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This Form 6-K consists of:

A copy of 2021 Annual Report of China Petroleum & Chemical Corporation (the “Registrant”), submitted by the Registrant with The Stock Exchange of Hong Kong Limited on April 21, 2022.

2	Company Profile

3	Principal Financial Data and Indicators

7	Chairman’s Address

11	Business Review and Prospects

19	Management’s Discussion and Analysis

31	Corporate Governance

53	Environment and Social Responsibilities

55	Significant Events

62	Connected Transactions

65	Report of the Board of Directors

75	Report of the Board of Supervisors

77	Changes in Share Capital and Shareholdings of Principal Shareholders

79	Bond General Information

82	Principal Wholly-owned and Controlled Subsidiaries

83	Financial Statements

223	Corporate Information

224	Documents for Inspection

1	FINANCIAL DATA AND INDICATORS PREPARED IN ACCORDANCE WITH CASS

(1)

Principal financial data

	For the year ended 31 December
	2021	2020 After adjustment	2020 Before adjustment	Change	2019 After adjustment	2019 Before adjustment
Items	RMB million	RMB million	RMB million	(%)	RMB million	RMB million
Operating income	2,740,884	2,104,724	2,105,984	30.2	2,957,868	2,959,799
Operating profit	112,414	50,803	50,331	121.3	90,273	90,134
Profit before taxation	108,348	48,441	47,969	123.7	90,250	90,111
Net profit attributable to equity shareholders of the Company	71,208	33,271	32,924	114.0	57,643	57,619
Net profit/(loss) attributable to equity shareholders of the Company excluding extraordinary gains and losses	72,220	(1,565)	(1,565)	–	54,280	54,280
Net cash flow from operating activities	225,174	168,520	167,518	33.6	154,380	153,619

	2021
	First Quarter	Second Quarter	Third Quarter	Fourth Quarter	Total
	RMB million	RMB million	RMB million	RMB million	RMB million
Operating income	576,559	684,214	740,918	739,193	2,740,884
Net profit attributable to equity shareholders of the Company	18,160	21,266	20,603	11,179	71,208
Net profit attributable to equity shareholders of the Company excluding extraordinary gains and losses	17,674	20,746	20,300	13,500	72,220
Net cash flow from operating activities	(15,188)	63,535	68,397	108,430	225,174

	For the year ended 31 December
	2021	2020 After adjustment	2020 Before adjustment	Change	2019 After adjustment	2019 Before adjustment
Items	RMB million	RMB million	RMB million	(%)	RMB million	RMB million
Total assets	1,889,255	1,738,896	1,733,805	8.6	1,765,702	1,760,286
Total liabilities	973,214	850,176	849,929	14.5	882,554	881,912
Total equity attributable to equity shareholders of the Company	775,102	747,294	742,463	3.7	744,738	739,965
Total number of shares (1,000 shares)	121,071,210	121,071,210	121,071,210	–	121,071,210	121,071,210

(2)

Principal financial indicators

	For the year ended 31 December
	2021	2020 After adjustment	2020 Before adjustment	Change	2019 After adjustment	2019 Before adjustment
Items	RMB Yuan	RMB Yuan	RMB Yuan	(%)	RMB Yuan	RMB Yuan
Basic earnings per share	0.588	0.275	0.272	113.8	0.476	0.476
Diluted earnings per share	0.588	0.275	0.272	113.8	0.476	0.476
Basic earnings per share (excluding extraordinary gains and losses)	0.597	(0.013)	(0.013)	–	0.448	0.448
Weighted average return on net assets (%)	9.35	4.46	4.44	4.89 Percentage ponts	7.85	7.90
Weighted average return (excluding extraordinary gains and losses) on net assets (%)	9.49	(0.21)	(0.21)	9.70 percentage points	7.39	7.44
Net cash flow from operating activities per share	1.860	1.392	1.384	33.6	1.275	1.269

	For the year ended 31 December
	2021	2020 After adjustment	2020 Before adjustment	Change	2019 After adjustment	2019 Before adjustment
Items	RMB Yuan	RMB Yuan	RMB Yuan	(%)	RMB Yuan	RMB Yuan
Net assets attributable to equity shareholders of the Company per share	6.402	6.172	6.132	3.7	6.151	6.112
Liabilities to assets ratio (%)	51.51	48.89	49.02	2.62	49.98	50.10
				percentage
				points

(3)

Extraordinary items and corresponding amounts

	For the year ended 31 December
	(Income)/expenses
	2021	2020	2019
Items	RMB million	RMB million	RMB million
Net (gain)/loss on disposal of non-current assets	(665)	(973)	1,318
Donations	165	301	209
Government grants	(3,085)	(8,605)	(6,857)
Gain on holding and disposal of various investments	(259)	(37,520)	(410)
Other non-operating expenses, net	4,720	2,992	634
Net (loss)/profit acquired through business combination under common control during the reporting period	101	(472)	(139)
Subtotal	977	(44,277)	(5,245)
Tax effect	(72)	6,736	1,757
Total	905	(37,541)	(3,488)
Attributable to: Equity shareholders of the Company	1,012	(34,836)	(3,363)
Minority interests	(107)	(2,705)	(125)

(4)

Items measured by fair values

				Influence
	Beginning	End		on the profit
Items	of the year	of the year	Changes	of the year
Other equity instruments	1,525	767	(758)	–
Derivative financial instruments	157	1,350	1,193	(14,873)
Cash flow hedging	7,545	13,798	6,253	10,690
Financial assets held for trading	1	–	(1)	99
Receivables financing	8,735	5,939	(2,796)	–
Total	17,963	21,854	3,891	(4,084)

(5)

Significant changes of items in the financial statements

	As of 31 December		Increase/(decrease)
	2021	2020	Amount	Percentage
Items	RMB million	RMB million	RMB million	(%)	Reasons for change
Operating income	2,740,884	2,104,724	636,160	30.2	A result of sharp increase in the price and sales volume of refining products
Operating costs	2,216,551	1,685,674	530,877	31.5	Increase in procurement cost of raw materials due to the rising prices of commodities including crude oil
Investment income	6,032	47,486	(41,454)	(87.3)	Lump-sum income from the restruction of PipeChina was recognised in 2020
Gains/(Losses) from changes in fair value	3,341	(1,253)	4,594	–	Impact of changes in variable gains and losses on hedged derivatives
Impairment losses	(13,165)	(26,087)	12,922	(49.5)	Decrease in allowance for diminution in value of inventories
Operating profit	112,414	50,803	61,611	121.3	Increase in demand and gross margins of main products
Profit before taxation	108,348	48,441	59,907	123.7	Expansion of operation and increase in the level of gross profit
Income tax expense	23,318	6,344	16,974	267.6	Increase in profit for the year
Net profit	85,030	42,097	42,933	102.0	Increase in operating profit
Cash flow hedges	19,018	7,073	11,945	168.9	Increase in effective portion of cash flow hedges
Derivative financial assets	18,371	12,528	5,843	46.6	Unrealised profit increased from crude oil hedging
Derivative financial liabilities	3,223	4,826	(1,603)	(33.2)
Receivables financing	5,939	8,735	(2,796)	(32.0)	Improvement in fund efficiency and increase of bills turnover
Inventories	207,433	152,191	55,242	36.3	Increase in the prices of crude oil, refined oil products and the cost of inventory
Short-term loans	27,366	20,756	6,610	31.8	Increase in loan of holding subsidiaries.
Accounts payable	203,919	151,514	52,405	34.6	Increase in procurement cost due to increase in the price of crude oil and refined oil
Other payables	114,701	85,012	29,689	34.9	Increase in derivative commodity margins
Net cash flow from operating activities	225,174	168,520	56,654	33.6	Increase in cash income from net profit due to higher gross profit
Net cash received from disposal of subsidiaries and other business entities	5,205	49,869	(44,664)	(89.6)	Mainly due to the cash consideration received from the restruction of PipeChina in 2020
Net cash flow from investing activities	(145,198)	(102,650)	(42,548)	41.4	Mainly because of the cash consideration received from the restruction of PipeChina in 2020
Net cash flow from financing activities	(57,942)	(37,510)	(20,432)	54.5	Increase in actual cash dividend paid for 2021

2	FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH IFRS

	For the year ended 31 December
Items	2021	2020	2019	2018	2017
Revenue	2,740,884	2,104,724	2,957,868	2,879,192	2,347,726
Operating profit	94,628	13,669	86,516	82,884	72,396
Profit before taxation	109,169	48,615	90,161	99,658	87,544
Profit attributable to shareholders of the Company	71,975	33,443	57,517	61,920	51,821
Basic earnings per share (RMB)	0.594	0.276	0.475	0.511	0.428
Diluted earnings per share (RMB)	0.594	0.276	0.475	0.511	0.428
Return on capital employed (%)	11.29	6.22	8.94	9.21	8.27
Return on net assets (%)	9.30	4.48	7.73	8.57	7.08
Net cash generated from operating activities per share (RMB)	1.860	1.392	1.275	1.455	1.579

	As of 31 December
Items	2021	2020	2019	2018	2017
Non-current assets	1,331,231	1,283,236	1,318,258	1,097,045	1,074,985
Net current liabilities	83,256	67,335	133,166	63,514	52,466
Non-current liabilities	332,901	328,199	303,014	170,803	163,387
Non-controlling interests	140,892	141,377	138,359	139,922	127,510
Total equity attributable to shareholders of the Company	774,182	746,325	743,719	722,806	731,622
Net assets per share (RMB)	6.394	6.164	6.143	5.970	6.043
Adjusted net assets per share (RMB)	6.225	5.954	5.993	5.787	5.913

3	MAJOR DIFFERENCES BETWEEN THE AUDITED FINANCIAL STATEMENTS PREPARED UNDER CASS AND IFRS PLEASE REFER TO PAGE 216 OF THE REPORT.

1	MARKET REVIEW

(1)

Crude Oil & Natural Gas Market

(2)

Refined Oil Products Market

(3)

Chemical Products Market

2	PRODUCTION & OPERATION REVIEW

(1)

Exploration and Production

				Change from
	2021	2020	2019	2020 to 2021(%)
Oil and gas production (mmboe)	479.74	459.02	458.92	4.5
Crude oil production (mmbbls)	279.76	280.22	284.22	(0.2)
China	249.60	249.52	249.43	0.0
Overseas	30.16	30.70	34.79	(1.8)
Natural gas production (bcf)	1,199.44	1,072.33	1,047.78	11.9

	Crude oil reserves (mmbbls)
Items	31 December 2021	31 December 2020
Proved reserves	1,749	1,542
Proved developed reserves	1,578	1,389
China	1,291	1,130
Consolidated companies	1,291	1,130
Shengli	961	821
Others	330	309
Overseas	287	259
Consolidated companies	24	15
Equity accounted entities	263	244
Proved undeveloped reserves	171	153
China	125	102
Consolidated companies	125	102
Shengli	17	16
Others	108	86
Overseas	46	51
Consolidated companies	0	5
Equity accounted entities	46	46

	Natural gas reserves (bcf)
Items	31 December 2021	31 December 2020
Proved reserves	8,456	8,191
Proved developed reserves	6,740	6,365
China	6,734	6,357
Consolidated companies	6,734	6,357
Puguang	1,582	1,675
Fuling	1,529	1,491
Others	3,623	3,191
Overseas	6	8
Consolidated companies	0	0
Equity accounted entities	6	8
Proved undeveloped reserves	1,716	1,826
China	1,715	1,824
Consolidated companies	1,715	1,824
Fuling	99	119
Others	1,616	1,705
Overseas	1	2
Consolidated companies	0	0
Equity accounted entities	1	2

	Wells drilled (as of 31 December)
	2021				2020
	Exploratory		Development		Exploratory		Development
	Productive	Dry	Productive	Dry	Productive	Dry	Productive	Dry
China	363	129	1,828	4	383	136	2,015	3
Consolidated companies	363	129	1,828	4	383	136	2,015	3
Shengli	170	58	944	2	204	64	1,080	2
Others	193	71	884	2	179	72	935	1
Overseas	2	1	114	0	2	0	100	0
Consolidated companies	0	0	2	0	0	0	4	0
Equity accounted entities	2	1	112	0	2	0	96	0
Total	365	130	1,942	4	385	136	2,115	3

	Wells drilling (as of 31 December)
	2021				2020
	Gross		Net		Gross		Net
	Exploratory	Development	Exploratory	Development	Exploratory	Development	Exploratory	Development
China	108	201	108	201	92	212	92	212
Consolidated companies	108	201	108	201	92	212	92	212
Shengli	33	55	33	55	29	52	29	52
Others	75	146	75	146	63	160	63	160
Overseas	0	123	0	62	2	0	2	0
Consolidated companies	0	3	0	1	0	0	0	0
Equity accounted entities	0	120	0	61	2	0	2	0
Total	108	324	108	263	94	212	94	212

	Oil productive wells (as of 31 December)
	2021		2020
	Gross	Net	Gross	Net
China	53,851	53,851	53,240	53,240
Consolidated companies	53,851	53,851	53,240	53,240
Shengli	34,991	34,991	34,572	34,572
Others	18,860	18,860	18,668	18,668
Overseas	5,534	2,372	7,055	2,752
Consolidated companies	30	11	28	10
Equity accounted entities	5,504	2,361	7,027	2,742
Total	59,385	56,223	60,295	55,992

	Natural gas productive wells (as of 31 December)
	2021		2020
Region	Gross	Net	Gross	Net
China	7,539	7,489	6,976	6,928
Consolidated companies	7,539	7,489	6,976	6,928
Puguang	79	79	67	67
Fuling	779	779	632	632
Others	6,681	6,631	6,277	6,229
Total	7,539	7,489	6,976	6,928

	Area under license (as of 31 December)
	2021	2020
Acreage with exploration licenses	390,023	436,864
China	390,023	436,864
Acreage with development licenses	42,391	39,195
China	36,480	33,965
Overseas	5,911	5,230

(2)

Refining

				Change from
	2021	2020	2019	2020 to 2021 (%)
Refinery throughput	255.28	236.91	248.52	7.8
Gasoline, diesel and kerosene production	146.21	141.50	159.99	3.3
Gasoline	65.21	57.91	62.77	12.6
Diesel	59.85	63.21	66.06	(5.3)
Kerosene	21.15	20.38	31.16	3.8
Light chemical feedstock production	45.41	40.22	39.78	12.9
Light product yield (%)	73.83	74.34	76.38	(0.51) percentage points
Refinery yield (%)	94.65	94.77	94.98	(0.12) percentage points

(3)

Marketing and Distribution

				Change from
	2021	2020	2019	2020 to 2021 (%)
Total sales volume of oil products (million tonnes)*	220.79	217.91	254.95	1.3
Total domestic sales volume of oil products (million tonnes)	171.31	167.99	184.45	2.0
Retail sales (million tonnes)	114.30	113.19	122.54	1.0
Direct sales and distribution (million tonnes)	57.01	54.80	61.91	4.0
Annual average throughput per station (tonne/station)	3,720	3,686	3,992	0.9

	31 December 2021	31 December 2020	31 December 2019	Change from the end of the previous year to the end of the reporting period (%)
Total number of service stations under the Sinopec brand	30,725	30,713	30,702	0.04
Number of company-operated stations	30,725	30,707	30,696	0.06

(4)

Chemicals

Summary of Operations for the Chemicals Segment

Unit: thousand tonnes

				Change from
	2021	2020	2019	2020 to 2021 (%)
Ethylene	13,380	12,060	12,493	10.9
Synthetic resin	18,999	17,370	17,244	9.4
Synthetic rubber	1,252	1,067	1,047	17.3
Synthetic fiber monomer and polymer	9,201	9,057	10,029	1.6
Synthetic fiber	1,357	1,313	1,289	3.4

(5)

Research and Development

(6)

Health and Safety

(7)

Capital Expenditures

(1)

Market Prospects

(2)

Production & Operation

1	CONSOLIDATED RESULTS OF OPERATIONS

	Year ended 31 December
	2021	2020	Change (%)
	RMB million	RMB million
Revenue	2,740,884	2,104,724	30.2
Revenue from primary business	2,679,500	2,048,654	30.8
Other operating revenues	61,384	56,070	9.5
Operating expenses	(2,646,256)	(2,091,055)	26.6
Purchased crude oil, products and operating supplies and expenses	(2,076,665)	(1,589,821)	30.6
Selling, general and administrative expenses	(54,978)	(53,668)	2.4
Depreciation, depletion and amortisation	(115,680)	(107,461)	7.6
Exploration expenses, including dry holes	(12,382)	(9,716)	27.4
Personnel expenses	(103,492)	(87,525)	18.2
Taxes other than income tax	(259,032)	(235,018)	10.2
Other operating expenses, net	(21,716)	(5,780)	275.7
Operating profit	94,628	13,669	592.3
Net finance costs	(9,010)	(9,510)	(5.3)
Investment income and share of profits less losses from associates and joint ventures	23,551	44,456	(47.0)
Profit before taxation	109,169	48,615	124.6
Income tax expense	(23,318)	(6,344)	267.6
Profit for the year	85,851	42,271	103.1
Attributable to:
Shareholders of the Company	71,975	33,443	115.2
Non-controlling interests	13,876	8,828	57.2

(1)

Revenue

				Average realised price
	Sales volume (thousand tonnes)			(RMB/tonne, RMB/thousand cubic meters)
	Year ended 31 December			Year ended 31 December
	2021	2020	Change (%)	2021	2020	Change (%)
Crude oil	7,162	7,422	(3.5)	3,049	2,029	50.3
Natural gas (million cubic meters)	29,953	26,280	14.0	1,606	1,352	18.8
Gasoline	90,836	86,193	5.4	7,731	6,300	22.7
Diesel	78,335	77,280	1.4	5,891	4,789	23.0
Kerosene	21,270	20,828	2.1	3,772	2,635	43.1
Basic chemical feedstock	36,173	36,683	(1.4)	5,486	3,636	50.9
Monomer and polymer for synthetic fibre	6,955	9,691	(28.2)	6,537	4,297	52.1
Synthetic resin	17,923	17,112	4.7	8,325	7,148	16.5
Synthetic fibre	1,457	1,402	3.9	7,521	6,381	17.9
Synthetic rubber	1,286	1,361	(5.5)	11,099	7,982	39.1
Chemical fertiliser	976	1,177	(17.1)	2,807	1,955	43.6

(2)

Operating expenses

(3)

Operating profit was RMB94.6 billion, representing an increase of 592.3% over the same period of 2020. That was mainly because that with the increase of international crude oil prices and steady improvement of market demand, the Company increased its processing volume and sales volumes which led to an increase in the gross profit margin of petrochemical products and significant improvement of the Company’s operating results.

(4)

Profit before taxation was RMB109.2 billion, representing an increase of 124.6% compared with 2020.

(5)

Income tax expense was RMB23.3 billion, representing an increase of 267.6% year on year. That was mainly due to the taxable income increase as a result of good profit the Company achieved in 2021.

(6)

Profit attributable to non-controlling shareholders was RMB13.9 billion, representing an increase of RMB5.0 billion and 57.2% over the same period of 2020. That was mainly due to the improvement in the profits of our non-wholly owned subsidiaries.

(7)

Profit attributable to shareholders of the Company was RMB72.0 billion, representing a year-on-year increase of 115.2%.

2	RESULTS OF SEGMENT OPERATIONS

	Operating revenues Year ended 31 December		As a percentage of consolidated operating revenue before elimination of inter-segment sales Year ended 31 December		As a percentage of consolidated operating revenue after elimination of inter-segment sales Year ended 31 December
	2021	2020	2021	2020	2021	2020
	RMB million	RMB million	(%)	(%)	(%)	(%)
Exploration and Production Segment
External sales*	162,700	110,242	3.4	3.2	5.9	5.2
Inter-segment sales	87,298	57,513	1.8	1.7
Operating revenues	249,998	167,755	5.2	4.9
Refining Segment
External sales*	173,109	117,847	3.6	3.4	6.3	5.6
Inter-segment sales	1,212,455	826,219	24.9	23.7
Operating revenues	1,385,564	944,066	28.5	27.1
Marketing and Distribution Segment
External sales*	1,404,469	1,097,352	29.0	31.6	51.2	52.1
Inter-segment sales	7,075	4,854	0.1	0.1
Operating revenues	1,411,544	1,102,206	29.1	31.7
Chemicals Segment
External sales*	435,261	330,927	9.0	9.5	16.0	15.2
Inter-segment sales	70,242	40,702	1.4	1.2
Operating revenues	505,503	371,629	10.4	10.7
Corporate and Others
External sales*	565,345	460,210	11.7	13.2	20.6	21.9
Inter-segment sales	732,356	430,073	15.1	12.4
Operating revenues	1,297,701	890,283	26.8	25.6
Operating revenue before elimination of inter-segment sales	4,850,310	3,475,939	100.0	100.0
Elimination of inter-segment sales	(2,109,426)	(1,371,215)
Revenue	2,740,884	2,104,724			100.0	100.0

	Year ended 31 December
	2021	2020	Change
	RMB million	RMB million	(%)
Exploration and Production Segment
Operating revenues	249,998	167,755	49.0
Operating expenses	245,313	184,231	33.2
Operating profit/(loss)	4,685	(16,476)	–
Refining Segment
Operating revenues	1,385,564	944,066	46.8
Operating expenses	1,320,285	949,591	39.0
Operating profit/(loss)	65,279	(5,525)	–
Marketing and Distribution Segment
Operating revenues	1,411,544	1,102,206	28.1
Operating expenses	1,390,340	1,081,378	28.6
Operating profit	21,204	20,828	1.8
Chemicals Segment
Operating revenues	505,503	371,629	36.0
Operating expenses	494,397	360,811	37.0
Operating profit	11,106	10,818	2.7
Corporate and Others
Operating revenues	1,297,701	890,283	45.8
Operating expenses	1,300,926	890,676	46.1
Operating loss	(3,225)	(393)	–
Elimination of inter-segment profit/(loss)	(4,421)	4,417	–

(1)

Exploration and Production Segment

(2)

Refining Segment

	Sales Volume (thousand tonnes)			Average realised price (RMB/tonne)
	Year ended 31 December			Year ended 31 December
	2021	2020	Change (%)	2021	2020	Change (%)
Gasoline	63,827	56,259	13.5	7,208	5,813	24.0
Diesel	58,807	61,167	(3.9)	5,563	4,354	27.8
Kerosene	17,313	17,309	0.0	3,734	2,673	39.7
Chemical feedstock	45,234	39,872	13.5	3,989	2,596	53.7
Other refined petroleum products	68,783	65,353	5.3	5,061	3,004	68.5

(3)

Marketing and distribution segment

	Sales volume (thousand tonnes)			Average realised price (RMB/tonne)
	Year ended 31 December			Year ended 31 December
	2021	2020	Change (%)	2021	2020	Change (%)
Gasoline	90,873	86,216	5.4	7,730	6,370	21.4
Retail	64,325	61,446	4.7	8,223	6,940	18.5
Direct sales and distribution	26,548	24,770	7.2	6,537	4,955	31.9
Diesel	78,566	77,507	1.4	5,890	4,865	21.1
Retail	33,644	36,757	(8.5)	6,537	5,351	22.2
Direct sales and distribution	44,923	40,750	10.2	5,406	4,426	22.1
Kerosene	21,296	20,828	2.2	3,772	2,634	43.2
Fuel oil	25,847	23,331	10.8	3,437	2,536	35.6

(4)

Chemicals segment

	Sales Volume (Thousand tonnes)			Average realised price (RMB/tonne)
	Year ended 31 December			Year ended 31 December
	2021	2020	Change (%)	2021	2020	Change (%)
Basic organic chemicals	48,059	47,109	2.0	5,311	3,569	48.8
Synthetic fibre monomer and polymer	7,010	9,743	(28.1)	6,580	4,302	53.0
Synthetic resin	17,924	17,124	4.7	8,325	7,150	16.4
Synthetic fibre	1,457	1,403	3.8	7,521	6,407	17.4
Synthetic rubber	1,289	1,364	(5.5)	11,104	7,986	39.0
Chemical fertiliser	981	1,181	(16.9)	2,797	1,950	43.4

(5)

Corporate and Others

3	ASSETS, LIABILITIES, EQUITY AND CASH FLOWS

(1)

Assets, liabilities and equity

	As of 31 December 2021	As of 31 December 2020	Change
Total assets	1,889,255	1,738,896	150,359
Current assets	558,024	455,660	102,364
Non-current assets	1,331,231	1,283,236	47,995
Total liabilities	974,181	851,194	122,987
Current liabilities	641,280	522,995	118,285
Non-current liabilities	332,901	328,199	4,702
Total equity attributable to shareholders of the Company	774,182	746,325	27,857
Share capital	121,071	121,071	–
Reserves	653,111	625,254	27,857
Non-controlling interests	140,892	141,377	(485)
Total equity	915,074	887,702	27,372

(2)

Cash Flow

Major items of cash flows	Year ended 31 December
	2021	2020
Net cash generated from operating activities	225,174	168,520
Net cash used in investing activities	(145,198)	(102,650)
Net cash used in financing activities	(57,942)	(37,510)

(3)

Contingent Liabilities

(4)

Capital Expenditure

(5)

Research & Development and Environmental Expenditures

(6)

Measurement of fair values of derivatives and relevant system

Items	Beginning of the year	End of the year	Profits and losses from variation of fair values in the current year	Accumulated variation of fair values recorded as equity	Impairment loss provision of the current year	Funding source
Financial assets held for trading	1	–	–	–	–	Self-owned fund
Stock	1	–	–	–	–
Derivative financial instruments	157	1,350	(14,873)	–	–	Self-owned fund
Cash flow hedges	7,545	13,798	694	15,659	–	Self-owned fund
Other equity instruments investment	1,525	767	–	(6)	–	Self-owned fund
Total	9,228	15,915	(14,179)	15,653	–

4	ANALYSIS OF FINANCIAL STATEMENTS PREPARED UNDER CASs

(1)

Under CASs, the operating income and operating profit or loss by reportable segments were as follows:

	Year ended 31 December
	2021	2020
	RMB million	RMB million
Operating income
Exploration and Production Segment	249,998	167,755
Refining Segment	1,385,564	944,066
Marketing and Distribution Segment	1,411,544	1,102,206
Chemicals Segment	505,503	371,629
Corporate and Others	1,297,701	890,283
Elimination of inter-segment sales	(2,109,426)	(1,371,215)
Consolidated operating income	2,740,884	2,104,724
Operating profit/(loss)
Exploration and Production Segment	613	(20,570)
Refining Segment	65,360	(6,526)
Marketing and Distribution Segment	23,102	19,634
Chemicals Segment	11,361	9,592
Corporate and Others	9,521	(2,048)
Elimination of inter-segment sales	(4,421)	4,417
Financial expenses, investment income, losses from changes in fair value, other income and asset disposal gains/(losses)	6,878	46,304
Consolidated operating profit	112,414	50,803
Net profit attributable to equity shareholders of the Company	71,208	33,271

(2)

Financial data prepared under CASs

	As of 31	As of 31
	December 2021	December 2020	Change
	RMB million	RMB million
Total assets	1,889,255	1,738,896	150,359
Non-current liabilities	331,934	327,181	4,753
Shareholder’s equity	916,041	888,720	27,321

(3)

The results of the principal operations by segments

Segments	Operation income RMB million	Operation cost RMB million	Gross profit margin* (%)	Increase of operation income on a year-on-year basis (%)	Increase of operation cost on a year-on- year basis (%)	Increase/ (decrease) of gross profit margin on a year-on-year basis (%)
Exploration and Production	249,998	206,332	12.9	49.0	37.3	7.0
Refining	1,385,564	1,061,650	6.0	46.8	50.8	4.0
Marketing and Distribution	1,411,544	1,317,918	6.4	28.1	29.4	(0.9)
Chemicals	505,503	466,971	6.9	36.0	38.8	(2.0)
Corporate and Others	1,297,701	1,268,685	2.2	45.8	45.1	0.4
Elimination of inter-segment sales	(2,109,426)	(2,105,005)	N/A	N/A	N/A	N/A
Total	2,740,884	2,216,551	9.7	30.2	31.5	0.9

*:

Gross profit margin = (operation income – operation cost, tax and surcharges)/operation income.

5	THE CAUSE AND IMPACT OF THE CHANGE IN THE COMPANY’S ACCOUNTING POLICY, ACCOUNTING ESTIMATES AND ACCOUNTING METHODS

1	IMPROVEMENTS IN CORPORATE GOVERNANCE DURING THE REPORTING PERIOD

2	GENERAL MEETINGS

3	EQUITY INTERESTS OF DIRECTORS, SUPERVISORS AND OTHER SENIOR MANAGEMENT

4	COMPANY’S INDEPENDENCE FROM CONTROLLING SHAREHOLDER

5	COMPETITION BETWEEN SINOPEC CORP. AND ITS CONTROLLING SHAREHOLDER

6	IMPROVEMENT AND IMPLEMENTATION OF THE INTERNAL CONTROL SYSTEM

7	MANAGEMENT CONTROL OF SUBSIDIARIES

8	SENIOR MANAGEMENT APPRAISAL AND INCENTIVE SCHEMES

9	CORPORATE GOVERNANCE REPORT (IN ACCORDANCE WITH HONG KONG LISTING RULES)

(1)

Compliance with the Corporate Governance Code

A	Board of Directors

A.1

Board of Directors

a.

The Board is the decision-making body of Sinopec Corp. and abides by good corporate governance practices and procedures. All decisions made by the Board are implemented by the Management of Sinopec Corp.

b.

The Board of the Company held its meetings at least once a quarter. The Board will usually communicate the time and proposals of the Board meeting 14 days before convening of the meeting. The relevant documents and materials for Board meetings are usually delivered to each Director 10 days in advance. In 2021, Sinopec Corp. held seven Board meetings. For details about each Director’s attendance at the Board meetings and the general meetings, please refer to the section “Report of the Board of Directors” in this annual report.

c.

Each Director of the Board can submit proposals to be included in the agenda of Board meetings, and each Director is entitled to request other related information.

d.

The Board has reviewed and evaluated its performance in 2021 and is of the view that the Board made decisions in compliance with domestic and overseas regulatory authorities’ requirements and the Company’s internal rules; that the Board has considered the suggestions from the Party organisation, Board of Supervisors and management during its decision-making process; and that the Board safeguarded the legitimate rights and interests of Sinopec Corp. and its shareholders.

e.

The Secretary to the Board assists the Directors in handling the day-to-day work of the Board, continuously informs the Directors of the regulations, policies or other requirements of domestic or overseas regulatory authorities in relation to corporate governance and ensures that the Directors comply with domestic and overseas laws and regulations when performing their duties and responsibilities. Sinopec Corp. has purchased liability insurance for all Directors to minimise the potential risks that might arise from the adequate performance of their duties.

A.2

Chairman and President

a.

Mr. Ma Yongsheng serves as Chairman of the Board and Mr. Yu Baocai serves as President of Sinopec Corp. The Chairman of the Board is elected by a majority vote of all Directors, and the President is nominated and appointed by the Board. The respective main duties and responsibilities of the Chairman and the President are clearly distinguished from each other, and the scope of their respective duties and responsibilities are set out in the Articles of Association.

b.

The Chairman of the Board places great emphasis on communication with the Independent Non-executive Directors. The Chairman independently held three meetings with the Independent Non-executive Directors in respect of development strategy, corporate governance, and operational management, etc.

c.

The Chairman encourages open and active discussions. The Directors fully and deeply participated in the discussions of significant decisions in the Board meetings.

A.3

Board composition

a.

The Board of Directors currently consists of ten members, among whom are four Executive Directors and six Non-executive Directors. Among the Non-executive Directors, there are four Independent Non-executive Directors, accounting for two-fifths of the total number of Directors. For details, please refer to the section “Directors, Supervisors, Senior Management and Employees” of this annual report.

b.

Sinopec Corp. has received from each of the Independent Non-executive Directors a letter of confirmation for 2022 regarding their compliance with relevant independence requirements set out in Rule 3.13 of the Hong Kong Listing Rules. Sinopec Corp. considers that each of the Independent Non-executive Directors is independent.

A.4

Appointment, re-election and dismissal

a.

The Directors serve three-year terms, and the consecutive terms of office of any Independent Non-executive Director cannot exceed six years. In May 2021, Mr. Zhang Yuzhuo, Mr. Ma Yongsheng, Mr. Zhao Dong, Mr. Yu Baocai, Mr. Ling Yiqun, Mr. Li Yonglin, Mr. Liu Hongbin, Mr. Cai Hongbin, Mr. Ng, Kar Ling Johnny, Ms. Shi Dan, and Mr. Bi Mingjian, nominated by the Board of Directors as the candidates for the eighth session of the Board based on the actual needs of the Company, were elected by the general meeting of shareholders as Directors of the Company; Mr. Ma Yongsheng was elected by the Board of Directors as Chairman of the Board of Directors of Sinopec Corp on 29 November 2021. For details about the tenure of each Director, please refer to the section “Directors, Supervisors, Senior Management and Employees”.

(1)

Mr. Bi was not a relationship holder of the Company or China Petrochemical Corporation in CICC throughout his service in CICC;

(2)

Other than being a consultant ending in March 2022, which is of honorary nature, Mr. Bi does not involve in the management or operation of CICC, and Mr. Bi has not had any engagement with CICC, nor holds any position in CICC after his retirement;

(3)

Mr. Bi holds no share in the Company or China Petrochemical Corporation as at the date of this report;

(4)

Mr. Bi holds 1,501,451 shares in CICC, representing 0.03% of the total issued shares of CICC as at the date of this report, which constitutes a minimal part of the share capital of CICC and is immaterial in the context of independence, and Mr. Bi does not have any other economic interest in or in association with CICC;

(5)

Mr. Bi has not involved or participated in, and will not involve or participate in, any transaction (if any) between the Company (or its controlling shareholder, or their respective subsidiaries or core connected persons) and CICC in his capacity as a consultant of CICC; and

(6)

Mr. Bi has met all requirements under Rule 3.13 (other than Rule 3.13(3)) of the Hong Kong Listing Rules (“Listing Rules”) and there are no other matters that would potentially compromise Mr. Bi’s compliance with the independence criterion as set out in Rule 3.13.

b.

All Directors of Sinopec Corp. have been elected at the general meeting of shareholders. The Board has no power to appoint temporary Directors.

c.

Sinopec Corp. engages professional consultants to prepare detailed materials for newly elected Directors, to notify them of the regulations of each listing place of Sinopec Corp. and to remind them of their rights, responsibilities, and obligations as Directors.

A.5

Nomination Committee

a.

The Board of Directors established Nomination Committee, consisting of the Independent Non-executive Director, Ms. Shi Dan, who serves as the chairman, and the Chairman of the Board, Mr. Ma Yongsheng, and Mr. Ng, Kar Ling Johnny, who serve as members. The principal responsibilities of Nomination Committee are to provide suggestions to the Board on Board’s size and composition, the selecting standards and procedures, and candidates for Directors and senior management. Procedures to Propose a Person for Election as a Director of Sinopec Corp. are published on Sinopec Corp.’s website at http://www.sinopec.com.

b.

The Board established the Board Diversity Policy which stipulates that the members of the Board shall be nominated and appointed based on the skills and experience for the overall optimum operation of the Board, while taking into account the targets and requirements of the board diversity. When deciding the composition of the Board, Sinopec Corp. shall consider several factors in relation to the diversity of the Board, including but not limited to professional experience, skills, knowledge, length of service, regions, cultural and educational backgrounds, gender, and age. The provisions of the Articles of Association concerning the term of office of directors help to ensure that the Board of Directors has a proper balance between continuous experience and new thinking, and enhance the level of diversity. Sinopec Corp. focuses on the implementation of the Board Diversity Policy. Currently, the Board has achieved diversity in terms of gender, culture, educational backgrounds, professional specialties, etc. The Directors come from different industries at home and abroad with rich work experience. Professional backgrounds of Directors include petroleum and petrochemical corporate management, as well as economics, accounting, finance, and industry and energy economy, which are conductive to strategic planning and scientific decision-making.

c.

The members of the Nomination Committee can engage professionals when performing their duties. Reasonable costs arising from such consultations are borne by Sinopec Corp. In the meantime, the Nomination Committee has also appointed consultant members and can require such member to provide advice. The working expenses of the Nomination Committee are included in the budget of Sinopec Corp.

d.

During the reporting period, the Nomination Committee held two meetings (please refer to “Meetings Held by the Board Committees” under the section “Report of the Board of Directors” in this annual report).

A.6

Responsibility of Directors

a.

All Non-executive Directors have the same duties and powers as the Executive Directors. In addition, the Independent Non-executive Directors are entitled to certain specific powers. The Articles of Association and the Rules of Procedure of Board Meetings clearly prescribe the duties and powers of Directors, Non-executive Directors including Independent Non-executive Directors, which are published on the Sinopec Corp.’s website at http://www.sinopec.com.

b.

Each of the Directors was able to devote sufficient time and efforts to handling the affairs of Sinopec Corp.

c.

Each of the Directors confirmed that he/she has complied with the Model Code for Securities Transactions by Directors of Listed Issuers during the reporting period. Meanwhile, Sinopec Corp. formulated the Rules Governing Shares Held by Company Directors, Supervisors and Senior Managers and Changes in Shares and the Model Code of Securities Transactions by Company Employees to regulate the purchase and sale of Sinopec Corp.’s securities by relevant personnel.

d.

