ANNUAL REPORT AND ACCOUNTS 2024 CONTENTS 2 Company Profile 3 Principal Financial Data and Indicators 7 Chairman’s Address 10 Business Review and Prospects 17 Management’s Discussion and Analysis 28 Corporate Governance, Environment and Society 55 Significant Events 62 Connected Transactions 64 Report of the Board of Directors 74 Report of the Supervisory Committee 76 Changes in Share Capital and Shareholdings of Principal Shareholders 79 Bond General Information 81 Principal Wholly-owned and Controlled Subsidiaries 82 Financial Statements 219 Corporate Information 220 Documents for Inspection This annual report includes forward-looking statements. All statements, other than statements of historical facts, that address activities, events or developments that the Company expects or anticipates will or may occur in the future (including but not limited to projections, targets, reserve and other estimates and business plans) are forward-looking statements. The Company’s actual results or developments in the future may differ materially from those indicated by these forward-looking statements as a result of various factors and uncertainties. The Company makes the forward-looking statements referred to herein as at 21 March 2025 and unless required by regulatory authorities, the Company undertakes no obligation to update these forward-looking statements. 2 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Company Profile COMPANY PROFILE IMPORTANT NOTICE: THE BOARD OF DIRECTORS, THE SUPERVISORY COMMITTEE, DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT OF SINOPEC CORP. WARRANT THAT THERE ARE NO FALSE REPRESENTATIONS, MISLEADING STATEMENTS OR MATERIAL OMISSIONS IN THIS ANNUAL REPORT, AND JOINTLY AND SEVERALLY ACCEPT FULL RESPONSIBILITY FOR THE AUTHENTICITY, ACCURACY AND COMPLETENESS OF THE INFORMATION CONTAINED IN THIS ANNUAL REPORT. THERE IS NO OCCUPANCY OF NON-OPERATING FUNDS BY THE CONTROLLING SHAREHOLDERS OF SINOPEC CORP. ALL DIRECTORS ATTENDED THE 5TH MEETING OF THE NINTH SESSION OF THE BOARD. MR. MA YONGSHENG, CHAIRMAN OF THE BOARD, MR. ZHAO DONG, VICE CHAIRMAN OF THE BOARD AND PRESIDENT, MS. SHOU DONGHUA, CHIEF FINANCIAL OFFICER AND HEAD OF THE FINANCIAL DEPARTMENT OF SINOPEC CORP. WARRANT THE AUTHENTICITY, ACCURACY AND COMPLETENESS OF THE FINANCIAL STATEMENTS CONTAINED IN THIS ANNUAL REPORT. THE AUDIT COMMITTEE OF SINOPEC CORP. HAS REVIEWED THE ANNUAL REPORT OF SINOPEC CORP. FOR THE YEAR ENDED 31 DECEMBER 2024. THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 OF THE COMPANY PREPARED IN ACCORDANCE WITH THE PRC ACCOUNTING STANDARDS FOR BUSINESS ENTERPRISES (CASs) AND IFRS ACCOUNTING STANDARDS HAVE BEEN AUDITED BY KPMG HUAZHEN LLP AND KPMG RESPECTIVELY. BOTH FIRMS HAVE ISSUED STANDARD UNQUALIFIED AUDITOR’S REPORTS. AS APPROVED AT THE 5TH MEETING OF THE NINTH SESSION OF THE BOARD OF DIRECTORS OF SINOPEC CORP., THE BOARD PROPOSED A FINAL CASH DIVIDEND OF RMB0.14 (TAX INCLUSIVE) PER SHARE FOR 2024, COMBINING WITH THE INTERIM CASH DIVIDEND OF RMB0.146 (TAX INCLUSIVE) PER SHARE, THE TOTAL CASH DIVIDEND FOR 2024 WILL BE RMB0.286 (TAX INCLUSIVE) PER SHARE. THE FINAL DIVIDEND PROPOSAL IS SUBJECT TO THE SHAREHOLDERS’ APPROVAL AT THE ANNUAL GENERAL MEETING FOR THE YEAR 2024. COMPANY PROFILE Sinopec Corp.’s H shares were listed in Hong Kong Stock Exchange on 18 October 2000 and A shares were listed in the SSE on 8 August 2001. Sinopec Corp. is one of the largest integrated energy and chemical companies in China. Its principal operations include the exploration and production, pipeline transportation and sale of petroleum and natural gas; the production, sale, storage and transportation of refinery products, petrochemical products, coal chemical products, synthetic fibre, and other chemical products; the import and export, including import and export agency business, of petroleum, natural gas, petroleum products, petrochemical and chemical products, and other commodities and technologies; research, development and application of technologies and information; hydrogen energy business and related services such as hydrogen production, storage, transportation and sales; battery charging and swapping, solar energy, wind energy and other new energy business and related services. DEFINITIONS: In this report, unless the context otherwise requires, the following terms shall have the meaning as set out below: Sinopec Corp.: China Petroleum & Chemical Corporation Company: Sinopec Corp. and its subsidiaries China Petrochemical Corporation: the controlling shareholder of Sinopec Corp., China Petrochemical Corporation Sinopec Group: China Petrochemical Corporation and its subsidiaries NDRC: China National Development and Reform Commission SSE: Shanghai Stock Exchange RMC: Oil and Natural Gas Reserves Management Committee of the Company Sinopec Finance Co.: Sinopec Finance Co., Ltd. Century Bright: Sinopec Century Bright Capital Investment, Ltd. CSRC: China Securities Regulatory Commission Hong Kong Stock Exchange: The Stock Exchange of Hong Kong Limited Hong Kong Listing Rules: Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited CONVERSION: For domestic production of crude oil, 1 tonne is about 7.1 barrels; For overseas production of crude oil: 1 tonne is about 7.25 barrels in 2024, 1 tonne is about 7.26 barrels in 2023, 1 tonne is about 7.26 barrels in 2022; For production of natural gas, 1 cubic meter = 35.31 cubic feet; For Refinery throughput, 1 tonne is about 7.35 barrels. 3 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Principal Financial Data and Indicators PRINCIPAL FINANCIAL DATA AND INDICATORS 1. FINANCIAL DATA AND INDICATORS PREPARED IN ACCORDANCE WITH CASS (1) Principal financial data For the year ended 31 December 2024 2023 Change 2022 Items RMB million RMB million (%) RMB million Operating income 3,074,562 3,212,215 (4.3) 3,318,168 Operating profit 72,257 86,744 (16.7) 96,414 Profit before taxation 70,513 86,116 (18.1) 94,515 Net profit attributable to equity shareholders of the Company 50,313 60,463 (16.8) 67,082 Net profit attributable to equity shareholders of the Company excluding extraordinary gains and losses 48,057 60,692 (20.8) 57,962 Net cash flow from operating activities 149,360 161,475 (7.5) 116,269 2024 First Quarter Second Quarter Third Quarter Fourth Quarter Total Items RMB million RMB million RMB million RMB million RMB million Operating income 789,967 786,164 790,410 708,021 3,074,562 Net profit attributable to equity shareholders of the Company 18,316 17,387 8,544 6,066 50,313 Net profit attributable to equity shareholders of the Company excluding extraordinary gains and losses 18,186 17,396 8,385 4,090 48,057 Net cash flow (used in)/generated from operating activities (13,755) 56,024 59,272 47,819 149,360 As of 31 December 2024 2023 Change 2022 Items RMB million RMB million (%) RMB million Total assets 2,084,771 2,026,674 2.9 1,951,121 Total liabilities 1,108,478 1,068,019 3.8 1,010,664 Total equity attributable to equity shareholders of the Company 819,922 805,794 1.8 788,471 Total number of shares (1,000 shares) 121,281,556 119,349,252 1.6 119,896,408 (2) Principal financial indicators For the year ended 31 December 2024 2023 Change 2022 Items RMB Yuan RMB Yuan (%) RMB Yuan Basic earnings per share 0.415 0.505 (17.8) 0.555 Diluted earnings per share 0.415 0.505 (17.8) 0.555 Basic earnings per share (excluding extraordinary gains and losses) 0.397 0.507 (21.7) 0.479 Weighted average return on net assets (%) 6.19 7.59 (1.40) percentage points 8.57 Weighted average return (excluding extraordinary gains and losses) on net assets (%) 5.91 7.61 (1.70) percentage points 7.40 Net cash flow from operating activities per share 1.233 1.348 (8.5) 0.962 As of 31 December 2024 2023 Change 2022 Items RMB Yuan RMB Yuan (%) RMB Yuan Net assets attributable to equity shareholders of the Company per share 6.760 6.752 0.1 6.576 Liabilities to assets ratio (%) 53.17 52.70 0.47 percentage points 51.80 4 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Principal Financial Data and Indicators PRINCIPAL FINANCIAL DATA AND INDICATORS (CONTINUED) (3) Extraordinary items and corresponding amounts For the year ended 31 December (Income)/expenses 2024 2023 2022 Items RMB million RMB million RMB million Net gain on disposal of non-current assets (1,967) (4,226) (672) Donations 293 310 447 Government grants (4,068) (3,533) (3,826) Gain on holding and disposal of various investments (586) (931) (13,902) Other non-operating expenses, net 1,807 797 2,178 One-time impact on loss during the reporting period due to adjustments to laws and regulations – 5,955 – Subtotal (4,521) (1,628) (15,775) Tax effect 1,485 635 2,304 Total (3,036) (993) (13,471) Attributable to: Equity shareholders of the Company (2,256) 229 (9,120) Minority interests (780) (1,222) (4,351) (4) Items measured by fair values Unit: RMB million Impact Beginning End on the profit Items of the year of the year Changes of the year Other equity instruments investment 450 416 (34) 55 Receivables financing 2,221 2,613 392 – Derivative financial instruments and cash flow hedging 6,969 (858) (7,827) 2,448 Financial assets held for trading 3 4 1 1 Total 9,643 2,175 (7,468) 2,504 5 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Principal Financial Data and Indicators (5) Significant changes of items in the financial statements The table below sets forth reasons for those changes where the fluctuation was more than 30% during the reporting period: As of 31 December 2024 As of 31 December 2023 Increase/(Decrease) Amount Percentage Items of Consolidated Balance Sheet RMB million RMB million RMB million (%) Main reasons for changes Financial assets held for trading 4 3 1 33.3 Impact of changes in fair value of funds held by the Company. Derivative financial assets 2,554 9,721 (7,167) (73.7) Impact of changes in fair value of hedging business. Other non-current assets 47,443 33,483 13,960 41.7 Increase in time deposits of more than one year. Bills payable 47,740 29,122 18,618 63.9 Increase in bill-settled procurement. Non-current liabilities due within one year 64,602 30,457 34,145 112.1 Certain long-term loans being reclassified to non-current liabilities due within one year. Debentures payable 25,562 8,513 17,049 200.3 Issuance of financing debentures. Other comprehensive income (987) 3,060 (4,047) – Impact of changes in foreign currency statement conversion differences. For the year ended 31 December 2024 RMB Million For the year ended 31 December 2023 RMB Million Increase/(Decrease) Items of Consolidated Income Statement Amount RMB Million Percentage (%) Main reasons for changes Investment income 15,889 5,811 10,078 173.4 Changes in performance of hedging business and improvement in performance of associates and joint ventures. (Losses)/gains from changes in fair value (4,147) 467 (4,614) – Increase in floating loss of hedging business. Credit impairment (losses)/reversals (108) 243 (351) – Decrease in bad debt reversal of accounts receivables. Asset disposal gains 1,967 4,226 (2,259) (53.5) Land and facilities disposal income generated by the relocation of Hunan Petrochemical, as well as increase in the disposal income of certain pipeline network assets in the previous year, which did not happen during the reporting period. For the year ended 31 December 2024 RMB Million For the year ended 31 December 2023 RMB Million Increase/(Decrease) Items of Consolidated Cash Flow Statement Amount RMB Million Percentage (%) Main reasons for changes Refund of taxes and levies 7,934 11,530 (3,596) (31.2) Decrease in VAT refunds year-on-year. Cash received from disposal of investments 475 1,580 (1,105) (69.9) Cash received from sale of equity in the previous year, which did not happen during the reporting period. Net cash received from disposal of fixed assets, intangible assets and other long-term assets 1,864 5,363 (3,499) (65.2) Disposal of fixed assets decreased year-on-year. Cash paid for acquisition of investments (10,604) (5,918) (4,686) 79.2 Capital injection to associates and joint ventures in this period increased year-on-year. Cash received from capital contributions 15,458 1,509 13,949 924.4 Proceeds received from the issue of shares to the target subscriber. Including: Cash received from non-controlling shareholders’ capital contributions to subsidiaries 3,463 1,509 1,954 129.5 Increase in capital injection for projects received from minority shareholders year-on-year. Other cash received relating to financing activities 1,290 420 870 207.1 Increase in capital received from the financial leasing business year-on-year. 6 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Principal Financial Data and Indicators PRINCIPAL FINANCIAL DATA AND INDICATORS (CONTINUED) 2 FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH IFRS ACCOUNTING STANDARDS Unit: RMB million For the year ended 31 December Items 2024 2023 2022 2021 2020 Revenue 3,074,562 3,212,215 3,318,168 2,740,884 2,104,724 Operating profit 70,686 86,828 75,835 94,628 13,669 Profit before taxation 69,142 83,934 94,400 109,169 48,615 Profit attributable to shareholders of the Company 48,939 58,310 66,933 72,483 34,196 Basic earnings per share (RMB) 0.404 0.487 0.554 0.599 0.282 Diluted earnings per share (RMB) 0.404 0.487 0.554 0.599 0.282 Return on capital employed (%) 5.78 7.22 8.73 11.33 6.50 Return on net assets (%) 6.00 7.26 8.50 9.34 4.57 Net cash generated from operating activities per share (RMB) 1.233 1.348 0.962 1.860 1.392 Unit: RMB million As of 31 December Items 2024 2023 2022 2021 2020 Non-current assets 1,556,925 1,490,261 1,427,981 1,332,940 1,284,416 Net current liabilities 148,722 112,641 144,245 83,256 67,335 Non-current liabilities 436,056 421,811 344,194 332,162 327,517 Non-controlling interests 156,332 152,820 151,942 141,226 141,633 Total equity attributable to shareholders of the Company 815,815 802,989 787,600 776,296 747,931 Net assets per share (RMB) 6.727 6.728 6.569 6.412 6.178 Adjusted net assets per share (RMB) 6.500 6.486 6.310 6.228 5.957 3 MAJOR DIFFERENCES BETWEEN THE AUDITED FINANCIAL STATEMENTS PREPARED UNDER CASS AND IFRS ACCOUNTING STANDARDS PLEASE REFER TO PAGE 213 OF THE REPORT. 7 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Chairman’s Address CHAIRMAN’S ADDRESS Dear Shareholders and Friends, On behalf of the Board, management and entire staff, I would like to express my sincere gratitude to our shareholders and all walks of life in the community for their care and support for Sinopec Corp. In 2024, the Board sized up the situation and carried out reforms and promoted development under the new development philosophy. The management has overcome difficulties supported by all the employees. As a result, the Company achieved hard-won operating results. Under IFRS Accounting Standards, the Company realized revenue of RMB3.07 trillion, profit attributable to shareholders of the Company of RMB48.94 billion, operating cash flow of RMB149.36 billion, and the debt-to-asset ratio at the end of the period of 53.3%. The Company maintained a stable financial condition with strong risk resistance capacity, fully showing its resilience when facing a complex and severe market environment. With an overall consideration of the profitability, shareholders’ return and sustainable development needs of the Company, the Board proposed a final cash dividend of RMB0.14 per share (tax-inclusive, the same below). Together with the interim cash dividend of RMB0.146 per share, the total annual cash dividend amounted to RMB0.286 per share and the annual total payout ratio reached 75% after aggregating the share repurchase amount. Over the past year, the Company’s corporate governance became more effective. The 9th session of the Board and the Supervisory Committee were elected and senior management was appointed. The Board implemented “Corporate Value and Return Enhancement Action Plan” and the Dividend Distribution and Return Plan for Shareholders for the Next Three Years, formulated the Company’s market value management policy, and continued the domestic and overseas share repurchases to improve asset quality, operational efficiency, and enterprise value. All independent directors performed their duties with diligence, conducted whole industry chain thematic surveys, proactively participated in decision-making and supervision, and offered valuable suggestions for the reform and development of the Company. Full play was given to the role of party building, which supports and ensures the scientific decision-making procedure of the Board. We further deepened the reform, strengthened the effectiveness of risk prevention and internal control system, and continued to elevate the enterprise management level. Continuing connected transactions for three years from 2025 to 2027 were supported and approved by shareholders, ensuring the stable production and operation of the Company. Over the past year, the Company’s high-quality development foundation became more solid. For upstream, we vigorously implemented the seven-year action plan, enhanced high-quality exploration efforts on both conventional and unconventional oil and gas, achieved a number of significant breakthroughs and effectively increased oil and gas reserves and production. By improving the synergy of production, supply, storage and marketing, the production and sales volume of the natural gas business steadily increased with the profit of the whole industry chain reaching a record high. We coordinated the refining and marketing businesses to create higher value, and further optimized business system, regional operations and product mix. By actively promoting the low-cost “refined oil products to chemical feedstocks” and high-value “refined oil products to refining specialties” strategy, we increased both volume and profit of featured products including high-end carbon materials and expanded more profitable refinery throughput. Through efforts in expanding markets and increasing sales volume, we achieved growth in high-grade gasoline sales and sustainable development in non-fuel businesses. In chemical segment, we closely followed the market demand, vigorously implemented operations optimization and costs reduction and steadily increased the proportion of high value-added products in synthetic resin, synthetic fibre, synthetic rubber and fine chemicals. Over the past year, the Company’s high-quality development momentum became more forceful. Adhering to the innovation as a driving force, we made outstanding progress in core technologies in exploration and development of new type oil and gas, refining specialties, and new chemical materials. With digital and intelligent technology empowering industrial development, intelligent operation center 2.0 was put into operation, and an intelligent ethylene factory based on digital twins was built. In addition, taking transition and upgrading as a driving force, we made steady progress in a number of refining and chemical upgrading and facilities revamping projects, such as Zhenhai Refining and Chemical Phase II capacity expansion project and the high-end new materials project. We continued to develop ourselves into a comprehensive energy service provider of “petrol, gas, hydrogen, power and services”. Our domestic market share of automotive LNG business stayed ahead. We have built a total of more than 10,000 EV charging and battery swapping stations and 142 hydrogen refueling stations, and Easy Joy’s service scope was further enriched. 8 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Chairman’s Address CHAIRMAN’S ADDRESS (CONTINUED) Over the past year, the Company’s high-quality development feature became more distinct. We strengthened ESG governance and disclosure, and achieved good results. Actively responding to global climate change, we steadily advanced the ‘Eight actions for Carbon Peaking’ and energy efficiency benchmarking and upgrading, mapped out detailed medium and long-term carbon emission reduction targets, launched the second phase of the Green Enterprise Action plan, and vigorously promoted pollution prevention and control. Our comprehensive energy consumption per RMB10,000 of production output and emissions of major pollutants continued to decline. Meanwhile, we cared for the physical and mental health of employees and promoted the development of the health-consciousness of the Company. We actively contributed to rural revitalization, continued to carry out public welfare projects such as ‘Lifeline Health Express’ and ‘Drivers’ Home’, and promoted the harmony among economy, environment and social welfare in our project location domestically and abroad, which demonstrated our enterprise social responsibility. The past achievements laid a good foundation for the sustainable development of the Company. The hard-won achievements were attributable to the hard work and endeavour of the Board, the Supervisory Committee, management and all employees, as well as the long-term strong support of our shareholders and all walks of life in the community. Mr. Cai Hongbin, Mr. Ng, Kar Ling Johnny, Ms. Shi Dan and Mr. Bi Mingjian ceased to be our independent directors after the election of the 9th session of the Board. During their tenure, they performed their duties diligently and played an important role in scientific decision-making, compliance operation and reform and development of the Company. On behalf of the Board, I would like to express my sincere gratitude to all shareholders, all walks of life in the community and independent directors. 2025 is the final year of the “14th Five-Year Plan” and the 25th anniversary of the Company’s listing. Adhering to the complete, accurate and comprehensive implementation of the new development philosophy, Sinopec Corp. will focus on scientific and technological innovation, industrial transition, reform and management, difficulty overcoming and profit improving, risk prevention and other key areas, strive to improve our operation quality and increase business scale reasonably, spare no efforts to protect enterprise value of the Company, promote high-quality development in an all-round way, and lay a solid foundation for a good start of the “15th Five-Year Plan”. We will take scientific and technological innovation as the engine to support and lead the high-quality development of the industry. By deepening the integration of innovation, industry, capital, and talents, we will accelerate the development of core technologies such as shale oil and deep & ultra-deep stratum oil and gas exploration and development, refining specialties, new energy, high-end new materials, and industrial softwares, promote the synergy among production, sales, research and application, accelerate the iterative development of technology achievements and the process of achieving profits through commercialization of technologies. We will strengthen the leading and driving force of technological innovation. The Company will promote the deep integration of artificial intelligence and the petrochemical industry to empower technological innovation and upgrading in our industry. We will take strengthening, supplementing and extending industrial chains as key tasks, and accelerate the development of new quality productivity. For upstream, we will continue to consolidate the resource foundation, spare no efforts in achieving the seven-year action plan targets, expand acreage with exploration and development licenses, achieve stable growth of oil and gas, lower the break-even point by taking multiple measures, and therefore lay a solid foundation for the sustainable development of the Company. For refining and chemical, we will focus on improving the profitability of existing assets and investment return of new projects. Through intensive operation, we will reduce basic products cost, improve the featured products’ profitability and reinforce the layout of refining specialties, high-end carbon materials, sustainable fuels, high value-added chemicals, and waste plastics recycling utilization, and make every effort to promote profit and development. As for marketing, we will consolidate our position in the refined oil market and forge the prime brand in LNG fueling business. We will expand the application of hydrogen energy and promote its large-scale utilization in transportation. We will accelerate the growth of power business and extend the industrial chain and value chain, maintain the sustainable development of non-fuel business and develop the Company into a comprehensive energy provider of “petrol, gas, hydrogen, power and services”. 9 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Chairman’s Address CHAIRMAN’S ADDRESS (CONTINUED) We will take improving quality, reducing cost and increasing profitability as the principal mission, and enhance synergies across the whole industrial chain to drive value creation. We will leverage our advantages of integration, actively respond to market changes, strengthen the cost control, tap the potential, and improve operational quality and profitability. We will adhere to customer-centric principle, innovate marketing strategies, strive to expand market and enhance profitability, to consolidate our market leadership. We will adhere to the market-oriented principle, coordinate the whole chain of procurement, transportation, production, storage and sales, strengthen synergistic and regional optimization of the upstream and downstream of the industrial chain, and improve the competitiveness and profitability of the whole industrial chain. We will take green transition as the key incentive to create new competitive edge from green development. We will further integrate ESG into our development strategy, coordinate the “Carbon Peak” and ‘Carbon Neutrality’ action, steadily implement the second phase of the Green Enterprise Action plan, promote the conservation and efficient utilization of resources, and take collaborative efforts to cut carbon emissions, reduce pollution, pursue green development and boost business growth. At the same time, we will strengthen the R&D and commercialization of green and low-carbon technologies, promote the industry layout for CCUS, energy conservation and environmental protection, and carbon assets business, and strengthen carbon trading and carbon footprint management. We will accelerate the large-scale layout of green electricity business and improve the operation level of green hydrogen refining and chemical projects. In addition, efforts will be taken to tackle and prevent pollution issues and protect the ecological environment. Considering our development strategy, market environment, operation, cash flow and other factors, the Company plans to invest RMB164.3 billion of capital expenditure in 2025, mainly in high-quality exploration and development, refining and chemical business transition and upgrading, comprehensive energy service network development, new energy, new materials, environment-friendly projects and other fields. Among industrial competition in changes unseen in a century, only by leading with innovation and forging ahead with unwavering dedication can we achieve breakthrough and shape the future. In 2025, the Board will lead the management and all employees to reinforce confidence and determination, adhere to the high-end, intelligent and green development. We will coordinate and drive the transition and upgrading of traditional industries, the cultivation and growth of emerging industries, and pioneering the deployment of future industries. The Company will fully promote high-quality development, delivering greater value for shareholders and the society. Ma Yongsheng Chairman Beijing, China 21 March 2025 10 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Business Review and Prospects BUSINESS REVIEW AND PROSPECTS BUSINESS REVIEW In 2024, China’s economy maintained stability, registering a GDP growth of 5.0% year-on-year. International crude oil prices fluctuated in a wide range. The domestic demand for natural gas grew rapidly, while that for refined oil products domestically declined slightly, and domestic demand for chemical products continued to increase. (2) Refined Oil Products Market In 2024, domestic demand for refined oil products mildly decreased. Based on the Company’s statistics, domestic consumption of refined oil products (including gasoline, diesel and kerosene) was 404 million tonnes, down by 1.9% from the previous year, with gasoline down by 1.2%, diesel down by 5.4% and kerosene up by 13.3%. (3) Chemical Products Market Domestic demand for chemicals went up steadily in 2024. Based on the Company’s statistics, domestic consumption of ethylene equivalent was up by 2.4% from the previous year, and the apparent consumption of synthetic resin, synthetic fibre and synthetic rubber rose by 1.1%, 10.4%, and 4.4% respectively. Affected by newly commercialized chemical production capacities, chemical margin stayed at a low level. 1 MARKET REVIEW (1) Crude Oil & Natural Gas Market In 2024, international crude oil prices were volatile in a wide range, with a year-on-year increase of 5.3% in the first half and a rapid decline of 9.3% in the second half. The spot price of Platts Brent for the year averaged USD80.8 per barrel, down by 2.2% year-on-year. Based on the statistics of NDRC, domestic apparent consumption of natural gas reached 426.1 billion cubic meters, up by 8.0% year-on-year. Movement of International Crude Oil Prices USD/Barrel 60 80 100 120 WTI-NYMEX BRENT ICE BRENT DTD DUBAI 0 Jan-2023 Apr-2023 Jul-2023 Oct-2023 Jan-2024 Apr-2024 Jul-2024 Oct-2024 Jan-2025 11 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Business Review and Prospects 2 PRODUCTION & OPERATIONS REVIEW (1) Exploration and Production In 2024, the Company strengthened high-quality exploration and profitable development and further improved profitability. The Company made progress in increasing oil and gas reserve and gas output, stabilizing oil production as well as cutting cost. In terms of exploration, we spared no effort to expand exploration & development licenses and increase reserves. Significant breakthroughs were made in the exploration of ultra-deep shale gas in the Sichuan Basin, risk exploration in the Songliao Basin, and shale oil in the Bohai Bay Basin. The construction of the Shengli Jiyang Shale Oil National Demonstration Zone was efficiently promoted. In terms of oil development, we accelerated the construction of key oil production capacities such as Tahe, West Jungar, and Shengli Offshore, and reinforced the fine-tuned development of mature oil fields. In natural gas development, we actively pushed ahead the building of key natural gas production capacities such as Shunbei Area II and marine facies gas in West Sichuan. At the same time, we further optimised the synergy of integrated gas business system covering production, supply, storage and sales, with the profit for the whole gas business chain hitting a historical high. The Company’s production of oil and gas in 2024 was 515.35 million barrels of oil equivalent, up by 2.2% year-on- year, among which domestic crude oil production totaled 254.00 million barrels, up by 0.9% year-on-year, and natural gas production reached 1,400.4 billion cubic feet, up by 4.7% year-on-year. Summary of Operations for the Exploration and Production Segment Change from 2024 2023 2022 2023 to 2024(%) Oil and gas production (mmboe) 515.35 504.09 488.99 2.2 Crude oil production (mmbbls) 281.85 281.12 280.86 0.3 China 254.00 251.63 250.79 0.9 Overseas 27.84 29.49 30.07 (5.6) Natural gas production (bcf) 1,400.39 1,337.82 1,248.75 4.7 Summary of Reserves of Crude Oil and Natural Gas Crude oil reserves (mmbbls) Items 31 December 2024 31 December 2023 Proved reserves 2,097 2,003 Proved developed reserves 1,845 1,777 China 1,587 1,507 Consolidated companies 1,587 1,507 Shengli 1,188 1,119 Others 399 388 Overseas 258 270 Consolidated companies 14 17 Equity accounted entities 244 253 Proved undeveloped reserves 252 226 China 218 189 Consolidated companies 218 189 Shengli 84 67 Others 134 122 Overseas 34 37 Consolidated companies 3 3 Equity accounted entities 31 34 12 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Business Review and Prospects BUSINESS REVIEW AND PROSPECTS (CONTINUED) Natural gas reserves (bcf) Items 31 December 2024 31 December 2023 Proved reserves 9,870 9,311 Proved developed reserves 7,951 7,529 China 7,942 7,525 Consolidated companies 7,942 7,525 Puguang 1,324 1,213 Fuling 1,834 1,701 Others 4,784 4,611 Overseas 9 4 Consolidated companies 0 0 Equity accounted entities 9 4 Proved undeveloped reserves 1,919 1,782 China 1,919 1,782 Consolidated companies 1,919 1,782 Fuling 140 113 Others 1,779 1,669 Overseas 0 0 Consolidated companies 0 0 Equity accounted entities 0 0 Exploration and Production Activities As of 31 December 2024 2023 Exploratory Development Exploratory Development Wells drilled Productive Dry Productive Dry Productive Dry Productive Dry China 425 79 2,083 4 343 105 2,312 6 Consolidated companies 425 79 2,083 4 343 105 2,312 6 Shengli 169 31 1,183 2 127 29 1,379 3 Others 256 48 900 2 216 76 933 3 Overseas 3 0 148 0 0 0 144 0 Consolidated companies 0 0 0 0 0 0 0 0 Equity accounted entities 3 0 148 0 0 0 144 0 Total 428 79 2,231 4 343 105 2,456 6 As of 31 December 2024 2023 Gross Net Gross Net Wells drilling Exploratory Development Exploratory Development Exploratory Development Exploratory Development China 80 179 80 177 80 184 80 184 Consolidated companies 80 179 80 177 80 184 80 184 Shengli 19 61 19 61 19 60 19 60 Others 61 118 61 116 61 124 61 124 Overseas 1 8 1 4 1 8 1 4 Consolidated companies 0 0 0 0 0 0 0 0 Equity accounted entities 1 8 1 4 1 8 1 4 Total 81 187 81 181 81 192 81 188 As of 31 December 2024 2023 Oil productive wells Gross Net Gross Net China 56,630 56,630 55,548 55,548 Consolidated companies 56,630 56,630 55,548 55,548 Shengli 36,868 36,868 36,024 36,024 Others 19,762 19,762 19,524 19,524 Overseas 5,532 2,338 5,476 2,314 Consolidated companies 30 11 30 11 Equity accounted entities 5,502 2,327 5,446 2,303 Total 62,162 58,968 61,024 57,862 13 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Business Review and Prospects As of 31 December Natural gas productive wells 2024 2023 Region Gross Net Gross Net China 8,731 8,640 8,256 8,186 Consolidated companies 8,731 8,640 8,256 8,186 Puguang 106 106 90 90 Fuling 1,156 1,156 1,019 1,019 Others 7,469 7,378 7,147 7,077 Total 8,731 8,640 8,256 8,186 Unit: Square kilometers As of 31 December Area under license 2024 2023 Acreage with exploration licenses 375,255 365,219 China 375,255 365,219 Acreage with development licenses 49,081 47,567 China 43,247 41,596 Overseas 5,834 5,971 (2) Refining In 2024, the Company actively addressed the challenges brought by weak demand and the narrowing margins of certain refining products, and optimised integrated production and marketing. We enhanced regional coordination, went all out for profitable processing volume and maintained a relatively high utilisation rate. We closely aligned with the demand of the entire business value chain to coordinate crude oil resources and reduce procurement costs. We followed market demand and flexibly adjusted product mix and export scheduling by producing more jet fuel and continuously reducing the diesel-to-gasoline ratio. Effort was made to carry forward the transition of low-cost “refined oil products to chemical feedstocks” and high-value “refined oil products to refining specialties” strategy, and to increase production of market-favored products such as high-end carbon materials and refining specialties. We sped up the building of refining clusters and proceeded with refining structural adjustment projects in an orderly manner. In 2024, the Company processed 252 million tonnes of crude oil and produced 153 million tonnes of refined oil products, with gasoline and kerosene output up by 2.6% and 8.6% respectively year-on-year. Summary of Operations for the Refining Segment Unit: million tonnes Change from 2024 2023 2022 2023 to 2024 (%) Refinery throughput 252.30 257.52 242.27 (2.0) Gasoline, diesel and kerosene production 153.49 156.00 140.15 (1.6) Gasoline 64.15 62.51 59.05 2.6 Diesel 57.91 64.54 63.09 (10.3) Kerosene 31.43 28.95 18.01 8.6 Light chemical feedstock production 40.78 43.29 42.65 (5.8) Note: Includes 100% of the production from domestic joint ventures. (3) Marketing and Distribution In 2024, by adapting to market changes, the Company fully leveraged its integration and network advantages, and continued to build an integrated energy service provider of petrol, gas, hydrogen, power and service. We carried forward targeted marketing tactics, expanded strategic clients base and boosted the sales volume of high-grade gasoline. We stepped up effort in gas refueling and EV battery charging and swapping businesses. Over one thousand gas-refueling stations and more than 10 thousand battery charging and swapping stations were built. Hydrogen- based traffic was promoted steadily. Meanwhile, we vigorously expanded our global presence, explored the low-sulfur bunker fuel market both at home and abroad and the total operating volume of our bunker fuel business ranked second in the world. We continued to enrich the Easy Joy service ecosystem and upgraded non-fuel business operational quality. Total sales volume of refined oil products for the year was 239 million tonnes. 14 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Business Review and Prospects BUSINESS REVIEW AND PROSPECTS (CONTINUED) Summary of Operations for the Marketing and Distribution Segment Change from 2024 2023 2022 2023 to 2024 (%) Total sales volume of oil products (million tonnes) 239.33 239.05 206.74 0.1 Total domestic sales volume of oil products (million tonnes) 182.82 188.17 162.55 (2.8) Retail sales (million tonnes) 113.45 120.12 106.91 (5.6) Direct sales and distribution (million tonnes) 69.38 68.05 55.65 2.0 31 December 2024 31 December 2023 31 December 2022 Change from the end of the previous year to the end of the reporting period (%) Total number of service stations under the Sinopec brand 30,987 30,958 30,808 0.1 Number of company-operated stations 30,987 30,958 30,808 0.1 Note: The total sales volume of refined oil products includes the amount of refined oil marketing and trading sales volume. (4) Chemicals In 2024, in the face of the tough external environment of the newly added domestic chemicals supply and narrowed chemical margin, the Company closely followed market demand, further optimised operation and slashed costs and expenses. The Company optimised the structure of feedstock, facilities and products, and maintained high utilisation rate in profitable facilities such as aromatics, with a focus on efficiency, thus achieving a new historical high in PX production. We continued to diversify feedstock to bring down costs and raise the ratio of high-value-added products steadily. In 2024, ethylene production was 13.47 million tonnes. By strengthening strategic client cooperation and providing tailor-made product services, as well as actively exploring domestic and global market, total chemical sales volume reached 83.45 million tonnes, up by 0.5%, with export volume up by 13.1%. Summary of Operations for the Chemicals Segment Unit: thousand tonnes Change from 2024 2023 2022 2023 to 2024 (%) Ethylene 13,467 14,314 13,437 (5.9) Synthetic resin 20,087 20,574 18,544 (2.4) Synthetic rubber 1,429 1,424 1,284 0.4 Synthetic fiber monomer and polymer 10,033 7,866 8,886 27.5 Synthetic fiber 1,248 1,113 1,112 12.1 Note: Includes 100% of the production of domestic joint ventures. (5) Science and Technology Innovation In 2024, the Company pushed forward the integrated innovation of science and technology together with the industry, deepened the reform of the science and technology system and mechanism, strived to build national-level research institutes in the energy sector, and achieved new results in science and technology innovation. In upstream, breakthroughs were made in the exploration theories and technologies for deep and ultra-deep shale gas. Profitable production were obtained by applying shale oil development technologies in Jiyang and North Jiangsu basins. In refining, we successfully applied the catalyst and technology for producing BTX products through LCO hydrocracking aromatic extraction and batch production and application for refining specialties including animal vaccine white oil and ultra-high voltage transformer oil was realized. In chemicals, we put into operation the world’s first cyclohexene esterification and hydrogenation unit for producing cyclohexanone, and carried forward ultra-high molecular weight polyethylene, linear alpha-olefin (LAO) and other key technologies into industrial application. In addition, intelligent ethylene plant based on digital twins became operational and China’s first factory-scale seawater to hydrogen production demonstration project was completed. In 2024, the Company filed 9,666 patent applications at home and abroad with 5,550 of them granted. 15 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Business Review and Prospects (6) HSE In 2024, the Company continued to improve the HSE management system with professional management further strengthened. We further implemented the all-staff work safety responsibility mechanism, carried forward the scheme of the Safety Management Enhancement Year, and made every effort to promote major risk control and incident prevention, thus maintaining overall stability in production safety. We continuously enhanced health management, improved working conditions and strengthened prevention and control of occupational diseases at the source. Effort was also made to promote the development of the health- consciousness of the Company and safeguard the occupational, physical, and mental health for employees both at home and abroad. (7) Capital Expenditure In 2024, the Company continued to optimise the management of projects, with a capital expenditure of RMB175.0 billion for the whole year. The capital expenditure of the E&P segment was RMB82.3 billion, mainly for the crude oil production capacity building in Jiyang and Tahe, natural gas production capacity building in West Sichuan as well as the oil and gas storage and transportation facilities. The capital expenditure of the refining segment was RMB29.3 billion, mainly for ZRCC Expansion and Guangzhou Petrochemical technological upgrading projects etc. The capital expenditure of the marketing and distribution segment was RMB14.1 billion, mainly for the development of the petrol, gas, hydrogen, power and service integrated energy network, the renovation of the existing marketing network, non-fuel business and other projects. The capital expenditure of the chemical segment was RMB44.7 billion, mainly for the ethylene units in Zhenhai and Maoming and aromatics unit in Jiujiang etc. The capital expenditure of corporate and others was RMB4.6 billion, mainly for R&D and digitalization projects, etc. BUSINESS OUTLOOK 1 MARKET OUTLOOK Looking forward to 2025, as China’s economy continues to recover and improve, domestic demand for natural gas and chemical products is expected to maintain growth, and that for refined oil products will remain influenced by alternative energy. Taking into account the impact of changes in global supply and demand, geopolitics and inventory levels, international crude oil prices are expected to fluctuate within a wide range. 2 PRODUCTION & OPERATION In 2025, the Company will focus on value creation, industrial transition, scientific and technological innovation, reform and management, risk prevention and control to promote high-quality development on all fronts, and will make great efforts in the following areas: Exploration & Production: The Company will strengthen the linkage between exploration & development licenses and reserves, endeavour to acquire high-quality and large-scale exploration and development licenses, increase risk exploration and trap pre-exploration, strengthen exploration in the fields of marine facies carbonate rocks, shale oil and gas and tight oil and gas, and increase high-quality and scaled reserves; strengthen profitable development, and take multiple measures to reduce the break-even point. In terms of crude oil development, we will accelerate the construction of production capacity in Shengli Offshore, Jungar west and Tahe, build a high-quality national demonstration area for Shengli Jiyang shale oil, and strengthen the fine development of mature areas. In terms of natural gas business, we will accelerate the construction of production capacity in Sichuan Xujiahe reservoir, Shunbei Area II and Sichuan West Marine Phase, focus on operation optimisation and market development, and enhance the profitability of natural gas business. For the year, we plan to produce 280.15 million barrels of crude oil, of which 25.26 million barrels will be from abroad, and 1,450.3 billion cubic feet of natural gas. 16 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Business Review and Prospects BUSINESS REVIEW AND PROSPECTS (CONTINUED) Refining: The Company will focus on improving quality and profitability, adhere to the synergy between production and sales, and ensure the efficient operation of the industrial chain and the efficient utilisation of advantageous production capacity. We will give full play to the advantages of global of resources allocation, increase the differentiated procurement of crude oil and reduce the procurement cost; enhance the degree of crude oil processing intensification and promote the optimisation of regional resources; continue to optimise the crude throughput, utilization rate and product slate, and make every effort to increase the production of jet fuel; continue with the transition of low-cost “refined oil products to chemical feedstocks” and high-value “refined oil products to refining specialties” strategy, and promote the development of products such as lubricating grease, special wax and sustainable fuel, and build up an industry chain for high-end carbon material. The annual plan is to process 255 million tonnes of crude oil and produce 155 million tonnes of refined oil products. Marketing and Distribution: The Company will give full play to its advantages in integrated business, strengthen digital intelligence empowerment and enhance its comprehensive competitiveness. We will continue to coordinate procurement and sales, as well as volume and price to stabilise the scale of retail business; continue to optimise the network layout and forge the prime brand of LNG fuelling business; consolidate and enhance the advantages of low-sulphur bunker fuel production and sales, and actively expand the scale of business at home and abroad; deepen the application of big data analysis, and explore the value of data assets; expand hydrogen application scenarios, demonstrate and drive the utilisation of hydrogen, promote the development of the electricity business, and expand and extend the value chain of the electricity business; strengthen the building of our own brand, accelerate the expansion of the comprehensive service scenarios of EasyJoy, and accelerate the transition to an ‘petrol, gas, hydrogen, power and service’ comprehensive energy service provider. For the full year, the Company’s domestic marketing sales volume plan is 178 million tonnes. Chemicals: The Company will closely track changes in the chemical market, adhere to the ‘basic + high-end’ strategy, make every effort to reduce costs, expand the market, and tap potential for improving profitability. We will continue to promote the diversification of feedstocks and take various measures to reduce the feedstock cost; dynamically optimise the utilization rate, reduce the frequency of changing products in certain unit, and improve the gross margin of products; and intensify the development of new products and high value-added products, so as to expand the potential for profit creation. At the same time, we will meet the differentiated and tailor-made needs of our customers, increase the proportion of sales to strategic customers, increase the export of profitable products, and enhance the level of international operations. For the full year, we plan to produce 15.59 million tonnes of ethylene. Science and Technology Innovation: The Company will firmly implement the innovation-driven strategy, promote the deep integration of the innovation, industry, capital and talent, focus on key areas and make every effort to develop core technologies, and give full play to the supporting and leading role of scientific and technological innovation. We will intensify our research efforts in new fields such as shale oil and gas, deep coalbed methane, and offshore technologies, and promote the increase of oil and gas reserves and production. We will increase technological innovation in catalytic cracking, catalytic reforming, hydrogenation and other technologies to support low-cost “refined oil products to chemical feedstocks” and high-value “refined oil products to refining specialties” strategy. We will continue to enhance the technological advancement of basic organic feedstocks and synthetic materials, and accelerate the technological breakthrough of high-end materials. We will promote technological research in new fields such as deep geothermal energy, hydrogen energy and circular economy. We will carry out the ‘AI+’ action and promote the deep integration of artificial intelligence with the whole industrial chain. Capital Expenditures: In 2025, the Company’s capital expenditures is RMB164.3 billion. The capital expenditure in the E&P segment is RMB76.7 billion, which will be mainly used for the construction of crude oil production capacity in areas such as Jiyang and Tahe, the construction of natural gas production capacity in areas such as Dingshan-Dongxi and Western Sichuan, as well as oil and gas storage and transportation facilities. The capital expenditure in the refining segment is RMB22.3 billion, mainly for the projects such as the Guangzhou Petrochemical revamping and Maoming Refining upgrading projects. The capital expenditure in the marketing and distribution segment is RMB14.5 billion, mainly for the development of the comprehensive energy network, the renovation of the existing sales network, and projects related to non-fuel business. The capital expenditure in the chemical segment is RMB44.9 billion, mainly for ethylene projects in Maoming, Zhenhai and Qilu, and the aromatics project in Jiujiang. The capital expenditure for the corporate and others is RMB5.9 billion, mainly for R&D and digitalization projects, etc. 17 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Management’s Discussion and Analysis MANAGEMENT’S DISCUSSION AND ANALYSIS THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH THE COMPANY’S AUDITED FINANCIAL STATEMENTS AND THE ACCOMPANYING NOTES. PARTS OF THE FOLLOWING FINANCIAL DATA WERE ABSTRACTED FROM THE COMPANY’S AUDITED FINANCIAL STATEMENTS THAT HAVE BEEN PREPARED ACCORDING TO THE IFRS ACCOUNTING STANDARDS. THE PRICES IN THE FOLLOWING DISCUSSION DO NOT INCLUDE VALUE-ADDED TAX. 1 CONSOLIDATED RESULTS OF OPERATIONS In 2024, international crude oil price fluctuated with downward trends, domestic new energy substitution in traffic industry accelerated, new production capacity in the chemical market continued to release, and the gross profit of chemicals narrowed significantly. The Company made every effort to expand the market and sales, intensified the optimisation of the integration of production and operation, continued to strengthen cost and expense control, and took multiple measures to cope with the impact of market changes. The Company realised revenue of RMB3,074.6 billion, decreased by 4.3% year-on-year and operating profit of RMB70.7 billion, decreased by 18.6% year-on-year. The following table sets forth the main revenue and expenses from the Company’s consolidated financial statements: Year ended 31 December 2024 2023 Change (%) RMB million RMB million Revenue 3,074,562 3,212,215 (4.3) Revenue from primary business 3,015,321 3,146,873 (4.2) Other operating revenues 59,241 65,342 (9.3) Operating expenses (3,003,876) (3,125,387) (3.9) Purchased crude oil, products and operating supplies and expenses (2,449,614) (2,569,412) (4.7) Selling, general and administrative expenses (57,547) (59,575) (3.4) Depreciation, depletion and amortisation (120,714) (113,750) 6.1 Exploration expenses, including dry holes (9,375) (11,055) (15.2) Personnel expenses (110,187) (108,017) 2.0 Taxes other than income tax (267,315) (272,921) (2.1) Impairment (losses)/reversals on trade and other receivables (108) 243 – Other operating income/(expenses), net 10,984 9,100 20.7 Operating profit 70,686 86,828 (18.6) Net finance costs (11,174) (9,922) 12.6 Investment income and share of profits less losses from associates and joint ventures 9,630 7,028 37.0 Profit before taxation 69,142 83,934 (17.6) Income tax expense (12,966) (16,070) (19.3) Profit for the year 56,176 67,864 (17.2) Attributable to: Shareholders of the Company 48,939 58,310 (16.1) Non-controlling interests 7,237 9,554 (24.3) (1) Revenue In 2024, the Company’s revenue from primary business was RMB3,015.3 billion, representing a decrease of 4.2% year-on-year. This was mainly due to the decreased prices and sales volumes of products including refined oil products. The following table sets forth the external sales volume, average realised prices and respective rates of change of the Company’s major products in 2024 and 2023: Average realised price Sales volume (thousand tonnes) (RMB/tonne, RMB/thousand cubic meters) Year ended 31 December Change (%) Year ended 31 December Change (%) 2024 2023 2024 2023 Crude oil 7,728 7,237 6.8 3,896 3,962 (1.7) Natural gas (million cubic meters) 40,805 36,964 10.4 2,230 2,156 3.4 Gasoline 91,832 92,483 (0.7) 8,858 8,980 (1.4) Diesel 82,678 86,866 (4.8) 6,790 7,182 (5.5) Kerosene 27,856 25,962 7.3 5,497 5,948 (7.6) Basic chemical feedstock 37,667 36,605 2.9 5,830 5,743 1.5 Monomer and polymer for synthetic fibre 7,545 6,297 19.8 5,683 5,409 5.1 Synthetic resin 16,699 17,938 (6.9) 7,472 7,393 1.1 Synthetic fibre 1,289 1,172 10.0 7,685 7,779 (1.2) Synthetic rubber 1,407 1,455 (3.3) 12,438 10,545 18.0 Chemical fertiliser 397 753 (47.3) 2,168 2,636 (17.8) 18 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Management’s Discussion and Analysis MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) Most crude oil and a small portion of natural gas produced by the Company were internally used for refining and chemical production, with the remaining sold to external customers. In 2024, the turnover from crude oil, natural gas and other upstream products sold externally amounted to RMB175.8 billion (accounting for 5.7% of the Company’s revenue), down by 1.2% year-on-year. The change was mainly due to decreases in crude oil prices. In 2024, petroleum products (mainly consisting of refined oil products and other refined petroleum products) sold by Refining Segment and Marketing and Distribution Segment achieved external sales revenues of RMB1,831.2 billion (accounting for 59.6% of the Company’s revenue), representing a decrease of 5.0% over 2023, mainly due to the decreased sales volumes and prices of products including gasoline and diesel. The sales revenue of gasoline, diesel and kerosene was RMB1,527.9 billion (accounting for 83.4% of the total sales revenue of petroleum products), representing a decrease of 5.0% over 2023. Sales revenue of other refined petroleum products was RMB303.3 billion (accounting for 16.6% of the total sales revenue of petroleum products), representing a decrease of 4.8% compared with that of 2023. The Company’s external sales revenue of chemical products was RMB418.3 billion (accounting for 13.6% of the Company’s revenue), representing an increase of 1.7% over 2023. This was mainly due to increase in sales volumes and average prices of chemical products. (2) Operating expenses In 2024, the Company’s operating expenses was RMB3,003.9 billion, decreased by 3.9% compared with that of 2023. The operating expenses mainly consisted of the following: Purchased crude oil, products and operating supplies and expenses was RMB2,449.6 billion, representing a decrease of 4.7% over the same period of 2023, accounting for 81.5% of the total operating expenses, of which: Crude oil purchasing expenses was RMB909.5 billion, representing a decrease of 3.7% over the same period of 2023. Crude oil purchased externally used for processing in 2024 was 207.65 million tonnes (excluding the volume processed for third parties), representing a decrease of 2.3% over the same period of 2023. The average cost of processing crude oil purchased externally was RMB4,380 per tonne, representing a decrease by 1.4% over 2023. The Company’s other purchasing expenses was RMB1,540.1 billion, representing a decrease of 5.2% over the same period of 2023. This was mainly attributable to the decreased volumes and prices of outsourced refined oil products and traded crude oil. Selling, general and administrative expenses was RMB57.5 billion, representing a decrease of 3.4% over 2023, mainly because the Company further strengthened the control of non-productive expenses, and the marketing and management expenses were reduced. Depreciation, depletion and amortisation was RMB120.7 billion, representing an increase of 6.1% over the same period of 2023. This was mainly due to the increased scale of assets. Exploration expenses were RMB9.4 billion, representing a decrease of 15.2% compared with 2023. This was mainly attributed to the Company adjusted the structural of exploration investment and strengthened the intensity of unconventional oil and gas exploration with high success rate based on controlling overall exploration investment, which led to the reduction of related expenses. Personnel expenses were RMB110.2 billion, representing an increase of 2.0% over 2023. Taxes other than income tax were RMB267.3 billion, representing a decrease of 2.1% over the same period of 2023. That was mainly because that the Company centrally made provision for levy of mineral rights concessions for the past last year. Other operating income/(expenses), net was RMB11.0 billion, representing an increase of 20.7% over the same period of 2023. It was mainly attributable to increase in the income from the hedging business of commodity derivatives. (3) Operating profit was RMB70.7 billion, representing a decrease of 18.6% over the same period of 2023. This was mainly due to the decreased domestic sales volume and price of diesel and decreased gross profit of jet fuel and chemical products. 19 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Management’s Discussion and Analysis 2 RESULTS OF SEGMENT OPERATIONS The Company manages its operations through four business segments, namely exploration and production segment, refining segment, marketing and distribution segment and chemicals segment, and corporate and others. Unless otherwise specified, the inter-segment transactions have not been eliminated from financial data discussed in this section. In addition, the operating revenue data of each segment includes other operating revenues. The following table shows the operating revenues by each segment, the contribution of external sales and inter-segment sales as a percentage of operating revenues before elimination of inter-segment sales, and the contribution of external sales as a percentage of consolidated operating revenues (i.e. after elimination of inter-segment sales) for the periods indicated. 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 2024 2023 2024 2023 2024 2023 RMB million RMB million (%) (%) (%) (%) Exploration and Production Segment External sales* 179,952 183,316 3.3 3.2 5.9 5.7 Inter-segment sales 117,297 116,703 2.1 2.0 Operating revenues 297,249 300,019 5.4 5.2 Refining Segment External sales* 168,774 174,476 3.1 3.1 5.5 5.4 Inter-segment sales 1,312,728 1,355,310 24.0 23.7 Operating revenues 1,481,502 1,529,786 27.1 26.8 Marketing and Distribution Segment External sales* 1,707,021 1,800,486 31.2 31.6 55.5 56.1 Inter-segment sales 7,337 17,943 0.1 0.3 Operating revenues 1,714,358 1,818,429 31.3 31.9 Chemicals Segment External sales* 425,937 420,881 7.8 7.4 13.8 13.1 Inter-segment sales 97,925 94,426 1.8 1.7 Operating revenues 523,862 515,307 9.6 9.1 Corporate and Others External sales* 592,878 633,056 10.8 11.1 19.3 19.7 Inter-segment sales 864,348 905,264 15.8 15.9 Operating revenues 1,457,226 1,538,320 26.6 27.0 Operating revenue before elimination of inter-segment sales 5,474,197 5,701,861 100.0 100.0 Elimination of inter-segment sales (2,399,635) (2,489,646) Revenue 3,074,562 3,212,215 100.0 100.0 * Other operating revenues are included. (4) Investment income and share of profits less losses from associates and joint ventures was RMB9.6 billion, up by 37.0% year-on-year. It was mainly attributable to improvement in performance of some associates and joint ventures. (5) Profit before taxation was RMB69.1 billion, representing a decrease of 17.6% compared with 2023. (6) Income tax expense was RMB13.0 billion, representing a decrease of 19.3% year-on- year. (7) Profit attributable to non-controlling shareholders was RMB7.2 billion, representing a decrease of 24.3% over the same period of 2023. (8) Profit attributable to shareholders of the Company was RMB48.9 billion, representing a year-on-year decrease of 16.1%. 20 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Management’s Discussion and Analysis MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) The following table sets forth the operating revenues, operating expenses and operating profit by each segment before elimination of the inter-segment transactions for the periods indicated, and the percentage change of 2024 compared to 2023. Year ended 31 December 2024 2023 Change RMB million RMB million (%) Exploration and Production Segment Operating revenues 297,249 300,019 (0.9) Operating expenses 240,864 255,056 (5.6) Operating profit 56,385 44,963 25.4 Refining Segment Operating revenues 1,481,502 1,529,786 (3.2) Operating expenses 1,474,788 1,509,178 (2.3) Operating profit 6,714 20,608 (67.4) Marketing and Distribution Segment Operating revenues 1,714,358 1,818,429 (5.7) Operating expenses 1,695,712 1,792,490 (5.4) Operating profit 18,646 25,939 (28.1) Chemicals Segment Operating revenues 523,862 515,307 1.7 Operating expenses 533,859 521,343 2.4 Operating loss (9,997) (6,036) – Corporate and Others Operating revenues 1,457,226 1,538,320 (5.3) Operating expenses 1,457,658 1,537,716 (5.2) Operating (loss)/profit (432) 604 – Elimination of inter-segment (profit)/loss (630) 750 – (1) Exploration and Production Segment Most crude oil and a small portion of the natural gas produced by the exploration and production segment were used for the Company’s refining and chemical production. Most of the natural gas and a small portion of crude oil were sold externally to other customers. In 2024, the operating revenue of this segment was RMB297.2 billion, representing a decrease of 0.9% over 2023. This was mainly attributable to the decrease in crude oil prices. In 2024, the segment sold 34.52 million tonnes of crude oil, representing an increase of 0.4% over 2023. Natural gas sales volume was 35.6 billion cubic meters (bcm), representing an increase of 6.5% over 2023. Regasified LNG sales volume was 15.0 bcm, representing a decrease of 12.4% over 2023. LNG sales volume was 3.00 million tonnes, representing an increase of 112.3% over 2023. Average realised prices of crude oil, natural gas, regasified LNG, and LNG were RMB3,767 per tonne, RMB1,802 per thousand cubic meters, RMB3,385 per thousand cubic meters, and RMB3,954 per tonne, respectively, representing a decrease of 1.7%, an increase of 1.5%, a decrease of 4.9%, and a decrease of 4.4% respectively over 2023. In 2024, the operating expenses of this segment were RMB240.9 billion, representing a decrease of 5.6% over 2023. That was mainly because that imported LNG procurement cost decreased by RMB6.4 billion year-on- year; taxes including special oil gain levy and levy for mineral rights concessions decreased by RMB6.1 billion year-on- year; exploration expense decreased by RMB1.7 billion year-on-year. In 2024, the oil and gas lifting cost was RMB745.4 per tonne, representing a decrease of 1.3% year-on-year. In 2024, this segment seized the opportunity of relative high crude oil prices, intensified high-quality exploration, strengthened the integration of the whole natural gas industry chain, and spared no efforts to increase reserves, boost production, cut cost, and improve profit, achieving operating profit of RMB56.4 billion, with an increase of RMB11.4 billion and 25.4% over 2023. (2) Refining Segment Business activities of the refining segment include purchasing crude oil from third parties and the exploration and production segment of the Company, as well as processing crude oil into refined petroleum products. Most of gasoline, diesel and kerosene were sold internally to the marketing and distribution segment of the Company; part of the chemical feedstock was sold internally to the chemicals segment of the Company; and other refined petroleum products were sold externally to both domestic and overseas customers. In 2024, the operating revenue of this segment was RMB1,481.5 billion, representing a decrease of 3.2% over 2023. This was mainly due to the decreased prices of refined oil products year-on-year resulting from decreased price of international crude oil, and decreased sales volume of diesel year-on-year. 21 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Management’s Discussion and Analysis The following table sets forth the sales volumes, average realised prices and the respective changes of the refined oil products of the segment in 2024 and 2023. Sales Volume (thousand tonnes) Average realised price (RMB/tonne) Year ended 31 December Change (%) Year ended 31 December Change (%) 2024 2023 2024 2023 Gasoline 62,642 60,926 2.8 8,409 8,494 (1.0) Diesel 56,310 61,807 (8.9) 6,725 6,872 (2.1) Kerosene 23,834 23,097 3.2 5,501 5,884 (6.5) Chemical feedstock 40,353 42,035 (4.0) 4,692 4,473 4.9 Other refined petroleum products 64,986 67,321 (3.5) 3,880 3,859 0.5 In 2024, sales revenue of gasoline was RMB526.8 billion, representing an increase of 1.8% over 2023. The sales revenue of diesel was RMB378.7 billion, representing a decrease of 10.8% over 2023. The sales revenue of kerosene was RMB131.1 billion, representing a decrease of 3.5% over 2023. The sales revenue of chemical feedstock was RMB189.3 billion, representing an increase of 0.7% over 2023. The sales revenue of refined petroleum products other than gasoline, diesel, kerosene and chemical feedstock was RMB252.1 billion, representing a decrease of 3.0% over 2023. In 2024, the segment’s operating expense was RMB1,474.8 billion, representing a decrease of 2.3% over 2023 which was mainly attributable to a decrease in the crude oil and refining feedstock procurement cost. In 2024, the average processing cost for crude oil and refining feedstock was RMB4,408 per tonne, representing a decrease of 1.5% over 2023. Total crude oil and refining feedstock processed was 256.95 million tonnes (excluding volume processed for third parties), representing a decrease of 2.1% over 2023. The total cost of crude oil and refining feedstock processed was RMB1,132.7 billion, representing a decrease of 3.6% over 2023. In 2024, refining margin was RMB304 per tonne, representing a decrease of RMB49 per tonne compared with that of the same period of 2023. This was mainly attributable to the decrease in domestic cracking spread of jet fuel, and increase in procurement of imported crude oil due to difference of foreign exchange rate. In 2024, the refining unit cash operating cost (defined as operating expenses less the processing cost of crude oil and refining feedstock, depreciation and amortisation, taxes other than income tax and other operating expenses, then divided by the throughput of crude oil and refining feedstock) was RMB209 per tonne, representing a decrease of 1.6% over 2023, which was mainly attributable to the year-on-year decrease in costs of power and maintenance. In 2024, the segment continued to intensify efforts in optimization of the industrial chain and regional integration, coordinated cost-effective crude oil procurement based on the demand of industrial chain, dynamically adjusted utilisation rate and product slate, strengthened cost and expense control. Impacted by factors including the decrease in crack spread of jet fuel, and increase in procurement of imported crude oil due to difference of the foreign exchange rate, the segment realised an operating profit of RMB6.7 billion, decreased by RMB13.9 billion or 67.4% year-on-year. (3) Marketing and Distribution Segment The business activities of the marketing and distribution segment include purchasing refined oil products from the refining segment and the third parties, conducting direct sales and wholesale to domestic customers and retailing, distributing oil products through the segment’s retail and distribution network as well as providing related services and selling convenience store products, new energy products and providing related services. In 2024, the operating revenues of this segment were RMB1,714.4 billion, down by 5.7% year-on-year. This was mainly attributable to weak demand for refined oil products, the decrease in the Company’s sales volume of refined oil products and the decreased prices of refined oil products resulting from decreased price of crude oil. The sales revenues of gasoline totalled RMB813.8 billion, down by 2.1% year-on-year; the sales revenues of diesel were RMB562.8 billion, down by 10.1% year-on-year; the sales revenues of kerosene were RMB153.0 billion, down by 1.1% year-on-year; the sales revenues of natural gas were RMB29.5 billion, up by 29.8% year-on-year. 22 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Management’s Discussion and Analysis MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) In 2024, the operating expenses of the segment were RMB1,695.7 billion, down by RMB96.8 billion or 5.4% year-on-year. This was mainly due to a year-on-year decreased procurement cost of refined oil products. In 2024, the segment’s marketing expense (defined as the operating expenses less the purchase costs, taxes other than income tax, depreciation and amortization, divided by sales volume) was RMB194.2 per tonne, up by 0.4% year-on-year. This was mainly due to the decrease in domestic refined oil products sales volume. In 2024, the gross profit of non-fuel business of this segment was RMB11.5 billion, representing an increase of RMB0.9 billion year-on-year, among which, gross profit of selling convenience store products and providing related services was RMB11.1 billion, up by RMB0.52 billion year-on-year, mainly due to the Company actively responded to market changes, and enriched Easy Joy’s service scope. Gross profit of EV charging business was RMB0.43 billion, up by 20 times year-on-year, mainly attributed to the growth of business scale. The charging volume reached 1.8 billion kilowatt-hours, increasing by 21 times year-on-year. The profit of non-fuel business of this segment was RMB4.7 billion, representing an increase of RMB0.1 billion year-on-year. In 2024, facing complex market environment, the segment strived to maintain the market share of refined oil products, actively explored new business models including EV charging, battery swapping and non-fuel business, and promoted transition and development on all fronts to offset the impact of factors including new energy and vehicle LNG substitution. The segment realised an operating profit of RMB18.6 billion, representing a decrease of RMB7.3 billion year-on-year, down by 28.1% year-on-year. (4) Chemicals segment The business activities of the chemicals segment include purchasing chemical feedstock from the refining segment and the third parties and producing, marketing and distributing petrochemical and inorganic chemical products. In 2024, the operating revenue of this segment was RMB523.9 billion, up by 1.7% year-on-year. This was mainly due to the increase in sales volume and prices of chemical products year-on-year. In 2024, the sales revenue generated by the segment’s six major categories of chemical products (namely basic organic chemicals, synthetic resin, synthetic fiber monomer and polymer, synthetic fibre, synthetic rubber, and chemical fertiliser) was RMB485.4 billion, up by 2.0% year-on-year, accounting for 92.7% of the operating revenues of the segment. The following table sets forth the sales volume, average realised prices and respective changes of each of the segment’s six categories of chemical products in 2024 and 2023. Sales Volume (thousand tonnes) Average realised price (RMB/tonne) Year ended 31 December Change (%) Year ended 31 December Change (%) 2024 2023 2024 2023 Basic organic chemicals 50,274 49,202 2.2 5,752 5,740 0.2 Synthetic fibre monomer and polymer 7,582 6,350 19.4 5,682 5,416 4.9 Synthetic resin 16,705 17,941 (6.9) 7,472 7,393 1.1 Synthetic fibre 1,289 1,172 10.0 7,688 7,779 (1.2) Synthetic rubber 1,410 1,456 (3.2) 12,443 10,551 17.9 Chemical fertiliser 442 800 (44.8) 2,130 2,619 (18.7) The following table sets forth the sales volumes, average realised prices and respective percentage changes of the segment’s five major refined oil products in 2024 and 2023, including detailed information about retail, direct sales and distribution of gasoline and diesel: Sales volume (thousand tonnes) Average realised price (RMB/tonne) Year ended 31 December Change (%) Year ended 31 December Change (%) 2024 2023 2024 2023 Gasoline 91,877 92,595 (0.8) 8,857 8,978 (1.3) Retail 64,271 65,833 (2.4) 9,402 9,453 (0.5) Direct sales and distribution 27,606 26,762 3.2 7,588 7,808 (2.8) Diesel 82,890 87,141 (4.9) 6,789 7,181 (5.5) Retail 32,474 36,772 (11.7) 7,366 7,673 (4.0) Direct sales and distribution 50,415 50,368 0.1 6,418 6,822 (5.9) Kerosene 27,842 26,045 6.9 5,496 5,941 (7.5) Fuel oil 26,716 31,996 (16.5) 3,972 3,985 (0.3) Natural gas 6,609 4,756 39.0 4,460 4,774 (6.6) 23 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Management’s Discussion and Analysis 3 ASSETS, LIABILITIES, EQUITY AND CASH FLOWS The major funding sources of the Company are its operating activities and short-term and long-term loans. The major use of funds includes operating expenses, capital expenditures, and repayment of the short-term and long-term debts. (1) Assets, liabilities and equity Unit: RMB million As of 31 December 2024 As of 31 December 2023 Change Total assets 2,081,440 2,024,696 56,744 Current assets 524,515 534,435 (9,920) Non-current assets 1,556,925 1,490,261 66,664 Total liabilities 1,109,293 1,068,887 40,406 Current liabilities 673,237 647,076 26,161 Non-current liabilities 436,056 421,811 14,245 Total equity attributable to shareholders of the Company 815,815 802,989 12,826 Share capital 121,282 119,349 1,933 Reserves 694,533 683,640 10,893 Non-controlling interests 156,332 152,820 3,512 Total equity 972,147 955,809 16,338 In 2024, the operating expenses of the chemicals segment were RMB533.9 billion, representing an increase of 2.4% over 2023, mainly due to increased procurement cost of chemical feedstock including naphtha, etc. In 2024, the segment closely followed the market trend, deepened integration of production, marketing and research, optimised the structure of feedstock, facilities and products, improved resource allocation efficiency and proportion of high value-added products, and enhanced cost control including feedstock, fuel, and power. Impacted by newly added domestic chemicals capacity and significant narrowed chemical product margin, the operating loss of the segment was RMB10.0 billion, the performance down by RMB4.0 billion year-on-year. (5) Corporate and Others The business activities of corporate and others mainly consist of import and export business activities of the Company’s subsidiaries, R&D activities of the Company, and managerial activities of headquarters. In 2024, the operating revenue generated from corporate and others was approximately RMB1,457.2 billion, representing a decrease of 5.3% over 2023. This was mainly attributed to the decrease in the trading volume and prices of crude oil. In 2024, the operating expense of corporate and others was RMB1,457.7 billion, representing a decrease of 5.2% over 2023. In 2024, the operating loss from corporate and others was RMB0.4 billion. 24 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Management’s Discussion and Analysis MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) (2) Cash Flow The following table sets forth the major items in the consolidated cash flow statements for 2024 and 2023. Unit: RMB million Year ended 31 December Major items of cash flows 2024 2023 Net cash generated from operating activities 149,360 161,475 Net cash used in investing activities (161,240) (155,865) Net cash (used in)/generated from financing activities (19,237) 22,732 As of 31 December 2024, the Company’s total assets were RMB2,081.4 billion, representing an increase of RMB56.7 billion compared with that of the end of 2023, of which: Current assets were RMB524.5 billion, representing a decrease of RMB9.9 billion compared with that of the end of 2023, mainly because inventories increased by RMB5.7 billion as well as cash and cash equivalents and time deposits with financial institutions decreased by RMB18.0 billion. Non-current assets were RMB1,556.9 billion, representing an increase of RMB66.7 billion compared with that of the end of 2023. This was mainly because that the Company promoted transition and upgrading, and increased investments in refining and chemical clusters construction, thus, property, plant and equipment and construction in progress increased by RMB54.7 billion. In addition, the Company enhanced cooperation with foreign enterprises, and equity in associates and joint ventures up by RMB10.9 billion. The Company’s total liabilities were RMB1,109.3 billion, representing an increase of RMB40.4 billion compared with that of the end of 2023, of which: Current liabilities were RMB673.2 billion, representing an increase of RMB26.2 billion as compared with that of the end of 2023. This was mainly due to certain long-term loans being reclassified to non-current liabilities due within one year. Non-current liabilities were RMB436.1 billion, representing an increase of RMB14.2 billion compared with that of the end of 2023. This was mainly due to the issuance of low-cost and long-term bond financing. Total equity attributable to owners of the Company was RMB815.8 billion, representing an increase of RMB12.8 billion compared with that of the end of 2023. 25 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Management’s Discussion and Analysis Items relevant to measurement of fair values Unit: RMB million Items Amount at the beginning of the year Amount at the 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 Purchase amount in the current year Sell or redemption amount in the current year Other changes Financial assets held for trading 3 4 1 – – – 86 (86) – Fund 3 4 1 – – – – – – Derivative financial instruments and cash flow hedges 6,969 (858) 805 (1,193) – – – (7,439) – Receivables financing 2,221 2,613 – – – – 72,154 (71,762) – Other equity instrument investments 450 416 – (8) – – – (14) (12) Total 9,643 2,175 806 (1,201) – – 72,240 (79,301) (12) In 2024, the Company traded in commodity and currency derivatives according to the Annual Business Plan for Financial Derivatives approved by the Board. Such business met the regulatory requirements of financial derivatives, operated in a standardized manner, and achieved the goals of suppressing price fluctuation, stabilising operating profit, and preventing market risks. In 2024, the net cash generated from operating activities of the Company was RMB149.4 billion, representing a decrease of RMB12.1 billion over 2023. This was mainly due to the decrease of net profit. In 2024, the Company’s net cash used in investing activities was RMB161.2 billion, representing an increase of cash outflow of RMB5.4 billion year-on-year. This was mainly because that the Company enhanced cooperation with foreign enterprises with investment on associates and joint ventures up by RMB4.7 billion year-on-year, In 2024, the Company’s net cash used in financing activities was RMB19.2 billion, representing an increase of cash outflow of RMB42.0 billion year-on-year. This was mainly due to a year-on-year decrease of cash inflow of RMB55.1 billion resulting from net change of interest-bearing debt, and an increase of cash inflow of RMB12.0 billion from issuance of shares to the target subscriber. At the end of 2024, the cash and cash equivalents were RMB91.3 billion. (3) Contingent Liabilities Please refer to “Material Guarantee Contracts and their Performance” in the Chapter “Significant Events” of this report (4) Capital Expenditure Please refer to “Capital Expenditure” in the Chapter “Business Review and Prospects” of this report. (5) Research & Development and Environmental Expenditures R&D expenditures include related expenses and investment cost occurred in the period. In 2024, the expenditures for R&D were RMB23.6 billion, of which expense was RMB15.2 billion, and investment cost was RMB8.4 billion. Environmental expenditures refer to the normal routine pollutant discharge fees paid by the Company, excluding capitalised cost of pollutant treatment properties. In 2024, the Company paid environmental expenditures of RMB18.4 billion. (6) Measurement of fair values of derivatives and relevant system The Company has established sound decision-making mechanism, continued improving business process and internal control systems relevant to financial instrument accounting and information disclosure. The following table sets out the items relevant to measurement of fair values. 26 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Management’s Discussion and Analysis MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) 4 ANALYSIS OF FINANCIAL STATEMENTS PREPARED UNDER CASs The major differences between the Company’s financial statements prepared under CASs and IFRS Accounting Standards are set out in Section C of the financial statements of the Company on page 213 of this report. (1) Under CASs, the operating income and operating profit or loss by reportable segments were as follows: For the year ended 31 December 2024 2023 RMB million RMB million Operating income Exploration and Production Segment 297,249 300,019 Refining Segment 1,481,502 1,529,786 Marketing and Distribution Segment 1,714,358 1,818,429 Chemicals Segment 523,862 515,307 Corporate and Others 1,457,226 1,538,320 Elimination of inter-segment sales (2,399,635) (2,489,646) Consolidated operating income 3,074,562 3,212,215 Operating profit/(loss) Exploration and Production Segment 49,058 37,976 Refining Segment 6,303 19,358 Marketing and Distribution Segment 17,698 25,531 Chemicals Segment (14,046) (10,273) Corporate and Others (914) 1,915 Elimination (630) 750 Financial expenses, investment income and losses/gains from changes in fair value 14,788 11,487 Consolidated operating profit 72,257 86,744 Net profit attributable to equity shareholders of the Company 50,313 60,463 Operating profit: In 2024, the operating profit of the Company was RMB72.3 billion, representing a decrease of RMB14.5 billion as compared with that of 2023. Net profit: In 2024, the net profit attributable to the equity shareholders of the Company was RMB50.3 billion, representing a decrease of RMB10.2 billion or 16.8% compared with 2023. 27 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Management’s Discussion and Analysis (2) Financial data prepared under CASs As of 31 December 2024 As of 31 December 2023 Change RMB million RMB million Total assets 2,084,771 2,026,674 58,097 Non-current liabilities 435,241 420,943 14,298 Shareholder’s equity 976,293 958,655 17,638 Change analysis: At the end of 2024, the Company’s total assets were RMB2,084.8 billion, representing an increase of RMB58.1 billion compared with that of the end of 2023. This was mainly due to fixed assets and construction in progress increased by RMB54.6 billion resulting from increase on investment in transition and upgrading. At the end of 2024, the Company’s non-current liabilities were RMB435.2 billion, representing an increase of RMB14.3 billion compared with that of the end of 2023. This was mainly due to the issuance of low-interest long-term bond financing. At the end of 2024, total shareholders’ equity of the Company was RMB976.3 billion, representing an increase of RMB17.6 billion compared with that of the end of 2023. (3) The results of the principal operations by segments Segments Operation income RMB million Operation cost RMB million Gross profit margin* (%) Increase/ (decrease) of operation income on a year-on-year basis (%) Increase/ (decrease) of operation cost on a year-on-year basis (%) Increase/ (decrease) of gross profit margin on a year-on-year basis (%) Exploration and Production 297,249 202,388 25.2 (0.9) (2.5) 3.1 Refining 1,481,502 1,216,284 1.6 (3.2) (3.0) (0.8) Marketing and Distribution 1,714,358 1,624,356 5.1 (5.7) (5.6) (0.1) Chemicals 523,862 517,448 0.9 1.7 3.1 (0.9) Corporate and Others 1,457,226 1,437,464 1.3 (5.3) (5.2) (0.1) Elimination of inter-segment sales (2,399,635) (2,399,005) N/A N/A N/A N/A Total 3,074,562 2,598,935 6.8 (4.3) (4.1) (0.3) * : 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 For details, please refer to Note 3(27) to the financial statements prepared in accordance with CASs and Note 1 to the financial statement prepared in accordance with IFRS Accounting Standards. Annual Report 2024 Corporate Governance, Environment and Society CORPORATE GOVERNANCE, ENVIRONMENT AND SOCIETY 1 IMPROVEMENTS IN CORPORATE GOVERNANCE DURING THE REPORTING PERIOD During the reporting period, Sinopec Corp. complied with the Articles of Association as well as domestic and overseas laws and regulations, adhered to the standard operation, operated in compliance with laws and continuously improved the level of corporate governance. Sinopec Corp. completed the re-election of the Board and Supervisory Committee, adjusted the members of the Board Committees, improved the diversity of the Board, and appointed the Senior Management. Sinopec Corp. attached great importance to shareholder returns, formulated and released the “Corporate Value and Return Enhancement Action Plan” for the year 2024 and the Dividend Distribution and Return Plan for Shareholders for the Next Three Years (2024-2026) to maintain high cash dividends payout ratio. For the third consecutive year, Sinopec Corp. repurchased shares both domestically and overseas to increase the corporate value and shareholders’ interests. The Independent Directors conscientiously fulfilled their duties, played a positive role in “participation in decision-making, supervision checks and balances, professional consultation”, reviewed proposals with due care, conducted thematic research on the upstream, midstream, and downstream industry chains, and offered advice and suggestions on Company’s reforms and development. Sinopec Corp. revised the Articles of Association, the Rules and Procedures for Board of Directors’ Meetings, as well as the Rules and Procedures of Supervisory Committee’s Meetings based on the actual needs of the Company. It improved the internal control system and promoted the effectiveness of the implementation of internal control system continuously. It improved the Company’s transparency by focusing on value orientation and high-quality information disclosure, and continuously obtained A-level rating of SSE for information disclosure. It expanded the breadth and depth of investor communication, improved communication effectiveness and received favorable market feedback. It strengthened ESG management, enhanced the ecological environmental protection, steadily advanced the Action Plan for Carbon Dioxide Peaking, and initiated the second phase of the Green Enterprise Action plan. It carried out the annual safety management improvement campaign and consolidated the favorable trend of safe and stable operation. It made high-quality contribution to rural revitalization, and actively fulfilled its social responsibility. It boosted the enthusiasm of employees and enhanced the discipline inspection and supervision by giving full play to the advantages of Party building, which contributed to the effective implementation of the Board resolutions and the high-quality development of the Company. During the reporting period, there was no material inconsistency between Sinopec Corp.’s corporate governance and the requirements of the PRC Company Law and relevant regulations of the CSRC. Supervisory Committee of Sinopec Corp. had no objection to any of the supervised matters. None of Sinopec Corp., the Board, the Directors, the Supervisors, the Senior Management, the controlling shareholder or de facto controller of Sinopec Corp. was under the investigation by the CSRC or received any regulatory sanction or was criticised publicly by the CSRC, the Hong Kong Securities and Futures Commission or received any public censure from SSE or Hong Kong Stock Exchange. 