen demand in waste
+water discharged was down by 4.1%,
+sulphur dioxide emissions were down
+by 4.8%, and all hazardous chemicals
+and discharged water, gas, and solid
+wastes were properly treated. For more
+detailed information, please refer to
+our Communication on Progress for
+Sustainable Development.
+(6) Health, safety and the environment
+In 2015, the Company improved its
+work safety and accountability scheme,
+upgraded its safety supervision
+and management system, and
+strengthened procedures to identify
+and eliminate potential hazards. We
+improved management capabilities in
+emergency response and safety control,
+standardised worker protection, and
+safeguarded employee occupational
+health. The Company integrated efforts
+in energy conservation, emissions
+control and carbon reduction by
+performance compounds, and styrene-
+butyl-rubber for high-performance tyres,
+strongly facilitating the Company to
+produce high-value-added products. In
+2015, we applied for a total of 5,246
+patents at home and abroad, and 3,769
+patents were granted. During the year,
+we won one top award and one second-
+place award for National Science and
+Technology Advancement, two second-
+place awards for Technology Invention,
+one National Patent Gold Award and six
+Awards of Excellence.
+Looking ahead to 2016, the world
+economy is expected to be weak in
+recovery while China's economy will
+maintain its steady growth. International
+oil prices are expected to fluctuate at a
+low level. A gradual opening up of import
+license for crude oil may introduce more
+competitions in domestic oil products
+market. Quality upgrading for oil
+products will advance steadily and the
+demand pattern will be further adjusted.
+Growth in domestic demand for major
+petrochemical products will be steady.
+3,107
+52,784
+56,575
+6,885
+0
+0
+0
+1
+0
+0
+1
+0
+0
+2
+0
+1
+110
+153
+1
+0
+3
+0
+323035
+35
+23
+3
+60
+3
+60
+75
+129
+60
+187
+60
+186
+0
+1
+63
+250
+63
+247
+31,547
+30,534
+30,534
+18,115
+18,115
+18,058
+18,058
+6,913
+175
+7,127
+2,786
+28
+15
+25
+8
+31,547
+2015
+48,592
+49,662
+Items
+As of 31 December
+Oil Production Wells
+China
+Shengli
+Others
+Overseas
+Consolidated Subsidiaries
+2015
+2014
+gross
+net
+gross
+net
+49,662
+48,592
+155
+Change from
+In 2015, the Company insisted on setting
+innovation as the core of development,
+further improved the mechanism and
+institution of R&D, reinforced the
+integration of production, marketing
+and R&D, and gave full play to R&D for
+driving and supporting the growth of the
+Company. In our upstream business,
+we successfully completed building the
+capacity of the Fuling shale gas field of
+5 billion cubic meters per year using
+an in-house package of exploration and
+development technology. We officially
+launched the integrated solution platform
+for π Frame seismic data processing
+and interpretation. In refining, we
+commercialised such technologies as the
+integrated hydrogenation-FCC process
+for maximising light oil products and
+high octane gasoline from catalytic diesel
+process. These technologies provided
+guarantees for optimising product mix
+and upgrading oil products quality.
+In chemicals, we commercialised a
+number of technologies and products,
+including the gas-liquid polyethylene
+process, optical-film-grade polyester
+Note: Includes 100% of production of domestic joint ventures.
+Refinery yield (%)
+Light products yield (%)
+Light chemical feedstock
+Kerosene
+Diesel
+(3) Marketing and distribution
+Gasoline
+Refinery throughput
+Unit: million tonnes
+improved our margins in lubricants,
+LPG and asphalt. In 2015, we processed
+236 million tonnes of crude oil, up
+by 0.5% from the previous year, and
+produced 148 million tonnes of refined
+oil products, up by 1.5%.
+5,009
+4,982
+22,912
+Gasoline, diesel and kerosene production
+In 2015, in response to the changes
+in supply and demand of oil products,
+we adjusted our marketing strategies
+and promoted the sales of high-octane
+gasoline and high-value-added products.
+We optimised oil products pipeline layout
+and marketing network, accelerated
+the construction of compressed
+2015
+2014
+70.05
+5.4
+45.56
+51.22
+53.98
+1.5
+140.40
+146.23
+148.38
+0.5
+231.95
+235.38
+236.49
+Change from
+2014 to 2015 (%)
+2013
+25,748
+74.26
+27,921
+960,981
+0
+4,606
+4,727
+4,758
+Total
+4,471
+4,496
+0
+4,497
+0
+Overseas
+4,528
+Others
+56
+56
+175
+0
+4,581
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+13
+857,420
+2014
+960,981
+857,420
+further upgraded oil products quality
+as scheduled. We optimised resource
+allocation, controlled costs and took
+advantage of our strong economies of
+scale. By tapping our well-established
+advantages in specialisation, we
+Summary of Operations for the Refining Segment
+In 2015, the Company adjusted the
+product mix in response to market
+demand by increasing production of
+gasoline and kerosene, maintained safe
+and reliable refinery operations and
+(2) Refining
+Acreage with development license
+China
+Overseas
+China
+Acreage with exploration license
+As of 31 December
+2015
+Unit: Square Kilometers
+BUSINESS REVIEW AND PROSPECTS (CONTINUED)
+Business Review and Prospects
+Business Review and Prospects
+30,730
+77.40
+(5.7)
+24.35
+30,551
+2013
+2014
+2015
+30,560
+30,547
+31 December
+31 December
+30,536
+31 December
+14
+Total number of service stations under Sinopec brand
+Number of company-operated stations
+1.0
+3,707
+3,858
+3,896
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+30,538
+30,523
+Change from
+the end of the
+previous year
+to the end of
+the reporting
+(5) Research and development
+Note: Includes 100% production of domestic joint ventures.
+Synthetic fibre
+Synthetic fibre monomer and polymer
+Synthetic rubber
+Synthetic resin
+Ethylene
+11.12 million tonnes. Meanwhile, by
+keeping inventories at low levels and
+implementing a differentiated marketing
+strategy, our full-year chemicals sales
+volume increased by 3.4% to 62.87
+million tonnes, with all produced
+chemicals sold.
+tuned its feedstock mix to lower costs,
+deepened the links among research and
+development, production, marketing and
+sales of new products, and maximised
+production of high-value-added products
+tailored to market demands. Ethylene
+output rose by 3.9% from 2014 to
+Summary of Operations for Chemicals Segment
+In 2015, we enhanced the operations of
+our manufacturing facilities by adjusting
+utilisation rates to achieve satisfactory
+marginal profitability while sustained
+safe and stable operations among
+principal plants. The Company fine.
+(4) Chemicals
+0.03
+0.03
+period (%)
+Annual average throughput per station (tonne/station)
+(1.5)
+51.69
+53.13
+2015
+was 189 million tonnes, of which
+domestic sales accounted for 171 million
+tonnes. In the meantime, our non-fuel
+businesses achieved stronger momentum
+in specialisation, market orientation,
+marketing scale and profitability. Non-
+fuel business transactions increased by
+45.2% from the previous year to RMB
+24.83 billion.
+Summary of Operations for Marketing and Distribution Segment
+natural gas service stations. In its
+transformation from a fuel supplier to
+an comprehensive service provider, the
+marketing segment unleashed great
+potential in complementary fuel and non-
+fuel businesses. As a result, total retail
+volume and per-station pumped volume
+sustained growth despite of intense
+market competition. In 2015, the total
+sales volume of refined oil products
+76.19 (0.02) percentage points
+94.82 0.09 percentage points
+76.52
+94.66
+94.75
+76.50
+(0.9)
+37.97
+39.17
+38.81
+17.4
+17.43
+20.75
+2014
+Unit: thousand tonnes
+2013
+Total sales volume of oil products (million tonnes)
+52.34
+Direct sales & Distribution (million tonnes)
+1.0
+113.73
+117.84
+119.03
+0.2
+165.42
+170.97
+171.37
+Total domestic sales volume of oil products (million tonnes)
+Retail sales (million tonnes)
+0.1
+179.99
+189.17
+189.33
+Change from
+2014 to 2015 (%)
+110
+3,122
+0
+1,701
+2,465
+1,326
+1,917
+375
+548
+312
+317
+230
+266
+2,782
+201
+116
+105
+85
+130
+29
+31
+Items
+Proved Reserves
+Proved Developed Reserves
+China
+235
+Puguang
+Fuling
+Others
+2,013
+2,243
+471.91
+480.22
+442.84
+(1.7)
+349.47
+360.73
+332.54
+(3.1)
+296.34
+310.87
+3,048
+310.84
+53.13
+49.86
+21.70
+6.6
+734.79
+716.35
+660.18
+2.6
+Reserves of Crude Oil (mmbbls)
+31 December 2015 31 December 2014
+(4.7)
+Overseas
+Proved Undeveloped Reserves
+China
+640
+1
+2
+12
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+Exploration & Production Activities
+As of 31 December
+2015
+2014
+Exploratory
+931
+Development
+Development
+Wells drilled
+China
+Productive
+Dry Productive
+Dry
+Productive
+Dry
+Productive
+Dry
+Exploratory
+88
+181
+0
+Puguang
+Fuling
+Others
+Overseas
+Reserves of Natural Gas (bcf)
+31 December 2015 31 December 2014
+7,570
+6,741
+6,457
+6,011
+6,439
+5,987
+2,470
+2,663
+1,016
+472
+2,953
+2,852
+18
+24
+1,113
+730
+1,112
+728
+0
+2014 to 2015(%)
+373
+2013
+2015
+115
+105
+95
+85
+75
+65
+55
+45
+35
+25
+125
+Mr. Li Chunguang, Board Director and President
+2014.2
+2014.3
+2014.4
+2014.5
+2014.6
+2014.7
+2014.8
+2014.9
+2014.10
+2014.11
+2014.1
+2014.12
+US$/barrel
+(3) Chemicals
+emissions of sulphur dioxide dropped by 4.8%;
+and all hazardous chemicals and liquid, gas,
+and solid wastes were properly treated. We have
+been actively supporting various philanthropic
+projects to promote the development of local
+communities and support the poor and the
+unprivileged. And we participated in disaster
+prevention and relief programs as well as the
+Lifeline Express project. The Company continued
+to support the UN Global Compact and its
+principles, leading other Chinese enterprises to
+jointly promote green and low-carbon growth.
+In 2015, turnover and other operating income
+under International Financial Reporting
+Standards was RMB 2.02 trillion, down by
+28.6% from the previous year. Profit for the year
+was RMB 43.7 billion, down by 8.9% from that
+of 2014, while profit attributable to shareholders
+of the Company was RMB 32.4 billion, down
+by 30.2% from that of 2014. The liability-to-
+asset ratio declined to 45.66%. Taking into
+consideration the Company's profitability,
+shareholders return and future development, the
+Board of Directors proposed the final dividend of
+RMB 0.06 per share, which, combined with the
+interim dividend of RMB 0.09 per share, brought
+the full-year dividend to RMB 0.15 per share.
+Looking ahead, the global economy is expected
+to be characterised by slow growth, weak
+international trade, low inflation, sluggish
+investments and high levels of debt. Chinese
+economy may face downward pressure while
+maintaining its moderate growth. International
+oil prices are expected to remain at a low level,
+and the Company is facing changing market
+and intense competition, as well as greater
+constraints in resources and environment.
+However, the Company is fully confident to
+meet all-round challenges. Over the years,
+Sinopec Corp. has built on solid foundations,
+well equipped with advanced technologies,
+proficient human resources, robust management
+excellence and a strong corporate culture. The
+Company benefits from the integrated value
+chain of upstream, midstream and downstream
+operations and enjoys competitive advantages
+in its refining and chemical expertise, extensive
+marketing network and wide-spread international
+presence, which in combination will help Sinopec
+Corp. address the challenges and drive healthy
+and sustainable growth.
+In the first year of China's 13th Five-Year Plan,
+in response to the development concept of
+innovation, coordination, green, openness and
+sharing initiated by the Chinese government,
+we will implement five corporate strategies,
+including value-orientation, innovation-driven
+development, integrated resource allocation,
+open cooperation, and green and low-carbon
+growth, to promote quality and profitability
+as well as the sustainable development of the
+Company. On value-orientation strategy, we will
+focus value creation on all aspects to improve
+asset quality and value. On innovation-driven
+development, we will promote innovation in
+science and technology, management, product
+development, services and business model and
+accumulate greater momentum and potentials
+for growth. On integrated resource allocation, we
+will take advantage of the synergies among our
+businesses to improve allocation, optimisation
+and efficiency of energy and other resources
+to ensure sufficient, balanced and synergetic
+resource supplies. On open cooperation strategy,
+we will capture the strategic opportunities arising
+from the Belt and Road Initiative to actively
+participate in overseas oil and gas exploration
+and production, refining and chemical operation
+and trading, improving our international
+operations and management excellence. Our
+open cooperation strategy will facilitate positive
+and sound progress in mixed ownership reforms
+to unleash the vitality, management, market
+dominance and risk resilience of the Company.
+On green and low-carbon growth, we will
+vigorously implement energy-saving, emission
+reduction and low carbon initiatives, develop
+clean energy, and supply environmentally
+friendly products. The Company is committed to
+green growth in harmony with the society and
+environment.
+In 2016, the Company will focus on the above
+strategies, leveraging the opportunities arising
+from favorable national policies and economic
+growth in China to drive quality upgrading and
+endogenous growth from reform, innovation and
+competition. We aim for sharpened competitive
+edge and speed up the transformation and
+structural adjustment of the Company. Capital
+expenditures for 2016 will be consistent with the
+strategies, focusing on returns on investment,
+as well as quality and profitability. The
+Company plans to arrange the full-year capital
+expenditures of RMB 100.4 billion, down by
+10.6% from the previous year. Capital investment
+will mainly be used in the second phase of the
+Fuling shale gas development, the gas pipeline
+expansion and construction of storage facilities
+for the Sichuan-East China Gas Pipeline project,
+the revamping projects at Zhenhai and Maoming
+refineries as well as other locations, the quality
+upgrading of oil products on China's GBV
+standard for keeping the predominance in oil
+products quality, the extension of the sales and
+logistics network, and non-fuel business as well
+as other new businesses development for steady
+growth in both market share and sales volume.
+I am convinced, together with the Board
+of Directors, that with the support of our
+shareholders and people from all fabrics of the
+society, and through the concerted efforts of the
+Board of Directors, the Board of Supervisors,
+the management team and all of our employees,
+Sinopec Corp. will be able to address the
+challenges, forging ahead with vitality, creating
+sustained value for the nation, our shareholders,
+our employees and the greater society.
+Wang Yupu
+Chairman
+Beijing, China
+29 March 2016
+In 2015, growth in domestic demand for
+chemicals remained stable. According
+to the Company's statistics, domestic
+consumption of synthetic resin, synthetic
+fibre and synthetic rubber rose by 5.5%,
+10.6% and 8.8%, respectively, from
+the previous year, and that of ethylene
+equivalent grew by 4.9%.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+Chairman's Statement
+பாமா
+BUSINESS REVIEW AND PROSPECTS
+BUSINESS REVIEW
+In 2015, the global economic recovery remained
+weak, and Chinese economy maintained steady
+growth with GDP up by 6.9%. International oil
+prices were under downward pressure while
+fluctuating to new lows. Growth of oil products
+demand slowed, yet demand for chemicals was
+stable. Meanwhile, domestic environmental
+requirements became more stringent. The
+Company intensified its evaluation of the macro-
+economy and market trends so that it actively
+respond to these changes. With a focus on
+growth quality and profitability, the Company
+emphasised on reform and innovation, stringent
+management and tight coordination of all
+aspects of our work.
+1 MARKET REVIEW
+(1) Crude oil market
+In 2015, international crude oil prices
+fluctuated to new lows. The average spot
+price of Platts Brent for the year was
+USD 53.6 per barrel, down by 46.1%
+from the previous year.
+(2) Oil products market
+In 2015, growth in domestic demand for
+oil products further declined. According
+to statistics, consumption of oil products
+(including gasoline, diesel and kerosene)
+was 276 million tonnes, up by 1.2% from
+the previous year. Demand for gasoline
+and kerosene grew by 7.0% and 9.3%,
+respectively, from the previous year,
+while demand for diesel dropped by 3.7%.
+Domestic oil product prices were adjusted
+timely in response to the changing
+international oil prices. Domestically, oil
+product consumption tax was increased
+and floor price policy for oil products was
+considered and issued afterwards.
+9
+2015.1
+2015.2
+2015.3
+high-efficiency exploration activities,
+making a number of new discoveries in
+Beibu Gulf of the South China Sea, the
+Sichuan Basin, the Ordos Basin, and
+the Central Tahe Basin. In development,
+we completed the production capacity
+of the Fuling shale gas field of 5 billion.
+cubic meters per year, optimised
+development programs in mature oilfields
+and increased the production capacity in
+Summary of Operations for the Exploration and Production Segment
+frontier acreages. In 2015, our production
+dropped by 1.7% to 471.91 million
+barrels of oil equivalent, with domestic
+crude oil production down by 4.7% and
+overseas production up by 6.6%. Natural
+gas production rose by 2.6%. Impacted
+by low oil prices, proved reserves of crude
+dropped over 2014 while proved reserves
+of natural gas increased by 12.3% mainly
+driven by Fuling shale gas reserves.
+Oil and gas production (mmboe)
+Crude oil production (mmbbls)
+China
+Overseas
+Natural gas production (bcf)
+Summary of Reserves of Crude Oil and Natural Gas
+Items
+and reduced high-cost oil production. In
+exploration, we actively carried forward
+Proved Reserves
+China
+Shengli
+Others
+Overseas
+Proved Undeveloped Reserves
+China
+Shengli
+Others
+Overseas
+Change from
+Proved Developed Reserves
+In 2015, faced with low oil prices, we
+optimised exploration and development
+projects. We implemented dynamic
+investment decision-making mechanism
+in the context of oil prices fluctuation
+(1) Exploration and production
+2 OPERATIONS REVIEW
+2015.4
+2015.5
+2015.6
+2015.7
+2015.8
+2015.9
+2015.10
+2015 10
+2015.11
+Trend of International Crude Oil Prices
+2015.12
+2016.1
+2016.2
+CHINA PETROLEUM & CHEMICAL CORPORATION
+Annual Report 2015
+11
+WTI
+ICE BRENT
+DTD BRENT
+DUBAI
+Business Review and Prospects
+Business Review and Prospects
+BUSINESS REVIEW AND PROSPECTS (CONTINUED)
+2014
+Total
+Fuling
+26
+1,020
+18
+141
+64
+2,027
+30
+781
+7
+73
+193
+1,614
+149
+1
+3
+0
+323
+5
+0
+123
+0
+221016
+373
+195
+1,801
+25
+334
+187
+3,641
+56
+Shengli
+196
+150
+223
+Overseas
+0
+Consolidated Subsidiaries
+0
+Equity accounted entities
+0
+Total
+Other
+0
+0
+0
+China
+6
+152
+110
+152
+63
+247
+63
+246
+Shengli
+35
+Others
+75
+129
+Overseas
+0
+Consolidated Subsidiaries
+0
+Equity accounted entities
+Exploratory Development Exploratory Development
+Exploratory Development Exploratory Development
+110
+net
+144
+1
+3
+0
+317
+Wells drilling
+1,950
+26
+337
+0
+3,964
+56
+As of 31 December
+2015
+2014
+gross
+net
+187
+gross
+Table 1: Capitalised costs related to oil and gas producing activities
+(Unaudited)
+194
+Financial Statements
+Tables | to VI of supplemental information on oil and gas producing activities set out below represent information of the Company and its consolidated
+subsidiaries and equity method investments.
+(D) SUPPLEMENTAL INFORMATION ON OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED)
+In accordance with the Accounting Standards Update 2010-03, “Extractive Activities Oil and Gas (Topic 932): Oil and Gas Reserve Estimation and
+Disclosures" ("ASU 2010-03"), issued by the Financial Accounting Standards Board of the United States, and in accordance with "Industrial Information
+Disclosure Guidelines for Public Company No.8 Oil and Gas Exploitation", issued by Shanghai Stock Exchange, this section provides supplemental
+information on oil and gas exploration and producing activities of the Group and its equity method investments at 31 December 2015 and 2014, and
+for the years then ended in the following six separate tables. Tables I through III provide historical cost information under IFRS pertaining to capitalised
+costs related to oil and gas producing activities; costs incurred in oil and gas exploration and development; and results of operation related to oil and
+gas producing activities. Tables IV through VI present information on the Group's and its equity method investments' estimated net proved reserve
+quantities; standardised measure of discounted future net cash flows; and changes in the standardised measure of discounted cash flows.
+(Differences Between the ASBE and IFRS)
+Supplemental Information on Oil and
+Gas Producing Activities (Unaudited)
+Financial Statements
+Total of the Group's and its equity method
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+The figures are extracted from the consolidated financial statements prepared in accordance with the accounting policies complying with IFRS during the year ended
+31 December 2014 and 2015 which have been audited by PricewaterhouseCoopers.
+*
+645,577
+784,219
+Total equity under IFRS*
+(1,518)
+31 December
+2014
+RMB million
+647,095
+(1,404)
+2015
+RMB million
+193
+2014
+RMB million
+Other
+Total
+Development
+16,704
+16,704
+11,572
+11,572
+Exploration
+The Group
+Other
+countries
+China
+Total
+Other
+countries
+China
+Total
+RMB million
+RMB million
+2014
+2015
+Table II: Costs incurred in oil and gas exploration and development
+30,241
+412,732
+442,973
+25,566
+408,995
+52,229
+49,605
+2,624
+73,923
+investments' results of exploration
+and development costs
+65,019
+61,177
+1,381
+92,008
+88,172
+3,836
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+(D) SUPPLEMENTAL INFORMATION ON OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED) (CONTINUED)
+TABLE III: Results of operations related to oil and gas producing activities
+1,218
+434,561
+1,218
+Share of costs of exploration and development
+Equity method investments
+2,455
+88,172
+90,627
+2,624
+61,177
+63,801
+Total costs incurred
+2,455
+71,468
+of associates and joint ventures
+1,381
+investments' results of net capitalised costs
+15,277
+15
+36,035
+533,137
+190,988
+569,172
+191,003
+78,971
+858
+69,873
+70,731
+Uncompleted wells, equipments and facilities
+20
+204,773
+204,793
+Supporting equipments and facilities.
+40,688
+572,446
+613,134
+and facilities
+Property cost, wells and related equipments
+The Group
+Other
+countries
+China
+Total
+countries
+China
+78,185
+786
+Total capitalised costs
+888,658
+15,277
+11,296
+11,296
+Share of net capitalised costs of associates
+and joint ventures
+Equity method investments
+14,964
+412,732
+427,696
+14,270
+408,995
+423,265
+Total of the Group's and its equity method
+Net capitalised costs
+(389,578)
+(411,450)
+(27,296)
+(465,393) (438,097)
+amortisation and impairment losses
+Accumulated depreciation, depletion,
+36,836
+802,310
+839,146
+41,566
+847,092
+(21,872)
+3,842
+Total of the Group's and its equity method investments'
+Total
+results of operations for producing activities
+1,105
+629
+7,207
+12,973
+7,207
+785,623
+12,973
+(1,371)
+(10)
+(2,157)
+(2,961)
+(3,036)
+(6,881)
+(1,165)
+845
+427
+Share of profit for producing activities of
+Production costs excluding taxes
+(1,165)
+Exploration expenses
+(4)
+||||||
+Depreciation, depletion, amortisation and
+associates and joint ventures
+impairment losses
+Taxes other than income tax
+(3,036)
+Profit before taxation
+845
+Income tax expense
+(418)
+(2,157)
+7,207
+1,750
+(958)
+Financial Statements
+Supplemental Information on Oil and
+Gas Producing Activities (Unaudited)
+196
+Financial Statements
+Supplemental Information on Oil and
+Gas Producing Activities (Unaudited)
+195
+(D) SUPPLEMENTAL INFORMATION ON OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED) (CONTINUED)
+The Group's and its equity method investments' estimated net proved underground oil and gas reserves and changes thereto for the years ended 31
+December 2015 and 2014 are shown in the following table.
+Proved oil and gas reserves are those quantities of oil and gas, which by analysis of geoscience and engineering data, can be estimated with reasonable
+certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions, operating methods,
+and government regulation before contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain,
+regardless of whether the estimate is a deterministic estimate or probabilistic estimate. Due to the inherent uncertainties and the limited nature of
+reservoir data, estimates of underground reserves are subject to change as additional information becomes available.
+Proved developed oil and gas reserves are proved reserves that can be expected to be recovered through existing wells with existing equipment and
+operating methods or in which the cost of the required equipment is relatively minor compared with the cost of a new well.
+"Net" reserves exclude royalties and interests owned by others and reflect contractual arrangements and obligation of rental fee in effect at the time of
+the estimate.
+2015
+TABLE IV: RESERVE QUANTITIES INFORMATION
+(418)
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+3,048
+427
+792
+476
+49,213
+46,165
+12,973
+The results of operations for producing activities for the years ended 31 December 2015 and 2014 are shown above. Revenues include sales to
+unaffiliated parties and transfers (essentially at third-party sales prices) to other segments of the Group. Income taxes are based on statutory tax
+rates, reflecting allowable deductions and tax credits. General corporate overhead and interest income and expense are excluded from the results of
+operations.
+12,973
+(10)
+| | |
+(2,961)
+(6,881)
+1,750
+(958)
+792
+(1,371)
+7,207
+Sales
+Revenues
+123,033
+116,480
+6,553
+210,744
+202,143
+8,601
+8,601
+Production costs excluding taxes
+(46,883)
+(1,432)
+(50,567)
+(48,962)
+(1,605)
+Exploration expenses
+(48,315)
+(10,459)
+132,920
+6,553
+China
+countries
+Total
+China
+2014
+RMB million
+Other
+countries
+The Group
+Revenues
+141,521
+Sales
+52,580
+69,223
+69,223
+Transfers
+70,453
+63,900
+52,580
+(10,459)
+(10,969)
+(10,969)
+Income tax expense
+(1,205)
+(210)
+(995)
+(17,454)
+Results of operation from producing activities
+4,323
+678
+49
+48,421
+(15,387)
+46,165
+(2,067)
+2,256
+Equity method investments
+629
+65,875
+1,044
+839
+Depreciation, depletion, amortisation and
+impairment losses
+(56,293)
+(52,216)
+(4,077)
+(51,338)
+(48,665)
+(2,673)
+Taxes other than income tax
+(6,083)
+(6,083)
+(31,995)
+(31,995)
+Profit before taxation
+1,883
+2015
+RMB million
+Other
+31 December
+2015
+RMB million
+(4)
+Safety production fund
+Note
+31 December
+2015
+31 December
+2014
+RMB
+RMB
+Non-current assets
+Property, plant and equipment, net
+Construction in progress
+Investment in subsidiaries
+Interest in associates
+Interest in joint ventures
+Available-for-sale financial assets
+Lease prepayments
+Long-term prepayments and other assets
+Total non-current assets
+Current assets
+13,196
+5,453
+5,931
+164,399
+191,403
+100,543
+BALANCE SHEET OF THE COMPANY (Amounts in million)
+72,763
+439,477
+Inventories
+Bills receivable
+Trade accounts receivable
+Time deposits with financial institutions
+Cash and cash equivalents
+452,361
+13,346
+41 BALANCE SHEET AND RESERVE MOVEMENT OF THE COMPANY
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+Carrying amount
+Fair value
+31 December
+2015
+RMB million
+105,927
+103,482
+31 December
+2014
+RMB million
+115,767
+112,362
+The Group has not developed an internal valuation model necessary to estimate the fair values of loans from Sinopec Group Company and
+fellow subsidiaries as it is not considered practicable to estimate their fair values because the cost of obtaining discount and borrowing rates for
+comparable borrowings would be excessive based on the Reorganisation, the Group's existing capital structure and the terms of the borrowings.
+Investments in unquoted equity securities are individually and in the aggregate not material to the Group's financial condition or results of
+operations. There are no listed market prices for such interests in the PRC and, accordingly, a reasonable estimate of fair value could not be
+made without incurring excessive costs. The Group intends to hold these unquoted other investments in equity securities for long term purpose.
+Except for the above items, the financial assets and liabilities of the Group are carried at amounts not materially different from their fair values
+at 31 December 2015 and 2014.
+39 ACCOUNTING ESTIMATES AND JUDGEMENTS
+The Group's financial condition and results of operations are sensitive to accounting methods, assumptions and estimates that underlie the
+preparation of the consolidated financial statements. Management bases the assumptions and estimates on historical experience and on
+various other assumptions that it believes to be reasonable and which form the basis for making judgements about matters that are not readily
+apparent from other sources. On an ongoing basis, management evaluates its estimates. Actual results may differ from those estimates as facts,
+circumstances and conditions change.
+The selection of critical accounting policies, the judgements and other uncertainties affecting application of such policies and the sensitivity of
+reported results to changes in conditions and assumptions are factors to be considered when reviewing the consolidated financial statements. The
+significant accounting policies are set forth in Note 2. Management believes the following critical accounting policies involve the most significant
+judgements and estimates used in the preparation of the consolidated financial statements.
+Oil and gas properties and reserves
+The accounting for the exploration and production's oil and gas activities is subject to accounting rules that are unique to the oil and gas industry.
+There are two methods to account for oil and gas business activities, the successful efforts method and the full cost method. The Group has elected
+to use the successful efforts method. The successful efforts method reflects the volatility that is inherent in exploring for mineral resources in that
+costs of unsuccessful exploratory efforts are charged to expense as they are incurred. These costs primarily include dry hole costs, seismic costs
+and other exploratory costs. Under the full cost method, these costs are capitalised and written-off or depreciated over time.
+Engineering estimates of the Group's oil and gas reserves are inherently imprecise and represent only approximate amounts because of the
+subjective judgements involved in developing such information. There are authoritative guidelines regarding the engineering criteria that have to be
+met before estimated oil and gas reserves can be designated as "proved". Proved and proved developed reserves estimates are updated at least
+annually and take into account recent production and technical information about each field. In addition, as prices and cost levels change from
+year to year, the estimate of proved and proved developed reserves also changes. This change is considered a change in estimate for accounting
+purposes and is reflected on a prospective basis in relation to depreciation rates.
+Future dismantlement costs for oil and gas properties are estimated with reference to engineering estimates after taking into consideration the
+anticipated method of dismantlement required in accordance with industry practices in similar geographic area, including estimation of economic
+life of oil and gas properties, technology and price level. The present values of these estimated future dismantlement costs are capitalised as oil and
+gas properties with equivalent amounts recognised as provisions for dismantlement costs.
+Despite the inherent imprecision in these engineering estimates, these estimates are used in determining depreciation expense, impairment loss
+and future dismantlement costs. Capitalised costs of proved oil and gas properties are amortised on a unit-of-production method based on volumes
+produced and reserves.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015 189
+Financial Statements (International)
+190
+Financial Statements (International)
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+The directors consider the parent and ultimate holding company of the Group as at 31 December 2015 is Sinopec Group Company, a state-owned
+enterprise established in the PRC. This entity does not produce financial statements available for public use.
+40 PARENT AND ULTIMATE HOLDING COMPANY
+If the costs of inventories become higher than their net realisable values, an allowance for diminution in value of inventories is recognised. Net
+realisable value represents the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated
+costs necessary to make the sale. Management bases the estimates on all available information, including the current market prices of the finished
+goods and raw materials, and historical operating costs. If the actual selling prices were to be lower or the costs of completion were to be higher
+than estimated, the actual allowance for diminution in value of inventories could be higher than estimated.
+Allowance for diminution in value of inventories
+Management estimates impairment losses for bad and doubtful debts resulting from the inability of the Group's customers to make the required
+payments. Management bases the estimates on the ageing of the accounts receivable balance, customer credit-worthiness, and historical write-off
+experience. If the financial condition of the customers were to deteriorate, actual write-offs would be higher than estimated.
+for the year ended 31 December 2015
+Impairment for bad and doubtful debts
+Depreciation
+If circumstances indicate that the net book value of a long-lived asset may not be recoverable, the asset may be considered “impaired", and an
+impairment loss may be recognised in accordance with IAS 36 “Impairment of Assets". The carrying amounts of long-lived assets are reviewed
+periodically in order to assess whether the recoverable amounts have declined below the carrying amounts. These assets are tested for impairment
+whenever events or changes in circumstances indicate that their recorded carrying amounts may not be recoverable. When such a decline has
+occurred, the carrying amount is reduced to recoverable amount. For goodwill, the recoverable amount is estimated annually. The recoverable
+amount is the greater of the net selling price and the value in use. It is difficult to precisely estimate selling price because quoted market prices for
+the Group's assets or cash-generating units are not readily available. In determining the value in use, expected cash flows generated by the asset
+or the cash-generating unit are discounted to their present value, which requires significant judgement relating to level of sale volume, selling price
+and amount of operating costs. Management uses all readily available information in determining an amount that is a reasonable approximation
+of recoverable amount, including estimates based on reasonable and supportable assumptions and projections of sale volume, selling price and
+amount of operating costs.
+Impairment for long-lived assets
+39 ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued)
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+Property, plant and equipment, other than oil and gas properties, are depreciated on a straight-line basis over the estimated useful lives of the
+assets, after taking into account the estimated residual value. Management reviews the estimated useful lives of the assets at least annually in order
+to determine the amount of depreciation expense to be recorded during any reporting period. The useful lives are based on the Group's historical
+experience with similar assets and take into account anticipated technological changes. The depreciation expense for future periods is adjusted if
+there are significant changes from previous estimates.
+The fair values of the Group's financial instruments carried at other than fair value (other than long-term indebtedness and investments in
+unquoted equity securities) approximate their carrying amounts due to the short-term maturity of these instruments. The fair values of long-term
+indebtedness are estimated by discounting future cash flows using current market interest rates offered to the Group that range from 1.08% to
+4.90% (2014: 0.33% to 6.15%). The following table presents the carrying amount and fair value of the Group's long-term indebtedness other
+than loans from Sinopec Group Company and fellow subsidiaries at 31 December 2015 and 2014:
+297
+6,492
+221,715
+Income tax payable
+552
+Total current liabilities
+267,854
+396,428
+Net current liabilities
+40,594
+72,380
+Total assets less current liabilities
+704,983
+677,961
+Non-current liabilities
+Long-term debts
+75,926
+75,493
+Loans from Sinopec Group Company and fellow subsidiaries
+Share capital
+Equity
+Total non-current liabilities
+3,104
+3,382
+Other long-term liabilities
+112,999
+25,830
+Provisions
+600
+177
+Deferred tax liabilities
+41,930
+44,100
+28,968
+91
+Accrued expenses and other payables
+1,852
+6,930
+16,018
+7,218
+745,577
+750,341
+46,453
+1,804
+1
+29,512
+25,031
+540
+176
+46,029
+74,654
+Prepaid expenses and other current assets
+104,726
+222,382
+Bills payable
+102,399
+85,182
+Trade accounts payable
+6,750
+18,690
+2,933
+Loans from Sinopec Group Company and fellow subsidiaries
+49,131
+Short-term debts
+Current liabilities
+324,048
+227,260
+Total current assets
+62,079
+The disclosures of the fair value estimates, and their methods and assumptions of the Group's financial instruments, are made to comply
+with the requirements of IFRS 7 and IAS 39 and should be read in conjunction with the Group's consolidated financial statements and related
+notes. The estimated fair value amounts have been determined by the Group using market information and valuation methodologies considered
+appropriate. However, considerable judgement is required to interpret market data to develop the estimates of fair value. Accordingly, the
+estimates presented herein are not necessarily indicative of the amounts the Group could realise in a current market exchange. The use of
+different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.
+(ii) Fair values of financial instruments carried at other than fair value
+Fair values (Continued)
+Special reserve
+(3,215)
+(3,088)
+Appropriation
+(28,031)
+(24,214)
+Distribution to owners (Note 13)
+32,035
+28,727
+Profit for the year
+164,698
+166,481
+Balance at 1 January
+Retained earnings
+1,745
+1,922
+Balance at 31 December
+Balance at 1 January
+1,745
+4,613
+Cash flow hedges, net of deferred tax
+47
+(657)
+(81)
+Change in fair value of available-for-sale financial assets, net of deferred tax
+Special reserve
+81
+(994)
+Others
+49
+92
+(1,309)
+Other reserves
+994
+167,825
+Government grants
+Adjustments:
+Shareholders' equity under ASBE
+Note
+Effects of major differences between the shareholders' equity under ASBE and the total equity under IFRS are analysed as follows:
+47,933
+43,664
+Profit for the year under IFRS*
+(1,093)
+191
+116
+127
+(i)
+(ii)
+Safety production fund
+Government grants
+2014
+RMB million
+48,910
+RMB million
+43,346
+166,481
+431,359
+412,724
+192
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+(C) DIFFERENCES BETWEEN CONSOLIDATED FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH
+THE ACCOUNTING POLICIES COMPLYING WITH ASBE AND IFRS (UNAUDITED)
+Balance at 31 December
+Other than the differences in the classifications of certain financial statements captions and the accounting for the items described below, there are no
+material differences between the Group's consolidated financial statements prepared in accordance with the accounting policies complying with ASBE
+and IFRS. The reconciliation presented below is included as supplemental information, is not required as part of the basic financial statements and
+does not include differences related to classification, presentation or disclosures. Such information has not been subject to independent audit or review.
+The major differences are:
+Under ASBE, grants from the government are credited to capital reserve if required by relevant governmental regulations. Under IFRS, government
+grants relating to the purchase of fixed assets are recognised as deferred income and are transferred to the income statement over the useful life of
+these assets.
+(II) SAFETY PRODUCTION FUND
+Under ASBE, safety production fund should be recognised in profit or loss with a corresponding increase in reserve according to PRC regulations.
+Such reserve is reduced for expenses incurred for safety production purposes or, when safety production related fixed assets are purchased, is
+reduced by the purchased cost with a corresponding increase in the accumulated depreciation. Such fixed assets are not depreciated thereafter.
+Under IFRS, payments are expensed as incurred, or capitalised as fixed assets and depreciated according to applicable depreciation methods.
+Effects of major differences between the net profit under ASBE and the profit for the year under IFRS are analysed as follows:
+Note
+2015
+Net profit under ASBE
+Adjustments:
+(I) GOVERNMENT GRANTS
+117,000
+117,000
+117,000
+41 BALANCE SHEET AND RESERVE MOVEMENT OF THE COMPANY (Continued)
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+Financial Statements (International)
+Financial Statements (International)
+191
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+Chief Financial Officer
+Wen Dongfen
+President
+Li Chunguang
+(Legal representative)
+Chairman
+Wang Yupu
+531,004
+552,430
+412,724
+38 FINANCIAL RISK MANAGEMENT AND FAIR VALUES (Continued)
+for the year ended 31 December 2015
+NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
+2014
+Reserves
+Total equity
+(a) RESERVES MOVEMENT OF THE COMPANY
+Approved and authorised for issue by the board of directors on 29 March 2016.