Sinopec Corp. organised and arranged training sessions for Directors and paid the relevant fees as well as making relevant records. During the reporting period, the Directors actively participated in the trainings and attached great importance to continuing professional development to ensure that their contribution to the Board remains informed and relevant.

A.7

Provision and use of information

a.

The agenda and other documents for reference for meetings of the Board and Board committees are distributed prior to the meetings to allow each Director sufficient time to review the materials so that Directors can make informed decisions.

b.

Each Director can obtain all related information in a comprehensive and timely manner. The Secretary of the Board is responsible for organising and preparing the materials for the Board meetings, including preparation of explanations for each proposal to ensure fully understanding by the Directors. The Management is responsible for providing the Directors with necessary information and materials. The Directors may require the Management, or require, via the Management, relevant departments to provide necessary information or explanations. The Directors may seek advice from professional consultants when necessary.

B	REMUNERATION AND APPRAISAL COMMITTEE

a.

Remuneration and Appraisal Committee (“Remuneration Committee”) consists of Independent Non-executive Director, Mr. Bi Mingjian, who serves as the Chairman, and the Chairman of the Board, Mr. Ma Yongsheng and the Independent Non-executive Director, Mr. Ng, Kar Ling Johnny, who serve as the members of the Remuneration Committee. The Remuneration Committee is responsible for reviewing the implementation of the annual remuneration plans for Directors, Supervisors, and other senior management as approved at the general meeting of the shareholders, and reporting to the Board.

b.

The Remuneration Committee always consults the Chairman of the Board and the President about the remuneration plans for other Executive Directors. After the Remuneration Committee’s review, it is of the view that all the Executive Directors of Sinopec Corp. have fulfilled the duty clauses in their service contracts in 2021.

c.

The members of the Remuneration Committee can engage independent professionals when performing its duties. Reasonable costs arising from such consultations are borne by Sinopec Corp. In the meantime, the Remuneration Committee has also appointed consultant members and can require such members to provide advice. The working expenses of the Remuneration Committee are included in the budget of Sinopec Corp. According to the policies of Sinopec Corp., the senior management and relevant departments of Sinopec Corp. shall actively cooperate with the Remuneration Committee.

d.

During the reporting period, the Remuneration Committee held one meeting (please refer to “Meetings Held by the Board Committees” under the section of “Report of the Board of Directors” in this annual report).

C	ACCOUNTABILITY AND AUDITING

C.1

Financial reporting

a.

Directors are responsible for supervising the preparation of accounts for each fiscal period to ensure that the accounts truly and fairly reflect the condition of the business, the performance, and the cash flow of the Company during the period. The Board approved the Financial Report for 2021 and warranted that the annual report contained no false representations, no material omissions or misleading statements and jointly and severally accepted full responsibility for the authenticity, accuracy, and completeness of the content.

b.

Sinopec Corp. provides Directors with information about the financial, production and operating data of the Company, capital market updates, and securities regulatory developments every month to ensure that the Directors can learn about the latest developments of the Company and regulatory changes in a timely manner.

c.

Sinopec Corp. has adopted an internal control mechanism to ensure that the Management and relevant departments have provided the Board and the Audit Committee with sufficient financial data and related explanations and materials.

d.

The external auditors of Sinopec Corp. made a statement on their reporting responsibilities in the auditor’s report contained in the financial report.

C.2

Internal Control and Risk Management

a.

Sinopec Corp. has formulated and implemented its internal control and risk management system. The Board as a decision-making body is responsible for evaluating and reviewing the effectiveness of its internal control and risk management. The Board and the Audit Committee periodically (at least annually) receive reports of the Company regarding internal control and risk management information from the Management. All major internal control and risk management issues are reported to the Board and the Audit Committee. Sinopec Corp. has set up its internal control and risk management department and internal auditing departments, which are equipped with sufficient staff, and these departments periodically (at least twice per year) report to the Audit Committee. The internal control and risk management system of the Company are designed to manage rather than eliminate all the risks of the Company.

b.

In terms of internal control, Sinopec Corp. adopted the internal control framework prescribed in the internationally accepted Committee of Sponsoring Organisations of the Treadway Commission Report (“COSO”). Based upon the Articles of Association and the applicable management policies currently in effect, as well as in accordance with relevant domestic and overseas applicable regulations, Sinopec Corp. formulates and continuously improves the Internal Control Manual to achieve internal control of all factors of internal environment, risk assessment, controlling activities, information and communication, and internal supervision. At the same time, Sinopec Corp. has constantly supervised and evaluated its internal control, and conducted comprehensive and multi-level inspections including regular test, enterprise self-examination and auditing check, and included headquarters, branches and subsidiaries into the scope of internal control evaluation, with an internal control evaluation report being produced. The Board annually reviews the internal control evaluation report. For detailed information about the internal control during the reporting period, please refer to the “Report on Internal Control Evaluation” prepared by Sinopec Corp.

c.

In terms of risk management, Sinopec Corp. adopts the enterprise risk management framework provided by COSO, and establishes its risk management policy and risk management organisation system. The Company annually conducts risk evaluation to identify major and important risks and perform risk management duties. It has designed major and important risks tackling strategies and measures combined with its internal control system and periodically monitors their implementation to ensure adequate care, monitor and tackling of major risks.

d.

Based upon the review and evaluation of internal control and risk management of the reporting period, the Board is of the view that the internal control and risk management of the Company are effective.

C.3

Audit Committee

a.

The Board has established an Audit Committee. The Audit Committee consists of Independent Non-executive Director, Mr. Ng, Kar Ling Johnny, who serves as the Chairman, and Independent Non-executive Directors, Mr. Cai Hongbin, Ms. Shi Dan, and Mr. Bi Mingjian, who serve as members.

b.

During the reporting period, the Audit Committee held five meetings (please refer to the “Meetings Held by the Board Committees” under the section of “Report of the Board of Directors” in this annual report). The review opinions were issued at each meeting and submitted to the Board. During the reporting period, the Board and the Audit Committee had no disagreement.

c.

Audit Committee can engage independent professionals when performing its duties. Reasonable costs arising from such consultations are borne by Sinopec Corp. In the meantime, the Audit Committee has appointed consultant members and can request such members to provide advice. The working expenses of the Audit Committee are included in the budget of Sinopec Corp. In accordance with the policies of Sinopec Corp., the senior management and relevant departments of Sinopec Corp. shall actively cooperate with the Audit Committee.

d.

The Audit Committee has reviewed the adequacy and sufficiency of the resources for accounting and financial reporting and the qualifications and experience of the relevant employees as well as the sufficiency of the training courses and the budget thereof. Audit Committee is of the view that the Management has fulfilled the duties to establish an effective internal control system. The Company established a whistle-blowing policy in its internal control system, providing several channels including online reporting, reporting by letters, appeals and complaint mailbox, etc. to employees to report behaviour that violates the internal control system of the Company. The Audit Committee has reviewed and approved such policy.

D	DELEGATION OF POWER BY THE BOARD

a.

The Board and the Management have clear duties and responsibilities under written rules. The Articles of Association and the Rules of Procedure for the General Meetings of Shareholders and the Rules of Procedure of the Board Meetings clearly set forth the scope of duties, powers, and delegation of power of the Board and Management, which are published on the website of Sinopec Corp. at http://www.sinopec.com.

b.

In addition to the Audit Committee, the Remuneration Committee and Nomination Committee, the Board had established the Strategy Committee and the Sustainable Development Committee (formerly known as Social Responsibility Management Committee). The Strategy Committee is responsible for overseeing long-term development strategies and significant investment decisions of the Company. The Strategy Committee consists of eight Directors, including the Chairman of the Board, Mr. Ma Yongsheng, who serves as Chairman, Executive Directors, Mr. Yu Baocai, Mr. Ling Yiqun, Mr. Li Yonglin, Mr. Liu Hongbin, and Independent Non-executive Directors, Mr. Cai Hongbin, Ms. Shi Dan, and Mr. Bi Mingjian, who serve as members. The Sustainable Development Committee (formerly known as Social Responsibility Management Committee) is responsible for preparing policies, governance, strategies and plans for sustainable development of the Company, which consists of four Directors, including the Chairman of the Board, Mr. Ma Yongsheng, who serves as Chairman, the Non-executive Director, Mr. Zhao Dong, the Executive Director, Mr. Li Yonglin, and the Independent Non-executive Director, Mr. Cai Hongbin, who serve as members.

c.

Each Board Committee shall report its decisions and recommendations to the Board and has formulated its terms of references. The Terms of Reference of the Audit Committee, the Terms of Reference of the Remuneration Committee, the Terms of Reference of the Nomination Committee and the Terms of Reference of the Nomination Committee are published on the website of Sinopec Corp. at http://www.sinopec.com.

E	INVESTOR RELATIONS

a.

Sinopec Corp. attach considerable significance to investor relations. The Management attends road shows every year to answer questions on subjects of concern to investors, such as introducing the development strategies and the production and business performance of the Company. The Board Secretariat of Sinopec Corp. is responsible for communicating with investors. In compliance with regulatory provisions, Sinopec Corp. enhances communication with investors by holding meetings with institutional investors, setting up an investor hotline, and communicating through internet platform, etc.

b.

During the reporting period, separate resolutions were proposed for each substantially separate issue at the general meeting of shareholders. All resolutions were voted by poll in protection of the interest of all shareholders. Notices of the general meeting were dispatched to shareholders 45 days (excluding the date of the general meeting) in advance.

c.

The Chairman (or the director who performs the duties of Chairman) of the Board hosted the annual general meeting for the year 2020 and the First Extraordinary General Meeting for the year 2021. Several members of the Board of Directors, the Board of Supervisors, and senior management attended the meetings and conducted in-depth communication with the investors.

d.

According to relevant rules of Sinopec Corp., the Secretary to the Board is responsible for establishing an effective communication channel between Sinopec Corp. and its shareholders, for setting up special departments to communicate with the shareholders and for passing the opinions and proposals of the shareholders to the Board and Management in a timely manner. Contact details of Sinopec Corp. can be found in the “Investor Centre” column on Sinopec Corp.’s website.

F	COMPANY SECRETARY

a.

The Hong Kong Stock Exchange recognised the Secretary to the Board as having the relevant qualifications as company Secretary. Nominated by the Chairman of the Board and appointed by the Board, the Secretary to the Board is a senior management officer of Sinopec Corp. and responsible for the Company and the Board. The Secretary gives opinions on corporate governance to the Board and arranges orientation training and professional development for the Directors.

b.

During the reporting period, the Secretary to the Board actively participated in career development training for more than 15 training hours.

G	SHAREHOLDERS’ RIGHTS

a.

Shareholders who individually or collectively hold 10% of the total voting shares of Sinopec Corp. may request the Board in writing to convene the general meeting of shareholders. If the Board fails to approve the request to convene the meeting according to the Rules of Procedure for General Meetings of Shareholders, the shareholders may convene and hold the meeting at their discretion according to applicable laws, and reasonable expenses incurred will be borne by Sinopec Corp. These aforementioned provisions are subject to the following conditions: the proposals at the general meeting of shareholders must fall within the responsibilities of the general meeting of shareholders, with specific proposals and resolutions and in compliance with relevant laws, administrative regulations and the Articles of Association.

b.

When Sinopec Corp. holds the general meeting of shareholders, shareholders who individually or collectively hold 3% of the total voting shares of Sinopec Corp. may propose a supplemental proposal 10 days before the date of the general meeting.

c.

The eligibility for attending the general meeting, the rights of shareholders, the resolutions at the meeting and the voting procedures are clearly stated in the notice of the general meeting of shareholders of Sinopec Corp. dispatched to the shareholders.

d.

Sinopec Corp. has established a special organisation for communication with shareholders and publishes relevant contact details to facilitate shareholders to make enquiries in accordance with Articles of Association.

(2)

Auditors

(3)

Other information about Sinopec Corp.’s corporate governance

10	DETAILED IMPLEMENTATION OF THE SHARE INCENTIVE SCHEME DURING THE REPORTING PERIOD

11	INTRODUCTION OF DIRECTORS, SUPERVISORS AND OTHER SENIOR MANAGEMENT

(1)

Directors

Name	Gender	Age	Position in Sinopec Corp.	Tenure	Remuneration paid by in 2021 (RMB1,000, before tax)	Whether paid by the holding Company	Equity interests in Sinopec Corp. (as at 31 December)
							2021	2020
Ma Yongsheng	Male	60	Board Director, President	2016.02-2024.05	715.3	No	0	0
Zhao Dong	Male	51	Board Director	2021.05-2024.05	–	Yes	0	0
Yu Baocai	Male	57	Board Director, President	2018.10-2024.05	441.8	No	0	0
Ling Yiqun	Male	59	Board Director, Senior Vice President	2018.05-2024.05	–	Yes	13,000	13,000
Li Yonglin	Male	55	Board Director, Senior Vice President	2021.05-2024.05	–	Yes	0	0
Liu Hongbin	Male	59	Board Director, Senior Vice President	2020.05-2024.05	–	Yes	0	0
Cai Hongbin	Male	54	Independent Director	2018.05-2024.05	416.7	No	0	0
Ng, Kar Ling Johnny	Male	61	Independent Director	2018.05-2024.05	416.7	No	0	0
Shi Dan	Female	60	Independent Director	2021.05-2024.05	300.0	No	0	0
Bi Mingjian	Male	66	Independent Director	2021.05-2024.05	300.0	No	0	0

Name	Gender	Age	Position in Sinopec Corp.	Tenure	Remuneration paid by in 2021 (RMB1,000, before tax)	Whether paid by the holding Company	Equity interests in Sinopec Corp. (as at 31 December)
Zhang Yuzhuo	Male	60	Former Chairman	2020.03-2021.08	–	Yes	0	0
Zhang Shaofeng	Male	50	Former Director	2020.09-2021.05	–	Yes	0	0
Tang Min	Male	68	Former Independent Director	2015.05-2021.05	116.7	No	0	0

(2)

Supervisors

Name	Gender	Age	Position in Sinopec Corp.	Tenure	Remuneration paid by Sinopec Corp. in 2021 (RMB1,000, before tax)	Whether paid by the shareholders of the Company or their related entities	Equity interests in Sinopec Corp. (as of 31 December)
							2021	2020
Zhang Shaofeng	Male	50	Chairman of the Board of Supervisors	2021.05-2024.05	–	Yes	0	0
Jiang Zhenying	Male	57	Supervisor	2018.05-2024.05	–	Yes	0	0
Zhang Zhiguo	Male	59	Supervisor	2021.05-2024.05	–	Yes	0	0
Yin Zhaolin	Male	56	Supervisor	2021.05-2024.05	–	Yes	0	0
Guo Hongjin	Male	56	Supervisor	2021.05-2024.05	403.2	No	0	0
Li Defang	Male	60	Employee Representative Supervisor	2020.05-2024.05	298.4	No	40,000	40,000
Lv Dapeng	Male	60	Employee representative Supervisor	2021.01-2024.05	417.2	No	0	0
Chen Yaohuan	Male	58	Employee Representative Supervisor	2021.01-2024.05	1,165.4	No	0	0

Name	Gender	Age	Position in Sinopec Corp.	Tenure	Remuneration paid by in 2020 (RMB1,000 before tax)	Whether paid by the shareholders of the Company or their related entities	Equity interests in Sinopec Corp. (as of 31 December)
							2021	2020
Zhao Dong	Male	51	Former Chairman of the Board of supervisor	2017.06-2021.05	–	Yes	0	0
Zou Huiping	Male	61	Supervisor	2006.05-2021.01	0	No	0	0
Sun Huanquan	Male	57	Employee Representative Supervisor	2020.05-2021.01	–	Yes	0	0
Yu Renming	Male	58	Employee Representative Supervisor	2010.12-2021.01	–	Yes	0	0

(3)

Other Members of Senior Management

Name	Gender	Age	Position in Sinopec Corp.	Remuneration paid by Sinopec Corp. in 2021 (RMB1,000, before tax)	Whether paid by the shareholders of the Company or their related entities	Equity interests in Sinopec Corp. (as of 31 December)
						2021	2020
Chen Ge	Male	59	Senior Vice President	1,586.7	No	0	0
Yu Xizhi	Male	59	Vice President	1,411.0	No	0	0
Shou Donghua	Female	52	Chief Financial Officer	1,292.4	No	0	0
Zhao Rifeng	Male	59	Vice President	1,451.9	No	0	0
Huang Wensheng	Male	55	Vice President, Board Secretary	1,407.9	No	0	0

12	INFORMATION ON APPOINTMENT OR TERMINATION OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT

13	CHANGE OF SHAREHOLDING OF DIRECTORS, SUPERVISORS, AND THE SENIOR MANAGEMENT

14	CONTRACTUAL INTERESTS OF DIRECTORS AND SUPERVISORS

15	CONTRACTS WITH DIRECTORS AND SUPERVISORS

16	REMUNERATION OF DIRECTORS, SUPERVISORS, AND THE SENIOR MANAGEMENT

17	THE COMPANY’S EMPLOYEES

18	CHANGES OF CORE TECHNICAL TEAM OR KEY TECHNICIANS

19	EMPLOYEE BENEFITS SCHEME

20	REMUNERATION POLICY

21	TRAINING PROGRAMS

1	WORK CONDUCTED IN ECOLOGICAL PROTECTION, POLLUTION PREVENTION AND ENVIRONMENTAL RESPONSIBILITIES IMPLEMENTATION IN THE REPORTING PERIOD

2	MEASURES TAKEN TO MITIGATE CARBON EMISSION AND ITS EFFECT IN THE REPORTING PERIOD

3	ENVIRONMENTAL PROTECTION SOLUTIONS OF COMPANIES AND THEIR SUBSIDIARIES AS MAJOR POLLUTANT DISCHARGING COMPANIES IDENTIFIED BY ENVIRONMENTAL PROTECTION DEPARTMENTS

(1)

Pollutant discharge information

(2)

Construction and operation of pollution prevention facilities

(3)

Environmental influence evaluation for construction projects and other administrative permit for environmental protection

(4)

Contingent scheme for sudden environmental incident

(5)

Scheme for environment self-monitoring

(6)

Administrative penalties due to environmental problems in the reporting period

(7)

Other environmental information to be disclosed

4	EXPAND THE ACHIEVEMENTS IN POVERTY-ALLEVIATION AND RURAL REVITALIZATION

5	SUPPORT THE WINTER OLYMPIC AND PARALYMPIC GAMES BEIJING 2022

1	MAJOR PROJECTS

(1)

Zhenhai refining & chemical expansion project (phase 1)

(2)

Zhenhai refining & chemical expansion project (phase 2)

(3)

Tianjin Nanggang ethylene and downstream high-end new material industry cluster project

(4)

Wuhan de-bottleneck project

(5)

Hainan 1,000,000 tpa ethylene and refining expansion project

(6)

Yifzheng PTA project

(7)

Weirong shale gas project (phases 1 & 2)

(8)

Tianjin LNG project (phase 2)

(9)

Longkou LNG project

2	PURCHASE OF EQUITY AND NON-EQUITY ASSETS

3.	THE TRANSACTIONS WITH CHINA OIL & GAS PIPELINE NETWORK CORPORATION (PIPECHINA)

4	PERFORMANCE OF THE UNDERTAKINGS BY CHINA PETROCHEMICAL CORPORATION

Background	Type of Undertaking	Party	Contents	Term for performance	Whether bears deadline or not	Whether strictly performed or not
Undertakings related to Initial Public Offerings (IPOs)	IPOs	China Petrochemical Corporation	1 Compliance with the connected transaction agreements;	From 22 June 2001	No	Yes
			2 Solving the issues regarding the legality of land-use rights certificates and property ownership rights certificates within a specified period of time;
			3 Implementation of the Reorganisation Agreement (please refer to the definition of Reorganisation Agreement in the H share prospectus of Sinopec Corp.);
			4 Granting licenses for intellectual property rights;
			5 Avoiding competition within the same industry;
			6 Abandonment of business competition and conflicts of interest with Sinopec Corp.
Other undertakings	Other	China Petrochemical Corporation	Given that China Petrochemical Corporation engages in the same or similar businesses as Sinopec Corp. with regard to the exploration and production of overseas petroleum and natural gas, China Petrochemical Corporation hereby grants a 10-year option to Sinopec Corp. with the following provisions: (i) after a thorough analysis from political, economic and other perspectives, Sinopec Corp. is entitled to require China Petrochemical Corporation to sell its overseas oil and gas assets owned as of the date of the undertaking and still in its possession upon Sinopec Corp.’s exercise of the option to Sinopec Corp.; (ii) in relation to the overseas oil and gas assets acquired by China Petrochemical Corporation after the issuance of the undertaking, within 10 years of the completion of such acquisition, after a thorough analysis from political, economic and other perspectives, Sinopec Corp. is entitled to require China Petrochemical Corporation to sell these assets to Sinopec Corp. China Petrochemical Corporation undertakes to transfer the assets as required by Sinopec Corp. under aforesaid items (i) and (ii) to Sinopec Corp., provided that the exercise of such option complies with applicable laws and regulations, contractual obligations and other procedural requirements.	Within 10 years after 29 April 2014 or the date when China Petrochemical Corporation acquires the assets	Yes	Yes

5	MATERIAL GUARANTEE CONTRACTS AND THEIR PERFORMANCE

Major external guarantees (excluding guarantees for controlled subsidiaries)

Guarantor

Relationship with the Company

Name of guaranteed company

Amount*1

Transaction date (date of signing)

Period of guarantee

Type

Principal debt condition

guaranty

Whether Completed or not

Whether overdue or not

Amount of overdue guarantee

Counter-guaranteed

Whether guaranteed for connected parties yes or no)*2

Sinopec Corp.

The listed company itself

Zhongtian Hechuang Energy Co., Ltd

5,746

May-16

May 2016-December 2023 (the mature date is estimated)

Joint and several liability guarantee

Normal performance

–

No

No

–

No

No

Sinopec Corp.

The listed company itself

Zhong An United Coal Chemical Co., Ltd.

5,680

Apr-18

April 2018-December 2031

Joint and several liability guarantee

Normal performance

–

No

No

–

No

No

Sinopec Corp.

The listed company itself

Russian Amur Natural Gas Chemical Integrated LLC

3,264*4

Dec-21

December 2021-December 2035 (the mature date is estimated)

Joint and several liability guarantee

Normal performance

–

No

No

–

No

No

Sinopec Corp.

The listed company itself

Russian Amur Natural Gas Chemical Integrated LLC

173

Jan-21

January 2021-June 2026 (the mature date is estimated

Joint and several liability guarantee

Normal performance

–

No

No

–

No

No

Total amount of guarantees provided during the reporting period*4			3,437
Total amount of guarantees outstanding at the end of reporting period*4 (A)			14,863
Guarantees by the Company to the controlled subsidiaries
Total amount of guarantee provided to controlled subsidiaries during the reporting period			0
Total amount of guarantee for controlled subsidiaries outstanding at the end of the reporting period (B)			11,157
Total amount of guarantees for the Company (including those provided for controlled subsidiaries)
Total amount of guarantees (A+B)			26,020
The proportion of the total amount of guarantees to the Sinopec Corp.’s net assets (%)			3.36
Guarantees provided for shareholder, de facto controller and its related parties (C)			0
Amount of debt guarantees provided directly or indirectly to the companies with liabilities to assets ratio over 70% (D)			9,117
The amount of guarantees in excess of 50% of the net assets (E)			0
Total amount of the above three guarantee items (C+D+E)			9,117
Statement of guarantee undue that might be involved in any joint and several liabilities			None
Statement of guarantee status

* 1:

Guarantee amount refers to the actual amount of guarantee liability that the company may undertake during the reporting period within the approved guarantee limit.

* 2:

As defined in the Rules Governing the Listing of Stocks on Shanghai Stock Exchange.

* 3:

Excluding the interest corresponding to the loan principal agreed in the guarantee contract, export credit premium and other expenses

* 4:

The amount of guarantees provided during the reporting period and the outstanding balance of guarantees amount at the end of the reporting period include the guarantees provided by the controlled subsidiaries to external parties. The amount of the guarantees provided by these subsidiaries is derived from multiplying the guarantees provided by Sinopec Corp.’s subsidiaries by the percentage of shareholding of Sinopec Corp. in such subsidiaries.

6.	SPECIFIC STATEMENTS AND INDEPENDENT OPINIONS FROM INDEPENDENT NON-EXECUTIVE DIRECTORS REGARDING OUTSTANDING EXTERNAL GUARANTEES PROVIDED BY THE COMPANY DURING AND BY THE END OF 2021:

7	SIGNIFICANT LITIGATION, ARBITRATION RELATING TO THE COMPANY

8	INSOLVENCY AND RESTRUCTURING

9	OTHER MATERIAL CONTRACTS

10	CREDIBILITY FOR THE COMPANY, CONTROLLING SHAREHOLDERS AND DE FACTO CONTROLLER

11	TRUSTEESHIP, CONTRACTING AND LEASES

12	ENTRUSTED FINANCING AND LOAN

(1)

ENTRUSTED FINANCING

(2)

ENTRUSTED LOAN

Class	Origin	Transaction amount	Undue amount	Overdue
Working capital loan	Self-owned fund	(467)	154	0
Project construction loan	Self-owned fund	(42)	2,690	0

(3)

OTHER LOAN

Class	Origin	Transaction amount	Undue amount	Overdue
Project construction loan	Self-owned fund	3,060	3,060	0

(4)

OTHER FINANCING AND DERIVATIVE INVESTMENT

13	BUSINESS WITH SINOPEC FINANCE CO., LTD. (SINOPEC FINANCE) AND SINOPEC CENTURY BRIGHT CAPITAL INVESTMENT, LTD. (CENTURY BRIGHT)

(1)

DEPOSIT

					Transaction amount
Related party	Related party relationship	Daily Cap	Interest rate range	Balance at beginning	Total deposit	Total withdrawn	Balance in the end
Sinopec Finance	Sinopec Group 51%; Sinopec Corp.49%	RMB80 billion by Sinopec Finance and Century Bright	current: 0.35%-1.725%; time deposit: 1.35%-7.4%	23,953	9,385	9,480	15,708
Century Bright	Sinopec Group 100%		current: 0%-0.25%; time deposit: 0.08%-1.23%	29,464	197,800	176,800	45,974

Note 1:

generally, the deposit interest rate at Sinopec Finance and Century Bright is no lower than that of the same type of deposits for the same period from major commercial banks

Note 2:

the current period’s occurrence is on a time deposit basis.

(2)

LOAN

					Transaction amount
Related party	Related party relationship	Daily Cap	Interest rate range	Balance at beginning	Total loan	Total withdrawn	Balance in the end
Century Bright	Sinopec Group 100%	127,920	0.56%-4.25%	6,614	151,233	154,648	3,199
Sinopec Finance	Sinopec Group 51%; Sinopec Corp. 49%	13,364	1.08%-5.23%	10,428	32,305	29,369	13,364

Note:

generally, the loan interest rate at Sinopec Finance and Century Bright is no higher than that of the same type of deposits for the same period from major commercial banks.

(3)

CREDIT OR OTHER FINANCIAL BUSINESS

Related party	Related party relationship	Business nature	Total amount	Transaction amount
Sinopec Finance	Sinopec Group 51%; Sinopec Corp. 49%	Credit	9,494	23,590
		Discounted bills	–	7,194

14	APPROPRIATION OF NON-OPERATIONAL FUNDS BY THE CONTROLLING SHAREHOLDER AND ITS RELATED PARTIES AND THE PROGRESS FOR CLEARING UP

15	STRUCTURED ENTITY CONTROLLED BY THE COMPANY

16	INFLUENCE ON THE INDUSTRY FROM NEWLY-ENFORCED LAW, ADMINISTRATIVE RULES, REGULATIONS AND INDUSTRY POLICIES

1	AGREEMENTS CONCERNING CONTINUING CONNECTED TRANSACTIONS BETWEEN SINOPEC CORP. AND CHINA PETROCHEMICAL CORPORATION

2	COMPLIANCE OF DISCLOSURE AND APPROVALS OF CONTINUING CONNECTED TRANSACTIONS BETWEEN THE COMPANY AND SINOPEC GROUP WITH HONG KONG LISTING RULES AND THE SHANGHAI LISTING RULES

3	ACTUAL CONTINUING CONNECTED TRANSACTIONS ENTERED INTO BY THE COMPANY DURING THE YEAR

(a)

The government-prescribed price, if any, will apply;

(b)

where there is no government-prescribed price but where there is a government-guidance price, the government-guidance price will apply;

(c)

where there is neither a government-prescribed price nor a government-guidance price, the market price will apply; or

(d)

where none of the above is applicable, the price for the provision of the products or services is to be agreed between the relevant parties, which shall be the reasonable cost incurred in providing the same plus 6% or less of such cost.

(a)

The transactions have been conducted in the ordinary course of the Company’s business;

(b)

The transactions have been entered into based on either of the following terms:

i

normal commercial terms; or

ii

terms not less favorable than those available from or 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 conducted pursuant to the terms of relevant agreements, and the terms were fair and reasonable and in the interests of Sinopec Corp. and its shareholders as a whole.

4	OTHER SIGNIFICANT CONNECTED TRANSACTIONS OCCURED THIS YEAR

5	FUNDS PROVIDED BETWEEN RELATED PARTIES

		Funds to related parties			Funds from related parties
Related Parties	Relations	Balance at the beginning of the year	Amount incurred	Balance at the end of the year	Balance at the beginning of the year	Amount incurred	Balance at the end of the year
Sinopec Group	Parent company and affiliated companies*	10,645	(848)	9,797	9,670	21,012	30,682
Other related parties	Associates and joint ventures	11,328	(4,185)	7,143	6,087	(2,494)	3,593
Total		21,973	(5,033)	16,940	15,757	18,518	34,275

Reason for provision of funds between related parties	Loans and other accounts receivable and payable
Impacts on the Company	No material negative impact

1	MEETINGS OF THE BOARD

(1)

The 20th meeting of the seventh session of the Board was held by written proposals on 28 January 2021, whereby the proposals in relation to the following matters were approved:(i) the continuing connected transactions with China Oil & Gas Pipeline Network Corporation for the year 2020-2021; (ii) Information Disclosure Management Regulation; (iii) Investor Relations Management Regulation; (iv) the Internal Control Manual (2021).

(2)

The 21st meeting of the seventh session of the Board was held by on-site meeting and via video conference on 26 March 2021, whereby the proposals in relation to the following matters were approved: (i) the development strategy of Sinopec Corp. (ii) the Work Report of the seventh session of the Board; (iii) the Work Report of the seventh session of the Senior Management; (iv) financial results and business performance of the Company for the year 2020; (v) provision for impairment for the year 2020; (vi) the continuing connected transactions for the year 2020; (vii) profit distribution plan for the year 2020; (viii) audit costs for the year 2020; (ix) to authorize the Board to determine the interim profit distribution plan of Sinopec Corp. for the year 2021; (x) to authorize the Board to determine the plan for issuance of debt financing instrument(s); (xi) the report of Risk Assessment for Capital Deposits at Finance Company and Century Bright Company; (xii) change in the accounting firm; (xiii) Internal control assessment report of Sinopec Corp. for the year 2020; (xiv) Financial Statements of Sinopec Corp. for the year 2020; (xv) Annual Report of the Company for the year 2020; (xvi) Form 20F of the Company for the year 2020; (xvii) Acquisition of relevant assets and equities of the Sinopec Group; (xviii) investment and construction of 11 million tonnes/year refinery and high-end synthetic new materials project; (xix) the report of Sustainable Development of Sinopec Corp. for the year 2020; (xx) granting to the Board a general mandate to issue new domestic shares and/or overseas-listed foreign shares of Sinopec Corp.; (xxi) the re-election of the Board of Directors; (xxii) the re-election of the Board of Supervisors; (xxiii) Service Contract for the Directors of the eighth session of the Board (including remuneration clauses) and Supervisors of the eighth session of the Board of Supervisors (including remuneration clauses); (xxiv) Notice of 2020 Annual General Meeting.

(3)

The 22th meeting of the seventh session of the Board was held by way of written resolution on 28 April 2021, whereby the proposals in relation to the following matters were approved: (i) the first quarterly report for the three months ended 31 March 2021; (ii) transformation and upgrading of refining business and improvement of ethylene business for Maoming Branch.

(4)

The 1st meeting of the eighth session of the Board was held by on-site meeting and via video conference on 25 May 2021, whereby the proposals in relation to the following matters were approved: (i) election of the Chairman of the eighth session of the Board; (ii) to rename the Social Responsibility Management Committee and revise the Term of Reference of Social Responsibility Management Committee; (iii) the revision of the terms of reference of the Nomination Committee; (iv) composition of the special committees of the eighth session of the Board; (v) the appointment of President of Sinopec Corp.; (vi) the appointment of Senior Vice President, Vice President, Chief Financial Officer of Sinopec Corp.; (vii) the appointment of the Secretary to the Board of Sinopec Corp., the Authorized Representative of the Hong Kong Stock Exchange and the Authorized Representative of the Shanghai Stock Exchange.

(5)

The 2nd meeting of the eighth session of the Board was held by on-site meeting on 27 August 2021, whereby the proposals in relation to the following matters were approved: (i) the report on the fulfillment of the key targets for the first half of the year 2021 and the work arrangements for the second half of the year 2021; (ii) amendments to the Article of Association; (iii) profit distribution plan for the first half of the year 2021; (iv) the report of Risk Assessment for Capital Deposits at Finance Company and Century Bright Company; (v) the financial statements for the first half of the year 2021; (vi) interim report for the six months ended 30 June 2021; (vii) the continuing connected transactions for the year 2022 to 2024; (viii) establishment of a joint venture by Shanghai Petrochemical and Baling Petrochemical; (ix) investment and construction of 1.5 million tonnes/year ethylene project for Zhenhai Refinery & Chemical Branch; (x) Notice of 2021 First Extraordinary General Meeting.

(6)

The 3rd meeting of the eighth session of the Board was held by written resolution on 28 October 2021, whereby the proposal in relation to the third quarterly report for three months ended 30 September 2021 was approved.

(7)

The 4th meeting of the eighth session of the Board was held by way of written resolution on 29 November 2021, whereby the proposals in relation to the following matters were approved: (i) the election of the Chairman of the Board; (ii) adjustment of the composition of the board special committees; (iii) the appointment of President of Sinopec Corp.; (iv) acquisition of relevant assets and equities of Sinopec Group; (v) the Terms of Reference of the Independent Non-Executive Directors.

2	IMPLEMENTATION OF RESOLUTIONS APPROVED AT THE GENERAL MEETINGS OF SHAREHOLDERS BY THE BOARD

3	DIRECTORS’ ATTENDANCE TO THE BOARD MEETINGS AND TO THE GENERAL MEETINGS

(1)

Attendance to the board meetings and general meetings during the reporting period by the Directors of the eighth session of the Board

Director titles	Name	Board meeting					General meeting
		No. of meetings held	On-site attendance	Meetings attended by communication	Meetings attend by proxy	Absent	No. of meetings held	Actual attendance
Chairman	Ma Yongsheng	7	3	4	0	0	2	2
Director	Zhao Dong	4	1	2	1	0	1	1
Director	Yu Baocai	7	2	4	1	0	2	2
Director	Ling Yiqun	7	3	4	0	0	2	0
Director	Li Yonglin	4	2	2	0	0	1	0
Director	Liu Hongbin	7	2	4	1	0	2	0
Independent Director	Cai Hongbin	7	2	4	1	0	2	0
Independent Director	Ng, Kar Ling Johnny	7	3	4	0	0	2	0
Independent Director	Shi Dan	4	2	2	0	0	1	0
Independent Director	Bi Mingjian	4	2	2	0	0	1	0

(2)

Attendance to the board meetings and general meetings during the reporting period by the former Directors of the eighth session of the Board

Director titles	Name	Board meeting					General meeting
		No. of meetings held	On-site attendance	Meetings attend by communication	Meetings attend by proxy	Absent	No. of meetings held	Actual attendance
Former Chairman	Zhang Yuzhuo	4	2	2	0	0	1	1
Former Director	Zhang Shaofeng	3	1	2	0	0	1	0
Former Independent Director	Tang Min	3	1	2	0	0	1	0

(3)

Attendance to the general meetings by the Independent Director

4	MEETINGS HELD BY THE BOARD COMMITTEES

(1)

The 14th meeting of the seventh session of the Audit Committee was held by way of written resolution on 28 January 2021, whereby the proposal in relation to the Internal Control Manual (2021) was approved.

(2)

The 15th meeting of the seventh session of the Audit Committee was held by on-site meeting and via video conference on 25 March 2021, whereby the proposals in relation to the following matters were approved: (i) Financial results and business performance of the Company for the year 2020; (ii) Financial statements of Sinopec Corp. for the year 2020; (iii) Annual Report of the Company for the year 2020; (iv) Form 20F of the Company for the year 2020; (v) change in the accounting firm; (vi) Internal control assessment report of Sinopec Corp. for the year 2020; (vii) Report on audit work for 2020 and audit work arrangement for 2021.

(3)

The 16th meeting of the seventh session of the Audit Committee was held by way of written resolution on 28 April 2021, whereby the proposal in relation to the first quarterly report for the three months ended 31 March 2021 was approved.