2 GENERAL MEETINGS During the reporting period, Sinopec Corp. convened 2023 Annual General Meeting (AGM), First A Shareholders Class Meeting for 2024 and First H Shareholders Class Meeting for 2024 on 28 June 2024, and 2024 First Extraordinary General Meeting (EGM) on 22 October 2024, strictly in accordance with the required procedures of noticing, convening and holding the general meetings pursuant to the relevant laws and regulations and the Articles of Association. For details of the meetings, please refer to the poll results announcements published on China Securities Journal, Shanghai Securities News, Securities Times and the website of SSE on 29 June and 23 October 2024, respectively, as well as those published on the website of Hong Kong Stock Exchange on 28 June and 22 October 2024, respectively. 3 EQUITY INTERESTS HELD BY DIRECTORS, SUPERVISORS AND OTHER SENIOR MANAGEMENT As of 31 December 2024, none of the Directors, Supervisors and Senior Management of Sinopec Corp. and their respective associates had any interests or short positions (including any interests or short positions that are regarded or treated as being held in accordance with the Securities and Futures Ordinance (SFO)) in any shares, underlying shares or debentures of Sinopec Corp. or any associated corporations (as defined in Part XV of the SFO), as recorded in the registry pursuant to Section 352 of the SFO or as otherwise notified to Sinopec Corp. and the Hong Kong Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies (Model Code) contained in the Hong Kong Listing Rules. As required under the Hong Kong Listing Rules, Sinopec Corp. has formulated Rules Governing Shares and Changes in Shares of the Company Held by Directors, Supervisors and Senior Management and Rules on Insider Registration and Management (collectively, Rules) to regulate securities transactions by relevant personnel. The standards of the Rules above-mentioned are no less strict than those set out in the Model Code. Upon the specific inquiries made by Sinopec Corp., all the Directors confirmed that they had complied with the required standards in the Model Code as well as those set out in the Rules during the reporting period. 4 COMPANY’S INDEPENDENCE FROM CONTROLLING SHAREHOLDER The Company is independent from its controlling shareholder in terms of, among other matters, business, assets and finances. The controlling shareholder of the Company exercised shareholder’s rights through the general meeting according to applicable laws and didn’t overstep the authority of the general meeting or directly or indirectly interfere with the Company’s operating decisions and operating activities. The Company has well-integrated independent businesses and independent operating capabilities. During the reporting period, the Company did not identify the controlling shareholder taking advantage of its special position to misappropriate and damage the interests of the Company or other shareholders. 28 CHINA PETROLEUM & CHEMICAL CORPORATION Corporate Governance, Environment and Society 5 COMPETITION BETWEEN SINOPEC CORP. AND ITS CONTROLLING SHAREHOLDER Please refer to “Performance of the Undertakings by Relevant Entities” under the Chapter “Significant Events” for details. 6 IMPROVEMENT AND IMPLEMENTATION OF THE INTERNAL CONTROL SYSTEM For details of internal control self-assessment and internal control auditing, please refer to the internal control assessment report and the internal control auditing report disclosed by Sinopec Corp. on the same date of this annual report. 7 MANAGEMENT CONTROL OF SUBSIDIARIES The Company implements standardized control over different types of subsidiaries in accordance with laws and regulations, the Articles of Association and the internal control system. During the reporting period, the Company did not acquire any subsidiaries that met material criteria, and exists no abnormalities in the management and control of subsidiaries. 8 SENIOR MANAGEMENT APPRAISAL AND INCENTIVE SCHEMES Sinopec Corp. has established and is continuously improving the fairness and transparency of its performance appraisal standards, incentive and restrictive mechanisms for Directors, Supervisors and other Senior Management. Sinopec Corp. has implemented incentive policies including the Measures of Sinopec Corp. for the Management of Performance Evaluations. 9 CORPORATE GOVERNANCE REPORT (IN ACCORDANCE WITH HONG KONG LISTING RULES) (1) Compliance with the Corporate Governance Code During the reporting period, Sinopec Corp. complied with all code provisions of the Corporate Governance Code set out in Appendix C1 of the Hong Kong Listing Rules. A. CORPORATE PURPOSE, STRATEGY AND GOVERNANCE A.1 Corporate Strategy, Business Model and Culture a. The Board of Sinopec Corp. has always adhered to the underlying principle of pursuing progress while ensuring stability, applied the new development philosophy fully, accurately and comprehensively, scientifically formulated the medium-term and long-term development strategy, facilitated the implementation of the strategy, actively promoted the high-quality development, and continuously created value for the stakeholders. b. Sinopec Corp. attaches great importance to the construction of corporate culture. In the long process of reform and development, the Company has cultivated and formed its corporate culture, comprising the enterprise spirit of “loving China, strengthening the petrochemical industry”, as well as such fine traditions as being hardworking, meticulous and rigorous. The Company strives to provide more cutting-edge technologies, premium products and quality services. The relevant content is published on Sinopec Corp.’s website at http://www.sinopec.com. A.2 Corporate Governance Functions a. The Board of Sinopec Corp. is responsible for performing duties of corporate governance, formulating and approving relevant corporate governance rules, adhering to the standard operation, improving the corporate governance, ensuring that the Company complies with laws, regulations and domestic and overseas regulatory rules, and disclosing the Company’s compliance with the Corporate Governance Code in the Corporate Governance Report. b. The Board arranged training sessions for Directors, Supervisors and Senior Management, and made relevant records. During the reporting period, the Directors, Supervisors and Senior Management of Sinopec Corp. actively participated in the trainings and attached great importance to continuing professional development to ensure that their contribution to the Sinopec Corp. remains informed and relevant. The current Directors’ attendance to the trainings is as follows: Laws and regulations update Accounting/finance/operational management Name Positions Reading materials Training and lectures Reading materials Research Ma Yongsheng Chairman, Non-executive Director √ √ √ √ Zhao Dong Vice Chairman, Executive Director, President √ √ √ √ Zhong Ren Non-executive Director √ √ √ √ Li Yonglin Executive Director, Senior Vice President √ √ √ √ Lv Lianggong Executive Director, Senior Vice President √ √ √ √ Niu Shuanwen Executive Director, Senior Vice President √ √ √ √ Wan Tao Executive Director, Senior Vice President √ √ √ √ Yu Baocai Executive Director, Senior Vice President √ √ √ √ Xu Lin Independent Non-executive Director √ √ √ √ Zhang Liying Independent Non-executive Director √ √ √ √ Liu Tsz Bun Bennett Independent Non-executive Director √ √ √ √ Zhang Xiliang Independent Non-executive Director √ √ √ √ 29 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Annual Report 2024 Corporate Governance, Environment and Society CORPORATE GOVERNANCE, ENVIRONMENT AND SOCIETY (CONTINUED) B. BOARD COMPOSITION AND NOMINATION B.1 Board Composition, Succession and Evaluation a. The Board of Sinopec Corp. is the decision-making body of Sinopec Corp. and abides by sound corporate governance practices and procedures. All decisions made by the Board are implemented by the Management of Sinopec Corp. b. The Board of Sinopec Corp. currently consists of twelve members, among whom there are six Executive Directors and six Non-executive Directors. Among the Non-executive Directors, there are four Independent Non-executive Directors, accounting for approximately 33% of the total number of the Board. c. Each of the Independent Non-executive Directors has conducted independence self-examination and submitted a letter of annual confirmation to the Company, regarding their compliance with relevant independence requirements set out in Rule 3.13 of the Hong Kong Listing Rules. The Board of Sinopec Corp. considers that each of the Independent Non-executive Directors is independent. The composition and operational mechanism of the Board of Sinopec Corp. ensure that independent and objective views and input are available to the Board. The Board reviews and evaluates the effectiveness of such operational mechanism on an annual basis. d. The Board of Sinopec Corp. 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 factors in relation to the diversity of the Board, including but not limited to professional experience, skills, knowledge, term of office, regions, culture 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 has a proper balance between continuous experience and new thinking, and enhance the level of diversity. Sinopec Corp. annually reviews the implementation of the Board Diversity Policy. Currently, the Board achieved the diversity in terms of gender, culture, educational background and professional expertise. The Directors come from different industries domestically and abroad with rich professional experience, including petroleum and petrochemical corporate management, as well as industrial policy, finance, new energy and electricity, accounting, internal control and risk management, energy and environmental economics, etc., which are conductive to strategic planning and scientific decision-making. The Board and the Nomination Committee endeavor to look for potential female Director candidates matching development needs of the Company through self-regulatory organisations, professional recommendation and other channels to ensure gender diversity of the Board. Currently, female Director accounts for 8% of the Board members, and has achieved the numerical targets of at least one female Director. Sinopec Corp. has always devoted to establishing a workplace with diversity and equal opportunities, recruited female employees actively to increase the diversity of the team, and provided equal employment opportunities and environment for all employees, so as to offer them career development spaces to give full play to their personal characteristics and values. In 2024, female employees in the Company account for 29.9% of the total employees. The Company adheres to the doctrine of gender equality, ensuring female employees have equal labor and social security rights as male employees. For details, please refer to the 2024 Sustainability Report of Sinopec Corp. B.2 Appointment, Re-election and Removal a. The term of office for each Director is three years, and the consecutive terms of office of any Independent Non-executive Director cannot exceed six years. In June 2024, Mr. Ma Yongsheng, Mr. Zhao Dong, Mr. Zhong Ren, Mr. Li Yonglin, Mr. Lv Lianggong, Mr. Niu Shuanwen, Mr. Wan Tao, Mr. Yu Baocai, Mr. Xu Lin, Ms. Zhang Liying, Mr. Liu Tsz Bun Bennett and Mr. Zhang Xiliang, nominated by the Board as the candidates for the ninth session of the Board based on the actual needs of the Company, were elected as Directors of the Company by general meeting. For details about the tenure of each Director, please refer to the item 11 under this chapter. b. All Directors of Sinopec Corp. must be elected at the general meeting of shareholders. The Board has no power to appoint temporary Directors. c. Each of the Directors was able to devote sufficient time and effort to handling the affairs of Sinopec Corp. B.3 Nomination Committee a. The Board of Sinopec Corp. established the Nomination Committee, consisting of the Independent Non-executive Director, Ms. Zhang Liying, who serves as the Chairwoman, and the Chairman of the Board, Mr. Ma Yongsheng, and the Independent Non-executive Director, Mr. Liu Tsz Bun Bennett, who serve as members. The principal responsibilities of the 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. When recommending candidates for Directors, the Nomination Committee mainly considers the skills, knowledge, experience and qualifications of the candidates, and also evaluates the time and energy they can devote as well as the Board Diversity Policy. Procedures for Nomination of Director of Sinopec Corp. and Terms of Reference of the Nomination Committee are published on Sinopec Corp.’s website at http://www.sinopec.com. 30 CHINA PETROLEUM & CHEMICAL CORPORATION Corporate Governance, Environment and Society b. The Nomination Committee can engage professionals when performing its 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 members to provide advice. The working expenses of the Nomination Committee are included in the budget of Sinopec Corp. c. During the reporting period, the Nomination Committee held four meetings (please refer to “The Board Committees Meetings and the Special Meeting of Independent Directors” under the Chapter “Report of the Board of Directors” in this annual report). C. DIRECTORS’ RESPONSIBILITIES, DELEGATION AND BOARD PROCEEDINGS C.1 Responsibility of Directors a. 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. Each Director newly elected during the current year has received legal opinions from a qualified law firm on 28 June 2024, and is aware of all the provisions in the Hong Kong Listing Rules applicable to the Directors of Sinopec Corp., as well as the potential consequences of making false statements or providing false information to the Hong Kong Stock Exchange. Sinopec Corp. has purchased liability insurance for all Directors to minimize the potential risks that might arise from the adequate performance of their duties. b. 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 and Procedures for Board of Directors’ Meetings clearly prescribe the duties and powers of Directors and Non-executive Directors including Independent Non-executive Directors, which are published on the Sinopec Corp.’s website at http://www.sinopec.com. c. Each of the Directors confirmed that he/she has complied with the Model Code during the reporting period. Meanwhile, Sinopec Corp. formulated the Rules Governing Shares and Changes in Shares of the Company held by Directors, Supervisors and Senior Management and the Rules on Insider Registration and Management, which are no less exacting than the Model Code, to further regulate the dealings of Sinopec Corp.’s securities by relevant personnel. d. All the Independent Non-executive Directors and other Non-executive Directors of the Sinopec Corp. regularly attended the Board meetings and the meetings held by the Board Committees they served, closely followed the production and operational status of the Company, and offered constructive suggestions on the Company’s reforms and development based on their skills and professional knowledge. For details about each Director’s attendance at the relevant meetings, please refer to the Chapter “Report of the Board of Directors” in this annual report. C.2 Chairman and President a. Mr. Ma Yongsheng, elected by all Directors, serves as Chairman of the Board. Mr. Zhao Dong, nominated and appointed by the Board, serves as President of Sinopec Corp. The respective main duties and responsibilities of the Chairman of the Board and the President are clearly distinguished from each other, and the scope of their respective duties and responsibilities is set out in the Articles of Association. b. The Chairman of the Board ensures that all the Directors could receive full, clear and complete information in time, and be informed of proposals of the Board meetings. c. The Chairman of the Board places great emphasis on communication with the Independent Non-executive Directors. The Chairman independently communicated with the Independent Non-executive Directors in respect of development strategy, medium-term and long-term development plans, corporate governance, and operational management, etc. d. The Chairman of the Board encourages open and active discussions. The Directors fully and deeply participated in the discussions of significant decisions in the Board meetings. C.3 Management Functions a. The Board and the Management have clear duties and responsibilities under written rules. The Articles of Association and its appendices, the Procedures of Shareholders’ General Meetings and the Rules and Procedures for Board of Directors’ 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. C.4 Board Committees a. In addition to the Audit Committee, the Remuneration and Appraisal Committee and the Nomination Committee, the Board of Sinopec Corp. has established the Strategy Committee and the Sustainable Development Committee. The Strategy Committee is responsible for studying long-term development strategies and significant investment decisions of the Company. The Strategy Committee consists of five Directors, including the Chairman of the Board, Mr. Ma Yongsheng, who serves as the Chairman, Vice Chairman, Executive Director, Mr. Zhao Dong, Executive Director, Mr. Li Yonglin, and Independent Non-executive Directors, Mr. Xu Lin and Ms. Zhang Liying, who serve as members. The Sustainable Development 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 the Chairman, the Non-executive Director, Mr. Zhong Ren, the Executive Director, Mr. Wan Tao, and the Independent Non-executive Director, Mr. Zhang Xiliang, who serve as members. 31 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Annual Report 2024 Corporate Governance, Environment and Society CORPORATE GOVERNANCE, ENVIRONMENT AND SOCIETY (CONTINUED) b. Each Board Committee shall report its decisions and recommendations to the Board and has formulated its terms of references. Terms of Reference of the Audit Committee, Terms of Reference of the Remuneration and Appraisal Committee, Terms of Reference of the Sustainable Development Committee and Terms of Reference of the Nomination Committee are published on the website of Sinopec Corp. at http://www.sinopec.com. C.5 Special Meeting of Independent Directors a. Sinopec Corp. has established the mechanism of the Special Meeting of Independent Directors, and stipulates that matters such as connected transactions subject to disclosure, shall be submitted to the Board for consideration after approval by a majority of all the Independent Directors. b. During the reporting period, the Nomination Committee held two meetings (please refer to “The Board Committees Meetings and the Special Meeting of Independent Directors” under the Chapter “Report of the Board of Directors” in this annual report). C.6 Board Proceedings and Supply of and Access to Information a. The Articles of Association and the Rules and Procedures for Board of Directors’ Meetings of Sinopec Corp. clearly prescribe the proceedings of Board meetings, which are published on the website of Sinopec Corp. at http://www.sinopec.com. b. The Board of Sinopec Corp. 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 the meeting. The relevant documents and materials for Board meetings and for the Board Committees are usually delivered to each Director 10 days in advance. Before the meetings were held, assigned persons were responsible for answering the possible questions raised by the Directors, ensuring the Directors could participate in the proceedings of the Board meetings effectively and positively, and fully understand the proposals to make decisions. In 2024, Sinopec Corp. held seven Board meetings. For details about each Director’s attendance at the meetings, please refer to the Chapter “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. 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. d. Each Director can obtain all related information in a comprehensive and timely manner. The Secretary to the Board is responsible for organising and preparing the materials for the Board meetings, including preparation of explanations for each proposal to ensure full understanding by the Directors. The Management is responsible for providing the Directors with necessary information and materials. The Directors can require the Management, or require relevant departments via the Management to provide necessary information or explanations. The Directors can seek advice from professional consultants when necessary. e. Resolutions and minutes of Board meetings and the meetings held by the Board Committees were recorded and archived by designated recorders, and were reviewed and confirmed by the Directors attending the relevant meetings. All the discussion matters and final decisions were recorded fully and accurately in the meeting minutes. f. The Board has reviewed and evaluated its performance in 2024 and is of the view that the Board operated in compliance with domestic and overseas regulatory authorities’ requirements and the Company’s internal rules; that the Board has fully communicated, and considered the suggestions from the Party organisation, Supervisory Committee and Management during its decision-making process; and that the Board safeguarded the legitimate rights and interests of Sinopec Corp. and its shareholders. C.7 Company Secretary a. The Hong Kong Stock Exchange recognised the Secretary to the Board of Sinopec Corp. as having the relevant qualifications as Company Secretary. The Secretary to the Board, nominated by the Chairman of the Board and appointed by the Board, is a senior management officer of Sinopec Corp. He reports to the Chairman of the Board and the President and is responsible for Sinopec Corp. and the Board. The Secretary to the Board gives opinions on corporate governance to the Board and arranges orientation training and professional development for the Directors. b. The Secretary to the Board of Sinopec Corp. 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. c. During the reporting period, the Secretary to the Board of Sinopec Corp. actively participated in career development training for more than 15 training hours. D. AUDIT, INTERNAL CONTROL AND RISK MANAGEMENT D.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 2024 and warranted that the annual report contained no false representations, misleading statements or material omissions and jointly and severally accepted full responsibility for the authenticity, accuracy, and completeness of the content. b. The Management of Sinopec Corp. provides Directors with information about the financial, production and operating data of the Company, 32 CHINA PETROLEUM & CHEMICAL CORPORATION Corporate Governance, Environment and Society capital market updates, and securities regulatory developments every month to ensure that the Directors have access to 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 will provide 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 audit responsibilities in the auditor’s report contained in the financial report. D.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 for internal control and risk management is responsible for evaluating and reviewing the effectiveness of internal control and risk management of Sinopec Corp. 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 department, 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 report of Committee of Sponsoring Organisations of the Treadway Commission (COSO). Based upon the Articles of Association and the management policies currently in effect, as well as in accordance with domestic and overseas 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 Company’s 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. Sinopec Corp. has formulated and implemented its information disclosure policy and insider registration policy. The Company regularly evaluates the policy implementation and makes disclosure in accordance with relevant regulations. Please refer to the website of Sinopec Corp. (http://www.sinopec.com) for the details of the information disclosure policy. c. In terms of risk management, Sinopec Corp. adopted the enterprise risk management framework provided by COSO, and established 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, monitoring and tackling of major risks. The Board attaches great importance to the ESG management approach and strategy, optimises ESG mechanism, strengthens the Board’s role in supervising and participation in ESG related issues, and integrates ESG considerations into the Company’s development strategy, major decision-making processes and production and operation. The Company keeps strictly to the anti-corruption laws and regulations of China, as well as anti-corruption and anti-bribery laws applicable in the country (region) where the business is conducted. The Company fully supports the UN Convention against Corruption, the UN Global Compact and other relevant initiatives, abides by the rules and commitments of the Company and business partners on clean practices and anti-corruption, and strengthens the construction of a culture of integrity. The Company has continuously improved the organisational and institutional systems of anti-corruption, organised and carried out anti-corruption training, and attached importance to risk assessment of anti-corruption. 33 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Annual Report 2024 Corporate Governance, Environment and Society CORPORATE GOVERNANCE, ENVIRONMENT AND SOCIETY (CONTINUED) The Board has reviewed and evaluated the adequacy of resources, staff qualifications and experience, training programmes and budget of ESG performance and reporting during the reporting period. For details, please refer to the 2024 Sustainability Report of Sinopec Corp. d. Based upon the review and evaluation of internal control and risk management in the reporting period, the Board is of the view that the internal control and risk management of the Company are effective. D.3 Audit Committee a. The Board of Sinopec Corp. has established an Audit Committee, formulated the Terms of Reference of the Audit Committee, which stipulates the scope of responsibility of the Audit Committee. The Audit Committee is responsible for supervising and evaluating internal and external audit work, reviewing and commenting on the financial reports of the Company, monitoring and evaluating the effectiveness of risk management and internal control system, and coordinating the communication between external auditor and management, internal auditor and related departments. The Audit Committee consists of Independent Non-executive Director, Mr. Liu Tsz Bun Bennett, who serves as the Chairman, and Independent Non-executive Directors, Mr. Xu Lin, Ms. Zhang Liying, and Mr. Zhang Xiliang, who serve as members. b. During the reporting period, the Audit Committee held six meetings (please refer to “The Board Committees Meetings and the Special Meeting of Independent Directors” under the Chapter “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 of Sinopec Corp. and the Audit Committee had no disagreement. c. Audit Committee can engage 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, internal audit, financial reporting functions and the qualifications and experience of the relevant employees as well as the sufficiency of the training courses and the budget thereof. The 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 reviewed and approved by the Audit Committee, providing several channels, including online reporting, reporting by letters, appeals and complaint mailbox, etc., to employees and others who have dealings with the Company (such as suppliers and customers) to raise concerns on improper matters of the Company secretly and anonymously. The Audit Committee has established an internal procedure, which covers receiving, retaining and handling complaints or anonymous reports concerning accounting, internal control or audit matters. E. REMUNERATION E.1 The Level and Make-up of Remuneration and Disclosure a. The remuneration policy of the Director is stipulated in Director’s service contracts approved at the general meeting of Sinopec Corp. Remuneration of Executive Directors is determined according to the relevant regulations of the country and the relevant rules of performance evaluation and remuneration management of Sinopec Corp.; Non-executive Directors do not receive remuneration in the Company. Remuneration of Independent Non-executive Directors is approved at the general meeting, and is determined with comprehensive consideration of industry conditions, company size and other factors. For details about the annual remuneration of Directors, Supervisors, and other Senior Management, please refer to page 41 to page 49 in this annual report. b. The Board of Sinopec Corp. established Remuneration and Appraisal Committee, consisting of Independent Non-executive Director, Mr. Xu Lin, who serves as the Chairman, and the Non-executive Director, Mr. Zhong Ren and the Independent Non-executive Director, Mr. Liu Tsz Bun Bennett, who serve as the members. The Remuneration and Appraisal 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, and reporting to the Board. 34 CHINA PETROLEUM & CHEMICAL CORPORATION Corporate Governance, Environment and Society c. The Remuneration and Appraisal Committee always consults the Chairman of the Board and the President about the remuneration plans for other Executive Directors. After the Remuneration and Appraisal 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 2024. d. The Remuneration and Appraisal 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 and Appraisal Committee has also appointed consultant members and can require such members to provide advice. The working expenses of the Remuneration and Appraisal 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 and Appraisal Committee. e. During the reporting period, the Remuneration and Appraisal Committee held two meetings (please refer to “The Board Committees Meetings and the Special Meeting of Independent Directors” under the Chapter “Report of the Board of Directors” in this annual report). F. SHAREHOLDERS ENGAGEMENT F.1 Effective Communication a. Sinopec Corp. revised the relevant provisions of equity structure and registered capital in the Articles of Association in accordance with the actual situation on shares repurchase and cancellation of the repurchased shares, and revised the size of the Board and the Supervisory Committee in the Articles of Association in accordance with the actual situation, which were reviewed and approved by the AGM. For details, please refer to the announcements published by Sinopec Corp. on China Securities Journal, Shanghai Securities News, Securities Times, and on the website of SSE on 25 March and 29 June 2024, respectively, and on the website of Hong Kong Stock Exchange on 24 March and 28 June 2024, respectively. b. The policy on payment of dividends of Sinopec Corp. is disclosed in the Report of the Board of Directors in this annual report, please refer to page 67 to page 68 in this annual report. c. Sinopec Corp. attaches considerable significance to investor relations. The Chairman of the Board attended annual and interim results conferences, and the Management attended road shows 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 Independent Non-executive Director of the eighth session of the Board, Mr. Bi Mingjian, attended the annual online performance meetings, and the Independent Non-executive Director of the ninth session of the Board, Mr. Xu Lin, attended the interim online performance meetings. The Board Secretariat of Sinopec Corp. is responsible for organising the communication with investors. In compliance with regulatory provisions, Sinopec Corp. enhances communication with investors by holding meetings with institutional investors, reverse roadshow, setting up an investor hotline, and communicating through internet platform, etc. 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 Center” column on Sinopec Corp.’s website, ensuring that shareholders can get in touch with the Company at any time. During this year, Sinopec Corp. kept on monitoring and evaluating the implementation and effectiveness of the Shareholders’ Communication Policy, in order to ensure its effectiveness. F.2 General Meeting a. 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. b. The Chairman of the Board of Sinopec Corp. hosted the AGM, the First A Shareholders Class Meeting for 2024, the First H Shareholders Class Meeting for 2024, and the EGM. Several members of the Board, the Supervisory Committee, and Senior Management attended the meetings and conducted in-depth communication with the investors. Certain members of the Audit Committee, the Nomination Committee, the Remuneration and Appraisal Committee, the Strategy 35 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Annual Report 2024 Corporate Governance, Environment and Society CORPORATE GOVERNANCE, ENVIRONMENT AND SOCIETY (CONTINUED) Committee, and the Sustainable Development Committee attended the meetings. The external auditors of the Company attended the meetings. During the AGM and the EGM, the Company assigned working stuff to record questions raised by investors as well as the feedback, which were related to each Board Committee. In the meetings, investors did not raise questions that need to be answered or matters that need to be paid attention to by each Board Committee. After the AGM and the EGM, the Company communicated separately with investors. c. 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 and Procedures of Shareholders’ General Meetings, 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. 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. d. The eligibility for attending the general meeting, the rights of shareholders, the resolutions at the meeting and the voting procedures are clearly set out in the notice and circular of the general meeting of Sinopec Corp. dispatched to the shareholders. e. Sinopec Corp. has established a special department for communication with shareholders and published relevant contact details to facilitate shareholders to make enquiries to the Board in accordance with Articles of Association. G. AUDITORS The re-appointment of KPMG Huazhen LLP and KPMG as the external auditors of Sinopec Corp. for the year 2024 and the authorisation of the Board to determine their remunerations were approved at Sinopec Corp.’s AGM on 28 June 2024. The audit fee for 2024 was RMB39.862 million (including audit fee of internal control), which was approved at the 5th meeting of the ninth session of the Board. The annual financial statements of the year ended 31 December 2024 have been audited by KPMG Huazhen LLP and KPMG. The Chinese certified public accountants signing the report are Yang Jie and He Shu from KPMG Huazhen LLP. KPMG Huazhen LLP and KPMG have provided audit services to Sinopec Corp. since 2021. For details of the limit of consecutive years in which the current engagement partners and certified public accountants who have served the Company, please refer to the announcement on re-appointment of the external auditors published on China Securities Journal, Shanghai Securities News, Securities Times and the website of SSE on 25 March 2024, and on the website of Hong Kong Stock Exchange on 24 March 2024. During the reporting period, KPMG Huazhen LLP, KPMG and their affiliates firms provided non-audit service, such as tax consulting and due diligence investigation to the Company, and the fee charged was RMB7.285 million. (2) Other information about Sinopec Corp.’s corporate governance Except for their working relationships in the Company, none of the Directors, Supervisors or other Senior Management has any financial, business or family relationship or any relationship in other material aspects with one another. For information about changes in share capital and shareholdings of principal shareholders, please refer to page 76 to page 78; for information about meetings of the Board, please refer to page 64; for information about meetings held by Board Committees, please refer to page 66 to page 67. 10 DETAILED IMPLEMENTATION OF THE SHARE INCENTIVE SCHEME The Company did not implement any share incentive scheme during the reporting period. 36 CHINA PETROLEUM & CHEMICAL CORPORATION 37 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Corporate Governance, Environment and Society Ma Yongsheng 11 BIOGRAPHICAL DETAILS OF DIRECTORS, SUPERVISORS AND OTHER SENIOR MANAGEMENT (1) Directors Ma Yongsheng, aged 63, Chairman of the Board of Sinopec Corp. Mr. Ma is a professor level senior engineer with a Ph.D. degree. Mr. Ma is a member of the 13th and 14th National Committee of Chinese People’s Political Consultative Conference (“CPPCC”) and an academician of the Chinese Academy of Engineering. In January 2017, he was appointed as Member of the Leading Party Member Group and Vice President of China Petrochemical Corporation and Senior Vice President and Chief Geologist of Sinopec Corp.; in October 2018, he was appointed as President of Sinopec Corp.; in April 2019, he was appointed as Director, President and Deputy Secretary of the Leading Party Member Group of China Petrochemical Corporation; in November 2021, he was appointed as Chairman and Secretary of the Leading Party Member Group of China Petrochemical Corporation. In February 2016, he was elected as Director of Sinopec Corp.; in November 2021, he was elected as the Chairman of the Board of Sinopec Corp. Zhao Dong, aged 54, Vice Chairman of the Board and President of Sinopec Corp. Mr. Zhao is a professor level senior accountant with a Ph.D. degree. Mr. Zhao is an alternate member of the 20th Central Committee of the Party. In November 2016, he was appointed as Member of the Leading Party Member Group and Chief Accountant of China Petrochemical Corporation; in June 2017, he was appointed as Chairman of Supervisory Committee of Sinopec Corp.; in May 2020, he was appointed as Director and Deputy Secretary of the Leading Party Member Group of China Petrochemical Corporation; in June 2022, he was appointed as President of China Petrochemical Corporation. In May 2021, he was elected as Director of Sinopec Corp.; in April 2024, he was appointed as President of Sinopec Corp.; in June 2024, he was elected as Vice Chairman of the Board of Sinopec Corp. Zhong Ren, aged 58, Director of Sinopec Corp. Mr. Zhong holds an EMBA degree. In May 2018, he was appointed as Member of the Leading Party Member Group and Vice President of Sinochem Group Co., Ltd.; in April 2021, he was appointed as Member of the Leading Party Member Group and Vice President of Sinochem Holdings; in October 2023, he was appointed as Director and Deputy Secretary of the Leading Party Member Group of China Petrochemical Corporation. In June 2024, he was elected as Director of Sinopec Corp. Zhong Ren Zhao Dong 38 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Corporate Governance, Environment and Society CORPORATE GOVERNANCE, ENVIRONMENT AND SOCIETY (CONTINUED) Lv Lianggong Li Yonglin, aged 58, Director and Senior Vice President of Sinopec Corp. Mr. Li is a professor level senior engineer with a Ph.D. degree. Mr. Li is a member of the 13th National Committee of CPPCC. In October 2019, he was appointed as Secretary of CPC Committee of Sinopec Tianjin Petrochemical Company and Corporate Representative of Sinopec Tianjin Company; in July 2020, he was appointed as Assistant to the President, Head of Organization Department of the Leading Party Member Group and General Manager of Human Resources Department of China Petrochemical Corporation; in November 2020, he was appointed as Member of the Leading Party Member Group and Vice President of China Petrochemical Corporation. In May 2021, Mr. Li was elected as Director and appointed as Senior Vice President of Sinopec Corp. Lv Lianggong, aged 59, Director and Senior Vice President of Sinopec Corp. Mr. Lv is a professor level senior engineer with a master’s degree. In September 2018, he was appointed as General Manager and Deputy Secretary of the CPC Committee of Sinopec Zhenhai Refining & Chemical Company; in December 2019, he was appointed as Representative and Secretary of the CPC Committee of Sinopec Zhenhai Refining & Chemical Company; in December 2020, he was appointed as Deputy Chief Economist, Head of Organization Department of the Leading Party Member Group and General Manager of Human Resource Department of China Petrochemical Corporation; in May 2022, he was elected as Supervisor of Sinopec Corp.; in August 2022, he was appointed as Member of the Leading Party Member Group and Vice President of China Petrochemical Corporation. In October 2022, he was appointed as Senior Vice President of Sinopec Corp; in May 2023, he was elected as Director of Sinopec Corp. Niu Shuanwen, aged 50, Director and Senior Vice President of Sinopec Corp. Mr. Niu is a professor level senior engineer with a Ph.D. degree. In October 2018, he was appointed as Deputy General Manager of Sinopec Shengli Oilfield Company; in May 2020, he was appointed as General Manager and Deputy Secretary of CPC Committee of Sinopec Shengli Petroleum Administrative Bureau Co., Ltd. and General Manager of Sinopec Shengli Oilfield Company; in January 2022, he was appointed as Executive Director and Secretary of CPC Committee of Sinopec Shengli Petroleum Administrative Bureau Co., Ltd. and Representative of Sinopec Shengli Oilfield Company; in June 2023, he was appointed as Member of the Leading Party Member Group and Vice President of China Petrochemical Corporation. In July 2023, he was appointed Senior Vice President of Sinopec Corp.; in June 2024, he was elected as Director of Sinopec Corp. Li Yonglin Niu Shuanwen 39 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Corporate Governance, Environment and Society Wan Tao Xu Lin Wan Tao, aged 57, Director and Senior Vice President of Sinopec Corp. Mr. Wan is a professor level senior engineer with a master’s degree. In January 2018, he was appointed as Executive Director, General Manager and Secretary of CPC Committee of Sinopec Yizheng Chemical Fibre Limited Liability Company and General Manager of Yizheng Branch at Sinopec Assets Management Co, Ltd.; in July 2022, he was elected as Chairman and appointed as Secretary of CPC Committee of Sinopec Shanghai Petrochemical Company Limited; in March 2024, he was appointed as Member of the Leading Party Member Group and Vice President of China Petrochemical Corporation. In April 2024, he was appointed as Senior Vice President of Sinopec Corp.; in June 2024, he was elected as Director of Sinopec Corp. Yu Baocai, aged 60, Director and Senior Vice President of Sinopec Corp. Mr. Yu is a senior engineer with a master’s degree in economics. In June 2018, he was appointed as Member of the Leading Party Member Group and Vice President of China Petrochemical Corporation; in September 2020, he was appointed as Senior Vice President of Sinopec Corp.; in November 2021, he was appointed as President of Sinopec Corp. In October 2018, he was elected as Director of Sinopec Corp.; in April 2024, he was appointed as Senior Vice President of Sinopec Corp. Xu Lin, aged 62, Independent Director of Sinopec Corp. Mr. Xu holds master’s degrees in economics and public administration. Mr. Xu is now Chairman of China-U.S. Green Fund Management Co., Ltd. He concurrently serves as Executive President and Secretary of CPC Committee of China Mergers & Acquisitions Association, Independent Director of Industrial Bank Co., Ltd., Independent Director of Guomin Pension Insurance Co., Ltd., External Supervisor of the Supervisory Committee of Bank of Beijing, Director of Farsoon Technologies Co., Ltd., Independent Director of CNFinance Holdings Limited. Mr. Xu previously served as Deputy Director of the Department of Development Planning of the State Development Planning Commission, Director General of the Department of Fiscal and Financial Affairs and Director General of the Department of Development Planning of NDRC, Director of the China Center for Urban Development, Independent Director of Zhejiang Crystal-Optech Co., Ltd. and Beijing GeoEnviron Engineering & Technology, Inc, Chairman of the China-U.S. Green Investment Management Co., Ltd. In June 2024, he was elected as Independent Director of Sinopec Corp. Yu Baocai 40 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Corporate Governance, Environment and Society CORPORATE GOVERNANCE, ENVIRONMENT AND SOCIETY (CONTINUED) Zhang Liying Zhang Liying, aged 65, Independent Director of Sinopec Corp. Ms. Zhang is a professor level senior engineer with a doctor’s degree in technical economics and management. She is now an Independent Director of Huaneng Power International, Inc., Executive Member, Chairwoman of the Urban Power Supply and Reliability Committee, Chairwoman of the Committee of Women Science and Technology Workers of the Chinese Society for Electrical Engineering, and Chief Expert of the Expert Committee of the China Electricity Council and enjoys the State Council’s special government allowance. She previously served as Chief Engineer, President Assistant and Consultant of State Grid Corporation of China. In June 2024, she was elected as Independent Director of Sinopec Corp. Liu Tsz Bun Bennett, aged 62, Independent Director of Sinopec Corp. Mr. Liu holds a bachelor’s degree in economics and has the chartered accountant qualification in England and Wales as well as the Hong Kong Institute of Certified Public Accountants senior fellowship. Mr. Liu is now an honorary consultant of the Hong Kong Business Accountants Association, an Independent Director of China CITIC Bank Co., Ltd., an Independent Director of China Vanke Co., Ltd., an Independent Director of Shenzhen WeBank Co., Ltd., and an Independent Director of Ping An Life Insurance Company of China. He was Chairman of KPMG China from April 2015 to September 2019, and senior advisor of KPMG Hong Kong from September 2019 to March 2021. He previously served as an accounting consulting expert of the Ministry of Finance of China and a Hong Kong member of the 14th Tianjin Municipal Committee of the Chinese People’s Political Consultative Conference. In June 2024, he was elected as Independent Director of Sinopec Corp. Liu Tsz Bun Bennett Zhang Xiliang Zhang Xiliang, aged 61, Independent Director of Sinopec Corp. Mr. Zhang holds a Ph.D. in systems engineering. He is now the Director of the Institute of Energy, Environment and Economy, a professor of the Institute of Nuclear and New Energy Technology and the Chief Scientist of Climate Governance and Carbon Finance Area of Carbon Neutral Institute of Tsinghua University. Mr. Zhang is concurrently a member of the National Experts Panel on Climate Change, the Chairman of China Emissions Trading Association of Chinese Society for Environmental Sciences, an Executive Council Member and the Chairman of the Energy System Engineering Committee of the China Energy Research Society, and a Council Member of the Chinese Society for Sustainable Development. In June 2024, he was elected as Independent Director of Sinopec Corp. Corporate Governance, Environment and Society LIST OF MEMBERS OF THE BOARD Remuneration paid by Sinopec Corp. in 2024 (RMB1,000, Whether paid by the shareholders of the Company or their related entities in Equity interests in Sinopec Corp. (as at 31 December) Name Gender Age Position in Sinopec Corp. Tenure before tax) 2024 2024 2023 Ma Yongsheng Male 63 Chairman of the Board, Non-executive Director 2016.2-2027.6 － Yes 0 0 Zhao Dong Male 54 Vice Chairman of the Board, Executive Director, President 2021.5-2027.6 852.0 No 0 0 Zhong Ren Male 58 Non-executive Director 2024.6-2027.6 － Yes 0 0 Li Yonglin Male 58 Executive Director, Senior Vice President 2021.5-2027.6 － Yes 0 0 Lv Lianggong Male 59 Executive Director, Senior Vice President 2023.5-2027.6 － Yes 0 0 Niu Shuanwen Male 50 Executive Director, Senior Vice President 2024.6-2027.6 － Yes 0 0 Wan Tao Male 57 Executive Director, Senior Vice President 2024.6-2027.6 － Yes 0 0 Yu Baocai Male 60 Executive Director, Senior Vice President 2018.10-2027.6 1,106.3 No 0 0 Xu Lin Male 62 Independent Non-Executive Director 2024.6-2027.6 320.8 No 0 0 Zhang Liying Female 65 Independent Non-Executive Director 2024.6-2027.6 320.8 No 0 0 Liu Tsz Bun Bennett Male 62 Independent Non-Executive Director 2024.6-2027.6 320.8 No 0 0 Zhang Xiliang Male 61 Independent Non-Executive Director 2024.6-2027.6 320.8 No 0 0 LIST OF FORMER MEMBERS OF THE BOARD OF DIRECTORS Remuneration paid by Sinopec Corp. in 2024 (RMB1,000, Whether paid by the shareholders of the Company or their related entities in Equity interests in Sinopec Corp. (as at 31 December) Name Gender Age Position in Sinopec Corp. Tenure before tax) 2024 2024 2023 Cai Hongbin Male 57 Former Independent Non-Executive Director 2018.5-2024.6 187.5 No 0 0 Ng, Kar Ling Johnny Male 64 Former Independent Non-Executive Director 2018.5-2024.6 187.5 No 0 0 Shi Dan Female 63 Former Independent Non-Executive Director 2021.5-2024.6 187.5 No 0 0 Bi Mingjian Male 69 Former Independent Non-Executive Director 2021.5-2024.6 187.5 No 0 0 41 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 42 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Corporate Governance, Environment and Society CORPORATE GOVERNANCE, ENVIRONMENT AND SOCIETY (CONTINUED) Wang An Dai Liqi Tan Wenfang (2) Supervisors Wang An, aged 55, Supervisor of Sinopec Corp. Mr. Wang is a senior economist and a qualified lawyer with a bachelor’s degree. In September 2018, he was appointed as Deputy Director of Party Affairs and Employee Relations Department (Leading Party Member Group Office) of China Petrochemical Corporation; in November 2018, he was appointed as Secretary of the Youth League Committee of China Petrochemical Corporation; in October 2019, he was appointed as Deputy Director of Human Resource Department of Sinopec Corp.; in December 2019, he was appointed as Deputy Head of Organization Department of the Leading Party Member Group of China Petrochemical Corporation and Deputy General Manager of Human Resource Department of Sinopec Corp.; in April 2021, he was appointed as General Manager and Deputy Secretary of CPC Committee of Sinopec Shared Service Co., Ltd.; in April 2023, he was appointed as Director General of Party Affairs and Employee Relations Department and Head of United Front Work Department of CPC Committee of China Petrochemical Corporation. In June 2024, he was elected as Supervisor of Sinopec Corp. Dai Liqi, aged 57, Supervisor of Sinopec Corp. Mr. Dai is a professor level senior engineer with a bachelor’s degree. In December 2018, he was appointed as General Manager of SINOPEC SABIC Tianjin Petrochemical Co., Ltd. (administrated as a General Manager of a Level-I Largescale Enterprise) and Deputy General Manager of Sinopec Tianjin Company; in July 2023, he was appointed as General Manager of Foreign Affair Department and Director General of Office of Hong Kong, Macau and Taiwan Affairs of China Petrochemical Corporation and General Manager of International Cooperation Department of Sinopec Corp. In June 2024, he was elected as Supervisor of Sinopec Corp. Tan Wenfang, aged 60, Supervisor of Sinopec Corp. Mr. Tan is a professor level senior engineer with a Ph.D. degree in management. In December 2017, he was appointed as Executive Deputy Secretary of CPC Committee (administrated as a General Manager of a Level-I Largescale Enterprise) and Deputy General Manager of Sinopec International Petroleum Exploration and Production Corporation and Deputy General Manager of Sinopec International Petroleum Exploration and Production Limited; in May 2018, he was appointed as Chairman of Supervisory Committee of Sinopec International Petroleum Exploration and Production Corporation and Director of Sinopec International Petroleum Exploration and Production Limited; in August 2020, he was appointed as Director General of Office of Leading Party Member Group Inspection Work of China Petrochemical Corporation. In June 2024, he was elected as Supervisor of Sinopec Corp. 43 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Corporate Governance, Environment and Society Yang Yanfei Zhou Meiyun Zhang Zheng Yang Yanfei, aged 57, Supervisor of Sinopec Corp. Mr. Yang is a professor level senior economist with a bachelor’s degree. In July 2013, he was appointed as Deputy Director of Production and Operations Management Department of Sinopec Corp.; in December 2019, he was appointed as Deputy General Manager of Production and Operations Management Department of Sinopec Corp.; in March 2020, he was elected as Executive Director of Sinopec Kantons Holdings Limited; in January 2022, he was appointed as General Manager of Production and Operations Management Department and Chief Coordinator of Production Dispatching Command Center of Sinopec Corp. In June 2024, he was elected as Supervisor of Sinopec Corp. Zhou Meiyun, aged 55, Supervisor of Sinopec Corp. Mr. Zhou is a senior accountant with a master’s degree. In February 2017, he was appointed as Deputy General Manager and Chief Financial Officer of Sinopec Shanghai Petrochemical Company Limited; in June 2017, he was elected as Executive Director of Sinopec Shanghai Petrochemical Company Limited; in September 2020, he was appointed as Deputy General Manager of the Finance Department of China Petrochemical Corporation; in February 2021, he was elected as Non-executive Director of Sinopec Oilfield Service Corporation; in May 2022, he was appointed as Deputy Chairman, General Manager and Deputy Secretary of CPC Committee of Sinopec Capital Co., Ltd.; in December 2022, he was appointed as Deputy General Manager of Capital and Finance Department of China Petrochemical Corporation (administrated as a General Manager of department); in June 2023, he was appointed as General Manager of Capital and Finance Department of China Petrochemical Corporation, and Chairman and Secretary of CPC Committee of Sinopec Capital Co., Ltd.; in July 2024, he was appointed as General Manager of the Finance Department of China Petrochemical Corporation and Chairman of Century Bright. In June 2024, he was elected as Supervisor of Sinopec Corp. Zhang Zheng, aged 56, Employee’s Representative Supervisor of Sinopec Corp. Mr. Zhang is an international business engineer with a bachelor’s degree. In December 2018, he was appointed as Deputy Head of Foreign Affairs Bureau and Deputy Director General of Office of Hong Kong, Macau and Taiwan Affairs of China Petrochemical Corporation and Deputy Director General of International Cooperation Department of Sinopec Corp. (administrated as a General Manager of department); in October 2019, he was appointed as Director General of the Board Secretariat of Sinopec Corp.; in December 2019, he was appointed as Director General of Board Secretariat and Deputy Director General of General Administration Department of Sinopec Corp. (chief member level of department); in January 2020, he was appointed as Representative on Securities Matters of Sinopec Corp. In June 2024, he was elected as Employee’s Representative Supervisor of Sinopec Corp. 44 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Corporate Governance, Environment and Society CORPORATE GOVERNANCE, ENVIRONMENT AND SOCIETY (CONTINUED) Bian Fengming Zhang Chunsheng Bian Fengming, aged 58, Employee’s Representative Supervisor of Sinopec Corp. Mr. Bian is a professor level senior engineer with a Ph.D. degree. In January 2017, he was appointed as Chairman, General Manager and Deputy Secretary of the CPC Committee of Sinopec Hainan Refining and Chemical Company Limited; in April 2020, he was appointed as Chairman and Secretary of the CPC Committee of Sinopec Hainan Refining and Chemical Company Limited; in December 2020, he was appointed as General Manager of Science & Technology Department of Sinopec Corp. and Chairman of China Petrochemical Technology Co., Ltd. In June 2024, he was elected as Employee’s Representative Supervisor of Sinopec Corp. Zhang Chunsheng, aged 60, Employee’s Representative Supervisor of Sinopec Corp. Mr. Zhang is a professor level senior engineer with a bachelor’s degree. In January 2016, he was appointed as Vice Chairman, General Manager and Deputy Secretary of the CPC Committee of Sinopec Group Jinling Petrochemical Co., Ltd.; in September 2018, he was appointed as Chairman and Secretary of the CPC Committee of Sinopec Group Jinling Petrochemical Co., Ltd. and Representative of Sinopec Jinling Company; in May 2022, he was appointed as Executive Director and Secretary of the CPC Committee of Sinopec Group Jinling Petrochemical Co., Ltd. and Representative of Sinopec Jinling Company. In June 2024, he was elected as Employee’s Representative Supervisor of Sinopec Corp. Corporate Governance, Environment and Society LIST OF MEMBERS OF THE SUPERVISORY COMMITTEE Remuneration paid by Sinopec Corp. in 2024 (RMB1,000, Whether paid by the shareholders of Sinopec Corp. or their related entities in Equity interests in Sinopec Corp. (as at 31 December) Name Gender Age Position in Sinopec Corp. Tenure before tax) 2024 2024 2023 Wang An Male 55 Supervisor 2024.6-2027.6 － Yes 0 0 Dai Liqi Male 57 Supervisor 2024.6-2027.6 － Yes 0 0 Tan Wenfang Male 60 Supervisor 2024.6-2027.6 － Yes 0 0 Yang Yanfei Male 57 Supervisor 2024.6-2027.6 － Yes 0 0 Zhou Meiyun Male 55 Supervisor 2024.6-2027.6 － Yes 0 0 Zhang Zheng Male 56 Employee’s Representative Supervisor 2024.6-2027.6 404.0 No 0 0 Bian Fengming Male 58 Employee’s Representative Supervisor 2024.6-2027.6 404.0 No 0 0 Zhang Chunsheng Male 60 Employee’s Representative Supervisor 2024.6-2027.6 410.5 No 0 0 LIST OF FORMER MEMBERS OF THE SUPERVISORY COMMITTEE Remuneration paid by Sinopec Corp. in 2024 (RMB1,000, Whether paid by the shareholders of Sinopec Corp. or their related entities in Equity interests in Sinopec Corp. (as at 31 December) Name Gender Age Position in Sinopec Corp. Tenure before tax) 2024 2024 2023 Zhang Shaofeng Male 53 Former Chairman of the Supervisory Committee 2021.5-2025.1 － Yes 0 0 Qiu Fasen Male 59 Former Supervisor 2022.5-2024.6 － Yes 0 0 Wu Bo Male 51 Former Supervisor 2022.5-2024.5 － Yes 0 0 Zhai Yalin Male 61 Former Supervisor 2022.5-2024.6 － Yes 0 0 Guo Hongjin Male 59 Former Employee’s Representative Supervisor 2022.5-2024.6 1,057.7 No 0 0 Yin Zhaolin Male 59 Former Employee’s Representative Supervisor 2022.5-2024.6 1,387.8 No 0 0 Chen Yaohuan Male 61 Former Employee’s Representative Supervisor 2021.1-2024.6 1,044.8 No 0 0 45 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 46 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Corporate Governance, Environment and Society CORPORATE GOVERNANCE, ENVIRONMENT AND SOCIETY (CONTINUED) (3) Other Members of Senior Management Shou Donghua, aged 56, Chief Financial Officer of Sinopec Corp. Ms. Shou is a professor level senior accountant with a master’s degree in business administration. In August 2017, she was appointed as Secretary of the CPC Committee and Deputy General Manager of Sinopec Zhenhai Refining & Chemical Company; in September 2018, she was appointed as Director General of Finance Department of China Petrochemical Corporation and Chairwoman of Century Bright; in December 2019, she was appointed as General Manager of Finance Department of Sinopec Corp.; in October 2023, she was appointed as Chairwoman and Secretary of the CPC Committee of Sinopec Overseas Investment Holding Limited. In January 2020, she was appointed as Chief Financial Officer of Sinopec Corp. Huang Wensheng, aged 58, Vice President of Sinopec Corp. and Secretary to the Board of Directors. Mr. Huang is a professor level senior economist with a bachelor’s degree. In June 2018, he was appointed as Director General of Department of Capital Management and Financial Services of Sinopec Corp.; in July 2018, he was appointed as Chairman, General Manager and Secretary of the CPC Committee of Sinopec Capital Co., Ltd. In May 2012, he was appointed as Secretary to the Board of Directors of Sinopec Corp; in May 2014, he was appointed as Vice President of Sinopec Corp. Guo Hongjin, aged 59, Vice President of Sinopec Corp. Mr. Guo is a professor level senior engineer with a Ph.D. degree. In March 2018, he was appointed as General Manager and Deputy Secretary of the CPC Committee of Sinopec Shengli Petroleum Administrative Bureau Co., Ltd. and General Manager of Sinopec Shengli Oilfield Company; in December 2018, he was appointed as Executive Director, General Manager and Deputy Secretary of the CPC Committee of Sinopec Jianghan Petroleum Administrative Bureau Co., Ltd. and General Manager of Sinopec Jianghan Oilfield Company; in July 2019, he was appointed as Executive Director and Secretary of the CPC Committee of Sinopec Jianghan Petroleum Administrative Bureau Co., Ltd. and Representative of Sinopec Jianghan Oilfield Company; in April 2020, he was appointed as General Manager of the Petroleum Exploration & Development Department of Sinopec Corp.; in May 2021, he was elected as Supervisor of Sinopec Corp.; in May 2022, he was elected as Employee Representative Supervisor of Sinopec Corp. In June 2024, he was appointed as Vice President of Sinopec Corp. Shou Donghua Huang Wensheng Guo Hongjin 47 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Corporate Governance, Environment and Society Xu Yi Li Yuxing Xu Yi, aged 58, Vice President of Sinopec Corp. Mr. Xu is a senior engineer with a master’s degree. In March 2019, he was appointed as Executive Director and Secretary of the CPC Committee of Sinopec Chongqing SVW Chemical Co., Ltd.; in August 2019, he was appointed as General Manager and Deputy Secretary of the CPC Committee of Sinopec Chemical Commercial Holding Company Limited; in December 2020, he was appointed as Executive Director and Secretary of the CPC Committee of Sinopec Chemical Commercial Holding Company Limited, Chairman of Sinopec Chemical Commercial Holding (Hong Kong) Co., Ltd. and Deputy General Manager of the Chemicals Department of Sinopec Corp.; in April 2024, he was appointed as General Manager of the Chemicals Department of Sinopec Corp. and Executive Director of Sinopec Group Asset Management Co., Ltd. In June 2024, he was appointed as Vice President of Sinopec Corp. Li Yuxing, aged 58, Vice President of Sinopec Corp. Mr. Li is a professor level senior engineer with a master’s degree. In October 2019, he was appointed as Representative of Sinopec Guangxi Oil Products Company and Secretary of the CPC Committee of Sinopec Group Guangxi Oil Products Company; in July 2021, he was appointed as Vice Chairman, General Manager and Deputy Secretary of the CPC Committee of Sinopec Marketing Co., Ltd., Deputy General Manager of the Marketing Department of Sinopec Corp. and Vice Chairman and General Manager of Sinopec Sales Industry Co., Ltd.; in September 2023, he was appointed as Chairman and Secretary of the CPC Committee of Sinopec Marketing Co., Ltd., General Manager of the Marketing Department of Sinopec Corp., Executive Director of Sinopec Sales Industry Co., Ltd. and Chairman of Sinopec (Hong Kong) Limited. In June 2024, he was appointed as Vice President of Sinopec Corp. Guo Xusheng, aged 59, Chief Geologist of Sinopec Corp. Mr. Guo is a professor level senior engineer with a Ph.D. degree and an academician of the Chinese Academy of Engineering. In June 2016, he was appointed as General Manager and Deputy Secretary of the CPC Committee of Sinopec Exploration Company; in November 2020, he was appointed as Deputy Chief Geologist of Sinopec Corp.; in July 2022, he was appointed as Dean and Deputy Secretary of the CPC Committee of Sinopec Group Petroleum Exploration and Production Research Institute, and Executive Director and General Manager of Sinopec Petroleum Exploration and Production Research Institute Co. Ltd. In January 2024, he was appointed as Chief Geologist of Sinopec Corp. Guo Xusheng 48 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Corporate Governance, Environment and Society CORPORATE GOVERNANCE, ENVIRONMENT AND SOCIETY (CONTINUED) Liu Jiahai Liu Jiahai, aged 58, Chief Safety Officer of Sinopec Corp. Mr. Liu is a professor level senior engineer with a Ph.D. degree. In August 2018, he was appointed as Representative of Sinopec Wuhan Company, Secretary of the CPC Committee of Wuhan Petroleum and Chemical Factory of Sinopec Group Company and Chairman of Sinopec-SK (Wuhan) Petrochemical Company Limited; in July 2022, he was appointed as General Manager of Safety Supervisory Department of Sinopec Corp.; in May 2023, he was appointed as General Manager of Department of Health, Safety and Environmental Protection of Sinopec Corp. In June 2024, he was appointed as Chief Safety Officer of Sinopec Corp. Corporate Governance, Environment and Society LIST OF MEMBERS OF THE SENIOR MANAGEMENT Remuneration paid by Sinopec Corp. in 2024 (RMB1,000, Whether paid by the shareholders of Sinopec Corp. or their related entities in Equity interests in Sinopec Corp. (as at 31 December) Name Gender Age Position in Sinopec Corp. before tax) 2024 2024 2023 Shou Donghua Female 56 Chief Financial Officer 1,303.8 No 0 0 Huang Wensheng Male 58 Vice President, Secretary to the Board 1,301.4 No 0 0 Guo Hongjin Male 59 Vice President 281.0 No 0 0 Xu Yi Male 58 Vice President 351.8 No 0 0 Li Yuxing Male 58 Vice President 349.9 No 0 0 Guo Xusheng Male 59 Chief Geologist 1,593.0 No 0 0 Liu Jiahai Male 58 Chief Safety Officer 351.8 No 0 0 12 INFORMATION ON APPOINTMENT OR TERMINATION OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT On 22 January 2024, Mr. Guo Xusheng was appointed as Chief Geologist of Sinopec Corp. On 28 April 2024, Mr. Yu Baocai resigned as President of Sinopec Corp. due to work arrangement. Mr. Zhao Dong was appointed as President and re-designated as the Executive Director of Sinopec Corp. Mr. Wan Tao and Mr. Yu Baocai were appointed as Senior Vice Presidents of Sinopec Corp. On 13 May 2024, Mr. Wu Bo resigned as supervisor of Sinopec Corp. due to change of working arrangement. On 28 June 2024, the members of the ninth session of the Board and the ninth session of the Supervisory Committee were elected at the AGM. On the same day, the first meeting of the ninth session of the Board was convened, the Chairman and Vice Chairman of the Board were elected and senior management were appointed; the first meeting of the ninth session of the Supervisory Committee was convened and the Chairman of the Supervisory Committee was elected. Changes in directors, supervisors and senior management were as follows: The ninth session of the Board: Mr. Ma Yongsheng as Non-executive Director and Chairman of the Board; Mr. Zhao Dong as Executive Director, Vice Chairman of the Board and President; Mr. Zhong Ren as Non-executive Director; Mr. Li Yonglin, Mr. Lv Lianggong, Mr. Niu Shuanwen, Mr. Wan Tao, and Mr. Yu Baocai as Executive Directors and Senior Vice Presidents; Mr. Xu Lin, Ms. Zhang Liying, Mr. Liu Tsz Bun Bennett, and Mr. Zhang Xiliang as the Independent Non-executive Directors. Mr. Cai Hongbin, Mr. Ng, Kar Ling Johnny, Ms. Shi Dan and Mr. Bi Mingjian ceased to be the Independent Non-executive Directors. The ninth session of the Supervisory Committee: Mr. Zhang Shaofeng as the Chairman of the Supervisory Committee; Mr. Wang An, Mr. Dai Liqi, Mr. Tan Wenfang, Mr. Yang Yanfei and Mr. Zhou Meiyun as the supervisors; Mr. Zhang Zheng, Mr. Bian Fengming and Mr. Zhang Chunsheng as employee’s representative supervisors. Mr. Qiu Fasen, Mr. Zhai Yalin, Mr. Guo Hongjin, Mr. Yin Zhaolin and Mr. Chen Yaohuan ceased to be the supervisors. Other senior management: Ms. Shou Donghua as the Chief Financial Officer; Mr. Huang Wensheng as Vice President and the Secretary to the Board; Mr. Guo Hongjin, Mr. Xu Yi and Mr. Li Yuxing as Vice Presidents; Mr. Guo Xusheng as Chief Geologist; and Mr. Liu Jiahai as Chief Safety Officer. On 15 January 2025, Mr. Zhang Shaofeng resigned as Chairman of the Supervisory Committee and supervisor of Sinopec Corp. due to change of working arrangement. 49 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Annual Report 2024 Corporate Governance, Environment and Society CORPORATE GOVERNANCE, ENVIRONMENT AND SOCIETY (CONTINUED) 13 CHANGE OF SHAREHOLDING OF DIRECTORS, SUPERVISORS, AND THE SENIOR MANAGEMENT There is no change in shareholdings of Sinopec Corp. of Directors, Supervisors and other senior management during the reporting period. 14 CONTRACTUAL INTERESTS OF DIRECTORS AND SUPERVISORS As of 31 December 2024 or any time during the reporting period, no Director or Supervisor entered into any agreement with Sinopec Corp., its controlling shareholder, any subsidiary or related subsidiary which shall substantially benefit such Director or Supervisor. 15 CONTRACTS WITH DIRECTORS AND SUPERVISORS The Company has entered into service contracts with all the Directors and Supervisors. None of the Directors and Supervisors has entered into or will enter into service contracts that are not terminable by the Company within one year without compensation (except for statutory compensation). 16 REMUNERATION OF DIRECTORS, SUPERVISORS, AND THE SENIOR MANAGEMENT During the reporting period, a total of 22 Directors, Supervisors and other senior management received remuneration from Sinopec Corp. with a total amount of RMB14.2333 million. 17 THE COMPANY’S EMPLOYEES As at 31 December 2024, the Company has a total of 355,952 employees. There are a total of 311,149 retired employees to be reimbursed by the Company. Sinopec Marketing Co. Limited and China International United Petroleum & Chemicals Co. Limited, the principal subsidiaries of Sinopec Corp., have 114,825 and 627 employees respectively. The male and female ratio of all employees is 2.3:1, achieved the Company’s target for the female representation, and the male and female ratio of the members of senior management is 12:1. THE BREAKDOWN OF NUMBER OF EMPLOYEES BY OPERATION SEGMENTS IS AS FOLLOWS: (INCLUDING EXPLORATION AND PRODUCTION, REFINING, MARKETING AND DISTRIBUTION, CHEMICALS, R&D AND OTHERS) R&D Other Segments Exploration and Production Refining Marketing and Distribution Chemicals 31.6% 15.5% 17.5% 32.3% 1.9% 1.2% 55,111 62,250 114,825 4,390 6,802 112,574 EMPLOYEES’ PROFESSIONAL STRUCTURE AS FOLLOWS: (INCLUDING PRODUCTION, SALES, TECHNOLOGY, FINANCE, ADMINISTRATION AND OTHERS) Technology Finance Administration Others Production Sales 28.9% 24.2% 2.3% 7.4% 1.2% 35.9% 127,803 102,789 86,266 8,306 26,446 4,342 50 CHINA PETROLEUM & CHEMICAL CORPORATION Corporate Governance, Environment and Society EDUCATIONAL BACKGROUND STRUCTURE FOR EMPLOYEES AS FOLLOWS: (INCLUDING MASTER’S DEGREE AND ABOVE, UNDERGRADUATE, JUNIOR COLLEGE, TECHNICAL SECONDARY SCHOOL, SENIOR HIGH SCHOOL AND TECHNICAL SCHOOL DEGREES AND BELOW) Senior high school and technical school degrees or below Master’s degree or above Undergraduate Junior college Technical secondary school 29.2% 9.5% 30.6% 23.7% 7.1% 33,888 108,803 84,351 25,125 103,785 R&D PERSONNEL EDUCATIONAL STRUCTURE: (INCLUDING PHD, MASTER’S DEGREE, UNDERGRADUATE AND BELOW) Ph.D. Master’s Degree Undergraduate or below 0 500 1000 1500 2000 2500 3000 3500 2,484 3,035 1,283 R&D PERSONNEL AGE STRUCTURE: 21-30 31-40 41-50 51 and above 0 500 1000 1500 2000 2500 1,433 2,217 1,845 1,307 51 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Annual Report 2024 Corporate Governance, Environment and Society CORPORATE GOVERNANCE, ENVIRONMENT AND SOCIETY (CONTINUED) 18 CHANGES OF CORE TECHNICAL TEAM OR KEY TECHNICIANS During the reporting period, there are no significant changes of core technical team or key technicians in the Company. 19 EMPLOYEE BENEFITS SCHEME Details of the Company’s employee benefits scheme are set out in Note 40 of the financial statements prepared under IFRS Accounting Standards of this annual report. As at 31 December 2024, the Company had a total of 311,149 retired employees. All of them participated in the basic pension schemes administered by provincial governments (or those of autonomous regions or municipalities). Government- administered pension funds are responsible for the payments of basic pensions. 20 REMUNERATION POLICY Based on a relatively unified basic remuneration system, Sinopec Corp. has established its remuneration system based on the value of positions, performance & contribution, with an aim at improving employee capabilities, and has constantly improved employee performance evaluation and incentive & discipline mechanisms. 21 TRAINING PROGRAMS During the reporting period, the Company continued to strengthen the overall management of education and training, established and improved the high-quality training system, and precisely conducted training programs for all types of talents. The headquarter trained 3,880 key talents. The training for managers, experts, technical personnel, and international talents improved the comprehensive caliber and performance ability of all kinds of talents. The Company strengthened corporate culture training, innovatively held specialized training camp on digital and intelligent transformation and reform management. The digital transformation of training was vigorously promoted and over 60 million on-line training hours were achieved this year. 22 ENVIRONMENTAL INFORMATION Sinopec Corp. established the HSE management system since 2001 and continued to improve it. As of the end of the reporting period, Sinopec Corp. has formed the system consisting of 16 environmental protection management policies currently in effect and covering pollution prevention, ecological protection, environmental protection of construction projects, environmental statistics and monitoring, as well as environmental risk management and emergency response. 23 WORK CONDUCTED IN ECOLOGICAL PROTECTION, POLLUTION PREVENTION AND ENVIRONMENTAL RESPONSIBILITIES PERFORMANCE BY THE COMPANY IN THE REPORTING PERIOD In the reporting period, the Company deepened the campaign of pollution prevention, persistently built the “no waste group”, strengthened ecological and environmental protection in the Yangtze and Yellow River basins, comprehensively promoted the second phase of the Green Enterprise Action plan. The sewage COD and sulphur dioxide emissions decreased by 2.6% and 0.2% year-on-year respectively, and the solid waste was 100% properly disposed. 24 MEASURES TAKEN TO MITIGATE CARBON EMISSION AND ITS EFFECT During the reporting period, the company actively and steadily promoted the “dual carbon” initiative, orderly promoted the adjustment and optimization of industrial structure and energy consumption structure, strengthened the development and application of key low-carbon technologies, strengthened the management and control of emissions of CO2 and methane and achieved good results in carbon emission reduction. In 2024, the Company decreased GHG emissions by 2.05 million tonnes of CO2 equivalent through energy conservation and consumption reduction, 2.10 million tonnes of CO2 were recycled, 0.966 million tons of carbon dioxide used for EOR, 956 million cubic meters of methane were recovered which was equivalent to reducing 14.00 million tonnes of CO2 emissions. 25 ENVIRONMENTAL PROTECTION SOLUTIONS OF COMPANIES AND THEIR SUBSIDIARIES AS MAJOR POLLUTANT DISCHARGING COMPANIES IDENTIFIED BY ENVIRONMENTAL PROTECTION DEPARTMENTS (1) Pollutant discharge information In the reporting period, certain subsidiaries of Sinopec Corp. listed as major pollutant discharge units announced by national or local ecological and environmental authorities have obtained their pollutant discharge license in accordance with the requirements of the national list of fixed pollution source emission permit classification management and disclosed environmental information as required by the relevant authorities and local government. The details of such information were published on national pollutant discharge license management information platform (https://permit.mee.gov.cn/permitExt/ defaults/default-index!getInformation. action) and the local government website. 52 CHINA PETROLEUM & CHEMICAL CORPORATION Corporate Governance, Environment and Society Discharge information summarized by category is as follows: (a) Discharge of air pollutants1 No. Pollutant type Number of vents involved2 Ways of discharge3 Discharge standards implemented4 Permitted concentration limit5 Actual annual average concentration6 Approved actual discharge amount Discharge compliance 1 SO2 1,251 continuous Discharge Standards for Air Pollutants from Thermal Power Plants (GB 13223-2011) Discharge Standards for Air Pollutants from Boilers (GB13271-2014) Discharge Standards for Pollutants in the Petroleum Refining Industry (GB31570-2015) Discharge Standards for Pollutants in the Petrochemical Industry (GB31571-2015) Discharge Standards for Pollutants in the Synthetic Resin Industry (GB31572-2015) 35-200 mg/m3 5-50 mg/m3 4,652 tonnes The compliance rate is 99.99%, the details of which are subject to the announcement by the ecological authorities. 2 NOX 1,243 continuous Discharge Standards for Air Pollutants from Thermal Power Plants (GB 13223-2011) Discharge Standards for Air Pollutants from Boilers (GB13271-2014) Discharge Standards for Pollutants in the Petroleum Refining Industry (GB31570-2015) Discharge Standards for Pollutants in the Petrochemical Industry (GB31571-2015) Discharge Standards for Pollutants in the Synthetic Resin Industry (GB31572-2015) 50-240 mg/m3 20-100 mg/m3 18,482 tonnes The compliance rate is 99.99%, the details of which are subject to the announcement by the ecological authorities. Note 1: This report discloses the discharge of the Company’s oilfield, refining and chemical companies and specialized companies that are included in the key management of emission permits. The data is calculated by self-monitoring data and is ultimately subject to the data published by the local ecological authorities. Note 2: Count the number of organized vents involved for this pollutant. Note 3: Intermittent discharge from some vents. Note 4: The discharge standards implemented are the major industrial discharge standards. Other standards such as local emission standards implemented by each company can be found in the public information of the ecological authorities. Note 5: The permitted concentration limit is major industrial discharge standard limit. The limit of other standards implemented by each company can be found in the public information of the ecological authorities. Note 6: The actual annual average concentration of the main discharge outlets is within the corresponding disclosure range, and the public information of the ecological and environmental department can be consulted for details. (b) Discharge of water pollutants1 No. Pollutant type Number of vents involved Ways of discharge2 Discharge standards implemented3 Permitted concentration limit4 Actual annual average concentration5 Approved actual discharge amount Discharge compliance 1 COD 76 continuous Discharge Standards for Pollutants in the Petroleum Refining Industry (GB31570-2015) Discharge Standards for Pollutants in the Petrochemical Industry (GB31571-2015) Discharge Standards for Pollutants in the Synthetic Resin Industry (GB31572-2015) 40-60 mg/L 10-50 mg/L 4,432 tonnes Daily average data has a 100% compliance rate. 2 Ammonia and nitrogen 75 continuous Discharge Standards for Pollutants in the Petroleum Refining Industry (GB31570-2015) Discharge Standards for Pollutants in the Petrochemical Industry (GB31571-2015) Discharge Standards for Pollutants in the Synthetic Resin Industry (GB31572-2015) 5-8 mg/L 0.5-4 mg/L 69 tonnes Daily average data has a 100% compliance rate. Note 1: This report discloses the discharge of the Company’s oilfield, refining and chemical companies and specialized companies that are included in the key management of discharge permits. The data is calculated by self-monitoring data and is ultimately subject to the data published by the local ecological authorities. Note 2: Intermittent discharge from some vents. Note 3: The discharge standards implemented are the major industrial discharge standard. Other standards such as local emission standards implemented by each company can be found in the public information of the ecological authorities. Note 4: The permitted concentration limit is major industrial discharge standard limit. The limit of other standards implemented by each company can be found in the public information of the ecological authorities. Note 5: The actual annual average concentration of the main discharge outlets is within the corresponding disclosure range, and the public information of the ecological and environmental department can be consulted for details. 53 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Annual Report 2024 Corporate Governance, Environment and Society CORPORATE GOVERNANCE, ENVIRONMENT AND SOCIETY (CONTINUED) (2) Construction and operation of pollution prevention facilities In the reporting period, the Company built pollution prevention and control facilities for sewage, flue gas, solid waste and noise in accordance with the requirements of the national and local pollution prevention and environmental protection standards, maintained effective and stable operation of pollution prevention and control facilities. For details, please refer to the Sinopec Corp. Sustainability Report. (3) Environmental influence evaluation for construction projects and other administrative permit for environmental protection In the reporting period, the Company strictly standardized environmental protection management for construction projects, implemented whole process environmental protection management on construction and operation, with measures of the “simultaneous three” of the environmental protection implemented, all new projects have acquired approval for environmental evaluation from government, and obtained environmental protection acceptance of completion project as required. (4) Contingent scheme for sudden environmental incident In the reporting period, the Company complied with the requirements for environmental incident contingent scheme by the State and persistently improved its contingent scheme against sudden environmental incidents and weather with severe pollution. (5) Scheme for environmental self-monitoring In the reporting period, the Company continuously improved its self-monitoring scheme in accordance with the industry guideline, implemented the national requirements for sewage, flue gas and noise monitoring, and disclosed the monitor information as required. (6) Administrative penalties due to environmental problems in the reporting period In the reporting period, to the knowledge of the Company, Sinopec Corp. and its subsidiaries were subject to the environmental administrative penalty of RMB1.6579 million. The details of administrative penalties were published on the websites of local ecological and environmental authorities. (7) Other environmental information to be disclosed In the reporting period, for subsidiaries not listed as major pollution units, the Company has obtained related permissions from national and local government, and enforced environmental protection measures. The above-mentioned subsidiaries are not obliged to disclosure in accordance with the requirements of national and local ecological environment authorities. 26 DONATION AND INVESTMENT IN RURAL REVITALIZATION AND PUBLIC WELFARE PROJECT During the reporting period, the Company implemented 261 donations with an expenditure of RMB0.29 billion, mainly focusing on expanding achievements in poverty-alleviation and rural revitalization and public welfare programs, including RMB0.25 billion used in rural revitalization. For details, please refer to the 2024 Sustainability Report of Sinopec Corp. 54 CHINA PETROLEUM & CHEMICAL CORPORATION 55 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Significant Events SIGNIFICANT EVENTS 1 MAJOR CONSTRUCTION PROJECTS (1) Chuanxi Natural Gas Project (phase 1) The project mainly consists of building 1.77 billion cubic meters per year purified gas capacity and drilling 16 wells. The project started in 2019 and was put into operation in January 2024. The project investment consists of the Company’s self-owned fund, joint venture fund and bank loan. As of 31 December 2024, the aggregate amount invested was RMB6.6 billion. (2) Shengli Shale Oil Project The project mainly launches shale oil exploration and development in Jiyang depression, planning to build a new production capacity of 1 million tpa in the 14th Five Year Plan. The project started in 2019. It has built 152 wells and generated production capacity of 0.87 million tpa. The project investment consists of the self-owned fund and bank loan. As of 31 December 2024, the aggregate amount invested was RMB14.0 billion. (3) Longkou LNG Project The project mainly consists of building wharf, terminal and power plant warm drainage and water intake. The designed LNG capacity in the first phase is 6 million tons per year. One LNG berth with 0.266 million cubic meters will be modified and four 0.22 million cubic meters storage tanks will be newly built. The project started in November 2021. The project investment consists of the self-owned fund and bank loan. As of 31 December 2024, the aggregate amount invested was RMB5.7 billion. (4) Zhenhai Refining & Chemical 11 million tpa Refinery Plant and High-End Synthetic New Material Project The project mainly consists of building 11 million tpa refinery plant and 0.6 million tpa propane dehydrogenation and downstream processing units, etc. The project started in June 2022 and achieved mechanical completion in December 2024. The project investment consists of the self-owned fund and bank loan. As of 31 December 2024, the aggregate amount invested was RMB32.9 billion. (5) Maoming Refining Transition and Upgrading and Ethylene Quality Revamping Project The project mainly consists of building 3 million tpa catalytic cracking united plant, 1 million tpa ethylene unit, supporting utilities and auxiliary facilities, etc. The project started in June 2023. The project investment consists of the self-owned fund and bank loan. As of 31 December 2024, the aggregate amount invested was RMB6.0 billion. (6) Qilu Refining of Local Crude Oil Upgrading and Technical Transformation Project The project mainly consists of building 10 million tpa crude oil distillation unit, renovating 1 million tpa ethylene unit, construction of supporting utilities and auxiliary facilities, etc. The project started in December 2024. The project investment consists of the self-owned fund and bank loan. As of 31 December 2024, the aggregate amount invested was RMB65 million. (7) Jiujiang 1.5 million tpa Aromatic and Supporting Refinery Renovation Project The project mainly consists of building 1.5 million tpa aromatic united plant, 2.6 million tpa hydrocracking unit, 2.6 million tpa continuous catalytic reforming unit, supporting utilities and auxiliary facilities, etc. The project started in July 2024. The project investment consists of the self-owned fund and bank loan. As of 31 December 2024, the aggregate amount invested was RMB0.8 billion. (8) Zhenhai 1.5 million tpa Ethylene and Downstream High-End New Material Industry Cluster Project The project mainly consists of 1.5 million tpa ethylene units, downstream processing units, supporting utilities and auxiliary facilities, etc. The project started in November 2023. The project investment consists of the self-owned fund and bank loan. As of 31 December 2024, the aggregate amount invested was RMB4.4 billion. (9) Tianjin Nangang 1.2 million tpa Ethylene and Downstream High-End New Material Industry Cluster Project The project mainly consists of 1.2 million tpa ethylene units and downstream processing units, etc. The project started in May 2021 and was put into operation at the end of 2024. The project investment consists of the self-owned fund and bank loan. As of 31 December 2024, the aggregate amount invested was RMB15.4 billion. (10) Yizheng Chemical Fibre 3 million tpa PTA Project The project mainly consists of oxidation units, purification units and auxiliary units, etc. The project started in July 2021 and was put into operation in April 2024. The project investment consists of the self-owned fund and bank loan. As of 31 December 2024, the aggregate amount invested was RMB5.1 billion. 