09/02/2021 | Press release | Distributed by Public on 09/02/2021 06:35
The Board is pleased to announce that on 27 August 2021, the Board has considered and approved the proposed establishment of the Joint Venture by Shanghai Petrochemical and Baling Petrochemical, both being subsidiaries of the Company. Pursuant to the Joint Venture Agreement, Shanghai Petrochemical and Baling Petrochemical will jointly establish the Joint Venture and each shall contribute in cash the amount of RMB 400 million. Following completion of the Transaction, Shanghai Petrochemical and Baling Petrochemical shall each own 50% equity interest of the Joint Venture.
As at the date of the announcement, the Company directly holds 50.44% equity interest of Shanghai Petrochemical and 55% equity interest in Baling Petrochemical. Baling Petrochemical is owned as to 45% by Assets Company, which is a wholly-owned subsidiary of China Petrochemical Corporation (being the Company's controlling shareholder). Pursuant to Chapter 14A of the Listing Rules, Baling Petrochemical is a connected subsidiary of the Company and the Transaction constitutes a connected transaction of the Company. In the past 12 months, Hainan Refining and Chemical, being a subsidiary of the Company, entered into a joint venture agreement with Baling Petrochemical (the 'Previous Transaction'), which was exempted from the reporting, announcement and independent shareholders' approval requirements under Chapter 14A of the Listing Rules as the applicable percentage ratios calculated under Rule 14.07 of the Listing Rules were less than 0.1%. The Transaction and the Previous Transaction are subject to aggregation pursuant to Rule 14A.81 of the Listing Rules. Since one or more of the applicable percentage ratios as calculated under Rule 14.07 of the Listing Rules on aggregate basis are more than 0.1% but less than 5%, the Transaction is subject to the reporting and announcement requirements but is exempted from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.
Shareholders and potential investors of the Company are reminded that the Joint Venture Agreement is pending the execution by Shanghai Petrochemical and Baling Petrochemical. The Company will make a further announcement when the Joint Venture Agreement is signed.
|
Company name:
|
:
|
Shanghai Jinshan Baling New Material Company Limited
|
Company nature:
|
:
|
Stated-controlled company with limited liability
|
Registered address:
|
:
|
Second Industrial Zone, Jinshan District, Shanghai
|
Principal business:
|
:
|
Production and sales of styrene thermoplastic elastomer new materials including SBS, SIS, SEBS, SEPS, SSBR (collectively referred to as 'SBC') and their feedstock, intermediate products and by-products; import and export (The specific scope is subject to business registration and items that require further approval under relevant laws may be operated upon obtaining such approval by competent authorities).
|
Registered capital
|
:
|
RMB800 million
|
Shareholders' Name
|
Contribution Amount
|
Contribution Proportion
|
Method
|
|||
Baling Petrochemical
|
400
|
50%
|
Cash
|
|||
Shanghai Petrochemical
|
400
|
50%
|
Cash
|
|||
In Total
|
800
|
100%
|
-
|
Parties
|
:
|
Shanghai Petrochemical and Baling Petrochemical
|
Method of Cooperation
|
:
|
The registered capital of the Joint Venture shall be RMB800 million, among which, each of Baling Petrochemical and Shanghai Petrochemical shall contribute RMB400 million in cash, representing 50% of the total registered capital respectively. Following completion of the Transaction, Baling Petrochemical and Shanghai Petrochemical shall each hold 50% equity interest of the Joint Venture and the financial results of the Joint Venture shall be consolidated into the financial statements of Baling Petrochemical.
|
Principal business
|
:
|
Production and sales of styrene thermoplastic elastomer new materials and their feedstock, intermediate products and by-products; import and export (The specific scope is subject to business registration and items that require further approval under relevant laws may be operated upon obtaining such approval by competent authorities).
|
Effective arrangement
|
:
|
The Joint Venture Agreement shall be established upon being duly signed and sealed by both parties and shall take effect after the parties complete the internal and external approvals. Matters not covered by this Agreement shall be mutually negotiated and agreed upon in a written supplemental agreement.
|
Board Composition
|
:
|
The Joint Venture shall establish a board of directors composed of 7 directors including 3 recommended by Baling Petrochemical, 3 recommended by Shanghai Petrochemical and 1 employee director.
|
Liabilities for breach of the Agreement
|
:
|
Shanghai Petrochemical and Baling Petrochemical shall bear liabilities for false contribution and compensate for the damages caused to third parties during the term of the Agreement. If the defaulting party falls three months behind on its committed contribution amount to the registered capital of the Joint Venture, the non-defaulting party shall be entitled to suspend the Agreement and demand the defaulting party to pay up the contribution amount, and also be entitled to default penalties calculated at 2% of the capital contribution amount and compensation for any losses incurred under the Agreement.
The defaulting party shall indemnify and hold harmless the Joint Venture or the other party against any liabilities or losses due to the defaulting party's breach of the Agreement, by compensating for any expenses or costs, liabilities to third parties, and other losses borne by the Joint Venture or the other party resulting from such breach.
|
Any party failing to perform under the Joint Venture Agreement due to governmental action or force majeure shall promptly notify the other party of the reasons for the non-performance, delay in performance or partial performance and provide a written proof from relevant authorities within 15 days. Upon the receipt of the written proof, it shall be mutually negotiated by Shanghai Petrochemical and Baling Petrochemical as to whether the performance shall be delayed, partially performed or not performed, and whether the liability for breach of contract shall be exonerated in part or in whole based on case-by-case analysis.
Either of Shanghai Petrochemical and Baling Petrochemical which is unable to fulfil the obligations under the Joint Venture Agreement due to force majeure shall adopt effective measures to minimize the economic losses caused to the Joint Venture or the other party.
|
||
Equity transfer
|
:
|
Any party contemplating to transfer all or any part of its equity in the Joint Venture to a third party shall notify the other party in written form. The non-transferring party shall have the right of first refusal on such equity. The transferring party shall have the right to transfer the equity to a third party in accordance with relevant state-owned equity transfer regulations if the non-transferring party fails to inform the transferring party of its consent or opposition to the proposed transfer within 30 working days upon the receipt of notification from the transferring party, or if the non-transferring party explicitly declines to purchase such equity despite its opposition to the transfer.
|
'Assets Company'
|
Sinopec Group Asset Management Co., Ltd.
|
|
'Baling Petrochemical'
|
Sinopec Baling Petrochemical Company Limited
|
|
'Board'
|
the board of directors of the Company
|
|
'China Petrochemical Corporation'
|
China Petrochemical Corporation
|
|
'Company' or 'Sinopec Corp.'
|
China Petroleum & Chemical Corporation
|
|
'connected person(s)'
|
has the meaning ascribed thereto under the Listing Rules
|
|
'Director(s)'
|
the Director(s) of the Company
|
|
'Group'
|
the Company and its subsidiaries
|
|
'Hainan Refining and Chemical'
|
Sinopec Hainan Refining and Chemical Company Limited
|
|
'Joint Venture'
|
Shanghai Jinshan Baling New Material Company Limited (a proposed name subject to approval by business registration authority)
|
'Joint Venture Agreement' or 'Agreement'
|
the Joint Venture Agreement on establishing Shanghai Jinshan Baling New Material Company Limited to be entered into by Shanghai Petrochemical and Baling Petrochemical
|
|
'Listing Rules'
|
the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited
|
|
'Previous Transaction'
|
the transaction under the joint venture agreement entered into by Baling Petrochemical and Hainan Refining and Chemical
|
|
'PRC'
|
the People's Republic of China
|
|
'Shanghai Petrochemical'
|
Sinopec Shanghai Petrochemical Company Limited
|
|
'RMB'
|
Renminbi, the lawful currency of the PRC
|
|
'Stock Exchange'
|
The Stock Exchange of Hong Kong Limited
|
|
'Transaction'
|
the proposed establishment of the Joint Venture by Shanghai Petrochemical and Baling Petrochemical under the Joint Venture Agreement
|
By Order of the Board
|
|
China Petroleum & Chemical Corporation
|
|
Huang Wensheng
|
|
Vice President and Secretary to the Board of Directors
|
By Order of the Board
|
|
China Petroleum & Chemical Corporation
|
|
Huang Wensheng
|
|
Vice President and Secretary to the Board of Directors
|
# |
Executive Director
|
* |
Non-executive Director
|
+ |
Independent Non-executive Director
|
2
|
Company Profile
|
|
4
|
Principal Financial Data and Indicators
|
|
6
|
Business Review and Prospects
|
|
10
|
Management's Discussion and Analysis
|
|
21
|
Corporate Governance
|
|
24
|
Environment and Social Responsibilities
|
|
26
|
Significant Events
|
|
33
|
Changes in Share Capital and Shareholdings of Shareholders
|
|
34
|
Bond General Information
|
|
36
|
Financial Statements
|
|
136
|
Index of Documents for Inspection
|
A Shares: |
Shanghai Stock Exchange
|
H Shares: |
Hong Kong Stock Exchange
|
ADRs: |
New York Stock Exchange
|
1 |
FINANCIAL DATA AND INDICATORS PREPARED IN ACCORDANCE WITH CASs
|
|
(1) |
Principal accounting data
|
Items
|
Six-month period ended 30 June
|
Changes
over the same
period of the
preceding year
(%)
|
||
2021
RMB million
|
2020
RMB million
(adjusted)
|
2020
RMB million
(before
adjustment)
|
||
Operating income
|
1,261,603
|
1,033,064
|
1,034,246
|
22.1
|
Net profit/(loss) attributable to equity shareholders of the Company
|
39,153
|
(23,001)
|
(22,882)
|
-
|
Net profit/(loss) attributable to equity shareholders of the Company excluding extraordinary gains and losses
|
38,420
|
(24,404)
|
(24,404)
|
-
|
Net cash flow from operating activities
|
47,736
|
40,365
|
39,794
|
18.3
|
As of
30 June
2021
RMB million
|
As of
31 December
2020
RMB million
|
Changes
from the end
of last year
(%)
|
|
Total equity attributable to shareholders of the Company
|
765,154
|
742,463
|
3.1
|
Total assets
|
1,852,964
|
1,733,805
|
6.9
|
|
Note: |
The Company completed the reorganisation of Sinopec Baling Petrochemical Co. Ltd. in 2020. This business reorganisation has been accounted as business combination under common control. Accordingly, the Company has retrospectively adjusted the relevant financial data for the same period in 2020.
|
|
(2) |
Principal financial indicators
|
Items
|
Six-month period ended 30 June
|
Changes
over the same
period of the
preceding year
(%)
|
||
2021
RMB
|
2020
RMB
(adjusted)
|
2020
RMB
(before
adjustment)
|
||
Basic earnings/(losses) per share
|
0.323
|
(0.190)
|
(0.189)
|
-
|
Diluted earnings/(losses) per share
|
0.323
|
(0.190)
|
(0.189)
|
-
|
Basic earnings/(losses) per share (excluding extraordinary gains and losses)
|
0.317
|
(0.202)
|
(0.202)
|
-
|
Weighted average return on net assets (%)
|
5.19
|
(3.21)
|
(3.21)
|
8.40
percentage points |
Weighted average return (excluding extraordinary gains and losses) on net assets (%)
|
5.10
|
(3.41)
|
(3.42)
|
8.51
percentage points |
|
(3) |
Extraordinary items and corresponding amounts
|
Items
|
Six-month period
ended 30 June 2021
(income)/expenses
|
RMB million
|
|
Net gain on disposal of non-current assets
|
(281)
|
Donations
|
8
|
Government grants
|
(1,549)
|
Gain on holding and disposal of various investments
|
(166)
|
Other extraordinary expenses, net
|
690
|
Subtotal
|
(1,298)
|
Tax effect
|
388
|
Total
|
(910)
|
Attributable to:
|
|
Equity shareholders of the Company
|
(733)
|
Minority interests
|
(177)
|
2 |
FINANCIAL DATA AND INDICATORS PREPARED IN ACCORDANCE WITH IFRS
|
|
(1) |
Principal accounting data
|
Items
|
Six-month period ended 30 June
|
Changes
over the same
period of the
preceding year
(%)
|
||
2021
RMB million
|
2020
RMB million
(adjusted)
|
2020
RMB million
(before
adjustment)
|
||
Operating profit/(loss)
|
58,109
|
(21,659)
|
(21,501)
|
-
|
Profit/(loss) attributable to shareholders of the Company
|
39,954
|
(21,844)
|
(21,725)
|
-
|
Net cash generated from operating activities
|
47,736
|
40,365
|
39,794
|
18.3
|
As of
30 June
2021
RMB million
|
As of
31 December
2020
RMB million
|
Changes
from the end
of last year
(%)
|
|
Total equity attributable to shareholders of the Company
|
764,208
|
741,494
|
3.1
|
Total assets
|
1,852,964
|
1,733,805
|
6.9
|
|
Note: |
The Company completed the reorganisation of Sinopec Baling Petrochemical Co. Ltd. in 2020. This business reorganisation has been accounted as business combination under common control. Accordingly, the Company has retrospectively adjusted the relevant financial data for the same period in 2020.
|
|
(2) |
Principal financial indicators
|
Items
|
Six-month period ended 30 June
|
Changes
over the same
period of the
preceding year
(%)
|
||
2021
RMB
|
2020
RMB
(adjusted)
|
2020
RMB
(before
adjustment)
|
||
Basic earnings/(losses) per share
|
0.330
|
(0.180)
|
(0.179)
|
-
|
Diluted earnings/(losses) per share
|
0.330
|
(0.180)
|
(0.179)
|
-
|
Return on capital employed (%)
|
6.14
|
(1.91)
|
(1.89)
|
8.05
percentage points |
1 |
PRODUCTION & OPERATIONS REVIEW
|
|
(1) |
Exploration and Production
|
Six-month period ended 30 June
|
Changes
|
||
2021
|
2020
|
(%)
|
|
Oil and gas production (mmboe)
|
235.29
|
225.71
|
4.2
|
Crude oil production (mmbbls)
|
138.15
|
140.27
|
(1.5)
|
China
|
123.62
|
124.05
|
(0.3)
|
Overseas
|
14.53
|
16.22
|
(10.4)
|
Natural gas production (bcf)
|
582.60
|
512.41
|
13.7
|
|
(2) |
Refining
|
Six-month period ended 30 June
|
Changes
|
||
2021
|
2020
|
(%)
|
|
Refinery throughput
|
126.11
|
110.95
|
13.7
|
Gasoline, diesel and kerosene production
|
72.19
|
67.19
|
7.4
|
Gasoline
|
32.40
|
26.82
|
20.8
|
Diesel
|
28.54
|
30.47
|
(6.3)
|
Kerosene
|
11.24
|
9.90
|
13.5
|
Light chemical feedstock production
|
22.26
|
19.00
|
17.2
|
|
(3) |
Marketing and Distribution
|
Six-month period ended 30 June
|
Change
|
||
2021
|
2020
|
(%)
|
|
Total sales volume of refined oil products (million tonnes)
|
109.13
|
107.03
|
2.0
|
Total domestic sales volume of refined oil products (million tonnes)
|
84.01
|
77.75
|
8.1
|
Retail (million tonnes)
|
55.50
|
52.50
|
5.7
|
Direct sales and Distribution (million tonnes)
|
28.51
|
25.24
|
13.0
|
Annualised average throughput per station (tonne/station)
|
3,614
|
3,419
|
5.7
|
Change
|
|||
As of
|
As of
|
from the end
|
|
30 June
|
31 December
|
of last year
|
|
2021
|
2020
|
(%)
|
|
Total number of Sinopec-branded service stations
|
30,716
|
30,713
|
0.0
|
Number of convenience stores
|
27,812
|
27,721
|
0.3
|
|
(4) |
Chemicals
|
Six-month period ended 30 June
|
Changes
|
||
2021
|
2020
|
(%)
|
|
Ethylene
|
6,463
|
5,776
|
11.9
|
Synthetic resin
|
9,292
|
8,376
|
10.9
|
Synthetic fiber monomer and polymer
|
4,507
|
4,421
|
1.9
|
Synthetic fiber
|
676
|
573
|
18.0
|
Synthetic rubber
|
594
|
526
|
12.9
|
2 |
HEALTH AND SAFETY
|
3 |
CAPITAL EXPENDITURES
|
1 |
CONSOLIDATED RESULTS OF OPERATIONS
|
Six-month period ended 30 June
|
|||
2021
|
2020
|
Change
|
|
RMB million
|
RMB million
|
(%)
|
|
Revenue
|
1,261,603
|
1,033,064
|
22.1
|
Revenue from primary business
|
1,231,980
|
1,006,808
|
22.4
|
Other operating revenues
|
29,623
|
26,256
|
12.8
|
Operating expenses
|
(1,203,494)
|
(1,054,723)
|
14.1
|
Purchased crude oil, products and operating supplies and expenses
|
(947,242)
|
(835,004)
|
13.4
|
Selling, general and administrative expenses
|
(25,748)
|
(24,373)
|
5.6
|
Depreciation, depletion and amortisation
|
(54,267)
|
(51,465)
|
5.4
|
Exploration expenses, including dry holes
|
(4,846)
|
(4,465)
|
8.5
|
Personnel expenses
|
(45,010)
|
(38,476)
|
17.0
|
Taxes other than income tax
|
(120,866)
|
(108,711)
|
11.2
|
Impairment reversal/(losses) on trade and other receivables
|
55
|
(101)
|
-
|
Other operating (expenses)/income, net
|
(5,570)
|
7,872
|
-
|
Operating profit/(loss)
|
58,109
|
(21,659)
|
-
|
Net finance costs
|
(4,901)
|
(5,263)
|
(6.9)
|
Investment income and share of profits less losses from associates and joint ventures
|
11,247
|
73
|
15,306.8
|
Profit/(loss) before taxation
|
64,455
|
(26,849)
|
-
|
Income tax expense
|
(14,949)
|
5,791
|
-
|
Profit/(loss) for the period
|
49,506
|
(21,058)
|
-
|
Attributable to:
|
|||
Shareholders of the Company
|
39,954
|
(21,844)
|
-
|
Non-controlling interests
|
9,552
|
786
|
1,115.3
|
|
(1) |
Revenue
|
Sales Volume (thousand tonnes)
|
Average realised price
(VAT excluded)
(RMB/tonne, RMB/thousand cubic meters)
|
|||||
Six-month period
ended 30 June
|
Change
|
Six-month period
ended 30 June
|
Change
|
|||
2021
|
2020
|
(%)
|
2021
|
2020
|
(%)
|
|
Crude oil
|
3,537
|
3,488
|
1.4
|
2,794
|
2,006
|
39.3
|
Natural gas (million cubic meters)
|
14,371
|
12,475
|
15.2
|
1,522
|
1,360
|
11.9
|
Gasoline
|
45,597
|
39,799
|
14.6
|
7,307
|
6,372
|
14.7
|
Diesel
|
34,648
|
35,980
|
(3.7)
|
5,388
|
4,862
|
10.8
|
Kerosene
|
11,016
|
9,519
|
15.7
|
3,397
|
2,892
|
17.5
|
Basic chemical feedstock
|
17,665
|
17,109
|
3.3
|
5,168
|
3,578
|
44.4
|
Synthetic fibre monomer and polymer
|
3,408
|
4,542
|
(25.0)
|
6,216
|
4,347
|
43.0
|
Synthetic resin
|
8,652
|
8,304
|
4.2
|
8,174
|
6,658
|
22.8
|
Synthetic fibre
|
714
|
602
|
18.6
|
7,356
|
6,723
|
9.4
|
Synthetic rubber
|
622
|
647
|
(3.9)
|
10,584
|
7,742
|
36.7
|
|
(2) |
Operating expenses
|
|
• |
Crude oil purchasing expenses were RMB300.1 billion, representing an increase of 20% year-on-year. Throughput of crude oil purchased externally in the first half of 2021 was 118 million tonnes (excluding the volume processed for third parties), up by 13.7% year-on-year. The average processing cost of crude oil purchased externally was RMB2,846 per tonne, up by 6.7% year-on-year.
|
|
• |
The Company's purchasing expenses of refined oil products were RMB136.0 billion, up by 0.9% year-on-year.
|
|
• |
The Company's purchasing expenses related to trading activities were RMB260.0 billion, up by 7.7% year-on-year.
|
|
• |
Other purchasing expenses were RMB251.2 billion, up by 20.3% year-on-year.
|
|
(3) |
Operating profit/(loss)
|
|
(4) |
Net finance costs
|
|
(5) |
Profit/(loss) before taxation
|
|
(6) |
Income tax expense
|
|
(7) |
Profit/(loss) attributable to non-controlling interests of the Company
|
|
(8) |
Profit/(loss) attributable to shareholders of the Company
|
2 |
RESULTS OF SEGMENT OPERATIONS
|
Operating revenues
|
As a percentage of
consolidated operating
revenues before elimination
of inter-segment sales
|
As a percentage of
consolidated operating
revenues after elimination
of inter-segment sales
|
||||
Six-month period
ended 30 June
|
Six-month period
ended 30 June
|
Six-month period
ended 30 June
|
||||
2021
|
2020
|
2021
|
2020
|
2021
|
2020
|
|
RMB million
|
(%)
|
(%)
|
||||
Exploration and Production Segment
|
||||||
External sales*
|
70,135
|
50,177
|
3.2
|
2.9
|
5.6
|
4.9
|
Inter-segment sales
|
39,391
|
28,752
|
1.8
|
1.7
|
||
Operating revenues
|
109,526
|
78,929
|
5.0
|
4.6
|
||
Refining Segment
|
||||||
External sales*
|
82,469
|
52,243
|
3.7
|
3.1
|
6.5
|
5.1
|
Inter-segment sales
|
543,540
|
386,115
|
24.4
|
22.7
|
||
Operating revenues
|
626,009
|
438,358
|
28.1
|
25.8
|
||
Marketing and Distribution Segment
|
||||||
External sales*
|
632,203
|
527,519
|
28.5
|
30.8
|
50.1
|
51.1
|
Inter-segment sales
|
2,967
|
2,282
|
0.1
|
0.1
|
||
Operating revenues
|
635,170
|
529,801
|
28.6
|
30.9
|
||
Chemicals Segment
|
||||||
External sales*
|
203,158
|
152,906
|
9.2
|
8.9
|
16.1
|
13.5
|
Inter-segment sales
|
30,025
|
25,786
|
1.4
|
1.5
|
||
Operating revenues
|
233,183
|
178,692
|
10.6
|
10.4
|
||
Corporate and Others
|
||||||
External sales*
|
273,638
|
261,906
|
12.3
|
15.3
|
21.7
|
25.4
|
Inter-segment sales
|
340,701
|
222,719
|
15.4
|
13.0
|
||
Operating revenues
|
614,339
|
484,625
|
27.7
|
28.3
|
||
Operating revenue before elimination of inter-segment sales
|
2,218,227
|
1,710,405
|
100.0
|
100.0
|
||
Elimination of inter-segment sales
|
(956,624)
|
(677,341)
|
||||
Consolidated operating revenues
|
1,261,603
|
1,033,064
|
100.0
|
100.0
|
Six-month period ended 30 June
|
|||
2021
|
2020
|
Change
|
|
RMB million
|
(%)
|
||
Exploration and Production Segment
|
|||
Operating revenues
|
109,526
|
78,929
|
38.8
|
Operating expenses
|
103,293
|
84,931
|
21.6
|
Operating profit/(loss)
|
6,233
|
(6,002)
|
-
|
Refining Segment
|
|||
Operating revenues
|
626,009
|
438,358
|
42.8
|
Operating expenses
|
586,611
|
470,047
|
24.8
|
Operating profit/(loss)
|
39,398
|
(31,689)
|
-
|
Marketing and Distribution Segment
|
|||
Operating revenues
|
635,170
|
529,801
|
19.9
|
Operating expenses
|
619,102
|
521,137
|
18.8
|
Operating profit
|
16,068
|
8,664
|
85.5
|
Chemicals Segment
|
|||
Operating revenues
|
233,183
|
178,692
|
30.5
|
Operating expenses
|
220,178
|
175,656
|
25.3
|
Operating profit
|
13,005
|
3,036
|
328.4
|
Corporate and Others
|
|||
Operating revenues
|
614,339
|
484,625
|
26.8
|
Operating expenses
|
618,074
|
484,793
|
27.5
|
Operating loss
|
(3,735)
|
(168)
|
-
|
Elimination
|
(12,860)
|
4,500
|
-
|
|
(1) |
Exploration and Production Segment
|
|
(2) |
Refining Segment
|
Sales Volume (thousand tonnes)
|
Average realised price
(VAT excluded)
(RMB/tonne)
|
|||||
Six-month period ended
30 June
|
Change
|
Six-month period ended
30 June
|
Change
|
|||
2021
|
2020
|
(%)
|
2021
|
2020
|
(%)
|
|
Gasoline
|
31,795
|
25,773
|
23.4
|
6,786
|
5,929
|
14.5
|
Diesel
|
28,021
|
29,063
|
(3.6)
|
5,056
|
4,390
|
15.2
|
Kerosene
|
8,991
|
8,208
|
9.6
|
3,371
|
2,969
|
13.5
|
Chemical feedstock
|
22,337
|
18,334
|
21.8
|
3,609
|
2,561
|
40.9
|
Other refined petroleum products
|
33,752
|
30,677
|
10.0
|
4,600
|
2,757
|
66.8
|
|
(3) |
Marketing and Distribution Segment
|
Sales volume
(thousand tonnes)
|
Average realised price
(RMB/tonne)
|
|||||
Six-month period
ended 30 June
|
Change
|
Six-month period
ended 30 June
|
Change
|
|||
2021
|
2020
|
(%)
|
2021
|
2020
|
(%)
|
|
Gasoline
|
45,606
|
39,807
|
14.6
|
7,307
|
6,523
|
12.0
|
Retail
|
32,383
|
28,322
|
14.3
|
7,807
|
7,128
|
9.5
|
Direct sales and distribution
|
13,222
|
11,485
|
15.1
|
6,082
|
5,031
|
20.9
|
Diesel
|
34,742
|
36,098
|
(3.8)
|
5,388
|
5,019
|
7.4
|
Retail
|
15,065
|
17,137
|
(12.1)
|
6,079
|
5,500
|
10.5
|
Direct sales and distribution
|
19,677
|
18,961
|
3.8
|
4,860
|
4,584
|
6.0
|
Kerosene
|
11,016
|
9,519
|
15.7
|
3,397
|
2,891
|
17.5
|
Fuel oil
|
12,751
|
11,548
|
10.4
|
3,103
|
2,736
|
13.4
|
|
(4) |
Chemicals
|
Sales volume
(thousand tonnes)
|
Average realised price
(VAT excluded, RMB/tonne)
|
|||||
Six-month period
ended 30 June
|
Change
|
Six-month period
ended 30 June
|
Change
|
|||
2021
|
2020
|
(%)
|
2021
|
2020
|
(%)
|
|
Basic organic chemicals
|
23,377
|
21,928
|
6.6
|
4,968
|
3,541
|
40.3
|
Synthetic fibre monomer and polymer
|
3,432
|
4,572
|
(24.9)
|
6,253
|
4,354
|
43.6
|
Synthetic resin
|
8,652
|
8,312
|
4.1
|
8,174
|
6,661
|
22.7
|
Synthetics fibre
|
714
|
602
|
18.5
|
7,356
|
6,771
|
8.6
|
Synthetic rubber
|
624
|
649
|
(3.8)
|
10,589
|
7,747
|
36.7
|
Chemical fertiliser
|
505
|
592
|
(14.7)
|
2,666
|
1,928
|
38.3
|
|
(5) |
Corporate and others
|
3 |
ASSETS, LIABILITIES, EQUITY AND CASH FLOWS
|
|
(1) | Assets, Liabilities and Equity | Unit:RMB million |
As of
30 June
2021
|
As of
31 December
2020
|
Change
|
|
Total assets
|
1,852,964
|
1,733,805
|
119,159
|
Current assets
|
553,436
|
455,395
|
98,041
|
Non-current assets
|
1,299,528
|
1,278,410
|
21,118
|
Total liabilities
|
946,656
|
850,947
|
95,709
|
Current liabilities
|
623,995
|
522,190
|
101,805
|
Non-current liabilities
|
322,661
|
328,757
|
(6,096)
|
Total equity attributable to the shareholders of the Company
|
764,208
|
741,494
|
22,714
|
Share capital
|
121,071
|
121,071
|
-
|
Reserves
|
643,137
|
620,423
|
22,714
|
Non-controlling interests
|
142,100
|
141,364
|
736
|
Total equity
|
906,308
|
882,858
|
23,450
|
|
(2) |
Cash Flows
|
Major items of cash flows
|
Six-month period ended 30 June
|
Change
|
|
2021
|
2020
|
||
Net cash generated from operating activities
|
47,736
|
40,365
|
7,371
|
Net cash used in investing activities
|
(65,791)
|
(75,605)
|
9,814
|
Net cash generated from financing activities
|
9,062
|
61,224
|
(52,162)
|
Net (decrease)/increase in cash and cash equivalents
|
(8,993)
|
25,984
|
(34,977)
|
|
(3) |
Contingent Liabilities
|
|
(4) |
Capital Expenditure
|
|
(5) |
Research & Development and Environmental Expenditure
|
|
(6) |
Measurement of Fair Values of Derivatives and Relevant System
|
Profits and
losses from
variation of fair
|
Accumulated
variation
|
Impairment
loss provision
|
||||
Beginning of
|
End of the
|
values in the
|
of fair values
|
of the current
|
||
Items
|
the reporting
period
|
reporting
period
|
current reporting
period
|
recorded as
equity
|
reporting
period
|
Funding
source
|
Financial assets at fair value through profit or loss of the reporting period
|
1
|
3,988
|
23
|
-
|
-
|
Self-owned fund
|
Structured deposit
|
-
|
3,988
|
23
|
-
|
-
|
Self-owned fund
|
Stock
|
1
|
-
|
-
|
-
|
-
|
Self-owned fund
|
Derivative financial instruments
|
157
|
(1,598)
|
(5,936)
|
-
|
-
|
|
Cash flow hedges
|
7,545
|
19,205
|
(303)
|
5,214
|
-
|
|
Other equity instruments
|
1,525
|
1,534
|
-
|
(11)
|
-
|
|
Total
|
9,228
|
23,129
|
(6,216)
|
5,203
|
-
|
4 |
ANALYSIS OF FINANCIAL STATEMENTS PREPARED UNDER CASs
|
|
(1) |
Under CASs, the operating income and operating profit or loss by reportable segments were as follows:
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Operating income
|
||
Exploration and Production Segment
|
109,526
|
78,929
|
Refining Segment
|
626,009
|
438,358
|
Marketing and Distribution Segment
|
635,170
|
529,801
|
Chemicals Segment
|
233,183
|
178,692
|
Corporate and Others
|
614,339
|
484,625
|
Elimination of inter-segment sales
|
(956,624)
|
(677,341)
|
Consolidated operating income
|
1,261,603
|
1,033,064
|
Operating profit/(loss)
|
||
Exploration and Production Segment
|
5,218
|
(8,044)
|
Refining Segment
|
39,177
|
(32,548)
|
Marketing and Distribution Segment
|
16,583
|
6,807
|
Chemicals Segment
|
12,468
|
2,699
|
Corporate and Others
|
1,646
|
(4,388)
|
Elimination of inter-segment sales
|
(12,860)
|
4,500
|
Financial expenses, losses/gains from changes in fair value, investment income and disposal income
|
386
|
582
|
Other income
|
1,244
|
2,467
|
Consolidated operating profit/(loss)
|
63,862
|
(27,925)
|
Net profit/(loss) attributable to equity shareholders of the Company
|
39,153
|
(23,001)
|
|
(2) |
Financial data prepared under CASs:
|
At 30 June
|
At 31 December
|
||
2021
|
2020
|
Changes
|
|
RMB million
|
RMB million
|
RMB million
|
|
Total assets
|
1,852,964
|
1,733,805
|
119,159
|
Non-current liabilities
|
321,668
|
327,739
|
(6,071)
|
Shareholders' equity
|
907,301
|
883,876
|
23,425
|
|
(3) |
The results of the principal operations by segments
|
Increase of
|
||||||
gross profit
|
||||||
Increase of
|
Increase of
|
margin on
|
||||
operating
|
operating
|
a year-on-year
|
||||
Operating
|
Gross profit
|
income on
|
cost on
|
basis
|
||
income
|
Operating cost
|
margin*
|
a year-on-year
|
a year-on-year
|
(percentage
|
|
Segments
|
(RMB million)
|
(RMB million)
|
(%)
|
basis (%)
|
basis (%)
|
points)
|
Exploration and Production
|
109,526
|
87,795
|
15.5
|
38.8
|
21.4
|
11.8
|
Refining
|
626,009
|
461,307
|
8.2
|
42.8
|
31.6
|
11.4
|
Marketing and Distribution
|
635,170
|
585,264
|
7.6
|
19.9
|
18.9
|
0.7
|
Chemicals
|
233,183
|
205,184
|
11.4
|
30.5
|
33.5
|
2.2
|
Corporate and Others
|
614,339
|
604,198
|
1.6
|
26.8
|
26.0
|
0.5
|
Elimination of inter-segment sales
|
(956,624)
|
(943,765)
|
N/A
|
N/A
|
N/A
|
N/A
|
Total
|
1,261,603
|
999,983
|
11.2
|
22.1
|
14.4
|
6.3
|
|
* |
Gross profit margin = (Operating income - Operating cost, taxes and surcharges)/Operating income
|
1. |
IMPROVEMENTS IN CORPORATE GOVERNANCE
|
2. |
GENERAL MEETINGS
|
3. |
DIRECTORS, SUPERVISORS AND OTHER SENIOR MANAGEMENT
|
|
(1) |
Information On Appointment Or Termination
|
|
(2) |
Equity Interests of Directors, Supervisors, and Other Senior Management
|
4 |
DIVIDEND
|
|
(1) |
Dividend distribution for the year ended 31 December 2020
|
|
(2) |
Interim dividend distribution plan for the six months ended 30 June 2021
|
5. |
DETAILED IMPLEMENTATION OF THE SHARE INCENTIVE SCHEME DURING THE REPORTING PERIOD
|
6. |
COMPLY WITH CORPORATE GOVERNANCE CODE
|
7. |
REVIEW THE INTERIM REPORT
|
1 |
ECOLOGICAL PROTECTION, POLLUTION PREVENTION AND CONTROL, AND ENVIRONMENTAL RESPONSIBILITY DURING THE REPORTING PERIOD
|
2 |
MEASURES AND EFFECTS TAKEN BY THE COMPANY TO REDUCE CARBON EMISSIONS DURING THE REPORTING PERIOD
|
3 |
ENVIRONMENTAL PROTECTION STATEMENTS OF COMPANIES AND THEIR SUBSIDIARIES AS KEY POLLUTANT DISCHARGE UNITS RECOGNISED BY ENVIRONMENTAL PROTECTION DEPARTMENTS
|
|
(1) |
Information of pollutant discharging
|
|
(2) |
Construction and operation of prevention and control facilities
|
|
(3) |
Environmental impact assessment of construction projects and other environmental protection administrative permits
|
|
(4) |
Emergency response plan for environmental emergencies
|
|
(5) |
Environmental self-monitoring programme
|
|
(6) |
Administrative penalties imposed for environmental problems during the reporting period
|
Company
|
Time
|
Penalty document
|
Penalty amount/
RMB thousand
|
Penalty reason
|
Rectification measures
|
Sinopec Nanjing Catalyst Co. LTD
|
2021 January
|
寧新區管環罰
[2020]117號
|
272
|
In some periods of 2019 and 2020, the average online monitoring data of total non-methane hydrocarbons exceeded standard for 3 hours within 24 hours.