+146,957
+552,430
+531,004
+121,071
+118,280
+431,359
+152,553
+The reconciliation between the opening and closing balances of each component of the Group's consolidated reserves is set out in the
+consolidated statement of changes in equity. Details of the change in the Company's individual component of reserves between the beginning
+and the end of the year are as follows:
+The Company
+2015
+RMB million
+41,824
+Balance at 1 January
+76,552
+73,337
+Appropriation
+Balance at 31 December
+55,850
+Discretionary surplus reserve
+Balance at 31 December
+3,088
+3,215
+79,640
+76,552
+117,000
+Balance at 1 January
+(i)
+(ii)
+8,477
+Conversion of the 2011 Convertible Bonds (Note 28(iii))
+2014
+RMB million
+Share premium
+Capital reserve
+Balance at 1 January
+Balance at 31 December
+Balance at 1 January
+14,026
+Balance at 31 December
+9,122
+9,122
+9,122
+9,122
+41,824
+33,347
+Statutory surplus reserve
+Total
+61,552
+Other
+countries
+6,520
+26
+6,715
+6,741
+Beginning of year
+(gas) (billion cubic feet)
+Proved developed and undeveloped reserves
+347
+3,047
+341
+1,902
+2,243
+End of year
+357
+2,773
+3,130
+347
+2,700
+3,047
+Beginning of year
+(oil) (million barrels)
+6,493
+Proved developed and undeveloped reserves
+27
+7,570
+2014
+RMB million
+Other
+countries
+China
+Total
+2015
+RMB million
+Other
+countries
+China
+Total
+The information provided does not represent management's estimate of the Group's and its equity method investments' expected future cash flows or
+value of proved oil and gas reserves. Estimates of proved reserve quantities are imprecise and change over time as new information becomes available.
+Moreover, probable and possible reserves, which may become proved in the future, are excluded from the calculations. The arbitrary valuation requires
+assumptions as to the timing and amount of future development and production costs. The calculations are made for the years ended 31 December
+2015 and 2014 and should not be relied upon as an indication of the Group's and its equity method investments' future cash flows or value of its oil
+and gas reserves.
+The standardised measure of discounted future net cash flows, related to the above proved oil and gas reserves, is calculated in accordance with the
+requirements of ASU 2010-03 and “Industrial Information Disclosure Guidelines for Public Company - No.8 Oil and Gas Exploitation". Estimated future
+cash inflows from production are computed by applying the average, first-day-of-the-month price for oil and gas during the twelve-month period before
+the ending date of the period covered by the report to year-end quantities of estimated net proved reserves. Future price changes are limited to those
+provided by contractual arrangements in existence at the end of each reporting year. Future development and production costs are those estimated
+future expenditures necessary to develop and produce year-end estimated proved reserves based on year-end cost indices, assuming continuation of
+year-end economic conditions. Estimated future income taxes are calculated by applying appropriate year-end statutory tax rates to estimated future
+pre-tax net cash flows, less the tax basis of related assets. Discounted future net cash flows are calculated using 10% midperiod discount factors. This
+discounting requires a year-by-year estimate of when the future expenditure will be incurred and when the reserves will be produced.
+TABLE V: STANDARDISED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS
+(D) SUPPLEMENTAL INFORMATION ON OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED) (CONTINUED)
+Activities (Unaudited)
+Supplemental Information on Oil and
+Gas Producing
+Financial Statements
+198
+197
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+26
+6,715
+6,741
+19
+7,551
+End of year
+32
+2
+3
+26
+30
+30
+23
+252
+259
+252
+260
+259
+252
+275
+(32)
+2
+16
+289
+| | | | | ||
+275
+286
+(32)
+(33)
+2
+23
+23
+26
+27
+21
+24
+24
+22
+24
+24
+22
+18
+24
+26
+The Group
+26
+(5)
+(5)
+(4)
+Gas Producing Activities (Unaudited)
+Supplemental Information on Oil and
+Financial Statements
+4
+4
+(3)
+27
+19
+Future cash flows
+Future production costs
+Future development costs
+Undiscounted future net cash flows
+(8,530)
+(8,530)
+(4,159)
+(4,159)
+Future income tax expenses
+(13,313)
+(13,313)
+(2,996)
+(2,996)
+Future development costs
+(14,393)
+(14,393)
+(11,665)
+(11,665)
+Future production costs
+77,593
+77,593
+41,013
+China
+41,013
+22,193
+22,193
+41,357
+41,357
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+28,060
+505,049
+533,109
+14,607
+287,477
+302,084
+discounted future net cash flows
+results of standardised measure of
+Total of the Group's and its equity method investments'
+Future cash flows
+19,650
+12,365
+12,365
+future net cash flows
+Standardised measure of discounted
+(21,707)
+(21,707)
+(9,828)
+(9,828)
+of cash flows
+10% annual discount for estimated timing
+19,650
+9
+Equity method investments
+4,815
+(1,360)
+(9,779)
+(11,139)
+(8,242)
+(38,442)
+(46,684)
+(4,577)
+(34,092)
+(12,308)
+(811,267)
+43,573
+1,763,757
+1,807,330
+(823,575)
+(9,384)
+18,739
+912,898
+(430,695)
+931,637
+(440,079)
+(38,669)
+of cash flows
+10% annual discount for estimated timing
+Undiscounted future net cash flows
+Future income tax expenses
+441,750
+438,332
+3,418
+(135,219)
+801,852
+1,356
+1,356
+non-controlling interests
+Discounted future net cash flows attributable to
+8,410
+505,049
+513,459
+2,242
+287,477
+289,719
+4,815
+net cash flows
+(4,723)
+(283,670)
+(288,393)
+(1,176)
+(150,855)
+(152,031)
+13,133
+788,719
+(9,890)
+(125,329)
+Standardised measure of discounted future
+-
+2,700
+16
+235
+243
+Beginning of year
+Proved undeveloped reserves
+64
+2,465
+2,529
+52
+1,701
+1,753
+End of year
+61
+2,501
+2,562
+64
+2,465
+2,529
+Beginning of year
+Proved developed reserves
+32
+I
+8
+32
+279
+7
+Production
+Extensions and discoveries
+Improved recovery
+175
+175
+(252)
+(252)
+Revisions of previous estimates
+6,493
+6,493
+6,715
+6,715
+Beginning of year
+(gas) (billion cubic feet)
+Proved developed and undeveloped reserves
+8
+235
+3
+201
+204
+End of year
+272
+25
+25
+undeveloped reserves at the end of year
+41
+41
+141
+130
+11
+Production
+(317)
+(297)
+End of year
+1,957
+1,902
+25
+(20)
+(326)
+(311)
+(15)
+55
+2,772
+2,700
+72
+Non-controlling interest in proved developed and
+Extensions and discoveries
+154
+154
+99
+1
+Other
+Total
+China
+countries
+The Group
+Proved developed and undeveloped reserves
+(oil) (million barrels)
+Beginning of year
+2,772
+2,700
+End of year
+72
+2,773
+Revisions of previous estimates
+(638)
+(641)
+3
+(38)
+(46)
+68
+8
+Improved recovery
+99
+2,841
+70
+243
+48
+34
+275
+Extensions and discoveries
+End of year
+Proved undeveloped reserves
+Beginning of year
+End of year
+Total of the Group and its equity method investments
+(4)
+19
+24
+18
+21
+70
+|| | || | || | || | ||
+│|||||||||||||
+275
+289
+Improved recovery
+Proved developed reserves
+Revisions of previous estimates
+1
+9
+Production
+End of year
+End of year
+Production
+Extensions and discoveries
+Improved recovery
+(3)
+26
+Revisions of previous estimates
+Beginning of year
+(gas) (billion cubic feet)
+associates and joint ventures
+Beginning of year
+Proved developed and undeveloped reserves of
+End of year
+23
+Beginning of year
+Proved undeveloped reserves
+260
+End of year
+252
+Beginning of year
+Proved developed reserves
+(33)
+286
+26
+Other
+countries
+Beginning of year
+Total
+Beginning of year
+Proved undeveloped reserves
+5,987
+5,987
+6,439
+6,439
+End of year
+5,781
+5,781
+5,987
+5,987
+Beginning of year
+China
+Proved developed reserves
+6,715
+7,551
+7,551
+(712)
+(712)
+(731)
+(731)
+711
+711
+1,749
+1,749
+48
+6,715
+728
+728
+712
+Total
+China
+712
+2014
+2015
+Proved developed and undeveloped reserves of
+associates and joint ventures (oil) (million barrels)
+Equity method investments
+Other
+countries
+TABLE IV: RESERVE QUANTITIES INFORMATION (Continued)
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+728
+728
+34
+1,112
+1,112
+End of year
+(D) SUPPLEMENTAL INFORMATION ON OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED) (CONTINUED)
+: 11th Floor
+: 22nd Floor,
+PricewaterhouseCoopers,
+: PricewaterhouseCoopers
+Zhong Tian LLP
+Stock name
+Address
+NAMES AND ADDRESSES OF AUDITORS OF
+SINOPEC CORP.
+Domestic Auditors
+http://www.sinopec.com
+: SINOPEC CORP
+: SNP
+Stock code
+Central, Hong Kong
+Overseas Auditors
+Address
+2 Corporate Avenue,
+202 Hu Bin Road,
+Huangpu District,
+Shanghai, PRC
+PricewaterhouseCoopers
+: 600028
+: SINOPEC CORP
+: SNP
+The US:
+:ir@sinopec.com
+DEPOSITARY FOR ADRS
+Citibank, N.A.
+388 Greenwich St., 14th Floor
+New York NY 10013
+United States of America
+COPIES OF THIS ANNUAL REPORT ARE
+AVAILABLE AT
+The PRC:
+China Petroleum & Chemical Corporation
+PLACES OF LISTING OF SHARES, STOCK
+London Stock Exchange
+NAMES AND STOCK CODES
+Shanghai Stock Exchange
+Stock name
+: SINOPEC CORP
+Stock code
+H Shares:
+Hong Kong Stock Exchange
+Stock name
+Sinopec Corp
+Stock code
+: 0386
+ADRs:
+New York Stock Exchange
+Stock name
+Stock code
+A Shares:
+PLACE OF BUSINESS IN HONG KONG
+Chang Zhenyong
+Convention Plaza
+愀
+观
+生
+Ma Yongsheng
+Jiao Fangzheng
+Zhang Haichao
+Dai Houliang
+厚度 焦方证
+堋
+厚良
+Zhang Jianhua
+Li Chunguang
+Wang Yupu
+王志刚
+章观华
+臌
+曾
+Signatures of the Directors and Senior Management:
+Wang Zhigang
+Jiang Xiaoming
+Andrew Y. Yan
+Tang Min
+R1712 1716, 17th Floor, Hopewell Centre
+183 Queen's Road East
+Hong Kong
+ПОРЕС
+Chaoyang District
+中国石化
+No. 22 Chaoyangmen North Street
+China Petroleum & Chemical Corporation (Sinopec Corp.)
+This annual report is published in both English
+and Chinese. Should any conflict regarding
+the meaning arises, the Chinese version shall
+prevail.
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+202
+Lei Dianwu
+典
+29 March 2016
+Wen Dongfen
+Huang Wensheng
+Ling Yiqun
+Jiang Zhenghong
+清廷朗
+江正洪
+Fan Gang
+According to the relevant provisions and requirements of the PRC Securities Law and Management
+Rules for Information Disclosure by Listed Companies promulgated by the CSRC, as the Board
+directors and senior management of Sinopec Corp., we have carefully reviewed the 2015 annual
+report of Sinopec Corp. and concluded that this annual report truly and objectively represents
+Sinopec Corp.'s business performance in 2015, it contains no false representations, misleading
+statements or material omissions and complies with the requirements of the CSRC and other
+relevant regulatory authorities.
+CONFIRMATION FROM THE DIRECTORS AND SENIOR MANAGEMENT
+from the Directors and
+ConfirmSenior Management
+The US:
+Beijing, PRC
+Chaoyang District
+No.22 Chaoyangmen North Street,
+Board Secretariat
+Postcode: 100020
+Beijing PRC
+Chaoyang District
+No. 5, Dong San Huan Central Road
+20th Floor, Fortune Financial Centre
+Haiwen & Partners
+People's Republic of China:
+LEGAL ADVISORS
+No change during the reporting period
+COPIES OF RELATIVE REPORTS
+INFORMATION DISCLOSURE AND PLACES FOR
+Hong Kong
+Wanchai
+1 Harbour Road
+Citibank, N.A.
+20th Floor, Office Tower
+388 Greenwich St., 14th Floor
+United States of America
+Documents for Inspection
+201
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+Beijing, PRC, 29 March 2016
+Chairman
+Wang Yupu
+By Order of the Board
+d) All the original copies of the documents
+and announcements that Sinopec Corp. has
+published in the newspapers stipulated by
+the CSRC during the reporting period.
+c) The original auditors' report signed by the
+auditors; and
+b) The original copies of financial statements
+and consolidated financial statements as of
+31 December 2015 prepared under IFRS
+and ABSE, signed by Mr. Wang Yupu, the
+Chairman, Mr. Li Chunguang, director and
+President, Ms. Wen Dongfen, the Chief
+Financial Officer and head of the financial
+department of Sinopec Corp.;
+a) The original copies of the 2015 annual
+reports signed by Mr. Wang Yupu, the
+Chairman;
+The following documents will be available for
+inspection during normal business hours after
+29 March 2016 (Tuesday) at the registered
+address of Sinopec Corp. upon requests by the
+relevant regulatory authorities and shareholders
+in accordance with the Articles of Association
+and the laws and regulations of PRC:
+DOCUMENTS FOR INSPECTION
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+London E14 5LB, U.K.
+Canada Square, Canary Wharf
+Citigroup Centre
+Citibank, N.A.
+The UK:
+New York NY 10013
+Hong Kong Registrars Limited
+Prince's Building,
+Printed on environmentally friendly paper
+(68,875)
+(1,453)
+18,494
+22,286
+60,005
+60,425
+79,281
+6,262
+(223,740)
+2,058
+(3,006)
+(4,721)
+(12,987)
+(4,573)
+997
+(431)
+611
+404
+1,520
+978
+1,163
+1,343
+2,681
+68,147
+2,746
+(D) SUPPLEMENTAL INFORMATION ON OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED) (CONTINUED)
+2015
+44,838
+(14,207)
+(6,873)
+(11,220)
+(128,182)
+(68,635)
+(281,975)
+Net changes for the year
+Net changes in income taxes
+Accretion of discount
+Previously estimated development costs incurred during the year
+Net changes due to extensions, discoveries and improved recoveries
+Revisions of previous quantity estimates
+Net changes in estimated future development cost
+Sales and transfers of oil and gas produced, net of production costs
+Net changes in prices and production costs
+Equity method investments
+Net changes for the year
+Net changes in income taxes
+Net changes due to extensions, discoveries and improved recoveries
+Revisions of previous quantity estimates
+Net changes in estimated future development cost
+Net changes in prices and production costs
+Sales and transfers of oil and gas produced, net of production costs
+The Group
+2014
+RMB million
+RMB million
+TABLE VI: CHANGES IN THE STANDARDISED MEASURE OF DISCOUNTED CASH FLOWS
+1,736
+Previously estimated development costs incurred during the year
+Accretion of discount
+(7,285)
+Beijing 100728 PRC
+H Shares:
+China Securities Registration and Clearing
+Company Limited Shanghai Branch Company
+36th Floor, China Insurance Building
+166 Lujiazui East Road
+Shanghai, PRC
+A Shares:
+REGISTRARS
+Skadden, Arps, Slate, Meagher & Flom LLP
+42/F, Edinburgh Tower, The Landmark
+15 Queen's Road, Central, Hong Kong
+Mr. Huang Wensheng
+SECRETARY TO THE BOARD
+Mr. Huang Wensheng
+REPRESENTATIVE ON SECURITIES MATTERS
+Mr. Zheng Baomin
+REGISTERED ADDRESS AND PLACE OF
+BUSINESS
+No.22 Chaoyangmen North Street,
+Chaoyang District
+643
+: 100728
+Postcode
+Tel.
+: 86-10-59960028
+U.S.A.
+Fax
+: 86-10-59960386
+Website
+E-mail addresses
+Hong Kong:
+Herbert Smith Freehills
+23rd Floor, Gloucester Tower
+Beijing, PRC
+15 Queen's Road
+Central, Hong Kong
+STATUTORY NAME
+LEGAL REPRESENTATIVE
+Sinopec Corp.
+ENGLISH ABBREVIATION
+中国石化
+CHINESE ABBREVIATION
+China Petroleum & Chemical Corporation
+ENGLISH NAME
+中国石油化工股份有限公司
+Mr. Li Chunguang
+CORPORATE INFORMATION
+Corporate Information
+200
+Gas Producing Activities (Unaudited)
+Supplemental Information on Oil and
+Financial Statements
+199
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+(1,553)
+(231,025)
+Total of the Group's and its equity method investments' results of net changes for the year
+(3,611)
+Mr. Wang Yupu
+AUTHORISED REPRESENTATIVES
+22
+8,585
+6,996
+9.8
+53,003
+22
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+In 2015, the unit refining cash operating
+cost (defined as operating expenses
+less the processing cost of crude oil
+and refining feedstock, depreciation and
+amortisation, taxes other than income
+tax and other operating expenses, then
+divided by the throughput of crude oil
+and refining feedstock) was RMB 167.6
+per tonne, remaining flat over 2014
+despite of investments in refined oil
+products quality upgrading.
+In 2015, the operating profit of the
+segment totaled RMB 21.0 billion,
+representing an increase of RMB 22.9
+billion as compared with 2014. This was
+mainly due to the timely adjustment of
+refined oil product prices, tapping the
+Company's well established advantages
+in scale of refining, as well as production
+increase of oil products and high-value-
+added products for which demand
+was strong.
+(3) Marketing and Distribution Segment
+The business of the marketing and
+distribution segment includes purchasing
+refined oil products from the refining
+segment and third parties, conducting
+wholesale and direct sales to domestic
+customers and distributing oil products
+through the segment's retail and
+distribution network, as well as providing
+related services.
+In 2015, the operating revenues of this
+segment were RMB 1,106.7 billion, a
+decrease of 25.1% over 2014. Of which:
+the sales revenues of gasoline totaled
+RMB 471.2 billion, which decreased by
+12.0% compared with 2014; the sales.
+revenues of diesel were RMB 473.4
+billion, a decrease of 31.0% over 2014,
+and the sales revenues of kerosene were
+RMB 78.0 billion, a decrease of 37.5%
+over 2014.
+The following table sets forth the sales volumes, average realised prices, and the respective percentage changes of the segment's four major
+refined oil products in 2015 and 2014, including breakdown in retail, direct sales and wholesale of gasoline and diesel:
+Sales Volume (Thousand tonnes)
+Year ended 31 December
+Average realised price (RMB/tonne)
+Year ended 31 December
+2015
+2014
+2014. Total crude oil processed was
+223.43 million tonnes (excluding volume
+processed for third parties), representing
+a decrease of 0.2% over 2014. The total
+cost of crude oil processed was RMB
+601.7 billion, representing a decrease of
+42.8% over 2014.
+2015
+2014
+Change (%)
+Gasoline
+Retail
+69,842
+In 2015, the average processing cost
+for crude oil was RMB 2,693 per tonne,
+representing a decrease of 42.6% over
+64,190
+8.8
+6,747
+8,338
+(19.1)
+58,211
+In 2015, refining gross margin was RMB
+318.1 per tonne, representing an increase
+of RMB 105.1 per tonne compared with
+2014. As international crude oil price
+falls, prices of other refined petroleum
+products dropped less, and the price
+spread between products and feedstock
+widened.
+Change (%)
+11.631
+Direct sales and wholesale
+45,151
+47,322
+(4.6)
+4,314
+6,196
+(30.4)
+Kerosene
+23,028
+21,845
+5.4
+3,387
+5,710
+(40.7)
+Fuel
+24,980
+25,537
+(2.2)
+Direct sales and wholesale
+(18.5)
+(21.9)
+5,490
+In 2015, the segment's operating
+expenses were RMB 905.7 billion,
+representing a decrease of 29.0% over
+2014, mainly attributable to the decline
+in procurement cost of crude oil.
+11,187
+4.0
+5,498
+7,166
+(23.3)
+Diesel
+95,907
+103,255
+(7.1)
+4,936
+6,648
+(25.7)
+Retail
+50,756
+55,934
+(9.3)
+7,029
+The sales revenues of refined petroleum
+products other than gasoline, diesel,
+kerosene and chemical feedstock were
+RMB 148.9 billion, representing a
+decrease of 24.3% over 2014.
+7,784
+3,943
+Special oil income levy and resources
+tax dropped by RMB 25.9 billion
+owing to the decline of crude oil price;
+By strengthening cost control,
+operating costs decreased by RMB 2.3
+billion;
+Depreciation, depletion and
+amortisation increased by RMB 3.3
+billion.
+In 2015, the oil and gas lifting cost was
+RMB 780 per tonne, representing a
+year-on-year decrease of 3.0%, this was
+mainly attributable to stricter cost cutting
+policy put forward by the Company in
+respond to the decline of crude oil price.
+In 2015, the operating loss of the
+exploration and production segment were
+RMB 17.4 billion, representing a decrease
+of RMB 64.5 billion as compared with
+2014 which is mainly attributable to the
+sharp decline of crude oil price.
+(2) Refining Segment
+Business activities of the refining
+segment include purchasing crude oil
+from third parties and the exploration
+and production segment of the Company,
+as well as processing crude oil into
+refined petroleum products. Gasoline,
+diesel and kerosene are sold internally to
+the marketing and distribution segment
+of the Company; part of the chemical
+feedstock is sold to the chemicals
+segment of the Company; and other
+refined petroleum products are sold to
+both domestic and overseas customers.
+In 2015, the operating revenues of
+this segment were RMB 926.6 billion,
+representing a decrease of 27.2% over
+2014. This was mainly attributable to the
+decreased in refined oil products prices.
+The following table sets forth the sales volumes, average realised prices and the respective changes of the Company's major refined oil products
+of the segment in 2015 and 2014.
+Sales Volume (thousand tonnes)
+Year ended 31 December
+Gasoline
+Diesel
+Kerosene
+Chemical feedstock
+Other refined petroleum products
+representing a decrease of 13.6% over
+2014. The decrease was mainly due to
+the following:
+In 2015, sales revenues of gasoline
+were RMB 315.3 billion, representing a
+decrease of 15.2% over 2014.
+In 2015, the operating expenses of
+this segment were RMB 156.1 billion,
+In 2015, the operating revenues of
+this segment were RMB 138.7 billion,
+representing a decrease of 39.1% over
+2014. This was mainly attributable to the
+decline of realised price of crude oil.
+783,490
+1,310,236
+1,311,299
+(40.2)
+(40.3)
+384
+4,566
+(1,063)
+2,179
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+21
+Management's Discussion
+and Analysis
+Management's
+Discussion
+and Analysis
+MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
+(1) Exploration and Production Segment
+Almost all of the crude oil and a small
+portion of the natural gas produced by
+the exploration and production segment
+were used for the Company's refining and
+chemical operations. Most of the natural
+gas and a small portion of crude oil were
+sold externally to other customers.
+In 2015, the segment sold 42.22 million
+tonnes of crude oil, representing a
+decrease of 2.6% over 2014. Natural
+gas sales volume was 19.83 billion
+cubic meters, representing an increase
+of 10.3% over 2014. Average realised
+prices of crude oil and natural gas were
+RMB 2,014 per tonne and RMB 1,535
+per thousand cubic meters, representing
+decreases of 48.9% and 4.0%
+respectively over 2014.
+The sales revenues of diesel were RMB
+303.9 billion, representing a decrease of
+28.9% over 2014.
+The sales revenues of kerosene were RMB
+46.2 billion, representing a decrease of
+34.7% over 2014.
+The sales revenues of chemical feedstock
+were RMB 107.3 billion, representing a
+decrease of 46.6% over 2014.
+12,410
+8.9
+3,420
+5,705
+(40.0)
+35,945
+37,690
+(4.6)
+2,984
+5,333
+(44.1)
+52,418
+49,901
+5.0
+2,842
+13,518
+(23.7)
+6,288
+4,797
+Average realised price (RMB/tonne)
+Year ended 31 December
+2,215
+2015
+2014
+Change (%)
+2015
+2014
+(27.9)
+Change (%)
+47,786
+6.6
+6,191
+(20.5)
+63,359
+67,945
+(6.7)
+50,921
+4,016
+9,436
+In 2015, the operating expenses of the
+segment were RMB 1,077.8 billion,
+representing a decrease of RMB 369.3
+billion or 25.5% as compared with that of
+2014. This was mainly due to decreased
+procurement costs resulting from the
+decrease of oil products price.
+(141,615)
+Non-current liabilities
+196,268
+201,534
+(5,266)
+Total equity attributable to owners of the Company
+Share capital
+674,029
+593,041
+80,988
+121,071
+118,280
+2,791
+Reserves
+552,958
+474,761
+604,257
+78,197
+462,642
+(146,881)
+Total assets
+Current assets
+1,443,129
+332,405
+1,451,368
+(8,239)
+360,144
+(27,739)
+Non-current assets
+1,110,724
+1,091,224
+19,500
+Total liabilities
+658,910
+805,791
+Current liabilities
+Non-controlling interests
+110,190
+52,536
+Net cash used in investing activities
+Net cash generated from/(used in) financing activities
+In 2015, the net cash generated from
+operating activities of the company
+was RMB 165.8 billion, representing an
+increase of RMB 17.5 billion as compared
+with 2014. This was mainly due to
+the decrease of operating capital and
+increase of depreciation and depletion
+over the same period of 2014.
+In 2015, the net cash used in investing
+activities was RMB 117.0 billion,
+representing a decrease of RMB 15.7
+billion over 2014. This was mainly due to
+the decrease of fixed assets expenditure
+in the reporting period.
+In 2015, the net cash inflow generated
+from the Company's financing activities
+was RMB 9.3 billion, representing an
+increase of RMB 30.7 billion over 2014.
+This was mainly due to the completion
+of capital injection to Sinopec Marketing
+Co. and the repayment of high interest
+bearing debts.
+At the end of 2015, the cash and cash
+equivalents were RMB 67.8 billion.
+(3) Contingent Liabilities
+Please refer to "Material Guarantee
+Contracts and Their Performances" in the
+"Significant Events" section.
+Unit: RMB million
+Year ended 31 December
+2015
+165,818
+(116,952)
+9,310
+2014
+148,347
+(132,633)
+(21,421)
+(4) Capital Expenditures
+Please refer to "Capital Expenditures"
+in the "Business Review and Prospects"
+section of this report.
+(5) Research & development expenses and
+environmental expenditures
+Research & development expenses
+refer to the expenses recognised as
+expenditures when they occur. In
+2015, the expenditure for research &
+development was RMB 5.65 billion.
+Environmental expenditures refer to
+the normal routine pollutant discharge
+fees paid by the Company, excluding
+capitalised cost of pollutant treatment
+properties. In 2015, the Company paid
+environmental expenditures fees of RMB
+5.81 billion.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+Net cash generated from operating activities
+Major items of cash flows
+The following table sets forth the major items in the consolidated cash flow statements for 2015 and 2014.
+(2) Cash Flow
+57,654
+Total equity
+784,219
+645,577
+138,642
+24
+24
+Change
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+Current assets were RMB 332.4 billion,
+representing a decrease of RMB 27.7
+billion compared with that of the end of
+2014. This was mainly due to the fact
+that inventories decreased by RMB 42.7
+billion, accounts receivable decreased
+by RMB 34.7 billion, and cash and cash
+equivalent increased by RMB 58.5 billion.
+Non-current assets were RMB 1,110.7
+billion, representing an increase of RMB
+19.5 billion as compared with that of the
+end of 2014. This was mainly due to the
+fact that property, plant and equipment
+(net) increased by RMB 29.1 billion,
+construction in progress decreased
+by RMB 25.4 billion, the investment
+of equity acquisition of Sibur Holding
+increased by RMB 9.5 billion; the long-
+term equity investments of associates
+and joint ventures increased by RMB
+2.4 billion; newly added land use right,
+long-term prepayments and other assets
+increased by RMB 3.5 billion.
+The Company's total liabilities were RMB
+658.9 billion, representing a decrease of
+RMB 146.9 billion compared with that of
+the end of 2014, of which:
+Current liabilities were RMB 462.6 billion,
+representing a decrease of RMB 141.6
+billion as compared with that of the end
+of 2014. This was mainly due to short.
+term loans of Sinopec group decreased
+by RMB 59.0 billion, account payables
+decreased by RMB 67.9 billion.
+Non-current liabilities were RMB 196.3
+billion, representing a decrease of RMB
+5.3 billion compared with that of the
+end of 2014. This was mainly due to
+long-term debts decreased by RMB 12.3
+billion, estimated liabilities increased by
+RMB 3.5 billion due to the provision for
+future dismantling of oil and gas assets,
+long-term payable and other debts
+increased by RMB 2.0 billion.
+Total equity attributable to owners of
+the Company was RMB 674.0 billion,
+representing an increase of RMB 81.0
+billion compared with that of the end
+of 2014, which was mainly due to the
+completion of capital injection to Sinopec
+Marketing Co., conversion of Sinopec CB
+and increased retained earnings from the
+net profit for this period.
+As of 31 December 2015, the Company's
+total assets were RMB 1,443.1 billion,
+representing a decrease of RMB 8.2
+billion compared with that of the end of
+2014, of which:
+(44.8)
+As of 31
+December 2014
+Unit: RMB million
+Synthetic fibre
+Synthetic rubber
+Chemical fertiliser
+Average realised price (RMB/tonne)
+Year ended 31 December
+2015
+2014
+Change (%)
+2015
+2014
+Change (%)
+38,903
+35,788
+8.7
+4,121
+6,118
+(32.6)
+Synthetic resin
+6,083
+Synthetic fibre monomer and polymer
+Sales Volume (Thousand tonnes)
+Year ended 31 December
+In 2015, the segment's marketing cash
+operating cost (defined as the operating
+expenses less purchase costs, taxes
+other than income tax, depreciation
+and amortisation, and then divided by
+the sales volume) was RMB 189.2 per
+tonne, representing a decrease of 1.9%
+compared with that of 2014.
+In 2015, the operating profit of
+this segment was RMB 28.9 billion,
+representing a decrease of 2.0%
+compared with 2014.
+(4) Chemicals Segment
+The business activities of the chemicals
+segment include purchasing chemical
+feedstock from refining segment and
+third parties, producing, marketing and
+distributing petrochemical and inorganic
+chemical products.
+In 2015, the operating revenues of the
+chemicals segment were RMB 326.3
+billion, representing a decrease of 23.7%
+as compared with that of 2014, which
+was mainly attributable to price drop
+of chemical products partly offset by
+the volume increase of basic organic
+chemicals and synthetic resin.
+Sales revenue generated by the
+segment's six major categories of
+chemical products (namely basic organic
+chemicals, synthetic resin, synthetic fibre
+monomer and polymer, synthetic fibre,
+synthetic rubber, and chemical fertiliser)
+totaled RMB 309.6 billion, representing
+a decrease of 23.6% as compared with
+2014, and accounting for 94.9% of the
+operating revenues of the segment.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+23
+Management's Discussion
+and Analysis
+Management's
+Discussion
+and Analysis
+MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
+The following table sets forth the sales volume, average realised prices and respective percentage changes of each of the segment's six major
+categories of chemical products in 2015 and 2014.
+Basic organic chemicals
+6,496
+(6.4)
+5,797
+243
+598
+(59.4)
+1,823
+1,686
+8.1
+In 2015, the operating expenses of the
+chemicals segment were RMB 306.6
+billion, representing a decrease of 28.6%
+over 2014. This was mainly attributable
+to the decline of chemical feedstock cost
+by RMB 115.2 billion or 32.6% over
+2014 as the crude oil prices dropped.
+In 2015, the operating profit of
+this segment was RMB 19.7 billion,
+representing an increase of RMB 21.9
+billion as compared with 2014. This
+was mainly due to the increasing
+competitiveness of naphtha-based
+chemical and preferable product margin
+as feedstock costs lowered.
+3 ASSETS, LIABILITIES, EQUITY AND CASH FLOWS
+(5) Corporate and Others
+The business activities of corporate
+and others mainly consist of import
+and export business activities of the
+Company's subsidiaries, research and
+development activities of the Company,
+and managerial activities of headquarters.
+In 2015, the operating revenues
+generated from corporate and others.
+were RMB 783.9 billion among which the
+sales revenues realised by subsidiaries
+such as trading companies were RMB
+779.3 billion, representing a decrease of
+40.2% over 2014 mainly attributed to the
+decline in trading income caused by price
+drop of crude oil.
+In 2015, the operating expenses of
+corporate and others were RMB 783.5
+billion, among which operating expenses
+realised by subsidiaries such as trading
+companies were RMB 775.5 billion,
+representing a decrease of 40.3% over
+2014.
+In 2015, the operating profit from
+corporate and others was RMB 0.4
+billion, among which the operating profit
+realised by subsidiaries such as trading
+companies was RMB 3.8 billion.
+The major funding source of the Company is its operating activities and short-term and long-term loans. The major use of funds includes operating
+expense, capital expenditures, and repayment of the short-term and long-term debts.
+(1) Assets, liabilities and equity
+(16.9)
+10,549
+8,769
+(8.3)
+7,220
+(19.7)
+11,993
+11,603
+3.4
+7,771
+9,679
+As of 31
+December 2015
+(19.7)
+1,430
+(3.5)
+7,739
+Elimination of inter-segment profit
+(18.0)
+1,107
+1,207
+1,380
+Operating expenses
+Operating profit/(loss)
+External sales*
+Operating revenues
+(40.7)
+5,710
+3,387
+5.4
+21,845
+23,028
+Kerosene
+(25.7)
+6,647
+Basic chemical feedstock
+4,937
+102,724
+95,472
+Diesel
+(19.1)
+8,339
+6,749
+8.8
+64,083
+69,749
+(7.1)
+Gasoline
+29,608
+8.5
+2.2
+3.0
+138,653
+227,597
+4.3
+4.8
+External sales*
+125,654
+180,851
+27,277
+3.8
+6.2
+6.4
+Inter-segment sales
+800,962
+1,092,244
+24.4
+23.3
+Operating revenues
+926,616
+3.8
+141,544
+(4.4)
+1,519
+2014
+8,864
+9,674
+Crude oil
+2015
+Average realised price
+(RMB/tonne, RMB/thousand cubic meters
+Year ended 31 December
+Year ended 31 December
+Sales volume (thousand tonnes)
+The following table sets forth the external sales volume, average realised prices and respective rates of change of the Company's major products
+in 2015 and 2014:
+In 2015, the Company's turnover was RMB 1,976.4 billion, representing a decrease of 28.9% over 2014. This was mainly attributable to the
+decline of crude oil and petrochemical products prices.
+Change (%)
+(1) Turnover and other operating revenues
+1,467
+(30.2)
+46,466
+32,438
+11,226
+Non-controlling interests
+Owners of the Company
+(8.9)
+47,933
+43,664
+665.2
+1,589
+2015
+Change (%)
+10.7
+16,661
+18,440
+Natural gas (million cubic meters)
+4,691
+0
+84
+0
+Oversea
+2014
+(49.5)
+2,019
+10.2
+8,780
+9,674
+Domestic
+(49.6)
+4,008
+2,019
+9.1
+4,001
+71,019
+3.0
+3.4
+(5) Profit before taxation was RMB 56.3
+billion, representing a decrease of 14.1%
+as compared with 2014.
+(4) Net finance costs were RMB 9.3 billion,
+representing a decrease of 34.8% over
+2014. Of which: the net interest expense
+of the Company was RMB 5.2 billion,
+representing a decrease of RMB 4.3
+billion over 2014; net losses from foreign
+exchange increased by RMB 3.7 billion
+as compared with 2014 due to the RMB
+exchange rate fluctuation in 2015; loss
+from fair value change in convertible
+bonds decreased RMB 4.4 billion
+compared with the same period of 2014.
+(3) Operating profit was RMB 57.0 billion,
+representing a decrease of 22.4%
+compared with 2014.
+Other operating expense, net were RMB
+0.1 billion.
+Taxes other than income tax were RMB
+236.3 billion, representing an increase of
+23.6% compared with 2014. Of which,
+although the special oil income levy and
+resources tax decreased by RMB 24.6
+billion over the same period of 2014 due
+to crude oil price drop, the consumption
+tax increased by RMB 62.0 billion as a
+result of increased consumption tax rate,
+and city construction tax and
+educational surcharge increased by
+RMB 7.9 billion accordingly over the
+same period of 2014.
+Personnel expenses were RMB 56.3
+billion, representing a decrease of 1.6%
+over 2014.
+Exploration expenses, including dry
+holes were RMB 10.5 billion, representing
+a decrease of 4.6% compared with 2014,
+mainly attributable to the optimisation
+of exploration investment and effective
+reduction of exploration expenses.
+Depreciation, depletion and amortisation
+were RMB 96.4 billion, representing an
+increase of 7.0% as compared with 2014.
+This was mainly due to the continued
+investment in fixed assets.
+Selling, general and administrative
+expenses were RMB 69.3 billion,
+representing an increase of 1.4%
+over 2014.
+(6) Tax expense was RMB 12.6 billion,
+representing a decrease of RMB 5.0
+billion as compared with 2014.
+The Company's other purchasing
+expenses were RMB 1,023.5 billion,
+representing a decrease of 31.6% over
+the same period of 2014. This was
+mainly due to the decline in the prices of
+externally purchased raw materials.
+Purchased crude oil, products and
+operating supplies and expenses were
+RMB 1,492.9 billion, representing a
+decrease of 36.0% over the same period
+of 2014, accounting for 76.1% of the
+total operating expenses, of which:
+In 2015, the Company's operating
+expenses were RMB 1,961.9 billion,
+decreased by 28.7% compared with
+2014. The operating expenses mainly
+consisted of the following:
+(2) Operating expenses
+The Company's external sales revenue
+of chemical products was RMB 275.2
+billion, representing a decrease of 22.9%
+over 2014, accounting for 13.6% of
+the Company's total turnover and other
+operating revenues. This was mainly
+due to the decline of chemical products
+prices.
+In 2015, petroleum products (mainly
+consisting of oil products and other
+refined petroleum products) sold by
+Refining Segment and Marketing and
+Distribution Segment achieved external
+sales revenues of RMB 1,206.7 billion,
+accounting for 59.8% of the Company's
+turnover and other operating revenues,
+representing a decrease of 26.1% over
+2014 mainly due to the decline of various
+refinery products prices. The sales
+revenue of gasoline, diesel and kerosene
+was RMB 1,020.2 billion, representing
+a decrease of 24.0% over 2014, and
+accounting for 84.5% of the total sales
+revenue of petroleum products. Turnover
+of other refined petroleum products
+was RMB 186.5 billion, representing a
+decrease of 36.1% compared with 2014,
+accounting for 15.5% of the total sales
+revenue of petroleum products.
