Annual Report 2012

6 DIVIDEND
During this report period, the company
revised the Articles of Association of Sinopec
Corp., and further clarified the profit
distribution policy of the company.
The profit distribution policy of Sinopec
Corp. maintains continuity and stability,
and moreover gives consideration to the
long-term interests of the Company, overall
interests of all the shareholders and the
sustainable development of the Company.
The Company will have priority to adopt cash
dividends for profit distribution, and can
perform the interim profit distribution. When
Sinopec Corp. achieved the retained profits
of parent company and the accumulated
undistributed profits of the Company were
positive in current year, and in the event
that the cash flow of the Company can
satisfy the normal operation and sustainable
development, the Company should adopt
cash dividends, and the distribution profits
in cash every year are no less than 30%
of the net profits of parent company in
current year.
The profit distribution plan of Sinopec
Corp in current year will be carried out in
accordance with the policy and procedures
stipulated as per the Articles of Association
of Sinopec Corp., whereby the advices
of minority shareholders must be heard,
and the independent directors will issue
independent opinions.
Proposals for dividend distribution
At the 6th meeting of the Fifth Session of
the Board of Directors of Sinopec Corp., the
Board approved the proposal to declare a
final cash dividend of RMB 0.20 per share
(tax included) with an interim distributed
dividend of RMB 0.10 per share (tax
included), the total dividend for the whole
year is RMB 0.30 per share (tax included);
and based on the total equity on relevant
record date, issue 2 bonus shares converted
from retained earnings and 1 bonus share
converted from capital reserve for every 10
existing shares held by the shareholders
on relevant record date. The distribution
proposal will be implemented upon the
approval by the shareholders at the annual
general meeting for 2012. The details of the
proposals for dividend distribution will be set
out in the circular in relation to the Proposed
Cash Dividend and the Proposed Bonus Issue
of Shares to be published in due course.
The dividend will be denominated and
declared in RMB, and distributed to the
domestic shareholders in RMB and to
the overseas shareholders in Hong Kong
Dollar. The exchange rate for the dividend
calculation in Hong Kong Dollar is based on
the average benchmark exchange rate
of RMB against Hong Kong Dollar as
published by the People’s Bank of China one
week preceding the date of the declaration of
such dividend.
In accordance with the Enterprise Income
Tax Law of the People’s Republic of China
and its implementation regulations which
came into effect on 1 January 2008, Sinopec
Corp. is required to withhold and pay
enterprise income tax at the rate of 10%
on behalf of the non-resident enterprise
shareholders whose names appear on the
register of members for H Shares of Sinopec
Corp. when distributing the Cash Dividends
and Bonus Shares issued by way of
capitalization of the undistributed profits of
the Company for the year 2012 to them. Any
H Shares of the Sinopec Corp. registered not
under the name of an individual shareholder,
including HKSCC Nominees Limited, other
nominees, agents or trustees, or other
organisations or groups, shall be deemed
as shares held by non-resident enterprise
shareholders. Therefore, on this basis,
enterprise income tax shall be withheld from
dividends payable to such shareholders. If
holders of H Shares intend to change its
shareholder status, please enquire about
the relevant procedures with your agents or
trustees. Sinopec Corp. will strictly comply
with the law or the requirements of the
relevant government authority and withhold
and pay enterprise income tax on behalf
of the relevant shareholders based on the
register of members for H shares of Sinopec
Corp. as at the Record Date.
If the individual holders of the H shares
who are Hong Kong or Macau residents
or residents of the countries which had
an agreed tax rate of 10% for the Cash
Dividends and Bonus Shares issued by
way of capitalization of the undistributed
profits of the Company for the year 2012
to them with China under the relevant tax
agreement, Sinopec Corp. should withhold
and pay individual income tax on behalf
of the relevant shareholders at a rate of
10%. Should the individual holders of the
H Shares are residents of the countries
which had an agreed tax rate of less than
10% with China under the relevant tax
agreement, Sinopec Corp. shall withhold and
pay individual income tax on behalf of the
relevant shareholders at a rate of 10%. In
that case, if the relevant individual holders
of the H Shares wish to reclaim the extra
amount withheld (the “Extra Amount”) due
to the application of 10% tax rate, Sinopec
Corp. can apply for the relevant agreed
preferential tax treatment provided that the
relevant shareholders submit the evidence
required by the notice of the tax agreement
to the share register of Sinopec Corp. within
the timeline set out below. Sinopec Corp. will
assist with the tax refund after the approval
of the competent tax authority. Should
the individual holders of the H Shares are
residents of the countries which had an
agreed tax rate of over 10% but less than
20% with China under the tax agreement,
Sinopec Corp. shall withhold and pay the
individual income tax at the agreed actual
rate in accordance with the relevant tax
agreement. In the case that the individual
holders of the H Shares are residents of
the countries which had an agreed tax
rate of 20% with China, or which has not
entered into any tax agreement with China, or
otherwise, Sinopec Corp. shall withhold and
pay the individual income tax at a rate of 20%.
In accordance with relevant tax law and
requirements of the PRC, the Company will not
deduct or withhold any income tax in respect
of the Bonus Shares to all Shareholders held
by way of capitalization of the capital reserve
of the Company to share capital.
The dividend distribution or capital reserves capitalization and profit sharing declared by Sinopec Corp. in the last three years are as follows:
Year 2011 Year 2010 Year 2009
Cash dividends (RMB/share) 0.30 0.21 0.18
Total amount of cash dividends(hundred million, including taxes) 260.34 182.07 156.06
Net profits attributed to the shareholders of the listed company shown
in the consolidated statement for the dividend year (hundred million). 716.97 707.13 626.77
Ratio between the dividends and the net profit attributed to the shareholders
of the listed company in the consolidated statement (%) 36.32 25.75 24.90
Number of bonus shares per share (share) 0 0 0
Capitalization per 10 shares (share) 0 0 0
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CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2012
Report of the Board of Directors