|
The Company has taken rectification measures and established mechanism of abnormal environmental protection online data, strengthened the management of environmental protection facilities and online monitoring facilities, and conducted assessment of relevant contractors.
|
|
(7) |
Other environmental information required to be disclosed
|
4 |
PERFORMANCE OF POVERTY ALLEVIATION AND RURAL REVITALISATION DURING THE REPORTING PERIOD
|
5 |
RENDERING ASSISTANCE TO FLOOD CONTROL AND DISASTER RELIEF AND POST-DISASTER RECONSTRUCTION IN HENAN PROVINCE
|
6 |
SUPPORTING BEIJING 2022 WINTER OLYMPICS AND PARALYMPICS
|
1. |
MAJOR PROJECTS
|
|
(1) |
Zhenhai Refining & Chemical expansion project (phase 1)
|
|
(2) |
Zhenhai Refining & Chemical expansion project (phase 2)
|
|
(3) |
Tianjin Nanggang ethylene and downstream high-end new material industry cluster project
|
|
(4) |
Wuhan ethylene de-bottleneck project
|
|
(5) |
Hainan Refining 1,000,000 tpa ethylene and refinery revamping and expansion project
|
|
(6) |
Weirong shale gas project (phase 1 and phase 2)
|
|
(7) |
Tianjin LNG project (phase 2)
|
2. |
CORE COMPETITIVENESS ANALYSIS
|
3. |
ACTUAL CONTINUING CONNECTED TRANSACTIONS ENTERED INTO BY THE COMPANY DURING THE REPORTING PERIOD
|
4. |
FUNDS PROVIDED BETWEEN RELATED PARTIES
|
Funds to related parties
|
Funds from related parties
|
||||||
Related Parties
|
Relations
|
Balance
at the
beginning
of the reporting
period
|
Amount incurred
|
Balance
at the end
of the reporting
period
|
Balance
at the
beginning
of the reporting
period
|
Amount incurred
|
Balance at
the end
of the reporting
period
|
Sinopec Group
|
Parent company and affiliated companies*
|
10,523
|
179
|
10,702
|
9,027
|
19,645
|
28,672
|
Other related parties
|
Associates and joint ventures
|
11,328
|
(6,172)
|
5,156
|
6,087
|
(2,083)
|
4,004
|
Total
|
21,851
|
(5,993)
|
15,858
|
15,114
|
17,562
|
32,676
|
|
Reason for provision of funds between related parties
|
Loans and accounts receivable and payable
|
||||||
Impacts of the provision of funds on the Company
|
No material negative impact
|
5. |
ACTUAL DAILY RELATED TRANSACTIONS ENTERED INTO BY THE COMPANY AND CHINA OIL & GAS PIPELINE NETWORK CORPORATION (PIPECHINA) DURING THE REPORTING PERIOD
|
6. |
ACQUISITION OF EQUITY AND NON-EQUITY ASSETS
|
7. |
SIGNIFICANT LITIGATION, ARBITRATION RELATING TO THE COMPANY
|
8. |
CREDIBILITY FOR THE COMPANY, CONTROLLING SHAREHOLDERS AND DE FACTO CONTROLLER
|
9. |
MATERIAL CONTRACTS AND THEIR PERFORMANCE
|
10. |
SIGNIFICANT EQUITY INVESTMENT
|
11. |
SIGNIFICANT SALE OF ASSETS OR EQUITY
|
12. |
BUSINESS WITH SINOPEC FINANCE CO. AND CENTURY BRIGHT
|
|
(1) |
DEPOSIT BUSINESS
|
Related Parties
|
Relations
|
Daily Deposit Cap
|
Deposit Interest Rate Range
|
Balance at the
Beginning of the
Reporting Period
|
Amount
Incurred
|
Balance at the
end of the
Reporting Period
|
Sinopec Finance Co.
|
51% by China Petrochemical Corporation, 49% by Sinopec Corp.
|
Cap RMB80.0 billion by Sinopec Finance Co. and Century Bright
|
current deposit 0.35%-
1.725%; time deposit 1.62%-7.4% |
23,953
|
6,868
|
17,964
|
Century Bright
|
100% by China Petrochemical Corporation
|
current deposit 0%-0.25%;
time deposit 0.08%-1.23% |
29,464
|
113,512
|
36,186
|
|
Total
|
/
|
/
|
/
|
53,417
|
120,380
|
54,150
|
|
Note 1: |
In general, the deposit interest rate in Sinopec Finance Co. and Century Bright by Sinopec Corp. is no lower than the same kind and same period deposit interest rate of major commercial banks.
|
|
Note 2: |
The amount incurred in the reporting period is in the calibre of time deposits (new deposits and mature deposits), of which the time deposit of the Sinopec Finance Co. increased by RMB3.986 billion in the first half of the 2021 and due by RMB2.882 billion; the time deposit of Century Bright increased by RMB60.811 billion in the first half of the 2021, and due by RMB52.701 billion.
|
|
(2) |
LOAN BUSINESS
|
Related Parties
|
Relations
|
Loan Cap
|
Loan Interest Rate Range
|
Balance at the
Beginning of the
Reporting Period
|
Amount
Incurred
|
Balance at the
end of the
Reporting Period
|
Century Bright
|
100% by China Petrochemical Corporation
|
120,956
|
0.62%-4.25%
|
6,614
|
115,407
|
9,999
|
Sinopec Finance Co.
|
51% by China Petrochemical Corporation, 49% by Sinopec Corp.
|
10,400
|
1.08%-5.23%
|
10,428
|
22,860
|
10,400
|
Total
|
/
|
/
|
/
|
17,042
|
138,267
|
20,399
|
|
Note 1: |
In general, the loan interest rate by Sinopec Finance Co. and Century Bright to Sinopec Corp. is no higher than the same kind and same period loan interest rate of major commercial banks.
|
|
Note 2: |
Among the amounts incurred in the reporting period, that of Century Bright increased by RMB59.396 billion and decreased by RMB56.011 billion, and that of Sinopec Finance Co. increased by RMB11.416 billion and decreased by RMB11.444 billion.
|
|
(3) |
CREDIT BUSINESS AND OTHER FINANCE BUSINESS
|
Related Parties
|
Relations
|
Business Type
|
Balance at the end
of the Reporting Period
|
Amount Incurred
|
Sinopec Finance Co.
|
51% by China Petrochemical Corporation, 49% by Sinopec Corp.
|
Acceptance bill
|
9,735
|
10,318
|
Discounted bill
|
/
|
2,884
|
13. |
MATERIAL GUARANTEE CONTRACTS AND THEIR PERFORMANCE
|
Major external guarantees (excluding guarantees for controlled subsidiaries)
|
|||||||||||||
Guarantor
|
Relationship with
the Company
|
Name of guaranteed
company
|
Amount
|
Transaction date
(date of signing)
|
Period of guarantee
|
Type
|
Main Debts
|
Guarantees
|
Whether
completed
or not
|
Whether
overdue
or not
|
Amount of
overdue
guarantee
|
Counter-
guaranteed
|
Whether
guaranteed
for connected
parties*1
|
Sinopec Corp.
|
The listed company itself
|
Zhongtian Hechuang Energy Co., Ltd.
|
6,760
|
25 May 2016
|
25 May 2016-31 December 2023 (the mature date is estimated)
|
Joint liability guarantee
|
Normal performance
|
None
|
No
|
No
|
None
|
No
|
No
|
Sinopec Corp.
|
The listed company itself
|
Zhong An United Coal Chemical Co., Ltd.
|
6,035
|
18 April 2018
|
18 April 2018-31 December 2031
|
Joint liability guarantee
|
Normal performance
|
None
|
No
|
No
|
None
|
No
|
No
|
Total amount of guarantees provided during the reporting period*2
|
0
|
Total balance amount of guarantee at the end of reporting period*2 (A)
|
12,795
|
Guarantees by the Company to the controlled subsidiaries
|
|
Total amount of guarantee provided to controlled subsidiaries during the reporting period
|
0
|
Total balance amount of guarantee for controlled subsidiaries at the end of the reporting period (B)
|
11,305
|
Total amount of guarantees by the Company (including those provided for controlled subsidiaries)
|
|
Total amount of guarantees (A+B)
|
24,100
|
The proportion of the total amount of guarantees attribute to the Sinopec Corp.'s net assets (%)
|
3.15%
|
Among which:
|
|
Guarantees provided for shareholder, de facto controller and its related parties (C)
|
0
|
Amount of debt guarantees provided directly or indirectly to the companies with liabilities to assets ratio over 70% (D)
|
6,035
|
The amount of guarantees in excess of 50% of the net assets (E)
|
0
|
Total amount of the above three guarantee items (C+D+E)
|
6,035
|
Explanation of guarantee undue that might involve joint and several liabilities
|
None
|
Explanation of guarantee status
|
None
|
|
*1: |
As defined in the Rules Governing the Listing of Stocks on Shanghai Stock Exchange.
|
|
*2: |
The amount of guarantees provided during the reporting period and the outstanding balance of guarantees amount 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 from multiplying the guarantees provided by Sinopec Corp.'s subsidiaries by the percentage of shareholding of Sinopec Corp. in such subsidiaries.
|
14. |
PERFORMANCE OF THE UNDERTAKINGS BY CHINA PETROCHEMICAL CORPORATION
|
Background
|
Type of
Undertaking
|
Party
|
Contents
|
Term for performance
|
Whether bears
deadline or not
|
Whether strictly
performed or not
|
Undertakings related to Initial Public Offerings (IPOs)
|
IPOs
|
China Petrochemical Corporation
|
1Compliance with the connected transaction agreements;
2Solving the issues regarding the legality of land-use rights certificates and property ownership rights certificates within a specified period of time;
3Implementation of the Reorganisation Agreement (please refer to the definition of Reorganisation Agreement in the H share prospectus of Sinopec Corp.);
4Granting licenses for intellectual property rights;
5Avoiding competition within the same industry;
6Abandonment of business competition and conflicts of interest with Sinopec Corp.
|
From 22 June 2001
|
No
|
Yes
|
Other undertakings
|
Other
|
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) within ten years from the issuance date of this undertaking, 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.
|
Within 10 years after 29 April 2014 or the date when China Petrochemical Corporation acquires the assets
|
Yes
|
Yes
|
15. |
STRUCTURED ENTITY CONTROLLED BY THE COMPANY
|
16. |
REPURCHASE, SALES AND REDEMPTION OF SHARES
|
17. |
INFORMATION ON MAJOR SUBSIDIARIES OR THE ASSOCIATES OR JOINT VENTURES
|
Percentage of
share held by
|
Revenue of
|
Profit of
|
||||||
Company name
|
Registered
capital
|
Sinopec Corp.
(%)
|
Total asset
|
Net Assets
|
Net Profit
|
primary
business
|
primary
business
|
Primary Activities
|
Sinopec Marketing Co., Ltd.
|
28,403
|
70.42
|
521,709
|
245,930
|
12,969
|
615,076
|
44,145
|
Sales of refined oill products
|
18. |
CHANGE OF AUDITORS
|
19. |
RISK FACTORS
|
1 |
CHANGES IN THE SHARE CAPITAL
|
2 |
NUMBER OF SHAREHOLDERS AND THEIR SHAREHOLDINGS
|
|
(1) |
Top ten shareholders as of 30 June 2021
|
Name of Shareholders
|
Nature of shareholders
|
Percentage of shareholdings
%
|
Total number of shares held
|
Changes of shareholding1
|
Number of shares subject to pledges or lock up
|
China Petrochemical Corporation
|
State-owned share
|
68.31
|
82,709,227,393
|
0
|
0
|
HKSCC (Nominees) Limited2
|
H share
|
20.97
|
25,385,923,845
|
643,437
|
unknown
|
中國證券金融股份有限公司
|
A share
|
1.92
|
2,325,374,407
|
(283,937,650)
|
0
|
香港中央結算有限公司
|
A share
|
0.93
|
1,122,299,922
|
281,227,640
|
0
|
中國人壽保險股份有限公司-傳統-普通保險產品-005L-CT001滬
|
A share
|
0.67
|
813,500,331
|
(1,105,700)
|
0
|
中國人壽保險股份有限公司-分紅-個人分紅-005L-FH002滬
|
A share
|
0.27
|
323,077,505
|
(492,592,663)
|
0
|
中中央匯金資產管理有限責任公司
|
A share
|
0.27
|
322,037,900
|
0
|
0
|
國信證券股份有限公司
|
A share
|
0.16
|
196,977,796
|
177,793,001
|
0
|
黃長富
|
A share
|
0.13
|
160,000,087
|
160,000,087
|
0
|
全國社保基金一一三組合
|
A share
|
0.09
|
107,387,897
|
107,387,897
|
0
|
|
1. |
As compared with the number of shares as at 31 December 2020.
|
|
2. |
Sinopec Century Bright Capital Investment Limited, a wholly-owned overseas subsidiary of China Petrochemical Corporation, holds 553,150,000 H shares, accounting for 0.46% of the total share capital of Sinopec Corp. Such shareholdings are included in the total number of shares held by HKSCC Nominees Limited.
|
|
(2) |
Information disclosed by the holders of H shares in accordance with the Securities and Futures Ordinance (SFO) as of 30 June 2021
|
Name of shareholders
|
Status of shareholders
|
Number of
shares
interests held
or regarded as
held
|
Approximate
percentage
of Sinopec Corp.'s
issued share
capital
(H share) (%)
|
Citigroup Inc.
|
Person having a security interest in shares
|
7,771,000(L)
|
0.03(L)
|
Interests of corporation controlled by the
|
127,810,267(L)
|
0.50(L)
|
|
substantial shareholder
|
124,137,279(S)
|
0.49(S)
|
|
Approved lending agent
|
1,901,979,079(L)
|
7.45(L)
|
|
BlackRock, Inc.
|
Interests of corporation controlled by the
|
1,968,236,873(L)
|
7.71(L)
|
substantial shareholder
|
5,529,900(S)
|
0.02(S)
|
|
GIC Private Limited
|
Investment manager
|
1,523,751,125(L)
|
5.97(L)
|
3 |
CHANGES IN THE CONTROLLING SHAREHOLDERS AND THE DE FACTO CONTROLLER
|
1. |
CORPORATE BOND
|
Bond name
|
Sinopec Corp.2012 Corporate bond
|
|
Abbreviation
|
12石化02
|
|
Code
|
122150
|
|
Issuance date
|
1 June 2012
|
|
Interest commencement date
|
1 June 2012
|
|
Maturity date
|
1 June 2022
|
|
Amount issued (RMB billion)
|
7
|
|
Outstanding balance (RMB billion)
|
7
|
|
Interest rate (%)
|
4.90
|
|
Principal and interest repayment
|
Simple interest is calculated and paid on an annual basis without compounding interests. Interest is paid once a year. The principal will be paid at maturity with last instalment of interest.
|
|
Investor Qualification Arrangement
|
12石化02 was publicly offered to qualified investors in accordance with Administration of the Issuance and Trading of Corporate Bonds.
|
|
Applicable trading mechanism
|
floor trading at Shanghai Stock Exchange, in line with pledge repurchase requirement
|
|
Risk of suspension for listed trading, and countermeasures
|
N/A
|
|
Listing exchange
|
Shanghai Stock Exchange
|
|
Use of proceeds
|
Proceeds from the above-mentioned corporate bonds have been used for their designated purpose as disclosed. All the proceeds have been completely used.
|
|
Credit rating agency
|
During the reporting period, United Credit Ratings Co., Ltd. tracked and provided credit rating for 12石化02 and reaffirmed AAA credit rating in the continuing credit rating report. The credit rating of Sinopec Corp. remained AAA with its outlook being stable. Pursuant to relevant regulations, the latest credit rating results have been published through media designated by regulators within two months commencing from the disclosure of annual report for 2020.
|
|
Special terms for Issuer or investor option or investor protection, whether triggered or executed
|
No special terms for Issuer or investor option or investor protection, thus not applicable
|
|
Guarantee and repayment scheme and other relative events in the reporting period
|
China Petrochemical Corporation bears non-irrevocable joint liability guarantee. Interest is paid as usual in the reporting period without triggering any guarantee.
|
|
Convening of corporate bond holders' meeting
|
During the reporting period, the bondholders' meeting was not convened.
|
|
Performance of corporate bonds trustee
|
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 of the bond. The bond trustee has also advised the Company to fulfil obligations as described in the corporate bond prospectus and exercised its duty to protect the bondholders' legitimate rights and interests. The bond trustee has disclosed the Trustee Management Affairs Report of last year. The full disclosure is available on the website of Shanghai Stock Exchange (http://www.sse.com.cn).
|
2. |
NON-FINANCIAL ENTERPRISE DEBT FINANCING TOOL IN INTER-BANK BOND MARKET
|
Principal data
|
At the end of the
reporting period
|
At the end of
last year
|
Change
|
Reason for change
|
Current ratio
|
0.89
|
0.87
|
0.02
|
Due to increase of current assets
|
Quick ratio
|
0.57
|
0.58
|
(0.01)
|
Due to slightly increase of other current liabilities
|
Liability-to-asset ratio
|
51.04%
|
49.02%
|
2.02 percentage points
|
Due to increase of liabilities
|
Loan repayment rate
|
100%
|
100%
|
-
|
-
|
The reporting
period for 2021
(January-June)
|
The reporting
period for 2020
(January-June)
|
Change
|
Reason for change
|
|
Net profit/(loss) attributable to equity shareholders of the Company excluding extraordinary gains and losses
|
38,420
|
(24,404)
|
62,824
|
Due to increase of net profit
|
Net profit/(loss) excluding extraordinary gains and losses
|
47,618
|
(23,836)
|
71,454
|
Due to increase of net profit
|
EBITDA-to-total debt ratio
|
0.77
|
0.18
|
0.59
|
Due to increase of EBITDA
|
EBITDA-to-interest coverage ratio
|
16.17
|
2.99
|
13.18
|
Due to increase of EBITDA
|
Interest coverage ratio
|
9.68
|
(2.46)
|
12.14
|
Due to increase of profit before tax
|
Cash interest coverage ratio
|
29.29
|
13.88
|
15.41
|
Due to increase of operating cash flow
|
Interest payment rate
|
100%
|
100%
|
-
|
KPMG Huazhen LLP
|
Certified Public Accountants
|
Registered in the People's Republic of China
|
|
Yang Jie (Engagement Partner)
|
|
Beijing, China
|
He Shu
|
27 August 2021
|
(A) |
FINANCIAL STATEMENTS PREPARED UNDER CHINA ACCOUNTING STANDARDS FOR BUSINESS ENTERPRISES
|
Notes
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
||
RMB million
|
RMB million
|
||
Assets
|
|||
Current assets
|
|||
Cash at bank and on hand
|
5
|
190,482
|
184,412
|
Financial assets held for trading
|
6
|
3,988
|
1
|
Derivative financial assets
|
7
|
24,554
|
12,528
|
Accounts receivable
|
8
|
71,843
|
35,587
|
Receivables financing
|
9
|
9,686
|
8,735
|
Prepayments
|
10
|
8,317
|
4,862
|
Other receivables
|
11
|
28,605
|
33,602
|
Inventories
|
12
|
199,234
|
151,895
|
Other current assets
|
16,727
|
23,773
|
|
Total current assets
|
553,436
|
455,395
|
|
Non-current assets
|
|||
Long-term equity investments
|
13
|
199,652
|
188,342
|
Other equity instrument investments
|
1,534
|
1,525
|
|
Fixed assets
|
14
|
580,846
|
589,285
|
Construction in progress
|
15
|
137,799
|
124,765
|
Right-of-use assets
|
16
|
189,103
|
189,583
|
Intangible assets
|
17
|
115,425
|
114,066
|
Goodwill
|
18
|
8,609
|
8,620
|
Long-term deferred expenses
|
19
|
9,689
|
9,535
|
Deferred tax assets
|
20
|
29,989
|
25,054
|
Other non-current assets
|
21
|
26,882
|
27,635
|
Total non-current assets
|
1,299,528
|
1,278,410
|
|
Total assets
|
1,852,964
|
1,733,805
|
|
Liabilities and shareholders' equity
|
|||
Current liabilities
|
|||
Short-term loans
|
23
|
37,649
|
20,756
|
Derivative financial liabilities
|
7
|
6,947
|
4,826
|
Bills payable
|
24
|
11,260
|
10,394
|
Accounts payable
|
25
|
216,268
|
151,262
|
Contract liabilities
|
26
|
127,920
|
126,160
|
Employee benefits payable
|
27
|
15,826
|
7,081
|
Taxes payable
|
28
|
36,897
|
76,843
|
Other payables
|
29
|
101,977
|
84,600
|
Non-current liabilities due within one year
|
30
|
29,397
|
22,493
|
Other current liabilities
|
31
|
39,854
|
17,775
|
Total current liabilities
|
623,995
|
522,190
|
|
Non-current liabilities
|
|||
Long-term loans
|
32
|
43,149
|
45,459
|
Debentures payable
|
33
|
31,251
|
38,356
|
Lease liabilities
|
34
|
171,945
|
172,306
|
Provisions
|
35
|
45,947
|
45,552
|
Deferred tax liabilities
|
20
|
10,572
|
8,124
|
Other non-current liabilities
|
36
|
18,804
|
17,942
|
Total non-current liabilities
|
321,668
|
327,739
|
|
Total liabilities
|
945,663
|
849,929
|
|
Shareholders' equity
|
|||
Share capital
|
37
|
121,071
|
121,071
|
Capital reserve
|
38
|
121,194
|
122,558
|
Other comprehensive income
|
39
|
901
|
1,038
|
Specific reserve
|
2,719
|
1,941
|
|
Surplus reserves
|
40
|
209,280
|
209,280
|
Undistributed profits
|
309,989
|
286,575
|
|
Total equity attributable to shareholders of the Company
|
765,154
|
742,463
|
|
Minority interests
|
142,147
|
141,413
|
|
Total shareholders' equity
|
907,301
|
883,876
|
|
Total liabilities and shareholders' equity
|
1,852,964
|
1,733,805
|
Ma Yongsheng
|
Shou Donghua
|
|
Director and President
|
Chief Financial Officer
|
Notes
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
||
RMB million
|
RMB million
|
||
Assets
|
|||
Current assets
|
|||
Cash at bank and on hand
|
95,080
|
99,188
|
|
Derivative financial assets
|
6,858
|
7,776
|
|
Accounts receivable
|
8
|
26,060
|
21,763
|
Receivables financing
|
656
|
707
|
|
Prepayments
|
10
|
4,588
|
2,626
|
Other receivables
|
11
|
39,507
|
37,938
|
Inventories
|
47,429
|
39,034
|
|
Other current assets
|
13,380
|
14,048
|
|
Total current assets
|
233,558
|
223,080
|
|
Non-current assets
|
|||
Long-term equity investments
|
13
|
348,233
|
343,356
|
Other equity instrument investments
|
428
|
428
|
|
Fixed assets
|
14
|
278,692
|
283,695
|
Construction in progress
|
15
|
63,373
|
59,880
|
Right-of-use assets
|
16
|
107,899
|
108,737
|
Intangible assets
|
8,558
|
8,779
|
|
Long-term deferred expenses
|
2,485
|
2,499
|
|
Deferred tax assets
|
17,324
|
12,661
|
|
Other non-current assets
|
33,769
|
26,828
|
|
Total non-current assets
|
860,761
|
846,863
|
|
Total assets
|
1,094,319
|
1,069,943
|
|
Liabilities and shareholders' equity
|
|||
Current liabilities
|
|||
Short-term loans
|
20,180
|
20,669
|
|
Derivative financial liabilities
|
175
|
362
|
|
Bills payable
|
6,557
|
6,061
|
|
Accounts payable
|
84,884
|
65,779
|
|
Contract liabilities
|
5,162
|
5,840
|
|
Employee benefits payable
|
6,779
|
1,673
|
|
Taxes payable
|
21,237
|
43,500
|
|
Other payables
|
192,810
|
188,568
|
|
Non-current liabilities due within one year
|
18,867
|
12,026
|
|
Other current liabilities
|
27,342
|
439
|
|
Total current liabilities
|
383,993
|
344,917
|
|
Non-current liabilities
|
|||
Long-term loans
|
29,832
|
30,413
|
|
Debentures payable
|
19,982
|
26,977
|
|
Lease liabilities
|
105,573
|
105,691
|
|
Provisions
|
36,644
|
36,089
|
|
Other non-current liabilities
|
3,452
|
3,581
|
|
Total non-current liabilities
|
195,483
|
202,751
|
|
Total liabilities
|
579,476
|
547,668
|
|
Shareholders' equity
|
|||
Share capital
|
121,071
|
121,071
|
|
Capital reserve
|
69,012
|
68,976
|
|
Other comprehensive income
|
5,819
|
5,910
|
|
Specific reserve
|
1,467
|
1,189
|
|
Surplus reserves
|
209,280
|
209,280
|
|
Undistributed profits
|
108,194
|
115,849
|
|
Total shareholders' equity
|
514,843
|
522,275
|
|
Total liabilities and shareholders' equity
|
1,094,319
|
1,069,943
|
Ma Yongsheng
|
Shou Donghua
|
|
Director and President
|
Chief Financial Officer
|
Notes
|
Six-month period ended 30 June
|
||
2021
|
2020
|
||
RMB million
|
RMB million
|
||
Operating income
|
41
|
1,261,603
|
1,033,064
|
Less: Operating costs
|
41
|
999,983
|
873,735
|
Taxes and surcharges
|
42
|
120,866
|
108,711
|
Selling and distribution expenses
|
31,700
|
29,510
|
|
General and administrative expenses
|
35,746
|
31,530
|
|
Research and development expenses
|
45
|
5,359
|
4,319
|
Financial expenses
|
43
|
4,901
|
5,263
|
Including: Interest expenses
|
7,658
|
8,083
|
|
Interest income
|
2,662
|
2,267
|
|
Exploration expenses, including dry holes
|
46
|
4,846
|
4,465
|
Add: Other income
|
47
|
1,244
|
2,467
|
Investment income
|
48
|
4,890
|
5,631
|
Including: Income from investment in associates and joint ventures
|
11,133
|
8
|
|
Gains from changes in fair value
|
49
|
116
|
110
|
Credit impairment reversals/(losses)
|
55
|
(101)
|
|
Impairment losses
|
50
|
(926)
|
(11,667)
|
Asset disposal gains
|
281
|
104
|
|
Operating profit/(loss)
|
63,862
|
(27,925)
|
|
Add: Non-operating income
|
51
|
696
|
684
|
Less: Non-operating expenses
|
52
|
1,081
|
977
|
Profit/(loss) before taxation
|
63,477
|
(28,218)
|
|
Less: Income tax expense
|
53
|
14,949
|
(5,791)
|
Net profit/(loss)
|
48,528
|
(22,427)
|
|
Including: net loss of acquiree before business combination under common control
|
-
|
(217)
|
|
Classification by going concern:
|
|||
Continuous operating net profit/(loss)
|
48,528
|
(22,427)
|
|
Termination of net profit
|
-
|
-
|
|
Classification by ownership:
|
|||
Equity shareholders of the Company
|
39,153
|
(23,001)
|
|
Minority interests
|
9,375
|
574
|
|
Basic earnings/(losses) per share
|
64
|
0.323
|
(0.190)
|
Diluted earnings/(losses) per share
|
64
|
0.323
|
(0.190)
|
Other comprehensive income
|
39
|
||
Items that may not be reclassified subsequently to profit or loss
|
|||
Changes in fair value of other equity instrument investments
|
8
|
(30)
|
|
Items that may be reclassified subsequently to profit or loss
|
|||
Other comprehensive income that can be converted into profit or loss under the equity method
|
121
|
(1,781)
|
|
Cost of hedging reserve
|
(40)
|
-
|
|
Cash flow hedges
|
8,640
|
(1,660)
|
|
Foreign currency translation differences
|
(621)
|
1,059
|
|
Total other comprehensive income
|
8,108
|
(2,412)
|
|
Total comprehensive income
|
56,636
|
(24,839)
|
|
Attributable to:
|
|||
Equity shareholders of the Company
|
47,137
|
(25,214)
|
|
Minority interests
|
9,499
|
375
|
Ma Yongsheng
|
Shou Donghua
|
|
Director and President
|
Chief Financial Officer
|
Notes
|
Six-month period ended 30 June
|
||
2021
|
2020
|
||
RMB million
|
RMB million
|
||
Operating income
|
41
|
469,122
|
358,575
|
Less: Operating costs
|
41
|
363,427
|
287,803
|
Taxes and surcharges
|
72,725
|
70,139
|
|
Selling and distribution expenses
|
1,866
|
1,475
|
|
General and administrative expenses
|
16,386
|
15,006
|
|
Research and development expenses
|
4,962
|
4,050
|
|
Financial expenses
|
5,382
|
4,534
|
|
Including: Interest expenses
|
4,193
|
4,027
|
|
Interest income
|
1,160
|
500
|
|
Exploration expenses, including dry holes
|
4,182
|
3,710
|
|
Add: Other income
|
743
|
1,894
|
|
Investment income
|
48
|
10,602
|
6,599
|
Including: Income from investment in associates and joint ventures
|
4,366
|
544
|
|
Gains from changes in fair value
|
232
|
360
|
|
Credit impairment losses
|
2
|
30
|
|
Impairment losses
|
(753)
|
(8,094)
|
|
Asset disposal (losses)/gains
|
(3)
|
13
|
|
Operating profit/(loss)
|
11,015
|
(27,340)
|
|
Add: Non-operating income
|
203
|
103
|
|
Less: Non-operating expenses
|
519
|
444
|
|
Profit/(loss) before taxation
|
10,699
|
(27,681)
|
|
Less: Income tax expense
|
2,813
|
(8,124)
|
|
Net profit/(loss)
|
7,886
|
(19,557)
|
|
Classification by going concern:
|
|||
Continuous operating net profit/(loss)
|
7,886
|
(19,557)
|
|
Termination of net profit
|
-
|
-
|
|
Other comprehensive income
|
|||
Items that may be reclassified subsequently to profit or loss
|
|||
Other comprehensive income that can be converted into profit or loss under the equity method
|
18
|
(94)
|
|
Cash flow hedges
|
5,936
|
(2,591)
|
|
Total other comprehensive income
|
5,954
|
(2,685)
|
|
Total comprehensive income
|
13,840
|
(22,242)
|
Ma Yongsheng
|
Shou Donghua
|
|
Director and President
|
Chief Financial Officer
|
Notes
|
Six-month period ended 30 June
|
||
2021
|
2020
|
||
RMB million
|
RMB million
|
||
Cash flows from operating activities:
|
|||
Cash received from sale of goods and rendering of services
|
1,310,456
|
1,150,544
|
|
Refund of taxes and levies
|
788
|
1,665
|
|
Other cash received relating to operating activities
|
65,751
|
110,834
|
|
Sub-total of cash inflows
|
1,376,995
|
1,263,043
|
|
Cash paid for goods and services
|
(1,031,983)
|
(899,824)
|
|
Cash paid to and for employees
|
(36,563)
|
(32,751)
|
|
Payments of taxes and levies
|
(195,923)
|
(156,244)
|
|
Other cash paid relating to operating activities
|
(64,790)
|
(133,859)
|
|
Sub-total of cash outflows
|
(1,329,259)
|
(1,222,678)
|
|
Net cash flow from operating activities
|
55(a)
|
47,736
|
40,365
|
Cash flows from investing activities:
|
|||
Cash received from disposal of investments
|
3,341
|
5,476
|
|
Cash received from returns on investments
|
3,316
|
2,744
|
|
Net cash received from disposal of fixed assets, intangible assets and other long-term assets
|
502
|
1,522
|
|
Net cash received from disposal of subsidiaries and other business entities
|
55(d)
|
4,296
|
31
|
Other cash received relating to investing activities
|
21,019
|
28,066
|
|
Sub-total of cash inflows
|
32,474
|
37,839
|
|
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets
|
(56,023)
|
(53,109)
|
|
Cash paid for acquisition of investments
|
(9,226)
|
(6,362)
|
|
Other cash paid relating to investing activities
|
(33,016)
|
(53,973)
|
|
Sub-total of cash outflows
|
(98,265)
|
(113,444)
|
|
Net cash flow from investing activities
|
(65,791)
|
(75,605)
|
|
Cash flows from financing activities:
|
|||
Cash received from capital contributions
|
302
|
3,267
|
|
Including: Cash received from minority shareholders' capital contributions to subsidiaries
|
302
|
3,267
|
|
Cash received from borrowings
|
170,144
|
403,021
|
|
Other cash received relating to financing activities
|
-
|
296
|
|
Sub-total of cash inflows
|
170,446
|
406,584
|
|
Cash repayments of borrowings
|
(130,857)
|
(308,951)
|
|
Cash paid for dividends, profits distribution or interest
|
(19,181)
|
(27,409)
|
|
Including: Subsidiaries' cash payments for distribution of dividends or profits to minority shareholders
|
(1,203)
|
(918)
|
|
Other cash paid relating to financing activities
|
55(c)
|
(11,346)
|
(9,000)
|
Sub-total of cash outflows
|
(161,384)
|
(345,360)
|
|
Net cash flow from financing activities
|
9,062
|
61,224
|
|
Effects of changes in foreign exchange rate
|
(452)
|
504
|
|
Net (decrease)/increase in cash and cash equivalents
|
(9,445)
|
26,488
|
|
Add: Cash and cash equivalents at the beginning of the year
|
87,559
|
60,438
|
|
Cash and cash equivalents at the end of the period
|
55(b)
|
78,114
|
86,926
|
Ma Yongsheng
|
Shou Donghua
|
|
Director and President
|
Chief Financial Officer
|
Notes
|
Six-month period ended 30 June
|
||
2021
|
2020
|
||
RMB million
|
RMB million
|
||
Cash flows from operating activities:
|
|||
Cash received from sale of goods and rendering of services
|
512,907
|
409,385
|
|
Refund of taxes and levies
|
492
|
1,542
|
|
Other cash received relating to operating activities
|
6,052
|
2,015
|
|
Sub-total of cash inflows
|
519,451
|
412,942
|
|
Cash paid for goods and services
|
(369,090)
|
(250,667)
|
|
Cash paid to and for employees
|
(19,181)
|
(16,878)
|
|
Payments of taxes and levies
|
(110,031)
|
(91,431)
|
|
Other cash paid relating to operating activities
|
(9,587)
|
(9,186)
|
|
Sub-total of cash outflows
|
(507,889)
|
(368,162)
|
|
Net cash flow from operating activities
|
11,562
|
44,780
|
|
Cash flows from investing activities:
|
|||
Cash received from disposal of investments
|
12,101
|
11,274
|
|
Cash received from returns on investments
|
4,676
|
5,463
|
|
Net cash received from disposal of fixed assets, intangible assets and other long-term assets
|
39
|
6,542
|
|
Other cash received relating to investing activities
|
58,662
|
64,906
|
|
Sub-total of cash inflows
|
75,478
|
88,185
|
|
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets
|
(25,419)
|
(23,615)
|
|
Cash paid for acquisition of investments
|
(19,726)
|
(12,044)
|
|
Other cash paid relating to investing activities
|
(61,762)
|
(90,732)
|
|
Sub-total of cash outflows
|
(106,907)
|
(126,391)
|
|
Net cash flow from investing activities
|
(31,429)
|
(38,206)
|
|
Cash flows from financing activities:
|
|||
Cash received from borrowings
|
88,635
|
173,471
|
|
Other cash received relating to financing activities
|
136,030
|
105,890
|
|
Sub-total of cash inflows
|
224,665
|
279,361
|
|
Cash repayments of borrowings
|
(63,205)
|
(115,933)
|
|
Cash paid for dividends or interest
|
(19,812)
|
(25,548)
|
|
Other cash paid relating to financing activities
|
(127,904)
|
(121,353)
|
|
Sub-total of cash outflows
|
(210,921)
|
(262,834)
|
|
Net cash flow from financing activities
|
13,744
|
16,527
|
|
Effects of changes in foreign exchange rate
|
(1)
|
1
|
|
Net increase/(decrease) in cash and cash equivalents
|
(6,124)
|
23,102
|
|
Add: Cash and cash equivalents at the beginning of the year
|
28,081
|
15,984
|
|
Cash and cash equivalents at the end of the period