+Most of crude oil and a portion of
+natural gas produced by the Company
+were internally used for refining and
+chemical production, with the remaining
+sold to other customers. In 2015, the
+turnover from crude oil, natural gas
+and other upstream products sold
+externally amounted to RMB 57.7 billion,
+a decrease of 17.0% over 2014. The
+change was mainly due to the decrease
+of crude oil prices in 2015.
+MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
+and Analysis
+Discussion
+Crude oil purchasing expenses were RMB
+469.4 billion, representing a decrease
+of 44.0% over the same period of 2014.
+Throughput of crude oil purchased
+externally in 2015 was 176.29 million
+tonnes (excluding the volume processed
+for third parties), representing a decrease
+of 0.6% over the same period of 2014.
+The average cost of crude oil purchased
+externally was RMB 2,663 per tonne,
+representing a drop of 43.6% over 2014.
+Management's
+(7) Profit attributable to non-controlling
+interests was RMB 11.2 billion,
+representing an increase of RMB 9.8
+billion comparing with 2014.
+2 RESULTS OF SEGMENT OPERATIONS
+The Company manages its operations
+through four business segments, namely
+exploration and production segment, refining
+segment, marketing and distribution segment
+and chemicals segment, and corporate
+and others. Unless otherwise specified, the
+inter-segment transactions have not been
+eliminated from financial data discussed
+in this section. In addition, the operating
+revenue data of each segment include other
+operating revenues.
+Exploration and Production Segment
+(%)
+(%)
+(%)
+(%)
+2014
+2015
+2014
+2015
+(8) Profit attributable to owners of the
+Company was RMB 32.4 billion,
+representing a decrease of 30.2%
+compared with 2014.
+2014
+RMB million
+Operating revenues
+Year ended 31 December
+2015
+of inter-segment sales
+Year ended 31 December
+As a percentage of
+consolidated operating
+revenue after elimination
+of inter-segment sales
+Year ended 31 December
+As a percentage of
+consolidated operating
+revenue before elimination
+The following table shows the operating revenues by each segment, the contribution of external sales and inter-segment sales as a percentage
+of operating revenues before elimination of inter-segment sales, and the contribution of external sales as a percentage of consolidated operating
+revenues (i.e. after elimination of inter-segment sales) for the periods indicated.
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+20
+20
+RMB million
+and Analysis
+Management's Discussion
+19
+3.5
+11,584
+11,989
+Synthetic resin
+(19.8)
+7,223
+5,796
+(6.3)
+6,479
+7,771
+6,071
+(32.1)
+6,151
+4,175
+Operating revenues
+Refining Segment
+67,634
+86,053
+2.1
+1.8
+Monomer and polymer for synthetic fibre
+9,684
+(19.8)
+Synthetic fibre
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+8.1
+1,686
+1,823
+(59.4)
+598
+243
+Chemical fertiliser
+(16.8)
+10,554
+8,778
+(8.4)
+1,205
+1,104
+Synthetic rubber
+(18.0)
+9,436
+7,740
+(3.5)
+1,430
+1,380
+Attributable to:
+783,874
+Profit for the year
+(17,571)
+783,874
+1,310,236
+23.9
+27.8
+Operating revenue before elimination of
+inter-segment sales
+Elimination of inter-segment sales
+Consolidated operating revenue
+3,282,117
+4,715,019
+(1,263,234) (1,889,105)
+2,018,883
+2,825,914
+Operating revenues
+100.0
+100.0
+100.0
+*: Other operating revenues are included.
+The following table sets forth the operating revenues, operating expenses and operating profit/(loss) by each segment before elimination of the
+inter-segment transactions for the periods indicated, and the percentage change of 2015 compared to 2014.
+Year ended 31 December
+2015
+RMB million
+2014
+RMB million
+Change
+(%)
+Exploration and Production Segment
+100.0
+Operating revenues
+12.5
+587,663
+7.7
+14.0
+12.9
+42,743
+62,208
+1.3
+1.3
+326,308
+427,485
+10.5
+9.9
+External sales*
+438,420
+722,573
+13.4
+15.3
+21.7
+25.6
+Inter-segment sales
+345,454
+9.0
+8.6
+138,653
+(39.1)
+Operating expenses
+Operating profit
+Chemicals Segment
+Operating revenues
+Operating expenses
+Operating profit/(loss)
+Corporate and Others
+1,077,811
+28,855
+Inter-segment sales
+(25.1)
+(25.5)
+(2.0)
+326,308
+427,485
+(23.7)
+306,626
+429,666
+(28.6)
+19,682
+(2,181)
+29,449
+227,597
+1,476,606
+Operating revenues
+Operating expenses
+Operating (loss)/profit
+Refining Segment
+156,071
+180,540
+(13.6)
+(17,418)
+47,057
+Operating revenues
+1,106,666
+926,616
+(27.2)
+Operating expenses
+905,657
+1,275,049
+(29.0)
+Operating profit/(loss)
+20,959
+(1,954)
+Marketing and Distribution Segment
+1,273,095
+365,277
+283,565
+Corporate and Others
+(236,343)
+Taxes other than income tax
+(1.6)
+(57,233)
+(56,331)
+Personnel expenses
+(4.6)
+(10,969)
+(10,459)
+(191,202)
+Exploration expenses, including dry holes
+(90,097)
+(96,368)
+Depreciation, depletion and amortisation
+1.4
+(68,374)
+(69,330)
+(36.0)
+(2,334,399)
+(1,492,926)
+7.0
+(28.7)
+23.6
+(98)
+(12,613)
+Tax expense
+(14.1)
+65,504
+56,277
+Profit before taxation
+36.5
+6,246
+8,525
+Other operating expense, net
+Investment income and share of profits less losses from associates and joint ventures
+(14,229)
+(9,276)
+Net finance costs
+(22.4)
+73,487
+57,028
+Operating profit
+(35.9)
+(153)
+(34.8)
+(2,752,427)
+(1,961,855)
+Selling, general and administrative expenses
+1,471,160
+33.6
+1 CONSOLIDATED RESULTS OF OPERATIONS
+31.2
+54.7
+52.1
+Inter-segment sales
+Operating revenues
+3,056
+1,106,666
+1,103,610
+5,446
+203
+0.1
+0.1
+33.7
+31.3
+Chemicals Segment
+External sales*
+Inter-segment sales
+Operating revenues
+1,476,606
+External sales*
+Marketing and Distribution Segment
+27.1
+Purchased crude oil, product and operating supplies and expenses
+Operating expenses
+(4.1)
+44,273
+(28.9)
+2,781,641
+1,976,412
+42,471
+Other operating revenues
+Turnover
+(28.6)
+2,825,914
+2,018,883
+Turnover and other operating revenues
+Change (%)
+2014
+RMB million
+RMB million
+Year ended 31 December
+2015
+The following table sets forth the main revenue and expenses from the Company's consolidated financial statements:
+In 2015, the Company's turnover and other operating revenues were RMB 2,018.9 billion, decreased by 28.6% compared with that of 2014. The
+operating profit was RMB 57.0 billion, representing a year on year decrease of 22.4%.
+1,273,095
+28.2
+(28.2)
+1,447,157
+MANAGEMENT'S DISCUSSION AND ANALYSIS
+At the end of 2015, the Company's long-term liabilities were RMB 194.9 billion, representing a decrease of RMB 5.2 billion compared with that
+of the end of 2014. This was mainly due to the following factors: a) long-term loans decreased by RMB 10.9 billion; b) provisions increased by
+RMB 3.5 billion due to the provision for future dismantling costs of oil and gas properties; c) long-term payable and other debts increased by
+RMB 2.1 billion.
+2014
+RMB million
+Year ended 31 December
+2015
+RMB million
+Elimination of inter-segment sales
+Corporate and Others
+Chemicals Segment
+Marketing and Distribution Segment
+Refining Segment
+Exploration and Production Segment
+Operating profit/(loss)
+138,653
+926,616
+Consolidated operating income
+Corporate and Others
+Chemicals Segment
+Marketing and Distribution Segment
+Refining Segment
+Exploration and Production Segment
+Operating income
+(1) Under ASBE, the operating income and operating profit or loss by reportable segments were as follows:
+The major differences between the Company's financial statements prepared under ASBE and IFRS are set out in Section C of the financial
+statements of the Company on page 193 of this report.
+4 ANALYSIS OF FINANCIAL STATEMENTS PREPARED UNDER ASBE
+Elimination of inter-segment sales
+227,597
+1,273,095
+1,106,666
+1,476,606
+32,207
+65,481
+52,081
+(5,632)
+291
+2,179
+4,566
+(2,982)
+(678)
+(2,164)
+19,691
+29,753
+27,299
+(1,982)
+19,423
+46,309
+(18,511)
+2,825,914
+1,310,236
+(1,889,105)
+427,485
+326,308
+783,874
+(1,263,234)
+2,018,883
+6,515
+728
+5,386
+Self-owned fund
+Derivative financial instruments
+Available-for-sale financial assets
+Stock
+Impairment
+loss provision
+Accumulated
+variation of fair
+values recorded
+Profits and
+losses from
+variation of fair
+values in the
+current year
+the year
+of the year
+Items
+End of
+Beginning
+Unit: RMB million
+Items relevant to measurement of fair values
+The Company has established sound decision-making mechanism, business process and internal control systems relevant to financial instrument
+accounting and information disclosure.
+(6) Measurement of fair values of derivatives and relevant system
+and Analysis
+Discussion
+Management's
+and Analysis
+Management's Discussion
+25
+convertible bonds
+Financial expenses, investment income and loss from changes in fair value
+183
+as equity
+87
+2,881
+509
+4,722
+(7,557)
+(9,473)
+Cash flow hedging instruments
+Total
+Self-owned fund
+3,547
+(259)
+(3,288)
+Embedded derivative instruments of the
+Self-owned fund
+478
+403
+1,189
+87
+261
+183
+Self-owned fund
+source
+Funding
+of the
+current year
+261
+Consolidated operating profit
+MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)
+47,430
+(40.2)
+1.1
+774,799
+7.4
+(29.7)
+(23.7)
+11.3
+287,821
+326,308
+783,874
+Corporate and Others
+Chemicals
+1.8
+(26.5)
+(25.1)
+7.4
+1,022,620
+1,106,666
+Marketing and Distribution
+3.2
+(40.2)
+(27.2)
+(40.5)
+4.5
+0.6
+Total
+Net profit attributable to equity shareholders of the Company
+THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH THE
+COMPANY'S AUDITED FINANCIAL STATEMENTS AND THE ACCOMPANYING NOTES. PARTS OF THE
+FOLLOWING FINANCIAL DATA WERE ABSTRACTED FROM THE COMPANY'S AUDITED FINANCIAL
+STATEMENTS THAT HAVE BEEN PREPARED ACCORDING TO THE IFRS, UNLESS OTHERWISE STATED.
+THE PRICES IN THE FOLLOWING DISCUSSION DO NOT INCLUDE VALUE-ADDED TAX.
+VAYARA
+SAVAGAYA AAYANANAY
+and Analysis
+Management's Discussion
+27
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+*: Gross profit margin = (operation income - operation cost, tax and surcharges)/operation income.
+2.1
+(34.4)
+(28.6)
+9.4
+1,592,771
+2,018,883
+N/A
+N/A
+N/A
+N/A
+(1,267,801)
+(1,263,234)
+Elimination of inter-segment sales
+658,347
+ZALAYAYAYAYAYAYAYAYAYAY
+1.2
+1,451,368
+785,623
+194,864
+138,528
+(5,152)
+(8,239)
+RMB million
+Change
+As of 31
+200,016
+December 2014
+1,443,129
+RMB million
+Shareholders' equity
+Long-term liabilities
+Total assets
+(2) Financial data prepared under ASBE
+26
+Net profit: In 2015, the net profit attributable to the equity shareholders of the Company was RMB 32.2 billion, representing a decrease of
+RMB 15.2 billion or 32.1% comparing with 2014.
+(23.9)
+As of 31
+December 2015
+647,095
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+Operating profit: In 2015, the operating profit of the Company was RMB 52.1 billion, representing a decrease of RMB 13.4 billion as
+compared with 2014. This was mainly due to sharp drop of crude oil price, resulting in the decrease of realised profit of the company's
+upstream segment.
+11.2
+116,985
+(39.1)
+138,653
+926,616
+Refining
+Exploration and Production
+At the end of 2015, the Company's total assets were RMB 1,443.1 billion, representing a decrease of RMB 8.2 billion compared with that of
+the end of 2014. This was mainly due to the following factors: a) inventories decreased by RMB 42.7 billion because of the decrease in crude
+oil and other raw material prices; b) accounts receivable decreased by RMB 34.7 billion; c) currency reserves increased by RMB 58.5 billion; d)
+implemented investment plan, in which, fixed assets increased by RMB 29.1 billion and projects on progress decreased by RMB 25.4 billion.
+year-on-year
+basis (%)
+on a
+year-on-year
+basis (%)
+gross profit
+margin on a
+year-on-year
+basis (%)
+RMB million
+At the end of 2015, the shareholders' equity of the Company was RMB 785.6 billion, representing an increase of RMB 138.5 billion compared
+with that of the end of 2014. This was mainly due to the completion of capital injection to Sinopec Marketing Co., conversion of Sinopec CB and
+increased retained earnings from net profit for this period.
+(3) The results of the principal operations by segments
+Gross profit
+margin* (%)
+Operation
+cost
+Increase/
+(decrease) of
+operation
+income on a
+Operation
+income
+Increase/
+(decrease) of
+operation cost
+Increase/
+(decrease) of
+Segments
+RMB million
+Specific statements and independent
+opinions from independent non-executive
+directors regarding external guarantees
+provided by Sinopec Corp. during and by
+the end of 2015:
+SIGNIFICANT EVENTS (CONTINUED)
+Significant Events
+36
+Significant Events
+35
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+We, as independent non-executive directors
+of Sinopec Corp., hereby make the following
+statements after conducting a thorough
+check of external guarantees provided by
+Sinopec Corp. accumulated up to and during
+2015 in accordance with the requirements of
+the domestic regulatory authorities:
+The amount of guarantees provided during the reporting period and the amount of guarantees outstanding at the end of the reporting period include the
+guarantees provided by the controlled subsidiaries to external parties. The amount of the guarantees provided by these subsidiaries is derived by multiplying the
+guarantees provided by Sinopec Corp.'s subsidiaries by the percentage of shares held by Sinopec Corp. in such subsidiaries.
+3.96%
+As defined in the Listing Rules of the Shanghai Stock Exchange.
+*1:
+None
+None
+None
+2,314
+2,314
+None
+26,737
+22,728
+*2:
+Sinopec Corp. has disclosed its external
+guarantees for year 2015 in this annual
+report. The aggregate balance of external
+guarantees provided by Sinopec Corp. for
+the year 2015 was RMB 26.737 billion,
+accounting for approximately 3.96% of the
+Company's net assets.
+Ningbo Gaotou Petroleum
+Sinopec Corp. shall continue to strengthen
+its management and actively monitor
+guarantee risks. It shall strictly follow the
+approval and disclosure procedures in
+relation to guarantee businesses for any new
+external guarantees provided thereafter.
+Term
+billion)
+None
+Borrower
+Mortgage
+Amount
+(RMB
+Whether
+(2) Entrusted loans
+During the reporting period, Sinopec Corp. has no entrusted asset management subject to disclosure obligation.
+We hereby present the following opinions:
+(1) Entrusted Asset Management
+14 TRUSTEESHIP, CONTRACTING AND LEASES
+During the reporting period, Sinopec Corp.
+was not involved in any events relating to
+significant trusteeship, contracting or leases
+for the assets of any other company, nor has
+it placed its assets with any other company
+under a trusteeship, contracting or lease
+agreement subject to disclosure obligations.
+During the reporting period, the Company
+and its controlling shareholder did not have
+any court's effective judgments which should
+be performed or any comparatively large
+amount of debt which should be cleared up.
+FACTO CONTROLLER
+12 CREDIBILITY FOR THE COMPANY,
+CONTROLLING SHAREHOLDERS AND DE
+Saved as disclosed by Sinopec Corp., the
+Company did not enter into any significant
+contracts subject to disclosure obligations
+during the reporting period.
+11 OTHER MATERIAL CONTRACTS
+10 INSOLVENCY AND RESTRUCTURING
+During the reporting period, the Company
+was not involved in any insolvency or
+restructuring matters.
+No significant litigation, arbitration relating
+to the Company occurred during the
+reporting period.
+9 SIGNIFICANT LITIGATION, ARBITRATION
+RELATING TO SINOPEC CORP.
+15 ENTRUSTED ASSET MANAGEMENT AND ENTRUSTED LOANS
+13 PENALTIES ON THE COMPANY AND
+ITS DIRECTORS, SUPERVISORS,
+SENIOR MANAGEMENT, CONTROLLING
+SHAREHOLDER AND DE FACTO
+CONTROLLER AND REMEDIES THERETO
+On 27 April 2015, Sinopec Crop. was
+informed by China Petrochemical
+Corporation, the controlling shareholder of
+the Company, that Mr. Wang Tianpu, former
+non-executive Director and Vice Chairman
+of the Company, was currently under
+investigation by the competent authorities.
+Mr. Wang Tianpu tendered his resignation
+to the Board on 27 April 2015 and resigned
+from all his positions in the Company,
+including non-executive Director and Vice
+Chairman, with immediate effect from the
+same date. For further details, please refer
+to the announcements published in the China
+Securities Journal, the Shanghai Securities
+News and the Securities Times. on 28 April,
+2015. For the relevant details, please also
+refer to the disclosure made on the website
+of the Hong Kong Stock Exchange dated 27
+April 2015.
+No
+645
+Yanbu Aramco
+The listed
+Sinopec Corp.
+Sonangol E.P.
+Development Ltd./
+International
+subsidiary
+No
+Yes
+HO
+No
+No
+Joint obligations
+6,010
+New Bright
+Controlled
+0.3
+SSI
+Co., Ltd.
+company
+itself
+Sinopec Refining
+Company
+no specific 31 December 2014 30 years from the date
+amount
+Joint obligations
+Statement of guarantee status
+Statement of guarantee undue that might be involved in any joint and several liabilities
+Total amount of the above three guarantee items (C+D+E)
+The amount of guarantees in excess of 50% of the net assets (E)
+Amount of debt guarantees provided directly or indirectly to the companies with liabilities to assets ratio over 70% (D)
+Guarantees provided for shareholder, de facto controller and connected parties (C)
+The proportion of the total amount of guarantees to the Sinopec Corp.'s net assets
+Total amount of guarantees(A+B)
+Total amount of guarantees for the Company (including those provided for controlled subsidiaries)
+4,009
+Total amount of guarantee for controlled subsidiaries outstanding at the end of the reporting period (B)
+Total amount of guarantee provided to controlled subsidiaries during the reporting period
+Guarantees by the Company to the controlled subsidiaries
+Total amount of guarantees outstanding at the end of reporting period *² (A)
+Total amount of guarantees provided during the reporting period *2
+(YASREF) Limited
+Yanbu project company
+requires supply of
+No
+No
+No
+hydrogen from Air
+Liquedi Arabia LLC.
+4 years
+Zhongtian Synergetic Energy
+or
+number of internal rules, including the
+Rules for the Internal Control System,
+the Rules for Implementation of Overseas
+Capital Management Methods, and the
+Provisional Methods for Overseas Fund
+Platform Management, to impose strict rules
+on Century Bright Company for providing
+overseas financial services. Century Bright
+Company has also established the Rules for
+the Implementation of the Internal Control
+System, which ensures the standardisation
+and safety of its corporate deposits business.
+At the same time, as the wholly controlling
+shareholder of Century Bright Company,
+China Petrochemical Corporation entered
+into a keep-well agreement with Century
+Bright Company in 2013, under which China
+Petrochemical Corporation undertakes that
+when Century Bright Company has difficulty
+making payments, China Petrochemical
+Corporation will ensure that Century Bright
+Company will fulfill its repayment obligation
+through various channels.
+In order to regulate connected transactions
+between the Company and Sinopec
+Century Bright Capital Investment, Ltd.
+(Century Bright Company, Sinopec Corp.'s
+overseas settlement center), Century
+Bright Company ensures the safety of
+the deposits of Sinopec Corp. in Century
+Bright Company by strengthening internal
+risk controls and obtaining support from
+China Petrochemical Corporation. China
+Petrochemical Corporation has issued a
+In order to regulate connected transactions
+between the Company and Sinopec Finance
+Co., Ltd. (Sinopec Corp.'s domestic
+settlement center, hereinafter referred to
+as the "Finance Company") and to ensure
+the safety and liquidity of the deposits of
+Sinopec Corp. in the Finance Company,
+Sinopec Corp. and the Finance Company
+formulated the Risk Control System on
+Connected Transactions of China Petroleum
+& Chemical Corporation and Sinopec Finance
+Co., Ltd., which covers the risk control
+system and the risk management plan of the
+Company to prevent financial risks and to
+ensure that the deposits of the Company in
+the Finance Company can be utilised at the
+Company's discretion. At the same time, as
+the controlling shareholder of the Finance
+Company, China Petrochemical Corporation
+undertakes that in case of an emergency
+where the Finance Company has difficulty
+making payments, China Petrochemical
+Corporation will increase the capital of
+the Finance Company in accordance with
+the actual need for the purpose to make
+payment.
+16 DEPOSITS AT SINOPEC FINANCE CO., LTD.
+AND SINOPEC CENTURY BRIGHT CAPITAL
+INVESTMENT, LTD.
+During the reporting period, Sinopec
+Corp. has no other asset management
+and derivative investment subject to
+disclosure obligation.
+(3) Other asset management and derivative
+investment
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+Zhongtian Synergetic has repaid the RMB 3.1 billion loan in March 2016.
+*.
+capital loan
+Co., Ltd. (Zhongtian Synergetic)
+Gain
+Associate
+No
+No
+Yes
+No
+None
+Working
+The deposits of the Company in the Finance
+Company and Century Bright Company
+during the reporting period did not exceed
+the cap as approved at the general meeting
+of shareholders. During daily operations,
+the deposits of Sinopec Corp. in the Finance
+Company and Century Bright Company can
+be fully withdrawn for the Company's use.
+17 APPROPRIATION OF NONOPERATIONAL
+FUNDS BY THE CONTROLLING
+SHAREHOLDER AND ITS RELATED PARTIES
+AND THE PROGRESS FOR CLEARING UP
+Not applicable
+18 STRUCTURED ENTITY CONTROLLED BY
+THE COMPANY
+None
+19 DETAILED IMPLEMENTATION OF THE
+SHARE INCENTIVE SCHEME DURING THE
+REPORTING PERIOD
+Director and Vice President
+No
+|MA FU379
+BUD
+中国石化 SINOPEC
+↑
+助
+柴油
+98 汽油
+3 months 4.44%
+95 汽油
+自助加油
+便利店
+义 易捷
+SINOPEC
+中国石化
+Significant Events
+37
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+Sinopec Corp. did not implement any share
+incentive scheme during the reporting period.
+92 汽油
+Interest
+Rate
+5.75%
+3.1
+Gain
+Joint Venture
+No
+No
+No
+No
+None
+or loss
+relationship
+or not
+or not
+or not
+Gain
+Connected
+in lawsuit
+Whether
+involved
+Whether
+roll-over
+Whether connected
+overdue transaction
+or not
+Purpose guarantor
+Working
+capital loan
+Development, Ltd.
+Gain
+Ningbo Gaotou Petroleum
+0.2
+5 years
+No Joint Venture
+No
+No
+No
+None
+Project
+4.75%
+5 years
+0.6
+construction
+Maoming-BASF, Ltd.
+Development, Ltd.
+Gain
+No Joint Venture
+No
+No
+No
+None
+Working
+6.00%
+capital loan
+No
+Tang Weizhong*
+No
+7.76
+Interest coverage ratio
+points
+0.11
+0.50
+0.61
+EBITDA to liabilities ratio
+(9.85)
+percentage
+55.41
+45.56
+6.57
+Liability-to-asset ratio (%)
+0.28
+0.40
+Quick ratio
+Mainly due to the decrease of short-term debts
+0.12
+0.60
+0.72
+Current ratio
+31 December (RMB million)
+0.12
+625.0%
+1.19
+23.08
+500 million, with an annual interest rate
+of 4.250%. These notes were listed on the
+Hong Kong Stock Exchange on 25 April
+2013, with interest payable semi-annually.
+The first payment of interest was on 24
+October 2013. During the reporting period,
+Sinopec Corp. has paid in full the current-
+period interests.
+On 18 April 2013, Sinopec Capital (2013)
+Limited, a wholly owned overseas subsidiary
+of Sinopec Corp., issued senior notes
+guaranteed by Sinopec Corp. with four
+different maturities, 3 years, 5 years,
+10 years and 30 years. The 3-year notes
+principal totaled USD 750 million, with an
+annual interest rate of 1.250%; the 5-year
+notes principal totaled USD 1 billion, with
+an annual interest rate of 1.875%; the 10-
+year notes principal totaled USD 1.25 billion,
+with an annual interest rate of 3.125%; and
+the 30-year notes principal totaled USD
+During the reporting period, Sinopec Corp.
+paid in full the interest accrued for the other
+bonds and debt financing instruments. As
+at 31 December 2015, the standby credit
+line acquired by the Company from several
+domestic financial institutions is RMB 298
+billion in total, facilitating the Company to
+get such amount of unsecured loans. During
+the reporting period, Sinopec Corp. fulfilled
+relevant undertakings in the prospectus
+of corporate bonds. During the reporting
+period, Sinopec Corp. had no significant
+matters which could influence the Company's
+operation and debt paying ability.
+Loan repayment rate (%)
+Interest payment rate (%)
+Significant Events
+100
+100
+100
+100
+Mainly due to the decrease of interest expense
+Cash flow interest coverage ratio
+Mainly due to the decrease of interest expense of
+cash
+Mainly due to the decrease of interest-bearing
+debts
+Mainly due to capital injection to Sinopec
+Marketing Co. and improvement of the net cash
+flow from operating activities
+Mainly due to the decrease of short-term debts
+5.28
+13.98
+19.26
+EBITDA-to-interest coverage ratio
+4.74
+18.34
+Mainly due to the decrease of interest expense
+6 SHARE OPTION INCENTIVE SCHEME OF
+SINOPEC CORP.'S SUBSIDIARY, SINOPEC
+SHANGHAI PETROCHEMICAL COMPANY
+LIMITED ("SHANGHAI PETRO"), DURING
+THE REPORTING PERIOD
+9,355
+Cash and cash equivalents as of
+During the reporting period, United Credit ratings Co., Ltd. (the Rating Agency) assigned the AAA credit rating for Bond 136039,
+Bond 136040 and the long term credit rating of Sinopec Corp. with outlook stable.
+Proceeds for the above-mentioned corporate bonds have been used for their designated purpose disclosed in the relevant
+announcements. As of 31 December 2015, all the proceeds have been completely used.
+12th Floor, PICC building, No.2 Jianguomenwai Avenue, Chaoyang District, Beijing
+United Credit ratings Co., Ltd.
+(010) 6505 1166
+Huang Xu, Zhai Ying
+27th-28th Floor, China World Office 2, 1 Jianguomenwai Avenue, Chaoyang District, Beijing
+China International Capital Corporation Limited
+Sinopec Corp. had paid in full the interest accrued for the current period interest payment
+year and Bond 122051 had been repaid and delisted from the Shanghai Stock Exchange.
+Shanghai Stock Exchange
+The credit rating agency provided continuing credit rating for Bond 122052, Bond 122149 and Bond 122150 and reaffirmed
+AAA credit rating. The long term credit rating and outlook of Sinopec Corp. remained at AAA and stable respectively.
+During the reporting period, there is no credit addition mechanism and change of the repayment arrangement for the above-
+mentioned corporate bonds
+Simple interest is calculated and paid on an annual basis without compounding and overdue interests. The principal will be paid
+at maturity with last installment of interest.
+3.3
+4.90
+4.26
+4
+4
+2020
+2018
+16
+16
+7
+13
+3.7
+67,824
+During the reporting period, the bondholders' meeting has not been convened.
+30
+Mainly due to capital injection to Sinopec
+Marketing Co.
+activities (RMB million)
+(21,421)
+9,310
+Net cash flow from financing
+Mainly due to the decrease of the capital
+expenditure
+(11.8)%
+(132,633)
+(116,952)
+During the durations of the above-mentioned bonds, the bond trustee, China International Capital Corporation Limited, has
+strictly followed the Bond Trustee Management Agreement and continuously tracked the company's credit status, utilisation of
+bond proceeds and repayment of principals and interests. The bond trustee has also advised the company to satisfy obligations
+as described in the corporate bond prospectus and exercised its duty to protect the bondholders' legitimate rights and interests.
+The bond trustee is expected to disclose the Trustee Management Affairs Report after disclosure of the company's annual
+report. The full disclosure will be available on the website of Shanghai Stock Exchange (http://www.sse.com.cn)
+Net cash flow from investing activities
+(RMB million)
+Reasons for change
+Change
+(4.4)%
+2014
+166,788
+2015
+159,379
+EBITDA (RMB million)
+Principal data
+Principal accounting data and financial indicators for the two years ended 31 December 2015
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+30
+Mainly due to the decrease of the earning
+compared with last year
+9
+4.05
+Pursuant to the requirements of the Listing
+Rules, the resolution relating to the Shanghai
+Petrochemical A Share Option Incentive
+Scheme (Draft) was considered and passed
+at the 18th meeting of the fifth session of
+the Board and the first extraordinary general
+meeting of Sinopec Corp. for 2014. The
+Scheme came into effect on 23 December
+2014.
+The purpose of the Share Option
+Incentive Scheme is to further establish
+and improve Shanghai Petro's operational
+mechanism; establish and improve
+Shanghai Petro's incentive mechanism
+for members of the senior management;
+0
+50
+Number of
+share options
+held at the
+end of the
+Reporting
+period ('0,000)
+Share options
+excised during
+the Reporting
+Number of
+period
+Number of
+Share options
+with exercisable
+rights during
+the Reporting
+period
+Number of new
+share options
+granted during
+the Reporting
+period ('0,000)
+period
+0
+0
+Chairman and President
+Wang Zhiqing
+Name
+No. of share
+options held at
+the beginning
+of the reporting
+Shanghai Petro granted 2,540,000 A share options to six directors and senior management. The share options mentioned in the first grant
+account for 6.55% of the total number of share options to be granted under the initial grant and account for 0.024% of the total share capital of
+Shanghai Petro at the time of the initial grant.
+(1) Share options granted to Directors, senior management and substantial shareholders of Shanghai Petro during the reporting period
+Number of Share Options Granted: 38,760,000
+Number of Participants: 214 persons
+Grant Date: 6 January 2015
+Initial Grant of the Share Options:
+Position
+The expiry date of the scheme is 22 December 2024.
+50
+Vice Chairman and Vice President
+No
+Guo Xiaojun
+43
+0
+0
+43
+0
+Director and Vice President
+Jin Qiang
+Gao Jinping
+43
+0
+43
+Director and Chief Financial Officer
+Ye Guohua
+50
+0
+0
+50
+0
+0
+Summary of Share Option Incentive Scheme
+(1) Purpose of the Scheme
+(9) Expiry date
+32
+commencing on the first trading day after the expiry of the 24-month period following the
+grant date and ending on the last trading day preceding the expiry of the 36-month period
+following the grant date
+determined by the board of directors upon fulfillment of the conditions for grant under the
+Share Option Incentive Scheme
+Arrangement
+3rd Exercisable Period
+2nd Exercisable Period
+1st Exercisable Period
+Stage
+Grant Date
+The exercisable period for the share options shall be three years, commencing from the expiry of the two-year period after the grant date. Please
+refer to the following table for the details of the exercise arrangement for the Share Option Incentive Scheme:
+(5) Validity Period
+commencing on the first trading day after the expiry of the 36-month period following the
+grant date and ending on the last trading day preceding the expiry of the 48-month period
+following the grant date
+Unless approved by the shareholders as a special resolution at a general meeting of Shanghai Petro, the aggregate number of A Shares to be
+acquired by each grantee through the Share Option Incentive Scheme and other effective share option schemes of Shanghai Petro (if any) at
+any time shall not exceed 1% of the total A share capital of Shanghai Petro. The number of share options to be granted to each Participant was
+determined on the basis that the estimated benefit upon exercise of the Share Options will not exceed 30% of his/her total emolument level
+(including the estimated benefit upon exercise of the share options) at the grant date.
+Under the Share Option Incentive Scheme, the total number of underlying shares to be granted shall neither exceed 10% of the total share
+capital of Shanghai Petro (10,800 million shares) nor exceed 10% of the total A share capital of Shanghai Petro (7,305 million shares). Under the
+proposed initial grant, the number of share options to be granted by Shanghai Petro to the Participants shall be no more than 41,030,000 with
+the underlying shares representing 0.38% of the total share capital of Shanghai Petro.
+(3) Total number of shares to be granted and its percentage of the total share capital
+SIGNIFICANT EVENTS (CONTINUED)
+Significant Events
+31
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+The eligible participants shall include
+the directors, senior management
+members and key business personnel
+of Shanghai Petro. The participants of
+the initial grant under the Share Option
+Incentive Scheme included: i. directors
+and senior management members; and
+ii. key business personnel holding core
+positions. Such aforesaid participants of
+the proposed initial grant shall exclude
+independent non-executive directors,
+supervisors and directors who do not
+concurrently hold senior management
+positions in Shanghai Petro, substantial
+shareholders holding more than 5% of
+the shareholdings of Shanghai Petro and
+the de facto controller of Shanghai Petro,
+together with their respective spouses
+and immediate family members.
+(2) Eligible Participants
+advocate the concept of sustainable
+development jointly achieved by Shanghai
+Petro, its management team and key
+personnel; effectively incentivise its
+management team and key personnel;
+attract and retain talents; enhance
+Shanghai Petro's competitive position in
+the industry and its core competitiveness;
+and ensure the realisation of Shanghai
+Petro's development strategy and
+operational objectives.
+(4) Maximum Entitlement of each participant
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+commencing on the first trading day after the expiry of the 48-month period following the
+grant date and ending on the last trading day preceding the expiry of the 60-month period
+following the grant date
+40%
+32
+II. the average closing price of the
+A shares of Shanghai Petro for
+the 30 trading days immediately
+before the date of announcement
+on the summary of the draft of
+each grant.
+I. the closing price of the A shares
+of Shanghai Petro on the trading
+day immediately before the date
+of announcement on the summary
+of the draft proposal of each
+grant; or
+The exercise price under each
+proposed grant (other than the initial
+grant) shall be the higher of the
+followings:
+B The Exercise Price under Further
+Grant
+Accordingly, the exercise price
+under the initial grant shall not be
+lower than RMB4.20 per share.
+share options, i.e. RMB 6.43 per
+share, was adjusted to RMB 4.20
+per share.
+III. RMB 4.20 per share. In June
+2013, Sinopec Corp. undertook in
+Shanghai Petro's A Share reform
+plan that it would propose to the
+board of Shanghai Petro a share
+option scheme which complies
+with the relevant systems of the
+SASAC and the CSRC, with an
+initial exercise price of the share
+options not lower than RMB 6.43
+per share (if there is occurrence
+of any ex-dividend event before
+the release of the draft share
+option scheme, the price shall be
+adjusted accordingly). As Shanghai
+Petro has made a distribution
+of its 2013 interim cash
+dividend plan, implemented the
+capitalisation of capital funds and
+surplus reserves fund in December
+2013, and made a distribution
+of 2013 annual cash dividend in
+July 2014, the aforesaid initial
+minimum exercise price of the
+before the date of announcement
+on the summary of the Share
+Option Incentive Scheme Draft,
+which was RMB 3.27 per share;
+and
+Exercise Ratio Cap
+the 30 trading days immediately
+I. The closing price of the A shares
+of Shanghai Petro on the trading
+day immediately before the
+date of announcement on the
+summary of the Share Option
+Incentive Scheme Draft, which was
+RMB3.29 per share;
+The exercise price under the initial
+grant shall not be lower than the
+highest of the followings:
+A The exercise price under the initial
+grant
+(8) Exercise Price
+(7) No Requirement of fund to apply or
+accept stock option and allotted time of
+payment or notice of payment or allotted
+time of credit payment for application of
+stock options
+The vesting period for each grant under
+the scheme shall be no less than two
+years.
+If a Participant is also a director or member of senior management of Shanghai Petro, at least 20% of the total options granted to him/her shall
+not be exercisable until such Participant passes the appraisal during his/her term of office.
+(6) Vesting Period
+30%
+30%
+II. The average closing price of the
+A shares of Shanghai Petro for
+0
+3.75
+Mainly due to the increase of cash reserve
+13
+Yes
+Other undertakings
+Other
+Other undertakings
+Other
+Other undertakings
+Other
+China Petrochemical Given that the majority of China Petrochemical
+Corporation Corporation's refining business had been injected
+into Sinopec Corp., China Petrochemical Corporation
+undertook to dispose of its minor remaining refining
+business within five years to eliminate competition with
+Sinopec Corp. in refining business.
+China Petrochemical
+Corporation
+Yes
+China Petrochemical
+Corporation
+Given that China Petrochemical Corporation engages in
+the same or similar businesses as Sinopec Corp. with
+regard to the exploration and production of overseas
+petroleum and natural gas, China Petrochemical
+Corporation hereby grants a 10-year option to Sinopec
+Corp. with the following provisions: (i) after a thorough
+analysis from political, economic and other perspectives,
+Sinopec Corp. is entitled to require China Petrochemical
+Corporation to sell its overseas oil and gas assets
+owned as of the date of the undertaking and still in its
+possession upon Sinopec Corp.'s exercise of the option
+to Sinopec Corp.; (ii) in relation to the overseas oil and
+gas assets acquired by China Petrochemical Corporation
+after the issuance of the undertaking, within 10 years
+of the completion of such acquisition, after a thorough
+analysis from political, economic and other perspectives,
+Sinopec Corp. is entitled to require China Petrochemical
+Corporation to sell these assets to Sinopec Corp. China
+Petrochemical Corporation undertakes to transfer the
+assets as required by Sinopec Corp. under aforesaid
+items (i) and (ii) to Sinopec Corp., provided that the
+exercise of such option complies with applicable laws and
+regulations, contractual obligations and other procedural
+requirements.
+from 27 October 2010
+Within five years, commencing
+from 15 March 2012
+Yes
+Yes
+Within 10 years after 29 April
+2014 or the date when China
+Petrochemical Corporation acquires
+the assets
+Yes
+Yes
+Since 2010, China Petrochemical Corporation has earnestly fulfilled its undertakings to eliminate competitions in refining business with Sinopec
+Corp. through: (1) injecting the related assets or equity interest of refining business into Sinopec Corp.; (2) providing most of the components as the
+intermediate feedstock to Sinopec Corp., and deliver the minor remaining by-products to Sinopec Corp. for marketing.
+China Petrochemical Corporation would dispose of its
+minor remaining chemicals business within five years
+in order to avoid competition with Sinopec Corp. in the
+chemicals business.
+As of the end of the reporting period, Sinopec Corp. had no undertakings in respect of profits, asset injections or asset restructuring that had not
+been fulfilled, nor did Sinopec Corp. make any profit forecast in relation to any asset or project.