(4)

The 1st meeting of the eighth session of the Audit Committee was held by on site meeting on 25 August 2021, whereby the proposals in relation to the following matters were approved: (i) Notes on financial results and business performance for the first half of the year 2021; (ii) Financial statements for the first half of the year 2021;(iii) Interim report for the six months ended 30 June 2021; (iv) Proposal in relation to the continuing connected transactions for the year 2022 to2024; (v) Report on the main audit work for the first half of 2021 and the overall arrangement of audit work for the second half of 2021.

(5)

The 2nd meeting of the eighth session of the Audit Committee was held by way of written resolution on 28 October 2021, whereby the proposal in relation to the third quarterly report for the three months ended 30 September 2021 was approved.

(6)

The 7th meeting of the seventh session of the Strategy Committee was held by way of written resolution on 25 March 2021, whereby the proposals in relation to the following matters were approved:(i) the development strategy of Sinopec Corp.; (ii) the investments plan of 2021 of Sinopec Corp.

(7)

The 3rd meeting of the seventh session of the Remuneration and Appraisal Committee was held by way of written resolution on 25 March 2021 whereby the proposal in relation to implementation of the rules of the remuneration of directors, supervisors and senior management for 2020 and the remuneration of the Board of Directors and the Board of Supervisors of the eighth session of the Board was approved.

(8)

The 3rd meeting of the seventh session of the Social Responsibility Management Committee was held by way of written resolution on 25 March 2021, whereby the proposals in relation to the following matters were approved:(i) Report of Sustainable Development of Sinopec Corp. for the year 2020; (ii) Report on the environmental protection work of Sinopec Corp. for the year 2020 and the plan of 2021; (iii) Report on the anti-corruption compliance work of Sinopec Corp. for the year 2020 and the plan of 2021.

(9)

The 8th meeting of the seventh board of the Nomination Committee was held by way of written resolution on 25 March 2021, whereby the proposal in relation to the re-election of the Board of Directors was approved.

(10)

The 1st meeting of the eighth session of the Nomination Committee was held by on site meeting and via video conference on 25 May 2021, whereby the proposals in relation to the following matters were approved:(i) the appointment of President of Sinopec Corp.; (ii) the appointment of Senior Vice President, Vice President, Chief Financial Officer of Sinopec Corp.; (iii) the appointment of the Secretary to the Board of Directors of Sinopec Corp..

5	BOARD SPECIAL COMMITTEES ISSUED REVIEW OPINIONS TO THE BOARD WHEN PERFORMING THEIR DUTIES DURING THE REPORTING PERIOD, WITHOUT OBJECTION.

6	PERFORMANCE OF THE DIRECTORS’ DUTIES

7	BUSINESS PERFORMANCE

8

DIVIDEND

	2021	2020	2019
Cash dividends (RMB/Share, tax inclusive)	0.47	0.20	0.31
Total amount of cash dividends (RMB billion, tax inclusive)	569.03	242.14	375.33
Net profits attributed to the shareholders of the listed company shown in the consolidated statement for the dividend year (RMB billion)	712.08	332.71	576.43
Ratio of the dividends to the net profit attributed to the shareholders of the listed company in the consolidated statement (%)	79.9	72.8	65.1

9	RESPONSIBILITIES FOR THE COMPANY’S INTERNAL CONTROL

10	DURING THE REPORTING PERIOD, THE IMPLEMTATION OF ENVIRONMENTAL POLICIES BY THE COMPANY

11	DURING THE REPORTING PERIOD, THE COMPANY DID NOT VIOLATE LAWS OR REGULATIONS WHICH HAVE A MATERIAL IMPACT ON THE COMPANY

12	MAJOR SUPPLIERS AND CUSTOMERS

13	BANK LOANS AND OTHER BORROWINGS

14	FIXED ASSETS

15

RESERVES

16

DONATIONS

17	PRE-EMPTIVE RIGHTS

18	REPURCHASE, SALES AND REDEMPTION OF SHARES

19	DIRECTORS’ INTERESTS IN COMPETING BUSINESS

20	DIRECTORS’ INTERESTS IN CONTRACTS

21	MANAGEMENT CONTRACTS

22	PERMITTED INDEMNITY PROVISIONS

23	EQUITY-LINKED AGREEMENTS

24	OIL & GAS RESERVE APPRAISAL PRINCIPLES

25	CORE COMPETITIVENESS ANALYSIS

26	RISK FACTORS

1	CHANGES IN THE SHARE CAPITAL

2	NUMBER OF SHAREHOLDERS AND THEIR SHAREHOLDINGS

(1)

Shareholdings of top ten shareholders

Name of shareholders	Nature of Shareholders	Percentage of shareholdings %	Total number of shares held	Changes of shareholding1	Number of shares subject to pledges or lock-up
China Petrochemical Corporation	State-owned Share	68.31	82,709,227,393	0	0
HKSCC Nominees Limited2	H Share	20.97	25,386,207,159	926,751	unknown
中國證券金融股份有限公司	A Share	1.92	2,325,374,407	(283,937,650)	0
香港中央結算有限公司	A Share	0.87	1,054,953,821	213,881,539	0
中國人壽保險股份有限公司－傳統－普通保險產品－005L－CT001滬	A Share	0.69	834,160,431	19,554,400	0
中央匯金資產管理有限責任公司	A Share	0.26	315,223,600	(6,814,300)	0
國信證券股份有限公司	A Share	0.17	202,363,585	183,178,790	0
中國工商銀行－上證50交易型開放式指數證券投資基金	A Share	0.09	113,436,276	13,846,100	0
全國社保基金一一三組合	A Share	0.09	110,044,157	110,044,157	0
中國人壽保險股份有限公司－分紅－個人分紅－005L－FH002滬	A Share	0.08	98,655,327	(717,014,841)	0

Note 1:	As compared with the number of shares held as of 31 December 2020.
Note 2:	Sinopec Century Bright Capital Investment Limited, an overseas wholly-owned subsidiary of China Petrochemical Corporation, held 623,454,000 H shares, accounting for 0.52% of the total issued share capital of Sinopec Corp. Those shareholdings were included in the total number of the shares held by HKSCC Nominees Limited.

(2)

Information disclosed by the shareholders of H shares in accordance with the Securities and Futures Ordinance (SFO) as of 31 December 2021

Name of shareholders	Status of shareholders	Number of shares interested	% of Sinopec Corp.’s issued voting shares (H Share)
BlackRock, Inc.	Interest of corporation controlled by the substantial shareholder	2,029,241,960(L)	7.95(L)
Citigroup Inc.	Person having a security interest in shares	11,307,899(L)	0.04(L)
	Interest of corporation controlled by	68,263,244(L)	0.27(L)
	the substantial shareholder	66,210,083(S)	0.26(S)
	Approved lending agent	1,704,518,264(L)	6.68(L)

3	ISSUANCE AND LISTING OF SECURITIES

(1)

Issuance of securities during the reporting period

(2)

Existing employee shares

4	CHANGES IN THE CONTROLLING SHAREHOLDERS AND THE DE FACTO CONTROLLER

(1)

Controlling shareholder

	Number of	Shareholding
Name of Company	Shares Held	Percentage
Sinopec Engineering (Group) Co. Ltd	2,907,856,000	65.67%
Sinopec Oilfield Service Corporation	10,727,896,364	56.51%
Sinopec Oilfield Equipment Corporation	456,756,300	58.74%
China Merchants Energy Shipping Co., Ltd	1,095,463,711	13.54%

(2)

Other than HKSCC Nominees Limited, there was no other legal person shareholder holding 10% or more of the total issued share capital of Sinopec Corp.

(3)

Basic information of the de facto controller

(4)

Diagram of the equity and controlling relationship between Sinopec Corp. and its de facto controller

* :

Inclusive of 623,454,000 H shares held by Sinopec Century Bright Capital Investment Ltd. (overseas wholly-owned subsidiary of China Petrochemical Corporation) through HKSCC Nominees Limited.

1.	CORPORATE BOND

Bond name	Sinopec Corp. 2012 Corporate bond
Abbreviation	12石化02
Code	122150
Issuance date	1 June 2012
Interest commencement date	1 June 2012
Maturity date	1 June 2022
Amount issued (RMB billion)	7
Outstanding balance (RMB billion)	7
Interest rate (%)	4.90
Principal and interest repayment	Simple interest is calculated and paid on an annual basis without compounding interests. Interest is paid once a year. The principal will be paid at maturity with last instalment of interest.
Investor Qualification Arrangement	12石化02 was publicly offered to qualified investors in accordance with Administration of the Issuance and Trading of Corporate Bonds.
Applicable trading mechanism	Floor trading at Shanghai Stock Exchange, in line with pledge repurchase requirement
Risk of suspension for listed trading, and countermeasures	N/A
Listing exchange	Shanghai Stock Exchange
Use of proceeds	Proceeds from the above-mentioned corporate bonds have been used for their designated purpose as disclosed. All the proceeds have been completely used.
Credit rating	During the reporting period, China Lianhe Credit Rating Co., Ltd. tracked and provided credit rating for 12石化02 and reaffirmed AAA credit rating in the continuing credit rating report. The long-term credit rating of Sinopec Corp. remained AAA with its outlook being stable. Pursuant to relevant regulations, the latest credit rating results have been published through media designated by regulators within six months commencing from the disclosure of annual report for 2020.
Special terms for Issuer or investor option or investor protection, whether triggered or executed	No special terms for Issuer or investor option or investor protection, thus not applicable
Guarantee, repayment scheme and other related events during the reporting period	China Petrochemical Corporation bears non-irrevocable joint liability guarantee. Interest is paid as usual during the reporting period without triggering any guarantee.
Convening of corporate bond holders’ meeting	During the reporting period, the bondholders’ meeting was not convened.
Performance of corporate bonds trustee	During the durations of the above-mentioned bonds, the bond trustee, China International Capital Corporation Limited, has strictly followed the Bond Trustee Management Agreement and continuously tracked the Company’s credit status, utilisation of bond proceeds and repayment of principals and interests of the bond. The bond trustee has also advised the Company to fulfil obligations as described in the corporate bond prospectus and actively exercised its duty to protect the bondholders’ legitimate rights and interests. The bond trustee has disclosed the Trustee Management Affairs Report of last year. The full disclosure is available on the website of Shanghai Stock Exchange (http://www.sse.com.cn).

2.	INTERBANK BOND MARKET DEBT FINANCING INSTRUMENT OF NON-FINANCIAL ENTERPRISES

Bond name	The first medium-term notes in 2020	The second medium-term notes in 2020	The third medium-term notes in 2020	The first medium-term notes in 2021	The second medium-term notes in 2021	The third medium-term notes in 2021	The first green medium-term notes in 2021
Abbreviation	20中石化MTN001	20中石化MTN002	20中石化MTN003	21中石化MTN001	21中石化MTN002	21中石化MTN003	21中石化GN001
code	102000568	102000569	102001109	102101386	102101480	102101489	132100172
Issuance date	2020/3/31	2020/3/31	2020/5/27	2021/7/23	2021/8/5	2021/8/5	2021/12/27
Interest commencement date	2020/4/1	2020/4/1	2020/5/28	2021/7/27	2021/8/6	2021/8/9	2021/12/28
Maturity date	2023/4/1	2023/4/1	2023/5/28	2026/7/27	2024/8/6	2023/8/9	2024/12/28
Amount issued (RMB billion)	5	5	10	5	2	2	2.55
Outstanding balance (RMB billion)	5	5	10	5	2	2	2.55
Interest rate (%)	2.7	2.7	2.2	3.2	2.95	2.8	2.5
Principal and interest repayment	Interest is paid once a year. The principal will be paid at maturity with last instalment of interest.
Investor Qualification Arrangement	Nationwide inter-bank bond market institutional investors
Applicable trading mechanism	Circulated and transferred in nationwide inter-bank bond market
Risk of suspension for listed trading (if any), and countermeasures	Not applicable
Trading market	Nationwide inter-bank bond market
Use of proceeds	Proceeds from the above-mentioned corporate bonds have been used for their designated purpose as disclosed in the corporate bond prospectus. All the proceeds have been completely used till now.
Credit rating	During the reporting period, United Credit Ratings Co., Ltd. issued the continuing credit rating report on May 21. The long-term credit rating of Sinopec Corp. remained AAA with its outlook being stable.
Special terms for Issuer or investor option or investor protection, whether triggered or executed	Not applicable
Guarantee, repayment scheme and other related events during the reporting period	No guarantee. Interest is paid as usual during the reporting period without triggering any guarantee.
Convening of corporate bond holders’ meeting	Not applicable
Performance of corporate bonds trustee	Corporate bonds trustee has performed its duties in accordance with regulatory requirements

Note:

Please refer to the website of Shanghai Stock Exchange (http://www.sse.com.cn), China Money Network (WWW) for the name, office address, name, contact person and telephone number of the intermediary institutions providing services for the issuance and maturity of the debt financing instruments of the above-mentioned corporate bonds and non-financial enterprises in the interbank market. Chinamoney.com.cn) and other websites disclosed the relevant contents of the prospectus and other documents.

Principal data	31 Dec. 2021	31 Dec. 2020	Change	Reasons for change
Current ratio	0.87	0.87	0
Quick ratio	0.55	0.58	(0.03)	Increase in current liabilities
Liability-to-asset ratio (%)	51.51	48.89	2.62 percentage points	Increase in liabilities
Loan repayment rate (%)	100	100	0

	2021	2020	Change	Reasons for change
Net profit/(loss) attributable to equity shareholders of the Company excluding extraordinary gains and losses (RMB million)	72,220	(1,565)	73,785	Increase in total profit
Net profit of the Company excluding extraordinary gains and losses (RMB million)	85,935	4,556	81,379	Increase in total profit
EBITDA to total debt ratio	1.41	1.14	0.27	Increase in total profit
EBITDA to interest coverage ratio	15.12	9.89	5.23	Increase in total profit
Interest coverage ratio	8.28	4.05	4.23	Increase in total profit
Cash interest coverage ratio	43.56	24.65	18.91	Increase in net cash flow
Interest payment rate (%)	100	100	0

Name of Company	Registered Capital RMB million	Percentage of Shares Held by Sinopec Corp. (%)	Total Assets RMB million	Net Assets RMB million	Net Profit/ (Net Loss) RMB million	Principal Activities
Sinopec International Petroleum Exploration and Production Limited	8,250	100	31,713	12,460	1,429	Investment in exploration, production andsale of petroleum and natural gas
Sinopec Great Wall Energy & Chemical Company Limited	22,761	100	30,655	14,187	3,714	Coal chemical industry investment management, production and sale of coal chemical products
Sinopec Yangzi Petrochemical Company Limited	15,651	100	36,602	22,482	1,945	Manufacturing of intermediate petrochemical products and petroleum products
Sinopec Yizheng Chemical Fibre Limited Liability Company	4,000	100	9,100	4,330	(1,290)	Production and sale of polyester chips and polyester fibres
Sinopec Lubricant Company Limited	3,374	100	9,311	4,789	141	Production and sale of refined petroleum products, lubricant base oil, and petrochemical materials
Sinopec Qingdao Petrochemical Company Limited	1,595	100	5,319	1,370	873	Manufacturing of intermediate petrochemical products and petroleum products
Sinopec Chemical Sales Company Limited	1,000	100	22,423	5,476	1,547	Marketing and distribution of petrochemical products
China International United Petroleum and Chemical Company Limited	5,000	100	229,548	44,082	6,268	Trading of crude oil and petrochemical products
Sinopec Overseas Investment Holding Limited	3,009 Million USD	100	23,019	13,467	(27)	Overseas investment holding
Sinopec Catalyst Company Limited	1,500	100	11,330	6,317	715	Production and sale of catalyst products
China Petrochemical International Company Limited	1,400	100	21,113	4,270	603	Trading of petrochemical products
Sinopec Beihai Refining and Chemica Limited Liability Company	5,294	99	19,396	13,461	2,729	Import and processing of crude oil, production, storage and sale of petroleum products andpetrochemical products
Sinopec Qingdao Refining and Chemical Company Limited	5,000	85	23,807	13,357	3,711	Manufacturing of intermediate petrochemical products and petroleum products
Sinopec Hainan Refining and Chemical Company Limited	9,606	100	40,040	23,265	4,097	Manufacturing of intermediate petrochemical products and petroleum products
Sinopec Marketing Co., Limited	28,403	70	486,036	233,117	18,582	Marketing and distribution of refined petroleum products
Sinopec Shanghai SECCO Petrochemical Company Limited	500	68	17,468	10,616	2,817	Production and sale of petrochemical products
Sinopec-SK(Wuhan) Petrochemical Company Limited	7,193	59	27,441	11,807	1,606	Production, sale, research and development of petroleum, petrochemical, ethylene and downstream by-products
Sinopec Kantons Holdings Limited	248 Million HKD	60	12,956	12,590	871	Oil jetty and nature gas pipeline
Sinopec Shanghai Gaoqiao Petroleum and Chemical Limited	10,000	55	37,561	18,214	3,536	Manufacturing of intermediate petrochemical products and petroleum products
Sinopec Shanghai Petrochemical Company Limited	10,824	50	47,039	30,395	2,004	Manufacturing of synthetic fibres, resin and plastics, intermediate petrochemical products and petroleum products
Fujian Petrochemical Company Limited	10,492	50	14,672	13,830	951	Manufacturing of plastics, intermediate petrochemical products and petroleum products

Note	1:	All above subsidiaries except Fujian Petrochemical Company Limited are audited by KPMG Huazhen LLP or KPMG.
	2:	The above indicated total assets and net profit has been prepared in accordance with CASs. Except for Sinopec Kantons Holdings Limited and Sinopec Overseas Investment Holdings Ltd., which are incorporated in Bermuda and Hong Kong SAR, respectively, all of the above wholly-owned and non-wholly-owned subsidiaries are incorporated in the PRC. All of the above wholly-owned and controlling subsidiaries are limited liability companies except for Sinopec Shanghai Petrochemical Company Limited, Sinopec Marketing Co., Limited and Sinopec Kantons Holdings Limited. The Board of Directors considered that it would be redundant to disclose the particulars of all subsidiaries of Sinopec Corp. and, therefore, only those which have material impact on the results or assets of Sinopec Corp. are set out above.

KPMG Huazhen LLP 8th Floor, KPMG Tower Oriental Plaza 1 East Chang An Avenue Beijing 100738 China Telephone       +86 (10) 8508 5000 Fax                 +86 (10) 8518 5111 Internet           kpmg.com/cn

畢馬威華振會計師事務所 （特殊普通合夥） 中國北京 東長安街1號 東方廣場畢馬威大樓8層 郵政編碼: 100738 電話 +86 (10) 8508 5000 傳真 +86 (10) 8518 5111 網址 kpmg.com/cn

The Key Audit Matter	How the matter was addressed in our audit
The Company reported fixed assets of Renminbi (“RMB”) 598,932 million as at 31 December 2021, a portion of which related to oil and gas producing activities. The Company reported impairment losses of RMB2,467 million for the fixed assets relating to oil and gas producing activities for the year ended 31 December 2021. The Company groups fixed assets relating to oil and gas producing activities into cash-generating units (“CGUs”) for impairment assessment. The Company compares the carrying amount of individual CGU with its value in use, using a discounted cash flow forecast, which was prepared based on the future production profiles included in the oil and gas reserves reports, to determine the impairment loss to be recognised. We identified assessment of impairment of fixed assets relating to oil and gas producing activities as a key audit matter. The value in use amounts of these CGUs are sensitive to the changes to future selling prices and production costs for crude oil and natural gas, future production profiles, and discount rates. Therefore a higher degree of subjective auditor judgment was required to evaluate the Company’s impairment assessment of fixed assets relating to oil and gas producing activities.	The following are the primary procedures we performed to address this key audit matter:   • we evaluated the design and tested the operating effectiveness of certain internal controls related to the process for impairment assessment of fixed assets relating to oil and gas producing activities;   • we assessed the competence, capabilities and objectivity of the Company’s reserves specialists and evaluated the methodology adopted by them in estimating the oil and gas reserves against the recognised industry standards;   • we compared future selling prices for crude oil and natural gas used in the discounted cash flow forecasts with the Company’s business plans and forecasts by external analysts;   • we compared future production costs and future production profiles used in the discounted cash flow forecasts with oil and gas reserves reports issued by the reserves specialists; and   • we involved valuation professionals with specialised skills and knowledge, who assisted in assessing the discount rates applied in the discounted cash flow forecasts against a discount rate range that was independently developed using publicly available market data for comparable companies in the same industry.

•

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

•	Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.

•	Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

•

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

•	Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

•

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

KPMG Huazhen LLP	Certified Public Accountants
Beijing, China	Registered in the People’s
	Republic of China
	Yang Jie (Engagement Partner)
	He Shu

(A)	FINANCIAL STATEMENTS PREPARED UNDER CHINA ACCOUNTING STANDARDS FOR BUSINESS ENTERPRISES CONSOLIDATED BALANCE SHEET

	Notes	At 31 December 2021	At 31 December 2020
		RMB million	RMB million
Assets
Current assets
Cash at bank and on hand	5	221,989	184,412
Financial assets held for trading		–	1
Derivative financial assets	6	18,371	12,528
Accounts receivable	7	34,861	35,439
Receivables financing	8	5,939	8,735
Prepayments	9	9,267	4,857
Other receivables	10	35,664	33,724
Inventories	11	207,433	152,191
Other current assets		24,500	23,773
Total current assets		558,024	455,660
Non-current assets
Long-term equity investments	12	209,179	188,342
Other equity instrument investments		767	1,525
Fixed assets	13	598,932	593,653
Construction in progress	14	155,939	125,525
Right-of-use assets	15	184,974	189,018
Intangible assets	16	119,210	114,280
Goodwill	17	8,594	8,620
Long-term deferred expenses	18	10,007	9,584
Deferred tax assets	19	19,389	25,054
Other non-current assets	20	24,240	27,635
Total non-current assets		1,331,231	1,283,236
Total assets		1,889,255	1,738,896
Liabilities and shareholders’ equity
Current liabilities
Short-term loans	22	27,366	20,756
Derivative financial liabilities	6	3,223	4,826
Bills payable	23	11,721	10,394
Accounts payable	24	203,919	151,514
Contract liabilities	25	124,622	126,241
Employee benefits payable	26	14,048	7,129
Taxes payable	27	81,267	76,848
Other payables	28	114,701	85,012
Non-current liabilities due within one year	29	28,651	22,494
Other current liabilities	30	31,762	17,781
Total current liabilities		641,280	522,995
Non-current liabilities
Long-term loans	31	49,341	45,459
Debentures payable	32	42,649	38,356
Lease liabilities	33	170,233	171,740
Provisions	34	43,525	45,552
Deferred tax liabilities	19	7,910	8,124
Other non-current liabilities	35	18,276	17,950
Total non-current liabilities		331,934	327,181
Total liabilities		973,214	850,176
Shareholders’ equity
Share capital	36	121,071	121,071
Capital reserve	37	120,188	127,389
Other comprehensive income	38	(690)	1,038
Specific reserve		2,664	1,941
Surplus reserves	39	213,224	209,280
Retained earnings		318,645	286,575
Total equity attributable to shareholders of the Company		775,102	747,294
Minority interests		140,939	141,426
Total shareholders’ equity		916,041	888,720
Total liabilities and shareholders’ equity		1,889,255	1,738,896

Ma Yongsheng	Yu Baocai	Shou Donghua
Chairman	President	Chief Financial Officer
(Legal representative)

	Notes	At 31 December	At 31 December
		2021	2020
		RMB million	RMB million
Assets
Current assets
Cash at bank and on hand		110,691	99,188
Derivative financial assets		4,503	7,776
Accounts receivable	7	21,146	21,763
Receivables financing		227	707
Prepayments	9	4,540	2,626
Other receivables	10	46,929	37,938
Inventories		63,661	39,034
Other current assets		23,408	14,048
Total current assets		275,105	223,080
Non-current assets
Long-term equity investments	12	360,847	343,356
Other equity instrument investments		201	428
Fixed assets	13	284,622	283,695
Construction in progress	14	66,146	59,880
Right-of-use assets	15	105,712	108,737
Intangible assets		9,334	8,779
Long-term deferred expenses		2,875	2,499
Deferred tax assets		8,715	12,661
Other non-current assets		34,227	26,828
Total non-current assets		872,679	846,863
Total assets		1,147,784	1,069,943
Liabilities and shareholders’ equity
Current liabilities
Short-term loans		16,550	20,669
Derivative financial liabilities		1,121	362
Bills payable		6,058	6,061
Accounts payable		85,307	65,779
Contract liabilities		7,505	5,840
Employee benefits payable		8,398	1,673
Taxes payable		46,333	43,500
Other payables		211,179	188,568
Non-current liabilities due within one year		16,737	12,026
Other current liabilities		13,702	439
Total current liabilities		412,890	344,917
Non-current liabilities
Long-term loans		34,258	30,413
Debentures payable		31,522	26,977
Lease liabilities		104,426	105,691
Provisions		35,271	36,089
Other non-current liabilities		3,103	3,581
Total non-current liabilities		208,580	202,751
Total liabilities		621,470	547,668
Shareholders’ equity
Share capital		121,071	121,071
Capital reserve		67,897	68,976
Other comprehensive income		6,024	5,910
Specific reserve		1,658	1,189
Surplus reserves		213,224	209,280
Retained earnings		116,440	115,849
Total shareholders’ equity		526,314	522,275
Total liabilities and shareholders’ equity		1,147,784	1,069,943

Ma Yongsheng	Yu Baocai	Shou Donghua
Chairman	President	Chief Financial Officer
(Legal representative)

	Notes	2021	2020
		RMB million	RMB million
Operating income	40	2,740,884	2,104,724
Less:  Operating costs	40	2,216,551	1,685,674
Taxes and surcharges	41	259,032	235,018
Selling and distribution expenses	44	57,891	64,495
General and administrative expenses	45	62,535	67,082
Research and development expenses	46	11,481	10,087
Financial expenses	42	9,010	9,510
Including:  Interest expenses		15,018	15,198
Interest income		5,732	4,803
Exploration expenses, including dry holes	47	12,382	9,716
Add:  Other income	48	5,850	7,514
Investment income	49	6,032	47,486
Including: Income from investment in associates and joint ventures		23,253	6,712
Losses from changes in fair value	50	3,341	(1,253)
Credit impairment losses		(2,311)	(2,066)
Impairment losses	51	(13,165)	(26,087)
Asset disposal gains		665	2,067
Operating profit		112,414	50,803
Add: Non-operating income	52	3,516	2,370
Less: Non-operating expenses	53	7,582	4,732
Profit before taxation		108,348	48,441
Less: Income tax expense	54	23,318	6,344
Net profit		85,030	42,097
Including: Net (loss)/profit of acquiree before business combination under common control		(200)	347
Classification by going concern:
Continuous operating net profit		85,030	42,097
Termination of net profit		–	–
Classification by ownership:
Equity shareholders of the Company		71,208	33,271
Minority interests		13,822	8,826
Basic earnings per share	65	0.588	0.275
Diluted earnings per share	65	0.588	0.275
Other comprehensive income	38
Items that may not be reclassified subsequently to profit or loss		(4)	(22)
Changes in fair value of other equity instrument investments		(4)	(22)
Items that may be reclassified subsequently to profit or loss		17,511	337
Other comprehensive income that can be converted into profit under the equity method		441	(2,441)
Cost of hedging reserve		(220)	162
Cash flow hedges		19,018	7,073
Foreign currency translation differences		(1,728)	(4,457)
Total other comprehensive income		17,507	315
Total comprehensive income		102,537	42,412
Attributable to:
Equity shareholders of the Company		88,782	34,665
Minority interests		13,755	7,747

Ma Yongsheng	Yu Baocai	Shou Donghua
Chairman	President	Chief Financial Officer
(Legal representative)

	Notes	2021	2020
		RMB million	RMB million
Operating income	40	1,045,000	770,321
Less:  Operating costs	40	808,540	584,315
Taxes and surcharges		156,174	148,350
Selling and distribution expenses		1,774	3,256
General and administrative expenses		30,551	29,868
Research and development expenses		10,102	9,098
Financial expenses		10,644	8,749
Including: Interest expenses		13,602	11,892
Interest income		2,953	3,181
Exploration expenses, including dry holes		10,502	8,297
Add:  Other income		4,045	4,922
Investment income	49	30,881	43,356
Including: Income from investment in associates and joint ventures		8,151	3,637
Gains from changes in fair value		644	350
Credit impairment reversal		1	71
Impairment losses		(7,192)	(16,374)
Asset disposal gains		58	261
Operating profit		45,150	10,974
Add: Non-operating income		776	900
Less: Non-operating expenses		2,209	1,319
Profit before taxation		43,717	10,555
Less: Income tax expense		4,273	(8,017)
Net profit		39,444	18,572
Classification by going concern:
Continuous operating net profit		39,444	18,572
Termination of net profit		–	–
Other comprehensive income
Items that may be reclassified subsequently to profit or loss		13,612	4,766
Other comprehensive income that can be converted into profit or loss under the equity method		12	(182)
Cash flow hedges reserve		13,600	4,948
Total other comprehensive income		13,612	4,766
Total comprehensive income		53,056	23,338

Ma Yongsheng	Yu Baocai	Shou Donghua
Chairman	President	Chief Financial Officer
(Legal representative)

	Notes	2021	2020
		RMB million	RMB million
Cash flows from operating activities:
Cash received from sale of goods and rendering of services		2,980,918	2,295,665
Refund of taxes and levies		4,641	2,985
Other cash received relating to operating activities		158,049	212,918
Sub-total of cash inflows		3,143,608	2,511,568
Cash paid for goods and services		(2,317,629)	(1,749,873)
Cash paid to and for employees		(95,778)	(85,481)
Payments of taxes and levies		(325,348)	(282,390)
Other cash paid relating to operating activities		(179,679)	(225,304)
Sub-total of cash outflows		(2,918,434)	(2,343,048)
Net cash flow from operating activities	56(a)	225,174	168,520
Cash flows from investing activities:
Cash received from disposal of investments		9,812	11,651
Cash received from returns on investments		10,134	11,510
Net cash received from disposal of fixed assets, intangible assets and other long-term assets		1,478	2,656
Net cash received from disposal of subsidiaries and other business entities	56(d)	5,205	49,869
Other cash received relating to investing activities		38,208	58,669
Sub-total of cash inflows		64,837	134,355
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets		(144,921)	(131,636)
Cash paid for acquisition of investments		(13,085)	(12,740)
Net cash paid for the acquisition of subsidiaries and other business entities		(1,106)	(340)
Other cash paid relating to investing activities		(50,923)	(92,289)
Sub-total of cash outflows		(210,035)	(237,005)
Net cash flow from investing activities		(145,198)	(102,650)
Cash flows from financing activities:
Cash received from capital contributions		1,001	4,219
Including: Cash received from minority shareholders’ capital contributions to subsidiaries		1,001	4,219
Cash received from borrowings		356,459	558,680
Other cash received relating to financing activities		133	700
Sub-total of cash inflows		357,593	563,599
Cash repayments of borrowings		(338,232)	(540,015)
Cash paid for dividends, profits distribution or interest		(49,027)	(43,812)
Including: Subsidiaries’ cash payments for distribution of dividends or profits to minority shareholders		(8,068)	(4,821)
Other cash paid relating to financing activities	56(e)	(28,276)	(17,282)
Sub-total of cash outflows		(415,535)	(601,109)
Net cash flow from financing activities		(57,942)	(37,510)
Effects of changes in foreign exchange rate		(1,003)	(1,239)
Net increase in cash and cash equivalents	56(b)	21,031	27,121
Add: Cash and cash equivalents at the beginning of the year		87,559	60,438
Cash and cash equivalents at the end of the period		108,590	87,559

Ma Yongsheng	Yu Baocai	Shou Donghua
Chairman	President	Chief Financial Officer
(Legal representative)

	Notes	2021	2020
		RMB million	RMB million
Cash flows from operating activities:
Cash received from sale of goods and rendering of services		1,155,516	862,093
Refund of taxes and levies		2,959	2,796
Other cash received relating to operating activities		13,868	9,407
Sub-total of cash inflows		1,172,343	874,296
Cash paid for goods and services		(823,402)	(606,295)
Cash paid to and for employees		(49,784)	(44,139)
Payments of taxes and levies		(181,187)	(164,635)
Other cash paid relating to operating activities		(25,895)	(19,239)
Sub-total of cash outflows		(1,080,268)	(834,308)
Net cash flow from operating activities		92,075	39,988
Cash flows from investing activities:
Cash received from disposal of investments		32,738	12,157
Cash received from returns on investments		22,712	18,805
Net cash received from disposal of fixed assets, intangible assets and other long-term assets		72	6,579
Other cash received relating to investing activities		136,276	78,751
Sub-total of cash inflows		191,798	116,292
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets		(70,578)	(59,216)
Cash paid for acquisition of investments		(52,212)	(41,066)
Other cash paid relating to investing activities		(134,009)	(66,408)
Sub-total of cash outflows		(256,799)	(166,690)
Net cash flow from investing activities		(65,001)	(50,398)
Cash flows from financing activities:
Cash received from borrowings		159,879	195,770
Other cash received relating to financing activities		298,755	70,516
Sub-total of cash inflows		458,634	266,286
Cash repayments of borrowings		(151,310)	(199,727)
Cash paid for dividends or interest		(42,933)	(36,973)
Other cash paid relating to financing activities		(284,979)	(7,074)
Sub-total of cash outflows		(479,222)	(243,774)
Net cash flow from financing activities		(20,588)	22,512
Effects of changes in foreign exchange rate		8	(5)
Net increase in cash and cash equivalents		6,494	12,097
Add: Cash and cash equivalents at the beginning of the year		28,081	15,984
Cash and cash equivalents at the end of the period		34,575	28,081

Ma Yongsheng	Yu Baocai	Shou Donghua
Chairman	President	Chief Financial Officer
(Legal representative)

	Share capital	Capital reserve	Other comprehensive income	Specific reserve	Surplus reserves	Retained earnings	Total shareholders’ equity attributable to equity shareholders of the Company	Minority interests	Total shareholders’ equity
	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million
Balance at 31 December 2019	121,071	122,864	(321)	1,741	207,423	287,187	739,965	138,409	878,374
Adjustment for business combination of entities under common control (Note 60)	–	4,773	–	–	–	–	4,773	1	4,774
Balance at 1 January 2020	121,071	127,637	(321)	1,741	207,423	287,187	744,738	138,410	883,148
Change for the year
1. Net profit	–	–	–	–	–	33,271	33,271	8,826	42,097
2. Other comprehensive income (Note 38)	–	–	1,406	–	–	(12)	1,394	(1,079)	315
Total comprehensive income	–	–	1,406	–	–	33,259	34,665	7,747	42,412
Amounts transferred to initial carrying amount of hedged items	–	–	(47)	–	–	–	(47)	48	1
Transactions with owners, recorded directly in shareholders’ equity:
3. Appropriations of profits:
– Appropriations for surplus reserves	–	–	–	–	1,857	(1,857)	–	–	–
– Distributions to shareholders (Note 55)	–	–	–	–	–	(31,479)	(31,479)	–	(31,479)
4. Contributions to subsidiaries from minority interests	–	–	–	–	–	–	–	3,325	3,325
5. Transaction with minority interests	–	(138)	–	–	–	–	(138)	13	(125)
6. Distributions to minority interests	–	–	–	–	–	–	–	(6,726)	(6,726)
7. Adjustment for business combination of entities under common control	–	(972)	–	–	–	–	(972)	972	–
Total transactions with owners, recorded directly in shareholders’ equity	–	(1,110)	–	–	1,857	(33,336)	(32,589)	(2,416)	(35,005)
8. Net increase in specific reserve for the year	–	–	–	200	–	–	200	37	237
9. Others	–	862	–	–	–	(535)	327	(2,400)	(2,073)
Balance at 31 December 2020	121,071	127,389	1,038	1,941	209,280	286,575	747,294	141,426	888,720
Balance at 1 January 2021	121,071	127,389	1,038	1,941	209,280	286,575	747,294	141,426	888,720
Change for the year
1. Net profit	–	–	–	–	–	71,208	71,208	13,822	85,030
2. Other comprehensive income (Note 38)	–	–	17,574	–	–	–	17,574	(67)	17,507
Total comprehensive income	–	–	17,574	–	–	71,208	88,782	13,755	102,537
Amounts transferred to initial carrying amount of hedged items	–	–	(19,302)	–	–	–	(19,302)	(648)	(19,950)
Transactions with owners, recorded directly in shareholders’ equity:
3. Appropriations of profits:
– Appropriations for surplus reserves (Note 39)	–	–	–	–	3,944	(3,944)	–	–	–
– Distributions to shareholders (Note 55)	–	–	–	–	–	(35,110)	(35,110)	–	(35,110)
4. Contributions to subsidiaries from minority interests	–	–	–	–	–	–	–	1,973	1,973
5. Transaction with minority interests	–	(1,396)	–	–	–	–	(1,396)	(6,796)	(8,192)
6. Distributions to minority interests	–	–	–	–	–	–	–	(8,982)	(8,982)
7. Adjustment for business combination of entities under common control (Note 60)	–	(6,124)	–	–	–	–	(6,124)	–	(6,124)
Total transactions with owners, recorded directly in shareholders’ equity	–	(7,520)	–	–	3,944	(39,054)	(42,630)	(13,805)	(56,435)
8. Net increase in specific reserve for the year	–	–	–	723	–	–	723	52	775
9. Others	–	319	–	–	–	(84)	235	159	394
Balance at 31 December 2021	121,071	120,188	(690)	2,664	213,224	318,645	775,102	140,939	916,041

Ma Yongsheng	Yu Baocai	Shou Donghua
Chairman	President	Chief Financial Officer
(Legal representative)

	Share capital	Capital reserve	Other Comprehensive income	Specific reserve	Surplus reserves	Retained earnings	Total shareholders’ equity
	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million
Balance at 1 January 2020	121,071	68,841	1,181	949	207,423	130,645	530,110
Change for the year
1. Net profit	–	–	–	–	–	18,572	18,572
2. Other comprehensive income	–	–	4,766	–	–	–	4,766
Total comprehensive income	–	–	4,766	–	–	18,572	23,338
Amounts transferred to initial carrying amount of hedged items	–	–	(37)	–	–	–	(37)
Transactions with owners, recorded directly in shareholders’ equity:
3. Appropriations of profits:
－Appropriations for surplus reserves	–	–	–	–	1,857	(1,857)	–
－Distributions to shareholders (Note 55)	–	–	–	–	–	(31,479)	(31,479)
Total transactions with owners, recorded directly in shareholders’ equity	–	–	–	–	1,857	(33,336)	(31,479)
4. Net increase in specific reserve for the year	–	–	–	240	–	–	240
5. Others	–	135	–	–	–	(32)	103
Balance at 31 December 2020	121,071	68,976	5,910	1,189	209,280	115,849	522,275
Balance at 1 January 2021	121,071	68,976	5,910	1,189	209,280	115,849	522,275
Change for the year
1. Net profit	–	–	–	–	–	39,444	39,444
2. Other comprehensive income	–	–	13,612	–	–	–	13,612
Total comprehensive income	–	–	13,612	–	–	39,444	53,056
Amounts transferred to initial carrying amount of hedged items	–	–	(13,498)	–	–	–	(13,498)
Transactions with owners, recorded directly in shareholders’ equity:
3. Appropriations of profits:	–	–	–	–	–	–	–
－Appropriations for surplus reserves (Note 39)	–	–	–	–	3,944	(3,944)	–
－Distributions to shareholders (Note 55)	–	–	–	–	–	(35,110)	(35,110)
Total transactions with owners, recorded directly in shareholders’ equity	–	–	–	–	3,944	(39,054)	(35,110)
4. Net increase in specific reserve for the year	–	–	–	469	–	–	469
5. Others	–	(1,079)	–	–	–	201	(878)
Balance at 31 December 2021	121,071	67,897	6,024	1,658	213,224	116,440	526,314

Ma Yongsheng	Yu Baocai	Shou Donghua
Chairman	President	Chief Financial Officer
(Legal representative)

1	STATUS OF THE COMPANY

(1)

the exploration, development and production of crude oil and natural gas;

(2)

the refining, transportation, storage and marketing of crude oil and petroleum product; and

(3)

the production and sale of chemical.

