Annual Report 2012

Decision-making procedures: The major
continuing connected transaction agreements
were entered into the Company’s ordinary
course of business and in accordance with
normal commercial terms which are fair
and reasonable to the Company and its
Shareholders as a whole. The Company,
according to the internal control procedures,
adjusts the scope and amount of continuing
connected transactions and cap for the
amount exempted from disclosure every
three years, and upon the approval of
the Board of Directors and independent
non-executive directors, publishes the
announcements and brings them into force.
For the temporary connected transactions,
the Company, in a strict compliance with
domestic and overseas regulatory rules,
publishes the announcement and brings
them in force only after submitting the
related matters of connected transactions
to the Board of Directors and/or general
meeting of shareholders for review according
to internal control procedures.
Please refer to Note 36 to the financial
statements prepared under the IFRS in this
annual report for details of the connected
transactions actually incurred during this year.
The abovementioned connected transactions
between Sinopec Corp. and China
Petrochemical Corporation in 2012 have
been approved at the 6th meeting of the
Fifth Session of the Board of Directors of
Sinopec Corp. and have complied with the
disclosure requirements under Chapter 14A
of the Hong Kong Listing Rules.
The auditors of Sinopec Corp. was engaged
to report on the Company’s continuing
connected transactions in accordance
with Hong Kong Standard on Assurance
Engagements 3000 “Assurance Engagement
Other Than Audits or Reviews of Historical
Financial Information” and with reference
to Practice Note 740 “Auditor’s Letter on
Continuing Connected Transactions under
the Hong Kong Listing Rules” issued by
Hong Kong Institute of Certified Public
Accountants. The auditor has issued his
unqualified letter containing his conclusions
in respect of the above-mentioned continuing
connected transactions in accordance with
Rule 14A.38 of the Hong Kong Listing Rules.
A copy of the auditor’s letter has been
submitted by the Company to the Stock
Exchange of Hong Kong Limited.
After reviewing the above-mentioned
connected transactions, the independent
non-executive directors of Sinopec Corp.
have confirmed that:
(a) The transactions have been conducted
in the Company’s ordinary course of
business;
(b) The transactions have been entered into
based on either of the following terms:
i on normal commercial terms;
ii on terms not less favorable than those
available from/to independent third
parties, where there is no available
comparison to determine whether
such terms are on normal commercial
terms; and
(c) The transactions were fair and reasonable
and in the interests of Sinopec Corp. and
its Shareholders as a whole.
4 OTHER SIGNIFICANT CONNECTED
TRANSACTIONS OCCURRED DURING THIS
YEAR
None
5 FUNDS PROVIDED BETWEEN CONNECTED PARTIES Unit: RMB millions
Fund to connected parties Fund from connected parties
Amount Amount
Connected Parties incurred Balance incurred Balance
China Petrochemical Corporation 797 2,936 (270) 10,116
Other connected parties 390 1,353 — —
Total 1,187 4,289 (270) 10,116
39
CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2012
Connected Transactions