+Within five years, commencing
+6
+Type of
+Undertaking
+Party
+Contents
+Initial Public
+Initial Public Offerings
+Offerings (IPOs)
+China Petrochemical 1
+Corporation
+(IPOs)
+2
+Granting licenses for intellectual property rights;
+Avoiding competition within the same industry;
+Abandonment of business competition and
+conflicts of interest with Sinopec Corp.
+3
+Term for performance
+Whether bears
+deadline or not
+Whether strictly
+performed or not
+From 22 June 2001
+No
+Yes
+4
+5
+Compliance with the connected transaction
+agreements;
+Solving the issues regarding the legality of land-
+use rights certificates and property ownership
+rights certificates within a specified period of time;
+Implementation of the Reorganisation Agreement
+(please refer to the definition of Reorganisation
+Agreement in the H share prospectus of Sinopec
+Corp.);
+Background
+Undertakings related to
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+7
+(yes
+or no)*1
+Joint obligations
+No
+No
+No
+No
+Gasification
+Corporation
+parties
+Sinopec Great
+Zhong An United
+590
+18 April 2014
+Wall Energy
+and Chemical
+Industry
+Co., LTD
+owned
+subsidiary
+Coal Chemical
+18 April 2014 -
+17 April 2026
+Joint obligations
+Wholly
+8 MATERIAL GUARANTEE CONTRACTS AND THEIR PERFORMANCE
+connected
+or not
+Unit: RMB million
+Whether
+guaranteed
+for
+with the
+Relationship Name of
+guaranteed
+Guarantor
+Company
+company
+Amount
+Whether
+of
+overdue overdue Counter-
+or not guarantee guaranteed
+Amount
+The listed
+Yueyang Sinopec
+113
+Transaction date
+(date of signing)
+10 December 2003
+Whether
+completed
+company
+itself
+Corp. Shell Coal
+Period of guarantee
+10 December 2003 -
+10 December 2017
+Туре
+Sinopec Corp.
+7 PERFORMANCE OF THE UNDERTAKINGS BY CHINA PETROCHEMICAL CORPORATION
+Major external guarantees (excluding guarantees for controlled subsidiaries)
+Significant Events
+holders' meeting
+Performance of corporate
+Credit addition mechanism, repayment
+scheme and other relative events for
+corporate bonds during the reporting period
+Convening of corporate bond
+Performance of credit rating agency
+Use of proceeds
+Credit rating agency
+Corporate bonds trustee
+Listing place
+Payment of interests
+Principal and interest repayment
+bonds trustee
+Outstanding balance (RMB billion)
+Interest rate (%)
+Maturity date
+Issuance date
+Code
+Abbreviation
+Bond name
+Basic information of corporate bonds
+5 CORPORATE BONDS ISSUED AND INTEREST PAYMENTS
+SIGNIFICANT EVENTS (CONTINUED)
+Significant Events
+Amount issued (RMB billion)
+Significant Events
+Sinopec Corp.
+2012 Corporate bond
+9
+SIGNIFICANT EVENTS (CONTINUED)
+19 November 19 November
+1 June 2022
+1 June 2017
+21 May 2020
+21 May 2015
+19 November 2015
+1 June 2012
+2010 Corporate bond
+10石化01
+21 May 2010
+136039
+15石化01
+12石化02
+122150
+122149
+12石化01
+10石化02
+122052
+122051
+2015 Corporate bond (first issue)
+Sinopec Corp.
+15石化02
+136040
+29
+Sinopec Corp.
+11
+0
+43
+Former Company Secretary
+0
+25
+0
+0
+0
+Mr. Tang Weizhong resigned as the Secretary to the Board on 23 October 2015 with immediate effect. According to the Share Option Incentive Scheme, his
+granted share options have been cancelled.
+0
+(2) Share options granted to employees of
+Shanghai Petro in addition to persons
+mentioned in item (1) during the
+reporting period
+(3) Exercise Price under the Initial Grant
+The exercise price under the initial
+grant is RMB 4.20 per share (until
+the expiration of the validity period
+of the Share Options, in the case of,
+among others, payment of dividends,
+capitalisation of capital reserves,
+distribution of bonus shares, subdivision
+of shares or reduction of shares,
+and rights issue, an adjustment to
+the exercise price shall be made in
+accordance with Share Option Incentive
+Scheme). On the trading day before the
+grant date, the closing price of A shares
+of Shanghai Petro was RMB 4.70 per
+share, and that of H shares of Shanghai
+Petro was HKD 2.38 per share.
+(4) Validity Period and Exercise Arrangement
+under the Initial Grant
+The validity period of the share options
+shall be five years commencing from
+the grant date, but will be subject to
+the following exercise arrangements.
+The exercisable period for the share
+options shall be three years, commencing
+from the expiry of the two-year period
+after the grant date. There shall be
+three exercisable periods (one year
+for each exercisable period, same for
+the following) under the Share Option
+Incentive Scheme. Upon the fulfillment of
+the exercise conditions, 40%, 30% and
+30% of the total share options granted
+shall become exercisable within the
+1st, 2nd and 3rd exercisable periods,
+respectively.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+33
+29
+Significant Events
+34
+Shanghai Petro granted 36,220,000
+A share options to 208 key business
+personnel, which account for 93.45%
+of the total number of share options to
+be granted under the initial grant and
+account for 0.335% of the total share
+capital of Shanghai Petro at the time
+of the initial grant. During the reporting
+period, none of the share options was
+exercisable and none of the share options
+was cancelled or lapsed.
+43
+*
+SIGNIFICANT EVENTS
+Sinopec Corp. issued A share convertible
+bonds of RMB 23 billion on 23 February
+2011. On 26 January 2015, the terms
+of conditional redemption of Sinopec CB
+were triggered. On 17 February 2015, the
+company paid the redemption payments and
+the current-period interests accrued with a
+total amount of RMB 53,348,948.28, and
+Sinopec CB was delisted from the Shanghai
+Stock Exchange at the same date. For further
+details, please refer to the announcements in
+relation to the results of the redemption and
+delisting of Sinopec CB by Sinopec Corp.
+published on the websites of the Shanghai
+Stock Exchange and Hong Kong Stock
+Exchange.
+CB
+4 ISSUANCE AND DELISTING OF SINOPEC
+On 19 February 2014, the 14th meeting of
+the fifth session of the Board considered
+and approved the proposal to begin the
+restructuring of Sinopec Corp.'s marketing
+and distribution segment. On 12 September
+2014, Sinopec Marketing Co. entered into a
+Capital Injection Agreement with 25 domestic
+and foreign investors, pursuant to which
+investors would subscribe for equity interests
+in Sinopec Marketing Co. by way of cash.
+As of 6 March 2015, the above-mentioned
+25 investors had made an aggregate capital
+injection of RMB 105.044 billion (including
+amounts in U.S. dollar equivalent) to Sinopec
+Marketing Co. and subscribed for 29.5849%
+shareholding interests in Sinopec Marketing
+Co. For further details, please refer to the
+announcements published on the China
+Securities Journal, the Shanghai Securities
+News and the Securities Times by Sinopec
+Corp. on 20 February 2014, 26 March 2014,
+2 April 2014, 1 July 2014, 15 September
+2014, 6 January 2015 and 7 March 2015.
+Please also refer to the disclosures made
+on the website of the The Stock Exchange of
+Hong Kong Limited (the "Hong Kong Stock
+Exchange").
+SEGMENT
+RESTRUCTURING OF MARKETING
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+As of the end of the reporting period,
+China Petrochemical Corporation had
+increased its shareholding in Sinopec Corp.
+by way of acquiring 72,000,000 A shares
+during the Increase Period, representing
+approximately 0.06% of the total issued
+share capital of Sinopec Corp. Before the
+shareholding increase, China Petrochemical
+Corporation directly and indirectly held
+86,273,821,101 shares of Sinopec Corp.,
+representing approximately 71.26% of the
+total issued share capital of Sinopec Corp.
+Following the increase of shareholding, China
+Petrochemical Corporation directly and
+indirectly held 86,345,821,101 shares of
+Sinopec Crop., representing approximately
+71.32% of the total issued share capital
+of Sinopec Crop. China Petrochemical
+Corporation undertakes not to reduce its
+shareholding in Sinopec Corp. during the
+Increase Period and the statutory period.
+On 8 July 2015, Sinopec Crop. was informed
+by China Petrochemical Corporation that,
+China Petrochemical Corporation proposed
+to increase its shareholding in Sinopec Corp.
+through acquisitions of the Sinopec Corp.'s
+shares on the secondary market in its own
+name or through other concerting parties
+within 12 months commencing on 8 July
+2015 (the Increase Period). The aggregate
+of such acquisition(s) will not exceed 2%
+(inclusive of the shares acquired on 8 July
+2015) of the total issued share capital of
+Sinopec Corp.
+2 THE INCREASED SHAREHOLDINGS OF
+SINOPEC CORP.'S A SHARE BY CHINA
+PETROCHEMICAL CORPORATION
+3
+(4) Tianjin LNG project
+The Guangxi LNG project, of which
+the designed receiving capacity is 3
+million tonnes per year, consists mainly
+of the construction of one wharf, one
+terminal and transportation pipelines.
+It is expected to be completed and
+operational in the first half of 2016.
+The Company's self-owned fund and the
+bank loan accounts for half of the project
+investment each. By the end of 2015, the
+cumulative investment was RMB 8 billion.
+(3) Guangxi LNG project
+During the 12th Five-Year Plan period,
+two phases of production capacity
+building of Yuanba marine facies gas
+field with the total production capacity
+of 3.4 billion cubic meters per year
+were started. The first phase has been
+completed and put into operation in
+2015 and the second phase is expected
+to be put into operation in the first half
+of 2016. The Company's self-owned fund
+and the bank loan accounts for 50%
+of the project investment each. By the
+end of 2015, the cumulative realised
+investment was RMB 11.9 billion.
+(2) Yuanba gas field project
+In accordance with the guidance for
+of "overall deployment and stage-wise
+implementation", the first phase of
+production capacity building of 5 billion.
+cubic meters per year was completed in
+2015 and the second phase of production
+capacity building of 5 billion cubic meters.
+per year has been officially launched.
+The Company's self-owned fund accounts
+for half of the project investment and
+bank loan is the main source of the other
+half. By the end of 2015, the cumulative
+investment was RMB 19.7 billion.
+(1) Fuling shale gas project
+The Tianjin LNG project, of which the
+designed receiving capacity is 3 million
+tonnes per year, consists mainly of the
+construction of one wharf, one terminal
+and transportation pipelines. It is
+expected to be completed and operational
+at the end of 2016. The Company's self-
+owned fund and the bank loan accounts
+for 50% of the project investment each.
+By the end of 2015, the cumulative
+investment was RMB 3.4 billion.
+MAJOR PROJECTS
+1
+a. The term of each session of the
+directors (including non-executive
+directors) of Sinopec Corp. is
+three years, and the consecutive
+term of office of an independent
+non-executive director cannot
+exceed six years.
+Corp. shall consider the factors
+in relation to the diversity of the
+Board, including (but not limited
+to) gender, age, background of
+education and culture, locations,
+profession and experience, skills,
+knowledge and service term.
+Members which stipulates that the
+members of the Board shall be
+nominated and appointed basing
+on the skills and experience
+required by the Board as well as
+the principles on diversity of the
+Board, and when deciding the
+composition of the Board, Sinopec
+b. The Board establishes the Policy
+Concerning Diversity of Board
+c. Sinopec Corp. engages
+professional consultants to
+prepare detailed materials for
+newly appointed directors, to
+notify them of the regulations of
+each listing place of Sinopec Corp.
+and to remind them of their rights,
+obligations and responsibilities as
+directors.
+a. Considering that the Board
+A.5 Nomination Committee
+b. All directors of Sinopec Corp.
+have been elected at the general
+meeting of shareholders. The
+Board has no power to appoint
+temporary directors.
+did not establish a Nomination
+Committee, the Board will perform
+the duties of the Nomination
+Committee prescribed in the
+Corporate Governance Code.
+The nomination of directors has
+been prescribed clearly in the
+Articles of Association and Rules
+of Procedure for the Shareholders'
+Meeting. Nomination of directors
+may be proposed by shareholders
+who individually or collectively
+hold 3% of the total voting shares
+of Sinopec Corp. (1% for the
+nomination of independent non-
+executive directors), by the Board
+or by the Board of Supervisors
+for approval at the general
+meeting of shareholders. When
+the Board nominates a candidate
+for director, independent non-
+executive directors should give
+their independent opinions on the
+nomination in advance. Eleven
+out of total twelve directors of the
+Board were elected at the annual
+general meeting of shareholders
+for the year 2014, one was elected
+at the first extraordinary general
+meeting of shareholders for the
+year 2016.
+A.6 Responsibility of directors
+a. All non-executive directors have
+the same duties and powers
+as the executive directors. In
+addition, the independent non-
+executive directors are entitled
+to certain specific powers. The
+Articles of Association and the
+Rules of Procedure for Meetings
+of Boards of Directors clearly
+prescribe the duties and powers of
+executive directors, non-executive
+directors including independent
+non-executive directors. The above
+duties and powers are published
+on the Sinopec Corp.'s website at
+http://www.sinopec.com.
+A.7 Provision of and access to
+information
+c. Each of the directors confirmed
+that he or she complied with
+the Model Code for Securities
+and Transactions by Directors
+of Listed Companies during the
+reporting period. In addition,
+Sinopec Corp. formulated the
+Rules Governing Shares Held by
+Company Directors, Supervisors
+and Senior Managers and Changes
+in Shares and the Model Code
+of Securities Transactions by
+Company Employees to regulate
+the purchase and sale of Sinopec
+Corp.'s securities by employees.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+45
+Corporate Governance
+CORPORATE GOVERNANCE (CONTINUED)
+d. Sinopec Corp. arranged training
+sessions for directors and paid
+the related fees. The directors
+diligently performed their
+responsibilities and actively
+participated in the continuing
+professional development
+program.
+B Remuneration of directors and senior
+management
+a. The agenda and other reference
+documents for meetings of the
+Board and Board committees
+will be distributed prior to the
+meetings to give each director
+sufficient time to review the
+materials so that directors
+can discuss the proposals
+comprehensively at meetings. Each
+director can obtain all related
+information in a comprehensive
+and timely manner, and may
+seek advices from professional
+consultants if necessary.
+b. The secretary to the Board is
+responsible for organising and
+preparing the materials for
+the Board meetings, including
+preparation of explanations for
+each proposal to ensure thorough
+understanding by the directors.
+Management is responsible for
+providing the directors with
+necessary information and
+materials. The director may
+ask the Management, or ask,
+via the Management, relevant
+departments to provide necessary
+information about Sinopec Corp.
+and related matters.
+A.4 Appointment, re-election and
+dismissal
+b. In 2015, each of the directors was
+able to devote sufficient time and
+effort to handling the matters of
+Sinopec Corp.
+b. Sinopec Corp. has received from
+each of the independent non-
+executive directors a letter of
+confirmation for 2015 regarding
+their compliance with relevant
+independence requirements set
+out in Rule 3.13 of the Hong
+Kong Listing Rules. Sinopec
+Corp. considers that each of
+the independent non-executive
+directors is independent.
+6 IMPROVEMENT AND IMPLEMENTATION OF
+THE INTERNAL CONTROL SYSTEM
+A.3 Board composition
+a. The Board has established a
+Remuneration and Appraisal
+Committee (Remuneration
+Committee) and formulated relevant
+terms of reference. The Remuneration
+Committee consists of independent
+non-executive director Mr. Fan Gang,
+who serves as the chairman, and
+the director and president Mr. Li
+Chunguang and independent non-
+executive director Mr. Jiang Xiaoming,
+For details of internal control self-assessment
+and internal control auditing, please refer to
+the internal control assessment report and
+the internal control auditing report disclosed
+the same day.
+7 SENIOR MANAGEMENT APPRAISAL AND
+INCENTIVE SCHEMES
+Sinopec Corp. has established and is
+continuously improving the fairness and
+transparency of its performance appraisal
+standards, its incentive schemes and
+requirements for directors, supervisors and
+other senior management. Sinopec Corp. has
+implemented a number of incentive schemes,
+including the Measures of Sinopec Corp.
+for the Implementation of Remuneration
+for Senior Managers, the Measures of
+Sinopec Corp. for the Management of Annual
+Performance Evaluations and the Measures
+of the Leadership of Companies Directly
+under Sinopec Corp. and the Headquarters
+Department for the Management of
+Performance Evaluation.
+(1) Compliance with the Corporate
+Governance Code
+Based on its actual circumstances,
+Sinopec Corp. did not establish a
+Nomination Committee of the Board
+according to section A.5 of the Corporate
+Governance Code and Corporate
+Governance Report (Corporate Governance
+Code) as set out in Appendix 14 of the
+Hong Kong Listing Rules. Sinopec Corp.
+believed that the nomination and election
+of director candidates by all members of
+the Board would be better suited in view
+of practical operation; the Board would
+perform the duties of the Nomination
+Committee prescribed in the Corporate
+Governance Code.
+Save as disclosed above, Sinopec Corp.
+complied with all code provisions set out
+in the Corporate Governance Code during
+the reporting period.
+A Board of Directors
+a. The Board consists of 12
+members with extensive
+professional and corporate
+governance experience (Please
+refer to the Directors, Supervisors,
+Other Senior Management and
+Employees in this annual report
+for detailed information). Of the
+12 members, seven are executive
+directors, five are non-executive
+directors including 4 independent
+non-executive directors. The
+independent non-executive
+directors represent one-third of
+the Board. The executive directors
+and non-executive directors of
+Sinopec Corp. have petroleum and
+petrochemical specialty, technical
+background and/or extensive
+management experience in large.
+scale enterprises. The independent
+non-executive directors have
+working backgrounds as well-
+known economist and have rich
+experience in international capital
+management and investment.
+The composition of the Board is
+balanced and diversified.
+A.1 Board of Directors
+c. Each director of the Board may
+submit proposals to be included
+in the agenda of Board meetings,
+and each director is entitled to
+request other related information.
+d. The Board has reviewed and
+evaluated its performance in
+2015 and is of the view that the
+Board composition is appropriate
+and balanced; that the Board
+made decisions in compliance
+with domestic and overseas
+laws and regulations and the
+Company's internal rules; that the
+Board was open to suggestions
+from the Board of Supervisors
+and Management; and that the
+Board safeguarded the rights and
+interests of Sinopec Corp. and its
+shareholders.
+e. The Secretary to the Board
+assists the directors in handling
+the daily work of the Board,
+continuously informs the directors
+of any regulations, policies or
+other requirements of domestic
+or overseas regulatory bodies in
+relation to corporate governance
+and ensures that the directors
+comply with domestic and
+overseas laws and regulations as
+Iwell as the Articles of Association
+etc. when performing their duties
+and responsibilities. Sinopec Corp.
+has purchased liability insurance
+for all directors to minimise their
+risks arising from the performance
+of their duties.
+A.2 Chairman and President
+a. Mr. Wang Yupu serves as
+Chairman of the Board and Mr. Li
+Chunguang serves as President of
+Sinopec Corp. The Chairman of the
+Board is elected by a majority vote
+of all directors, and the President
+is nominated and appointed
+by the Board. The duties and
+responsibilities of the Chairman
+and the President are clearly
+distinguished from each other,
+and the scope of their respective
+duties and responsibilities is set
+out in the Articles of Association.
+b. The Chairman of the Board places
+great emphasis on communication
+with the independent non-executive
+directors. The Chairman holds
+meetings with the independent
+non-executive directors at least
+once every year, in respect of
+development strategy, corporate
+governance, operational
+management, etc. of Sinopec
+Corp., at which no executive
+director is present.
+c. The Chairman encourages open
+and active discussions. Directors
+may speak freely at the Board
+meetings and actively participate
+in the discussions of significant
+decision-makings in the Board
+meetings.
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+Corporate Governance
+a. The Board is the decision-making
+body of Sinopec Corp., and all
+decisions made by the Board are
+implemented by the management
+of Sinopec Corp. The Board abides
+by good corporate governance
+practices and procedures.
+8 CORPORATE GOVERNANCE REPORT (IN
+ACCORDANCE WITH HONG KONG LISTING
+RULES)
+a.
+b. The Remuneration Committee
+always consults the Chairman
+and the President about proposed
+remuneration for other executive
+directors. After the Remuneration
+Committee's review, it is of the view
+that the executive directors of Sinopec
+Corp. executed all duty clauses
+stated in the service contracts of the
+directors in 2015.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+47
+48
+Corporate Governance
+CORPORATE GOVERNANCE (CONTINUED)
+b. In addition to the Audit Committee
+and the Remuneration Committee,
+the Board established the
+Strategy Committee and the
+Social Responsibility Management
+Committee. The Strategy Committee
+consists of 10* directors, including
+Chairman of the Board Mr. Wang
+Yupu, who serves as chairman, as
+well as executive director Mr Li
+Chunguang, Mr. Zhang Jianhua, Mr.
+Wang Zhigang, Mr. Dai Houliang, Mr.
+Zhang Haichao, Mr. Jiao Fangzheng,
+Mr. Ma Yongsheng* and independent
+non-executive director Mr. Andrew Y.
+Yan and Mr. Fan Gang, who serve as
+members. The Strategy Committee
+is responsible for overseeing long-
+term development strategies and
+significant investment decisions of the
+Company. The Social Responsibility
+Management Committee consists of
+three directors, including Chairman of
+the Board Mr. Wang Yupu, who serves
+as chairman, director and President
+Mr. Li Chunguang and independent
+non-executive director Mr. Tang
+Min, who serve as members. The
+Social Responsibility Management
+is responsible for preparing policies,
+governance, strategies and plans for
+social responsibility management of
+Sinopec Corp.
+Mr. Ma's appointment became effective
+upon the conclusion of the board
+meeting convened on the even date of
+this annual report
+c. Each Board committee has clear
+terms of reference in writing.
+According to each terms of reference
+of the Board committees, the
+committees are required to report
+their decisions and recommendations
+to the Board.
+E Communication with shareholders
+a. Sinopec Corp. pays close attention
+to investor relations. The Chairman,
+President and Chief Financial Officer
+conduct road shows every year
+to answer questions on subjects
+of concern to investors, such as
+development strategies and the
+production and business performance
+of the Company. Sinopec Corp.
+established a department responsible
+for communicating with investors.
+In compliance with regulatory
+provisions, Sinopec Corp. enhanced
+communication with investors by
+holding meetings with institutional
+investors, setting up an investor
+hotline and communicating through
+internet platform.
+D Delegation of power by the Board
+a. The Board, the management and each
+Board committee have clear terms of
+reference. The Articles of Association
+and the Rules of Procedure for the
+General Meetings of Shareholders and
+the Rules of Procedure for Meetings
+of Boards of Directors clearly set
+forth the scope of duties, powers and
+delegation of power of the Board and
+management, which are published
+on the website of Sinopec Corp. at
+http://www.sinopec.com.
+b. During the reporting period, separate
+resolution was proposed for each
+substantially separate issue at the
+general meeting. All resolutions were
+voted by poll to ensure the interests
+of all shareholders. Notices of the
+general meeting of shareholders were
+delivered to shareholders 45 days
+(excluding the date of the general
+meeting) in advance.
+extensively.
+d. During the reporting period, Sinopec
+Corp. amended its Articles of
+Association, including Sinopec Corp.'s
+scope of business, share capital
+structure and registered capital
+based on the actual situation of the
+Company.
+F Company secretary
+The Hong Kong Stock Exchange
+recognised the secretary to the Board
+as having the relevant qualifications
+for company secretary. Nominated
+by the Chairman of the Board
+and appointed by the Board, the
+secretary to the Board is the senior
+management officer reporting to
+Sinopec Corp. and the Board. The
+secretary gives opinions on corporate
+governance to the Board and arranges
+orientation training and professional
+development for the directors.
+b. The secretary to the Board actively
+participated in career development
+training, with more than 15 training
+hours during the reporting period.
+G Shareholders' rights
+a. Shareholders who individually or
+collectively hold 10% of the total
+voting shares of Sinopec Corp.
+may request the Board in writing
+to convene the general meeting of
+shareholders. If the Board fails to
+grant the request to convene the
+meeting according to the Rules of
+Procedure for Meetings of Boards
+of Directors, the shareholders may
+convene and hold the meeting at their
+discretion according to applicable
+laws, and reasonable expenses
+incurred will be borne by Sinopec
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+The Company is independent from its
+controlling shareholder in terms of, among
+other matters, business, assets and
+finances. The Company has a well-integrated
+independent business and independent
+operational capabilities.
+c. The Chairman of the Board did not
+attend the annual general meeting for
+the year 2014 due to other business
+arrangement. As recommended by
+more than half number of Directors,
+the President Mr. Li Chunguang
+hosted the annual general meeting
+for the year 2014 and arranged the
+members of the Board and senior
+management to attend the meeting
+and communicate with the investors
+management has fulfilled the
+duties of establishment of
+effective internal control system.
+Sinopec Corp. established a
+reporting and complaint system,
+providing online reporting, letter
+reporting, receipt of appeals and
+a complaint mailbox to employees
+to report behavior that violates
+the internal control system. The
+Audit Committee has reviewed and
+approved the system.
+Audit Committee has considered
+the adequacy of the resources
+for accounting and financial
+reporting and the experience of
+the employees as well as the
+sufficiency of the training courses
+provided to employees and the
+related budget. Audit Committee
+recognise the Sinopec's
+e. The Audit Committee held two
+meetings with auditors without
+the presence of Sinopec Corp.'s
+management to discuss the
+auditing of financial reports and
+the auditing fee for the year. The
+c. The members of the Remuneration
+Committee may engage independent
+professionals. Reasonable costs
+arising from or in connection with
+such consultations are borne by
+Sinopec Corp. The Remuneration
+Committee has also appointed
+consultants to provide advices. The
+working expenses of the Remuneration
+Committee are included in the
+budget of Sinopec Corp. In addition,
+according to the policies of Sinopec
+Corp., the senior management and
+relevant departments of Sinopec
+Corp. must actively cooperate with
+the Remuneration Committee.
+C Accountability and auditing
+C.1 Financial reporting
+a. Directors are responsible for
+supervising preparation of
+accounts for each fiscal period to
+ensure that the accounts truly and
+fairly reflect the condition of the
+business, its performance and the
+cash flow of the Company during
+the period. The Board approved
+the Financial Report for 2015 and
+warranted that the annual report
+contained no false representations,
+no material omissions or
+misleading statements and
+jointly and severally accepted full
+responsibility for the authenticity,
+accuracy and completeness of the
+content.
+b. Sinopec Corp. provides directors
+with information about the
+financial condition, its production
+and operating status of the
+Company every month to ensure
+that the directors can learn about
+the latest developments of the
+Company in a timely manner.
+c. Sinopec Corp. has adopted an
+internal control mechanism to
+ensure that the management
+and relevant departments have
+provided the Board and the Audit
+Committee with sufficient financial
+data and related explanations and
+materials.
+d. The external auditors of Sinopec
+Corp. made a statement about
+their reporting responsibilities in
+the auditor's report contained in
+the financial report.
+C.2 Internal Control
+a. In 2003, according to the relevant
+regulatory requirements for
+internal control of the listing
+places, Sinopec Corp. adopted
+the internal control framework
+prescribed in the internationally
+accepted Committee of Sponsoring
+Organizations of the Treadway
+Commission Report (COSO).
+Based upon the Articles of
+Association and all management
+policies currently in effect,
+as well as in accordance with
+relevant domestic and overseas
+applicable regulations, Sinopec
+Corp. formulated and continuously
+improving the Internal Control
+Manual which established controls
+46
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+Corporate Governance
+at both the corporate and
+business levels, thereby ensuring
+all-round internal control. The
+Board reviewed the report on
+internal control with the annual
+report every year since 2006.
+b. The management of Sinopec
+Corp. has implemented the
+measures for internal control in
+2015. With sufficient resources in
+accounting and financial reporting,
+Sinopec Corp. has qualified and
+experienced employees in this
+function and a sufficient budget
+for the training of relevant
+employees.
+For detailed information about the
+internal control system, during
+the reporting period, please refer
+to the report on internal control
+prepared by Sinopec Corp.
+c. Sinopec Corp. has established
+its internal audit department,
+staffed by qualified professional
+personnel, to ensure that the
+internal auditing functions of
+Sinopec Corp. are sound.
+C.3 Audit Committee
+a. The Audit Committee consists of
+independent non-executive director
+Mr. Andrew Y. Yan, who serves as
+the chairman, and independent
+non-executive director Mr. Jiang
+Xiaoming and independent non-
+executive director Mr. Tang
+Min, who serve as members. As
+verified, none of them has served
+as a partner or former partner in
+our current auditing firm.
+b. Sinopec Corp. has published the
+terms of reference of the Audit
+Committee. The terms of reference
+are available for inspection on the
+websites of Sinopec Corp. and the
+Hong Kong Stock Exchange.
+c. During the reporting period,
+the Audit Committee held five
+meetings. (For details, please refer
+to the section Meetings held by the
+special committees of the Board
+under the Report of the Board of
+Directors in this annual report.)
+The review opinions were issued
+at the meetings and submitted
+to the Board after signed by the
+members of the Audit Committee.
+During the reporting period, the
+Board and the Audit Committee
+had no disagreement.
+d. Audit Committee members may
+engage independent professionals.
+Reasonable costs arising from
+or in connection with such
+consultations are borne by Sinopec
+Corp. The Audit Committee also
+appoints consultants to provide
+advices. The working expenses
+of the Audit Committee are
+included in the budget of Sinopec
+Corp. In accordance with the
+policies of Sinopec Corp., the
+senior management and relevant
+departments of Sinopec Corp.
+must actively cooperate with the
+Audit Committee.
+who serve as the members of the
+Remuneration Committee. The terms
+of reference of the Remuneration
+Committee are available on the
+websites of Sinopec Corp. and
+the Hong Kong Stock Exchange.
+The Remuneration Committee is
+responsible for proposing to the
+Board the remuneration plans for
+directors, supervisors and other
+senior management and submitting
+the proposal to the general meeting
+of shareholders for approval after
+the proposal passed at the Board
+meeting.
+5 COMPANY'S INDEPENDENCE FROM
+CONTROLLING SHAREHOLDER
+b. The Board meets at least once a
+quarter. The Board will usually
+communicate the time and
+proposals of the Board meeting 14
+days before the scheduled meeting
+time. The relevant documents and
+materials for Board meetings are
+usually sent to each director 10
+days in advance. In 2015, Sinopec
+Corp. held nine Board meetings.
+For details about the attendance
+of each director, please refer
+to the Report of the Board of
+Directors in this annual report.
+CORPORATE GOVERNANCE (CONTINUED)
+For details of the pricing principle, please
+refer to relevant announcements published
+on 27 August 2015 in the China Securities
+Journal, the Shanghai Securities News and
+the Securities Times and on the websites of
+the Shanghai Stock Exchange and the Hong
+Kong Stock Exchange.
+Decision-making procedures:
+The major continuing connected transaction
+agreements were entered into in the ordinary
+course of the Company's business and in
+accordance with normal commercial terms
+that are fair and reasonable to the Company
+and its shareholders. The Company,
+according to internal control procedures,
+adjusts the scope and amount of continuing
+connected transactions and the caps for
+the amount exempted from disclosure
+every three years, and will be announced
+and implemented upon the approval of the
+Board and/or independent shareholders. For
+the other connected transactions, Sinopec
+Corp., in strict compliance with domestic
+and overseas regulatory rules, published
+the announcement and implemented the
+transactions only after submitting the
+relevant proposals of connected transactions
+to the Board and/or the general meeting of
+shareholders for consideration and approval
+according to internal control procedures.
+Related party transactions with the Sinopec
+Group that occurred during the year, as set
+out in Note 34 to the financial statements
+prepared under the IFRS in this annual
+report, also fall under the definition of
+connected transactions under Chapter 14A of
+the Hong Kong Listing Rules.
+The above-mentioned connected transactions
+between the Company and Sinopec Group in
+2015 were approved at the 5th meeting of
+the sixth session of the Board and complied
+with the disclosure requirements under
+Chapter 14A of the Hong Kong Listing Rules.
+The external auditor of Sinopec Corp.
+was engaged to report on the Company's
+continuing connected transactions in
+accordance with the Hong Kong Standard on
+Assurance Engagements 3000, Assurance
+Engagement Other Than Audits or Reviews
+of Historical Financial Information, and with
+reference to Practice Note 740, Auditor's
+Letter on Continuing Connected Transactions
+under the Hong Kong Listing Rules, issued
+by the Hong Kong Institute of Certified Public
+Accountants. The auditor has issued its
+unqualified letter containing its conclusions
+in respect of the above-mentioned continuing
+connected transactions in accordance with
+Rule 14A.56 of the Hong Kong Listing Rules.
+Sinopec Corp. has submitted a copy of the
+auditor's letter to the Hong Kong Stock
+Exchange.
+After reviewing the above-mentioned
+connected transactions, the independent
+non-executive directors of Sinopec Corp.
+have confirmed the following:
+(a) The transactions have been conducted in
+the ordinary course of the Sinopec Corp.
+business
+(b) The transactions have been entered into
+based on either of the following terms:
+(d) when none of the above is applicable, the
+price for the provision of the products
+or services is to be agreed upon by
+the relevant parties, and shall be the
+reasonable cost incurred in providing the
+products or services plus 6% or less of
+such cost.
+i
+ii terms not less favorable than those
+available from or to independent third
+parties, where there is no available
+comparison to determine whether
+such terms are on normal commercial
+terms.
+(c) The transactions were conducted
+pursuant to the terms of the relevant
+agreements, and the terms were fair
+and reasonable and in the interests of
+Sinopec Corp. and its shareholders as a
+whole.
+40
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+4 OTHER SIGNIFICANT CONNECTED
+TRANSACTIONS OCCURED THIS YEAR
+On 26 August 2015, Sinopec Corp. entered
+into the Equity Transfer Agreement relating
+to the Transfer of 100% Equity Interest
+of Sinopec Beijing Jingtian Engineering
+and Construction Co., Ltd. (Jingtian Co.)
+with Sinopec Baichuan Economic and
+Trading Company (Baichuan Co., a wholly-
+owned subsidiary of China Petrochemical
+Corporation), pursuant to which, Sinopec
+Corp. proposed to transfer 100% equity
+interest of Jingtian Co. held by it to
+Baichuan Co. The final consideration of
+above-mentioned equity interest was around
+RMB 1.869 billion which was arrived at
+after taking into account the value evaluated
+for net assets at valuation base date and
+differences between the net assets as
+shown on the audited financial statements
+as at the completion date and the financial
+statements as at the base date of Jingtian
+Co. For further details, please refer to the
+announcements published in the China
+Securities Journal, the Shanghai Securities
+News and the Securities Times by
+Sinopec Corp. on 27 August 2015 and
+the announcement published on the website
+of the Hong Kong Stock Exchange on
+26 August 2015.
+On 29 October 2015, Sinopec Corp. entered
+into the Joint Venture Agreement with
+Sinopec Assets Management Corporation
+(SAMC, a wholly-owned subsidiary of China
+Petrochemical Corporation) in relation to
+the formation of the Sinopec Shanghai
+Gaoqiao Petrochemical Company Limited
+(Gaoqiao Petrochemical Co.). Sinopec Corp.
+will subscribe 55% of the registered capital
+of Gaoqiao Petrochemical Co. and SAMC
+will subscribe 45% of the registered capital
+of Gaoqiao Petrochemical Co. For further
+details, please refer to the announcements
+published in the China Securities Journal, the
+Shanghai Securities News and the Securities
+Times by Sinopec Corp. on 30 October 2015
+and the announcement published on the
+website of the Hong Kong Stock Exchange on
+29 October 2015.
+On 28 December 2015, the Proposal on
+Providing Completion Guarantee for the
+Project Financing of Zhongtian Synergetic
+is considered and approved at the fourth
+meeting of the sixth session of Board,
+where all the Directors of Sinopec Crop.
+unanimously agreed to the provision by
+normal commercial terms
+(c) when there is neither a government-
+prescribed price nor a government.
+guidance price, the market price will
+apply; or
+(b) when there is no government-prescribed
+price but there is a government-guidance
+price, the government-guidance price will
+apply;
+(a) The government-prescribed price will
+apply;
+independently and objectively protected the
+legitimate interests of the shareholders,
+especially the minority shareholders, when
+performing their duties.
+CONNECTED TRANSACTIONS
+1 AGREEMENTS CONCERNING CONTINUING
+CONNECTED TRANSACTIONS
+BETWEEN SINOPEC CORP. AND CHINA
+PETROCHEMICAL CORPORATION
+Prior to Sinopec Corp.'s overseas listing,
+in order to ensure the smooth continuation
+of production and business conducted by
+the Company and China Petrochemical
+Corporation, the two parties entered into
+a number of agreements on continuing
+connected transactions, details of which are
+as follows:
+(1) The Company and China Petrochemical
+Corporation will mutually supply ancillary
+services for products, production and
+construction services (Mutual Supply
+Agreement)
+(2) China Petrochemical Corporation
+will provide trademarks, patents and
+computer software to the Company for
+use free of charge
+(3) China Petrochemical Corporation will
+provide cultural and educational, hygienic
+and community services to the Company
+(Cultural and Educational Hygienic and
+Community Services Agreement)
+(4) China Petrochemical Corporation will
+provide leasing services for lands and
+certain properties to the Company
+(5) China Petrochemical Corporation will
+provide comprehensive insurance to the
+Company
+(6) China Petrochemical Corporation will
+provide shareholders' loans to the
+Company and
+(7) The Company will provide franchise
+licenses for service stations to China
+Petrochemical Corporation.
+2
+On 26 August 2015, Sinopec Corp. and
+China Petrochemical Corporation entered into
+a supplementary agreement of connected
+transactions, whereby the terms of the
+Mutual Supply Agreement and the Cultural
+and Educational, Hygienic and Community
+Services Agreement were extended from 1
+January 2016 to 31 December 2018. The
+resolution relating to continuing connected
+transactions for the three years from 2016 to
+2018 was approved at the first extraordinary
+general meeting for 2015 held on 23 October
+2015. For details of the above continuing
+connected transactions, please refer to
+relevant announcements published on 27
+August 2015 in the China Securities Journal,
+the Shanghai Securities News and the
+Securities Times and on the websites of the
+Shanghai Stock Exchange and the Hong Kong
+Stock Exchange (dated 26 August 2015). The
+capitalised terms used in this section shall
+have the same meaning as that used in the
+above-mentioned announcements.
+COMPLIANCE OF DISCLOSURES AND
+APPROVALS OF CONTINUING CONNECTED
+TRANSACTIONS BETWEEN THE COMPANY
+AND SINOPEC GROUP WITH HONG KONG
+LISTING RULES AND THE SHANGHAI
+STOCK EXCHANGE
+Pursuant to the Hong Kong Listing Rules and
+the Rules Governing the Listing of Stocks
+on the Shanghai Stock Exchange (Shanghai
+Listing Rules), the continuing connected
+transactions between the Company and
+Sinopec Group are generally subject to
+full disclosure based on their nature and
+the value of the transactions, and are also
+subject to approvals from independent non-
+executive directors and/or independent
+shareholders. The Hong Kong Stock Exchange
+and Shanghai Stock Exchange exempted
+Sinopec Corp. from full compliance with the
+listing rules regarding the above continuing
+connected transactions and conditionally
+exempted Sinopec Corp. from complying
+with the obligations of continuous disclosure.
