REG - China Pet &Chem Corp - Half-year Report <Origin Href="QuoteRef">600028.SS</Origin> - Part 4
29/08/2017 07:08
- Part 4: For the preceding part double click ID:nRSc0740Pc
assumptions used in the reserve estimation, by reference to historical data, management plans and/or reputable external data. ‧ Compared the future cost profiles against historical costs or relevant budgets of the Group. ‧ Independently estimated a
range of discount rates, and found that the discount rates adopted by management were within the range. ‧ Tested selected other key data inputs, such as natural gas prices and production profiles in the projections by reference to historical data and/or
relevant budgets of the Group. ‧ Assessed the methodology adopted in, and tested mathematical accuracy of the discounted cash flow projections. ‧ Evaluated the sensitivity analyses prepared by the Group, and assessed the potential impacts of a range of
possible outcomes. Based on our work, we found the key assumptions and input data adopted were supported by the evidence we gathered and consistent with our expectations.
Other Information
Management is responsible for the other information. The other information comprises all of the information included in
2017 interim report of Sinopec Corp. other than the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact. We have nothing to
report in this regard.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with the
CASs, and for such internal control as management determines is necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to fraud or error.
In preparing these financial statements, management is responsible for assessing Sinopec Corp.'s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless management either intend to liquidate Sinopec Corp. or to cease operations, or have no realistic alternative but to
do so.
Those charged with governance are responsible for overseeing Sinopec Corp.'s financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether these financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with CSAs
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of these financial statements.
As part of an audit in accordance with CSAs, we exercise professional judgment and maintain professional scepticism
throughout the audit. We also:
‧ 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, but not for the purpose of expressing an opinion on the effectiveness of Sinopec Corp.'s
internal control.
‧ 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
Sinopec Corp.'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 these 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 Sinopec Corp. 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 Sinopec Corp. 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.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance
in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these
matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.
PricewaterhouseCoopers Zhong Tian LLP Certified Public Accountants
Registered in the People's Republic of China
Zhao Jianrong (Engagement Partner)
Gao Peng
Shanghai, the People's Republic of China 25 August 2017
(A) FINANCIAL STATEMENTS PREPARED UNDER CHINA ACCOUNTING STANDARDS FOR BUSINESS ENTERPRISES
CONSOLIDATED BALANCE SHEET
as at 30 June 2017
Note At 30 June At 31 December
2017 2016
RMB million RMB million
Assets
Current assets
Cash at bank and on hand 5 160,822 142,497
Bills receivable 6 9,819 13,197
Accounts receivable 7 50,560 50,289
Other receivables 8 23,151 25,596
Prepayments 9 4,154 3,749
Inventories 10 167,058 156,511
Other current assets 18,595 20,422
Total current assets 434,159 412,261
Non-current assets
Available-for-sale financial assets 11 11,325 11,408
Long-term equity investments 12 122,296 116,812
Fixed assets 13 652,294 690,594
Construction in progress 14 119,548 129,581
Intangible assets 15 90,230 85,023
Goodwill 16 6,325 6,353
Long-term deferred expenses 17 13,764 13,537
Deferred tax assets 18 9,761 7,214
Other non-current assets 19 27,836 25,826
Total non-current assets 1,053,379 1,086,348
Total assets 1,487,538 1,498,609
Liabilities and shareholders' equity
Current liabilities