|
21,957
|
39,086
|
Ma Yongsheng
|
Shou Donghua
|
|
Director and President
|
Chief Financial Officer
|
Share
capital
|
Capital
reserve
|
Other
comprehensive
income
|
Specific
reserve
|
Surplus
reserves
|
Retained
earnings
|
Total
shareholders'
equity
attributable
to equity
shareholders of
the Company
|
Minority
interests
|
Total
shareholders'
equity
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Balance at 31 December 2019
|
121,071
|
122,127
|
(321)
|
1,741
|
207,423
|
287,128
|
739,169
|
137,736
|
876,905
|
Adjustment for business combination of entities under common control (Note 59)
|
-
|
737
|
-
|
-
|
-
|
59
|
796
|
673
|
1,469
|
Balance at 1 January 2020
|
121,071
|
122,864
|
(321)
|
1,741
|
207,423
|
287,187
|
739,965
|
138,409
|
878,374
|
Change for the period
|
|||||||||
1. Net (loss)/profit
|
-
|
-
|
-
|
-
|
-
|
(23,001)
|
(23,001)
|
574
|
(22,427)
|
2. Other comprehensive loss (Note 39)
|
-
|
-
|
(2,213)
|
-
|
-
|
-
|
(2,213)
|
(199)
|
(2,412)
|
Total comprehensive income
|
-
|
-
|
(2,213)
|
-
|
-
|
(23,001)
|
(25,214)
|
375
|
(24,839)
|
Amounts transferred to initial carrying amount of hedged items
|
-
|
-
|
234
|
-
|
-
|
-
|
234
|
45
|
279
|
Transactions with owners, recorded directly in shareholders' equity:
|
|||||||||
3. Appropriations of profits:
|
|||||||||
- Distributions to shareholders (Note 54)
|
-
|
-
|
-
|
-
|
-
|
(23,004)
|
(23,004)
|
-
|
(23,004)
|
4. Contributions to subsidiaries from minority interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
2,363
|
2,363
|
5. Transaction with minority interests
|
-
|
(70)
|
-
|
-
|
-
|
-
|
(70)
|
(69)
|
(139)
|
6. Distributions to minority interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,838)
|
(1,838)
|
Total transactions with owners, recorded directly in shareholders' equity
|
-
|
(70)
|
-
|
-
|
-
|
(23,004)
|
(23,074)
|
456
|
(22,618)
|
7. Net increase in specific reserve for the period
|
-
|
-
|
-
|
1,136
|
-
|
-
|
1,136
|
210
|
1,346
|
8. Others
|
-
|
33
|
-
|
-
|
-
|
(5)
|
28
|
(14)
|
14
|
Balance at 30 June 2020
|
121,071
|
122,827
|
(2,300)
|
2,877
|
207,423
|
241,177
|
693,075
|
139,481
|
832,556
|
Balance at 1 January 2021
|
121,071
|
122,558
|
1,038
|
1,941
|
209,280
|
286,575
|
742,463
|
141,413
|
883,876
|
Change for the period
|
|||||||||
1. Net profit
|
-
|
-
|
-
|
-
|
-
|
39,153
|
39,153
|
9,375
|
48,528
|
2. Other comprehensive income (Note 39)
|
-
|
-
|
7,984
|
-
|
-
|
-
|
7,984
|
124
|
8,108
|
Total comprehensive (loss)/income
|
-
|
-
|
7,984
|
-
|
-
|
39,153
|
47,137
|
9,499
|
56,636
|
Amounts transferred to initial carrying amount of hedged items
|
-
|
-
|
(8,121)
|
-
|
-
|
-
|
(8,121)
|
(549)
|
(8,670)
|
Transactions with owners, recorded directly in shareholders' equity:
|
|||||||||
3. Appropriations of profits:
|
|||||||||
- Distributions to shareholders (Note 54)
|
-
|
-
|
-
|
-
|
-
|
(15,739)
|
(15,739)
|
-
|
(15,739)
|
4. Contributions from minority interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
559
|
559
|
5. Transactions with minority interests
|
-
|
(1,384)
|
-
|
-
|
-
|
-
|
(1,384)
|
(6,818)
|
(8,202)
|
6. Distributions to minority interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,885)
|
(1,885)
|
Total transactions with owners, recorded directly in shareholders' equity
|
-
|
(1,384)
|
-
|
-
|
-
|
(15,739)
|
(17,123)
|
(8,144)
|
(25,267)
|
7. Net increase in specific reserve for the period
|
-
|
-
|
-
|
778
|
-
|
-
|
778
|
175
|
953
|
8. Others
|
-
|
20
|
-
|
-
|
-
|
-
|
20
|
(247)
|
(227)
|
Balance at 30 June 2021
|
121,071
|
121,194
|
901
|
2,719
|
209,280
|
309,989
|
765,154
|
142,147
|
907,301
|
Ma Yongsheng
|
Shou Donghua
|
|
Director and President
|
Chief Financial Officer
|
Share
capital
|
Capital
reserve
|
Other
comprehensive
income
|
Specific
reserve
|
Surplus
reserves
|
Retained
earnings
|
Total
shareholders'
equity
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Balance at 1 January 2020
|
121,071
|
68,841
|
1,181
|
949
|
207,423
|
130,645
|
530,110
|
Change for the period
|
|||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
(19,557)
|
(19,557)
|
Other comprehensive income
|
-
|
-
|
(2,685)
|
-
|
-
|
-
|
(2,685)
|
Total comprehensive income
|
-
|
-
|
(2,685)
|
-
|
-
|
(19,557)
|
(22,242)
|
Amounts transferred to initial carrying amount of hedged items
|
-
|
-
|
56
|
-
|
-
|
-
|
56
|
Transactions with owners, recorded directly in shareholders' equity:
|
|||||||
Appropriations of profits:
|
|||||||
- Distributions to shareholders (Note 54)
|
-
|
-
|
-
|
-
|
-
|
(23,004)
|
(23,004)
|
Total transactions with owners, recorded directly in shareholders' equity
|
-
|
-
|
-
|
-
|
-
|
(23,004)
|
(23,004)
|
Net increase in specific reserve for the period
|
-
|
-
|
-
|
458
|
-
|
-
|
458
|
Others
|
-
|
(5)
|
-
|
-
|
-
|
-
|
(5)
|
Balance at 30 June 2020
|
121,071
|
68,836
|
(1,448)
|
1,407
|
207,423
|
88,084
|
485,373
|
Balance at 1 January 2021
|
121,071
|
68,976
|
5,910
|
1,189
|
209,280
|
115,849
|
522,275
|
Change for the period
|
|||||||
Net profit
|
-
|
-
|
-
|
-
|
-
|
7,886
|
7,886
|
Other comprehensive income
|
-
|
-
|
5,954
|
-
|
-
|
-
|
5,954
|
Total comprehensive income
|
-
|
-
|
5,954
|
-
|
-
|
7,886
|
13,840
|
Amounts transferred to initial carrying amount of hedged items
|
-
|
-
|
(6,045)
|
-
|
-
|
-
|
(6,045)
|
Transactions with owners, recorded directly in shareholders' equity:
|
|||||||
Appropriations of profits:
|
|||||||
- Distributions to shareholders (Note 54)
|
-
|
-
|
-
|
-
|
-
|
(15,739)
|
(15,739)
|
Total transactions with owners, recorded directly in shareholders' equity
|
-
|
-
|
-
|
-
|
-
|
(15,739)
|
(15,739)
|
Net increase in specific reserve for the period
|
-
|
-
|
-
|
278
|
-
|
-
|
278
|
Others
|
-
|
36
|
-
|
-
|
-
|
198
|
234
|
Balance at 30 June 2021
|
121,071
|
69,012
|
5,819
|
1,467
|
209,280
|
108,194
|
514,843
|
Ma Yongsheng
|
Shou Donghua
|
|
Director and President
|
Chief Financial Officer
|
1 |
STATUS OF THE COMPANY
|
|
(1) |
the exploration, development and production of crude oil and natural gas;
|
|
(2) |
the refining, transportation, storage and marketing of crude oil and petroleum product; and
|
|
(3) |
the production and sale of chemical.
|
2 |
BASIS OF PREPARATION
|
|
(1) |
Statement of compliance of China Accounting Standards for Business Enterprises ('CASs')
|
|
(2) |
Accounting period
|
|
(3) |
Measurement basis
|
|
- |
Financial assets held for trading (see Note 3(11))
|
|
- |
Other equity instrument investments (see Note 3(11))
|
|
- |
Derivative financial instruments (see Note 3(11))
|
|
- |
Receivables financing (see Note 3(11))
|
|
(4) |
Functional currency and presentation currency
|
3 |
SIGNIFICANT ACCOUNTING POLICIES
|
|
(1) |
Accounting treatment of business combination involving entities under common control and not under common control
|
|
(a) |
Business combination involving entities under common control
|
|
(b) |
Business combination involving entities not under common control
|
|
(c) |
Method for preparation of consolidated financial statements
|
3 |
SIGNIFICANT ACCOUNTING POLICIES (Continued)
|
|
(1) |
Accounting treatment of business combination involving entities under common control and not under common control (Continued)
|
|
(c) |
Method for preparation of consolidated financial statements (Continued)
|
|
(2) |
Transactions in foreign currencies and translation of financial statements in foreign currencies
|
|
(3) |
Cash and cash equivalents
|
3 |
SIGNIFICANT ACCOUNTING POLICIES (Continued)
|
|
(4) |
Inventories
|
|
(5) |
Long-term equity investments
|
|
(a) |
Investment in subsidiaries
|
3 |
SIGNIFICANT ACCOUNTING POLICIES (Continued)
|
|
(5) |
Long-term equity investments (Continued)
|
|
(b) |
Investment in joint ventures and associates
|
|
(c) |
The impairment assessment method and provision accrual on investment
|
3 |
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
|
|
(6) |
Leases
|
|
(a) |
As Lessee
|
|
(b) |
As Lessor
|
|
(7) |
Fixed assets and construction in progress
|
3 |
SIGNIFICANT ACCOUNTING POLICIES (Continued)
|
|
(7) |
Fixed assets and construction in progress (Continued)
|
Estimated useful life
|
Estimated rate of residual value
|
|
Plants and buildings
|
12-50 years
|
3%
|
Equipment, machinery and others
|
4-30 years
|
3%
|
|
(8) |
Oil and gas properties
|
|
(9) |
Intangible assets
|
3 |
SIGNIFICANT ACCOUNTING POLICIES (Continued)
|
|
(10) |
Goodwill
|
|
(11) |
Financial Instruments
|
|
(a) |
Financial assets
|
|
(i) |
Classification and measurement
|
|
- |
Measured at amortised cost:
|
|
- |
Measured at fair value through other comprehensive income:
|
3 |
SIGNIFICANT ACCOUNTING POLICIES (Continued)
|
|
(11) |
Financial Instruments (Continued)
|
|
(a) |
Financial assets (Continued)
|
|
(ii) |
Impairment
|
|
(iii) |
Derecognition
|
|
(b) |
Financial liabilities
|
|
(c) |
Determination of fair value
|
3 |
SIGNIFICANT ACCOUNTING POLICIES (Continued)
|
|
(11) |
Financial Instruments (Continued)
|
|
(d) |
Derivative financial instruments and hedge accounting
|
|
(1) |
There is an economic relationship between the hedged item and the hedging instrument, which share a risk and that gives rise to opposite changes in fair value that tend to offset each other.
|
|
(2) |
The effect of credit risk does not dominate the value changes that result from that economic relationship.
|
|
(3) |
The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the entity actually hedges and the quantity of the hedging instrument that the entity actually uses to hedge that quantity of hedged item. However, that designation shall not reflect an imbalance between the weightings of the hedged item and the hedging instrument.
|
|
- |
Cash flow hedges
|
|
- |
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.
|
3 |
SIGNIFICANT ACCOUNTING POLICIES (Continued)
|
|
(11) |
Financial Instruments (Continued)
|
|
(d) |
Derivative financial instruments and hedge accounting (Continued)
|
|
- |
Cash flow hedges (Continued)
|
|
- |
Fair value hedges
|
|
(12) |
Impairment of other non-financial long-term assets
|
3 |
SIGNIFICANT ACCOUNTING POLICIES (Continued)
|
|
(13) |
Long-term deferred expenses
|
|
(14) |
Employee benefits
|
|
(a) |
Short term compensation
|
|
(b) |
Post-employment benefits
|
|
(c) |
Termination benefits
|
|
(15) |
Income tax
|
3 |
SIGNIFICANT ACCOUNTING POLICIES (Continued)
|
|
(15) |
Income tax (Continued)
|
|
- |
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
|
|
(17) |
Revenue recognition
|
|
(18) |
Government grants
|
|
(19) |
Borrowing costs
|
|
(20) |
Repairs and maintenance expenses
|
|
(21) |
Environmental expenditures
|
3 |
SIGNIFICANT ACCOUNTING POLICIES (Continued)
|
|
(22) |
Research and development costs
|
|
(23) |
Dividends
|
|
(24) |
Related parties
|
|
(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) |
joint ventures of the Group, including subsidiaries of the joint ventures;
|
|
(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
|
|
(l) |
an entity which is under control, joint control of principle individual investor, key management personnel or close family members of such individuals.
|
|
(m) |
the Company and the Joint ventures or associates of other members of the Company's holding company (including the holding company and the subsidiaries);and
|
|
(n) |
joint ventures of the Company and other joint ventures or associates of the Company.
|
|
(25) |
Segment reporting
|
|
• |
engage in business activities from which it may earn revenues and incur expenses;
|
|
• |
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.
|
4 |
TAXATION
|
Type of taxes
|
Tax rate
|
Tax basis and method
|
||
Value Added Tax (the 'VAT')
|
13%, 9%, 6%
|
Based on taxable value added amount. Tax payable is calculated using the taxable sales amount multiplied by the applicable tax rate less current period's deductible VAT input.
|
||
Resource Tax
|
6%
|
Based on the revenue from sales of crude oil and natural gas.
|
||
Consumption Tax
|
RMB2,109.76 per tonnage for Gasoline, RMB1,411.20 per tonnage for Diesel, RMB2,105.20 per tonnage for Naphtha, RMB1,948.64 per tonnage for Solvent oil, RMB1,711.52 per tonnage for Lubricant oil, RMB1,218.00 per tonnage for Fuel oil, and RMB1,495.20 per tonnage for Jet fuel oil.
|
Based on quantities
|
||
Corporate Income Tax
|
5% to 50%
|
Based on taxable income.
|
||
Crude Oil Special Gain Levy
|
20% to 40%
|
Based on the sales of domestic crude oil at prices higher than a specific level.
|
||
City Maintenance and Construction Tax
|
1%, 5% or 7%
|
Based on the actual paid VAT and consumption tax.
|
||
Education surcharges
|
3%
|
Based on the actual paid VAT and consumption tax.
|
||
Local Education surcharges
|
2%
|
Based on the actual paid VAT and consumption tax.
|
5 |
CASH AT BANK AND ON HAND
|
At 30 June 2021
|
At 31 December 2020
|
|||||
Originalcurrencymillion
|
Exchangerates
|
RMBmillion
|
Original currency million
|
Exchange rates
|
RMB million
|
|
Cash on hand
|
||||||
Renminbi
|
1
|
8
|
||||
Cash at bank
|
||||||
Renminbi
|
123,868
|
120,542
|
||||
US Dollar
|
1,494
|
6.4601
|
9,653
|
1,054
|
6.5249
|
6,875
|
Hong Kong Dollar
|
3,214
|
0.8321
|
2,674
|
1,377
|
0.8416
|
1,159
|
EUR
|
1
|
7.6862
|
10
|
1
|
8.0250
|
8
|
Others
|
126
|
2,403
|
||||
136,332
|
130,995
|
|||||
Deposits at related parities
|
||||||
Renminbi
|
17,969
|
23,737
|
||||
US Dollar
|
5,371
|
6.4601
|
34,706
|
4,443
|
6.5249
|
28,993
|
EUR
|
57
|
7.6862
|
441
|
49
|
8.0250
|
394
|
Others
|
1,034
|
293
|
||||
54,150
|
53,417
|
|||||
Total
|
190,482
|
184,412
|
6 |
FINANCIAL ASSETS HELD FOR TRADING
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Structured deposits
|
3,988
|
-
|
Equity investments, listed and at quoted market price
|
-
|
1
|
Total
|
3,988
|
1
|
7 |
DERIVATIVE FINANCIAL ASSETS AND DERIVATIVE FINANCIAL LIABILITIES
|
8 |
ACCOUNTS RECEIVABLE
|
The Group
|
The Company
|
|||
At 30 June
|
At 31 December
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
2021
|
2020
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Accounts receivable
|
75,614
|
39,447
|
26,158
|
21,871
|
Less: Allowance for doubtful accounts
|
3,771
|
3,860
|
98
|
108
|
Total
|
71,843
|
35,587
|
26,060
|
21,763
|
The Group
|
||||||||
At 30 June2021
|
At 31 December 2020
|
|||||||
Percentage
|
Percentage
|
|||||||
Percentage
|
of allowance
|
Percentage
|
of allowance
|
|||||
to total
|
to accounts
|
to total
|
to accounts
|
|||||
Amount
|
accounts
|
Allowance
|
receivable
|
Amount
|
accounts
|
Allowance
|
receivable
|
|
RMB
|
receivable
|
RMB
|
balance
|
RMB
|
receivable
|
RMB
|
balance
|
|
million
|
%
|
million
|
%
|
million
|
%
|
million
|
%
|
|
Within one year
|
70,642
|
93.4
|
2
|
-
|
34,626
|
87.8
|
117
|
0.3
|
Between one and two years
|
4,220
|
5.6
|
3,186
|
75.5
|
4,062
|
10.3
|
3,131
|
77.1
|
Between two and three years
|
182
|
0.2
|
82
|
45.1
|
149
|
0.4
|
85
|
57.0
|
Over three years
|
570
|
0.8
|
501
|
87.9
|
610
|
1.5
|
527
|
86.4
|
Total
|
75,614
|
100.0
|
3,771
|
39,447
|
100.0
|
3,860
|
The Company
|
||||||||
At 30 June 2021
|
At 31 December 2020
|
|||||||
Percentage
|
Percentage
|
|||||||
Percentage
|
of allowance
|
Percentage
|
of allowance
|
|||||
to total
|
to accounts
|
to total
|
to accounts
|
|||||
Amount
|
accounts
|
Allowance
|
receivable
|
Amount
|
accounts
|
Allowance
|
receivable
|
|
RMB
|
receivable
|
RMB
|
balance
|
RMB
|
receivable
|
RMB
|
balance
|
|
million
|
%
|
million
|
%
|
million
|
%
|
million
|
%
|
|
Within one year
|
25,814
|
98.7
|
-
|
-
|
21,647
|
99.0
|
1
|
-
|
Between one and two years
|
221
|
0.8
|
12
|
5.4
|
76
|
0.3
|
7
|
9.2
|
Between two and three years
|
30
|
0.1
|
2
|
6.7
|
49
|
0.2
|
13
|
26.5
|
Over three years
|
93
|
0.4
|
84
|
90.3
|
99
|
0.5
|
87
|
87.9
|
Total
|
26,158
|
100.0
|
98
|
21,871
|
100.0
|
108
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
|
Total amount (RMB million)
|
19,515
|
15,628
|
Percentage to the total balance of accounts receivable
|
25.8%
|
39.6%
|
Allowance for doubtful accounts
|
-
|
2,057
|
9 |
RECEIVABLES FINANCING
|
10 |
PREPAYMENTS
|
The Group
|
The Company
|
|||
At 30 June
|
At 31 December
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
2021
|
2020
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Prepayments
|
8,385
|
4,939
|
4,600
|
2,637
|
Less: Allowance for doubtful accounts
|
68
|
77
|
12
|
11
|
Total
|
8,317
|
4,862
|
4,588
|
2,626
|
The Group
|
||||||||
At 30 June 2021
|
At 31 December 2020
|
|||||||
Percentage of
|
Percentage of
|
|||||||
Percentage
|
allowance to
|
Percentage
|
allowance to
|
|||||
Amount
|
to total
|
Allowance
|
prepayments
|
Amount
|
to total
|
Allowance
|
prepayments
|
|
RMB
|
prepayments
|
RMB
|
balance
|
RMB
|
prepayments
|
RMB
|
balance
|
|
million
|
%
|
million
|
%
|
million
|
%
|
million
|
%
|
|
Within one year
|
7,450
|
88.8
|
-
|
-
|
4,440
|
89.9
|
-
|
-
|
Between one and two years
|
558
|
6.7
|
6
|
1.1
|
267
|
5.4
|
20
|
7.5
|
Between two and three years
|
203
|
2.4
|
10
|
4.9
|
142
|
2.9
|
8
|
5.6
|
Over three years
|
174
|
2.1
|
52
|
29.9
|
90
|
1.8
|
49
|
54.4
|
Total
|
8,385
|
100.0
|
68
|
4,939
|
100.0
|
77
|
The Company
|
||||||||
At 30 June 2021
|
At 31 December 2020
|
|||||||
Percentage of
|
Percentage of
|
|||||||
Percentage
|
allowance to
|
Percentage
|
allowance to
|
|||||
Amount
|
to total
|
Allowance
|
prepayments
|
Amount
|
to total
|
Allowance
|
prepayments
|
|
RMB
|
prepayments
|
RMB
|
balance
|
RMB
|
prepayments
|
RMB
|
balance
|
|
million
|
%
|
million
|
%
|
million
|
%
|
million
|
%
|
|
Within one year
|
4,058
|
88.2
|
-
|
-
|
2,337
|
88.6
|
-
|
-
|
Between one and two years
|
398
|
8.7
|
6
|
1.5
|
159
|
6.0
|
7
|
4.4
|
Between two and three years
|
43
|
0.9
|
3
|
7.0
|
39
|
1.5
|
-
|
-
|
Over three years
|
101
|
2.2
|
3
|
3.0
|
102
|
3.9
|
4
|
3.9
|
Total
|
4,600
|
100.0
|
12
|
2,637
|
100.0
|
11
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
|
Total amount (RMB million)
|
2,134
|
1,131
|
Percentage to the total balance of prepayments
|
25.5%
|
22.9%
|
11 |
OTHER RECEIVABLES
|
The Group
|
The Company
|
|||
At 30 June
|
At 31 December
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
2021
|
2020
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Other receivables
|
30,116
|
35,133
|
40,406
|
38,835
|
Less: Allowance for doubtful accounts
|
1,511
|
1,531
|
899
|
897
|
Total
|
28,605
|
33,602
|
39,507
|
37,938
|
The Group
|
||||||||
At 30 June 2021
|
At 31 December 2020
|
|||||||
Percentage
|
Percentage
|
|||||||
Percentage
|
of allowance
|
Percentage
|
of allowance
|
|||||
to total
|
to other
|
to total
|
to other
|
|||||
Amount
|
other
|
Allowance
|
receivables
|
Amount
|
other
|
Allowance
|
receivables
|
|
RMB
|
receivables
|
RMB
|
balance
|
RMB
|
receivables
|
RMB
|
balance
|
|
million
|
%
|
million
|
%
|
million
|
%
|
million
|
%
|
|
Within one year
|
18,906
|
62.8
|
51
|
0.3
|
23,888
|
68.1
|
51
|
0.2
|
Between one and two years
|
8,565
|
28.4
|
179
|
2.1
|
8,513
|
24.2
|
196
|
2.3
|
Between two and three years
|
1,021
|
3.4
|
48
|
4.7
|
1,169
|
3.3
|
84
|
7.2
|
Over three years
|
1,624
|
5.4
|
1,233
|
75.9
|
1,563
|
4.4
|
1,200
|
76.8
|
Total
|
30,116
|
100.0
|
1,511
|
35,133
|
100.0
|
1,531
|
The Company
|
||||||||
At 30 June 2021
|
At 31 December 2020
|
|||||||
Percentage
|
Percentage
|
|||||||
Percentage
|
of allowance
|
Percentage
|
of allowance
|
|||||
to total
|
to other
|
to total
|
to other
|
|||||
Amount
|
other
|
Allowance
|
receivables
|
Amount
|
other
|
Allowance
|
receivables
|
|
RMB
|
receivables
|
RMB
|
balance
|
RMB
|
receivables
|
RMB
|
balance
|
|
million
|
%
|
million
|
%
|
million
|
%
|
million
|
%
|
|
Within one year
|
24,031
|
59.5
|
-
|
-
|
21,378
|
55.0
|
-
|
-
|
Between one and two years
|
1,171
|
2.9
|
1
|
0.1
|
2,123
|
5.5
|
1
|
-
|
Between two and three years
|
1,729
|
4.3
|
2
|
0.1
|
1,618
|
4.2
|
5
|
0.3
|
Over three years
|
13,475
|
33.3
|
896
|
6.6
|
13,716
|
35.3
|
891
|
6.5
|
Total
|
40,406
|
100.0
|
899
|
38,835
|
100.0
|
897
|
At 30 June
|
At 31 December
|
||
2021
|
2020
|
||
Total amount (RMB million)
|
25,576
|
22,581
|
|
Ageing
|
Within one year, between one and two years, between two and three years and over three years
|
Within one year, between one and two years, between two and three years and over three years
|
|
Percentage to the total balance of other receivables
|
84.9%
|
64.3%
|
|
Allowance for doubtful accounts
|
73
|
-
|
12 |
INVENTORIES
|
At 30 June
|
At 31 December
|
||
2021
|
2020
|
||
RMB million
|
RMB million
|
||
Raw materials
|
88,869
|
60,155
|
|
Work in progress
|
13,972
|
13,053
|
|
Finished goods
|
96,164
|
78,415
|
|
Spare parts and consumables
|
3,601
|
3,372
|
|
202,606
|
154,995
|
||
Less: Provision for diminution in value of inventories
|
3,372
|
3,100
|
|
Total
|
199,234
|
151,895
|
13 |
LONG-TERM EQUITY INVESTMENTS
|
Provision for
|
||||
Investments in
|
Investments
|
impairment
|
||
joint ventures
|
in associates
|
losses
|
Total
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Balance at 1 January 2021
|
55,018
|
136,872
|
(3,548)
|
188,342
|
Additions for the period
|
2,638
|
659
|
-
|
3,297
|
Share of profits less losses under the equity method
|
5,151
|
5,982
|
-
|
11,133
|
Change of other comprehensive income under the equity method
|
(29)
|
150
|
-
|
121
|
Other equity movements under the equity method
|
6
|
19
|
-
|
25
|
Dividends declared
|
(996)
|
(2,239)
|
-
|
(3,235)
|
Disposals for the period
|
(29)
|
(8)
|
-
|
(37)
|
Foreign currency translation differences
|
(141)
|
(84)
|
19
|
(206)
|
Other movements
|
-
|
247
|
-
|
247
|
Movement of provision for impairment
|
-
|
-
|
(35)
|
(35)
|
Balance at 30 June 2021
|
61,618
|
141,598
|
(3,564)
|
199,652
|
Investments
in subsidiaries
|
Investments in
joint ventures
|
Investments
in associates
|
Provision for
impairment
losses
|
Total
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Balance at 1 January 2021
|
266,939
|
14,762
|
69,540
|
(7,886)
|
343,355
|
Additions for the period
|
77
|
673
|
63
|
-
|
813
|
Share of profits less losses under the equity method
|
-
|
2,377
|
1,989
|
-
|
4,366
|
Change of other comprehensive income under the equity method
|
-
|
2
|
16
|
-
|
18
|
Other equity movements under the equity method
|
-
|
4
|
25
|
-
|
29
|
Dividends declared
|
-
|
(352)
|
(81)
|
-
|
(433)
|
Disposals for the period
|
(72)
|
-
|
-
|
-
|
(72)
|
Other movements
|
-
|
-
|
198
|
-
|
198
|
Movement of provision for impairment
|
-
|
-
|
-
|
(41)
|
(41)
|
Balance at 30 June 2021
|
266,944
|
17,466
|
71,750
|
(7,927)
|
348,233
|
13 |
LONG-TERM EQUITY INVESTMENTS (Continued)
|
|
(a) |
Principal joint ventures and associates
|
Name of investees
|
Principal place
of business
|
Register location
|
Legal representative
|
Principal activities
|
Registered
Capital
RMB million
|
Percentage of equity/voting
right directly or
indirectly held
by the Company
|
1. Joint ventures
|
||||||
Fujian Refining & Petrochemical Company Limited ('FREP')
|
PRC
|
PRC
|
Gu Yuefeng
|
Manufacturing refining oil products
|
14,758
|
50.00%
|
BASF-YPC Company Limited ('BASF-YPC')
|
PRC
|
PRC
|
Gu Yuefeng
|
Manufacturing and distribution of petrochemical products
|
12,704
|
40.00%
|
Taihu Limited ('Taihu')
|
Russia
|
Cyprus
|
NA
|
Crude oil and natural gas extraction
|
25,000 USD
|
49.00%
|
Yanbu Aramco Sinopec Refining Company Ltd. ('YASREF')
|
Saudi Arabia
|
Saudi Arabia
|
NA
|
Petroleum refining and processing
|
1,560 million USD
|
37.50%
|
Sinopec SABIC Tianjin Petrochemical Company Limited ('Sinopec SABIC Tianjin')
|
PRC
|
PRC
|
AHMED AL-SHAIKH
|
Manufacturing and distribution of petrochemical products
|
10,520
|
50.00%
|
2. Associates
|
||||||
National Petroleum Pipe Network Group Co., Ltd. ('National Pipe Network Group') (i)
|
PRC
|
PRC
|
Zhang Wei
|
Operation of natural gas pipelines and auxiliary facilities
|
500,000
|
14.00%
|
Sinopec Finance Company Limited ('Sinopec Finance')
|
PRC
|
PRC
|
Jiang Yongfu
|
Provision of non-banking financial services
|
18,000
|
49.00%
|
PAO SIBUR Holding ('SIBUR') (i)
|
Russia
|
Russia
|
NA
|
Processing natural gas and manufacturing petrochemical products
|
21,784 million RUB
|
10.00%
|
Zhongtian Synergetic Energy Company Limited ('Zhongtian Synergetic Energy')
|
PRC
|
PRC
|
Peng Yi
|
Mining coal and manufacturing of coal-chemical products
|
17,516
|
38.75%
|
Caspian Investments Resources Ltd. ('CIR')
|
Kazakhstan
|
The Republic of British Virgin Islands
|
NA
|
Crude oil and natural gas extraction
|
10.002 USD
|
50.00%
|
|
(b) |
Major financial information of principal joint ventures
|
FREP
|
BASF-YPC
|
Taihu
|
YASREF
|
Sinopec SABIC Tianjin
|
||||||
At 30
|
At 31
|
At 30
|
At 31
|
At 30
|
At 31
|
At 30
|
At 31
|
At 30
|
At 31
|
|
June
|
December
|
June
|
December
|
June
|
December
|
June
|
December
|
June
|
December
|
|
2021
|
2020
|
2021
|
2020
|
2021
|
2020
|
2021
|
2020
|
2021
|
2020
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Current assets
|
||||||||||
Cash and cash equivalents
|
6,702
|
7,448
|
2,645
|
1,838
|
1,279
|
1,280
|
979
|
1,408
|
6,172
|
5,259
|
Other current assets
|
10,459
|
7,492
|
6,439
|
4,777
|
1,527
|
1,223
|
10,453
|
7,516
|
3,660
|
2,665
|
Total current assets
|
17,161
|
14,940
|
9,084
|
6,615
|
2,806
|
2,503
|
11,432
|
8,924
|
9,832
|
7,924
|
Non-current assets
|
14,348
|
15,237
|
9,538
|
9,993
|
13,233
|
12,531
|
44,475
|
45,413
|
18,230
|
18,258
|
Current liabilities
|
||||||||||
Current financial liabilities
|
(1,240)
|
(1,203)
|
(20)
|
(456)
|
(37)
|
(38)
|
(9,028)
|
(9,520)
|
(607)
|
(998)
|
Other current liabilities
|
(4,949)
|
(5,147)
|
(2,512)
|
(2,190)
|
(1,641)
|
(1,043)
|
(11,628)
|
(8,644)
|
(4,264)
|
(3,052)
|
Total current liabilities
|
(6,189)
|
(6,350)
|
(2,532)
|
(2,646)
|
(1,678)
|
(1,081)
|
(20,656)
|
(18,164)
|
(4,871)
|
(4,050)
|
Non-current liabilities
|
||||||||||
Non-current financial liabilities
|
(8,148)
|
(8,761)
|
-
|
-
|
(94)
|
(85)
|
(30,086)
|
(29,650)
|
(7,915)
|
(6,773)
|
Other non-current liabilities
|
(241)
|
(235)
|
(35)
|
(42)
|
(1,488)
|
(2,017)
|
(1,785)
|
(2,008)
|
(377)
|
(378)
|
Total non-current liabilities
|
(8,389)
|
(8,996)
|
(35)
|
(42)
|
(1,582)
|
(2,102)
|
(31,871)
|
(31,658)
|
(8,292)
|
(7,151)
|
Net assets
|
16,931
|
14,831
|
16,055
|
13,920
|
12,779
|
11,851
|
3,380
|
4,515
|
14,899
|
14,981
|
Net assets attributable to shareholders of the Company
|
16,931
|
14,831
|
16,055
|
13,920
|
12,335
|
11,439
|
3,380
|
4,515
|
14,899
|
14,981
|
Net assets attributable to minority interests
|
-
|
-
|
-
|
444
|
412
|
-
|
-
|
-
|
-
|
|
Share of net assets from joint ventures
|
8,466
|
7,416
|
6,422
|
5,568
|
6,044
|
5,605
|
-
|
-
|
7,450
|
7,491
|
Carrying Amounts
|
8,466
|
7,416
|
6,422
|
5,568
|
6,044
|
5,605
|
-
|
-
|
7,450
|
7,491
|
13 |
LONG-TERM EQUITY INVESTMENTS (Continued)
|
|
(b) |
Major financial information of principal joint ventures (Continued)
|
Six-month period ended 30 June
|
FREP
|
BASF-YPC
|
Taihu
|
YASREF
|
Sinopec SABIC Tianjin
|
|||||
2021
|
2020
|
2021
|
2020
|
2021
|
2020
|
2021
|
2020
|
2021
|
2020
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Revenue
|
22,263
|
18,852
|
12,776
|
6,195
|
6,847
|
4,426
|
28,009
|
15,977
|
11,645
|
6,168
|
Interest income
|
73
|
53
|
17
|
15
|
193
|
188
|
2
|
16
|
103
|
95
|
Interest expense
|
(210)
|
(278)
|
(3)
|
(8)
|
(42)
|
(126)
|
(484)
|
(626)
|
(46)
|
(66)
|
Profit/(Loss) before taxation
|
2,472
|
(1,625)
|
3,968
|
(538)
|
1,250
|
690
|
(1,829)
|
(2,437)
|
1,295
|
(132)
|
Tax expense
|
(618)
|
429
|
(991)
|
132
|
(246)
|
(185)
|
302
|
371
|
(377)
|
(6)
|
Profit/(Loss) for the period
|
1,854
|
(1,196)
|
2,977
|
(406)
|
1,004
|
505
|
(1,527)
|
(2,066)
|
918
|
(138)
|
Other comprehensive income
|
-
|
-
|
-
|
-
|
(352)
|
(1,019)
|
392
|
(15)
|
-
|
-
|
Total comprehensive income
|
1,854
|
(1,196)
|
2,977
|
(406)
|
652
|
(514)
|
(1,135)
|
(2,081)
|
918
|
(138)
|
Dividends from joint ventures
|
-
|
300
|
336
|
461
|
-
|
-
|
-
|
-
|
500
|
-
|
Share of net profit/(loss) from joint ventures
|
927
|
(598)
|
1,191
|
(162)
|
492
|
239
|
-
|
(775)
|
459
|
(69)
|
Share of other comprehensive income from joint ventures (ii)
|
-
|
-
|
-
|
-
|
(172)
|
(482)
|
-
|
(6)
|
-
|
-
|
|
(c) |
Major financial information of principal associates
|
Pipe China
|
Sinopec Finance
|
SIBUR
|
Zhongtian Synergetic Energy
|
CIR
|
||||||
At 30
|
At 31
|
At 30
|
At 31
|
At 30
|
At 31
|
At 30
|
At 31
|
At 30
|
At 31
|
|
June
|
December
|
June
|
December
|
June
|
December
|
June
|
December
|
June
|
December
|
|
2021
|
2020
|
2021
|
2020
|
2021
|
2020
|
2021
|
2020
|
2021
|
2020
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Current assets
|
73,128
|
74,012
|
179,610
|
175,139
|
39,080
|
30,678
|
3,554
|
3,721
|
1,124
|
2,402
|
Non-current assets
|
729,413
|
655,982
|
52,889
|
53,008
|
138,264
|
147,140
|
51,368
|
53,124
|
756
|
903
|
Current liabilities
|
(69,132)
|
(55,562)
|
(201,059)
|
(197,872)
|
(33,213)
|
(31,157)
|
(8,491)
|
(8,315)
|
(722)
|
(699)
|
Non-current liabilities
|
(131,266)
|
(104,150)
|
(552)
|
(514)
|
(49,565)
|
(58,941)
|
(24,065)
|
(28,422)
|
(259)
|
(286)
|
Net assets
|
602,143
|
570,282
|
30,888
|
29,761
|
94,566
|
87,720
|
22,366
|
20,108
|
899
|
2,320
|
Net assets attributable to shareholders of the Company
|
517,329
|
505,336
|
30,888
|
29,761
|
93,300
|
87,280
|
22,366
|
20,108
|
899
|
2,320
|
Net assets attributable to minority interests
|
84,814
|
64,946
|
-
|
-
|
1,266
|
440
|
-
|
-
|
-
|
-
|
Share of net assets from associates
|
72,426
|
70,747
|
15,135
|
14,583
|
9,330
|
8,728
|
8,667
|
7,792
|
450
|
1,160
|
Carrying Amounts
|
72,426
|
70,747
|
15,135
|
14,583
|
9,330
|
8,728
|
8,667
|
7,792
|
450
|
1,160
|
Six-month period ended 30 June
|
Pipe China
|
Sinopec Finance
|
SIBUR
|
Zhongtian Synergetic Energy
|
CIR
|
|||||
2021
|
2021
|
2020
|
2021
|
2020
|
2021
|
2020
|
2021
|
2020
|
||
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
||
Revenue
|
48,917
|
2,514
|
2,332
|
32,583
|
23,726
|
8,619
|
4,820
|
878
|
607
|
|
Profit/(loss) for the period
|
15,036
|
1,093
|
1,065
|
8,329
|
(2,681)
|
2,074
|
(525)
|
218
|
(43)
|
|
Other comprehensive income
|
-
|
34
|
(191)
|
1,057
|
(7,250)
|
-
|
-
|
(22)
|
198
|
|
Total comprehensive income
|
15,036
|
1,127
|
874
|
9,386
|
(9,931)
|
2,074
|
(525)
|
196
|
155
|
|
Dividends declared by associates
|
-
|
-
|
-
|
254
|
177
|
-
|
-
|
815
|
-
|
|
Share of net profit/(loss) from associates
|
1,625
|
536
|
522
|
531
|
(291)
|
804
|
(203)
|
109
|
(22)
|
|
Share of other comprehensive (loss)/ income from associates (ii)
|
-
|
17
|
(94)
|
113
|
(802)
|
-
|
-
|
(11)
|
99
|
13 |
LONG-TERM EQUITY INVESTMENTS (Continued)
|
|
(c) |
Major financial information of principal associates (Continued)
|
|
(i) |
Sinopec is able to exercise significant influence in National Pipe Network Group and SIBUR since Sinopec has a member in National Pipe Network Group and SIBUR's Board of Director.