56 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Significant Events SIGNIFICANT EVENTS (CONTINUED) 2. ACTUAL DAILY RELATED TRANSACTIONS ENTERED INTO BY THE COMPANY AND CHINA OIL & GAS PIPELINE NETWORK CORPORATION DURING THE REPORTING PERIOD On 22 March 2024, the Board of Sinopec Corp. approved the daily related transaction cap in relation to refined oil pipeline transportation services between Sinopec Marketing Company Limited and China Oil & Gas Pipeline Network Corporation for the period from 1 January 2024 to 31 December 2024. For details, please refer to the announcements published by Sinopec Corp. on China Securities Journal, Shanghai Securities News, Securities Times, and on the website of SSE on 25 March 2024 and on the website of Hong Kong Stock Exchange on 22 March 2024. The actual amount of the daily related transactions of Sinopec Marketing Company Limited and China Oil & Gas Pipeline Network Corporation regarding refined oil pipeline transportation services from 1 January 2024 to 31 December 2024 was RMB5.398 billion. 3 THE ISSUANCE OF A SHARES BY SINOPEC CORP. TO THE TARGET SUBSCRIBER In the reporting period, Sinopec Corp. completed the issuance of 2,390,438,247 A shares to China Petrochemical Corporation (the “Issuance”). New shares issued thereof had completed trusteeship registration and lock-up procedures in China Securities Registration and Clearing Company Limited Shanghai Branch Company on 18 March 2024. These shares shall not be transferred within 36 months from the completion date of the Issuance. After the completion of the Issuance, the total share capital of Sinopec Corp. changed from 119,349,251,646 shares to 121,739,689,893 shares. For details, please refer to announcements published by Sinopec Corp. on China Securities Journal, Shanghai Securities News, Securities Times and the website of the SSE on 16 March 2024 and 20 March 2024 and the circular and announcement published on the website of Hong Kong Stock Exchange on 13 April 2023 and 19 March 2024, respectively. (1) Use of the proceeds Unit: RMB million Source of proceeds Receiving time of proceeds Total amount of proceeds Net amount of proceed after deducting issuance fees Proposed amount of proceeds to be invested in the offering circular Accumulated amount of used proceeds at the end of the reporting period % of accumulated amount of used proceeds at the end of the reporting period Amount used in the year % of amount used in the year Accumulated amount of proceeds with changed purposes The issuance of shares to the targeted subscriber 12 March 2024 12,000 11,987 11,987 1,867 16 1,867 16 N/A Note: There were no excess-raised funds involved in the Issuance. 57 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Significant Events (2) Detail of investment projects Detailed use of the proceeds Unit: RMB million Source of proceeds Name of projects Nature of projects Whether the projects be mentioned in the prospectus or not Whether the project be changed or not Proposed amount of proceeds to be invested Amount of used proceeds during the reporting period Accumulated amount of used proceeds at the end of the reporting period Amount of remaining proceeds at the end of the reporting period % of accumulated amount of used proceeds at the end of the reporting period Year of projects reaching expected conditions for use Whether the project be finished or not Whether the progress of investment is in line with the proposed schedule or not Whether the feasibility of the project has significantly changed or not. If yes, please explain the specific situations. Profits realized during the reporting period Profits realized or R&D achievements of the projects The issuance of shares to the targeted subscriber First Stage of Phase III of Tianjin LNG Project Production and construction Yes No 4,500 278 278 4,222 6 2027 No Yes No — — The issuance of shares to the targeted subscriber Yanshan Branch Hydrogen Purification Facilities Improvement Project 1 Production and construction Yes No 187 115 115 72 61 2024 No Yes No — — The issuance of shares to the targeted subscriber Maoming Branch Oil Refining Transition and Upgrading and Ethylene Quality Revamping Project Production and construction Yes No 4,800 182 182 4,618 4 2027 No Yes No — — The issuance of shares to the targeted subscriber Maoming Branch 50,000 tpa Polyolefin Elastomer (POE) Industrial Test Unit Project Production and construction Yes No 900 796 796 104 88 2025 No Yes No — — The issuance of shares to the targeted subscriber ZhongKe (Guangdong) Refinery & Petrochemical Company Limited No. 2 EVA Project Production and construction Yes No 1,600 496 496 1,104 31 2026 No Yes No — — Total — — — — 11,987 1,867 1,867 10,120 16 — — — — — — Note 1: The Yanshan branch hydrogen purification facility improvement project had reached the intended usable condition in December 2024. As of December 31, 2024, the amount of remaining proceeds was RMB72 million, primarily consisting of progress payments, quality guarantee deposits, and surplus proceeds. The surplus proceeds was mainly due to the reduction in construction costs under guaranteed quality and controlled risks by strict control, supervision, and management of construction costs and expenses, as well as the rational scheduling and optimization of various resources. (3) In the reporting period, there were no changes or terminations of investment projects. (4) Pre-investment of investment projects and replacement of self-raised funds On 28 April 2024, the 22nd meeting of the eighth session of the Board considered and approved Proposal on Replacing Pre-invested Self-raised Funds with Proceeds, approving the Company to use the proceeds of RMB1,215,422,591.73 to replace the pre-invested self-raised funds. For details, please refer to announcements published by Sinopec Corp. on China Securities Journal, Shanghai Securities News, Securities Times and the website of the SSE on 29 April 2024 and 26 August 2024, respectively. (5) Other situations regarding the use of proceeds During the reporting period, the Company did not use idle proceeds to temporarily supplement working capital, carry out cash management, or invest in related products. (6) Conclusive opinions of intermediary agency on the special verification and authentication of the storage and use of proceeds In the opinion of KPMG Huazhen LLP, the accounting firm, the Company’s Special Report on the Deposit and Utilization of Raised Funds for the year 2024 was prepared, in all material respects, in accordance with the requirements of “Regulatory Guidelines for Listed Companies No. 2 – Regulatory Requirements for the Management and Use of Funds Raised by Listed Companies” issued by the CSRC and the “Self-regulatory Guidelines for Listed Companies on the SSE No. 1 – Standardized Operation” issued by the SSE, as well as relevant format guidelines. It also faithfully reflected the deposit and utilization of raised funds for the year 2024 in all material respects. In the opinion of GF Securities Co., Ltd., the sponsor, the Company’s deposit and utilization of raised funds for the year 2024 complied with the requirements of “Regulatory Guidelines for Listed Companies No. 2 – Regulatory Requirements for the Management and Use of Funds Raised by Listed Companies (2022 Revision)” (CSRC Announcement [2022] No. 15) issued by the CSRC and the “Self-regulatory Guidelines for Listed Companies on the SSE No. 1 – Standardized Operation” issued by the SSE, as well as relevant laws, regulations, and normative documents. The Company deposited the proceeds in dedicated accounts and used them for proposed projects, without any disguised change in the usage or prejudice to the shareholders’ interests, nor any illegal use of proceeds. 58 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Significant Events SIGNIFICANT EVENTS (CONTINUED) 4 PERFORMANCE OF THE UNDERTAKINGS BY RELEVANT ENTITIES Background Type of undertaking Party Contents Date of undertaking Whether bears deadline or not Term for performance Whether strictly performed or not Undertakings related to Initial Public Offerings (IPOs) IPOs China Petrochemical Corporation 1. Compliance with the connected transaction agreements; 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. From 22 June 2001 No – Yes 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 provision, that 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., provided that the exercise of such option complies with applicable laws and regulations, contractual obligations and other procedural requirements. 28 April 20141 Yes Within 10 years after the date when China Petrochemical Corporation acquires the assets Yes Undertaking related to refinancing Restricted sale of shares China Petrochemical Corporation China Petrochemical Corporation undertook not to transfer its subscribed A-shares within 36 months from the completion of the Issuance. March 2023 Yes 36 months from the completion of the Issuance Yes No reduction China Petrochemical Corporation China Petrochemical Corporation undertook that within six months after the completion of the Issuance, China Petrochemical Corporation and its controlled enterprises will not reduce their shareholdings of Sinopec Corp.’s stocks. March 20232 Yes Within six months after the completion of the Issuance Yes Note 1: According to the undertaking issued on 28 April 2014, within 10 years of the issuance of the undertaking, Sinopec Corp. was 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 the exercise of option to Sinopec Corp. Since the issuance of the undertaking, China Petrochemical Corporation had earnestly performed its undertaking. As of 28 April 2024, the ten-year option owned by Sinopec Corp. had expired, and the undertaking had been fully performed. Currently, no horizontal competition with material negative impact on Sinopec Corp. existed in the exploration and production of overseas petroleum and natural gas between Sinopec Corp. and China Petrochemical Corporation. Note 2: As of September 2024, the undertaking had expired and been fully performed. As of the date of this report, Sinopec Corp. had no undertakings in respect of financial performance, asset injections or asset restructuring that had not been fulfilled, nor did Sinopec Corp. make any profit forecast in relation to any asset or project. 5 SIGNIFICANT EQUITY INVESTMENT In the reporting period, no significant equity investment occurred by the Company. 6 SIGNIFICANT SALE OF ASSETS OR EQUITY In the reporting period, no significant sale of assets or equity occurred by the Company. 59 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Significant Events 7 MATERIAL GUARANTEE CONTRACTS AND THEIR PERFORMANCE Unit: RMB million 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 Zhong An United Coal Chemical Co., Ltd. 4,402 April 2018 April 2018-December 2031 Joint and several liability guarantee Normal performance None No No None No No Sinopec Corp. The listed company itself Russian Amur Natural Gas Chemical Integrated LLC 3,791 *3 December 2021 December 2021-December 2035 (the mature date is estimated) Joint and several liability guarantee Normal performance None No No None No No Total amount of guarantees provided during the reporting period *4 56 Total amount of guarantees outstanding at the end of reporting period *4 (A) 8,193 Guarantees by the Company to the controlled subsidiaries Total amount of guarantee provided to controlled subsidiaries during the reporting period 53 Total amount of guarantee for controlled subsidiaries outstanding at the end of the reporting period (B) 3,594 Total amount of guarantees by the Company (including those provided to controlled subsidiaries) Total amount of guarantees (A+B) 11,787 The proportion of the total amount of guarantees to the Sinopec Corp.’s net assets (%) 1.4 Among which: Guarantees provided for shareholders, de facto controller and its related parties (C) – Amount of debt guarantees provided directly or indirectly to the companies with liabilities to assets ratio over 70% (D) 4,402 The amount of guarantees in excess of 50% of the net assets (E) – Total amount of the above three guarantee items (C+D+E) 4,402 Statement of guarantee undue that might be involved in any joint and several liabilities None Statement of guarantee status None * 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 SSE. * 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. 60 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Significant Events SIGNIFICANT EVENTS (CONTINUED) 8 SIGNIFICANT LITIGATION AND ARBITRATION No significant litigation or arbitration relating to the Company occurred during the reporting period. 9 INSOLVENCY AND RESTRUCTURING During the reporting period, the Company was not involved in any insolvency or restructuring matters. 10 OTHER MATERIAL CONTRACTS Saved as disclosed by Sinopec Corp., the Company did not enter into any material contracts subject to disclosure obligations during the reporting period. 11 CREDIBILITY FOR THE COMPANY, CONTROLLING SHAREHOLDERS AND DE FACTO CONTROLLER During the reporting period, the Company and its controlling shareholder did not fail to perform any effective judgments of the courts or fail to repay any substantial amount of debt due. 12 TRUSTEESHIP, CONTRACTING AND LEASES During the reporting period, the Company was not involved in any events relating to significant trusteeship, contracting or leases for the assets of any other company, nor has it placed its assets with any other company under a trust, contracting or lease agreement subject to disclosure obligations. 13 ENTRUSTED FINANCING AND LOAN (1) ENTRUSTED FINANCING During the reporting period, the Company was not involved in any entrusted financing subject to disclosure obligations. (2) ENTRUSTED LOAN During the reporting period, the Company was not involved in any entrusted loan subject to disclosure obligations. (3) OTHER LOAN Unit: RMB million Type Fund sources Transaction amount Undue amount Overdue Project construction loan Self-owned fund (4,318) 2,970 0 (4) OTHER INVESTMENT AND FINANCING During the reporting period, the Company was not involved in other investment or financing subject to disclosure obligations. 14 BUSINESS WITH SINOPEC FINANCE CO. AND CENTURY BRIGHT (1) DEPOSIT BUSINESS Unit: RMB million Transaction amount Related party Related party relationship Daily Cap Interest rate range Balance at beginning Time deposit Time deposit withdrawn Net changes current deposits Balance in the end Sinopec Finance Co. China Petrochemical Corporation 51%; Sinopec Corp. 49% RMB80.0 billion by Sinopec Finance Co. and Century Bright Current: 0.35%-1.35%; Time deposit: 0.80%-7.40% 7,493 14,705 14,816 340 7,722 Century Bright China Petrochemical Corporation 100% Current: 0%-5.05% Time deposit: 0.50%-6.27% 58,474 437,799 437,679 117 58,711 Note: Generally, the deposit interest rate at Sinopec Finance Co. and Century Bright is no lower than that of the same type of deposits for the same period from major commercial banks. (2) LOAN BUSINESS Unit: RMB million Transaction amount Related party Related party relationship Loan Cap Interest rate range Balance at beginning Total loan Total repayment Balance in the end Century Bright China Petrochemical Corporation 100% 117,540 1.52%-6.39% 1,424 424,698 423,453 2,669 Sinopec Finance Co. China Petrochemical Corporation 51%; Sinopec Corp. 49% 50,174 1.08%-4.99% 35,824 74,770 85,285 25,309 Note: Generally, the loan interest rate at Sinopec Finance Co. and Century Bright is no higher than that of the same type of loan for the same period from major commercial banks. 61 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Significant Events (3) CREDIT BUSINESS OR OTHER FINANCE BUSINESS Unit: RMB million Related party Related party relationship Business nature Balance in the end Transaction amount Sinopec Finance Co. China Petrochemical Corporation 51%; Sinopec Corp. 49% Issued the acceptance bills 14,929 33,516 Discounted bills 0 9,847 Note: The transaction amount includes the newly issued bills and discounts in the year. In order to regulate connected transactions between the Company and Sinopec Finance Co. (Sinopec Corp.’s domestic settlement center) and to ensure the safety and liquidity of the deposits of the Company at Sinopec Finance Co., Sinopec Corp. and the Finance Company formulated the Risk Control System on Connected Transactions between China Petroleum & Chemical Corporation and Sinopec Finance Co., Ltd., which covers the risk control system and the risk management plan of the Company to prevent financial risks, ensuring the Company’s discretion to use and control its deposits with Sinopec Finance Co.. At the same time, as the controlling shareholder of Sinopec Finance Co., China Petrochemical Corporation undertook that in case of an emergency when Sinopec Finance Co. has difficulty in making payments, China Petrochemical Corporation would increase the capital of Sinopec Finance Co. to meet the payment needs. In order to regulate connected transactions between the Company and Century Bright (Sinopec Corp.’s overseas settlement center), Century Bright ensures the safety of the deposits of the Company at Century Bright by strengthening internal risk controls and obtaining support from China Petrochemical Corporation. China Petrochemical Corporation has formulated a number of internal rules, including the Rules for the Internal Control System, the Rules for Implementation of Overseas Capital Management Methods, and the Provisional Methods for Overseas Fund Platform Management, to impose strict restrictions on Century Bright regarding the provision of overseas financial services. Century Bright has also established the Rules for the Implementation of the Internal Control System, which ensures the standardisation and safety of its corporate deposits business. At the same time, as the wholly controlling shareholder of Century Bright, China Petrochemical Corporation entered into a keep-well agreement with Century Bright in 2013, in which China Petrochemical Corporation undertakes that when Century Bright has difficulty in making payments, China Petrochemical Corporation will ensure that Century Bright will fulfill its repayment obligation through various channels. Sinopec Corp. has formulated the Risk Disposal Plan of China Petroleum & Chemical Corporation for Conducting Financial Business with Sinopec Finance Co. and Century Bright and agreed on the corresponding risk control measures to ensure the safety of the Company’s funds in Sinopec Finance Co. and Century Bright to effectively prevent, timely control and resolve financial business risks. The deposits of the Company at Sinopec Finance Co. and Century Bright during the reporting period are in strict compliance with the relevant caps as approved at the general meeting of Sinopec Corp. During daily operations, the Company can withdraw the full amount of its deposits at the Sinopec Finance Co. and Century Bright. 15 APPROPRIATION OF NON-OPERATIONAL FUNDS BY THE CONTROLLING SHAREHOLDER AND ITS RELATED PARTIES AND THE PROGRESS FOR CLEARING UP Not applicable 16 STRUCTURED ENTITY CONTROLLED BY THE COMPANY None 17 MAJOR INFLUENCES ON THE INDUSTRY FROM NEWLY-ENFORCED LAWS, ADMINISTRATIVE RULES, REGULATIONS AND INDUSTRY POLICIES On 12 April 2024, the State Council issued the “Several Opinions on Strengthening Regulation, Forestalling Risks, and Promoting High-quality Development of the Capital Market”, which required strict ongoing supervision of listed companies, strengthening the supervision of information disclosure and corporate governance, reinforcing the supervision of cash dividends of listed companies, and promoting the enhancement of listed companies’ investment value. On 23 May 2024, the State Council issued the “Action Plan for Energy Conservation and Carbon Reduction for 2024-2025”, which emphasized the requirement to achieve higher level and higher quality of energy saving and carbon reduction in various industries, and accelerating the energy saving and carbon reduction transformation of the petrochemical and chemical industries. In addition, the relevant government departments have also issued other policies and guidance related to ecological environmental protection, carbon emission rights, safety and emergency management, data security, trademark and intellectual property rights protection, etc., emphasizing the need to strengthen compliance management in terms of energy supply security, confidentiality and intellectual property rights, while focusing on promoting sustainable development, establishing a long-term mechanism for safe production, steadily pushing forward the green and low-carbon transformation of energy, etc. 62 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Connected Transactions CONNECTED TRANSACTIONS 1 AGREEMENTS ON CONTINUING CONNECTED TRANSACTIONS BETWEEN SINOPEC CORP. AND SINOPEC GROUP Prior to Sinopec Corp.’s overseas listing, in order to ensure the smooth continuation of production and business conducted by the Company and Sinopec Group, the two parties entered into the agreements on continuing connected transactions. On 27 August 2021, Sinopec Corp. and its controlling shareholder, China Petrochemical Corporation, entered into the sixth supplemental agreement on continuing connected transactions. The resolution relating to continuing connected transactions for the three years from 2022 to 2024 was approved at the First Extraordinary General Meeting of Sinopec Corp. for the year 2021 held on 20 October 2021. For details of the above agreements on continuing connected transactions, please refer to relevant announcements of Sinopec Corp. published on 30 August 2021 in China Securities Journal, Shanghai Securities News and Securities Times and on the website of the SSE and on 29 August 2021 on the website of the Hong Kong Stock Exchange. On 23 August 2024, Sinopec Corp. entered into the seventh supplemental agreement on continuing connected transactions with its controlling shareholder, China Petrochemical Corporation, and the Financial Services Agreement with the Sinopec Finance Co. and Century Bright. Resolution in relation to the continuing connected transactions for the three years from 2025 to 2027 and the resolution in relation to the Financial Services Agreement signed with Sinopec Finance Co. and Century Bright were approved at EGM held on 22 October 2024. For details agreements on the above continuing connected transactions, please refer to relevant announcements and circular of Sinopec Corp. published on 26 August 2024 in China Securities Journal, Shanghai Securities News and Securities Times and on the website of the SSE and on 25 August 2024, 1 September 2024 and 22 October 2024 on the website of the Hong Kong Stock Exchange. The capitalised terms used in this paragraph shall have the same meaning as that used in the above-mentioned announcements. 2 COMPLIANCE OF DISCLOSURE AND APPROVALS OF CONTINUING CONNECTED TRANSACTIONS BETWEEN THE COMPANY AND SINOPEC GROUP WITH THE HONG KONG LISTING RULES AND THE SHANGHAI LISTING RULES Pursuant to the Hong Kong Listing Rules and the Shanghai Listing Rules, the continuing connected transactions between the Company and Sinopec Group are subject to disclosure, independent directors committee meeting’s approval and/or independent shareholders’ approval (if needed) based on the nature and the value of the transactions. Sinopec Corp. has fully complied with the above requirements of the rules in relation to the continuing connected transactions between the Company and Sinopec Group. The aggregated amount of the continuing connected transactions for 2024 of the Company is in compliance with the relevant requirements of the Hong Kong Listing Rules and the Shanghai Listing Rules. For actual performance details of continuing connected transaction agreements, please refer to Item 3 below. 3 ACTUAL PERFORMANCE OF CONTINUING CONNECTED TRANSACTIONS ENTERED INTO BY THE COMPANY DURING THE YEAR In the reporting period, purchase expenses of the continuing connected transactions of the Company were RMB272.466 billion, representing 8.65% of the total amount of this type of transactions for the reporting period, including purchases of products and services (procurement, storage, transportation, exploration and production services, and production-related services) of RMB259.150 billion, payment of property rent of RMB1.088 billion (annual value of right-of-use assets for property leasing of RMB1.039 billion), payment of land rent of RMB10.937 billion (annual value of right-of-use assets for lands leasing of RMB10.441 billion), and interest expenses of RMB1.291 billion. The sales income of the continuing connected transactions of the Company during the reporting period was RMB157.526 billion, representing 4.91% of the total amount of this type of transactions for the reporting period, including sales of products of RMB154.350 billion, agency commission income of RMB68 million, and interest income of RMB3.108 billion. Entrusted loan provided by the Company to the Connected Subsidiaries was RMB1 million. For definitions, please refer to relevant announcement and circular published on 30 August 2021 in China Securities Journal, Shanghai Securities News and Securities Times and on the website of the SSE, and the website of the Hong Kong Stock Exchange on 29 August 2021 and 3 September 2021. The amounts of the above continuing connected transactions between the Company and Sinopec Group did not exceed the relevant caps for the continuing connected transactions as approved by the general meeting of shareholders and the Board. The pricing principles for the continuing connected transactions are as follows: (a) the government-prescribed price; (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. Sinopec Corp. confirmed that the prices and terms of continuing connected transactions in the reporting period complied with their pricing principles. For details of the pricing principle, please refer to relevant announcements published on 30 August 2021 in China Securities Journal, Shanghai Securities News and Securities Times and on the website of the SSE and on 29 August 2021 the website of the Hong Kong Stock Exchange. 63 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Connected Transactions Decision-making procedures: The continuing connected transaction agreements were entered into in the ordinary course of the Company’s business and in accordance with normal commercial terms that are fair and reasonable to the Company and its shareholders. The Company, according to its internal control procedures, adjusts the scope and the relevant caps of continuing connected transactions every three years, and will announce and implement upon the approval of the Board and/or independent shareholders. For the other connected transactions, Sinopec Corp., in strict compliance with domestic and overseas regulatory rules, will publish the announcement and implement the transactions only after submitting the relevant proposals of connected transactions to the Board and/or the general meeting of shareholders for consideration and approval according to internal control procedures. Related party transactions with the Sinopec Group that occurred during the year, as set out in Note 39. to the financial statements prepared under the IFRS Accounting Standards in this annual report, also fall under the definition of connected transactions under Chapter 14A of the Hong Kong Listing Rules. The above-mentioned connected transactions between the Company and Sinopec Group were approved at the 2nd meeting of the eighth session of the Board and have complied with the requirements under Chapter 14A of the Hong Kong Listing Rules. The external auditor of Sinopec Corp. was engaged to report on the Company’s continuing connected transactions in accordance with the Hong Kong Standard on Assurance Engagements 3000, Assurance Engagement other than Audits or Reviews of Historical Financial Information, and with reference to Practice Note 740, Auditor’s Letter on Continuing Connected Transactions under the Hong Kong Listing Rules, issued by the Hong Kong Institute of Certified Public Accountants. The auditor has issued its unqualified letter containing its conclusions in respect of the above-mentioned continuing connected transactions in accordance with Rule 14A.56 of the Hong Kong Listing Rules. After reviewing the above-mentioned connected transactions, the independent directors committee meeting of Sinopec Corp. has confirmed the following: (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 OCCURRED THIS YEAR For details, please refer to item 2 “Actual Daily Related Transactions Entered into by the Company and China Oil & Gas Pipeline Network Corporation During the Reporting Period” and item 3 “The Issuance of A Shares by Sinopec Corp. to the Target Subscriber” in the Chapter “Significant Events”. 5 FUNDS PROVIDED BETWEEN RELATED PARTIES Unit: RMB million 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* 12,776 1,884 14,660 17,417 3,672 21,089 Other related parties Associates and joint ventures 8,242 (4,306) 3,936 5,759 60 5,819 Total 21,018 (2,422) 18,596 23,176 3,732 26,908 Reason for provision of funds between related parties Loans and other accounts receivable and payable Impacts on the Company No material negative impact * : affiliated companies include subsidiaries, associates and joint ventures. 64 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Report of the Board of Directors REPORT OF THE BOARD OF DIRECTORS The Board is pleased to present the report of the Board of Directors for the year ended 31 December 2024 for the shareholders’ review. 1 MEETINGS OF THE BOARD During this reporting period, Sinopec Corp. held seven (7) Board meetings. The details are as follows (1) The 20th meeting of the eighth session of the Board was held through electronic means of communication on 22 January 2024, whereby the proposals in relation to the following matters were approved: (i) Appointment of Chief Geologist; (ii) Internal Control Manual (2024). (2) The 21st meeting of the eighth session of the Board was held by on-site meeting on 22 March 2024, whereby the proposals in relation to the following matters were approved: (i) the Work Report of the eighth session of the Board (including the Work Report of the Board for 2023); (ii) Special Opinion of the Board of Directors on the Self-assessment of Independence of Independent Directors; (iii) the Work Report of the eighth session of the Senior Management (including the Work Report of the Senior Management for 2023); (iv) financial results and business performance of the Company for the year 2023; (v) provision for impairment for the year 2023; (vi) proposal on the implementation of the continuing connected transactions for the year 2023; (vii) Continuous Risk Assessment Report of Connected Transactions for the year 2023 between Sinopec Corp. and Sinopec Finance Co., Ltd. and Sinopec Century Bright Capital Investment, Ltd.; (viii) Report on the Implementation of Derivatives Business for the year 2023 and the Work Plan for the year 2024; (ix) profit distribution plan for the year 2023; (x) Internal Control Assessment Report of Sinopec Corp. for the year 2023; (xi) Financial Statements of Sinopec Corp. for the year 2023; (xii) Annual Report of the Company for the year 2023; (xiii) Assessment Report on KPMG’s Performance in 2023 by the Company; (xiv) audit costs for the year 2023; (xv) the reappointment of external auditors of Sinopec Corp. for the year 2024 and the authorization of the Board to determine their remunerations; (xvi) Report of Sustainable Development of Sinopec Corp. for the year 2023; (xvii) the continuing connected transactions between Sinopec Corp. and China Oil & Gas Pipeline Network Corporation for the year 2024; (xviii) Change of the Registered Capital and Amendments to the Articles of Association, the Rules and Procedures for the Board Meetings and the Rules and Procedures for the Supervisory Committee Meeting; (xix) to authorize the Board to determine the interim profit distribution plan of Sinopec Corp. for the year 2024; (xx) to authorize the Board to determine the plan for issuance of debt financing instrument(s); (xxi) to grant to the Board a general mandate to issue new domestic shares and/or overseas-listed foreign shares of Sinopec Corp.; (xxii) to grant to the Board a mandate to buy back domestic shares and/or overseas-listed foreign shares of Sinopec Corp. (3) The 22nd meeting of the eighth session of the Board was held through electronic means of communication on 28 April 2024, whereby the proposals in relation to the following matters were approved: (i) Proposal on the Use of Raised Funds to Replace Pre-invested Self-raised Funds; (ii) Appointment of President; (iii) Appointment of Senior Vice President; (iv) First Quarterly Report for 2024. (4) The 23rd meeting of the eighth session of the Board was held through electronic means of communication on 13 May 2024, whereby the proposals in relation to the following matters were approved: (i) the re-election of the Board of Directors; (ii) the re-election of the Supervisory Committee; (iii) Service Contract for the Directors of the ninth session of the Board (including remuneration clauses) and Supervisors of the ninth session of the Supervisory Committee (including remuneration clauses); (iv) Notice of Annual General Meeting for 2023, First A Shareholders Class Meeting for 2024, and First H Shareholders Class Meeting for 2024. (5) The 1st meeting of the ninth session of the Board was held by on-site meeting on 28 June 2024, whereby the proposals in relation to the following matters were approved: (i) election of the Chairman and Vice Chairman of the ninth session of the Board; (ii) composition of the special committees of the ninth session of the Board; (iii) the appointment of President, Secretary to the Board of Sinopec Corp.; (iv) the appointment of Senior Vice President, Chief Financial Officer, Vice President and other Senior Management of Sinopec Corp.; (v) the appointment of the Authorized Representative of the Hong Kong Stock Exchange and the Authorized Representative of the SSE. (6) The 2nd meeting of the ninth session of the Board was held by on-site meeting on 23 August 2024, whereby the proposals in relation to the following matters were approved: (i) Report on the Fulfillment of the Key Targets for the first half of the year 2024 and the Work Arrangements for the second half of the year 2024; (ii) financial results and business performance of the Company for the first half of the year 2024; (iii) profit distribution plan for the first half of the year 2024; (iv) Special Report on the Deposit and Utilization of Raised Funds for the first half of the year 2024; (v) the Continuous Risk Assessment Report of Connected Transactions between Sinopec Corp. and Sinopec Finance Co., Ltd. and Sinopec Century Bright Capital Investment, Ltd. for the first half of the year 2024; (vi) Financial Statements for the first half of the year 2024; (vii) Interim Report for 2024; (viii) the programme on share buy-back by centralized bidding; (ix) Dividend Distribution and Return Plan for Shareholders for the Next Three Years (2024-2026); (x) the continuing connected transactions for the year 2025 to 2027; (xi) the financial business for the year 2025 to 2027 among Sinopec Corp., Sinopec Finance Co., Ltd. and Sinopec Century Bright Capital Investment Limited; (xii) the report of Risk Assessment of Sinopec Finance Co., Ltd. and Sinopec Century Bright Capital Investment Limited; (xiii) Risk Disposal Plan for financial business with Sinopec Finance Co., Ltd. and Sinopec Century Bright Capital Investment Limited; (xiv) Notice of 2024 First Extraordinary General Meeting. (7) The 3rd meeting of the ninth session of the Board was held through electronic means of communication on 28 October 2024, whereby the proposal in relation to Third Quarterly Report for 2024 was approved. For details of each meeting, please refer to the announcements published in China Securities Journal, Shanghai Securities News and Securities Times after each meeting and on the websites of SSE, Hong Kong Stock Exchange and Sinopec Corp. 65 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Report of the Board of Directors 2 IMPLEMENTATION OF RESOLUTIONS APPROVED AT THE GENERAL MEETINGS OF SHAREHOLDERS BY THE BOARD During this reporting period, in accordance with relevant laws and regulations as well as the Articles of Association, all members of the Board diligently implemented the resolutions approved at the general meetings of Sinopec Corp., and completed all the tasks delegated to them at the general meetings. 3 DIRECTORS’ ATTENDANCE TO THE BOARD MEETINGS AND TO THE GENERAL MEETINGS DURING THE REPORTING PERIOD On 28 June 2024, Sinopec Corp. completed the election of the new session of the Board. The attendance of directors at the meetings of the eighth and ninth boards of directors is listed as follows: (1) Attendance to the Board meetings and general meetings during the reporting period by the Directors of the eighth session of the Board Board meeting General meetings Positions Name No. of meetings held On-site attendance Meetings attended through electronic means of communication Meetings attended by proxy Absent No. of meetings held Actual attendance Chairman Ma Yongsheng 4 1 3 0 0 3 3 Director Zhao Dong 4 0 3 1 0 3 3 Director Li Yonglin 4 1 3 0 0 3 3 Director Lv Lianggong 4 1 3 0 0 3 3 Director Yu Baocai 4 1 3 0 0 3 3 Independent Director Cai Hongbin 4 1 3 0 0 3 0 Independent Director Ng, Kar Ling Johnny 4 1 3 0 0 3 0 Independent Director Shi Dan 4 1 3 0 0 3 0 Independent Director Bi Mingjian 4 1 3 0 0 3 3 (2) Attendance to the Board meetings and general meetings during the reporting period by the Directors of the ninth session of the Board Positions Name Board meeting General meetings No. of meetings held On-site attendance Meetings attended through electronic means of communication Meetings attended by proxy Absent No. of meetings held Actual attendance Chairman Ma Yongsheng 3 2 1 0 0 1 1 Vice Chairman Zhao Dong 3 2 1 0 0 1 1 Director Zhong Ren 3 2 1 0 0 1 1 Director Li Yonglin 3 2 1 0 0 1 0 Director Lv Lianggong 3 2 1 0 0 1 1 Director Niu Shuanwen 3 2 1 0 0 1 1 Director Wan Tao 3 2 1 0 0 1 1 Director Yu Baocai 3 2 1 0 0 1 1 Independent Director Xu Lin 3 2 1 0 0 1 0 Independent Director Zhang Liying 3 2 1 0 0 1 1 Independent Director Liu Tsz Bun Bennett 3 2 1 0 0 1 1 Independent Director Zhang Xiliang 3 2 1 0 0 1 0 Note: No Directors were absent from two consecutive meetings of the Board. 66 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Report of the Board of Directors REPORT OF THE BOARD OF DIRECTORS (CONTINUED) 4 THE BOARD COMMITTEES MEETINGS AND THE SPECIAL MEETING OF INDEPENDENT DIRECTORS During the reporting period, the Board committees held fifteen (15) meetings, among which, the Strategy Committee held one (1) meeting, the Audit Committee held six (6) meetings, the Sustainable Development Committee held two (2) meetings, the Remuneration and Appraisal Committee held two (2) meetings, and the Nomination Committee held four (4) meetings. All members of each committee had attended the relevant meetings. The Company held two (2) Special Meetings of Independent Directors. All Independent Directors attended the meetings. Details of those meetings are as follows: (1) The 5th meeting of the eighth session of the Nomination Committee was held through electronic means of communication on 22 January 2024, whereby the proposal in relation to the appointment of Chief Geologist was approved. (2) The 13th meeting of the eighth session of the Audit Committee was held through electronic means of communication on 22 January 2024, whereby the proposal in relation to the Internal Control Manual (2024) was approved. (3) The 3rd meeting of the eighth session of the Strategy Committee was held through electronic means of communication on 20 March 2024, whereby the proposal in relation to the investments plan of 2024 was approved. (4) The 14th meeting of the eighth session of the Audit Committee was held by on- site meeting on 20 March 2024, whereby the proposals in relation to the following matters were approved: (i) financial results and business performance of the Company for the year 2023; (ii) Financial Statements of Sinopec Corp. for the year 2023; (iii) Annual Report of the Company for the year 2023; (iv) Continuous Risk Assessment Report of Connected Transactions for the year 2023 between Sinopec Corp. and Sinopec Finance Co., Ltd. and Sinopec Century Bright Capital Investment Limited; (v) Report on the Implementation of Derivatives Business for the year 2023 and the Work Plan for the year 2024; (vi) Assessment Report on KPMG’s Performance in 2023 by the Company; (vii) Internal Control Assessment Report of Sinopec Corp. for the year 2023; (viii) Report on the Main Audit Work in 2023 and the Overall Arrangement of Audit Work in 2024. (5) The 3rd meeting of the eighth session of the Remuneration and Appraisal Committee was held through electronic means of communication on 20 March 2024 whereby the proposal in relation to implementation of the rules of the remuneration of Directors, supervisors and other senior management for 2023 was approved. (6) The 4th meeting of the eighth session of the Sustainable Development Committee was held through electronic means of communication on 20 March 2024, whereby the proposals in relation to the following matters were approved: (i) Report of Sustainable Development of Sinopec Corp. for the year 2023; (ii) Report on the Completion of HSE Work for the year 2023 and the Work Arrangements for the year 2024; (iii) Report on the Anti-corruption Compliance Work of Sinopec Corp. for the year 2023 and the Plan of 2024. (7) The 2nd meeting of the Special Meeting of Independent Directors of the eighth session of the Board was held by on- site meeting on 20 March 2024, whereby the proposal in relation to the continuing connected transactions between Sinopec Corp. and China Oil & Gas Pipeline Network Corporation for the year 2024 was approved. The Independent Directors signed annual reports of their personal performance and engaged in discussions focused on implementing the domestic reform requirements for the Independent Directors. (8) The 6th meeting of the eighth session of the Nomination Committee was held through electronic means of communication on 18 April 2024, whereby the proposals in relation to the following matters were approved: (i) Appointment of President; (ii) Appointment of Senior Vice President. (9) The 15th meeting of the eighth session of the Audit Committee was held through electronic means of communication on 28 April 2024, whereby the proposals in relation to the following matters were approved: (i) First Quarterly Report for 2024; (ii) Report on the Implementation of the Internal Audit Plan in the first quarter of 2024. (10) The 7th meeting of the eighth session of the Nomination Committee was held through electronic means of communication on 13 May 2024, whereby the proposal in relation to the Election of New Session of the Board was approved. (11) The 4th meeting of the eighth session of the Remuneration and Appraisal Committee was held through electronic means of communication on 13 May 2024 whereby the proposal in relation to the remuneration of the Directors of the ninth session of the Board and Supervisors of the ninth session of the Supervisory Committee was approved. (12) The 1st meeting of the ninth session of the Nomination Committee was held through electronic means of communication on 28 June 2024, whereby the proposals in relation to the following matters were approved: (i) the appointment of President, Secretary to the Board of Sinopec Corp.; (ii) the appointment of Senior Vice President, Chief Financial Officer, Vice President and other Senior Management of Sinopec Corp. (13) The 1st meeting of the ninth session of the Audit Committee was held through electronic means of communication on 28 June 2024, whereby the proposal in relation to the appointment of Chief Financial Officer of Sinopec Corp. was approved. (14) The 2nd meeting of the ninth session of the Audit Committee was held by on-site meeting on 21 August 2024, 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 2024; (ii) Special Report on the Deposit and Utilization of Raised Funds for the first half of the year 2024; (iii) Continuous Risk Assessment Report of Connected Transactions between Sinopec Corp. and Sinopec Finance Co., Ltd. and Sinopec Century Bright Capital Investment Limited for the first half of the year 2024; (iv) Financial Statements for the first half of the year 2024; (v) Interim Report for 2024; (vi) Report on the Main Audit Work for the first half of 2024 and the Major Arrangement of Audit Work for the second half of 2024. 67 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Report of the Board of Directors (15) The 1st meeting of the Special Meeting of Independent Directors of the ninth session of the Board was held by on-site meeting on 21 August 2024, whereby the proposal in relation to the continuing connected transactions for the year 2025 to 2027 was approved. (16) The 1st meeting of the ninth session of the Sustainable Development Committee was held through electronic means of communication on 21 August 2024, whereby the proposal in relation to the Report on the Completion of HSE Work for the first half of 2024 and the Work Arrangements for the second half of 2024 was approved. (17) The 3rd meeting of the ninth session of the Audit Committee was held through electronic means of communication on 28 October 2024, whereby the proposals in relation to the following matters were approved: (i) Third Quarterly Report for 2024; (ii) Report on the Implementation of the Internal Audit Plan in the third quarter of 2024. 5 BOARD COMMITTEES ISSUED REVIEW OPINIONS TO THE BOARD WHEN PERFORMING THEIR DUTIES DURING THE REPORTING PERIOD, WITHOUT OBJECTION. 6 PERFORMANCE OF THE DIRECTORS During the reporting period, The Directors of Sinopec Corp. fulfilled their duties diligently in accordance with the Articles of Association, attended Board meetings and meetings of the relevant Board committees (please refer to the Report of the Board of Directors in this annual report for their attendance of the meetings). The Directors reviewed proposals with due care, utilized their professional expertise to provide suggestions on the Company’s development strategy, operations, reform and other significant matters, promoted scientific decision-making of the Board, and maintained timely and effective communication with the management, external auditors and internal audit department to strengthen internal control and risk prevention. In June 2024, Sinopec Corp. completed the election of the new session of the Board. The Directors of the ninth session of the Board have maintained diversity in terms of gender, background and professional skills. Independent Directors align with the company’s overall business characteristics, corporate scale, and needs for reform and development, further enriching the Board’s competency matrix. The Directors actively participated in securities regulatory training, continuously enhancing their performance abilities of compliance. The newly appointed Independent Directors comprehensively and systematically understood the business development of the company and its various business sectors, conducted thematic research to subsidiaries and carried out on-site visit the upstream, midstream, and downstream industrial chain business in person, laying a solid foundation for scientifically informed decision-making. During the reporting period, Independent Directors held Special Meetings to review and approve connected transactions, protecting the minority shareholders’ legitimate interests. None of the Directors had any objection to the Company’s resolutions, and all the suggestions of Directors relevant to reform and development were accepted. Pursuant to requirements of securities regulatory authority of China, Independent Directors of Sinopec Corp. reviewed the performance of the senior management of Sinopec Corp. who concurrently are senior management in China Petrochemical Corporation, and issued a special opinion as follows: “Mr. Zhao Dong, the President, Mr. Li Yonglin, Mr. Lv Lianggong, Mr. Niu Shuanwen and Mr. Wan Tao, Senior Vice Presidents, each of whom concurrently held position as senior management of China Petrochemical Corporation, have obtained the exemptions for holding concurrent position from CSRC. In 2024, Mr. Zhao Dong, Mr. Li Yonglin, Mr. Lv Lianggong, Mr. Niu Shuanwen and Mr. Wan Tao strictly abided by the provisions of laws and regulations, the Articles of Association and the service contracts, conscientiously fulfilled their duties of loyalty and diligence, implemented the resolutions of the Board, and devoted sufficient time and attention to organize production and operation. They protected the interests of the Company and its shareholders and have not prejudiced the legitimate interests of Sinopec Corp. and its shareholders due to holding aforesaid concurrent positions in China Petrochemical Corporation.” 7 BUSINESS PERFORMANCE The financial results of the Company for the year ended 31 December 2024, which were prepared in accordance with IFRS Accounting Standards and the financial position as at that date and the accompanying analysis are set out from page 157 to page 212 in this annual report. A fair review of the Company’s business, a discussion and analysis on business performance using financial key performance indicators and the material factors underlying our results and financial position during the reporting period, particulars of significant events affecting the Company and the outlook of the Company’s business are discussed throughout this annual report and included in the Chapters “Chairman’s Address”, “Business Review and Prospects”, “Management’s Discussion and Analysis” and “Significant Events” of this annual report. All of the above discussions constitute parts of the report of the Board of Directors. 8 DIVIDEND The profit distribution policy of Sinopec Corp. maintains consistency and steadiness and considers the long-term interests of the Company, overall interests of all the shareholders and the sustainable development of the Company. Sinopec Corp. gives priority to adopting cash dividends for profit distribution and is allowed to distribute an interim profit. When the net profits and retained earnings of the parent company are positive in current year and in the event that the cash flow of Sinopec Corp. can satisfy the normal operation and sustainable development, Sinopec Corp. should adopt cash dividends and the distribution profits in cash every year should be no less than 30% of the net profits of the parent company recorded during the corresponding year. On 22 October 2024, the extraordinary general meeting of the Company approved the resolution relating to “Dividend Distribution and Return Plan for the Next Three Years (2024-2026)”. If the net profit of the parent company for the current year is positive, the retained earnings are positive and the Company’s cash flow can satisfy the normal operation and sustainable development of the Company, the profit of the Company to be distributed by cash in each year shall not be less than 65% of the net profit attributable to equity shareholders of the Company under CASs or the profit attributable to shareholders of the Company under IFRS Accounting Standards (whichever is lower). The profit distribution plan of the Company for the corresponding year shall be carried out in accordance with the policy and procedures stipulated in the Articles of Association and valid dividend distribution and return plan, taking into account the advice from the minority shareholders. 68 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Report of the Board of Directors REPORT OF THE BOARD OF DIRECTORS (CONTINUED) Proposals for dividend distribution At the 5th meeting of the ninth session of the Board, the Board approved the proposal to distribute a final cash dividend of RMB0.14 (tax inclusive) per share for 2024. Taking into account the distributed interim dividend of RMB0.146 (tax inclusive) per share for the first half of 2024, the total dividend for the whole year is RMB0.286 (tax inclusive) per share. The final cash dividend will be distributed on or before Friday, 27 June 2025 to all shareholders whose names appear on the register of members of Sinopec Corp. on the record date of Tuesday, 17 June 2025. In order to qualify for the final dividend for H shares, the holders of H shares must lodge all share certificates accompanied by the transfer documents with Computershare Hong Kong Investor Services Limited located at Shops 1712-1716, 17th Floor Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong before 4:30 p.m. on Tuesday, 10 June 2025 for registration. The H shares register and transfer of members of Sinopec Corp. will be closed from Wednesday, 11 June 2025 to Tuesday, 17 June 2025 (both dates inclusive). The dividend will be denominated and declared in RMB, and distributed to the domestic shareholders and investors participating in the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect Programmes in RMB and to the overseas shareholders in Hong Kong Dollar. The exchange rate for the dividend calculated in Hong Kong Dollar is based on the average benchmark exchange rate of RMB against Hong Kong Dollar as published by the People’s Bank of China one week preceding the date of the declaration and distribution of such dividend. In accordance with the Enterprise Income Tax Law of the People’s Republic of China and its implementation regulations which came into effect on 1 January 2008, Sinopec Corp. is required to withhold and pay enterprise income tax at the rate of 10% on behalf of the non-resident enterprise shareholders whose names appear on the register of members for H Shares of Sinopec Corp. when distributing the cash dividends or issuing bonus shares by way of capitalisation from retained earnings. Any Shares of the Sinopec Corp. which are not registered under the name of an individual shareholder, including those registered under HKSCC Nominees Limited, other nominees, agents or trustees, or other organisations or groups, shall be deemed as shares held by non-resident enterprise shareholders. On such basis, enterprise income tax shall be withheld from dividends payable to such shareholders. If holders of H Shares intend to change their shareholder status, please enquire about the relevant procedures with your agents or trustees. Sinopec Corp. will strictly comply with the law or the requirements of the relevant government authority to withhold and pay enterprise income tax on behalf of the relevant shareholders based on the registration of members for H shares of Sinopec Corp. as at the record date. If the individual holders of H shares are residents of Hong Kong, Macau or countries which had an agreed tax rate of 10% for cash dividends or bonus shares by way of capitalisation from retained earnings with China under the relevant tax agreement, Sinopec Corp. should withhold and pay individual income tax on behalf of the relevant shareholders at a rate of 10%. If the individual holders of H Shares are residents of countries which had an agreed tax rate of less than 10% with China under relevant tax agreement, Sinopec Corp. shall withhold and pay individual income tax on behalf of the relevant shareholders at a rate of 10%. In that case, if the relevant individual holders of H Shares wish to reclaim the extra amount withheld due to the application of 10% tax rate, Sinopec Corp. would apply for the relevant agreed preferential tax treatment pursuant to the relevant tax agreement provided that the relevant shareholders submit the evidence required by the notice of the tax agreement to the share register of H Shares of Sinopec Corp. in a timely manner. Sinopec Corp. will assist with the tax refund after the approval of the competent tax authority. If the individual holders of H Shares are residents of countries which had an agreed tax rate of over 10% but less than 20% with China under the tax agreement, Sinopec Corp. shall withhold and pay the individual income tax at the agreed actual rate in accordance with the relevant tax agreements. If the individual holders of H Shares are residents of countries which had an agreed tax rate of 20% with China, or which had not entered into any tax agreement with China, or otherwise, Sinopec Corp. shall withhold and pay the individual income tax at a rate of 20%. Pursuant to the Notice on the Tax Policies Related to the Pilot Program of the Shanghai-Hong Kong Stock Connect (關於 滬港股票市場交易互聯互通機制試點有關稅收政 策的通知) (Caishui [2014] No. 81) and the Notice on the Tax Policies Related to the Pilot Program of the Shenzhen-Hong Kong Stock Connect (《關於深港股票市場交易互聯 互通機制試點有關稅收政策的通知》) (Caishui [2016] No.127): For dividends of domestic investors investing in the H Shares of Sinopec Corp. through Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect Program, the Company shall withhold and pay income tax at the rate of 20% on behalf of individual investors and securities investment funds. The Company will not withhold or pay the income tax of dividends for domestic enterprise investors and those domestic enterprise investors shall report and pay the relevant tax by themselves. For dividends of investors of the Hong Kong Stock Exchange (including enterprises and individuals) investing in the A Shares of Sinopec Corp. through Shanghai-Hong Kong Stock Connect Program, the Company will withhold and pay income taxes at the rate of 10% on behalf of those investors and will report to the competent tax authorities for the withholding. For investors who are tax residents of other countries which have entered into a tax treaty with the PRC stipulating a dividend tax rate of lower than 10%, the enterprises and individuals may, or may entrust a withholding agent to, apply to the competent tax authorities for the entitlement of the rate under such tax treaty. Upon approval by the tax authorities, the amount paid in excess of the tax payable based on the tax rate according to such tax treaty will be refunded. 69 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Report of the Board of Directors The dividend distribution and capital reserve capitalization declared by Sinopec Corp. in the past three years are as follows (in accordance with CASs): 2024 2023 2022 Cash dividends (RMB/Share, tax inclusive) 0.286 0.345 0.355 Cash dividends paid in other ways (such as repurchase of shares) (RMB million, tax inclusive) 2,131 2,325 4,179 Total amount of cash dividends (including dividends paid in other ways) (RMB million, tax inclusive) 36,878 43,575 46,930 Net profits attributed to the shareholders of the listed company shown in the consolidated statement for the dividend year (RMB million) 50,313 60,463 67,082 Ratio of the dividends to the net profit attributed to the shareholders of the listed company in the consolidated statement (%) 73.3 72.1 70.0 Note: The final cash dividend for 2024 is subject to the approval at the 2024 annual general meeting. The aggregate cash dividend declared by Sinopec Corp. during three years from 2022 to 2024 is RMB0.986 per share, with a total amount of RMB118.748 billion, the total paid amount for repurchase of shares was RMB8.635 billion, and the aggregate amount with cash dividend was RMB127.383 billion. The average net profit attributed to the shareholders of the Company in the three years was RMB59.286 billion. The total cash dividend and repurchase amount from 2022 to 2024 as a percentage of average net profit attributed to the shareholders was 214.86%. At the end of 2024, the retained earnings of the parent company were RMB106.517 billion. 9 RESPONSIBILITIES FOR THE COMPANY’S INTERNAL CONTROL The Board is fully responsible for establishing and maintaining the internal control system related to the financial statements as well as ensuring its effective implementation. In 2024, the Board assessed and evaluated the internal control of Sinopec Corp. according to the Basic Standard for Enterprise Internal Control, Application Guidelines for Enterprise Internal Control and Assessment Guidelines for Enterprise Internal Control. There was no material defect in relation to the internal control system as of 31 December 2024. The internal control system of Sinopec Corp. related to the financial statements is sound and effective. 2024 Internal Control Assessment Report of Sinopec Corp. was reviewed and approved at the 5th meeting of the ninth session of the Board on 21 March 2025, and all members of the Board warrant that the contents of the report are true, accurate and complete, and there are no false representations, misleading statements or material omissions contained in the report. 10 DURING THE REPORTING PERIOD, THE COMPLIANCE OF ENVIRONMENTAL POLICIES BY THE COMPANY During the reporting period, the Company complied with the environmental policy in all material aspects. Details with regard to the Company’s environmental policies and performances are provided in the Chapter “Corporate Governance, Environment and Social Responsibilities” in this annual report as well as the 2024 Sustainability Report of Sinopec Corp. 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 The Company maintained a stable cooperation relationship with major suppliers and customers. During the reporting period, the total value of the purchasing from the top five suppliers accounted for 44.61% of the total value of purchasing by the Company, among which, the purchasing value of the largest supplier accounted for 11.61% of the total annual purchasing value and the total value of the purchasing from the connected party Sinopec Group among the five largest supplier was RMB301.727 billion, accounted for 11.61% of the total value of purchasing by the Company. The total revenue from the five largest customers of the Company was RMB184.423 billion, accounting for 6.00% of the total revenue of the Company for the year, among which the sales value to the connected party Sinopec Group among the five largest customers was RMB71.223 billion, accounting for 2.32% of the total revenue for the year. During the reporting period, other than disclosed above, to the best knowledge of the Board of the Directors of the Company, none of the Directors of the Company, their close associates, and shareholders holding more than 5% of the shares of the Company had any interest in the top five suppliers or the top five customers of the Company. There were no suppliers, customers, employees or others on which the Company’s success depends. 13 BANK LOANS AND OTHER BORROWINGS Details of bank loans and other borrowings of the Company as of 31 December 2024 are set out in Note 30 to the financial statements prepared in accordance with IFRS Accounting Standards in this annual report. 14 FIXED ASSETS During the reporting period, changes to the fixed assets of the Company are set out in Note 17 to the financial statements prepared in accordance with IFRS Accounting Standards in this annual report. 15 RESERVES During the reporting period, the changes to the reserves of the Company are set out in the consolidated statement of changes in shareholders’ equity in the financial statements prepared in accordance with IFRS Accounting Standards in this annual report. 16 DONATIONS During the reporting period, the amount of charity donations made by the Company amounted to approximately RMB293 million. 17 PRE-EMPTIVE RIGHTS Pursuant to the Articles of Association and the laws of the PRC, the shareholders of Sinopec Corp. are not entitled to any pre-emptive rights. Therefore, the existing shareholders cannot request Sinopec Corp. to issue shares to them on a preferential basis in proportion to their shareholdings. 70 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Report of the Board of Directors REPORT OF THE BOARD OF DIRECTORS (CONTINUED) 18 REPURCHASE, SALES AND REDEMPTION OF SHARES (1) Progress in the share repurchase On 30 May 2023 and 28 June 2024, the annual general meetings and shareholders class meetings of Sinopec Corp. considered and approved the Resolution to Grant to the Board a Mandate to Buy Back Domestic Shares and/or Overseas-listed Foreign Shares of Sinopec Corp., authorizing the Board (or the director authorised by the Board) to repurchase A shares or H shares not exceeding 10% of the issued number of A shares or H shares of Sinopec Corp. in issue. The Board considered and approved the Plan on Repurchasing the Company’s Shares by Centralized Bidding Transactions. For details, please refer to the announcements published by Sinopec Corp. on the website of the SSE on 28 August 2023 and 26 August 2024, respectively. During the reporting period, Sinopec Corp. has repurchased 130,146,195 A shares, accounting for 0.11% of the total issued shares of Sinopec Corp. on 31 December 2024, the highest and lowest repurchase prices were RMB6.43 and RMB6.16 per share respectively, and the total amount paid was RMB816,001,427.20 (exclusive of transaction fees). For details, please refer to the Announcement on the Results of the Implementation of Share Repurchase published by Sinopec Corp. on the website of the SSE on 23 November 2024. The Company completed A shares repurchase on 22 November 2024, and finished the cancellation of all repurchased A shares on 27 November 2024. For details, please refer to the announcements published by Sinopec Corp. on the website of the SSE on 23 November 2024 and 27 November 2024, respectively. During the reporting period, Sinopec Corp. has repurchased 328,126,000 H Shares, accounting for approximately 0.27% of the total issued shares of Sinopec Corp. on 31 December 2024, and the total amount paid was HK$1,436,267,366.40 (exclusive of transaction fees), among which 39,866,000 H shares were repurchased in March 2024, and were cancelled on 2 July 2024. For details, please refer to the announcement published by Sinopec Corp. on the website of the Hong Kong Stock Exchange on 2 July 2024. 288,260,000 H shares were repurchased from September to December 2024, among which 288,122,000 H shares were cancelled on 30 December 2024. For details, please refer to the announcement published by Sinopec Corp. on the website of the Hong Kong Stock Exchange on 30 December 2024. A Share Repurchase Month Repurchase Amount Price per share Total Amount (RMB) Highest (RMB/share) Lowest (RMB/share) 9 7,490,800 6.40 6.17 47,315,369.00 10 30,309,200 6.33 6.16 188,823,082.00 11 92,346,195 6.43 6.18 579,862,976.20 H Share Repurchase Month Repurchase Amount Price per share Total Amount (HK$) Highest (HK$/share) Lowest (HK$/share) 3 39,866,000 4.48 4.36 176,703,167.40 9 111,192,000 4.89 4.31 506,261,070.60 10 15,370,000 4.41 4.34 67,233,397.00 11 125,756,000 4.47 4.09 532,312,348.00 12 35,942,000 4.50 4.13 153,757,383.40 Save as disclosed above, during the reporting period, neither Sinopec Corp. nor any of its subsidiaries repurchased, sold or redeemed any listed shares of Sinopec Corp. or its subsidiaries. 19 DIRECTORS’ INTERESTS IN COMPETING BUSINESS As at the end of the reporting period, the Company has resolved its competition with Sinopec Group in the chemical business. For details for the positions held by the Directors (excluding Independent Non-executive (2) Progress in the share repurchase of subsidiaries During the reporting period, Sinopec Shanghai Petrochemical Company Limited, as a subsidiary of the Sinopec Corp. repurchased its H shares. For details, please refer to the 2024 annual report published by Sinopec Shanghai Petrochemical Company Limited on the website of the SSE on 20 March 2025, and annual results announcement for the year 2024 on the website of the Hong Kong Stock Exchange on 19 March 2025. Directors) of Sinopec Corp. in the Sinopec Group during the reporting period, please refer to the Chapter “Corporate Governance, Environment and Social Responsibilities” in this annual report. 20 DIRECTORS’ INTERESTS IN CONTRACTS No Director had a material interest, either directly or indirectly, in any contract of significance to the business of the Company to which Sinopec Corp. or any of its holding companies, subsidiaries or fellow subsidiaries was a party during the reporting period. 71 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Report of the Board of Directors 21 MANAGEMENT CONTRACTS No contracts concerning management or administration of the whole or any substantial part of the business of the Company were entered into or existed during the reporting period. 22 PERMITTED INDEMNITY PROVISIONS During the reporting period, Sinopec Corp. has purchased liability insurance for all Directors to minimise their risks arising from the performance of their duties. The permitted indemnity provisions are stipulated in such Directors’ liability insurance in respect of the liabilities and costs associated with the potential legal proceedings that may be brought against such Directors. 23 EQUITY-LINKED AGREEMENTS As of 31 December 2024, the Company has not entered into any equity-linked agreement. 24 OIL & GAS RESERVE APPRAISAL PRINCIPLES The Company managed the estimation of crude oil and natural gas reserves through a two-tier management system. The RMC, at the headquarter level oversees the overall reserves estimation process including organisation, coordination, monitoring and major decision-making, and reviews the reserves estimation results of the Company. Each of our oilfield branches has a reserves management committee that manages and coordinates the reserves estimation, organises the estimation process and reviews the reserve estimation report at the branch level, being responsible to the RMC of the Company. The RMC consists of the senior management of the Company, related departments of headquarter, senior management of Sinopec International Petroleum Exploration and Production Corporation and Production Research Institute of Sinopec. Mr. Niu Shuanwen, Senior Vice President of Sinopec Corp., is the Chairman of RMC. A majority of our RMC members hold master’s or Ph.D. degrees, and have an average of more than 20 years of technical experience in relevant professional fields, such as geology, engineering and economics. The reserves estimation of the Company was conducted in reference to the rules of the U.S. Securities and Exchange Commission, and are guided by procedural manuals and technical guidance formulated by ourselves. A number of working divisions at the production bureau level, including the exploration, development and financial divisions, are responsible for initial collection and compilation of information about reserves. Experts from exploration, development and economic divisions prepare the initial report on the reserves estimate which is then reviewed by the reserves management committee at the subsidiary level to ensure the qualitative and quantitative compliance with technical guidance as well as its accuracy and reasonableness. Professional supporting agency for reserves estimation of the Company has reviewed the estimates rules and parameter selection of our oilfield branches, and the final results have been approved by the RMC. The reserves estimation process is further facilitated by a specialised reserves database, which is improved and updated periodically. 25 CORE COMPETITIVENESS ANALYSIS The Company is a large-scale integrated energy and petrochemical company with upstream, mid-stream and downstream operations, and has overall strong strength of scale. The Company is the largest supplier of refined oil and chemical products, and a major oil and gas producer in China. The Company is the world’s largest refining company and second-largest chemical company, and ranks second globally in terms of the number of gas stations. The integrated business structure of the Company carries strong advantages in synergy among its various business segments, contributing to the Company by tapping onto potentials in attaining an efficient and comprehensive utilisation of its resources, and endows the Company with relatively strong capabilities in risk resistance and sustaining profitability. The Company enjoys a favourable positioning with its operations located close to the consumer markets. The steady growth in the Chinese economy is helpful to the development of both refined oil business and chemical business of the Company; through continuously promoting specialized marketing, the Company’s capability in international operations and market expansion has been further enhanced. The Company owns a team of professionals with expertise in the production of oil and gas, operation of refineries and chemical plants, as well as marketing activities. The Company applies outstanding fine management measures with its remarkable capabilities in management of operations and enjoys an operational cost advantage in its downstream businesses. The Company has formulated a well-established technology system and mechanism, and owns competent teams specialised in R&D covering a wide range of subjects. The Company establishes technological systems for exploration and development of oil and gas, refining, petrochemicals and utility. With its overall technologies reaching state of the art level in the global arena, and certain technologies taking the lead globally, the Company enjoys a strong technical strength. The Company always attaches great importance to the fulfilment of corporate social responsibilities and carries out the green and clean development strategy to pursue a sustainable development. Moreover, the Company enjoys an outstanding “Sinopec” brand name, plays an important role in the national economy and is a renowned and reputable company in China. The Company formulated a strategy for future green transition and development, accelerating the development of new energy with hydrogen energy as emphasis and high-end chemical materials, and focusing on building a globally leading clean energy and chemical company. 26 RISK FACTORS In the course of its production and operations, Sinopec Corp. will actively take various measures to circumvent operational risks. However, in practice, it may not be possible to prevent the occurrence of all risks and uncertainties described below. 72 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Report of the Board of Directors REPORT OF THE BOARD OF DIRECTORS (CONTINUED) Risks with regard to the variations from macroeconomic situation: The business results of the Company are closely related to macroeconomic situation. The global economy experienced insufficient driving force and more uncertainty. The development of economy is increasingly constrained by climate change and environmental issues. The Company’s business could also be adversely affected by other factors such as the impact on export due to carbon tariffs and trade protectionism from certain countries, and impact on the return of the investment of upstream projects and refining and storage projects which results from the uncertainty of geopolitics, international crude oil price and etc. Risks with regard to the cyclical effects from the industry: The majority of the Company’s operating income comes from the sales of refined oil products and petroleum and petrochemical products, and part of those businesses and their related products are cyclic and are sensitive to macro-economy, cyclic changes of regional and global economy, industry polices, the changes of the production capacity and output, demand of consumers, prices and supply of the raw materials, as well as prices and supply of the alternative products etc. Although the Company is an integrated company with upstream, midstream and downstream operations, it can only counteract the adverse influences of industry cycle to a certain extent. Risks from the macro policies and government regulation: Although the Chinese government is gradually liberalizing the market entry regulations on petroleum and petrochemicals sector, the petroleum and petrochemical industries in China are still subject to entry regulations to a certain degree, which include: issuing exploration and mining permits in relation to crude oil and natural gas, issuing licenses in relation to exploration and development of crude oil and natural gas, issuing business licenses for trading crude oil and refined oil, issuing business licenses for trading hazardous chemicals, setting caps for retail prices of gasoline, diesel and other refined oil products, the imposition of the special oil income levy; the formulation of refined oil import and export quotas and procedures, the formulation of safety, environmental protection and quality standards and the formulation of energy conservation policies, restrictions on high energy consumption and high pollution projects, etc. In addition, the changes which have occurred or might occur in macro and industry policies such as further opening up of crude oil import licenses and the right of tenure and the tightening control of export quota of refined oil; deepening the reform and improvement in pricing mechanism of natural gas, accelerating the exploration of upstream and downstream price linkage mechanisms, cost supervision of gas pipeline and equal access to third party and accelerating the establishment of a uniform gas energy metering and pricing system; the accelerating substitution of new energy, the excess of refined oil products resources, and the increasingly intense market competition; reform in resource tax and environmental tax; and the introduction of measures for energy conservation and carbon reduction in key areas to improve energy efficiency; and the transforming policy from “double control” of energy consumption to “double control” of carbon emissions and intensity, etc. Such factors might further impact the industry development and market environment, as well as the operations and profitability of the Company. Risks with regard to the changes from environmental legislation requirements: The Company’s production activities generate waste water, gases, solids and noise. The Company has built up the corresponding pollution prevention and risk control facilities to prevent and reduce the pollution. However, the relevant government authorities may issue and implement much stricter environmental protection laws and regulations, adopt much stricter environment protection standards. Under such situations, the Company may increase expenses in relation to the environment protection accordingly. Risks from the uncertainties of obtaining additional oil and gas resources: The future sustainable development of the Company is dependent on our abilities in continuously discovering or acquiring additional oil and natural gas resources to a certain extent. To obtain oil and natural gas resources, the Company faces some inherent risks associated with exploration and development and/or with acquisition activities of oil and gas resources, and the Company has to invest a large amount of money with no guarantee of certainty. If the Company fails to increase the reserves of crude oil and natural gas through further exploration, development and acquisition, the oil and natural gas reserves and production of the Company may decline over time which may adversely affect the Company’s financial situation and operation performance. Risks with regard to the external purchase of crude oil: A significant amount of crude oil as needed by the Company is satisfied through external purchases. In recent years, especially influenced by mismatch between supply and demand of crude oil, volatile geopolitics, slow global economic recovery and other factors, the prices of crude oil fluctuate sharply. Additionally, the supply of crude oil may even be interrupted due to some extreme major incidents in certain regions. Although the Company has taken flexible countermeasures, it may not fully avoid risks associated with any significant fluctuation of international crude oil prices and sudden disruption of supply of crude oil from certain regions. Risks with regard to the operation and natural disasters: The petroleum and petrochemical industry is exposed to the high risks of inflammation, explosion, toxicity, harm and environmental pollution and is vulnerable to natural disasters such as extended weather. Such emergencies may cause impacts to the society, financial losses to the Company and grievous injuries to people. The Company has always been laying great emphasis on the safety production, and has implemented a strict HSE management system as an effort to avoid such risks as far as possible. Meanwhile, the main assets and inventories of the Company as well as the possibility of damage to a third party have been insured. However, such measures may not shield the Company from financial losses or adverse impact resulting from such emergencies. 73 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Report of the Board of Directors Investment risks: Petroleum and chemical sector is a capital-intensive industry. Although the Company has adopted a prudent investment strategy, executed the investment management rules and negative investment lists effectively, conducted rigorous feasibility study and risk evaluation on each investment project, and organized special verifications in raw material market, technical scheme, profitability, safety and environmental protection, legal compliance, etc. on major structural adjustment and layout projects to ensure making decision rigorously and scientifically, certain investment risks will still exist due to major changes in factors such as market environment, industrial policies, prices of commodities, and construction period during the implementation of the projects. Risks with regard to overseas business development and management: The Company engages in oil and gas exploration, refining and chemical, warehouse logistics and international trading businesses in some regions and countries overseas. The Company’s overseas businesses and assets are subject to the jurisdiction of the host country’s laws and regulations. In light of the complicated factors such as changes in international geopolitics, uncertainty of economic recovery, imbalance of global and regional economy, competitiveness of industry and trade structure, exclusiveness of regional trading blocs, polarization of benefits distribution in trade, and politicisation of economic and trade issues, and political society, economic finance, macro market, business environment, legal compliance, HSE and other risks in the country where overseas business and assets are located, including sanctions, barriers to entry, instability in the financial and taxation policies, contract defaults, tax dispute, the Company’s risks with regard to overseas business development and management could be increased. Currency risks: At present, China implements an administered floating exchange rate regime based on market supply and demand which is regulated with reference to a basket of currencies in terms of the exchange rate of Renminbi. As the Company purchases a significant portion of crude oil in foreign currency which is based on US dollar-denominated prices, the realized price of crude oil is based on international crude oil price. Despite the fact that the price of the domestic refined oil products will change as the exchange rate of the Renminbi changes according to the pricing mechanism for the domestic refined oil products, and the price of other domestic petrochemical products will also be influenced by the price of the imported products, which to a large extent, smooths the impact of the Renminbi exchange rate on the processing and sales of the Company’s crude oil refined products., the fluctuation of the Renminbi exchange rate will still have an effect on the income of the upstream sector. Cyber-security risks: The Company has a well-established network safety system. The Company establishes an emergency response mechanism in relation to network security operation and information system, builds an information platform of network security risk management and control, operated by professional network security team, and devotes significant resources to protecting the digital infrastructure and data of the Company against cyber-attacks. However, continuous attention should be paid to the coverage and efficiency of these protection measures. If our systems against cyber-security risk are proved to be insufficient or ineffective, the Company could be adversely affected by, among other things, disruptions to our business operations, and loss of key information, thus causing harm to our personnel, property, environment and reputation. As cyber-security attacks continue to evolve, the Company may be required to expend additional resources to enhance our protective measures against cyber-security breaches, in particular increase investment in new solutions and technologies such as data security solution, business security solution, artificial intelligence, cloud computing, and Internet of Things devices to improve the cyber-security protection level. By Order of the Board Ma Yongsheng Chairman Beijing, China, 21 March 2025 74 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Report of the Supervisory Committee REPORT OF THE SUPERVISORY COMMITTEE Dear Shareholders: In 2024, the Supervisory Committee and each supervisor of Sinopec Corp. diligently performed their supervision responsibilities, actively participated in the supervision process of decision making, carefully reviewed and effectively supervised the major decisions of the Company, and endeavored to safeguard the interests of shareholders and the Company in accordance with the PRC Company Law and the Articles of Association of Sinopec Corp. During the reporting period, the Supervisory Committee held five (5) meetings in total, mainly reviewed and approved the proposals in relation to the Company’s annual report, financial statements, sustainability report, internal control assessment report and working report of the Supervisory Committee etc., and elected the Chairman of the ninth session of the Supervisory Committee. Details are as below: On 22 March 2024, the 12th meeting of the eighth session of the Supervisory Committee was held, and the proposals in relation to the Financial Statements of Sinopec Corp. for 2023, Annual Report of Sinopec Corp. for 2023, Sustainability Report of Sinopec Corp. for 2023, Internal Control Assessment Report of Sinopec Corp. for 2023, Work Report of the Supervisory Committee of Sinopec Corp. for 2023, Work Report of the eighth session of Supervisory Committee of Sinopec Corp., and Work Plan of the Supervisory Committee of Sinopec Corp. for 2024 were reviewed and approved at the meeting. On 28 April 2024, the 13th meeting of the eighth session of the Supervisory Committee was held, and the proposal in relation to the First Quarterly Report of Sinopec Corp. for the three months ended 31 March 2024 and Proposal on Replacing Pre-invested Self-raised Funds with Proceeds were reviewed and approved at the meeting. On 28 June 2024, the 1st meeting of the ninth session of the Supervisory Committee was held, the proposal in relation to the Election of the Chairman of the Ninth Session of the Supervisory Committee of Sinopec Corp. was reviewed and approved, and Mr. Zhang Shaofeng was elected as the Chairman of the ninth session of the Supervisory Committee. (Due to change of working arrangement, Mr. Zhang Shaofeng resigned as Chairman of the Supervisory Committee of Sinopec Corp. on 15 January 2025) On 23 August 2024, the 2nd meeting of the ninth session of Supervisory Committee was held, the Interim Financial Statements of Sinopec Corp. for 2024, the Interim Report of Sinopec Corp. for 2024, the Continuing Connected Transactions for the year 2025 to 2027, the Financial Business for the year 2025 to 2027 among Sinopec Corp., Sinopec Finance Co., Ltd. and Sinopec Century Bright Capital Investment Limited, the Dividend Distribution and Return Plan for the Next Three Years (2024-2026), and Special Report on the Deposit and Utilization of Raised Funds for the First Half of 2024 were reviewed and approved at the meeting. On 28 October 2024, the 3rd meeting of the ninth session of the Supervisory Committee was held, and the Third Quarterly Report of Sinopec Corp. for the three months ended 30 September 2024 was reviewed and approved at the meeting. In addition, the Company organised supervisors to attend the general meetings of shareholder and meetings of the Board. The company arranged all supervisors to participate in the training courses for directors and supervisors organized by the Beijing Listed Companies Association and the SSE in July and November 2024, further enhanced the ability and proficiency of supervisors in performing their responsibilities and duties. In 2024, the recovery of global economy faced pressure, geopolitical risks rose, international crude oil prices fluctuated within a wide range, and the Company’s production and operation encountered challenges. Through supervising Sinopec Corp.’s production and operation as well as financial management, the Supervisory Committee and all supervisors believed that Sinopec Corp. resolutely implemented the resolutions approved by the Board, vigorously implemented high-quality development actions, actively cultivated new quality productivity, and made every effort to expand markets, optimize operation, adjust structures, reduce costs, promote reforms, prevent risks, and accelerate the construction of world-class enterprise. New progress and achievements were made in all aspects of work. The Supervisory Committee had no objection to the supervised issues during the reporting period. Firstly, the Board and the senior management of Sinopec Corp. performed their responsibilities and duties pursuant to relevant laws and regulations under the PRC Company Law and the Articles of Association, and made informed decisions on major issues. The senior management diligently executed the resolutions approved by the Board, strived to optimize the production and operation organization, coordinated the profitable operation of each segment, promoted regional collaboration, resulting in giving full play to achieve the annual target of business operations set by the Board. During the reporting period, the Supervisory Committee did not discover any behavior of any director or senior management which violated laws, regulations, the Articles of Association, or was detrimental to the interests of Sinopec Corp. or its shareholders. Secondly, the annual reports and financial statements prepared by Sinopec Corp. for 2024 complied with the relevant regulation of domestic and overseas securities regulators, the disclosed information truly, accurately, completely and fairly reflected Sinopec Corp.’s financial results and operation performance. The dividend distribution plan was made after comprehensive consideration of the long-term interests of Sinopec Corp. and the interests of the shareholders. No violation of confidential provisions by persons who prepared and reviewed the financial report was found. 