Short-term loans 21 42,032 30,374
Bills payable 22 6,162 5,828
Accounts payable 23 170,116 174,301
Advances from customers 24 96,039 95,928
Employee benefits payable 25 4,190 1,618
Taxes payable 26 31,857 52,886
Dividends payable 22,336 2,006
Other payables 27 64,171 77,630
Short-term debentures payable 30 - 6,000
Non-current liabilities due within one year 28 25,506 38,972
Total current liabilities 462,409 485,543
Non-current liabilities
Long-term loans 29 68,045 62,461
Debentures payable 30 47,784 54,985
Provisions 31 40,207 39,298
Deferred tax liabilities 18 6,146 7,661
Other non-current liabilities 32 17,121 16,136
Total non-current liabilities 179,303 180,541
Total liabilities 641,712 666,084
Shareholders' equity
Share capital 33 121,071 121,071
Capital reserve 34 119,529 119,525
Other comprehensive income 35 (1,574) (932)
Specific reserve 36 1,539 765
Surplus reserves 37 196,640 196,640
Retained earnings 281,673 275,163
Total equity attributable to shareholders of the Company 718,878 712,232
Minority interests 126,948 120,293
Total shareholders' equity 845,826 832,525
Total liabilities and shareholders' equity 1,487,538 1,498,609
17,121
16,136
Total non-current liabilities
179,303
180,541
Total liabilities
641,712
666,084
Shareholders' equity
Share capital
33
121,071
121,071
Capital reserve
34
119,529
119,525
Other comprehensive income
35
(1,574)
(932)
Specific reserve
36
1,539
765
Surplus reserves
37
196,640
196,640
Retained earnings
281,673
275,163
Total equity attributable to shareholders of the Company
718,878
712,232
Minority interests
126,948
120,293
Total shareholders' equity
845,826
832,525
Total liabilities and shareholders' equity
1,487,538
1,498,609
These financial statements have been approved by the board of directors on 25 August 2017.
Wang Yupu Dai Houliang Wang Dehua
Chairman Vice Chairman, President Chief Financial Officer
(Legal representative)
The accompanying notes form part of these financial statements.
BALANCE SHEET
as at 30 June 2017
Note At 30 June At 31 December
2017 2016
RMB million RMB million
Assets
Current assets
Cash at bank and on hand 105,003 98,250
Bills receivable 294 471
Accounts receivable 7 28,044 38,332
Other receivables 8 53,629 45,643
Prepayments 9 1,915 3,454
Inventories 44,948 46,942
Other current assets 30,885 32,743
Total current assets 264,718 265,835
Non-current assets
Available-for-sale financial assets 297 297
Long-term equity investments 12 271,220 268,451
Fixed assets 13 348,492 373,020
Construction in progress 14 46,170 49,277
Intangible assets 7,664 7,913
Long-term deferred expenses 1,901 1,980
Deferred tax assets 2,365 -
Other non-current assets 11,404 10,952
Total non-current assets 689,513 711,890
Total assets 954,231 977,725
Liabilities and shareholders' equity
Current liabilities
Short-term loans 12,966 9,256
Bills payable 2,612 2,761
Accounts payable 67,566 75,787
Advances from customers 2,602 2,360
Employee benefits payable 1,433 312
Taxes payable 18,716 32,423
Dividends payable 20,582 -
Other payables 120,465 113,841
Short-term debentures payable - 6,000
Non-current liabilities due within one year 17,970 38,082
Total current liabilities 264,912 280,822
Non-current liabilities
Long-term loans 64,096 58,448
Debentures payable 36,000 36,000
Provisions 30,552 29,767
Deferred tax liabilities - 505
Other non-current liabilities 3,054 2,607
Total non-current liabilities 133,702 127,327
Total liabilities 398,614 408,149
Shareholders' equity
Share capital 121,071 121,071
Capital reserve 68,769 68,769
Other comprehensive income 274 263
Specific reserve 832 393
Surplus reserves 196,640 196,640
Retained earnings 168,031 182,440
Total shareholders' equity 555,617 569,576
Total liabilities and shareholders' equity 954,231 977,725
Total non-current liabilities
133,702
127,327
Total liabilities
398,614
408,149
Shareholders' equity
Share capital
121,071
121,071
Capital reserve
68,769
68,769
Other comprehensive income
274
263
Specific reserve
832
393
Surplus reserves
196,640
196,640
Retained earnings
168,031
182,440
Total shareholders' equity
555,617
569,576
Total liabilities and shareholders' equity
954,231
977,725
These financial statements have been approved by the board of directors on 25 August 2017.