|
|
(ii) |
Including foreign currency translation differences.
|
14 |
FIXED ASSETS
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Fixed assets (a)
|
580,689
|
589,247
|
Fixed assets pending for disposal
|
157
|
38
|
Total
|
580,846
|
589,285
|
|
(a) |
Fixed assets
|
Oil
|
Equipment,
|
|||
Plants and
|
and gas
|
machinery
|
||
buildings
|
properties
|
and others
|
Total
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Cost:
|
||||
Balance at 1 January 2021
|
136,445
|
757,592
|
986,094
|
1,880,131
|
Additions for the period
|
28
|
739
|
303
|
1,070
|
Transferred from construction in progress
|
2,016
|
14,967
|
18,114
|
35,097
|
Reclassifications
|
43
|
(32)
|
(11)
|
-
|
Decreases for the period
|
(660)
|
(202)
|
(3,960)
|
(4,822)
|
Exchange adjustments
|
(23)
|
(408)
|
(38)
|
(469)
|
Balance at 30 June 2021
|
137,849
|
772,656
|
1,000,502
|
1,911,007
|
Accumulated depreciation:
|
||||
Balance at 1 January 2021
|
58,484
|
572,603
|
571,545
|
1,202,632
|
Additions for the period
|
2,251
|
17,247
|
23,662
|
43,160
|
Reclassifications
|
111
|
(28)
|
(83)
|
-
|
Decreases for the period
|
(222)
|
(5)
|
(3,163)
|
(3,390)
|
Exchange adjustments
|
(12)
|
(366)
|
(21)
|
(399)
|
Balance at 30 June 2021
|
60,612
|
589,451
|
591,940
|
1,242,003
|
Provision for impairment losses:
|
||||
Balance at 1 January 2021
|
3,813
|
48,117
|
36,322
|
88,252
|
Additions for the period
|
28
|
-
|
456
|
484
|
Decreases for the period
|
(31)
|
-
|
(364)
|
(395)
|
Exchange adjustments
|
-
|
(26)
|
-
|
(26)
|
Balance at 30 June 2021
|
3,810
|
48,091
|
36,414
|
88,315
|
Net book value:
|
||||
Balance at 30 June 2021
|
73,427
|
135,114
|
372,148
|
580,689
|
Balance at 31 December 2020
|
74,148
|
136,872
|
378,227
|
589,247
|
14 |
FIXED ASSETS (Continued)
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Fixed assets (b)
|
278,659
|
283,691
|
Fixed assets pending for disposal
|
33
|
4
|
Total
|
278,692
|
283,695
|
|
(b) |
Fixed assets
|
Equipment,
|
||||
Plants and
|
Oil and gas
|
machinery
|
||
buildings
|
properties
|
and others
|
Total
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Cost:
|
||||
Balance at 1 January 2021
|
49,356
|
618,483
|
484,351
|
1,152,190
|
Additions for the period
|
-
|
573
|
116
|
689
|
Transferred from construction in progress
|
232
|
10,323
|
9,258
|
19,813
|
Reclassifications
|
134
|
(32)
|
(102)
|
-
|
Decreases for the period
|
(91)
|
(14)
|
(1775)
|
(1,880)
|
Balance at 30 June 2021
|
49,631
|
629,333
|
491,848
|
1,170,812
|
Accumulated depreciation:
|
||||
Balance at 1 January 2021
|
25,189
|
468,718
|
309,841
|
803,748
|
Additions for the period
|
748
|
13,797
|
10,439
|
24,984
|
Reclassifications
|
63
|
(28)
|
(35)
|
-
|
Decreases for the period
|
(52)
|
(5)
|
(1,328)
|
(1,385)
|
Balance at 30 June 2021
|
25,948
|
482,482
|
318,917
|
827,347
|
Provision for impairment losses:
|
||||
Balance at 1 January 2021
|
1,917
|
41,406
|
21,428
|
64,751
|
Additions for the period
|
11
|
-
|
330
|
341
|
Decreases for the period
|
(25)
|
-
|
(261)
|
(286)
|
Balance at 30 June 2021
|
1,903
|
41,406
|
21,497
|
64,806
|
Net book value:
|
||||
Balance at 30 June 2021
|
21,780
|
105,445
|
151,434
|
278,659
|
Balance at 31 December 2020
|
22,250
|
108,359
|
153,082
|
283,691
|
15 |
CONSTRUCTION IN PROGRESS
|
The Group
|
The Company
|
|
RMB million
|
RMB million
|
|
Cost:
|
||
Balance at 1 January 2021
|
126,812
|
60,182
|
Additions for the period
|
54,806
|
25,788
|
Dry hole costs written off
|
(2,640)
|
(2,356)
|
Transferred to fixed assets
|
(35,097)
|
(19,813)
|
Reclassification to other assets
|
(4,021)
|
(126)
|
Exchange adjustments
|
(35)
|
-
|
Balance at 30 June 2021
|
139,825
|
63,675
|
Provision for impairment losses:
|
||
Balance at 1 January 2021
|
2,047
|
302
|
Decreases for the period
|
(12)
|
-
|
Exchange adjustments
|
(9)
|
-
|
Balance at 30 June 2021
|
2,026
|
302
|
Net book value:
|
||
Balance at 30 June 2021
|
137,799
|
63,373
|
Balance at 31 December 2020
|
124,765
|
59,880
|
Percentage
|
Accumulated
|
||||||
Project name
|
Budgeted
amount
|
Balance at
1 January
2021
|
Net change
for
the period
|
Balance at
30 June
2021
|
of project
investment
to budgeted
amount
|
Source of funding
|
interest
capitalised
at 30 June
2021
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|||
Zhenhai Refining and Chemical ethylene expansion project
|
26,680
|
7,632
|
5,073
|
12,705
|
53%
|
Bank loans & self-financing
|
141
|
Hainan Refining and Chemical ethylene and oil refinery expansion project
|
28,085
|
5,002
|
5,382
|
10,384
|
37%
|
Self-financing
|
-
|
Western Sichuan Gas Field Leikoupo Formation Gas Reservoir Development and Construction Project)
|
6,315
|
1,427
|
10
|
1,437
|
23%
|
Bank loans & self-financing
|
112
|
Caprolactam industry chain relocation and upgrading transformation development project
|
13,590
|
1,000
|
247
|
1,247
|
9%
|
Bank loans
|
20
|
Weirong field Longmaxi Formation Shale Gas Production Capacity Construction Project (Second Stage)
|
6,747
|
865
|
772
|
1,637
|
30%
|
Bank loans & self-financing
|
25
|
16 |
RIGHT-OF-USE ASSETS
|
Land
|
Others
|
Total
|
|
RMB million
|
RMB million
|
RMB million
|
|
Cost:
|
|||
Balance at 1 January 2021
|
171,388
|
41,268
|
212,656
|
Additions for the period
|
1,553
|
6,584
|
8,137
|
Decreases for the period
|
(1,303)
|
(1,718)
|
(3,021)
|
Balance at 30 June 2021
|
171,638
|
46,134
|
217,772
|
Accumulated depreciation:
|
|||
Balance at 1 January 2021
|
12,592
|
10,481
|
23,073
|
Additions for the period
|
3,233
|
3,392
|
6,625
|
Decreases for the period
|
(87)
|
(942)
|
(1,029)
|
Balance at 30 June 2021
|
15,738
|
12,931
|
28,669
|
Net book value:
|
|||
Balance at 30 June 2021
|
155,900
|
33,203
|
189,103
|
Balance at 31 December 2020
|
158,796
|
30,787
|
189,583
|
Land
|
Others
|
Total
|
|
RMB million
|
RMB million
|
RMB million
|
|
Cost:
|
|||
Balance at 1 January 2021
|
115,047
|
2,272
|
117,319
|
Additions for the period
|
459
|
1,101
|
1,560
|
Decreases for the period
|
(98)
|
(330)
|
(428)
|
Balance at 30 June 2021
|
115,408
|
3,043
|
118,451
|
Accumulated depreciation:
|
|||
Balance at 1 January 2021
|
7,494
|
1,088
|
8,582
|
Additions for the period
|
1,868
|
404
|
2,272
|
Decreases for the period
|
(24)
|
(278)
|
(302)
|
Balance at 30 June 2021
|
9,338
|
1,214
|
10,552
|
Net book value:
|
|||
Balance at 30 June 2021
|
106,070
|
1,829
|
107,899
|
Balance at 31 December 2020
|
107,553
|
1,184
|
108,737
|
17 |
INTANGIBLE ASSETS
|
Land use
|
Non-patent
|
Operation
|
||||
rights
|
Patents
|
technology
|
rights
|
Others
|
Total
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Cost:
|
||||||
Balance at 1 January 2021
|
101,968
|
5,377
|
5,577
|
53,567
|
6,150
|
172,639
|
Additions for the period
|
4,590
|
945
|
-
|
345
|
482
|
6,362
|
Decreases for the period
|
(487)
|
-
|
-
|
(176)
|
(56)
|
(719)
|
Balance at 30 June 2021
|
106,071
|
6,322
|
5,577
|
53,736
|
6,576
|
178,282
|
Accumulated amortisation:
|
||||||
Balance at 1 January 2021
|
24,957
|
3,788
|
3,461
|
21,522
|
3,904
|
57,632
|
Additions for the period
|
1,793
|
1,028
|
101
|
1,148
|
333
|
4,403
|
Decreases for the period
|
(43)
|
-
|
-
|
(58)
|
(18)
|
(119)
|
Balance at 30 June 2021
|
26,707
|
4,816
|
3,562
|
22,612
|
4,219
|
61,916
|
Provision for impairment losses:
|
||||||
Balance at 1 January 2021 and at 30 June 2021
|
226
|
482
|
27
|
189
|
17
|
941
|
Net book value:
|
||||||
Balance at 30 June 2021
|
79,138
|
1,024
|
1,988
|
30,935
|
2,340
|
115,425
|
Balance at 31 December 2020
|
76,785
|
1,107
|
2,089
|
31,856
|
2,229
|
114,066
|
18 |
GOODWILL
|
Name of investees
|
Principal activities
|
At 30 June
|
At 31 December
|
2021
|
2020
|
||
RMB million
|
RMB million
|
||
Sinopec Zhenhai Refining and Chemical Branch ('Zhenhai R&C')
|
Manufacturing of intermediate petrochemical products and petroleum products
|
4,043
|
4,043
|
Shanghai SECCO Petrochemical Company Limited ('Shanghai SECCO')
|
Production and sale of petrochemical products
|
2,541
|
2,541
|
Sinopec Beijing Yanshan Petrochemical Branch ('Sinopec Yanshan')
|
Manufacturing of intermediate petrochemical products and petroleum products
|
1,004
|
1,004
|
Other units without individual significant goodwill
|
1,021
|
1,032
|
|
Total
|
8,609
|
8,620
|
19 |
LONG-TERM DEFERRED EXPENSES
|
20 |
DEFERRED TAX ASSETS AND LIABILITIES
|
Deferred tax assets
|
Deferred tax liabilities
|
|||
At 30 June
|
At 31 December
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
2021
|
2020
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Receivables and inventories
|
6,437
|
2,411
|
-
|
-
|
Payables
|
2,734
|
1,286
|
-
|
-
|
Cash flow hedges
|
3,060
|
1,790
|
(5,519)
|
(4,420)
|
Fixed assets
|
15,034
|
15,793
|
(13,989)
|
(13,415)
|
Tax value of losses carried forward
|
11,673
|
13,322
|
-
|
-
|
Other equity instrument investments
|
127
|
127
|
(10)
|
(11)
|
Intangible assets
|
827
|
869
|
(509)
|
(517)
|
Others
|
345
|
371
|
(793)
|
(676)
|
Deferred tax assets/(liabilities)
|
40,237
|
35,969
|
(20,820)
|
(19,039)
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Deferred tax assets
|
10,248
|
10,915
|
Deferred tax liabilities
|
10,248
|
10,915
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Deferred tax assets
|
29,989
|
25,054
|
Deferred tax liabilities
|
10,572
|
8,124
|
21 |
OTHER NON-CURRENT ASSETS
|
22 |
DETAILS OF IMPAIRMENT LOSSES
|
Balance at
|
Other
|
Balance at
|
|||||
Note
|
31 December
2020
|
Provision for
the period
|
Written back
for the period
|
Written off for
the period
|
increase/
(decrease)
|
30 June
2021
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
||
Allowance for doubtful accounts
|
|||||||
Included: Accounts receivable
|
8
|
3,860
|
14
|
(50)
|
(13)
|
(40)
|
3,771
|
Prepayments
|
10
|
77
|
5
|
(38)
|
-
|
24
|
68
|
Other receivables
|
11
|
1,531
|
22
|
(42)
|
-
|
-
|
1,511
|
5,468
|
41
|
(130)
|
(13)
|
(16)
|
5,350
|
||
Inventories
|
12
|
3,100
|
433
|
(3)
|
(143)
|
(15)
|
3,372
|
Long-term equity investments
|
13
|
3,548
|
42
|
-
|
(7)
|
(19)
|
3,564
|
Fixed assets
|
14
|
88,252
|
484
|
-
|
(402)
|
(19)
|
88,315
|
Construction in progress
|
15
|
2,047
|
-
|
-
|
(5)
|
(16)
|
2,026
|
Intangible assets
|
17
|
941
|
-
|
-
|
-
|
-
|
941
|
Goodwill
|
18
|
7,861
|
-
|
-
|
-
|
-
|
7,861
|
Others
|
6
|
3
|
-
|
-
|
-
|
9
|
|
Total
|
111,223
|
1,003
|
(133)
|
(570)
|
(85)
|
111,438
|
23 |
SHORT-TERM LOANS
|
At 30 June 2021
|
At 31 December 2020
|
|||||
Original
|
Original
|
|||||
currency
|
Exchange
|
currency
|
Exchange
|
|||
million
|
rates
|
RMB million
|
million
|
rates
|
RMB million
|
|
Short-term bank loans
|
29,640
|
16,111
|
||||
- Renminbi loans
|
29,570
|
16,111
|
||||
- US Dollar loans
|
11
|
6.4601
|
70
|
-
|
6.5249
|
-
|
Short-term other loans
|
-
|
-
|
3
|
|||
- Renminbi loans
|
-
|
3
|
||||
Short-term loans from Sinopec Group Company and fellow subsidiaries
|
8,009
|
4,642
|
||||
- Renminbi loans
|
739
|
1,141
|
||||
- US Dollar loans
|
1,080
|
6.4601
|
6,981
|
505
|
6.5249
|
3,298
|
- Hong Kong Dollar loans
|
71
|
0.8321
|
59
|
37
|
0.8416
|
31
|
- Euro loans
|
30
|
7.6862
|
230
|
21
|
8.0250
|
172
|
Total
|
37,649
|
20,756
|
24 |
BILLS PAYABLE
|
25 |
ACCOUNTS PAYABLE
|
26 |
CONTRACT LIABILITIES
|
27 |
EMPLOYEE BENEFITS PAYABLE
|
28 |
TAXES PAYABLE
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Value-added tax payable
|
2,194
|
5,085
|
Consumption tax payable
|
19,380
|
56,762
|
Income tax payable
|
8,391
|
6,586
|
Mineral resources compensation fee payable
|
9
|
132
|
Other taxes
|
6,923
|
8,278
|
Total
|
36,897
|
76,843
|
29 |
OTHER PAYABLES
|
30 |
NON-CURRENT LIABILITIES DUE WITHIN ONE YEAR
|
At 30 June 2021
|
At 31 December 2020
|
|||||
Original
|
Original
|
|||||
currency
|
Exchange
|
currency
|
Exchange
|
|||
million
|
rates
|
RMB million
|
million
|
rates
|
RMB million
|
|
Long-term bank loans
|
||||||
- Renminbi loans
|
4,187
|
4,613
|
||||
- US Dollar loans
|
4
|
6.4601
|
23
|
4
|
6.5249
|
24
|
Long-term loans from Sinopec Group Company and fellow subsidiaries
|
||||||
- Renminbi loans
|
578
|
622
|
||||
Long term loans due within one year
|
4,788
|
5,259
|
||||
Debentures payable due within one year
|
||||||
- Renminbi debentures
|
7,000
|
-
|
||||
Lease liabilities due within one year
|
15,544
|
15,292
|
||||
Others
|
2,065
|
1,942
|
||||
Non-current liabilities due within one year
|
29,397
|
22,493
|
31 |
OTHER CURRENT LIABILITIES
|
32 |
LONG-TERM LOANS
|
At 30 June 2021
|
At 31 December 2020
|
||||||
Interest rate and final maturity
|
Original
currency
million
|
Exchange rates
|
RMB million
|
Original
currency
million
|
Exchange rates
|
RMB million
|
|
Long-term bank loans
|
|||||||
- Renminbi loans
|
Interest rates ranging from interest 1.08% to 3.73% per annum at 30 June 2021 with maturities through 2039
|
35,470
|
38,226
|
||||
- US Dollar loans
|
Interest rates at 1.55% per annum at 30 June 2021 with maturities through 2030
|
12
|
6.4601
|
77
|
14
|
6.5249
|
92
|
Less: Current portion
|
4,210
|
4,637
|
|||||
Long-term bank loans
|
31,337
|
33,681
|
|||||
Long-term loans from Sinopec Group Company and fellow subsidiaries
|
|||||||
- Renminbi loans
|
Interest rates ranging from interest 1.08% to 5.23% per annum at 30 June 2020 with maturities through 2037
|
11,115
|
11,013
|
||||
- US Dollar loans
|
Interest rates at 1.60% per annum at 30 June 2021 with maturities through 2027
|
197
|
6.4601
|
1,275
|
21
|
6.5249
|
1,387
|
Less: Current portion
|
578
|
622
|
|||||
Long-term loans from Sinopec Group Company and fellow subsidiaries
|
11,812
|
11,778
|
|||||
Total
|
43,149
|
45,459
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Between one and two years
|
16,660
|
3,520
|
Between two and five years
|
23,797
|
39,504
|
After five years
|
2,692
|
2,435
|
Total
|
43,149
|
45,459
|
33 |
DEBENTURES PAYABLE
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Debentures payable:
|
||
- Corporate Bonds (i)
|
38,251
|
38,356
|
Less: Current portion
|
7,000
|
-
|
Total
|
31,251
|
38,356
|
|
(i) |
These corporate bonds are carried at amortised cost, including USD denominated corporate bonds of RMB11,269 million, and RMB denominated corporate bonds of RMB26,982 million (31 December 2020: USD denominated corporate bonds of RMB11,379 million, and RMB denominated corporate bonds of RMB26,977 million).
|
34 |
LEASE LIABILITY
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Lease liabilities
|
187,489
|
187,598
|
Deduct: Current portion of lease liabilities (Note 30)
|
15,544
|
15,292
|
Total
|
171,945
|
172,306
|
35 |
PROVISIONS
|
The Group
|
|
RMB million
|
|
Balance at 1 January 2021
|
43,713
|
Provision for the period
|
728
|
Accretion expenses
|
691
|
Decrease for the period
|
(417)
|
Exchange adjustments
|
(20)
|
Balance at 30 June 2021
|
44,695
|
36 |
OTHER NON-CURRENT LIABILITIES
|
37 |
SHARE CAPITAL
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Registered, issued and fully paid:
|
||
95,557,771,046 listed A shares (31 December 2020: 95,557,771,046) of RMB1.00 each
|
95,558
|
95,558
|
25,513,438,600 listed H shares (31 December 2020: 25,513,438,600) of RMB1.00 each
|
25,513
|
25,513
|
Total
|
121,071
|
121,071
|
37 |
SHARE CAPITAL (Continued)
|
38 |
CAPITAL RESERVE
|
RMB million
|
|
Balance at 1 January 2021
|
122,558
|
Transaction with minority interests
|
(1,384)
|
Others
|
20
|
Balance at 30 June 2021
|
121,194
|
39 |
OTHER COMPREHENSIVE INCOME
|
|
(a) |
The changes of other comprehensive income in consolidated income statement
|
Six-month period ended 30 June 2021
|
|||
Before-tax amount
|
Tax effect
|
Net-of-tax amount
|
|
RMB million
|
RMB million
|
RMB million
|
|
Cash flow hedges:
|
|||
Effective portion of changes in fair value of hedging instruments recognised during the period
|
5,214
|
(1,130)
|
4,084
|
Less: Reclassification adjustments for amounts transferred to the consolidated income statement
|
(5,201)
|
645
|
(4,556)
|
Subtotal
|
10,415
|
(1,775)
|
8,640
|
Cost of hedging reserve
|
(40)
|
-
|
(40)
|
Changes in fair value of other equity instrument investments
|
7
|
1
|
8
|
Other comprehensive loss that can be converted into profit or loss under the equity method
|
121
|
-
|
121
|
Foreign currency translation differences
|
(621)
|
-
|
(621)
|
Other comprehensive loss
|
9,882
|
(1,774)
|
8,108
|
39 |
OTHER COMPREHENSIVE INCOME (Continued)
|
|
(a) |
The changes of other comprehensive income in consolidated income statement (Continued)
|
Six-month period ended 30 June 2020
|
|||
Before-tax amount
|
Tax effect
|
Net-of-tax amount
|
|
RMB million
|
RMB million
|
RMB million
|
|
Cash flow hedges:
|
|||
Effective portion of changes in fair value of hedging instruments recognised during the period
|
(2,460)
|
664
|
(1,796)
|
Less: Reclassification adjustments for amounts transferred to the consolidated income statement
|
(175)
|
39
|
(136)
|
Subtotal
|
(2,285)
|
625
|
(1,660)
|
Changes in fair value of other equity instrument investments
|
(31)
|
1
|
(30)
|
Other comprehensive loss that can be converted into profit or loss under the equity method
|
(1,781)
|
-
|
(1,781)
|
Foreign currency translation differences
|
1,059
|
-
|
1,059
|
Other comprehensive income
|
(3,038)
|
626
|
(2,412)
|
|
(b) |
The change of each item in other comprehensive income
|
Equity Attributable to shareholders of the company
|
Minority
|
Total other
|
||||||
Other
|
interests
|
comprehensive
|
||||||
comprehensive
|
income
|
|||||||
loss that
|
Changes in fair
|
|||||||
can be converted
|
value of
|
Foreign
|
||||||
into profit or
|
other equity
|
currency
|
||||||
loss under the
|
instrument
|
Fair value
|
Cash flow
|
translation
|
||||
equity method
|
investments
|
hedges
|
hedges
|
differences
|
Subtotal
|
|||
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
1 January 2020
|
(4,088)
|
(16)
|
-
|
1,037
|
2,746
|
(321)
|
(1,569)
|
(1,890)
|
Change for the period
|
(1,443)
|
(21)
|
-
|
(1,332)
|
817
|
(1,979)
|
(154)
|
(2,133)
|
30 June 2020
|
(5,531)
|
(37)
|
-
|
(295)
|
3,563
|
(2,300)
|
(1,723)
|
(4,023)
|
1 January 2021
|
(6,089)
|
(20)
|
81
|
7,805
|
(739)
|
1,038
|
(2,600)
|
(1,562)
|
Change for the period
|
115
|
11
|
(20)
|
220
|
(463)
|
(137)
|
(425)
|
(562)
|
30 June 2021
|
(5,974)
|
(9)
|
61
|
8,025
|
(1,202)
|
901
|
(3,025)
|
(2,124)
|
40 |
SURPLUS RESERVES
|
The Group
|
|||
Statutory
|
Discretionary
|
||
surplus reserve
|
surplus reserves
|
Total
|
|
RMB million
|
RMB million
|
RMB million
|
|
Balance at 1 January 2021
|
92,280
|
117,000
|
209,280
|
Appropriation
|
-
|
-
|
-
|
Balance at 30 June 2021
|
92,280
|
117,000
|
209,280
|
|
(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;
|
|
(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.
|
41 |
OPERATING INCOME AND OPERATING COSTS
|
Six-month period ended 30 June
|
||||
The Group
|
The Company
|
|||
2021
|
2020
|
2021
|
2020
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Income from principal operations
|
1,231,980
|
1,006,808
|
456,623
|
349,258
|
Income from other operations
|
29,623
|
26,256
|
12,499
|
9,317
|
Total
|
1,261,603
|
1,033,064
|
469,122
|
358,575
|
Operating costs
|
999,983
|
873,735
|
363,427
|
287,803
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Income from principal operations
|
1,231,980
|
1,006,808
|
Included: Gasoline
|
345,353
|
260,303
|
Diesel
|
226,152
|
205,806
|
Crude oil
|
204,510
|
199,035
|
Basic chemical feedstock
|
112,709
|
70,192
|
Synthetic resin
|
70,721
|
55,957
|
Kerosene
|
51,165
|
38,960
|
Natural gas
|
30,019
|
22,269
|
Synthetic fiber monomers and polymers
|
21,182
|
19,743
|
Others (i)
|
170,169
|
134,543
|
Income from other operations
|
29,623
|
26,256
|
Included: Sale of materials and others
|
29,068
|
25,792
|
Rental income
|
555
|
464
|
Total
|
1,261,603
|
1,033,064
|
|
(i) |
Others are primarily liquefied petroleum gas and other refinery and chemical by-products and joint products.