2	BASIS OF PREPARATION

(1)

Statement of compliance of China Accounting Standards for Business Enterprises (“CASs”)

(2)

Accounting period

(3)

Measurement basis

(4)

Functional currency and presentation currency

3	SIGNIFICANT ACCOUNTING POLICIES

(1)

Accounting treatment of business combination involving entities under common control and not under common control

(a)

Business combination involving entities under common control

(b)

Business combination involving entities not under common control

(c)

Method for preparation of consolidated financial statements

3	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(1)

Accounting treatment of business combination involving entities under common control and not under common control (Continued)

(c)

Method for preparation of consolidated financial statements (Continued)

(2)

Transactions in foreign currencies and translation of financial statements in foreign currencies

3	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(3)

Cash and cash equivalents

(4)

Inventories

(5)

Long-term equity investments

(a)

Investment in subsidiaries

3	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(5)

Long-term equity investments (Continued)

(b)

Investment in joint ventures and associates

(c)

The impairment assessment method and provision accrual on investment

3	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(6)

Leases

(a)

As Lessee

(b)

As Lessor

(7)

Fixed assets and construction in progress

3	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(7)

Fixed assets and construction in progress (Continued)

	Estimated useful life	Estimated rate of residual value
Plants and buildings	12-50 years	3%
Equipment, machinery and others	4-30 years	3%

(8)

Oil and gas properties

(9)

Intangible assets

(10)

Goodwill

3	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(11)

Financial Instruments

(a)

Financial assets

(i)

Classification and measurement

–

Measured at amortised cost:

–

Measured at fair value through other comprehensive income:

(ii)

Impairment

3	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(11)

Financial Instruments (Continued)

(a)

Financial assets (Continued)

(ii)

Impairment (Continued)

(iii)

Derecognition

(b)

Financial liabilities

3	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(11)

Financial Instruments (Continued)

(c)

Determination of fair value

(d)

Derivative financial instruments and hedge accounting

(1)

There is an economic relationship between the hedged item and the hedging instrument, which share a risk and that gives rise to opposite changes in fair value that tend to offset each other.

(2)

The effect of credit risk does not dominate the value changes that result from that economic relationship.

(3)

The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the entity actually hedges and the quantity of the hedging instrument that the entity actually uses to hedge that quantity of hedged item. However, that designation shall not reflect an imbalance between the weightings of the hedged item and the hedging instrument.

–

The cumulative gain or loss on the hedging instrument from inception of the hedge;

–

The cumulative change in present value of the expected future cash flows on the hedged item from inception of the hedge.

3	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(11)

Financial Instruments (Continued)

(d)

Derivative financial instruments and hedge accounting (Continued)

(3)

(Continued)

–

Cash flow hedges (Continued)

–

Fair value hedges

(12)

Impairment of other non-financial long-term assets

3	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(12)

Impairment of other non-financial long-term assets (Continued)

(13)

Long-term deferred expenses

(14)

Employee benefits

(a)

Short-term compensation

(b)

Post-employment benefits

(c)

Termination benefits

3	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(15)

Income tax

–

the same taxable entity; or

–

different taxable entities which either to intend to settle the current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

(16)

Provisions

3	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(17)

Revenue recognition

(18)

Government grants

(19)

Borrowing costs

(20)

Repairs and maintenance expenses

(21)

Environmental expenditures

(22)

Research and development costs

3	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(23)

Dividends

(24)

Related parties

(25)

Segment reporting

(26)

Changes in significant accounting policies

(a)

Bulletin No.14

(i)

“Public-private partnership” (PPP) arrangements

(b)

Caikuai [2021] No.9

4

TAXATION

Type of taxes	Tax rate	Tax basis and method
Value Added Tax (the “VAT”)	13%, 9%, 6%	Based on taxable value added amount. Tax payable is calculated using the taxable sales amount multiplied by the applicable tax rate less current period’s deductible VAT input.
Resource Tax	6%	Based on the revenue from sales of crude oil and natural gas.
Consumption Tax	RMB2,109.76 per tonnage for Gasoline, RMB1,411.20 per tonnage for Diesel, RMB2,105.20 per tonnage for Naphtha, RMB1,948.64 per tonnage for Solvent oil, RMB1,711.52 per tonnage for Lubricant oil, RMB1,218.00 per tonnage for Fuel oil, and RMB1,495.20 per tonnage for Jet fuel oil.	Based on quantities
Corporate Income Tax	5% to 50%	Based on taxable income.
Crude Oil Special Gain Levy	20% to 40%	Based on the sales of domestic crude oil at prices higher than a specific level.
City Maintenance and Construction Tax	1%, 5% or 7%	Based on the actual paid VAT and consumption tax.
Education surcharges	3%	Based on the actual paid VAT and consumption tax.
Local Education surcharges	2%	Based on the actual paid VAT and consumption tax.

5	CASH AT BANK AND ON HAND

	At 31 December 2021			At 31 December 2020
	Original currency	Exchange	RMB	Original currency	Exchange	RMB
	million	rates	million	million	rates	million
Cash on hand
Renminbi			1			8
Cash at bank
Renminbi			144,294			120,542
US Dollar	2,027	6.3757	12,924	1,054	6.5249	6,875
Hong Kong Dollar	3,533	0.8176	2,888	1,377	0.8416	1,159
EUR	3	7.2197	20	1	8.0250	8
Others			180			2,403
			160,307			130,995
Deposits at related parities
Renminbi			15,758			23,737
US Dollar	6,943	6.3757	44,266	4,443	6.5249	28,993
EUR	67	7.2197	483	49	8.0250	394
Others			1,175			293
			61,682			53,417
Total			221,989			184,412

6	DERIVATIVE FINANCIAL ASSETS AND DERIVATIVE FINANCIAL LIABILITIES

7	ACCOUNTS RECEIVABLE

	The Group		The Company
	At 31 December	At 31 December	At 31 December	At 31 December
	2021	2020	2021	2020
	RMB million	RMB million	RMB million	RMB million
Accounts receivable	38,894	39,299	21,239	21,871
Less: Allowance for doubtful accounts	4,033	3,860	93	108
Total	34,861	35,439	21,146	21,763

	The Group
	At 31 December 2021				At 31 December 2020
	Amount	Percentage to total accounts receivable	Allowance	Percentage of allowance to accounts receivable balance	Amount	Percentage to total accounts receivable	Allowance	Percentage of allowance to accounts receivable balance
	RMB million	%	RMB million	%	RMB million	%	RMB million	%
Within one year	34,263	88.1	83	0.2	34,478	87.7	117	0.3
Between one and two years	623	1.6	181	29.0	4,062	10.3	3,131	77.1
Between two and three years	3,411	8.8	3,190	93.5	149	0.4	85	57.0
Over three years	597	1.5	579	97.0	610	1.6	527	86.4
Total	38,894	100.0	4,033		39,299	100.0	3,860

	The Company
	At 31 December 2021				At 31 December 2020
	Amount	Percentage to total accounts receivable	Allowance	Percentage of allowance to accounts receivable balance	Amount	Percentage to total accounts receivable	Allowance	Percentage of allowance to accounts receivable balance
	RMB million	%	RMB million	%	RMB million	%	RMB million	%
Within one year	20,196	95.1	9	0.1	21,647	99.0	1	–
Between one and two years	946	4.5	6	0.6	76	0.3	7	9.2
Between two and three years	20	0.1	2	10.0	49	0.2	13	26.5
Over three years	77	0.3	76	98.7	99	0.5	87	87.9
Total	21,239	100.0	93		21,871	100.0	108

	At 31 December	At 31 December
	2021	2020
Total amount (RMB million)	10,444	15,628
Percentage to the total balance of accounts receivable	26.9%	39.8%
Allowance for doubtful accounts	2,062	2,057

7	ACCOUNTS RECEIVABLE (Continued)

		Impairment provision on individual basis		Impairment provision on provision matrix basis
31 December 2021	Gross carrying amount	Carrying amount	Impairment provision on individual basis	Weighted- average loss rate	Impairment provision	Loss allowance
	RMB million	RMB million	RMB million	%	RMB million	RMB million
Current and within 1 year past due	34,263	4,280	26	0.2%	57	83
1 to 2 years past due	623	500	137	35.8%	44	181
2 to 3 years past due	3,411	3,324	3,146	50.6%	44	3,190
Over 3 years past due	597	208	190	100.0%	389	579
Total	38,894	8,312	3,499		534	4,033

		Impairment provision on individual basis		Impairment provision on provision matrix basis
31 December 2020	Gross carrying amount	Carrying amount	Impairment provision on individual basis	Weighted- average loss rate	Impairment provision	Loss allowance
	RMB million	RMB million	RMB million	%	RMB million	RMB million
Current and within 1 year past due	34,478	5,023	117	0.0%	–	117
1 to 2 years past due	4,062	3,637	3,024	25.2%	107	3,131
2 to 3 years past due	149	27	18	54.9%	67	85
Over 3 years past due	610	218	182	88.0%	345	527
Total	39,299	8,905	3,341		519	3,860

8	RECEIVABLES FINANCING

9	PREPAYMENTS

	The Group		The Company
	At 31 December	At 31 December	At 31 December	At 31 December
	2021	2020	2021	2020
	RMB million	RMB million	RMB million	RMB million
Prepayments	9,350	4,934	4,556	2,637
Less: Allowance for doubtful accounts	83	77	16	11
Total	9,267	4,857	4,540	2,626

	The Group
	At 31 December 2021				At 31 December 2020
	Amount	Percentage to total prepayments	Allowance	Percentage of allowance to prepayments balance	Amount	Percentage to total prepayments	Allowance	Percentage of allowance to prepayments balance
	RMB million	%	RMB million	%	RMB million	%	RMB million	%
Within one year	8,541	91.3	–	–	4,435	89.9	–	–
Between one and two years	444	4.8	7	1.6	267	5.4	20	7.5
Between two and three years	166	1.8	25	15.1	142	2.9	8	5.6
Over three years	199	2.1	51	25.8	90	1.8	49	54.4
Total	9,350	100.0	83		4,934	100.0	77

	The Company
	At 31 December 2021				At 31 December 2020
	Amount	Percentage to total prepayments	Allowance	Percentage of allowance to prepayments balance	Amount	Percentage to total prepayments	Allowance	Percentage of allowance to prepayments balance
	RMB million	%	RMB million	%	RMB million	%	RMB million	%
Within one year	3,965	87.0	–	–	2,337	88.6	–	–
Between one and two years	369	8.1	2	0.5	159	6.0	7	4.4
Between two and three years	99	2.2	10	10.1	39	1.5	–	–
Over three years	123	2.7	4	3.3	102	3.9	4	3.9
Total	4,556	100.0	16		2,637	100.0	11

	At 31 December	At 31 December
	2021	2020
Total amount (RMB million)	2,939	1,131
Percentage to the total balance of prepayments	31.4%	22.9%

10	OTHER RECEIVABLES

	The Group		The Company
	At 31 December	At 31 December	At 31 December	At 31 December
	2021	2020	2021	2020
	RMB million	RMB million	RMB million	RMB million
Other receivables	37,254	35,255	47,827	38,835
Less: Allowance for doubtful accounts	1,590	1,531	898	897
Total	35,664	33,724	46,929	37,938

	The Group
	At 31 December 2021				At 31 December 2020
	Amount	Percentage to total other receivables	Allowance	Percentage of allowance to other receivables balance	Amount	Percentage to total other receivables	Allowance	Percentage of allowance to other receivables balance
	RMB million	%	RMB million	%	RMB million	%	RMB million	%
Within one year	26,579	71.3	35	0.1	24,010	68.1	51	0.2
Between one and two years	597	1.6	112	18.8	8,513	24.2	196	2.3
Between two and three years	7,661	20.6	165	2.2	1,169	3.3	84	7.2
Over three years	2,417	6.5	1,278	52.9	1,563	4.4	1,200	76.8
Total	37,254	100.0	1,590		35,255	100.0	1,531

	The Company
	At 31 December 2021				At 31 December 2020
	Amount	Percentage to total other receivables	Allowance	Percentage of allowance to other receivables balance	Amount	Percentage to total other receivables	Allowance	Percentage of allowance to other receivables balance
	RMB million	%	RMB million	%	RMB million	%	RMB million	%
Within one year	28,176	58.9	–	–	21,378	55.0	–	–
Between one and two years	3,740	7.8	2	0.1	2,123	5.5	1	–
Between two and three years	1,414	3.0	2	0.1	1,618	4.2	5	0.3
Over three years	14,497	30.3	894	6.2	13,716	35.3	891	6.5
Total	47,827	100.0	898		38,835	100.0	897

	At 31 December	At 31 December
	2021	2020
Total amount (RMB million)	19,056	22,581
Ageing	Within one year, one to two years, two to three years and over three years	Within one year, one to two years, two to three years and over three years
Percentage to the total balance of other receivables	51.2%	64.1%
Allowance for doubtful accounts	74.0	–

11	INVENTORIES

	At 31 December	At 31 December
	2021	2020
	RMB million	RMB million
Raw materials	109,940	60,379
Work in progress	15,701	13,066
Finished goods	84,174	78,481
Spare parts and consumables	2,515	3,372
	212,330	155,298
Less: Provision for diminution in value of inventories	4,897	3,107
Total	207,433	152,191

12	LONG-TERM EQUITY INVESTMENTS

	Investments in joint ventures	Investments in associates	Provision for impairment losses	Total
	RMB million	RMB million	RMB million	RMB million
Balance at 1 January 2021	55,018	136,872	(3,548)	188,342
Additions for the year	4,110	5,212	–	9,322
Share of profits less losses under the equity method	9,366	13,887	–	23,253
Change of other comprehensive loss under the equity method	155	286	–	441
Other equity movements under the equity method	24	675	–	699
Dividends declared	(3,872)	(7,120)	–	(10,992)
Disposals for the year	(1,176)	(97)	–	(1,273)
Foreign currency translation differences	(368)	(315)	42	(641)
Other movements	127	100	–	227
Movement of provision for impairment	–	–	(199)	(199)
Balance at 31 December 2021	63,384	149,500	(3,705)	209,179

	Investments in  subsidiaries	Investments in joint ventures	Investments in associates	Provision for impairment losses	Total
	RMB million	RMB million	RMB million	RMB million	RMB million
Balance at 1 January 2021	266,939	14,762	69,540	(7,885)	343,356
Additions for the year	12,646	812	1,014	–	14,472
Share of profits less losses under the equity method	–	4,190	3,961	–	8,151
Change of other comprehensive loss under the equity method	–	–	12	–	12
Other equity movements under the equity method	–	18	155	–	173
Dividends declared	–	(1,387)	(1,019)	–	(2,406)
Disposals for the year	(2,275)	(786)	(8)	–	(3,069)
Other movement	–	–	199	–	199
Movement of provision for impairment	–	–	–	(41)	(41)
Balance at 31 December 2021	277,310	17,609	73,854	(7,926)	360,847

12	LONG-TERM EQUITY INVESTMENTS (Continued)

(a)

Principal joint ventures and associates

Name of investees	Principal place of business	Register location	Legal representative	Principal activities	Registered Capital RMB million	Percentage of equity/voting right directly or indirectly held by the Company
1. Joint ventures
Fujian Refining & Petrochemical Company Limited (“FREP”)	PRC	PRC	Gu Yuefeng	Manufacturing refining oil products	14,758	50.00%
BASF-YPC Company Limited (“BASF-YPC”)	PRC	PRC	Gu Yuefeng	Manufacturing and distribution of petrochemical products	12,704	40.00%
Taihu Limited (“Taihu”)	Russia	Cyprus	NA	Crude oil and natural gas extraction	25,000 USD	49.00%
Yanbu Aramco Sinopec Refining Company Ltd. (“YASREF”)	Saudi Arabia	Saudi Arabia	NA	Petroleum refining and processing	1,560 million USD	37.50%
Sinopec SABIC Tianjin Petrochemical Company Limited (“Sinopec SABIC Tianjin”)	PRC	PRC	AHMED AL-SHAIKH	Manufacturing and distribution of petrochemical products	10,520	50.00%
2. Associates
China Oil & Gas Pipeline Network Corporation (“PipeChina”) (i)	PRC	PRC	Zhang Wei	Operation of oil and natural gas pipelines and auxiliary facilities	500,000	14.00%
Sinopec Finance Company Limited (“Sinopec Finance”)	PRC	PRC	Jiang Yongfu	Provision of non-banking financial services	18,000	49.00%
Sinopec Capital Co.,Ltd. (“Sinopec Capital”)	PRC	PRC	Sun Mingrong	Project management, equity management, investment consulting, self-owned equity management	10,000	49.00%
Zhongtian Synergetic Energy Company Limited (“Zhongtian Synergetic Energy”)	PRC	PRC	Peng Yi	Mining coal and manufacturing of coal-chemical products	17,516	38.75%
Caspian Investments Resources Ltd. (“CIR”)	The Republic of Kazakhstan	British Virgin Islands	NA	Crude oil and natural gas extraction	10,002 USD	50.00%

12	LONG-TERM EQUITY INVESTMENTS (Continued)

(b)

Major financial information of principal joint ventures

	FREP		BASF-YPC		Taihu		YASREF		Sinopec SABIC Tianjin
	At 31	At 31	At 31	At 31	At 31	At 31	At 31	At 31	At 31	At 31
	December	December	December	December	December	December	December	December	December	December
	2021	2020	2021	2020	2021	2020	2021	2020	2021	2020
	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million
Current assets
Cash and cash equivalents	6,562	7,448	5,375	1,838	1,258	1,280	5,441	1,408	4,820	5,259
Other current assets	9,217	7,492	6,953	4,777	2,188	1,223	12,404	7,516	3,437	2,665
Total current assets	15,779	14,940	12,328	6,615	3,446	2,503	17,845	8,924	8,257	7,924
Non-current assets	13,744	15,237	9,336	9,993	14,032	12,531	41,947	45,413	18,835	18,258
Current liabilities
Current financial liabilities	(1,177)	(1,203)	(77)	(456)	(32)	(38)	(9,549)	(9,520)	(597)	(998)
Other current liabilities	(5,008)	(5,147)	(2,546)	(2,190)	(1,931)	(1,043)	(15,844)	(8,644)	(3,547)	(3,052)
Total current liabilities	(6,185)	(6,350)	(2,623)	(2,646)	(1,963)	(1,081)	(25,393)	(18,164)	(4,144)	(4,050)
Non-current liabilities
Non-current financial liabilities	(6,857)	(8,761)	–	–	(85)	(85)	(30,903)	(29,650)	(7,599)	(6,773)
Other non-current liabilities	(242)	(235)	(92)	(42)	(1,439)	(2,017)	(1,723)	(2,008)	(382)	(378)
Total non-current liabilities	(7,099)	(8,996)	(92)	(42)	(1,524)	(2,102)	(32,626)	(31,658)	(7,981)	(7,151)
Net assets	16,239	14,831	18,949	13,920	13,991	11,851	1,773	4,515	14,967	14,981
Net assets attributable to shareholders of the company	16,239	14,831	18,949	13,920	13,523	11,439	1,773	4,515	14,967	14,981
Net assets attributable to minority interests	–	–	–	–	468	412	–	–	–	–
Share of net assets from joint ventures	8,120	7,416	7,580	5,568	6,626	5,605	–	–	7,484	7,491
Carrying Amounts	8,120	7,416	7,580	5,568	6,626	5,605	–	–	7,484	7,491

For the year ended 31 December 2021	FREP		BASF-YPC		Taihu		YASREF		Sinopec SABIC Tianjin
	2021	2020	2021	2020	2021	2020	2021	2020	2021	2020
	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million
Turnover	47,224	38,691	27,499	15,701	15,190	9,528	68,548	37,337	24,631	14,881
Interest income	147	118	52	27	451	291	6	17	209	183
Interest expense	(411)	(535)	(5)	(16)	(107)	(20)	(945)	(1,136)	(89)	(131)
Profit/(loss) before taxation	2,261	520	8,218	1,518	2,864	2,304	(2,868)	(7,193)	1,393	954
Tax expense	(597)	(87)	(2,054)	(379)	(601)	(378)	332	1,057	(407)	(236)
Profit/(loss) for the year	1,664	433	6,164	1,139	2,263	1,926	(2,536)	(6,136)	986	718
Other comprehensive loss	–	–	–	–	(123)	(3,368)	(206)	(584)	–	–
Total comprehensive income/(loss)	1,664	433	6,164	1,139	2,140	(1,442)	(2,742)	(6,720)	986	718
Dividends from joint ventures	128	300	454	691	–	–	–	–	500	–
Share of net profit/(loss) from joint ventures	832	217	2,466	456	1,081	911	–	(2,301)	493	359
Share of other comprehensive loss from joint ventures (ii)	–	–	–	–	(60)	(1,593)	–	(219)	–	–

12	LONG-TERM EQUITY INVESTMENTS (Continued)

(c)

Major financial information of principal associates

	PipeChina		Sinopec Finance		Sinopec Capital		Zhongtian Synergetic Energy		CIR
	At 31	At 31	At 31	At 31	At 31	At 31	At 31	At 31	At 31	At 31
	December	December	December	December	December	December	December	December	December	December
	2021	2020	2021	2020	2021	2020	2021	2020	2021	2020
	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million
Current assets	86,335	74,012	194,458	175,139	13,140	11,871	3,532	3,721	576	2,402
Non-current assets	768,161	655,982	55,086	53,008	102	106	51,331	53,124	870	903
Current liabilities	(136,150)	(55,562)	(217,987)	(197,872)	(28)	(18)	(8,577)	(8,315)	(822)	(699)
Non-current liabilities	(103,243)	(104,150)	(602)	(514)	(676)	(411)	(22,216)	(28,422)	(144)	(286)
Net assets	615,103	570,282	30,955	29,761	12,538	11,548	24,070	20,108	480	2,320
Net assets attributable to shareholders of the Company	526,241	505,336	30,955	29,761	12,538	11,548	24,070	20,108	480	2,320
Net assets attributable to minority interests	88,862	64,946	–	–	–	–	–	–	–	–
Share of net assets from associates	73,674	70,747	15,168	14,583	6,144	5,659	9,327	7,792	240	1,160
Carrying Amounts	73,674	70,747	15,168	14,583	6,144	5,659	9,327	7,792	240	1,160

For the year ended 31 December 2021	PipeChina		Sinopec Finance		Sinopec Capital		ZTHC Energy		CIR
	2021	2020	2021	2020	2021	2020	2021	2020	2021	2020
	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million
Turnover	101,572	22,766	5,177	4,742	2	2	16,959	11,707	1,826	1,252
Profit for the year	29,776	6,444	2,168	2,027	990	1,278	4,184	551	461	181
Other comprehensive income	2	–	26	(372)	–	–	–	–	3	(308)
Total comprehensive income	29,778	6,444	2,194	1,655	990	1,278	4,184	551	464	(127)
Dividends declared by associates	442	–	490	–	–	–	86	284	1,152	2,517
Share of profit from associates	3,205	709	1,062	993	485	626	1,621	214	231	91
Share of other comprehensive income from associates (ii)	–	–	13	(182)	–	–	–	–	2	(154)

(i)

Sinopec is able to exercise significant influence in PipeChina since Sinopec has a member in PipeChina’s Board of Directors and has a member in PipeChina’s Management Board.

(ii)

Including foreign currency translation differences.

13	FIXED ASSETS

	At 31 December 2021	At 31 December 2020
	RMB million	RMB million
Fixed assets (a)	598,925	593,615
Fixed assets pending for disposal	7	38
Total	598,932	593,653

(a)

Fixed assets

	Plants and buildings	Oil and gas properties	Equipment, machinery and others	Total
	RMB million	RMB million	RMB million	RMB million
Cost:
Balance at 1 January 2021	138,550	757,592	996,702	1,892,844
Additions for the year	509	2,192	5,177	7,878
Transferred from construction in progress	5,487	40,357	65,182	111,026
Reclassifications	646	(617)	(29)	–
Decreases for the year	(1,970)	(5,539)	(18,710)	(26,219)
Exchange adjustments	(57)	(940)	(95)	(1,092)
Balance at 31 December 2021	143,165	793,045	1,048,227	1,984,437
Less: Accumulated depreciation:
Balance at 1 January 2021	59,471	572,603	577,748	1,209,822
Additions for the year	4,586	39,670	48,568	92,824
Reclassifications	185	(410)	225	–
Decreases for the year	(734)	(7)	(12,987)	(13,728)
Exchange adjustments	(29)	(844)	(56)	(929)
Balance at 31 December 2021	63,479	611,012	613,498	1,287,989
Less: Provision for impairment losses:
Balance at 1 January 2021	4,069	48,117	37,221	89,407
Additions for the year	742	1,904	6,774	9,420
Decreases for the year	(124)	(135)	(984)	(1,243)
Exchange adjustments	–	(60)	(1)	(61)
Balance at 31 December 2021	4,687	49,826	43,010	97,523
Net book value:
Balance at 31 December 2021	74,999	132,207	391,719	598,925
Balance at 31 December 2020	75,010	136,872	381,733	593,615

	At 31 December 2021	At 31 December 2020
	RMB million	RMB million
Fixed assets (a)	284,618	283,691
Fixed assets pending for disposal	4	4
Total	284,622	283,695

13	FIXED ASSETS (Continued)

(a)

Fixed assets (Continued)

	Plants and buildings	Oil and gas properties	Equipment, machinery and others	Total
	RMB million	RMB million	RMB million	RMB million
Cost:
Balance at 1 January 2021	49,356	618,483	484,351	1,152,190
Additions for the year	2,056	1,592	10,850	14,498
Transferred from construction in progress	970	29,458	27,752	58,180
Reclassifications	360	(620)	260	–
Transferred from subsidiaries	–	–	33	33
Transferred to subsidiaries	(422)	(286)	(667)	(1,375)
Decreases for the year	(624)	(2,607)	(8,157)	(11,388)
Balance at 31 December 2021	51,696	646,020	514,422	1,212,138
Accumulated depreciation:
Balance at 1 January 2021	25,189	468,718	309,841	803,748
Additions for the year	2,604	31,534	27,473	61,611
Reclassifications	98	(412)	314	–
Transferred from subsidiaries	–	–	1	1
Transferred to subsidiaries	(91)	–	(383)	(474)
Decreases for the year	(428)	(7)	(6,793)	(7,228)
Balance at 31 December 2021	27,372	499,833	330,453	857,658
Provision for impairment losses:
Balance at 1 January 2021	1,917	41,406	21,428	64,751
Additions for the year	359	1,901	3,472	5,732
Transferred to subsidiaries	(27)	–	(2)	(29)
Decreases for the year	(21)	–	(571)	(592)
Balance at 31 December 2021	2,228	43,307	24,327	69,862
Net book value:
Balance at 31 December 2021	22,096	102,880	159,642	284,618
Balance at 31 December 2020	22,250	108,359	153,082	283,691

14	CONSTRUCTION IN PROGRESS

	The Group	The Company
	RMB million	RMB million
Cost:
Balance at 1 January 2021	127,572	60,182
Additions for the year	159,729	72,196
Disposals for the year	(146)	(90)
Dry hole costs written off	(7,702)	(6,733)
Transferred to fixed assets	(111,026)	(58,180)
Reclassification to other assets	(10,302)	(927)
Exchange adjustments	(56)	–
Balance at 31 December 2021	158,069	66,448
Provision for impairment losses:
Balance at 1 January 2021	2,047	302
Additions for the year	144	–
Decreases for the year	(39)	–
Exchange adjustments	(22)	–
Balance at 31 December 2021	2,130	302
Net book value:
Balance at 31 December 2021	155,939	66,146
Balance at 31 December 2020	125,525	59,880

Project name	Budgeted amount	Balance at 1 January 2021	Net change for the year	Balance at 31 December 2021	Percentage of project investment to budgeted amount	Source of funding	Accumulated interest capitalised at 31 December 2021
	RMB million	RMB million	RMB million	RMB million			RMB million
Hainan Refining and Chemical Ethylene and Refining Reconstruction and Expansion Project	28,565	5,002	10,600	15,602	55%	Bank loans & self-financing	63
Zhenhai Refinery Expansion Ethylene Project	23,055	9,155	2,022	11,177	48%	Bank loans & self-financing	305
Caprolactam Industry Chain Relocation and Upgrading Transformation Development Project	13,950	1,000	2,700	3,700	27%	Bank loans & self-financing	32
Tianjin Nangang Ethylene and Downstream High-end New Material Industry Cluster Project	29,052	–	2,999	2,999	10%	Bank loans & self-financing	13
Zhenhai Refining and Chemical Refining and High-end Synthetic New Material Project	41,639	328	1,800	2,128	5%	Self-financing	–

15	RIGHT-OF-USE ASSETS

	Land	Others	Total
	RMB million	RMB million	RMB million
Cost:
Balance at 1 January 2021	171,392	40,698	212,090
Additions for the year	2,389	9,653	12,042
Decreases for the year	(1,677)	(3,430)	(5,107)
Balance at 31 December 2021	172,104	46,921	219,025
Accumulated depreciation:
Balance at 1 January 2021	12,591	10,481	23,072
Additions for the year	6,495	6,863	13,358
Decreases for the year	(182)	(2,197)	(2,379)
Balance at 31 December 2021	18,904	15,147	34,051
Net book value:
Balance at 31 December 2021	153,200	31,774	184,974
Balance at 31 December 2020	158,801	30,217	189,018

	Land	Others	Total
	RMB million	RMB million	RMB million
Cost:
Balance at 1 January 2021	115,047	2,272	117,319
Additions for the year	653	1,619	2,272
Decreases for the year	(211)	(935)	(1,146)
Balance at 31 December 2021	115,489	2,956	118,445
Accumulated depreciation:
Balance at 1 January 2021	7,494	1,088	8,582
Additions for the year	3,760	882	4,642
Decreases for the year	(50)	(441)	(491)
Balance at 31 December 2021	11,204	1,529	12,733
Net book value:
Balance at 31 December 2021	104,285	1,427	105,712
Balance at 31 December 2020	107,553	1,184	108,737

16	INTANGIBLE ASSETS

	Land use rights	Patents	Non-patent technology	Operation rights	Others	Total
	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million
Cost:
Balance at 1 January 2021	102,177	5,383	5,593	53,567	6,179	172,899
Additions for the year	10,690	1,159	379	912	2,122	15,262
Decreases for the year	(1,003)	(9)	(832)	(688)	(84)	(2,616)
Balance at 31 December 2021	111,864	6,533	5,140	53,791	8,217	185,545
Accumulated amortisation:
Balance at 1 January 2021	24,957	3,791	3,477	21,522	3,931	57,678
Additions for the year	3,406	1,123	332	2,458	604	7,923
Decreases for the year	(169)	(7)	(9)	(310)	(43)	(538)
Balance at 31 December 2021	28,194	4,907	3,800	23,670	4,492	65,063
Provision for impairment losses:
Balance at 1 January 2021	226	482	27	189	17	941
Additions for the year	11	–	103	241	–	355
Decreases for the year	(1)	–	–	(23)	–	(24)
Balance at 31 December 2021	236	482	130	407	17	1,272
Net book value:
Balance at 31 December 2021	83,434	1,144	1,210	29,714	3,708	119,210
Balance at 31 December 2020	76,994	1,110	2,089	31,856	2,231	114,280

17

GOODWILL

		At 31 December	At 31 December
Name of investees	Principal activities	2021	2020
		RMB million	RMB million
Sinopec Zhenhai Refining and Chemical Branch	Manufacturing of intermediate petrochemical products and petroleum products	4,043	4,043
Shanghai SECCO Petrochemical Company Limited (“Shanghai SECCO”)	Production and sale of petrochemical products	2,541	2,541
Sinopec Beijing Yanshan Petrochemical Branch	Manufacturing of intermediate petrochemical products and petroleum products	1,004	1,004
Other units without individual significant goodwill		1,006	1,032
Total		8,594	8,620

18	LONG-TERM DEFERRED EXPENSES

19	DEFERRED TAX ASSETS AND LIABILITIES

	Deferred tax assets		Deferred tax liabilities
	At 31 December	At 31 December	At 31 December	At 31 December
	2021	2020	2021	2020
	RMB million	RMB million	RMB million	RMB million
Receivables and inventories	3,763	2,411	–	–
Payables	2,858	1,286	–	–
Cash flow hedges	258	1,790	(2,709)	(4,420)
Fixed assets	16,777	15,793	(15,037)	(13,415)
Tax value of losses carried forward	4,749	13,322	–	–
Other equity instrument investments	127	127	(9)	(11)
Intangible assets	1,008	869	(492)	(517)
Others	1,056	371	(870)	(676)
Deferred tax assets/(liabilities)	30,596	35,969	(19,117)	(19,039)

	At 31 December	At 31 December
	2021	2020
	RMB million	RMB million
Deferred tax assets	11,207	10,915
Deferred tax liabilities	11,207	10,915

	At 31 December	At 31 December
	2021	2020
	RMB million	RMB million
Deferred tax assets	19,389	25,054
Deferred tax liabilities	7,910	8,124

20	OTHER NON-CURRENT ASSETS

21	DETAILS OF IMPAIRMENT LOSSES

	Note	Balance at 1 January 2021	Provision for the year	Written back for the year	Written off for the year	Other increase/ (decrease)	Balance at 31 December 2021
		RMB million	RMB million	RMB million	RMB million	RMB million	RMB million
Allowance for doubtful accounts
Included:Accounts receivable	7	3,860	436	(127)	(30)	(106)	4,033
Prepayments	9	77	14	(54)	–	46	83
Other receivables	10	1,531	83	(12)	(12)	–	1,590
Other non-current assets		–	1,931	–	–	2	1,933
		5,468	2,464	(193)	(42)	(58)	7,639
Inventories	11	3,107	3,148	(18)	(1,300)	(40)	4,897
Long-term equity investments	12	3,548	206	–	(7)	(42)	3,705
Fixed assets	13	89,407	9,420	–	(1,141)	(163)	97,523
Construction in progress	14	2,047	144	–	(33)	(28)	2,130
Intangible assets	16	941	262	–	(24)	93	1,272
Goodwill	17	7,861	–	–	–	–	7,861
Others		6	43	–	–	–	49
Total		112,385	15,687	(211)	(2,547)	(238)	125,076

22	SHORT-TERM LOANS

	At 31 December 2021			At 31 December 2020
	Original currency million	Exchange rates	RMB million	Original currency million	Exchange rates	RMB million
Short-term bank loans			24,959			16,111
– Renminbi loans			24,959			16,111
Short-term other loans			–			3
– Renminbi loans			–			3
Short-term loans from Sinopec Group Company and fellow subsidiaries			2,407			4,642
– Renminbi loans			1,320			1,141
– US Dollar loans	146	6.3757	934	505	6.5249	3,298
– Hong Kong Dollar loans	–		–	37	0.8416	31
– Euro loans	21	7.2197	153	21	8.0250	172
Total			27,366			20,756

23	BILLS PAYABLE

24	ACCOUNTS PAYABLE

25	CONTRACT LIABILITIES

26	EMPLOYEE BENEFITS PAYABLE

(1)

Employee benefits payable:

	Balance at the beginning of the year	Accrued during the year	Decreased during the year	Balance at the end of the year
Short-term employee benefits	7,043	97,396	(90,472)	13,967
Post-employment benefits	74	12,241	(12,246)	69
defined contribution plans	12	91	(91)	12
Total	7,129	109,728	(102,809)	14,048

(2)

Short-term employee benefits

	Balance at the beginning of the year	Accrued during the year	Decreased during the year	Balance at the end of the year
Salaries, bonuses, allowances	3,836	72,704	(65,810)	10,730
Staff welfare	2,660	7,610	(7,684)	2,586
Social insurance	234	5,955	(5,912)	277
Medical insurance	224	5,423	(5,382)	265
Work-related injury insurance	5	381	(380)	6
Maternity insurance	5	151	(150)	6
Housing fund	47	6,244	(6,243)	48
Labour union fee, staff and workers’ education fee	236	2,246	(2,203)	279
Other short-term employee benefits	30	2,637	(2,620)	47
Total	7,043	97,396	(90,472)	13,967

(3)

Post-employment benefits – defined contribution plans

	Balance at the beginning of the year	Accrued during the year	Decreased during the year	Balance at the end of the year
Basic pension insurance	51	8,147	(8,148)	50
Unemployment insurance	8	305	(305)	8
Annuity	15	3,789	(3,793)	11
Total	74	12,241	(12,246)	69

27	TAXES PAYABLE

	At 31 December	At 31 December
	2021	2020
	RMB million	RMB million
Value-added tax payable	8,818	5,089
Consumption tax payable	56,084	56,762
Income tax payable	4,809	6,586
Mineral resources compensation fee payable	8	132
Other taxes	11,548	8,279
Total	81,267	76,848

28	OTHER PAYABLES

29	NON-CURRENT LIABILITIES DUE WITHIN ONE YEAR

	At 31 December 2021			At 31 December 2020
	Original currency million	Exchange rates	RMB million	Original currency million	Exchange rates	RMB million
Long-term bank loans
– Renminbi loans			3,281			4,613
– US Dollar loans	2	6.3757	12	4	6.5249	24
Long-term loans from Sinopec Group Company and fellow subsidiaries
– Renminbi loans			466			622
Long-term loans due within one year			3,759			5,259
Debentures payable due within one year
– Renminbi debentures			7,000			–
Lease liabilities due within one year			15,173			15,293
Others			2,719			1,942
Non-current liabilities due within one year			28,651			22,494

30	OTHER CURRENT LIABILITIES

31	LONG-TERM LOANS

		At 31 December 2021			At 31 December 2020
	Interest rate and final maturity	Original currency million	Exchange rates	RMB million	Original currency million	Exchange rates	RMB million
Long-term bank loans
– Renminbi loans	Interest rates ranging from interest 1.08% to 4.00% per annum at 31 December 2021 (2020: 1.08% to 5.23%) with maturities through 2039			38,880			38,226
– US Dollar loans	Interest rates at 1.55% per annum at 31 December 2020 (2020: 1.55%) with maturities through 2038	10	6.3757	64	14	6.5249	92
Less: Portion with one year				(3,293)			(4,637)
Long-term bank loans				35,651			33,681
Long-term loans from Sinopec Group Company and fellow subsidiaries
– Renminbi loans	Interest rates ranging from interest 1.08% to 5.23% per annum at 31 December 2021 (2020: 1.08% to 5.23%) with maturities through 2037			12,988			11,013
– US Dollar loans	Interest rates at 1.65% per annum at 31 December 2021 (2020:1.60%)with maturities in 2027	183	6.3757	1,168	213	6.5249	1,387
Less: Portion with one year (note 29)				(466)			(622)
Long-term loans from Sinopec Group Company and fellow subsidiaries				13,690			11,778
Total				49,341			45,459

	At 31 December	At 31 December
	2021	2020
	RMB million	RMB million
Between one and two years	18,373	3,520
Between two and five years	26,633	39,504
After five years	4,335	2,435
Total	49,341	45,459

32	DEBENTURES PAYABLE

	At 31 December	At 31 December
	2021	2020
	RMB million	RMB million
Debentures payable:
– Corporate Bonds (i)	49,649	38,356
Less: Portion with one year (Note 29)	7,000	–
Total	42,649	38,356

(i)

The Company issued corporate bonds with a maturity of five years on 26 July 2021 at par value of RMB100. The total issued amount of the corporate bonds is RMB5 billion. The corporate bonds adopt a simple interest rate on an annual basis with a fixed rate at 3.20% per annum and the interest is paid once a year.