Wang Yupu Dai Houliang Wang Dehua
Chairman Vice Chairman, President Chief Financial Officer
(Legal representative)
The accompanying notes form part of these financial statements.
CONSOLIDATED INCOME STATEMENT
for the six-month period ended 30 June 2017
Note Six-month periods ended 30 June
2017 2016
RMB million RMB million
Operating income 38 1,165,837 879,220
Less: Operating costs 38/41 942,602 665,193
Taxes and surcharges 39 116,297 112,831
Selling and distribution expenses 41 25,955 23,572
General and administrative expenses 41 35,903 38,416
Financial expenses 40 1,289 4,284
Exploration expenses, including dry holes 41/42 4,542 4,730
Impairment losses 43 4,076 1,423
Add:Gain from changes in fair value 44 369 113
Investment income 45 8,152 5,394
Other income 46 1,321 -
Operating profit 45,015 34,278
Add:Non-operating income 47 833 1,357
Less: Non-operating expenses 48 816 875
Profit before taxation 45,032 34,760
Less: Income tax expense 49 8,915 8,379
Net profit 36,117 26,381
Including: net profit of acquiree before the consolidation under common control - 86
Attributable to:
Equity shareholders of the Company 27,092 19,250
Minority interests 9,025 7,131
Income from continued operations 36,117 26,381
Basic earnings per share 59 0.224 0.159
Diluted earnings per share 59 0.224 0.159
Net profit 36,117 26,381
Other comprehensive income 35
Items that may be reclassified subsequently to profit or loss
(net of tax and after reclassification adjustments):
Cash flow hedges 162 1,767
Changes in fair value of available-for-sale financial assets (7) (33)
Share of other comprehensive income of associates and joint ventures 277 99
Foreign currency translation differences (1,542) 987
Total other comprehensive income (1,110) 2,820
Total comprehensive income 35,007 29,201
Attributable to:
Equity shareholders of the Company 26,450 24,233
Minority interests 8,557 4,968
Cash flow hedges
162
1,767
Changes in fair value of available-for-sale financial assets
(7)
(33)
Share of other comprehensive income of associates and joint ventures
277
99
Foreign currency translation differences
(1,542)
987
Total other comprehensive income
(1,110)
2,820
Total comprehensive income
35,007
29,201
Attributable to:
Equity shareholders of the Company
26,450
24,233
Minority interests
8,557
4,968
These financial statements have been approved by the board of directors on 25 August 2017.
Wang Yupu Dai Houliang Wang Dehua
Chairman Vice Chairman, President Chief Financial Officer
(Legal representative)
The accompanying notes form part of these financial statements.
INCOME STATEMENT
for the six-month period ended 30 June 2017
Note Six-month periods ended 30 June
2017 2016
RMB million RMB million
Operating income 38 411,410 346,149
Less: Operating costs 38 306,503 237,835
Taxes and surcharges 77,324 79,602
Selling and distribution expenses 1,280 1,304
General and administrative expenses 19,509 21,527
Financial expenses 1,395 2,065
Exploration expenses, including dry holes 4,143 4,730
Impairment losses 3,681 1,124
Add:Gain from changes in fair value - -
Investment income 45 8,873 8,750
Other income 358 -
Operating profit 6,806 6,712
Add:Non-operating income 326 767
Less: Non-operating expenses 481 469
Profit before taxation 6,651 7,010
Less: Income tax expense 478 852
Net profit 6,173 6,158
Income from continued operations 6,173 6,158
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
(net of tax and after reclassification adjustments):
Cash flow hedges 22 307
Share of other comprehensive loss of associates (11) (15)
Total other comprehensive income 11 292
Total comprehensive income 6,184 6,450
Items that may be reclassified subsequently to profit or loss
(net of tax and after reclassification adjustments):
Cash flow hedges
22
307
Share of other comprehensive loss of associates
(11)
(15)
Total other comprehensive income
11
292
Total comprehensive income
6,184
6,450
These financial statements have been approved by the board of directors on 25 August 2017.
