Annual Report 2012

Report of the Board of Directors
REPORT OF THE BOARD OF DIRECTORS (CONTINUED)
The aggregate cash dividend declared by
Sinopec Corp. during three years from 2009
to 2011 is RMB 0.69 per share, and the
dividend from 2009 to 2011 as a percentage
of average net profits in the three years is
87.54%. It fulfilled the refinancing conditions
in the domestic securities market provided
by the “Decisions on Modifying Provisions
Concerning Cash Dividends of Listed
Companies” issued by CSRC.
7 RESPONSIBILITIES FOR THE COMPANY’S
INTERNAL CONTROL
The Board of Directors of Sinopec Corp.
are fully responsible for establishing and
maintaining the internal control system
related to the financial reporting as well
as ensuring its effective implementation.
In 2012, the Board assessed the internal
control of Sinopec Corp. according to the
“Basic Standard for Enterprise Internal
Control”, “Application Guidelines for
Enterprise Internal Control” and “Estimation
Guidelines for Enterprise Internal Control”.
There were no significant defects as of 31
December, 2012. Therefore the internal
control system of Sinopec Corp. related to
the financial reporting is sound and effective.
The “2012 Annual Internal Control
Assessment Report of Sinopec Corp.” was
reviewed and approved on the 6th meeting
of the Fifth Session of the Board of Directors
on 22 March, 2013 , and all members of the
Board ensured that the contents of the report
are authentic, accurate and complete, and
without any misrepresentation, misleading
statements or material omissions.
8 MAJOR SUPPLIERS AND CUSTOMERS
During this reporting period, the total
purchases from the top five crude oil
suppliers of Sinopec Corp. accounted for
42.3 %of the total purchases of crude oil by
Sinopec Corp., of which the purchases from
the largest supplier accounted for 23.9% of
the total purchases of crude oil by Sinopec
Corp..
The total sales to the five largest customers
of Sinopec Corp. accounted for 10 % of the
total sales of Sinopec Corp., of which sales
to the largest customer accounted for 4% of
the total sales.
During this reporting period, other than the
connected transactions with the controlling
shareholder – China Petrochemical
Corporation and its subsidiaries, as
disclosed in the Section headed “Connected
Transaction” of this annual report, none of
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Annual Report 2012 CHINA PETROLEUM & CHEMICAL CORPORATION
the directors, supervisors of Sinopec Corp.
and their associates or any shareholders
holding 5% or more of the share capital
of Sinopec Corp. had any interest in any
of the above-mentioned major suppliers
and customers.
9 BANK LOANS AND OTHER BORROWINGS
Details of bank loans and other borrowings of
Sinopec Corp. as of 31 December 2012 are
set out in note 29 to the financial statements
prepared in accordance with IFRS in this
annual report.
10 FIXED ASSETS
During this reporting period, changes to
the in fixed assets of Sinopec Corp. are set
out in note 17 to the financial statements
prepared in accordance with IFRS in this
annual report.
11 RESERVES
During this reporting period, the changes
to the reserves of Sinopec Corp. are set out
in the consolidated statement of changes
in shareholders’ equity in the financial
statements prepared in accordance with
IFRS in this annual report.
12 DONATIONS
During this reporting period, the amount of
charity donations made by Sinopec Corp.
amounted to RMB 79 million.
13 PRE-EMPTIVE RIGHTS
Pursuant to the Articles of Association
and the laws of the PRC, the shareholders
of Sinopec Corp. are not entitled to any
pre-emptive rights, therefore the existing
shareholders cannot request Sinopec Corp.
for the right of first refusal in proportion to
their shareholdings.
14 REPURCHASE, SALES AND REDEMPTION
OF SHARES
During this reporting period, neither
Sinopec Corp. nor any of its subsidiaries
repurchased, sold or redeemed any listed
shares of Sinopec Corp. or its subsidiaries.
15 CORE COMPETITIVENESS ANALYSIS
Sinopec Corp. is a large scale vertically
integrated energy & petro-chemical company
with upstream, mid stream and downstream
operations. The Company ranks first
among all enterprises in China in terms of
revenue; It is the second largest supplier of
oil and gas in China; In respect of refining
capacity, it ranks first in China and second
globally; Equipped with a well developed
refined oils products sales network, Sinopec
Corp. is the largest supplier of refined oil
products in China; and in terms of ethylene
production capacity, the Company takes the
first position in China and the 4th in the
world, and has a well established marketing
network for chemical products.
The integrated business structure of the
Company carries strong advantages in
synergy among its various business segments,
enabling the Company to continuously
tap potentials in attaining an efficient and
comprehensive utilization of its resources,
and endowed the Company strong resistance
against risks, as well as remarkable
capabilities in delivering stable profitability.
The Company enjoys a favorable location
which is close to the consumer markets.
Along with the steady growth in the
Chinese economy, sales volume of both
oil products and chemical products by
the Company has been increasing steadily
over the years; through continuous and
specialized marketing efforts, its capability
in international operations and market
expansion has been further enhanced.
Sinopec Corp. owns a team of professionals
and expertise engaged in the production
of oil & gas, operation of refineries and
chemical plants, as well as marketing
activities. The Company applies outstanding
fine management measures with its
remarkable capabilities in management
of operations, and enjoys a favorable cost
advantage in its downstream businesses.
The Company has formulated a well
established technology system and
mechanism, and owns competent teams
specialized in technology covering a wide
range of subjects; the four platforms for
technology advancement is taking shape,
which includes exploration and development
of oil & gas, refining, chemicals and
commonly applied technology. With its
overall technologies reaching state of the art
level in the global arena, and some of them
taking the lead globally, the Company enjoys
strong capability for technical innovations.
The Company always attaches great
importance to fulfilling social responsibilities
as an enterprise, and carries out the green
& low carbon development strategy to
pursue a sustainable pattern of development.
Moreover, Sinopec Corp. enjoys an
outstanding brand name, plays an important
role in the economy and is a renowned and
reputable company in China.