|
|
(ii) |
Except for rental income, the above income are generated from the contract.
|
42 |
TAXES AND SURCHARGES
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Consumption tax
|
100,539
|
90,966
|
City construction tax
|
8,288
|
7,451
|
Education surcharge
|
6,128
|
5,454
|
Resources tax
|
3,004
|
2,237
|
Others
|
2,907
|
2,603
|
Total
|
120,866
|
108,711
|
43 |
FINANCIAL EXPENSES
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Interest expenses incurred
|
2,689
|
3,461
|
Less: Capitalised interest expenses
|
349
|
699
|
Add: Interest expense on lease liabilities
|
4,627
|
4,695
|
Net interest expenses
|
6,967
|
7,457
|
Accretion expenses (Note 35)
|
691
|
626
|
Interest income
|
(2,662)
|
(2,267)
|
Net foreign exchange gain
|
(95)
|
(553)
|
Total
|
4,901
|
5,263
|
44 |
CLASSIFICATION OF EXPENSES BY NATURE
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Purchased crude oil, products and operating supplies and expenses
|
947,242
|
835,004
|
Personnel expenses
|
45,010
|
38,476
|
Depreciation, depletion and amortisation
|
54,267
|
51,465
|
Exploration expenses (including dry holes)
|
4,846
|
4,465
|
Other expenses
|
26,269
|
14,149
|
Total
|
1,077,634
|
943,559
|
45 |
RESEARCH AND DEVELOPMENT EXPENSES
|
46 |
EXPLORATION EXPENSES
|
47 |
OTHER INCOME
|
48 |
INVESTMENT INCOME
|
Six-month period ended 30 June
|
||||
The Group
|
The Company
|
|||
2021
|
2020
|
2021
|
2020
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Income from investment of subsidiaries accounted for under cost method
|
-
|
-
|
5,366
|
5,896
|
Income from investment accounted for under equity method
|
11,133
|
8
|
4,366
|
544
|
Investment income from disposal of long-term equity investments
|
60
|
3
|
60
|
1
|
Dividend income from holding of other equity instrument investments
|
(21)
|
9
|
(39)
|
-
|
Investment income/(loss) from holding/disposal of financial assets and liabilities and derivative financial instruments at fair value through profit or loss
|
(5,390)
|
3,104
|
(95)
|
39
|
Gain/(loss) from ineffective portion of cash flow hedges
|
(942)
|
2,527
|
365
|
-
|
Others
|
50
|
(20)
|
579
|
119
|
Total
|
4,890
|
5,631
|
10,602
|
6,599
|
49 |
GAINS/(LOSSES) FROM CHANGES IN FAIR VALUE
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Net fair value losses on financial assets and financial liabilities at fair value through profit or loss
|
(523)
|
(2,003)
|
Unrealised gains from ineffective portion cash flow hedges, net
|
639
|
2,113
|
Total
|
116
|
110
|
50 |
IMPAIRMENT LOSSES
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Prepayments
|
(33)
|
52
|
Inventories
|
430
|
11,585
|
Fixed assets
|
484
|
30
|
Others
|
45
|
-
|
Total
|
926
|
11,667
|
51 |
NON-OPERATING INCOME
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Government grants
|
305
|
232
|
Others
|
391
|
452
|
Total
|
696
|
684
|
52 |
NON-OPERATING EXPENSES
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Fines, penalties and compensation
|
39
|
77
|
Donations
|
8
|
99
|
Others
|
1,034
|
801
|
Total
|
1,081
|
977
|
53 |
INCOME TAX EXPENSE
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Provision for income tax for the period
|
17,286
|
4,079
|
Deferred taxation
|
(2,373)
|
(10,219)
|
Under-provision for income tax in respect of preceding year
|
36
|
349
|
Total
|
14,949
|
(5,791)
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Profit/(loss) before taxation
|
63,477
|
(28,218)
|
Expected income tax expense at a tax rate of 25%
|
15,869
|
(7,055)
|
Tax effect of non-deductible expenses
|
3,739
|
1,198
|
Tax effect of non-taxable income
|
(3,119)
|
120
|
Tax effect of preferential tax rate (i)
|
(1,377)
|
(393)
|
Effect of income taxes at foreign operations
|
(433)
|
(308)
|
Tax effect of utilisation of previously unrecognised tax losses and temporary differences
|
(361)
|
(4)
|
Tax effect of tax losses not recognised
|
30
|
270
|
Write-down of deferred tax assets
|
565
|
32
|
Adjustment for under provision for income tax in respect of preceding years
|
36
|
349
|
Actual income tax expense
|
14,949
|
(5,791)
|
|
(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 2030.
|
54 |
DIVIDENDS
|
|
(a) |
Dividends of ordinary shares declared after the balance sheet date
|
|
(b) |
Dividends of ordinary shares declared during the period
|
55 |
SUPPLEMENTAL INFORMATION TO THE CASH FLOW STATEMENT
|
|
(a) |
Reconciliation of net profit to cash flows from operating activities:
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Net profit/(loss)
|
48,528
|
(22,427)
|
Add: Impairment losses on assets
|
926
|
11,667
|
Credit impairment (reversals)/losses
|
(55)
|
101
|
Depreciation of right-of-use assets
|
6,436
|
6,306
|
Depreciation of fixed assets
|
43,160
|
40,698
|
Amortisation of intangible assets and long-term deferred expenses
|
4,671
|
4,461
|
Dry hole costs written off
|
2,640
|
3,287
|
Net loss on disposal of non-current assets
|
63
|
111
|
Fair value gain
|
(116)
|
(110)
|
Financial expenses
|
4,996
|
7,493
|
Investment income
|
(4,890)
|
(5,631)
|
Increase in deferred tax assets
|
(4,460)
|
(9,744)
|
Increase/(decrease) in deferred tax liabilities
|
2,087
|
(475)
|
(Increase)/decrease in inventories
|
(47,769)
|
793
|
Safety fund reserve
|
953
|
1,346
|
Increase in operating receivables
|
(46,497)
|
(10,974)
|
Increase in operating payables
|
37,063
|
13,463
|
Net cash flow from operating activities
|
47,736
|
40,365
|
|
(b) |
The analysis of cash held by the Group is as follows:
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Cash at bank and on hand
|
||
- Cash on hand
|
1
|
4
|
- Demand deposits
|
78,113
|
86,922
|
Cash at the end of the period
|
78,114
|
86,926
|
|
(c) |
Other cash paid relating to financing activities:
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Repayments of lease liabilities
|
9,408
|
7,786
|
Others
|
1,938
|
1,214
|
Total
|
11,346
|
9,000
|
|
(d) |
Cash or cash equivalents received by disposal of subsidiaries and other business units:
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Cash received by disposal of oil and gas pipelines and relevant assets
|
3,756
|
-
|
Others
|
540
|
31
|
Total
|
4,296
|
31
|
56 |
RELATED PARTIES AND RELATED PARTY TRANSACTIONS
|
|
(1) |
Related parties having the ability to exercise control over the Group
|
The name of the company
|
:
|
China Petrochemical Corporation
|
Unified social credit identifier
|
:
|
9111000010169286X1
|
Registered address
|
:
|
No. 22, Chaoyangmen North Street, Chaoyang District, Beijing
|
Principal activities
|
:
|
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.
|
Relationship with the Group
|
:
|
Ultimate holding company
|
Types of legal entity
|
:
|
State-owned
|
Authorised representative
|
:
|
Zhang Yuzhuo
|
Registered capital
|
:
|
RMB326,547 million
|
|
(2) |
Related parties not having the ability to exercise control over the Group
|
|
Note: |
Sinopec Finance is under common control of a parent company with the Company and is also the associate of the Group.
|
56 |
RELATED PARTIES AND RELATED PARTY TRANSACTIONS (Continued)
|
|
(3) |
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
|
|||
Note
|
Six-month period ended 30 June
|
||
2021
|
2020
|
||
RMB million
|
RMB million
|
||
Sales of goods
|
(i)
|
136,079
|
106,817
|
Purchases
|
(ii)
|
95,876
|
65,233
|
Transportation and storage
|
(iii)
|
6,966
|
3,820
|
Exploration and development services
|
(iv)
|
15,046
|
11,395
|
Production related services
|
(v)
|
14,707
|
10,615
|
Ancillary and social services
|
(vi)
|
642
|
1,556
|
Agency commission income
|
(vii)
|
97
|
67
|
Interest income
|
(viii)
|
381
|
422
|
Interest expense
|
(ix)
|
196
|
573
|
Net deposits placed with related parties
|
(viii)
|
733
|
10,941
|
Net funds obtained from related parties
|
(x)
|
6,241
|
55,961
|
|
(i) |
Sales of goods represent the sale of crude oil, intermediate petrochemical products, petroleum products and ancillary materials.
|
|
(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.
|
|
(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.
|
|
(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, and management services.
|
56 |
RELATED PARTIES AND RELATED PARTY TRANSACTIONS (Continued)
|
|
(3) |
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: (Continued)
|
|
(vi) |
Ancillary and social services represent expenditures for social welfare and support services such as educational facilities, media communication services, sanitation, accommodation, canteens and property maintenance.
|
|
(vii) |
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.
|
|
(viii) |
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.
|
|
(ix) |
Interest expense represents interest charges on the loans obtained from Sinopec Group Company and fellow subsidiaries.
|
|
(x) |
The Group obtained loans, discounted bills and others from Sinopec Group Company and fellow subsidiaries.
|
|
(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:
|
|
• |
the government-prescribed price;
|
|
• |
where there is no government-prescribed price, the government-guidance price;
|
|
• |
where there is neither a government-prescribed price nor a government-guidance price, the market price; or
|
|
• |
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%.
|
|
(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.
|
|
(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.
|
|
(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.
|
|
(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.
|
|
(f) |
On the basis of a series of continuing connected transaction agreements signed in 2000, the Company and Sinopec Group Company have signed the Fifth Supplementary Agreement and the Fourth Revised Memorandum of land use rights leasing contract on 24 August 2018, which took effect on 1 January 2019 and made adjustment to 'Mutual Supply Agreement', 'Agreement for Provision of Cultural and Educational, Health Care and Community Services', 'Buildings Leasing Contract', 'Intellectual Property Contract' and 'Land Use Rights Leasing Contract', etc.
|
56 |
RELATED PARTIES AND RELATED PARTY TRANSACTIONS (Continued)
|
|
(4) |
Balances with Sinopec Group Company and fellow subsidiaries, associates and joint ventures
|
The ultimate holding company
|
Other related companies
|
|||
At 30 June
|
At 31 December
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
2021
|
2020
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Cash at bank and on hand
|
-
|
-
|
54,150
|
53,417
|
Accounts receivable
|
36
|
42
|
12,442
|
16,854
|
Receivables financing
|
-
|
-
|
591
|
760
|
Other receivables
|
-
|
-
|
12,637
|
18,062
|
Prepayments and other current assets
|
106
|
7
|
764
|
1,236
|
Other non-current assets
|
-
|
-
|
6,534
|
6,435
|
Bills payable
|
9
|
8
|
3,499
|
3,671
|
Accounts payable
|
238
|
122
|
15,106
|
19,004
|
Contract liabilities
|
42
|
41
|
5,642
|
5,899
|
Other payables
|
215
|
38
|
29,246
|
12,078
|
Other non-current liabilities
|
-
|
-
|
3,227
|
3,010
|
Short-term loans
|
-
|
-
|
8,009
|
4,642
|
Long-term loans (including current portion) (Note)
|
-
|
-
|
12,390
|
12,400
|
Lease liabilities (including current portion)
|
73,078
|
74,178
|
87,791
|
87,870
|
|
(5) |
Key management personnel emoluments
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB thousand
|
RMB thousand
|
|
Short-term employee benefits
|
1,771
|
3,675
|
Retirement scheme contributions
|
120
|
165
|
Total
|
1,891
|
3,840
|
57 |
PRINCIPAL ACCOUNTING ESTIMATES AND JUDGEMENTS
|
57 |
PRINCIPAL ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued)
|
|
(a) |
Oil and gas properties and reserves
|
|
(b) |
Impairment for assets
|
|
(c) |
Depreciation
|
|
(d) |
Measurement of expected credit losses
|
|
(e) |
Allowance for diminution in value of inventories
|
58 |
PRINCIPAL SUBSIDIARIES
|
Full name of enterprise
|
Principal activities
|
Registered
capital/
paid-up capital
|
Actual
investment
at 30 June
2021
|
Percentage
of equity
interest/
voting right
held by the
Group
|
Minority
Interests at
30 June 2021
|
million
|
million
|
%
|
RMB million
|
||
(a) Subsidiaries acquired through group restructuring:
|
|||||
China Petrochemical International Company Limited
|
Trading of petrochemical products
|
RMB1,400
|
RMB1,856
|
100.00
|
13
|
China International United Petroleum and Chemical Company Limited
|
Trading of crude oil and petrochemical products
|
RMB5,000
|
RMB6,585
|
100.00
|
5,234
|
Sinopec Catalyst Company Limited
|
Production and sale of catalyst products
|
RMB1,500
|
RMB2,424
|
100.00
|
260
|
Sinopec Yangzi Petrochemical Company Limited
|
Manufacturing of intermediate petrochemical products and petroleum products
|
RMB15,651
|
RMB15,651
|
100.00
|
-
|
Sinopec Lubricant Company Limited
|
Production and sale of refined petroleum products, lubricant base oil, and petrochemical materials
|
RMB3,374
|
RMB3,374
|
100.00
|
89
|
Sinopec Yizheng Chemical Fibre Limited Liability Company
|
Production and sale of polyester chips and polyester fibres
|
RMB4,000
|
RMB6,713
|
100.00
|
-
|
Sinopec Marketing Co. Limited ('Marketing Company')
|
Marketing and distribution of refined petroleum products
|
RMB28,403
|
RMB20,000
|
70.42
|
79,286
|
Sinopec Kantons Holdings Limited ('Sinopec Kantons')
|
Provision of crude oil jetty services and natural gas pipeline transmission services
|
HKD248
|
HKD3,952
|
60.33
|
4,950
|
Sinopec Shanghai Petrochemical Company Limited ('Shanghai Petrochemical')
|
Manufacturing of synthetic fibres, resin and plastics, intermediate petrochemical products and petroleum products
|
RMB10,824
|
RMB5,820
|
50.44
|
14,744
|
Fujian Petrochemical Company Limited ('Fujian Petrochemical') (i)
|
Manufacturing of plastics, intermediate petrochemical products and petroleum products
|
RMB10,492
|
RMB5,246
|
50.00
|
7,013
|
(b) Subsidiaries established by the Group:
|
|||||
Sinopec International Petroleum Exploration and Production Limited ('SIPL')
|
Investment in exploration, production and sale of petroleum and natural gas
|
RMB8,250
|
RMB8,250
|
100.00
|
5,814
|
Sinopec Overseas Investment Holding Limited ('SOIH')
|
Investment holding of overseas business
|
USD1,662
|
USD1,959
|
100.00
|
-
|
Sinopec Chemical Sales Company Limited
|
Marketing and distribution of petrochemical products
|
RMB1,000
|
RMB1,165
|
100.00
|
108
|
Sinopec Great Wall Energy & Chemical Company Limited
|
Coal chemical industry investment management, production and sale of coal chemical products
|
RMB22,761
|
RMB22,795
|
100.00
|
(219)
|
Sinopec Beihai Refining and Chemical Limited Liability Company
|
Import and processing of crude oil, production, storage and sale of petroleum products and petrochemical products
|
RMB5,294
|
RMB5,240
|
98.98
|
128
|
ZhongKe (Guangdong) Refinery & Petrochemical Company Limited
|
Crude oil processing and petroleum products manufacturing
|
RMB6,397
|
RMB5,776
|
90.30
|
2,171
|
Sinopec Qingdao Refining and Chemical Company Limited
|
Manufacturing of intermediate petrochemical products and petroleum products
|
RMB5,000
|
RMB4,250
|
85.00
|
1,754
|
Sinopec-SK (Wuhan) Petrochemical Company Limited ('Sinopec-SK')
|
Production, sale, research and development of ethylene and downstream byproducts
|
RMB7,193
|
RMB7,193
|
59.00
|
4,949
|
(c) Subsidiaries acquired through business combination under common control:
|
|||||
Sinopec Hainan Refining and Chemical Company Limited
|
Manufacturing of intermediate petrochemical products and petroleum products
|
RMB9,606
|
RMB12,615
|
100.00
|
-
|
Sinopec Qingdao Petrochemical Company Limited
|
Manufacturing of intermediate petrochemical products and petroleum products
|
RMB1,595
|
RMB7,233
|
100.00
|
-
|
Gaoqiao Petrochemical Company Limited
|
Manufacturing of intermediate petrochemical products and petroleum products
|
RMB10,000
|
RMB4,804
|
55.00
|
7,772
|
Sinopec Baling Petrochemical Co. Ltd. ('Baling Petrochemical') (ii)
|
Crude oil processing and petroleum products manufacturing
|
RMB3,000
|
RMB3,000
|
55.00
|
2,239
|
(d) Subsidiaries acquired through business combination not under common control:
|
|||||
Shanghai SECCO
|
Production and sale of petrochemical products
|
RMB7,801
|
RMB7,801
|
67.60
|
4,170
|
|
* |
The minority interests of subsidiaries which the Group holds 100% of equity interests at the end of the period are the minority interests of their subsidiaries.
|
|
(i) |
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.
|
|
(ii) |
Please refer to Note 59 Change in the Scope of Consolidation.
|
58 |
PRINCIPAL SUBSIDIARIES (Continued)
|
Marketing Company
|
SIPL
|
Shanghai Petrochemical
|
Fujian Petrochemical
|
Sinopec Kantons
|
Shanghai SECCO
|
Sinopec-SK
|
||||||||
At 30
|
At 31
|
At 30
|
At 31
|
At 30
|
At 31
|
At 30
|
At 31
|
At 30
|
At 31
|
At 30
|
At 31
|
At 30
|
At 31
|
|
June
|
December
|
June
|
December
|
June
|
December
|
June
|
December
|
June
|
December
|
June
|
December
|
June
|
December
|
|
2021
|
2020
|
2021
|
2020
|
2021
|
2020
|
2021
|
2020
|
2021
|
2020
|
2021
|
2020
|
2021
|
2020
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Current assets
|
200,909
|
172,352
|
21,762
|
22,620
|
18,728
|
17,305
|
1,776
|
1,582
|
4,038
|
4,373
|
14,294
|
10,431
|
4,821
|
3,639
|
Current liabilities
|
(215,943)
|
(201,678)
|
(397)
|
(475)
|
(17,049)
|
(15,232)
|
(502)
|
(458)
|
(433)
|
(924)
|
(5,850)
|
(2,783)
|
(5,610)
|
(6,377)
|
Net current (liabilities)/assets
|
(15,034)
|
(29,326)
|
21,365
|
22,145
|
1,679
|
2,073
|
1,274
|
1,124
|
3,605
|
3,449
|
8,444
|
7,648
|
(789)
|
(2,738)
|
Non-current assets
|
320,800
|
323,571
|
8,567
|
8,951
|
28,102
|
27,444
|
13,448
|
12,568
|
8,967
|
9,106
|
4,520
|
12,177
|
21,392
|
22,187
|
Non-current liabilities
|
(59,836)
|
(59,554)
|
(18,052)
|
(18,270)
|
(175)
|
(162)
|
(696)
|
(693)
|
(133)
|
(170)
|
(93)
|
(1,553)
|
(8,533)
|
(8,509)
|
Net non-current assets/(liabilities)
|
260,964
|
264,017
|
(9,485)
|
(9,319)
|
27,927
|
27,282
|
12,752
|
11,875
|
8,834
|
8,936
|
4,427
|
10,624
|
12,859
|
13,678
|
Six-month period
|
Marketing Company
|
SIPL
|
Shanghai Petrochemical
|
Fujian Petrochemical
|
Sinopec Kantons
|
Shanghai SECCO
|
Sinopec-SK
|
|||||||
ended 30 June
|
2021
|
2020
|
2021
|
2020
|
2021
|
2020
|
2021
|
2020
|
2021
|
2020
|
2021
|
2020
|
2021
|
2020
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Revenue
|
633,752
|
528,615
|
762
|
1,000
|
37,137
|
35,663
|
2,771
|
2,198
|
277
|
574
|
14,459
|
10,234
|
23,172
|
16,191
|
Net profit/(loss) for the period
|
12,969
|
5,025
|
643
|
343
|
1,249
|
(1,708)
|
1,025
|
(595)
|
558
|
552
|
2,328
|
661
|
974
|
(963)
|
Total comprehensive income
|
12,981
|
4,937
|
465
|
18
|
1,302
|
(1,718)
|
1,025
|
(595)
|
411
|
512
|
2,328
|
661
|
974
|
(948)
|
Comprehensive income attributable to minority interests
|
4,527
|
1,830
|
275
|
45
|
648
|
(847)
|
512
|
(298)
|
221
|
203
|
754
|
214
|
399
|
(332)
|
Dividends paid to minority interests
|
1,008
|
520
|
-
|
316
|
536
|
644
|
-
|
-
|
98
|
108
|
1,028
|
-
|
-
|
-
|
Net cash generated from/(used in) operating activities
|
15,743
|
42,614
|
282
|
232
|
(2,390)
|
(2,904)
|
87
|
11
|
(639)
|
155
|
1,735
|
67
|
751
|
178
|
59 |
CHANGE IN THE SCOPE OF CONSOLIDATION
|
60 |
COMMITMENTS
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Authorised and contracted for (i)
|
115,260
|
171,335
|
Authorised but not contracted for
|
69,102
|
33,942
|
Total
|
184,362
|
205,277
|
|
(i) |
The investment commitments of the Group is RMB9,135 million (31 December 2020: RMB13,172 million).
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Within one year
|
118
|
390
|
Between one and two years
|
76
|
99
|
Between two and three years
|
67
|
66
|
Between three and four years
|
63
|
63
|
Between four and five years
|
38
|
56
|
Thereafter
|
815
|
824
|
Total
|
1,177
|
1,498
|
61 |
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.
|
|
(b) |
At 30 June 2021 and 31 December 2020, the guarantees by the Group in respect of facilities granted to the parties below are as follows:
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Joint ventures (i)
|
6,035
|
6,390
|
Associates (ii)
|
6,760
|
8,450
|
Total
|
12,795
|
14,840
|
|
(i) |
The Group provided a guarantee in respect to standby credit facilities granted to Zhongan United Coal Chemical Co., Ltd. ('Zhongan United') by banks amount to RMB7,100 million. At 30 June 2021, the amount withdrawn by Zhongan United from banks and guaranteed by the Group was RMB6,035 million (31 December 2020: RMB6,390 million).
|
|
(ii) |
The Group provided a guarantee in respect to standby credit facilities granted to Zhongtian Synergetic Energy by banks amount to RMB17,050 million. At 30 June 2021, the amount withdrawn by Zhongtian Synergetic Energy from banks and guaranteed by the Group was RMB6,760 million (31 December 2020: RMB8,450 million).
|
62 |
SEGMENT REPORTING
|
|
(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.
|
|
(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.
|
|
(iv) |
Chemicals - which manufactures and sells petrochemical products, derivative petrochemical products and other chemical products to external customers.
|
|
(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.
|
|
(1) |
Information of reportable segmental revenues, profits or losses, assets and liabilities
|
62 |
SEGMENT REPORTING (Continued)
|
|
(1) |
Information of reportable segmental revenues, profits or losses, assets and liabilities (Continued)
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Income from principal operations
|
||
Exploration and production
|
||
External sales
|
67,727
|
48,011
|
Inter-segment sales
|
39,391
|
28,752
|
107,118
|
76,763
|
|
Refining
|
||
External sales
|
80,079
|
50,194
|
Inter-segment sales
|
543,540
|
386,115
|
623,619
|
436,309
|
|
Marketing and distribution
|
||
External sales
|
613,521
|
510,446
|
Inter-segment sales
|
2,967
|
2,282
|
616,488
|
512,728
|
|
Chemicals
|
||
External sales
|
197,926
|
148,865
|
Inter-segment sales
|
30,025
|
25,786
|
227,951
|
174,651
|
|
Corporate and others
|
||
External sales
|
272,727
|
260,979
|
Inter-segment sales
|
340,701
|
222,719
|
613,428
|
483,698
|
|
Elimination of inter-segment sales
|
(956,624)
|
(677,341)
|
Consolidated income from principal operations
|
1,231,980
|
1,006,808
|
Income from other operations
|
||
Exploration and production
|
2,408
|
2,166
|
Refining
|
2,390
|
2,049
|
Marketing and distribution
|
18,682
|
17,073
|
Chemicals
|
5,232
|
4,041
|
Corporate and others
|
911
|
927
|
Consolidated income from other operations
|
29,623
|
26,256
|
Consolidated operating income
|
1,261,603
|
1,033,064
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Operating profit/(loss)
|
||
By segment
|
||
Exploration and production
|
5,218
|
(8,044)
|
Refining
|
39,177
|
(32,548)
|
Marketing and distribution
|
16,583
|
6,807
|
Chemicals
|
12,468
|
2,699
|
Corporate and others
|
1,646
|
(4,388)
|
Elimination
|
(12,860)
|
4,500
|
Total segment operating profit/(loss)
|
62,232
|
(30,974)
|
Investment income
|
||
Exploration and production
|
1,772
|
778
|
Refining
|
617
|
(1,704)
|
Marketing and distribution
|
887
|
1,354
|
Chemicals
|
4,891
|
(402)
|
Corporate and others
|
(3,277)
|
5,605
|
Total segment investment income
|
4,890
|
5,631
|
Less: Financial expenses
|
4,901
|
5,263
|
Add: Other income
|
1,244
|
2,467
|
Gains from changes in fair value
|
116
|
110
|
Asset disposal gains
|
281
|
104
|
Operating profit/(loss)
|
63,862
|
(27,925)
|
Add: Non-operating income
|
696
|
684
|
Less: Non-operating expenses
|
1,081
|
977
|
Profit/(loss) before taxation
|
63,477
|
(28,218)
|
62 |
SEGMENT REPORTING (Continued)
|
|
(1) |
Information of reportable segmental revenues, profits or losses, assets and liabilities (Continued)
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Assets
|
||
Segment assets
|
||
Exploration and production
|
359,451
|
354,024
|
Refining
|
288,164
|
270,431
|
Marketing and distribution
|
383,640
|
373,430
|
Chemicals
|
204,830
|
189,678
|
Corporate and others
|
166,189
|
118,458
|
Total segment assets
|
1,402,274
|
1,306,021
|
Cash at bank and on hand
|
190,482
|
184,412
|
Long-term equity investments
|
199,652
|
188,342
|
Deferred tax assets
|
29,989
|
25,054
|
Other unallocated assets
|
30,567
|
29,976
|
Total assets
|
1,852,964
|
1,733,805
|
Liabilities
|
||
Segment liabilities
|
||
Exploration and production
|
163,601
|
157,430
|
Refining
|
77,998
|
135,046
|
Marketing and distribution
|
225,998
|
213,455
|
Chemicals
|
57,019
|
47,871
|
Corporate and others
|
200,623
|
117,684
|
Total segment liabilities
|
725,239
|
671,486
|
Short-term loans
|
37,649
|
20,756
|
Non-current liabilities due within one year
|
29,397
|
22,493
|
Long-term loans
|
43,149
|
45,459
|
Debentures payable
|
31,251
|
38,356
|
Deferred tax liabilities
|
10,572
|
8,124
|
Other non-current liabilities
|
18,804
|
17,942
|
Other unallocated liabilities
|
49,602
|
25,313
|
Total liabilities
|
945,663
|
849,929
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Capital expenditure
|
||
Exploration and production
|
23,965
|
20,470
|
Refining
|
7,887
|
9,536
|
Marketing and distribution
|
6,773
|
8,646
|
Chemicals
|
18,961
|
6,308
|
Corporate and others
|
355
|
221
|
57,941
|
45,181
|
|
Depreciation, depletion and amortisation
|
||
Exploration and production
|
23,745
|
21,307
|
Refining
|
10,018
|
9,911
|
Marketing and distribution
|
11,459
|
11,529
|
Chemicals
|
7,557
|
7,114
|
Corporate and others
|
1,488
|
1,604
|
54,267
|
51,465
|
|
Impairment losses on long-lived assets
|
||
Exploration and production
|
-
|
3
|
Refining
|
427
|
2
|
Marketing and distribution
|
52
|
75
|
Chemicals
|
50
|
2
|
Corporate and others
|
-
|
-
|
529
|
82
|
62 |
SEGMENT REPORTING (Continued)
|
|
(2) |
Geographical information
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
External sales
|
||
Mainland China
|
973,328
|
785,959
|
Singapore
|
141,109
|
126,729
|
Others
|
147,166
|
120,376
|
1,261,603
|
1,033,064
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Non-current assets
|
||
Mainland China
|
1,218,699
|
1,211,441
|
Others
|
45,742
|
36,782
|
1,264,441
|
1,248,223
|
63 |
FINANCIAL INSTRUMENTS
|
|
• |
credit risk;
|
|
• |
liquidity risk; and
|
|
• |
market risk.
|
|
(i) |
Risk management
|
63 |
FINANCIAL INSTRUMENTS (Continued)
|
|
(ii) |
Impairment of financial assets
|
At 30 June 2021
|
||||||
Carrying
amount
|
Total
contractual
undiscounted
cash flow
|
Within one
year or on
demand
|
More than
one year but
less than
two years
|
More than
two years but
less than
five years
|
More than
five years
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Short-term loans
|
37,649
|
38,385
|
38,385
|
-
|
-
|
-
|
Derivative financial liabilities
|
6,947
|
6,947
|
6,947
|
-
|
-
|
-
|
Bills payable
|
11,260
|
11,260
|
11,260
|
-
|
-
|
-
|
Accounts payable
|
216,268
|
216,268
|
216,268
|
-
|
-
|
-
|
Other payables and employee benefits payable
|
117,803
|
117,803
|
117,803
|
-
|
-
|
-
|
Non-current liabilities due within one year
|
29,397
|
30,516
|
30,516
|
-
|
-
|
-
|
Short-term corporate bonds
|
27,999
|
28,260
|
28,260
|
-
|
-
|
-
|
Long-term loans
|
43,149
|
46,387
|
1,019
|
18,334
|
24,131
|
2,903
|
Debentures payable
|
31,251
|
35,460
|
861
|
28,806
|
388
|
5,405
|
Lease liabilities
|
171,945
|
300,598
|
-
|
13,283
|
38,419
|
248,896
|
Total
|
693,668
|
831,884
|
451,319
|
60,423
|
62,938
|
257,204
|
63 |
FINANCIAL INSTRUMENTS (Continued)
|
At 31 December 2020
|
||||||
Carrying
amount
|
Total
contractual
undiscounted
cash flow
|
Within one
year or on
demand
|
More than
one year but
less than
two years
|
More than
two years but
less than
five years
|
More than
five years
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Short-term loans
|
20,756
|
20,950
|
20,950
|
-
|
-
|
-
|
Derivative financial liabilities
|
4,826
|
4,826
|
4,826
|
-
|
-
|
-
|
Bills payable
|
10,394
|
10,394
|
10,394
|
-
|
-
|
-
|
Accounts payable
|
151,262
|
151,262
|
151,262
|
-
|
-
|
-
|
Other payables and employee benefits payable
|
91,681
|
91,681
|
91,681
|
-
|
-
|
-
|
Non-current liabilities due within one year
|
22,493
|
23,880
|
23,880
|
-
|
-
|
-
|
Short-term corporate bonds
|
3,018
|
3,024
|
3,024
|
-
|
-
|
-
|
Long-term loans
|
45,459
|
49,074
|
936
|
4,638
|
41,009
|
2,491
|
Debentures payable
|
38,356
|
44,791
|
1,240
|
8,044
|
29,514
|
5,993
|
Lease liabilities
|
172,306
|
313,126
|
-
|
15,456
|
43,513
|
254,157
|
Total
|
560,551
|
713,008
|
308,193
|
28,138
|
114,036
|
262,641
|
|
(a) |
Currency risk
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
|
million
|
million
|
|
Gross exposure arising from loans and lease liabilities
|
||
US Dollar
|
38
|
22
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
US Dollar
|
12
|
5
|
63 |
FINANCIAL INSTRUMENTS (Continued)
|
|
(b) |
Interest rate risk
|
|
(c) |
Commodity price risk
|
|
(i) |
Financial instruments carried at fair value
|
|
• |
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.