+There was no change to the above-mentioned
+supplementary agreements on continuing
+connected transactions during the reporting
+period. The aggregated amount of the
+connected transactions for 2015 of the
+Company is in compliance with the relevant
+requirements of the Hong Kong Listing
+Rules and the Shanghai Listing Rules. For
+performance details of connected transaction
+agreements, please refer to Item 3 below.
+3 ACTUAL CONTINUING CONNECTED
+TRANSACTIONS ENTERED INTO BY THE
+COMPANY DURING THE YEAR
+Pursuant to the above-mentioned agreements
+on continuing connected transactions,
+the aggregate amount of the connected
+transactions of the Company during the
+year was RMB 190.867 billion. Among the
+expenses, purchases amounted to RMB
+112.449 billion, representing 5.73% of the
+total amount of this type of transaction for
+the reporting period, including purchases of
+products and services (procurement, storage,
+exploration and development services, and
+production-related services) amounted to
+RMB 93.421 billion, auxiliary and community
+services amounted to RMB 6.754 billion. The
+housing rent paid by the Company amounted
+to RMB 462 million. The rent for use of land
+was RMB 10.618 billion. Interest expenses
+amounted to RMB 1.194 billion. The sales
+income amounted to RMB 78.418 billion,
+representing 3.88% of the total amount of
+this type of transaction for the reporting
+period, including RMB 78.184 billion for
+sales of products and services, RMB 27
+million for agency commission income, and
+RMB 207 million for interest income.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+39
+Connected Transactions
+Connected Transactions
+CONNECTED TRANSACTIONS (CONTINUED)
+The amounts of the above continuing
+connected transactions between the
+Company and Sinopec Group did not exceed
+the caps for the continuing connected.
+transactions approved by the general
+meeting of shareholders and the Board.
+Principle of pricing for connected
+transactions:
+Sinopec Corp. of a completion guarantee
+to Zhongtian Synergetic Ordos coal deep
+processing demonstration project subject
+to the provision of completion guarantees
+by the other shareholders of Zhongtian
+Synergetic on a pro-rata basis (Guarantee).
+The Guarantee has been considered and
+approved at the first extraordinary general
+meeting for the year 2016. Zhongtian
+Synergetic is a connected party of the
+Company under the Shanghai Listing Rules
+because its vice chairman, Mr. Chang
+Zhenyong is the vice president of Sinopec
+Corp. However, Zhongtian Synergetic is not
+a connected person under the Hong Kong
+Listing Rules. For further details, please
+refer to the announcements published in
+the China Securities Journal, the Shanghai
+Securities News and the Securities Times by
+Sinopec Corp. on 29 December 2015 and
+26 February 2016 and the announcement
+published on the website of the Hong Kong
+Stock Exchange on 28 December 2015.
+5 FUNDS PROVIDED BETWEEN RELATED PARTIES
+Sinopec Group
+Other related parties
+*. affiliated companies include subsidiaries, associates and joint ventures.
+Loans and other accounts receivable and accounts payable
+No material negative impact
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+41
+Connected Transactions
+CORPORATE GOVERNANCE
+1 IMPROVEMENTS IN CORPORATE
+GOVERNANCE DURING THE REPORTING
+PERIOD
+During the reporting period, Sinopec Corp.
+was in full compliance with the Company
+Law of the People's Republic of China (PRC)
+and other domestic and overseas laws and
+regulations on securities, optimised and
+adjusted the composition of the Board and
+the Board Committees. The members of the
+Board are professional and complementary
+and role of independent directors were
+brought into full play. Sinopec Corp.
+amended its normative documents such
+as the Articles of Association, regulated
+the process of approval and information
+disclosure for the continuing connected
+transactions for three years from 2016 to
+2018. Sinopec Corp. actively propelled to
+fulfill undertakings of China Petrochemical
+Corporation and eliminated competition
+in the oil refining business. Sinopec
+Corp. continuously enhanced the effects
+achieved through investor relationships
+and information disclosure and received
+recognition from capital market. As a lead
+member of the United Nations Global
+Compact, Sinopec Corp. had supported
+hosting of Climate China Summit for
+consecutive three sessions and helped to
+lead Chinese enterprises along the path of
+green and low-carbon development.
+During the reporting period, Sinopec Corp.'s
+corporate governance complied with the
+PRC Company Law and all regulations
+on securities of the CSRC. The Board of
+Supervisors of Sinopec Corp. agreed with all
+supervised matters. None of Sinopec Corp.,
+the Board, directors, supervisors, senior
+management, controlling shareholders or de
+facto controllers of Sinopec Corp. were under
+the investigation by the CSRC or punished
+administratively or criticized publicly by the
+CSRC, the Hong Kong Securities and Futures
+Commission, the Securities and Exchange
+Commission of the United States, Shanghai
+Stock Exchange, the Hong Kong Stock
+Exchange, the New York Stock Exchange or
+the London Stock Exchange.
+Related Parties
+During the reporting period, Sinopec Corp.
+convened 2014 annual general meeting
+and the 1st Extraordinary General Meeting
+for 2015 in Beijing, China respectively
+on 27 May 2015 and 23 October 2015
+in accordance with relevant laws and
+regulations and procedures of notice,
+convening and holding procedure specified
+in the Articles of Association. For meeting
+details, please refer to the poll results
+announcements published in China Securities
+Journal, Shanghai Securities News and
+Securities Times after each meeting and on
+the websites of Shanghai Stock Exchange,
+Hong Kong Stock Exchange and Sinopec
+Corp.'s website.
+3 EQUITY INTERESTS OF DIRECTORS,
+SUPERVISORS AND OTHER SENIOR
+MANAGEMENT
+As of 31 December 2015, apart from
+13,000 A shares of Sinopec Corp. held
+by Vice President Mr. Ling Yiqun, none of
+the directors, supervisors or other senior
+management of Sinopec Corp. held any
+shares of Sinopec Corp.
+Save as disclosed above, during the reporting
+period, none of the directors, supervisors
+and senior management of Sinopec Corp.
+and their associates had any interests or
+short positions (including any interest or
+short position that is regarded or treated as
+being held in accordance with the Securities
+and Futures Ordinance (SFO) in the shares,
+debentures and underlying shares) of
+Sinopec Corp. or any associated corporations
+(as defined in Part XV of SFO) would fall
+to be disclosed to the Sinopec Corp. and
+the Hong Kong Stock Exchange under the
+Division 7 and 8 of Part XV of SFO or which
+was recorded in the register required to be
+kept under section 352 of SFO or otherwise
+notified to Sinopec Corp. and the Hong Kong
+Stock Exchange pursuant to the Model Code
+for Securities Transactions by Directors of
+Listed Company.
+4 CONFIRMATION OF INDEPENDENCE OF
+THE INDEPENDENT NON-EXECUTIVE
+DIRECTORS AND OVERVIEW OF THEIR
+PERFORMANCE
+As required by the Hong Kong Stock
+Exchange, with regard to the independence
+of its independent non-executive directors,
+Sinopec Corp. confirms that it has received
+and accepted the annual confirmation letters
+from all independent non-executive directors
+acknowledging full compliance with the
+relevant requirements in respect of their
+independence pursuant to Rule 3.13 of the
+Hong Kong Listing Rules. Sinopec Corp.
+considers that all independent non-executive
+directors are independent.
+During the reporting period, the independent
+non-executive directors of Sinopec Corp.
+strictly implemented the working rules for
+independent non-executive directors, fulfilled
+their duties in good faith as required by
+laws and regulations and the Articles of
+Association. They actively attended, meetings
+of the Board and meetings of the Board
+committees (please refer to the Report of
+the Board of Directors in this annual report
+for details of their attendance), reviewed
+the relevant documents with due care and
+exercised their profession advantages to
+offer advice and suggestions to Sinopec
+Corp.'s development strategy, operations
+and reform. The independent non-
+executive directors gave their independent
+opinions on matters such as connected
+transactions, external guarantees, dividend
+distributions and appointments of senior
+management and maintained timely and
+effective communications with the executive
+directors, management, external auditors
+and the internal auditing department.
+The independent non-executive directors
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+43
+Corporate Governance
+44
+Corporate Governance
+Reason for provision of funds between related parties
+Impacts on the Company
+26,843
+2 ANNUAL GENERAL MEETING
+174
+(1,607)
+Funds to related parties
+Unit: RMB million
+Funds from related parties
+Relations
+Parent company and affiliated
+companies*
+Balance
+at the
+beginning
+of the year
+Amount
+incurred
+Balance
+at the end
+of the year
+Balance
+at the
+beginning
+of the year
+Amount
+incurred
+Total
+15,095
+Balance
+at the end
+of the year
+(1,433)
+(174)
+28,102
+348
+28,450
+20,485
+5,472
+25,957
+8,678
+26,669
+3,288
+2,184
+Associates and joint ventures
+5,390
+17,279
+1
+Independent Non-executive Director
+Independent Non-executive Director
+(2) The fifth session of the Board Directors' attendance to the Board Meeting and the General Meetings.
+Director Titles
+Name
+4
+4
+0
+1
+0
+4
+Chairman
+0
+1
+0
+1
+Deputy Chairman Non-executive Director
+Deputy Chairman Non-executive Director
+Executive Director
+Executive Director
+Executive Director
+Non-executive Director
+Executive Director
+4
+Fan Gang
+Executive Director
+1
+Jiao Fangzheng
+4
+4
+0
+1
+1
+0
+Independent Non-executive Director
+Jiang Xiaoming
+4
+Tang Min
+4
+1
+0
+1
+Independent Non-executive Director
+Andrew Y. Yan
+4
+4
+0
+1
+0
+0
+Non-executive Director
+1
+Independent and Non-executive Director
+Independent and Non-executive Director
+Independent and Non-executive Director
+5
+5
+0
+1
+0
+1
+Li Chunguang
+5
+5
+0
+1
+1
+0
+Zhang Jianhua
+5
+5
+0
+1
+1
+0
+Wang Zhigang
+Zhang Yaocang
+1
+0
+0
+*:1.
+2.
+Board Meetings"¹
+No. of
+meeting held
+Attended
+Attended
+by proxy
+General meetings of the shareholders
+No. of
+meeting held
+Attended
+Independent and Non-executive Director
+Independent and Non-executive Director
+Absence
+5
+5
+0
+1
+0
+1
+Wang Tianpu*2
+2
+2
+0
+Fu Chengyu
+1
+1
+1
+During this reporting period, Sinopec Corp.
+held nine(9) Board meetings. The details are as
+follows:
+(1) The 22nd meeting of the fifth session
+of the Board was held by written
+resolution on 26 January 2015, whereby
+the proposals in relation to the internal
+control manual of Sinopec Corp. (2015)
+and the early redemption of Sinopec
+convertible bonds were approved in the
+meeting.
+(2) The 23rd meeting of the fifth session
+of the Board was held by on site and
+video conference on 20 March 2015,
+whereby the proposals in relation to
+the following matters were approved: (i)
+the Work Report of the Fifth Session of
+the Board, (ii) the Work Report of the
+Fifth Session of the Senior Management,
+(iii) financial results and business
+performance of Sinopec Corp. for the
+year 2014, (iv) the Financial Statements
+of Sinopec Corp. for the year 2014,
+(v) the Annual Report and 20F form of
+Sinopec Corp. for the year 2014, (vi)
+the internal control assessment report
+of Sinopec Corp. for the year 2014, (vii)
+the 2014 Communication on Progress
+for Sustainable Development Report of
+Sinopec Corp., (viii) the re-appointment
+of external auditors of Sinopec Corp. for
+the year of 2015 and to authorise the
+Board to determine their remunerations,
+(ix) the amendments to the articles of
+association of Sinopec Corp. and the
+rules and procedures for the supervisors'
+meetings, (x) the re-election of the Board
+of Directors, (xi) the service contracts
+between Sinopec Corp. and the Directors
+of the sixth session of the Board
+(including emolument provisions), and
+service contracts between Sinopec Corp.
+and the Supervisors of the sixth session
+of the Supervisory Committee (including
+emolument provisions), (xii) to authorise
+the Board to determine the interim profit
+distribution plan of Sinopec Corp. for the
+year 2015, (xiii) to authorise the Board to
+determine the proposed plan for issuance
+of debt financing instrument(s), (xiv) to
+grant to the Board a general mandate
+to issue new domestic shares and/or
+overseas-listed foreign shares of Sinopec
+Corp., and (xv) to convene the annual
+general meeting of Sinopec Corp. for the
+year 2014 and to despatch the notice of
+the annual general meeting.
+(3) The 24th meeting of the fifth session of
+the Board was held by written resolution
+on 27 April 2015, whereby the proposals
+in relation to the withdrawal of the
+Resolution on Re-election of the Board of
+Directors of Sinopec Corp. and Modifying
+the Notice of the Annual General Meeting
+for the year 2014 were approved in the
+meeting.
+(4) The 25th meeting of the fifth session of
+the Board was held by written resolution
+on 29 April 2015, whereby the proposal
+in relation to the first quarterly results
+of Sinopec Corp. for the three months
+ended 31 March 2015 was approved in
+the meeting.
+(5) The 26th meeting of the fifth session of
+the Board was held by written resolution
+on 6 May 2015, whereby the proposals
+in relation to the withdrawal of the
+Resolution on Annual General Meeting
+for the year 2014 and postponement of
+annual general meeting for the year 2014
+were approved in the meeting.
+(6) The 1st meeting of the sixth session of
+the Board was held by on site meeting
+on 27 May 2015, whereby the proposals
+in relation to the following matters
+were approved: (i) the election of the
+Chairman of the six session of the
+Board, (ii) the adjustment of members
+of the Board committees including
+Strategy Committee, Audit Committee,
+Remuneration Committee and Social
+Responsibility Management Committee,
+(iii) the appointment of the President of
+Sinopec Corp., (iv) the appointment of
+Senior Vice Presidents, Chief Financial
+Officer and Vice Presidents of Sinopec
+Corp., (v) the appointment of the
+Secretary to the Board, the appointment
+of the Company authorised representative
+to Hong Kong Stock Exchange and the
+representative on securities matters to
+Shanghai Stock Exchange.
+(7) The 2nd meeting of the sixth session of
+the Board was held by on site meeting
+on 25-26 August 2015, whereby the
+proposals in relation to the following
+matters were approved: (i) the report
+on the fulfillment of the key targets for
+the first half of the year 2015 and the
+work arrangements for the second half
+of the year 2015, (ii) the 2015 interim
+dividend distribution plan, (iii) the report
+on auditing expenditure for the first
+half of the year 2015, (iv) the financial
+statements for the first half the year
+2015, (v) the report of Risk Assessment
+for Capital Deposits at Finance Company
+and Century Bright Company, (vi) the
+interim report for the 6 months ended 30
+June 2015, (vii) the continuing connected
+transactions for three years from 2016
+to 2018, (viii) the equity transfer of
+Jingtian Co., and (ix) to convene the 1st
+extraordinary general meeting of Sinopec
+Corp. for the year 2015 and to dispatch
+the notice of the meeting.
+1 MEETINGS OF THE BOARD
+(8) The 3rd meeting of the sixth session of
+the Board was held by written resolution
+on 29 October 2015, whereby the
+proposals in relation to (i) the third
+quarterly report of the year 2015, (ii)
+the issuance of corporate bonds, and
+(iii) entering into joint venture agreement
+with SAMC in relation to the formation
+of Gaoqiao Petrochemical Co. were
+approved in the meeting.
+For details of each meeting, please refer
+to the announcements published in China
+Securities Journal, Shanghai Securities News
+and Securities Times on the next working
+day after each meeting and on the websites
+of Shanghai Stock Exchange, Hong Kong
+Stock Exchange and Sinopec Corp.
+2 IMPLEMENTATION OF RESOLUTIONS
+APPROVED AT THE GENERAL MEETINGS
+OF SHAREHOLDERS BY THE BOARD
+During this reporting period, in accordance
+with relevant laws and regulations as well
+as the articles of association, all members
+of the Board diligently implemented the
+resolutions approved at the general meetings
+of Sinopec Corp., and have completed
+various tasks delegated to them at the
+general meetings.
+50
+50
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+3 ATTENDANCE TO THE BOARD MEETINGS
+(1) The sixth session of the Board Directors' attendance to the Board Meeting and the General Meetings.
+Director Titles
+Names
+Board Meetings"¹
+(9) The 4th meeting of the sixth session of
+the Board was held by written resolution
+on 28 December 2015, whereby the
+proposals in relation to (i) to appoint Mr.
+Ma Yongsheng as Senior Vice President of
+Sinopec Corp. and Ms. Wen Dongfen as
+Chief Financial Officer of Sinopec Corp.,
+(ii) to naminate Mr. Ma Yongsheng as
+candidate of the Executive Director of the
+sixth session of the Board and to submit
+the nomination to the general meeting
+of Sinopec Corp., for approval, (iii) the
+provision of completion guarantees for
+Zhongtian Synergetic's project finance,
+and (iv) to convene the 1st extraordinary
+general meeting for the year 2016 and to
+dispatch the notice of the extraordinary
+general meeting, were approved in the
+meeting.
+General Meetings of the shareholders
+The Board is pleased to present the directors'
+report for the year ended 31 December 2015 for
+shareholders' review.
+Report of the Board of Directors
+Corporate Governance
+Corp. These provisions are subject
+to the following conditions: the
+proposals at the general meeting
+of shareholders must fall within
+the responsibilities of the general
+meeting of shareholders, with specific
+proposals and resolutions and in
+compliance with relevant laws,
+administrative regulations and the
+Articles of Association.
+b. When Sinopec Corp. holds the
+general meeting of shareholders,
+shareholders who individually or
+collectively hold 3% of the total
+voting shares of Sinopec Corp. may
+propose a supplementary proposal 10
+days before the date of the general
+meeting.
+c. The eligibility for attending the
+general meeting, the rights of
+shareholders, the meeting agenda
+and the voting procedures are clearly
+stated in the notice of the general
+meeting of Sinopec Corp. dispatched
+to the shareholders.
+d. According to relevant rules of
+Sinopec Corp., the Board secretary
+is responsible for establishing an
+effective communication channel
+between Sinopec Corp. and its
+shareholders, for setting up special
+departments to communicate with
+the shareholders and for passing
+the opinions and proposals of the
+shareholders to the Board and
+management in a timely manner.
+Contact details of Sinopec Corp. can
+be found on the Investor Center page
+on the Sinopec Corp's website.
+(2) Auditors
+The appointment of
+PricewaterhouseCoopers Zhong Tian
+LLP and PricewaterhouseCoopers as
+Sinopec Corp.'s external auditors for
+2015 and the authorisation of the Board
+to determine their remuneration were
+approved at Sinopec Corp.'s annual
+general meeting for the year 2014 on
+27 May 2015. The audit fee for 2015
+is RMB 51.58 million (including audit
+fee of internal control), which was
+approved at the 5th meeting of the
+sixth session of the Board. The annual
+financial statements have been audited
+by PricewaterhouseCoopers Zhong Tian
+LLP and PricewaterhouseCoopers; the
+Chinese certified accountants signing the
+report are Li Dan and Gao Peng from
+PricewaterhouseCoopers Zhong Tian LLP.
+REPORT OF THE BOARD OF DIRECTORS
+During the reporting period, neither
+PricewaterhouseCoopers Zhong Tian LLP
+nor PricewaterhouseCoopers provided any
+non-audit service to Sinopec Corp.
+Except for their working relationships
+with Sinopec Corp., none of the directors,
+supervisors or other senior management
+has any financial, business or family
+relationship or any relationship in other
+material aspects with one another. For
+information about changes in share
+capital and shareholdings of substantial
+shareholders, please refer to page
+6 to page 7; for information about
+meetings of the Board, please refer to
+page 51; for information about equity
+9
+interests of directors, supervisors and
+other senior management, please refer
+to page 43; for information about the
+biographies and annual remuneration of
+directors, supervisors and other senior
+management, please refer to page 60 to
+page 71.
+COMPARISON OF NEW YORK STOCK
+EXCHANGE CORPORATE GOVERNANCE
+RULES AND CHINA CORPORATE
+GOVERNANCE RULES FOR LISTED
+COMPANIES
+For details, please refer to the content on
+the website of Sinopec Corp. at http://
+english.sinopec.com/investor_center/
+corporate governance/fact-sheet/20120315/
+download/2012031503.pdf.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+49
+(3) Other information about Sinopec Corp.'s
+corporate governance
+No. of
+meeting held
+Attended
+No. of meeting
+1
+0
+Executive Director
+Wang Zhigang
+4
+4
+0
+1
+1
+0
+5
+Executive Director
+4
+4
+0
+1
+1
+0
+Executive Director
+Zhang Haichao
+4
+3
+Dai Houliang
+0
+4
+4
+Attended
+by proxy
+held attended
+Attended
+Absence
+Chairman
+Wang Yupu
+4
+4
+0
+1
+0
+1
+Executive Director
+Li Chunguang
+4
+4
+0
+1
+1
+0
+Executive Director
+Zhang Jianhua
+1
+4
+5
+1
+The total sales to the five largest customers
+of the Company accounted for 5.0% of
+the total sales of the Company, of which
+sales to the largest customer accounted for
+3.0% of the total sales. Sinopec Group, the
+controlling shareholder of Sinopec Crop., is
+one of the five largest customers.
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+Report of the Board of Directors
+During the reporting period, other than
+disclosed above, all the top five crude oil
+suppliers and the other largest customers
+of the Company were independent third
+parties. There were no supplier, customer,
+employee and others that have a significant
+impact on the Company and on which the
+Company's success depends.
+During this reporting period, other than the
+connected transactions with Sinopec Group,
+as disclosed in Connected Transactions of
+this annual report, none of the directors,
+supervisors of Sinopec Corp. and their
+associates or any shareholders holding 5%
+or more of the share capital of Sinopec
+Corp. had any interest in any of the above-
+mentioned major suppliers and customers.
+11 BANK LOANS AND OTHER BORROWINGS
+Details of bank loans and other borrowings
+of Sinopec Corp. as of 31 December 2015
+are set out in Note 28 to the financial
+statements prepared in accordance with
+IFRS in this annual report.
+12 FIXED ASSETS
+During this reporting period, changes to the
+fixed assets of Sinopec Corp. are set out in
+Note 16 to the financial statements prepared
+in accordance with IFRS in this annual
+report.
+13 RESERVES
+During this reporting period, the changes
+to the reserves of Sinopec Corp. are set out
+in the consolidated statement of changes
+in shareholders' equity in the financial
+statements prepared in accordance with
+IFRS in this annual report.
+14 DONATIONS
+During this reporting period, the amount of
+charity donations made by Sinopec Corp.
+amounted to RMB 92 million.
+15 PRE-EMPTIVE RIGHTS
+Pursuant to the Articles of Association
+and the laws of the PRC, the shareholders
+of Sinopec Corp. are not entitled to any
+pre-emptive rights, therefore the existing
+shareholders cannot request Sinopec Corp.
+for the right of first refusal in proportion to
+their shareholdings.
+16 REPURCHASE, SALES AND REDEMPTION
+OF SHARES
+During this reporting period, neither
+Sinopec Corp. nor any of its subsidiaries
+repurchased, sold or redeemed any
+listed shares of Sinopec Corp. or its
+subsidiaries.
+17 DIRECTORS' INTERESTS IN COMPETING
+BUSINESS
+During the reporting period, there remains
+a few competing business in chemicals
+segment between Sinopec Group and the
+Company. All of the directors of Sinopec
+Corp. (excluding Independent Non-
+executive Directors) hold positions in
+Sinopec Group. For details, please refer
+to the chapter Directors, Supervisors,
+Senior Management and Employees of
+this annual report.
+18 DIRECTORS' INTERESTS IN CONTRACTS
+No Director had a material interest, either
+directly or indirectly, in any contract
+of significance to the business of the
+Company to which Sinopec Corp., or any
+of its holding companies, subsidiaries or
+fellow subsidiaries was a party during the
+reporting period.
+19 MANAGEMENT CONTRACTS
+No contracts concerning management
+or administration of the whole or any
+substantial part of the business of the
+Company were entered into or existed
+during the reporting period.
+10 MAJOR SUPPLIERS AND CUSTOMERS
+During this reporting period, the total
+purchases from the top five crude oil
+suppliers of the Company accounted for
+47.2% of the total purchases of crude oil
+by the Company, of which the purchases
+from the largest supplier accounted for
+19.0% of the total purchases of crude oil
+by the Company.
+DURING THIS REPORTING PERIOD, DID
+THE COMPANY VIOLATE LAWS AND
+REGULATIONS WHICH HAVE A SIGNIFICANT
+IMPACT ON THE COMPANY
+No
+41.69
+50.24
+*: The final cash dividend for 2015 is to be approved by 2015 annual general meeting.
+The aggregate cash dividend declared by
+Sinopec Corp. during three years from 2013
+to 2015 is RMB 0.59 per share, and the
+total dividend payment from 2013 to 2015
+as a percentage of average net profits in the
+three years is 143.0%.
+7 RESPONSIBILITIES FOR THE COMPANY'S
+INTERNAL CONTROL
+The Board is fully responsible for establishing
+and maintaining the internal control system
+related to the financial statements as well
+as ensuring its effective implementation. In
+2015, the Board assessed and evaluated the
+internal control of Sinopec Corp. according
+to the Basic Standard for Enterprise
+Internal Control, Application Guidelines for
+Enterprise Internal Control and Estimation
+Guidelines for Enterprise Internal Control.
+There were no significant defects in relation
+to the internal control system related to
+the financial statements as of 31 December
+2015. Therefore the internal control system
+of Sinopec Corp. related to the financial
+statements is sound and effective.
+8
+The 2015 Annual Internal Control
+Assessment Report of Sinopec Corp. was
+reviewed and approved on the 5th meeting
+of the sixth Session of the Board on 29
+March 2016, and all members of the Board
+undertook that the contents of the report are
+true, accurate and complete, and without any
+false representation, misleading statements
+or material omissions.
+DURING THIS REPORTING PERIOD,
+THE COMPANY DID NOT VIOLATE
+ENVIRONMENTAL POLICIES
+Details with regard to the Company's
+performance in relation to environmental and
+social-related key performance indicators and
+policies, are provided in this annual report.
+in the Chapters of Chairman's Statement
+and Business Review and Prospects as well
+as the 2015 Communication on Progress
+for the Sustainable Development Report of
+Sinopec Corp. All these discussions in regard
+to environmental policies constitute part of
+the Report of the Board of Directors.
+9
+2015*
+20 PERMITTED INDEMNITY PROVISIONS
+During the reporting period, Sinopec
+Corp. has purchased liability insurance
+for all directors to minimise their
+risks arising from the performance of
+their duties. The permitted indemnity
+provisions are provided in such directors
+liability insurance in respect of potential
+liability and costs associated with legal
+proceedings that may be brought against
+such directors.
+2014
+0.15
+0.20
+0.24
+18,160
+23,830
+28,010
+32,207
+47,430
+67,179
+56.39
+2013
+21 EQUITY-LINKED AGREEMENTS
+For the reporting period, the Company
+has not entered into any equity-linked
+agreement.
+22 CORE COMPETITIVENESS ANALYSIS
+The Company is a large scale integrated
+energy and petrochemical company with
+upstream, mid-stream and downstream
+operations. The Company is a large
+scaled oil and gas producer in China; in
+respect of refining capacity, it ranks first
+in China; equipped with a well-developed
+refined oil products sales network, the
+Company is the largest supplier of refined
+oil products in China; and in terms
+of ethylene production capacity, the
+Company takes the first position in China,
+and has a well-established marketing
+network for chemical products.
+Wang Yupu
+Chairman
+Beijing, China, 29 March 2016
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+57
+Report of the Board of Directors
+Report of the Board of Supervisors
+REPORT OF THE BOARD OF SUPERVISORS
+Mr. Liu Yun Chairman of the Board of Supervisors
+Dear Shareholders:
+By order of the Board
+The Board of Supervisors and each supervisor
+of Sinopec Corp. diligently performed their
+supervision responsibilities, actively participated
+in the process supervision, carefully reviewed
+decisions made such as major assets restructuring,
+equity transfer and bond financing, and
+endeavored to safeguard the interests of
+shareholders and the Company in accordance
+with the PRC Company Law and the Articles of
+Association of Sinopec Corp.
+sustainable development, internal control
+assessment report and proposals of asset
+restructuring, equity transfer, bond issuance
+and amendments to articles of association and
+relevant rules and procedures etc.
+On 20 March 2015, the 13th meeting of the
+fifth session of the Board of Supervisors was
+held, and the Financial Statements of Sinopec
+Corp. for 2014, Annual Report of Sinopec Corp.
+for 2014, 2014 Communication on Progress
+for Sustainable Development Report of Sinopec
+Corp., Internal Control Assessment Report of
+Sinopec Corp. for 2014, Report on the Work
+of Board of Supervisors of Sinopec Corp. for
+2014 and the amendments to the Articles of
+Association of Sinopec Corp. and the Rules and
+Procedures for the Supervisors' Meeting were
+approved at the meeting.
+On 29 April 2015, the 14th meeting of the fifth
+session of the Board of Supervisors was held,
+and the First Quarterly Report of Sinopec Corp.
+for 2015 was approved at the meeting.
+On 27 May 2015, the first meeting of the sixth
+session of the Board of Supervisors was held,
+and Mr. Liu Yun was elected as the Chairman of
+the Board of Supervisors.
+On 25 August 2015, the second meeting of the
+sixth session of the Board of Supervisors was
+held, and Interim Financial Statement of 2015
+for Sinopec Corp., Interim Report of Sinopec
+Corp., Proposal of Continuing Connected
+Transactions for the year from 2016 to 2018,
+and Proposal of Equity Transfer in relation to
+Jingtian Co. were considered and passed. In the
+meantime, the Board of Supervisors submitted a
+written proposal on risk prevention of production
+management for the second half of the year to
+the management of the Company.
+On 30 October 2015, the third meeting of sixth
+session of the Board of Supervisors was held,
+and the Third Quarterly Report of Sinopec Corp.
+for 2015, Proposal of Corporate Bond Issuance
+by Sinopec Corp. and Proposal of establishment
+of Joint Venture in relation to the Formation of
+Gaoqiao Petrochemical Co. were approved.
+During this reporting period, the Board
+of Supervisors organised newly-appointed
+supervisors to attend the trainings for directors
+and supervisors of listed companies organised
+by Beijing Securities Supervisory Bureau under
+CSRC and the supervisors also attended the
+general meetings of shareholders and presented
+at meetings of the Board. These activities have.
+further improved their capabilities in performing
+supervisory duties. Through supervision and
+inspection on the production and operation
+management as well as financial management
+conditions, especially process supervision
+on significant decision-makings. The Board
+of Supervisors is of the view that: facing the
+severe operating situations such as sharp
+fluctuations of international crude oil price at
+a low level in 2015, the fierce competition in
+refined oil and chemical products markets,
+and the digestion of high cost inventory caused
+by the precipitous drop of oil price in the
+second half of 2014, Sinopec Corp., centering
+on the task of sustaining profit and growth,
+actively implemented resource optimisations
+and structural adjustment, carefully arranged
+production and operations, strictly controlled
+costs, expenses, accounts receivable and
+inventory occupation, carried out connected
+58
+58
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+During this reporting period, the Board of
+Supervisors held five (5) meetings in total,
+and mainly reviewed and approved Sinopec
+Corp.'s annual report, financial statement,
+communication on progress report for
+of the listed company in the consolidated statement (%)
+Currency risks: At present, China
+implements an administered floating
+exchange rate regime based on market
+supply and demand which is regulated
+with reference to a basket of currencies in
+terms of the exchange rate of Renminbi.
+As the Company purchases a significant
+portion of crude oil in foreign currency
+which is based on US dollar-denominated
+prices, fluctuations in the exchange
+rate of Renminbi against US dollars and
+certain other foreign currencies may
+affect the Company's purchasing costs
+of crude oil. Meanwhile, according to
+domestic pricing mechanism of refined oil
+products, the prices of domestic refined
+oil products fluctuate with Renminbi
+exchange rate, and the prices of other
+domestic refined and chemical products
+would also be influenced by import price.
+Risks with regard to overseas business
+development and management: The
+Company engages in oil and gas
+exploration, refining and chemical,
+warehouse logistics and international
+The integrated business structure of
+the Company carries strong advantages
+in synergy among its various business
+segments, enabling the Company to
+continuously tap onto potentials in
+attaining an efficient and comprehensive
+utilisation of its resources, and endowed
+the Company with strong resistance
+against risks, as well as remarkable
+capabilities in sustaining profitability.
+The Company enjoys a favorable
+positioning with its operations located
+close to the consumer markets. Along
+with the steady growth in the Chinese
+economy, sales volume of both oil
+products and chemical products of the
+Company has been increasing steadily
+over the years; through continuous
+and specialised marketing efforts, the
+Company's capability in international
+operations and market expansion has
+been further enhanced.
+The Company owns a team of
+professionals and expertise engaged in
+the production of oil and gas, operation
+of refineries and chemical plants, as well
+as marketing activities. The Company
+applies outstanding fine management
+measures with its remarkable capabilities
+in management of operations, and enjoys
+a favorable operational cost advantage in
+its downstream businesses.
+The Company has formulated a well-
+established technology system and
+mechanism, and owns competent teams
+specialised in scientific research covering
+a wide range of subjects; the four
+platforms for technology advancement is
+taking shape, which includes exploration
+and development of oil and gas, refining,
+chemicals and strategic emerging
+technology. With its overall technologies
+reaching state of the art level in
+the global arena, and some of them
+taking the lead globally, the Company
+enjoys strong capability for technical
+innovations.
+The Company always attaches
+great importance to fulfilling social
+responsibilities, and carries out the green
+and low carbon development strategy
+to pursue a sustainable development.
+Moreover, the Company enjoys an
+outstanding brand name, plays an
+important role in the economy and is
+a renowned and reputable company in
+China.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+55
+56
+Report of the Board of Directors
+REPORT OF THE BOARD OF DIRECTORS (CONTINUED)
+trading businesses in some regions
+outside China. The Company's overseas.
+businesses and assets are subject to the
+jurisdiction of the host country's laws and
+regulations. In light of the complicacy
+of geopolitics, economic and other
+conditions, including sanctions, barriers
+to entry, instability in the financial and
+taxation policies, contract defaults, the
+Company's risks with regard to overseas
+business development and management
+could be increased.
+23 RISK FACTORS
+Risks with regard to the variations from
+macroeconomic situation: The business
+results of the Company are closely related
+to China's and global economic situation.
+The development of Chinese economy has
+entered New Normal. Although various
+countries have adopted different kinds
+of macroeconomic policies to eliminate
+negative effects caused by lower growth
+of global economy, the turnaround
+of economic recovery still remains
+uncertain. The Company's business could
+also be adversely affected by such factors
+as the impact on export due to trade
+protectionism from some countries, and
+impact on import which is likely caused
+by regional trade agreements and etc.
+Risks with regard to the cyclical effects
+from the industry: The majority of the
+Company's operating income comes
+from the sales of refined oil products
+and petrochemical products, and part of
+the those businesses and their related
+products are cyclic and are sensitive
+to macro-economy, cyclic changes of
+regional and global economy, the changes
+of the production capacity and output,
+demand of consumers, prices and supply
+of the raw materials, as well as prices
+and supply of the alternative products etc.
+Although the Company is an integrated
+company with upstream, midstream
+and downstream operations, it can only
+counteract the adverse influences of
+industry cycle to some extent.
+Risks from the macroeconomic policies
+and government regulation: Although
+the Chinese government is gradually
+liberalising the market entry regulations
+on petroleum and petrochemicals
+sector, the petroleum and petrochemical
+industries in China are still subject to
+entry regulations to a certain degree,
+which include: issuing licenses in relation
+to exploration and development of crude
+oil and natural gas, issuing business
+licenses for trading crude oil and refined
+oil, setting caps for retail prices of
+gasoline, diesel and other oil products,
+the imposing of the special oil income
+levy, formulation of import and export
+quotas and procedures, formulation
+of safety, quality and environmental
+protection standards and formulation of
+energy conservation policies. In addition,
+the changes which have occurred or
+might occur in macroeconomic and
+industry policies such as the opening up
+of crude oil import licenses, and further
+improvement in pricing mechanism
+of refined oil products, reforming and
+improvement in pricing mechanism of
+natural gas, and reforming in resource
+tax and environmental tax, will cause
+effects on our business operations. Such
+changes might further intensify market
+competition and have certain effect on
+the operations and profitability of the
+Company.
+Risks with regard to the changes from
+environmental legislation requirements:
+Our production activities generate waste
+liquids, gases and solids. The Company
+has built up the supporting effluent
+treatment systems to prevent and
+reduce the pollution to the environment.
+However, the relevant government
+authorities may issue and implement
+much stricter environmental protection
+laws and regulations, adopt much stricter
+environment protection standards.
+Under such situations, the Company
+may increase expenses in relation to the
+environment protection accordingly.
+Risks from the uncertainties of obtaining
+additional oil and gas resources: The
+future sustainable development of the
+Company is partly dependent to a certain
+extent on our abilities in continuously
+discovering or acquiring additional oil
+and natural gas resources. To obtain
+additional oil and natural gas resources,
+the Company faces some inherent
+risks associated with exploration and
+development and/or with acquisition
+activities, and the Company has to
+invest a large amount of money with no
+guarantee of certainty. If the Company
+fails to acquire additional resources
+through further exploration, development
+and acquisition to increase the reserves
+of crude oil and natural gas, the oil and
+natural gas reserves and production of
+the Company may decline over time which
+may adversely affect the Company's
+financial situation and operation
+performance.
+Risks with regard to the external
+purchase of crude oil: A significant
+amount of crude oil as needed by the
+Company is satisfied through external
+purchases. In recent years, especially
+influenced by the mismatch between
+supply and demand of crude oil,
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+geopolitics, global economic growth and
+other factors, the prices of crude oil
+fell sharply. Additionally, the supply of
+crude oil may even be interrupted due to
+some extreme major incidents in certain
+regions. Although the Company has taken
+flexible counter measures, it may not fully
+avoid risks associated with any significant
+fluctuation of international crude oil
+prices and sudden disruption of supply of
+crude oil from certain regions.
+Risks with regard to the operation
+and natural disasters: The process of
+petroleum chemical production is exposed
+to the risks of inflammation, explosion
+and environmental pollution and is
+vulnerable to natural disasters. Such
+contingencies may cause serious impacts
+to the community, major financial losses
+to the Company and grievous injuries to
+people. The Company has always been
+paying great emphasis on the safety
+of production, and has implemented
+a strict HSE management system as
+an effort to avoid such risks as far as
+possible. Meanwhile, the main assets
+and inventories of the Company as well
+as the possibility of damage to a third
+party have been insured. However, such
+measures may not shield the Company
+from financial losses or adverse impact
+resulting from such contingencies.