75 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Report of the Supervisory Committee Thirdly, Sinopec Corp. further improved its internal management systems and internal control mechanisms, and the internal control system was effective. No material defect of internal control system of the Company was found. Fourthly, the consideration for assets transactions made by Sinopec Corp. was fair and reasonable. Neither inside trading, damage to shareholders’ interest nor losses of corporate assets were discovered. Fifthly, all connected transactions of the Company were in compliance with the relevant rules and regulations of domestic and overseas listing exchanges. The pricing of all the connected transactions was fair and reasonable. No behavior detrimental to the interests of Sinopec Corp. or its shareholders was discovered. In 2025, the Supervisory Committee and each supervisor will continue to follow the principle of due diligence and integrity, earnestly perform the duties of supervision as delegated by the shareholders, strictly review the significant decisions, strengthen the process control and supervision, increase the strength of inspection and supervision on branches and subsidiaries, protect Sinopec Corp.’s benefit and its shareholders’ interests, and promote the high-quality development of Sinopec Corp. with high-quality supervision. The Supervisory Committee of Sinopec Corp. 21 March 2025 76 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Changes in Share Capital and Shareholdings of Principal Shareholders CHANGES IN SHARE CAPITAL AND SHAREHOLDINGS OF PRINCIPAL SHAREHOLDERS 1 CHANGES IN THE SHARE CAPITAL Unit: share Before change Change (+, -) After change Amount Percentage (%) Amount1 Subtotal Amount Percentage (%) I. Shares subject to lock-up restriction – – 2,390,438,247 2,390,438,247 2,390,438,247 1.97 1. State-owned shares – – – – – – 2. Shares held by state-owned legal persons – – 2,390,438,247 2,390,438,247 2,390,438,247 1.97 3. Shares held by other domestic investors – – – – – – Among which: – – – – – – domestic non-state-owned legal persons – – – – – – domestic natural persons – – – – – – 4. Shares held by foreign investors – – – – – – Among which: foreign legal persons – – – – – – foreign natural persons – – – – – – II. Shares not subject to lock-up restriction 119,349,251,646 100 (458,134,195) (458,134,195) 118,891,117,451 98.03 1. RMB-denominated ordinary shares 94,971,971,046 79.57 (130,146,195) (130,146,195) 94,841,824,851 78.20 2. Domestically listed foreign shares – – – – – – 3. Overseas listed foreign shares 24,377,280,600 20.43 (327,988,000) (327,988,000) 24,049,292,600 19.83 4. Others – – – – – – III. Total 119,349,251,646 100 1,932,304,052 1,932,304,052 121,281,555,698 100 Note 1: During the reporting period, Sinopec Corp. repurchased and cancelled 130,146,195 A shares and 327,988,000 H shares and 2,390,438,247 A shares with lock- up restriction were issued by Sinopec Corp. to the controlling shareholder, China Petrochemical Corporation. Share repurchases increase basic earnings per share and net assets per share attributable to ordinary shareholders of the Company in the most recent year, while share issuance decreases them. During the reporting period, there was no stock dividends or conversion of capital reserve into shares. 2 NUMBER OF SHAREHOLDERS AND THEIR SHAREHOLDINGS As of 31 December 2024, the total number of shareholders of Sinopec Corp. was 384,938 including 379,663 holders of A shares and 5,275 holders of H shares. As of 28 February 2025, the total number of shareholders of Sinopec Corp. was 452,822. Sinopec Corp. has complied with requirement for public float under the Hong Kong Listing Rules. (1) The shareholdings of top ten shareholders, top ten shareholders with tradable shares (or shareholders with non-restricted shares) and shareholders with restricted shares as of 31 December 2024: Unit: share The shareholdings of top ten shareholders (excluding shares lent through refinancing)2 Name of shareholder Change of shareholding1 Total number of shares held at the end of reporting period Percentage (%) Number of restricted shares held3 Shares subject to pledges, marked or freezing Nature of Shareholders Status Amount China Petrochemical Corporation4 2,428,230,807 83,062,059,096 68.49 2,390,438,247 None – State-owned share HKSCC Nominees Limited5 (315,010,115) 23,911,589,584 19.72 – Unknown Unknown H share 中國證券金融股份有限公司 – 2,325,374,407 1.92 – None – A share 中國石油天然氣集團有限公司 – 2,165,749,530 1.79 – None – A share 香港中央結算有限公司 (133,036,440) 1,095,838,528 0.90 – None – A share 中國人壽保險股份有限公司－傳統－普通保險產品－005L－CT001滬 (48,576,643) 555,368,449 0.46 – None – A share 國新投資有限公司 148,811,355 392,125,944 0.32 – None – A share 中央匯金資產管理有限責任公司 – 315,223,600 0.26 – None – A share 中國工商銀行－上證 50 交易型開放式指數證券投資基金 40,508,641 274,012,855 0.23 – None – A share 中國工商銀行股份有限公司－華泰柏瑞滬深 300 交易型開放式指數證券投資基金 110,075,677 251,716,707 0.21 – None – A share Description of the special repurchase account among the top ten shareholders None Description of the voting rights entrusted by or to, or waived by the above-mentioned shareholders None Statement on related parties or parties acting in concert among the above-mentioned shareholders Sinopec Corp. is not aware of any connected relationship or acting in concert among or between the above-mentioned top ten shareholders. Description of the shareholders holding preference shares with restored voting rights and their shareholding None 77 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Changes in Share Capital and Shareholdings of Principal Shareholders Note 1: As compared with the number of shares as of 31 December 2023. Note 2: Compared to shareholders’ holdings at the end of 2023, 中國工商銀行股份有限公司－華泰柏瑞滬深 300 交易型開放式指數證券投資基金 became one of top ten shareholders, while 國信證券股份有限公司 withdrew from top ten shareholders. Note 3: In the reporting period, Sinopec Corp. completed the issuance of 2,390,438,247 A shares to China Petrochemical Corporation. For details, please refer to item “The Issuance of A Shares by Sinopec Corp. to the Target Subscriber” in the Chapter “Significant Events”. Note 4: Due to confidence in Sinopec Corp.’s development prospects, the controlling shareholder China Petrochemical Corporation increased its shareholdings of A shares and H shares of Sinopec Corp. by itself and its wholly-owned subsidiary, by an amount of not less than RMB1.0 billion (inclusive) and not more than RMB2.0 billion (inclusive) within 12 months since 11 November 2023 (the “Shareholding Increase Plan”). As of 10 November 2024, the Shareholding Increase Plan was completed and China Petrochemical Corporation and its wholly-owned subsidiary increased their shareholdings by 374,201,456 shares of Sinopec Corp. during the implementation period of the Shareholding Increase Plan. For details, please refer to the announcements published by Sinopec Corp. on China Securities Journal, Shanghai Securities News, Securities Times, the website of SSE on 11 November 2023, 6 December 2023, 20 January 2024, 12 September 2024, 21 October 2024, and 12 November 2024, and on the website of Hong Kong Stock Exchange on 10 November 2023, 18 December 2023, 19 January 2024, 11 September 2024 and 11 November 2024. Note 5: Century Bright, an overseas wholly-owned subsidiary of China Petrochemical Corporation, held 1,042,664,000 H shares, accounting for 0.86% 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. Unit: share The shareholdings of top ten shareholders with non-restricted shares1 Name of shareholder Number of non-restricted shares held Class and number of shares Class Amount China Petrochemical Corporation 80,671,620,849 RMB ordinary share 80,671,620,849 HKSCC Nominees Limited 23,911,589,584 Overseas listed foreign share 23,911,589,584 中國證券金融股份有限公司 2,325,374,407 RMB ordinary share 2,325,374,407 中國石油天然氣集團有限公司 2,165,749,530 RMB ordinary share 2,165,749,530 香港中央結算有限公司 1,095,838,528 RMB ordinary share 1,095,838,528 中國人壽保險股份有限公司－傳統－普通保險產品－005L－CT001滬 555,368,449 RMB ordinary share 555,368,449 國新投資有限公司 392,125,944 RMB ordinary share 392,125,944 中央匯金資產管理有限責任公司 315,223,600 RMB ordinary share 315,223,600 中國工商銀行－上證 50 交易型開放式指數證券投資基金 274,012,855 RMB ordinary share 274,012,855 中國工商銀行股份有限公司－華泰柏瑞滬深 300 交易型開放式指數證券投資基金 251,716,707 RMB ordinary share 251,716,707 Note 1: Compared to shareholders’ holdings at the end of 2023, 中國工商銀行股份有限公司－華泰柏瑞滬深 300 交易型開放式指數證券投資基金 became one of top ten shareholders, while 國信證券股份有限公司 withdrew from top ten shareholders. Shareholders holding more than 5% of the shares, top ten shareholders and top ten non-restricted shareholders have not participated in lending of shares through refinancing. Unit: share The shareholdings of shareholders with restricted shares No. Name of shareholders with restricted shares Number of restricted shares held Trading of restricted shares Undertakings Trading day Amount 1 China Petrochemical Corporation 2,390,438,247 18 March 2027 2,390,438,247 Not to transfer within 36 months from the completion of the issuance Statement on related parties or parties acting in concert among the above-mentioned shareholders None 78 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Changes in Share Capital and Shareholdings of Principal Shareholders CHANGES IN SHARE CAPITAL AND SHAREHOLDINGS OF PRINCIPAL SHAREHOLDERS (CONTINUED) (2) Information disclosed by the shareholders of H shares in accordance with the SFO as of 31 December 2024 Name of shareholder Status of shareholder Number of shares interested % of Sinopec Corp.’s issued voting shares (H Share) BlackRock, Inc. Interest of corporation controlled by the substantial shareholder 1,497,123,814(L) 6.23(L) 3,392,000(S) 0.01(S) (L): Long position, (S): Short position 3 ISSUANCE AND LISTING OF SECURITIES (1) Issuance of securities during the reporting period In the reporting period, Sinopec Corp. completed the issuance of 2,390,438,247 A shares to China Petrochemical Corporation. For details, please refer to item “The Issuance of A Shares by Sinopec Corp. to the Target Subscriber” in the Chapter “Significant Events” and “The shareholdings of shareholders with restricted shares” in the Chapter “Changes in Share Capital and Shareholdings of Principal Shareholders”. (2) Existing employee shares There were no existing employee shares of Sinopec Corp. during the reporting period. 4 CHANGES IN THE CONTROLLING SHAREHOLDERS AND THE DE FACTO CONTROLLER There was no change in the controlling shareholder or the de facto controller of Sinopec Corp. during the reporting period. (1) Controlling shareholder The controlling shareholder of Sinopec Corp. is China Petrochemical Corporation. Established in July 1998, China Petrochemical Corporation is a state-authorised investment organisation and a state-owned enterprise. The legal representative is Mr. Ma Yongsheng. Through re-organization in 2000, China Petrochemical Corporation injected its principal petroleum and petrochemical businesses into Sinopec Corp. and retained certain petrochemical facilities. It provides well-drilling services, well-logging services, downhole operation services, services in connection with manufacturing and maintenance of production equipment, engineering construction service, and utility services including water and power and social services. Shares of other listed companies directly held by China Petrochemical Corporation as of the end of the reporting period Number of Shareholding Name of Company Shares Held Percentage SINOPEC Engineering (Group) Co., Ltd. 2,687,876,000 61.12% Sinopec Oilfield Service Corporation 9,968,726,364 52.52% Sinopec Oilfield Equipment Corporation 456,756,300 47.77% China Merchants Energy Shipping Co., Ltd. 1,095,463,711 13.45% PetroChina Company Limited 1,830,210,000 1.00% (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 China Petrochemical Corporation is the de facto controller of Sinopec Corp. (4) Diagram of the equity and controlling relationship between Sinopec Corp. and its de facto controller 69.35%* 100% China Petrochemical Corporation Sinopec Corp. State-owned Assets Supervision and Administration Commission of the State Council * : Inclusive of 1,042,664,000 H shares held by Century Bright (overseas wholly-owned subsidiary of China Petrochemical Corporation) through HKSCC Nominees Limited. 79 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Bond General Information BOND GENERAL INFORMATION 1. INTERBANK BOND MARKET DEBT FINANCING INSTRUMENT OF NON-FINANCIAL ENTERPRISES Bond name The first medium-term notes in 2021 The first medium-term notes in 2024 The second medium-term notes in 2024 The third medium-term notes in 2024 The fourth medium-term notes in 2024 The first medium-term notes in 2025 The second medium-term notes in 2025 The third medium-term notes in 2025 Abbreviation 21中石化 MTN001 24中石化 MTN001 24中石化 MTN002 24中石化 MTN003 24中石化 MTN004 25中石化 MTN001 25中石化 MTN002 25中石化 MTN003 Code 102101386 102483276 102483277 102485444 102485443 102580205 102580206 102580639 Issuance date 2021/7/23 2024/7/30 2024/7/30 2024/12/16 2024/12/16 2025/1/13 2025/1/13 2025/2/18 Interest commencement date 2021/7/27 2024/7/31 2024/7/31 2024/12/17 2024/12/17 2025/1/14 2025/1/14 2025/2/19 Maturity date 2026/7/27 2034/7/31 2034/7/31 2026/12/17 2027/12/17 2030/1/14 2035/1/14 2045/2/19 Amount issued (RMB billion) 5 3.5 3.5 6 4 12 10 5 Outstanding balance (RMB billion) 5 3.5 3.5 6 4 12 10 5 Interest rate (%) 3.2 2.24 2.24 1.7 1.75 1.75 1.96 2 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 interbank bond market institutional investors Applicable trading mechanism Circulated and transferred in nationwide interbank bond market Risk of suspension for listed trading (if any), and countermeasures Not applicable Trading market Nationwide interbank 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 Entity rating AAA, 20-year bond rating AAA 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. No change on the repayment scheme Convening of corporate bond holders’ meeting During the reporting period, the bondholders’ meeting was not convened Performance of corporate bonds trustee Corporate bonds trustee has performed its duties in accordance with regulatory requirements Note: Please refer to offering circular published on the website of SSE (http://www.sse.com.cn), China Money Network (http://www.chinamoney.com.cn) and other websites for the name, office address, signing auditor, contact person and telephone number of the intermediary institutions providing services for the issuance and during the terms of the above-mentioned in interbank market debt financial instrument of non-financial enterprises and other disclosed information in the offering circular. 80 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Bond General Information BOND GENERAL INFORMATION (CONTINUED) Principal accounting data and financial indicators for the two years ended 31 December 2024 (in accordance with CASs) Principal data 31 December 2024 31 December 2023 Change Reasons for change Current ratio 0.78 0.83 (0.05) Decrease in cash at bank and on hand, and decrease in accounts receivable Quick ratio 0.40 0.44 (0.04) Decrease in cash at bank and on hand, and decrease in accounts receivable Liability-to-asset ratio 53.17% 52.70% 0.47 percentage points The increase in total liabilities is greater than the increase in total assets Loan repayment rate 100% 100% – 2024 2023 Change Reasons for change Net profit attributable to equity shareholders of the Company excluding extraordinary gains and losses (RMB million) 48,057 60,692 (12,635) The year-on-year decline in the profit due to the fluctuation with downward trends in crude oil prices, the acceleration of new energy substitution, and continuous release of new chemical production capacity Net profit of the Company excluding extraordinary gains and losses (RMB million) 54,511 69,053 (14,542) The year-on-year decline in the profit due to the fluctuation with downward trends in crude oil prices, the acceleration of new energy substitution, and continuous release of new chemical production capacity EBITDA to total debt ratio 0.52 0.66 (0.14) Decrease in profit before taxation and increase in total debt EBITDA to interest coverage ratio 9.89 10.77 (0.88) Decrease in profit before taxation and increase in interest expense Interest coverage ratio 4.61 5.59 (0.98) Decrease in profit before taxation and increase in interest expense Cash interest coverage ratio 21.90 22.97 (1.07) Decrease in cash flows from operating activities and increase in interest expense Interest payment rate 100% 100% – Note: Liability-to-asset ratio = total liabilities/total assets During the reporting period, the Company paid in full and on time the interest accrued for the other bonds and debt financing instruments. As at 31 December 2024, the standby credit line provided by several domestic financial institutions to the Company was RMB722.3 billion in total, facilitating the Company to get such amount of unsecured loans. The Company has fulfilled all the relevant undertakings in the bond offering circular and had no significant matters which could influence the Company’s operation and debt repayment ability. On 18 April 2013, Sinopec Capital (2013) Limited, a wholly-owned overseas subsidiary of Sinopec Corp., issued senior notes guaranteed by the Company with four different maturities, 3 years, 5 years, 10 years and 30 years. The 3-year notes principal totalled USD0.75 billion, with an annual interest rate of 1.250% and had been repaid and delisted; the 5-year notes principal totalled USD1 billion, with an annual interest rate of 1.875% and had been repaid and delisted; the 10-year notes principal totalled USD1.25 billion, with an annual interest rate of 3.125% and had been repaid and delisted; and the 30-year notes principal totalled USD0.5 billion, with an annual interest rate of 4.250%. These notes were listed on the Hong Kong Stock Exchange on 25 April 2013, with interest payable semi-annually. The first payment of interest was made on 24 October 2013. During the reporting period, the Company has paid in full the current-period interests of notes with 30 years. 81 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Principal Wholly-Owned and Controlled Subsidiaries PRINCIPAL WHOLLY-OWNED AND CONTROLLED SUBSIDIARIES On 31 December 2024, details of the principal wholly-owned and controlled subsidiaries of the Company were as follows: 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 Business Sinopec International Petroleum Exploration and Production Limited 8,250 100 29,527 17,214 3,195 Investment in exploration, production and sale of petroleum and natural gas Sinopec Great Wall Energy & Chemical Company Limited 22,761 100 48,712 21,267 (225) Coal chemical industry investment management, production and sale of coal chemical products Sinopec Yangzi Petrochemical Company Limited 15,651 100 28,451 11,664 (2,476) Manufacturing of intermediate petrochemical products and petroleum products Sinopec Yizheng Chemical Fibre Limited Liability Company 4,000 100 15,058 2,609 (1,183) Production and sale of polyester chips and polyester fibres Sinopec Lubricant Company Limited 3,374 100 9,381 5,619 290 Production and sale of refined petroleum products, lubricant base oil, and petrochemical materials Sinopec Qingdao Petrochemical Company Limited 1,595 100 3,365 1,727 400 Manufacturing of intermediate petrochemical products and petroleum products Sinopec Chemical Sales Company Limited 1,000 100 24,927 6,499 1,030 Marketing and distribution of petrochemical products China International United Petroleum and Chemical Company Limited 5,000 100 198,427 68,990 8,855 Trading of crude oil and petrochemical products Sinopec Overseas Investment Holding Limited 4,621 Million USD 100 34,895 26,177 957 Overseas investment and equity holding management Sinopec Catalyst Company Limited 1,500 100 14,271 7,505 950 Production and sale of catalyst products China Petrochemical International Company Limited 1,400 100 22,539 5,625 1,105 Trading of petrochemical products Sinopec Beihai Refining and Chemical Limited Liability Company 5,294 98.98 17,461 13,586 840 Import and processing of crude oil, production, storage and sale of petroleum products and petrochemical products Sinopec Qingdao Refining and Chemical Company Limited 5,153 85 20,854 14,501 1,466 Manufacturing of intermediate petrochemical products and petroleum products Sinopec Hainan Refining and Chemical Company Limited 9,606 100 48,359 23,876 108 Manufacturing of intermediate petrochemical products and petroleum products Sinopec Marketing Co., Limited 28,403 70.42 539,981 258,059 16,928 Marketing and distribution of refined petroleum products Sinopec-SK (Wuhan) Petrochemical Company Limited 7,193 59 22,732 7,277 (2,333) Production, sale, research and development of petroleum, petrochemical, ethylene and downstream by-products Sinopec Kantons Holdings Limited 248 Million HKD 60.33 14,559 14,208 1,075 Oil jetty and nature gas pipeline Sinopec Shanghai Gaoqiao Petroleum and Chemical Limited 10,000 55 31,375 21,706 (468) Manufacturing of intermediate petrochemical products and petroleum products Sinopec Shanghai Petrochemical Company Limited 10,799 51.14 41,769 25,144 323 Manufacturing of synthetic fibres, resin and plastics, intermediate petrochemical products and petroleum products Fujian Petrochemical Company Limited 10,492 50 9,666 7,406 (2,634) Manufacturing of plastics, intermediate petrochemical products and petroleum products Sinopec Hunan Petrochemical Co., Ltd. 7,333 74.69 37,245 16,751 820 Crude oil processing and petroleum products manufacturing Note 1: In 2024, all above subsidiaries are audited by KPMG Huazhen LLP or KPMG. Note 2: The above total assets and net profit have been prepared in accordance with CASs. Except for Sinopec Kantons Holdings Limited and Sinopec Overseas Investment Holding Limited which are incorporated in Bermuda and Hong Kong SAR, respectively, all of the above wholly-owned and controlled 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. 82 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) REPORT OF THE PRC AUDITOR 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 AUDITOR’S REPORT 畢馬威華振審字第2501667號 The Shareholders of China Petroleum & Chemical Corporation: OPINION We have audited the accompanying financial statements of China Petroleum & Chemical Corporation (“the Company”), which comprise the consolidated and company balance sheets as at 31 December 2024, the consolidated and company income statements, the consolidated and company cash flow statements, the consolidated and company statements of changes in shareholders’ equity for the year then ended, and notes to the financial statements. In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated and company financial position of the Company as at 31 December 2024, and the consolidated and company financial performance and cash flows of the Company for the year then ended in accordance with Accounting Standards for Business Enterprises issued by the Ministry of Finance of the People’s Republic of China. BASIS FOR OPINION We conducted our audit in accordance with China Standards on Auditing for Certified Public Accountants (“CSAs”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the China Code of Ethics for Certified Public Accountants (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. KEY AUDIT MATTERS Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Assessment of impairment of fixed assets relating to oil and gas producing activities Refer to Note 3 (8) Oil and gas properties, (12) Impairment of other non-financial long-term assets, Note 13 Fixed assets, and Note 59 Principal accounting estimates and judgements to the financial statements The Key Audit Matter How the matter was addressed in our audit The Company reported fixed assets of Renminbi (“RMB”) 717,105 million as at 31 December 2024, a portion of which related to oil and gas producing activities. The Company reported impairment losses of RMB211 million for the fixed assets relating to oil and gas producing activities for the year ended 31 December 2024. 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 management 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. 83 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) REPORT OF THE PRC AUDITOR (CONTINUED) OTHER INFORMATION The Company’s management is responsible for the other information. The other information comprises all the information included in 2024 annual report of the Company, 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 the financial statements in accordance with the Accounting Standards for Business Enterprises, and for the design, implementation and maintenance of such internal control necessary to enable that the financial statements are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Company’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 intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company’s financial reporting process. AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS Our objectives are to obtain reasonable assurance about whether the 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 judgement 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. • 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. 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. 84 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) REPORT OF THE PRC AUDITOR (CONTINUED) AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS (Continued) We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and 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. KPMG Huazhen LLP Certified Public Accountants Beijing, China Registered in the People’s Republic of China Yang Jie (Engagement Partner) He Shu 21 March 2025 85 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) (A) FINANCIAL STATEMENTS PREPARED UNDER CHINA ACCOUNTING STANDARDS FOR BUSINESS ENTERPRISES CONSOLIDATED BALANCE SHEET As at 31 December 2024 Notes At 31 December At 31 December 2024 2023 RMB million RMB million Assets Current assets Cash at bank and on hand 5 146,799 164,960 Financial assets held for trading 4 3 Derivative financial assets 6 2,554 9,721 Accounts receivable 7 44,333 48,652 Receivables financing 8 2,613 2,221 Prepayments 9 6,429 5,067 Other receivables 10 32,123 26,089 Inventories 11 256,595 250,898 Other current assets 33,065 26,824 Total current assets 524,515 534,435 Non-current assets Long-term equity investments 12 246,819 234,608 Other equity instrument investments 416 450 Fixed assets 13 717,105 690,957 Construction in progress 14 208,747 180,250 Right-of-use assets 15 164,342 174,529 Intangible assets 16 137,983 138,181 Goodwill 17 6,493 6,472 Long-term deferred expenses 18 12,131 13,199 Deferred tax assets 19 18,777 20,110 Other non-current assets 20 47,443 33,483 Total non-current assets 1,560,256 1,492,239 Total assets 2,084,771 2,026,674 Liabilities and shareholders’ equity Current liabilities Short-term loans 22 48,231 59,815 Derivative financial liabilities 6 3,412 2,752 Bills payable 23 47,740 29,122 Accounts payable 24 208,857 229,878 Contract liabilities 25 127,697 127,239 Employee benefits payable 26 14,167 13,941 Taxes payable 27 38,497 40,008 Other payables 28 98,467 93,031 Non-current liabilities due within one year 29 64,602 30,457 Other current liabilities 30 21,567 20,833 Total current liabilities 673,237 647,076 Non-current liabilities Long-term loans 31 184,934 179,347 Debentures payable 32 25,562 8,513 Lease liabilities 33 154,904 163,864 Provisions 34 49,668 48,269 Deferred tax liabilities 19 7,324 7,817 Other non-current liabilities 35 12,849 13,133 Total non-current liabilities 435,241 420,943 Total liabilities 1,108,478 1,068,019 Shareholders’ equity Share capital 36 121,282 119,349 Capital reserve 37 125,368 117,273 Less: treasury shares 1 – Other comprehensive income 38 (987) 3,060 Specific reserve 39 2,549 2,597 Surplus reserves 40 227,663 223,134 Retained earnings 344,048 340,381 Total equity attributable to shareholders of the Company 819,922 805,794 Non-controlling interests 156,371 152,861 Total shareholders’ equity 976,293 958,655 Total liabilities and shareholders’ equity 2,084,771 2,026,674 These financial statements have been approved for issue by the board of directors on 21 March 2025. Ma Yongsheng Zhao Dong Shou Donghua Chairman President Chief Financial Officer (Legal representative) The accompanying notes form part of these financial statements. 86 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) BALANCE SHEET As at 31 December 2024 Notes At 31 December At 31 December 2024 2023 RMB million RMB million Assets Current assets Cash at bank and on hand 30,024 65,753 Financial assets held for trading 4 3 Derivative financial assets 72 482 Accounts receivable 7 22,239 27,878 Receivables financing 1,074 367 Prepayments 9 2,423 1,760 Other receivables 10 49,654 50,940 Inventories 67,751 67,922 Other current assets 40,075 33,852 Total current assets 213,316 248,957 Non-current assets Long-term equity investments 12 440,565 413,572 Other equity instrument investments 15 14 Fixed assets 13 310,814 305,494 Construction in progress 14 85,166 70,306 Right-of-use assets 15 77,896 84,589 Intangible assets 8,265 8,312 Long-term deferred expenses 4,259 4,652 Deferred tax assets 5,601 6,567 Other non-current assets 54,867 47,004 Total non-current assets 987,448 940,510 Total assets 1,200,764 1,189,467 Liabilities and shareholders’ equity Current liabilities Short-term loans 38,966 39,413 Derivative financial liabilities 148 251 Bills payable 5,081 5,014 Accounts payable 72,883 81,628 Contract liabilities 9,832 9,079 Employee benefits payable 8,152 8,366 Taxes payable 19,161 22,103 Other payables 236,548 250,472 Non-current liabilities due within one year 32,710 16,100 Other current liabilities 964 912 Total current liabilities 424,445 433,338 Non-current liabilities Long-term loans 104,050 108,427 Debentures payable 21,989 4,993 Lease liabilities 80,887 86,399 Provisions 41,102 40,077 Other non-current liabilities 1,660 1,684 Total non-current liabilities 249,688 241,580 Total liabilities 674,133 674,918 Shareholders’ equity Share capital 121,282 119,349 Capital reserve 69,181 61,814 Less: treasury shares 1 – Other comprehensive income 365 700 Specific reserve 1,624 1,673 Surplus reserves 227,663 223,134 Retained earnings 106,517 107,879 Total shareholders’ equity 526,631 514,549 Total liabilities and shareholders’ equity 1,200,764 1,189,467 These financial statements have been approved for issue by the board of directors on 21 March 2025. Ma Yongsheng Zhao Dong Shou Donghua Chairman President Chief Financial Officer (Legal representative) The accompanying notes form part of these financial statements. 87 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) CONSOLIDATED INCOME STATEMENT For the year ended 31 December 2024 Notes 2024 2023 RMB million RMB million Operating income 41 3,074,562 3,212,215 Less: Operating costs 41 2,598,935 2,709,656 Taxes and surcharges 42 267,315 272,921 Selling and distribution expenses 45 61,422 61,164 General and administrative expenses 46 58,021 59,664 Research and development expenses 47 15,215 13,969 Financial expenses 43 11,174 9,922 Including: Interest expenses 18,601 18,069 Interest income 5,935 6,828 Exploration expenses, including dry holes 48 9,375 11,055 Add: Other income 49 12,253 10,905 Investment income 50 15,889 5,811 Including: Income from investment in associates and joint ventures 10,314 8,177 (Losses)/gains from changes in fair value 51 (4,147) 467 Credit impairment (losses)/reversals (108) 243 Impairment losses 52 (6,702) (8,772) Asset disposal gains 1,967 4,226 Operating profit 72,257 86,744 Add: Non-operating income 53 2,226 1,970 Less: Non-operating expenses 54 3,970 2,598 Profit before taxation 70,513 86,116 Less: Income tax expense 55 12,966 16,070 Net profit 57,547 70,046 Classification by going concern: Net profit from continuing operations 57,547 70,046 Net profit from discontinued operations – – Classification by ownership: Shareholders of the Company 50,313 60,463 Non-controlling interests 7,234 9,583 Basic earnings per share (RMB/share) 65 0.415 0.505 Diluted earnings per share (RMB/share) 65 0.415 0.505 Other comprehensive income 38 (1) Other comprehensive income (net of tax) attributable to shareholders of the Company (3,003) 2,501 Items that will not be reclassified to profit or loss Other comprehensive income not reclassifiable to profit or loss (6) (8) Items that may be reclassified subsequently to profit or loss Other comprehensive income that can be reclassified to profit or loss under the equity method (3,058) (4,287) Cash flow hedges (1,374) 5,145 Foreign currency translation differences 1,435 1,651 (2) Other comprehensive income (net of tax) attributable to non-controlling interests 17 (1,912) Total other comprehensive income net of tax (2,986) 589 Total comprehensive income 54,561 70,635 Attributable to: Shareholders of the Company 47,310 62,964 Non-controlling interests 7,251 7,671 These financial statements have been approved for issue by the board of directors on 21 March 2025. Ma Yongsheng Zhao Dong Shou Donghua Chairman President Chief Financial Officer (Legal representative) The accompanying notes form part of these financial statements. 88 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) INCOME STATEMENT For the year ended 31 December 2024 Notes 2024 2023 RMB million RMB million Operating income 41 1,061,965 1,206,728 Less: Operating costs 41 850,450 962,889 Taxes and surcharges 146,116 167,354 Selling and distribution expenses 1,718 1,934 General and administrative expenses 22,434 24,038 Research and development expenses 13,457 12,201 Financial expenses 12,531 11,319 Including: Interest expenses 20,545 19,187 Interest income 8,074 8,027 Exploration expenses, including dry holes 8,003 9,371 Add: Other income 6,542 7,839 Investment income 50 37,228 34,870 Including: Income from investment in associates and joint ventures 3,641 4,552 (Losses)/gains from changes in fair value (17) 284 Credit impairment losses (6) (4) Impairment losses (4,304) (5,057) Asset disposal gains 812 1,006 Operating profit 47,511 56,560 Add: Non-operating income 856 710 Less: Non-operating expenses 2,262 2,197 Profit before taxation 46,105 55,073 Less: Income tax expense 810 3,830 Net profit 45,295 51,243 Classification by going concern: Net profit from continuing operations 45,295 51,243 Net profit from discontinued operations – – Other comprehensive income Items that will not be reclassified subsequently to profit or loss Changes in fair value of other equity instrument investments 1 2 Items that may be reclassified subsequently to profit or loss Other comprehensive income that can be converted into profit or loss under the equity method 227 (63) Cash flow hedges 33 420 Total other comprehensive income net of tax 261 359 Total comprehensive income 45,556 51,602 These financial statements have been approved for issue by the board of directors on 21 March 2025. Ma Yongsheng Zhao Dong Shou Donghua Chairman President Chief Financial Officer (Legal representative) The accompanying notes form part of these financial statements. 89 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) CONSOLIDATED CASH FLOW STATEMENT For the year ended 31 December 2024 Notes 2024 2023 RMB million RMB million Cash flows from operating activities: Cash received from sale of goods and rendering of services 3,504,042 3,577,814 Refund of taxes and levies 7,934 11,530 Other cash received relating to operating activities 127,105 165,002 Sub-total of cash inflows 3,639,081 3,754,346 Cash paid for goods and services (2,852,274) (2,919,751) Cash paid to and for employees (109,030) (107,021) Payments of taxes and levies (339,210) (326,774) Other cash paid relating to operating activities (189,207) (239,325) Sub-total of cash outflows (3,489,721) (3,592,871) Net cash flow from operating activities 57(a) 149,360 161,475 Cash flows from investing activities: Cash received from disposal of investments 475 1,580 Cash received from returns on investments 11,543 10,886 Net cash received from disposal of fixed assets, intangible assets and other long-term assets 1,864 5,363 Net cash received from disposal of subsidiaries and other business units 3 – Other cash received relating to investing activities 57(d) 90,760 95,917 Sub-total of cash inflows 104,645 113,746 Cash paid for acquisition of fixed assets, intangible assets and other long-term assets (139,206) (171,493) Cash paid for acquisition of investments (10,604) (5,918) Net cash paid for the acquisition of subsidiaries and other business entities – (110) Other cash paid relating to investing activities 57(e) (116,075) (92,090) Sub-total of cash outflows (265,885) (269,611) Net cash flow used in investing activities (161,240) (155,865) Cash flows from financing activities: Cash received from capital contributions 15,458 1,509 Including: Cash received from non-controlling shareholders’ capital contributions to subsidiaries 3,463 1,509 Cash received from borrowings 57(g) 672,450 699,410 Other cash received relating to financing activities 1,290 420 Sub-total of cash inflows 689,198 701,339 Cash repayments of borrowings (628,052) (599,954) Cash paid for dividends, profits distribution or interest (56,164) (56,734) Including: Subsidiaries’ cash payments for distribution of dividends or profits to non-controlling shareholders (6,144) (7,977) Other cash paid relating to financing activities 57(f) (24,219) (21,919) Sub-total of cash outflows (708,435) (678,607) Net cash flow (used in)/generated from financing activities (19,237) 22,732 Effects of changes in foreign exchange rate 653 (21) Net (decrease)/increase in cash and cash equivalents 57(b) (30,464) 28,321 Add: Cash and cash equivalents at the beginning of the year 121,759 93,438 Cash and cash equivalents at the end of the year 57(c) 91,295 121,759 These financial statements have been approved for issue by the board of directors on 21 March 2025. Ma Yongsheng Zhao Dong Shou Donghua Chairman President Chief Financial Officer (Legal representative) The accompanying notes form part of these financial statements. 90 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) CASH FLOW STATEMENT For the year ended 31 December 2024 Notes 2024 2023 RMB million RMB million Cash flows from operating activities: Cash received from sale of goods and rendering of services 1,188,366 1,328,613 Refund of taxes and levies 6,153 7,396 Other cash received relating to operating activities 61,516 49,015 Sub-total of cash inflows 1,256,035 1,385,024 Cash paid for goods and services (852,765) (988,689) Cash paid to and for employees (51,877) (52,767) Payments of taxes and levies (175,336) (173,711) Other cash paid relating to operating activities (120,986) (92,621) Sub-total of cash outflows (1,200,964) (1,307,788) Net cash flow from operating activities 55,071 77,236 Cash flows from investing activities: Cash received from disposal of investments 24,062 4,241 Cash received from returns on investments 32,054 21,550 Net cash received from disposal of fixed assets, intangible assets and other long-term assets 369 1,360 Other cash received relating to investing activities 10,709 45,932 Sub-total of cash inflows 67,194 73,083 Cash paid for acquisition of fixed assets, intangible assets and other long-term assets (66,072) (80,398) Cash paid for acquisition of investments (31,154) (21,595) Other cash paid relating to investing activities (51,332) (23,481) Sub-total of cash outflows (148,558) (125,474) Net cash flow used in investing activities (81,364) (52,391) Cash flows from financing activities: Cash received from capital contributions 11,995 – Cash received from borrowings 166,580 169,988 Other cash received relating to financing activities 279,937 226,040 Sub-total of cash inflows 458,512 396,028 Cash repayments of borrowings (137,205) (99,656) Cash paid for dividends or interest (50,046) (48,816) Other cash paid relating to financing activities (281,905) (231,193) Sub-total of cash outflows (469,156) (379,665) Net cash flow (used in)/generated from financing activities (10,644) 16,363 Effects of changes in foreign exchange rate (14) 35 Net (decrease)/increase in cash and cash equivalents (36,951) 41,243 Add: Cash and cash equivalents at the beginning of the year 64,471 23,228 Cash and cash equivalents at the end of the year 27,520 64,471 These financial statements have been approved for issue by the board of directors on 21 March 2025. Ma Yongsheng Zhao Dong Shou Donghua Chairman President Chief Financial Officer (Legal representative) The accompanying notes form part of these financial statements. 91 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2024 Share capital Capital reserve Less: Treasury shares Other comprehensive income Specific reserve Surplus reserves Retained earnings Total shareholders’ equity attributable to equity shareholders of the Company Non- controlling interests Total shareholders’ equity RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million Balance at 1 January 2023 119,896 118,875 – 3,072 2,813 218,009 325,806 788,471 151,986 940,457 Change for the year 1. Net profit – – – – – – 60,463 60,463 9,583 70,046 2. Other comprehensive income (Note 38) – – – 2,501 – – – 2,501 (1,912) 589 Total comprehensive income – – – 2,501 – – 60,463 62,964 7,671 70,635 Amounts transferred to initial carrying amount of hedged items – – – (2,513) – – – (2,513) (142) (2,655) Transactions with owners, recorded directly in shareholders’ equity: 3. Decrease of shareholders’ capital: – Purchase of own shares (Note 36) (547) (1,778) – – – – – (2,325) – (2,325) 4. Appropriations of profits: – Appropriations for surplus reserves (Note 40) – – – – – 5,125 (5,125) – – – – Distributions to shareholders (Note 56) – – – – – – (40,760) (40,760) – (40,760) 5. Contributions to subsidiaries from non-controlling interests – – – – – – – – 2,209 2,209 6. Transaction with non-controlling interests – – – – – – – – (213) (213) 7. Distributions to non-controlling interests – – – – – – – – (8,573) (8,573) Total transactions with owners, recorded directly in shareholders’ equity (547) (1,778) – – – 5,125 (45,885) (43,085) (6,577) (49,662) 8. Net increase in specific reserve for the year – – – – (216) – – (216) (32) (248) 9. Other equity movements under the equity method – 220 – – – – – 220 – 220 10. Others – (44) – – – – (3) (47) (45) (92) Balance at 31 December 2023 119,349 117,273 – 3,060 2,597 223,134 340,381 805,794 152,861 958,655 Balance at 1 January 2024 119,349 117,273 – 3,060 2,597 223,134 340,381 805,794 152,861 958,655 Change for the year 1. Net profit – – – – – – 50,313 50,313 7,234 57,547 2. Other comprehensive income (Note 38) – – – (3,003) – – – (3,003) 17 (2,986) Total comprehensive income – – – (3,003) – – 50,313 47,310 7,251 54,561 Amounts transferred to initial carrying amount of hedged items – – – (1,029) – – – (1,029) 91 (938) Transactions with owners, recorded directly in shareholders’ equity: 3. Shareholders’ increase and decrease of capital: – Common shares invested by shareholders (Note 36) 2,391 9,597 – – – – – 11,988 – 11,988 – Purchase of own shares (Note 36) – – (2,131) – – – – (2,131) – (2,131) – Cancellation of repurchased own shares (Note 36) (458) (1,672) 2,130 – – – – – – – 4. Appropriations of profits: – Appropriation of surplus reserve (Note 40) – – – – – 4,529 (4,529) – – – – Distributions to shareholders (Note 56) – – – – – – (42,108) (42,108) – (42,108) 5. Contributions and reduction to subsidiaries from non-controlling interests – 970 – – – – – 970 1,266 2,236 6. Transaction with non-controlling interests – (1,078) – – – – – (1,078) 1,180 102 7. Distributions to non-controlling interests – – – – – – – – (6,024) (6,024) Total transactions with owners, recorded directly in shareholders’ equity 1,933 7,817 (1) – – 4,529 (46,637) (32,359) (3,578) (35,937) 8. Net increase in specific reserve for the year – – – – (48) – – (48) 1 (47) 9. Transfer of other comprehensive income to retained earnings – – – (15) – – 15 – – – 10. Other equity movements under the equity method – (68) – – – – – (68) (10) (78) 11. Others – 346 – – – – (24) 322 (245) 77 Balance at 31 December 2024 121,282 125,368 (1) (987) 2,549 227,663 344,048 819,922 156,371 976,293 These financial statements have been approved for issue by the board of directors on 21 March 2025. Ma Yongsheng Zhao Dong Shou Donghua Chairman President Chief Financial Officer (Legal representative) The accompanying notes form part of these financial statements. 92 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2024 Share capital Capital reserve Less: Treasury shares 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 RMB million Balance at 1 January 2023 119,896 63,628 – 827 1,745 218,009 102,522 506,627 Change for the year 1. Net profit – – – – – – 51,243 51,243 2. Other comprehensive income – – – 359 – – – 359 Total comprehensive income – – – 359 – – 51,243 51,602 Amounts transferred to initial carrying amount of hedged items – – – (486) – – – (486) Transactions with owners, recorded directly in shareholders’ equity: 3. Shareholders’ decrease of capital: －Purchase of own shares (Note 36) (547) (1,778) – – – – – (2,325) 4. Appropriations of profits: －Appropriations for surplus reserves (Note 40) – – – – – 5,125 (5,125) – －Distributions to shareholders (Note 56) – – – – – – (40,760) (40,760) Total transactions with owners, recorded directly in shareholders’ equity (547) (1,778) – – – 5,125 (45,885) (43,085) 5. Net increase in specific reserve for the year – – – – (72) – – (72) 6. Other equity movements under the equity method – (36) – – – – – (36) 7. Others – – – – – – (1) (1) Balance at 31 December 2023 119,349 61,814 – 700 1,673 223,134 107,879 514,549 Balance at 1 January 2024 119,349 61,814 – 700 1,673 223,134 107,879 514,549 Change for the year 1. Net profit – – – – – – 45,295 45,295 2. Other comprehensive income – – – 261 – – – 261 Total comprehensive income – – – 261 – – 45,295 45,556 Amounts transferred to initial carrying amount of hedged items – – – (596) – – – (596) Transactions with owners, recorded directly in shareholders’ equity: 3. Shareholders’ increase and decrease of capital: －Common shares invested by shareholders (Note 36) 2,391 9,597 – – – – – 11,988 －Purchase of own shares (Note 36) – – (2,131) – – – – (2,131) －Cancellation of repurchased own shares (Note 36) (458) (1,672) 2,130 – – – – – 4. Appropriations of profits: －Appropriation of surplus reserve (Note 40) – – – – – 4,529 (4,529) – －Distributions to shareholders (Note 56) – – – – – – (42,108) (42,108) Total transactions with owners, recorded directly in shareholders’ equity 1,933 7,925 (1) – – 4,529 (46,637) (32,251) 5. Net increase in specific reserve for the year – – – – (49) – – (49) 6. Other equity movements under the equity method – 43 – – – – – 43 7. Others – (601) – – – – (20) (621) Balance at 31 December 2024 121,282 69,181 (1) 365 1,624 227,663 106,517 526,631 These financial statements have been approved for issue by the board of directors on 21 March 2025. Ma Yongsheng Zhao Dong Shou Donghua Chairman President Chief Financial Officer (Legal representative) The accompanying notes form part of these financial statements. 93 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2024 1 STATUS OF THE COMPANY China Petroleum & Chemical Corporation (the “Company”) was established on 25 February 2000 as a joint stock limited company. The company is registered in Beijing, the People’s Republic of China, and the headquarter is located in Beijing, the People’s Republic of China. The approval date of the financial report is 21 March 2025. According to the State Council’s approval to the “Preliminary Plan for the Reorganisation of China Petrochemical Corporation” (the “Reorganisation”), the Company was established by China Petrochemical Corporation, which transferred its core businesses together with the related assets and liabilities at 30 September 1999 to the Company. Such assets and liabilities had been valued jointly by China United Assets Appraisal Corporation, Beijing Zhong Zheng Appraisal Company, CIECC Assets Appraisal Corporation and Zhong Fa International Properties Valuation Corporation. The net asset value was determined at RMB98,249,084,000. The valuation was reviewed and approved by the Ministry of Finance (the “MOF”) (Cai Ping Zi [2000] No. 20 “Comments on the Review of the Valuation Regarding the Formation of a Joint Stock Limited Company by China Petrochemical Corporation”). In addition, pursuant to the notice Cai Guan Zi [2000] No. 34 “Reply to the Issue Regarding Management of State-Owned Equity by China Petroleum and Chemical Corporation” issued by the MOF, 68.8 billion domestic state-owned shares with a par value of RMB1.00 each were issued to Sinopec Group Company, the amount of which is equivalent to 70% of the above net asset value transferred from Sinopec Group Company to the Company in connection with the reorganisation. Pursuant to the notice Guo Jing Mao Qi Gai [2000] No. 154 “Reply on the Formation of China Petroleum and Chemical Corporation”, the Company obtained the approval from the State Economic and Trade Commission on 21 February 2000 for the formation of a joint stock limited company. The Company took over the exploration, development and production of crude oil and natural gas, refining, chemicals and related sales and marketing business of Sinopec Group Company after the establishment of the Company. The Company and its subsidiaries (the “Group”) engage in the oil and gas and chemical operations and businesses, including: (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. Details of the Company’s principal subsidiaries are set out in Note 60. 2 BASIS OF PREPARATION (1) Statement of compliance of China Accounting Standards for Business Enterprises (“CASs”) The financial statements have been prepared in accordance with the requirements of Accounting Standards for Business Enterprises – Basic Standards, specific standards and relevant regulations (hereafter referred as CASs collectively) issued by the MOF on or after 15 February 2006. These financial statements also comply with the disclosure requirements of “Regulation on the Preparation of Information Disclosures of Companies Issuing Public Shares, No.15: General Requirements for Financial Reports” revised in 2023 by the China Securities Regulatory Commission (“CSRC”). These financial statements present truly and completely the consolidated and company financial position as at 31 December 2024, and the consolidated and company financial performance and the consolidated and company cash flows for the year ended 31 December 2024. These financial statements are prepared on a basis of going concern. (2) Accounting period The accounting year of the Group is from 1 January to 31 December. (3) Measurement basis The financial statements of the Group have been prepared under the historical cost convention, except for the assets and liabilities set out below: – Financial assets held for trading (see Note 3(11)) – Other equity instrument investments (see Note 3(11)) – Derivative financial instruments (see Note 3(11)) – Receivables financing (see Note 3(11)) (4) Functional currency and presentation currency The functional currency of the Company’s and most of its subsidiaries are Renminbi. The Company and its subsidiaries determine their functional currency according to the main economic environment in where they operate. The Group’s consolidated financial statements are presented in Renminbi. Some of subsidiaries use other currency as the functional currency. The Company translates the financial statements of subsidiaries from their respective functional currencies into Renminbi (see Note 3(2)) if the subsidiaries’ functional currencies are not Renminbi. 94 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 2 BASIS OF PREPARATION (Continued) (5) Materiality criteria: Determination method and selection basis Item Materiality criteria Principal joint ventures and associates The carrying amount of long-term equity investments ≥ RMB4,000 million Principal construction in progress The carrying amount of construction in progress ≥ RMB4,000 million Goodwill The carrying amount of goodwill ≥ RMB4,000 million Principal non-wholly-owned subsidiary The amount of non-controlling interests ≥ RMB4,000 million 3 MATERIAL ACCOUNTING POLICIES The Group determines specific accounting policies and accounting estimates based on the characteristics of production and operational activities, mainly reflected in the accounting for allowance for financial assets (Note 3(11)), valuation of inventories (Note 3(4)), depreciation of fixed assets and depletion of oil and gas properties (Notes 3(7), (8)), measurement of provisions (Note 3(16)), etc. Principal accounting estimates and judgements of the Group are set out in Note 59. (1) Accounting treatment of business combination involving entities under common control and not under common control (a) Business combination involving entities under common control A business combination involving entities or businesses under common control is a business combination in which all of the combining entities or businesses are ultimately controlled by the same party or parties both before and after the business combination, and that control is not transitory. The assets and liabilities that the acquirer receives in the acquisition are accounted for at the acquiree’s carrying amount on the acquisition date. The difference between the carrying amount of the acquired net assets and the carrying amount of the consideration paid for the acquisition (or the total nominal value of shares issued) is recognised in the share premium of capital reserve, or the retained earnings in case of any shortfall in the share premium of capital reserve. Any costs directly attributable to the combination shall be recognised in profit or loss for the current period when occurred. The expense incurred for equity securities and debt securities issued as the consideration of the combination is recognised in the initial cost of the securities. The combination date is the date on which the acquirer effectively obtains control of the acquiree. (b) Business combination involving entities not under common control A business combination involving entities or businesses not under common control is a business combination in which all of the combining entities or businesses are not ultimately controlled by the same party or parties both before and after the business combination. Difference between the consideration paid by the Group as the acquirer, comprises of the aggregate of the fair value at the acquisition date of assets given, liabilities incurred or assumed, and equity securities issued by the acquirer in exchange for control of the acquiree, and the Group’s interest in the fair value of the identifiable net assets of the acquiree, is recognised as goodwill (Note 3(10)) if it is an excess, otherwise in the profit or loss. The expense incurred for equity securities and debt securities issued as the consideration of the combination is recognised in the initial cost of the securities. Any other expense directly attributable to the business combination is recognised in the profit or loss for the year. The difference between the fair value and the book value of the assets given is recognised in profit or loss. The acquiree’s identifiable assets, liabilities and contingent liabilities, if satisfying the recognition criteria, are recognised by the Group at their fair value at the acquisition date. The acquisition date is the date on which the acquirer effectively obtains control of the acquiree. (c) Criteria for determining control and method for the preparation of consolidated financial statements The scope of consolidated financial statements is based on control and the consolidated financial statements comprise the Company and its subsidiaries. Control means an entity 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. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Where the Company combines a subsidiary during the reporting period through a business combination involving entities under common control, the financial statements of the subsidiary are included in the consolidated financial statements as if the combination had occurred at the beginning of the earliest comparative year presented or, if later, at the date that common control was established. Therefore the opening balances and the comparative figures of the consolidated financial statements are restated. In the preparation of the consolidated financial statements, the subsidiary’s assets, liabilities and results of operations are included in the consolidated balance sheet and the consolidated income statement, respectively, based on their carrying amounts in the subsidiary’s financial statements, from the date that common control was established. Where the Company acquires a subsidiary during the reporting year through a business combination involving entities not under common control, the identifiable assets, liabilities and results of operations of the subsidiaries are consolidated into consolidated financial statements from the date that control commences, based on the fair value of those identifiable assets and liabilities at the acquisition date. Where the Company acquired a non-controlling interest from a subsidiary’s non-controlling shareholders, the difference between the investment cost and the newly acquired interest into the subsidiary’s identifiable net assets at the acquisition date is adjusted to the capital reserve (capital surplus) in the consolidated balance sheet. Where the Company partially disposed an investment of a subsidiary that do not result in a loss of control, the difference between the proceeds and the corresponding share of the interest into the subsidiary is adjusted to the capital reserve (capital surplus) in the consolidated balance sheet. If the credit balance of capital reserve (capital surplus) is insufficient, any excess is adjusted to the share premium of capital reserve, or the retained earnings. 95 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 3 MATERIAL ACCOUNTING POLICIES (Continued) (1) Accounting treatment of business combination involving entities under common control and not under common control (Continued) (c) Criteria for determining control and method for the preparation of consolidated financial statements (Continued) In a business combination involving entities not under common control achieved in stages, the Group remeasures its previously held equity interest in the acquiree on the acquisition date. The difference between the fair value and the net book value is recognised as investment income for the year. If other comprehensive income was recognised regarding the equity interest previously held in the acquiree before the acquisition date, the relevant other comprehensive income is transferred to investment income in the period in which the acquisition occurs. Where control of a subsidiary is lost due to partial disposal of the equity investment held in a subsidiary, or any other reasons, the Group derecognises assets, liabilities, non-controlling interests and other equity items related to the subsidiary. The remaining equity investment is remeasured to fair value at the date in which control is lost. The sum of consideration received from disposal of equity investment and the fair value of the remaining equity investment, net of the fair value of the Group’s previous share of the subsidiary’s identifiable net assets recorded from the acquisition date, is recognised in investment income in the period in which control is lost. Other comprehensive income related to the previous equity investment in the subsidiary, is transferred to investment income when control is lost. Other comprehensive income related to the equity investment of the original subsidiary shall be converted into the current investment income in the event of loss of control. Non-controlling interest is presented separately in the consolidated balance sheet within shareholders’ equity. Net profit or loss attributable to non-controlling shareholders is presented separately in the consolidated income statement below the net profit line item. The excess of the loss attributable to the non-controlling interests during the period over the non-controlling interests’ share of the equity at the beginning of the reporting period is deducted from non-controlling interests. Where the accounting policies and accounting period adopted by the subsidiaries are different from those adopted by the Company, adjustments are made to the subsidiaries’ financial statements according to the Company’s accounting policies and accounting period. Intra- group balances and transactions, and any unrealised profit or loss arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised losses resulting from intra-group transactions are eliminated in the same way as unrealised gains but only to the extent that there is no evidence of impairment. The unrealised profit or loss arising from the sale of assets by the Company to its subsidiaries is eliminated in full against the net profit attributed to shareholders; the unrealised profit or loss from the sale of assets by subsidiaries to the Company is eliminated according to the distribution ratio between shareholders of the parent company and non-controlling interests. For sale of assets that occurred between subsidiaries, the unrealised gains and losses is eliminated according to the distribution ratio for its subsidiaries seller between net profit attributable to shareholders of the parent company and non-controlling interests. (2) Transactions in foreign currencies and translation of financial statements in foreign currencies Foreign currency transactions are, on initial recognition, translated into Renminbi at the spot exchange rates quoted by the People’s Bank of China (“PBOC rates”) at the transaction dates. Foreign currency monetary items are translated at the PBOC rates at the balance sheet date. Exchange differences, except for those directly related to the acquisition, construction or production of qualified assets, are recognised as income or expenses in the income statement. Non- monetary items denominated in foreign currency measured at historical cost are not translated. Non-monetary items denominated in foreign currency that are measured at fair value are translated using the exchange rates at the date when the fair value was determined. The difference between the translated amount and the original currency amount is recognised as other comprehensive income, if it is classified as other equity instrument investments; or charged to the income statement if it is measured at fair value through profit or loss. The assets and liabilities of foreign operation are translated into Renminbi at the spot exchange rates at the balance sheet date. The equity items, excluding “Retained earnings”, are translated into Renminbi at the spot exchange rates at the transaction dates. The income and expenses of foreign operation are translated into Renminbi at the spot exchange rates or an exchange rate that approximates the spot exchange rates on the transaction dates. The resulting exchange differences are separately presented as other comprehensive income in the balance sheet within equity. Upon disposal of a foreign operation, the cumulative amount of the exchange differences recognised in which relate to that foreign operation is transferred to profit or loss in the year in which the disposal occurs. 96 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 3 MATERIAL ACCOUNTING POLICIES (Continued) (3) Cash and cash equivalents Cash and cash equivalents comprise cash on hand, demand deposits, short-term and highly liquid investments which are readily convertible into known amounts of cash and are subject to an insignificant risk of change in value. (4) Inventories (a) Inventories categories Inventories include raw materials, work in progress, semi-finished goods, finished goods and reusable materials. Reusable materials include low-value consumables, packaging materials and other materials, which can be used repeatedly but do not meet the definition of fixed assets. Reusable materials are amortised in full when received for use. The amounts of the amortisation are included in the cost of the related assets or profit or loss. Inventories are initially measured at cost. Cost includes the cost of purchase and processing, and other expenditures incurred in bringing the inventories to their present location and condition. The cost of inventories is mainly calculated using the weighted average method. In addition to the cost of purchase of raw material, work in progress and finished goods include direct labour and an appropriate allocation of manufacturing overhead costs. (b) Criteria for recognition and method of provision for diminution in value of inventories At the balance sheet date, inventories are stated at the lower of cost and net realisable value. Any excess of the cost over the net realisable value of each item of inventories is recognised as a provision for diminution in the value of inventories and included in the current period profit and loss. Net realisable value is the estimated selling price in the normal course of business less the estimated costs of completion and the estimated costs necessary to make the sale and relevant taxes. The net realisable value of materials held for use in the production is measured based on the net realisable value of the finished goods in which they will be incorporated. The net realisable value of the quantity of inventory held to satisfy sales or service contracts is measured based on the contract price. If the quantities held by the Group are more than the quantities of inventories specified in sales contracts, the net realisable value of the excess portion of inventories is measured based on general selling prices. (c) Inventory system Inventories are recorded by perpetual method. (5) Long-term equity investments (a) Investment in subsidiaries In the Company’s separate financial statements, long-term equity investments in subsidiaries are accounted for using the cost method. Except for cash dividends or profits distributions declared but not yet distributed that have been included in the price or consideration paid in obtaining the investments, the Company recognises its share of the cash dividends or profit distributions declared by the investee as investment income irrespective of whether these represent the net profit realised by the investee before or after the investment. Investments in subsidiaries are stated at cost less impairment losses (see Note 3(12)) in the balance sheet. At initial recognition, such investments are measured as follows: The initial investment cost of a long-term equity investment obtained through a business combination involving entities under common control is the Company’s share of the carrying amount of the subsidiary’s equity at the combination date. The difference between the initial investment cost and the carrying amounts of the consideration given is adjusted to share premium in capital reserve. If the balance of the share premium is insufficient, any excess is adjusted to the share premium of capital reserve, or the retained earnings. For a long-term equity investment obtained through a business combination not involving enterprises under common control, the initial investment cost comprises the aggregate of the fair values of assets transferred, liabilities incurred or assumed, and equity securities issued by the Company, in exchange for control of the acquiree. For a long-term equity investment obtained through a business combination not involving enterprises under common control, if it is achieved in stages, the initial cost comprises the carrying value of previously-held equity investment in the acquiree immediately before the acquisition date, and the additional investment cost at the acquisition date. An investment in a subsidiary acquired otherwise than through a business combination is initially recognised at actual purchase cost if the Group acquires the investment by cash, or at the fair value of the equity securities issued if an investment is acquired by issuing equity securities, or at the value stipulated in the investment contract or agreement if an investment is contributed by investors. 97 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 3 MATERIAL ACCOUNTING POLICIES (Continued) (5) Long-term equity investments (Continued) (b) Investment in joint ventures and associates A joint venture is an incorporated entity over which the Group, based on legal form, contractual terms and other facts and circumstances, has joint control with the other parties to the joint venture and rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the Group and the parties sharing control. An associate is the investee that the Group has significant influence on their financial and operating policies. Significant influence represents the right to participate in the financial and operating policy decisions of the investee but is not control or joint control over the establishment of these policies. The Group generally considers the following circumstances in determining whether it can exercise significant influence over the investee: whether there is representative appointed to the board of directors or equivalent governing body of the investee; whether to participate in the investee’s policy-making process; whether there are significant transactions with the investees; whether there is management personnel sent to the investee; whether to provide critical technical information to the investee. An investment in a joint ventures or an associate is accounted for using the equity method, unless the investment is classified as held for sale. The initial cost of investment in joint ventures and associates is stated at the consideration paid except for cash dividends or profits distributions declared but unpaid at the time of acquisition and therefore included in the consideration paid should be deducted if the investment is made in cash. Under the circumstances that the long-term investment is obtained through non-monetary asset exchange, the initial cost of the investment is stated at the fair value of the assets exchanged if the transaction has commercial substance, the difference between the fair value of the assets exchanged and its carrying amount is charged to profit or loss; or stated at the carrying amount of the assets exchanged if the transaction lacks commercial substance. The Group’s accounting treatments when adopting the equity method include: Where the initial investment cost of a long-term equity investment exceeds the Group’s interest in the fair value of the investee’s identifiable net assets at the date of acquisition, the investment is initially recognised at the initial investment cost. Where the initial investment cost is less than the Group’s interest in the fair value of the investee’s identifiable net assets at the time of acquisition, the investment is initially recognised at the investor’s share of the fair value of the investee’s identifiable net assets, and the difference is charged to profit or loss. After the acquisition of the investment, the Group recognises its share of the investee’s net profits or losses and other comprehensive income as investment income or losses and other comprehensive income, and adjusts the carrying amount of the investment accordingly. Once the investee declares any cash dividends or profits distributions, the carrying amount of the investment is reduced by that attributable to the Group. The Group recognises its share of the investee’s net profits or losses after making appropriate adjustments to align the accounting policies or accounting periods with those of the Group based on the fair values of the investee’s net identifiable assets at the time of acquisition. Under the equity accounting method, unrealised profits and losses resulting from transactions between the Group and its associates or joint ventures are eliminated to the extent of the Group’s interest in the associates or joint ventures. Unrealised losses resulting from transactions between the Group and its associates or joint ventures are fully recognised in the event that there is an evidence of impairment. The Group discontinues recognising its share of net losses of the investee after the carrying amount of the long-term equity investment and any long-term interest that is in substance forms part of the Group’s net investment in the associate or the joint venture is reduced to zero, except to the extent that the Group has an obligation to assume additional losses. However, if the Group has incurred obligations for additional losses and the conditions on recognition of provision are satisfied in accordance with the accounting standard on contingencies, the Group continues recognising the investment losses and the provision. Where net profits are subsequently made by the associate or joint venture, the Group resumes recognising its share of those profits only after its share of the profits equals the share of losses not recognised. The Group adjusts the carrying amount of the long-term equity investment for changes in owners’ equity of the investee other than those arising from net profits or losses and other comprehensive income, and recognises the corresponding adjustment in capital reserve. (c) The impairment assessment method and provision accrual on investment The impairment assessment and provision accrual on investments in subsidiaries, associates and joint ventures are stated in Note 3(12). 98 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 3 MATERIAL ACCOUNTING POLICIES (Continued) (6) Leases A lease is a contract that a lessor transfers the right to use an identified asset for a period of time to a lessee in exchange for consideration. (a) As Lessee The Group recognises a right-of-use asset at the commencement date, and recognises the lease liability at the present value of the lease payments that are not paid at that date. The lease payments include fixed payments, the exercise price of a purchase option if the Group is reasonably certain to exercise that option, and payments of penalties for terminating the lease if the lease term reflects the Group exercising that option, etc. Variable payments that are based on a percentage of sales are not included in the lease payments, and should be recognised in profit or loss when incurred. Lease liabilities to be paid within one year (including one year) from balance sheet date is presented in non- current liabilities due within one year. Right-of-use assets of the Group mainly comprise land. Right-of-use assets are measured at cost which comprises the amount of the initial measurement of the lease liability, any lease payments made at or before the commencement date, any initial direct costs incurred by the lessee, less any lease incentives received. The Group depreciates the right-of-use assets over the shorter of the asset’s useful life and the lease term on a straight-line basis. When the recoverable amount of a right-of-use asset is less than its carrying amount, the carrying amount is reduced to the recoverable amount. Payments associated with short-term leases with lease terms within 12 months and leases for which the underlying assets are individually of low value when it is new (the individual lease asset has a relatively low value when brand new) are recognised on a straight-line basis over the lease term as an expense in profit or loss or as cost of relevant assets, instead of recognising right-of-use assets and lease liabilities. (b) As Lessor A lease that transfers substantially all the risks and rewards incidental to ownership of an asset is a finance lease. An operating lease is a lease other than a finance lease. When the Group leases self-owned plants and buildings, equipment and machinery, lease income from an operating lease is recognised on a straight-line basis over the period of the lease. The Group recognises variable lease income which is based on a certain percentage of sales as rental income when occurred. (7) Fixed assets and construction in progress Fixed assets represent the tangible assets held by the Group using in the production of goods, rendering of services and for operation and administrative purposes with useful life over one year. Fixed assets are stated in the balance sheet at cost less accumulated depreciation and impairment losses (see Note 3(12)). Construction in progress is stated in the balance sheet at cost less impairment losses (see Note 3(12)). The cost of a purchased fixed asset comprises the purchase price, related taxes, and any directly attributable expenditure for bringing the asset to working condition for its intended use. The cost of self-constructed assets includes the cost of materials, direct labour, capitalised borrowing costs (see Note 3(20)), and any other costs directly attributable to bringing the asset to working condition for its intended use. According to legal or contractual obligations, costs of dismantling and removing the items and restoring the site on which the related assets located are included in the initial cost. Construction in progress is transferred to fixed assets when the asset is ready for its intended use. No depreciation is provided against construction in progress. The criteria and timing for each type of construction in progress to be transferred to fixed assets are as follows: Category Criteria and time point for transfer to fixed assets Plants and buildings Asset management relevant departments complete on-site inspection and acceptance with conditions for use. Equipment, machinery and others (1) A single set of equipment can be put into operation separately and produce qualified products independently of other equipment or processes, and the relevant departments have issued a commissioning report; (2) Combined devices can be successfully commissioned jointly and produce qualified products normally, and the relevant departments will issue a commissioning report; (3) The supporting facilities are completed with the joint device as a whole and reach the point of the intended usable state; (4) The petrol station has completed on-site acceptance by the relevant management department; (5) The petrol filling station has completed on-site acceptance by the relevant departments and passed the relevant special acceptance by the local law enforcement authorities; (6) Fixed assets not required to be installed have passed acceptance by relevant departments; (7) The long-distance pipeline reaches the conditions for oil injection or section oil injection operation, and the relevant management departments of the enterprise complete the on-site acceptance and pass the relevant special acceptance by the local law enforcement departments. When an enterprise sells products or by-products produced before a fixed asset is available for its intended use, the proceeds and related cost are accounted for in accordance with CAS 14 – Revenue and CAS 1 – Inventories respectively, and recognised in profit or loss for the current period. 99 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 3 MATERIAL ACCOUNTING POLICIES (Continued) (7) Fixed assets and construction in progress (Continued) Where the individual component parts of an item of fixed asset have different useful lives or provide benefits to the Group in different patterns thus necessitating use of different depreciation rates or methods, each part is recognised as a separate fixed asset. The subsequent costs including the cost of replacing part of an item of fixed assets are recognised in the carrying amount of the item if the recognition criteria are satisfied, and the carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of fixed assets are recognised in profit or loss as incurred. The Group terminates the recognition of an item of fixed asset when it is in a state of disposal or it is estimated that it is unable to generate any economic benefits through use or disposal. Gains or losses arising from the retirement or disposal of an item of fixed asset are determined as the difference between the net disposal proceeds and the carrying amount of the item and are recognised in profit or loss on the date of retirement or disposal. Other than oil and gas properties, the cost of fixed assets less residual value and accumulated impairment losses is depreciated using the straight-line method over their estimated useful lives, unless the fixed asset is classified as held for sale. The estimated useful lives and the estimated rate of residual values adopted for respective classes of fixed assets are as follows: Estimated Estimated rate useful life of residual value Plants and buildings 12-50 years 3% Equipment, machinery and others 4-30 years 3% Useful lives, residual values and depreciation methods are reviewed at least each year end. (8) Oil and gas properties Oil and gas assets refer to the ownership or control of mining interests and the formation of oil and gas wells and related auxiliary equipment through oil and gas exploration and development activities. For mining rights and interests, if proven economically recoverable reserves are discovered in the mining area within the year, the expenses incurred in the current period should be capitalized. If no proven economically recoverable reserves are found in the mining area within the year, the expenses incurred in the current period should be temporarily capitalized; When reserves are subsequently discovered, they should be transferred within the oil and gas assets. For completed exploration wells that have completed exploration tasks, obtained industrial oil and gas flow, and can be economically and effectively included in oil and gas production management, the actual expenses for drilling the well, production costs, and disposal fees determined according to the disposal plan will be converted into oil and gas assets when it is put into production (reaching a usable state), and an estimated liability for oil and gas asset disposal fees will be calculated; Exploration tasks have been completed, and exploration wells that have not obtained industrial oil and gas flow have been identified. If they are economically and effectively utilized for other purposes (co associated resources, injection wells, etc.), the actual expenses and production costs of drilling the well will be converted into corresponding assets when it is put into production (reaching a usable state); Exploration tasks have been completed, and exploration wells that have not obtained industrial oil and gas flow, or exploration wells that have obtained industrial oil and gas flow but do not have the conditions for oil and gas production and cannot be economically and effectively included in oil and gas production management (including other economically and effectively utilized methods), shall be written off. The actual drilling and exploration expenses of the well shall be included in the current period’s profit and loss. For unfinished exploration wells, the drilling support of the well shall be listed as under construction within one year after completion; After one year of completion, it is still uncertain whether the well has obtained industrial oil and gas flow. If further exploration activities of the well are already in progress or have clear plans and are about to be implemented, the expenditure of the well will continue to be included in the construction project. Otherwise, the actual expenditure of the well will be recognized in the current profit and loss. For the development well, if it is determined to obtain industrial oil and gas flow and can be economically and effectively included in oil and gas production management, the actual expenses, production costs, and disposal fees determined according to the disposal plan of the well will be converted into oil and gas assets when it is put into production (reaching a usable state), and an estimated liability for oil and gas asset disposal fees will be calculated. For auxiliary equipment related to oil and gas assets, they will be converted into oil and gas assets when the project is completed and reaches the predetermined usable state. The estimation of the future demolition costs of oil and gas assets by our group is based on current industry practices, taking into account expected demolition methods and referring to the estimates of engineers. The relevant demolition costs are discounted to present value based on the pre tax risk-free rate of return and capitalized as part of the value of oil and gas assets, which are subsequently amortized. The capitalization cost of proven oil and gas assets is amortized based on production and oil and gas reserves using the production method. 