33	LEASE LIABILITY

	At 31 December	At 31 December
	2021	2020
	RMB million	RMB million
Lease liabilities	185,406	187,033
Deduct: Portion of lease liabilities with one year (Note 29)	15,173	15,293
Total	170,233	171,740

34	PROVISIONS

	The Group
	RMB million
Balance at 1 January 2021	43,713
Provision for the year	2,163
Accretion expenses	1,135
Decrease for the year	(6,435)
Exchange adjustments	(81)
Balance at 31 December 2021	40,495

35	OTHER NON-CURRENT LIABILITIES

36	SHARE CAPITAL

	At 31 December	At 31 December
	2021	2020
	RMB million	RMB million
Registered, issued and fully paid:
95,557,771,046 listed A shares (2020: 95,557,771,046) of RMB1.00 each	95,558	95,558
25,513,438,600 listed H shares (2020: 25,513,438,600) of RMB1.00 each	25,513	25,513
Total	121,071	121,071

36	SHARE CAPITAL (Continued)

37	CAPITAL RESERVE

	RMB million
Balance at 1 January 2021	127,389
Adjustment for business combination of entities under common control	(6,124)
Transaction with minority interests	(1,396)
Others	319
Balance at 31 December 2021	120,188

38	OTHER COMPREHENSIVE INCOME

(a)

The changes of other comprehensive income in consolidated income statement

	2021
	Before-tax amount	Tax effect	Net-of-tax amount
	RMB million	RMB million	RMB million
Cash flow hedges:
Effective portion of changes in fair value of hedging instruments recognised during the year	15,659	(3,881)	11,778
Less: Reclassification adjustments for amounts transferred to the consolidated income statement	(8,858)	1,618	(7,240)
Subtotal	24,517	(5,499)	19,018
Cost of hedging reserve	(220)	–	(220)
Changes in fair value of other equity instrument investments	(6)	2	(4)
Other comprehensive loss that can be converted into profit or loss under the equity method	441	–	441
Foreign currency translation differences	(1,728)	–	(1,728)
Other comprehensive income	23,004	(5,497)	17,507

	2020
	Before-tax amount	Tax effect	Net-of-tax amount
	RMB million	RMB million	RMB million
Cash flow hedges:
Effective portion of changes in fair value of hedging instruments recognised during the year	9,207	(2,295)	6,912
Less: Reclassification adjustments for amounts transferred to the consolidated income statement	(198)	37	(161)
Subtotal	9,405	(2,332)	7,073
Cost of hedging reserve	162	–	162
Changes in fair value of other equity instrument investments	(18)	(4)	(22)
Other comprehensive loss that can be converted into profit or loss under the equity method	(2,441)	–	(2,441)
Foreign currency translation differences	(4,457)	–	(4,457)
Other comprehensive income	2,651	(2,336)	315

(b)

The change of each item in other comprehensive income

	Equity Attributable to shareholders of the company
	Other comprehensive income that can be converted into profit or loss under the equity method	Changes in fair value of other equity instrument investments	fair value hedges	Cash flow hedges	Foreign currency translation differences	Subtotal	Minority interests	Total other comprehensive income
	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million
1 January 2020	(4,088)	(16)	–	1,037	2,746	(321)	(1,569)	(1,890)
Changes in 2020	(2,001)	(4)	81	6,768	(3,485)	1,359	(1,031)	328
31 December 2020	(6,089)	(20)	81	7,805	(739)	1,038	(2,600)	(1,562)
1 January 2021	(6,089)	(20)	81	7,805	(739)	1,038	(2,600)	(1,562)
Changes in 2021	324	2	(110)	(591)	(1,353)	(1,728)	(715)	(2,443)
31 December 2021	(5,765)	(18)	(29)	7,214	(2,092)	(690)	(3,315)	(4,005)

39	SURPLUS RESERVES

	The Group
	Statutory surplus reserve	Discretionary surplus reserves	Total
	RMB million	RMB million	RMB million
Balance at 1 January 2021	92,280	117,000	209,280
Appropriation	3,944	–	3,944
Balance at 31 December 2021	96,224	117,000	213,224

(a)

10% of the net profit is transferred to the statutory surplus reserve. In the event that the reserve balance reaches 50% of the registered capital, no transfer is needed;

(b)

After the transfer to the statutory surplus reserve, a transfer to discretionary surplus reserve can be made upon the passing of a resolution at the shareholders’ meeting.

40	OPERATING INCOME AND OPERATING COSTS

	The Group		The Company
	2021	2020	2021	2020
	RMB million	RMB million	RMB million	RMB million
Income from principal operations	2,679,500	2,048,654	1,013,961	743,188
Income from other operations	61,384	56,070	31,039	27,133
Total	2,740,884	2,104,724	1,045,000	770,321
Operating costs	2,216,551	1,685,674	808,540	584,315

	2021	2020
	RMB million	RMB million
Income from principal operations	2,679,500	2,048,654
Gasoline	726,057	557,605
Diesel	542,260	422,566
Crude oil	429,038	351,707
Basic chemical feedstock	242,532	155,397
Synthetic resin	149,208	122,368
Kerosene	112,519	72,385
Natural gas	68,443	48,099
Synthetic fiber monomers and polymers	45,464	42,388
Others (i)	363,979	276,139
Income from other operations	61,384	56,070
Sale of materials and others	59,990	54,986
Rental income	1,394	1,084
Total	2,740,884	2,104,724

(i)

Others are primarily liquefied petroleum gas and other refinery and chemical byproducts and joint products and so on.

(ii)

The above incomes, except rental income, are all income from contracts.

41	TAXES AND SURCHARGES

	2021	2020
	RMB million	RMB million
Consumption tax	213,894	197,542
City construction tax	18,044	15,710
Education surcharge	13,409	11,678
Resources tax	6,432	4,572
Others	7,253	5,516
Total	259,032	235,018

42	FINANCIAL EXPENSES

	2021	2020
	RMB million	RMB million
Interest expenses incurred	5,679	6,517
Less: Capitalised interest expenses	996	2,011
Add: Interest expense on lease liabilities	9,200	9,349
Net interest expenses	13,883	13,855
Accretion expenses (Note 34)	1,135	1,343
Interest income	(5,732)	(4,803)
Net foreign exchange gains	(276)	(885)
Total	9,010	9,510

43	CLASSIFICATION OF EXPENSES BY NATURE

	2021	2020
	RMB million	RMB million
Purchased crude oil, products and operating supplies and expenses	2,076,665	1,589,821
Personnel expenses	103,492	87,525
Depreciation, depletion and amortisation	115,680	107,461
Exploration expenses (including dry holes)	12,382	9,716
Other expenses	52,621	42,531
Total	2,360,840	1,837,054

44	SELLING AND DISTRIBUTION EXPENSES

45	GENERAL AND ADMINISTRATIVE EXPENSES

46	RESEARCH AND DEVELOPMENT EXPENSES

47	EXPLORATION EXPENSES

48	OTHER INCOME

49	INVESTMENT INCOME

	The Group		The Company
	2021	2020	2021	2020
	RMB million	RMB million	RMB million	RMB million
Income from investment of subsidiaries accounted for under cost method	–	–	21,416	19,296
Income from investment accounted for under equity method	23,253	6,712	8,151	3,637
Investment income from disposal of business and long-term equity investments	82	37,525	56	21,079
Dividend income from holding of other equity instrument investments	34	156	22	16
Investment (loss)/income from holding/disposal of financial assets and liabilities and derivative financial instruments at fair value through profit or loss	(17,687)	687	(376)	(1,013)
Gain from ineffective portion of cash flow hedges	266	2,475	409	84
Others	84	(69)	1,203	257
Total	6,032	47,486	30,881	43,356

50	INCOME FROM CHANGES IN FAIR VALUE

	2021	2020
	RMB million	RMB million
Net fair value gains on financial assets and financial liabilities at fair value through profit or loss	2,913	(1,824)
Unrealised gains from ineffective portion cash flow hedges, net	428	576
Others	–	(5)
Total	3,341	(1,253)

51	IMPAIRMENT LOSSES

	2021	2020
	RMB million	RMB million
Prepayments	(40)	97
Inventories	3,130	11,361
Long-term equity investment	206	1,955
Fixed assets	9,420	11,783
Intangible assets	262	47
Construction in progress	144	844
Others	43	–
Total	13,165	26,087

52	NON-OPERATING INCOME

	2021	2020
	RMB million	RMB million
Government grants	806	1,210
Others	2,710	1,160
Total	3,516	2,370

53	NON-OPERATING EXPENSES

	2021	2020
	RMB million	RMB million
Fines, penalties and compensation	220	43
Donations	165	301
Asset scrap, damage loss	3,727	1,669
Others	3,470	2,719
Total	7,582	4,732

54	INCOME TAX EXPENSE

	2021	2020
	RMB million	RMB million
Provision for income tax for the year	17,522	14,334
Deferred taxation	6,258	(7,873)
Under-provision for income tax in respect of preceding year	(462)	(117)
Total	23,318	6,344

	2021	2020
	RMB million	RMB million
Profit before taxation	108,348	48,441
Expected income tax expense at a tax rate of 25%	27,087	12,110
Tax effect of non-deductible expenses	6,142	3,340
Tax effect of non-taxable income	(8,085)	(8,345)
Tax effect of preferential tax rate (i)	(2,766)	(1,011)
Effect of income taxes at foreign operations	(222)	(730)
Tax effect of utilisation of previously unrecognised tax losses and temporary differences	(701)	(65)
Tax effect of tax losses not recognised and temporary differences	1,391	1,087
Write-down of deferred tax assets	934	75
Adjustment for under provision for income tax in respect of preceding years	(462)	(117)
Actual income tax expense	23,318	6,344

(i)

The provision for PRC current income tax is based on a statutory income tax rate of 25% of the assessable income of the Group as determined in accordance with the relevant income tax rules and regulations of the PRC, except for certain entities of the Group in western regions in the PRC are taxed at preferential income tax rate of 15% through the year 2021. According to Announcement [2020] No.23 of the MOF “Announcement of the MOF, the State Taxation Administration and the National Development and Reform Commission on continuation of the income tax policy of western development enterprises”, the preferential income tax rate extends from 1 January 2021 to 31 December 2030.

55

DIVIDENDS

(a)

Dividends of ordinary shares declared after the balance sheet date

(b)

Dividends of ordinary shares declared during the year

56	SUPPLEMENTAL INFORMATION TO THE CASH FLOW STATEMENT

(a)

Reconciliation of net profit to cash flows from operating activities:

	2021	2020
	RMB million	RMB million
Net profit	85,030	42,097
Add: Impairment losses on assets	13,165	26,087
Credit impairment losses	2,311	2,066
Depreciation of right-of-use assets	12,972	12,842
Depreciation of fixed assets	92,824	85,494
Amortisation of intangible assets and long-term deferred expenses	9,884	9,125
Dry hole costs written off	7,702	5,928
Net loss/(gain) on disposal of non-current assets	3,062	(398)
Fair value (gain)/loss	(3,341)	1,253
Financial expenses	9,286	10,395
Investment income	(6,032)	(47,486)
Decrease/(increase)in deferred tax assets	5,456	(10,143)
Increase in deferred tax liabilities	802	2,270
(Increase)/decrease in inventories	(58,372)	22,407
Safety fund reserve	775	237
Increase in operating receivables	(8,177)	(17,610)
Increase in operating payables	57,827	23,956
Net cash flow from operating activities	225,174	168,520

(b)

Net change in cash:

	2021	2020
	RMB million	RMB million
Cash balance at the end of the year	108,590	87,559
Less: Cash at the beginning of the year	87,559	60,438
Net increase of cash	21,031	27,121

(c)

The analysis of cash held by the Group is as follows:

	2021	2020
	RMB million	RMB million
Cash at bank and on hand
– Cash on hand	1	8
– Demand deposits	108,589	87,551
Cash at the end of the year	108,590	87,559

(d)

Net cash received from disposal of subsidiaries and other business entities:

	2021	2020
	RMB million	RMB million
Cash received from disposal of equity interests in the relevant companies, oil and gas pipeline and ancillary facilities	4,225	49,832
Others	980	37
Total	5,205	49,869

(e)

Other cash paid relating to financing activities:

	2021	2020
	RMB million	RMB million
Repayments of lease liabilities	19,412	15,327
Others	8,864	1,955
Total	28,276	17,282

57	RELATED PARTIES AND RELATED PARTY TRANSACTIONS

(1)

Related parties having the ability to exercise control over the Group

The name of the company	:	China Petrochemical Corporation
Unified social credit identifier	:	9111000010169286X1
Registered address	:	No. 22, Chaoyangmen North Street, Chaoyang District, Beijing
Principal activities	:	Exploration, production, storage and transportation (including pipeline transportation), sales and utilisation of crude oil and natural gas; refining; wholesale and retail of gasoline, kerosene and diesel; production, sales, storage and transportation of petrochemical and other chemical products; industrial investment and investment management; exploration, construction, installation and maintenance of petroleum and petrochemical constructions and equipments; manufacturing electrical equipment; research, development, application and consulting services of information technology and alternative energy products; import & export of goods and technology.
Relationship with the Group	:	Ultimate holding company
Types of legal entity	:	State-owned
Authorised representative	:	Ma Yongsheng
Registered capital	:	RMB326,547 million

(2)

Related parties not having the ability to exercise control over the Group

57	RELATED PARTIES AND RELATED PARTY TRANSACTIONS (Continued)

(3)

The principal related party transactions with Sinopec Group Company and fellow subsidiaries, associates and joint ventures, which were carried out in the ordinary course of business, are as follows:

		The Group
	Note	2021	2020
		RMB million	RMB million
Sales of goods	(i)	297,381	228,307
Purchases	(ii)	191,888	151,300
Transportation and storage	(iii)	19,443	8,734
Exploration and development services	(iv)	33,930	31,444
Production related services	(v)	44,405	31,915
Ancillary and social services	(vi)	1,730	2,952
Agency commission income	(vii)	194	160
Interest income	(viii)	715	704
Interest expense	(ix)	385	919
Net deposits placed with related parties	(viii)	(8,265)	(17,585)
Net funds obtained from/(repaid to) related parties	(x)	30,305	(31,144)

57	RELATED PARTIES AND RELATED PARTY TRANSACTIONS (Continued)

(3)

The principal related party transactions with Sinopec Group Company and fellow subsidiaries, associates and joint ventures, which were carried out in the ordinary course of business, are as follows: (Continued)

(a)

The Company has entered into a non-exclusive “Agreement for Mutual Provision of Products and Ancillary Services” (“Mutual Provision Agreement”) with Sinopec Group Company effective from 1 January 2000 in which Sinopec Group Company has agreed to provide the Group with certain ancillary production services, construction services, information advisory services, supply services and other services and products. While each of Sinopec Group Company and the Company is permitted to terminate the Mutual Provision Agreement upon at least six months’ notice, Sinopec Group Company has agreed not to terminate the agreement if the Group is unable to obtain comparable services from a third party. The pricing policy for these services and products provided by Sinopec Group Company to the Group is as follows:

•

the government-prescribed price;

•

where there is no government-prescribed price, the government-guidance price;

•

where there is neither a government-prescribed price nor a government-guidance price, the market price; or

•

where none of the above is applicable, the price to be agreed between the parties, which shall be based on a reasonable cost incurred in providing such services plus a profit margin not exceeding 6%.

(b)

The Company has entered into a non-exclusive “Agreement for Provision of Cultural and Educational, Health Care and Community Services” with Sinopec Group Company effective from 1 January 2000 in which Sinopec Group Company has agreed to provide the Group with certain cultural, educational, health care and community services on the same pricing terms and termination conditions as agreed to in the above Mutual Provision Agreement.

(c)

The Company has entered into a number of lease agreements with Sinopec Group Company to lease certain lands and buildings effective on 1 January 2000. The lease term is 40 or 50 years for lands and 20 years for buildings, respectively. The Company and Sinopec Group Company can renegotiate the rental amount every three years for land. The Company and Sinopec Group Company can renegotiate the rental amount for buildings every year. However such amount cannot exceed the market price as determined by an independent third party.

(d)

The Company has entered into agreements with Sinopec Group Company effective from 1 January 2000 under which the Group has been granted the right to use certain trademarks, patents, technology and computer software developed by Sinopec Group Company.

(e)

The Company has entered into a service station franchise agreement with Sinopec Group Company effective from 1 January 2000 under which its service stations and retail stores would exclusively sell the refined products supplied by the Group.

(f)

On the basis of a series of continuing connected transaction agreements signed in 2000, the Company and Sinopec Group Company have signed the Sixth Supplementary Agreement on 27 August 2021, which took effect on 1 January 2022 and made adjustment to “Mutual Supply Agreement” and “Buildings Leasing Contract”, etc.

57	RELATED PARTIES AND RELATED PARTY TRANSACTIONS (Continued)

(4)

Balances with Sinopec Group Company and fellow subsidiaries, associates and joint ventures

	The ultimate holding company		Other related companies
	At 31 December	At 31 December	At 31 December	At 31 December
	2021	2020	2021	2020
	RMB million	RMB million	RMB million	RMB million
Cash at bank and on hand	–	–	61,682	53,417
Accounts receivable	30	42	8,625	16,735
Receivables financing	–	–	186	760
Other receivables	–	122	13,941	18,062
Prepayments and other current assets	19	7	577	1,231
Other non-current assets	–	–	3,116	6,435
Bills payable	5	8	3,798	3,671
Accounts payable	228	123	10,139	18,990
Contract liabilities	50	41	4,627	5,896
Other payables and other current liabilities	85	681	50,564	12,078
Other non-current liabilities	–	–	2,779	3,010
Short-term loans	–	–	2,407	4,642
Long-term loans (including current portion)	–	–	14,156	12,400
Lease liabilities (including current portion)	72,176	74,178	86,585	87,870

(5)

Key management personnel emoluments

	2021	2020
	RMB thousand	RMB thousand
Short-term employee benefits	4,612	5,753
Retirement scheme contributions	379	342
Total	4,991	6,095

58	PRINCIPAL ACCOUNTING ESTIMATES AND JUDGEMENTS

58	PRINCIPAL ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued)

(a)

Oil and gas properties and reserves

(b)

Impairment for assets

(c)

Depreciation

(d)

Measurement of expected credit losses

(e)

Allowance for diminution in value of inventories

59	PRINCIPAL SUBSIDIARIES

Full name of enterprise	Principal activities	Registered capital/paid- up capital	Actual investment at 31 December 2021	Percentage of equity interest/ voting right held by the Group	Minority Interests at 31 December 2021
		million	million	%	RMB million
(a) Subsidiaries acquired through group restructuring:
China Petrochemical International Company Limited	Trading of petrochemical products	RMB1,400	RMB1,856	100.00	11
China International United Petroleum and Chemical Company Limited	Trading of crude oil and petrochemical products	RMB5,000	RMB6,585	100.00	5,259
Sinopec Catalyst Company Limited	Production and sale of catalyst products	RMB1,500	RMB2,424	100.00	233
Sinopec Yangzi Petrochemical Company Limited	Manufacturing of intermediate petrochemical products and petroleum products	RMB15,651	RMB15,651	100.00	_
Sinopec Lubricant Company Limited	Production and sale of refined petroleum products, lubricant base oil, and petrochemical materials	RMB3,374	RMB3,374	100.00	88
Sinopec Yizheng Chemical Fibre Limited Liability Company	Production and sale of polyester chips and polyester fibres	RMB4,000	RMB6,713	100.00	_
Marketing Company	Marketing and distribution of refined petroleum products	RMB28,403	RMB20,000	70.42	75,560
Sinopec Kantons Holdings Limited (“Sinopec Kantons”)	Provision of crude oil jetty services and natural gas pipeline transmission services	HKD248	HKD3,952	60.33	5,011
Sinopec Shanghai Petrochemical Company Limited (“Shanghai Petrochemical”)	Manufacturing of synthetic fibres, resin and plastics, intermediate petrochemical products and petroleum products	RMB10,824	RMB5,820	50.44	15,132
Fujian Petrochemical Company Limited (“Fujian Petrochemical”) (i)	Manufacturing of plastics, intermediate petrochemical products and petroleum products	RMB10,492	RMB5,246	50.00	6,915
(b) Subsidiaries established by the Group:
Sinopec International Petroleum Exploration and Production Limited (“SIPL”)	Investment in exploration, production and sale of petroleum and natural gas	RMB8,250	RMB8,250	100.00	6,119
Sinopec Overseas Investment Holding Limited (“SOIH”)	Investment holding of overseas business	USD3,009	USD3,009	100.00	–
Sinopec Chemical Sales Company Limited	Marketing and distribution of petrochemical products	RMB1,000	RMB1,165	100.00	124
Sinopec Great Wall Energy & Chemical Company Limited	Coal chemical industry investment management, production and sale of coal chemical products	RMB22,761	RMB22,795	100.00	18
Sinopec Beihai Refining and Chemical Limited Liability Company	Import and processing of crude oil, production, storage and sale of petroleum products and petrochemical products	RMB5,294	RMB5,240	98.98	137
ZhongKe (Guangdong) Refinery & Petrochemical Company Limited	Crude oil processing and petroleum products manufacturing	RMB6,397	RMB5,776	90.30	2,288
Sinopec Qingdao Refining and Chemical Company Limited	Manufacturing of intermediate petrochemical products and petroleum products	RMB5,000	RMB4,250	85.00	2,004
Sinopec-SK (Wuhan) Petrochemical Company Limited (“Sinopec-SK”)	Production, sale, research and development of ethylene and downstream byproducts	RMB7,193	RMB7,193	59.00	5,130
(c) Subsidiaries acquired through business combination under common control:
Sinopec Hainan Refining and Chemical Company Limited	Manufacturing of intermediate petrochemical products and petroleum products	RMB9,606	RMB12,615	100.00	–
Sinopec Qingdao Petrochemical Company Limited	Manufacturing of intermediate petrochemical products and petroleum products	RMB1,595	RMB7,233	100.00	_
Gaoqiao Petrochemical Company Limited	Manufacturing of intermediate petrochemical products and petroleum products	RMB10,000	RMB4,804	55.00	8,197
Sinopec Baling Petrochemical Co. Ltd. (“Baling Petrochemical”)	Crude oil processing and petroleum products manufacturing	RMB3,000	RMB3,000	55.00	2,272
(d) Subsidiaries acquired through business combination not under common control:
Shanghai SECCO	Production and sale of petrochemical products	RMB500	RMB500	67.59	3,441

*

The minority interests of subsidiaries which the Group holds 100% of equity interests at the end of the year are the minority interests of their subsidiaries.

(i)

The Group consolidated the financial statements of the entity because it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those return through its power over the entity.

59	PRINCIPAL SUBSIDIARIES (Continued)

	Marketing Company		SIPL		Shanghai Petrochemical		Fujian Petrochemical		Sinopec Kantons		Shanghai SECCO		Sinopec-SK
	At	At 31	At	At	At	At	At	At	At	At	At	At	At	At
	31 December	31 December	31 December	31 December	31 December	31 December	31 December	31 December	31 December	31 December	31 December	31 December	31 December	31 December
	2021	2020	2021	2020	2021	2020	2021	2020	2021	2020	2021	2020	2021	2020
	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million
Current assets	159,599	172,352	22,759	22,620	20,932	17,305	1,464	1,582	4,761	4,373	6,066	10,431	6,791	3,639
Current liabilities	(193,315)	(201,678)	(1,430)	(475)	(15,796)	(15,232)	(142)	(458)	(196)	(924)	(5,434)	(2,783)	(8,122)	(6,377)
Net current (liabilities)/assets	(33,716)	(29,326)	21,329	22,145	5,136	2,073	1,322	1,124	4,565	3,449	632	7,648	(1,331)	(2,738)
Non-current assets	326,437	323,571	8,954	8,951	26,106	27,444	13,208	12,568	8,195	9,106	11,402	12,177	20,650	22,187
Non-current liabilities	(59,604)	(59,554)	(17,823)	(18,270)	(847)	(162)	(700)	(693)	(170)	(170)	(1,418)	(1,553)	(7,512)	(8,509)
Net non-current assets/(liabilities)	266,833	264,017	(8,869)	(9,319)	25,259	27,282	12,508	11,875	8,025	8,936	9,984	10,624	13,138	13,678

Year ended 31 December	Marketing Company		SIPL		Shanghai Petrochemical		Fujian Petrochemical		Sinopec Kantons		Shanghai SECCO		Sinopec-SK
	2021	2020	2021	2020	2021	2020	2021	2020	2021	2020	2021	2020	2021	2020
	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million
Turnover	1,408,523	1,099,680	2,166	2,017	89,280	74,705	5,549	4,871	528	1,064	29,723	21,626	50,208	28,702
Profit/(loss) for the year	18,582	22,415	1,429	1,160	2,004	639	951	243	871	2,047	2,817	2,132	1,606	(920)
Total comprehensive income	18,439	21,149	1,045	(720)	2,145	628	951	243	677	1,814	2,817	2,132	1,606	(920)
Comprehensive income attributable to minority interests	6,822	7,205	579	(287)	1,065	317	476	121	268	707	2,390	691	659	(377)
Dividends paid to minority interests	7,064	2,766	–	316	541	649	64	150	164	175	1,028	767	–	–
Net cash generated from/(used in) operating activities	28,923	54,139	690	281	4,060	1,751	(292)	(244)	133	586	3,447	3,119	5,476	(363)

60	CHANGE IN THE SCOPE OF CONSOLIDATION

60	CHANGE IN THE SCOPE OF CONSOLIDATION (Continued)

(1)

The relevant financial information disclosed for changes in the scope of consolidation are as follows:

acquiree	Share of acquired equity	The basis for the business combination under the common control	Date of acquisition	Basis of Determination on the acquisition date	Income of the acquiree from 1 January 2021 to the acquisition date	Net profits/ (losses) of the acquiree from 1 January 2021 to the acquisition date	Income of the acquiree from 1 January 2020 to 31 December 2020	Net profits/ (losses) of the acquiree from 1 January 2020 to 31 December 2020	Net cash flow from operating activities of the acquiree from 1 January 2021 to the acquisition date	Net cash flow of the acquiree from 1 January 2021 to the acquisition date
					RMB Million	RMB Million	RMB Million	RMB Million	RMB Million	RMB Million
Beihai petrochemical business	98.98%	The acquiree and the company are controlled by Sinopec Group Company both before and after combination, and the control is not transitory	1 July 2021	According to the agreement	13	5	39	19	43	–
Oriental Petrochemical Business	100%	The acquiree and the company are controlled by Sinopec Group Company both before and after combination, and the control is not transitory	1 July 2021	According to the agreement	620	84	1,223	87	162	–
Cangzhou Branch business	100%	The acquiree and the company are controlled by Sinopec Group Company both before and after combination, and the control is not transitory	1 July 2021	According to the agreement	246	(15)	560	(6)	20	–
Asset company business	100%	The acquiree and the company are controlled by Sinopec Group Company both before and after combination, and the control is not transitory	1 December 2021	According to the agreement	7,723	(376)	7,177	242	385	–
Group Yanshan Business	100%	The acquiree and the company are controlled by Sinopec Group Company both before and after combination, and the control is not transitory	1 December 2021	According to the agreement	3,086	102	3,234	5	392	–
Total					11,688	(200)	12,233	347	1,002	–

(2)

Cost of acquisition:

Cost of acquisition(RMB Million)

6,124

(3)

Details of the assets and liabilities acquired are as follows:

	Book value at	Book value at
	the Acquisition Date	December 31 2020
	RMB Million	RMB Million
Total current assets	974	480
Total assets	6,712	5,875
Total current liabilities	2,540	1,020
Total liabilities	2,557	1,031
Total shareholders’ equity	4,155	4,844

61	COMMITMENTS

	At 31 December	At 31 December
	2021	2020
	RMB million	RMB million
Authorised and contracted for (i)	184,430	171,597
Authorised but not contracted for	90,227	33,997
Total	274,657	205,594

	At 31 December	At 31 December
	2021	2020
	RMB million	RMB million
Within one year	301	390
Between one and two years	112	99
Between two and three years	110	66
Between three and four years	102	63
Between four and five years	64	56
Thereafter	846	824
Total	1,535	1,498

62	CONTINGENT LIABILITIES

(a)

The Company has been advised by its PRC lawyers that, except for liabilities constituting or arising out of or relating to the business assumed by the Company in the Reorganisation, no other liabilities were assumed by the Company, and the Company is not jointly and severally liable for other debts and obligations incurred by Sinopec Group Company prior to the Reorganisation.

(b)

At 31 December 2021 and 31 December 2020, the guarantees by the Group in respect of facilities granted to the parties below are as follows:

	At 31 December	At 31 December
	2021	2020
	RMB million	RMB million
Joint ventures(i)	9,117	6,390
Associates (ii)	5,746	8,450
Total	14,863	14,840

(i)

The Group provided a guarantee in respect to standby credit facilities granted to Zhongan United Coal Chemical Co., Ltd. (“Zhongan United”) by banks amount to RMB7,100 million. As at 31 December 2021, the amount withdrawn (The portion corresponding to the shareholding ratio of the Group) by Zhongan United from banks and guaranteed by the Group was RMB5,680 million (31 December 2020: RMB6,390 million). The Group provided a guarantee in respect to standby credit facilities granted to Amur Gas Chemical Complex Limited Liability Company (“Amur Gas”) by banks amount to RMB23,208 million. As at 31 December 2021, the amount withdrawn (The portion corresponding to the shareholding ratio of the Group) by Amur Gas from banks and guaranteed by the Group was RMB3,264 million (31 December 2020: Nil).

(ii)

The Group provided a guarantee in respect to standby credit facilities granted to Zhongtian Synergetic Energy by banks amount to RMB17,050 million. As at 31 December 2021, the amount withdrawn (The portion corresponding to the shareholding ratio of the Group) by Zhongtian Synergetic Energy and guaranteed by the Group was RMB5,746 million (2020: RMB8,450 million).

63	SEGMENT REPORTING

(i)

Exploration and production – which explores and develops oil fields, produces crude oil and natural gas and sells such products to the refining segment of the Group and external customers.

(ii)

Refining – which processes and purifies crude oil, which is sourced from the exploration and production segment of the Group and external suppliers, and manufactures and sells petroleum products to the chemicals and marketing and distribution segments of the Group and external customers.

(iii)

Marketing and distribution – which owns and operates oil depots and service stations in the PRC, and distributes and sells refined petroleum products (mainly gasoline and diesel) in the PRC through wholesale and retail sales networks.

(iv)

Chemicals – which manufactures and sells petrochemical products, derivative petrochemical products and other chemical products to external customers.

(v)

Corporate and others – which largely comprise the trading activities of the import and export companies of the Group and research and development undertaken by other subsidiaries.