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Assets
|
||||
Financial assets held for trading:
|
||||
- Structured deposits
|
-
|
-
|
3,988
|
3,988
|
Derivative financial assets:
|
||||
- Derivative financial assets
|
9,583
|
14,971
|
-
|
24,554
|
Receivables financing:
|
||||
- Receivables financing
|
-
|
-
|
9,686
|
9,686
|
Other equity instrument investments:
|
||||
- Other Investments
|
155
|
-
|
1,379
|
1,534
|
9,738
|
14,971
|
15,053
|
39,762
|
|
Liabilities
|
||||
Derivative financial liabilities:
|
||||
- Derivative financial liabilities
|
2,046
|
4,901
|
-
|
6,947
|
2,046
|
4,901
|
-
|
6,947
|
63 |
FINANCIAL INSTRUMENTS (Continued)
|
|
(i) |
Financial instruments carried at fair value (Continued)
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Assets
|
||||
Financial assets held for trading:
|
||||
- Structured deposits
|
||||
- Equity investments, listed and at quoted market price
|
1
|
-
|
-
|
1
|
Derivative financial assets:
|
||||
- Derivative financial assets
|
9,628
|
2,900
|
-
|
12,528
|
Receivables financing:
|
||||
- Receivables financing
|
-
|
-
|
8,735
|
8,735
|
Other equity instrument investments:
|
||||
- Other Investments
|
149
|
-
|
1,376
|
1,525
|
9,778
|
2,900
|
10,111
|
22,789
|
|
Liabilities
|
||||
Derivative financial liabilities:
|
||||
- Derivative financial liabilities
|
2,471
|
2,355
|
-
|
4,826
|
2,471
|
2,355
|
-
|
4,826
|
|
(ii) |
Fair values of financial instruments carried at other than fair value
|
At 30 June
|
At 31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Carrying amount
|
73,798
|
76,674
|
Fair value
|
72,426
|
74,282
|
64 |
BASIC AND DILUTED EARNINGS/(LOSSES) PER SHARE
|
|
(i) |
Basic earnings/(losses) per share
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
Net profit/(loss) attributable to equity shareholders of the Company (RMB million)
|
39,153
|
(23,001)
|
Weighted average number of outstanding ordinary shares of the Company (million)
|
121,071
|
121,071
|
Basic earnings/(losses) per share (RMB/share)
|
0.323
|
(0.190)
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
Weighted average number of outstanding ordinary shares of the Company at 1 January (million)
|
121,071
|
121,071
|
Weighted average number of outstanding ordinary shares of the Company at 30 June (million)
|
121,071
|
121,071
|
|
(ii) |
Diluted earnings/(losses) per share
|
65 |
RETURN ON NET ASSETS AND EARNINGS/(LOSSES) PER SHARE
|
Six-month period ended 30 June
|
2021
|
2020
|
||||
Weighted average return on net assets
|
Basic losses per share
|
Diluted losses per share
|
Weighted average return on net assets
|
Basic earnings per share
|
Diluted earnings per share
|
|
(%)
|
(RMB/Share)
|
(RMB/Share)
|
(%)
|
(RMB/Share)
|
(RMB/Share)
|
|
Net profit/(loss) attributable to the Company's ordinary equity shareholders
|
5.19
|
0.323
|
0.323
|
(3.21)
|
(0.190)
|
(0.190)
|
Net profit/(loss) deducted extraordinary gains and losses attributable to the Company's ordinary equity shareholders
|
5.10
|
0.317
|
0.317
|
(3.41)
|
(0.202)
|
(0.202)
|
66 |
NON-RECURRING PROFIT/LOSS ITEMS
|
Non-recurring profit/loss items
|
Six-month period ended
30 June 2021
|
Six-month period ended
30 June 2020
|
(Profit)/loss (RMB Million)
|
(Profit)/loss (RMB Million)
|
|
Net profit on disposal of non-current assets
|
(281)
|
(89)
|
Donations
|
8
|
99
|
Government grants
|
(1,549)
|
(2,694)
|
Gains on holding and disposal of business and various investments
|
(166)
|
(42)
|
Other non-operating income and expenses, net
|
690
|
434
|
Net profit/(loss) acquired through business combination under common control during the reporting period
|
-
|
206
|
Subtotal
|
(1,298)
|
(2,086)
|
Tax effect
|
388
|
677
|
Total
|
(910)
|
(1,409)
|
Attributable to: Equity shareholders of the Company
|
(733)
|
(1,403)
|
Minority interests
|
(177)
|
(6)
|
(B) |
FINANCIAL STATEMENTS PREPARED UNDER INTERNATIONAL FINANCIAL REPORTING STANDARDS ('IFRS')
|
Notes
|
Six-month period ended 30 June
|
||
2021
|
2020
|
||
RMB
|
RMB
|
||
Revenue
|
|||
Revenue from primary business
|
3
|
1,231,980
|
1,006,808
|
Other operating revenues
|
29,623
|
26,256
|
|
1,261,603
|
1,033,064
|
||
Operating expenses
|
|||
Purchased crude oil, products and operating supplies and expenses
|
(947,242)
|
(835,004)
|
|
Selling, general and administrative expenses
|
(25,748)
|
(24,373)
|
|
Depreciation, depletion and amortisation
|
(54,267)
|
(51,465)
|
|
Exploration expenses, including dry holes
|
(4,846)
|
(4,465)
|
|
Personnel expenses
|
(45,010)
|
(38,476)
|
|
Taxes other than income tax
|
4
|
(120,866)
|
(108,711)
|
Impairment reversal/(losses) on trade and other receivables
|
55
|
(101)
|
|
Other operating (expenses)/income, net
|
(5,570)
|
7,872
|
|
Total operating expenses
|
(1,203,494)
|
(1,054,723)
|
|
Operating profit/(loss)
|
58,109
|
(21,659)
|
|
Finance costs
|
|||
Interest expense
|
(7,658)
|
(8,083)
|
|
Interest income
|
2,662
|
2,267
|
|
Foreign currency exchange gains, net
|
95
|
553
|
|
Net finance costs
|
(4,901)
|
(5,263)
|
|
Investment income
|
114
|
65
|
|
Share of profits less losses from associates and joint ventures
|
11,133
|
8
|
|
Profit/(loss) before taxation
|
64,455
|
(26,849)
|
|
Income tax expense
|
5
|
(14,949)
|
5,791
|
Profit/(loss) for the period
|
49,506
|
(21,058)
|
|
Attributable to:
|
|||
Shareholders of the Company
|
39,954
|
(21,844)
|
|
Non-controlling interests
|
9,552
|
786
|
|
Profit/(loss) for the period
|
49,506
|
(21,058)
|
|
Earnings/(losses) per share:
|
|||
Basic
|
7
|
0.330
|
(0.180)
|
Diluted
|
7
|
0.330
|
(0.180)
|
Notes
|
Six-month period ended 30 June
|
||
2021
|
2020
|
||
RMB
|
RMB
|
||
Profit/(loss) for the period
|
49,506
|
(21,058)
|
|
Other comprehensive income:
|
|||
Items that may not be reclassified subsequently to profit or loss
|
|||
Equity investments at fair value through other comprehensive income
|
8
|
(30)
|
|
Total items that may not be reclassified subsequently to profit or loss
|
8
|
(30)
|
|
Items that may be reclassified subsequently to profit or loss
|
|||
Share of other comprehensive income of associates and joint ventures
|
121
|
(1,781)
|
|
Cash flow hedges
|
8,640
|
(1,660)
|
|
Cost of hedging reserve
|
(40)
|
-
|
|
Foreign currency translation differences
|
(621)
|
1,059
|
|
Total items that may be reclassified subsequently to profit or loss
|
8,100
|
(2,382)
|
|
Total other comprehensive income
|
8,108
|
(2,412)
|
|
Total comprehensive income for the period
|
57,614
|
(23,470)
|
|
Attributable to:
|
|||
Shareholders of the Company
|
47,938
|
(24,057)
|
|
Non-controlling interests
|
9,676
|
587
|
|
Total comprehensive income for the period
|
57,614
|
(23,470)
|
Notes
|
30 June
|
31 December
|
|
2021
|
2020
|
||
RMB
|
RMB
|
||
Non-current assets
|
|||
Property, plant and equipment, net
|
8
|
580,689
|
589,247
|
Construction in progress
|
9
|
137,799
|
124,765
|
Right-of-use assets
|
10
|
268,240
|
266,368
|
Goodwill
|
8,609
|
8,620
|
|
Interest in associates
|
140,855
|
136,163
|
|
Interest in joint ventures
|
58,797
|
52,179
|
|
Financial assets at fair value through other comprehensive income
|
13
|
1,534
|
1,525
|
Deferred tax assets
|
29,989
|
25,054
|
|
Long-term prepayments and other assets
|
11
|
73,016
|
74,489
|
Total non-current assets
|
1,299,528
|
1,278,410
|
|
Current assets
|
|||
Cash and cash equivalents
|
78,114
|
87,559
|
|
Time deposits with financial institutions
|
112,368
|
100,498
|
|
Financial assets at fair value through profit or loss
|
3,988
|
1
|
|
Derivative financial assets
|
24,554
|
12,528
|
|
Trade accounts receivable
|
12
|
71,843
|
35,587
|
Financial assets at fair value through other comprehensive income
|
13
|
9,686
|
8,735
|
Inventories
|
199,234
|
151,895
|
|
Prepaid expenses and other current assets
|
53,649
|
58,592
|
|
Total current assets
|
553,436
|
455,395
|
|
Current liabilities
|
|||
Short-term debts
|
14
|
68,849
|
23,769
|
Loans from Sinopec Group Company and fellow subsidiaries
|
14
|
8,587
|
5,264
|
Lease liabilities
|
15
|
15,544
|
15,292
|
Derivative financial liabilities
|
6,947
|
4,826
|
|
Trade accounts payable and bills payable
|
16
|
227,528
|
161,656
|
Contract liabilities
|
127,920
|
126,160
|
|
Other payables
|
160,229
|
178,637
|
|
Income tax payable
|
8,391
|
6,586
|
|
Total current liabilities
|
623,995
|
522,190
|
|
Net current liabilities
|
70,559
|
66,795
|
|
Total assets less current liabilities
|
1,228,969
|
1,211,615
|
|
Non-current liabilities
|
|||
Long-term debts
|
14
|
62,588
|
72,037
|
Loans from Sinopec Group Company and fellow subsidiaries
|
14
|
11,812
|
11,778
|
Lease liabilities
|
15
|
171,945
|
172,306
|
Deferred tax liabilities
|
10,572
|
8,124
|
|
Provisions
|
45,947
|
45,552
|
|
Other long-term liabilities
|
19,797
|
18,960
|
|
Total non-current liabilities
|
322,661
|
328,757
|
|
906,308
|
882,858
|
||
Equity
|
|||
Share capital
|
17
|
121,071
|
121,071
|
Reserves
|
643,137
|
620,423
|
|
Total equity attributable to shareholders of the Company
|
764,208
|
741,494
|
|
Non-controlling interests
|
142,100
|
141,364
|
|
Total equity
|
906,308
|
882,858
|
Ma Yongsheng
|
Shou Donghua
|
|
Director and President
|
Chief Financial Officer
|
Share
capital
|
Capital
reserve
|
Share
premium
|
Statutory
surplus
reserve
|
Discretionary
surplus
reserve
|
Other
reserves
|
Retained
earnings
|
Total equity
attributable to
shareholders
of the
Company
|
Non-
controlling
interests
|
Total
equity
|
|
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
|
Balance at 31 December 2019
|
121,071
|
28,993
|
55,850
|
90,423
|
117,000
|
1,941
|
322,872
|
738,150
|
137,685
|
875,835
|
Contribution from SAMC in the Acquisition of Baling Branch of SAMC (Note 19)
|
-
|
737
|
-
|
-
|
-
|
-
|
59
|
796
|
673
|
1,469
|
Balance at 1 January 2020
|
121,071
|
29,730
|
55,850
|
90,423
|
117,000
|
1,941
|
322,931
|
738,946
|
138,358
|
877,304
|
(Loss)/profit for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
(21,844)
|
(21,844)
|
786
|
(21,058)
|
Other comprehensive income
|
-
|
-
|
-
|
-
|
-
|
(2,213)
|
-
|
(2,213)
|
(199)
|
(2,412)
|
Total comprehensive income for the period
|
-
|
-
|
-
|
-
|
-
|
(2,213)
|
(21,844)
|
(24,057)
|
587
|
(23,470)
|
Amounts transferred to initial carrying amount of hedged items
|
-
|
-
|
-
|
-
|
-
|
234
|
-
|
234
|
45
|
279
|
Transactions with owners, recorded directly in equity:
|
||||||||||
Contributions by and distributions to owners:
|
||||||||||
Final dividend for 2019 (Note 6)
|
-
|
-
|
-
|
-
|
-
|
-
|
(23,004)
|
(23,004)
|
-
|
(23,004)
|
Distributions to non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,838)
|
(1,838)
|
Contributions to subsidiaries from non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
2,363
|
2,363
|
Total contributions by and distributions to owners
|
-
|
-
|
-
|
-
|
-
|
-
|
(23,004)
|
(23,004)
|
525
|
(22,479)
|
Transaction with non-controlling interests
|
-
|
(70)
|
-
|
-
|
-
|
-
|
-
|
(70)
|
(69)
|
(139)
|
Total transactions with owners
|
-
|
(70)
|
-
|
-
|
-
|
-
|
(23,004)
|
(23,074)
|
456
|
(22,618)
|
Others
|
-
|
(27)
|
-
|
-
|
-
|
1,136
|
(1,076)
|
33
|
(14)
|
19
|
Balance at 30 June 2020
|
121,071
|
29,633
|
55,850
|
90,423
|
117,000
|
1,098
|
277,007
|
692,082
|
139,432
|
831,514
|
Share
capital
|
Capital
reserve
|
Share
premium
|
Statutory
surplus
reserve
|
Discretionary
surplus
reserve
|
Other
reserves
|
Retained
earnings
|
Total equity
attributable to
shareholders
of the
Company
|
Non-
controlling
interests
|
Total
equity
|
|
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
|
Balance at 1 January 2021
|
121,071
|
29,432
|
55,850
|
92,280
|
117,000
|
3,500
|
322,361
|
741,494
|
141,364
|
882,858
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
39,954
|
39,954
|
9,552
|
49,506
|
Other comprehensive income
|
-
|
-
|
-
|
-
|
-
|
7,984
|
-
|
7,984
|
124
|
8,108
|
Total comprehensive income for the period
|
-
|
-
|
-
|
-
|
-
|
7,984
|
39,954
|
47,938
|
9,676
|
57,614
|
Amounts transferred to initial carrying amount of hedged items
|
-
|
-
|
-
|
-
|
-
|
(8,121)
|
-
|
(8,121)
|
(549)
|
(8,670)
|
Transactions with owners, recorded directly in equity:
|
||||||||||
Contributions by and distributions to owners:
|
||||||||||
Final dividend for 2020 (Note 6)
|
-
|
-
|
-
|
-
|
-
|
-
|
(15,739)
|
(15,739)
|
-
|
(15,739)
|
Distributions to non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,885)
|
(1,885)
|
Contributions to subsidiaries from non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
559
|
559
|
Total contributions by and distributions to owners
|
-
|
-
|
-
|
-
|
-
|
-
|
(15,739)
|
(15,739)
|
(1,326)
|
(17,065)
|
Transaction with non-controlling interests
|
-
|
(1,384)
|
-
|
-
|
-
|
-
|
-
|
(1,384)
|
(6,818)
|
(8,202)
|
Total transactions with owners
|
-
|
(1,384)
|
-
|
-
|
-
|
-
|
(15,739)
|
(17,123)
|
(8,144)
|
(25,267)
|
Others
|
-
|
20
|
-
|
-
|
-
|
778
|
(778)
|
20
|
(247)
|
(227)
|
Balance at 30 June 2021
|
121,071
|
28,068
|
55,850
|
92,280
|
117,000
|
4,141
|
345,798
|
764,208
|
142,100
|
906,308
|
(a) |
The usage of the discretionary surplus reserve is similar to that of statutory surplus reserve.
|
(b) |
As at 30 June 2021, the amount of retained earnings available for distribution was RMB108,194 million (30 June 2020: RMB88,084 million), being the amount determined in accordance with CASs. According to the Articles of Association of the Company, the amount of retained earnings available for distribution to shareholders of the Company is lower of the amount determined in accordance with the accounting policies complying with CASs and the amount determined in accordance with the accounting policies complying with International Financial Reporting Standards ('IFRS').
|
(c) |
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 (Note 1); and (ii) the difference between the considerations paid over or received the amount of the net assets of entities and related operations acquired from or sold to Sinopec Group Company and non-controlling interests.
|
(d) |
The application of the share premium account is governed by Sections 167 and 168 of the PRC Company Law.
|
Notes
|
Six-month period ended 30 June
|
||
2021
|
2020
|
||
RMB
|
RMB
|
||
Net cash generated from operating activities
|
(a)
|
47,736
|
40,365
|
Investing activities
|
|||
Capital expenditure
|
(49,236)
|
(48,003)
|
|
Exploratory wells expenditure
|
(6,787)
|
(5,106)
|
|
Purchase of investments, investments in associates and investments in joint ventures
|
(2,576)
|
(1,662)
|
|
Payments for financial assets at fair value through profit or loss
|
(6,650)
|
(4,700)
|
|
Proceeds from sale of financial assets at fair value through profit or loss
|
2,700
|
4,300
|
|
Proceeds from disposal of investments and investments in associates
|
4,937
|
1,207
|
|
Proceeds from disposal of property, plant, equipment and other non-current assets
|
502
|
1,522
|
|
Increase in time deposits with maturities over three months
|
(33,073)
|
(51,566)
|
|
Decrease in time deposits with maturities over three months
|
17,558
|
26,426
|
|
Interest received
|
1,595
|
1,081
|
|
Investment and dividend income received
|
3,316
|
2,744
|
|
Proceeds from/(payments of) other investing activities
|
1,923
|
(1,848)
|
|
Net cash used in investing activities
|
(65,791)
|
(75,605)
|
|
Financing activities
|
|||
Proceeds from bank and other loans
|
170,144
|
403,021
|
|
Repayments of bank and other loans
|
(130,857)
|
(308,951)
|
|
Contributions to subsidiaries from non-controlling interests
|
302
|
3,267
|
|
Dividends paid by the Company
|
(15,739)
|
(23,004)
|
|
Distributions by subsidiaries to non-controlling interests
|
(1,203)
|
(918)
|
|
Interest paid
|
(2,239)
|
(3,487)
|
|
Payments made to acquire non-controlling interests
|
(1,410)
|
(1,117)
|
|
Repayments of lease liabilities
|
(9,408)
|
(7,786)
|
|
Proceeds from other financing activities
|
-
|
296
|
|
Payments of other financing activities
|
(528)
|
(97)
|
|
Net cash generated from financing activities
|
9,062
|
61,224
|
|
Net (decrease)/increase in cash and cash equivalents
|
(8,993)
|
25,984
|
|
Cash and cash equivalents at 1 January
|
87,559
|
60,438
|
|
Effect of foreign currency exchange rate changes
|
(452)
|
504
|
|
Cash and cash equivalents at 30 June
|
78,114
|
86,926
|
(a) |
Reconciliation from profit before taxation to net cash generated from operating activities
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB
|
RMB
|
|
Operating activities
|
||
Profit/(loss) before taxation
|
64,455
|
(26,849)
|
Adjustments for:
|
||
Depreciation, depletion and amortisation
|
54,267
|
51,465
|
Dry hole costs written off
|
2,640
|
3,287
|
Share of profits less losses from associates and joint ventures
|
(11,133)
|
(8)
|
Investment income
|
(114)
|
(65)
|
Interest income
|
(2,662)
|
(1,391)
|
Interest expense
|
7,658
|
7,629
|
Loss on foreign currency exchange rate changes and derivative financial instruments
|
520
|
1,651
|
Loss on disposal of property, plant, equipment and other non-current assets, net
|
63
|
111
|
Impairment losses on assets
|
926
|
11,667
|
Credit impairment (reversal)/losses
|
(55)
|
101
|
116,565
|
47,598
|
|
Net changes from:
|
||
Accounts receivable and other current assets
|
(46,497)
|
(10,974)
|
Inventories
|
(47,769)
|
793
|
Accounts payable and other current liabilities
|
41,049
|
7,502
|
63,348
|
44,919
|
|
Income tax paid
|
(15,612)
|
(4,554)
|
Net cash generated from operating activities
|
47,736
|
40,365
|
1 |
PRINCIPAL ACTIVITIES AND ORGANISATION
|
2 |
BASIS OF PREPARATION
|
|
(a) |
New and amended standards and interpretations adopted by the Group
|
3 |
REVENUE FROM PRIMARY BUSINESS
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Gasoline
|
345,353
|
260,303
|
Diesel
|
226,152
|
205,806
|
Crude oil
|
204,510
|
199,035
|
Basic chemical feedstock
|
112,709
|
70,192
|
Synthetic resin
|
70,721
|
55,957
|
Kerosene
|
51,165
|
38,960
|
Natural gas
|
30,019
|
22,269
|
Synthetic fiber monomers and polymers
|
21,182
|
19,743
|
Others (i)
|
170,169
|
134,543
|
1,231,980
|
1,006,808
|
|
(i) |
Others are primarily liquefied petroleum gas and other refinery and chemical by-products and joint products.
|
4 |
TAXES OTHER THAN INCOME TAX
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Consumption tax
|
100,539
|
90,966
|
City construction tax
|
8,288
|
7,451
|
Education surcharge
|
6,128
|
5,454
|
Resources tax
|
3,004
|
2,237
|
Others
|
2,907
|
2,603
|
120,866
|
108,711
|
5 |
INCOME TAX EXPENSE
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Current tax
|
||
- Provision for the period
|
17,286
|
4,079
|
- Adjustment of prior years
|
36
|
349
|
Deferred taxation
|
(2,373)
|
(10,219)
|
14,949
|
(5,791)
|
6 |
DIVIDENDS
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Interim dividends declared after the date of the statement of financial position of RMB0.16 per share (2020: RMB0.07 per share)
|
19,371
|
8,475
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Final cash dividends in respect of the previous financial year, approved during the period of RMB0.13 per share (2020: RMB0.19 per share)
|
15,739
|
23,004
|
7 |
BASIC AND DILUTED EARNINGS/(LOSSES) PER SHARE
|
8 |
PROPERTY, PLANT AND EQUIPMENT
|
Equipment,
|
||||
Plants and
|
Oil and gas
|
machinery
|
||
buildings
|
properties
|
and others
|
Total
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Cost:
|
||||
Balance at 1 January 2020
|
130,234
|
727,552
|
1,016,794
|
1,874,580
|
Additions
|
341
|
582
|
1,427
|
2,350
|
Transferred from construction in progress
|
2,407
|
11,562
|
15,476
|
29,445
|
Reclassifications
|
330
|
(12)
|
(318)
|
-
|
Reclassified to other long-term assets
|
(46)
|
-
|
(262)
|
(308)
|
Disposals
|
(83)
|
(309)
|
(2,110)
|
(2,502)
|
Exchange adjustments
|
41
|
647
|
65
|
753
|
Balance at 30 June 2020
|
133,224
|
740,022
|
1,031,072
|
1,904,318
|
Balance at 1 January 2021
|
136,445
|
757,592
|
986,094
|
1,880,131
|
Additions
|
28
|
739
|
303
|
1,070
|
Transferred from construction in progress
|
2,016
|
14,967
|
18,114
|
35,097
|
Reclassifications
|
43
|
(32)
|
(11)
|
-
|
Invest into the joint ventures and associated companies
|
(1)
|
-
|
(5)
|
(6)
|
Reclassified to other long-term assets
|
(396)
|
(14)
|
(359)
|
(769)
|
Disposals
|
(263)
|
(188)
|
(3,596)
|
(4,047)
|
Exchange adjustments
|
(23)
|
(408)
|
(38)
|
(469)
|
Balance at 30 June 2021
|
137,849
|
772,656
|
1,000,502
|
1,911,007
|
Accumulated depreciation:
|
||||
Balance at 1 January 2020
|
59,859
|
587,192
|
601,837
|
1,248,888
|
Depreciation for the period
|
2,165
|
14,113
|
24,573
|
40,851
|
Impairment losses for the period
|
-
|
-
|
30
|
30
|
Reclassifications
|
62
|
(5)
|
(57)
|
-
|
Other additions
|
94
|
-
|
78
|
172
|
Reclassified to other long-term assets
|
(20)
|
-
|
(27)
|
(47)
|
Written back on disposals
|
(40)
|
(1)
|
(1,691)
|
(1,732)
|
Exchange adjustments
|
20
|
612
|
37
|
669
|
Balance at 30 June 2020
|
62,140
|
601,911
|
624,780
|
1,288,831
|
Balance at 1 January 2021
|
62,297
|
620,720
|
607,867
|
1,290,884
|
Depreciation for the period
|
2,251
|
17,247
|
23,662
|
43,160
|
Impairment losses for the period
|
28
|
-
|
456
|
484
|
Reclassifications
|
111
|
(28)
|
(83)
|
-
|
Invest into the joint ventures and associated companies
|
-
|
-
|
(3)
|
(3)
|
Reclassified to other long-term assets
|
(57)
|
(5)
|
(39)
|
(101)
|
Written back on disposals
|
(196)
|
-
|
(3,485)
|
(3,681)
|
Exchange adjustments
|
(12)
|
(392)
|
(21)
|
(425)
|
Balance at 30 June 2021
|
64,422
|
637,542
|
628,354
|
1,330,318
|
Net book value:
|
||||
Balance at 1 January 2020
|
70,375
|
140,360
|
414,957
|
625,692
|
Balance at 30 June 2020
|
71,084
|
138,111
|
406,292
|
615,487
|
Balance at 1 January 2021
|
74,148
|
136,872
|
378,227
|
589,247
|
Balance at 30 June 2021
|
73,427
|
135,114
|
372,148
|
580,689
|
9 |
CONSTRUCTION IN PROGRESS
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Balance at 1 January
|
124,765
|
173,872
|
Additions
|
54,806
|
43,750
|
Dry hole costs written off
|
(2,640)
|
(3,287)
|
Transferred to property, plant and equipment
|
(35,097)
|
(29,445)
|
Reclassification to other long-term assets
|
(4,021)
|
(2,829)
|
Disposals and others
|
12
|
1
|
Exchange adjustments
|
(26)
|
(4)
|
Balance at 30 June
|
137,799
|
182,058
|
10 |
RIGHT-OF-USE ASSETS
|
Land
|
Others
|
Total
|
|
RMB million
|
RMB million
|
RMB million
|
|
Cost:
|
|||
Balance at 1 January 2021
|
253,144
|
41,268
|
294,412
|
Additions
|
6,216
|
6,584
|
12,800
|
Decreases
|
(1,863)
|
(1,718)
|
(3,581)
|
Balance at 30 June 2021
|
257,497
|
46,134
|
303,631
|
Accumulated depreciation:
|
|||
Balance at 1 January 2021
|
17,563
|
10,481
|
28,044
|
Additions
|
5,046
|
3,392
|
8,438
|
Decreases
|
(150)
|
(941)
|
(1,091)
|
Balance at 30 June 2021
|
22,459
|
12,932
|
35,391
|
Net book value:
|
|||
Balance at 1 January 2021
|
235,581
|
30,787
|
266,368
|
Balance at 30 June 2021
|
235,038
|
33,202
|
268,240
|
11 |
LONG-TERM PREPAYMENTS AND OTHER ASSETS
|
30 June
|
31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Operating rights of service stations
|
30,935
|
31,856
|
Prepayment to Sinopec Group Company and fellow subsidiaries
|
2,976
|
2,801
|
Prepayments for construction projects to third parties
|
9,280
|
5,861
|
Others (i)
|
29,825
|
33,971
|
73,016
|
74,489
|
|
(i) |
Others mainly comprise catalyst expenditures and improvement expenditures of leased assets.
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Operating rights of service stations
|
||
Cost:
|
||
Balance at 1 January
|
53,567
|
53,549
|
Additions
|
345
|
115
|
Decreases
|
(176)
|
(47)
|
Balance at 30 June
|
53,736
|
53,617
|
Accumulated amortisation:
|
||
Balance at 1 January
|
21,711
|
19,536
|
Additions
|
1,148
|
1,146
|
Decreases
|
(58)
|
(16)
|
Balance at 30 June
|
22,801
|
20,666
|
Net book value at 30 June
|
30,935
|
32,951
|
12 |
TRADE ACCOUNTS RECEIVABLE
|
30 June
|
31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Amounts due from third parties
|
63,122
|
22,536
|
Amounts due from Sinopec Group Company and fellow subsidiaries
|
4,689
|
12,120
|
Amounts due from associates and joint ventures
|
7,803
|
4,791
|
75,614
|
39,447
|
|
Less: Loss allowance for expected credit losses
|
(3,771)
|
(3,860)
|
71,843
|
35,587
|
30 June
|
31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Within one year
|
70,640
|
34,509
|
Between one and two years
|
1,034
|
931
|
Between two and three years
|
100
|
64
|
Over three years
|
69
|
83
|
71,843
|
35,587
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Balance at 1 January
|
3,860
|
1,848
|
Provision for the period
|
14
|
149
|
Written back for the period
|
(50)
|
(30)
|
Written off for the period
|
(13)
|
(9)
|
Others
|
(40)
|
14
|
Balance at 30 June
|
3,771
|
1,972
|
13 |
FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
|
30 June
|
31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Non-current assets
|
||
Unlisted equity instruments
|
1,379
|
1,376
|
Listed equity instruments
|
155
|
149
|
1,534
|
1,525
|
|
Current assets
|
||
Trade accounts receivable and bills receivable (i)
|
9,686
|
8,735
|
|
(i) |
As at 30 June 2021, bills receivable and certain trade accounts receivable were classified as financial assets at fair value through other comprehensive income, as relevant business model is achieved both by collecting contractual cash flows and selling of these assets.
|
14 |
SHORT-TERM AND LONG-TERM DEBTS AND LOANS FROM SINOPEC GROUP COMPANY AND FELLOW SUBSIDIARIES
|
30 June
|
31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Third parties' debts
|
||
Short-term bank loans
|
29,640
|
16,111
|
RMB denominated
|
29,570
|
16,111
|
United States Dollar ('USD') denominated
|
70
|
-
|
Short-term other loans
|
-
|
3
|
RMB denominated
|
-
|
3
|
Current portion of long-term bank loans
|
4,210
|
4,637
|
RMB denominated
|
4,187
|
4,613
|
USD denominated
|
23
|
24
|
Current portion of long-term corporate bonds
|
7,000
|
-
|
RMB denominated
|
7,000
|
-
|
11,210
|
4,637
|
|
Corporate bonds (i)
|
27,999
|
3,018
|
RMB denominated
|
27,999
|
3,018
|
68,849
|
23,769
|
|
Loans from Sinopec Group Company and fellow subsidiaries
|
||
Short-term loans
|
8,009
|
4,642
|
RMB denominated
|
739
|
1,141
|
USD denominated
|
6,981
|
3,298
|
Hong Kong Dollar ('HKD') denominated
|
59
|
31
|
European Dollar denominated
|
230
|
172
|
Current portion of long-term loans
|
578
|
622
|
RMB denominated
|
578
|
622
|
8,587
|
5,264
|
|
77,436
|
29,033
|
14 |
SHORT-TERM AND LONG-TERM DEBTS AND LOANS FROM SINOPEC GROUP COMPANY AND FELLOW SUBSIDIARIES (Continued)
|
Interest rate and final maturity
|
30 June
|
31 December
|
|
2021
|
2020
|
||
RMB million
|
RMB million
|
||
Third parties' debts
|
|||
Long-term bank loans
|
|||
RMB denominated
|
Interest rates ranging from 1.08% to
|
35,470
|
38,226
|
3.73% per annum at 30 June 2021
|
|||
with maturities through 2039
|
|||
USD denominated
|
Interest rates at 1.55% per annum at 30 June 2021
|
77
|
92
|
with maturities through 2030
|
|||
35,547
|
38,318
|
||
Corporate bonds
|
|||
RMB denominated
|
Fixed interest rates ranging from 2.20% to
|
26,982
|
26,977
|
4.90% per annum at 30 June 2021
|
|||
with maturities through 2023
|
|||
USD denominated
|
Fixed interest rates ranging from 3.13% to
|
11,269
|
11,379
|
4.25% per annum at 30 June 2021
|
|||
with maturities through 2043
|
|||
38,251
|
38,356
|
||
Total third parties' long-term debts
|
|
73,798 |
76,674
|
Less: Current portion
|
(11,210)
|
(4,637)
|
|
62,588
|
72,037
|
||
Long-term loans from Sinopec Group Company and fellow subsidiaries
|
|||
RMB denominated
|
Interest rates ranging from 1.08% to
|
11,115
|
11,013
|
5.23% per annum at 30 June 2021
|
|||
with maturities through 2037
|
|||
USD denominated
|
Interest rates at 1.60% per annum at 30 June 2021
|
1,275
|
1,387
|
with maturities through 2027
|
|||
Less: Current portion
|
(578)
|
(622)
|
|
11,812
|
11,778
|
||
74,400
|
83,815
|
|
(i) |
The total amount of the 180-day corporate bonds issued on 4 February 2021 is RMB5 billion with a fixed rate at 2.50% per annum; the total amount of the 119-day corporate bonds issued on 4 March 2021 is RMB11 billion with a fixed rate at 2.65% per annum; the total amount of the 180-day corporate bonds issued on 25 March 2021 is RMB3 billion with a fixed rate at 2.64% per annum; the total amount of the 120-day corporate bonds issued on 29 March 2021 is RMB8 billion with a fixed rate at 2.45% per annum; the total amount of the 60-day corporate bonds issued on 16 June 2021 is RMB1 billion with a fixed rate at 2.25% per annum.
|
15 |
LEASE LIABILITIES
|
30 June
|
31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Lease liabilities
|
||
Current
|
15,544
|
15,292
|
Non-current
|
171,945
|
172,306
|
187,489
|
187,598
|
16 |
TRADE ACCOUNTS PAYABLE AND BILLS PAYABLE
|
30 June
|
31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Amounts due to third parties
|
200,924
|
132,136
|
Amounts due to Sinopec Group Company and fellow subsidiaries
|
8,169
|
11,384
|
Amounts due to associates and joint ventures
|
7,175
|
7,742
|
216,268
|
151,262
|
|
Bills payable
|
11,260
|
10,394
|
Trade accounts payable and bills payable measured at amortised cost
|
227,528
|
161,656
|
30 June
|
31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Within 1 month or on demand
|
203,919
|
146,295
|
Between 1 month and 6 months
|
18,596
|
9,665
|
Over 6 months
|
5,013
|
5,696
|
227,528
|
161,656
|
17 |
SHARE CAPITAL
|
30 June
|
31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Registered, issued and fully paid
|
||
95,557,771,046 listed A shares (31 December 2020: 95,557,771,046) of RMB1.00 each
|
95,558
|
95,558
|
25,513,438,600 listed H shares (31 December 2020: 25,513,438,600) of RMB1.00 each
|
25,513
|
25,513
|
121,071
|
121,071
|
17 |
SHARE CAPITAL (Continued)
|
18 |
COMMITMENTS AND CONTINGENT LIABILITIES
|
30 June
|
31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Authorised and contracted for (i)
|
115,260
|
171,335
|
Authorised but not contracted for
|
69,102
|
33,942
|
184,362
|
205,277
|
|
(i) |
The investment commitments of the Group is RMB9,135 million (31 December 2020: RMB13,172 million).