100 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 3 MATERIAL ACCOUNTING POLICIES (Continued) (9) Intangible assets Intangible assets, where the estimated useful life is finite, are stated in the balance sheet at cost less accumulated amortisation and provision for impairment losses (see Note 3(12)). For an intangible asset with finite useful life, its cost less estimated residual value and accumulated impairment losses is amortised on a straight-line basis over the expected useful lives, unless the intangible assets are classified as held for sale. The useful life, basis of determination and amortization method of each intangible asset are as follows: Item Useful life Basis of determination Amortization method Land use rights Title registration period Straight-line method Patents Expected years of economic benefits Straight-line method Non-patented technology Expected years of economic benefits Straight-line method Operating rights Contractual period Straight-line method Others Expected years of economic benefits Straight-line method An intangible asset is regarded as having an indefinite useful life and is not amortised when there is no foreseeable limit to the year over which the asset is expected to generate economic benefits for the Group. Useful lives and amortisation methods are reviewed at least each year end. For the sales of products or by-products produced during the research and development process, the group shall conduct accounting treatment for the relevant income and costs in accordance with the Accounting Standards for Business Enterprises No. 14 – Revenue, Accounting Standards for Business Enterprises No. 1 – Inventory, and include in the current profit and loss. (10) Goodwill The initial cost of goodwill represents the excess of cost of acquisition over the acquirer’s interest in the fair value of the identifiable net assets of the acquiree under the business combination involving entities not under common control. Goodwill is not amortised and is stated at cost less accumulated impairment losses (see Note 3(12)). On disposal of an asset group or a set of asset groups, any attributable amount of purchased goodwill is written off and included in the calculation of the profit or loss on disposal. (11) Financial Instruments Financial instruments, refer to the contracts that form one party’s financial assets and form the financial liabilities or equity instruments of the other party. The Group recognises a financial asset or a financial liability when the Group enters into and becomes a party to the underlining contract of the financial instrument. (a) Financial assets (i) Classification and measurement The Group classifies financial assets into different categories depending on the business model for managing the financial assets and the contractual terms of cash flows of the financial assets: (1) financial assets measured at amortised cost, (2) financial assets measured at fair value through other comprehensive income, (3) financial assets measured at fair value through profit or loss. A contractual cash flow characteristic which could have only a de minimis effect, or could have an effect that is more than de minimis but is not genuine, does not affect the classification of the financial asset. Financial assets are initially recognised at fair value. For financial assets measured at fair value through profit or loss, the relevant transaction costs are recognised in profit or loss. The transaction costs for other financial assets are included in the initially recognised amount. However, accounts receivable arising from sales of goods or rendering services, without significant financing component, are initially recognised based on the transaction price expected to be entitled by the Group. Debt instruments The debt instruments held by the Group refer to the instruments that meet the definition of financial liabilities from the perspective of the issuer, and are measured in the following ways: – Measured at 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. The financial assets include cash at bank and on hand and receivables. – Measured at fair value through other comprehensive income: 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, the contractual cash flow characteristics of such financial assets are consistent with the basic lending arrangements. 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. The financial assets include receivables financing. 101 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 3 MATERIAL ACCOUNTING POLICIES (Continued) (11) Financial Instruments (Continued) (a) Financial assets (Continued) (i) Classification and measurement (Continued) Equity instruments Equity instruments that the Group has no power to control, jointly control or exercise significant influence over, are measured at fair value through profit or loss and presented as financial assets held for trading. In addition, the Group designates some equity instruments that are not held for trading as financial assets at fair value through other comprehensive income, and presented in other equity instrument investments. The relevant dividends of these financial assets are recognised in profit or loss. When derecognised, the cumulative gain or loss previously recognised in other comprehensive income is transferred to retained earnings. (ii) Impairment • Expected credit losses measurement The Group recognises a loss allowance for expected credit losses on financial assets measured at amortised cost and receivables financing measured at fair value through other comprehensive income. The Group measures and recognises expected credit losses, considering reasonable and supportable information about the relevant past events, current conditions and forecasts of future economic conditions. The Group measures the expected credit losses of financial instruments on different stages at each balance sheet date. For financial instruments that have no significant increase in credit risk since the initial recognition, on first stage, the Group measures the loss allowance at an amount equal to 12-month expected credit losses. If there has been a significant increase in credit risk since the initial recognition of a financial instrument but credit impairment has not occurred, on second stage, the Group recognises a loss allowance at an amount equal to lifetime expected credit losses. If credit impairment has occurred since the initial recognition of a financial instrument, on third stage, the Group recognises a loss allowance at an amount equal to lifetime expected credit losses. For financial instruments that have low credit risk at the balance sheet date, the Group assumes that there is no significant increase in credit risk since the initial recognition, and measures the loss allowance at an amount equal to 12-month expected credit losses. For financial instruments on the first stage and the second stage, and that have low credit risk, the Group calculates interest income according to carrying amount without deducting the impairment allowance and effective interest rate. For financial instruments on the third stage, interest income is calculated according to the carrying amount minus amortised cost after the provision of impairment allowance and effective interest rate. For accounts receivable and receivables financing arising from ordinary business activities such as sales of goods and rendering of services, the Group measures the loss allowance at an amount equal to lifetime expected credit losses. The Group recognises the loss allowance accrued or written back in profit or loss. • Allowance for doubtful accounts on receivables (a) The type of portfolio for which provision for bad debts is made according to the credit risk characteristics and the basis for its determination Receivables items Basis of determination Accounts receivable Based on the historical experience of the Group, there are significant differences in losses across different operating segments. Therefore the Group estimates the allowance for doubtful accounts of the accounts receivable of each operating segment as a separate portfolio respectively. Other receivables The Group’s other receivables mainly include security deposits and deposits receivable, receivables from related parties, dividends receivable, etc. Based on their credit risk, the Group estimates the allowance for doubtful accounts of the other receivables for different ages as a separate portfolio respectively. Receivables financing The Group’s receivables financing consists of bank acceptance bills held for dual purposes. Due to the high credit ratings of the accepting banks, the Group treats all receivables financing as a single portfolio. (b) According to the criteria for judging the individual provision for bad debts For accounts receivable, other receivables and receivables financing, the Group usually measures its loss allowance according to the combination of credit risk characteristics. If the credit risk characteristics of a counterparty are significantly different from those of other counterparties in the portfolio, or if the credit risk characteristics of the counterparty change significantly, the amount receivable from the counterparty shall be exposed to provision measurement and/or recognition on a separate basis. 102 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 3 MATERIAL ACCOUNTING POLICIES (Continued) (11) Financial Instruments (Continued) (a) Financial assets (Continued) (iii) Derecognition The Group derecognises a financial asset when a) the contractual right to receive cash flows from the financial asset expires; b) the Group transfers the financial asset and substantially all the risks and rewards of ownership of the financial asset; c) the financial assets have been transferred and the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset, but the Group has not retained control. On derecognition of other equity instrument investments, the difference between the carrying amounts and the sum of the consideration received and any cumulative gain or loss previously recognised in other comprehensive income, is recognised in retained earnings. While on derecognition of other financial assets, this difference is recognised in profit or loss. (b) Financial liabilities The Group, at initial recognition, classifies financial liabilities as either financial liabilities subsequently measured at amortised cost or financial liabilities at fair value through profit or loss. The Group’s financial liabilities are mainly financial liabilities measured at amortised cost, including bills payable, accounts payable, other payables, loans and debentures payable, etc. These financial liabilities are initially measured at the amount of their fair value after deducting transaction costs and use the effective interest rate method for subsequent measurement. Where the present obligations of financial liabilities are completely or partially discharged, the Group derecognises these financial liabilities or discharged parts of obligations. The differences between the carrying amounts and the consideration received are recognised in profit or loss. Financial guarantee liabilities Financial guarantees are contracts that requires the Group to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument. Financial guarantees issued are initially recognised at fair value, which is determined by reference to fees charged in an arm’s length transaction for similar services, when such information is obtainable, or to interest rate differentials, by comparing the actual rates charged by lenders when the guarantee is made available with the estimated rates that lenders would have charged, had the guarantees not been available, where reliable estimates of such information can be made. Where consideration is received or receivable for the issuance of the guarantee, the consideration is recognised in accordance with the Group’s policies applicable to that category of asset. Where no such consideration is received or receivable, an immediate expense is recognised in profit or loss. Subsequent to initial recognition, the amount initially recognised as deferred income is amortised in profit or loss over the term of the guarantee as income from financial guarantees issued. (c) Determination of fair value If there is an active market for financial instruments, the quoted price in the active market is used to measure fair values of the financial instruments. If no active market exists for financial instruments, valuation techniques are used to measure fair values. In valuation, the Group adopts valuation techniques that are applicable in the current situation and have sufficient available data and other information to support it, and selects input values that are consistent with the asset or liability characteristics considered by market participants in the transaction of relevant assets or liabilities, and gives priority to relevant observable input values. Use of unobservable input values where relevant observable input values cannot be obtained or are not practicable. (d) Derivative financial instruments and hedge accounting Derivative financial instruments are recognised initially at fair value. At each balance sheet date, the fair value is remeasured. The gain or loss on remeasurement to fair value is recognised immediately in profit or loss, except where the derivatives qualify for hedge accounting. Hedge accounting is a method which recognises the offsetting effects on profit or loss of changes in the fair values of the hedging instrument and the hedged item in the same accounting period, to represent the effect of risk management activities. Hedged items are the items that expose the Group to risks of changes in future cash flows and that are designated as being hedged and that must be reliably measurable. The Group’s hedged items include a forecast transaction that is settled with an undetermined future market price and exposes the Group to risk of variability in cash flows, etc. A hedging instrument is a designated derivative whose changes in cash flows are expected to offset changes in the cash flows of the hedged item. 103 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 3 MATERIAL ACCOUNTING POLICIES (Continued) (11) Financial Instruments (Continued) (d) Derivative financial instruments and hedge accounting (Continued) The hedging relationship meets all of the following hedge effectiveness requirements: (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. – Cash flow hedges Cash flow hedge is a hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with all, or a component of, a recognised asset or liability (such as all or some future interest payments on variable-rate debt) or a highly probable forecast transaction, and could affect profit or loss. As long as a cash flow hedge meets the qualifying criteria for hedge accounting, the hedging relationship shall be accounted for as follows. The cash flow hedge reserve is adjusted to the lower of the following in absolute amounts: – 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. The gain or loss on the hedging instrument that is determined to be an effective hedge is recognised in other comprehensive income. The portion of the gain or loss on the hedging instrument that is determined to be an ineffective hedge is recognised in profit or loss. If a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability, or a hedged forecast transaction for a non-financial asset or a non-financial liability becomes a firm commitment for which fair value hedge accounting is applied, the entity shall remove that amount from the cash flow hedge reserve and include it directly in the initial cost or other carrying amount of the asset or the liability. This is not a reclassification adjustment and hence it does not affect other comprehensive income. For cash flow hedges, other than those covered by the preceding two policy statements, that amount shall be reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment in the same period or periods during which the hedged expected future cash flows affect profit or loss. If the amount that has been accumulated in the cash flow hedge reserve is a loss and the Group expects that all or a portion of that loss will not be recovered in one or more future periods, the Group immediately reclassify the amount that is not expected to be recovered into profit or loss. When the hedging relationship no longer meets the risk management objective on the basis of which it qualified for hedge accounting (ie the entity no longer pursues that risk management objective), or when a hedging instrument expires or is sold, terminated, exercised, or there is no longer an economic relationship between the hedged item and the hedging instrument or the effect of credit risk starts to dominate the value changes that result from that economic relationship or no longer meets the criteria for hedge accounting, the Group discontinues prospectively the hedge accounting treatments. If the hedged future cash flows are still expected to occur, that amount shall remain in the cash flow hedge reserve and shall be accounted for as cash flow hedges. If the hedged future cash flows are no longer expected to occur, that amount shall be immediately reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment. A hedged future cash flow that is no longer highly probable to occur may still be expected to occur, if the hedged future cash flows are still expected to occur, that amount shall remain in the cash flow hedge reserve and shall be accounted for as cash flow hedges. – Fair value hedges A fair value hedge is a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognised firm commitment, or a portion of such an asset, liability or firm commitment. The gain or loss from remeasuring the hedging instrument is recognised in profit or loss. The gain or loss on the hedged item attributable to the hedged risk adjusts the carrying amount of the recognised hedged item not measured at fair value and is recognised in profit or loss. Any adjustment to the carrying amount of a hedged item is amortised to profit or loss if the hedged item is a financial instrument (or a component thereof) measured at amortised cost.The amortisation is based on a recalculated effective interest rate at the date that amortisation begins. 104 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 3 MATERIAL ACCOUNTING POLICIES (Continued) (12) Impairment of other non-financial long-term assets Internal and external sources of information are reviewed at each balance sheet date for indications that the following assets, including fixed assets, construction in progress, right-of-use assets, goodwill, intangible assets, long-term deferred expenses and investments in subsidiaries, associates and joint ventures may be impaired. Assets are tested for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. The recoverable amounts of goodwill and intangible assets with uncertain useful lives are estimated annually no matter there are any indications of impairment. Goodwill is tested for impairment together with related asset units or groups of asset units. An asset unit is the smallest identifiable group of assets that generates cash inflows largely independent of the cash inflows from other assets or groups of assets. An asset unit comprises related assets that generate associated cash inflows. In identifying an asset unit, the Group primarily considers whether the asset unit is able to generate cash inflows independently as well as the management style of production and operational activities, and the decision for the use or disposal of asset. The recoverable amount is the greater of the fair value less costs to sell and the present value of expected future cash flows generated by the asset (or asset unit, set of asset units). Fair value less costs to sell of an asset is based on its selling price in an arm’s length transaction less any direct costs attributable to the disposal. Present value of expected future cash flows is the estimation of future cash flows to be generated from the use of and upon disposal of the asset, discounted at an appropriate pre-tax discount rate over the asset’s remaining useful life. If the recoverable amount of an asset is less than its carrying amount, the carrying amount is reduced to the recoverable amount. The amount by which the carrying amount is reduced is recognised as an impairment loss in profit or loss. A provision for impairment loss of the asset is recognised accordingly. Impairment losses related to an asset unit or a set of asset units first reduce the carrying amount of any goodwill allocated to the asset unit or set of asset units, and then reduce the carrying amount of the other assets in the asset unit or set of asset units on a pro rata basis. However, the carrying amount of an impaired asset will not be reduced below the highest of its individual fair value less costs to sell (if determinable), the present value of expected future cash flows (if determinable) and zero. Once an impairment loss is recognised, it is not reversed in a subsequent period. (13) Long-term deferred expenses Long-term deferred expenses are amortised on a straight-line basis over their beneficial periods (14) Employee benefits Employee benefits are all forms of considerations and compensation given in exchange for services rendered by employees, including short-term compensation, post-employment benefits, termination benefits and other long term employee benefits. (a) Short-term compensation Short term compensation includes salaries, bonuses, allowances and subsidies, employee benefits, medical insurance premiums, work- related injury insurance premium, maternity insurance premium, contributions to housing fund, unions and education fund and short-term absence with payment etc. When an employee has rendered service to the Group during an accounting period, the Group shall recognise the short-term compensation actually incurred as a liability and charge to the cost of an asset or to profit or loss in the same period, and non- monetary benefits are valued with the fair value. (b) Post-employment benefits The Group classifies post-employment benefits into either Defined Contribution Plan (DC plan) or Defined Benefit Plan (DB plan). DC plan means the Group only contributes a fixed amount to an independent fund and no longer bears other payment obligation; DB plan is post- employment benefits other than DC plan. In this reporting period, the post-employment benefits of the Group primarily comprise basic pension insurance and unemployment insurance and both of them are DC plans. Basic pension insurance Employees of the Group participate in the social insurance system established and managed by local labor and social security department. The Group makes basic pension insurance to the local social insurance agencies every month, at the applicable benchmarks and rates stipulated by the government for the benefits of its employees. After the employees retire, the local labor and social security department has obligations to pay them the basic pension. When an employee has rendered service to the Group during an accounting period, the Group shall recognise the accrued amount according to the above social security provisions as a liability and charge to the cost of an asset or to profit or loss in the same period. (c) Termination benefits When the Group terminates the employment relationship with employees before the employment contracts expire, or provides compensation as an offer to encourage employees to accept voluntary redundancy, a provision for the termination benefits provided is recognised in profit or loss under the conditions of both the Group has a formal plan for the termination of employment or has made an offer to employees for voluntary redundancy, which will be implemented shortly; and the Group is not allowed to withdraw from termination plan or redundancy offer unilaterally. 105 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 3 MATERIAL ACCOUNTING POLICIES (Continued) (15) Income tax Current tax and deferred tax are recognised in profit or loss except to the extent that they relate to business combinations and items recognised directly in equity (including other comprehensive income). Current tax is the expected tax payable calculated at the applicable tax rate on taxable income for the year, plus any adjustment to tax payable in respect of previous years. At the balance sheet date, current tax assets and liabilities are offset if the Group has a legally enforceable right to set them off and also intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. Deferred tax assets and deferred tax liabilities arise from deductible and taxable temporary differences respectively, being the differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases, which include deductible losses and tax credits carried forward to subsequent periods. Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax is not recognised for temporary differences arising from the initial recognition of assets or liabilities in a single transaction that is not a business combination, affects neither accounting profit nor taxable profit (or deductible loss) and does not give rise to equal taxable and deductible temporary differences. Deferred tax is also not recognised for taxable temporary differences arising from the initial recognition of goodwill. At the balance sheet date, deferred tax is measured based on the tax consequences that would follow from the expected manner of recovery or settlement of the carrying amounts of the assets and liabilities, using tax rates enacted at the balance sheet date that are expected to be applied in the period when the asset is recovered or the liability is settled. The carrying amount of a deferred tax asset is reviewed at each balance sheet date, and is reduced to the extent that it is no longer probable that the related tax benefits will be utilised. Such reductions are reversed to the extent that it becomes probable that sufficient taxable profits will be available. At the balance sheet date, deferred tax assets and liabilities are offset if all the following conditions are met: – the same taxable entity; or; – different taxable entities which intend either to settle the current tax liabilities and current tax 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 deferred tax assets are expected to be settled or recovered. (16) Provisions Provisions are recognised when the Group has a present obligation as a result of a contingent event, it is probable that an outflow of economic benefits will be required to settle the obligations and a reliable estimate can be made. Where the effect of time value of money is material, provisions are determined by discounting the expected future cash flows. Provisions for future dismantlement costs are initially recognised based on the present value of the future costs expected to be incurred in respect of the Group’s expected dismantlement and abandonment costs at the end of related oil and gas exploration and development activities. Any subsequent change in the present value of the estimated costs, other than the change due to passage of time which is regarded as interest costs, is reflected as an adjustment to the provision of oil and gas properties. Loss-making contracts exist when the costs of performing contractual obligations inevitably exceed the expected economic benefits in the contracts entered into by the Group. The projected liability for loss-making contracts is calculated at the present value of the lesser of the expected cost of termination and the net cost of continuing to perform the contract. The cost of performing a contract includes the allocation of incremental costs for the performance of the contract and other costs directly related to the performance of the contract. (17) Specific reserve The Group recognises a safety fund in the specific reserve pursuant to relevant government regulations, with a corresponding increase in the costs of the related products or expenses. When the safety fund is subsequently used for revenue expenditure, the specific reserve is reduced accordingly. When the safety fund is subsequently used for the construction or acquisition of fixed assets, the Group recognises the capitalised expenditure incurred as the cost of the fixed assets when the related assets are ready for their intended use. In such cases, the specific reserve is reduced by the amount that corresponds to the cost of the fixed assets and the credit side is recognised in the accumulated depreciation with respect to the related fixed assets. Consequently, such fixed assets are not depreciated in subsequent periods. 106 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 3 MATERIAL ACCOUNTING POLICIES (Continued) (18) Revenue recognition Revenue arises in the course of the Group’s ordinary activities, and increases in economic benefits in the form of inflows that result in an increase in equity, other than those relating to contributions from equity participants. The Group sells crude oil, natural gas, petroleum and chemical products, etc. Revenue is recognised according to the expected consideration amount, when a customer obtains control over the relevant goods or services. To determine whether a customer obtains control of a promised asset, the Group shall consider indicators of the transfer of control, which include, but are not limited to: – the Group has a present right to payment for the asset; – the Group has transferred physical possession of the asset to the customer; – the customer has the significant risks and rewards of ownership of the asset; – the customer has accepted the asset. The Group determines whether it is a principal or an agent, based on whether it obtains control of the specified good or service before that good or service is transferred to a customer. The Group is a principal if it controls the specified good or service before that good or service is transferred to a customer, and recognises revenue in the gross amount of consideration which it has received (or which is receivable). Otherwise, the Group is an agent, and recognises revenue in the amount of any fee or commission to which it expects to be entitled. The fee or commission is the net amount of consideration that the Group retains after paying the other party the consideration, or is determined according to the established amount or proportion. The circumstances in which the Group is able to control the goods before transferring them to customers include: – The Group acquires control of the goods or other assets from a third party and then transfers them to the customer; – The Group is able to lead third parties to provide services to customers on behalf of the Group; – After the Group acquires control of a product from a third party, it transfers the product to a customer by integrating the product with other products into a combination of products through the provision of significant services; In determining whether the Group has control over the Goods before the transfer of the Goods to the Customer, the Group takes into account all relevant facts and circumstances, including: – The Group bears the primary responsibility for the transfer of goods to customers; – The Group assumes the inventory risk of the goods before or after the transfer of the goods; – The Group reserves the right to determine the price of the products it trades at its own discretion. (19) Government grants Government grants are non-reciprocal transfers of monetary or non-monetary assets from the government to the Group except for capital contributions from the government in the capacity as an investor in the Group. Government grants are recognised when there is reasonable assurance that the grants will be received and the Group is able to comply with the conditions attaching to them. Government grants in the form of monetary assets are recorded based on the amount received or receivable, whereas non-monetary assets are measured at fair value. Government grants received in relation to assets are recorded as deferred income, and recognised evenly in profit or loss over the assets’ useful lives. Government grants received in relation to revenue are recorded as deferred income, and recognised as income in future periods as compensation when the associated future expenses or losses arise; or directly recognised as income in the current period as compensation for past expenses or losses. (20) Borrowing costs Borrowing costs incurred on borrowings for the acquisition, construction or production of qualified assets are capitalised into the cost of the related assets in the capitalisable period. Except for the above, other borrowing costs are recognised as financial expenses in the income statement when incurred. (21) Repairs and maintenance expenses Repairs and maintenance (including overhauling expenses) expenses are recognised in profit or loss when incurred. 107 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 3 MATERIAL ACCOUNTING POLICIES (Continued) (22) Environmental expenditures Environmental expenditures that relate to current ongoing operations or to conditions caused by past operations is expensed as incurred. Liabilities related to future remediation costs are recorded when environmental assessments and/or cleanups are probable and the costs can be reliably estimated. As facts concerning environmental contingencies become known to the Group, the Group reassesses its position both with respect to accrued liabilities and other potential exposures. (23) Research and development costs Research costs and development costs that cannot meet the capitalisation criteria are recognised in profit or loss when incurred. (24) Dividends Dividends and distributions of profits proposed in the profit appropriation plan which will be authorised and declared after the balance sheet date, are not recognised as a liability at the balance sheet date and are separately disclosed in the notes to the financial statements. Dividends are recognised as a liability in the period in which they are declared. (25) Related parties If a party has the power to control, jointly control or exercise significant influence over another party, or vice versa, or where two or more parties are subject to common control, joint control from another party, they are considered to be related parties, except for the two parties significantly influenced by a party. Related parties may be individuals or enterprises. Where enterprises are subject to state control but are otherwise unrelated, they are not related parties. In addition to the related parties stated above, the Company determines related parties based on the disclosure requirements of Administrative Procedures on the Information Disclosures of Listed Companies issued by the CSRC. (26) Segment reporting Reportable segments are identified based on operating segments which are determined based on the structure of the Group’s internal organisation, management requirements and internal reporting system. An operating segment is a component of the Group that meets the following respective conditions: – engage in business activities from which it may earn revenues and incur expenses; – whose operating results are regularly reviewed by the Group’s management to make decisions about resource to be allocated to the segment and assess its performance; and – for which financial information regarding financial position, results of operations and cash flows are available. Inter-segment revenues are measured on the basis of actual transaction price for such transactions for segment reporting, and segment accounting policies are consistent with those for the consolidated financial statements. (27) Changes in significant accounting policies In 2024, the Group has adopted the revised accounting requirements and guidance under CASs newly issued by the Ministry of Finance (“MOF”) as follows: “The provision on the Classification of Liabilities as Current or Non-current” in CAS Bulletin No. 17 (Caikuai [2023] No. 21) (“CAS Bulletin No. 17”). In accordance with CAS Bulletin No. 17, when classifying the liquidity of liabilities, the Group only considers whether it has a substantial right to defer the settlement of liabilities to more than one year after the balance sheet date (“Right to Defer the Settlement of Liabilities”) at the balance sheet date, without taking into account the subjective likelihood of the Group exercising such rights. For liabilities arising from the Group’s loan arrangements, if the Group’s Right to Defer the Settlement of Liabilities depends on whether the Group has complied with the conditions stipulated in the loan arrangements (“Contractual Conditions”), the Group classifies the liquidity of the relevant liabilities by considering only the impact of the Contractual Conditions to be followed by the Group on or before the balance sheet date, without considering the impact of Contractual Conditions that the Group should comply with after the balance sheet date. For liabilities settled by the Group through the delivery of its own equity instruments at the option of the counterparty, if the Group classifies such options as equity instruments and recognises them separately as equity components of compound financial instruments in accordance with the provisions of CAS No. 37 – Presentation of Financial Instruments, the liquidity classification of such liability will not be affected. Conversely, if such options cannot be classified as equity instruments, the liquidity classification of the liability will be affected. The adoption of this provision does not have a material impact on the Group’s financial position and results of operations. 108 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 4 TAXATION Major types of tax applicable to the Group are value-added tax, resources tax, consumption tax, income tax, crude oil special gain levy, Levy for mineral rights concessions, city construction tax, education surcharge and local education surcharge etc. Tax rate of products is presented as below: 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 RMB 2,109.76 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. Levy for mineral rights concessions Oil, gas, shale gas, Natural gas hydrates 0.8% onshore, 0.6% offshore, coal bed methane 0.3%, mineral salts (rock salt) 2.8% Based on revenue from sales of mineral products 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 The Group At 31 December 2024 At 31 December 2023 Original Original currency Exchange RMB currency Exchange RMB million rates million million rates million Cash on hand Renminbi 1 1 Cash at bank Renminbi 50,313 87,278 US Dollar 3,490 7.1884 25,087 1,169 7.0827 8,277 Hong Kong Dollar 4,343 0.9260 4,021 3,584 0.9062 3,248 EUR 1 7.5257 4 1 7.8592 4 Others 940 185 80,366 98,993 Deposits at related parities Renminbi 8,390 7,602 US Dollar 7,987 7.1884 57,416 8,196 7.0827 58,050 EUR 29 7.5257 222 10 7.8592 76 Others 405 239 66,433 65,967 Total 146,799 164,960 Deposits at related parties represent deposits placed at Sinopec Finance Company Limited and Sinopec Century Bright Capital Investment Limited. Deposits interest is calculated based on market rate. At 31 December 2024, time deposits with financial institutions of the Group amounted to RMB54,285 million (31 December 2023: RMB41,778 million), security deposit and other restricted deposits totally amounted to RMB1,219 million (31 December 2023: RMB1,423 million), which was not reported as cash and cash equivalents. 109 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 6 DERIVATIVE FINANCIAL ASSETS AND DERIVATIVE FINANCIAL LIABILITIES Derivative financial assets and derivative financial liabilities of the Group are primarily commodity futures and hedge accounting. See Note 64(c). 31 December 2024 31 December 2023 RMB Million RMB Million Derivative financial assets Derivative financial liabilities Derivative financial assets Derivative financial liabilities Commodity derivatives 2,538 3,381 9,715 2,720 Financial derivatives 16 31 6 32 2,554 3,412 9,721 2,752 7 ACCOUNTS RECEIVABLE The Group The Company At 31 December At 31 December At 31 December At 31 December 2024 2023 2024 2023 RMB million RMB million RMB million RMB million Accounts receivable 48,515 52,668 22,337 27,949 Less: Allowance for doubtful accounts 4,182 4,016 98 71 Total 44,333 48,652 22,239 27,878 Ageing analysis on accounts receivable is as follows: The Group At 31 December 2024 At 31 December 2023 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 43,813 90.3 114 0.3 48,261 91.6 74 0.2 Between one and two years 466 1.0 62 13.3 326 0.6 47 14.4 Between two and three years 154 0.3 57 37.0 116 0.3 62 53.4 Over three years 4,082 8.4 3,949 96.7 3,965 7.5 3,833 96.7 Total 48,515 100.0 4,182 52,668 100.0 4,016 The Company At 31 December 2024 At 31 December 2023 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 21,389 95.8 11 0.1 27,387 98.0 4 – Between one and two years 691 3.1 2 0.3 319 1.1 1 0.3 Between two and three years 33 0.1 6 18.2 24 0.1 5 20.8 Over three years 224 1.0 79 35.3 219 0.8 61 27.9 Total 22,337 100.0 98 27,949 100.0 71 As at 31 December 2024 and 31 December 2023, the total amounts of the top five accounts receivable of the Group are set out below: At 31 December At 31 December 2024 2023 Total amount (RMB million) 8,304 15,137 Percentage to the total balance of accounts receivable 17.1% 28.7% Allowance for doubtful accounts 2,238 2,204 As at 31 December 2024, the carrying amount of accounts receivable under factoring arrangement that are derecognised is RMB13,527 million (31 December 2023: RMB12,767 million). 110 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 7 ACCOUNTS RECEIVABLE (Continued) Sales are generally on a cash term. Credit is generally only available for major customers with well-established trading records. Amounts due from China Petrochemical Corporation (“Sinopec Group Company”) and fellow subsidiaries are repayable under the same terms. Accounts receivables relate to a wide range of customers for whom there is no recent history of default. Information about the impairment of accounts receivable and the Group exposure to credit risk can be found in Note 64. During 2024 and 2023, the Group and the Company had no individually significant accounts receivable been fully or substantially provided allowance for doubtful accounts. During 2024 and 2023, the Group and the Company had no individually significant write-off or recovery of doubtful debts which had been fully or substantially provided for in prior years. Ageing started from the overdue date of accounts receivable. The Group always measured the provision for impairment of accounts receivable based on the amount equivalent to the expected credit loss during the entire duration. The ECLs were calculated based on historical actual credit loss experience. The rates were considered the differences between economic conditions during the period over which the historical data has been collected, current conditions and the Group’s view of economic conditions over the expected lives of the receivables. The Group performed the calculation of ECL rates by the operating segment and geographical location. Impairment provision on individual basis Impairment provision on provision matrix basis 31 December 2024 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 43,813 6,048 4 0.3% 110 114 1 to 2 years past due 466 366 32 30.0% 30 62 2 to 3 years past due 154 53 1 55.4% 56 57 Over 3 years past due 4,082 3,670 3,537 100.0% 412 3,949 Total 48,515 10,137 3,574 608 4,182 Impairment provision on individual basis Impairment provision on provision matrix basis 31 December 2023 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 48,261 8,958 4 0.2% 70 74 1 to 2 years past due 326 139 1 24.6% 46 47 2 to 3 years past due 116 34 25 45.1% 37 62 Over 3 years past due 3,965 3,599 3,467 100.0% 366 3,833 Total 52,668 12,730 3,497 519 4,016 8 RECEIVABLES FINANCING Receivables financing represents mainly the bills of acceptance issued by banks for sales of goods and products and certain trade accounts receivable. The business model of financial assets is achieved both by collecting contractual cash flows and selling of these assets. At 31 December 2024, the Group considers that its bills of acceptance issued by banks do not pose a significant credit risk and will not cause any significant loss due to the default of drawers. At 31 December 2024, the Group’s derecognised but outstanding bills due to endorsement or discount amounted to RMB71,762 million (2023: RMB49,616 million). 111 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 9 PREPAYMENTS The Group The Company At 31 December At 31 December At 31 December At 31 December 2024 2023 2024 2023 RMB million RMB million RMB million RMB million Prepayments 6,497 5,242 2,431 1,767 Less: Allowance for doubtful accounts 68 175 8 7 Total 6,429 5,067 2,423 1,760 Ageing analysis of prepayments is as follows: The Group At 31 December 2024 At 31 December 2023 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 6,032 92.8 – – 4,373 83.4 – – Between one and two years 170 2.6 6 3.5 568 10.8 86 15.1 Between two and three years 174 2.7 3 1.7 112 2.1 24 21.4 Over three years 121 1.9 59 48.8 189 3.7 65 34.4 Total 6,497 100.0 68 5,242 100.0 175 The Company At 31 December 2024 At 31 December 2023 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 2,300 94.6 – – 1,726 97.7 – – Between one and two years 122 5.0 1 0.8 29 1.6 – – Between two and three years 1 0.1 – – – – – – Over three years 8 0.3 7 87.5 12 0.7 7 58.3 Total 2,431 100.0 8 1,767 100.0 7 At 31 December 2024 and 31 December 2023, the total amounts of the top five prepayments of the Group are set out below: At 31 December At 31 December 2024 2023 Total amount (RMB million) 1,715 1,041 Percentage to the total balance of prepayments 26.4% 19.9% 112 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 10 OTHER RECEIVABLES The Group The Company At 31 December At 31 December At 31 December At 31 December 2024 2023 2024 2023 RMB million RMB million RMB million RMB million Other receivables 33,712 27,761 50,533 51,843 Less: Allowance for doubtful accounts 1,589 1,672 879 903 Total 32,123 26,089 49,654 50,940 Other receivables mainly include security deposits and deposits. Ageing analysis of other receivables is as follows: The Group At 31 December 2024 At 31 December 2023 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 21,101 62.7 6 – 17,121 61.7 13 0.1 Between one and two years 2,409 7.1 30 1.2 313 1.1 34 10.9 Between two and three years 106 0.3 22 20.8 152 0.5 43 28.3 Over three years 10,096 29.9 1,531 15.2 10,175 36.7 1,582 15.5 Total 33,712 100.0 1,589 27,761 100.0 1,672 The Company At 31 December 2024 At 31 December 2023 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 43,241 85.6 – – 36,754 70.9 – – Between one and two years 2,215 4.4 2 0.1 6,676 12.9 5 0.1 Between two and three years 1,560 3.0 5 0.3 2,118 4.1 3 0.1 Over three years 3,517 7.0 872 24.8 6,295 12.1 895 14.2 Total 50,533 100.0 879 51,843 100.0 903 At 31 December 2024 and at 31 December 2023, the total amounts of the top five other receivables of the Group are set out below: At 31 December At 31 December 2024 2023 Total amount (RMB million) 22,121 14,545 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 65.6% 52.4% Allowance for doubtful accounts 72 72 During the year ended 31 December 2024 and 2023, the Group and the Company had no individually significant other receivables been fully or substantially provided allowance for doubtful accounts. During the year ended 31 December 2024 and 2023, the Group and the Company had no individually significant write-off or recovery of doubtful debts which had been fully or substantially provided for in prior years. 113 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 11 INVENTORIES The Group At 31 December At 31 December 2024 2023 RMB million RMB million Raw materials 134,970 138,143 Work in progress 20,282 20,375 Finished goods 103,249 95,227 Spare parts and consumables 3,359 2,994 261,860 256,739 Less: Provision for diminution in value of inventories 5,265 5,841 Total 256,595 250,898 At 31 December 2024, the provision for diminution in value of inventories of the Group was primarily due to the costs of finished goods and raw materials were higher than net realisable value. 12 LONG-TERM EQUITY INVESTMENTS The Group Provision for Investments in Investments impairment joint ventures in associates losses Total RMB million RMB million RMB million RMB million Balance at 1 January 2024 74,399 164,129 (3,920) 234,608 Additions for the year 13,982 2,378 – 16,360 Share of profits less losses under the equity method (2,252) 12,566 – 10,314 Change of other comprehensive income under the equity method (2,034) (1,473) – (3,507) Other equity movements under the equity method (41) (37) – (78) Dividends declared (2,126) (9,116) – (11,242) Disposals for the year (110) (824) – (934) Foreign currency translation differences 341 337 (30) 648 Movement of provision for impairment – – 6 6 Other movements 588 56 – 644 Balance at 31 December 2024 82,747 168,016 (3,944) 246,819 The Company 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 2024 320,406 23,604 77,491 (7,929) 413,572 Additions for the year 24,249 2,014 481 – 26,744 Share of profits less losses under the equity method – (811) 4,452 – 3,641 Change of other comprehensive income under the equity method – – 227 – 227 Other equity movements under the equity method – (34) 77 – 43 Dividends declared – (941) (2,681) – (3,622) Disposals for the year (40) – (1) – (41) Movement of provision for impairment – – – 1 1 Balance at 31 December 2024 344,615 23,832 80,046 (7,928) 440,565 For the year ended 31 December 2024, the Group and the Company had no individually significant long-term investment impairment. Details of the Company’s principal subsidiaries are set out in Note 60. 114 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 12 LONG-TERM EQUITY INVESTMENTS (Continued) Principal joint ventures and associates of the Group are as follows: (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 Zhang Xiguo Manufacturing refining oil products 14,758 50.00% BASF-YPC Company Limited (“BASF-YPC”) PRC PRC Gu Yuefeng Manufacturing and distribution of petrochemical products 13,141 40.00% Taihu Limited (“Taihu”) Russia Cyprus NA Crude oil and natural gas extraction USD25,000 49.00% Sinopec SABIC Tianjin Petrochemical Company Limited (“Sinopec SABIC Tianjin”) PRC PRC ALSHAIKH, AHMED TRAIS S Manufacturing and distribution of petrochemical products 10,520 50.00% Shanghai SECCO Petrochemical Company Limited. (“Shanghai SECCO”) PRC PRC Wang Jingyi Manufacturing and distribution of petrochemical products 3,115 50.00% 2. Associates China Oil & Gas Pipeline Network Corporation (“PipeChina”) (Note) 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 Cheng Zhong Provision of non-banking financial services 18,000 49.00% Sinopec Capital Co., Ltd. (“Sinopec Capital”) PRC PRC Zhou Meiyun Project management, equity investment management, investment consulting, self-owned equity management 10,000 49.00% Zhongtian Synergetic Energy Company Limited (“Zhongtian Synergetic Energy”) PRC PRC Meng Wei Mining coal and manufacturing of coal- chemical products 17,516 38.75% China National Aviation Fuel Supply Co., Ltd. (“Aviation Fuel”) PRC PRC Bian Hui Wholesale of gasoline, kerosene, and diesel within the civil aviation system 3,800 29.00% Joint ventures and associates above are limited companies. Note: 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. 115 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 12 LONG-TERM EQUITY INVESTMENTS (Continued) (b) Major financial information of principal joint ventures Summarised balance sheet and reconciliation to their carrying amounts in respect of the Group’s principal joint ventures: FREP BASF-YPC Taihu Sinopec SABIC Tianjin Shanghai SECCO 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 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 3,704 3,258 1,553 2,051 933 654 538 2,974 1,025 1,563 Other current assets 10,676 13,017 5,648 4,615 6,811 4,864 4,462 2,455 2,253 3,106 Total current assets 14,380 16,275 7,201 6,666 7,744 5,518 5,000 5,429 3,278 4,669 Total non-current assets 11,873 11,752 8,206 9,000 9,726 12,254 16,087 17,345 26,928 26,386 Current liabilities Current financial liabilities (907) (827) (6) (25) (51) (42) (5,088) (3,900) (1,681) (3,582) Other current liabilities (12,064) (12,115) (1,743) (1,963) (718) (2,243) (2,168) (2,262) (2,298) (2,256) Total current liabilities (12,971) (12,942) (1,749) (1,988) (769) (2,285) (7,256) (6,162) (3,979) (5,838) Non-current liabilities Non-current financial liabilities (4,781) (2,738) – – (118) (139) (4,060) (5,152) (6,424) (4,303) Other non-current liabilities (239) (223) (137) (123) (1,054) (914) (568) (603) (896) (1,097) Total non-current liabilities (5,020) (2,961) (137) (123) (1,172) (1,053) (4,628) (5,755) (7,320) (5,400) Net assets 8,262 12,124 13,521 13,555 15,529 14,434 9,203 10,857 18,907 19,817 Net assets attributable to owners of the company 8,262 12,124 13,521 13,555 15,105 14,034 9,203 10,857 18,907 19,817 Net assets attributable to non-controlling interests – – – – 424 400 – – – – Share of net assets from joint ventures 4,131 6,062 5,408 5,422 7,401 6,876 4,602 5,429 9,454 9,909 Carrying Amounts 4,131 6,062 5,408 5,422 7,401 6,876 4,602 5,429 9,454 9,909 Summarised income statement FREP BASF-YPC Taihu Sinopec SABIC Tianjin Shanghai SECCO 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million Turnover 46,674 60,091 20,433 19,381 17,613 14,090 24,407 22,915 21,776 17,426 Interest income 167 136 37 67 1,044 720 54 113 23 72 Interest expense (320) (315) (2) (4) (56) (61) (157) (204) (208) (199) (Loss)/profit before taxation (3,691) (1,215) 384 430 2,916 1,666 (1,647) (1,832) (1,212) (2,551) Income tax expense (171) 346 (98) (108) (584) (292) (7) 423 302 642 (Loss)/profit for the year (3,862) (869) 286 322 2,332 1,374 (1,654) (1,409) (910) (1,909) Other comprehensive income – – – – (1,237) (9,531) – – – – Total comprehensive income (3,862) (869) 286 322 1,095 (8,157) (1,654) (1,409) (910) (1,909) Dividends declared by joint ventures – – 128 1,060 – – – – – – Share of net (loss)/profit from joint ventures (1,931) (435) 114 129 1,111 660 (827) (704) (455) (955) Share of other comprehensive income from joint ventures – – – – (586) (4,535) – – – – The share of profit and other comprehensive income of the Group in the year 2024 in all individually immaterial joint ventures accounted for using equity method in aggregate was loss RMB264 million (2023: loss RMB2,296 million) and loss RMB1,448 million (2023: loss RMB544 million) respectively. As at 31 December 2024, the carrying amount of all individually immaterial joint ventures accounted for using equity method in aggregate was RMB48,650 million (2023: RMB37,621 million). 116 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 12 LONG-TERM EQUITY INVESTMENTS (Continued) (c) Major financial information of principal associates Summarised balance sheet and reconciliation to their carrying amounts in respect of the Group’s principal associates: PipeChina Sinopec Finance Sinopec Capital Zhongtian Synergetic Energy Aviation Fuel At 31 December 2024 At 31 December 2023 At 31 December 2024 At 31 December 2023 At 31 December 2024 At 31 December 2023 At 31 December 2024 At 31 December 2023 At 31 December 2024 At 31 December 2023 RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million Current assets 70,803 118,631 132,724 148,026 17,592 15,098 2,713 3,672 21,747 25,394 Non-current assets 857,411 821,864 71,744 66,093 513 409 46,377 48,615 15,847 14,158 Current liabilities (111,879) (130,331) (168,058) (179,459) (172) (74) (6,499) (7,464) (14,213) (17,200) Non-current liabilities (218,629) (225,296) (1,004) (906) (2,659) (1,275) (14,086) (17,563) (1,543) (1,533) Net assets 597,706 584,868 35,406 33,754 15,274 14,158 28,505 27,260 21,838 20,819 Net assets attributable to shareholders of the Company 548,484 536,607 35,406 33,754 15,274 14,158 28,505 27,260 19,290 18,488 Net assets attributable to non-controlling interests 49,222 48,261 – – – – – – 2,548 2,331 Share of net assets from associates 76,788 75,125 17,349 16,539 7,484 6,937 11,045 10,563 5,594 5,362 Carrying Amounts 76,788 75,125 17,349 16,539 7,484 6,937 11,045 10,563 5,594 5,362 Summarised income statement PipeChina Sinopec Finance Sinopec Capital ZTHC Energy Aviation Fuel 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million Turnover 119,800 120,943 5,903 5,988 4 4 16,691 15,676 189,250 181,290 Profit for the year 34,010 34,054 2,204 2,205 490 888 2,569 2,752 2,271 2,515 Other comprehensive income – – 448 (182) 21 52 – – – – Total comprehensive income 34,010 34,054 2,652 2,023 511 940 2,569 2,752 2,271 2,515 Dividends declared by associates 2,553 2,306 490 490 174 188 513 966 363 638 Share of profit from associates 4,174 4,035 1,080 1,080 240 435 995 1,066 595 656 Share of other comprehensive income from associates – – 220 (89) 10 25 – – – – The share of profit and other comprehensive income of the Group in the year 2024 in all individually immaterial associates accounted for using equity method in aggregate was RMB5,482 million (2023: RMB4,506 million) and loss RMB1,703 million (2023: RMB1,540 million) respectively. As at 31 December 2024, the carrying amount of all individually immaterial associates accounted for using equity method in aggregate was RMB48,913 million (2023: RMB48,763 million). (d) Long-term equity investment impairment assessment As at 31 December 2024, there are indicators of impairment in the long-term equity investment in Shanghai SECCO. The recoverable amount of this long-term equity investment is estimated based on a value-in-use calculation. The projected future cash flows primarily take into account the five-year profit forecast for Shanghai SECCO approved by the management, which is adjusted based on the historical performance of Shanghai SECCO and relevant industry trends, with cash flows remaining stable after five years. The pre-tax discount rate of 11.08% (2023: 11.29%) is calculated based on the weighted average cost of capital. The result of value-in-use calculation indicates that there is no impairment loss in this long-term equity investment as at 31 December 2024. 117 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 13 FIXED ASSETS The Group At 31 December At 31 December 2024 2023 RMB million RMB million Fixed assets (a) 717,083 690,897 Fixed assets pending for disposal 22 60 Total 717,105 690,957 (a) Fixed assets Oil Equipment, Plants and and gas machinery buildings properties and others Total RMB million RMB million RMB million RMB million Cost: Balance at 1 January 2024 158,385 896,453 1,171,364 2,226,202 Additions for the year 427 1,989 2,895 5,311 Transferred from construction in progress 8,215 49,479 62,446 120,140 Reclassifications 1,915 (855) (1,060) – Decreases for the year (1,194) (168) (18,618) (19,980) Exchange adjustments 47 677 63 787 Balance at 31 December 2024 167,795 947,575 1,217,090 2,332,460 Less: Accumulated depreciation: Balance at 1 January 2024 71,761 676,150 687,220 1,435,131 Additions for the year 5,277 34,001 55,033 94,311 Reclassifications 887 (824) (63) – Decreases for the year (570) (131) (13,939) (14,640) Exchange adjustments 25 620 42 687 Balance at 31 December 2024 77,380 709,816 728,293 1,515,489 Less: Provision for impairment losses: Balance at 1 January 2024 4,690 53,396 42,088 100,174 Additions for the year 276 137 1,866 2,279 Reclassifications 8 (4) (4) – Decreases for the year (180) (4) (2,424) (2,608) Exchange adjustments – 43 – 43 Balance at 31 December 2024 4,794 53,568 41,526 99,888 Net book value: Balance at 31 December 2024 85,621 184,191 447,271 717,083 Balance at 31 December 2023 81,934 166,907 442,056 690,897 The Company At 31 December At 31 December 2024 2023 RMB million RMB million Fixed assets (b) 310,796 305,439 Fixed assets pending for disposal 18 55 Total 310,814 305,494 118 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 13 FIXED ASSETS (Continued) (b) 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 2024 51,178 720,488 506,242 1,277,908 Additions for the year 1 1,548 334 1,883 Transferred from construction in progress 1,444 38,142 21,859 61,445 Reclassifications 575 (776) 201 – Transferred from subsidiaries 46 53 899 998 Transferred to subsidiaries (1,932) (1,998) (13,624) (17,554) Decreases for the year (513) (87) (13,056) (13,656) Balance at 31 December 2024 50,799 757,370 502,855 1,311,024 Accumulated depreciation: Balance at 1 January 2024 28,542 544,606 329,340 902,488 Additions for the year 1,471 25,737 20,347 47,555 Reclassifications 365 (760) 395 – Transferred from subsidiaries 9 39 107 155 Transferred to subsidiaries (1,179) (170) (8,519) (9,868) Decreases for the year (346) (80) (8,226) (8,652) Balance at 31 December 2024 28,862 569,372 333,444 931,678 Provision for impairment losses: Balance at 1 January 2024 2,439 45,711 21,831 69,981 Reclassifications 24 137 897 1,058 Additions for the year 1 (1) – – Transferred to subsidiaries (119) (1) (526) (646) Decreases for the year (93) (2) (1,748) (1,843) Balance at 31 December 2024 2,252 45,844 20,454 68,550 Net book value: Balance at 31 December 2024 19,685 142,154 148,957 310,796 Balance at 31 December 2023 20,197 130,171 155,071 305,439 The additions to oil and gas properties of the Group and the Company for the year ended 31 December 2024 included RMB1,989 million (2023: RMB1,681 million) and RMB1,548 million (2023: RMB1,344 million), respectively of the estimated dismantlement costs for site restoration. In 2024, the impairment loss on fixed assets was mainly due to the impairment loss of the exploration and development segment of RMB211 million (2023: RMB785 million), the impairment loss of the chemical segment of RMB1,547 million (2023: RMB1,280 million), the impairment loss of the refining segment of RMB230 million (2023: RMB191 million), and the impairment loss of the marketing and distribution segment of RMB218 million (2023: RMB235 million). Among them, oil and gas properties and other fixed assets provided impairment losses of RMB137 million and RMB74 million respectively, which were mainly related to the decline in oil and gas reserves of individual oilfields and the high extraction costs. The recoverable amount used for impairment assessment of fixed assets in the E&P segment is determined based on the present value of the expected future cash flows of the relevant asset group. The duration of the prediction period and the production of crude oil and natural gas during the prediction period are determined based on the results of proven reserves; The sales prices of crude oil and natural gas during the forecast period are determined based on a comprehensive analysis of the energy supply and demand relationship, China’s low-carbon transformation development requirements, and the domestic and international economic situation.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 7.06%-15.82% (2023: 7.86%-15.94%). 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 RMB1,552 million (2023: RMB1,418 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 RMB782 million (2023: RMB634 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 RMB1 million (2023: RMB8 million). The impairment provisions for the chemical and refining divisions are related to the refining and chemical production equipment, mainly due to individual production units being shut down due to sustained lower than expected economic performance or having a clear shutdown plan in place, resulting in their book value being written down to their recoverable amount. The impairment provisions for the marketing and distribution segment is mainly due to the fact that the gas station is closed, resulting in their book value being written down to their recoverable amount. The recoverable amount mainly considers the profit forecast approved by the management for a five-year period, which refers to the historical operating performance of relevant refining and chemical production facilities and is adjusted according to the development trends of the refining and chemical industry. The predicted cash flow after five years will remain stable, and the pre tax discount rate is calculated based on the weighted average cost of capital, which is 8.00%-16.76% (2023: 10.30% to 16.50%). At 31 December 2024 and 31 December 2023, the Group and the Company had no individually significant fixed assets which were temporarily idle or pending for disposal, or individually significant fully depreciated fixed assets which were still in use. Details of the determination method for impairment of fixed assets are set out in Note 59. 119 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 14 CONSTRUCTION IN PROGRESS The Group The Company RMB million RMB million Cost: Balance at 1 January 2024 182,991 70,703 Additions for the year 159,694 81,751 Disposals for the year (41) (2) Dry hole costs written off (4,955) (4,429) Transferred to fixed assets (120,140) (61,445) Reclassification to other assets (5,971) (1,017) Exchange adjustments 27 – Balance at 31 December 2024 211,605 85,561 Provision for impairment losses: Balance at 1 January 2024 2,741 397 Additions for the year 134 – Decreases for the year (41) (2) Exchange adjustments 24 – Balance at 31 December 2024 2,858 395 Net book value: Balance at 31 December 2024 208,747 85,166 Balance at 31 December 2023 180,250 70,306 At 31 December 2024, material construction in progress projects of the Group are as follows: Project name Budgeted amount Balance at 1 January 2024 Net change for the year Balance at 31 December 2024 Percentage of project investment to budgeted amount Source of funding Accumulated interest capitalised at 31 December 2024 RMB million RMB million RMB million RMB million RMB million Zhenhai Refining and Chemical Refining and High-end Synthetic New Material Project 41,673 17,512 12,716 30,228 77.53% Bank loans & self-financing 440 Expand the 1.5 million tons/year ethylene and downstream high-end new material industry agglomeration project 24,939 2,700 1,700 4,400 16.63% Bank loans & self-financing 1 120 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 15 RIGHT-OF-USE ASSETS The Group Land Others Total RMB million RMB million RMB million Cost： Balance at 1 January 2024 170,102 57,643 227,745 Additions for the year 7,132 10,187 17,319 Decreases for the year (11,325) (6,968) (18,293) Balance at 31 December 2024 165,909 60,862 226,771 Accumulated depreciation: Balance at 1 January 2024 27,423 25,793 53,216 Additions for the year 6,697 9,419 16,116 Decreases for the year (1,899) (5,004) (6,903) Balance at 31 December 2024 32,221 30,208 62,429 Net book value: Balance at 31 December 2024 133,688 30,654 164,342 Balance at 31 December 2023 142,679 31,850 174,529 The Company Land Others Total RMB million RMB million RMB million Cost： Balance at 1 January 2024 96,340 4,578 100,918 Additions for the year 96 1,603 1,699 Decreases for the year (4,154) (1,043) (5,197) Balance at 31 December 2024 92,282 5,138 97,420 Accumulated depreciation: Balance at 1 January 2024 13,542 2,787 16,329 Additions for the year 3,218 1,557 4,775 Decreases for the year (590) (990) (1,580) Balance at 31 December 2024 16,170 3,354 19,524 Net book value: Balance at 31 December 2024 76,112 1,784 77,896 Balance at 31 December 2023 82,798 1,791 84,589 Depreciation of the right-of-use assets of the Group and Company charged for the year ended 31 December 2024 are RMB15,932 million (2023: RMB14,829 million) and RMB4,774 million (2023: RMB4,700 million) respectively. 121 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 16 INTANGIBLE ASSETS The Group 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 2024 124,341 5,235 5,974 54,186 25,445 215,181 Additions for the year 5,991 137 364 281 1,279 8,052 Decreases for the year (513) (274) (441) (596) (715) (2,539) Balance at 31 December 2024 129,819 5,098 5,897 53,871 26,009 220,694 Accumulated amortisation: Balance at 1 January 2024 34,558 3,940 4,312 27,641 5,305 75,756 Additions for the year 3,663 178 250 2,130 1,024 7,245 Decreases for the year (134) (112) (441) (387) (349) (1,423) Balance at 31 December 2024 38,087 4,006 4,121 29,384 5,980 81,578 Provision for impairment losses: Balance at 1 January 2024 258 485 123 361 17 1,244 Additions for the year 2 3 – 75 2 82 Decreases for the year (2) (162) – (27) (2) (193) Balance at 31 December 2024 258 326 123 409 17 1,133 Net book value: Balance at 31 December 2024 91,474 766 1,653 24,078 20,012 137,983 Balance at 31 December 2023 89,525 810 1,539 26,184 20,123 138,181 Amortisation of the intangible assets of the Group charged for the year ended 31 December 2024 is RMB6,730 million (2023: RMB6,641 million). 17 GOODWILL Goodwill is allocated to the following Group’s cash-generating units: Name of investees Principal activities At 31 December 2024 At 31 December 2023 RMB million RMB million Sinopec Zhenhai Refining and Chemical Branch Manufacturing of intermediate petrochemical products and petroleum products 4,043 4,043 Other units allocated 2,450 2,429 Total 6,493 6,472 The Group’s goodwill impairment assessment is carried out in conjunction with its related asset group or combination of asset groups, and the recoverable amounts of goodwill are estimated annually based on value in use calculations, which is consistent with prior years. These calculations use cash flow projections based on five-year financial budgets approved by management for a goodwill-related asset group or a combination of asset groups, with cash flow remaining stable after five years. The cash flow forecasts use sales volumes, selling price and discount rates as key assumptions, with sales volumes based on production capacity and/or actual sales volumes for periods prior to the budget period, selling prices based on management’s expectations of future international crude oil and petrochemical price trends, and pre-tax discount rates based on weighted average cost of capital, which ranged from 10.7% to 11.8%(2023: 11.3% to 13.1%). Based on the result of the impairment assessment of goodwill, no major impairment loss was recognised. 18 LONG-TERM DEFERRED EXPENSES Long-term deferred expenses primarily represent catalysts expenditures and improvement expenditures of leased fixed assets. 122 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 19 DEFERRED TAX ASSETS AND LIABILITIES Deferred tax assets and liabilities before the consolidated elimination adjustments are as follows: Deferred tax assets Deferred tax liabilities At 31 December At 31 December At 31 December At 31 December 2024 2023 2024 2023 RMB million RMB million RMB million RMB million Receivables and inventories 4,294 3,721 (49) (20) Payables 2,649 2,715 – – Cash flow hedges 41 16 (667) (1,142) Fixed assets 17,529 17,965 (31,560) (26,669) Tax value of losses carried forward 12,256 9,036 – – Other equity instrument investments 139 137 (4) (7) Intangible assets 1,296 1,084 (93) (92) Lease liabilities and Right-of-use assets 40,876 44,334 (36,594) (40,422) Others 2,457 2,792 (1,117) (1,155) Deferred tax assets/(liabilities) 81,537 81,800 (70,084) (69,507) The consolidated elimination amount between deferred tax assets and liabilities are as follows: At 31 December At 31 December 2024 2023 RMB million RMB million Deferred tax assets 62,760 61,690 Deferred tax liabilities 62,760 61,690 Deferred tax assets and liabilities after the offsetting adjustments are as follows: At 31 December At 31 December 2024 2023 RMB million RMB million Deferred tax assets 18,777 20,110 Deferred tax liabilities 7,324 7,817 At 31 December 2024, certain subsidiaries of the Company did not recognise deferred tax of deductible loss carried forward of RMB28,197 million (2023: RMB24,783 million), of which RMB5,070 million (2023: RMB5,496 million) was incurred for the year ended 31 December 2024, because it was not probable that the related tax benefit will be realised. These deductible losses carried forward of RMB3,349 million, RMB5,310 million, RMB8,972 million, RMB5,496 million and RMB5,070 million will expire in 2025, 2026, 2027, 2028, 2029 and after, respectively. Periodically, management performed assessment on the probability that future taxable profit will be available over the period which the deferred tax assets can be realised or utilised. In assessing the probability, both positive and negative evidence was considered, including whether it is probable that the operations will have sufficient future taxable profits over the periods which the deferred tax assets are deductible or utilised and whether the tax losses result from identifiable causes which are unlikely to recur. 20 OTHER NON-CURRENT ASSETS Other non-current assets mainly represent long-term receivables, prepayments for construction projects, prepayments for purchases of equipment and time deposits with maturities over one year. 123 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 21 DETAILS OF IMPAIRMENT LOSSES At 31 December 2024, impairment losses of the Group are analysed as follows: Note Balance at 1 January 2024 Provision for the year Written back for the year Written off for the year Other increase/ (decrease) Balance at 31 December 2024 RMB million RMB million RMB million RMB million RMB million RMB million Allowance for doubtful accounts Included: Accounts receivable 7 4,016 151 (31) (12) 58 4,182 Prepayments 9 175 3 (128) – 18 68 Other receivables 10 1,672 78 (81) (80) – 1,589 Other non-current assets 899 – (9) – 14 904 Total 6,762 232 (249) (92) 90 6,743 Inventories 11 5,841 4,599 (179) (5,001) 5 5,265 Long-term equity investments 12 3,920 – – (2) 26 3,944 Fixed assets 13 100,174 2,206 – (2,599) 107 99,888 Construction in progress 14 2,741 134 – (33) 16 2,858 Intangible assets 16 1,244 72 – (188) 5 1,133 Goodwill 17 7,861 – – – – 7,861 Others 63 – (5) – (3) 55 Total 128,606 7,243 (433) (7,915) 246 127,747 The reasons for recognising impairment losses are set out in the respective notes of respective assets. 22 SHORT-TERM LOANS The Group’s short-term loans represent: At 31 December 2024 At 31 December 2023 Original currency million Exchange rates RMB million Original currency million Exchange rates RMB million Short-term bank loans 44,369 51,175 －Renminbi loans 44,369 51,175 Short-term loans from Sinopec Group Company and fellow subsidiaries 3,862 8,640 －Renminbi loans 1,459 7,628 －US Dollar loans 334 7.1884 2,403 143 7.0827 1,012 Total 48,231 59,815 At 31 December 2024, the Group’s interest rates on short-term loans were from interest 1.45% to 5.42% (2023: 1.08% to 6.39%) per annum. The majority of the above loans are by credit. At 31 December 2024 and 31 December 2023, the Group had no significant overdue short-term loans. 23 BILLS PAYABLE Bills payable primarily represented bank accepted bills for the purchase of material, goods and products. Bills payable were due within one year. At 31 December 2024 and 31 December 2023, the Group had no overdue unpaid bills. 24 ACCOUNTS PAYABLE Accounts payable primarily represent goods payable or material payable. 25 CONTRACT LIABILITIES As at 31 December 2024 and 31 December 2023, the Group’s contract liabilities primarily represent advances from customers. Related performance obligations are expected to be satisfied and revenue is recognised within one year. 124 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 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 13,891 101,454 (101,232) 14,113 Post-employment benefits – defined contribution plans 44 14,874 (14,871) 47 Termination benefits 6 165 (164) 7 Total 13,941 116,493 (116,267) 14,167 (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 11,585 74,013 (73,724) 11,874 Staff welfare 1,625 7,653 (7,657) 1,621 Social insurance 334 7,083 (7,089) 328 Included: Medical insurance 331 6,375 (6,381) 325 Work-related injury insurance 2 583 (583) 2 Maternity insurance 1 125 (125) 1 Housing fund 35 7,544 (7,543) 36 Labour union fee, staff and workers’ education fee 275 2,597 (2,647) 225 Other short-term employee benefits 37 2,564 (2,572) 29 13,891 101,454 (101,232) 14,113 (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 35 9,870 (9,866) 39 Unemployment insurance 1 381 (381) 1 Annuity 8 4623 (4,624) 7 Total 44 14,874 (14,871) 47 27 TAXES PAYABLE The Group At 31 December At 31 December 2024 2023 RMB million RMB million Value-added tax payable 2,535 2,989 Consumption tax payable 18,860 18,275 Income tax payable 1,706 1,455 Mineral resources compensation fee payable – 2 Levy for mineral rights concessions 7,114 7,385 Other taxes 8,282 9,902 Total 38,497 40,008 28 OTHER PAYABLES At 31 December 2024 and 31 December 2023, other payables of the Group over one year primarily represented payables for constructions. 125 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 29 NON-CURRENT LIABILITIES DUE WITHIN ONE YEAR The Group’s non-current liabilities due within one year represent: At 31 December 2024 At 31 December 2023 Original currency million Exchange rates RMB million Original currency million Exchange rates RMB million Long-term bank loans – Renminbi loans 43,246 2,813 Long-term loans from Sinopec Group Company and fellow subsidiaries – Renminbi loans 822 3,797 Long-term loans due within one year 44,068 6,610 Debentures payable due within one year – Renminbi debentures 165 4,546 Lease liabilities due within one year 17,831 17,536 Others 2,538 1,765 Non-current liabilities due within one year 64,602 30,457 At 31 December 2024 and 31 December 2023, the Group had no significant overdue long-term loans. 30 OTHER CURRENT LIABILITIES As at 31 December 2024, other current liabilities mainly represent RMB13,351 million (31 December 2023: RMB13,310 million) output VAT to be transferred. 31 LONG-TERM LOANS The Group’s long-term loans represent: At 31 December 2024 At 31 December 2023 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 3.90% per annum at 31 December 2024 (2023: 1.08% to 4.80%) with maturities through 2039 204,840 157,298 – US Dollar loans Interest rates at 0.00% per annum at 31 December 2024 (2023:0.00%) with maturities through 2031 6 7.1884 46 7 7.0827 51 Less: Portion with one year (note 29) (43,246) (2,813) Long-term bank loans 161,640 154,536 Long-term loans from Sinopec Group Company and fellow subsidiaries – Renminbi loans Interest rates ranging from interest 2.20% to 4.50% per annum at 31 December 2024 (2023: 1.08% to 4.99%) with maturities through 2038 24,116 28,608 Less: Portion with one year (note 29) (822) (3,797) Long-term loans from Sinopec Group Company and fellow subsidiaries 23,294 24,811 Total 184,934 179,347 The maturity analysis of the Group’s long-term loans is as follows: At 31 December At 31 December 2024 2023 RMB million RMB million Between one and two years 81,436 66,265 Between two and five years 67,514 84,656 After five years 35,984 28,426 Total 184,934 179,347 Long-term loans are carried at amortised costs. 126 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 32 DEBENTURES PAYABLE The Group At 31 December At 31 December 2024 2023 RMB million RMB million Debentures payable: – Corporate Bonds (Note) 25,727 13,059 Less: Portion within one year (Note 29) 165 4,546 Total 25,562 8,513 Note: These corporate bonds are carried at amortised cost. At 31 December 2024, USD denominated corporate bonds were equivalent to RMB3,607 million, and RMB denominated corporate bonds were RMB22,120 million (31 December 2023: USD denominated corporate bonds of RMB3,520 million, and RMB denominated corporate bonds of RMB9,541 million). 33 LEASE LIABILITY The Group At 31 December At 31 December 2024 2023 RMB million RMB million Lease liabilities 172,735 181,400 Deduct: Portion of lease liabilities within one year (Note 29) 17,831 17,536 Total 154,904 163,864 34 PROVISIONS Provisions primarily represent provision for future dismantlement costs of oil and gas properties. The Group has established certain standardised measures for the dismantlement of its retired oil and gas properties by making reference to the industry practices and is thereafter constructively obligated to take dismantlement measures of its retired oil and gas properties. Movement of provision of the Group’s obligations for the dismantlement of its retired oil and gas properties is as follows: The Group RMB million Balance at 1 January 2024 45,222 Provision for the year 1,989 Accretion expenses 779 Decrease for the year (1,497) Foreign currency translation differences 35 Balance at 31 December 2024 46,528 35 OTHER NON-CURRENT LIABILITIES Other non-current liabilities primarily represent long-term payables, special payables and deferred income. 127 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 36 SHARE CAPITAL The Group At 31 December At 31 December 2024 2023 RMB million RMB million Registered, issued and fully paid: 97,232,263,098 listed A shares (2023: 94,971,971,046) of RMB1.00 each 97,233 94,972 24,049,292,600 listed H shares (2023: 24,377,280,600) of RMB1.00 each 24,049 24,377 Total 121,282 119,349 The Company was established on 25 February 2000 with a registered capital of 68.8 billion domestic state-owned shares with a par value of RMB1.00 each. Such shares were issued to Sinopec Group Company in consideration for the assets and liabilities transferred to the Company (Note 1). Pursuant to the resolutions passed at an Extraordinary General Meeting held on 25 July 2000 and approvals from relevant government authorities, the Company is authorised to increase its share capital to a maximum of 88.3 billion shares with a par value of RMB1.00 each and offer not more than 19.5 billion shares with a par value of RMB1.00 each to investors outside the PRC. Sinopec Group Company is authorised to offer not more than 3.5 billion shares of its shareholdings in the Company to investors outside the PRC. The shares sold by Sinopec Group Company to investors outside the PRC would be converted into H shares. In October 2000, the Company issued 15,102,439,000 H shares with a par value of RMB1.00 each, representing 12,521,864,000 H shares and 25,805,750 American Depositary Shares (“ADSs”, each representing 100 H shares), at prices of HKD1.59 per H share and USD20.645 per ADS, respectively, by way of a global initial public offering to Hong Kong SAR and overseas investors. As part of the global initial public offering, 1,678,049,000 state-owned ordinary shares of RMB1.00 each owned by Sinopec Group Company were converted into H shares and sold to Hong Kong SAR and overseas investors. In July 2001, the Company issued 2.8 billion listed A shares with a par value of RMB1.00 each at RMB4.22 by way of a public offering to natural persons and institutional investors in the PRC. During the year ended 31 December 2010, the Company issued 88,774 listed A shares with a par value of RMB1.00 each, as a result of exercise of 188,292 warrants entitled to the Bonds with Warrants. During the year ended 31 December 2011, the Company issued 34,662 listed A shares with a par value of RMB1.00 each, as a result of conversion by the holders of the 2011 Convertible Bonds. During the year ended 31 December 2012, the Company issued 117,724,450 listed A shares with a par value of RMB1.00 each, as a result of conversion by the holders of the 2011 Convertible Bonds. On 14 February 2013, the Company issued 2,845,234,000 listed H shares (“the Placing”) with a par value of RMB1.00 each at the Placing Price of HKD8.45 per share. The aggregate gross proceeds from the Placing amounted to approximately HKD24,042,227,300.00 and the aggregate net proceeds (after deduction of the commissions and estimated expenses) amounted to approximately HKD23,970,100,618.00. In June 2013, the Company issued 21,011,962,225 listed A shares and 5,887,716,600 listed H shares as a result of bonus issues of 2 shares converted from the retained earnings, and 1 share transferred from capital reserve for every 10 existing shares. During the year ended 31 December 2013, the Company issued 114,076 listed A shares with a par value of RMB1.00 each, as a result of exercise of conversion by the holders of the 2011 Convertible Bonds. During the year ended 31 December 2014, the Company issued 1,715,081,853 listed A shares with a par value of RMB1.00 each, as a result of exercise of conversion by the holders of the 2011 Convertible Bonds. During the year ended 31 December 2015, the Company issued 2,790,814,006 listed A shares with a par value of RMB1.00 each, as a result of conversion by the holders of the 2011 Convertible Bonds. During the year ended 31 December 2022, the Company repurchased 442,300,000 listed A shares and 732,502,000 listed H shares respectively at a price of RMB4.06 per share to RMB4.50 per share for the repurchase of listed A shares, with a total amount of RMB1,888,163,981.61, and a price of HKD3.06 per share to HKD3.75 per share for the repurchase of listed H shares, with a total amount of HKD2,499,261,860.00, which had been cancelled in the year ended 31 December 2022. During the year ended 31 December 2023, the Company repurchased 143,500,000 listed A shares and 403,656,000 listed H shares respectively at a price of RMB5.29 per share to RMB6.17 per share for the repurchase of listed A shares, with a total amount of RMB816,009,269.44, and a price of HKD3.78 per share to HKD4.56 per share for the repurchase of listed H shares, with a total amount of HKD1,646,392,242.20, which had been cancelled in the year ended 31 December 2023. 128 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 36 SHARE CAPITAL (Continued) The Group (Continued) Pursuant to the resolutions of the 15th meeting of the 8th session of the board of directors held on 24 March 2023 and the 2022 Annual General Meeting of Shareholders held on 30 May 2023, and with the approval for registration by the China Securities Regulatory Commission in the Reply on Agreeing to the Registration of China Petroleum & Chemical Corporation to Issue Shares to Specific Targets (Zheng Jian Xu Ke [2024] No. 110(證監許可[2024]110 號)), the Company was approved to issued 2,390,438,247 listed A shares (par value of RMB1.00 per share at an issue price of RMB5.02 per share) to Sinopec Group Company on 18 March 2024. The total amount of raised funds is RMB11,999,999,999.94. After deducting the total amount of RMB12,671,221.04 (excluding VAT) of recommendation and underwriting expenses and other issuance expenses, the net amount of raised funds is RMB11,987,328,778.90, which is included in the share capital of RMB2,390,438,247.00 and capital reserve of RMB9,596,890,531.90. During the year ended 31 December 2024, the Company repurchased 130,146,195 listed A shares and 328,126,000 listed H shares respectively at a price of RMB6.16 per share to RMB6.43 per share for the repurchase of listed A shares, with a total amount of RMB816,001,427.20, and a price of HKD4.09 per share to HKD4.89 per share for the repurchase of listed H shares, with a total amount of HKD1,436,267,366.40. The 130,146,195 listed A shares and 327,988,000 listed H shares repurchased from 26 March to 18 December 2024 had been canceled, while the 138,000 listed H shares repurchased on 30 December 2024 had not been canceled in the year ended 31 December 2024. All A shares and H shares rank pari passu in all material aspects. Capital management Management optimises the structure of the Group’s capital, which comprises of equity, debts and bonds. In order to maintain and adjust the capital structure of the Group, management may cause the Group to issue new shares, adjust the capital expenditure plan, sell assets to reduce debt, or adjust the proportion of short-term and long-term loans and bonds. Management monitors capital on the basis of the debt-to-capital ratio, which is calculated by dividing long-term loans (excluding current portion) and debentures payable, by the total of equity attributable to shareholders of the Company and long-term loans (excluding current portion) and debentures payable, and liability-to-asset ratio, which is calculated by dividing total liabilities by total assets. Management’s strategy is to make appropriate adjustments according to the Group’s operating and investment needs and the changes of market conditions, and to maintain the debt-to-capital ratio and the liability-to-asset ratio of the Group at a range considered reasonable. As at 31 December 2024, the debt-to-capital ratio and the liability-to-asset ratio of the Group were 20.4% (2023: 18.9%) and 53.2% (2023: 52.7%), respectively. The schedule of the contractual maturities of loans and commitments are disclosed in Notes 31,32 and 61, respectively. There were no changes in the management’s approach to capital management of the Group during the year. Neither the Company nor any of its subsidiaries is subject to externally imposed capital requirements. 