(1)

Information of reportable segmental revenues, profits or losses, assets and liabilities

63	SEGMENT REPORTING (Continued)

(1)

Information of reportable segmental revenues, profits or losses, assets and liabilities (Continued)

	2021	2020
	RMB million	RMB million
Income from principal operations
Exploration and production
External sales	156,026	104,524
Inter-segment sales	87,298	57,513
	243,324	162,037
Refining
External sales	167,948	113,214
Inter-segment sales	1,212,455	826,219
	1,380,403	939,433
Marketing and distribution
External sales	1,367,605	1,062,447
Inter-segment sales	7,075	4,854
	1,374,680	1,067,301
Chemicals
External sales	424,774	322,169
Inter-segment sales	70,242	40,702
	495,016	362,871
Corporate and others
External sales	563,147	458,154
Inter-segment sales	732,356	430,073
	1,295,503	888,227
Elimination of inter-segment sales	(2,109,426)	(1,371,215)
Consolidated income from principal operations	2,679,500	2,048,654
Income from other operations
Exploration and production	6,674	5,718
Refining	5,161	4,633
Marketing and distribution	36,864	34,905
Chemicals	10,487	8,758
Corporate and others	2,198	2,056
Consolidated income from other operations	61,384	56,070
Consolidated operating income	2,740,884	2,104,724

	2021	2020
	RMB million	RMB million
Operating profit/(loss)
By segment
Exploration and production	613	(20,570)
Refining	65,360	(6,526)
Marketing and distribution	23,102	19,634
Chemicals	11,361	9,592
Corporate and others	9,521	(2,048)
Elimination	(4,421)	4,417
Total segment operating profit	105,536	4,499
Investment income
Exploration and production	3,023	13,837
Refining	547	13,085
Marketing and distribution	1,796	12,230
Chemicals	11,269	1,662
Corporate and others	(10,603)	6,672
Total segment investment income	6,032	47,486
Less: Financial expenses	9,010	9,510
Add: Other income	5,850	7,514
Gains/(losses) from changes in fair value	3,341	(1,253)
Asset disposal gains	665	2,067
Operating profit	112,414	50,803
Add: Non-operating income	3,516	2,370
Less: Non-operating expenses	7,582	4,732
Profit before taxation	108,348	48,441

63	SEGMENT REPORTING (Continued)

(1)

Information of reportable segmental revenues, profits or losses, assets and liabilities (Continued)

	At 31 December	At 31 December
	2021	2020
	RMB million	RMB million
Assets
Segment assets
Exploration and production	371,100	354,024
Refining	304,785	270,766
Marketing and distribution	377,499	373,430
Chemicals	222,803	194,434
Corporate and others	133,961	118,458
Total segment assets	1,410,148	1,311,112
Cash at bank and on hand	221,989	184,412
Long-term equity investments	209,179	188,342
Deferred tax assets	19,389	25,054
Other unallocated assets	28,550	29,976
Total assets	1,889,255	1,738,896
Liabilities
Segment liabilities
Exploration and production	159,358	157,430
Refining	129,103	135,157
Marketing and distribution	210,215	213,455
Chemicals	65,103	47,992
Corporate and others	197,447	117,684
Total segment liabilities	761,226	671,718
Short-term loans	27,366	20,756
Non-current liabilities due within one year	28,651	22,494
Long-term loans	49,341	45,459
Debentures payable	42,649	38,356
Deferred tax liabilities	7,910	8,124
Other non-current liabilities	18,276	17,950
Other unallocated liabilities	37,795	25,319
Total liabilities	973,214	850,176

	2021	2020
	RMB million	RMB million
Capital expenditure
Exploration and production	68,148	56,416
Refining	22,469	24,756
Marketing and distribution	21,897	25,403
Chemicals	51,648	28,217
Corporate and others	3,786	2,312
	167,948	137,104
Depreciation, depletion and amortisation
Exploration and production	52,880	46,273
Refining	20,743	20,090
Marketing and distribution	23,071	23,196
Chemicals	16,093	14,830
Corporate and others	2,893	3,072
	115,680	107,461
Impairment losses on long-lived assets
Exploration and production	2,467	8,495
Refining	860	1,923
Marketing and distribution	1,211	536
Chemicals	5,332	3,675
Corporate and others	165	–
	10,035	14,629

63	SEGMENT REPORTING (Continued)

(2)

Geographical information

	2021	2020
	RMB million	RMB million
External sales
Mainland China	2,166,040	1,720,695
Singapore	278,024	215,846
Others	296,820	168,183
	2,740,884	2,104,724

	At 31 December	At 31 December
	2021	2020
	RMB million	RMB million
Non-current assets
Mainland China	1,268,814	1,216,267
Others	40,551	36,782
	1,309,365	1,253,049

64	FINANCIAL INSTRUMENTS

•

credit risk;

•

liquidity risk; and

•

market risk.

(i)

Risk management

64	FINANCIAL INSTRUMENTS (Continued)

(ii)

Impairment of financial assets

	At 31 December 2021
	Carrying amount	Total contractual undiscounted cash flow	Within one year or on demand	More than one year but less than two years	More than two years but less than five years	More than five years
	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million
Short-term loans	27,366	27,787	27,787	–	–	–
Derivative financial liabilities	3,223	3,223	3,223	–	–	–
Bills payable	11,721	11,721	11,721	–	–	–
Accounts payable	203,919	203,919	203,919	–	–	–
Other payables and employee benefits payable	128,749	128,749	128,749	–	–	–
Non-current liabilities due within one year	28,651	29,554	29,554	–	–	–
Long-term loans	49,341	53,704	1,230	19,350	27,786	5,338
Debentures payable	42,649	47,553	1,195	30,645	10,443	5,270
Lease liabilities	170,233	280,652	–	12,030	35,412	233,210
Total	665,852	786,862	407,378	62,025	73,641	243,818

64	FINANCIAL INSTRUMENTS (Continued)

	At 31 December 2020
	Carrying amount	Total contractual undiscounted cash flow	More than one year but less than two years	More than two years but less than five years	Within one year or on demand	More than five years
	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million
Short-term loans	20,756	20,950	20,950	–	–	–
Derivative financial liabilities	4,826	4,826	4,826	–	–	–
Bills payable	10,394	10,394	10,394	–	–	–
Accounts payable	151,514	151,514	151,514	–	–	–
Other payables and employee benefits payable	92,141	92,141	92,141	–	–	–
Non-current liabilities due within one year	22,494	23,880	23,880	–	–	–
Debentures payable due within one year	3,018	3,024	3,024	–	–	–
Long-term loans	45,459	49,074	936	4,638	41,009	2,491
Debentures payable	38,356	44,791	1,240	8,044	29,514	5,993
Lease liabilities	171,740	312,544	–	15,456	43,513	253,575
Total	560,698	713,138	308,905	28,138	114,036	262,059

(a)

Currency risk

(b)

Interest rate risk

(c)

Commodity price risk

64	FINANCIAL INSTRUMENTS (Continued)

(i)

Financial instruments carried at fair value

•

Level 1 (highest level): fair values measured using quoted prices (unadjusted) in active markets for identical financial instruments.

•

Level 2: fair values measured using quoted prices in active markets for similar financial instruments, or using valuation techniques in which all significant inputs are directly or indirectly based on observable market data.

•

Level 3 (lowest level): fair values measured using valuation techniques in which any significant input is not based on observable market data.

	Level 1	Level 2	Level 3	Total
	RMB million	RMB million	RMB million	RMB million
Assets
Financial assets held for trading:
– Derivative financial assets	5,883	12,488	–	18,371
Receivables financing:
– Receivables financing	–	–	5,939	5,939
Other equity instrument investments:
– Other Investments	179	–	588	767
	6,062	12,488	6,527	25,077
Liabilities
Derivative financial liabilities:
– Derivative financial liabilities	804	2,419	–	3,223
	804	2,419	–	3,223

	Level 1	Level 2	Level 3	Total
	RMB million	RMB million	RMB million	RMB million
Assets
Financial assets held for trading:
– Equity investments, listed and at quoted market price	1	–	–	1
Derivative financial assets:
– Derivative financial assets	9,628	2,900	–	12,528
Receivables financing:
– Receivables financing	–	–	8,735	8,735
Other equity instrument investments:
– Other Investments	149	–	1,376	1,525
	9,778	2,900	10,111	22,789
Liabilities
Derivative financial liabilities:
– Derivative financial liabilities	2,471	2,355	–	4,826
	2,471	2,355	–	4,826

64	FINANCIAL INSTRUMENTS (Continued)

(ii)

Fair values of financial instruments carried at other than fair value

	At 31 December	At 31 December
	2021	2020
	RMB million	RMB million
Carrying amount	88,593	76,674
Fair value	85,610	74,282

65	BASIC AND DILUTED EARNINGS PER SHARE

(i)

Basic earnings per share

	2021	2020
Net profit attributable to equity shareholders of the Company (RMB million)	71,208	33,271
Weighted average number of outstanding ordinary shares of the Company (million)	121,071	121,071
Basic earnings per share (RMB/share)	0.588	0.275

	2021	2020
Weighted average number of outstanding ordinary shares of the Company at 1 January (million)	121,071	121,071
Weighted average number of outstanding ordinary shares of the Company at 31 December (million)	121,071	121,071

(ii)

Diluted earnings per share

66	RETURN ON NET ASSETS AND EARNINGS PER SHARE

	2021			2020
	Weighted average return on net assets	Basic earnings per share	Diluted earnings per share	Weighted average return on net assets	Basic earnings per share	Diluted earnings per share
	(%)	(RMB/Share)	(RMB/Share)	(%)	(RMB/Share)	(RMB/Share)
Net profit attributable to the Company’s ordinary equity shareholders	9.35	0.588	0.588	4.46	0.275	0.275
Net profit/(loss) deducted extraordinary gains and losses attributable to the Company’s ordinary equity shareholders	9.49	0.597	0.597	(0.21)	(0.013)	(0.013)

67	EXTRAORDINARY GAINS AND LOSSES

	2021	2020
	RMB million	RMB million
Extraordinary (gains)/losses for the year:
Net gains on disposal of non-current assets	(665)	(973)
Donations	165	301
Government grants	(3,085)	(8,605)
Gain on holding and disposal of business and various investments	(259)	(37,520)
Other non-operating losses, net	4,720	2,992
Net (loss)/profit acquired through business combination under common control during the reporting period	101	(472)
	977	(44,277)
Tax effect	(72)	6,736
Total	905	(37,541)
Attributable to:
Equity shareholders of the Company	1,012	(34,836)
Minority interests	(107)	(2,705)

KPMG 8th Floor, Prince’s Building Central, Hong Kong G P O Box 50, Hong Kong Telephone +852 2522 6022 Fax +852 2845 2588 Internet kpmg.com/cn

畢馬威會計師事務所 香港中環太子大廈8樓 香港郵政總局信箱50號 電話+852 2522 6022 傳真+852 2845 2588 網址kpmg.com/cn

The Key Audit Matter	How the matter was addressed in our audit
The Company reported property, plant and equipment of Renminbi (“RMB”) 598,925 million as at 31 December 2021, a portion of which related to oil and gas producing activities. The Company reported impairment losses of RMB2,467 million for the property, plant and equipment relating to oil and gas producing activities for the year ended 31 December 2021.   The Company groups property, plant and equipment relating to oil and gas producing activities into cash-generating units (“CGUs”) for impairment assessment. The Company compares the carrying amount of individual CGU with its value in use, using a discounted cash flow forecast, which was prepared based on the future production profiles included in the oil and gas reserves reports, to determine the impairment loss to be recognised.   We identified assessment of impairment of property, plant and equipment relating to oil and gas producing activities as a key audit matter. The value in use amounts of these CGUs are sensitive to the changes to future selling prices and production costs for crude oil and natural gas, future production profiles, and discount rates. Therefore a higher degree of subjective auditor judgment was required to evaluate the Company’s impairment assessment of property, plant and equipment relating to oil and gas producing activities.	The following are the primary procedures we performed to address this key audit matter:   • we evaluated the design and tested the operating effectiveness of certain internal controls related to the process for impairment assessment of property, plant and equipment relating to oil and gas producing activities;   • we assessed the competence, capabilities and objectivity of the Company’s reserves specialists and evaluated the methodology adopted by them in estimating the oil and gas reserves against the recognised industry standards;   • we compared future selling prices for crude oil and natural gas used in the discounted cash flow forecasts with the Company’s business plans and forecasts by external analysts;   • we compared future production costs and future production profiles used in the discounted cash flow forecasts with oil and gas reserves reports issued by the reserves specialists; and   • we involved valuation professionals with specialised skills and knowledge, who assisted in assessing the discount rates applied in the discounted cash flow forecasts against a discount rate range that was independently developed using publicly available market data for comparable companies in the same industry.

•

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control.

•	Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

•	Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

•

Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

•	Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

•

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

(B)	FINANCIAL STATEMENTS PREPARED UNDER INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”) CONSOLIDATED INCOME STATEMENT

	Note	Year ended 31 December
		2021	2020
		RMB	RMB
Revenue
Revenue from primary business	3	2,679,500	2,048,654
Other operating revenues	4	61,384	56,070
		2,740,884	2,104,724
Operating expenses
Purchased crude oil, products and operating supplies and expenses		(2,076,665)	(1,589,821)
Selling, general and administrative expenses	5	(54,978)	(53,668)
Depreciation, depletion and amortisation		(115,680)	(107,461)
Exploration expenses, including dry holes		(12,382)	(9,716)
Personnel expenses	6	(103,492)	(87,525)
Taxes other than income tax	7	(259,032)	(235,018)
Impairment losses on trade and other receivables		(2,311)	(2,066)
Other operating income/(expenses), net	8	(21,716)	(5,780)
Total operating expenses		(2,646,256)	(2,091,055)
Operating profit		94,628	13,669
Finance costs
Interest expense	9	(15,018)	(15,198)
Interest income		5,732	4,803
Foreign currency exchange gains, net		276	885
Net finance costs		(9,010)	(9,510)
Investment income	10	298	37,744
Share of profits less losses from associates and joint ventures	21,22	23,253	6,712
Profit before taxation		109,169	48,615
Income tax expense	11	(23,318)	(6,344)
Profit for the year		85,851	42,271
Attributable to:
Shareholders of the Company		71,975	33,443
Non-controlling interests		13,876	8,828
Profit for the year		85,851	42,271
Earnings per share:
Basic	16	0.594	0.276
Diluted	16	0.594	0.276

	Note	Year ended 31 December
		2021	2020
		RMB	RMB
Profit for the year		85,851	42,271
Other comprehensive income:	15
Items that may not be reclassified subsequently to profit or loss
Equity investments at fair value through other comprehensive income		(4)	(22)
Total items that may not be reclassified subsequently to profit or loss		(4)	(22)
Items that may be reclassified subsequently to profit or loss
Cost of hedging reserve		(220)	162
Share of other comprehensive income of associates and joint ventures		441	(2,441)
Cash flow hedges		19,018	7,073
Foreign currency translation differences		(1,728)	(4,457)
Total items that may be reclassified subsequently to profit or loss		17,511	337
Total other comprehensive income		17,507	315
Total comprehensive income for the year		103,358	42,586
Attributable to:
Shareholders of the Company		89,549	34,837
Non-controlling interests		13,809	7,749
Total comprehensive income for the year		103,358	42,586

	Note	31 December	31 December
		2021	2020
		RMB	RMB
Non-current assets
Property, plant and equipment, net	17	598,925	593,615
Construction in progress	18	155,939	125,525
Right-of-use assets	19	268,408	266,012
Goodwill	20	8,594	8,620
Interest in associates	21	148,729	136,163
Interest in joint ventures	22	60,450	52,179
Financial assets at fair value through other comprehensive income	26	767	1,525
Deferred tax assets	29	19,389	25,054
Long-term prepayments and other assets	23	70,030	74,543
Total non-current assets		1,331,231	1,283,236
Current assets
Cash and cash equivalents		108,590	87,559
Time deposits with financial institutions		113,399	100,498
Financial assets at fair value through profit or loss		–	1
Derivative financial assets	24	18,371	12,528
Trade accounts receivable	25	34,861	35,439
Financial assets at fair value through other comprehensive income	26	5,939	8,735
Inventories	27	207,433	152,191
Prepaid expenses and other current assets	28	69,431	58,709
Total current assets		558,024	455,660
Current liabilities
Short-term debts	30	35,252	23,769
Loans from Sinopec Group Company and fellow subsidiaries	30	2,873	5,264
Lease liabilities	31	15,173	15,293
Derivative financial liabilities	24	3,223	4,826
Trade accounts payable and bills payable	32	215,640	161,908
Contract liabilities	33	124,622	126,241
Other payables	34	239,688	179,108
Income tax payable		4,809	6,586
Total current liabilities		641,280	522,995
Net current liabilities		83,256	67,335
Total assets less current liabilities		1,247,975	1,215,901
Non-current liabilities
Long-term debts	30	78,300	72,037
Loans from Sinopec Group Company and fellow subsidiaries	30	13,690	11,778
Lease liabilities	31	170,233	171,740
Deferred tax liabilities	29	7,910	8,124
Provisions	35	43,525	45,552
Other long-term liabilities		19,243	18,968
Total non-current liabilities		332,901	328,199
		915,074	887,702
Equity
Share capital	36	121,071	121,071
Reserves		653,111	625,254
Total equity attributable to shareholders of the Company		774,182	746,325
Non-controlling interests		140,892	141,377
Total equity		915,074	887,702

Ma Yongsheng	Yu Baocai	Shou Donghua
Chairman	President	Chief Financial Officer
(Legal representative)

	Share capital	Capital reserve	Share premium	Statutory surplus reserve	Discretionary surplus reserve	Other reserves	Retained earnings	Total equity attributable to shareholders of the Company	Non-controlling interests	Total equity
	RMB	RMB	RMB	RMB	RMB	RMB	RMB	RMB	RMB	RMB
Balance at 31 December 2019	121,071	29,730	55,850	90,423	117,000	1,941	322,931	738,946	138,358	877,304
Adjustment for business combination of entities under common control (Note 38)	–	4,773	–	–	–	–	–	4,773	1	4,774
Balance at 1 January 2020	121,071	34,503	55,850	90,423	117,000	1,941	322,931	743,719	138,359	882,078
Profit for the year	–	–	–	–	–	–	33,443	33,443	8,828	42,271
Other comprehensive income (Note 15)	–	–	–	–	–	1,406	(12)	1,394	(1,079)	315
Total comprehensive income for the year	–	–	–	–	–	1,406	33,431	34,837	7,749	42,586
Amounts transferred to initial carrying amount of hedged items	–	–	–	–	–	(47)	–	(47)	48	1
Transactions with owners, recorded directly in equity:
Contributions by and distributions to owners:
Final dividend for 2019 (Note 14)	–	–	–	–	–	–	(23,004)	(23,004)	–	(23,004)
Interim dividend for 2020 (Note 14)	–	–	–	–	–	–	(8,475)	(8,475)	–	(8,475)
Appropriation (Note (a))	–	–	–	1,857	–	–	(1,857)	–	–	–
Distributions to non-controlling interests	–	–	–	–	–	–	–	–	(6,726)	(6,726)
Contributions to subsidiaries from non-controlling interests	–	–	–	–	–	–	–	–	3,325	3,325
Distribution to SAMC in the Acquisition of Baling Branch of SAMC	–	(972)	–	–	–	–	–	(972)	972	–
Total contributions by and distributions to owners	–	(972)	–	1,857	–	–	(33,336)	(32,451)	(2,429)	(34,880)
Transaction with non-controlling interests	–	(138)	–	–	–	–	–	(138)	13	(125)
Total transactions with owners	–	(1,110)	–	1,857	–	–	(33,336)	(32,589)	(2,416)	(35,005)
Others	–	870	–	–	–	200	(665)	405	(2,363)	(1,958)
Balance at 31 December 2020	121,071	34,263	55,850	92,280	117,000	3,500	322,361	746,325	141,377	887,702

	Share capital	Capital reserve	Share premium	Statutory surplus reserve	Discretionary surplus reserve	Other reserves	Retained earnings	Total equity attributable to shareholders of the Company	Non- controlling interests	Total equity
	RMB	RMB	RMB	RMB	RMB	RMB	RMB	RMB	RMB	RMB
Balance at 1 January 2021	121,071	34,263	55,850	92,280	117,000	3,500	322,361	746,325	141,377	887,702
Profit for the year	–	–	–	–	–	–	71,975	71,975	13,876	85,851
Other comprehensive income (Note 15)	–	–	–	–	–	17,574	–	17,574	(67)	17,507
Total comprehensive income for the year	–	–	–	–	–	17,574	71,975	89,549	13,809	103,358
Amounts transferred to initial carrying amount of hedged items	–	–	–	–	–	(19,302)	–	(19,302)	(648)	(19,950)
Transactions with owners, recorded directly in equity:
Contributions by and distributions to owners:
Final dividend for 2020 (Note 14)	–	–	–	–	–	–	(15,739)	(15,739)	–	(15,739)
Interim dividend for 2021 (Note 14)	–	–	–	–	–	–	(19,371)	(19,371)	–	(19,371)
Appropriation (Note (a))	–	–	–	3,944	–	–	(3,944)	–	–	–
Distributions to non-controlling interests	–	–	–	–	–	–	–	–	(8,982)	(8,982)
Contributions to subsidiaries from non-controlling interests	–	–	–	–	–	–	–	–	1,973	1,973
Distribution to sellers in the business combination of entities under common control (Note 38)	–	(6,124)	–	–	–	–	–	(6,124)	–	(6,124)
Total contributions by and distributions to owners	–	(6,124)	–	3,944	–	–	(39,054)	(41,234)	(7,009)	(48,243)
Transaction with non-controlling interests	–	(1,396)	–	–	–	–	–	(1,396)	(6,796)	(8,192)
Total transactions with owners	–	(7,520)	–	3,944	–	–	(39,054)	(42,630)	(13,805)	(56,435)
Others	–	319	–	–	–	723	(802)	240	159	399
Balance at 31 December 2021	121,071	27,062	55,850	96,224	117,000	2,495	354,480	774,182	140,892	915,074

(a)

According to the PRC Company Law and the Articles of Association of the Company, the Company is required to transfer 10% of its net profit determined in accordance with the accounting policies complying with Accounting Standards for Business Enterprises (“CASs”), adopted by the Group to statutory surplus reserve. In the event that the reserve balance reaches 50% of the registered capital, no transfer is required. The transfer to this reserve must be made before distribution of a dividend to shareholders. Statutory surplus reserve can be used to make good previous years’ losses, if any, and may be converted into share capital by issuing of new shares to shareholders in proportion to their existing shareholdings or by increasing the par value of the shares currently held by them, provided that the balance after such issue is not less than 25% of the registered capital. During the year ended 31 December 2021, the Company transferred RMB3,944 million (2020: RMB1,857 million) to the statutory surplus reserve, being 10% of the current year’s net profit determined in accordance with the accounting policies complying with CASs.

(b)	The usage of the discretionary surplus reserve is similar to that of statutory surplus reserve.

(c)

As at 31 December 2021, the amount of retained earnings available for distribution was RMB116,440 million (2020: RMB115,849 million), being the amount determined in accordance with CASs. According to the Articles of Association of the Company, the amount of retained earnings available for distribution to shareholders of the Company is lower of the amount determined in accordance with the accounting policies complying with CASs and the amount determined in accordance with the accounting policies complying with International Financial Reporting Standards (“IFRS”).

(d)

The capital reserve represents (i) the difference between the total amount of the par value of shares issued and the amount of the net assets transferred from Sinopec Group Company in connection with the Reorganisation (Note 1); and (ii) the difference between the considerations paid over or received the amount of the net assets of entities and related operations acquired from or sold to Sinopec Group Company and non-controlling interests.

(e)	The application of the share premium account is governed by Sections 167 and 168 of the PRC Company Law.

	Note	Year ended 31 December
		2021	2020
		RMB	RMB
Net cash generated from operating activities	(a)	225,174	168,520
Investing activities
Capital expenditure		(127,965)	(118,321)
Exploratory wells expenditure		(16,956)	(13,315)
Purchase of investments		(4,935)	(6,040)
Payment for financial assets at fair value through profit or loss		(8,150)	(6,700)
Proceeds from settlement of financial assets at fair value through profit or loss		8,248	10,000
Payment for acquisition of subsidiary, net of cash acquired		(1,106)	(340)
Proceeds from disposal of investments		6,769	51,520
Proceeds from disposal of property, plant, equipment and other non-current assets		1,478	2,656
Increase in time deposits with maturities over three months		(50,844)	(84,689)
Decrease in time deposits with maturities over three months		34,298	54,950
Interest received		3,372	2,305
Investment and dividend income received		10,134	11,510
Proceeds from/(payments of) other investing activities		459	(6,186)
Net cash used in investing activities		(145,198)	(102,650)
Financing activities
Proceeds from bank and other loans		356,459	558,680
Repayments of bank and other loans		(338,232)	(540,015)
Contributions to subsidiaries from non-controlling interests		1,001	4,219
Dividends paid by the Company		(35,110)	(31,479)
Distributions by subsidiaries to non-controlling interests		(8,068)	(4,821)
Interest paid		(5,849)	(7,512)
Payments made to acquire non-controlling interests		(8,198)	(1,121)
Repayments of lease liabilities		(19,412)	(15,327)
Proceeds from other financing activities		133	700
Repayments of other financing activities		(666)	(834)
Net cash used in financing activities		(57,942)	(37,510)
Net increase in cash and cash equivalents		22,034	28,360
Cash and cash equivalents at 1 January		87,559	60,438
Effect of foreign currency exchange rate changes		(1,003)	(1,239)
Cash and cash equivalents at 31 December		108,590	87,559

(a)

Reconciliation from profit before taxation to net cash generated from operating activities

	Year ended 31 December
	2021	2020
	RMB	RMB
Operating activities
Profit before taxation	109,169	48,615
Adjustments for:
Depreciation, depletion and amortisation	115,680	107,461
Dry hole costs written off	7,702	5,928
Share of profits from associates and joint ventures	(23,253)	(6,712)
Investment income	(298)	(37,744)
Interest income	(5,732)	(4,803)
Interest expense	15,018	15,198
(Gain)/loss on foreign currency exchange rate changes and derivative financial instruments	(3,723)	2,003
Loss/(gain) on disposal of property, plant, equipment and other non-current assets, net	3,062	(398)
Impairment losses on assets	13,165	26,087
Impairment losses on trade and other receivables	2,311	2,066
	233,101	157,701
Net changes from:
Accounts receivable and other current assets	(8,177)	(17,610)
Inventories	(58,372)	22,407
Accounts payable and other current liabilities	82,408	15,169
	248,960	177,667
Income tax paid	(23,786)	(9,147)
Net cash generated from operating activities	225,174	168,520

1	PRINCIPAL ACTIVITIES, ORGANISATION AND BASIS OF PREPARATION

(a)

New and amended standards and interpretations adopted by the Group

•

Amendment to IFRS 16, COVID-19-related rent concessions

•

Amendment to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, Interest rate benchmark reform – phase 2

(b)

New and amended standards and interpretations not yet adopted by the Group

2	SIGNIFICANT ACCOUNTING POLICIES

(a)

Basis of consolidation

(i)

Subsidiaries and non-controlling interests

(ii)

Associates and joint ventures

2	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(a)

Basis of consolidation (Continued)

(iii)

Transactions eliminated on consolidation

(iv)

Merger accounting for common control combination

(b)

Translation of foreign currencies

(c)

Cash and cash equivalents

(d)

Trade, bills and other receivables

(e)

Inventories

2	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(f)

Property, plant and equipment

	Estimated usage period	Estimated residuals rate
Buildings	12 to 50 years	3%
Equipment, machinery and others	4 to 30 years	3%

(g)

Oil and gas properties

(h)

Construction in progress

(i)

Goodwill

2	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(j)

Financial assets

(i)

Classification and measurement

•

Amortised cost: The business model for managing such financial assets by the Group are held for collection of contractual cash flows. The contractual cash flow characteristics are to give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Interest income from these financial assets is recognised using the effective interest rate method.

•

FVOCI: The business model for managing such financial assets by the Group are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest on the principal amount outstanding. Movements in the carrying amount are taken through other comprehensive income, except for the recognition of impairment gains or losses, foreign exchange gains and losses and interest income calculated using the effective interest rate method, which are recognised in profit or loss.

(ii)

Impairment

2	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(j)

Financial assets (Continued)

(iii)

Derecognition

(iv)

Financial guarantees issued

(k)

Financial liabilities

(l)

Determination of fair value for financial instruments

2	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(m)

Derivative financial instruments and hedge accounting

(i)

There is an economic relationship between the hedged item and the hedging instrument, which shares a risk and that gives rise to opposite changes in fair value that tend to offset each other.

(ii)

The effect of credit risk does not dominate the value changes that result from that economic relationship.

(iii)

The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the entity actually hedges and the quantity of the hedging instrument that the entity actually uses to hedge that quantity of hedged item. However, that designation does not reflect an imbalance between the weightings of the hedged item and the hedging instrument.

(i)

The cumulative gain or loss on the hedging instrument from inception of the hedge; and

(ii)

The cumulative change in fair value (present value) of the hedged item (i.e. the present value of the cumulative change in the hedged expected future cash flows) from inception of the hedge.

2	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(m)

Derivative financial instruments and hedge accounting (Continued)

(n)

Impairment of assets

(o)

Trade, bills and other payables

(p)

Interest-bearing borrowings

(q)

Provisions and contingent liability

2	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(r)

Revenue recognition

(s)

Government grants

(t)

Borrowing costs

(u)

Repairs and maintenance expenditure

(v)

Environmental expenditures

(w)

Research and development expense

2	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(x)

Leases

(i)

As lessee

(ii)

As lessor

(y)

Employee benefits

(z)

Income tax

2	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(aa)

Dividends

(bb)

Segment reporting

3	REVENUE FROM PRIMARY BUSINESS

	2021	2020
	RMB million	RMB million
Gasoline	726,057	557,605
Diesel	542,260	422,566
Crude oil	429,038	351,707
Basic chemical feedstock	242,532	155,397
Synthetic resin	149,208	122,368
Kerosene	112,519	72,385
Natural gas	68,443	48,099
Synthetic fiber monomers and polymers	45,464	42,388
Others (i)	363,979	276,139
	2,679,500	2,048,654

(i)

Others are primarily liquefied petroleum gas and other refinery and chemical byproducts and joint products.

4	OTHER OPERATING REVENUES

	2021	2020
	RMB million	RMB million
Sale of materials and others	59,990	54,986
Rental income	1,394	1,084
	61,384	56,070

5	SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

	2021	2020
	RMB million	RMB million
Variable lease payments, low-value and short-term lease payment	2,393	2,683
Auditor’s remuneration:
– Audit services	59	73
– Others	8	8

6	PERSONNEL EXPENSES

	2021	2020
	RMB million	RMB million
Salaries, wages and other benefits	91,560	78,542
Contributions to retirement schemes (Note 40)	11,932	8,983
	103,492	87,525

7	TAXES OTHER THAN INCOME TAX

	2021	2020
	RMB million	RMB million
Consumption tax (i)	213,894	197,542
City construction tax (ii)	18,044	15,710
Education surcharge (ii)	13,409	11,678
Resources tax	6,432	4,572
Others	7,253	5,516
	259,032	235,018

(i)

Consumption tax was levied based on sales quantities of taxable products, tax rate of products is presented as below:

Products	RMB/Ton
Gasoline	2,109.76
Diesel	1,411.20
Naphtha	2,105.20
Solvent oil	1,948.64
Lubricant oil	1,711.52
Fuel oil	1,218.00
Jet fuel oil	1,495.20

(ii)

City construction tax and education surcharge is levied on an entity based on its paid amount of value-added tax and consumption tax.

8	OTHER OPERATING INCOME/(EXPENSES), NET

	2021	2020
	RMB million	RMB million
Government grants (i)	6,706	8,776
Ineffective portion of change in fair value of cash flow hedges	694	3,052
Net realised and unrealised loss on derivative financial instruments not qualified as hedging	(14,873)	(1,252)
Impairment losses on long-lived assets (ii)	(10,035)	(14,629)
(Loss)/gain on disposal of property, plant, equipment and other non-current assets, net	(3,062)	398
Fines, penalties and compensations	(220)	(43)
Donations	(165)	(301)
Others	(761)	(1,781)
	(21,716)	(5,780)

(i)

Government grants for the years ended 31 December 2021 and 2020 primarily represent financial appropriation income and non-income tax refunds received from respective government agencies without conditions or other contingencies attached to the receipts of the grants.

(ii)

Impairment losses on long-lived assets for the year ended 31 December 2021 primarily represent impairment losses recognised in the exploration and production (“E&P”) segment of RMB2,467 million (2020: RMB8,495 million), the chemicals segment of RMB5,332 million (2020: RMB3,675 million), the refining segment of RMB860 million (2020: RMB1,923 million), and the marketing and distribution segment of RMB1,211 million (2020: RMB536 million). The impairment losses in the E&P segment were mainly the impairment losses of properties, plant and equipment relating to oil and gas producing activities. The primary factors resulting in the E&P segment impairment loss were low oil price outlook in the long term and downward revision of oil and gas reserve in certain fields. E&P segment determines recoverable amounts of properties, plant and equipment relating to oil and gas producing activities, which include significant judgments and assumptions. The recoverable amounts were determined based on the present values of the expected future cash flows of the assets using a pre-tax discount rate 10.47% (2020: 10.47%). Further future downward revisions to the Group’s oil or nature gas price outlook would lead to further impairments which, in aggregate, are likely to be material. It is estimated that a general decrease of 5% in oil price, with all other variables held constant, would result in additional impairment loss on the Group’s properties, plant and equipment relating to oil and nature gas producing activities by approximately RMB3,628 million (2020: RMB4,548 million). It is estimated that a general increase of 5% in operating cost, with all other variables held constant, would result in additional impairment loss on the Group’s properties, plant and equipment relating to oil and gas producing activities by approximately RMB2,400 million (2020: RMB2,836 million). It is estimated that a general increase of 5% in discount rate, with all other variables held constant, would result in additional impairment loss on the Group’s properties, plant and equipment relating to oil and gas producing activities by approximately RMB180 million (2020: RMB287 million). Impairment losses recognised in the chemical segment and refining segment relate to certain refinery and chemical production facilities and are not individually significant. The impairment losses were mainly due to the suspension of operations of certain production facilities, and evidence that indicate the economic performance of certain production facilities continuously was lower than the expectation, thus the carrying amounts of these facilities were written down to their recoverable amounts, which were determined based on the present values of forecasted future cash flows of the cash generating units using pre-tax discount rates ranging from 10.50% to 13.9% (2020: 9.87% to 11.60%).

9	INTEREST EXPENSE

	2021	2020
	RMB million	RMB million
Interest expense incurred	5,679	6,517
Less: Interest expense capitalised*	(996)	(2,011)
	4,683	4,506
Interest expense on lease liabilities	9,200	9,349
Accretion expenses (Note 35)	1,135	1,343
Interest expense	15,018	15,198
* Interest rates per annum at which borrowing costs were capitalised for construction in progress	1.84% to 4.35%	2.60% to 4.66%

10	INVESTMENT INCOME

	2021	2020
	RMB million	RMB million
Investment income from disposal of business and long-term equity investments (i)	82	37,525
Dividend income from holding of other equity instrument investments	34	156
Others	182	63
	298	37,744

(i)

The Company and Sinomart KTS Development Limited, Sinopec Natural Gas Limited Company and Sinopec Marketing Company Limited (“Marketing Company”), the subsidiaries of the Company entered into the Agreement on Cash Payment to Purchase Equity in Sinopec Yu Ji Pipeline Company Limited, the Agreement on Additional Issuance of Equity and Cash Payment to Purchase Assets, the Agreement on Cash Payment to Purchase Assets and the Agreement on Additional Issuance of Equity to Purchase Assets with China Oil & Gas Pipeline Network Corporation (“PipeChina”), on 21 July 2020 and on 23 July 2020 respectively, pursuant to which the Company and its subsidiaries proposed to dispose target business, including equity interests in the relevant companies, oil and gas pipeline and ancillary facilities, to PipeChina. The above transactions were considered and approved by the 15th Session of 7th Directorate Meeting on 23 July 2020 and the second Extraordinary General Meeting on 28 September 2020. The transaction consideration was mainly additional issuance of equity and/or cash payment by PipeChina and the gain on above transactions was RMB37,731 million in 2020.

11	INCOME TAX EXPENSE

	2021	2020
	RMB million	RMB million
Current tax
– Provision for the year	17,522	14,334
– Adjustment of prior years	(462)	(117)
Deferred taxation (Note 29)	6,258	(7,873)
	23,318	6,344

	2021	2020
	RMB million	RMB million
Profit before taxation	109,169	48,615
Expected PRC income tax expense at a statutory tax rate of 25%	27,292	12,154
Tax effect of non-deductible expenses	5,948	3,281
Tax effect of non-taxable income	(8,096)	(8,330)
Tax effect of preferential tax rate (i)	(2,766)	(1,011)
Effect of income taxes at foreign operations	(222)	(730)
Tax effect of utilisation of previously unrecognised tax losses and temporary differences	(701)	(65)
Tax effect of tax losses not recognised and temporary differences	1,391	1,087
Write-down of deferred tax assets	934	75
Adjustment of prior years	(462)	(117)
Actual income tax expense	23,318	6,344

(i)

The provision for PRC current income tax is based on a statutory income tax rate of 25% of the assessable income of the Group as determined in accordance with the relevant income tax rules and regulations of the PRC, except for certain entities of the Group in western regions in the PRC are taxed at preferential income tax rate of 15% through the year 2021. According to Announcement [2020] No. 23 of the MOF “Announcement of the MOF, the State Taxation Administration and the National Development and Reform Commission on continuation of the income tax policy of western development enterprises”, the preferential tax rate of 15% extends from 1 January 2021 to 31 December 2030.