|
18 |
COMMITMENTS AND CONTINGENT LIABILITIES (Continued)
|
30 June
|
31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Within one year
|
118
|
390
|
Between one and two years
|
76
|
99
|
Between two and three years
|
67
|
66
|
Between three and four years
|
63
|
63
|
Between four and five years
|
38
|
56
|
Thereafter
|
815
|
824
|
1,177
|
1,498
|
30 June
|
31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Joint ventures (ii)
|
6,035
|
6,390
|
Associates (iii)
|
6,760
|
8,450
|
12,795
|
14,840
|
|
(i) |
The Group provided a guarantee in respect to standby credit facilities granted to Zhongan United Coal Chemical Co., Ltd. ('Zhongan United') by banks amount to RMB7,100 million. At 30 June 2021, the amount withdrawn by Zhongan United from banks and guaranteed by the Group was RMB6,035 million (31 December 2020: RMB6,390 million).
|
|
(ii) |
The Group provided a guarantee in respect to standby credit facilities granted to Zhongtian Synergetic Energy Company Limited ('Zhongtian Synergetic Energy') by banks amount to RMB17,050 million. As at 30 June 2021, the amount withdrawn by Zhongtian Synergetic Energy and guaranteed by the Group was RMB6,760 million (31 December 2020: RMB8,450 million).
|
19 |
BUSINESS COMBINATION
|
20 |
RELATED PARTY TRANSACTIONS
|
|
(a) |
Transactions with Sinopec Group Company and fellow subsidiaries, associates and joint ventures
|
Note
|
Six-month period ended 30 June
|
||
2021
|
2020
|
||
RMB million
|
RMB million
|
||
Sales of goods
|
(i)
|
136,079
|
106,817
|
Purchases
|
(ii)
|
95,876
|
65,233
|
Transportation and storage
|
(iii)
|
6,966
|
3,820
|
Exploration and development services
|
(iv)
|
15,046
|
11,395
|
Production related services
|
(v)
|
14,707
|
10,615
|
Ancillary and social services
|
(vi)
|
642
|
1,556
|
Agency commission income
|
(vii)
|
97
|
67
|
Interest income
|
(viii)
|
381
|
422
|
Interest expense
|
(ix)
|
196
|
573
|
Net deposits placed with related parties
|
(viii)
|
733
|
10,941
|
Net funds obtained from related parties
|
(x)
|
6,241
|
55,961
|
20 |
RELATED PARTY TRANSACTIONS (Continued)
|
|
(a) |
Transactions with Sinopec Group Company and fellow subsidiaries, associates and joint ventures (Continued)
|
|
(i) |
Sales of goods represent the sale of crude oil, intermediate petrochemical products, petroleum products and ancillary materials.
|
|
(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.
|
|
(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.
|
|
(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, environmental protection and management services.
|
|
(vi) |
Ancillary and social services represent expenditures for social welfare and support services such as educational facilities, media communication services, sanitation, accommodation, canteens and property maintenance.
|
|
(vii) |
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.
|
|
(viii) |
Interest income represents interest received from deposits placed with Sinopec Finance Company Limited ('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. The balance of deposits at 30 June 2021 was RMB54,150 million (31 December 2020: RMB53,417 million).
|
|
(ix) |
Interest expense represents interest charges on the loans obtained from Sinopec Group Company and fellow subsidiaries.
|
|
(x) |
The Group obtained loans, discounted bills and others from Sinopec Group Company and fellow subsidiaries.
|
|
• |
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;
|
|
(2) |
where there is no government-prescribed price, the government-guidance price;
|
|
(3) |
where there is neither a government-prescribed price nor a government-guidance price, the market price; or
|
|
(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%.
|
20 |
RELATED PARTY TRANSACTIONS (Continued)
|
|
(a) |
Transactions with Sinopec Group Company and fellow subsidiaries, associates and joint ventures (Continued)
|
|
• |
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.
|
|
• |
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.
|
|
• |
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 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.
|
|
• |
On the basis of a series of continuing connected transaction agreements signed in 2000, the Company and Sinopec Group Company have signed the Fifth Supplementary Agreement and the Fourth Revised Memorandum of land use rights leasing contract on 24 August 2018, which took effect on 1 January 2019 and made adjustment to 'Mutual Supply Agreement', 'Agreement for Provision of Cultural and Educational, Health Care and Community Services', 'Buildings Leasing Contract', 'Intellectual Property Contract' and 'Land Use Rights Leasing Contract', etc.
|
30 June
|
31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Trade accounts receivable
|
12,478
|
16,896
|
Financial assets at fair value through other comprehensive income
|
591
|
760
|
Prepaid expenses and other current assets
|
13,507
|
19,305
|
Long-term prepayments and other assets
|
6,534
|
6,435
|
Total
|
33,110
|
43,396
|
Trade accounts payable and bills payable
|
18,852
|
22,805
|
Contract liabilities
|
5,684
|
5,940
|
Other payables
|
29,461
|
12,116
|
Other long-term liabilities
|
3,227
|
3,010
|
Short-term loans and current portion of long-term loans from Sinopec Group Company and fellow subsidiaries
|
8,587
|
5,264
|
Long-term loans excluding current portion from Sinopec Group Company and fellow subsidiaries
|
11,812
|
11,778
|
Lease liabilities (including to be paid within one year)
|
160,869
|
162,048
|
Total
|
238,492
|
222,961
|
20 |
RELATED PARTY TRANSACTIONS (Continued)
|
|
(b) |
Key management personnel emoluments
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB'000
|
RMB'000
|
|
Short-term employee benefits
|
1,771
|
3,675
|
Retirement scheme contributions
|
120
|
165
|
1,891
|
3,840
|
|
(c) |
Contributions to defined contribution retirement plans
|
|
(d) |
Transactions with other state-controlled entities in the PRC
|
|
• |
sales and purchases of goods and ancillary materials;
|
|
• |
rendering and receiving services;
|
|
• |
lease of assets;
|
|
•‧ |
depositing and borrowing money; and
|
|
• |
uses of public utilities.
|
21 |
SEGMENT REPORTING
|
|
(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.
|
|
(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.
|
|
(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.
|
|
(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 comprise the trading activities of the import and export companies of the Group and research and development undertaken by other subsidiaries.
|
21 |
SEGMENT REPORTING (Continued)
|
|
(1) |
Information of reportable segmental revenues, profits or losses, assets and liabilities
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Revenue from primary business
|
||
Exploration and production
|
||
External sales
|
67,727
|
48,011
|
Inter-segment sales
|
39,391
|
28,752
|
107,118
|
76,763
|
|
Refining
|
||
External sales
|
80,079
|
50,194
|
Inter-segment sales
|
543,540
|
386,115
|
623,619
|
436,309
|
|
Marketing and distribution
|
||
External sales
|
613,521
|
510,446
|
Inter-segment sales
|
2,967
|
2,282
|
616,488
|
512,728
|
|
Chemicals
|
||
External sales
|
197,926
|
148,865
|
Inter-segment sales
|
30,025
|
25,786
|
227,951
|
174,651
|
|
Corporate and others
|
||
External sales
|
272,727
|
260,979
|
Inter-segment sales
|
340,701
|
222,719
|
613,428
|
483,698
|
|
Elimination of inter-segment sales
|
(956,624)
|
(677,341)
|
Revenue from primary business
|
1,231,980
|
1,006,808
|
Other operating revenues
|
||
Exploration and production
|
2,408
|
2,166
|
Refining
|
2,390
|
2,049
|
Marketing and distribution
|
18,682
|
17,073
|
Chemicals
|
5,232
|
4,041
|
Corporate and others
|
911
|
927
|
Other operating revenues
|
29,623
|
26,256
|
Revenue
|
1,261,603
|
1,033,064
|
21 |
SEGMENT REPORTING (Continued)
|
|
(1) |
Information of reportable segmental revenues, profits or losses, assets and liabilities (Continued)
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Result
|
||
Operating profit/(loss)
|
||
By segment
|
||
- Exploration and production
|
6,233
|
(6,002)
|
- Refining
|
39,398
|
(31,689)
|
- Marketing and distribution
|
16,068
|
8,664
|
- Chemicals
|
13,005
|
3,036
|
- Corporate and others
|
(3,735)
|
(168)
|
- Elimination
|
(12,860)
|
4,500
|
Total segment operating profit/(loss)
|
58,109
|
(21,659)
|
Share of profits/(losses) from associates and joint ventures
|
||
- Exploration and production
|
1,472
|
737
|
- Refining
|
596
|
(1,688)
|
- Marketing and distribution
|
1,606
|
313
|
- Chemicals
|
4,933
|
(407)
|
- Corporate and others
|
2,526
|
1,053
|
Aggregate share of profits from associates and joint ventures
|
11,133
|
8
|
Investment income
|
||
- Exploration and production
|
47
|
42
|
- Refining
|
(5)
|
(56)
|
- Marketing and distribution
|
7
|
9
|
- Chemicals
|
(42)
|
2
|
- Corporate and others
|
107
|
68
|
Aggregate investment income
|
114
|
65
|
Net finance costs
|
(4,901)
|
(5,263)
|
Profit/(loss) before taxation
|
64,455
|
(26,849)
|
30 June
|
31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Assets
|
||
Segment assets
|
||
- Exploration and production
|
359,451
|
354,024
|
- Refining
|
288,164
|
270,431
|
- Marketing and distribution
|
383,640
|
373,430
|
- Chemicals
|
204,830
|
186,033
|
- Corporate and others
|
166,189
|
118,458
|
Total segment assets
|
1,402,274
|
1,302,376
|
Interest in associates and joint ventures
|
199,652
|
188,342
|
Financial assets at fair value through other comprehensive income
|
1,534
|
1,525
|
Deferred tax assets
|
29,989
|
25,054
|
Cash and cash equivalents, time deposits with financial institutions
|
190,482
|
188,057
|
Other unallocated assets
|
29,033
|
28,451
|
Total assets
|
1,852,964
|
1,733,805
|
Liabilities
|
||
Segment liabilities
|
||
- Exploration and production
|
169,964
|
163,588
|
- Refining
|
80,228
|
136,869
|
- Marketing and distribution
|
244,266
|
234,309
|
- Chemicals
|
58,141
|
49,497
|
- Corporate and others
|
202,104
|
119,215
|
Total segment liabilities
|
754,703
|
703,478
|
Short-term debts
|
68,849
|
23,769
|
Income tax payable
|
8,391
|
6,586
|
Long-term debts
|
62,588
|
72,037
|
Loans from Sinopec Group Company and fellow subsidiaries
|
20,399
|
17,042
|
Deferred tax liabilities
|
10,572
|
8,124
|
Other unallocated liabilities
|
21,154
|
19,911
|
Total liabilities
|
946,656
|
850,947
|
21 |
SEGMENT REPORTING (Continued)
|
|
(1) |
Information of reportable segmental revenues, profits or losses, assets and liabilities (Continued)
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Capital expenditure
|
||
Exploration and production
|
23,965
|
20,470
|
Refining
|
7,887
|
9,536
|
Marketing and distribution
|
6,773
|
8,646
|
Chemicals
|
18,961
|
6,308
|
Corporate and others
|
355
|
221
|
57,941
|
45,181
|
|
Depreciation, depletion and amortisation
|
||
Exploration and production
|
23,745
|
21,307
|
Refining
|
10,018
|
9,911
|
Marketing and distribution
|
11,459
|
11,529
|
Chemicals
|
7,557
|
7,114
|
Corporate and others
|
1,488
|
1,604
|
54,267
|
51,465
|
|
Impairment losses on long-lived assets
|
||
Exploration and production
|
-
|
3
|
Refining
|
427
|
2
|
Marketing and distribution
|
52
|
75
|
Chemicals
|
50
|
2
|
Corporate and others
|
-
|
-
|
529
|
82
|
|
(2) |
Geographical information
|
Six-month period ended 30 June
|
||
2021
|
2020
|
|
RMB million
|
RMB million
|
|
External sales
|
||
Mainland China
|
973,328
|
785,959
|
Singapore
|
141,109
|
126,729
|
Others
|
147,166
|
120,376
|
1,261,603
|
1,033,064
|
30 June
|
31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Non-current assets
|
||
Mainland China
|
1,218,699
|
1,211,441
|
Others
|
45,742
|
36,782
|
1,264,441
|
1,248,223
|
22 |
FINANCIAL RISK MANAGEMENT AND FAIR VALUES
|
|
• |
credit risk;
|
|
• |
liquidity risk; and
|
|
•‧ |
market risk.
|
|
(i) |
Risk management
|
|
(ii) |
Impairment of financial assets
|
22 |
FINANCIAL RISK MANAGEMENT AND FAIR VALUES (Continued)
|
30 June 2021
|
||||||
Total
|
||||||
contractual
|
Within
|
More than 1
|
More than 2
|
|||
Carrying
|
undiscounted
|
1 year or
|
year but less
|
years but less
|
More than
|
|
amount
|
cash flow
|
on demand
|
than 2 years
|
than 5 years
|
5 years
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Short-term debts
|
68,849
|
70,260
|
70,260
|
-
|
-
|
-
|
Long-term debts
|
62,588
|
68,955
|
1,670
|
46,431
|
14,738
|
6,116
|
Loans from Sinopec Group Company and fellow subsidiaries
|
20,399
|
21,507
|
8,825
|
709
|
9,781
|
2,192
|
Lease liabilities
|
187,489
|
316,819
|
16,221
|
13,283
|
38,419
|
248,896
|
Derivative financial liabilities
|
6,947
|
6,947
|
6,947
|
-
|
-
|
-
|
Trade accounts payable and bills payable
|
227,528
|
227,528
|
227,528
|
-
|
-
|
-
|
Other payables
|
119,868
|
119,868
|
119,868
|
-
|
-
|
-
|
693,668
|
831,884
|
451,319
|
60,423
|
62,938
|
257,204
|
31 December 2020
|
||||||
Total
|
||||||
contractual
|
Within
|
More than 1
|
More than 2
|
|||
Carrying
|
undiscounted
|
1 year or
|
year but less
|
years but less
|
More than
|
|
amount
|
cash flow
|
on demand
|
than 2 years
|
than 5 years
|
5 years
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Short-term debts
|
23,769
|
25,280
|
25,280
|
-
|
-
|
-
|
Long-term debts
|
72,037
|
80,562
|
1,339
|
11,753
|
60,414
|
7,056
|
Loans from Sinopec Group Company and fellow subsidiaries
|
17,042
|
17,978
|
5,512
|
929
|
10,109
|
1,428
|
Lease liabilities
|
187,598
|
329,083
|
15,957
|
15,456
|
43,513
|
254,157
|
Derivative financial liabilities
|
4,826
|
4,826
|
4,826
|
-
|
-
|
-
|
Trade accounts payable and bills payable
|
161,656
|
161,656
|
161,656
|
-
|
-
|
-
|
Other payables
|
93,623
|
93,623
|
93,623
|
-
|
-
|
-
|
560,551
|
713,008
|
308,193
|
28,138
|
114,036
|
262,641
|
22 |
FINANCIAL RISK MANAGEMENT AND FAIR VALUES (Continued)
|
|
(a) |
Currency risk
|
30 June
|
31 December
|
|
2021
|
2020
|
|
Million
|
Million
|
|
Gross exposure arising from loans
|
||
USD
|
38
|
22
|
30 June
|
31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
USD
|
12
|
5
|
|
(b) |
Interest rate risk
|
|
(c) |
Commodity price risk
|
22 |
FINANCIAL RISK MANAGEMENT AND FAIR VALUES (Continued)
|
|
(i) |
Financial instruments carried at fair value
|
|
• |
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.
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Assets
|
||||
Financial assets at fair value through profit or loss:
|
||||
- Structured deposits
|
-
|
-
|
3,988
|
3,988
|
Derivative financial assets:
|
||||
- Derivative financial assets
|
9,583
|
14,971
|
-
|
24,554
|
Financial assets at fair value through other comprehensive income:
|
||||
- Equity instruments
|
155
|
-
|
1,379
|
1,534
|
- Trade accounts receivable and bills receivable
|
-
|
-
|
9,686
|
9,686
|
9,738
|
14,971
|
15,053
|
39,762
|
|
Liabilities
|
||||
Derivative financial liabilities
|
||||
- Derivative financial liabilities
|
2,046
|
4,901
|
-
|
6,947
|
2,046
|
4,901
|
-
|
6,947
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
RMB million
|
RMB million
|
RMB million
|
RMB million
|
|
Assets
|
||||
Financial assets at fair value through profit or loss:
|
||||
- Equity investments, listed and at quoted market price
|
1
|
-
|
-
|
1
|
Derivative financial assets:
|
||||
- Derivative financial assets
|
9,628
|
2,900
|
-
|
12,528
|
Financial assets at fair value through other comprehensive income:
|
||||
- Equity instruments
|
149
|
-
|
1,376
|
1,525
|
- Trade accounts receivable and bills receivable
|
-
|
-
|
8,735
|
8,735
|
9,778
|
2,900
|
10,111
|
22,789
|
|
Liabilities
|
||||
Derivative financial liabilities
|
||||
- Derivative financial liabilities
|
2,471
|
2,355
|
-
|
4,826
|
2,471
|
2,355
|
-
|
4,826
|
22 |
FINANCIAL RISK MANAGEMENT AND FAIR VALUES (Continued)
|
|
(ii) |
Fair values of financial instruments carried at other than fair value
|
30 June
|
31 December
|
|
2021
|
2020
|
|
RMB million
|
RMB million
|
|
Carrying amount
|
73,798
|
76,674
|
Fair value
|
72,426
|
74,282
|
23 |
ACCOUNTING ESTIMATES AND JUDGEMENTS
|
23 |
ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued)
|
23 |
ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued)
|
24 |
STANDARDS ISSUED BUT NOT YET EFFECTIVE
|
(C) |
DIFFERENCES BETWEEN CONSOLIDATED FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH THE ACCOUNTING POLICIES COMPLYING WITH CASS AND IFRS (UNAUDITED)
|
|
(i) |
GOVERNMENT GRANTS
|
|
(ii) |
SAFETY PRODUCTION FUND
|
Note
|
30 June
|
31 December
|
|
2021
|
2020
|
||
RMB million
|
RMB million
|
||
Shareholders' equity under CASs
|
907,301
|
883,876
|
|
Adjustments:
|
|||
Government grants
|
(i)
|
(993)
|
(1,018)
|
Total equity under IFRS*
|
906,308
|
882,858
|
Note
|
Six-month period ended 30 June
|
||
2021
|
2020
|
||
RMB million
|
RMB million
|
||
Net profit/(loss) under CASs
|
48,528
|
(22,427)
|
|
Adjustments:
|
|||
Government grants
|
(i)
|
25
|
28
|
Safety production fund
|
(ii)
|
953
|
1,346
|
Others
|
-
|
(5)
|
|
Profit/(loss) profit for the period under IFRS*
|
49,506
|
(21,058)
|
|
* |
The figures are extracted from the consolidated financial statements prepared in accordance with the accounting policies complying with IFRS.
|
1 |
The original interim report for the first half of 2021 signed by Mr. Ma Yongsheng, the Director and President;
|
2 |
The original financial statements and consolidated financial statements of Sinopec Corp. for the six-month period ended 30 June 2021 prepared in accordance with the CASs and IFRS, signed by Mr. Ma Yongsheng, the Director and President, and Ms. Shou Donghua, the Chief Financial Officer and head of the accounting department of Sinopec Corp.;
|
3 |
The original report on review of the above financial statements signed by the auditors; and
|
4 |
Copies of disclosure documents published by Sinopec Corp. in the newspapers designated by the CSRC during the reporting period.
|
By Order of the Board
|
|
China Petroleum & Chemical Corporation
|
|
Huang Wensheng
|
|
Vice President and Secretary to the Board of Directors
|
Reference is made to the circular of Sinopec Corp. dated 7 September 2018 in relation to the continuing connected transactions between the Company and Sinopec Group. At Sinopec Corp.'s first extraordinary general meeting of 2018, the Independent Shareholders approved, among other things, the Major Continuing Connected Transactions, and the annual caps for three years ending 31 December 2021 for the Major Continuing Connected Transactions and the Non-Major Continuing Connected Transactions.
Sinopec Corp. anticipates that the continuing connected transactions with Sinopec Group will continue after 31 December 2021. In respect of the continuing connected transactions commencing from 1 January 2022, Sinopec Corp. and China Petrochemical Corporation entered into the Continuing Connected Transactions Sixth Supplemental Agreement on 27 August 2021, pursuant to which, amendments were made to the terms of certain Continuing Connected Transactions under the Mutual Supply Agreement and the Properties Leasing Agreement.
Pursuant to the Hong Kong Listing Rules and the Shanghai Listing Rules, China Petrochemical Corporation, holding approximately 68.31% of the total issued share capital of Sinopec Corp., and its associates will constitute connected persons of Sinopec Corp. As such, the continuing transactions between the Company and Sinopec Group constitute continuing connected transactions of Sinopec Corp. under Chapter 14A of the Hong Kong Listing Rules. Sinopec Corp. shall comply with the reporting, announcement and Independent Shareholders' approval (if necessary) requirements in respect of such continuing connected transactions. In addition, the deposit services to be provided by Sinopec Financial Institutions to the Company will also constitute discloseable transactions under Chapter 14 of the Hong Kong Listing Rules.
Sinopec Corp. will seek the approval of Independent Shareholders in respect of the Renewal of Major Continuing Connected Transactions (including the relevant proposed caps), and, in accordance with the requirements of the SSE, the Non-Major Continuing Connected Transactions and the Exempted Continuing Connected Transactions (including the relevant proposed caps). A circular containing, among other things, (i) further details of the Continuing Connected Transactions, (ii) a letter from the Independent Board Committee and (iii) a letter from the IFA, will be dispatched and/or notified to the Shareholders within 15 business days after the date of this announcement.
|
1. |
BACKGROUND
|
2. |
RENEWAL OF CONTINUING CONNECTED TRANSACTIONS AND DISCLOSEABLE TRANSACTIONS
|
(I) |
Mutual Supply Agreement
|
1. |
Signing Date and Term
|
2. |
Scope of Service
|
|
(1) |
Products and services provided by the Company, including
|
|
(a) |
Crude oil, natural gas, refined and petrochemical products and by-products, semi-finished products, coal, steel, water, electricity, gas, heat, measurements, quality inspection, other related or similar products and services, and guarantee;
|
|
(b) |
Financial services including entrusted loan to the Connected Subsidiaries.
|
|
(2) |
Products and services provided by Sinopec Group, including:
|
|
(a) |
Supply: fresh water, chemical water, recycled water, industrial air, hydrogen, nitrogen, electricity, steam, heat supply, materials and equipment parts, chemical raw materials, precious metals, the sourcing of crude oil and natural gas (including crude oil and natural gas from overseas), and other related or similar products and services;
|
|
(b) |
Storage and transportation: railway, vehicular transport, water transport, pipeline transmission, loading and unloading, wharves, warehousing and other related or similar services;
|
|
(c) |
Ancillary production: well drilling, well surveying, well logging, exploration and development testing, technological research, communication, fire control, security guards,
|
|
(d) |
Training and auxiliary services1: staff training, culture and sports, newspapers and magazines, radio and TV, office and factory property management, canteens, dormitories, commuting, re-employment service centres and other related or similar services;
|
|
(e) |
Others: deposit and loan service, loan guarantee service, agent services in the collection and payment of administrative services fees, labour services, asset leasing, insurance, insurance agency service, entrusted loans, foreign exchange services, settlement services and other intermediary services, sharing services including finance, human resources, business travelling and information technology etc., and other related or similar services.
|
|
(i) |
Deposit services provided as part of the settlements process. The annual caps for such transactions have been proposed on page 13 of this announcement;
|
|
(ii) |
Loan services, as such loans will be on normal commercial terms and the Company does not provide any security in connection with such loan, such transactions will be fully exempted continuing connected transactions;
|
|
(iii) |
Loan guarantee services, as such transactions will be on normal commercial terms and the Company does not provide any security in connection with such guarantee, such transactions will be fully exempted continuing connected transactions;
|
|
(iv) |
Finance sharing services, the annual cap for such transactions have been included in the proposed caps for products and services provided by Sinopec Group to the Company;
|
|
(v) |
Insurance services, the annual cap for such transactions have been included in the proposed caps for products and services provided by Sinopec Group to the Company; and
|
|
(vi) |
Insurance agency service, entrusted loans, foreign exchange services, settlement service and other intermediary services. The proposed annual caps for such transactions have been included in the proposed annual caps for products and services provided by Sinopec Group to the Company.
|
1 |
The term of the Cultural, Educational, Hygiene and Auxiliary Service Agreement will expire on 31 December 2021, and will not be renewed due to the significant decrease in the service scale after the separation and transfer of assets and business such as the Three Supplies and One Industry Assets etc. Cultural and educational services related or similar to training and auxiliary services thereunder will be incorporated into the Mutual Supply Agreement.
|
|
(I) |
In terms of crude oil, on one hand, according to relevant regulations in China, overseas crude oil purchases require relevant qualifications, which Sinopec Group lacks. China International United Petroleum and Chemical Company Limited, being a subsidiary of Sinopec Corp., has the relevant qualifications and is a leading crude oil trading company in China. By purchasing crude oil from China International United Petroleum and Chemical Company Limited, Sinopec Group can ensure stable production and operation. On the other hand, the Company purchases a large amount of crude oil from overseas every year in order to meet its production and operation demands, a small portion of which is overseas equity crude oil of Sinopec Group. In addition, taking into account factors such as transport time, market demand, and the crude oil's adaptability to facilities, the Company will purchase crude oil from Sinopec Group's commercial petroleum storage company in the same region from time to time;
|
|
(II) |
In terms of natural gas, on one hand, since Sinopec Group has demands for natural gas as raw material, fuel and for other uses whereas the Company is engaged in natural gas exploration and production, Sinopec Group needs to purchase natural gas from the Company for production and operation. On the other hand, since some of the Company's gas-consuming member enterprises and the Company's natural gas exploration and production member enterprises are located in different regions, a small number of the Company's member enterprises need to occasionally purchase a small amount of natural gas for production and operation from Sinopec Group in order to reduce costs;
|
|
(III) |
In terms of utilities, utilities in some regions belong to the Company while utilities in some other regions belong to Sinopec Group. Under circumstances where member enterprises of the Company and Sinopec Group are located in the same region, one party will purchase the utility products belonging to the other party so as to satisfy its production and operation demands and to ensure its stable operation.
|
3. |
Pricing Policy
|
|
(1) |
government-prescribed price;
|
|
(2) |
where there is no government-prescribed price but government guidance price exists, the government guidance price will apply;
|
|
(3) |
where there is neither a government-prescribed price nor a government guidance price, the market price will apply; or
|
|
(4) |
where none of the above is applicable, the price is to be agreed between relevant parties for the provision of the above products or service, which shall be the reasonable cost incurred in providing the same plus 6% or less of such cost.
|
|
(1) |
Government-prescribed price (including government guidance price)
|
Types of product/service with government-prescribed price
|
Primary basis for price determination
|
|
Refined oil products (i.e. gasoline and diesel)
|
According to the Circular on Further Improving the Issues Concerning the Pricing Formation Mechanism of Refined Oil (Fa Gai Jia Ge [2016] No.64) (《關於進一步完善成品油價格形成機制有關問題的通知》(發改價格[2016]64號)) issued by the NDRC on 13 January 2016, government guidance price shall be applied for the retail price and wholesale price of gasoline and diesel, as well as the supply price of gasoline and diesel to special users such as social wholesale enterprises, railway and transportation etc.; government-prescribed price shall be applied for the supply price of gasoline and diesel to the national reserve and other entities, and the factory price of aviation gasoline. The price of gasoline and diesel may be adjusted every ten working days with reference to the changes in the international market price of crude oil. The NDRC prescribes the maximum retail price of gasoline and diesel for all provinces (autonomous regions, municipalities) or central cities, and the supply price of gasoline and diesel to the national reserve and other entities, as well as the factory price of aviation gasoline. The price adjustment for refined oil products is subject to the documents issued by the relevant national competent authorities for pricing.
|
|
Natural gas
|
In recent years, the state has continued to promote natural gas market reform. According to the Circular on the Adjustment Reducing of the Gate Station Prices of Non-residential Natural Gas and Further Promoting Price Marketisation Reform Prices (Fa Gai Jia Ge [2015] No.2688) (《關於降低非居民用天然氣門站價格並進一步推進價格市場化改革的通知》(發改價格[2015] 2688號) issued by the NDRC on November 2015, the price for natural gas used by non-residents was converted from the highest gate station price management to the benchmark gate station price management. The supplying party and requisitioning party can negotiate and determine the price within the range of up to 20%, down to unlimited range based on the benchmark gas station price. In 2016, the NDRC loosened its hold on the price of fertiliser-used gas and the price associated with gas storage facilities. In September 2017, considering the downward adjustment of natural gas pipeline price, the gas station price of natural gas used by non-residents was reduced by RMB 0.1 per square. At the end of May 2018, the NDRC released the Circular on Adjustment Rationalising of the Gas Station Price of Natural Gas used by Residents (《關於理順居民用氣門站價格的通知》) to rationalise the gate station price of natural gas used by residents by increasing it, thus realising the integration of gas prices used by residents and non-residents. The price for gas used by residents after the integration will rise starting from 10 June 2019.
|
|
Water supply
|
Subject to the regulations of the relevant local government authorities of commodity prices.
|
Power supply
|
Pursuant to the Circular of the NDRC on Reducing the On-Grid Price for Coal-fired Power and Electricity Prices for Industrial and Commercial Use (Fa Gai Jia Ge [2015] No.748) (《國家發展改革委關於降低燃煤發電上網電價和工商業用電價格的通知》(發改價格[2015]748號)), electricity supply is subject to the government-prescribed price. For diverted power supply, the price should be government-prescribed price plus diversion cost.
|
|
Heating supply
|
Subject to the regulations of the relevant local government authorities of commodity.
|
|
(2) |
Relevant market price (including tender price)
|
Types of product/service with relevant market price
|
Primary basis for price determination
|
|
Crude oil
|
The relevant market price of crude oil is determined with reference to crude oil quoted prices on international markets, such as Brent, Dubai and Oman.
|
|
Refined oil products (jet fuel, light chemical feedstock, lubricant, heavy oil)
|
The relevant market price of jet fuel is determined in accordance with the CIF cum tax price for jet fuel imports from the Singapore market; the relevant market price of light chemical feedstock is determined in accordance with the CIF cum tax price for naphtha imports from Japan and Singapore markets; the relevant market price of lubricant is determined by referring to the quotations on the relevant domestic price websites for lubricant; the relevant market price of heavy oil is determined in accordance with the CIF cum tax price for imports of 180C heavy oil from Singapore market. Such product prices in Singapore and Japan markets are publicly available.
|
|
Chemical products
|
The relevant market price is determined in accordance with the order price or contract price of external sales, taking into account factors such as freight rate and quality.
|
|
Coal
|
The market price is determined through price enquiry and comparison on the relevant price websites and by tender through the e-commerce system in accordance with the type of coal and the quality requirements.
|
|
Asset leasing, machinery repairs, transportation, warehousing and materials procurement, etc.
|
The relevant market price is determined through price enquiry and comparison on the relevant price websites or by referring to the prices of similar transactions in surrounding markets or by tender through the e-commerce system.
|
|
(3) |
Agreed price (determined as reasonable cost incurred plus reasonable profit2)
|
Types of product/service with agreed price
|
Primary basis for price determination
|
|
Steam, industrial water, industrial air, hydrogen, nitrogen, oxygen and other utility products
|
Prices for connected transactions are determined as reasonable cost plus reasonable profit. Reasonable cost mainly refers to the comparable average cost of similar enterprises in proximity and reasonable profit margin is determined with reference to bank lending rates. For products and services with prices determined by agreement, the supplier will provide a cost list, the purchaser will conduct comparison with the comparable average cost of similar enterprises in proximity or the cost of same type of products of the Company to determine the reasonable cost for ascertaining the price of connected transaction. The price of connected transactions, once determined and signed, shall not be changed by either party unilaterally.
|
|
Finance, human resources, business travelling, information technology and other sharing services
|
The connected transaction price is determined at a reasonable cost plus a reasonable profit. The reasonable cost is determined on the basis of FTE (full-time labour equivalent). The cost and tax are used as the cost benchmark, and the profit rate is controlled within 6% to determine the price of the sharing services. The price of connected transactions, once determined and signed, shall not be changed by either party unilaterally.
|
|
Training and auxiliary services
|
The connected transaction price is determined at a reasonable cost plus a reasonable profit. The cost and tax are used as the cost benchmark, and the profit rate is controlled within 6% to determine the price of the services.
|
|
(4) |
For certain products or services, the following pricing principles are adopted
|
Types of product/service
|
Primary basis for price determination
|
|
Well drilling, well surveying, well logging and other petroleum engineering services
|
The connected transactions are determined, via public tendering3 with reference to design budget and commissioned construction work content, which are dependent on the geological block, well type, and depth of well. If no public tendering has been made, price is determined based on professional fixed unit price4 of petroleum engineering published by Sinopec Group. For engineering design, construction and installation of building and inspection and maintenance projects, the price is determined via public tendering with reference to the unit price of project budget and pricing standards set by relevant government department or Sinopec Group.
|
2 |
6% or less of such cost.
|
3 |
The Company has established a tender management committee (or special group) for sending bidding invitations to qualified suppliers to participate in public tender or invitation tender according to the specific conditions of the project, and observes the principles of openness, fairness, economy, safe protection and timely supply in evaluating the tenders submitted adopting the lowest bid price method or comprehensive evaluation method to determine the specific supplier.