37 CAPITAL RESERVE The movements in capital reserve of the Group are as follows: RMB million Balance at 1 January 2024 117,273 Common shares invested by shareholders 9,597 Cancellation of treasury shares (1,672) Minority shareholder investment 970 Transactions with minority shareholders (1,078) Other equity movements under the equity method (68) Others 346 Balance at 31 December 2024 125,368 Capital reserve represents mainly: (a) 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; (b) share premiums derived from issuances of H shares and A shares by the Company and excess of cash paid by investors over their proportionate shares in share capital, the proportionate shares of unexercised portion of the Bond with Warrants at the expiration date, and the amount transferred from the proportionate liability component and the derivative component of the converted portion of the 2011 Convertible Bonds; (c) difference between consideration paid for the combination of entities under common control and the transactions with non-controlling interests over the carrying amount of the net assets acquired. 129 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 38 OTHER COMPREHENSIVE INCOME The Group (a) The changes of other comprehensive income in consolidated income statement 2024 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 (1,193) 243 (950) Less: Reclassification adjustments for amounts transferred to the consolidated income statement 562 (30) 532 Subtotal (1,755) 273 (1,482) Changes in fair value of other equity instrument investments (8) 5 (3) Other comprehensive loss that can be converted into profit or loss under the equity method (3,507) – (3,507) Foreign currency translation differences 2,006 – 2,006 Other comprehensive income (3,264) 278 (2,986) 2023 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 7,420 (1,075) 6,345 Less: Reclassification adjustments for amounts transferred to the consolidated income statement 1,245 (234) 1,011 Subtotal 6,175 (841) 5,334 Changes in fair value of other equity instrument investments (13) 5 (8) Other comprehensive loss that can be converted into profit or loss under the equity method (6,683) – (6,683) Foreign currency translation differences 1,946 – 1,946 Other comprehensive income 1,425 (836) 589 (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 Cash flow hedges Foreign currency translation differences l Subtotal Non-controlling interests Total other comprehensive income RMB million RMB million RMB million RMB million RMB million RMB million RMB million 1 January 2023 (4,155) (83) 3,024 4,286 3,072 (1,051) 2,021 Changes in 2023 (4,287) (8) 2,632 1,651 (12) (2,054) (2,066) 31 December 2023 (8,442) (91) 5,656 5,937 3,060 (3,105) (45) 1 January 2024 (8,442) (91) 5,656 5,937 3,060 (3,105) (45) Changes in 2024 (3,058) (21) (2,403) 1,435 (4,047) 108 (3,939) 31 December 2024 (11,500) (112) 3,253 7,372 (987) (2,997) (3,984) As at 31 December 2024, cash flow hedge reserve amounted to a gain of RMB3,338 million (31 December 2023: a gain of RMB5,758 million), of which a gain of RMB3,253 million was attribute to shareholders of the Company (31 December 2023: a gain of RMB5,656 million). 39 SPECIFIC RESERVE In accordance with the Administrative Measures for the Extraction and Use of Production Safety Expenses of Enterprises issued by the Ministry of Finance and the Ministry of Emergency Management of the PRC, the Group mainly extracts a certain percentage of production safety expenses from its net profit on a monthly basis based on the operating revenues of the businesses to which the Measures are applicable or the output of raw minerals mined in the PRC, which is included in the special reserve. Production safety expenses are specifically used to perfect and improve the production safety conditions of the enterprise or project, and any expenditure that is in line with the scope of use of production safety expenses shall be charged to the production safety expenses withdrawn. The assets formed by the use of production safety expenses are included in the relevant asset management. The balance of the current year’s production safety expenses is carried forward for use in the following year. 130 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 40 SURPLUS RESERVES Movements in surplus reserves are as follows: The Group Statutory Discretionary surplus reserve surplus reserves Total RMB million RMB million RMB million Balance at 1 January 2024 106,134 117,000 223,134 Appropriation of surplus reserve 4,529 – 4,529 Balance at 31 December 2024 110,663 117,000 227,663 The PRC Company Law and Articles of Association of the Company have set out the following profit appropriation plans: (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. 41 OPERATING INCOME AND OPERATING COSTS The Group The Company 2024 2023 2024 2023 RMB million RMB million RMB million RMB million Income from principal operations 3,015,321 3,146,873 1,035,143 1,173,747 Income from other operations 59,241 65,342 26,822 32,981 Operating income 3,074,562 3,212,215 1,061,965 1,206,728 Operating costs 2,598,935 2,709,656 850,450 962,889 The income from principal operations mainly represents revenue from the sales of refined petroleum products, chemical products, crude oil and natural gas.The income from other operations mainly represents revenue from sale of materials, services providing, rental income and others. Operating costs primarily represent the products cost related to the principal operations. The Group’s segmental information is set out in Note 63. The Group’s operating income is mainly composed of sales revenue from the products as follows: 2024 2023 RMB million RMB million Income from principal operations 3,015,321 3,146,873 Included: Gasoline 847,815 861,453 Diesel 653,111 722,307 Crude oil 365,045 412,488 Chemical feedstock 41,994 38,039 Basic organic chemicals 219,608 210,216 Synthetic resin 124,780 132,625 Kerosene 231,214 216,456 Natural gas 91,015 79,681 Synthetic fiber monomers and polymers 42,880 34,059 Others (i) 397,859 439,549 Income from other operations 59,241 65,342 Included: Sale of materials and others 57,785 63,990 Rental income 1,456 1,352 Total 3,074,562 3,212,215 Notes: (i) Others are primarily liquefied petroleum gas and other refinery and chemical byproducts and joint products and so on. (ii) The above operating incomes, except rental income, are all income from contracts. 131 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 42 TAXES AND SURCHARGES The Group 2024 2023 RMB million RMB million Consumption tax 215,245 215,483 City construction tax 18,010 17,478 Special oil income levy 5,112 6,223 Education surcharge 13,255 12,847 Resources tax 8,466 8,230 Levy for mineral rights concessions 1,574 7,412 Others 5,653 5,248 Total 267,315 272,921 The applicable tax rate of the taxes and surcharges are set out in Note 4. 43 FINANCIAL EXPENSES The Group 2024 2023 RMB million RMB million Interest expenses incurred 10,525 9,807 Less: Capitalised interest expenses 1,470 1,788 Add: Interest expense on lease liabilities 8,767 8,951 Net interest expenses 17,822 16,970 Accretion expenses (Note 34) 779 1,099 Interest income (5,935) (6,828) Net foreign exchange gains (1,492) (1,319) Total 11,174 9,922 The interest rates per annum at which borrowing costs were capitalised during the year ended 31 December 2024 by the Group ranged from 2.00% to 3.90%(2023: 1.70% to 4.25%). 44 CLASSIFICATION OF EXPENSES BY NATURE The operating costs, selling and distribution expenses, general and administrative expenses, research and development expenses and exploration expenses (including dry holes) in consolidated income statement classified by nature are as follows: 2024 2023 RMB million RMB million Purchased crude oil, products and operating supplies and expenses 2,449,614 2,569,412 Personnel expenses 110,187 108,017 Depreciation, depletion and amortisation 120,714 113,750 Exploration expenses (including dry holes) 9,375 11,055 Other expenses 53,078 53,274 Total 2,742,968 2,855,508 45 SELLING AND DISTRIBUTION EXPENSES Selling expenses mainly include wages and salaries of sales staff, depreciation and amortization of sales equipment and related systems, etc. 46 GENERAL AND ADMINISTRATIVE EXPENSES Administrative expenses mainly include salaries of administrative personnel, depreciation and amortization of office facilities, office systems and software, and repair costs. 47 RESEARCH AND DEVELOPMENT EXPENSES The research and development expenditures are mainly used for the replacement of resources in upstream, optimising structure and operation upgrades in refining sector, structured adjustment of materials and products in chemical segment. 48 EXPLORATION EXPENSES Exploration expenses include geological and geophysical expenses and written-off of unsuccessful dry hole costs. 132 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 49 OTHER INCOME Classified by characteristic 2024 2023 RMB million RMB million Government grants 12,026 10,553 Others 227 352 Total 12,253 10,905 Other income are mainly the government grants related to the business activities. 50 INVESTMENT INCOME The Group The Company 2024 2023 2024 2023 RMB million RMB million RMB million RMB million Income from investment of subsidiaries accounted for under cost method – – 31,965 29,431 Income from investment accounted for under equity method 10,314 8,177 3,641 4,552 Investment income from disposal of business and long-term equity investments 97 303 3 15 Dividend income from holding of other equity instrument investments 55 10 1 6 Investment income/(loss) from holding/disposal of financial assets and liabilities and derivative financial instruments at fair value through profit or loss 4,031 (4,575) – 263 Gain from ineffective portion of cash flow hedges 875 1,380 353 (809) Others 517 516 1,265 1,412 Total 15,889 5,811 37,228 34,870 51 INCOME FROM CHANGES IN FAIR VALUE The Group 2024 2023 RMB million RMB million Net fair value losses on financial assets and financial liabilities at fair value through loss (4,143) (159) Unrealised or gains from ineffective portion cash flow hedges, net 43 649 Others (47) (23) Total (4,147) 467 52 IMPAIRMENT LOSSES The Group 2024 2023 RMB million RMB million Prepayments (125) 77 Inventories 4,420 6,053 Long-term equity investment – 2 Fixed assets 2,206 2,491 Intangible assets 72 27 Construction in progress 134 116 Others (5) 6 Total 6,702 8,772 53 NON-OPERATING INCOME The Group 2024 2023 RMB million RMB million Government grants 406 636 Others 1,820 1,334 Total 2,226 1,970 133 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 54 NON-OPERATING EXPENSES The Group 2024 2023 RMB million RMB million Fines, penalties and compensation 431 43 Donations 293 310 Asset scrap, damage loss 1,157 1,231 Others 2,089 1,014 Total 3,970 2,598 55 INCOME TAX EXPENSE The Group 2024 2023 RMB million RMB million Provision for income tax for the year 12,536 15,098 Deferred taxation 1,669 2,442 Under-provision for income tax in respect of preceding year (1,239) (1,470) Total 12,966 16,070 Reconciliation between actual income tax expense and accounting profit at applicable tax rates is as follows: 2024 2023 RMB million RMB million Profit before taxation 70,513 86,116 Expected income tax expense at a tax rate of 25% 17,628 21,529 Tax effect of non-deductible expenses 2,491 2,987 Tax effect of non-taxable income (4,247) (4,060) Tax effect of preferential tax rate (Note) (2,763) (3,117) Effect of income taxes at foreign operations (253) (846) Tax effect of utilisation of previously unrecognised tax losses and temporary differences (152) (399) Tax effect of tax losses not recognised and temporary differences 1,267 1,374 Write-down of deferred tax assets 234 72 Adjustment for under provision for income tax in respect of preceding years (1,239) (1,470) Actual income tax expense 12,966 16,070 Note: 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 2024. 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 of 15% extends from 1 January 2021 to 31 December 2030. 56 DIVIDENDS (a) Dividends of ordinary shares declared after the balance sheet date Pursuant to a resolution passed at the director’s meeting on 21 March 2025, final dividends in respect of the year ended 31 December 2024 of RMB0.140 (2023: RMB0.200) per share totaling RMB16,979 million (2023: RMB23,870 million) were proposed for shareholders’ approval at the Annual General Meeting. Final cash dividend proposed after the balance sheet date has not been recognised as a liability at the balance sheet date. (b) Dividends of ordinary shares declared during the period Pursuant to the approval at the director’s meeting on 23 August 2024, the interim dividends for the year ending 31 December 2024 of RMB0.146 (2023: RMB0.145) per share totaling RMB17,768 million (2023: RMB17,380 million) were approved. Dividends were paid on 13 September 2024. Pursuant to the shareholders’ approval at the Annual General Meeting on 28 June 2024, a final dividend of RMB0.200 per share totaling RMB24,340 million according to total shares on 15 July 2024 was approved. All dividends have been paid before 31 December 2024. Pursuant to the shareholders’ approval at the General Meeting on 25 August 2023, the interim dividends for the year ending 31 December 2023 of RMB0.145 per share totaling RMB17,380 million were approved. Dividends were paid on 15 September 2023. Pursuant to the shareholders’ approval at the Annual General Meeting on 30 May 2023, a final dividend of RMB0.195 per share totaling RMB23,380 million according to total shares on 20 June 2023 was approved. All dividends have been paid before 31 December 2023. 134 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 57 SUPPLEMENTAL INFORMATION TO THE CASH FLOW STATEMENT The Group (a) Reconciliation of net profit to cash flows from operating activities: 2024 2023 RMB million RMB million Net profit 57,547 70,046 Add: Impairment losses on assets 6,702 8,772 Credit impairment losses/(reversals) 108 (243) Depreciation of right-of-use assets 15,932 14,829 Depreciation of fixed assets 94,311 88,512 Amortisation of intangible assets and long-term deferred expenses 10,471 10,409 Dry hole costs written off 4,955 6,723 Net gain on disposal of assets (810) (2,995) Fair value loss/(gain) 4,147 (467) Financial expenses 12,666 11,241 Investment income (15,889) (5,811) Decrease in deferred tax assets 527 7 Increase in deferred tax liabilities 1,142 2,435 Increase in inventories (10,117) (12,726) Safety fund reserve (47) (248) (Increase)/Decrease in operating receivables (7,864) 3,974 Decrease in operating payables (24,421) (32,983) Net cash flow from operating activities 149,360 161,475 (b) Net change in cash: 2024 2023 RMB million RMB million Cash balance at the end of the year 91,295 121,759 Less: Cash at the beginning of the year 121,759 93,438 Net (decrease)/increase of cash (30,464) 28,321 (c) The analysis of cash held by the Group is as follows: 2024 2023 RMB million RMB million Cash at bank and on hand – Cash on hand 1 1 – Demand deposits 91,294 121,758 Cash at the end of the year 91,295 121,759 (d) Other cash received relating to investing activities: 2024 2023 RMB million RMB million Decrease in time deposits with maturities over three months 86,624 86,975 Interest income 4,113 8,929 Others 23 13 Total 90,760 95,917 (e) Other cash paid relating to investing activities: 2024 2023 RMB million RMB million Increase in time deposits with maturities over three months (114,855) (90,562) Loans from fellow subsidiaries (717) (500) Others (503) (1,028) Total (116,075) (92,090) 135 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 57 SUPPLEMENTAL INFORMATION TO THE CASH FLOW STATEMENT (Continued) The Group (Continued) (f) Other cash paid relating to financing activities: 2024 2023 RMB million RMB million Repayments of lease liabilities (19,654) (18,991) Capital reduction by minority shareholders (1,474) – Cash payments to repurchase own shares (2,131) (2,325) Others (960) (603) Total (24,219) (21,919) (g) Reconciliation of liabilities (excluding lease liabilities) arising from financial activities: Additions for the year Decreases for the year Balance at 1 January 2024 Cash Non-cash Cash Non-cash Balance at 31 December 2024 RMB million RMB million RMB million RMB million RMB million RMB million Long-term and Short-term loans and debentures payable 258,831 657,989 74,107 (621,813) (66,154) 302,960 Other non-current liabilities – loans to related parties 5,133 461 620 (151) (920) 5,143 Other current liabilities – loans to short-term bonds payable – 14,000 – (14,000) – – Total 263,964 672,450 74,727 (635,964) (67,074) 308,103 The decrease in cash for the year includes interest actually paid: RMB7,912 million (2023: RMB7,997 million). 136 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 58 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 : Limited Liability Company (State-owned) Authorised representative : Ma Yongsheng Registered capital : RMB326,547 million Sinopec Group Company is an enterprise controlled by the PRC government. Sinopec Group Company directly and indirectly holds 69.35% shareholding of the Company. (2) Related parties not having the ability to exercise control over the Group Related parties under common control of a parent company with the Company: Sinopec Finance (Note) Sinopec Shengli Petroleum Administrative Bureau CO., LTD. Sinopec Zhongyuan Petroleum Exploration Bureau CO., LTD. Sinopec Assets Management CO., LTD. Sinopec Engineering Incorporation Sinopec Century Bright Capital Investment Limited Sinopec Petroleum Storage and Reserve Limited Associates of the Group: PipeChina Sinopec Finance Sinopec Capital Zhongtian Synergetic Energy Aviation Fuel Joint ventures of the Group: FREP BASF-YPC Taihu Sinopec SABIC Tianjin Shanghai SECCO Note: Sinopec Finance is under common control of a parent company with the Company and is also the associate of the Group. 137 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 58 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 2024 2023 RMB million RMB million Sales of goods (i) 381,571 408,554 Purchases (ii) 176,738 218,974 Transportation and storage (iii) 26,081 29,830 Exploration and development services (iv) 39,208 41,783 Production related services (v) 36,880 43,361 Agency commission income (vi) 160 179 Interest income (vii) 3,108 2,838 Interest expense (viii) 1,291 1,283 Net deposits placed with related parties (vii) (466) (903) Net funds obtained from related parties (ix) 34,093 43,621 The amounts set out in the table above in respect of the year ended 31 December 2024 and 2023 represent the relevant costs and income as determined by the corresponding contracts with the related parties. For the year ended 31 December 2024 the Group purchases from Sinopec Group Company and fellow subsidiaries amounting to RMB159,275 million (2023: RMB200,604 million) comprising purchases of products and services (i.e. procurement, transportation and storage, exploration and development services and production related services) of RMB145,685 million (2023: RMB187,117 million), lease charges for land, buildings and others paid by the Group of RMB10,937 million, RMB1,088 million and RMB274 million (2023: RMB10,926 million, RMB1,050 million and RMB228 million), respectively and interest expenses of RMB1,291 million (2023: RMB1,283 million). For the year ended 31 December 2024, the group sales to Sinopec Group Company and fellow subsidiaries amounting to RMB72,711 million (2023: RMB87,247 million), comprising RMB69,281 million (2023: RMB84,329 million) for sales of goods, RMB3,363 million (2023: RMB2,838 million) for interest income and RM67 million (2023: RMB80 million) for agency commission income. For the year ended 31 December 2024, the amount of rental the Group paid to Sinopec Group Company and fellow subsidiaries, associates and joint ventures for land, buildings and others are RMB10,941 million, RMB1,094 million and RMB363 million (2023: RMB10,931 million, RMB1,053 million and RMB273 million). Interest expense on lease liabilities is RMB7,434 million (2023: RMB7,637 million). Among them, according to the continuing connected transaction agreement signed in 2000, the sixth supplementary agreement for continuing connected transactions signed on 27 August, 2021, and the fourth revision memorandum of the land use right lease contract, the actual payment of land, land and land use rights between Sinopec Group and Sinopec Group The rental amount of houses was RMB10,937 million and RMB1,088 million respectively (2023: RMB10,926 million and RMB1,050 million). The Group, as the lessee, has not leased single significant right-of-use assets from Sinopec Group, subsidiaries, associated companies and joint ventures. As of December 31, 2024 and 2023, the Group’s guarantee on bank credit to associated companies and joint ventures is shown in Note 62 (b). In addition, the Group has no other bank guarantee for Sinopec Group and its subsidiaries, associates and joint ventures Notes: (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 and environmental protection, and management services. (vi) 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. (vii) 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. 138 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 58 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) Notes (Continued): (viii) Interest expense represents interest charges on the loans obtained from Sinopec Group Company and fellow subsidiaries. (ix) The Group obtained loans, discounted bills and issued the acceptance bills from Sinopec Group Company and fellow subsidiaries, etc. In connection with the Reorganisation, the Company and Sinopec Group Company entered into a number of agreements under which 1) Sinopec Group Company will provide goods and products and a range of ancillary, social and supporting services to the Group and 2) the Group will sell certain goods to Sinopec Group Company. These agreements impacted the operating results of the Group for the year ended 31 December 2024. The terms of these agreements are summarised as follows: (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 Seventh Supplementary Agreement on 23 August 2024, which took effect on 1 January 2025 and made adjustment to “Mutual Supply Agreement”,”Land Leasing Contract” and “Buildings Leasing Contract”. 139 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 58 RELATED PARTIES AND RELATED PARTY TRANSACTIONS (Continued) (4) Balances with Sinopec Group Company and fellow subsidiaries, associates and joint ventures The balances with Sinopec Group Company and fellow subsidiaries, associates and joint ventures at 31 December 2024 and 31 December 2023 are as follows: The ultimate holding company Other related companies At 31 December At 31 December At 31 December At 31 December 2024 2023 2024 2023 RMB million RMB million RMB million RMB million Cash at bank and on hand – – 66,433 65,967 Accounts receivable 3 2 9,148 12,054 Receivables financing – – 166 101 Other receivables 71 74 14,804 14,487 Prepayments and other current assets 150 3 1,039 389 Other non-current assets – – 4,648 9,025 Bills payable – – 7,267 6,938 Accounts payable 35 16 19,073 13,017 Contract liabilities 1 25 5,348 4,377 Other payables and other current liabilities 13 64 30,464 25,988 Other non-current liabilities – – 6,415 5,133 Short-term loans – – 3,862 8,640 Long-term loans (including current portion) – – 24,116 28,608 Lease liabilities (including current portion) 62,783 65,228 83,572 88,823 Amounts due from/to Sinopec Group Company and fellow subsidiaries, associates and joint ventures, other than short-term loans and long-term loans, bear no interest, are unsecured and are repayable in accordance with normal commercial terms. The terms and conditions associated with short-term loans and long-term loans payable to Sinopec Group Company and fellow subsidiaries are set out in Note 22 and Note 31. As at and for the year ended 31 December 2024, and as at and for the year ended 31 December 2023, no individually significant impairment losses for bad and doubtful debts were recorded in respect of amounts due from Sinopec Group Company and fellow subsidiaries, associates and joint ventures. (5) Key management personnel emoluments Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, including directors and supervisors of the Group. The key management personnel compensations are as follows: 2024 2023 RMB thousand RMB thousand Short-term employee benefits 8,149 6,757 Retirement scheme contributions 554 512 Total 8,703 7,269 59 PRINCIPAL ACCOUNTING ESTIMATES AND JUDGEMENTS The Group’s financial condition and results of operations are sensitive to accounting methods, assumptions and estimates that underlie the preparation of the financial statements. The Group bases the assumptions and estimates on historical experience and on various other assumptions that it believes to be reasonable and which form the basis for making judgements about matters that are not readily apparent from other sources. On an on-going basis, management evaluates its estimates. Actual results may differ from those estimates as facts, circumstances and conditions change. The selection of critical accounting policies, the judgements and other uncertainties affecting application of those policies and the sensitivity of reported results to changes in conditions and assumptions are factors to be considered when reviewing the financial statements. The significant accounting policies are set forth in Note 3. The Group believes the following critical accounting policies involve the most significant judgements and estimates used in the preparation of the financial statements. 140 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 59 PRINCIPAL ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued) (a) Oil and gas properties and reserves The accounting for the exploration and production segment’s oil and gas activities is subject to accounting rules that are unique to the oil and gas industry. The Group has used the successful efforts method to account for oil and gas business activities. The successful efforts method reflects the volatility that is inherent in exploring for mineral resources in that costs of unsuccessful exploratory efforts are charged to expense. These costs primarily include dry hole costs, seismic costs and other exploratory costs. Engineering estimates of the Group’s oil and gas reserves are inherently imprecise and represent only approximate amounts because of the subjective judgements involved in developing such information. Although there are inherent inaccuracies in engineering estimates, these estimates are used as benchmark for depreciation costs, impairment losses and future demolition costs. There are authoritative guidelines regarding the engineering criteria that have to be met before estimated oil and gas reserves can be designated as “proved”. Proved and proved developed reserves estimates are updated at least annually and take into account recent production and technical information about each field. In addition, as prices and cost levels change from year to year, the estimate of proved and proved developed reserves also changes. This change is considered a change in estimate for accounting purposes and is reflected on a prospective basis in related depreciation rates. Oil and gas reserves have a direct impact on the assessment of the recoverability of the carrying amounts of oil and gas properties reported in the financial statements. If proved reserves estimates are revised downwards, the Group’s earnings could be affected by changes in depreciation expense or an immediate write-down of the carrying amount of oil and properties. Future dismantlement costs for oil and gas properties are estimated with reference to engineering estimates after taking into consideration the anticipated method of dismantlement required in accordance with industry practices in the similar geographic area, including estimation of economic life of oil and gas properties, technology and price level. The present values of these estimated future dismantlement costs are capitalised as oil and gas properties with equivalent amounts recognised as provisions for dismantlement costs. (b) Impairment for assets If circumstances indicate that the net book value of a long-lived asset may not be recoverable, the asset may be considered “impaired”, and an impairment loss may be recognised in accordance with “CASs 8 – Impairment of Assets”. The carrying amounts of long-lived assets are reviewed periodically in order to assess whether the recoverable amounts have declined below the carrying amounts. These assets are tested for impairment whenever events or changes in circumstances indicate that their recorded carrying amounts may not be recoverable. When such a decline has occurred, the carrying amount is reduced to recoverable amount. For goodwill, the recoverable amount is estimated annually. The recoverable amount is the greater of the fair value less costs to sell and the present value of expected future cash flows. It is difficult to precisely estimate the fair value because quoted market prices for the Group’s assets or cash-generating units are not readily available. Therefore, the Group determines the recoverable amount based on the present value of the expected future cash flows of assets. The expected future cash flows of assets are based on the most recent financial budget or forecast data approved by management, as well as stable or decreasing growth rates for years after the budget or forecast period. If the increasing growth rate is reasonable, then it should be based on the increasing growth rate. In appropriate and reasonable circumstances, the growth rate can be zero or negative. Expected cash flows based on budgets or forecasts typically cover five years, and if a longer period is reasonable, it can cover a longer period. When estimating cash flows for years after the budget or forecast period, the growth rate used should not exceed the long-term average growth rate of the industry or market in which the products operated by the group are located, or the long-term average growth rate of the market in which the asset is located, unless it can prove that a higher growth rate is reasonable. In determining the discount rate, the weighted average cost of capital is usually used as the basis. In determining the value of expected future cash flows, expected cash flows generated by the asset or the cash-generating unit are discounted to their present value, which requires significant judgement relating to sales volume, selling price, amount of operating costs and discount rate. The Group uses all readily available information in determining an amount that is a reasonable approximation of recoverable amount, including estimates based on reasonable and supportable assumptions and projections of sales volume, selling price, amount of operating costs and discount rate. (c) Depreciation Fixed assets other than oil and gas properties, are depreciated on a straight-line basis over the estimated useful lives of the assets, after taking into account the estimated residual value. Management reviews the estimated useful lives of the assets at least annually in order to determine the amount of depreciation expense to be recorded during any reporting period. The useful lives are based on the Group’s historical experience with similar assets and taking into account anticipated technological changes. The depreciation expense for future periods is adjusted if there are significant changes from previous estimates. (d) Measurement of expected credit losses ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive). The Group measures and recognises expected credit losses, considering reasonable and supportable information about the relevant past events, current conditions and forecasts of future economic conditions. The Group regularly monitors and reviews the assumptions used for estimating expected credit losses. 141 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 59 PRINCIPAL ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued) (e) Allowance for diminution in value of inventories If the costs of inventories become higher than their net realisable values, an allowance for diminution in value of inventories is recognised. Net realisable value represents the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. Management bases the estimates on all available information, including the current market prices of the finished goods and raw materials, and historical operating costs. If the actual selling prices were to be lower or the costs of completion were to be higher than estimated, the actual allowance for diminution in value of inventories would be higher than estimated. 60 PRINCIPAL SUBSIDIARIES The Company’s principal subsidiaries have been consolidated into the Group’s financial statements for the year ended 31 December 2024. The following list contains the particulars of subsidiaries which principally affected the results, assets and liabilities of the Group: Full name of enterprise Principal activities Registered capital/paid-up capital Actual investment at 31 December 2024 Percentage of equity interest/ voting right held by the Group Non-controlling Interests at 31 December 2024 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 9 China International United Petroleum and Chemical Company Limited Trading of crude oil and petrochemical products RMB5,000 RMB6,585 100.00 6,084 Sinopec Catalyst Company Limited Production and sale of catalyst products RMB1,500 RMB2,981 100.00 334 Sinopec Yangzi Petrochemical Company Limited Manufacturing of intermediate petrochemical products and petroleum products RMB15,651 RMB15,756 100.00 – Sinopec Lubricant Company Limited Production and sale of refined petroleum products, lubricant base oil, and petrochemical materials RMB3,374 RMB3,374 100.00 77 Sinopec Yizheng Chemical Fibre Limited Liability Company Production and sale of polyester chips and polyester fibres RMB4,000 RMB7,437 100.00 – Marketing Company Marketing and distribution of refined petroleum products RMB28,403 RMB20,000 70.42 84,235 Sinopec Kantons Holdings Limited (“Sinopec Kantons”) Provision of pipeline transmission services HKD248 HKD3,952 60.33 5,656 Sinopec Shanghai Petrochemical Company Limited (“Shanghai Petrochemical”) Manufacturing of synthetic fibres, resin and plastics, intermediate petrochemical products and petroleum products RMB10,799 RMB5,820 51.14 12,339 Fujian Petrochemical Company Limited (“Fujian Petrochemical”) (i) Manufacturing of plastics, intermediate petrochemical products and petroleum products RMB10,492 RMB5,246 50.00 3,703 (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 6,060 Sinopec Overseas Investment Holding Limited (“SOIH”) Investment holding of overseas business USD4,621 USD4,621 100.00 – Sinopec Chemical Sales Company Limited Marketing and distribution of petrochemical products RMB1,000 RMB1,165 100.00 150 Sinopec Great Wall Energy & Chemical Company Limited Coal chemical industry investment management, production and sale of coal chemical products RMB22,761 RMB26,087 100.00 23 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 98.98 139 ZhongKe (Guangdong) Refinery & Petrochemical Company Limited Crude oil processing and petroleum products manufacturing RMB8,168 RMB6,275 90.30 2,358 Sinopec Qingdao Refining and Chemical Company Limited Manufacturing of intermediate petrochemical products and petroleum products RMB5,153 RMB4,380 85.00 2,175 Sinopec-SK (Wuhan) Petrochemical Company Limited (“Sinopec-SK”) Production, sale, research and development of ethylene and downstream byproducts RMB7,193 RMB4,244 59.00 2,733 (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 RMB12,615 100.00 318 Sinopec Qingdao Petrochemical Company Limited Manufacturing of intermediate petrochemical products and petroleum products RMB1,595 RMB7,233 100.00 – Sinopec Shanghai Gaoqiao Petrochemical Co., Ltd. (“Gaoqiao Petrochemical”) Manufacturing of intermediate petrochemical products and petroleum products RMB10,000 RMB4,804 55.00 9,768 Sinopec Baling Petrochemical Co. Ltd. (“Hunan Petrochemical”) Crude oil processing and petroleum products manufacturing RMB7,333 RMB5,477 74.69 4,240 * 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. Except for Sinopec Kantons and SOIH, which are incorporated in Bermuda and Hong Kong SAR, respectively, all of the above principal subsidiaries are incorporated and operate their businesses principally in the PRC. Note: (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. 142 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 60 PRINCIPAL SUBSIDIARIES (Continued) Summarised financial information on subsidiaries with material non-controlling interests Set out below are the summarised financial information which the amount before inter-company eliminations for each subsidiary whose non- controlling interests that are material to the Group. Summarised consolidated balance sheet Marketing Company SIPL Shanghai Petrochemical Sinopec Kantons Gaoqiao Petrochemical Hunan Petrochemical At 31 December 2024 At 31 December 2023 At 31 December 2024 At 31 December 2023 At 31 December 2024 At 31 December 2023 At 31 December 2024 At 31 December 2023 At 31 December 2024 At 31 December 2023 At 31 December 2024 At 31 December 2023 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 220,984 202,333 20,088 19,529 20,633 15,455 6,599 6,118 16,797 18,521 6,417 3,951 Current liabilities (228,365) (217,315) (778) (936) (16,289) (14,573) (155) (207) (5,736) (7,107) (14,328) (11,979) Net current (liabilities)/assets (7,381) (14,982) 19,310 18,593 4,344 882 6,444 5,911 11,061 11,414 (7,911) (8,028) Non-current assets 318,997 324,288 9,439 8,983 21,136 24,203 7,960 8,001 14,578 14,904 30,828 22,167 Non-current liabilities (53,557) (56,057) (11,535) (11,583) (336) (143) (196) (255) (3,933) (4,050) (6,166) (8,317) Net non-current assets/(liabilities) 265,440 268,231 (2,096) (2,600) 20,800 24,060 7,764 7,746 10,645 10,854 24,662 13,850 Summarised consolidated statement of comprehensive income and cash flow Year ended 31 December Marketing Company SIPL Shanghai Petrochemical Sinopec Kantons Gaoqiao Petrochemical Hunan Petrochemical 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 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 1,710,948 1,814,710 2,881 2,952 87,133 93,014 609 549 60,338 60,156 68,683 18,648 Net profit/(loss) for the period 16,928 22,418 3,195 3,208 323 (1,409) 1,075 1,169 (468) 106 820 1,138 Total comprehensive income 17,095 23,260 2,641 (1,193) 266 (1,363) 1,118 1,252 (467) 105 826 1,138 Comprehensive income attributable to non-controlling interests 6,709 8,259 1,277 (861) 133 (676) 444 499 (210) 47 209 288 Dividends paid to non-controlling interests 5,192 6,749 – – 8 7 225 195 30 895 – – Net cash flow generated from/(used in) operating activities 41,550 50,598 1,101 1,947 7,740 807 81 557 362 (1,507) 1,898 769 143 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 61 COMMITMENTS Capital commitments At 31 December 2024 and 31 December 2023, capital commitments of the Group are as follows: At 31 December At 31 December 2024 2023 RMB million RMB million Authorised and contracted for (i) 177,173 177,809 Authorised but not contracted for 61,996 61,951 Total 239,169 239,760 These capital commitments relate to oil and gas exploration and development, refining and petrochemical production capacity expansion projects, the construction of service stations and oil depots and investment commitments. Note: (i) At 31 December 2024, the investment commitments of the Group is RMB13,353 million (2023: RMB5,856 million). Commitments to joint ventures Pursuant to certain of the joint venture agreements entered into by the Group, the Group is obliged to purchase products from the joint ventures based on market prices. Exploration and production licenses Exploration licenses for exploration activities are registered with the Ministry of Natural Resources. The term of the Group’s exploration licenses is 5 years, and may be renewed three times within 30 days prior to expiration of the original term with each renewal being for a five-year term. The Group is obligated to make progressive annual minimum exploration investment relating to the exploration blocks in respect of which the license is issued. The Ministry of Natural Resources also issues production licenses to the Group on the basis of the reserve reports approved by relevant authorities. The maximum term of a full production license is 30 years unless a special dispensation is given by the State Council. The maximum term of the production licenses issued to the Group is 80 years as a special dispensation was given to the Group by the State Council. The Group’s production license is renewable upon application by the Group 30 days prior to expiration. The Group is required to make payments of exploration license fees and production right usage fees to the Ministry of Natural Resources annually which are expensed. Expenses recognised were approximately RMB183 million for the year ended 31 December 2024 (2023: RMB628 million). Estimated future annual payments are as follows: At 31 December At 31 December 2024 2023 RMB million RMB million Within one year 237 802 Between one and two years 179 175 Between two and three years 134 176 Between three and four years 76 172 Between four and five years 76 156 Thereafter 862 875 Total 1,564 2,356 The implementation of commitments in previous year and the Group’s commitments did not have material discrepancy. 144 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 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 2024 and 31 December 2023, the guarantees by the Group in respect of facilities granted to the parties below are as follows: At 31 December At 31 December 2024 2023 RMB million RMB million Joint ventures (Note) 8,193 8,563 Note: The Group provided guarantees in respect to standby credit facilities granted amounting to RMB34,351 million (31 December 2023: RMB32,881 million) to certain joint ventures. As at 31 December 2024, the amount withdrawn (the portion corresponding to the shareholding ratio of the Group) from banks and guaranteed by the Group was RMB8,193 million (31 December 2023: RMB8,563 million). The Group provided a guarantee in respect to payment obligation of a joint venture under certain agreement amount to RMB17,468 million (31 December 2023: RMB17,211 million). As at 31 December 2024, there has not yet incurred the relevant payment obligations and therefore the Group has no guarantee amount (31 December 2023: Nil). Management monitors the risk that the specified debtor will default on the contract and recognises a provision when ECLs on the financial guarantees are determined to be higher than the carrying amount in respect of the guarantees. At 31 December 2024 and 2023, the Group estimates that there is no material liability has been accrued for ECLs related to the Group’s obligation under these guarantee arrangements. Environmental contingencies Under existing legislation, management believes that there are no probable liabilities that will have a material adverse effect on the financial position or operating results of the Group. The PRC government, however, has moved, and may move further towards more rigorous enforcement of applicable laws, and towards the adoption of more stringent environmental standards. Environmental liabilities are subject to considerable uncertainties which affect the Group’s ability to estimate the ultimate cost of remediation efforts. These uncertainties include (i) the exact nature and extent of the contamination at various sites including, but not limited to refineries, oil fields, service stations, terminals and land development areas, whether operating, closed or sold, (ii) the extent of required cleanup efforts, (iii) varying costs of alternative remediation strategies, (iv) changes in environmental remediation requirements, and (v) the identification of new remediation sites. The amount of such future cost is indeterminable due to such factors as the unknown magnitude of possible contamination and the unknown timing and extent of the corrective actions that may be required. Accordingly, the outcome of environmental liabilities under proposed or future environmental legislation cannot reasonably be estimated at present, and could be material. The Group recognised normal routine pollutant discharge fees of approximately RMB18,448 million in the consolidated financial statements for the year ended 31 December 2024 (2023: RMB19,156 million). Legal contingencies The Group is defendant in certain lawsuits as well as the named party in other proceedings arising in the ordinary course of business. Management has assessed the likelihood of an unfavourable outcome of such contingencies, lawsuits or other proceedings and believes that any resulting liabilities will not have a material adverse effect on the financial position, operating results or cash flows of the Group. 145 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 63 SEGMENT REPORTING Segment information is presented in respect of the Group’s operating segments. The format is based on the Group’s management and internal reporting structure. In a manner consistent with the way in which information is reported internally to the Group’s chief operating decision maker for the purposes of resource allocation and performance assessment, the Group has identified the following five reportable segments. No operating segments have been aggregated to form the following reportable segments. (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. The segments were determined primarily because the Group manages its exploration and production, refining, marketing and distribution, chemicals, and corporate and others businesses separately. The reportable segments are each managed separately because they manufacture and/ or distribute distinct products with different production processes and due to their distinct operating and gross margin characteristics. (1) Information of reportable segmental revenues, profits or losses, assets and liabilities The Group’s chief operating decision maker evaluates the performance and allocates resources to its operating segments on an operating profit basis, without considering the effects of finance costs or investment income. Inter-segment transfer pricing is based on the market price or cost plus an appropriate margin, as specified by the Group’s policy. Assets and liabilities dedicated to a particular segment’s operations are included in that segment’s total assets and liabilities. Segment assets include all tangible and intangible assets, except for cash at bank and on hand, long-term equity investments, deferred tax assets and other unallocated assets. Segment liabilities exclude short-term loans, non-current liabilities due within one year, long-term loans, debentures payable, deferred tax liabilities, other non-current liabilities and other unallocated liabilities. 146 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 63 SEGMENT REPORTING (Continued) (1) Information of reportable segmental revenues, profits or losses, assets and liabilities (Continued) Reportable information on the Group’s operating segments is as follows: 2024 2023 RMB million RMB million Income from principal operations Exploration and production Externalsales 175,844 177,980 Inter-segmentsales 117,297 116,703 293,141 294,683 Refining Externalsales 165,335 170,691 Inter-segmentsales 1,312,728 1,355,310 1,478,063 1,526,001 Marketing and distribution Externalsales 1,665,827 1,756,575 Inter-segmentsales 7,337 17,943 1,673,164 1,774,518 Chemicals Externalsales 418,294 411,379 Inter-segmentsales 97,925 94,426 516,219 505,805 Corporate and others Externalsales 590,021 630,248 Inter-segmentsales 864,348 905,264 1,454,369 1,535,512 Elimination of inter-segment sales (2,399,635) (2,489,646) Consolidated income from principal operations 3,015,321 3,146,873 Income from other operations Exploration and production 4,108 5,336 Refining 3,439 3,785 Marketing and distribution 41,194 43,911 Chemicals 7,643 9,502 Corporate and others 2,857 2,808 Consolidated income from other operations 59,241 65,342 Consolidated operating income 3,074,562 3,212,215 2024 2023 RMB million RMB million Operating profit/(loss) By segment Exploration and production 49,058 37,976 Refining 6,303 19,358 Marketing and distribution 17,698 25,531 Chemicals (14,046) (10,273) Corporate and others (914) 1,915 Elimination (630) 750 Total segment operating profit 57,469 75,257 Investment income Exploration and production 3,667 2,211 Refining (1,480) (413) Marketing and distribution 4,252 2,619 Chemicals (292) (2,746) Corporate and others 9,742 4,140 Total segment investment income 15,889 5,811 Less: Financial expenses 11,174 9,922 Add: Other income 12,253 10,905 (Losses)/gains from changes in fair value (4,147) 467 Asset disposal gains 1,967 4,226 Operating profit 72,257 86,744 Add: Non-operating income 2,226 1,970 Less: Non-operating expenses 3,970 2,598 Profit before taxation 70,513 86,116 147 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 63 SEGMENT REPORTING (Continued) (1) Information of reportable segmental revenues, profits or losses, assets and liabilities (Continued) At 31 December At 31 December 2024 2023 RMB million RMB million Assets Segment assets Exploration and production 484,172 444,485 Refining 330,301 331,084 Marketing and distribution 390,475 387,557 Chemicals 268,375 255,409 Corporate and others 152,682 153,674 Total segment assets 1,626,005 1,572,209 Cash at bank and on hand 146,799 164,960 Long-term equity investments 246,819 234,608 Deferred tax assets 18,777 20,110 Other unallocated assets 46,371 34,787 Total assets 2,084,771 2,026,674 Liabilities Segment liabilities Exploration and production 186,878 181,002 Refining 68,967 53,000 Marketing and distribution 232,264 226,798 Chemicals 99,053 89,069 Corporate and others 154,325 196,226 Total segment liabilities 741,487 746,095 Short-term loans 48,231 59,815 Non-current liabilities due within one year 64,602 30,457 Long-term loans 184,934 179,347 Debentures payable 25,562 8,513 Deferred tax liabilities 7,324 7,817 Other non-current liabilities 12,849 13,133 Other unallocated liabilities 23,489 22,842 Total liabilities 1,108,478 1,068,019 2024 2023 RMB million RMB million Capital expenditure Exploration and production 82,253 78,596 Refining 29,341 22,899 Marketing and distribution 14,128 15,735 Chemicals 44,664 55,038 Corporate and others 4,579 4,485 174,965 176,753 Depreciation and amortisation Exploration and production 50,443 46,755 Refining 20,204 20,386 Marketing and distribution 24,485 23,995 Chemicals 20,938 18,958 Corporate and others 4,644 3,656 120,714 113,750 Impairment losses on long-lived assets Exploration and production 211 887 Refining 230 191 Marketing and distribution 424 278 Chemicals 1,547 1,280 Corporate and others – – 2,412 2,636 148 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 63 SEGMENT REPORTING (Continued) (2) Geographical information The geographical information of the Group’s external sales and the Group’s non-current assets, excluding financial instruments and deferred tax assets. In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers, and segment assets are based on the geographical location of the assets. The Group’s external sales and non-current assets from mainland China were RMB2,478,160 million (2023: RMB2,635,334 million) and RMB1,491,020 million (December 31, 2023: RMB1,426,377 million), respectively. The proportion to the total revenue from domestic transactions and the proportion to the total non-current assets are 80.6% (2023: 82.0%) and 96.9% (2023: 97.4%) respectively. In addition, there is no other single country or region with segment revenue or segment assets accounting for more than 10%. 64 FINANCIAL INSTRUMENTS Overview Financial assets of the Group include cash at bank and on hand, financial assets held for trading, derivative financial assets, accounts receivable, receivables financing, other receivables and other equity instrument investments. Financial liabilities of the Group include short-term loans, derivative financial liabilities, bills payable, accounts payable, employee benefits payable, other payables, long-term loans, debentures payable and lease liabilities. The Group has exposure to the following risks from its uses of financial instruments: • credit risk; • liquidity risk; and • market risk. The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework, and developing and monitoring the Group’s risk management policies. The Group’s risk management policies are established to identify and analyse the risks faced by the Group, and set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations. Internal audit department undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Group’s audit committee. Credit risk (i) Risk management Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s deposits placed with financial institutions (including structured deposits) and receivables from customers. To limit exposure to credit risk relating to deposits, the Group primarily places cash deposits only with large financial institutions in the PRC with acceptable credit ratings. The majority of the Group’s accounts receivable relates to sales of petroleum and chemical products to related parties and third parties operating in the petroleum and chemical industries. No single customer accounted for greater than 10% of total accounts receivable at 31 December 2024, except for the amounts due from Sinopec Group Company and fellow subsidiaries. The Group performs ongoing credit evaluations of its customers’ financial condition and generally does not require collateral on accounts receivable. The Group maintains an impairment loss for doubtful accounts and actual losses have been within management’s expectations. The carrying amounts of cash at bank and on hand, financial assets held for trading, derivative financial assets, accounts receivable, receivables financing, other receivables and long-term receivables, represent the Group’s maximum exposure to credit risk in relation to financial assets. 149 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 64 FINANCIAL INSTRUMENTS (Continued) Credit risk (Continued) (ii) Impairment of financial assets The Group’s primary type of financial assets that are subject to the expected credit loss model is accounts receivable, receivables financing and other receivables. The Group’s cash deposits are placed only with large financial institutions with acceptable credit ratings, and there is no material impairment loss identified. For accounts receivable and receivables financing, the Group applies the “No. 22 Accounting Standards for Business Enterprises – Financial instruments: recognition and measurement” simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all accounts receivable and receivables financing. To measure the expected credit losses, accounts receivable and receivables financing have been grouped based on shared credit risk characteristics and the days past due. The expected loss rates are based on the payment profiles of sales over a period of 36 months before 31 December 2024 or 31 December 2023, respectively, and the corresponding historical credit losses experienced within this period and calculate expected credit losses for the above financial assets using an allowance matrix The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the accounts receivable and receivables financing. The detailed analysis of accounts receivable and receivables financing is listed in Note 7 and Note 8. The Group’s other receivables are considered to have low credit risk (Note 10), and the loss allowance recognised during the year was therefore limited to 12 months expected credit losses. The Group considers “low credit risk” for other receivables when they have a low risk of default and the issuer has a strong capacity to meet its contractual cash flow obligations in the near term. Liquidity risk Liquidity risk is the risk that the Group encounters short fall of capital when meeting its obligation of financial liabilities. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed capital conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The Group prepares monthly cash flow budget to ensure that they will always have sufficient liquidity to meet its financial obligations as they fall due. The Group arranges and negotiates financing with financial institutions and maintains a certain level of standby credit facilities to reduce the liquidity risk. At 31 December 2024, the Group has standby credit facilities with several PRC financial institutions which provide the Group to borrow up to RMB722,258 million (2023: RMB416,358 million) on an unsecured basis, at a weighted average interest rate of 2.31% per annum (2023: 2.23%). At 31 December 2024, the Group’s outstanding borrowings under these facilities were RMB48,231 million (2023: RMB59,815 million) and were included in loans. The following table sets out the remaining contractual maturities at the balance sheet date of the Group’s financial liabilities, which are based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on prevailing rates at the balance sheet date) and the earliest date the Group would be required to repay: At 31 December 2024 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 48,231 48,760 48,760 – – – Derivative financial liabilities 3,412 3,412 3,412 – – – Bills payable 47,740 47,740 47,740 – – – Accounts payable 208,857 208,857 208,857 – – – Other payables 98,467 98,467 98,467 – – – Non-current liabilities due within one year 64,602 65,378 65,378 – – – Long-term loans 184,934 192,680 1,109 84,284 68,115 39,172 Debentures payable 25,562 30,458 645 11,572 4,996 13,245 Lease liabilities 154,904 247,772 – 12,025 34,449 201,298 Total 836,709 943,524 474,368 107,881 107,560 253,715 150 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 64 FINANCIAL INSTRUMENTS (Continued) Liquidity risk (Continued) At 31 December 2023 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 59,815 60,230 60,230 – – – Derivative financial liabilities 2,752 2,752 2,752 – – – Bills payable 29,122 29,122 29,122 – – – Accounts payable 229,878 229,878 229,878 – – – Other payables 93,031 93,031 93,031 – – – Non-current liabilities due within one year 30,457 31,484 31,484 – – – Long-term loans 179,347 193,451 4,322 67,860 92,601 28,668 Debentures payable 8,513 11,821 314 314 5,484 5,709 Lease liabilities 163,864 272,894 – 12,512 35,821 224,561 Total 796,779 924,663 451,133 80,686 133,906 258,938 Management believes that the Group’s current cash on hand, expected cash flows from operations and available standby credit facilities from financial institutions will be sufficient to meet the Group’s short-term and long-term capital requirements. Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk. (a) Currency risk Currency risk arises on financial instruments that are denominated in a currency other than the functional currency in which they are measured. The Group does not have significant financial instruments that are denominated in foreign currencies other than the functional currencies of respective entities as at 31 December, and consequently does not have significant exposure to foreign currency risk. (b) Interest rate risk The Group’s interest rate risk exposure arises primarily from its short-term and long-term loans. Loans carrying interest at variable interest rates and at fixed interest rates expose the Group to cash flow interest rate risk and fair value interest rate risk respectively. The interest rates and terms of repayment of short-term and long-term loans of the Group are disclosed in Note 22 and Note 31, respectively. At 31 December 2024, it is estimated that a general increase/decrease of 100 basis points in variable interest rates, with all other variables held constant, would decrease/increase the Group’s net profit for the year by approximately RMB1,794 million (2023: decrease/increase RMB1,353 million). This sensitivity analysis has been determined assuming that the change of interest rates was applied to the Group’s debts outstanding at the balance sheet date with exposure to cash flow interest rate risk. The analysis is performed on the same basis for 2023. (c) Commodity price risk and hedge accounting The Group engages in oil and gas operations and is exposed to commodity price risk related to price volatility of crude oil, refined oil products and chemical products. The fluctuations in prices of crude oil, refined oil products and chemical products could have significant impact on the Group. The Group uses derivative financial instruments, including commodity futures and swaps contracts, to manage a portion of such risk. Based on the dynamic study and judging of the market, combined with the resource demand and production and operation plan, the Group evaluate and monitor the market risk exposure caused by transaction positions, and continuously manage and hedge the risk of commodity price fluctuation caused by market changes. As at 31 December 2024, the Group had certain commodity contracts of crude oil, refund oil products and chemical products designated as qualified cash flow hedges and economic hedges. At 31 December 2024, it is estimated that a general increase/decrease of USD10 per barrel in basic price of derivative financial instruments, with all other variables held constant, would impact the fair value of derivative financial instruments, which would decrease/increase the Group’s net profit for the year by approximately RMB8,698 million (2023: decrease/increase RMB1,139 million), and increase/decrease the Group’s other comprehensive income by approximately RMB5,883 million (2023: decrease/ increase RMB4,537 million). This sensitivity analysis has been determined assuming that the change in prices had occurred at the balance sheet date and the change was applied to the Group’s derivative financial instruments at that date with exposure to commodity price risk. The analysis is performed on the same basis for 2023. 151 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 64 FINANCIAL INSTRUMENTS (Continued) Market risk (Continued) (c) Commodity price risk and hedge accounting (Continued) For the hedge relationship with cash flow hedge accounting applied, the corresponding changes in cash flow hedge reserves are as follows: The Group 2024 2023 RMB million RMB million Beginning of the year 5,758 3,079 Effective portion of changes in fair value of hedging instruments recognised during the year (1,193) 7,420 Reclassification adjustments for amounts transferred to the consolidated income statement (562) (1,245) Amounts transferred to initial carrying amount of hedged items (1,157) (3,078) Related tax 492 (418) End of the year 3,338 5,758 The ineffective portion of cash flow hedge relationship is disclosed in Note 50 and Note 51. Fair values (i) Financial instruments carried at fair value The following table presents the carrying value of financial instruments measured at fair value at the balance sheet date across the three levels of the fair value hierarchy. With the fair value of each financial instrument categorised in its entirely based on the lowest level of input that is significant to that fair value measurement. The levels are defined as follows: • 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. At 31 December 2024 The Group Level 1 Level 2 Level 3 Total RMB million RMB million RMB million RMB million Assets Financial assets held for trading: – Fund Investments 4 – – 4 Derivative financial assets: – Derivative financial assets 824 1,730 – 2,554 Receivables financing: – Receivables financing – – 2,613 2,613 Other equity instrument investments: – Other Investments 93 – 323 416 921 1,730 2,936 5,587 Liabilities Derivative financial liabilities: – Derivative financial liabilities 2,496 916 – 3,412 2,496 916 – 3,412 152 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 64 FINANCIAL INSTRUMENTS (Continued) Fair values (Continued) (i) Financial instruments carried at fair value (Continued) At 31 December 2023 The Group Level 1 Level 2 Level 3 Total RMB million RMB million RMB million RMB million Assets Financial assets held for trading: – Fund Investments 3 – – 3 Derivative financial assets: – Derivative financial assets 5,942 3,779 – 9,721 Receivables financing: – Receivables financing – – 2,221 2,221 Other equity instrument investments: – Other Investments 120 – 330 450 6,065 3,779 2,551 12,395 Liabilities Derivative financial liabilities: – Derivative financial liabilities 367 2,385 – 2,752 367 2,385 – 2,752 During the year ended 31 December 2024 and 2023, there was no transfer between instruments in Level 1 and Level 2. Management of the Group uses discounted cash flow model with inputted interest rate and commodity index, which were influenced by historical fluctuation and the probability of market fluctuation, to evaluate the fair value of receivables financing classified as Level 3 financial assets. (ii) Fair values of financial instruments carried at other than fair value The fair values of the Group’s financial instruments carried at other than fair value (other than long-term indebtedness and investments in unquoted equity securities) approximate their carrying amounts due to the short-term maturity of these instruments. The fair values of long-term indebtedness are estimated by discounting future cash flows using current market interest rates offered to the Group for debt with substantially the same characteristic and maturities range from 1.74% to 4.49% (2023: from 2.69% to 5.47%). The following table presents the carrying amount and fair value of the Group’s long-term indebtedness (other than loans from Sinopec Group Company and fellow subsidiaries) at 31 December 2024 and 2023: At 31 December At 31 December 2024 2023 RMB million RMB million Carrying amount 230,613 170,408 Fair value 228,946 167,014 The Group has not developed an internal valuation model necessary to estimate the fair value of loans from Sinopec Group Company and fellow subsidiaries as it is not considered practicable to estimate their fair value because the cost of obtaining discount and borrowing rates for comparable borrowings would be excessive based on the Reorganisation of the Group, its existing capital structure and the terms of the borrowings. Except for the above items, the financial assets and liabilities of the Group are carried at amounts not materially different from their fair values at 31 December 2024 and 2023. 153 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (PRC) NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2024 65 BASIC AND DILUTED EARNINGS PER SHARE (i) Basic earnings per share Basic earnings per share is calculated by the net profit attributable to equity shareholders of the Company and the weighted average number of outstanding ordinary shares of the Company: 2024 2023 Net profit attributable to equity shareholders of the Company (RMB million) 50,313 60,463 Weighted average number of outstanding ordinary shares of the Company (RMB million) 121,138 119,811 Basic earnings per share (RMB/share) 0.415 0.505 The calculation of the weighted average number of ordinary shares is as follows: 2024 2023 Weighted average number of outstanding ordinary shares of the Company at 1 January (million) 119,349 119,896 Impact of issuing ordinary shares (million shares) 1,888 – Impact of repurchasing shares (million shares) (99) (85) Weighted average number of outstanding ordinary shares of the Company at 31 December (million) 121,138 119,811 (ii) Diluted earnings per share There are no potential dilutive ordinary shares, and diluted earnings per share are equal to the basic earning per share. 66 RETURN ON NET ASSETS AND EARNINGS PER SHARE In accordance with “Regulation on the Preparation of Information Disclosures of Companies Issuing Public Shares No. 9 – Calculation and Disclosure of the Return on Net Assets and Earnings Per Share” (2010 revised) issued by the CSRC and relevant accounting standards, the Group’s return on net assets and earnings per share are calculated as follows: 2024 2023 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 6.19 0.415 0.415 7.59 0.505 0.505 Net profit deducted extraordinary gains and losses attributable to the Company’s ordinary equity shareholders 5.91 0.397 0.397 7.61 0.507 0.507 67 EXTRAORDINARY GAINS AND LOSSES Pursuant to “Explanatory Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public – Extraordinary Gain and Loss” (2023), the extraordinary gains and losses of the Group are as follows: 2024 2023 RMB million RMB million Extraordinary (gains)/losses for the year: Net gains on disposal of non-current assets (1,967) (4,226) Donations 293 310 Government grants (4,068) (3,533) Gain on holding and disposal of business and various investments (586) (931) Other non-operating losses, net 1,807 797 One-time impact on loss for the current period due to adjustments in laws and regulations – 5,955 Subtotal (4,521) (1,628) Tax effect 1,485 635 Total (3,036) (993) Attributable to: Equity shareholders of the Company (2,256) 229 Non-controlling interests (780) (1,222) 154 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) REPORT OF THE INTERNATIONAL AUDITOR 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 Independent auditor’s report to the shareholders of China Petroleum & Chemical Corporation (established in the People’s Republic of China with limited liability) OPINION We have audited the consolidated financial statements of China Petroleum & Chemical Corporation (“the Company”) and its subsidiaries (“the Group”) set out on pages 157 to 212 which comprise the consolidated statement of financial position as at 31 December 2024, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended and notes, comprising material accounting policy information and other explanatory information. In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 31 December 2024 and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (“IASB”) and have been properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance. BASIS FOR OPINION We conducted our audit in accordance with Hong Kong Standards on Auditing (“HKSAs”) issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”). Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the HKICPA’s Code of Ethics for Professional Accountants (“the Code”) together with any ethical requirements that are relevant to our audit of the consolidated financial statements in the People’s Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. KEY AUDIT MATTER Key audit matter is the matter that, in our professional judgment, was of most significance in our audit of the consolidated financial statements of the current period. The matter was addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter. Assessment of impairment of property, plant and equipment relating to oil and gas producing activities Refer to notes 2(g), 2(n), 8, 17 and 44 to the consolidated financial statements The Key Audit Matter How the matter was addressed in our audit The Company reported property, plant and equipment of Renminbi (“RMB”) 717,083 million as at 31 December 2024, a portion of which related to oil and gas producing activities. The Company reported impairment losses of RMB211 million for the property, plant and equipment relating to oil and gas producing activities for the year ended 31 December 2024. 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 management 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. 155 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) REPORT OF THE INTERNATIONAL AUDITOR (CONTINUED) INFORMATION OTHER THAN THE CONSOLIDATED FINANCIAL STATEMENTS AND AUDITOR’S REPORT THEREON The directors are responsible for the other information. The other information comprises all the information included in the annual report, other than the consolidated financial statements and our auditor’s report thereon. Our opinion on the consolidated 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 consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated 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 THE DIRECTORS FOR THE CONSOLIDATED FINANCIAL STATEMENTS The directors are responsible for the preparation of the consolidated financial statements that give a true and fair view in accordance with IFRS Accounting Standards as issued by the IASB and the disclosure requirements of the Hong Kong Companies Ordinance and for such internal control as the directors determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, the directors are responsible for assessing the Group’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 the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. The directors are assisted by the Audit Committee in discharging their responsibilities for overseeing the Group’s financial reporting process. AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS Our objectives are to obtain reasonable assurance about whether the consolidated 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. This report is made solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with HKSAs 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 consolidated financial statements. As part of an audit in accordance with HKSAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • 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. 156 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) REPORT OF THE INTERNATIONAL AUDITOR (CONTINUED) • Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the group financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion. We communicate with the Audit Committee 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 the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and, where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with the Audit Committee, we determine those matters that were of most significance in the audit of the consolidated 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. The engagement partner on the audit resulting in this independent auditor’s report is Ho Ying Man, Simon. KPMG Certified Public Accountants 8th Floor, Prince’s Building 10 Chater Road Central, Hong Kong 21 March 2025 157 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) (B) FINANCIAL STATEMENTS PREPARED UNDER IFRS ACCOUNTING STANDARDS CONSOLIDATED INCOME STATEMENT for the year ended 31 December 2024 (Amounts in million, except per share data) Note Year ended 31 December 2024 2023 RMB RMB Revenue Revenue from primary business 3 3,015,321 3,146,873 Other operating revenues 4 59,241 65,342 3,074,562 3,212,215 Operating expenses Purchased crude oil, products and operating supplies and expenses (2,449,614) (2,569,412) Selling, general and administrative expenses 5 (57,547) (59,575) Depreciation, depletion and amortisation (120,714) (113,750) Exploration expenses, including dry holes (9,375) (11,055) Personnel expenses 6 (110,187) (108,017) Taxes other than income tax 7 (267,315) (272,921) Impairment (losses)/reversals on trade and other receivables (108) 243 Other operating income/(expenses), net 8 10,984 9,100 Total operating expenses (3,003,876) (3,125,387) Operating profit 70,686 86,828 Finance costs Interest expense 9 (18,601) (18,069) Interest income 5,935 6,828 Foreign currency exchange gains, net 1,492 1,319 Net finance costs (11,174) (9,922) Investment income 10 669 829 Share of profits less losses from associates and joint ventures 21,22 8,961 6,199 Profit before taxation 69,142 83,934 Income tax expense 11 (12,966) (16,070) Profit for the year 56,176 67,864 Attributable to: Shareholders of the Company 48,939 58,310 Non-controlling interests 7,237 9,554 Profit for the year 56,176 67,864 Earnings per share: Basic 16 0.404 0.487 Diluted 16 0.404 0.487 The notes on pages 164 to 212 form part of these consolidated financial statements. Details of dividends payable to shareholders of the Company attributable to the profit for the year are set out in Note 14. 158 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 December 2024 (Amounts in million) Note Year ended 31 December 2024 2023 RMB RMB Profit for the year 56,176 67,864 Other comprehensive income: 15 Other comprehensive income (net of tax) attributable to shareholders of the Company (3,003) 2,501 Items that will not be reclassified to profit or loss Changes in fair value of investments in other equity instruments (6) (8) Items that may be reclassified subsequently to profit or loss Share of other comprehensive income of associates and joint ventures (3,058) (4,287) Cash flow hedges (1,374) 5,145 Foreign currency translation differences 1,435 1,651 Other comprehensive income (net of tax) attributable to non-controlling interests 17 (1,912) Total other comprehensive income net of tax (2,986) 589 Total comprehensive income for the year 53,190 68,453 Attributable to: Shareholders of the Company 45,936 60,811 Non-controlling interests 7,254 7,642 The notes on pages 164 to 212 form part of these consolidated financial statements. 159 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2024 (Amounts in million) Note 31 December 31 December 2024 2023 RMB RMB Non-current assets Property, plant and equipment, net 17 717,083 690,897 Construction in progress 18 208,747 180,250 Right-of-use assets 19 255,816 264,054 Goodwill 20 6,493 6,472 Interest in associates 21 166,786 163,066 Interest in joint ventures 22 76,702 69,564 Financial assets at fair value through other comprehensive income 26 416 450 Deferred tax assets 29 18,777 20,110 Long-term prepayments and other assets 23 106,105 95,398 Total non-current assets 1,556,925 1,490,261 Current assets Cash and cash equivalents 91,295 121,759 Time deposits with financial institutions 54,285 41,778 Financial assets at fair value through profit or loss 4 3 Derivative financial assets 24 2,554 9,721 Trade accounts receivable 25 44,333 48,652 Financial assets at fair value through other comprehensive income 26 2,613 2,221 Inventories 27 256,595 250,898 Prepaid expenses and other current assets 28 72,836 59,403 Total current assets 524,515 534,435 Current liabilities Short-term debts 30 87,780 58,534 Loans from Sinopec Group Company and fellow subsidiaries 30 4,684 12,437 Lease liabilities 31 17,831 17,536 Derivative financial liabilities 24 3,412 2,752 Trade accounts payable and bills payable 33 256,597 259,000 Contract liabilities 34 127,697 127,239 Other payables 35 173,530 168,124 Income tax payable 1,706 1,454 Total current liabilities 673,237 647,076 Net current liabilities 148,722 112,641 Total assets less current liabilities 1,408,203 1,377,620 Non-current liabilities Long-term debts 30 187,202 163,049 Loans from Sinopec Group Company and fellow subsidiaries 30 23,294 24,811 Lease liabilities 31 154,904 163,864 Deferred tax liabilities 29 7,324 7,817 Provisions 36 49,668 48,269 Other long-term liabilities 13,664 14,001 Total non-current liabilities 436,056 421,811 972,147 955,809 Equity Share capital 37 121,282 119,349 Reserves 694,533 683,640 Total equity attributable to shareholders of the Company 815,815 802,989 Non-controlling interests 156,332 152,820 Total equity 972,147 955,809 Approved and authorised for issue by the board of directors on 21 March 2025. Ma Yongsheng Zhao Dong Shou Donghua Chairman President Chief Financial Officer (Legal representative) The notes on pages 164 to 212 form part of these consolidated financial statements. 160 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31 December 2023 (Amounts in million) 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 2023 119,896 28,753 52,846 101,009 117,000 6,407 361,689 787,600 151,942 939,542 Profit for the year – – – – – – 58,310 58,310 9,554 67,864 Other comprehensive income (Note 15) – – – – – 2,501 – 2,501 (1,912) 589 Total comprehensive income for the year – – – – – 2,501 58,310 60,811 7,642 68,453 Amounts transferred to initial carrying amount of hedged items – – – – – (2,513) – (2,513) (142) (2,655) Transactions with owners, recorded directly in equity: Purchase of own shares (Note 37) (547) – (1,778) – – – – (2,325) – (2,325) Contributions by and distributions to owners: Final dividend for 2022 (Note 14) – – – – – – (23,380) (23,380) – (23,380) Interim dividend for 2023 (Note 14) – – – – – – (17,380) (17,380) – (17,380) Appropriation (Note (a)) – – – 5,125 – – (5,125) – – – Distributions to non-controlling interests – – – – – – – – (8,573) (8,573) Contributions to subsidiaries from non-controlling interests – – – – – – – – 2,209 2,209 Total contributions by and distributions to owners – – – 5,125 – – (45,885) (40,760) (6,364) (47,124) Transactions with non-controlling interests – – – – – – – – (213) (213) Total transactions with owners (547) – (1,778) 5,125 – – (45,885) (43,085) (6,577) (49,662) Other equity movements under the equity method – 220 – – – – – 220 – 220 Others – (44) – – – (216) 216 (44) (45) (89) Balance at 31 December 2023 119,349 28,929 51,068 106,134 117,000 6,179 374,330 802,989 152,820 955,809 The notes on pages 164 to 212 form part of these consolidated financial statements. 161 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED) for the year ended 31 December 2024 (Amounts in million) The notes on pages 164 to 212 form part of these consolidated financial statements. Share capital Capital reserve Share premium Treasury shares 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 RMB Balance at 1 January 2024 119,349 28,929 51,068 – 106,134 117,000 6,179 374,330 802,989 152,820 955,809 Profit for the year – – – – – – – 48,939 48,939 7,237 56,176 Other comprehensive income (Note 15) – – – – – – (3,003) – (3,003) 17 (2,986) Total comprehensive Income for the year – – – – – – (3,003) 48,939 45,936 7,254 53,190 Amounts transferred to initial carrying amount of hedged items – – – – – – (1,029) – (1,029) 91 (938) Transactions with owners, recorded directly in equity: Purchase of own shares (Note 37) – – – (2,131) – – – – (2,131) – (2,131) Cancellation of repurchased own shares (Note 37) (458) – (1,672) 2,130 – – – – – – – Contributions by and distributions to owners: Issue of ordinary shares (Note 37) 2,391 – 9,597 – – – – – 11,988 – 11,988 Final dividend for 2023 (Note 14) – – – – – – – (24,340) (24,340) – (24,340) Interim dividend for 2024 (Note 14) – – – – – – – (17,768) (17,768) – (17,768) Appropriation (Note (a)) – – – – 4,529 – – (4,529) – – – Distributions to non-controlling interests – – – – – – – – – (6,024) (6,024) Contributions to subsidiaries from non-controlling interests – 970 – – – – – – 970 1,266 2,236 Total contributions by and distributions to owners 2,391 970 9,597 – 4,529 – – (46,637) (29,150) (4,758) (33,908) Transactions with non-controlling interests – (1,078) – – – – – – (1,078) 1,180 102 Total transactions with owners 1,933 (108) 7,925 (1) 4,529 – – (46,637) (32,359) (3,578) (35,937) Other comprehensive income transferred to retained earnings – – – – – – (15) 15 – – – Other equity movements under the equity method – (68) – – – – – – (68) (10) (78) Others – 346 – – – – (48) 48 346 (245) 101 Balance at 31 December 2024 121,282 29,099 58,993 (1) 110,663 117,000 2,084 376,695 815,815 156,332 972,147 Notes: (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 China 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 2024, the Company transferred RMB4,529 million (2023: RMB5,125 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 2024, the amount of retained earnings available for distribution was RMB106,517 million (2023: RMB107,879 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 IFRS Accounting Standards. (d) The capital reserve mainly 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 213 and 214 of the PRC Company Law. 162 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 31 December 2024 (Amounts in million) Note Year ended 31 December 2024 2023 RMB RMB Net cash generated from operating activities (a) 149,360 161,475 Investing activities Capital expenditure (119,144) (152,325) Exploratory wells expenditure (20,062) (19,168) Purchase of investments (10,578) (5,892) Payment for financial assets at fair value through profit or loss (26) (26) Proceeds from settlement of financial assets at fair value through profit or loss 26 – Payment for acquisition of subsidiary, net of cash acquired – (110) Proceeds from disposal of investments 452 1,580 Proceeds from disposal of property, plant, equipment and other non-current assets 1,864 5,363 Increase in time deposits with maturities over three months (114,855) (90,562) Decrease in time deposits with maturities over three months 86,624 86,975 Interest received 4,113 8,929 Investment and dividend income received 11,543 10,886 Payments of other investing activities (1,197) (1,515) Net cash used in investing activities (161,240) (155,865) Financing activities Proceeds from bank and other loans 672,450 699,410 Repayments of bank and other loans (628,052) (599,954) Issue of new shares 11,995 – Contributions to subsidiaries from non-controlling interests 3,463 1,509 Dividends paid by the Company (42,108) (40,760) Distributions by subsidiaries to non-controlling interests (6,144) (7,977) Interest paid (7,912) (7,997) Payments made to acquire non-controlling interests (1,474) (203) Cash payments to purchase own shares (2,131) (2,325) Repayments of lease liabilities (19,654) (18,991) Proceeds from other financing activities 1,290 420 Payments of other financing activities (960) (400) Net cash (used in)/generated from financing activities (19,237) 22,732 Net (decrease)/increase in cash and cash equivalents (31,117) 28,342 Cash and cash equivalents at 1 January 121,759 93,438 Effect of foreign currency exchange rate changes 653 (21) Cash and cash equivalents at 31 December 91,295 121,759 The notes on pages 164 to 212 form part of these consolidated financial statements. 163 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 31 December 2024 (Amounts in million) (a) Reconciliation from profit before taxation to net cash generated from operating activities 31 December 31 December 2024 2023 RMB million RMB million Operating activities Profit before taxation 69,142 83,934 Adjustments for: Depreciation, depletion and amortisation 120,714 113,750 Dry hole costs written off 4,955 6,723 Share of profits from associates and joint ventures (8,961) (6,199) Investment income (669) (829) Interest income (5,935) (6,828) Interest expense 18,601 18,069 Gain on foreign currency exchange rate changes and derivative financial instruments (622) (249) Gain on disposal of property, plant, equipment and other assets, net (810) (2,995) Impairment losses on assets 6,702 8,772 Impairment losses/(reversals) on trade and other receivables 108 (243) 203,225 213,905 Net changes from: Accounts receivable and other current assets (7,864) 3,974 Inventories (10,117) (12,726) Accounts payable and other current liabilities (19,844) (29,489) 165,400 175,664 Income tax paid (16,040) (14,189) Net cash generated from operating activities 149,360 161,475 The notes on pages 164 to 212 form part of these consolidated financial statements. 