12	DIRECTORS’ AND SUPERVISORS’ EMOLUMENTS

(a)

Directors’ and supervisors’ emoluments

	Emoluments paid or receivable in respect of director’s other services in connection with the management of the affairs of the Company or its subsidiary undertaking			Emoluments paid or receivable in respect of a person’s services as a director, whether of the Company or its subsidiary undertaking
	2021
	Salaries, allowances and benefits in kind	Bonuses	Retirement scheme contributions	Directors’/ Supervisors’ fee	Total
Name	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
Directors
Ma Yongsheng	291	322	102	–	715
Zhao Dong (i)	–	–	–	–	–
Yu Baocai	24	409	9	–	442
Ling Yiqun	–	–	–	–	–
Li Yonglin (ii)	–	–	–	–	–
Liu Hongbin
Zhang Yuzhuo (iii)	–	–	–	–	–
Independent non-executive directors
Cai Hongbin	–	–	–	417	417
Johnny Karling Ng	–	–	–	417	417
Shi Dan (iv)	–	–	–	300	300
Bi Mingjian (iv)	–	–	–	300	300
Tang Min (v)	–	–	–	117	117
Supervisors
Zhang Shaofeng (vi)	–	–	–	–	–
Jiang Zhenying	–	–	–	–	–
Zhang Zhiguo (vii)	–	–	–	–	–
Yin Zhaolin (vii)	–	–	–	–	–
Guo Hongjin (vii)	202	140	61	–	403
Li Defang	154	100	44	–	298
Lv Dapeng (viii)	216	140	61	–	417
Chen Yaohuan (viii)	371	692	102	–	1,165
Zou Huiping (ix)	–	–	–	–	–
Sun Huanquan (x)	–	–	–	–	–
Yu Renming (x)	–	–	–	–	–
Total	1,258	1,803	379	1,551	4,991

12	DIRECTORS’ AND SUPERVISORS’ EMOLUMENTS (Continued)

(a)

Directors’ and supervisors’ emoluments (Continued)

	Emoluments paid or receivable in respect of director’s other services in connection with the management of the affairs of the Company or its subsidiary undertaking			Emoluments paid or receivable in respect of a person’s services as a director, whether of the Company or its subsidiary undertaking
	2020
	Salaries, allowances and benefits in kind	Bonuses	Retirement scheme contributions	Directors’/ Supervisors’ fee	Total
Name	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
Directors
Zhang Yuzhuo (iii)	–	–	–	–	–
Ma Yongsheng	299	620	94	–	1,013
Yu Baocai	–	–	–	–	–
Liu Hongbin	–	–	–	–	–
Ling Yiqun	–	–	–	–	–
Zhang Shaofeng (vi)	–	–	–	–	–
Dai Houliang (xi)	–	–	–	–	–
Li Yunpeng (xii)	–	–	–	–	–
Li Yong (xiii)	–	–	–	–	–
Independent non-executive directors
Tang Min (v)	–	–	–	350	350
Cai Hongbin	–	–	–	350	350
Johnny Karling Ng	–	–	–	350	350
Fan Gang (xiv)	–	–	–	–	–
Supervisors
Zhao Dong (i)	–	–	–	–	–
Jiang Zhenying	366	710	83	–	1,159
Zou Huiping (ix)	272	555	59	–	886
Sun Huanquan (x)	247	160	60	–	467
Yu Renming (x)	–	–	–	–	–
Li Defang	–	–	–	–	–
Yu Xizhi (xv)	125	613	23	–	761
Zhou Hengyou (xv)	125	611	23	–	759
Yang Changjiang (xvi)	–	–	–	–	–
Zhang Baolong (xvi)	–	–	–	–	–
Total	1,434	3,269	342	1,050	6,095

(i)

Mr. Zhao Dong ceased being chairman of the Board of Supervisors from 25 May 2021, and was elected to be non-executive director from 25 May 2021.

(ii)

Mr. Li Yonglin was elected to be director from 25 May 2021.

(iii)

Due to change of working arrangement, Mr. Zhang Yuzhuo has tendered his resignation as chairman, non-executive director, chairman of Strategy Committee,and Sustainable Development Committee of the Board, member of Nomination Committee of the Board from 2 August 2021.

(iv)

Ms. Shi Dan was elected to be independent non-executive director from 25 May 2021; Mr. Bi Mingjian was elected to be independent non-executive director from 25 May 2021.

(v)

Mr. Tang Min ceased being independent non-executive director from 25 May 2021.

(vi)

Mr. Zhang Shaofeng ceased being non-executive director from 25 May 2021, and was elected to be chairman of the Board of Supervisors from 25 May 2021.

(vii)

Mr. Zhang Zhiguo was elected to be supervisor from 25 May 2021; Mr. Yin Zhaolin was elected to be supervisor from 25 May 2021; Mr. Guo Hongjin was elected to be supervisor from 25 May 2021

(viii)

Mr. Lv Dapeng was elected to be supervisor from 11 January 2021; Mr. Chen Yaohuan was elected to be supervisor from 11 January 2021.

(ix)

Mr. Zou Huiping ceased being supervisor from 28 January 2021.

(x)

Mr. Sun Huanquan ceased being supervisor from 11 January 2021; Mr. Yu Renming ceased being supervisor from 11 January 2021.

(xi)

Mr. Dai Houliang ceased being chairman and non-executive director from 19 January 2020.

(xii)

Mr. Li Yunpeng ceased being non-executive director from 24 March 2020.

(xiii)

Mr. Li Yong ceased being non-executive director from 22 September 2020.

(xiv)

Mr. Fan Gang ceased being independent non-executive director from 28 August 2020.

(xv)

Mr. Yu Xizhi ceased being supervisor from 18 May 2020; Mr. Zhou Hengyou ceased being supervisor from 18 May 2020.

(xvi)

Mr. Yang Changjiang ceased being supervisor from 9 September 2020; Mr. Zhang Baolong ceased being supervisor from 9 September 2020.

13	SENIOR MANAGEMENT’S EMOLUMENTS

	Number of individuals
	2021	2020
Emoluments
HKD1,000,001 to HKD1,500,000	–	3
HKD1,500,001 to HKD2,000,000	5	2

14

DIVIDENDS

	2021	2020
	RMB million	RMB million
Dividends declared and paid during the year of RMB0.16 per share (2020: RMB0.07 per share)	19,371	8,475
Dividends declared after the date of the statement of financial position of RMB0.31 per share (2020: RMB0.13 per share)	37,532	15,739
	56,903	24,214

	2021	2020
	RMB million	RMB million
Final cash dividends in respect of the previous financial year, approved during the year of RMB0.13 per share (2020: RMB0.19 per share)	15,739	23,004

15	OTHER COMPREHENSIVE INCOME

	2021			2020
	Before tax amount	Tax effect	Net of tax amount	Before tax amount	Tax effect	Net of tax amount
	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million
Cash flow hedges:
Effective portion of changes in fair value of hedging instruments recognised during the year	15,659	(3,881)	11,778	9,207	(2,295)	6,912
Reclassification adjustments for amounts transferred to the consolidated income statement	8,858	(1,618)	7,240	198	(37)	161
Net movement during the year recognised in other comprehensive income (i)	24,517	(5,499)	19,018	9,405	(2,332)	7,073
Changes in the fair value of instruments at fair value through other comprehensive income	(6)	2	(4)	(6)	(4)	(10)
Transfer of loss on disposal of equity investments at fair value through other comprehensive income to retained earnings	–	–	–	(12)	–	(12)
Net movement during the year recognised in other comprehensive income	(6)	2	(4)	(18)	(4)	(22)
Cost of hedging reserve	(220)	–	(220)	162	–	162
Share of other comprehensive income of associates and joint ventures	441	–	441	(2,441)	–	(2,441)
Foreign currency translation differences	(1,728)	–	(1,728)	(4,457)	–	(4,457)
Other comprehensive income	23,004	(5,497)	17,507	2,651	(2,336)	315

(i)

As at 31 December 2021, cash flow hedge reserve amounted to a gain of RMB7,244 million (31 December 2020: a gain of RMB8,176 million), of which a gain of RMB7,214 million was attributable to shareholders of the Company (31 December 2020: a gain of RMB7,805 million).

16	BASIC AND DILUTED EARNINGS PER SHARE

17	PROPERTY, PLANT AND EQUIPMENT

			Equipment,
	Plants and buildings	Oil and gas, properties	machinery and others	Total
	RMB million	RMB million	RMB million	RMB million
Cost:
Balance at 1 January 2020	132,327	727,552	1,027,324	1,887,203
Additions	390	1,563	5,163	7,116
Transferred from construction in progress	10,965	32,214	98,427	141,606
Reclassifications	1,443	(125)	(1,318)	–
Invest into the joint ventures and associated companies	–	–	(115)	(115)
Reclassification to other long-term assets	(38)	–	(1,052)	(1,090)
Disposals	(6,396)	(806)	(131,501)	(138,703)
Exchange adjustments	(141)	(2,806)	(226)	(3,173)
Balance at 31 December 2020	138,550	757,592	996,702	1,892,844
Balance at 1 January 2021	138,550	757,592	996,702	1,892,844
Additions	509	2,192	5,177	7,878
Transferred from construction in progress	5,487	40,357	65,182	111,026
Reclassifications	646	(617)	(29)	–
Invest into the joint ventures and associated companies	(8)	–	(188)	(196)
Reclassification to other long-term assets	(665)	(22)	(1,027)	(1,714)
Disposals	(1,297)	(5,517)	(17,495)	(24,309)
Exchange adjustments	(57)	(940)	(95)	(1,092)
Balance at 31 December 2021	143,165	793,045	1,048,227	1,984,437
Accumulated depreciation and impairment losses:
Balance at 1 January 2020	61,069	587,192	608,622	1,256,883
Depreciation for the year	4,680	32,054	48,760	85,494
Impairment losses for the year	684	4,739	6,360	11,783
Reclassifications	393	(98)	(295)	–
Invest into the joint ventures and associated companies	–	–	(54)	(54)
Reclassification to other long-term assets	(8)	–	(161)	(169)
Written back on disposals	(3,229)	(464)	(48,125)	(51,818)
Exchange adjustments	(49)	(2,703)	(138)	(2,890)
Balance at 31 December 2020	63,540	620,720	614,969	1,299,229
Balance at 1 January 2021	63,540	620,720	614,969	1,299,229
Depreciation for the year	4,586	39,670	48,568	92,824
Impairment losses for the year	742	1,904	6,774	9,420
Reclassifications	185	(410)	225	–
Invest into the joint ventures and associated companies	(5)	–	(133)	(138)
Reclassification to other long-term assets	(82)	(7)	(170)	(259)
Written back on disposals	(771)	(135)	(13,668)	(14,574)
Exchange adjustments	(29)	(904)	(57)	(990)
Balance at 31 December 2021	68,166	660,838	656,508	1,385,512
Net book value:
Balance at 1 January 2020	71,258	140,360	418,702	630,320
Balance at 31 December 2020	75,010	136,872	381,733	593,615
Balance at 31 December 2021	74,999	132,207	391,719	598,925

18	CONSTRUCTION IN PROGRESS

	2021	2020
	RMB million	RMB million
Balance at 1 January	125,525	176,119
Additions	159,729	131,099
Dry hole costs written off	(7,702)	(5,928)
Transferred to property, plant and equipment	(111,026)	(141,606)
Reclassification to other long-term assets	(10,302)	(11,464)
Impairment losses for the year	(144)	(844)
Disposals and others	(107)	(21,798)
Exchange adjustments	(34)	(53)
Balance at 31 December	155,939	125,525

19	RIGHT-OF-USE ASSETS

	Land	Others	Total
	RMB million	RMB million	RMB million
Cost
Balance at 1 January 2020	248,775	34,188	282,963
Additions	14,370	9,653	24,023
Decreases	(9,790)	(3,140)	(12,930)
Balance at 31 December 2020	253,355	40,701	294,056
Balance at 1 January 2021	253,355	40,701	294,056
Additions	13,263	9,650	22,913
Decreases	(2,862)	(3,430)	(6,292)
Balance at 31 December 2021	263,756	46,921	310,677
Accumulated depreciation
Balance at 1 January 2020	9,101	5,702	14,803
Additions	9,358	6,354	15,712
Decreases	(896)	(1,575)	(2,471)
Balance at 31 December 2020	17,563	10,481	28,044
Balance at 1 January 2021	17,563	10,481	28,044
Additions	9,966	6,863	16,829
Decreases	(407)	(2,197)	(2,604)
Balance at 31 December 2021	27,122	15,147	42,269
Net book value
Balance at 1 January 2020	239,674	28,486	268,160
Balance at 31 December 2020	235,792	30,220	266,012
Balance at 31 December 2021	236,634	31,774	268,408

20

GOODWILL

	31 December	31 December
	2021	2020
	RMB million	RMB million
Cost	16,455	16,481
Less: Accumulated impairment losses	(7,861)	(7,861)
	8,594	8,620

		31 December	31 December
	Principal activities	2021	2020
		RMB million	RMB million
Sinopec Zhenhai Refining and Chemical Branch	Manufacturing of intermediate petrochemical products and petroleum products	4,043	4,043
Shanghai SECCO Petrochemical Company Limited (“Shanghai SECCO”)	Production and sale of petrochemical products	2,541	2,541
Sinopec Beijing Yanshan Petrochemical Branch	Manufacturing of intermediate petrochemical products and petroleum products	1,004	1,004
Other units without individually significant goodwill		1,006	1,032
		8,594	8,620

21	INTEREST IN ASSOCIATES

Name of company	% of ownership interests	Principal activities	Measurement method	Country of incorporation	Principal place of business
PipeChina (i)	14.00	Operation of oil and natural gas pipeline and auxiliary facilities	Equity method	PRC	PRC
Sinopec Finance Company Limited (“Sinopec Finance”)	49.00	Provision of non-banking financial services	Equity method	PRC	PRC
Sinopec Capital Company Limited (“Sinopec Capital”)	49.00	Project and equity investment, investment management, investment consulting,self-owned equity management	Equity method	PRC	PRC
Zhongtian Synergetic Energy Company Limited (“Zhongtian Synergetic Energy”)	38.75	Mining coal and manufacturing of coal-chemical products	Equity method	PRC	PRC
Caspian Investments Resources Ltd. (“CIR”)	50.00	Crude oil and natural gas extraction	Equity method	British Virgin Islands	The Republic of Kazakhstan

21	INTEREST IN ASSOCIATES (Continued)

	PipeChina		Sinopec Finance		Sinopec Capital		Zhongtian Synergetic Energy		CIR
	31	31	31	31	31	31	31	31	31	31
	December	December	December	December	December	December	December	December	December	December
	2021	2020	2021	2020	2021	2020	2021	2020	2021	2020
	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million
Current assets	86,335	74,012	194,458	175,139	13,140	11,871	3,532	3,721	576	2,402
Non-current assets	768,161	655,982	55,086	53,008	102	106	51,331	53,124	870	903
Current liabilities	(136,150)	(55,562)	(217,987)	(197,872)	(28)	(18)	(8,577)	(8,315)	(822)	(699)
Non-current liabilities	(103,243)	(104,150)	(602)	(514)	(676)	(411)	(22,216)	(28,422)	(144)	(286)
Net assets	615,103	570,282	30,955	29,761	12,538	11,548	24,070	20,108	480	2,320
Net assets attributable to owners of the Company	526,241	505,336	30,955	29,761	12,538	11,548	24,070	20,108	480	2,320
Net assets attributable to non-controlling interests	88,862	64,946	–	–	–	–	–	–	–	–
Share of net assets from associates	73,674	70,747	15,168	14,583	6,144	5,659	9,327	7,792	240	1,160
Carrying Amounts	73,674	70,747	15,168	14,583	6,144	5,659	9,327	7,792	240	1,160

Year ended 31 December	PipeChina (ii)		Sinopec Finance		Sinopec Capital		Zhongtian Synergetic Energy		CIR
	2021	2020	2021	2020	2021	2020	2021	2020	2021	2020
	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million
Revenue	101,572	22,766	5,177	4,742	2	2	16,959	11,707	1,826	1,252
Profit for the year	29,776	6,444	2,168	2,027	990	1,278	4,184	551	461	181
Other comprehensive income	2	–	26	(372)	–	–	–	–	3	(308)
Total comprehensive income	29,778	6,444	2,194	1,655	990	1,278	4,184	551	464	(127)
Dividends declared by associates	442	–	490	–	–	–	86	284	1,152	2,517
Share of profit from associates	3,205	709	1,062	993	485	626	1,621	214	231	91
Share of other comprehensive income from associates (iii)	–	–	13	(182)	–	–	–	–	2	(154)

(i)

The Group has a member in the Board of Directors of PipeChina. According to the structure and the resolution mechanism of the Board of Directors, the Group can exercise significant influence on PipeChina.

(ii)

The summarised statement of comprehensive income for the year 2020 presents the operating results from the date when the Group can exercise significant influence on PipeChina to 31 December 2020.

(iii)

Including foreign currency translation differences.

22	INTEREST IN JOINT VENTURES

Name of entity	% of ownership interests	Principal activities	Measurement method	Country of incorporation	Principal place of business
Fujian Refining & Petrochemical Company Limited (“FREP”)	50.00	Manufacturing refining oil products	Equity method|	PRC	PRC
BASF-YPC Company Limited (“BASF-YPC”)	40.00	Manufacturing and distribution of petrochemical products	Equity method	PRC	PRC
Taihu Limited (“Taihu”)	49.00	Crude oil and natural gas extraction	Equity method	Cyprus	Russia
Yanbu Aramco Sinopec Refining Company Ltd. (“YASREF”)	37.50	Petroleum refining and processing business	Equity method	Saudi Arabia	Saudi Arabia
Sinopec SABIC Tianjin Petrochemical Company Limited (“Sinopec SABIC Tianjin”)	50.00	Manufacturing and distribution of petrochemical products	Equity method	PRC	PRC

	FREP		BASF-YPC		Taihu		YASREF		Sinopec SABIC Tianjin
	31 December 2021	31 December 2020	31 December 2021	31 December 2020	31 December 2021	31 December 2020	31 December 2021	31 December 2020	31 December 2021	31 December 2020
	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million
Current assets
Cash and cash equivalents	6,562	7,448	5,375	1,838	1,258	1,280	5,441	1,408	4,820	5,259
Other current assets	9,217	7,492	6,953	4,777	2,188	1,223	12,404	7,516	3,437	2,665
Total current assets	15,779	14,940	12,328	6,615	3,446	2,503	17,845	8,924	8,257	7,924
Non-current assets	13,744	15,237	9,336	9,993	14,032	12,531	41,947	45,413	18,835	18,258
Current liabilities
Current financial liabilities	(1,177)	(1,203)	(77)	(456)	(32)	(38)	(9,549)	(9,520)	(597)	(998)
Other current liabilities	(5,008)	(5,147)	(2,546)	(2,190)	(1,931)	(1,043)	(15,844)	(8,644)	(3,547)	(3,052)
Total current liabilities	(6,185)	(6,350)	(2,623)	(2,646)	(1,963)	(1,081)	(25,393)	(18,164)	(4,144)	(4,050)
Non-current liabilities
Non-current financial liabilities	(6,857)	(8,761)	–	–	(85)	(85)	(30,903)	(29,650)	(7,599)	(6,773)
Other non-current liabilities	(242)	(235)	(92)	(42)	(1,439)	(2,017)	(1,723)	(2,008)	(382)	(378)
Total non-current liabilities	(7,099)	(8,996)	(92)	(42)	(1,524)	(2,102)	(32,626)	(31,658)	(7,981)	(7,151)
Net assets	16,239	14,831	18,949	13,920	13,991	11,851	1,773	4,515	14,967	14,981
Net assets attributable to owners of the company	16,239	14,831	18,949	13,920	13,523	11,439	1,773	4,515	14,967	14,981
Net assets attributable to non-controlling interests	–	–	–	–	468	412	–	–	–	–
Share of net assets from joint ventures	8,120	7,416	7,580	5,568	6,626	5,605	–	–	7,484	7,491
Carrying Amounts	8,120	7,416	7,580	5,568	6,626	5,605	–	–	7,484	7,491

Year ended 31 December	FREP		BASF-YPC		Taihu		YASREF		Sinopec SABIC Tianjin
	2021	2020	2021	2020	2021	2020	2021	2020	2021	2020
	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million
Revenue	47,224	38,691	27,499	15,701	15,190	9,528	68,548	37,337	24,631	14,881
Depreciation, depletion and amortisation	(2,789)	(2,222)	(1,467)	(1,244)	(667)	(541)	(3,224)	(3,140)	(1,164)	(1,085)
Interest income	147	118	52	27	451	291	6	17	209	183
Interest expense	(411)	(535)	(5)	(16)	(107)	(20)	(945)	(1,136)	(89)	(131)
Profit/(loss) before taxation	2,261	520	8,218	1,518	2,864	2,304	(2,868)	(7,193)	1,393	954
Tax expense	(597)	(87)	(2,054)	(379)	(601)	(378)	332	1,057	(407)	(236)
Profit/(loss) for the year	1,664	433	6,164	1,139	2,263	1,926	(2,536)	(6,136)	986	718
Other comprehensive income	–	–	–	–	(123)	(3,368)	(206)	(584)	–	–
Total comprehensive income	1,664	433	6,164	1,139	2,140	(1,442)	(2,742)	(6,720)	986	718
Dividends declared by joint ventures	128	300	454	691	–	–	–	–	500	–
Share of net profit/(loss) from joint ventures	832	217	2,466	456	1,081	911	–	(2,301)	493	359
Share of other comprehensive loss from joint ventures (i)	–	–	–	–	(60)	(1,593)	–	(219)	–	–

(i)

Including foreign currency translation differences.

23	LONG-TERM PREPAYMENTS AND OTHER ASSETS

	31 December	31 December
	2021	2020
	RMB million	RMB million
Operating rights of service stations	29,714	31,856
Long-term receivables from and prepayment to Sinopec Group Company and fellow subsidiaries	1,520	2,801
Prepayments for construction projects to third parties	7,470	5,861
Others (i)	31,326	34,025
	70,030	74,543

(i)

Others mainly comprise time deposits with terms of three years, catalyst expenditures and improvement expenditures of property, plant and equipment.

	2021	2020
	RMB million	RMB million
Operating rights of service stations
Cost:
Balance at 1 January	53,567	53,549
Additions	912	493
Decreases	(688)	(475)
Balance at 31 December	53,791	53,567
Accumulated amortisation:
Balance at 1 January	21,711	19,536
Additions	2,699	2,365
Decreases	(333)	(190)
Balance at 31 December	24,077	21,711
Net book value at 31 December	29,714	31,856

24	DERIVATIVE FINANCIAL ASSETS AND DERIVATIVE FINANCIAL LIABILITIES

25	TRADE ACCOUNTS RECEIVABLE

	31 December	31 December
	2021	2020
	RMB million	RMB million
Amounts due from third parties	30,159	22,473
Amounts due from Sinopec Group Company and fellow subsidiaries	2,199	12,045
Amounts due from associates and joint ventures	6,536	4,781
	38,894	39,299
Less: Loss allowance for expected credit losses	(4,033)	(3,860)
	34,861	35,439

	31 December	31 December
	2021	2020
	RMB million	RMB million
Within one year	34,180	34,361
Between one and two years	442	931
Between two and three years	221	64
Over three years	18	83
	34,861	35,439

	2021	2020
	RMB million	RMB million
Balance at 1 January	3,860	1,848
Provision for the year	436	2,173
Written back for the year	(127)	(68)
Written off for the year	(30)	(23)
Others	(106)	(70)
Balance at 31 December	4,033	3,860

26	FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

	31 December	31 December
	2021	2020
	RMB million	RMB million
Non-current assets
Unlisted equity instruments	588	1,376
Listed equity instruments	179	149
Current assets
Trade accounts receivable and bills receivable (i)	5,939	8,735
	6,706	10,260

(i)

As at 31 December 2021 and 2020, bills receivable and certain trade accounts receivable were classified as financial assets at FVOCI, as the Group’s business model is achieved both by collecting contractual cash flows and selling of these assets.

27	INVENTORIES

	31 December	31 December
	2021	2020
	RMB million	RMB million
Crude oil and other raw materials	109,940	60,379
Work in progress	15,701	13,066
Finished goods	84,174	78,481
Spare parts and consumables	2,515	3,372
	212,330	155,298
Less: Allowance for diminution in value of inventories	(4,897)	(3,107)
	207,433	152,191

28	PREPAID EXPENSES AND OTHER CURRENT ASSETS

	31 December	31 December
	2021	2020
	RMB million	RMB million
Receivables	35,918	35,096
Advances to suppliers	9,267	4,857
Value-added input tax to be deducted	19,137	18,625
Prepaid income tax	5,109	131
	69,431	58,709

29	DEFERRED TAX ASSETS AND LIABILITIES

	Deferred tax assets		Deferred tax liabilities
	31 December	31 December	31 December	31 December
	2021	2020	2021	2020
	RMB million	RMB million	RMB million	RMB million
Receivables and inventories	3,763	2,411	–	–
Payables	2,858	1,286	–	–
Cash flow hedges	258	1,790	(2,709)	(4,420)
Property, plant and equipment	16,777	15,793	(15,037)	(13,415)
Tax losses carried forward	4,749	13,322	–	–
Financial assets at fair value through other comprehensive income	127	127	(9)	(11)
Intangible assets	1,008	869	(492)	(517)
Others	1,056	371	(870)	(676)
Deferred tax assets/(liabilities)	30,596	35,969	(19,117)	(19,039)

	31 December	31 December
	2021	2020
	RMB million	RMB million
Deferred tax assets	11,207	10,915
Deferred tax liabilities	11,207	10,915

	31 December	31 December
	2021	2020
	RMB million	RMB million
Deferred tax assets	19,389	25,054
Deferred tax liabilities	7,910	8,124

29	DEFERRED TAX ASSETS AND LIABILITIES (Continued)

	Balance at 1 January 2020	Recognised in consolidated income statement	Recognised in other comprehensive income	Others	Transferred from reserve	Balance at 31 December 2020
	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million
Receivables and inventories	2,546	(122)	(12)	(1)	–	2,411
Payables	1,142	144	–	–	–	1,286
Cash flow hedges	(268)	(42)	(2,316)	–	(4)	(2,630)
Property, plant and equipment	4,146	(2,244)	127	349	–	2,378
Tax losses carried forward	3,594	9,960	(84)	(148)	–	13,322
Financial assets at fair value through other comprehensive income	124	(4)	(4)	–	–	116
Intangible assets	87	19	–	246	–	352
Others	(564)	162	24	73	–	(305)
Net deferred tax assets/(liabilities)	10,807	7,873	(2,265)	519	(4)	16,930

	Balance at 1 January 2021	Recognised in consolidated income statement	Recognised in other comprehensive income	Others	Transferred from reserve	Balance at 31 December 2021
	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million
Receivables and inventories	2,411	1,378	(26)	–	–	3,763
Payables	1,286	1,572	–	–	–	2,858
Cash flow hedges	(2,630)	(203)	(5,499)	–	5,881	(2,451)
Property, plant and equipment	2,378	(1,004)	41	325	–	1,740
Tax losses carried forward	13,322	(8,554)	(19)	–	–	4,749
Financial assets at fair value through other comprehensive income	116	–	2	–	–	118
Intangible assets	352	63	–	101	–	516
Others	(305)	490	(3)	4	–	186
Net deferred tax assets/(liabilities)	16,930	(6,258)	(5,504)	430	5,881	11,479

30	SHORT-TERM AND LONG-TERM DEBTS AND LOANS FROM SINOPEC GROUP COMPANY AND FELLOW SUBSIDIARIES

	31 December	31 December
	2021	2020
	RMB million	RMB million
Third parties’ debts
Short-term bank loans	24,959	16,111
RMB denominated	24,959	16,111
Short-term other loans	–	3
RMB denominated	–	3
Current portion of long-term bank loans	3,293	4,637
RMB denominated	3,281	4,613
USD denominated	12	24
Current portion of long-term corporate bonds	7,000	–
RMB denominated	7,000	–
Corporate bonds	–	3,018
RMB denominated	–	3,018
	35,252	23,769
Loans from Sinopec Group Company and fellow subsidiaries
Short-term loans	2,407	4,642
RMB denominated	1,320	1,141
USD denominated	934	3,298
Hong Kong Dollar (“HKD”) denominated	–	31
European Dollar (“EUR”) denominated	153	172
Current portion of long-term loans	466	622
RMB denominated	466	622
	2,873	5,264
	38,125	29,033

30	SHORT-TERM AND LONG-TERM DEBTS AND LOANS FROM SINOPEC GROUP COMPANY AND FELLOW SUBSIDIARIES (Continued)

	Interest rate and final maturity	31 December	31 December
		2021	2020
		RMB million	RMB million
Third parties’ debts
Long-term bank loans
RMB denominated	Interest rates ranging from 1.08% to 4.00% per annum at 31 December 2021 with maturities through 2039	38,880	38,226
USD denominated	Interest rates at 1.55% per annum at 31 December 2021 with maturities through 2038	64	92
		38,944	38,318
Corporate bonds (i)
RMB denominated	Fixed interest rates ranging from 2.20% to 4.90% per annum at 31 December 2021 with maturities through 2026	38,522	26,977
USD denominated	Fixed interest rates ranging from 3.13% to 4.25% per annum at 31 December 2021 with maturities through 2043	11,127	11,379
		49,649	38,356
Total third parties’ long-term debts		88,593	76,674
Less: Current portion		(10,293)	(4,637)
		78,300	72,037
Long-term loans from Sinopec Group Company and fellow subsidiaries
RMB denominated	Interest rates ranging from 1.08% to 5.23% per annum at 31 December 2021 with maturities through 2037	12,988	11,013
USD denominated	Interest rates at 1.65% per annum at 31 December 2021 with maturities in 2027	1,168	1,387
Less: Current portion		(466)	(622)
		13,690	11,778
		91,990	83,815

(i)

The Company issued corporate bonds with a maturity of five years on 26 July 2021 at par value of RMB100. The total issued amount of the corporate bonds is RMB5 billion. The corporate bonds adopt a simple interest rate on an annual basis with a fixed rate at 3.20% per annum and the interest is paid once a year.

31	LEASE LIABILITIES

	31 December	31 December
	2021	2020
	RMB million	RMB million
Lease liabilities
Current	15,173	15,293
Non-current	170,233	171,740
	185,406	187,033

32	TRADE ACCOUNTS PAYABLE AND BILLS PAYABLE

	31 December	31 December
	2021	2020
	RMB million	RMB million
Amounts due to third parties	193,547	132,256
Amounts due to Sinopec Group Company and fellow subsidiaries	4,227	11,512
Amounts due to associates and joint ventures	6,145	7,746
	203,919	151,514
Bills payable	11,721	10,394
Trade accounts payable and bills payable measured at amortised cost	215,640	161,908

	31 December	31 December
	2021	2020
	RMB million	RMB million
Within 1 month or on demand	138,741	146,415
Between 1 month and 6 months	25,280	9,793
Over 6 months	51,619	5,700
	215,640	161,908

33	CONTRACT LIABILITIES

34	OTHER PAYABLES

	31 December	31 December
	2021	2020
	RMB million	RMB million
Salaries and welfare payable	14,048	7,129
Interest payable	822	667
Payables for constructions	54,596	42,027
Other payables	93,764	59,023
Taxes other than income tax	76,458	70,262
	239,688	179,108

35	PROVISIONS

	2021	2020
	RMB million	RMB million
Balance at 1 January	43,713	42,438
Provision for the year	2,163	1,563
Accretion expenses	1,135	1,343
Decrease for the year	(6,435)	(1,490)
Exchange adjustments	(81)	(141)
Balance at 31 December	40,495	43,713

36	SHARE CAPITAL

	31 December	31 December
	2021	2020
	RMB million	RMB million
Registered, issued and fully paid
95,557,771,046 listed A shares (2020: 95,557,771,046) of RMB1.00 each	95,558	95,558
25,513,438,600 listed H shares (2020: 25,513,438,600) of RMB1.00 each	25,513	25,513
	121,071	121,071

37	COMMITMENTS AND CONTINGENT LIABILITIES

	31 December	31 December
	2021	2020
	RMB million	RMB million
Authorised and contracted for (i)	184,430	171,597
Authorised but not contracted for	90,227	33,997
	274,657	205,594

(i)

The investment commitments of the Group is RMB3,648 million (2020: RMB13,172 million).

	31 December	31 December
	2021	2020
	RMB million	RMB million
Within one year	301	390
Between one and two years	112	99
Between two and three years	110	66
Between three and four years	102	63
Between four and five years	64	56
Thereafter	846	824
	1,535	1,498

	31 December	31 December
	2021	2020
	RMB million	RMB million
Joint ventures (ii)	9,117	6,390
Associates (iii)	5,746	8,450
	14,863	14,840

37	COMMITMENTS AND CONTINGENT LIABILITIES (Continued)

(ii)

The Group provided a guarantee in respect to standby credit facilities granted to Zhongan United Coal Chemical Co., Ltd. (“Zhongan United”) by banks amount to RMB7,100 million. As at 31 December 2021, the amount withdrawn (The portion corresponding to the shareholding ratio of the Group) by Zhongan United from banks and guaranteed by the Group was RMB5,680 million (31 December 2020: RMB6,390 million). The Group provided a guarantee in respect to standby credit facilities granted to Amur Gas Chemical Complex Limited Liability Company (“Amur Gas”) by banks amount to RMB23,208 million. As at 31 December 2021, the amount withdrawn (The portion corresponding to the shareholding ratio of the Group) by Amur Gas from banks and guaranteed by the Group was RMB3,264 million (31 December 2020: Nil).

(iii)

The Group provided a guarantee in respect to standby credit facilities granted to Zhongtian Synergetic Energy by banks amount to RMB17,050 million. As at 31 December 2021, the amount withdrawn (The portion corresponding to the shareholding ratio of the Group) by Zhongtian Synergetic Energy and guaranteed by the Group was RMB5,746 million (2020: RMB8,450 million).

38	BUSINESS COMBINATION

38	BUSINESS COMBINATION (Continued)

	The Group, as previously reported	Acquired assets and liabilities of Sinopec Group Company	Elimination and Adjustment	The Group, as restated
	RMB million	RMB million	RMB million	RMB million
Summarised consolidated income statement for the year ended 31 December 2020:
Revenue	2,105,984	12,233	(13,493)	2,104,724
Profit attributable to shareholders of the Company	33,096	347	–	33,443
Profit attributable to non-controlling interests	8,828	–	–	8,828
Basic earnings per share (RMB)	0.273	0.003	–	0.276
Diluted earnings per share (RMB)	0.273	0.003	–	0.276
Summarised consolidated statement of financial position as at 31 December 2020:
Current assets	455,395	480	(215)	455,660
Total assets	1,733,805	5,875	(784)	1,738,896
Current liabilities	522,190	1,020	(215)	522,995
Total liabilities	850,947	1,031	(784)	851,194
Total equity attributable to shareholders of the Company	741,494	4,831	–	746,325
Non-controlling interests	141,364	13	–	141,377
Summarised consolidated statement of cash flows for the year ended 31 December 2020:
Net cash generated from operating activities	167,518	1,002	–	168,520
Net cash used in investing activities	(102,203)	(447)	–	(102,650)
Net cash used in financing activities	(36,955)	(555)	–	(37,510)
Net increase in cash and cash equivalents	28,360	–	–	28,360

39	RELATED PARTY TRANSACTIONS

(a)

Transactions with Sinopec Group Company and fellow subsidiaries, associates and joint ventures

	Note	2021	2020
		RMB million	RMB million
Sales of goods	(i)	297,381	228,307
Purchases	(ii)	191,888	151,300
Transportation and storage	(iii)	19,443	8,734
Exploration and development services	(iv)	33,930	31,444
Production related services	(v)	44,405	31,915
Ancillary and social services	(vi)	1,730	2,952
Agency commission income	(vii)	194	160
Interest income	(viii)	715	704
Interest expense	(ix)	385	919
Net deposits placed with related parties	(viii)	(8,265)	(17,585)
Net funds obtained from/(repaid to) related parties	(x)	30,305	(31,144)

39	RELATED PARTY TRANSACTIONS (Continued)

(a)

Transactions with Sinopec Group Company and fellow subsidiaries, associates and joint ventures (Continued)

(i)

Sales of goods represent the sale of crude oil, intermediate petrochemical products, petroleum products and ancillary materials.

(ii)

Purchases represent the purchase of materials and utility supplies directly related to the Group’s operations such as the procurement of raw and ancillary materials and related services, supply of water, electricity and gas.

(iii)

Transportation and storage represent the cost for the use of railway, road and marine transportation services, pipelines, loading, unloading and storage facilities.

(iv)

Exploration and development services comprise direct costs incurred in the exploration and development such as geophysical, drilling, well testing and well measurement services.

(v)

Production related services represent ancillary services rendered in relation to the Group’s operations such as equipment repair and general maintenance, insurance premium, technical research, communications, firefighting, security, product quality testing and analysis, information technology, design and engineering, construction of oilfield ground facilities, refineries and chemical plants, manufacture of replacement parts and machinery, installation, project management, environmental protection and management services.

(vi)

Ancillary and social services represent expenditures for social welfare and support services such as educational facilities, media communication services, sanitation, accommodation, canteens, and property maintenance.

(vii)

Agency commission income represents commission earned for acting as an agent in respect of sales of products and purchase of materials for certain entities owned by Sinopec Group Company.

(viii)

Interest income represents interest received from deposits placed with Sinopec Finance and Sinopec Century Bright Capital Investment Limited, finance companies controlled by Sinopec Group Company. The applicable interest rate is determined in accordance with the prevailing saving deposit rate. The balance of deposits at 31 December 2021 was RMB61,682 million (2020: RMB53,417 million).

(ix)

Interest expense represents interest charges on the loans obtained from Sinopec Group Company and fellow subsidiaries.

(x)

The Group obtained loans, discounted bills and issued the acceptance bills from Sinopec Group Company and fellow subsidiaries.