Wang Yupu Dai Houliang Wang Dehua
Chairman Vice Chairman, President Chief Financial Officer
(Legal representative)
The accompanying notes form part of these financial statements
CONSOLIDATED CASH FLOW STATEMENT
for the six-month period ended 30 June 2017
Note Six-month periods ended 30 June
2017 2016
RMB million RMB million
Cash flows from operating activities:
Cash received from sale of goods and rendering of services 1,310,796 1,024,105
Refund of taxes and levies 788 1,079
Other cash received relating to operating activities 33,601 39,148
Sub-total of cash inflows 1,345,185 1,064,332
Cash paid for goods and services (1,021,990) (732,307)
Cash paid to and for employees (28,759) (27,480)
Payments of taxes and levies (190,325) (169,094)
Other cash paid relating to operating activities (43,264) (59,339)
Sub-total of cash outflows (1,284,338) (988,220)
Net cash flow from operating activities 51(a) 60,847 76,112
Cash flows from investing activities:
Cash received from disposal of investments 717 17,911
Cash received from returns on investments 3,395 1,459
Net cash received from disposal of fixed assets, intangible assets 216 306
and other long-term assets
Other cash received relating to investing activities 20,595 987
Net cash received from disposal of subsidiaries and other business entities 1 2,027
Sub-total of cash inflows 24,924 22,690
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets (28,742) (31,353)
Cash paid for acquisition of investments (3,253) (14,393)
Other cash paid relating to investing activities (32,914) (3,003)
Net cash paid for the acquisition of subsidiaries and other business entities (17) -
Sub-total of cash outflows (64,926) (48,749)
Net cash flow from investing activities (40,002) (26,059)
Cash flows from financing activities:
Cash received from capital contributions 331 192
Including: Cash received from minority shareholders' capital contributions 331 192
to subsidiaries
Cash received from borrowings 269,008 262,851
Sub-total of cash inflows 269,339 263,043
Cash repayments of borrowings (279,559) (293,977)
Cash paid for dividends, profits distribution or interest (5,818) (14,996)
Including: Subsidiaries' cash payments for distribution of dividends or (2,608) (3,469)
profits to minority shareholders
Sub-total of cash outflows (285,377) (308,973)
Net cash flow from financing activities (16,038) (45,930)
Effects of changes in foreign exchange rate (148) 194
Net increase in cash and cash equivalents 51(b) 4,659 4,317
263,043
Cash repayments of borrowings
(279,559)
(293,977)
Cash paid for dividends, profits distribution or interest
(5,818)
(14,996)
Including: Subsidiaries' cash payments for distribution of dividends or
profits to minority shareholders
(2,608)
(3,469)
Sub-total of cash outflows
(285,377)
(308,973)
Net cash flow from financing activities
(16,038)
(45,930)
Effects of changes in foreign exchange rate
(148)
194
Net increase in cash and cash equivalents
51(b)
4,659
4,317
These financial statements have been approved by the board of directors on 25 August 2017.
Wang Yupu Dai Houliang Wang Dehua
Chairman Vice Chairman, President Chief Financial Officer
(Legal representative)
The accompanying notes form part of these financial statements.