164 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31 December 2024 1 PRINCIPAL ACTIVITIES, ORGANISATION, BASIS OF PREPARATION AND ACCOUNTING POLICY CHANGES Principal activities China Petroleum & Chemical Corporation (the “Company”) is an energy and chemical company incorporated in the People’s Republic of China (the “PRC”) that, through its subsidiaries (hereinafter collectively referred to as the “Group”), engages in oil and gas and chemical operations. Oil and gas operations consist of exploring for, developing and producing crude oil and natural gas; transporting crude oil and natural gas by pipelines; refining crude oil into finished petroleum products; and marketing crude oil, natural gas and refined petroleum products. Chemical operations include the manufacture and marketing of a wide range of chemicals for industrial uses. Organisation The Company was established in the PRC on 25 February 2000 as a joint stock limited company as part of the reorganisation (the “Reorganisation”) of China Petrochemical Corporation (“Sinopec Group Company”), the ultimate holding company of the Group and a ministry-level enterprise under the direct supervision of the State Council of the PRC. Prior to the incorporation of the Company, the oil and gas and chemical operations of the Group were carried on by oil administration bureaux, petrochemical and refining production enterprises and sales and marketing companies of Sinopec Group Company. As part of the Reorganisation, certain of Sinopec Group Company’s core oil and gas and chemical operations and businesses together with the related assets and liabilities were transferred to the Company. On 25 February 2000, in consideration for Sinopec Group Company transferring such oil and gas and chemical operations and businesses and the related assets and liabilities to the Company, the Company issued 68.8 billion domestic state-owned ordinary shares with a par value of RMB1.00 each to Sinopec Group Company. The shares issued to Sinopec Group Company on 25 February 2000 represented the entire registered and issued share capital of the Company on that date. The oil and gas and chemical operations and businesses transferred to the Company were related to (i) the exploration, development and production of crude oil and natural gas, (ii) the refining, transportation, storage and marketing of crude oil and petroleum products, and (iii) the production and sales of chemicals. Basis of preparation The accompanying consolidated financial statements have been prepared in accordance with all applicable IFRS Accounting Standards as issued by the International Accounting Standards Board (“IASB”). IFRS Accounting Standards includes International Accounting Standards (“IAS”) and related interpretations (“IFRIC”). These consolidated financial statements also comply with the applicable disclosure provisions of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited. A summary of the material accounting policies adopted by the Group are set out in Note 2. Accounting policy changes The accounting policies adopted are consistent with those of the previous financial year, except for the adoption of new and amended standards as set out below. (a) New and amended standards and interpretations adopted by the Group The IASB has issued the following amendments to IFRS Accounting Standards that are first effective for the current accounting period of the Group: • Amendments to IAS 1, Presentation of financial statements: Classification of liabilities as current or non-current (“2020 amendments”) • Amendments to IAS 1, Presentation of financial statements: Non-current liabilities with covenants (“2022 amendments”) The Group has not applied any new standard or interpretation that is not yet effective for the current accounting period. Impacts of the adoption of the new and amended IFRS Accounting Standards are discussed below: Amendments to IAS 1, Presentation of financial statements (“2020 and 2022 amendments”, or collectively the “IAS 1 amendments”) The IAS 1 amendments impact the classification of a liability as current or non-current, and are applied retrospectively as a package. The 2020 amendments primarily clarify the classification of a liability that can be settled in its own equity instruments. If the terms of a liability could, at the option of the counterparty, result in its settlement by the transfer of the entity’s own equity instruments and that conversion option is accounted for as an equity instrument, these terms do not affect the classification of the liability as current or non-current. Otherwise, the transfer of equity instruments would constitute settlement of the liability and impact classification. The 2022 amendments specify that conditions with which an entity must comply after the reporting date do not affect the classification of a liability as current or non-current. However, the entity is required to disclose information about non-current liabilities subject to such conditions in a full set of financial statements. Upon the adoption of the amendments, the Group has reassessed the classification of its liabilities as current or non-current and did not identify any reclassification to be made. 165 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 1 PRINCIPAL ACTIVITIES, ORGANISATION, BASIS OF PREPARATION AND ACCOUNTING POLICY CHANGES (Continued) (b) New and amended standards and interpretations not yet adopted by the Group A number of new accounting standards and interpretations have been published that are not mandatory for 31 December 2024 reporting periods and have not been early adopted by the Group. These standards are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions. The preparation of the consolidated financial statements in accordance with IFRS Accounting Standards requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Key assumptions and estimation made by management in the application of IFRS Accounting Standards that have significant effect on the consolidated financial statements and the major sources of estimation uncertainty are disclosed in Note 44. 2 MATERIAL ACCOUNTING POLICIES (a) Basis of consolidation The consolidated financial statements comprise the Company and its subsidiaries, and interest in associates and joint ventures. (i) Subsidiaries and non-controlling interests Subsidiaries are those entities controlled by the Group. The Group controls an entity when the Group 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. When assessing whether the Group has power, only substantive rights (held by the Group and other parties) are considered. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control effectively commences until the date that control effectively ceases. Non-controlling interests at the date of statement of financial position, being the portion of the net assets of subsidiaries attributable to equity interests that are not owned by the Company, whether directly or indirectly through subsidiaries, are presented in the consolidated statement of financial position and consolidated statement of changes in equity within equity, separately from equity attributable to the shareholders of the Company. Non-controlling interests in the results of the Group are presented on the face of the consolidated income statement and the consolidated statement of comprehensive income as an allocation of the total profit or loss and total comprehensive income for the year between non-controlling interests and the shareholders of the Company. Changes in the Group’s interests in a subsidiary that do not result in a loss of control are accounted for as equity transactions, whereby adjustments are made to the amounts of controlling and non-controlling interests within consolidated equity to reflect the change in relative interests, but no adjustments are made to goodwill and no gain or loss is recognised. If a business combination involving entities not under common control is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasurement are recognised in the consolidated income statement. When the Group loses control of a subsidiary, it is accounted for as a disposal of the entire interest in that subsidiary, with a resulting gain or loss being recognised in profit or loss. Any interest retained in that former subsidiary at the date when control is lost is recognised at fair value and this amount is regarded as the fair value on initial recognition of a financial asset (Note 2(j)) or, when appropriate, the cost on initial recognition of an investment in an associate or joint venture (Note 2(a)(ii)). In the Company’s statement of financial position, investments in subsidiaries are stated at cost less impairment losses (Note 2(n)). The particulars of the Group’s principal subsidiaries are set out in Note 42. 166 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 2 MATERIAL ACCOUNTING POLICIES (Continued) (a) Basis of consolidation (Continued) (ii) Associates and joint ventures An associate is an entity, not being a subsidiary, in which the Group exercises significant influence over its management. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. The investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations each investor has rather than the legal structure of the joint arrangement. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Investments in associates and joint ventures are accounted for in the consolidated and separate financial statements using the equity method from the date that significant influence or joint control commences until the date that significant influence or joint control ceases. Under the equity method, the investment is initially recorded at cost and adjusted thereafter for the post acquisition change in the Group’s share of the investee’s net assets and any impairment loss relating to the investment (Note 2(n)). The Group’s share of the post-acquisition, post-tax results of the investees and any impairment losses for the year are recognised in the consolidated income statement, whereas the Group’s share of the post-acquisition, post-tax items of the investees’ other comprehensive income is recognised in the consolidated statement of comprehensive income. When the Group’s share of losses exceeds its interest in the associate or the joint venture, the Group’s interest is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the investee. For this purpose, the Group’s interest is the carrying amount of the investment under the equity method, together with any other long-term interests that in substance form part of the Group’s net investment in the associate or the joint venture, after applying the expected credit losses (“ECLs”) model to such other long-term interests where applicable. When the Group ceases to have significant influence over an associate or joint control over a joint venture, it is accounted for as a disposal of the entire interest in that investee, with a resulting gain or loss being recognised in profit or loss. Any interest retained in that former investee at the date when significant influence or joint control is lost is recognised at fair value and this amount is regarded as the fair value on initial recognition of a financial asset (see Note 2(j)) or, when appropriate, the cost on initial recognition of an investment in an associate. (iii) Transactions eliminated on consolidation Inter-company balances and transactions and any unrealised gains arising from inter-company transactions are eliminated on consolidation. Unrealised gains arising from transactions with associates and joint ventures are eliminated to the extent of the Group’s interest in the entity. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. (iv) Merger accounting for common control combination The consolidated financial statements incorporate the financial statements of the combining entities or businesses in which the common control combination occurs as if they had been combined from the date when the combining entities or businesses first came under the control of the controlling party. The net assets of the combining entities or businesses are combined using the existing book values from the controlling parties’ perspective. No amount is recognised as consideration for goodwill or excess of acquirers’ interest in the net fair value of acquiree’s identifiable assets, liabilities and contingent liabilities over cost at the time of common control combination, to the extent of the continuation of the controlling party’s interest. The consolidated income statement includes the results of each of the combining entities or businesses from the earliest date presented or since the date when the combining entities or businesses first came under the common control, where there is a shorter period, regardless of the date of the common control combination. The comparative amounts in the consolidated financial statements are presented as if the entities or businesses had been combined at the beginning of the earliest period presented or when they first came under common control, whichever is shorter. A uniform set of accounting policies is adopted by those entities. All intra-group transactions, balances and unrealised gains on transactions between combining entities or businesses are eliminated on consolidation. Transaction costs, including professional fees, registration fees, costs of furnishing information to shareholders, costs or losses incurred in combining operations of the previously separate businesses, etc., incurred in relation to the common control combination that is to be accounted for by using merger accounting is recognised as an expense in the period in which it is incurred. 167 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 2 MATERIAL ACCOUNTING POLICIES (Continued) (b) Translation of foreign currencies The presentation currency of the Group is Renminbi. Foreign currency transactions during the year are translated into Renminbi at the applicable rates of exchange quoted by the People’s Bank of China (“PBOC”) prevailing on the transaction dates. Foreign currency monetary assets and liabilities are translated into Renminbi at the PBOC’s rates at the date of the statement of financial position. Exchange differences, other than those capitalised as construction in progress, are recognised as income or expense in the “finance costs” section of the consolidated income statement. The results of foreign operations are translated into Renminbi at the applicable rates quoted by the PBOC prevailing on the transaction dates. The statement of financial position items, including goodwill arising on consolidation of foreign operations are translated into Renminbi at the closing foreign exchange rates at the date of the statement of financial position. The income and expenses of foreign operation are translated into Renminbi at the spot exchange rates or an exchange rate that approximates the spot exchange rates on the transaction dates. The resulting exchange differences are recognised in other comprehensive income and accumulated in equity in the other reserves. On disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation is reclassified from equity to the consolidated income statement when the profit or loss on disposal is recognised. (c) Cash and cash equivalents Cash equivalents consist of time deposits with financial institutions with an initial term of less than three months when purchased. Cash equivalents are stated at cost, which approximates fair value. (d) Trade, bills and other receivables Trade, bills and other receivables are recognised initially at their transaction price, unless they contain significant financing components when they are recognised at fair value. They are subsequently measured at amortised cost using the effective interest method, less loss allowances for ECLs (Note 2(j)). Trade, bills and other receivables are derecognised if the Group’s contractual rights to the cash flows from these financial assets expire or if the Group transfers these financial assets to another party without retaining control or substantially all risks and rewards of the assets. (e) Inventories Inventories are stated at the lower of cost and net realisable value. Cost mainly includes the cost of purchase computed using the weighted average method and, in the case of work in progress and finished goods, direct labour and an appropriate proportion of production overheads. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. (f) Property, plant and equipment An item of property, plant and equipment is initially recorded at cost, less accumulated depreciation and impairment losses (Note 2(n)). The cost of an asset comprises its purchase price, any directly attributable costs of bringing the asset to working condition and location for its intended use. The Group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred, when it is probable that the future economic benefits embodied with the item will flow to the Group and the cost of the item can be measured reliably. All other expenditure is recognised as an expense in the consolidated income statement in the year in which it is incurred. Gains or losses arising from the retirement or disposal of an item of property, plant and equipment, other than oil and gas properties, are determined as the difference between the net disposal proceeds and the carrying amount of the item and are recognised as income or expense in the consolidated income statement on the date of retirement or disposal. Depreciation is provided to write off the cost amount of items of property, plant and equipment, other than oil and gas properties, over its estimated useful life on a straight-line basis, after taking into account its estimated residual value, as follows: Estimated usage period Estimated residuals rate Plants and buildings 12 to 50 years 3% Equipment, machinery and others 4 to 30 years 3% Where parts of an item of property, plant and equipment have different useful lives, the cost of the item is allocated on a reasonable basis between the parts and each part is depreciated separately. Both the useful life of an asset and its residual value, if any, are reassessed annually. 168 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 2 MATERIAL ACCOUNTING POLICIES (Continued) (g) Oil and gas properties The Group uses the successful efforts method of accounting for its oil and gas producing activities. Under this method, costs of development wells, the related supporting equipment and proved mineral interests in properties are capitalised. The cost of exploratory wells is initially capitalised as construction in progress pending determination of whether the well has found proved reserves. The impairment of exploratory well costs occurs upon the determination that the well has not found proved reserves. The exploratory well costs are usually not carried as an asset for more than one year following completion of drilling, unless (i) the well has found a sufficient quantity of reserves to justify its completion as a producing well if the required capital expenditure is made; (ii) drilling of the additional exploratory wells is under way or firmly planned for the near future; or (iii) other activities are being undertaken to sufficiently progress the assessing of the reserves and the economic and operating viability of the project. All other exploration costs, including geological and geophysical costs, other dry hole costs and annual lease rentals to explore for or use oil and natural gas, are expensed as incurred. Capitalised costs of proved oil and gas properties are amortised on a unit-of- production method based on volumes produced and reserves. Management estimates future dismantlement costs for oil and gas properties with reference to engineering estimates after taking into consideration the anticipated method of dismantlement required in accordance with the industry practices and the future cash flows are adjusted to reflect such risks specific to the liability, as appropriate. These estimated future dismantlement costs are discounted at pre-tax risk-free rate and are capitalised as oil and gas properties, which are subsequently amortised as part of the costs of the oil and gas properties. (h) Construction in progress Construction in progress represents buildings, oil and gas properties, various plant and equipment under construction and pending installation, and is stated at cost less impairment losses (Note 2(n)). Cost comprises direct costs of construction as well as interest charges, and foreign exchange differences on related borrowed funds to the extent that they are regarded as an adjustment to interest charges, during the periods of construction. Items may be produced while bringing an item of property, plant and equipment to the location and condition necessary for it to be capable of operating in the manner intended by management. The proceeds from selling any such items and the related costs are recognised in profit or loss. Construction in progress is transferred to property, plant and equipment when the asset is substantially ready for its intended use. No depreciation is provided in respect of construction in progress. (i) Goodwill Goodwill represents amounts arising on acquisition of subsidiaries, associates or joint ventures. Goodwill represents the difference between the cost of acquisition and the fair value of the net identifiable assets acquired. Prior to 1 January 2008, the acquisition of the non-controlling interests of a consolidated subsidiary was accounted for using the acquisition method whereby the difference between the cost of acquisition and the fair value of the net identifiable assets acquired (on a proportionate share) was recognised as goodwill. From 1 January 2008, any difference between the amount by which the non-controlling interest is adjusted (such as through an acquisition of the non-controlling interests) and the cash or other considerations paid is recognised in equity. Goodwill is stated at cost less accumulated impairment losses. Goodwill arising on a business combination is allocated to each cash-generating unit, or groups of cash-generating units, that is expected to benefit the synergies of the combination and is tested annually for impairment (Note 2(n)). In respect of associates or joint ventures, the carrying amount of goodwill is included in the carrying amount of the interest in the associate or joint venture and the investment as a whole is tested for impairment whenever there is objective evidence of impairment (Note 2(n)). (j) Financial assets (i) Classification and measurement The Group classifies financial assets into different categories depending on the business model for managing the financial assets and the contractual terms of cash flows of the financial assets: a) financial assets measured at amortised cost, b) financial assets measured at fair value through other comprehensive income (“FVOCI”), c) financial assets measured at fair value through profit or loss. A contractual cash flow characteristic which could have only a de minimis effect on the contractual cash flows of the financial assets, or could have an effect that is more than de minimis but is not genuine, does not affect the classification of the financial asset. Financial assets are initially recognised at fair value. For financial assets measured at fair value through profit or loss, the relevant transaction costs are recognised in profit or loss. The transaction costs for other financial assets are included in the initially recognised amount. However, trade accounts receivable and bills receivable arising from sale of goods or rendering services, without significant financing component, are initially recognised based on the transaction price expected to be entitled by the Group. 169 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 2 MATERIAL ACCOUNTING POLICIES (Continued) (j) Financial assets (Continued) (i) Classification and measurement (Continued) Debt instruments Debt instruments held by the Group mainly includes cash and cash equivalents, time deposits with financial institutions, receivables. These financial assets are measured at amortised cost and FVOCI. • 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. Equity instruments Equity instruments that the Group has no power to control, jointly control or exercise significant influence over, are measured at fair value through profit or loss and presented in financial assets at fair value through profit or loss. In addition, the Group designates some equity instruments that are not held for trading as financial assets at FVOCI, are presented in financial assets at FVOCI. The relevant dividends of these financial assets are recognised in profit or loss. When derecognised, the cumulative gain or loss previously recognised in other comprehensive income is transferred to retained earnings. (ii) Impairment The Group recognises a loss allowance for ECLs on a financial asset that is measured at amortised cost and a debt instrument that is measured at FVOCI. The Group measures and recognises ECLs, considering reasonable and supportable information about the relevant past events, current conditions and forecasts of future economic conditions. The Group measures the ECLs of financial instruments on different stages at each the date of the statement of financial position. For financial instruments that have no significant increase in credit risk since the initial recognition, on first stage, the Group measures the loss allowance at an amount equal to 12-month ECLs. If there has been a significant increase in credit risk since the initial recognition of a financial instrument but credit impairment has not occurred, on second stage, the Group recognises a loss allowance at an amount equal to lifetime ECLs. If credit impairment has occurred since the initial recognition of a financial instrument, on third stage, the Group recognises a loss allowance at an amount equal to lifetime ECLs. For financial instruments that have low credit risk at the date of the statement of financial position, the Group assumes that there is no significant increase in credit risk since the initial recognition, and measures the loss allowance at an amount equal to 12-month ECLs. For financial instruments on the first stage and the second stage, and that have low credit risk, the Group calculates interest income according to carrying amount without deducting the impairment allowance and effective interest rate. For financial instruments on the third stage, interest income is calculated according to the carrying amount minus amortised cost after the provision of impairment allowance and effective interest rate. For trade accounts receivable and bills receivable and financial assets at FVOCI related to revenue, the Group measures the loss allowance at an amount equal to lifetime ECLs. The Group recognises the loss allowance accrued or written back in profit or loss. (iii) Derecognition The Group derecognises a financial asset when: a) the contractual right to receive cash flows from the financial asset expires; b) the Group transfers the financial asset and substantially all the risks and rewards of ownership of the financial asset; c) the financial asset has been transferred and the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset, but the Group has not retained control. On derecognition of equity instruments at FVOCI, the amount accumulated in the fair value reserve is transferred to retained earnings. It is not recycled through profit or loss. While on derecognition of other financial assets, this difference is recognised in profit or loss. 170 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 2 MATERIAL ACCOUNTING POLICIES (Continued) (j) Financial assets (Continued) (iv) Financial guarantees issued Financial guarantees are contracts that require the issuer (i.e. the guarantor) to make specified payments to reimburse the beneficiary of the guarantee (the “holder”) for a loss the holder incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument. Financial guarantees issued are initially recognised at fair value, which is determined by reference to fees charged in an arm’s length transaction for similar services, when such information is obtainable, or to interest rate differentials, by comparing the actual rates charged by lenders when the guarantee is made available with the estimated rates that lenders would have charged, had the guarantees not been available, where reliable estimates of such information can be made. Where consideration is received or receivable for the issuance of the guarantee, the consideration is recognised in accordance with the Group’s policies applicable to that category of asset. Where no such consideration is received or receivable, an immediate expense is recognised in profit or loss. Subsequent to initial recognition, the amount initially recognised as deferred income is amortised in profit or loss over the term of the guarantee as income from financial guarantees issued. The Group monitors the risk that the specified debtor will default on the contract and recognises a provision when ECLs on the financial guarantees are determined to be higher than the carrying amount in respect of the guarantees (i.e. the amount initially recognised, less accumulated amortisation). (k) Financial liabilities The Group, at initial recognition, classifies financial liabilities as either financial liabilities subsequently measured at amortised cost or financial liabilities at fair value through profit or loss. The Group’s financial liabilities are mainly financial liabilities measured at amortised cost, including trade accounts payable and bills payable, other payables, and loans, etc. These financial liabilities are initially measured at the amount of their fair value after deducting transaction costs and use the effective interest rate method for subsequent measurement. Where the present obligations of financial liabilities are completely or partially discharged, the Group derecognises these financial liabilities or discharged parts of obligations. The differences between the carrying amounts and the consideration received are recognised in profit or loss. (l) Determination of fair value for financial instruments If there is an active market for financial instruments, the quoted price in the active market is used to measure fair values of the financial instruments. If no active market exists for financial instruments, valuation techniques are used to measure fair values. In valuation, the Group adopts valuation techniques that are applicable in the current situation and have sufficient available data and other information to support it, and selects input values that are consistent with the asset or liability characteristics considered by market participants in the transaction of relevant assets or liabilities, and gives priority to relevant observable input values. Use of unobservable input values where relevant observable input values cannot be obtained or are not practicable. (m) Derivative financial instruments and hedge accounting Derivative financial instruments are recognised initially at fair value. At each date of the statement of financial position, the fair value is remeasured. The gain or loss on remeasurement to fair value is recognised immediately in profit or loss, except where the derivatives qualify for hedge accounting. Hedge accounting is a method which recognises the offsetting effects on profit or loss (or other comprehensive income) of changes in the fair values of the hedging instrument and the hedged item in the same accounting period, to represent the effect of risk management activities. Hedged items are the items that expose the Group to risks of changes in future cash flows and that are designated as being hedged and that must be reliably measurable. The Group’s hedged items include a forecast transaction that is settled with an undetermined future market price and exposes the Group to risk of variability in cash flows, etc. A hedging instrument is a designated derivative whose changes in cash flows are expected to offset changes in cash flows of the hedged item. The hedging relationship meets all of the following hedge effectiveness requirements: (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. 171 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 2 MATERIAL ACCOUNTING POLICIES (Continued) (m) Derivative financial instruments and hedge accounting (Continued) Cash flow hedges Cash flow hedge is a hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with all, or a component of, a recognised asset or liability (such as all or some future interest payments on variable-rate debt) or a highly probable forecast transaction, and could affect profit or loss. Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument. If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in the hedging reserve is immediately reclassified through OCI to profit or loss. As long as a cash flow hedge meets the qualifying criteria for hedge accounting, the separate component of equity associated with the hedged item (cash flow hedge reserve) is adjusted to the lower of the following (in absolute amounts): (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. The gain or loss on the hedging instrument that is determined to be an effective hedge is recognised in other comprehensive income. The portion of the gain or loss on the hedging instrument that is determined to be an ineffective hedge is recognised in profit or loss. If a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability, or a hedged forecast transaction for a non-financial asset or a non-financial liability becomes a firm commitment for which fair value hedge accounting is applied, the entity removes that amount from the cash flow hedge reserve and include it directly in the initial cost or other carrying amount of the asset or the liability. This is not a reclassification adjustment and hence it does not affect other comprehensive income. If the amount that has been accumulated in the cash flow hedge reserve is a loss and the Group expects that all or a portion of that loss will not be recovered in one or more future periods, the Group immediately reclassifies the amount that is not expected to be recovered into profit or loss. When the hedging relationship no longer meets the risk management objective on the basis of which it qualified for hedge accounting (ie the entity no longer pursues that risk management objective), or when a hedging instrument expires or is sold, terminated, exercised, or there is no longer an economic relationship between the hedged item and the hedging instrument or the effect of credit risk starts to dominate the value changes that result from that economic relationship or no longer meets the criteria for hedge accounting, the Group discontinues prospectively the hedge accounting treatments. If the hedged future cash flows are no longer expected to occur, that amount remains in the cash flow hedge reserve and is accounted for as cash flow hedges. If the hedged future cash flows are no longer expected to occur, that amount is immediately reclassified from the cash flow hedge reserve to profit or loss as a reclassification adjustment. A hedged future cash flow that is no longer highly probable to occur may still be expected to occur, if the hedged future cash flows are still expected to occur, that amount remains in the cash flow hedge reserve and is accounted for as cash flow hedges. Fair value hedges A fair value hedge is a hedge of the exposure to changes in the fair value of a recognised asset or liability or an unrecognised firm commitment, or a portion of such an asset, liability or firm commitment. The gain or loss from remeasuring the hedging instrument is recognised in profit or loss. The gain or loss on the hedged item attributable to the hedged risk adjusts the carrying amount of the recognised hedged item not measured at fair value and is recognised in profit or loss. Any adjustment to the carrying amount of a hedged item is amortised to profit or loss if the hedged item is a financial instrument (or a component thereof) measured at amortised cost. The amortisation is based on a recalculated effective interest rate at the date that amortisation begins. (n) Impairment of assets The carrying amounts of assets, including property, plant and equipment, construction in progress, right-of-use assets and other assets, are reviewed at each date of the statement of financial position to identify indicators that the assets may be impaired. These assets are tested for impairment whenever events or changes in circumstances indicate that their recorded carrying amounts may not be recoverable. When such a decline has occurred, the carrying amount is reduced to the recoverable amount. For goodwill, the recoverable amount is estimated at each date of the statement of financial position. The recoverable amount is the greater of the fair value less costs to disposal and the value in use. In determining the value in use, expected future cash flows generated by the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where an asset does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the smallest group of assets that generates cash inflows independently (i.e. a cash-generating unit). 172 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 2 MATERIAL ACCOUNTING POLICIES (Continued) (n) Impairment of assets (Continued) The amount of the reduction is recognised as an expense in the consolidated income statement. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit and then, to reduce the carrying amount of the other assets in the unit on a pro rata basis, except that the carrying value of an asset will not be reduced below its individual fair value less costs to disposal, or value in use, if determinable. Management assesses at each date of the statement of financial position whether there is any indication that an impairment loss recognised for an asset, except in the case of goodwill, in prior years may no longer exist. An impairment loss is reversed if there has been a favourable change in the estimates used to determine the recoverable amount. A subsequent increase in the recoverable amount of an asset, when the circumstances and events that led to the write-down or write-off cease to exist, is recognised as an income. The reversal is reduced by the amount that would have been recognised as depreciation had the write-down or write-off not occurred. An impairment loss in respect of goodwill is not reversed. (o) Trade, bills and other payables Trade, bills and other payables generally are financial liabilities and are initially recognised at fair value and thereafter stated at amortised cost unless the effect of discounting would be immaterial, in which case they are stated at invoice amounts. (p) Interest-bearing borrowings Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest- bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the consolidated income statement over the period of borrowings using the effective interest method. (q) Provisions and contingent liability A provision is recognised for liability of uncertain timing or amount when the Group has a legal or constructive obligation arising as a result of a past event, when it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. When it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote. Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, a separate asset is recognised for any expected reimbursement that would be virtually certain. The amount recognised for the reimbursement is limited to the carrying amount of the provision. Provisions for future dismantlement costs are initially recognised based on the present value of the future costs expected to be incurred in respect of the Group’s expected dismantlement and abandonment costs at the end of related oil and gas exploration and development activities. Any subsequent change in the present value of the estimated costs, other than the change due to passage of time which is regarded as interest cost, is reflected as an adjustment to the provision and oil and gas properties. An onerous contract exists when the Group has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received from the contract. Provisions for onerous contracts are measured at the present value of the lower of the expected cost of terminating the contract and the net cost of continuing with the fulfilling the contract. The cost of fulfilling the contract includes both the incremental costs of fulfilling that contract and an allocation of other costs that relate directly to fulfilling that contract. (r) Revenue recognition Revenue arises in the course of the Group’s ordinary activities, and increases in economic benefits in the form of inflows that result in an increase in equity, other than those relating to contributions from equity participants. The Group sells crude oil, natural gas, petroleum and chemical products, etc. Revenue is recognised according to the expected consideration amount, when a customer obtains control over the relevant goods or services. To determine whether a customer obtains control of a promised goods or services (assets), the Group shall consider indicators of the transfer of control, which include, but are not limited to, the Group has a present right to payment for the assets; the Group has transferred physical possession of the assets to the customer; the customer has the significant risks and rewards of ownership of the assets; the customer has accepted the assets. 173 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 2 MATERIAL ACCOUNTING POLICIES (Continued) (r) Revenue recognition (Continued) Sales of goods Sales are recognised when control of the goods have transferred. Obtaining control of relevant goods means that a customer can direct the use of the goods and obtain almost all the economic benefits from it. Advance from customers but goods not yet delivered is recorded as contract liabilities and is recognised as revenues when a customer obtains control over the relevant goods. The Group determines whether it is a principal or an agent, based on whether it obtains control of the specified good or service before that good or service is transferred to a customer. The Group is a principal if it controls the specified good or service before that good or service is transferred to a customer, and recognises revenue in the gross amount of consideration which it has received (or which is receivable). Otherwise, the Group is an agent, and recognises revenue in the amount of any fee or commission to which it expects to be entitled. The fee or commission is the net amount of consideration that the Group retains after paying the other party the consideration, or is determined according to the established amount or proportion. The circumstances in which the Group is able to control the goods before transferring them to customers include: – The Group acquires control of the goods or other assets from a third party and then transfers them to the customer; – The Group is able to lead third parties to provide services to customers on behalf of the Group; – After the Group acquires control of a product from a third party, it transfers the product to a customer by integrating the product with other products into a combination of products through the provision of significant services; In determining whether the Group has control over the goods before the transfer of the goods to the customer, the Group takes into account all relevant facts and circumstances, including: – The Group bears the primary responsibility for the transfer of goods to customers; – The Group assumes the inventory risk of the goods before or after the transfer of the goods; – The Group reserves the right to determine the price of the products it trades at its own discretion. (s) Government grants Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions. Government grants relating to costs are deferred and recognised in the profit or loss over the period necessary to match them with the costs that they are intended to compensate. Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are recognised to profit or loss on a straight-line basis over the expected lives of the related assets. (t) Borrowing costs Borrowing costs are expensed in the consolidated income statement in the period in which they are incurred, except to the extent that they are capitalised as being attributable to the construction of an asset which necessarily takes a period of time to get ready for its intended use. (u) Repairs and maintenance expenditure Repairs and maintenance expenditure is expensed as incurred. (v) Environmental expenditures Environmental expenditures that relate to current ongoing operations or to conditions caused by past operations are expensed as incurred. Liabilities related to future remediation costs are recorded when environmental assessments and/or cleanups are probable and the costs can be reliably estimated. As facts concerning environmental contingencies become known to the Group, the Group reassesses its position both with respect to accrued liabilities and other potential exposures. (w) Research and development expense Research and development expenditures that cannot be capitalised are expensed in the period in which they are incurred. Research and development expense amounted to RMB15,215 million for the year ended 31 December 2024 (2023: RMB13,969 million). 174 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 2 MATERIAL ACCOUNTING POLICIES (Continued) (x) Leases A lease is a contract that a lessor transfers the right to use an identified asset for a period of time to a lessee in exchange for consideration. (i) As lessee The Group recognises a right-of-use asset at the date at which the leased asset is available for use by the Group, and recognises a lease liability measured at the present value of the remaining lease payments. The lease payments include fixed payments, the exercise price of a purchase option if the Group is reasonably certain to exercise that option, and payments of penalties for terminating the lease if the lease term reflects the Group exercising that option, etc. Variable payments that are based on a percentage of sales are not included in the lease payments, and should be recognised in profit or loss when incurred. Lease liabilities to be paid within one year (including one year) from the date of the statement of financial position is presented in current liabilities. Right-of-use assets of the Group mainly comprise land. Right-of-use assets are measured at cost which comprises the amount of the initial measurement of the lease liability, any lease payments made at or before the commencement date, any initial direct costs incurred by the lessee, less any lease incentives received. The Group depreciates the right-of-use assets over the shorter of the asset’s useful life and the lease term on a straight-line basis. When the recoverable amount of a right-of-use asset is less than its carrying amount, the carrying amount is reduced to the recoverable amount. Payments associated with short-term leases with lease terms within 12 months and all leases of low-value assets are recognised on a straight-line basis over the lease term as an expense in profit or loss or as cost of relevant assets, instead of recognising right-of-use assets and lease liabilities. A lessee shall account for a lease modification as a separate lease if both: (1) the modification increases the scope of the lease by adding the right to use one or more underlying assets; and (2) the consideration for the lease increases by an amount commensurate with the stand- alone price for the increase in scope and any appropriate adjustments to that stand-alone price to reflect the circumstances of the articular contract. The lease liability is also remeasured when there is a lease modification, which means a change in the scope of a lease or the consideration for a lease that is not originally provided for in the lease contract, if such modification is not accounted for as a separate lease. In this case, the lease liability is remeasured based on the revised lease payments and lease term using a revised discount rate at the effective date of the modification.The Group decrease the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease for lease modifications that decrease the scope or shorten the term of the lease, and shall recognise in profit or loss any gain or loss relating to the partial or full termination of the lease. The Group make a corresponding adjustment to the right-of-use asset for all other lease modifications. (ii) As lessor A lease that transfers substantially all the risks and rewards incidental to ownership of an asset is a finance lease. An operating lease is a lease other than a finance lease. When the Group leases self-owned plants and buildings, equipment and machinery, lease income from an operating lease is recognised on a straight-line basis over the period of the lease. The Group recognises variable lease income which is based on a certain percentage of sales as rental income when occurred. (y) Employee benefits The contributions payable under the Group’s retirement plans are recognised as an expense in the consolidated income statement as incurred and according to the contribution determined by the plans. Further information is set out in Note 40. Termination benefits, such as employee reduction expenses, are recognised when, and only when, the Group demonstrably commits itself to terminate employment or to provide benefits as a result of voluntary redundancy by having a detailed formal plan which is without realistic possibility of withdrawal. (z) Income tax Income tax comprises current and deferred tax. Current tax is calculated on taxable income by applying the applicable tax rates. Deferred tax is provided using the statement of financial position liability method on all temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes only to the extent that it is probable that future taxable income will be available against which the assets can be utilised. Deferred tax is calculated on the basis of the enacted tax rates or substantially enacted tax rates that are expected to apply in the period when the asset is realised or the liability is settled. The effect on deferred tax of any changes in tax rates is charged or credited to the consolidated income statement, except for the effect of a change in tax rate on the carrying amount of deferred tax assets and liabilities which were previously charged or credited to other comprehensive income or directly in equity. The tax value of losses expected to be available for utilisation against future taxable income is set off against the deferred tax liability within the same legal tax unit and jurisdiction to the extent appropriate, and is not available for set off against the taxable profit of another legal tax unit. The carrying amount of a deferred tax asset is reviewed at each date of statement of financial position and is reduced to the extent that it is no longer probable that the related tax benefit will be realised. 175 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 2 MATERIAL ACCOUNTING POLICIES (Continued) (aa) Dividends Dividends and distributions of profits proposed in the profit appropriation plan which will be authorised and declared after the date of statement of financial position, are not recognised as a liability at the date of statement of financial position and are separately disclosed in the notes to the financial statements. Dividends are recognised as a liability in the period in which they are declared. (bb) Segment reporting Operating segments, and the amounts of each segment item reported in the consolidated financial statements, are identified from the financial information provided regularly to the Group’s chief operating decision maker for the purposes of allocating resources to, and assessing the performance of the Group’s various lines of business. 3 REVENUE FROM PRIMARY BUSINESS Revenue from primary business mainly represents revenue from the sales of refined petroleum products, chemical products, crude oil and natural gas, which are recognised at a point in time. 2024 2023 RMB million RMB million Gasoline 847,815 861,453 Diesel 653,111 722,307 Crude oil 365,045 412,488 Chemical feedstock 41,994 38,039 Basic organic chemicals 219,608 210,216 Synthetic resin 124,780 132,625 Kerosene 231,214 216,456 Natural gas 91,015 79,681 Synthetic fiber monomers and polymers 42,880 34,059 Others (i) 397,859 439,549 3,015,321 3,146,873 Note: (i) Others are primarily liquefied petroleum gas and other refinery and chemical by-products and joint products. 4 OTHER OPERATING REVENUES 2024 2023 RMB million RMB million Sale of materials and others 57,785 63,990 Rental income 1,456 1,352 59,241 65,342 5 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES The following items are included in selling, general and administrative expenses: 2024 2023 RMB million RMB million Variable lease payments, low-value and short-term lease payment 2,362 2,344 Auditor’s remuneration: – Audit services 69 71 – Others 7 7 6 PERSONNEL EXPENSES 2024 2023 RMB million RMB million Salaries, wages and other benefits 95,694 94,085 Contributions to retirement schemes (Note 40) 14,493 13,932 110,187 108,017 176 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 7 TAXES OTHER THAN INCOME TAX 2024 2023 RMB million RMB million Consumption tax (i) 215,245 215,483 City construction tax (ii) 18,010 17,478 Special oil income levy 5,112 6,223 Education surcharge (ii) 13,255 12,847 Resources tax 8,466 8,230 Levy for mineral rights concessions (礦業權出讓收益) 1,574 7,412 Others 5,653 5,248 267,315 272,921 Notes: (i) Consumption tax was levied based on sales quantities of taxable products, tax rates of respective products are 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 2024 2023 RMB million RMB million Government grants (i) 12,714 11,587 Ineffective portion of change in fair value of cash flow hedges 918 2,029 Net realised and unrealised loss on derivative financial instruments not qualified as hedging (113) (4,744) Impairment losses on long-lived assets (ii) (2,412) (2,636) Gain on disposal of property, plant, equipment and other assets, net 810 2,995 Fines, penalties and compensations (431) (43) Donations (293) (310) Others (209) 222 10,984 9,100 Notes: (i) Government grants for the years ended 31 December 2024 and 2023 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 2024 primarily represent impairment losses recognised in the exploration and production (“E&P”) segment of RMB211 million (2023: RMB887 million), the chemicals segment of RMB1,547 million (2023: RMB1,280 million), the refining segment of RMB230 million (2023: RMB191 million), and the marketing and distribution segment of RMB424 million (2023:RMB278 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 downward revision of oil and gas reserve in certain fields and high lifting cost. 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 Group determines the crude oil and natural gas production for the forecast period and the number of years in the forecast period for impairment assessment based on the results of proved reserves. Meanwhile, the Group determines the sales prices of crude oil and natural gas for the forecast period, taking into account the analysis of the domestic and international economic situation as well as the relationship between energy supply and demand. 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 7.06% to 15.82%(2023: 7.86% to 15.94%). 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 RMB1,552 million (2023: RMB1,418 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 RMB782 million (2023: RMB634 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 RMB1 million (2023: RMB8 million). The impairment provisions for the chemical and refining segments are related to the refining and chemical production facilities, mainly due to sustained lower than expected economic performance of individual production units or having a clear shutdown plan in place, resulting in their book value being written down to their recoverable amount. The impairment provisions for the marketing and distribution segment is mainly due to the fact that the gas station is closed, so its book value is written down to the recoverable amount. The recoverable amount mainly considers the profit forecast approved by the management for a five-year period, which refers to the historical operating performance of relevant refining and chemical production facilities and is adjusted according to the development trends of the refining and chemical industry. The predicted cash flow after five years will remain stable, and the pre-tax discount rate is calculated based on the weighted average cost of capital, which is 8.00% to 16.76% (2023: 10.30% to 16.50%). 177 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 9 INTEREST EXPENSE 2024 2023 RMB million RMB million Interest expense incurred 10,525 9,807 Less: Interest expense capitalised* (1,470) (1,788) 9,055 8,019 Interest expense on lease liabilities 8,767 8,951 Accretion expenses (Note 36) 779 1,099 Interest expense 18,601 18,069 * Interest rates per annum at which borrowing costs were capitalised for construction in progress 2.00% to 3.90% 1.70% to 4.25% 10 INVESTMENT INCOME 2024 2023 RMB million RMB million Investment income from disposal of business and long-term equity investments 97 303 Dividend income from holding of other equity instrument investments 55 10 Others 517 516 669 829 11 INCOME TAX EXPENSE Income tax expense in the consolidated income statement represents: 2024 2023 RMB million RMB million Current tax – Provision for the year 12,536 15,098 – Adjustment of prior years (1,239) (1,470) Deferred taxation (Note 29) 1,669 2,442 12,966 16,070 Reconciliation between actual income tax expense and the expected income tax expense at applicable statutory tax rates is as follows: 2024 2023 RMB million RMB million Profit before taxation 69,142 83,934 Expected PRC income tax expense at a statutory tax rate of 25% 17,286 20,984 Tax effect of non-deductible expenses 2,503 3,049 Tax effect of non-taxable income (3,917) (3,577) Tax effect of preferential tax rate (i) (2,763) (3,117) Effect of income taxes at foreign operations (253) (846) Tax effect of utilisation of previously unrecognised tax losses and temporary differences (152) (399) Tax effect of tax losses not recognised and temporary differences 1,267 1,374 Write-down of deferred tax assets 234 72 Adjustment of prior years (1,239) (1,470) Actual income tax expense 12,966 16,070 Note: (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%. 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. 178 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 12 DIRECTORS’ AND SUPERVISORS’ EMOLUMENTS (a) Directors’ and supervisors’ emoluments The emoluments of every director and supervisor is set out below: 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 2024 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 – – – – – Zhao Dong (i) 176 608 68 – 852 Yu Baocai 322 650 134 – 1,106 Li Yonglin – – – – – Lv Lianggong – – – – – Zhong Ren (iii) – – – – – Niu Shuanwen (iv) – – – – Wan Tao (iv) – – – – Independent non-executive directors Cai Hongbin (vi) – – – 188 188 Johnny Karling Ng (vi) – – – 188 188 Shi Dan (vi) – – – 188 188 Bi Mingjian (vi) – – – 188 188 Xu Lin (v) – – – 321 321 Zhang Liying (v) – – – 321 321 Liu Tsz Bun Bennett (v) – – – 321 321 Zhang Xiliang (v) – – – 321 321 Supervisors Zhang Shaofeng – – – – – Qiu Fasen (viii) – – – – – Wu Bo (ii) – – – – – Zhai Yalin (viii) – – – – – Yin Zhaolin (viii) 198 1,142 48 – 1,388 Guo Hongjin (viii) 197 800 61 – 1,058 Chen Yaohuan (viii) 209 775 61 – 1,045 Wang An (vii) – – – – – Dai Liqi (vii) – – – – – Tan Wenfang (vii) – – – – – Yang Yanfei (vii) – – – – – Zhou Meiyun (vii) – – – – – Zhang Zheng (vii) 211 129 64 – 404 Bian Fengming (vii) 211 129 64 – 404 Zhang Chunsheng (vii) 240 116 54 – 410 Total 1,764 4,349 554 2,036 8,703 179 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 12 DIRECTORS’ AND SUPERVISORS’ EMOLUMENTS (Continued) (a) Directors’ and supervisors’ emoluments (Continued) The emoluments of every director and supervisor is set out below: (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 2023 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 – – – – – Zhao Dong – – – – – Yu Baocai 317 675 131 – 1,123 Ling Yiqun (ix) – – – – – Li Yonglin – – – – – Liu Hongbin (x) 108 80 42 – 230 Lv Lianggong (xii) – – – – – Independent non-executive directors Cai Hongbin – – – 450 450 Johnny Karling Ng – – – 450 450 Shi Dan – – – 450 450 Bi Mingjian – – – 450 450 Supervisors Zhang Shaofeng – – – – – Qiu Fasen – – – – – Zhang Zhiguo (xi) – – – – – Wu Bo – – – – – Zhai Yalin – – – – – Yin Zhaolin 401 503 97 – 1,001 Guo Hongjin 372 1,072 121 – 1,565 Chen Yaohuan 384 1,045 121 – 1,550 Total 1,582 3,375 512 1,800 7,269 Notes: (i) Mr. Zhao Dong was elected to be executive director from 28 April 2024. (ii) Due to change of working arrangement, Mr. Wu Bo has tendered his resignation as supervisor on 13 May 2024. (iii) Mr. Zhong Ren was elected to be non-executive director from 28 June 2024. (iv) Mr. Niu Shuanwen was elected to be executive director from 28 June 2024; Mr. Wan Tao was elected to be executive director from 28 June 2024. (v) Mr. Xu Lin was elected to be independent non-executive director from 28 June 2024; Ms. Zhang Liying was elected to be independent non-executive director from 28 June 2024; Mr. Liu Tsz Bun Bennett was elected to be independent non-executive director from 28 June 2024; Mr. Zhang Xiliang was elected to be independent non-executive director from 28 June 2024. (vi) Mr. Cai Hongbin ceased being independent non-executive director from 28 June 2024; Mr. Johnny Karling Ng ceased being independent non-executive director from 28 June 2024; Ms. Shi Dan ceased being independent non-executive director from 28 June 2024; Mr. Bi Mingjian ceased being independent non-executive director from 28 June 2024. (vii) Mr. Wang An was elected to be supervisor from 28 June 2024; Mr. Dai Liqi was elected to be supervisor from 28 June 2024; Mr. Tan Wenfang was elected to be supervisor from 28 June 2024; Mr. Yang Yanfei was elected to be supervisor from 28 June 2024; Mr. Zhou Meiyun was elected to be supervisor from 28 June 2024. Mr. Zhang Zheng was elected to be supervisor from 28 June 2024; Mr. Bian Fengming was elected to be supervisor from 28 June 2024; Mr. Zhang Chunsheng was elected to be supervisor from 28 June 2024. (viii) Mr. Qiu Fasen ceased being supervisor from 28 June 2024; Mr. Zhai Yalin ceased being supervisor from 28 June 2024; Mr. Guo Hongjin ceased being supervisor from 28 June 2024. Mr. Yin Zhaolin ceased being supervisor from 28 June 2024; Mr. Chen Yaohuan ceased being supervisor from 28 June 2024. 180 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 12 DIRECTORS’ AND SUPERVISORS’ EMOLUMENTS (Continued) (a) Directors’ and supervisors’ emoluments (Continued) Notes: (Continued) (ix) Mr. Ling Yiqun ceased being director from 26 April 2023. (x) Mr. Liu Hongbin ceased being director from 16 May 2023. (xi) Mr. Zhang Zhiguo ceased being supervisor from 19 May 2023. (xii) Mr. Lv Lianggong was elected to be director from 30 May 2023. 13 SENIOR MANAGEMENT’S EMOLUMENTS For the year ended 31 December 2024, the five highest paid individuals in the Company included one director, one supervisor and three senior management. The total salaries, wages and other benefits was RMB6,134 thousand, and the total amount of their retirement scheme contributions was RMB558 thousand. For the year ended 31 December 2023, the five highest paid individuals in the Company included one director, two supervisors and two senior management. Number of individuals 2024 2023 Emoluments HKD1,000,001 to HKD1,500,000 3 1 HKD1,500,001 to HKD2,000,000 2 4 During 2024 and 2023, the Company did not incur any emoluments paid or receivable in respect of a person accepting office as a director, or any payments to any director for loss of office. 14 DIVIDENDS Dividends payable to shareholders of the Company attributable to the year represent: 2024 2023 RMB million RMB million Dividends declared and paid during the year of RMB0.146 per share (2023: RMB0.145 per share) 17,768 17,380 Dividends declared after the date of the statement of financial position of RMB0.140 per share (2023: RMB0.200 per share) 16,979 23,870 34,747 41,250 Pursuant to the approval at the director’s meeting on 23 August 2024, the interim dividends for the year ended 31 December 2024 of RMB0.146 (2023: RMB0.145) per share totaling RMB17,768 million (2023: RMB17,380 million) were approved. Dividends were paid on 13 September 2024. Pursuant to a resolution passed at the director’s meeting on 21 March 2025, final dividends in respect of the year ended 31 December 2024 of RMB0.140 (2023: RMB0.200) per share totaling RMB16,979 million (2023: RMB23,870 million based on share number at 31 December 2023) based on share number at 31 December 2024 were proposed for shareholders’ approval at the Annual General Meeting. Final cash dividend proposed after the date of the statement of financial position has not been recognised as a liability at the date of the statement of financial position. Dividends payable to shareholders of the Company attributable to the previous financial year, approved during the year represent: 2024 2023 RMB million RMB million Final cash dividends in respect of the previous financial year, approved during the year of RMB0.200 per share (2023: RMB0.195 per share) 24,340 23,380 Pursuant to the shareholders’ approval at the Annual General Meeting on 28 June 2024, a final dividend of RMB0.200 per share totaling RMB24,340 million according to total shares on 15 July 2024 was approved. All dividends have been paid in the year ended 31 December 2024. Pursuant to the shareholders’ approval at the Annual General Meeting on 30 May 2023, a final dividend of RMB0.195 per share totaling RMB23,380 million according to total shares on 20 June 2023 was approved. All dividends have been paid in the year ended 31 December 2023. 181 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 15 OTHER COMPREHENSIVE INCOME 2024 2023 Before tax Tax Net of tax Before tax Tax Net of tax amount effect amount amount effect 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 (1,193) 243 (950) 7,420 (1,075) 6,345 Reclassification adjustments for amounts transferred to the consolidated income statement (562) 30 (532) (1,245) 234 (1,011) Net movement during the year recognised in other comprehensive income (i) (1,755) 273 (1,482) 6,175 (841) 5,334 Changes in the fair value of instruments at fair value through other comprehensive income (8) 5 (3) (13) 5 (8) Net movement during the year recognised in other comprehensive income (8) 5 (3) (13) 5 (8) Share of other comprehensive income of associates and joint ventures (3,507) – (3,507) (6,683) – (6,683) Foreign currency translation differences 2,006 – 2,006 1,946 – 1,946 Other comprehensive income (3,264) 278 (2,986) 1,425 (836) 589 Note: (i) As at 31 December 2024, cash flow hedge reserve amounted to a gain of RMB3,338 million (31 December 2023: a gain of RMB5,758 million), of which a gain of RMB3,253 million was attributable to shareholders of the Company (31 December 2023: a gain of RMB5,656 million). 16 BASIC AND DILUTED EARNINGS PER SHARE The calculation of basic earnings per share for the year ended 31 December 2024 is based on the profit attributable to ordinary shareholders of the Company of RMB48,939 million (2023:RMB58,310 million) and the weighted average number of shares of approximately 121,138 million (2023: approximately 119,811 million) during the year. There are no potential dilutive ordinary shares, and diluted earnings per share are equal to the basic earning per share. 182 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 17 PROPERTY, PLANT AND EQUIPMENT Equipment, Plants and Oil and gas, machinery buildings properties and others Total RMB million RMB million RMB million RMB million Cost: Balance at 1 January 2023 152,432 840,719 1,105,325 2,098,476 Additions 250 1,681 2,348 4,279 Transferred from construction in progress 6,163 54,374 90,823 151,360 Reclassifications 1,817 (416) (1,401) – Invested into joint ventures and associates – – (19) (19) Reclassification to other long-term assets (69) (399) (2,027) (2,495) Disposals (2,246) (257) (23,745) (26,248) Exchange adjustments 38 751 60 849 Balance at 31 December 2023 158,385 896,453 1,171,364 2,226,202 Balance at 1 January 2024 158,385 896,453 1,171,364 2,226,202 Additions 427 1,989 2,895 5,311 Transferred from construction in progress 8,215 49,479 62,446 120,140 Reclassifications 1,915 (855) (1,060) – Transferred to other long-term assets (204) (127) (803) (1,134) Disposals (990) (41) (17,815) (18,846) Exchange adjustments 47 677 63 787 Balance at 31 December 2024 167,795 947,575 1,217,090 2,332,460 Accumulated depreciation and impairment losses: Balance at 1 January 2023 72,795 697,612 697,369 1,467,776 Depreciation for the year 4,930 31,525 52,057 88,512 Impairment losses for the year 149 775 1,567 2,491 Reclassifications 230 (406) 176 – Invested into joint ventures and associates – – (6) (6) Transferred to other long-term assets (36) (396) (925) (1,357) Written back on disposals (1,636) (294) (20,969) (22,899) Exchange adjustments 19 730 39 788 Balance at 31 December 2023 76,451 729,546 729,308 1,535,305 Balance at 1 January 2024 76,451 729,546 729,308 1,535,305 Depreciation for the year 5,277 34,001 55,033 94,311 Impairment losses for the year 276 137 1,866 2,279 Reclassifications 895 (828) (67) – Transferred to other long-term assets (38) (94) (278) (410) Written back on disposals (712) (41) (16,085) (16,838) Exchange adjustments 25 663 42 730 Balance at 31 December 2024 82,174 763,384 769,819 1,615,377 Net book value: Balance at 1 January 2023 79,637 143,107 407,956 630,700 Balance at 31 December 2023 81,934 166,907 442,056 690,897 Balance at 31 December 2024 85,621 184,191 447,271 717,083 The Group compares the carrying amount of individual cash-generating units which were grouped for the property, plant and equipment related to oil and gas producing activities with its value in use, using a discounted cash flow forecast prepared based on the future production profiles included in the oil and gas reserve reports, and recorded impairment losses amounting to RMB211 million (2023:RMB777 million) for the year ended 31 December 2024. The addition to oil and gas properties of the Group for the year ended 31 December 2024 included RMB1,989 million (2023: RMB1,681 million) of estimated dismantlement costs for site restoration. At 31 December 2024 and 31 December 2023, the Group had no individual significant property, plant and equipment which were temporarily idle or pending for disposal or individually significant fully depreciated fixed assets which were still in use. 183 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 18 CONSTRUCTION IN PROGRESS 2024 2023 RMB million RMB million Balance at 1 January 180,250 196,045 Additions 159,694 184,350 Dry hole costs written off (4,955) (6,723) Transferred to property, plant and equipment (120,140) (151,360) Reclassification to other long-term assets (5,971) (24,372) Impairment losses for the year (134) (116) Disposals and others – (17,575) Exchange adjustments 3 1 Balance at 31 December 208,747 180,250 As at 31 December 2024, the amount of capitalised cost of exploratory wells included in construction in progress related to the exploration and production segment was RMB24,591 million (2023: RMB18,704 million). The geological and geophysical costs paid during the year ended 31 December 2024 were RMB4,077 million (2023: RMB3,728 million). 19 RIGHT-OF-USE ASSETS Land Others Total RMB million RMB million RMB million Cost Balance at 1 January 2023 269,127 51,800 320,927 Additions 10,372 10,076 20,448 Decreases (5,268) (4,233) (9,501) Balance at 31 December 2023 274,231 57,643 331,874 Balance at 1 January 2024 274,231 57,643 331,874 Additions 13,123 10,187 23,310 Decreases (11,840) (6,968) (18,808) Balance at 31 December 2024 275,514 60,862 336,376 Accumulated depreciation Balance at 1 January 2023 35,264 20,807 56,071 Additions 10,342 8,211 18,553 Decreases (3,579) (3,225) (6,804) Balance at 31 December 2023 42,027 25,793 67,820 Balance at 1 January 2024 42,027 25,793 67,820 Additions 10,362 9,419 19,781 Decreases (2,037) (5,004) (7,041) Balance at 31 December 2024 50,352 30,208 80,560 Net book value Balance at 1 January 2023 233,863 30,993 264,856 Balance at 31 December 2023 232,204 31,850 264,054 Balance at 31 December 2024 225,162 30,654 255,816 20 GOODWILL 31 December 31 December 2024 2023 RMB million RMB million Cost 14,354 14,333 Less: Accumulated impairment losses (7,861) (7,861) 6,493 6,472 Impairment tests for cash-generating units containing goodwill Goodwill is allocated to the following Group’s cash-generating units: 31 December 31 December The name of the investee and the composition of the asset group Principal activities 2024 2023 RMB million RMB million Sinopec Zhenhai Refining and Chemical Branch Manufacturing of intermediate petrochemical products and petroleum products 4,043 4,043 Other units allocated 2,450 2,429 6,493 6,472 The Group’s goodwill impairment assessment is carried out in conjunction with its related asset group or combination of asset groups, and the recoverable amounts of goodwill are estimated annually based on value in use calculations, which is consistent with prior years. These calculations use cash flow projections based on five-year financial budgets approved by management for a goodwill-related asset group or a combination of asset groups, with cash flow remaining stable after five years. The cash flow forecasts use sales volumes, selling price and discount rates as key assumptions, with sales volumes based on production capacity and/or actual sales volumes for periods prior to the budget period, selling prices based on management’s expectations of future international crude oil and petrochemical price trends, and pre-tax discount rates based on weighted average cost of capital, which ranged from 10.7% to 11.8% (2023: 11.3% to 13.1%). Based on the result of the impairment assessment of goodwill, no impairment loss was recognised. 184 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 21 INTEREST IN ASSOCIATES The Group’s investments in associates are with companies primarily engaged in the oil and gas, petrochemical, and marketing and distribution operations in the PRC. The Group’s principal associates are as follows: Name of company % of ownership interests Principal activities Measurement method Country of incorporation Principal place of business National Petroleum Pipe Network Group Co., Ltd. (“PipeChina”) 14.00 (i) Operation of 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 China National Aviation Fuel Supply Co., Ltd. (“Aviation Fuel”) 29.00 Wholesale of gasoline, kerosene, and diesel within the civil aviation system Equity method PRC PRC Note: (i) The Group has a member in the Board of Directors of PipeChina and has substantive participation in decision-making, so the Group can exercise significant influence on PipeChina. Summarised financial information and reconciliation to their carrying amounts in respect of the Group’s principal associates: PipeChina Sinopec Finance Sinopec Capital Zhongtian Synergetic Energy Aviation Fuel 31 31 31 31 31 31 31 31 31 31 December December December December December December December December December 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million Current assets 70,803 118,631 132,724 148,026 17,592 15,098 2,713 3,672 21,747 25,394 Non-current assets 857,411 821,864 71,744 66,093 513 409 46,377 48,615 15,847 14,158 Current liabilities (111,879) (130,331) (168,058) (179,459) (172) (74) (6,499) (7,464) (14,213) (17,200) Non-current liabilities (218,629) (225,296) (1,004) (906) (2,659) (1,275) (14,086) (17,563) (1,543) (1,533) Net assets 597,706 584,868 35,406 33,754 15,274 14,158 28,505 27,260 21,838 20,819 Net assets attributable to owners of the Company 548,484 536,607 35,406 33,754 15,274 14,158 28,505 27,260 19,290 18,488 Net assets attributable to non-controlling interests 49,222 48,261 – – – – – – 2,548 2,331 Share of net assets from associates 76,788 75,125 17,349 16,539 7,484 6,937 11,045 10,563 5,594 5,362 Carrying Amounts 76,788 75,125 17,349 16,539 7,484 6,937 11,045 10,563 5,594 5,362 Summarised statement of comprehensive income Year ended 31 December PipeChina Sinopec Finance Sinopec Capital Zhongtian Synergetic Energy Aviation Fuel 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million Revenue 119,800 120,943 5,903 5,988 4 4 16,691 15,676 189,250 181,290 Profit for the year 34,010 34,054 2,204 2,205 490 888 2,569 2,752 2,271 2,515 Other comprehensive income – – 448 (182) 21 52 – – – – Total comprehensive income 34,010 34,054 2,652 2,023 511 940 2,569 2,752 2,271 2,515 Dividends declared by associates 2,553 2,306 490 490 174 188 513 966 363 638 Share of profit from associates 4,174 4,035 1,080 1,080 240 435 995 1,066 595 656 Share of other comprehensive income from associates – – 220 (89) 10 25 – – – – The share of profit and other comprehensive income for the year ended 31 December 2024 in all individually immaterial associates accounted for using equity method in aggregate was RMB5,318 million (2023: RMB4,506 million) and loss RMB1,703 million (2023: loss RMB1,540 million) respectively. As at 31 December 2024, the carrying amount of all individually immaterial associates accounted for using equity method in aggregate was RMB48,526 million (2023: RMB48,540 million). 185 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 22 INTEREST IN JOINT VENTURES The Group’s principal interests in joint ventures are as follows: 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 Sinopec SABIC Tianjin Petrochemical Company Limited (“Sinopec SABIC Tianjin”) 50.00 Manufacturing and distribution of petrochemical products Equity method PRC PRC Shanghai SECCO Petrochemical Company Limited. (“Shanghai SECCO”) 50.00 Manufacturing and distribution of petrochemical products Equity method PRC PRC Summarised statement of financial position and reconciliation to their carrying amounts in respect of the Group’s principal joint ventures: FREP BASF-YPC Taihu Sinopec SABIC Tianjin Shanghai SECCO 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 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 3,704 3,258 1,553 2,051 933 654 538 2,974 1,025 1,563 Other current assets 10,676 13,017 5,648 4,615 6,811 4,864 4,462 2,455 2,253 3,106 Total current assets 14,380 16,275 7,201 6,666 7,744 5,518 5,000 5,429 3,278 4,669 Total non-current assets 11,873 11,752 8,206 9,000 9,726 12,254 16,087 17,345 26,928 26,386 Current liabilities Current financial liabilities (907) (827) (6) (25) (51) (42) (5,088) (3,900) (1,681) (3,582) Other current liabilities (12,064) (12,115) (1,743) (1,963) (718) (2,243) (2,168) (2,262) (2,298) (2,256) Total current liabilities (12,971) (12,942) (1,749) (1,988) (769) (2,285) (7,256) (6,162) (3,979) (5,838) Non-current liabilities Non-current financial liabilities (4,781) (2,738) – – (118) (139) (4,060) (5,152) (6,424) (4,303) Other non-current liabilities (239) (223) (137) (123) (1,054) (914) (568) (603) (896) (1,097) Total non-current liabilities (5,020) (2,961) (137) (123) (1,172) (1,053) (4,628) (5,755) (7,320) (5,400) Net assets 8,262 12,124 13,521 13,555 15,529 14,434 9,203 10,857 18,907 19,817 Net assets attributable to owners of the company 8,262 12,124 13,521 13,555 15,105 14,034 9,203 10,857 18,907 19,817 Net assets attributable to non-controlling interests – – – – 424 400 – – – – Share of net assets from joint ventures 4,131 6,062 5,408 5,422 7,401 6,876 4,602 5,429 9,454 9,909 Carrying Amounts 4,131 6,062 5,408 5,422 7,401 6,876 4,602 5,429 9,454 9,909 Summarised statement of comprehensive income FREP BASF-YPC Taihu Sinopec SABIC Tianjin Shanghai SECCO 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB million million million million million million million million million million Revenue 46,674 60,091 20,433 19,381 17,613 14,090 24,407 22,915 21,776 17,426 Depreciation, depletion and amortisation (946) (1,575) (1,214) (1,355) (612) (784) (1,560) (1,699) (549) (539) Interest income 167 136 37 67 1,044 720 54 113 23 72 Interest expense (320) (315) (2) (4) (56) (61) (157) (204) (208) (199) (Loss)/profit before taxation (3,691) (1,215) 384 430 2,916 1,666 (1,647) (1,832) (1,212) (2,551) Income tax expense (171) 346 (98) (108) (584) (292) (7) 423 302 642 Net (loss)/profit for the year (3,862) (869) 286 322 2,332 1,374 (1,654) (1,409) (910) (1,909) Other comprehensive income – – – – (1,237) (9,531) – – – – Total comprehensive income (3,862) (869) 286 322 1,095 (8,157) (1,654) (1,409) (910) (1,909) Dividends declared by joint ventures – – 128 1,060 – – – – – – Share of net (loss)/profit from joint ventures (1,931) (435) 114 129 1,111 660 (827) (704) (455) (955) Share of other comprehensive income from joint ventures – – – – (586) (4,535) – – – – 186 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 22 INTEREST IN JOINT VENTURES (Continued) Summarised statement of comprehensive income (Continued) The share of profit and other comprehensive income for the year ended 31 December 2024 in all individually immaterial joint ventures accounted for using equity method in aggregate was loss RMB1,453 million (2023: loss RMB4,274 million) and loss RMB1,448 million (2023: loss RMB544 million) respectively. As at 31 December 2024, the carrying amount of all individually immaterial joint ventures accounted for using equity method in aggregate was RMB45,706 million (2023: RMB35,866 million). Impairment test As at 31 December 2024, there are indicators of impairment in the long-term equity investment in Shanghai SECCO. The recoverable amount of this long-term equity investment is estimated based on a value-in-use calculation. The projected future cash flows primarily take into account the five-year profit forecast for Shanghai SECCO approved by the management, which is adjusted based on the historical performance of Shanghai SECCO and relevant industry trends, with cash flows remaining stable after five years. The pre-tax discount rate of 11.08% (2023: 11.29%) is calculated based on the weighted average cost of capital. The result of value-in-use calculation indicates that there is no impairment loss in this long-term equity investment as at 31 December 2024. 23 LONG-TERM PREPAYMENTS AND OTHER ASSETS 31 December 31 December 2024 2023 RMB million RMB million Operating rights of service stations 24,078 26,184 Long-term receivables from and prepayment to Sinopec Group Company and fellow subsidiaries 1,727 1,734 Prepayments for construction projects to third parties 4,322 4,198 Others (i) 75,978 63,282 106,105 95,398 Note: (i) Others mainly comprise catalyst expenditures, improvement expenditures of property, plant and equipment and time deposits with maturities over one year. The cost of operating rights of service stations is charged to expense on a straight-line basis over the respective periods of the rights. The movement of operating rights of service stations is as follows: 2024 2023 RMB million RMB million Operating rights of service stations Cost: Balance at 1 January 54,186 54,130 Additions 281 599 Decreases (596) (543) Balance at 31 December 53,871 54,186 Accumulated amortisation: Balance at 1 January 28,002 26,121 Additions 2,205 2,250 Decreases (414) (369) Balance at 31 December 29,793 28,002 Net book value at 31 December 24,078 26,184 24 DERIVATIVE FINANCIAL ASSETS AND DERIVATIVE FINANCIAL LIABILITIES Derivative financial assets and derivative financial liabilities of the Group are primarily commodity futures and swaps contracts. See Note 43. 31 December 2024 31 December 2023 RMB million RMB million Fair value of assets Fair value of liabilities Fair value of assets Fair value of liabilities Commodity derivatives 2,538 3,381 9,715 2,720 Financial derivatives 16 31 6 32 2,554 3,412 9,721 2,752 187 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 25 TRADE ACCOUNTS RECEIVABLE 31 December 31 December 2024 2023 RMB million RMB million Amounts due from third parties 39,320 40,588 Amounts due from Sinopec Group Company and fellow subsidiaries 2,252 5,762 Amounts due from associates and joint ventures 6,943 6,318 48,515 52,668 Less: Loss allowance for expected credit losses (4,182) (4,016) 44,333 48,652 The aging analysis of trade accounts receivable (net of loss allowance for expected credit losses) is as follows: 31 December 31 December 2024 2023 RMB million RMB million Within one year 43,699 48,187 Between one and two years 404 279 Between two and three years 97 54 Over three years 133 132 44,333 48,652 Loss allowance for expected credit losses are analysed as follows: 2024 2023 RMB million RMB million Balance at 1 January 4,016 4,079 Provision for the year 120 313 Written back for the year – (372) Written off for the year (13) (68) Others 59 64 Balance at 31 December 4,182 4,016 As at 31 December 2024, the carrying amount of accounts receivable under factoring arrangement that are derecognised is RMB13,527 million (at 31 December 2023:RMB12,767 million). Sales are generally on a cash term. Credit is generally only available for major customers with well-established trading records. Amounts due from Sinopec Group Company and fellow subsidiaries are repayable under the same terms. These receivables relate to a wide range of customers for whom there is no recent history of default. Information about the impairment of trade accounts receivable and the Group’s exposure to credit risk can be found in Note 43. 26 FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME 31 December 31 December 2024 2023 RMB million RMB million Non-current assets Unlisted equity instruments 323 330 Listed equity instruments 93 120 Current assets Trade accounts receivable and bills receivable (i) 2,613 2,221 3,029 2,671 Note: (i) As at 31 December 2024 and 2023, bills receivable were classified as financial assets at fair value through other comprehensive income, as relevant business model is achieved both by collecting contractual cash flows and selling of these assets. 188 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 27 INVENTORIES 31 December 31 December 2024 2023 RMB million RMB million Crude oil and other raw materials 134,970 138,143 Work in progress 20,282 20,375 Finished goods 103,249 95,227 Spare parts and consumables 3,359 2,994 261,860 256,739 Less: Allowance for diminution in value of inventories (5,265) (5,841) 256,595 250,898 The cost of inventories recognised as an expense in the consolidated income statement amounted to RMB2,557,782 million for the year ended 31 December 2024 (2023: RMB2,663,323 million). It includes the write-down of inventories of RMB4,554 million mainly related to finished goods and raw materials (2023: RMB6,300 million mainly related to finished goods and raw materials). 