+Investment risks: Petroleum and
+chemical sector is a capital intensive
+industry. Although the Company adopted
+a prudent investment strategy and
+conducted rigorous feasibility study
+on each investment project, some
+certain investment risks may exist in
+the sense that expected returns may
+not be achieved due to major changes
+in factors such as market environment,
+prices of equipment and raw materials,
+and construction period during the
+implementation of the projects.
+In the course of its production and
+operations, the Company will actively
+take various measures to circumvent
+operational risks. However, in practice,
+it may not be possible to prevent the
+occurrence of all risks and uncertainties
+described below.
+Ratio between the dividends and the net profit attributed to the shareholders
+in the consolidated statement for the dividend year (RMB million).
+Net profits attributed to the shareholders of the listed company shown
+0
+1
+5
+5
+0
+1
+0
+1
+5
+5
+1
+0
+0
+1
+5
+5
+0
+1
+0
+1
+5
+5
+1
+1
+0
+Chen Xiaojin
+1
+0
+Cao Yaofeng
+5
+5
+0
+1
+0
+Dai Houliang
+5
+5
+5
+1
+1
+0
+Liu Yun
+5
+5
+0
+1
+1
+0
+0
+1
+0
+No directors were absent from two consecutive meetings of the Board.
+Mr. Wang Tianpu has tendered his resignation to the Board on 27 April 2015 and resigned from all his positions in Sinopec Corp., including non-executive
+Director and Vice Chairman, effective from 27 April 2015.
+The final cash dividend will be distributed
+on or before 30 June 2016 (Thursday) to all
+shareholders whose names appear on the
+register of members of Sinopec Corp. on the
+record date of 23 June 2016 (Thursday).
+In order to qualify for the final dividend
+for H shares, the holders of H shares must
+lodge all share certificates accompanied
+by the transfer documents with Hong Kong
+Registrars Limited located at 1712-1716
+17th Floor Hopewell Centre, 183 Queen's
+Road East, Wan Chai Hong Kong before
+4:30 p.m. on 16 June 2016 (Thursday)
+for registration. The H shares register of
+members of Sinopec Corp. will be closed
+from 17 June 2016 (Friday) to 23 June 2015
+(Thursday) (both dates are inclusive).
+52
+42
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+The dividend will be denominated and
+declared in RMB, and distributed to the
+domestic shareholders and investors
+participating in the Shanghai-Hong Kong
+Stock Connect Program in RMB and to
+the overseas shareholders in Hong Kong
+Dollar. The exchange rate for the dividend
+calculation in Hong Kong Dollar is based
+on the average benchmark exchange rate of
+RMB against Hong Kong Dollar as published
+by the People's Bank of China one week
+preceding the date of the declaration of such
+dividend.
+In accordance with the Enterprise Income
+Tax Law of the People's Republic of China
+which came into effect on 1 January 2008
+and its implementation regulations, Sinopec
+Corp. is required to withhold and pay
+enterprise income tax at the rate of 10%
+on behalf of the non-resident enterprise
+shareholders whose names appear on the
+register of members for H Shares of Sinopec
+Corp. when distributing cash dividends or
+issuing bonus shares by way of capitalisation
+from retained earnings. Any H Shares of
+the Sinopec Corp. which is not registered
+under the name of an individual shareholder,
+including those registered under HKSCC
+Nominees Limited, other nominees, agents
+or trustees, or other organisations or groups,
+shall be deemed as shares held by non-
+resident enterprise shareholders. Therefore,
+on this basis, enterprise income tax shall
+be withheld from dividends payable to such
+shareholders. If holders of H Shares intend to
+change its shareholder status, please enquire
+about the relevant procedures with your
+agents or trustees. Sinopec Corp. will strictly
+comply with the law or the requirements
+of the relevant government authority to
+withhold and pay enterprise income tax on
+behalf of the relevant shareholders based on
+the registration of members for H shares of
+Sinopec Corp. as at the record date.
+If the individual holders of the H shares
+who are Hong Kong or Macau residents or
+residents of the countries which had an
+agreed tax rate of 10% for the cash dividends
+or bonus shares by way of capitalisation
+from retained earnings with China under
+the relevant tax agreement, Sinopec Corp.
+should withhold and pay individual income
+tax on behalf of the relevant shareholders
+at a rate of 10%. Should the individual
+holders of the H Shares are residents of the
+countries which had an agreed tax rate of
+less than 10% with China under the relevant
+tax agreement, Sinopec Corp. shall withhold
+and pay individual income tax on behalf
+of the relevant shareholders at a rate of
+10%. In that case, if the relevant individual
+holders of the H Shares wish to reclaim
+the extra amount withheld (Extra Amount)
+due to the application of 10% tax rate,
+Sinopec Corp. would apply for the relevant
+agreed preferential tax treatment provided
+that the relevant shareholders submit the
+evidence required by the notice of the tax
+agreement to the share register of Sinopec
+Corp. in a timely manner. Sinopec Corp. will
+assist with the tax refund after the approval
+of the competent tax authority. Should
+the individual holders of the H Shares are
+residents of the countries which had an
+agreed tax rate of over 10% but less than
+20% with China under the tax agreement,
+Sinopec Corp. shall withhold and pay the
+individual income tax at the agreed actual
+rate in accordance with the relevant tax
+agreement. In the case that the individual
+holders of the H Shares are residents of the
+countries which had an agreed tax rate of
+20% with China, or which has not entered
+into any tax agreement with China, or
+otherwise, Sinopec Corp. shall withhold and
+pay the individual income tax at a rate of
+20%-
+Pursuant to the Notice on the Tax Policies
+Related to the Pilot Program of the
+At the 5th meeting of the sixth session of the
+Board, the Board approved the proposal to
+distribute a final cash dividend of RMB 0.06
+(tax inclusive) per share, combining with an
+interim distributed dividend of RMB 0.09 (tax
+inclusive) per share, the total dividend for
+the whole year is RMB 0.15 (tax included)
+per share.
+Shanghai-Hong Kong Stock Connect (E
+港股票市場交易互聯互通機制試點有關稅收政策
+(Caishui [2014] No. 81):
+For investors of the Hong Kong Stock
+Exchange (including enterprises and
+individuals) investing in the A Shares of
+Sinopec Corp. through Shanghai-Hong Kong
+Stock Connect Program, the Company
+will withhold and pay income taxes at the
+rate of 10% on behalf of those investors
+and will report to the tax authorities for
+the withholding. For investors who are tax
+residents of other countries, whose country
+of domicile is a country having entered into a
+tax treaty with the PRC stipulating a dividend
+tax rate of lower than 10%, the enterprises
+and individuals may, or may entrust a
+withholding agent to, apply to the competent
+tax authorities for the entitlement of the rate
+under such tax treaty. Upon approval by the
+tax authorities, the amount paid in excess
+of the tax payable based on the tax rate
+according to such tax treaty will be refunded.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+53
+Report of the Board of Directors
+54
+Report of the Board of Directors
+REPORT OF THE BOARD OF DIRECTORS (CONTINUED)
+The dividend distribution and bonus shares declared by Sinopec Corp. in the past three years are as follows:
+Cash dividends (RMB/Share, tax inclusive)
+Total amount of cash dividends (RMB million, tax inclusive)
+For domestic investors investing in the H
+Shares of Sinopec Corp. through Shanghai-
+Hong Kong Stock Connect Program, the
+company shall withhold and pay income tax
+at the rate of 20% on behalf of individual
+investors and securities investment funds.
+The company will not withhold or pay
+the income tax of dividends for domestic
+enterprise investors and those domestic
+enterprise investors shall report and pay the
+relevant tax by themselves.
+Ma Weihua
+Jiang Xiaoming
+Andrew Y. Yan
+Bao Guoming
+Proposals for dividend distribution
+The profit distribution policy of Sinopec
+Corp. maintains consistency and steadiness,
+and moreover gives further consideration
+to the long-term interests of the Company,
+overall interests of all the shareholders and
+the sustainable development of the Company.
+Sinopec Corp. gives priority to adopting cash
+dividends for profit distribution, and is able
+to deliver an interim profit distribution. When
+the net profits and retained earnings of the
+Company. are positive in current year, and
+in the event that the cash flow of Sinopec
+Corp. can satisfy the normal operation and
+sustainable development, Sinopec Corp.
+should adopt cash dividends, and the
+distribution profits in cash every year are
+no less than 30% of the net profits of the
+Company in current year.
+4 MEETINGS HELD BY THE BOARD
+COMMITTEES
+During the reporting period, the Audit
+Committee held five (5) meetings. Each of
+the Strategy Committee, the Remuneration
+Committee and the Social Responsibility
+Management Committee held one (1)
+meeting. All members of each committee
+had attended the meetings. Details of those
+meetings are as follows:
+(1) The 14th Audit Committee meeting of
+the fifth session of the Board was held
+by written resolution on 26 January
+2015, whereby the proposal in relation
+to the internal control manual of
+Sinopec Corp. (2015) was approved in
+this meeting.
+(2) The 15th Audit Committee meeting of
+the fifth session of the Board was held
+by on site meeting on 18 March 2015,
+whereby the proposals in relation to
+the following matters were approved
+in the meeting: (i) the annual report
+of Sinopec Corp. for the year 2014,
+(ii) 20F of Sinopec Corp. for the year
+2014, (iii) the financial statements of
+Sinopec Corp. for the year 2014, (iv)
+the internal control assessment report
+for the year 2014, (v) the work report
+on the internal auditing work for the
+year 2014, (vi) the performance report
+of Audit Committee for the year 2014,
+(vii) the reports on the auditing of the
+financial statements for the year 2014
+delivered by the domestic and overseas
+auditors.
+(3) The 16th meeting of the fifth session of
+the Board was held by written resolution
+on 28 April 2015, whereby the proposal
+in relation to the first quarterly report
+for three months ended 31 March 2015
+was approved in the meeting.
+(4) The 1st meeting of the sixth session of
+the Audit Committee was held by on site
+meeting on 21 August 2015, whereby
+(i) the interim report for the first half
+of 2015, (ii) the financial statements
+for the first half year of 2015, (iii) the
+reports on internal auditing work for the
+first half of 2015, (iv) the continuing
+connected transactions for three years
+from 2016 to 2018, and (v) the Equity
+Transfer of Jingtian Co. were approved
+in the meeting.
+(5) The 2nd meeting of the sixth session
+of the Audit Committee was held by
+written resolution on 29 October 2015,
+whereby the third quarterly report for
+The profit distribution plan of Sinopec Corp.
+for the current year will be carried out in
+accordance with the policy and procedures
+stipulated as per the articles of association,
+with the advice of minority shareholders
+being heard and considered, meanwhile, the
+independent directors will issue independent
+opinions.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+Report of the Board of Directors
+Report of the Board of Directors
+REPORT OF THE BOARD OF DIRECTORS (CONTINUED)
+the year 2015 and entering into the
+Joint Venture Agreement with SAMC
+in regard to the formation of Gaoqiao
+Petrochemical Co. were approved in the
+meeting.
+(6) The 3rd meeting of the fifth session of
+the Strategy Committee was held by
+on site meeting on 18 March 2015,
+whereby the plan of investments for the
+year 2015 was approved in the meeting.
+(7) The 3rd meeting of the fifth session
+of the Remuneration Committee was
+held by on site meeting on 18 March
+2015, whereby the proposals on
+implementation of the rules of the
+remuneration of directors, supervisors
+and other senior management for 2014
+and the remuneration of Directors of
+the Sixth Session of the Board, and
+remuneration of Supervisors of the Sixth
+Session of the Supervisory Committee
+were approved in the meeting.
+(8) The 3rd meeting of the fifth session of
+the Social Responsibility Management
+Committee was held by on site meeting
+on 18 March 2015, whereby the 2014
+Communication on Progress for the
+Sustainable Development Report of
+Sinopec Corp. was approved in the
+meeting.
+5 BUSINESS PERFORMANCE
+The financial results of the Company for
+the year ended 31 December 2015, which
+is prepared in accordance with IFRS and
+the financial position as at that date and
+the accompanying analysis are set out from
+page 136 to page 192 in this annual report.
+A fair review of the Company's business,
+a discussions and analysis on business
+performance using financial key performance
+indicators and the material factors
+underlying our results and financial position
+during the reporting period, particulars of
+significant events affecting the Company
+and the outlook of the Company's business
+are discussed throughout this annual report
+included in the chapters of Chairman's
+Statement, Business Review and Prospects,
+Management's Discussion and Analysis and
+Significant Events. All above discussions
+constitute parts of the report of the Board of
+Directors.
+6
+DIVIDEND
+51
+0
+2006.05-2018.05
+DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES (CONTINUED)
+Supervisemployees
+Senior
+19
+No
+125.00
+2012.05-2015.05
+No
+125.00
+2010.05.2015.05
+Executive Director
+Former Independent Non-
+Executive Director
+Former Independent Non-
+Executive Director
+64
+Female
+Bao Guoming
+67
+Male
+Ma Weihua
+No
+125.00
+2009.05.2015.05
+Danagement and E
+64
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+Liu Yun
+Wang Yajun
+Yu Renming
+Jiang Zhenying
+Zou Huiping
+DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES (CONTINUED)
+Directors, Supervisors,
+Senior Management and Employees
+Senior Management and Employees
+Directors, Supervisors,
+55
+Former Independent Non-
+65
+Exploration Bureau; in March
+2011, he was appointed as
+Director General and Secretary
+of CPC Committee of China
+Petrochemical News. In March
+2015, he was appointed as
+Director General of the General
+Office of China Petrochemical
+Corporation, Director General of
+Policy Research Department of
+the General Office and Director
+General of President of Sinopec
+Corp. In August 2015, he was
+appointed as Director General
+of Board of Directors Office
+under China Petrochemical
+Corporation; and in May 2015,
+he was elected as Supervisor of
+Sinopec Corp.
+Zhou Hengyou, aged 52,
+Supervisor of Sinopec Corp.
+Mr. Zhou is a professor
+level senior administration
+engineer and a postgraduate.
+In December 1998, Mr. Zhou
+was appointed as a standing
+committee member of CPC
+Committee and Deputy
+Labour Union Chairman of
+Jiangsu Petroleum Exploration
+Bureau; in February 1999, he
+was appointed as a standing
+committee member of CPC
+Committee and Labour Union
+Chairman of Jiangsu Petroleum
+Exploration Bureau of China
+Petrochemical Corporation;
+in December 2002, he was
+appointed as Deputy Secretary
+of CPC Committee and Labour
+Union Chairman of Jiangsu
+Petroleum Exploration Bureau;
+in June 2004, he was appointed
+as Deputy Secretary of CPC
+Committee and Secretary of
+Supervisory Committee of
+Jiangsu Petroleum Exploration
+Bureau; in August 2005, he was
+appointed as Secretary of CPC
+Committee of Jiangsu Petroleum
+Liu Zhongyun, aged 52,
+Supervisor of Sinopec Corp.
+Mr. Liu is a professor level
+senior engineer with a doctorate
+in engineering. In December
+2002, he was appointed as a
+standing committee member of
+CPC Committee and Director
+of Organisation Department
+of Shengli Petroleum
+Administration Bureau; in
+November 2004, he was
+appointed as Deputy Secretary
+of CPC Committee of Shengli
+Petroleum Administration
+Bureau; in December
+2005, he was appointed as
+Manager of Sinopec Shengli
+Oilfield Branch; in December
+2008, he was appointed as
+Secretary of CPC Committee
+of Sinopec International
+Petroleum Exploration and
+Production Corporation; in July
+2010, he was appointed as
+General Manager of Sinopec
+Northwest Oilfield Company,
+Director General of Northwest
+Petroleum Bureau under China
+Petrochemical Corporation.
+Since August 2014, Mr. Liu
+has acted as Assistant to
+President and Director General
+of HR Department of China
+Petrochemical Corporation, and
+in May 2015, he was elected as
+Supervisor of Sinopec Corp.
+Corp.; in June 2006, he was
+appointed as Deputy CFO of
+Sinopec Corp.; in February
+2009, he was appointed as
+Chief Accountant of China
+Petrochemical Corporation; in
+May 2009, he was elected as
+a Director of Sinopec Corp.; in
+May 2012, he was appointed
+concurrently as the Chairman
+of Sinopec Finance Co., Ltd.;
+in September 2013, he was
+appointed concurrently as
+Chairman of Sinopec Insurance
+Co., Ltd.; and in May 2015, he
+was elected as Chairman of
+the Board of Supervisors of
+Sinopec Corp.
+Petrochemical Corporation;
+in February 2000, he was
+appointed as Deputy Director
+General of Finance Department
+of Sinopec Corp.; in January
+2001, he was appointed as
+Director General of Finance
+Department of Sinopec
+Liu Yun, aged 59, Chairman
+of the Board of Supervisors
+of Sinopec Corp. Mr. Liu
+is a professor level senior
+accountant with a master
+degree. In December 1998,
+he was appointed as Deputy
+Director General of Finance
+Department of China
+(2) Supervisors
+Zhou Hengyou
+Liu Zhongyun
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+Zou Huiping, aged 55,
+Supervisor of Sinopec Corp. Mr.
+Zou is a professor level senior
+accountant with a university
+diploma. In November 1998,
+he was appointed as Chief
+Accountant in Guangzhou
+Petrochemical General Plant
+of China Petrochemical
+Corporation; in February 2000,
+he was appointed as Deputy
+Director General of Finance &
+Assets Department of China
+Petrochemical Corporation;
+in December 2001, he
+was appointed as Deputy
+Director General of Finance &
+Planning Department of China
+Petrochemical Corporation; in
+March 2006, he was appointed
+as Director General of Finance
+& Assets Department of Assets
+Management Co., Ltd. of China
+Petrochemical Corporation; in
+March 2006, he was appointed
+as Director General of Auditing
+Department of Sinopec Corp.;
+and in May 2006, he was
+elected as Supervisor of Sinopec
+Corp.
+71
+Chen Xiaojin
+Wang Tianpu
+64
+Male
+Fu Chengyu
+Company
+Whether paid
+by the holding
+(RMB 1,000,
+before tax)
+Tenure
+Position in Sinopec Corp.
+Age
+Gender
+Name
+paid by Sinopec
+Corp. in 2015
+Remuneration
+Executive Director
+0
+0
+No
+175.0
+Male
+53
+Former Chairman
+Former Vice Chairman
+2011.05-2015.05
+Yes
+2009.05.2015.05
+Yes
+2009.05.2015.05
+Former Board Director
+Former Board Director
+59
+Male
+Liu Yun
+62
+Male
+Male
+Yes
+2009.05.2015.05
+Former Vice Chairman
+62
+Male
+Zhang Yaocang
+Yes
+2006.05-2015.04
+Yes
+Cao Yaofeng
+Jiang Zhenying, aged 51,
+Employee's Representative
+Supervisor of Sinopec Corp. Mr.
+Jiang is a professor level senior
+economist with a doctor degree.
+In December 1998, he was
+appointed as the Vice President
+of the China Petrochemical
+Supplies & Equipment Co.,
+Ltd.; in February 2000, he
+was appointed as the Deputy
+Director General of Sinopec
+Procurement Management
+Department; in December
+2001, he was appointed as the
+Director General of Sinopec
+Procurement Management
+Department and in November
+2005 he concurrently held the
+positions of Chairman of Board
+of Directors, President and
+Secretary of CPC Committee
+of China Petrochemical
+International Co., Ltd.; in
+March 2006, he was appointed
+as the Director General
+(General Manager), Executive
+Director and Secretary of the
+CPC Committee of Sinopec
+Procurement Management
+Department (Sinopec
+International Co. Ltd.); in April
+2010, he was appointed as
+the Director General (General
+Manager), Executive Director
+and Deputy Secretary of the
+CPC Committee of Sinopec
+Procurement Management
+Department (Sinopec
+International Co. Ltd); in
+November 2014, he was
+appointed as Director General
+of Security Management
+Department of Sinopec Corp.;
+and in December 2010, he
+was elected as the Employee's
+Representative Supervisor of
+Sinopec Corp.
+0
+lo
+No
+551.9
+2010.12 2018.05
+Employee's
+52
+Male
+Yu Renming
+Supervisor
+Representative
+0
+0
+No
+551.9
+2010.12 2018.05
+Employee's
+51
+Male
+Representative
+Supervisor
+Wang Yajun
+Male
+Position in Sinopec Corp.
+Age
+59
+Male
+Xu Bin
+Gender
+Name
+by the holding
+Whether paid
+(RMB1,000,
+before tax)
+Jiang Zhenying
+paid by Sinopec
+Corp. in 2015
+Supervisor
+Representative
+0
+0
+No
+257.9
+2015.05.2018.05
+Employee's
+58
+Remuneration
+0
+0
+No
+0
+Yes
+2015.05.2018.05
+Chairman, the Board
+59
+Male
+Liu Yun
+2014
+2015
+0
+Equity interests in Sinopec Corp.
+(as of 31 December)
+Position in
+Sinopec Corp.
+Age
+Gender
+Name
+List of Members of the Board of Supervisors
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+66
+Wang Yajun, aged 58,
+Empolyee's Representative
+Supervisor of Sinopec Corp.
+Mr. Wang is a professor level
+senior administration engineer
+with a university diploma.
+In December 2004, he was
+appointed as Vice Secretary of
+CPC committee, Secretary of
+Discipline Inspection Committee
+and Labour Union Chairman
+of Zhongyuan Petroleum
+Exploration Bureau of China
+Petrochemical Corporation.
+In November 2010, he was
+appointed as Party Secretary of
+CPC committee, of Zhongyuan
+Petroleum Exploration Bureau.
+In March 2015, Mr. Wang was
+appointed as Secretary of CPC
+of China Sinopec International
+Petroleum Exploration and
+Development Co., Ltd; and in
+May 2015, he was elected as
+Employee's Representative
+Supervisor of Sinopec Corp.
+Yu Renming, aged 52,
+Employee's Representative
+Supervisor of Sinopec Corp.
+Mr. Yu is a professor level
+senior engineer with a university
+diploma. In June 2000, he
+was appointed as the Deputy
+General Manager of Sinopec
+Zhenhai Refining & Chemical
+Co., Ltd.; in June 2003, he
+was appointed as the Board
+Director and Deputy General
+Manager of Sinopec Zhenhai
+Refining & Chemical Co.,
+Ltd.; in September 2006, he
+was appointed as the Vice
+President of Sinopec Zhenhai
+Refining & Chemical Company;
+in September 2007, he was
+appointed as the President
+and the Vice Secretary of
+CPC committee of Sinopec
+Zhenhai Refining & Chemical
+Company; in January 2008, he
+was appointed as the Director
+General of Sinopec Production
+Management Department;
+and in December 2010, he
+was elected as Employee's
+Representative Supervisor of
+Sinopec Corp.
+Tenure
+2015.05-2018.05
+of Supervisors
+Male
+551.9
+2006.05.2018.05
+Supervisor
+55
+Male
+Zou Huiping
+0
+0
+Yes
+Liu Zhongyun
+2015.05.2018.05
+52
+Male
+Zhou Hengyou
+0
+0
+Yes
+2015.05.2018.05
+Supervisor
+52
+Supervisor
+Independent Non-
+61
+Male
+Policy Committee of People's
+Bank of China. Mr. Fan is
+recognised as one of the
+National Young and Middle-
+Aged Experts with Outstanding
+Contributions. From May 2015
+to the present, he has acted
+as Independent Non-executive
+Director of Sinopec Corp.
+Fan Gang, aged 61,
+Independent Non-executive
+Director of Sinopec Corp.
+Mr. Fan has a doctorate in
+economics. He presently acts
+as Vice President of China
+Society of Economic Reform,
+President of China Reform
+Foundation, Head of the
+National Economic Research
+Institution, President of
+China Development Institute
+(Shenzhen) and an economics
+professor at Peking University.
+He began to work for Chinese
+Academy of Social Sciences
+in 1988, and subsequently
+served as Director of Editorial
+Department for the Economic
+Research Journal between
+1992 and 1993 and as Deputy
+Head of the Institute of
+Economics Chinese Academy
+of Social Sciences between
+1994 and 1995. In 1996, he
+was redesignated to work for
+China Society of Economic
+Reform, and subsequently
+founded the National Economic
+Research Institution. From
+2006 to 2010, and from 2015
+to the present, he has served
+as a member of the Monetary
+Minmetals Development Co.,
+Ltd, Origin Agritech Limited. He
+has served as the economist
+and senior economist at the
+Economic Research Centre
+of the Asian Development
+Bank between 1989 and
+2000; chief economist at
+the Representative office of
+the Asian Development Bank
+in China between 2000 and
+2004; deputy representative
+at the Representative Office
+of the Asian Development
+Bank in China between 2004
+and 2007 and the deputy
+secretary-general of the
+China Development Research
+Foundation between 2007
+and 2010. From May 2015
+to the present, he has acted
+as Independent Non-executive
+Director of Sinopec Corp.
+Tang Min, aged 62,
+Independent Non-executive
+Director of Sinopec Corp.
+Mr. Tang has a doctorate
+in economics. He presently
+acts as a Counsellor of the
+State Council of the PRC and
+the Executive Vice Chairman
+of YouChange China Social
+Entrepreneur Foundation,
+Independent Director of
+Investment Fund. And from
+May 2012 to the present, he
+has acted as Independent Non-
+executive Director of Sinopec
+Corp.
+Markets Partnership and
+Director of Hong Kong Office
+of AIG Asia Infrastructural
+Andrew Y. Yan, aged 58,
+Independent Non-executive
+Director of Sinopec Corp. Mr.
+Yan is the founding Managing
+Partner of SAIF Partners.
+He studied in Nanjing
+University of Aeronautics and
+Astronautics, Peking University
+and Princeton University
+and earned a master degree
+from Princeton University.
+Presently, he acts as the
+Independent Non-executive
+Director of China Resources
+Land Limited, CPMC Holdings
+Limited and Cogobuy Group,
+the Non-executive Director
+of Digital China Holdings
+Limited, China Huiyuan Juice
+Group Limited, Feng Deli
+Holdings Limited and Guodian
+Technology & Environment
+Group Corporation Limited; the
+Independent Director of Beijing
+BlueFocus Brand Management
+Consulting Co., Ltd, TCL Group
+and Sky Solar Holdings Ltd.;
+and the Director of ATA Co.,
+Ltd. From 1989 to 1994, he
+acted as the Economist of the
+World Bank headquarters in
+Washington, Senior Fellow of
+Hudson Institute, an American
+famous research think tank,
+and acted as the director
+of APAC Strategic Planning
+& Business Development
+of Sprint International
+Corporation; between 1994
+and 2001, he acted as the
+Managing Director of Emerging
+British Investment Bank, and
+Independent Director of China
+Oilfield Services Co., Ltd. From
+May 2012 to the present, he
+has acted as Independent Non-
+executive Director of Sinopec
+Corp.
+Jiang Xiaoming, aged 62,
+Independent Non-executive
+Director of Sinopec Corp.
+Mr. Jiang has a doctorate
+in economics. Presently, he
+acts as the member of the
+national committee of CPPCC,
+director of China Foundation
+for Disabled Persons, member
+of the United Nations Board
+of Investment, Chairman of
+the Board of Directors of Hong
+Kong Saibo International Co.
+Ltd., Independent Director of
+COSCO International, Senior
+Fellow of the University of
+Cambridge Business School,
+and trustee of University of
+Cambridge China Development
+Fund. Between 1992 and
+1998, he acted as the Vice
+President of United Nations
+Staff Retirement Fund;
+between 1999 and 2003, he
+acted as the Chairman of the
+Board of Directors of Frasers
+Property (China) Co., Ltd.; and
+he has previously acted as the
+Board Director of JSW Energy
+Ltd., member of the Advisory
+Committee of American Capital
+Group and Rothschild, the
+Fan Gang
+Tang Min
+Andrew Y. Yan
+Jiang Xiaoming
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+(Director General Level)
+and Deputy Commander
+of Sichuan-East China Gas
+Transmission Construction
+Project Headquarter; in July.
+2010, he served as Deputy
+Chief Geologist of Sinopec
+Corp.; in August 2013, he was
+appointed as Chief Geologist
+of Sinopec Corp.; in February
+2016, he was elected as Board
+Director of Sinopec Corp., and
+in December 2015, he served
+as Vice President of China
+Petrochemical Corporation
+and appointed as Senior Vice
+President of Sinopec Corp.
+Ma Yongsheng, aged 54,
+Board Director and Senior Vice
+President of Sinopec Corp.
+Mr. Ma is a professor level
+senior engineer with a Ph.D.
+degree and an academician
+of the Chinese Academy of
+Engineering. In April 2002,
+he was appointed as Chief
+Geologist of Sinopec Southern
+Exploration and Production
+Branch; in April 2006, he was
+appointed as Executive Deputy
+Manager (presiding over the
+work), Chief Geologist of
+Sinopec Southern Exploration
+and Production Branch;
+in January 2007, he was
+appointed as Manager and
+Party Secretary of Sinopec
+Southern Exploration and
+Production Branch; in
+March 2007, he served as
+General Manager and Deputy
+Party Secretary of Sinopec
+Exploration Branch; in May
+2007, he was appointed
+as Deputy Commander of
+Sichuan-East China Gas
+Transmission Construction
+Project Headquarter of Sinopec
+Corp., General Manager
+and Deputy Secretary of
+CPC Committee of Sinopec
+Exploration Branch; in May
+2008, he was appointed as
+Deputy Director General of
+Exploration and Production
+Department of Sinopec Corp.
+Co. Ltd and Vice Chairman of
+Board of Directors of Sinopec
+International Petroleum
+Exploration and Production
+Corporation; and in May 2015,
+he was elected as Board
+Director and Senior Vice
+President of Sinopec Corp.
+Jiao Fangzheng, aged 53,
+Board Director and Senior Vice
+President of Sinopec Corp. Mr.
+Jiao is a professor level senior
+engineer with a Ph.D. degree.
+In January 1999, he was
+appointed as Chief Geologist
+in Zhongyuan Petroleum
+Exploration Bureau of China
+Petrochemical Corporation;
+in February 2000, he was
+appointed as Vice President
+and Chief Geologist of Sinopec
+Zhongyuan Oilfield Company;
+in July 2000, he was appointed
+as Deputy Director General of
+Sinopec Petroleum Exploration
+& Development Research
+Institute; in March 2001, he
+was appointed as Deputy
+Director General of Sinopec
+Exploration & Production
+Department; in June 2004, he
+was appointed as President
+of Sinopec Northwest Oilfield
+Company; in October 2006,
+he was appointed as Vice
+President of Sinopec Corp. in
+July 2010, he was appointed
+as the Director General
+of Sinopec Exploration &
+Production Department; in
+July 2014, he was appointed
+as Vice President of China
+Petrochemical Corporation;
+in September 2014, he was
+elected concurrently as
+Chairman of Board of Directors
+of Sinopec Oilfield Service
+Zhang Haichao, aged 58,
+Board Director and Senior
+Vice President of Sinopec
+Corp. Mr. Zhang is a professor
+level senior economist with
+a master degree. In March
+1998, he was appointed as
+Vice President of Zhejiang
+Petroleum Corporation; in
+September 1999, he was
+appointed as President
+of Zhejiang Petroleum
+Corporation; in February 2000,
+he was appointed as President
+of Sinopec Zhejiang Petroleum
+Co., Ltd.; in April 2003, he
+was elected as Employee's
+Representative Supervisor of
+Sinopec Corp.; in April 2004,
+he served as Chairman of
+Board of Directors of Sinopec-
+BP Zhejiang Petroleum Sales
+Co., Ltd.; in October 2004, he
+served as Secretary of CPC
+Committee, Vice Chairman of
+Board of Directors, and Vice
+President of Sinopec Sales
+Co., Ltd.; in November 2005
+he served as Vice President
+of Sinopec Corp., Secretary
+of CPC Committee, Chairman
+of Board of Directors, and
+President of Sinopec Sales
+Co., Ltd.; in June 2006, he
+served as Chairman of Board
+of Directors, and President
+of Sinopec Sales Co., Ltd.; in
+July 2014, he was appointed
+as Vice President of China
+Petrochemical Corporation;
+and in May 2015, he was
+elected as Board Director
+and Senior Vice President of
+Sinopec Corp.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+63
+Directors, Supervisors,
+Senior Management and Employees
+59
+Male
+Wang Yupu
+2014
+2015
+Company
+(as at 31 December)
+Equity interests in Sinopec Corp.
+Whether paid
+Ma Yongsheng
+by the holding
+Sinopec Corp.
+Remuneration
+paid by
+Tenure
+Position in
+Sinopec Corp.
+Age
+Gender
+Name
+List of Members of the Board
+DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES (CONTINUED)
+in 2015
+(RMB 1,000,
+before tax)
+Jiao Fangzheng
+Zhang Haichao
+62
+(1) Directors
+MANAGEMENT
+DIRECTORS, SUPERVISORS
+AND OTHER SENIOR
+1 INTRODUCTION OF
+Zhang Jianhua
+Li Chunguang
+DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES
+Wang Yupu
+Report of the Board of Supervisors
+Wang Yupu, aged 59, Chairman
+of Board of Directors of
+Sinopec Corp. Mr. Wang is a
+professor level senior engineer
+with a Ph.D. degree and an
+academician of the Chinese
+Academy of Engineering.
+In October 2000, he was
+appointed as Director, Deputy
+General Manager of Daqing
+Oilfield Company Limited;
+in December 2003, he was
+appointed as Chairman and
+General Manager of Daqing
+Oilfield Company Limited;
+in March 2008, he was
+appointed as Chairman and
+General Manager (Director-
+General) of Daqing Oilfield
+Company Limited (Daqing
+Petroleum Administration
+Bureau); in August 2009,
+he was appointed as Vice
+Governor of the People's
+Government of Heilongjiang
+Province. In July 2010, he
+was elected as Secretary of
+59
+Chairman of the Board of Supervisors
+Beijing, China, 29 March 2016
+Liu Yun
+In 2016, the Board of Supervisors and each
+supervisor will continue to follow the principle
+of diligence and integrity, earnestly perform
+the duties of supervision as delegated by
+the shareholders, actively participate in the
+process supervision of significant decision
+makings, increase the strength of inspection and
+supervision on subsidiaries and protect Sinopec
+Corp.'s benefit and its shareholders' interests.
+Fourthly, all connected transactions between the
+Company and Sinopec Group were in compliance
+with the relevant rules and regulations of
+listing venues. All the connected transaction
+prices were fair and reasonable. The prices
+of Sinopec Corp.'s transactions concerning
+asset restructuring and equity transfer in 2015
+were fair, equitable and reasonable. No insider
+trading or asset loss which is detrimental to the
+interests of Sinopec Corp. or its shareholders
+was found in these transactions.
+responsibilities and promoted the sustainable
+development of social economy. Information
+disclosed in the sustainable development report
+was in compliance with requirements made by
+Shanghai Stock Exchange for listed companies
+with regard to the publication of social
+responsibility report.
+Thirdly, Sinopec Corp.'s internal control system
+is robust and effective, no material defects of
+internal control was found. In the meantime,
+Sinopec Corp. actively fulfilled its social
+Secondly, the reports and financial statements
+prepared by Sinopec Corp. in 2015 complied
+with the relevant regulation of domestic and
+overseas securities regulators, the disclosed
+information truly, accurately, completely
+and fairly reflected Sinopec Corp.'s financial
+status and operation performance. The
+dividend distribution plan was made after
+comprehensively consideration of the long-term
+interests of shareholders and Sinopec Corp. No
+violation of confidential provisions of persons
+who prepared and reviewed the report was
+found.
+Firstly, the Board diligently fulfilled its
+obligations and exercised its rights under
+the PRC Company Law and the Articles of
+Association, and made informed decisions on
+major issues concerning change in growth mode,
+structure adjustment, as well as development
+and profitability. The senior management
+diligently implemented the resolutions approved
+by the Board, continued to deepen the reform,
+focus on innovations, regulate operations,
+intensified strict management and strived
+to lower the costs and enhance efficiency,
+committed to achieving the aim of sustaining
+profit and growth set by the Board. During
+the reporting period, except for former Vice
+Chairman Mr. Wang Tianpu was involved
+in alleged violation of laws the Board of
+Supervisors did not discover any behaviors of
+any other director or senior management which
+violated laws, regulations, and the Articles of
+Association, or were detrimental to the interests
+of Sinopec Corp. or its shareholders.
+transactions and capital operations under
+strict guidelines, and endeavored to avoid and
+control the risk of production management, all
+contributing to a hard-won business result. The
+Board of Supervisors had no objection to the
+supervised issues during this reporting period.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+Chairman
+the Party Leadership Group,
+Vice Chairman, and First
+Secretary of the Secretariat of
+All China Federation of Trade
+Unions; in March 2013, he was
+appointed as Deputy Secretary
+of the Party Leadership Group
+(Minister Level) of the Chinese
+Academy of Engineering; in
+June 2014, he was appointed
+as Deputy Secretary of the
+Party Leadership Group and
+Vice President (Minister Level)
+of the Chinese Academy of
+Engineering. In April 2015,
+Mr. Wang acts as Chairman
+and Secretary of the Party
+Leadership Group of China
+Petrochemical Corporation. Mr.
+Wang is an Alternate Member
+of the 17th CPC Central
+Committee and a Member
+of the 18th CPC Central
+Committee. In May 2015,
+Mr. Wang was appointed as
+Chairman of Board of Directors
+of Sinopec Corp.
+Zhang Jianhua, aged 51,
+Board Director and Senior
+Vice President of Sinopec
+Corp. Mr. Zhang is a professor
+level senior engineer with a
+Ph.D. degree. In April 1999,
+he was appointed as Vice
+President of Shanghai Gaoqiao
+Petrochemical Company
+of China Petrochemical
+Corporation; in February
+2000, he was appointed as
+Vice President of Sinopec
+Shanghai Gaoqiao Company;
+in September 2000, he was
+appointed as President of
+Sinopec Shanghai Gaoqiao
+Company; in April 2003,
+he was appointed as Vice
+President of Sinopec Corp.;
+in November 2003, he was
+appointed concurrently as
+Director General of Production
+and Operation Management
+Department of Sinopec Corp.; in
+March 2005, he was appointed
+as Senior Vice President of
+Sinopec Corp.; in June 2007,
+he was appointed concurrently
+as Chairman of Sinopec (Hong
+Kong) Co., Ltd; in October
+2014, he was appointed
+concurrently as Chairman of
+Sinopec Engineering (Group)
+Co., Ltd; and in May 2006, he
+was elected as Board Director
+and appointed as Senior Vice
+President of Sinopec Corp.
+Management and Employees
+Senior
+Supervisors,
+Senior Management and Employees
+Directors, Supervisors,
+61
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+Corp.; in August 2008, he was
+concurrently appointed as the
+Chairman of Petro-Cyberworks
+Information Technology Co.,
+Ltd. (PCITC) and Sinopec
+Technology Development
+Company; in August 2012, he
+was appointed concurrently
+as Chairman of Sinopec Great
+Wall Energy & Chemical Co.,
+Ltd.; in March 2013, he was
+appointed concurrently as
+Chairman of Sinopec Catalyst
+Co., Ltd.; and in May 2009, he
+was elected as Board Director
+and appointed as Senior Vice
+President of Sinopec Corp.
