Annual Report 2012

ensure thorough understanding of
each director. The Management
shall provide the directors with
necessary information and
materials. The director may
request the President, or request,
via the President, relevant
departments to provide necessary
information of Sinopec Corp. and
related explanations.
B Remuneration of directors and senior
management
a. A Remuneration and Appraisal
Committee has been set up and
the relevant rules have been
formulated. The committee consists
of independent non-executive director
Mr. Chen Xiaojin who acts as the
committee chairman, and nonexecutive
director Mr. Li Chunguang
and independent non-executive
director Ms. Bao Guoming who act as
committee members. The committee
is mainly responsible for proposing
to the Board remuneration plans for
directors, supervisors and other senior
management. The term of reference
of the Remuneration and Appraisal
Committee is available at the website
of Sinopec Corp. and the website of
the Stock Exchange of Hong Kong
Limited for reference.
b. The Remuneration and Appraisal
Committee has always consulted
the Chairman and the President
regarding proposed remuneration
for other executive directors. After
the Committee’s review, it believed
that executive directors fulfilled their
duties and executed all duty clauses
stated in the service contracts for
directors with honesty, diligence and
in good faith in the year 2012.
c. Committee members may engage
independent professionals. Costs
arising from or in connection with
such consultation are borne by
Sinopec Corp.. Meanwhile, the
committee has appointed consultants
to provide suggestions to the
committee. The working expenses of
the committee are included in the
budget of Sinopec Corp.. In addition,
according to the policy of Sinopec
Corp., the senior management and
relevant departments of Sinopec Corp.
shall actively cooperate
with the Remuneration and
Appraisal Committee.
C Accountability and auditing
C.1 Financial reporting
a. Directors are responsible
for supervising the accounts
preparation for each fiscal period,
to ensure such amounts truly
and fairly reflect the condition
of business, performance and
cash flow of the Company during
such period. The Board approved
the Financial Report for the Year
2012 and warranted that there
were no material omissions, or
misrepresentations or misleading
statements contained in the annual
report, and jointly and severally
accepted full responsibility for
the authenticity, accuracy and
integrity of the content.
b. Sinopec Corp. provides directors
with financial condition and
production and operation status
every month to ensure that the
directors know about the latest
development of the company in a
timely manner.
c. Sinopec Corp. has adopted an
internal control mechanism to
ensure that the management
and relevant departments have
provided sufficient financial data
and related explanations and
materials to the Board and the
Audit Committee.
d. The external auditors of Sinopec
Corp. made a statement about
their reporting responsibilities in
the auditor’s report contained in
the financial statements.
C.2 Internal control
a. In 2003, according to the relevant
regulatory requirements of
internal control of the listing
places, Sinopec Corp. adopted
the internal control framework
prescribed in the internationally
approved COSO (Committee of
Sponsoring Organizations of the
Treadway Commission) Report,
and based upon the Articles of
Association and all management
systems currently in effect, as well
as in accordance with relevant
domestic and overseas governing
regulations, Sinopec Corp.
formulated the Internal Control
Manual, in which the control both
at corporate level and business
level was regulated, accordingly
realizing all-round internal
control. The Board of Directors
reviewed the Self Evaluation
Report on internal Control and self
assessment together with annual
report since 2006.
b. The management of Sinopec Corp.
implemented the responsibilities
of internal control. With sufficient
resources in the accounting and
financial reporting, Sinopec Corp.
has adequately qualified and
experienced employees in this
regard and sufficient budget for the
trainings of relevant employees.
For detailed information of the
internal control system during
the reporting period, please refer
to the “Self Evaluation Report on
Internal Control and
Self Assessment”.
c. Sinopec Corp. has established
its internal audit department,
staffed by adequate professional
personnel, which enables Sinopec
Corp. possess relatively sound
internal auditing functions.
C.3 Audit Committee
a. The Audit Committee consists
of independent non-executive
director Ms. Bao Guoming who
acts as the committee chairman,
and independent non-executive
director Mr. Jiang Xiaoming and
independent non-executive director
Mr. Andrew Y. Yan who act as
committee members. As verified,
none of them had served as a
partner or former partner in our
current auditing firm.
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CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2012
Corporate Governance