CASH FLOW STATEMENT
for the six-month period ended 30 June 2017
Note Six-month periods ended 30 June
2017 2016
RMB million RMB million
Cash flows from operating activities:
Cash received from sale of goods and rendering of services 488,179 385,148
Refund of taxes and levies 401 999
Other cash received relating to operating activities 11,055 10,499
Sub-total of cash inflows 499,635 396,646
Cash paid for goods and services (305,731) (241,787)
Cash paid to and for employees (15,729) (15,788)
Payments of taxes and levies (121,123) (85,487)
Other cash paid relating to operating activities (25,772) (20,785)
Sub-total of cash outflows (468,355) (363,847)
Net cash flow from operating activities 31,280 32,799
Cash flows from investing activities:
Cash received from disposal of investments 5,242 20,237
Cash received from returns on investments 10,444 12,224
Net cash received from disposal of fixed assets, intangible assets and 409 593
other long-term assets
Other cash received relating to investing activities 11,555 364
Net cash received from disposal of subsidiaries and other business entities 1 2,027
Sub-total of cash inflows 27,651 35,445
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets (17,267) (24,448)
Cash paid for acquisition of investments (5,519) (19,692)
Other cash paid relating to investing activities (13,010) (10)
Sub-total of cash outflows (35,796) (44,150)
Net cash flow from investing activities (8,145) (8,705)
Cash flows from financing activities:
Cash received from borrowings 76,625 95,722
Sub-total of cash inflows 76,625 95,722
Cash repayments of borrowings (93,317) (110,878)
Cash paid for dividends or interest (2,690) (9,460)
Sub-total of cash outflows (96,007) (120,338)
Net cash flow from financing activities (19,382) (24,616)
Net increase/(decrease) in cash and cash equivalents 3,753 (522)
Sub-total of cash inflows
76,625
95,722
Cash repayments of borrowings
(93,317)
(110,878)
Cash paid for dividends or interest
(2,690)
(9,460)
Sub-total of cash outflows
(96,007)
(120,338)
Net cash flow from financing activities
(19,382)
(24,616)
Net increase/(decrease) in cash and cash equivalents
3,753
(522)
These financial statements have been approved by the board of directors on 25 August 2017.
Wang Yupu Dai Houliang Wang Dehua
Chairman Vice Chairman, President Chief Financial Officer
(Legal representative)
The accompanying notes form part of these financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six-month period ended 30 June 2017
Total
Share capital Capital reserve Other comprehensive income Specific reserve Surplus reserves Retained earnings 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 2015 121,071 119,408 (7,984) 612 196,640 245,623 675,370 110,253 785,623
Adjustment for the combination of entities - 2,168 - - - - 2,168 1,774 3,942
under common control (Note 1)
Balance at 1 January 2016 121,071 121,576 (7,984) 612 196,640 245,623 677,538 112,027 789,565
Change for the period
1. Net profit - - - - - 19,250 19,250 7,131 26,381
2. Other comprehensive income (Note 35) - - 4,983 - - - 4,983 (2,163) 2,820
Total comprehensive income - - 4,983 - - 19,250 24,233 4,968 29,201
Transactions with owners, recorded directly
in shareholders' equity:
3. Appropriations of profits:
- Distributions to shareholders (Note 50) - - - - - (7,264) (7,264) - (7,264)
4. Transaction with minority interests - 1 - - - - 1 74 75
5. Distributions to the original shareholders in the - - - - - (47) (47) (39) (86)
combination of entities under common control
6. Distribution to minority interests - - - - - - - (2,194) (2,194)
7. Adjustment for the combination of entities - (2,137) - - - - (2,137) 2,137 -
under common control (Note 1)
Total transactions with owners, recorded directly - (2,136) - - - (7,311) (9,447) (22) (9,469)
in shareholders' equity
8. Net increase in specific reserve for the period - - - 620 - - 620 86 706
(Note 36)
9. Others - (10) - - - - (10) (10) (20)
Balance at 30 June 2016 121,071 119,430 (3,001) 1,232 196,640 257,562 692,934 117,049 809,983
Balance at 1 January 2017 121,071 119,525 (932) 765 196,640 275,163 712,232 120,293 832,525
Change for the period
1. Net profit - - - - - 27,092 27,092 9,025 36,117
2. Other comprehensive income (Note 35) - - (642) - - - (642) (468) (1,110)
Total comprehensive income - - (642) - - 27,092 26,450 8,557 35,007
Transactions with owners, recorded directly
in shareholders' equity:
3. Appropriations of profits:
- Distributions to shareholders (Note 50) - - - - - (20,582) (20,582) - (20,582)
4. Transaction with minority interests - - - - - - - 341 341
5. Distributions to minority interests - - - - - - - (2,341) (2,341)
Total transactions with owners, recorded directly - -
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