+in December 2004, he served
+concurrently as Chairman of
+Board of Directors of BASF-
+YPC Company Limited; in
+September 2005, he was
+appointed as Deputy CFO of
+Sinopec Corp.; in November
+2005, he was appointed as
+Vice President of Sinopec
+Corp.; in May 2006, he served
+as Board Director, Senior Vice
+President and CFO of Sinopec
+Li Chunguang, aged 60,
+Board Director and President
+of Sinopec Corp. and
+Vice President of China
+Petrochemical Corporation. Mr.
+Li is a professor level senior
+engineer with a university
+diploma. In August 1991,
+he was appointed as Vice
+President of Sinopec Sales
+Company North China Branch;
+in October 1995, he was
+appointed as Vice President
+of Sinopec Sales Company; in
+June 2001, he was appointed
+as President of Sinopec Sales
+Co., Ltd.; in December 2001,
+he was appointed as Director
+General of Oil Product Sales
+Department of Sinopec Corp.;
+in April 2002 he was elected as
+Chairman of Board of Directors
+and President of Sinopec Sales
+Co., Ltd.; in April 2003, he was
+appointed as Vice President of
+Sinopec Corp.; in November
+2005, he was appointed
+as Vice President of China
+Petrochemical Corporation;
+in May 2009, he was elected
+as Board Director of Sinopec
+Corp.; in May 2013, he was
+elected as Board Director and
+President of Sinopec Corp.
+in July 2002, he served as
+Vice Chairman of Board of
+Directors, President of Yangzi
+Petrochemical Co., Ltd. and
+Board Director of Yangzi
+Petrochemical Corporation;
+in December 2003, he served
+as Chairman of Board of
+Directors and President of
+Yangzi Petrochemical Co., Ltd.
+and concurrently as Chairman
+of Board of Directors of Yangzi
+Petrochemical Corporation;
+was appointed concurrently
+as Vice Chairman of Sinopec
+International Petroleum
+Exploration and Production
+Corporation; in September
+2014, he was appointed
+concurrently as Chairman of
+Board of Directors of Sinopec
+International Petroleum
+Exploration and Production
+Corporation; and in May
+2006, he was elected as
+Board Director and appointed
+as Senior Vice President of
+Sinopec Corp.
+Wang Zhigang, aged 58,
+Board Director and Senior Vice
+President of Sinopec Corp.
+Mr. Wang is a professor level
+senior engineer with a Ph.D.
+Degree. In February 2000,
+he was appointed as Vice
+President of Sinopec Shengli
+Oilfield Co., Ltd.; in June 2000,
+he served as Board Director
+and President of Shengli
+Oilfield Co., Ltd.; in November
+2001, he was appointed
+temporarily as Deputy
+Director General and Deputy
+Secretary of CPC Leading
+Group of Economic and Trade
+Commission, Ningxia Hui
+Autonomous Region; in April
+2003, he was appointed as
+Vice President of Sinopec
+Corp.; in June 2003, he was
+appointed concurrently as
+Director General of Exploration
+and Production Department of
+Sinopec Corp.; in March 2005,
+he was appointed as Senior
+Vice President of Sinopec
+Corp.; in January 2007, he
+Dai Houliang
+Wang Zhigang
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+60
+Senior
+Danagement and Employees
+Supervisors,
+Dai Houliang, aged 52, Board
+Director and Senior Vice
+President of Sinopec Corp. Mr.
+Dai is a professor level senior
+engineer with a Ph.D. degree.
+In December 1997, he was
+appointed as Vice President
+of Yangzi Petrochemical
+Corporation; in April 1998,
+he served as Board Director
+and Vice President of Yangzi
+Petrochemical Co., Ltd.;
+Tenure
+Li Chunguang
+60
+0
+No
+300.0
+2012.05.2018.05
+Independent Non-
+62
+62
+Male
+Jiang Xiaoming
+Senior Vice President
+이 이
+0
+0
+2016.02-2018.05
+0
+Yes
+2015.05.2018.05
+0
+0
+0
+Executive Director
+Andrew Y. Yan
+Male
+Fan Gang
+Executive Director
+0
+0
+No
+175.0
+2015.05-2018.05
+Independent Non-
+62
+Yes
+62
+Tang Min
+Executive Director
+0
+0
+No
+300.0
+2012.05-2018.05
+Independent Non-
+58
+Male
+2015.05.2018.05
+이
+이
+Male
+Wang Zhigang
+0
+0
+No
+489.4
+Board Director,
+Senior Vice President
+51
+Male
+Dai Houliang
+Zhang Jianhua
+0
+0
+No
+525.5
+0
+0
+Yes
+2015.05-2018.05
+2009.05.2018.05
+Board Director,
+President
+Male
+Male
+58
+0
+No
+485.9
+2009.05-2018.05
+0
+No
+488.9
+2006.05-2018.05
+Board Director,
+Senior Vice President
+Board Director,
+Senior Vice President
+Board Director,
+Senior Vice President
+Board Director,
+Senior Vice President
+Board Director,
+|8|
+54
+Ma Yongsheng
+53
+53
+Male
+Jiao Fangzheng
+58
+Male
+Zhang Haichao
+52
+Male
+Geng Limin
+Remuneration
+paid by Sinopec
+Corp. in 2015 Whether paid
+(RMB1,000, by the holding
+before tax)
+Company
+61
+Male
+58
+Former Employee's
+Representative
+Supervisor
+2012.05-2015.05
+508.0
+No
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+67
+Directors, Supervisors,
+Senior Management and Employees
+Directors, Supervisors,
+Senior Management and Employees
+DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES (CONTINUED)
+Ling Yiqun
+Huang Wensheng
+(3) Other Members of Senior
+Management*
+Jiang Zhenghong, aged 54, Vice
+President of Sinopec Corp. Mr.
+Jiang is a professor level senior
+economist with a doctor degree.
+In September 2000, he became
+Vice President of Shanghai
+Gaoqiao Petrochemical Co., Ltd.
+and Sinopec Shanghai Gaoqiao
+Company; in September
+2001, he was appointed as
+President of Shanghai Gaoqiao
+Petrochemical Co., Ltd.; in
+April 2006, he was appointed
+as Secretary of CPC Committee
+and Vice President of Sinopec
+Zhenhai Refining & Chemical
+Company; in September 2006,
+he was appointed as Secretary
+of CPC Committee and Vice
+President of Zhenhai subsidiary
+of China Petrochemical
+Corporation; in March 2008, he
+was promoted to President and
+Secretary of CPC Committee
+of Sinopec Zhenhai Refining
+& Chemical Company; in July
+2010, he was appointed as
+President and Deputy Secretary
+of CPC Committee of Sinopec
+Zhenhai Refining & Chemical
+Company; in August 2013, he
+was appointed as the Director
+General of Sinopec Corporate
+Reform Dept.; in September
+2013, he was appointed as Vice
+President of Sinopec Corp.
+Ling Yiqun, aged 53, Vice
+President of Sinopec Corp. Mr.
+Ling is a professor level senior
+engineer with a master degree.
+From 1983, he worked in the
+refinery of Beijing Yanshan
+Petrochemical Company and
+the Refining Department of
+Beijing Yanshan Petrochemical
+Company Ltd. In February 2000,
+he was appointed as the Deputy
+General Director of Refining
+Department of Sinopec Corp.;
+in June 2003, he was appointed
+as the Director General of
+Refining Department of Sinopec
+Corp.; in May 2012, he was
+appointed as Executive Director,
+President and Secretary of CPC
+Committee of Sinopec Refinery
+Product Sales Company
+Limited; in August 2013, he was
+appointed as the President of
+Sinopec Qilu Company; in July
+2010, he was appointed as Vice
+President of Sinopec Corp.
+Huang Wensheng, aged 49,
+Vice President of Sinopec
+Corp., Secretary to the Board
+of Directors. Mr. Huang is a
+professor level senior economist
+with a university diploma. In
+March 2003, he was appointed
+as Deputy Director General
+of the Board Secretariat
+of Sinopec Corp.; in May
+2006, he was appointed as
+Representative on Securities
+Matters of Sinopec Corp.; since
+August 2009, He has served as
+the Deputy Director General of
+President's office of Sinopec
+Corp. In September 2009,
+he was appointed as Director
+General of the Board Secretariat
+of Sinopec Corp.; in May 2012,
+he was appointed as Secretary
+to the Board of Directors of
+Sinopec Corp.; and in May
+2014, he was appointed as Vice
+President of Sinopec Corp.
+68
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+Male
+Chen Mingzheng
+Yes
+Jiang Zhenghong
+Yes
+Former Chairman the Board
+Of Supervisors
+Former Supervisor
+Yes
+2012.05.2015.05
+2012.05.2015.05
+Li Xinjian
+Male
+Former Supervisor
+2012.05.2015.05
+Kang Mingde
+Male
+62
+Former Independent
+2012.05.2015.05
+Zhou Shiliang
+Male
+58
+Supervisor
+Former Employee's
+Representative
+Supervisor
+2012.05.2015.05
+Company
+65
+Yes
+Yes
+13,919
+14,158
+18
+Note
+At 31 December
+2015
+RMB million
+At 31 December
+2014
+Assets
+17
+Current assets
+RMB million
+6,281
+82,970
+16
+78,681
+81,081
+15
+177,667
+152,276
+703,485
+732,577
+80,593
+868
+10,326
+1234
+Cash at bank and on hand
+6,271
+Bills receivable
+Non-current assets
+Other receivables
+Fixed assets
+12
+Long-term equity investments
+91
+297
+Available-for-sale financial assets
+14
+324,048
+225,009
+Total current assets
+19,186
+36,559
+Other current assets
+74,654
+46,029
+Inventories
+1,962
+1,296
+9
+Prepayments
+1,805
+176
+25,031
+201,234
+64,620
+8
+29,512
+7
+540
+46,453
+Accounts receivable
+13
+29,251
+Long-term deferred expenses
+56589
+Prepayments
+Other receivables
+Accounts receivable
+Bills receivable
+Cash at bank and on hand
+Current assets
+Assets
+At 31 December
+2014
+RMB million
+At 31 December
+2015
+RMB million
+Note
+as at 31 December 2015
+FINANCIAL STATEMENTS PREPARED UNDER CHINA ACCOUNTING STANDARDS FOR BUSINESS ENTERPRISES
+CONSOLIDATED BALANCE SHEET
+(A)
+Financial Statements (PRC)
+Financial Statements (PRC)
+73
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+11/F PricewaterhouseCoopers Center, 2 Corporate Avenue, 202 Hu Bin Road, Huangpu District, Shanghai 200021, PRC
+Tel: +86 (21) 2323 8888, Fax: +86 (21) 2323 8800, www.pwccn.com
+PricewaterhouseCoopers Zhongtian LLP
+29 March 2016
+Gao Peng
+Li Dan
+Registered in the People's Republic of China
+Certified Public Accountants
+Shanghai, the People's Republic of China
+PricewaterhouseCoopers Zhong Tian LLP
+68,557
+Deferred tax assets
+10,100
+13,963
+Goodwill
+Intangible assets
+Construction in progress
+Fixed assets
+12
+Long-term equity investments
+11
+Available-for-sale financial assets
+Non-current assets
+360,144
+332,405
+Total current assets
+23,996
+26,904
+Other current assets
+188,223
+145,498
+10
+Inventories
+3,780
+2,919
+13
+as at 31 December 2015
+21,452
+90,831
+56,126
+7
+10,949
+Construction in progress
+11,959
+234
+(3,026,590)
+50(a)
+165,818
+148,347
+3,353
+3,874
+3,111
+2,312
+454
+1,020
+6,126
+2,066
+13,044
+9,272
+(102,657)
+(124,381)
+11,12
+(23,332)
+(13,855)
+(3,918)
+(1,137)
+(89)
+(2,532)
+(129,996)
+(141,905)
+(116,952)
+(132,633)
+(2,228,500)
+(88,286)
+(115,169)
+(56,396)
+(292,259)
+Total Assets
+RMB million
+(%)
+RMB million
+Sinopec International Petroleum
+8,000
+100
+63,306
+Net Assets
+RMB million
+20,518
+(Net Loss) Principal Activities
+RMB million
+(222)
+Exploration and Production Limited
+Sinopec Great Wall Energy & Chemical
+Company Limited
+20,125
+105,477
+100
+20,579
+Sinopec Yangzi Petrochemical
+13,203
+100
+25,852
+15,777
+377
+Company Limited
+Sinopec Pipeline Storage & Transportation
+12,000
+100
+(55,137)
+(327,355)
+37,694
+14
+4,128
+4,120
+32,517
+1,080,822
+756,774
+754,277
+979,286
+2,767
+In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated and company's financial position of
+Sinopec Corp. as at 31 December 2015, and their financial performance and cash flows for the year then ended in accordance with the requirements of
+Accounting Standards for Business Enterprises.
+2,547
+2,154
+8,834
+8,397
+Advances from customers
+Accounts payable
+Bills payable
+Short-term loans
+Current liabilities
+Liabilities and shareholders' equity
+Total assets
+Total non-current assets
+Other non-current assets
+Long-term deferred expenses
+Intangible assets
+100,543
+72,763
+452,361
+439,477
+189,631
+219,230
+57,749
+1,852
+85,182
+2,933
+102,399
+1,090,241
+1,128,447
+1,195,718
+1,132,575
+(1,152,837)
+(1,114,481)
+(33,571)
+35,644
+(39,494)
+(1,212)
+(1,674)
+50(b)
+(1,186,408)
+9,310
+293
+58,469
+105,477
+(21)
+(1,153,996)
+(21,421)
+Wen Dongfen
+Chief Financial Officer
+198,144
+86,427
+Other payables
+19,883
+20,832
+Taxes payable
+310
+290
+Employee benefits payable
+3,926
+3,151
+16
+(5,691)
+OPINION
+7,316
+An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures
+selected depend on the auditor's 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, the auditor considers internal control relevant to the entity's preparation and fair presentation
+of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the
+appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall
+presentation of the financial statements.
+89,918
+1,185
+839
+26
+32,473
+28,677
+86,317
+103,302
+30,000
+11,277
+11,890
+Total current liabilities
+462,642
+604,257
+Non-current liabilities
+Long-term loans
+29
+56,493
+67,426
+Debentures payable
+Provisions
+Deferred tax liabilities
+Other non-current liabilities
+Total non-current liabilities
+Total liabilities
+Shareholders' equity
+Share capital
+92,649
+Capital reserve
+24
+74,729
+3,566
+130,446
+100
+4,000
+Sinopec Yizheng Chemical Fibre Limited
+Company Limited
+2,580
+20,038
+Other non-current assets
+Total non-current assets
+Total assets
+19
+23,835
+22,512
+1,110,724
+1,443,129
+1,091,224
+1,451,368
+Liabilities and shareholders' equity
+Current liabilities
+Short-term loans
+Bills payable
+Accounts payable
+Advances from customers
+Employee benefits payable
+Taxes payable
+23
+Other payables
+Short-term debentures payable
+Non-current liabilities due within one year
+28
+222222222
+166,688
+4,577
+198,366
+Specific reserve
+30
+83,253
+(7,261)
+612
+491
+196,640
+193,552
+245,623
+240,718
+Total equity attributable to shareholders of the Company
+Total liabilities and shareholders' equity
+These financial statements have been approved by the board of directors on 29 March 2016.
+675,370
+594,483
+110,253
+52,612
+785,623
+647,095
+1,443,129
+1,451,368
+Wang Yupu
+Chairman
+(Legal representative)
+The accompanying notes form part of these financial statements.
+74
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+Li Chunguang
+President
+Wen Dongfen
+Chief Financial Officer
+(7,984)
+48,703
+119,408
+118,280
+83,506
+31
+33,186
+29,715
+18
+8,259
+7,820
+32
+13,673
+11,549
+194,864
+200,016
+657,506
+7,950
+804,273
+Surplus reserves
+Retained earnings
+Minority interests
+Total shareholders' equity
+33333
+33
+34
+Net Profit/
+35
+36
+37
+34569
+121,071
+Other comprehensive income
+5,567
+Liability Company
+Sinopec Lubricant Company Limited
+50
+5,745
+Fujian Petrochemical Company Limited
+Company Limited
+50.56
+10,800
+Sinopec Shanghai Petrochemical
+60.34
+HKD 248
+Sinopec Kantons Holdings Limited
+Company Limited
+65
+6,270
+Sinopec-SK(Wuhan) Petrochemical
+70.42
+28,403
+Sinopec Marketing Co.
+Company Limited
+Manufacturing of intermediate petrochemical
+401
+6,161
+12,268
+75
+3,986
+Sinopec Hainan Refining and Chemical
+products and petroleum products
+Petrochemical Company Limited
+products and petroleum products
+Marketing and distribution of refined
+petroleum products
+Production, sale, research and development
+of ethylene and downstream byproducts
+Trading of crude oil and petroleum products
+Manufacturing of synthetic fibres, resin
+and plastics, intermediate petrochemical
+products and petroleum products
+Manufacturing of plastics, intermediate
+petrochemical products and
+petroleum products
+Note 1: All above subsidiaries except Fujian Petrochemical Company Limited are audited by PricewaterhouseCoopers Zhong Tian LLP or PricewaterhouseCoopers in 2015.
+KPMG Huazhen LLP served the exception.
+Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with China
+Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable
+assurance about whether the financial statements are free from material misstatement.
+AUDITOR'S RESPONSIBILITY
+Management of Sinopec Corp. is responsible for the preparation and fair presentation of these financial statements in accordance with the requirements
+of Accounting Standards for Business Enterprises, and for such internal control as management determines is necessary to enable the preparation of
+financial statements that are free from material misstatement, whether due to fraud or error.
+MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
+We have audited the accompanying financial statements of China Petroleum & Chemical Corporation (hereinafter "Sinopec Corp."), which comprise
+the consolidated and company balance sheets as at 31 December 2015, and the consolidated and company income statements, the consolidated and
+company statements of changes in shareholders' equity and the consolidated and company cash flow statements for the year then ended, and the notes
+to the financial statements.
+To the Shareholders of China Petroleum & Chemical Corporation,
+PwC ZT Shen Zi (2016) No. 10001
+普华永道
+pwc
+REPORT OF THE PRC AUDITOR
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+72
+1,456
+Manufacturing of intermediate petrochemical
+4,723
+825
+3,282
+20,136
+28,022
+7,885
+14,757
+1,738
+17,201
+23,684
+185,604
+BALANCE SHEET
+343,260
+3: Being a principal subsidiary of Sinopec Corp., Sinopec Marketing Co. preformed total revenue of RMB 1,103.9 billion, contributing more than 10% of Sinopec Corp.'s
+total net profit. For related changing trends on operating performance, please refer to related analysis from marketing and distribution department.
+2: The above indicated total assets and net profit has been prepared in accordance with ASBE. Except for Sinopec Kantons Holdings Limited and Sinopec Overseas
+Investment Holdings Ltd, which are incorporated in Bermuda and Hong Kong SAR, respectively, all of the above wholly-owned and non-wholly-owned subsidiaries are
+incorporated in the PRC. All of the above wholly-owned and controlling subsidiaries are limited liability companies except for Sinopec Shanghai Petrochemical Company
+Limited and Sinopec Kantons Holdings Limited. The Board of Directors considered that it would be redundant to disclose the particulars of all subsidiaries and,
+therefore, only those which have material impact on the results or assets of Sinopec Corp. are set out above.
+5,627
+We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
+279
+5,777
+7,406
+100
+1,500
+Sinopec Catalyst Company Limited
+Holding Limited
+1,656
+13,296
+2,515
+22,829
+137,300
+797
+1,489
+10,822
+(100)
+4,464
+(58) Investment holding
+Trading of crude oil and petrochemical
+products
+(623) Manufacturing of intermediate petrochemical
+products and petroleum products
+Marketing and distribution of petrochemical
+products
+(720) Production and sale of polyester
+chips and polyester fibres
+Production and sale of refined
+petroleum products, lubricant
+base oil, andpetrochemical materials
+products and petroleum products
+Pipeline storage and transportation
+of crude oil
+Manufacturing of intermediate petrochemical
+Investment in exploration, production
+and sale of petroleum and natural gas
+(138) Coal chemical industry investment
+management, production and sale
+of coal chemical products
+579
+3,457
+7,454
+100
+3,374
+3,522
+455
+Production and sale of catalyst products
+China Petrochemical International
+75
+4,397
+Sinopec Zhanjiang Dongxing
+products and petroleum products
+Company Limited
+Manufacturing of intermediate petrochemical
+1,128
+4,129
+12,087
+85
+5,000
+Sinopec Qingdao Refining and Chemical
+production, storage and sale of petroleum
+products and petrochemical products
+1,843
+Limited Liability Company
+828
+6,131
+9,119
+98.98
+5,294
+Sinopec Beihai Refining and Chemical
+Company Limited
+Trading of petrochemical products
+298
+2,991
+10,159
+100
+1,400
+Import and processing of crude oil,
+Percentage of
+shares held by
+Sinopec Corp.
+30,000
+Name of Company
+48,910
+32,207
+47,430
+11,139
+1,480
+55
+59
+0.266
+0.406
+59
+0.266
+0.406
+43,346
+48,910
+35
+3,163
+(4,485)
+62
+(1,225)
+(5,356)
+(3,042)
+2,268
+(514)
+137
+(9,266)
+43,483
+39,644
+43,346
+31,484
+11,999
+17,571
+48
+40
+42
+43
+44
+45
+62345
+9,017
+9,618
+10,459
+10,969
+8,767
+6,839
+735
+(4,151)
+8,573
+8,137
+52,081
+65,481
+46
+47
+69
+6,945
+4,710
+3,067
+3,710
+55,959
+66,481
+12,613
+39,762
+(118)
+Wen Dongfen
+Li Chunguang
+President
+Note
+2015
+2014
+RMB million
+RMB million
+38
+845,285
+1,222,323
+38
+609,596
+972,685
+172,568
+142,840
+2,628
+10,848
+41,327
+46,314
+6,152
+9,144
+10,430
+10,926
+5,052
+2,737
+(292)
+(4,605)
+45
+The accompanying notes form part of these financial statements.
+(Legal representative)
+Chairman
+Wang Yupu
+Chief Financial Officer
+INCOME STATEMENT
+for the year ended 31 December 2015
+Operating income
+Less: Operating costs
+Sales taxes and surcharges
+Selling and distribution expenses
+General and administrative expenses
+Financial expenses
+Exploration expenses, including dry holes
+Impairment losses
+Add: Loss from changes in fair value
+Investment income
+70,500
+Operating profit
+Less: Non-operating expenses
+Profit before taxation
+Less: Income tax expense
+Net profit
+Other comprehensive income
+Items that may be reclassified subsequently to profit or loss
+(net of tax and after reclassification adjustments):
+Cash flow hedges
+Changes in fair value of available-for-sale financial assets
+Share of other comprehensive income/(loss) of associates
+Total other comprehensive income/(loss)
+Total comprehensive income
+These financial statements have been approved by the board of directors on 29 March 2016.
+Add: Non-operating income
+30,582
+71,881
+46,872
+417,012
+542,173
+121,071
+118,280
+68,716
+54,690
+Other comprehensive income
+(145)
+(206)
+313
+232
+Surplus reserves
+Retained earnings
+Total shareholders' equity
+Total liabilities and shareholders' equity
+196,640
+193,552
+175,679
+172,101
+562,274
+538,649
+979,286
+1,080,822
+These financial statements have been approved by the board of directors on 29 March 2016.
+Wang Yupu
+Chairman
+(Legal representative)
+145,745
+The accompanying notes form part of these financial statements.
+151,409
+2,238
+Non-current liabilities due within one year
+ities due within one year
+5,352
+11,084
+Total current liabilities
+Non-current liabilities
+Long-term loans
+Debentures payable
+Provisions
+Deferred tax liabilities
+Other non-current liabilities
+Total non-current liabilities
+Total liabilities
+Shareholders' equity
+Share capital
+Capital reserve
+Specific reserve
+265,603
+396,428
+54,526
+55,202
+65,500
+62,221
+28,968
+25,830
+177
+600
+1,892
+Li Chunguang
+President
+Wen Dongfen
+Chief Financial Officer
+Share of other comprehensive loss of associates and jointly controlled entities
+Foreign currency translation differences
+Total other comprehensive income/(loss)
+Total comprehensive income
+Attributable to:
+Equity shareholders of the Company
+Minority interests
+These financial statements have been approved by the board of directors on 29 March 2016.
+Wang Yupu
+Chairman
+(Legal representative)
+The accompanying notes form part of these financial statements.
+76
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+Li Chunguang
+President
+Note
+2015
+2014
+RMB million
+RMB million
+38
+2,018,883
+2,825,914
+38
+1,592,771
+2,429,017
+39
+236,343
+191,202
+Changes in fair value of available-for-sale financial assets
+Cash flow hedges
+(net of tax and after reclassification adjustments):
+Items that may be reclassified subsequently to profit or loss
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+75
+Financial Statements (PRC)
+Financial Statements (PRC)
+CONSOLIDATED INCOME STATEMENT
+for the year ended 31 December 2015
+Operating income
+Less: Operating costs
+Sales taxes and surcharges
+Selling and distribution expenses
+General and administrative expenses
+Financial expenses
+Exploration expenses, including dry holes
+46,274
+Impairment losses
+Investment income
+Operating profit
+Add: Non-operating income
+Less: Non-operating expenses
+Profit before taxation
+Less: Income tax expense
+Net profit
+Attributable to:
+Equity shareholders of the Company
+Minority interests
+Basic earnings per share
+Diluted earnings per share
+Net profit
+Other comprehensive income
+Add: Gain/(loss) from changes in fair value
+13,417
+27,822
+35,641
+0
+0
+0
+[이이이
+2 INFORMATION ON
+APPOINTMENT OR
+TERMINATION OF DIRECTORS,
+SUPERVISORS AND SENIOR
+MANAGEMENT
+On 27 May 2015, Sinopec Corp.
+convened the annual general
+meeting for the year 2014,
+the first meeting of the sixth
+session of the Board and the
+first meeting of the sixth session
+of the Board of Supervisors.
+The meetings elected
+members of the new session
+of the Board and the Board of
+Supervisors and approved to
+the appointment of members of
+senior management. Changes
+of directors, supervisors and
+senior management are as
+follow:
+Board of Directors: Elected Mr.
+Wang Yupu as Non-executive
+Director and Chairman of
+Sinopec Corp.; elected Mr.
+Zhang Haichao and Mr. Jiao
+Fangzheng as Directors of
+Sinopec Corp.; elected Mr.
+Tang Min and Mr. Fan Gang
+as Independent Non-executive
+Directors of Sinopec Corp. Mr.
+Fu Chengyu was no longer the
+Chairman and Non-executive
+Director of Sinopec Corp.; Mr.
+Zhang Yaocang was no longer
+the Vice Chairman and Non-
+executive Director of Sinopec
+Corp.; Mr. Cao Yaofeng and Mr.
+Liu Yun were no longer the Non-
+executive Directors of Sinopec
+Corp.; Mr. Chen Xiaojin, Mr. Ma
+Weihua and Ms. Bao Guoming
+were no longer the Independent
+Non-executive Directors of
+Sinopec Corp.
+Board of Supervisors: Elected
+Mr. Liu Yun as Chairman of the
+Board of Supervisors of Sinopec
+Corp.; elected Mr. Liu Zhongyun
+and Mr. Zhou Hengyou as
+Supervisors of Sinopec Corp.;
+elected Mr. Wang Yajun as
+Employee's Representative
+Supervisor of Sinopec Corp. Mr.
+Xu Bin was no longer Chairman
+of the Board of Supervisors and
+Supervisor of Sinopec Corp.; Mr.
+Geng Limin and Mr. Li Xinjian
+were no longer Supervisors of
+Sinopec Corp.; Mr. Kang Mingde
+was no longer Independent
+Supervisor of Sinopec Corp.;
+Mr. Zhou Shiliang and Mr.
+Chen Mingzheng were no longer
+Employee's Representative
+Supervisors of Sinopec Corp.
+New appointments of Senior
+Management: Mr. Zhang
+Haichao and Mr. Jiao Fangzheng
+were appointed as Senior Vice
+Presidents.
+On 28 December 2015, Sinopec
+Corp. convened the fourth
+meeting of the sixth session
+of the Board of Directors. The
+meeting approved to appoint
+Mr. Ma Yongsheng as Senior
+Vice President of Sinopec Corp.
+Ms. Wen Dongfen was appointed
+as Chief Financial Officer of
+Sinopec Corp; Mr. Wang Xinhua
+was no longer Chief Financial
+Officer of Sinopec Corp due to
+an age limit.
+On 25 February 2016, Sinopec
+Corp. convened the first
+extraordinary general meeting
+for the year 2016. The meeting
+approved to appoint Mr. Ma
+Yongsheng as Executive Director
+of the sixth session of the
+Board.
+On 27 April 2015, Mr. Wang
+Tianpu resigned as Vice
+Chairman and Non-executive
+Director of the Board of Sinopec
+Corp. due to personal reasons.
+For details, please refer to the
+announcements, published
+in China Securities Journal,
+Shanghai Securities News
+and Securities Times after
+the meetings and on websites
+of Shanghai Stock Exchange,
+Hong Kong Stock Exchange and
+Sinopec Corp.
+3 REMUNERATION OF
+DIRECTORS, SUPERVISORS,
+AND THE SENIOR
+MANAGEMENT
+During this reporting
+period, 18 current directors,
+supervisors and other senior
+management and 5 former
+directors, supervisors and other
+senior management received
+remuneration from Sinopec
+Corp. with a total amount of
+remuneration of RMB 9.5834
+million.
+4 THE COMPANY'S EMPLOYEES
+As at 31 December 2015, the
+Company has a total of 351,019
+employees. Sinopec Marketing
+Co., a principal subsidiary of
+Sinopec Corp., has a total of
+56,679 employees.
+Supervisors,
+Dinagement and Employees
+Senior
+70
+70
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+THE BREAKDOWN ACCORDING TO THE MEMBERS OF EACH OPERATION SEGMENT AS FOLLOWS
+EMPLOYEES' PROFESSIONAL STRUCTURE AS FOLLOWS:
+Exploration and Production
+143,441 41%
+Refining
+No
+74,458
+0
+0
+Male
+57
+Vice President
+622.4
+Wen Dongfen
+Female
+51
+CFO
+42.9
+Lei Dianwu
+Male
+Male
+53
+60
+Vice President
+Former CFO
+647.1
+Wang Xinhua
+621.8
+*: The members of senior management are in order of the number of strokes of their surname in Chinese.
+Equity interests in Sinopec Corp.
+(as of 31 December)
+2015
+2014
+222 2222
+0
+13,000
+13,000
+0
+0
+21%
+Chemicals
+65,689 19%
+5 CHANGES OF CORE TECHNICAL TEAM OR KEY TECHNICIANS
+6
+During the reporting period, there are no significance changes of core technical team and key technicians.
+EMPLOYEE BENEFITS SCHEME
+Details of the Company's employee benefits scheme are set out in Note 35 of the financial statements prepared under IFRS of this annual
+report. As at 31 December 2015, the Company has a total of 208,061 retired employees. All of them participated in the basic pension schemes
+administered by provincial (autonomous region or municipalities) governments. Government-administered pension schemes are responsible for the
+payments of basic pensions.
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+71
+Directors, Supervisors,
+Senior Management and Employees
+y-owned
+Principal Widiaries
+and 
+Controlled
+PRINCIPAL WHOLLY-OWNED AND CONTROLLED SUBSIDIARIES
+On 31 December, 2015, details of the principal wholly-owned and controlled subsidiaries of the Company were as follows:
+Sinopec Qingdao Petrochemical
+1,595
+100
+Company Limited
+Sinopec Chemical Sales Company Limited
+1,000
+100
+China International United Petroleum
+3,000
+100
+and Chemical Company Limited
+Sinopec Overseas Investment
+USD 300
+100
+University 94,303 27%
+14,576 4%
+Master's degree or above
+39%
+Marketing and Distribution
+56,679 16%
+R&D
+5,791
+2%
+Other Segments
+4,961
+1%
+EDUCATIONAL BACKGROUND STRUCTURE FOR EMPLOYEES AS FOLLOWS:
+Sales
+47,435 13%
+Technology
+51,165 15%
+Chang Zhenyong
+Finance
+4%
+Administration
+Others
+Production
+28,080
+8%
+37,497 11%
+171,570 49%
+Junior college
+78,246 22%
+Technical secondary school
+25,847
+8%
+Senior high school and
+technical school degrees or below
+138,047
+15,272
+Board Secretary
+622.4
+Vice President,
+Cash paid to and for employees
+Payments of taxes and levies
+Other cash paid relating to operating activities
+Sub-total of cash outflows
+Net cash flow from operating activities
+Cash flows from investing activities:
+Cash received from disposal of investments
+Cash received from returns on investments
+Net cash received from disposal of fixed assets, intangible assets and other long-term assets
+Other cash received relating to investing activities
+Sub-total of cash inflows
+Cash paid for acquisition of fixed assets, intangible assets and other long-term assets
+Cash paid for acquisition of investments
+Other cash paid relating to investing activities
+Net cash paid for the acquisition of subsidiaries and other business entities
+Sub-total of cash outflows
+Net cash flow from investing activities
+Cash flows from financing activities:
+Cash received from capital contributions
+Including: Cash received from minority shareholders' capital contributions to subsidiaries
+Cash received from borrowings
+Sub-total of cash inflows
+Cash repayments of borrowings
+Cash paid for dividends, profits distribution or interest
+Including: Subsidiaries' cash payments for distribution of dividends or profits
+to minority shareholders
+Other cash paid relating to financing activities
+Sub-total of cash outflows
+Net cash flow from financing activities
+Cash paid for goods and services
+Sub-total of cash inflows
+Other cash received relating to operating activities
+Refund of taxes and levies
+4,361
+5,092
+1,482
+1,766
+30,701
+38,967
+(179)
+6,822
+30,880
+32,145
+47
+-
+(657)
+(1,309)
+Effects of changes in foreign exchange rate
+14
+61
+30,941
+(2,329)
+29,816
+Wen Dongfen
+Chief Financial Officer
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+77
+Financial Statements (PRC)
+Financial Statements (PRC)
+CONSOLIDATED CASH FLOW STATEMENT
+for the year ended 31 December 2015
+Cash flows from operating activities:
+Cash received from sale of goods and rendering of services.
+(363)
+Registered
+Capital
+Net increase/(decrease) in cash and cash equivalents
+Wang Yupu
+Directors, Supervisors,
+Senior Management and Employees
+DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES (CONTINUED)
+List of Members of the Senior Management
+Position in
+Sinopec Corp.
+Remuneration paid
+by Sinopec Corp.
+in 2015
+(RMB 1,000,
+before tax)
+Whether paid
+by the holding
+Company
+Name
+Gender
+Age
+Jiang Zhenghong
+Male
+54
+Vice President
+643.4
+Ling Yiqun
+Male
+53
+Vice President
+647.1
+Huang Wensheng
+Male
+49
+69
+Annual Report 2015
+CHINA PETROLEUM & CHEMICAL CORPORATION
+2009, he was appointed as
+Assistant to President of China
+Petrochemical Corporation; in
+August 2013, he was appointed
+as the Chief Economist of China
+Petrochemical Corporation; in
+October 2015, he was appointed
+as Secretary to the Board of
+Directors of China Petrochemical
+Corporation; and in May 2009,
+he was appointed as Vice
+President of Sinopec Corp.
+Chairman
+(Legal representative)
+The accompanying notes form part of these financial statements.
+78
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+Li Chunguang
+President
+Note
+2015
+RMB million
+2014
+RMB million
+2,305,183
+3,500
+3,129,123
+1,600
+85,635
+These financial statements have been approved by the board of directors on 29 March 2016.
+2,394,318
+(1,730,839)
+(2,589,649)
+Short-term debentures payable
+7,469
+Chang Zhenyong
+Wen Dongfen
+Lei Dianwu
+Chang Zhenyong, aged 57,
+Vice President of Sinopec Corp.
+Mr. Chang is a professor level
+senior engineer with a master's
+degree. In September 1997, he
+was appointed as Vice President
+of Tianjin Petrochemical
+Company; in February 2000,
+he was appointed as Vice
+President of Sinopec Tianjin
+Company; and in September
+2000, he was promoted to
+President of Sinopec Tianjin
+Company; from February 2004,
+he was appointed temporarily
+as Standing Committee of CPC
+Committee of Beihai, Guangxi; in
+March 2004, he was appointed
+temporarily as deputy mayor of
+Beihai, Guangxi; in November
+2005, he was appointed as
+Director General of Production
+and Operation Management
+Department of Sinopec Corp.;
+in December 2007, he was
+appointed as President of
+Qilu Petrochemical Company
+and President of Sinopec Qilu
+Company; inApril 2010, he
+was appointed as Employee's
+Representative Supervisor of
+Sinopec Corp.; in July 2010, he
+was appointed as Deputy Chief
+Engineer and concurrently as
+Director General of Chemicals
+Department of Sinopec Corp.; in
+August 2012, he was appointed
+concurrently as Vice Chairman
+of Board of Directors of Sinopec
+Great Wall Energy & Chemical
+Co., Ltd.; in November 2014,
+he was appointed as Executive
+Director and President of
+Sinopec Chemical Products
+Sales Co. Ltd and concurrently
+as Chairman of Board of
+Directors of Sinopec Chemical
+Products Sales (Hong Kong) Co.
+Ltd.; and in May 2014, he was
+appointed as Vice President of
+Sinopec Corp.
+Wen Dongfen, aged 51, Chief
+Financial Officer of Sinopec
+Corp. Ms. Wen is a professor
+level senior accountant with a
+university diploma. In December
+2001, she was appointed as
+Deputy Director General of the
+Finance & Planning Department
+of China Petrochemical
+Corporation; in May 2008,
+she was appointed as Deputy
+Director General of the
+Finance Department of China
+Petrochemical Corporation;
+in March 2009, she was
+promoted to Director General
+of the Finance Department
+of China Petrochemical
+Corporation; between May
+2012 and November 2015, she
+concurrently served as Chairman
+of Sinopec Century Bright
+Capital Investment Limited and
+in November 2015, she was
+appointed as Director General
+of the Finance Department of
+Sinopec Corp. Ms. Wen now
+concurrently serves as Director
+of Sinopec Shanghai Engineering
+Co. Ltd., Sinopec International
+Petroleum Exploration and
+Production Corporation and
+Sinopec Insurance Co., Ltd. She
+also concurrently serves as the
+Supervisor of Sinopec Oilfield
+Service Corporation, Vice
+Chairman of Sinopec Finance
+Company Limited and Director
+of Sunshine Insurance Group.
+In December 2015, she was
+appointed as Chief Financial
+Officer of Sinopec Corp.