39	RELATED PARTY TRANSACTIONS (Continued)

(a)

Transactions with Sinopec Group Company and fellow subsidiaries, associates and joint ventures (Continued)

•

The Company has entered into a non-exclusive “Agreement for Mutual Provision of Products and Ancillary Services” (“Mutual Provision Agreement”) with Sinopec Group Company effective from 1 January 2000 in which Sinopec Group Company has agreed to provide the Group with certain ancillary production services, construction services, information advisory services, supply services and other services and products. While each of Sinopec Group Company and the Company is permitted to terminate the Mutual Provision Agreement upon at least six months notice, Sinopec Group Company has agreed not to terminate the agreement if the Group is unable to obtain comparable services from a third party. The pricing policy for these services and products provided by Sinopec Group Company to the Group is as follows:

(1)

the government-prescribed price;

(2)

where there is no government-prescribed price, the government-guidance price;

(3)

where there is neither a government-prescribed price nor a government-guidance price, the market price; or

(4)

where none of the above is applicable, the price to be agreed between the parties, which shall be based on a reasonable cost incurred in providing such services plus a profit margin not exceeding 6%.

•

The Company has entered into a non-exclusive “Agreement for Provision of Cultural and Educational, Health Care and Community Services” with Sinopec Group Company effective from 1 January 2000 in which Sinopec Group Company has agreed to provide the Group with certain cultural, educational, health care and community services on the same pricing terms and termination conditions as described in the above Mutual Provision Agreement.

•

The Company has entered into a series of lease agreements with Sinopec Group Company to lease certain lands and buildings effective on 1 January 2000. The lease term is 40 or 50 years for lands and 20 years for buildings, respectively. The Company and Sinopec Group Company can renegotiate the rental amount every three years for land. The Company and Sinopec Group Company can renegotiate the rental amount for buildings every year. However such amount cannot exceed the market price as determined by an independent third party.

•

The Company has entered into agreements with Sinopec Group Company effective from 1 January 2000 under which the Group has been granted the right to use certain trademarks, patents, technology and computer software developed by Sinopec Group Company.

•

The Company has entered into a service stations franchise agreement with Sinopec Group Company effective from 1 January 2000 under which its service stations and retail stores would exclusively sell the refined products supplied by the Group.

•

On the basis of a series of continuing connected transaction agreements signed in 2000, the Company and Sinopec Group Company have signed the Sixth Supplementary Agreement on 27 August 2021, which took effect on 1 January 2022 and made adjustment to “Mutual Supply Agreement” and “Buildings Leasing Contract”, etc.

	31 December	31 December
	2021	2020
	RMB million	RMB million
Trade accounts receivable	8,655	16,777
Financial assets at fair value through other comprehensive income	186	760
Prepaid expenses and other current assets	14,537	19,422
Long-term prepayments and other assets	3,116	6,435
Total	26,494	43,394
Trade accounts payable and bills payable	14,170	22,792
Contract liabilities	4,677	5,937
Other payables	50,649	12,759
Other long-term liabilities	2,779	3,010
Short-term loans and current portion of long-term loans from Sinopec Group Company and fellow subsidiaries	2,873	5,264
Long-term loans excluding current portion from Sinopec Group Company and fellow subsidiaries	13,690	11,778
Lease liabilities (including to be paid within one year)	158,761	162,048
Total	247,599	223,588

39	RELATED PARTY TRANSACTIONS (Continued)

(a)

Transactions with Sinopec Group Company and fellow subsidiaries, associates and joint ventures (Continued)

(b)

Key management personnel emoluments

	2021	2020
	RMB’000	RMB’000
Short-term employee benefits	4,612	5,753
Retirement scheme contributions	379	342
	4,991	6,095

(c)

Contributions to defined contribution retirement plans

(d)

Transactions with other state-controlled entities in the PRC

•

sales and purchases of goods and ancillary materials;

•

rendering and receiving services;

•

lease of assets;

•

depositing and borrowing money; and

•

uses of public utilities.

40	EMPLOYEE BENEFITS PLAN

41	SEGMENT REPORTING

(i)

Exploration and production, which explores and develops oil fields, produces crude oil and natural gas and sells such products to the refining segment of the Group and external customers.

(ii)

Refining, which processes and purifies crude oil, that is sourced from the exploration and production segment of the Group and external suppliers, and manufactures and sells petroleum products to the chemicals and marketing and distribution segments of the Group and external customers.

(iii)

Marketing and distribution, which owns and operates oil depots and service stations in the PRC, and distributes and sells refined petroleum products (mainly gasoline and diesel) in the PRC through wholesale and retail sales networks.

(iv)

Chemicals, which manufactures and sells petrochemical products, derivative petrochemical products and other chemical products mainly to external customers.

(v)

Corporate and others, which largely comprises the trading activities of the import and export companies of the Group and research and development undertaken by other subsidiaries.

41	SEGMENT REPORTING (Continued)

(1)

Information of reportable segmental revenues, profits or losses, assets and liabilities

	2021	2020
	RMB million	RMB million
Revenue from primary business
Exploration and production
External sales	156,026	104,524
Inter-segment sales	87,298	57,513
	243,324	162,037
Refining
External sales	167,948	113,214
Inter-segment sales	1,212,455	826,219
	1,380,403	939,433
Marketing and distribution
External sales	1,367,605	1,062,447
Inter-segment sales	7,075	4,854
	1,374,680	1,067,301
Chemicals
External sales	424,774	322,169
Inter-segment sales	70,242	40,702
	495,016	362,871
Corporate and others
External sales	563,147	458,154
Inter-segment sales	732,356	430,073
	1,295,503	888,227
Elimination of Inter-segment sales	(2,109,426)	(1,371,215)
Revenue from primary business	2,679,500	2,048,654
Other operating revenues
Exploration and production	6,674	5,718
Refining	5,161	4,633
Marketing and distribution	36,864	34,905
Chemicals	10,487	8,758
Corporate and others	2,198	2,056
Other operating revenues	61,384	56,070
Revenue	2,740,884	2,104,724

41	SEGMENT REPORTING (Continued)

(1)

Information of reportable segmental revenues, profits or losses, assets and liabilities (Continued)

	2021	2020
	RMB million	RMB million
Result
Operating profit/(loss)
By segment
– Exploration and production	4,685	(16,476)
– Refining	65,279	(5,525)
– Marketing and distribution	21,204	20,828
– Chemicals	11,106	10,818
– Corporate and others	(3,225)	(393)
– Elimination	(4,421)	4,417
Total segment operating profit	94,628	13,669
Share of profit/(loss) from associates and joint ventures
– Exploration and production	2,783	2,117
– Refining	662	(2,516)
– Marketing and distribution	3,731	2,200
– Chemicals	11,323	1,723
– Corporate and others	4,754	3,188
Aggregate share of profits from associates and joint ventures	23,253	6,712
Investment income
– Exploration and production	55	13,118
– Refining	(10)	14,941
– Marketing and distribution	3	8,980
– Chemicals	(54)	(61)
– Corporate and others	304	766
Aggregate investment income	298	37,744
Net finance costs	(9,010)	(9,510)
Profit before taxation	109,169	48,615

	31 December	31 December
	2021	2020
	RMB million	RMB million
Assets
Segment assets
– Exploration and production	371,100	354,024
– Refining	304,785	270,766
– Marketing and distribution	377,499	373,430
– Chemicals	222,803	190,789
– Corporate and others	133,961	118,458
Total segment assets	1,410,148	1,307,467
Interest in associates and joint ventures	209,179	188,342
Financial assets at fair value through other comprehensive income	767	1,525
Deferred tax assets	19,389	25,054
Cash and cash equivalents, time deposits with financial institutions	221,989	188,057
Other unallocated assets	27,783	28,451
Total assets	1,889,255	1,738,896
Liabilities
Segment liabilities
– Exploration and production	166,486	163,588
– Refining	146,763	136,980
– Marketing and distribution	228,826	234,309
– Chemicals	69,977	49,625
– Corporate and others	198,828	119,215
Total segment liabilities	810,880	703,717
Short-term debts	35,252	23,769
Income tax payable	4,809	6,586
Long-term debts	78,300	72,037
Loans from Sinopec Group Company and fellow subsidiaries	16,563	17,042
Deferred tax liabilities	7,910	8,124
Other unallocated liabilities	20,467	19,919
Total liabilities	974,181	851,194

41	SEGMENT REPORTING (Continued)

(1)

Information of reportable segmental revenues, profits or losses, assets and liabilities (Continued)

	2021	2020
	RMB million	RMB million
Capital expenditure
Exploration and production	68,148	56,416
Refining	22,469	24,756
Marketing and distribution	21,897	25,403
Chemicals	51,648	28,217
Corporate and others	3,786	2,312
	167,948	137,104
Depreciation, depletion and amortisation
Exploration and production	52,880	46,273
Refining	20,743	20,090
Marketing and distribution	23,071	23,196
Chemicals	16,093	14,830
Corporate and others	2,893	3,072
	115,680	107,461
Impairment losses on long-lived assets
Exploration and production	2,467	8,495
Refining	860	1,923
Marketing and distribution	1,211	536
Chemicals	5,332	3,675
Corporate and others	165	–
	10,035	14,629

(2)

Geographical information

	2021	2020
	RMB million	RMB million
External sales
Mainland China	2,166,040	1,720,695
Singapore	278,024	215,846
Others	296,820	168,183
	2,740,884	2,104,724

	31 December	31 December
	2021	2020
	RMB million	RMB million
Non-current assets
Mainland China	1,268,814	1,216,267
Others	40,551	36,782
	1,309,365	1,253,049

42	PRINCIPAL SUBSIDIARIES

Name of company	Particulars of issued capital (million)	Interests held by the Company %	Interests held by non-controlling interests %	Principal activities
Sinopec Great Wall Energy & Chemical Company Limited	RMB22,761	100.00	–	Coal chemical industry investment management, production and sale of coal chemical products
Sinopec Yangzi Petrochemical Company Limited	RMB15,651	100.00	–	Manufacturing of intermediate petrochemical products and petroleum products
Sinopec Overseas Investment Holding Limited (“SOIH”)	USD3,009	100.00	–	Investment holding of overseas business
Sinopec International Petroleum Exploration and Production Limited (“SIPL”)	RMB8,250	100.00	–	Investment in exploration, production and sale of petroleum and natural gas
Sinopec Yizheng Chemical Fibre Limited Liability Company	RMB4,000	100.00	–	Production and sale of polyester chips and polyester fibres
Sinopec Lubricant Company Limited	RMB3,374	100.00	–	Production and sale of refined petroleum products, lubricant base oil, and petrochemical materials
China International United Petroleum and Chemical Company Limited	RMB5,000	100.00	–	Trading of crude oil and petrochemical products
Sinopec Qingdao Petrochemical Company Limited	RMB1,595	100.00	–	Manufacturing of intermediate petrochemical products and petroleum products
Sinopec Catalyst Company Limited	RMB1,500	100.00	–	Production and sale of catalyst products
China Petrochemical International Company Limited	RMB1,400	100.00	–	Trading of petrochemical products
Sinopec Chemical Sales Company Limited	RMB1,000	100.00	–	Marketing and distribution of petrochemical products
Sinopec Hainan Refining and Chemical Company Limited	RMB9,606	100.00	–	Manufacturing of intermediate petrochemical products and petroleum products
Sinopec Beihai Refining and Chemical Limited Liability Company	RMB5,294	98.98	1.02	Import and processing of crude oil, production, storage and sale of petroleum products and petrochemical products
ZhongKe (Guangdong) Refinery & Petrochemical Company Limited	RMB6,397	90.30	9.70	Crude oil processing and petroleum products manufacturing
Sinopec Qingdao Refining and Chemical Company Limited	RMB5,000	85.00	15.00	Manufacturing of intermediate petrochemical products and petroleum products
Marketing Company	RMB28,403	70.42	29.58	Marketing and distribution of refined petroleum products
Shanghai SECCO	RMB500	67.59	32.41	Production and sale of petrochemical products
Sinopec Kantons Holdings Limited (“Sinopec Kantons”)	HKD248	60.33	39.67	Provision of crude oil jetty services and natural gas pipeline transmission services
Sinopec-SK (Wuhan) Petrochemical Company Limited (“Sinopec-SK”)	RMB7,193	59.00	41.00	Production, sale, research and development of petrochemical products, ethylene and downstream byproducts
Gaoqiao Petrochemical Company Limited	RMB10,000	55.00	45.00	Manufacturing of intermediate petrochemical products and petroleum products
Sinopec Baling Petrochemical Co.Ltd. (“Baling Petrochemical”)	RMB3,000	55.00	45.00	Crude oil processing and petroleum products manufacturing
Sinopec Shanghai Petrochemical Company Limited (“Shanghai Petrochemical”)	RMB10,824	50.44	49.56	Manufacturing of synthetic fibres, resin and plastics, intermediate petrochemical products and petroleum products
Fujian Petrochemical Company Limited (“Fujian Petrochemical”) (i)	RMB10,492	50.00	50.00	Manufacturing of plastics, intermediate petrochemical products and petroleum products

(i)

The Group consolidated the financial statements of the entity because it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

42	PRINCIPAL SUBSIDIARIES (Continued)

	Marketing Company		SIPL*		Shanghai Petrochemical		Fujian Petrochemical		Sinopec Kantons		Shanghai SECCO		Sinopec-SK
	At 31 December	At 31 December	At 31 December	At 31 December	At 31 December	At 31 December	At 31 December	At 31 December	At 31 December	At 31 December	At 31 December	At 31 December	At 31 December	At 31 December
	2021	2020	2021	2020	2021	2020	2021	2020	2021	2020	2021	2020	2021	2020
	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million
Current assets	159,599	172,352	22,759	22,620	20,932	17,305	1,464	1,582	4,761	4,373	6,066	10,431	6,791	3,639
Current liabilities	(193,315)	(201,678)	(1,430)	(475)	(15,796)	(15,232)	(142)	(458)	(196)	(924)	(5,434)	(2,783)	(8,122)	(6,377)
Net current (liabilities)/assets	(33,716)	(29,326)	21,329	22,145	5,136	2,073	1,322	1,124	4,565	3,449	632	7,648	(1,331)	(2,738)
Non-current assets	326,437	323,571	8,954	8,951	25,988	27,314	13,208	12,568	8,195	9,106	11,402	12,177	20,650	22,187
Non-current liabilities	(59,604)	(59,554)	(17,823)	(18,270)	(747)	(52)	(700)	(693)	(170)	(170)	(1,418)	(1,553)	(7,512)	(8,509)
Net non-current assets/(liabilities)	266,833	264,017	(8,869)	(9,319)	25,241	27,262	12,508	11,875	8,025	8,936	9,984	10,624	13,138	13,678
Net assets	233,117	234,691	12,460	12,826	30,377	29,335	13,830	12,999	12,590	12,385	10,616	18,272	11,807	10,940
Attributable to owners of the Company	157,557	159,205	6,341	5,876	15,254	14,727	6,915	6,499	7,579	7,454	7,175	12,352	6,966	6,455
Attributable to non-controlling interests	75,560	75,486	6,119	6,950	15,123	14,608	6,915	6,500	5,011	4,931	3,441	5,920	4,841	4,485

Year ended 31 December	Marketing Company		SIPL*		Shanghai Petrochemical		Fujian Petrochemical		Sinopec Kantons		Shanghai SECCO		Sinopec-SK
	2021	2020	2021	2020	2021	2020	2021	2020	2021	2020	2021	2020	2021	2020
	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million
Revenue	1,408,523	1,099,680	2,166	2,017	89,198	74,624	5,549	4,871	528	1,064	29,723	21,626	50,208	28,702
Profit/(loss) for the year	18,582	22,415	1,429	1,160	2,077	656	951	243	871	2,047	2,817	2,132	1,606	(920)
Total comprehensive income	18,439	21,149	1,045	(720)	2,218	645	951	243	677	1,814	2,817	2,132	1,606	(920)
Comprehensive income attributable to non-controlling interests	6,822	7,205	579	(287)	1,101	325	476	121	268	707	2,390	691	659	(377)
Dividends paid to non-controlling interests	7,064	2,766	–	316	541	649	64	150	164	175	1,028	767	–	–

Year ended 31 December	Marketing Company		SIPL*		Shanghai Petrochemical		Fujian Petrochemical		Sinopec Kantons		Shanghai SECCO		Sinopec-SK
	2021	2020	2021	2020	2021	2020	2021	2020	2021	2020	2021	2020	2021	2020
	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million
Net cash generated from/ (used in) operating activities	28,923	54,139	690	281	3,950	1,680	(292)	(244)	133	586	3,447	3,119	5,476	(363)
Net cash generated from/ (used in) investing activities	2,420	(40,010)	15	(2,659)	(2,359)	(3,888)	420	(649)	1,276	3,846	1,534	(4,335)	(1,789)	(2,340)
Net cash (used in)/ generated from financing activities	(31,081)	(12,402)	(1,172)	1,683	(3,393)	1,682	(142)	882	(1,066)	(1,250)	(7,828)	(2,879)	(653)	2,176
Net increase/ (decrease) in cash and cash equivalents	262	1,727	(467)	(695)	(1,802)	(526)	(14)	(11)	343	3,182	(2,847)	(4,095)	3,034	(527)
Cash and cash equivalents at 1 January	8,642	6,901	7,699	8,833	6,916	7,450	68	79	3,182	117	5,181	9,278	1,066	1,593
Effect of foreign currency exchange rate changes	95	14	(164)	(439)	(2)	(8)	–	–	(93)	(117)	(1)	(2)	–	–
Cash and cash equivalents at 31 December	8,999	8,642	7,068	7,699	5,112	6,916	54	68	3,432	3,182	2,333	5,181	4,100	1,066

*

The non-controlling interests of subsidiaries which the Group holds 100% of equity interests at the end of the year are the non-controlling interests of their subsidiaries.

43	FINANCIAL RISK MANAGEMENT AND FAIR VALUES

•

credit risk;

•

liquidity risk; and

•

market risk.

(i)

Risk management

(ii)

Impairment of financial assets

43	FINANCIAL RISK MANAGEMENT AND FAIR VALUES (Continued)

(ii)

Impairment of financial assets (Continued)

		Impairment provision on individual basis		Impairment provision on provision matrix basis
	Gross carrying amount	Carrying amount	Impairment provision on individual basis	Weighted- average loss rate	Impairment provision	Loss allowance
31 December 2021	RMB million	RMB million	RMB million	%	RMB million	RMB million
Current and within 1 year past due	34,263	4,280	26	0.2%	57	83
1 to 2 years past due	623	500	137	35.8%	44	181
2 to 3 years past due	3,411	3,324	3,146	50.6%	44	3,190
Over 3 years past due	597	208	190	100.0%	389	579
Total	38,894	8,312	3,499		534	4,033

		Impairment provision on individual basis		Impairment provision on provision matrix basis
	Gross carrying amount	Carrying amount	Impairment provision on individual basis	Weighted- average loss rate	Impairment provision	Loss allowance
31 December 2020	RMB million	RMB million	RMB million	%	RMB million	RMB million
Current and within 1 year past due	34,478	5,023	117	0.0%	–	117
1 to 2 years past due	4,062	3,637	3,024	25.2%	107	3,131
2 to 3 years past due	149	27	18	54.9%	67	85
Over 3 years past due	610	218	182	88.0%	345	527
Total	39,299	8,905	3,341		519	3,860

43	FINANCIAL RISK MANAGEMENT AND FAIR VALUES (Continued)

	31 December 2021
		Total
		contractual	Within	More than 1	More than 2
	Carrying	undiscounted	1 year or	year but less	years but less	More than
	amount	cash flow	on demand	than 2 years	than 5 years	5 years
	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million
Short-term debts	35,252	35,871	35,871	–	–	–
Long-term debts	78,300	85,718	2,169	49,390	27,518	6,641
Loans from Sinopec Group Company and fellow subsidiaries	16,563	18,457	3,174	604	10,712	3,967
Lease liabilities	185,406	296,485	15,833	12,031	35,411	233,210
Derivative financial liabilities	3,223	3,223	3,223	–	–	–
Trade accounts payable and bills payable	215,640	215,640	215,640	–	–	–
Other payables	131,468	131,468	131,468	–	–	–
	665,852	786,862	407,378	62,025	73,641	243,818

	31 December 2020
		Total
		contractual	Within	More than 1	More than 2
	Carrying	undiscounted	1 year or	year but less	years but less	More than
	amount	cash flow	on demand	than 2 years	than 5 years	5 years
	RMB million	RMB million	RMB million	RMB million	RMB million	RMB million
Short-term debts	23,769	25,280	25,280	–	–	–
Long-term debts	72,037	80,562	1,339	11,753	60,414	7,056
Loans from Sinopec Group Company and fellow subsidiaries	17,042	17,978	5,512	929	10,109	1,428
Lease liabilities	187,033	328,501	15,957	15,456	43,513	253,575
Derivative financial liabilities	4,826	4,826	4,826	–	–	–
Trade accounts payable and bills payable	161,908	161,908	161,908	–	–	–
Other payables	94,083	94,083	94,083	–	–	–
	560,698	713,138	308,905	28,138	114,036	262,059

43	FINANCIAL RISK MANAGEMENT AND FAIR VALUES (Continued)

(a)

Currency risk

(b)

Interest rate risk

(c)

Commodity price risk

43	FINANCIAL RISK MANAGEMENT AND FAIR VALUES (Continued)

(i)

Financial instruments carried at fair value

•

Level 1 (highest level): fair values measured using quoted prices (unadjusted) in active markets for identical financial instruments.

•

Level 2: fair values measured using quoted prices in active markets for similar financial instruments, or using valuation techniques in which all significant inputs are directly or indirectly based on observable market data.

•

Level 3 (lowest level): fair values measured using valuation techniques in which any significant input is not based on observable market data.

	Level 1	Level 2	Level 3	Total
	RMB million	RMB million	RMB million	RMB million
Assets
Derivative financial assets:
– Derivative financial assets	5,883	12,488	–	18,371
Financial assets at fair value through other comprehensive income:
– Equity instruments	179	–	588	767
– Trade accounts receivable and bills receivable	–	–	5,939	5,939
	6,062	12,488	6,527	25,077
Liabilities
Derivative financial liabilities:
– Derivative financial liabilities	804	2,419	–	3,223
	804	2,419	–	3,223

	Level 1	Level 2	Level 3	Total
	RMB million	RMB million	RMB million	RMB million
Assets
Financial assets at fair value through profit or loss:
– Equity investments, listed and at quoted market price	1	–	–	1
Derivative financial assets:
– Derivative financial assets	9,628	2,900	–	12,528
Financial assets at fair value through other comprehensive income:
– Equity instruments	149	–	1,376	1,525
– Trade accounts receivable and bills receivable	–	–	8,735	8,735
	9,778	2,900	10,111	22,789
Liabilities
Derivative financial liabilities:
– Derivative financial liabilities	2,471	2,355	–	4,826
	2,471	2,355	–	4,826

43	FINANCIAL RISK MANAGEMENT AND FAIR VALUES (Continued)

(ii)

Fair values of financial instruments carried at other than fair value

	31 December	31 December
	2021	2020
	RMB million	RMB million
Carrying amount	88,593	76,674
Fair value	85,610	74,282

44	ACCOUNTING ESTIMATES AND JUDGEMENTS

44	ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued)

45	PARENT AND ULTIMATE HOLDING COMPANY

46	STATEMENT OF FINANCIAL POSITION AND RESERVE MOVEMENT OF THE COMPANY

STATEMENT OF FINANCIAL POSITION OF THE COMPANY (Amounts in million)	Note	31 December	31 December
		2021	2020
		RMB	RMB
Non-current assets
Property, plant and equipment, net		284,618	283,691
Construction in progress		66,146	59,880
Right-of-use assets		113,304	115,992
Investment in subsidiaries		269,456	259,087
Interest in associates		73,782	69,508
Interest in joint ventures		17,609	14,761
Financial assets at fair value through other comprehensive income		201	428
Deferred tax assets		8,715	12,661
Long-term prepayments and other assets		38,848	30,855
Total non-current assets		872,679	846,863
Current assets
Cash and cash equivalents		34,575	28,081
Time deposits with financial institutions		76,116	71,107
Derivative financial assets		4,503	7,776
Trade accounts receivable		21,146	21,763
Financial assets at fair value through other comprehensive income		227	707
Dividends receivable		971	796
Inventories		63,661	39,034
Prepaid expenses and other current assets		73,906	53,816
Total current assets		275,105	223,080
Current liabilities
Short-term debts		24,387	21,571
Loans from Sinopec Group Company and fellow subsidiaries		867	3,271
Lease liabilities		7,085	7,190
Derivative financial liabilities		1,121	362
Trade accounts payable and bills payable		91,365	71,840
Contract liabilities		7,505	5,840
Other payables		280,560	234,844
Total current liabilities		412,890	344,918
Net current liabilities		137,785	121,838
Total assets less current liabilities		734,894	725,025
Non-current liabilities
Long-term debts		56,765	49,311
Loans from Sinopec Group Company and fellow subsidiaries		9,015	8,079
Lease liabilities		104,426	105,691
Provisions		35,271	36,089
Other long-term liabilities		3,955	4,472
Total non-current liabilities		209,432	203,642
		525,462	521,383
Equity
Share capital		121,071	121,071
Reserves	(a)	404,391	400,312
Total equity		525,462	521,383

46	STATEMENT OF FINANCIAL POSITION AND RESERVE MOVEMENT OF THE COMPANY (Continued)

(a)

RESERVES MOVEMENT OF THE COMPANY

	The Company
	2021	2020
	RMB million	RMB million
Capital reserve
Balance at 1 January	9,382	9,247
Others	(1,079)	135
Balance at 31 December	8,303	9,382
Share premium
Balance at 1 January	55,850	55,850
Balance at 31 December	55,850	55,850
Statutory surplus reserve
Balance at 1 January	92,280	90,423
Appropriation	3,944	1,857
Balance at 31 December	96,224	92,280
Discretionary surplus reserve
Balance at 1 January	117,000	117,000
Balance at 31 December	117,000	117,000
Other reserves
Balance at 1 January	8,881	3,912
Share of other comprehensive income of associates and joint ventures, net of deferred tax	12	(182)
Cash flow hedges, net of deferred tax	102	4,911
Special reserve	469	240
Balance at 31 December	9,464	8,881
Retained earnings
Balance at 1 January	116,919	131,674
Profit for the year	39,950	18,821
Distribution to owners (Note 14)	(35,110)	(31,479)
Appropriation	(3,944)	(1,857)
Special reserve	(469)	(240)
Others	204	–
Balance at 31 December	117,550	116,919
	404,391	400,312

(C)	DIFFERENCES BETWEEN CONSOLIDATED FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH THE ACCOUNTING POLICIES COMPLYING WITH CASS AND IFRS (UNAUDITED)

(I)

GOVERNMENT GRANTS

(II)

SAFETY PRODUCTION FUND

	Note	31 December	31 December
		2021	2020
		RMB million	RMB million
Shareholders’ equity under CASs		916,041	888,720
Adjustments:
Government grants	(i)	(967)	(1,018)
Total equity under IFRS*		915,074	887,702

	Note	2021	2020
		RMB million	RMB million
Net profit under CASs		85,030	42,097
Adjustments:
Government grants	(i)	51	52
Safety production fund	(ii)	775	237
Others		(5)	(115)
Profit for the year under IFRS*		85,851	42,271

*

The figures are extracted from the consolidated financial statements prepared in accordance with the accounting policies complying with IFRS during the year ended 31 December 2020 and 2021which have been audited by PricewaterhouseCoopers and KPMG, respectively.

	2021 RMB million			2020 RMB million
	Total	China	Other countries	Total	China	Other countries
The Group
Property cost, wells and related equipments and facilities	793,045	752,352	40,693	757,592	716,683	40,909
Supporting equipments and facilities	188,766	188,742	24	184,638	184,621	17
Uncompleted wells, equipments and facilities	43,349	43,236	113	37,445	37,439	6
Total capitalised costs	1,025,160	984,330	40,830	979,675	938,743	40,932
Accumulated depreciation, depletion, amortisation and impairment losses	(787,623)	(748,705)	(38,918)	(742,195)	(702,829)	(39,366)
Net capitalised costs	237,537	235,625	1,912	237,480	235,914	1,566
Equity method investments
Share of net capitalised costs of associates and joint ventures	3,521	–	3,521	5,843	–	5,843
Total of the Group’s and its equity method investments’ net capitalised costs	241,058	235,625	5,433	243,323	235,914	7,409

	2021 RMB million			2020 RMB million
	Total	China	Other countries	Total	China	Other countries
The Group
Exploration	21,762	21,762	–	16,752	16,752	–
Development	46,147	45,590	557	38,241	37,636	605
Total costs incurred	67,909	67,352	557	54,993	54,388	605
Equity method investments
Share of costs of exploration and development of associates and joint ventures	442	–	442	100	–	100
Total of the Group’s and its equity method investments’ exploration and development costs	68,351	67,352	999	55,093	54,388	705

	2021 RMB million			2020 RMB million
	Total	China	Other countries	Total	China	Other countries
The Group
Revenues
Sales	72,953	72,953	–	52,354	52,354	–
Transfers	86,650	84,484	2,166	58,069	56,052	2,017
	159,603	157,437	2,166	110,423	108,406	2,017
Production costs excluding taxes	(49,649)	(48,674)	(975)	(44,595)	(43,487)	(1,108)
Exploration expenses	(12,382)	(12,382)	–	(9,716)	(9,716)	–
Depreciation, depletion, amortisation and impairment losses	(54,104)	(53,644)	(460)	(52,608)	(51,754)	(854)
Taxes other than income tax	(11,249)	(11,249)	–	(7,379)	(7,379)	–
Profit before taxation	32,219	31,488	731	(3,875)	(3,930)	55
Income tax expense	(8,225)	(7,872)	(353)	188	–	188
Results of operation from producing activities	23,994	23,616	378	(3,687)	(3,930)	243
Equity method investments
Revenues
Sales	8,812	–	8,812	4,913	–	4,913
	8,812	–	8,812	4,913	–	4,913
Production costs excluding taxes	(2,246)	–	(2,246)	(998)	–	(998)
Exploration expenses	–	–	–	–	–	–
Depreciation, depletion, amortisation and impairment losses	(533)	–	(533)	(940)	–	(940)
Taxes other than income tax	(4,391)	–	(4,391)	(1,930)	–	(1,930)
Profit before taxation	1,642	–	1,642	1,045	–	1,045
Income tax expense	(355)	–	(355)	(303)	–	(303)
Share of profit for producing activities of associates and joint ventures	1,287	–	1,287	742	–	742
Total of the Group’s and its equity method investments’ results of operations for producing activities	25,281	23,616	1,665	(2,945)	(3,930)	985

	2021			2020
	Total	China	Other countries	Total	China	Other countries
The Group
Proved developed and undeveloped reserves (oil) (million barrels)
Beginning of year	1,252	1,232	20	1,450	1,433	17
Revisions of previous estimates	194	185	9	(161)	(171)	10
Improved recovery	141	141	–	109	109	–
Extensions and discoveries	101	101	–	111	111	–
Production	(248)	(243)	(5)	(257)	(250)	(7)
End of year	1,440	1,416	24	1,252	1,232	20
Non-controlling interest in proved developed and undeveloped reserves at the end of year	8	–	8	5	–	5
Proved developed reserves
Beginning of year	1,145	1,130	15	1,343	1,326	17
End of year	1,315	1,291	24	1,145	1,130	15
Proved undeveloped reserves
Beginning of year	107	102	5	107	107	–
End of year	125	125	–	107	102	5
Proved developed and undeveloped reserves (gas) (billion cubic feet)
Beginning of year	8,181	8,181	–	7,216	7,216	–
Revisions of previous estimates	32	32	–	171	171	–
Improved recovery	666	666	–	692	692	–
Extensions and discoveries	678	678	–	1,171	1,171	–
Production	(1,108)	(1,108)	–	(1,069)	(1,069)	–
End of year	8,449	8,449	–	8,181	8,181	–
Proved developed reserves
Beginning of year	6,357	6,357	–	6,026	6,026	–
End of year	6,734	6,734	–	6,357	6,357	–
Proved undeveloped reserves
Beginning of year	1,824	1,824	–	1,190	1,190	–
End of year	1,715	1,715	–	1,824	1,824	–

	2021			2020
	Total	China	Other countries	Total	China	Other countries
Equity method investments
Proved developed and undeveloped reserves of associates and joint ventures (oil) (million barrels)
Beginning of year	290	–	290	290	–	290
Revisions of previous estimates	8	–	8	13	–	13
Improved recovery	1	–	1	–	–	–
Extensions and discoveries	35	–	35	11	–	11
Production	(25)	–	(25)	(24)	–	(24)
End of year	309	–	309	290	–	290
Proved developed reserves
Beginning of year	244	–	244	245	–	245
End of year	263	–	263	244	–	244
Proved undeveloped reserves
Beginning of year	46	–	46	45	–	45
End of year	46	–	46	46	–	46
Proved developed and undeveloped reserves of associates and joint ventures (gas) (billion cubic feet)
Beginning of year	10	–	10	9	–	9
Revisions of previous estimates	1	–	1	4	–	4
Improved recovery	–	–	–	–	–	–
Extensions and discoveries	–	–	–	–	–	–
Production	(4)	–	(4)	(3)	–	(3)
End of year	7	–	7	10	–	10
Proved developed reserves
Beginning of year	8	–	8	9	–	9
End of year	6	–	6	8	–	8
Proved undeveloped reserves
Beginning of year	2	–	2	–	–	–
End of year	1	–	1	2	–	2
Total of the Group and its equity method investments
Proved developed and undeveloped reserves (oil) (million barrels)
Beginning of year	1,542	1,232	310	1,740	1,433	307
End of year	1,749	1,416	333	1,542	1,232	310
Proved developed and undeveloped reserves (gas) (billion cubic feet)
Beginning of year	8,191	8,181	10	7,225	7,216	9
End of year	8,456	8,449	7	8,191	8,181	10

	2021 RMB million			2020 (Revised) Note RMB million
	Total	China	Other countries	Total	China	Other countries
The Group
Future cash flows	941,015	930,302	10,713	595,159	589,659	5,500
Future production costs	(413,006)	(407,903)	(5,103)	(275,409)	(271,824)	(3,585)
Future development costs	(79,562)	(77,687)	(1,875)	(80,785)	(77,659)	(3,126)
Future income tax expenses	(113,598)	(111,178)	(2,420)	(11,758)	(10,521)	(1,237)
Undiscounted future net cash flows	334,849	333,534	1,315	227,207	229,655	(2,448)
10% annual discount for estimated timing of cash flows	(93,354)	(93,164)	(190)	(54,158)	(52,706)	(1,452)
Standardised measure of discounted future net cash flows	241,495	240,370	1,125	173,049	176,949	(3,900)
Discounted future net cash flows attributable to non-controlling interests	370	–	370	(1,284)	–	(1,284)
Equity method investments
Future cash flows	49,217	–	49,217	31,259	–	31,259
Future production costs	(18,026)	–	(18,026)	(13,050)	–	(13,050)
Future development costs	(6,328)	–	(6,328)	(5,712)	–	(5,712)
Future income tax expenses	(4,513)	–	(4,513)	(1,740)	–	(1,740)
Undiscounted future net cash flows	20,350	–	20,350	10,757	–	10,757
10% annual discount for estimated timing of cash flows	(10,201)	–	(10,201)	(4,828)	–	(4,828)
Standardised measure of discounted future net cash flows	10,149	–	10,149	5,929	–	5,929
Total of the Group’s and its equity method investments’ results of standardised measure of discounted future net cash flows	251,644	240,370	11,274	178,978	176,949	2,029

Note:

Pursuant to Amendments to the XBRL Taxonomy, Accounting Standards Update No. 2010-03 Extractive Activities-Oil and Gas (Topic 932), the Company has revised the future development cost attributable to China for the year ended 31 December 2020 in Table V and Table VI to include future cash flows related to the settlement of asset retirement obligations.

	2021	2020 (Revised)
	RMB million	RMB million
The Group
Sales and transfers of oil and gas produced, net of production costs	(98,705)	(58,449)
Net changes in prices and production costs	135,697	(122,641)
Net changes in estimated future development cost	(7,413)	(11,628)
Net changes due to extensions, discoveries and improved recoveries	62,449	44,602
Revisions of previous quantity estimates	26,613	(11,211)
Previously estimated development costs incurred during the year	5,475	6,684
Accretion of discount	16,448	31,940
Net changes in income taxes	(72,118)	19,375
Net changes for the year	68,446	(101,328)
Equity method investments
Sales and transfers of oil and gas produced, net of production costs	(2,174)	(1,984)
Net changes in prices and production costs	4,967	(5,190)
Net changes in estimated future development cost	(752)	(299)
Net changes due to extensions, discoveries and improved recoveries	1,760	369
Revisions of previous quantity estimates	402	437
Previously estimated development costs incurred during the year	287	232
Accretion of discount	1,022	979
Net changes in income taxes	(1,292)	1,180
Net changes for the year	4,220	(4,276)
Total of the Group’s and its equity method investments’ results of net changes for the year	72,666	(105,604)

a)	The original copies of the 2021 annual report signed by Mr. Ma Yongsheng, the Chairman;

b)

The original copies of financial statements and consolidated financial statements as of 31 December 2021 prepared under IFRS and CASs, signed by Mr. Ma Yongsheng, the Chairman, Mr. Yu Baocai, the President, Ms. Shou Donghua, the Chief Financial Officer and head of the financial department of Sinopec Corp.;

c)	The original auditors’ reports signed by the auditors; and

d)	Copies of the documents and announcements that Sinopec Corp. has published in the newspapers designated by the CSRC during the reporting period.