|
4 |
The preparation method and composition of professional fixed unit price of petroleum engineering is determined in accordance with the industry pricing rules. Sinopec Corp. has taken the lead in formulating the professional fixed unit price of petroleum engineering published by Sinopec Group. The values used in pricing a project are determined in accordance with factors such as zone plots of different geological conditions, well types, well depth and the level of average advanced cost.
|
Deposit services
|
The interest rate of the deposit services provided by Sinopec Finance shall be determined in accordance with the relevant interest rate as promulgated by the People's Bank of China. For deposit services provided by Sinopec Financial Institutions to the Company, the interest rates of the relevant deposit will be not lower than those provided by independent third parties for the deposits of the same nature and the same maturity.
|
|
Insurance and other financial services
|
The price shall be determined based on the prices prescribed by government authorities including, among others, People's Bank of China and CBIRC, and the fee charging standards published by the aforementioned relevant regulatory authorities and are negotiated on arm's length with reference to the fee rates charged by major insurance companies for similar insurance products and/or commercial banks for comparable services provided to the Company.
|
|
Financial services including entrusted loan
|
Financial services including entrusted loan are provided by the Company based on the interest rate and relevant charging standards announced by People's Bank of China with reference to the market prices.
|
(II) |
Land Use Rights Leasing Agreement
|
(III) |
Safety Production Insurance Fund (the 'SPI Fund')
|
(IV) |
Properties Leasing Agreement
|
(V) |
Intellectual Property License Agreements
|
3. |
PROCEDURES AND INTERNAL CONTROL SYSTEM FOR PRICING AND TERMS OF THE CONTINUING CONNECTED TRANSACTIONS
|
|
(I) |
The transactions contemplated under the connected transactions agreements are conducted on a non-exclusive basis;
|
|
(II) |
As for the pricing mechanism of the Company's procurement and/or sales of products or services from Sinopec Group, according to the Company's procurement and sales measures, if there is no government-prescribed price or government-guided price, the Company will actively obtain information about market price through various channels, such as taking into consideration the transaction prices of at least two comparable transactions of the Company with independent third parties for the same period and transactions among independent third parties for the same period, conducting market price research through various independent industry information providers (such as industry websites), and participating in activities organised by leading industry organisations. Market price information will also be provided to other departments and subsidiaries of Sinopec Corp. so as to assist in pricing of relevant continuing connected transactions. Such price is determined by parties involved (i.e. the subsidiaries of Sinopec Corp. and the subsidiaries of China Petrochemical Corporation) on normal commercial terms with reference to aforementioned price information. For products and services with agreed prices, for the purpose of ascertaining the connected transaction prices, the supplier will provide a cost list, while the purchaser will compare the comparable average cost of similar companies in proximity or the cost of same type of products to determine reasonable cost. For the Company, such price is subject to the approval of the financial department of Sinopec Corp. The price of connected transactions, once determined and signed, shall not be changed by either party unilaterally;
|
|
(III) |
As for the Company's procurement process of relevant products or services, according to the Company's procurement measures, the Company will request suppliers, including Sinopec Group and other independent suppliers, to provide price quotations in respect of the requested services or products. Following the receipt of quotations, the Company will compare the quotations and negotiate the terms of quotations with suppliers. The Company will confirm supplier selection after taking into account factors such as price quotations, quality of the products or services, particular needs of parties involved, technical advantages of the supplier, ability of the supplier in performing the contracts and providing follow-up services, and qualifications and relevant experiences of the supplier;
|
|
(IV) |
The Company's internal control and risk management departments will conduct regular internal assessments on the internal control measures every year to examine the completeness and effectiveness of internal control measures in respect of connected transactions. The legal and contract management departments of the Company will conduct prudent reviews of the connected transaction contracts, while the departments executing relevant contracts will monitor the connected transaction amounts in a timely manner;
|
|
(V) |
The Company will implement connected transactions in accordance with the internal control procedures, and review the accounting statements on connected transactions submitted by relevant subsidiaries on a monthly basis. Review and analysis on the connected transaction statements and price implementation are conducted on a quarterly basis, and analysis report on the implementation of connected transactions will be prepared to recommend rectification measures for any issues identified;
|
|
(VI) |
The Board will review the implementation of the continuing connected transactions on an annual basis, and review the financial report, which included the implementation of the continuing connected transactions, on a half-year basis mainly in respect of matters such as: whether the Company and relevant connected parties performed the continuing connected transaction agreement during relevant period; whether the actual transaction amounts incurred are within the annual caps as approved at the general meeting. The independent non-executive directors report their performance of duties at general meeting on an annual basis, and particularly express their opinions on whether the continuing connected transactions exceed relevant caps as approved at the general meeting, whether the continuing connected transactions are performed pursuant to the agreements, and whether the continuing connected transactions are fair and reasonable and in the interests of the shareholders of Sinopec Corp. as a whole;
|
|
(VII) |
The board of supervisors of Sinopec Corp. will supervise the continuing connected transactions, and review the annual financial report and interim financial report, which include the implementation of the continuing connected transactions, on an annual basis. It will also review the domestic and overseas compliance of the connected transactions entered into between the Company and connected parties in respective year, whether the prices are fair and reasonable, and whether there are any acts which are detrimental to the interests of the Company and the Shareholders;
|
|
(VIII) |
The Audit Committee of Sinopec Corp. will review the annual financial statements, annual report, interim financial statements and interim report, which include the implementation of the continuing connected transactions, and express opinion on the connected transactions conducted during relevant periods mainly in respect of matters such as: whether the connected transactions are fair, and whether the actual connected transaction amounts incurred are within the annual caps;
|
|
(IX) |
The external auditor of the Company will conduct interim review and annual audit for each year, express opinions on the implementation of the pricing policies and whether the actual connected transaction amounts incurred are within relevant annual caps for respective year pursuant to the Hong Kong Listing Rules, issue relevant letter to the Board and submit the same to the Stock Exchange.
|
4. |
HISTORICAL FIGURES AND EXISTING CAPS
|
Historical Amount
(RMB100 million)
|
|||||
Continuing Connected Transactions
|
Caps for 2021
|
2019
|
2020
|
The six months ended 30 June 2021
|
|
1. Mutual Supply Agreement
|
|||||
(1)Products and services (except for financial services) provided by the Company to Sinopec Group
|
2,999
|
1,598
|
1,328
|
650
|
|
(2) Financial services including entrusted loan provided by the Company to the Connected Subsidiaries
|
-
|
-
|
-
|
-
|
|
(3) Products and services (except for financial services) provided by Sinopec Group to the Company 5
|
4,930
|
2,696
|
2,358
|
1,301
|
|
(4)Maximum daily amount of deposits and total accrued interests of the deposit service provided by Sinopec Financial Institutions to the Company6
|
800
|
765.8
|
785.6
|
752.2
|
|
2. Land Use Rights Leasing Agreement
|
|||||
Annual land rent payable by the Company to Sinopec Group7
|
140
|
113.3
|
110.86
|
54.02
|
5 |
The historical transaction amount under the Cultural, Educational, Hygiene and Auxiliary Service Agreement amounted to RMB3.097 billion, RMB3.126 billion and RMB0.642 billion for 2019, 2020 and the six months ended 30 June 2021, respectively.
|
6 |
The maximum daily amount of deposits and total accrued interests refer to the maximum amount of deposits and accrued interests thereof at any point of time in one day.
|
7 |
Historical transaction amount is calculated based on the annual land rent payable by the Company to Sinopec Group. As International Financial Reporting Standards 16 Lease has taken effect on 1 January 2019, for 2019, 2020 and the six months ended 30 June 2021, the amount of the total value of right-of-use assets of leased lands under the Land Use Rights Leasing Agreement amounted to RMB31 billion, RMB20.687 billion and RMB5.277 billion, respectively. The right-of-use assets were recognised based on the leasing conditions of lands from 2019 to 2021. The amount of right-of-use assets corresponding to the leased land in the Company's 2019 and 2020 annual reports and 2021 interim report is based on the aforementioned period and confirmed after taking into consideration of the renewal option.
|
3. SPI Fund Document
|
|||||
|
Annual premium payable by the Company8
|
33
|
21.78
|
21.81
|
11.27
|
4. Properties Leasing Agreement
|
|||||
|
Annual property rent payable by the Company to Sinopec Group9
|
7.3
|
5.09
|
5.65
|
2.72
|
5. |
PROPOSED ANNUAL CAPS FOR THE CONTINUING CONNECTED TRANSACTIONS
|
(I) |
Sinopec Corp. proposes the annual caps for the Continuing Connected Transactions for the years from 2022 to 2024 as follows:
|
Proposed annual caps for the year ended 31 December
(RMB100 million) |
||||
Continuing Connected Transactions
|
2022
|
2023
|
2024
|
|
1. Mutual Supply Agreement
|
||||
(1) Products and services (except for financial services) provided by the Company to Sinopec Group
|
1,891
|
2,007
|
2,095
|
|
(2)Financial services including entrusted loan provided by the Company to the Connected Subsidiaries
|
100
|
100
|
100
|
|
(3) Products and services (except for deposit services) provided by Sinopec Group to the Company
|
3,597
|
3,733
|
3,877
|
|
(4)Maximum daily amount of deposits and total accrued interests of the deposit service provided by Sinopec Financial Institutions to the Company
|
800
|
800
|
800
|
|
2. Land Use Rights Leasing Agreement
|
||||
Annual value of right-of-use assets of lands leased by the Company from Sinopec Group
|
383.05
|
249.40
|
133.65
|
8 |
After excluding the return of payments to Sinopec Corp. by Sinopec Group pursuant to the rules for implementation of the SPI Fund Document, in 2019, 2020 and the six months ended 30 June 2021, the actual aggregate amount paid by Sinopec Corp. to Sinopec Group were RMB871 million, RMB878 million and RMB525 million, respectively.
|
9 |
Historical transaction amount is calculated based on the annual properties rent payable by the Company to Sinopec Group. As International Financial Reporting Standards 16 Lease has taken effect as at 1 January 2019, for 2019, 2020 and the six months ended 30 June 2021, the amount of the total value of right-of-use assets of leased lands under the Land Use Rights Leasing Agreement amounted to RMB1.393 billion, RMB1.054 billion and RMB0.266 billion, respectively. The right-of-use assets were recognised based on the leasing conditions of properties from 2019 to 2021. The amount of right-of-use assets corresponding to the leased properties in the Company's 2019 and 2020 annual reports and 2021 interim report was based on the aforementioned period and confirmed after taking into consideration of the renewal option.
|
3. SPI Fund Document
|
||||
Annual premium payable by the Company
|
33
|
33
|
33
|
|
4. Properties Leasing Agreement
|
||||
Annual value of right-of-use assets of properties leased by the Company from Sinopec Group
|
38.30
|
24.94
|
13.37
|
(II) |
The following are the basis for the proposed annual caps for each type of Continuing Connected Transactions:
|
Continuing Connected Transactions
|
Basis for the proposed annual caps
|
||
1. Mutual Supply Agreement
|
|||
(1)Products and services (except for financial services) provided by the Company to Sinopec Group
|
The proposed annual caps for 2022 to 2024 have decreased as compared to the annual caps for 2019 to 2021, with the following major factors taken into consideration:
(i)The Company assumed that the prices of crude oil for 2022-2024 will be USD80/barrel, USD85/barrel and USD85/barrel, respectively, which are lower than the prices of crude oil used when determining the caps for 2019-2021 (USD90/barrel, USD95/barrel and USD95/barrel) by about 11%, and the prices of chemical products and refined oil products will also decrease accordingly based on the decline in prices of crude oil. Due to the decline in commodity prices, it is expected that the transaction amount between the Company and Sinopec Group will decrease significantly.
(ii)With the mergers and acquisitions of the Company, Sinopec Baling Petrochemical Company Limited has become a Connected Subsidiary of Sinopec Corp. since 2020, and Sinopec Hainan Refining and Chemical Company Limited and Sinopec Zhanjiang Dongxing Petrochemical Company Limited have ceased to be the Connected Subsidiaries of Sinopec Corp. It is expected that the total transaction amount between the Company and the Connected Subsidiaries will drop significantly.
(iii)Based on (a) the transaction amounts and the utilisation rates of the annual caps over the past three years; and (b) taking into account the significance of the Company's sales of products and services to Sinopec Group under the Mutual Supply Agreement to the Company's revenue, the business development of the Company and Sinopec Group, as well as the volatility of crude oil, natural gas, petrochemical products, exchange rates and others, the Company believes that the transaction caps should be flexible to accommodate various maximum possibilities under contemplation.
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(2) Financial services including entrusted loan provided by the Company to the Connected Subsidiaries
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The following major factors were taken into consideration for the proposed annual caps for 2022 to 2024:
(i)Based on (a) the Connected Subsidiaries' expected business development and corresponding capital needs in view of the companies' development plans and the market trend; (b) the relatively sufficient funds of the Company; (c) the capital market situation in the regions where the Connected Subsidiaries are located; (d) the Company's pricing policy for providing entrusted loans and other financial services; (e) the expected interest on the entrusted loans; and (f) taking into account the uncertainties of products, capital markets and the progress of development of the relevant business, the Company believes that the transaction caps should be flexible to accommodate various maximum possibilities under contemplation.
(ii) the Connected Subsidiaries are consolidated in the financial statements of the Company. Providing financial services such as entrusted loans with reference to market prices can help the Company improve capital utilisation efficiency.
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(3) Products and services (except for deposit services) provided by Sinopec Group to the Company
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The proposed annual caps for 2022 to 2024 have decreased as compared to the annual caps for 2019 to 2021, with the following major factors taken into consideration:
(i)The Company assumed that the prices of crude oil for 2022-2024 will be USD80/barrel, USD85/barrel and USD85/barrel, respectively, which are lower than the prices of crude oil used when determining the caps for 2019-2021 (USD90/barrel, USD95/barrel and USD95/barrel) by about 11%, and the prices of chemical products and refined oil products will also decrease accordingly based on the decline in prices of crude oil. Due to the decline in commodity prices, it is expected that the transaction amount between the Company and Sinopec Group will decrease significantly.
(ii) With the mergers and acquisitions of the Company, Sinopec Baling Petrochemical Company Limited has become a Connected Subsidiary of Sinopec Corp. since 2020, and Sinopec Hainan Refining and Chemical Company Limited and Sinopec Zhanjiang Dongxing Petrochemical Company Limited have ceased to be the Connected Subsidiaries of Sinopec Corp. It is expected that the total transaction amount between the Company and the Connected Subsidiaries will drop significantly.
(iii)The Company has strengthened the exploration and development of crude oil and natural gas and extended the downstream chemical industry chain. It is expected that the Company's purchase of related products and services will increase to a certain extent.
(iv) Based on (a) the transaction amounts and the utilisation rates of the annual caps over the past three years; and (b) taking into account the significance of the Company's sales of products and services to Sinopec Group under the Mutual Supply Agreement to the Company's revenue, the business development of the Company and Sinopec Group, as well as the volatility of crude oil, natural gas, petrochemical products, exchange rates and others, the Company believes that the transaction caps should be flexible to accommodate various maximum possibilities under contemplation.
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(4) Deposit services provided by Sinopec Financial Institutions to the Company
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The proposed annual caps for 2022 to 2024 remain unchanged as compared to the annual caps for 2019 to 2021, mainly taking into consideration of the transaction amounts and the utilisation rates of the annual caps over the past three years, as well as the future business development and scale of fund settlement of the Company.
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2. Land Use Rights Leasing Agreement
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Annual value of right-of-use assets of lands leased by the Company from Sinopec Group
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Since International Financial Reporting Standards 16 was effective on 1 January 2019, pursuant to the requirements of the Stock Exchange, the Company changed the basis of determination of the proposed annual cap for the period from 2022 to 2024 with reference to the annual value of right-of-use assets relating to land lease. The annual value of right-of-use assets is mainly based on the recognition of the current value of the minimum lease payment and the measurement of the corresponding lease liability.
The proposed annual caps of land leasing for 2022 to 2024 are based on: (1) the corresponding total value of right-of-use assets relating to land lease for 2022 to 2024; (2) the annual land rent payable by the Company to Sinopec Group (the 'Expected Land Rent Payment') is approximately RMB14 billion; (3) the discount rate is determined based on the interest rate of the incremental borrowings of the Company.
The Expected Land Rent Payment for 2022 to 2024 remain unchanged as compared to the rent caps of land lease for 2019 to 2021.
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3. SPI Fund Document
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Annual premium payable by the Company
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The proposed annual caps for 2022 to 2024 remain unchanged as compared to the annual cap for 2021, mainly taking into consideration the following factors: the transaction figures of the past three years, the historical average growth rate of fixed assets and inventory size caused by the amount of fixed assets and the scale of business expansion as of 30 June 2021.
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4. Properties Leasing Agreement
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Annual value of right-of-use assets of properties leased by the Company from Sinopec Group
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Since International Financial Reporting Standards 16 was effective on 1 January 2019, pursuant to the requirements of the Stock Exchange, the Company changed the basis of determination of the proposed annual cap for the period from 2022 to 2024 with reference to the annual value of right-of-use assets relating to property lease. The annual value of right-of-use asset is mainly based on the recognition of the current value of the minimum lease payment and the measurement of the corresponding lease liability.
The proposed annual caps of property leasing for 2022 to 2024 are based on: (1) the corresponding total value of right-of-use assets relating to property leasing for 2022 to 2024; (2) the annual payment of property rent by the Company to Sinopec Group (the 'Expected Property Rent Payment') is approximately RMB1.4 billion; (3) the discount rate is determined based on interest rate of the incremental borrowings of the Company.
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The Expected Property Rent Payment for 2022 to 2024 has increased as compared to the rent caps of property lease for 2019 to 2021, mainly taking into consideration, among others, the transaction amounts and the utilisation rates of the annual caps over the past three years, the future possible scale of increase in the property rents in the PRC, and the potential new property leases to be entered into between the Company and Sinopec Group.
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6. |
REASONS AND BENEFITS FOR THE CONTINUING CONNECTED TRANSACTIONS
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(I) |
Sinopec Group has advantages in various aspects, with a good reputation and a gigantic scale. The Company has established a long-term cooperative relationship with Sinopec Group;
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(II) |
The engineering technology, production and financial services provided by Sinopec Group to the Company have competitive advantages in the domestic industry. Compared with other service providers, there are significant empirical, technological and cost advantages;
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(III) |
The petroleum industry has its unique technological and quality requirements, and the oil and gas engineering and technological services provided by Sinopec Group are of higher standards within the industry, which can satisfy the technological and quality standards of the projects invested in and operated by the Company. At the same time, high quality services can also reduce safety and environmental protection risks of the Company significantly;
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(IV) |
The shared services provided by Sinopec Group to the Company can lower the cost through centralised processing and can help the Company to improve management refinement and operational efficiency;
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(V) |
The land and properties leased by the Company from Sinopec Group is necessary for the Company's continuous and stable operation, and the rent thereof is no higher than the then market rent confirmed by the independent valuer.
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(I) |
Realising centralised treasury management, improving treasury management efficiency: In the ordinary course of business, the Company's members trade internally, while the Company trades with China Petrochemical Corporation and its associates. Sinopec Financial Institutions are platforms for internal settlement, financing and treasury management of the Company and Sinopec Group, and the
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(II) |
Familiar with the Company's business: Since Sinopec Financial Institutions mainly provide financial services to China Petrochemical Corporation and its subsidiaries, they have accumulated in-depth knowledge in related industries such as oil and gas, refining and petrochemical industries over the years. Sinopec Financial Institutions are familiar with the capital structure, business operation, capital requirements and cash flow pattern of the Company, enabling it to better forecast the capital requirements of the Company. Therefore, Sinopec Financial Institutions can provide flexible, convenient and low cost service to the Company at any time, while it will be difficult for independent commercial banks to provide equivalent services;
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(III) |
Offering favourable commercial terms: As professional/centralised treasury management platforms, Sinopec Financial Institutions generally can offer Sinopec Corp. terms and interest rates no less favourable as compared to the services of the same nature and the same maturity from major commercial banks. Under normal circumstances, the deposit interest rate offered by Sinopec Financial Institutions will be no lower than that offered by major commercial banks for the deposits of the same nature and the same maturity. The loan interest rate will be no higher than that offered by major commercial banks for the loans of the same nature and the same maturity;
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(IV) |
Implementing internal control and risk management measures, guarantee the security of capital: The Company, Sinopec Finance and Sinopec Century Bright have taken various internal control and risk control measures for financial services so as to guarantee the security of capital and to ensure the Company's interests. Sinopec Financial Institutions have strict internal control system and risk management system established by Sinopec Group. Such regulations, internal control and risk control measures include but not limited to the followings:
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1. |
Sinopec Finance is a major domestic non-banking financial institution under the supervision of the CBIRC. The Beijing Bureau, being the dispatched agency of CBIRC, conducts daily supervision on Sinopec Finance, as well as on-site and off-site inspections. Meanwhile, Sinopec Century Bright holds the Money Lenders License issued by Hong Kong Government, and is supervised by the Hong Kong Government, the Companies Registry and other relevant regulatory authorities in Hong Kong;
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2. |
In order to regulate the connected transactions between the Company and Sinopec Finance, Sinopec Corp. and Sinopec Finance formulated the Risk Control System on Connected Transactions between China Petroleum & Chemical Corporation and Sinopec Finance Co., Ltd., which covers the relevant risk control system and the risk management plan to prevent financial risks of the Company and to ensure that the deposits of the Company in the Sinopec Finance can be utilised at the Company's discretion. Meanwhile, in order to regulate connected transactions between the Company and Sinopec Century Bright, Sinopec Century Bright is able
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3. |
According to the regulatory requirements, Sinopec Finance has established a complete corporate governance structure with board of directors and board of supervisors, which can facilitate the stable operation and effective supervision of Sinopec Finance. In accordance with relevant regulatory requirements of the CBIRC, Sinopec Finance has established an internal control system which covers all business areas, dynamically updated annually according to business needs, and through measures such as audit inspections. Sinopec Finance has ensured an effective internal control and a strict implementation of rules and regulations. Sinopec Finance has established a relatively completed risk management organisation structure, and the risk controls have been implemented. All regulatory indicators are in line with regulatory requirements. According to relevant regulations, Sinopec Century Bright carries out internal control assessment every quarter and risk evaluations when necessary;
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4. |
As the controlling shareholder of Sinopec Finance, China Petrochemical Corporation undertakes that in case of an emergency where the Sinopec Finance has difficulties making payments, China Petrochemical Corporation will increase the capital of Sinopec Finance based on actual needs in order to solve payment difficulties. At the same time, as the sole shareholder of Sinopec Century Bright, China Petrochemical Corporation entered into a keep-well agreement with Sinopec Century Bright, under which China Petrochemical Corporation undertakes that it will ensure that the repayment obligations of Sinopec Century Bright can be fulfilled through various channels if Sinopec Century Bright encounters any repayment difficulties. In respect of liquidity, the credit rating of China Petrochemical Corporation is higher than many enterprises, and even banks. Sinopec Finance, as a major domestic non-bank financial institution, is under the supervision of CBIRC, and has achieved the regulatory requirements as determined by regulatory indicators over the years. Sinopec Century Bright was granted credit rating of A/A2 from Standard & Poor's and Moody's, respectively;
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5. |
Sinopec Corp. holds 49% equity interest in Sinopec Finance. The majority of the directors in Sinopec Finance was appointed by Sinopec Corp. to oversee its operations. Each of Sinopec Finance and Sinopec Century Bright shall provide sufficient information, including various financial indicators (as well as annual and interim financial reports), quarterly so that the Company can monitor the financial conditions of Sinopec Finance and Sinopec Century Bright continuously. Sinopec Finance publicly disclose its annual report and financial information (http://www.sfc.sinopec.com/en/info/info.html);
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6. |
Sinopec Finance and Sinopec Century Bright shall monitor the maximum daily amount of deposits (including accrued interests) of the Company to ensure that relevant amount do not exceed the applicable annual caps; and
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7. |
In the course of annual audit for Sinopec Corp., the auditor will review and express opinions on the connected transactions between the Company, Sinopec Finance and Sinopec Century Bright, while Sinopec Corp. will timely perform the information disclosure obligations according to the requirements of Hong Kong Listing Rules.
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7. |
THE HONG KONG LISTING RULES AND THE SHANGHAI LISTING RULES REQUIREMENTS
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Continuing Connected Transactions
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Hong Kong Listing Rules Requirements
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(1)
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Major Continuing Connected Transactions
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1.
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Mutual Supply Agreement (exclusive of provision of financial services including entrusted loan by the Company to the Connected Subsidiaries)
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As the proposed annual caps of each of the transactions exceed 5% of the applicable percentage ratios, it is therefore subject to the reporting, announcement and independent shareholders' approval requirements under Chapter 14A of the Hong Kong Listing Rules.
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2.
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Land Use Rights Leasing Agreement
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(2)
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Non-Major Continuing Connected Transactions
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3.
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SPI Fund Document
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As the proposed annual caps of each of the transactions are less than 5% but more than 0.1% of the applicable percentage ratios, the relevant transactions are subject to the reporting and announcement requirements under Chapter 14A of the Hong Kong Listing Rules but will be exempt from independent shareholders' approval requirements.
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4.
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Properties Leasing Agreement
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5.
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Provision of financial services including entrusted loan by the Company to the Connected Subsidiaries under the Mutual Supply Agreement
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(3)
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Exempted Continuing Connected Transactions
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6.
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Intellectual Property License Agreements
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As Sinopec Corp. estimates that the annual fee payable by the Company to Sinopec Group for such transactions will be less than 0.1% of each of the applicable percentage ratios, the relevant transactions will be exempt from reporting, announcement and independent shareholders' approval requirements.
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8. |
APPROVAL BY THE BOARD AND INDEPENDENT SHAREHOLDERS
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9. |
GENERAL INFORMATION
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10. |
DEFINITIONS
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'amended Continuing Connected Transactions Agreements'
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collectively refer to the Mutual Supply Agreement and the Properties Leasing Agreement amended by the Continuing Connected Transactions Sixth Supplemental Agreement dated 27 August 2021;
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'amended Mutual Supply Agreement'
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the Mutual Supply Agreement amended by the Continuing Connected Transactions Sixth Supplemental Agreement dated 27 August 2021;
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'associates'
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has the meaning under the Hong Kong Listing Rules;
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'Board'
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the board of directors of Sinopec Corp.;
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'CBIRC'
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China Banking and Insurance Regulatory Commission;
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'China Petrochemical Corporation'
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China Petrochemical Corporation, being the controlling shareholder of Sinopec Corp.;
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'Company'
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Sinopec Corp. and its subsidiaries;
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'Computer Software License Agreement'
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the computer software license agreement dated 3 June 2000 (as amended) regarding the granting of license by Sinopec Group to the Company to use certain computer software of Sinopec Group;
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'Continuing Connected Transactions'
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the Exempted Continuing Connected Transactions, the Non-Major Continuing Connected Transactions and the Major Continuing Connected Transactions;
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'Continuing Connected Transactions Fifth Supplemental Agreement'
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the agreement dated 24 August 2018 entered into between Sinopec Corp. and China Petrochemical Corporation regarding the amendments of the terms of the Continuing Connected Transactions;
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'Continuing Connected Transactions Second Supplemental Agreement'
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the agreement dated 21 August 2009 entered into between Sinopec Corp. and China Petrochemical Corporation regarding the amendments of the terms of the continuing connected transactions;
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'Continuing Connected Transactions Sixth Supplemental Agreement'
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the agreement dated 27 August 2021 entered into between Sinopec Corp. and China Petrochemical Corporation regarding the amendments of the terms of the Continuing Connected Transactions;
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'Connected Subsidiaries'
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the subsidiaries of Sinopec Corp. in which China Petrochemical Corporation and its associates hold at least 10% of the direct interest (excluding any indirect interest in the subsidiaries of Sinopec Corp. held by China Petrochemical Corporation and its associates through the Company), and any subsidiaries of such subsidiaries;
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'Cultural, Educational, Hygiene and Auxiliary Service Agreement'
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the amended Cultural, Educational, Hygiene and Community Services Agreement dated 24 August 2018;
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'Cultural, Educational, Hygiene and Community Services Agreement'
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the cultural, educational, hygiene and community services agreement dated 3 June 2000 and the supplemental agreement dated 26 September 2000 (as amended) regarding the provision of, inter alia, certain cultural, educational, hygiene and community services. And the agreement was further revised as Cultural, Educational, Hygiene and Auxiliary Service Agreement pursuant to the Continuing Connected Transactions Fifth Supplemental Agreement dated 24 August 2018;
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'Directors'
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the directors of Sinopec Corp.;
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'EGM'
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the first extraordinary general meeting of 2021 of Sinopec Corp. to be held for Independent Shareholders to consider and approve the Renewal of Continuing Connected Transactions (including the relevant proposed caps);
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'Exempted Continuing Connected Transactions'
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the transactions contemplated under the Intellectual Property License Agreements;
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'Hong Kong'
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Hong Kong Special Administrative Region;
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'Hong Kong Listing Rules'
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the Rules Governing the Listing of Securities on the Stock Exchange;
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'IFA' or 'Somerley'
|
Somerley Capital Limited, a corporation licensed under the Securities and Futures Ordinance to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities, appointed as independent financial adviser to advise the Independent Board Committee and Independent Shareholders;
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'Independent Board Committee'
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an independent board committee of the Board comprising all independent non-executive Directors, namely Mr. Cai Hongbin, Mr. Ng, Kar Ling Johnny, Ms. Shi Dan and Mr. Bi Mingjian;
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'Independent Shareholders'
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the shareholders of Sinopec Corp. other than China Petrochemical Corporation and its associates;
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'Intellectual Property License Agreements'
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the Trademarks License Agreement, the Computer Software License Agreement and the Patents and Proprietary Technology License Agreement;
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'Land Use Rights Leasing Agreement'
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the land use rights leasing agreement dated 3 June 2000 (as amended) regarding the leasing of certain land use rights by Sinopec Group to the Company;
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'Land Use Rights Leasing Agreement Fourth Amendment Memo'
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the memo dated 24 August 2018 regarding the amendments to the Land Use Rights Leasing Agreement;
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'Major Continuing Connected Transactions'
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the transactions relating to the sales and supply of products and services, deposit service provided by the Sinopec Financial Institutions to the Company under the Mutual Supply Agreement and relating to the land use rights leasing under the Land Use Rights Leasing Agreement, subject to the Independent Shareholders' approval under the Hong Kong Listing Rules;
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'Ministry of Finance'
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the Ministry of Finance of the PRC;
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'Mutual Supply Agreement'
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the mutual supply agreement dated 3 June 2000 and the Supplemental agreement dated 26 September 2000 (as amended) regarding the provision of a range of products and services from time to time (1) by Sinopec Group to the Company; and (2) by the Company to Sinopec Group;
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'NDRC'
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the National Development and Reform Commission;
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'Non-Major Continuing Connected Transactions'
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the transactions contemplated under the SPI Fund Document and the Properties Leasing Agreement, and the financial services including entrusted loan provided by the Company to the Connected Subsidiaries under the Mutual Supply Agreement;
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'Patents and Proprietary Technology License Agreement'
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the patents and proprietary technology license agreement dated 3 June 2000 (as amended) regarding the granting of license by Sinopec Group to the Company to use certain patents and proprietary technology of Sinopec Group;
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'PRC' or 'China'
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the People's Republic of China, for the purpose of this announcement, excluding the Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan Region of the People's Republic of China;
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'Properties Leasing Agreement'
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the properties leasing agreement dated 3 June 2000 (as amended) regarding the leasing of certain properties by Sinopec Group to the Company;
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'Renewal of Continuing Connected Transactions'
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renewal of the Continuing Connected Transactions pursuant to the amended Continuing Connected Transactions Agreements;
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'Renewal of Major Continuing Connected Transactions'
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renewal of the Major Continuing Connected Transactions pursuant to the amended Continuing Connected Transactions Agreements;
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'RMB'
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the lawful currency of the PRC;
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'Shanghai Listing Rules'
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the Share Listing Rules of Shanghai Stock Exchange;
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'Shares'
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the ordinary shares of RMB1.00 each in the share capital of Sinopec Corp., including the A Shares and H Shares;
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'Shareholders'
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the shareholders of Sinopec Corp.;
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'Sinopec Century Bright'
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Sinopec Century Bright Capital Investment Limited, a wholly-owned subsidiary of China Petrochemical Corporation;
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'Sinopec Corp.'
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China Petroleum & Chemical Corporation, a joint stock limited company incorporated in the PRC with limited liability;
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'Sinopec Finance'
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Sinopec Finance Co., Ltd, a subsidiary of China Petrochemical Corporation jointly established with Sinopec Corp.;
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'Sinopec Financial Institutions'
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Sinopec Finance and Sinopec Century Bright;
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'Sinopec Group'
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(i) China Petrochemical Corporation and its associates (other than Sinopec Corp. and its subsidiaries except for those mentioned in (ii)); and (ii) Connected Subsidiaries;
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'SPI Fund Document'
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Safety Production Insurance Fund Document, a document jointly issued in 1997 by the Ministry of Finance and the ministerial level enterprise of China Petrochemical Corporation and its associated company before the industry reorganisation in 1998 (Cai Gong Zi 1997 No. 268) relating to the payment of insurance premium by Sinopec Corp. to the China Petrochemical Corporation;
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'SSE'
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the Shanghai Stock Exchange;
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'Stock Exchange' or 'Hong Kong Stock Exchange'
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The Stock Exchange of Hong Kong Limited;
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'Three Supplies and One Industry Assets'
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assets related to water supply, community power supply, community gas supply (heating supply) and property management; and
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'Trademarks License Agreement'
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the trademarks license agreement dated 3 June 2000 (as amended) regarding the granting of license by Sinopec Group to the Company to use certain trademarks of Sinopec Group.
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By Order of the Board
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China Petroleum & Chemical Corporation
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Huang Wensheng
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Vice President and Secretary to the Board of Directors
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