Annual Report 2012

Management’s Discussion
and Analysis
MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED)
(6) Measurement of fair values of derivatives and relevant system
The Company established and completed a decision-making mechanism, business procedure and internal control relevant to financial instrument
accounting and information disclosure.
26
Items relevant to measurement of fair values Unit: RMB millions
Items
Annual Report 2012 CHINA PETROLEUM & CHEMICAL CORPORATION
Beginning
of the year
Profits and
losses from
variation of
fair values in
the current year
Accumulated
variation of fair
values recorded
as equity
Decrement of
withdrawal
of the
current year End of the year
Financial assets
Of which: 1. Derivative financial assets 54 246 — — 187
2. Available-for-sale financial assets 255 — 26 — 83
3. Cash flow hedging 837 — — — 1,006
Subtotal of financial assets 1,146 246 26 — 1,276
Financial liabilities (3,569) (62) (151) — (3,684)
Totals (2,423) 184 (125) — (2,408)
Information concerning financial assets and liabilities held in foreign currencies; Unit: RMB millions
Items
Beginning
of the year
Profits and
losses from
variation of
fair values of
the current year
Accumulated
variation of fair
values recorded
into equity
Decrement of
withdrawal
of the
current year End of the year
Financial assets
Of which: 1. Derivative financial assets 54 246 — — 187
2. Loans and receivables 111,391 — — — 50,022
3. Available-for-sale financial assets 41 — 26 — 70
4. Held-to-maturity investments — — — — —
5. Cash flow hedging 837 — — — 1,006
Subtotal of financial assets 112,323 246 26 — 51,285
Financial liabilities (151,707) (43) (151) — (201,745)
Note: The financial assets and liabilities held by the Company in foreign currencies were mostly those held by its overseas subsidies, which were recognised in their
functional currencies.
4 ANALYSIS OF FINANCIAL STATEMENTS PREPARED UNDER ASBE
The major differences between the Company’s financial statements prepared under ASBE and IFRS are set out in Section C of the financial
statements of the Company from Page 191 of this report.
Under ABSE, the operating income and operating profit or loss by reportable segments were as follows:
Year ended 31 December
2012 2011
RMB millions RMB millions
Operating income
Exploration and Production Segment 257,185 241,838
Refining Segment 1,270,912 1,212,072
Marketing and Distribution Segment 1,471,882 1,347,626
Chemicals Segment 411,964 420,490
Others 1,312,970 1,134,182
Elimination of inter-segment sales (1,938,868) (1,850,525)
Consolidated operating income 2,786,045 2,505,683
Operating profit/(loss)
Exploration and Production Segment 69,466 71,221
Refining Segment (11,947) (37,608)
Marketing and Distribution Segment 41,950 45,068
Chemicals Segment 367 25,292
Others (2,502) (2,963)
Elimination of inter-segment sales (1,335) 891
Financial expenses, gain/(loss) from changes in fair value and investment income (8,073) (935)
Consolidated operating profit 87,926 100,966
Net profit attributable to equity shareholders of the Company 63,496 71,697
Operating profit: In 2012, the operating profit of the Company was RMB 87.9 billion, representing a decrease of RMB 13.0 billion as compared with
2011. This was mainly due to the decrease in product prices as demand for chemical products continued to be weak.
Net profit: In 2012, the net profit attributed to the equity shareholders of the Company was RMB 63.5 billion, representing a decrease of RMB 8.2
billion or 11.4% comparing with the same period of 2011.