+Lei Dianwu, aged 53, Vice
+President of Sinopec Corp. Mr.
+Lei is a Professor level Senior
+Engineer with a university
+diploma. In October 1995, he
+was appointed as Vice President
+of Yangzi Petrochemical
+Corporation; in December
+1997, he was appointed as
+Director General of Planning
+& Development Department
+in China Eastern United
+Petrochemical (Group) Co., Ltd.;
+in May 1998, he was appointed
+as Vice President of Yangzi
+Petrochemical Corporation; in
+August 1998 he was appointed
+as Vice President of Yangzi
+Petrochemical Co., Ltd.; in
+March 1999, he was appointed
+temporarily as Deputy Director
+General of Development &
+Planning Department of China
+Petrochemical Corporation;
+in February 2000, he was
+appointed as Deputy Director
+General of Development
+& Planning Department of
+Sinopec Corp.; in March 2001,
+he was appointed as Director
+General of Development
+& Planning Department of
+Sinopec Corp.; in March
+44,214
+3,174,937
+6,979
+Balance at 31 December 2015
+88
+RMB million
+224,534
+570,346
+52,914
+623,260
+47,430
+equity
+47,430
+48,910
+(7,668)
+(7,668)
+(7,668)
+(1,598)
+(9,266)
+47,430
+1,480
+39,762
+interests
+RMB million
+the Company
+Specific
+Surplus
+Retained
+shareholders of
+Minority
+Total
+shareholders'
+RMB million
+reserve
+RMB million
+36,947
+income
+RMB million
+407
+reserve
+RMB million
+1.556
+reserves
+RMB million
+190,337
+earnings
+RMB million
+116,565
+(118)
+39,644
+1,715 _ 8,477 ----
+11,693
+3,215
+(31,246)
+(14,623)
+(267)
+(14,890)
+1,715
+8. Net decrease in specific reserve for the year
+9. Other movement
+(1,065)
+(28)
+(1,093)
+63
+63
+111
+(1,065)
+in shareholders' equity
+Total transactions with owners, recorded directly
+(1,545)
+3,216
+| | | |
+3,215
+(3,215)
+(28,031)
+(28,031)
+(28,031)
+10,192
+10,192
+3,216
+(2,877)
+339
+4,155
+4,155
+(1,545)
+Capital comprehensive
+174
+Share
+capital
+RMB million
+7. Distributions to minority interests
+Sub-total of cash outflows
+Net cash flow from financing activities
+Net increase/(decrease) in cash and cash equivalents
+These financial statements have been approved by the board of directors on 29 March 2016.
+44,649
+(106,649)
+Cash paid for dividends or interest
+(142,194)
+(117,836)
+285,281
+250,706
+285,281
+250,706
+(267,932)
+68,215
+(260,485)
+Cash repayments of borrowings
+Sub-total of cash outflows
+5,899
+Net cash received from disposal of fixed assets, intangible assets and other long-term assets
+Other cash received relating to investing activities
+4,390
+2,254
+967
+214
+Net cash flow from investing activities
+Cash flows from financing activities:
+Cash received from borrowings
+Sub-total of cash inflows
+Sub-total of cash inflows
+24,358
+Cash paid for acquisition of fixed assets, intangible assets and other long-term assets
+Cash paid for acquisition of investments
+(77,403)
+(99,968)
+(29,246)
+(42,226)
+174,864
+(30,382)
+(36,519)
+(298,314)
+Balance at 1 January 2014
+Change for the year
+1. Net profit
+2. Other comprehensive income (Note 35)
+Total comprehensive income
+Transactions with owners, recorded directly
+to equity
+in shareholders' equity:
+- Appropriation for surplus reserves
+- Distributions to shareholders (Note 49)
+4. Conversion of the 2011 Convertible Bonds
+(Note 33)
+5. Transaction with minority interests
+6. Contributions to subsidiaries from minority interests
+3. Appropriations of profits:
+Total
+shareholders'
+equity
+attributable
+for the year ended 31 December 2015
+CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
+(297,004)
+(13,033)
+(46,298)
+(4,927)
+Wang Yupu
+Chairman
+(Legal representative)
+The accompanying notes form part of these financial statements.
+Li Chunguang
+President
+Wen Dongfen
+Chief Financial Officer
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+79
+Financial Statements (PRC)
+Financial Statements (PRC)
+Other
+Balance at 31 December 2014
+118,280
+48,703
+RMB million
+equity
+earnings
+RMB million
+reserves
+RMB million
+190,337
+1.226
+reserve
+RMB million
+171,202
+income
+RMB million
+2,123
+116.565
+RMB million
+capital
+Total
+shareholders'
+Retained
+Surplus
+reserve
+RMB million
+46,121
+Specific
+527,574
+32,145
+121
+121
+70
+191
+3,215
+| | |
+32,145
+8,477
+4. Conversion of the 2011 Convertible Bonds (Note 33)
+29,816
+32,145
+(2,329)
+(2,329)
+(2,329)
+1,715
+Capital comprehensive
+Other
+Share
+Wang Yupu
+These financial statements have been approved by the board of directors on 29 March 2016.
+785,623
+110,253
+675,370
+245,623
+Chairman
+196,640
+(7,984)
+163
+34
+129
+129
+119,408
+121,071
+612
+(Legal representative)
+The accompanying notes form part of these financial statements.
+80
+- Distributions to shareholders (Note 49)
+- Appropriation for surplus reserves
+3. Appropriations of profits:
+Transactions with owners, recorded directly in shareholders' equity:
+Total comprehensive income
+2. Other comprehensive income
+1. Net profit
+Change for the year
+Balance at 1 January 2014
+for the year ended 31 December 2015
+STATEMENT OF CHANGES IN EQUITY
+Chief Financial Officer
+Wen Dongfen
+Li Chunguang
+President
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+8. Net increase in specific reserve for the year
+(Note36)
+94,691
+45,092
+49,599
+2. Other comprehensive income (Note 35)
+32,207
+32,207
+11,139
+43,346
+Total comprehensive income
+1. Net profit
+Transactions with owners, recorded directly
+(1,169)
+(1,169)
+1,306
+137
+32,207
+31.038
+(1,169)
+Change for the year
+647.095
+52,612
+(7,261)
+491
+193,552
+240,718
+594,483
+52,612
+647,095
+Balance at 1 January 2015
+118,280
+48,703
+(7,261)
+491
+193.552
+240,718
+594,483
+12,445
+22,822
+43,483
+3. Appropriations of profits:
+446
+56,670
+48,807
+105,477
+7. Distributions to minority interests
+(3,389)
+56,224
+(3,389)
+in shareholders' equity
+2,791
+70,576
+446
+3,088
+(27,302)
+Total transactions with owners, recorded directly
+(Note53(i))
+6. Contributions to subsidiaries from minority interests
+(326)
+-Appropriation for surplus reserves (Note 37)
+3,088
+(3,088)
+- Distributions to shareholders (Note 49)
+(24,214)
+(24,214)
+(24,214)
+4.
+Conversion of the 2011 Convertible Bonds (Note33)
+2,791
+5. Transaction with minority interests
+14,026
+326
+16,817
+16,817
+326
+in shareholders' equity:
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+Cash received from returns on investments
+146,685
+(5) Long-term equity investments
+3 SIGNIFICANT ACCOUNTING POLICIES (Continued)
+for the year ended 31 December 2015
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+84
+(a) Investment in subsidiaries
+Inventories are recorded by perpetual method.
+Any excess of the cost over the net realisable value of each item of inventories is recognised as a provision for diminution in the value of
+inventories. Net realisable value is the estimated selling price in the normal course of business less the estimated costs of completion and the
+estimated costs necessary to make the sale and relevant taxes. The net realisable value of materials held for use in the production is measured
+based on the net realisable value of the finished goods in which they will be incorporated. The net realisable value of the quantity of inventory
+held to satisfy sales or service contracts is measured based on the contract price. If the quantities held by the Group are more than the
+quantities of inventories specified in sales contracts, the net realisable value of the excess portion of inventories is measured based on general
+selling prices.
+At the balance sheet date, inventories are stated at the lower of cost and net realisable value.
+Inventories are initially measured at cost. Cost includes the cost of purchase and processing, and other expenditures incurred in bringing the
+inventories to their present location and condition. The cost of inventories is calculated using the weighted average method. In addition to the
+cost of purchase of raw material, work in progress and finished goods include direct labour and an appropriate allocation of manufacturing
+overhead costs.
+(4) Inventories
+Cash and cash equivalents comprise cash on hand, demand deposits, short-term and highly liquid investments which are readily convertible into
+known amounts of cash and are subject to an insignificant risk of change in value.
+(3) Cash and cash equivalents
+Inventories include raw materials, work in progress, semi-finished goods, finished goods and reusable materials. Reusable materials include
+low-value consumables, packaging materials and other materials, which can be used repeatedly but do not meet the definition of fixed assets.
+Reusable materials are amortised in full when received for use. The amounts of the amortisation are included in the cost of the related assets or
+profit or loss.
+The assets and liabilities of foreign operation are translated into Renminbi at the spot exchange rates at the balance sheet date. The equity
+items, excluding "Retained earnings", are translated into Renminbi at the spot exchange rates at the transaction dates. The income and
+expenses of foreign operation are translated into Renminbi at the spot exchange rates or an exchange rate that approximates the spot exchange
+rates on the transaction dates. The resulting exchange differences are separately presented as other comprehensive income in the balance sheet
+within equity. Upon disposal of a foreign operation, the cumulative amount of the exchange differences recognised in which relate to that foreign
+operation is transferred to profit or loss in the year in which the disposal occurs.
+In the Group's consolidated financial statements, investment in subsidiaries are accounted for in accordance with the principles described in
+Note 3(1)(c).
+The initial investment cost of a long-term equity investment obtained through a business combination involving entities under common
+control is the Company's share of the carrying amount of the subsidiary's equity at the combination date. The difference between the initial
+investment cost and the carrying amounts of the consideration given is adjusted to share premium in capital reserve. If the balance of the
+share premium is insufficient, any excess is adjusted to retained earnings.
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+Financial Statements (PRC)
+Financial Statements (PRC)
+85
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+Where the initial investment cost of a long-term equity investment exceeds the Group's interest in the fair value of the investee's identifiable
+net assets at the date of acquisition, the investment is initially recognised at the initial investment cost. Where the initial investment cost is
+less than the Group's interest in the fair value of the investee's identifiable net assets at the time of acquisition, the investment is initially
+recognised at the investor's share of the fair value of the investee's identifiable net assets, and the difference is charged to profit or loss.
+After the acquisition of the investment, the Group recognises its share of the investee's net profits or losses and other comprehensive income,
+as investment income or losses and other comprehensive income, and adjusts the carrying amount of the investment accordingly. Once the
+investee declares any cash dividends or profits distributions, the carrying amount of the investment is reduced by that attributable to the
+Group.
+In the Company's separate financial statements, long-term equity investments in subsidiaries are accounted for using the cost method.
+Except for cash dividends or profits distributions declared but not yet distributed that have been included in the price or consideration paid
+in obtaining the investments, the Company recognises its share of the cash dividends or profit distributions declared by the investee as
+investment income irrespective of whether these represent the net profit realised by the investee before or after the investment. Investments
+in subsidiaries are stated at cost less impairment losses (see Note 3(12)) in the balance sheet. At initial recognition, such investments are
+measured as follows:
+The Group's accounting treatments when adopting the equity method include:
+An investment in a jointly controlled entity or an associate is accounted for using the equity method, unless the investment is classified as
+held for sale (see Note 3(10)).
+An associate is the investee that the Group has significant influence on their financial and operating policies. Significant influence represents
+the right to participate in the financial and operating policy decisions of the investee but is not control or joint control over the establishment
+of these policies. The Group generally considers the following circumstances in determining whether it can exercise significant influence
+over the investee: whether there is representative appointed to the board of directors or equivalent governing body of the investee; whether
+to participate in the investee's policy-making process; whether there are significant transactions with the investees; whether there is
+management personnel sent to the investee; whether to provide critical technical information to the investee.
+A joint venture is an incorporated entity over which the Group, based on legal form, contractual terms and other facts and circumstances,
+has joint control with the other parties to the joint venture and rights to the net assets of the joint venture. Joint control is the contractually
+agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of
+the Group and the parties sharing control.
+(b) Investment in jointly controlled entities and associates
+An investment in a subsidiary acquired otherwise than through a business combination is initially recognised at actual purchase cost if the
+Group acquires the investment by cash, or at the fair value of the equity securities issued if an investment is acquired by issuing equity
+securities, or at the value stipulated in the investment contract or agreement if an investment is contributed by investors.
+For a long-term equity investment obtained through a business combination not involving enterprises under common control, the initial
+investment cost comprises the aggregate of the fair values of assets transferred, liabilities incurred or assumed, and equity securities issued
+by the Company, in exchange for control of the acquiree. For a long-term equity investment obtained through a business combination not
+involving enterprises under common control, if it is achieved in stages, the initial cost comprises the carrying value of previously-held equity
+investment in the acquiree immediately before the acquisition date, and the additional investment cost at the acquisition date.
+The initial cost of investment in jointly controlled entities and associates is stated at the consideration paid except for cash dividends or
+profits distributions declared but unpaid at the time of acquisition and therefore included in the consideration paid should be deducted if the
+investment is made in cash, or at the fair value of the non-monetary assets exchanged for the investment. The difference between the fair
+value of the non-monetary assets being exchanged and its carrying amount is charged to profit or loss.
+Foreign currency monetary items are translated at the PBOC rates at the balance sheet date. Exchange differences, except for those directly
+related to the acquisition, construction or production of qualified assets, are recognised as income or expenses in the income statement. Non-
+monetary items denominated in foreign currency measured at historical cost are not translated. Non-monetary items denominated in foreign
+currency that are measured at fair value are translated using the exchange rates at the date when the fair value was determined. The difference
+between the translated amount and the original currency amount is recognised as other comprehensive income, if it is classified as available-for-
+sale financial assets; or charged to the income statement if it is measured at fair value through profit or loss.
+Foreign currency transactions are, on initial recognition, translated into Renminbi at the spot exchange rates quoted by the People's Bank of
+China ("PBOC rates") at the transaction dates.
+(2) Transactions in foreign currencies and translation of financial statements in foreign currencies
+A business combination involving entities or businesses not under common control is a business combination in which all of the combining
+entities or businesses are not ultimately controlled by the same party or parties both before and after the business combination. Difference
+between the consideration paid by the Group as the acquirer, comprises of the aggregate of the fair value at the acquisition date of assets
+given, liabilities incurred or assumed, and equity securities issued by the acquirer in exchange for control of the acquiree, and the Group's
+interest in the fair value of the identifiable net assets of the acquiree, is recognised as goodwill (Note 3(9)) if it is an excess, otherwise in the
+profit or loss. The expense incurred for equity securities and debt securities issued as the consideration of the combination is recognised
+in the initial cost of the securities. Any other expense directly attributable to the business combination is recognised in the profit or loss
+for the year. The difference between the fair value and the book value of the assets given is recognised in profit or loss. The acquiree's
+identifiable assets, liabilities and contingent liabilities, if satisfying the recognition criteria, are recognised by the Group at their fair value at
+the acquisition date. The acquisition date is the date on which the acquirer effectively obtains control of the acquiree.
+(b) Business combination involving entities not under common control
+A business combination involving entities or businesses under common control is a business combination in which all of the combining
+entities or businesses are ultimately controlled by the same party or parties both before and after the business combination, and that
+control is not transitory. The assets and liabilities that the acquirer receives in the acquisition are accounted for at the acquiree's carrying
+amount on the acquisition date. The difference between the carrying amount of the acquired net assets and the carrying amount of the
+consideration paid for the acquisition (or the total nominal value of shares issued) is recognised in the share premium of capital reserve, or
+the retained earnings in case of any shortfall in the share premium of capital reserve. Any costs directly attributable to the combination shall
+be recognised in profit or loss for the current period when occurred. The expense incurred for equity securities and debt securities issued as
+the consideration of the combination is recognised in the initial cost of the securities. The combination date is the date on which the acquirer
+effectively obtains control of the acquiree.
+(a) Business combination involving entities under common control
+(1) Accounting treatment of business combination involving entities under common control and not under common control
+Principal accounting estimates and judgements of the Group are set out in Note 52.
+(c) Method for preparation of consolidated financial statements
+The Group determines specific accounting policies and accounting estimates based on the characteristics of production and operational activities,
+mainly reflected in the accounting for allowance for accounts receivable (Note 3(12)), valuation of inventories (Note 3(4)), depreciation of fixed
+assets and oil and gas properties (Note 3(6), (7)), measurement of provisions (Note 3(16)), ie.
+for the year ended 31 December 2015
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+82
+The functional currency of the Company's and most of its subsidiaries is Renminbi. The Group's consolidated financial statements are presented
+in Renminbi. The Company translates the financial statements of subsidiaries from their respective functional currencies into Renminbi (see Note
+3(2)) if the subsidiaries' functional currencies are not Renminbi.
+(4) Functional currency and presentation currency
+3 SIGNIFICANT ACCOUNTING POLICIES
+The scope of consolidated financial statements is based on control and the consolidated financial statements comprise the Company and its
+subsidiaries. Control means an entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability
+to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial
+statements from the date that control commences until the date that control ceases.
+Where the Company combines a subsidiary during the reporting period through a business combination involving entities under common
+control, the financial statements of the subsidiary are included in the consolidated financial statements as if the combination had occurred at
+the beginning of the earliest comparative year presented or, if later, at the date that common control was established. Therefore the opening
+balances and the comparative figures of the consolidated financial statements are restated. In the preparation of the consolidated financial
+statements, the subsidiary's assets, liabilities and results of operations are included in the consolidated balance sheet and the consolidated
+income statement, respectively, based on their carrying amounts in the subsidiary's financial statements, from the date that common control
+was established.
+Where the Company acquires a subsidiary during the reporting year through a business combination involving entities not under common
+control, the identifiable assets, liabilities and results of operations of the subsidiaries are consolidated into consolidated financial statements
+from the date that control commences, based on the fair value of those identifiable assets and liabilities at the acquisition date.
+The unrealised profit or loss arising from the sale of assets by the Company to its subsidiaries is eliminated in full against the net profit
+attributed to shareholders; the unrealised profit or loss from the sale of assets by subsidiaries to the Company is eliminated according to the
+distribution ratio between shareholders of the parent company and minority interests. For sale of assets that occurred between subsidiaries,
+the unrealised gains and losses is eliminated according to the distribution ratio for its subsidiaries seller between net profit attributable to
+shareholders of the parent company and minority interests.
+Where the accounting policies and accounting period adopted by the subsidiaries are different from those adopted by the Company,
+adjustments are made to the subsidiaries' financial statements according to the Company's accounting policies and accounting period. Intra-
+group balances and transactions, and any unrealised profit or loss arising from intra-group transactions, are eliminated in preparing the
+consolidated financial statements. Unrealised losses resulting from intra-group transactions are eliminated in the same way as unrealised
+gains but only to the extent that there is no evidence of impairment.
+The excess of the loss attributable to the minority interests during the period over the minority interests' share of the equity at the beginning
+of the reporting period is deducted from minority interests.
+Minority interest is presented separately in the consolidated balance sheet within shareholders' equity. Net profit or loss attributable to
+minority shareholders is presented separately in the consolidated income statement below the net profit line item.
+(c) Method for preparation of consolidated financial statements (Continued)
+(1) Accounting treatment of business combination involving entities under common control and not under common control (Continued)
+3 SIGNIFICANT ACCOUNTING POLICIES (Continued)
+for the year ended 31 December 2015
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+Financial Statements (PRC)
+Financial Statements (PRC)
+83
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+In a business combination involving entities not under common control achieved in stages, the Group remeasures its previously held equity
+interest in the acquiree on the acquisition date. The difference between the fair value and the net book value is recognised as investment
+income for the year. If other comprehensive income was recognised regarding the equity interest previously held in the acquiree before the
+acquisition date, the relevant other comprehensive income is transferred to investment income in the period in which the acquisition occurs.
+Where control of a subsidiary is lost due to partial disposal of the equity investment held in a subsidiary, or any other reasons, the group
+derecognises assets, liabilities, minority interests and other equity items related to the subsidiary. The remaining equity investment is
+remeasured to fair value at the date in which control is lost. The sum of consideration received from disposal of equity investment and the
+fair value of the remaining equity investment, net of the fair value of the Group's previous share of the subsidiary's identifiable net assets
+recorded from the acquisition date, is recognised in investment income in the period in which control is lost. Other comprehensive income
+related to the previous equity investment in the subsidiary, is transferred to investment income when control is lost.
+Where the Company acquired a minority interest from a subsidiary's minority shareholders, the difference between the investment cost and
+the newly acquired interest into the subsidiary's identifiable net assets at the acquisition date is adjusted to the capital reserve (capital
+surplus) in the consolidated balance sheet. Where the Company partially disposed an investment of a subsidiary that do not result in a loss
+of control, the difference between the proceeds and the corresponding share of the interest into the subsidiary is adjusted to the capital
+reserve (capital surplus) in the consolidated balance sheet. If the credit balance of capital reserve (capital surplus) is insufficient, any excess
+is adjusted to retained profits.
+for the year ended 31 December 2015
+Derivative financial instruments (see Note 3(11))
+3 SIGNIFICANT ACCOUNTING POLICIES (Continued)
+(b) Investment in jointly controlled entities and associates (Continued)
+The Group recognises its share of the investee's net profits or losses after making appropriate adjustments to align the accounting policies
+or accounting periods with those of the Group based on the fair values of the investee's net identifiable assets at the time of acquisition.
+Under the equity accounting method, unrealised profits and losses resulting from transactions between the Group and its associates or
+jointly controlled entities are eliminated to the extent of the Group's interest in the associates or jointly controlled entities. Unrealised losses
+resulting from transactions between the Group and its associates or jointly controlled entities are fully recognised in the event that there is an
+evidence of impairment.
+Financial Statements (PRC)
+Financial Statements (PRC)
+87
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+The Group classifies financial assets and liabilities into different categories at initial recognition based on the purpose of acquiring assets
+and assuming liabilities: financial assets and financial liabilities at fair value through profit or loss, loans and receivables, held-to-maturity
+investments, available-for-sale financial assets and other financial liabilities.
+The Group recognises a financial asset or a financial liability on its balance sheet when the Group enters into and becomes a party to the
+underlining contract of the financial instrument.
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+(a) Classification, recognition and measurement of financial instruments
+(11) Financial Instruments
+A discontinued operation is a component of the Group that either has been disposed of, or is classified as held for sale, can be clearly
+distinguished operationally and for financial reporting purposes from the rest of the Group and (i) represents a separate major line of business
+or geographical area of operations, (ii) is part of a single coordinated plan to dispose of a separate major line of business or geographical area
+of operations, or (iii) is a subsidiary acquired exclusively with a view to resale.
+The assets and liabilities in the non-current asset or disposal groups which have been classified as assets held for sale are classified as current
+assets and current liabilities, and are presented separately in the consolidated balance sheet.
+Non-current assets, except for financial assets and deferred tax assets that satisfy there cognition criteria for assets held for sale are stated at to
+the lower of carrying amount and the fair value less costs to sell. Any excess of the original carrying amount over the fair value less costs to sell
+is recognised as asset impairment loss.
+Non-current assets or disposal group that meet the following conditions will be classified as held for sale. (i) for the non-current assets or the
+disposal group, they can only be sold immediately in current condition, according to the usual terms of selling the assets or disposal group;
+(ii) the Group has made the resolution and obtain the appropriate approval on disposal of the non-current assets or the disposal group; (iii) the
+Group has signed an irrevocable transfer agreement with the transferee; (iv) the transfer will be completed within one year.
+Goodwill is not amortised and is stated at cost less accumulated impairment losses (see Note 3(12)). On disposal of an asset group or a set of
+asset groups, any attributable amount of purchased goodwill is written off and included in the calculation of the profit or loss on disposal.
+(10) Held for sale and discontinued operation
+Financial instruments of the Group include cash and cash equivalents, bond investments, equity securities other than long-term equity
+investments, receivables, derivative financial instruments, payables, loans, bonds payable, and share capital, etc.
+The initial cost of goodwill represents the excess of cost of acquisition over the acquirer's interest in the fair value of the identifiable net assets
+of the acquiree under the business combination involving entities not under common control.
+for the year ended 31 December 2015
+(11) Financial Instruments (Continued)
+Except for the other financial liabilities described above, subsequent to initial recognition, other financial liabilities are measured at
+amortised cost using the effective interest method.
+Other financial liabilities include the liabilities arising from financial guarantee contracts. Financial guarantees are contracts that require
+the issuer (i.e. the guarantor) to make specified payments to reimburse the beneficiary of the guarantee (the holder) for a loss the holder
+incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument. Where the Group
+issues a financial guarantee, subsequent to initial recognition, the guarantee is measured at the higher of the amount initially recognised
+less accumulated amortisation and the amount of a provision determined in accordance with the principles of contingencies (see Note
+3(16)).
+Financial liabilities other than the financial liabilities at fair value through profit or loss are classified as other financial liabilities.
+Other financial liabilities
+Available-for-sale financial assets whose fair value cannot be measured reliably are measured at cost subsequent to initial recognition.
+Other than the above equity instrument investments whose fair values cannot be measured reliably, other available-for-sale financial assets
+are initially stated at fair values. The gains or losses arising from changes in the fair value are directly recognised in equity, except for
+the impairment losses and exchange differences from monetary financial assets denominated in foreign currencies, which are recognised
+in profit or loss. The cumulative gains and losses previously recognised in equity are transferred to profit or loss when the available-for-
+sale financial assets are derecognised. Dividend income from these equity instruments is recognised in profit or loss when the investee
+declares the dividends. Interest on available-for-sale financial assets calculated using the effective interest rate method is recognised in
+profit or loss (see Note 3(17) (c)).
+Available-for-sale financial assets include non-derivative financial assets that are designated as available for sales and other financial
+assets which do not fall into any of the above categories.
+3 SIGNIFICANT ACCOUNTING POLICIES (Continued)
+Available-for-sale financial assets
+Loans and Receivables are non-derivative financial assets with fixed or determinable recoverable amount and with no quoted price in
+active market. After the initial recognition, loans and receivables are measured at amortised cost using the effective interest rate method.
+Held-to-maturity investment
+― Loans and Receivables
+A financial asset or financial liability is classified as at fair value through profit or loss if it is acquired or incurred principally for the
+purpose of selling or repurchasing in the near term or if it is a derivative, unless the derivative is a designated and effective hedging
+instrument, or a financial guarantee contract, or a derivative that is linked to and must be settled by delivery of an unquoted equity
+instrument (without a quoted price from an active market) whose fair value cannot be reliably measured. These financial instruments
+are initially measured at fair value with subsequently changes in fair value recognised in profit or loss. Subsequent to initial recognition,
+financial assets and financial liabilities at fair value through profit or loss are measured at fair value, and changes therein are recognised
+in profit or loss.
+Financial asset or financial liability with change in fair value recognised through profit or loss
+Financial assets and financial liabilities are initially recognised at fair value. For financial asset or financial liability of which the change in its
+fair value is recognised in profit or loss, the relevant transaction cost is recognised in profit or loss. The transaction costs for other financial
+assets or financial liabilities are included in the initially recognised amount. Subsequent to initial recognition financial assets and liabilities
+are measured as follows:
+(a) Classification, recognition and measurement of financial instruments (Continued)
+Held-to-maturity investment includes non-derivative financial assets with fixed or determinable recoverable amount and fixed maturity that
+the Group has the positive intention and ability to hold to maturity. Subsequent to initial recognition, held-to-maturity investments are
+measured at amortised cost using the effective interest method.
+(9) Goodwill
+Useful lives and amortisation methods are reviewed at least each year end.
+An intangible asset is regarded as having an indefinite useful life and is not amortised when there is no foreseeable limit to the year over which
+the asset is expected to generate economic benefits for the Group.
+Plants and buildings
+Other than oil and gas properties, the cost of fixed assets less residual value and accumulated impairment losses is depreciated using the
+straight-line method over their estimated useful lives, unless the fixed asset is classified as held for sale (see Note 3(10)). The estimated useful
+lives and the estimated rate of residual values adopted for respective classes of fixed assets are as follows:
+The Group terminates the recognition of an item of fixed asset when it is in a state of disposal or it is estimated that it is unable to generate
+any economic benefits through use or disposal. Gains or losses arising from the retirement or disposal of an item of fixed asset are determined
+as the difference between the net disposal proceeds and the carrying amount of the item and are recognised in profit or loss on the date of
+retirement or disposal.
+The subsequent costs including the cost of replacing part of an item of fixed assets are recognised in the carrying amount of the item if the
+recognition criteria are satisfied, and the carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of fixed
+assets are recognised in profit or loss as incurred.
+Where the individual component parts of an item of fixed asset have different useful lives or provide benefits to the Group in different patterns
+thus necessitating use of different depreciation rates or methods, each part is recognised as a separate fixed asset.
+Construction in progress is transferred to fixed assets when the asset is ready for its intended use. No depreciation is provided against
+construction in progress.
+Equipment, machinery and others
+The cost of a purchased fixed asset comprises the purchase price, related taxes, and any directly attributable expenditure for bringing the asset
+to working condition for its intended use. The cost of self-constructed assets includes the cost of materials, direct labour, capitalised borrowing
+costs (see Note 3(19)), and any other costs directly attributable to bringing the asset to working condition for its intended use. Costs of
+dismantling and removing the items and restoring the site on which the related assets located are included in the initial cost.
+Fixed assets represent the tangible assets held by the Group using in the production of goods, rendering of services and for operation and
+administrative purposes with useful life over one year.
+(6) Fixed assets and construction in progress
+The impairment assessment and provision accrual on investments in subsidiaries, associates and jointly controlled enterprises are stated in
+Note 3(12).
+(c) The impairment assessment method and provision accrual on investment
+The Group adjusts the carrying amount of the long-term equity investment for changes in owners' equity of the investee other than those
+arising from net profits or losses and other comprehensive income, and recognises the corresponding adjustment in capital reserve.
+The Group discontinues recognising its share of net losses of the investee after the carrying amount of the long-term equity investment and
+any long-term interest that is in substance forms part of the Group's net investment in the associate or the jointly controlled entity is reduced
+to zero, except to the extent that the Group has an obligation to assume additional losses. However, if the Group has incurred obligations for
+additional losses and the conditions on recognition of provision are satisfied in accordance with the accounting standard on contingencies,
+the Group continues recognising the investment losses and the provision. Where net profits are subsequently made by the associate or jointly
+controlled entity, the Group resumes recognising its share of those profits only after its share of the profits equals the share of losses not
+recognised.
+Fixed assets are stated in the balance sheet at cost less accumulated depreciation and impairment losses (see Note 3(12)). Construction in
+progress is stated in the balance sheet at cost less impairment losses (see Note 3(12)).
+Useful lives, residual values and depreciation methods are reviewed at least each year end.
+Estimated Estimated rate
+useful life of residual value
+12-50 years
+4.30 years
+Intangible assets, where the estimated useful life is finite, are stated in the balance sheet at cost less accumulated amortisation and provision
+for impairment losses (see Note 3(12)). For an intangible asset with finite useful life, its cost less estimated residual value and accumulated
+impairment losses is amortised on a straight-line basis over the expected useful lives, unless the intangible assets are classified as held for sale
+(see Note 3(10)).
+(8) Intangible assets
+Capitalised costs of proved oil and gas properties are amortised on a unit-of-production method based on volumes produced and reserves.
+The Group estimates future dismantlement costs for oil and gas properties with reference to engineering estimates after taking into consideration
+the anticipated method of dismantlement required in accordance with the industry practices. These estimated future dismantlement costs are
+discounted at credit-adjusted risk-free rate and are capitalised as oil and gas properties, which are subsequently amortised as part of the costs
+of the oil and gas properties.
+Costs of development wells and related support equipment are capitalised. The cost of exploratory wells is initially capitalised as construction
+in progress pending determination of whether the well has found proved reserves. Exploratory well costs are charged to expenses upon the
+determination that the well has not found proved reserves. However, in the absence of a determination of the discovery of proved reserves,
+exploratory well costs are not carried as an asset for more than one year following completion of drilling. If, after one year has passed, a
+determination of the discovery of proved reserves cannot be made, the exploratory well costs are impaired and charged to expense. All other
+exploration costs, including geological and geophysical costs, are charged to profit or loss in the year as incurred.
+Oil and gas properties include the mineral interests in properties, wells and related support equipment arising from oil and gas exploration and
+production activities.
+(7) Oil and gas properties
+3 SIGNIFICANT ACCOUNTING POLICIES (Continued)
+for the year ended 31 December 2015
+NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
+Annual Report 2015 CHINA PETROLEUM & CHEMICAL CORPORATION
+86
+3%
+3%
+33
+(5) Long-term equity investments (Continued)
+Convertible bonds (see Note 3(11))
+Available-for-sale financial assets (see Note 3(11))
+The financial statements of the Group have been prepared under the historical cost convention, except for the assets and liabilities set out below:
+Financial asset and financial liability with change in fair value recognised through profit or loss (see Note 3(11))
+(994)
+(994)
+5. Net decrease in specific reserve for the year
+(17,839)
+(31,246)
+3,215
+6. Other movement
+8,477
+in shareholders' equity
+Total transactions with owners, recorded directly
+10,192
+(28,031)
+(28,031)
+(3,215)
+1,715
+CASH FLOW STATEMENT
+Balance at 31 December 2014
+92
+54,690
+118,280
+Total comprehensive income
+2. Other comprehensive income
+1. Net profit
+Change for the year
+92
+Balance at 1 January 2015
+172,101
+193,552
+232
+(206)
+54,690
+118,280
+538,649
+for the year ended 31 December 2015
+Note
+2015
+1,047,956
+1,494,453
+(643,612)
+(1,020,434)
+(35,061)
+(39,024)
+96,326
+(213,949)
+(165,867)
+(70,981)
+(1,058,489)
+(1,335,246)
+(10,533)
+159,207
+(204,807)
+69,615
+1,396,976
+1,151
+2014
+RMB million
+RMB million
+Cash flows from operating activities:
+Other cash received relating to operating activities
+Cash received from sale of goods and rendering of services
+Refund of taxes and levies
+Sub-total of cash inflows
+Cash paid for goods and services
+Cash paid to and for employees
+Payments of taxes and levies
+Other cash paid relating to operating activities
+Sub-total of cash outflows
+Net cash flow from operating activities
+Cash flows from investing activities:
+Cash received from disposal of investments
+975,387
+2,954
+(206)
+232
+193,552
+172,101
+for the year ended 31 December 2015
+NOTES TO THE FINANCIAL STATEMENTS
+Financial Statements (PRC)
+Financial Statements (PRC)
+81
+CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2015
+1 STATUS OF THE COMPANY
+Chief Financial Officer
+Li Chunguang
+President
+The accompanying notes form part of these financial statements.
+(Legal representative)
+Chairman
+Wang Yupu
+These financial statements have been approved by the board of directors on 29 March 2016.
+Wen Dongfen
+China Petroleum & Chemical Corporation (the "Company") was established on 25 February 2000 as a joint stock limited company. The company is
+registered in Beijing, the People's Republic of China, and the headquarter is located in Beijing, the People's Republic of China. The approval date of
+the financial report is 29 March 2016.
+According to the State Council's approval to the "Preliminary Plan for the Reorganisation of China Petrochemical Corporation" (the "Reorganisation"),
+the Company was established by China Petrochemical Corporation ("Sinopec Group Company"), which transferred its core businesses together with
+the related assets and liabilities at 30 September 1999 to the Company. Such assets and liabilities had been valued jointly by China United Assets
+Appraisal Corporation, Beijing Zhong Zheng Appraisal Company, CIECC Assets Appraisal Corporation and Zhong Fa International Properties Valuation
+Corporation. The net asset value was determined at RMB 98,249,084,000. The valuation was reviewed and approved by the Ministry of Finance (the
+"MOF") (Cai Ping Zi [2000] No. 20 "Comments on the Review of the Valuation Regarding the Formation of a Joint Stock Limited Company by China
+Petrochemical Corporation").
+In addition, pursuant to the notice Cai Guan Zi [2000] No. 34 "Reply to the Issue Regarding Management of State-Owned Equity by China Petroleum
+and Chemical Corporation" issued by the MOF, 68.8 billion domestic state-owned shares with a par value of RMB 1.00 each were issued to Sinopec
+Group Company, the amount of which is equivalent to 70% of the above net asset value transferred from Sinopec Group Company to the Company
+in connection with the Reorganisation.
+(3) Measurement basis
+The accounting year of the Group is from 1 January to 31 December.
+(2) Accounting period
+These financial statements are prepared on a basis of going concern.
+The financial statements have been prepared in accordance with the requirements of Accounting Standards for Business Enterprises
+Standards, specific standards and relevant regulations (hereafter referred as ASBE collectively) issued by the MOF on or after 15 February
+2006. These financial statements also comply with the disclosure requirements of "Regulation on the Preparation of Information Disclosures of
+Companies Issuing Public Shares, No.15: General Requirements for Financial Reports" issued by the China Securities Regulatory Commission
+("CSRC"). These financial statements present truly and completely the consolidated financial position and financial position of the Company as at
+31 December 2015, and the consolidated financial performance and financial performance and the consolidated cash flows and cash flows of the
+Company for the year then ended.
+Basic
+-
+(1) Statement of compliance of China Accounting Standards for Business Enterprises ("ASBE")
+2 BASIS OF PREPARATION
+Details of the Company's principal subsidiaries are set out in Note 53, and there are no significant changes related to the consolidation scope
+during the current year.
+(3) the production and sale of chemicals.
+(2) the refining, transportation, storage and marketing of crude oil and petroleum product; and
+(1) the exploration, development and production of crude oil and natural gas;
+The Company and its subsidiaries (the "Group") engage in the oil and gas and chemical operations and businesses, including:
+Pursuant to the notice Guo Jing Mao Qi Gai [2000] No. 154 "Reply on the Formation of China Petroleum and Chemical Corporation", the Company
+obtained the approval from the State Economic and Trade Commission on 21 February 2000 for the formation of a joint stock limited company.
+The Company took over the exploration, development and production of crude oil and natural gas, refining, chemicals and related sales and
+marketing business of Sinopec Group Company after the establishment of the Company.
+562,274
+15,991
+175,679
+313
+(24,214)
+- Distributions to shareholders (Note 49)
+(3,088)
+3.088
+- Appropriation for surplus reserves(Note 37)
+3. Appropriations of profits:
+(24,214)
+Transactions with owners, recorded directly in shareholders' equity:
+30.880
+61
+61
+30,880
+▬▬▬▬ 30,880
+538,649
+30.941
+9. Other movement
+2,791
+14,026
+(145)
+68,716
+121,071
+Balance at 31 December 2015
+81
+81
+5. Net increase in specific reserve for the year
+(7,397)
+(27,302)
+3,088
+14,026
+2,791
+in shareholders' equity
+Total transactions with owners, recorded directly
+16,817
+196,640
+4. Conversion of the 2011 Convertible Bonds (Note 33)