28 PREPAID EXPENSES AND OTHER CURRENT ASSETS 31 December 31 December 2024 2023 RMB million RMB million Receivables 33,896 25,443 Advances to suppliers 6,429 5,067 Value-added input tax to be deducted 26,060 24,990 Prepaid income tax 6,451 3,903 72,836 59,403 29 DEFERRED TAX ASSETS AND LIABILITIES Deferred tax assets and liabilities before offset are attributable to the items detailed in the table below: Deferred tax assets Deferred tax liabilities 31 December 31 December 31 December 31 December 2024 2023 2024 2023 RMB million RMB million RMB million RMB million Receivables and inventories 4,294 3,721 (49) (20) Payables 2,649 2,715 – – Cash flow hedges 41 16 (667) (1,142) Property, plant and equipment 17,529 17,965 (31,560) (26,669) Tax losses carried forward 12,256 9,036 – – Financial assets at fair value through other comprehensive income 139 137 (4) (7) Intangible assets 1,296 1,084 (93) (92) Lease liabilities and right of use assets 40,876 44,334 (36,594) (40,422) Others 2,457 2,792 (1,117) (1,155) Deferred tax assets/(liabilities) 81,537 81,800 (70,084) (69,507) The offsetting amount between deferred tax assets and liabilities are as follows: 31 December 31 December 2024 2023 RMB million RMB million Deferred tax assets 62,760 61,690 Deferred tax liabilities 62,760 61,690 Deferred tax assets and liabilities after the offsetting adjustments are as follows: 31 December 31 December 2024 2023 RMB million RMB million Deferred tax assets 18,777 20,110 Deferred tax liabilities 7,324 7,817 As at 31 December 2024, certain subsidiaries of the Company did not recognise deferred tax of deductible loss carried forward of RMB28,197 million (2023: RMB24,783 million), of which RMB5,070 million (2023: RMB5,496 million) was incurred for the year ended 31 December 2024, because it was not probable that the future taxable profits will be available. These deductible losses carried forward of RMB3,349 million, RMB5,310 million, RMB8,972 million, RMB5,496 million and RMB5,070 million, will expire in 2025, 2026, 2027, 2028, 2029 and after, respectively. Periodically, management performed assessment on the probability that future taxable profit will be available over the period which the deferred tax assets can be realised or utilised. In assessing the probability, both positive and negative evidence was considered, including whether it is probable that the operations will have sufficient future taxable profits over the periods which the deferred tax assets are deductible or utilised and whether the tax losses result from identifiable causes which are unlikely to recur. 189 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 29 DEFERRED TAX ASSETS AND LIABILITIES (Continued) Movements in the deferred tax assets and liabilities are as follows: Balance at 1 January 2023 Recognised in consolidated income statement Recognised in other comprehensive income Others Transferred from reserve Balance at 31 December 2023 RMB million RMB million RMB million RMB million RMB million RMB million Receivables and inventories 4,254 (568) – 15 – 3,701 Payables 3,091 (376) – – – 2,715 Cash flow hedges (651) (51) (841) (5) 422 (1,126) Property, plant and equipment (805) (7,873) – (26) – (8,704) Tax losses carried forward 4,643 4,392 – 1 – 9,036 Financial assets at fair value through other comprehensive income 125 – 5 – – 130 Intangible assets 982 11 – (1) – 992 Lease liabilities and right of use assets 3,304 608 – – – 3,912 Others 234 1,415 – (12) – 1,637 Net deferred tax assets/(liabilities) 15,177 (2,442) (836) (28) 422 12,293 Balance at 1 January 2024 Recognised in consolidated income statement Recognised in other comprehensive income Others Transferred from reserve Balance at 31 December 2024 RMB million RMB million RMB million RMB million RMB million RMB million Receivables and inventories 3,701 532 – 12 – 4,245 Payables 2,715 (66) – – – 2,649 Cash flow hedges (1,126) 25 273 (18) 220 (626) Property, plant and equipment (8,704) (5,425) – 98 – (14,031) Tax losses carried forward 9,036 3,220 – – – 12,256 Financial assets at fair value through other comprehensive income 130 – 5 – – 135 Intangible assets 992 (28) – 239 – 1,203 Lease liabilities and right of use assets 3,912 370 – – – 4,282 Others 1,637 (297) – – – 1,340 Net deferred tax assets/(liabilities) 12,293 (1,669) 278 331 220 11,453 30 SHORT-TERM AND LONG-TERM DEBTS AND LOANS FROM SINOPEC GROUP COMPANY AND FELLOW SUBSIDIARIES Short-term debts represent: 31 December 31 December 2024 2023 RMB million RMB million Third parties’ debts Short-term bank loans 44,369 51,175 RMB denominated 44,369 51,175 Current portion of long-term bank loans 43,246 2,813 RMB denominated 43,246 2,813 Current portion of long-term corporate bonds 165 4,546 RMB denominated 165 4,546 87,780 58,534 Loans from Sinopec Group Company and fellow subsidiaries Short-term loans 3,862 8,640 RMB denominated 1,459 7,628 USD denominated 2,403 1,012 Current portion of long-term loans 822 3,797 RMB denominated 822 3,797 4,684 12,437 92,464 70,971 The Group’s weighted average interest rate on short-term loans was 2.28% (2023: 2.23%) per annum at 31 December 2024. The above borrowings are unsecured. 190 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 30 SHORT-TERM AND LONG-TERM DEBTS AND LOANS FROM SINOPEC GROUP COMPANY AND FELLOW SUBSIDIARIES (Continued) Long-term debts represent: Interest rate and final maturity 31 December 31 December 2024 2023 RMB million RMB million Third parties’ debts Long-term bank loans RMB denominated Interest rates ranging from 1.08% to 3.90% per annum at 31 December 2024 with maturities through 2039 204,840 157,298 USD denominated Interest rates at 0.00% per annum at 31 December 2024 with maturities through 2031 46 51 204,886 157,349 Corporate bonds(i) RMB denominated Fixed interest rates ranging from 1.75% to 3.20% per annum at 31 December 2024 with maturities through 2034 22,120 9,541 USD denominated Fixed interest rates ranging 4.25% per annum at 31 December 2024 with maturities through 2043 3,607 3,518 25,727 13,059 Total third parties’ long-term debts 230,613 170,408 Less: Current portion (43,411) (7,359) 187,202 163,049 Long-term loans from Sinopec Group Company and fellow subsidiaries RMB denominated Interest rates ranging from 2.20% to 4.50% per annum at 31 December 2024 with maturities through 2038 24,116 28,608 Less: Current portion (822) (3,797) 23,294 24,811 210,496 187,860 Short-term and long-term bank loans, corporate bonds and loans from Sinopec Group Company and fellow subsidiaries are primarily unsecured and carried at amortised cost. Note: (i) These corporate bonds are carried at amortised cost. 31 LEASE LIABILITIES 31 December 31 December 2024 2023 RMB million RMB million Lease liabilities Current 17,831 17,536 Non-current 154,904 163,864 172,735 181,400 32 RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES (EXCLUDING LEASE LIABILITIES) Loans from Sinopec Group Company and fellow subsidiaries and debts Other long-term liabilities-loans from other related parties Total RMB million RMB million RMB million At 1 January 2024 258,831 5,133 263,964 Changes from financing cash flows: Proceeds from bank and other loans 671,989 461 672,450 Repayment of bank and other loans (628,052) – (628,052) Interest paid (7,761) (151) (7,912) Total changes from financing cash flows 36,176 310 36,486 Other changes: Interest costs (including capitalised interest costs) 9,905 620 10,525 Others (1,952) (920) (2,872) At 31 December 2024 302,960 5,143 308,103 191 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 32 RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES (EXCLUDING LEASE LIABILITIES) (Continued) Loans from Sinopec Group Company and fellow subsidiaries and debts Other long-term liabilities-loans from other related parties Total RMB million RMB million RMB million At 1 January 2023 174,290 5,180 179,470 Changes from financing cash flows: Proceeds from bank and other loans 698,936 474 699,410 Repayment of bank and other loans (599,954) – (599,954) Interest paid (7,713) (284) (7,997) Total changes from financing cash flows 91,269 190 91,459 Other changes: Interest costs (including capitalised interest costs) 9,474 333 9,807 Others (16,202) (570) (16,772) At 31 December 2023 258,831 5,133 263,964 33 TRADE ACCOUNTS PAYABLE AND BILLS PAYABLE 31 December 31 December 2024 2023 RMB million RMB million Amounts due to third parties 189,747 216,847 Amounts due to Sinopec Group Company and fellow subsidiaries 12,139 4,276 Amounts due to associates and joint ventures 6,971 8,755 208,857 229,878 Bills payable 47,740 29,122 Trade accounts payable and bills payable measured at amortised cost 256,597 259,000 The ageing analysis of trade accounts payable and bills payable is as follows: 31 December 31 December 2024 2023 RMB million RMB million Within 1 month or on demand 158,734 181,241 Between 1 month and 6 months 95,929 51,035 Over 6 months 1,934 26,724 256,597 259,000 34 CONTRACT LIABILITIES As at 31 December 2024 and 2023, the Group’s contract liabilities primarily represent advances from customers. Related performance obligations are expected to be satisfied and revenue is recognised within one year. 35 OTHER PAYABLES 31 December 31 December 2024 2023 RMB million RMB million Salaries and welfare payable 14,167 13,941 Interest payable – 145 Payables for constructions 77,951 66,928 Other payables 44,621 48,556 Taxes other than income tax 36,791 38,554 173,530 168,124 36 PROVISIONS Provisions primarily represent provision for future dismantlement costs of oil and gas properties. The Group has mainly committed to the PRC government to establish certain standardised measures for the dismantlement of its oil and gas properties by making reference to the industry practices and is thereafter constructively obligated to take dismantlement measures of its oil and gas properties. Movement of provision of the Group’s obligations for the dismantlement of its oil and gas properties is as follow: 2024 2023 RMB million RMB million Balance at 1 January 45,222 43,599 Provision for the year 1,989 1,681 Accretion expenses 779 1,099 Decrease for the year (1,497) (1,195) Exchange adjustments 35 38 Balance at 31 December 46,528 45,222 192 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 37 SHARE CAPITAL 31 December 31 December 2024 2023 RMB million RMB million Registered, issued and fully paid 97,232,263,098 listed A shares (2023: 94,971,971,046) of RMB1.00 each 97,233 94,972 24,049,292,600 listed H shares (2023: 24,377,280,600) of RMB1.00 each 24,049 24,377 121,282 119,349 The Company was established on 25 February 2000 with a registered capital of 68.8 billion domestic state-owned shares with a par value of RMB1.00 each. Such shares were issued to Sinopec Group Company in consideration for the assets and liabilities transferred to the Company (Note 1). Pursuant to the resolutions passed at an Extraordinary General Meeting held on 25 July 2000 and approvals from relevant government authorities, the Company is authorised to increase its share capital to a maximum of 88.3 billion shares with a par value of RMB1.00 each and offer not more than 19.5 billion shares with a par value of RMB1.00 each to investors outside the PRC. Sinopec Group Company is authorised to offer not more than 3.5 billion shares of its shareholdings in the Company to investors outside the PRC. The shares sold by Sinopec Group Company to investors outside the PRC would be converted into H shares. In October 2000, the Company issued 15,102,439,000 H shares with a par value of RMB1.00 each, representing 12,521,864,000 H shares and 25,805,750 American Depositary Shares (“ADSs”, each representing 100 H shares), at prices of HKD1.59 per H share and USD20.645 per ADS, respectively, by way of a global initial public offering to Hong Kong and overseas investors. As part of the global initial public offering, 1,678,049,000 state-owned ordinary shares of RMB1.00 each owned by Sinopec Group Company were converted into H shares and sold to Hong Kong and overseas investors. In July 2001, the Company issued 2.8 billion listed A shares with a par value of RMB1.00 each at RMB4.22 by way of a public offering to natural persons and institutional investors in the PRC. During the year ended 31 December 2010, the Company issued 88,774 listed A shares with a par value of RMB1.00 each, as a result of exercise of 188,292 warrants entitled to the Bonds with Warrants. During the year ended 31 December 2011, the Company issued 34,662 listed A shares with a par value of RMB1.00 each, as a result of conversion by the holders of the 2011 Convertible Bonds. During the year ended 31 December 2012, the Company issued 117,724,450 listed A shares with a par value of RMB1.00 each, as a result of conversion by the holders of the 2011 Convertible Bonds. On 14 February 2013, the Company issued 2,845,234,000 listed H shares (“the Placing”) with a par value of RMB1.00 each at the Placing Price of HKD8.45 per share. The aggregate gross proceeds from the Placing amounted to approximately HKD24,042,227,300.00 and the aggregate net proceeds (after deduction of the commissions and estimated expenses) amounted to approximately HKD23,970,100,618.00. 193 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 37 SHARE CAPITAL (Continued) In June 2013, the Company issued 21,011,962,225 listed A shares and 5,887,716,600 listed H shares as a result of bonus issues of 2 shares converted from the retained earnings, and 1 share transferred from the share premium for every 10 existing shares. During the year ended 31 December 2013, the Company issued 114,076 listed A shares with a par value of RMB1.00 each, as a result of exercise of conversion by the holders of the 2011 Convertible Bonds. During the year ended 31 December 2014, the Company issued 1,715,081,853 listed A shares with a par value of RMB1.00 each, as a result of exercise of conversion by the holders of the 2011 Convertible Bonds. During the year ended 31 December 2015, the Company issued 2,790,814,006 listed A shares with a par value of RMB1.00 each, as a result of exercise of conversion by the holders of the 2011 Convertible Bonds. During the year ended 31 December 2022, the Company repurchased 442,300,000 listed A shares and 732,502,000 listed H shares respectively at a price of RMB4.06 per share to RMB4.50 per share for the repurchase of listed A shares, with a total amount of RMB1,888,163,981.61, and a price of HKD3.06 per share to HKD3.75 per share for the repurchase of listed H shares, with a total amount of HKD2,499,261,860.00, which had been cancelled in the year ended 31 December 2022. During the year ended 31 December 2023, the Company repurchased 143,500,000 listed A shares and 403,656,000 listed H shares respectively at a price of RMB5.29 per share to RMB6.17 per share for the repurchase of listed A shares, with a total amount of RMB816,009,269.44, and a price of HKD3.78 per share to HKD4.56 per share for the repurchase of listed H shares, with a total amount of HKD1,646,392,242.20, which had been cancelled in the year ended 31 December 2023. Pursuant to the resolutions of the 15th meeting of the 8th session of the board of directors held on 24 March 2023 and the 2022 Annual General Meeting of Shareholders held on 30 May 2023, and with the approval for registration by the China Securities Regulatory Commission in the Reply on Agreeing to the Registration of China Petroleum & Chemical Corporation to Issue Shares to Specific Targets (Zheng Jian Xu Ke [2024] No. 110(證監許可[2024]110 號)), the Company was approved to issued 2,390,438,247 listed A shares (par value of RMB1.00 per share at an issue price of RMB5.02 per share) to Sinopec Group Company on 18 March 2024. The total amount of raised funds is RMB11,999,999,999.94. After deducting the total amount of RMB12,671,221.04 (excluding VAT) of recommendation and underwriting expenses and other issuance expenses, the net amount of raised funds is RMB11,987,328,778.90, which is included in the share capital of RMB2,390,438,247.00 and capital reserve of RMB9,596,890,531.90. During the year ended 31 December 2024, the Company repurchased 130,146,195 listed A shares and 328,126,000 listed H shares respectively at a price of RMB6.16 per share to RMB6.43 per share for the repurchase of listed A shares, with a total amount of RMB816,001,427.20, and a price of HKD4.09 per share to HKD4.89 per share for the repurchase of listed H shares, with a total amount of HKD1,436,267,366.40. The 130,146,195 listed A shares and 327,988,000 listed H shares repurchased from 26 March to 18 December 2024 had been canceled, while the 138,000 listed H shares repurchased on 30 December 2024 had not been canceled in the year ended 31 December 2024. All A shares and H shares rank pari passu in all material aspects. 194 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 37 SHARE CAPITAL (Continued) Capital management Management optimises the structure of the Group’s capital, which comprises of equity, debts and bonds. In order to maintain or adjust the capital structure of the Group, management may cause the Group to issue new shares, adjust the capital expenditure plan, sell assets to reduce debt, or adjust the proportion of short-term and long-term loans and bonds. Management monitors capital on the basis of the debt-to-capital ratio, which is calculated by dividing long-term loans (excluding current portion) and debentures payable, including long-term debts and loans from Sinopec Group Company and fellow subsidiaries, by the total of equity attributable to shareholders of the Company and long-term loans (excluding current portion) and debentures payable, and liability-to-asset ratio, which is calculated by dividing total liabilities by total assets. Management’s strategy is to make appropriate adjustments according to the Group’s operating and investment needs and the changes of market conditions, and to maintain the debt- to-capital ratio and the liability-to-asset ratio of the Group at a range considered reasonable. As at 31 December 2024, the debt-to-capital ratio and the liability-to-asset ratio of the Group were 20.5% (2023: 19.0%) and 53.3%(2023: 52.8%), respectively. The schedule of the contractual maturities of loans and commitments are disclosed in Notes 30 and 38, respectively. There were no changes in the management’s approach to capital management of the Group during the year. Neither the Company nor any of its subsidiaries is subject to externally imposed capital requirements. 38 COMMITMENTS AND CONTINGENT LIABILITIES Capital commitments At 31 December 2024 and 2023, capital commitments of the Group are as follows: 31 December 31 December 2024 2023 RMB million RMB million Authorised and contracted for (i) 177,173 177,809 Authorised but not contracted for 61,996 61,951 239,169 239,760 These capital commitments relate to oil and gas exploration and development, refining and petrochemical production capacity expansion projects, the construction of service stations and oil depots and investment commitments. Note: (i) The investment commitments of the Group is RMB13,353 million (2023: RMB5,856 million). Commitments to joint ventures Pursuant to certain of the joint venture agreements entered into by the Group, the Group is obliged to purchase products from the joint ventures based on market prices. Exploration and production licenses Exploration licenses for exploration activities are registered with the Ministry of Natural Resources. The term of the Group’s exploration licenses is 5 years, and may be renewed three times within 30 days prior to expiration of the original term with each renewal being for a five-year term. The Group is obligated to make progressive annual minimum exploration investment relating to the exploration blocks in respect of which the license is issued. The Ministry of Natural Resources also issues production licenses to the Group on the basis of the reserve reports approved by relevant authorities. The maximum term of a full production license is 30 years unless a special dispensation is given by the State Council. The maximum term of production licenses issued to the Group is 80 years as a special dispensation was given to the Group by the State Council. The Group’s production license is renewable upon application by the Group 30 days prior to expiration. The Group is required to make payments of exploration license fees and production right usage fees to the Ministry of Natural Resources annually which are expensed. Expenses recognised were approximately RMB183 million for the year ended 31 December 2024 (2023: RMB628 million). Estimated future annual payments are as follows: 31 December 31 December 2024 2023 RMB million RMB million Within one year 237 802 Between one and two years 179 175 Between two and three years 134 176 Between three and four years 76 172 Between four and five years 76 156 Thereafter 862 875 1,564 2,356 195 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 38 COMMITMENTS AND CONTINGENT LIABILITIES (Continued) Contingent liabilities At 31 December 2024 and 2023, the guarantees by the Group in respect of facilities granted to the parties below are as follows: 31 December 31 December 2024 2023 RMB million RMB million 8,193 8,563 Joint ventures (i) 8,193 8,563 Note: (i) The Group provided guarantees in respect to standby credit facilities granted amounting to RMB34,351 million (31 December 2023: RMB32,881 million) to certain joint ventures. As at 31 December 2024, the amount withdrawn (the portion corresponding to the shareholding ratio of the Group) and guaranteed by the Group was RMB8,193 million (31 December 2023: RMB8,563 million). The Group provided a guarantee in respect to payment obligation of a joint venture under certain agreement amount to RMB17,468 million (31 December 2023: RMB17,211 million). As at 31 December 2024, there has not yet incurred the relevant payment obligations and therefore the Group has no guarantee amount (31 December 2023: Nil). Management monitors the risk that the specified debtor will default on the contract and recognises a provision when ECLs on the financial guarantees are determined to be higher than the carrying amount in respect of the guarantees. At 31 December 2024 and 2023, the Group estimates that there is no material liability has been accrued for ECLs related to the Group’s obligation under these guarantee arrangements. Environmental contingencies Under existing legislation, management believes that there are no probable liabilities that will have a material adverse effect on the financial position or operating results of the Group. The PRC government, however, has moved, and may move further towards more rigorous enforcement of applicable laws, and towards the adoption of more stringent environmental standards. Environmental liabilities are subject to considerable uncertainties which affect management’s ability to estimate the ultimate cost of remediation efforts. These uncertainties include (i) the exact nature and extent of the contamination at various sites including, but not limited to refineries, oil fields, service stations, terminals and land development areas, whether operating, closed or sold, (ii) the extent of required cleanup efforts, (iii) varying costs of alternative remediation strategies, (iv) changes in environmental remediation requirements, and (v) the identification of new remediation sites. The amount of such future cost is indeterminable due to such factors as the unknown magnitude of possible contamination and the unknown timing and extent of the corrective actions that may be required. Accordingly, the outcome of environmental liabilities under proposed or future environmental legislation cannot reasonably be estimated at present, and could be material. The Group paid normal routine pollutant discharge fees of approximately RMB18,448 million in the consolidated financial statements for the year ended 31 December 2024 (2023: RMB19,156 million). Legal contingencies The Group is defendant in certain lawsuits as well as the named party in other proceedings arising in the ordinary course of business. Management has assessed the likelihood of an unfavourable outcome of such contingencies, lawsuits or other proceedings and believes that any resulting liabilities will not have a material adverse effect on the financial position, operating results or cash flows of the Group. 39 RELATED PARTY TRANSACTIONS Parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control or jointly control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to control or common control. Related parties may be individuals (being members of key management personnel, significant shareholders and/or their close family members) or other entities and include entities which are under the significant influence of related parties of the Group where those parties are individuals, and post-employment benefit plans which are for the benefit of employees of the Group or of any entity that is a related party of the Group. (a) Transactions with Sinopec Group Company and fellow subsidiaries, associates and joint ventures The Group is part of a larger group of companies under Sinopec Group Company, which is controlled by the PRC government, and has significant transactions and relationships with Sinopec Group Company and fellow subsidiaries. Because of these relationships, it is possible that the terms of these transactions are not the same as those that would result from transactions among wholly unrelated parties. 196 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 39 RELATED PARTY TRANSACTIONS (Continued) (a) Transactions with Sinopec Group Company and fellow subsidiaries, associates and joint ventures (Continued) 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: Notes 2024 2023 RMB million RMB million Sales of goods (i) 381,571 408,554 Purchases (ii) 176,738 218,974 Transportation and storage (iii) 26,081 29,830 Exploration and development services (iv) 39,208 41,783 Production related services (v) 36,880 43,361 Agency commission income (vi) 160 179 Interest income (vii) 3,108 2,838 Interest expense (viii) 1,291 1,283 Net deposits placed with related parties (vii) (466) (903) Net funds obtained from related parties (ix) 34,093 43,621 The amounts set out in the table above in respect of the year ended 31 December 2024 and 2023 represent the relevant costs and income as determined by the corresponding contracts with the related parties. Included in the transactions disclosed above, for the year ended 31 December 2024 are: a) purchases by the Group from Sinopec Group Company and fellow subsidiaries amounting to RMB159,275 million (2023: RMB200,604 million) comprising purchases of products and services (i.e. procurement, transportation and storage, exploration and development services and production related services) of RMB145,685 million (2023: RMB187,117 million), lease charges for land, buildings and others paid by the Group of RMB10,937 million, RMB1,088 million and RMB274 million (2023: RMB10,926 million, RMB1,050 million and RMB228 million), respectively and interest expenses of RMB1,291 million (2023: RMB1,283 million); and b) sales by the Group to Sinopec Group Company and fellow subsidiaries amounting to RMB72,711 million (2023: RMB87,247 million), comprising RMB69,281 million (2023: RMB84,329 million) for sales of goods, RMB3,363 million (2023: RMB2,838 million) for interest income and RMB67 million (2023: RMB80 million) for agency commission income. For the year ended 31 December 2024, no individually significant right-of-use assets were leased from Sinopec Group Company and fellow subsidiaries, associates and joint ventures by the Group. The interest expense recognised for the year ended 31 December 2024 on lease liabilities in respect of amounts due to Sinopec Group Company and fellow subsidiaries, associates and joint ventures was RMB7,434 million (2023: RMB7,637 million). For the year ended 31 December 2024, the amount of rental the Group paid to Sinopec Group Company and fellow subsidiaries, associates and joint ventures for land, buildings and others are RMB10,941 million, RMB1,094 million and RMB363 million (2023: RMB10,931 million, RMB1,053 million and RMB273 million), including pursuant to the continuing connected transaction agreements signed in 2000, the Sixth Supplementary Agreement on 27 August 2021, the amount of rental the Group paid to Sinopec Group Company for land and buildings are RMB10,937 million and RMB1,088 million (2023: RMB10,926 million and RMB1,050 million). As at 31 December 2024 and 2023, there was no guarantee given to banks by the Group in respect of banking facilities to Sinopec Group Company and fellow subsidiaries, associates and joint ventures, except for the guarantees disclosed in Note 38. Guarantees given to banks by the Group in respect of banking facilities to associates and joint ventures are disclosed in Note 38. The directors of the Company are of the opinion that the above transactions with related parties were conducted in the ordinary course of business and on normal commercial terms or in accordance with the agreements governing such transactions, and this has been confirmed by the independent non-executive directors. Notes: (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) 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. (vii) 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 2024 was RMB66,433 million (2023: RMB65,967 million). (viii) Interest expense represents interest charges on the loans obtained from Sinopec Group Company and fellow subsidiaries. (ix) The Group obtained loans, discounted bills and issued the acceptance bills from Sinopec Group Company and fellow subsidiaries. 197 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 39 RELATED PARTY TRANSACTIONS (Continued) (a) Transactions with Sinopec Group Company and fellow subsidiaries, associates and joint ventures (Continued) In connection with the Reorganisation, the Company and Sinopec Group Company entered into a number of agreements under which 1) Sinopec Group Company will provide goods and products and a range of ancillary, social and supporting services to the Group and 2) the Group will sell certain goods to Sinopec Group Company. These agreements impacted the operating results of the Group for the year ended 31 December 2024. The terms of these agreements are summarised as follows: • 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 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 Seventh Supplementary Agreement on 23 August 2024, which took effect on 1 January 2025 and made adjustment to “Mutual Supply Agreement” and “Buildings Leasing Contract”, etc. Amounts due from/to Sinopec Group Company and fellow subsidiaries, associates and joint ventures included in the following accounts captions are summarised as follows: 31 December 31 December 2024 2023 RMB million RMB million Trade accounts receivable 9,151 12,056 Financial assets at fair value through other comprehensive income 166 101 Prepaid expenses and other current assets 16,064 14,953 Long-term prepayments and other assets 4,648 9,025 Total 30,029 36,135 Trade accounts payable and bills payable 26,375 19,971 Contract liabilities 5,349 4,402 Other payables 30,477 26,052 Other long-term liabilities 6,415 5,133 Short-term loans and current portion of long-term loans from Sinopec Group Company and fellow subsidiaries 4,684 12,437 Long-term loans excluding current portion from Sinopec Group Company and fellow subsidiaries 23,294 24,811 Lease liabilities (including to be paid within one year) 146,355 154,051 Total 242,949 246,857 Amounts due from/to Sinopec Group Company and fellow subsidiaries, associates and joint ventures, other than short-term loans and long-term loans, bear no interest, are unsecured and are repayable in accordance with normal commercial terms. The terms and conditions associated with short-term loans and long-term loans payable to Sinopec Group Company and fellow subsidiaries are set out in Note 30. As at and for the year ended 31 December 2024, and as at and for the year ended 31 December 2023, no individually significant loss allowance for expected credit losses were recognised in respect of amounts due from Sinopec Group Company and fellow subsidiaries, associates and joint ventures. 198 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 39 RELATED PARTY TRANSACTIONS (Continued) (b) Key management personnel emoluments Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, including directors and supervisors of the Group. The key management personnel compensation is as follows: 2024 2023 RMB’000 RMB’000 Short-term employee benefits 8,149 6,757 Retirement scheme contributions 554 512 8,703 7,269 (c) Contributions to defined contribution retirement plans The Group participates in various defined contribution retirement plans organised by municipal and provincial governments for its staff. The details of the Group’s employee benefits plan are disclosed in Note 40. As at 31 December 2024 and 2023, the accrual for the contribution to post-employment benefit plans was not material. (d) Transactions with other state-controlled entities in the PRC The Group is a state-controlled energy and chemical enterprise and operates in an economic regime currently dominated by entities directly or indirectly controlled by the PRC government through its government authorities, agencies, affiliations and other organisations (collectively referred as “state-controlled entities”). Apart from transactions with Sinopec Group Company and fellow subsidiaries, the Group has transactions with other state-controlled entities, include but not limited to the followings: • sales and purchases of goods and ancillary materials; • rendering and receiving services; • lease of assets; • depositing and borrowing money; and • uses of public utilities. These transactions are conducted in the ordinary course of the Group’s business on terms comparable to those with other entities that are not state-controlled. 40 EMPLOYEE BENEFITS PLAN As stipulated by the regulations of the PRC, the Group participates in various defined contribution retirement plans organised by municipal and provincial governments for its staff. The Group is required to make contributions to the retirement plans at rates ranging from 13.0% to 16.0% of the salaries, bonuses and certain allowances of its staff. In addition, the Group provides a supplementary retirement plan for its staff at rates not exceeding 8% of the salaries. The Group has no other material obligation for the payment of pension benefits associated with these plans beyond the annual contributions described above. The Group’s contributions for the year ended 31 December 2024 were RMB14,493 million (2023: RMB13,932 million). 41 SEGMENT REPORTING Segment information is presented in respect of the Group’s business segments. The format is based on the Group’s management and internal reporting structure. In a manner consistent with the way in which information is reported internally to the Group’s chief operating decision maker for the purposes of resource allocation and performance assessment, the Group has identified the following five reportable segments. No operating segments have been aggregated to form the following reportable segments. (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. The segments were determined primarily because the Group manages its exploration and production, refining, marketing and distribution, chemicals, and corporate and others businesses separately. The reportable segments are each managed separately because they manufacture and/ or distribute distinct products with different production processes and due to their distinct operating and gross margin characteristics. 199 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 41 SEGMENT REPORTING (Continued) (1) Information of reportable segmental revenues, profits or losses, assets and liabilities The Group’s chief operating decision maker evaluates the performance and allocates resources to its operating segments on an operating profit basis, without considering the effects of finance costs or investment income. Inter-segment transfer pricing is based on the market price or cost plus an appropriate margin, as specified by the Group’s policy. Assets and liabilities dedicated to a particular segment’s operations are included in that segment’s total assets and liabilities. Segment assets include all tangible and intangible assets, except for interest in associates and joint ventures, investments, deferred tax assets, cash and cash equivalents, time deposits with financial institutions and other unallocated assets. Segment liabilities exclude short-term debts, income tax payable, long-term debts, loans from Sinopec Group Company and fellow subsidiaries, deferred tax liabilities and other unallocated liabilities. Information of the Group’s reportable segments is as follows: 2024 2023 RMB million RMB million Revenue from primary business Exploration and production External sales 175,844 177,980 Inter-segment sales 117,297 116,703 293,141 294,683 Refining External sales 165,335 170,691 Inter-segment sales 1,312,728 1,355,310 1,478,063 1,526,001 Marketing and distribution External sales 1,665,827 1,756,575 Inter-segment sales 7,337 17,943 1,673,164 1,774,518 Chemicals External sales 418,294 411,379 Inter-segment sales 97,925 94,426 516,219 505,805 Corporate and others External sales 590,021 630,248 Inter-segment sales 864,348 905,264 1,454,369 1,535,512 Elimination of Inter-segment sales (2,399,635) (2,489,646) Revenue from primary business 3,015,321 3,146,873 Other operating revenues Exploration and production 4,108 5,336 Refining 3,439 3,785 Marketing and distribution 41,194 43,911 Chemicals 7,643 9,502 Corporate and others 2,857 2,808 Other operating revenues 59,241 65,342 Revenue 3,074,562 3,212,215 200 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 41 SEGMENT REPORTING (Continued) (1) Information of reportable segmental revenues, profits or losses, assets and liabilities (Continued) 2024 2023 RMB million RMB million Result Operating profit/(loss) By segment – Exploration and production 56,385 44,963 – Refining 6,714 20,608 – Marketing and distribution 18,646 25,939 – Chemicals (9,997) (6,036) – Corporate and others (432) 604 – Elimination (630) 750 Total segment operating profit 70,686 86,828 Share of profit/(loss) from associates and joint ventures – Exploration and production 3,325 3,061 – Refining (1,554) (750) – Marketing and distribution 3,675 3,383 – Chemicals (1,505) (4,704) – Corporate and others 5,020 5,209 Aggregate share of profits from associates and joint ventures 8,961 6,199 Investment income – Exploration and production 1 – – Refining 31 30 – Marketing and distribution – – – Chemicals (185) (33) – Corporate and others 822 832 Aggregate investment income 669 829 Net finance costs (11,174) (9,922) Profit before taxation 69,142 83,934 31 December 31 December 2024 2023 RMB million RMB million Assets Segment assets – Exploration and production 485,208 445,556 – Refining 330,332 331,116 – Marketing and distribution 390,483 387,643 – Chemicals 268,458 255,577 – Corporate and others 152,743 153,740 Total segment assets 1,627,224 1,573,632 Interest in associates and joint ventures 243,488 232,630 Financial assets at fair value through other comprehensive income 416 450 Deferred tax assets 18,777 20,110 Cash and cash equivalents, time deposits with financial institutions and other bank balances 145,580 163,537 Other unallocated assets 45,955 34,337 Total assets 2,081,440 2,024,696 Liabilities Segment liabilities – Exploration and production 193,350 187,385 – Refining 71,783 55,095 – Marketing and distribution 252,247 246,586 – Chemicals 100,617 90,489 – Corporate and others 165,426 206,674 Total segment liabilities 783,423 786,229 Short-term debts 87,780 58,534 Income tax payable 1,706 1,454 Long-term debts 187,202 163,049 Loans from Sinopec Group Company and fellow subsidiaries 27,978 37,248 Deferred tax liabilities 7,324 7,817 Other unallocated liabilities 13,880 14,556 Total liabilities 1,109,293 1,068,887 201 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 41 SEGMENT REPORTING (Continued) (1) Information of reportable segmental revenues, profits or losses, assets and liabilities (Continued) 2024 2023 RMB million RMB million Capital expenditure Exploration and production 82,253 78,596 Refining 29,341 22,899 Marketing and distribution 14,128 15,735 Chemicals 44,664 55,038 Corporate and others 4,579 4,485 174,965 176,753 Depreciation, depletion and amortisation Exploration and production 50,443 46,755 Refining 20,204 20,386 Marketing and distribution 24,485 23,995 Chemicals 20,938 18,958 Corporate and others 4,644 3,656 120,714 113,750 Impairment losses on long-lived assets Exploration and production 211 887 Refining 230 191 Marketing and distribution 424 278 Chemicals 1,547 1,280 Corporate and others – – 2,412 2,636 (2) Geographical information The geographical information of the Group’s external sales and the Group’s non-current assets, excluding financial instruments and deferred tax assets are analysed by different regions. In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers, and segment assets are based on the geographical location of the assets. The Group’s external sales and non-current assets from mainland China were RMB2,478,160 million (2023: RMB2,635,334 million) and RMB1,491,020 million (2023:RMB1,426,377 million). The proportion to the total revenue from domestic transactions and the proportion to the total non-current assets are 80.6% (2023: 82.0%) and 97.1% (2023: 97.5%). In addition, there is no other single country or region with segment revenue or segment assets accounting for more than 10%. 202 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 42 PRINCIPAL SUBSIDIARIES As at 31 December 2024, the following list contains the particulars of subsidiaries which principally affected the results, assets and liabilities of the Group. Particulars Interests Interests held by of issued capital held by the non-controlling Name of company (million) Company % 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 (“SOIHL”) USD4,621 100.00 – 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 RMB8,168 90.30 9.70 Crude oil processing and petroleum products manufacturing Sinopec Qingdao Refining and Chemical Company Limited RMB5,153 85.00 15.00 Manufacturing of intermediate petrochemical products and petroleum products Zhongguo Petroleum & Chemical Sales Company Limited RMB28,403 70.42 29.58 Marketing and distribution of refined petroleum products Sinopec Kantons Holdings Limited (“Sinopec Kantons”) HKD248 60.33 39.67 Provision of crude oil pipeline transportation 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 Sinopec Shanghai Gaoqiao Petrochemical Company Limited (“Gaoqiao Petrochemical”) RMB10,000 55.00 45.00 Manufacturing of intermediate petrochemical products and petroleum products Sinopec Hunan Petrochemical Co., Ltd. (“Hunan Petrochemical”) RMB7,333 74.69 25.31 Crude oil processing and petroleum products manufacturing Sinopec Shanghai Petrochemical Company Limited (“Shanghai Petrochemical”) RMB10,799 51.14 48.86 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 Except for Sinopec Kantons and SOIHL, which are incorporated in Bermuda and Hong Kong SAR respectively, all of the above principal subsidiaries are incorporated and operate their businesses principally in the PRC. All of the above principal subsidiaries are limited companies. Note: (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. 203 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 42 PRINCIPAL SUBSIDIARIES (Continued) Summarised financial information on subsidiaries with material non-controlling interests Set out below are the summarised financial information which the amount before inter-company eliminations for each subsidiary that has non- controlling interests that are material to the Group. Summarised consolidated statement of financial position Marketing Company SIPL* Shanghai Petrochemical Sinopec Kantons Gaoqiao Petrochemical Hunan Petrochemical 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 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB million million million million million million million million million million million million Current assets 220,984 202,333 20,088 19,529 20,633 15,455 6,599 6,118 16,797 18,521 6,417 3,951 Current liabilities (228,365) (217,315) (778) (936) (16,289) (14,573) (155) (207) (5,736) (7,107) (14,328) (11,979) Net current (liabilities)/assets (7,381) (14,982) 19,310 18,593 4,344 882 6,444 5,911 11,061 11,414 (7,911) (8,028) Non-current assets 318,997 324,288 9,439 8,983 21,054 24,110 7,960 8,001 14,578 14,904 30,828 22,167 Non-current liabilities (53,557) (56,057) (11,535) (11,583) (266) (63) (196) (255) (3,933) (4,050) (6,166) (8,317) Net non-current assets/(liabilities) 265,440 268,231 (2,096) (2,600) 20,788 24,047 7,764 7,746 10,645 10,854 24,662 13,850 Net assets 258,059 253,249 17,214 15,993 25,132 24,929 14,208 13,657 21,706 22,268 16,751 5,822 Attributable to owners of the Company 173,806 170,919 11,154 9,789 12,799 12,542 8,552 8,220 11,938 12,248 12,511 4,349 Attributable to non-controlling interests 84,253 82,330 6,060 6,204 12,333 12,387 5,656 5,437 9,768 10,020 4,240 1,473 Summarised consolidated statement of comprehensive income Year ended 31 December Marketing Company SIPL* Shanghai Petrochemical Sinopec Kantons Gaoqiao Petrochemical Hunan Petrochemical 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB million million million million million million million million million million million million Revenue 1,710,948 1,814,710 2,881 2,952 87,060 92,932 609 549 60,338 60,156 68,683 18,648 Profit/(loss) for the year 16,928 22,418 3,195 3,208 317 (1,349) 1,075 1,169 (468) 106 820 1,138 Total comprehensive income 17,095 23,260 2,641 (1,193) 261 (1,304) 1,118 1,252 (467) 105 826 1,138 Comprehensive income attributable to non-controlling interests 6,709 8,259 1,277 (861) 131 (646) 444 499 (210) 47 209 288 Dividends paid to non-controlling interests 5,192 6,749 – – 8 7 225 195 30 895 – – Summarised statement of cash flows Year ended 31 December Marketing Company SIPL* Shanghai Petrochemical Sinopec Kantons Gaoqiao Petrochemical Hunan Petrochemical 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB million million million million million million million million million million million million Net cash generated from/(used in) operating activities 41,550 50,598 1,101 1,947 7,624 664 81 557 362 (1,507) 1,898 769 Net cash (used in)/generated from investing activities (22,182) (22,148) 1,218 509 (2,055) 1,973 (640) (633) 1,606 4,735 (3,578) (5,305) Net cash (used in)/generated from financing activities (22,371) (27,172) (1,138) (8,394) (2,268) 1,378 (575) (501) (1,970) (3,229) 1,226 4,936 Net (decrease)/increase in cash and cash equivalents (3,003) 1,278 1,181 (5,938) 3,301 4,015 (1,134) (577) (2) (1) (454) 400 Cash and cash equivalents at 1 January 14,569 13,204 14,262 20,040 4,906 889 1,665 2,224 2 3 456 56 Effect of foreign currency exchange rate changes 132 87 193 160 2 2 13 18 – – – – Cash and cash equivalents at 31 December 11,698 14,569 15,636 14,262 8,209 4,906 544 1,665 – 2 2 456 * 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. 204 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 43 FINANCIAL RISK MANAGEMENT AND FAIR VALUES Overview Financial assets of the Group include cash and cash equivalents, time deposits with financial institutions, financial assets at fair value through profit or loss, derivative financial assets, trade accounts receivable, amounts due from Sinopec Group Company and fellow subsidiaries, amounts due from associates and joint ventures, financial assets at FVOCI and other receivables. Financial liabilities of the Group include short-term debts, loans from Sinopec Group Company and fellow subsidiaries, derivative financial liabilities, trade accounts payable and bills payable, amounts due to Sinopec Group Company and fellow subsidiaries, amounts due to associates and joint ventures, other payables, long-term debts and lease liabilities. The Group has exposure to the following risks from its uses of financial instruments: • credit risk; • liquidity risk; and • market risk. The Board of Directors has overall responsibility for the establishment, oversight of the Group’s risk management framework, and developing and monitoring the Group’s risk management policies. The Group’s risk management policies are established to identify and analyse the risks faced by the Group, and set appropriate risk limits and controls to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and management controls and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations. Internal audit department undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Group’s audit committee. Credit risk (i) Risk management Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s deposits placed with financial institutions (including structured deposits) and receivables from customers. To limit exposure to credit risk relating to deposits, the Group primarily places cash deposits only with large financial institutions in the PRC with acceptable credit ratings. The majority of the Group’s trade accounts receivable relate to sales of petroleum and chemical products to related parties and third parties operating in the petroleum and chemical industries. No single customer accounted for greater than 10% of total trade accounts receivable at 31 December 2024, except the amounts due from Sinopec Group Company and fellow subsidiaries. Management performs ongoing credit evaluations of the Group’s customers’ financial condition and generally does not require collateral on trade accounts receivable. The Group maintains a loss allowance for expected credit losses and actual losses have been within management’s expectations. The carrying amounts of cash and cash equivalents, time deposits with financial institutions, financial assets at fair value through profit or loss, derivative financial assets, trade accounts receivable, financial assets at FVOCI and other receivables, represent the Group’s maximum exposure to credit risk in relation to financial assets. (ii) Impairment of financial assets The Group’s primary type of financial assets that are subject to the expected credit loss model is trade accounts receivable, financial assets at FVOCI and other receivables. The Group’s cash deposits are placed only with large financial institutions with acceptable credit ratings, and there is no material impairment loss identified. For trade accounts receivable and financial assets at FVOCI, the Group applies the IFRS 9 simplified approach to measuring ECLs which uses a lifetime expected loss allowance for all trade accounts receivable and financial assets at FVOCI. To measure the ECLs, trade accounts receivable and financial assets at FVOCI have been grouped based on shared credit risk characteristics and the days past due. The ECLs were calculated based on historical actual credit loss experience. The rates were considered the differences between economic conditions during the period over which the historical data has been collected, current conditions and the Group’s view of economic conditions over the expected lives of the receivables. The Group performed the calculation of ECL rates by the operating segment. 205 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 43 FINANCIAL RISK MANAGEMENT AND FAIR VALUES (Continued) Credit risk (Continued) (ii) Impairment of financial assets (Continued) The following table provides information about the exposure to credit risk and ECLs for accounts receivable as at 31 December 2024 and 2023. 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 2024 RMB million RMB million RMB million % RMB million RMB million Current and within 1 year past due 43,813 6,048 4 0.3% 110 114 1 to 2 years past due 466 366 32 30.0% 30 62 2 to 3 years past due 154 53 1 55.4% 56 57 Over 3 years past due 4,082 3,670 3,537 100.0% 412 3,949 Total 48,515 10,137 3,574 608 4,182 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 2023 RMB million RMB million RMB million % RMB million RMB million Current and within 1 year past due 48,261 8,958 4 0.2% 70 74 1 to 2 years past due 326 139 1 24.6% 46 47 2 to 3 years past due 116 34 25 45.1% 37 62 Over 3 years past due 3,965 3,599 3,467 100.0% 366 3,833 Total 52,668 12,730 3,497 519 4,016 All of the entity’s other receivables are considered to have low credit risk, and the loss allowance recognised during the period was therefore limited to 12 months expected losses. The Group considers there was no significant increase in credit risk for other receivables by taking into account of their past history of making payments when due and current ability to pay, and thus the impairment provision recognised during the period was limited to 12 months expected losses. 206 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 43 FINANCIAL RISK MANAGEMENT AND FAIR VALUES (Continued) Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. Management prepares monthly cash flow budget to ensure that the Group will always have sufficient liquidity to meet its financial obligations as they fall due. The Group arranges and negotiates financing with financial institutions and maintains a certain level of standby credit facilities to reduce the Group’s liquidity risk. As at 31 December 2024, the Group has standby credit facilities with several PRC financial institutions which provide borrowings up to RMB722,258 million (2023: RMB416,358 million) on an unsecured basis, at a weighted average interest rate of 2.31% per annum (2023: 2.23%). As at 31 December 2024, the Group’s outstanding borrowings under these facilities were RMB48,231 million (2023: RMB59,815 million) and were included in debts. The following table sets out the remaining contractual maturities at the date of the statement of financial position of the Group’s financial liabilities, which are based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on prevailing rates current at the date of the statement of financial position) and the earliest date the Group would be required to repay: 31 December 2024 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 87,780 88,186 88,186 – – – Long-term debts 187,202 199,405 1,281 89,384 65,805 42,935 Loans from Sinopec Group Company and fellow subsidiaries 27,978 28,540 5,280 6,472 7,306 9,482 Lease liabilities 172,735 266,379 18,607 12,025 34,449 201,298 Derivative financial liabilities 3,412 3,412 3,412 – – – Trade accounts payable and bills payable 256,597 256,597 256,597 – – – Other payables 101,005 101,005 101,005 – – – 836,709 943,524 474,368 107,881 107,560 253,715 31 December 2023 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 58,534 58,964 58,964 – – – Long-term debts 163,049 177,294 3,958 59,114 89,223 24,999 Loans from Sinopec Group Company and fellow subsidiaries 37,248 40,605 13,305 9,060 8,862 9,378 Lease liabilities 181,400 291,252 18,358 12,512 35,821 224,561 Derivative financial liabilities 2,752 2,752 2,752 – – – Trade accounts payable and bills payable 259,000 259,000 259,000 – – – Other payables 94,796 94,796 94,796 – – – 796,779 924,663 451,133 80,686 133,906 258,938 Management believes that the Group’s current cash on hand, expected cash flows from operations and available standby credit facilities from financial institutions will be sufficient to meet the Group’s short-term and long-term capital requirements. 207 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 43 FINANCIAL RISK MANAGEMENT AND FAIR VALUES (Continued) Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk. (a) Currency risk Currency risk arises on financial instruments that are denominated in a currency other than the functional currency in which they are measured. The Group does not have significant financial instruments that are denominated in foreign currencies other than the functional currencies of respective entities as at 31 December, and consequently does not have significant exposure to foreign currency risk. (b) Interest rate risk The Group’s interest rate risk exposure arises primarily from its short-term and long-term debts and loans from Sinopec Group Company and fellow subsidiaries. Debts bearing interest at variable rates and at fixed rates expose the Group to cash flow interest rate risk and fair value interest rate risk respectively. The interest rates and terms of repayment of short-term and long-term debts, and loans from Sinopec Group Company and fellow subsidiaries of the Group are disclosed in Note 30. As at 31 December 2024, it is estimated that a general increase/decrease of 100 basis points in variable interest rates, with all other variables held constant, would decrease/increase the Group’s profit for the year by approximately RMB1,794 million (2023: decrease/increase by approximately RMB1,353 million). This sensitivity analysis has been determined assuming that the change of interest rates was applied to the Group’s debts outstanding at the date of the statement of financial position with exposure to cash flow interest rate risk. The analysis is performed on the same basis for 2023. (c) Commodity price risk and hedge accounting The Group engages in oil and gas operations and is exposed to commodity price risk related to price volatility of crude oil, refined oil products and chemical products. The fluctuations in prices of crude oil, refined oil products and chemical products could have significant impact on the Group. The Group uses derivative financial instruments, including commodity futures and swaps contracts, to manage a portion of this risk. Based on the dynamic study and judging of the market, combined with the resource demand and production and operation plan, the Group evaluate and monitor the market risk exposure caused by transaction positions, and continuously manage and hedge the risk of commodity price fluctuation caused by market changes. As at 31 December 2024, the Group had certain commodity contracts of crude oil, refined oil products and chemical products designated as qualified cash flow hedges and economic hedges. As at 31 December 2024, it is estimated that a general increase/decrease of USD10 per barrel in basic price of derivative financial instruments, with all other variables held constant, would impact the fair value of derivative financial instruments, which would decrease/increase the Group’s profit for the year by approximately RMB8,698 million (2023: decrease/increase RMB1,139 million), and increase/decrease the Group’s other reserves by approximately RMB5,883 million (2023: decrease/increase RMB4,537 million). This sensitivity analysis has been determined assuming that the change in prices had occurred at the date of the statement of financial position and the change was applied to the Group’s derivative financial instruments at that date with exposure to commodity price risk. The analysis is performed on the same basis for 2023. For the hedge relationship with cash flow hedge accounting applied, the corresponding changes in cash flow hedge reserves are as follows: 2024 2023 RMB million RMB million Beginning of the year 5,758 3,079 Effective portion of changes in fair value of hedging instruments recognised during the year (1,193) 7,420 Reclassification adjustments for amounts transferred to the consolidated income statement (562) (1,245) Amounts transferred to initial carrying amount of hedged items (1,157) (3,078) Related tax 492 (418) End of the year 3,338 5,758 The ineffective portion of cash flow hedge relationship is disclosed in Note 8. 208 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 43 FINANCIAL RISK MANAGEMENT AND FAIR VALUES (Continued) Fair values (i) Financial instruments carried at fair value The following table presents the carrying value of financial instruments measured at fair value at the date of the statement of financial position across the three levels of the fair value hierarchy defined in IFRS 13, Fair Value Measurement, with the fair value of each financial instrument categorised in its entirety based on the lowest level of input that is significant to that fair value measurement. The levels are defined as follows: • 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. At 31 December 2024 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: – Fund Investments 4 – – 4 Derivative financial assets: – Derivative financial assets 824 1,730 – 2,554 Financial assets at fair value through other comprehensive income: – Equity instruments 93 – 323 416 – Trade accounts receivable and bills receivable – – 2,613 2,613 921 1,730 2,936 5,587 Liabilities Derivative financial liabilities: – Derivative financial liabilities 2,496 916 – 3,412 2,496 916 – 3,412 At 31 December 2023 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: – Fund Investments 3 – – 3 Derivative financial assets: – Derivative financial assets 5,942 3,779 – 9,721 Financial assets at fair value through other comprehensive income: – Equity instruments 120 – 330 450 – Trade accounts receivable and bills receivable – – 2,221 2,221 6,065 3,779 2,551 12,395 Liabilities Derivative financial liabilities: – Derivative financial liabilities 367 2,385 – 2,752 367 2,385 – 2,752 During the years ended 31 December 2024 and 2023, there was no transfer between instruments in Level 1 and Level 2. Management of the Group uses discounted cash flow model with inputted interest rate, which were influenced by historical fluctuation and the probability of market fluctuation, to evaluate the fair value of trade accounts receivable and bills receivable classified as Level 3 financial assets. 209 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 43 FINANCIAL RISK MANAGEMENT AND FAIR VALUES (Continued) Fair values (Continued) (ii) Fair values of financial instruments carried at other than fair value The disclosures of the fair value estimates, and their methods and assumptions of the Group’s financial instruments, are made to comply with the requirements of IFRS 7 and IFRS 9 and should be read in conjunction with the Group’s consolidated financial statements and related notes. The estimated fair value amounts have been determined by the Group using market information and valuation methodologies considered appropriate. However, considerable judgement is required to interpret market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Group could realise in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. The fair values of the Group’s financial instruments carried at other than fair value (other than long-term indebtedness and investments in unquoted equity securities) approximate their carrying amounts due to the short-term maturity of these instruments. The fair values of long-term indebtedness are estimated by discounting future cash flows using current market interest rates offered to the Group for debt with substantially the same characteristic and maturities range from 1.74% to 4.49% (2023: 2.69% to 5.47%). The following table presents the carrying amount and fair value of the Group’s long-term indebtedness other than loans from Sinopec Group Company and fellow subsidiaries at 31 December 2024 and 2023: 31 December 31 December 2024 2023 RMB million RMB million Carrying amount 230,613 170,408 Fair value 228,946 167,014 The Group has not developed an internal valuation model necessary to estimate the fair values of loans from Sinopec Group Company and fellow subsidiaries as it is not considered practicable to estimate their fair values because the cost of obtaining discount and borrowing rates for comparable borrowings would be excessive based on the Group’s existing capital structure and the terms of the borrowings. Except for the above items, the financial assets and liabilities of the Group are carried at amounts not materially different from their fair values at 31 December 2024 and 2023. 44 ACCOUNTING ESTIMATES AND JUDGEMENTS The Group’s financial condition and results of operations are sensitive to accounting methods, assumptions and estimates that underlie the preparation of the consolidated financial statements. Management bases the assumptions and estimates on historical experience and on various other assumptions that it believes to be reasonable and which form the basis for making judgements about matters that are not readily apparent from other sources. On an ongoing basis, management evaluates its estimates. Actual results may differ from those estimates as facts, circumstances and conditions change. The selection of material accounting policies, the judgements and other uncertainties affecting application of such policies and the sensitivity of reported results to changes in conditions and assumptions are factors to be considered when reviewing the consolidated financial statements. The material accounting policies are set forth in Note 2. Management believes the following material accounting policies involve the most significant judgements and estimates used in the preparation of the consolidated financial statements. Oil and gas properties and reserves The accounting for the exploration and production’s oil and gas activities is subject to accounting rules that are unique to the oil and gas industry. There are two methods to account for oil and gas business activities, the successful efforts method and the full cost method. The Group has elected to use the successful efforts method. The successful efforts method reflects the volatility that is inherent in exploring for mineral resources in that costs of unsuccessful exploratory efforts are charged to expense as they are incurred. These costs primarily include dry hole costs, seismic costs and other exploratory costs. Under the full cost method, these costs are capitalised and written-off or depreciated over time. Engineering estimates of the Group’s oil and gas reserves are inherently imprecise and represent only approximate amounts because of the subjective judgements involved in developing such information. There are authoritative guidelines regarding the engineering criteria that have to be met before estimated oil and gas reserves can be designated as “proved”. Proved and proved developed reserves estimates are updated at least annually and take into account recent production and technical information about each field. In addition, as prices and cost levels change from year to year, the estimates of proved and proved developed reserves also change. This change is considered a change in estimate for accounting purposes and is reflected on a prospective basis in relation to depreciation rates. Oil and gas reserves have a direct impact on the assessment of the recoverability of the carrying amounts of oil and gas properties reported in the financial statements. If proved reserves estimates are revised downwards, earnings could be affected by changes in depreciation expense or an immediate write-down of the property’s carrying amount. Future dismantlement costs for oil and gas properties are estimated with reference to engineering estimates after taking into consideration the anticipated method of dismantlement required in accordance with industry practices in similar geographic area, including estimation of economic life of oil and gas properties, technology and price level. The present values of these estimated future dismantlement costs are capitalised as oil and gas properties with equivalent amounts recognised as provisions for dismantlement costs. Despite the inherent imprecision in these engineering estimates, these estimates are used in determining depreciation expense, impairment loss and future dismantlement costs. Capitalised costs of proved oil and gas properties are amortised on a unit-of-production method based on volumes produced and reserves. 210 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 44 ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued) Impairment for long-lived assets If circumstances indicate that the net book value of a long-lived asset, may not be recoverable, the asset may be considered “impaired”, and an impairment loss may be recognised in accordance with IAS 36 “Impairment of Assets”. The carrying amounts of long-lived assets are reviewed periodically in order to assess whether the recoverable amounts have declined below the carrying amounts. These assets are tested for impairment whenever events or changes in circumstances, including environmental protection and energy structure transition variables, indicate that their recorded carrying amounts may not be recoverable. When such a decline has occurred, the carrying amount is reduced to recoverable amount. For goodwill, the recoverable amount is estimated annually. The recoverable amount is the greater of the net selling price and the value in use. It is difficult to precisely estimate selling price because quoted market prices for the Group’s assets or cash-generating units are not readily available. Accordingly, the Group determines the recoverable amount based on the present value in use. The projected future cash flows of an asset are based on data from the most recent financial budget approved by management, as well as on a stabilized growth rate for the years following the period of that budget. In appropriate and reasonable circumstances, the growth rate can be zero or negative. Projected cash flows based on budgets usually cover five years, or longer periods if that is reasonable. When projecting cash flows for years beyond the budgeted period, the growth rate used does not exceed the long-term average growth rate of the business or markets in which products are located, or the long-term average growth rate of the market in which the asset is located, except where a higher growth rate can be justified. In determining the discount rate, the weighted average cost of capital is usually used as the basis. In determining the value in use, expected cash flows generated by the asset or the cash-generating units are discounted to their present value, which requires significant judgement relating to future selling prices of crude oil, natural gas, refined and chemical products, the production costs, the product mix, production volumes, production profiles, the oil and gas reserves and discount rate. Management uses all readily available information in determining an amount that is a reasonable approximation of recoverable amount, including estimates based on reasonable and supportable assumptions and projections of sale volume, selling price, amount of operating costs and discount rate. Depreciation Property, plant and equipment, other than oil and gas properties, are depreciated on a straight-line basis over the estimated useful lives of the assets, after taking into account the estimated residual value. Management reviews the estimated useful lives of the assets at least annually in order to determine the amount of depreciation expense to be recorded during any reporting period. The useful lives are based on the Group’s historical experience with similar assets and take into account anticipated technological changes. The depreciation expense for future periods is adjusted if there are significant changes from previous estimates. Measurement of expected credit losses The Group measures and recognises ECLs using readiness matrix, considering reasonable and supportable information about the relevant past events, current conditions and forecasts of future economic conditions. The Group regularly monitors and reviews the assumptions used for estimating ECLs. Allowance for diminution in value of inventories If the costs of inventories become higher than their net realisable values, an allowance for diminution in value of inventories is recognised. Net realisable value represents the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. Management bases the estimates on all available information, including the current market prices of the finished goods, and historical operating costs. If the actual selling prices were to be lower or the costs of completion were to be higher than estimated, the actual allowance for diminution in value of inventories could be higher than estimated. 45 PARENT AND ULTIMATE HOLDING COMPANY The directors consider the parent and ultimate holding company of the Group as at 31 December 2024 is Sinopec Group Company, a state-owned enterprise established in the PRC. This entity does not produce financial statements available for public use. 211 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 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 2024 2023 RMB RMB Non-current assets Property, plant and equipment, net 310,796 305,439 Construction in progress 85,166 70,306 Right-of-use assets 84,048 90,705 Investment in subsidiaries 336,761 312,553 Interest in associates 79,971 77,415 Interest in joint ventures 23,833 23,604 Financial assets at fair value through other comprehensive income 15 14 Deferred tax assets 5,601 6,567 Long-term prepayments and other assets 61,257 53,907 Total non-current assets 987,448 940,510 Current assets Cash and cash equivalents 27,520 64,471 Time deposits with financial institutions 1,626 350 Financial assets at fair value through profit or loss 4 3 Derivative financial assets 72 482 Trade accounts receivable 22,239 27,878 Financial assets at fair value through other comprehensive income 1,074 367 Dividends receivable 1 1,644 Inventories 67,751 67,922 Prepaid expenses and other current assets 93,029 85,840 Total current assets 213,316 248,957 Current liabilities Short-term debts 60,369 40,545 Loans from Sinopec Group Company and fellow subsidiaries 2,901 6,090 Lease liabilities 6,267 6,420 Derivative financial liabilities 148 251 Trade accounts payable and bills payable 77,964 86,642 Contract liabilities 9,832 9,079 Other payables 266,964 284,311 Total current liabilities 424,445 433,338 Net current liabilities 211,129 184,381 Total assets less current liabilities 776,319 756,129 Non-current liabilities Long-term debts 126,039 107,484 Loans from Sinopec Group Company and fellow subsidiaries – 5,936 Lease liabilities 80,887 86,399 Provisions 41,102 40,077 Other long-term liabilities 2,463 2,495 Total non-current liabilities 250,491 242,391 525,828 513,738 Equity Share capital 121,282 119,349 Reserves (a) 404,546 394,389 Total equity 525,828 513,738 212 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements (International) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2024 46 STATEMENT OF FINANCIAL POSITION AND RESERVE MOVEMENT OF THE COMPANY (Continued) (a) RESERVES MOVEMENT OF THE COMPANY The reconciliation between the opening and closing balances of each component of the Group’s consolidated reserves is set out in the consolidated statement of changes in equity. Details of the change in the Company’s individual component of reserves between the beginning and the end of the year are as follows: The Company 2024 2023 RMB million RMB million Capital reserve Balance at 1 January 7,002 7,038 Other equity movements under the equity method 43 (36) Others (599) – Balance at 31 December 6,446 7,002 Share premium Balance at 1 January 51,068 52,846 Purchase of own shares (1,672) (1,778) Issue of ordinary shares 9,597 – Balance at 31 December 58,993 51,068 Treasury shares Balance at 1 January – – Purchase of own shares (2,131) – Cancellation of repurchased own shares 2,130 – Balance at 31 December (1) – Statutory surplus reserve Balance at 1 January 106,134 101,009 Appropriation 4,529 5,125 Balance at 31 December 110,663 106,134 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 4,155 4,354 Changes in the fair value of investments in other equity instruments, net of deferred tax 1 2 Share of other comprehensive income of associates and joint ventures, net of deferred tax 227 (63) Cash flow hedges, net of deferred tax (563) (66) Special reserve (49) (72) Balance at 31 December 3,771 4,155 Retained earnings Balance at 1 January 109,030 103,651 Profit for the year 45,230 51,193 Distribution to owners (Note 14) (42,108) (40,760) Appropriation (4,529) (5,125) Special reserve 49 72 Others 2 (1) Balance at 31 December 107,674 109,030 404,546 394,389 213 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Differences between Consolidated Financial Statements Prepared in Accordance with the Accounting Policies Complying with CASs and IFRS Accounting Standards (Unaudited) (C) DIFFERENCES BETWEEN CONSOLIDATED FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH THE ACCOUNTING POLICIES COMPLYING WITH CASS AND IFRS ACCOUNTING STANDARDS (UNAUDITED) Other than the differences in the classifications of certain financial statements captions and the accounting for the items described below, there are no material differences between the Group’s consolidated financial statements prepared in accordance with the accounting policies complying with CASs and IFRS Accounting Standards. The reconciliation presented below is included as supplemental information, is not required as part of the basic financial statements and does not include differences related to classification, presentation or disclosures. Such information has not been subject to independent audit or review. The major differences are: (i) GOVERNMENT GRANTS Under CASs, grants from the government are credited to capital reserve if required by relevant governmental regulations. Under IFRS Accounting Standards, government grants relating to the purchase of fixed assets are recognised as deferred income and are transferred to the income statement over the useful life of these assets. (ii) SAFETY PRODUCTION FUND Under CASs, safety production fund should be recognised in profit or loss with a corresponding increase in reserve according to PRC regulations. Such reserve is reduced for expenses incurred for safety production purposes or, when safety production related fixed assets are purchased, is reduced by the purchased cost with a corresponding increase in the accumulated depreciation. Such fixed assets are not depreciated thereafter. Under IFRS Accounting Standards, payments are expensed as incurred, or capitalised as fixed assets and depreciated according to applicable depreciation methods. (iii) CAPITALISATION OF EXCHANGE DIFFERENCE OF SPECIFIC LOANS Under CASs, exchange difference arising on translation of specific loans and related interest denominated in a foreign currency should be capitalised as part of the cost of qualifying assets. Under IFRS Accounting Standards, such exchange difference is recognised in income statement unless the exchange difference represents an adjustment to interest. Effects of major differences between the shareholders’ equity under CASs and the total equity under IFRS Accounting Standards are analysed as follows: Notes 31 December 31 December 2024 2023 RMB million RMB million Shareholders’ equity under CASs 976,293 958,655 Adjustments: Government grants (i) (815) (868) Capitalisation of exchange difference of specific loans (iii) (3,331) (1,978) Total equity under IFRS Accounting Standards* 972,147 955,809 Effects of major differences between the net profit under CASs and the profit for the year under IFRS Accounting Standards are analysed as follows: Notes 2024 2023 RMB million RMB million Net profit under CASs 57,547 70,046 Adjustments: Government grants (i) 53 47 Safety production fund (ii) (47) (248) Capitalisation of exchange difference of specific loans (iii) (1,353) (1,978) Others (24) (3) Profit for the year under IFRS Accounting Standards* 56,176 67,864 * The figures are extracted from the consolidated financial statements prepared in accordance with the accounting policies complying with IFRS Accounting Standards during the year ended 31 December 2023 and 2024 which have been audited by KPMG. 214 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements Supplemental Information on Oil and Gas Producing Activities (Unaudited) (D) SUPPLEMENTAL INFORMATION ON OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED) This section provides supplemental information on oil and gas exploration and producing activities of the Group and its equity method investments at 31 December 2024 and 2023, and for the years then ended in the following four separate tables. Table I provides costs incurred in oil and gas exploration and development. Table II through IV provide information on the Group’s and its equity method investments’ estimated net proved reserve quantities, standardised measure of discounted future net cash flows, and changes in the standardised measure of discounted cash flows. Table I: Costs incurred in oil and gas exploration and development 2024 2023 RMB million RMB million Other Other Total China countries Total China countries The Group Exploration 24,879 24,879 – 23,514 23,514 – Development 58,270 57,982 288 56,940 56,782 158 Total costs incurred 83,149 82,861 288 80,454 80,296 158 Equity method investments Share of costs of exploration and development of associates and joint ventures 853 – 853 705 – 705 Total of the Group’s and its equity method investments’ 84,002 82,861 1,141 81,159 80,296 863 Table II: Reserve quantities information The Group’s and its equity method investments’ estimated net proved underground oil and gas reserves and changes thereto for the years ended 31 December 2024 and 2023 are shown in the following table. Proved oil and gas reserves are those quantities of oil and gas, which by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulation before contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether the estimate is a deterministic estimate or probabilistic estimate. Due to the inherent uncertainties and the limited nature of reservoir data, estimates of underground reserves are subject to change as additional information becomes available. Proved developed oil and gas reserves are proved reserves that can be expected to be recovered through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared with the cost of a new well. “Net” reserves exclude royalties and interests owned by others and reflect contractual arrangements and obligation of rental fee in effect at the time of the estimate. 215 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements Supplemental Information on Oil and Gas Producing Activities (Unaudited) (D) SUPPLEMENTAL INFORMATION ON OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED) (CONTINUED) Table II: Reserve quantities information (Continued) 2024 2023 Other Other Total China countries Total China countries The Group Proved developed and undeveloped reserves (oil) (million barrels) Beginning of the year 1,716 1,696 20 1,659 1,642 17 Revisions of previous estimates 87 85 2 88 80 8 Improved recovery 128 128 – 89 89 – Extensions and discoveries 144 144 – 130 130 – Production (253) (248) (5) (250) (245) (5) End of the year 1,822 1,805 17 1,716 1,696 20 Proved developed reserves Beginning of the year 1,524 1,507 17 1,506 1,489 17 End of the year 1,601 1,587 14 1,524 1,507 17 Proved undeveloped reserves Beginning of the year 192 189 3 153 153 – End of the year 221 218 3 192 189 3 Proved developed and undeveloped reserves (gas) (billion cubic feet) Beginning of the year 9,307 9,307 – 8,802 8,802 – Revisions of previous estimates 726 726 – 880 880 – Improved recovery 40 40 – 20 20 – Extensions and discoveries 1,049 1,049 – 819 819 – Production (1,260) (1,260) – (1,214) (1,214) – End of the year 9,862 9,862 – 9,307 9,307 – Proved developed reserves Beginning of the year 7,525 7,525 – 7,135 7,135 – End of the year 7,942 7,942 – 7,525 7,525 – Proved undeveloped reserves Beginning of the year 1,782 1,782 – 1,667 1,667 – End of the year 1,920 1,920 – 1,782 1,782 – 216 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements Supplemental Information on Oil and Gas Producing Activities (Unaudited) (D) SUPPLEMENTAL INFORMATION ON OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED) (CONTINUED) Table II: Reserve quantities information (Continued) 2024 2023 Other Other Total China countries Total China countries Equity method investments Proved developed and undeveloped reserves of associates and joint ventures (oil) (million barrels) Beginning of the year 287 – 287 303 – 303 Revisions of previous estimates 6 – 6 1 – 1 Improved recovery – – – 2 – 2 Extensions and discoveries 5 – 5 5 – 5 Production (23) – (23) (24) – (24) End of the year 275 – 275 287 – 287 Proved developed reserves Beginning of the year 253 – 253 260 – 260 End of the year 244 – 244 253 – 253 Proved undeveloped reserves Beginning of the year 34 – 34 43 – 43 End of the year 31 – 31 34 – 34 Proved developed and undeveloped reserves of associates and joint ventures (gas) (billion cubic feet) Beginning of the year 4 – 4 4 – 4 Revisions of previous estimates 8 – 8 3 – 3 Improved recovery – – – – – – Extensions and discoveries – – – – – – Production (3) – (3) (3) – (3) End of the year 9 – 9 4 – 4 Proved developed reserves Beginning of the year 4 – 4 3 – 3 End of the year 9 – 9 4 – 4 Proved undeveloped reserves Beginning of the year – – – 1 – 1 End of the year – – – – – – Total of the Group and its equity method investments Proved developed and undeveloped reserves (oil) (million barrels) Beginning of the year 2,003 1,696 307 1,962 1,642 320 End of the year 2,097 1,805 292 2,003 1,696 307 Proved developed and undeveloped reserves (gas) (billion cubic feet) Beginning of the year 9,311 9,307 4 8,806 8,802 4 End of the year 9,871 9,862 9 9,311 9,307 4 217 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements Supplemental Information on Oil and Gas Producing Activities (Unaudited) (D) SUPPLEMENTAL INFORMATION ON OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED) (CONTINUED) Table III: Standardised measure of discounted future net cash flows The following table represents the standardised measure of discounted future net cash flows related to the above proved oil and gas reserves. Estimated future cash inflows from production are computed by applying the average, first-day-of-the-month price adjusted for differential for oil and gas during the twelve-month period before the ending date of the period covered by the report to year-end quantities of estimated net proved reserves. Future price changes are limited to those provided by contractual arrangements in existence at the end of each reporting year. Future development and production costs are those estimated future expenditures necessary to develop and produce year-end estimated proved reserves based on year-end cost indices, assuming continuation of year-end economic conditions. Estimated future income taxes are calculated by applying appropriate year-end statutory tax rates to estimated future pre-tax net cash flows, less the tax basis of related assets. Discounted future net cash flows are calculated using 10% discount factors. This discounting requires a year-by-year estimate of when the future expenditure will be incurred and when the reserves will be produced. The information provided does not represent management’s estimate of the Group’s and its equity method investments’ expected future cash flows or value of proved oil and gas reserves. Estimates of proved reserve quantities are imprecise and change over time as new information becomes available. Moreover, probable and possible reserves, which may become proved in the future, are excluded from the calculations. The arbitrary valuation requires assumptions as to the timing and amount of future development and production costs. The calculations are made for the years ended 31 December 2024 and 2023 and should not be relied upon as an indication of the Group’s and its equity method investments’ future cash flows or value of its oil and gas reserves. 2024 2023 RMB million RMB million Other Other Total China countries Total China countries The Group Future cash flows 1,439,530 1,429,660 9,870 1,365,530 1,354,246 11,284 Future production costs (596,614) (592,612) (4,002) (576,620) (571,451) (5,169) Future development costs (110,305) (108,376) (1,929) (105,071) (102,896) (2,175) Future income tax expenses (184,546) (182,168) (2,378) (172,520) (169,975) (2,545) Undiscounted future net cash flows 548,065 546,504 1,561 511,319 509,924 1,395 10% annual discount for estimated timing of cash flows (162,045) (161,766) (279) (146,846) (146,599) (247) Standardised measure of discounted future net cash flows 386,020 384,738 1,282 364,473 363,325 1,148 Equity method investments Future cash flows 45,867 – 45,867 42,746 – 42,746 Future production costs (17,221) – (17,221) (16,828) – (16,828) Future development costs (6,073) – (6,073) (6,449) – (6,449) Future income tax expenses (4,366) – (4,366) (3,426) – (3,426) Undiscounted future net cash flows 18,207 – 18,207 16,043 – 16,043 10% annual discount for estimated timing of cash flows (8,705) – (8,705) (7,656) – (7,656) Standardised measure of discounted future net cash flows 9,502 – 9,502 8,387 – 8,387 Total of the Group’s and its equity method investments’ results of standardised measure of discounted future net cash flows 395,522 384,738 10,784 372,860 363,325 9,535 218 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Financial Statements Supplemental Information on Oil and Gas Producing Activities (Unaudited) (D) SUPPLEMENTAL INFORMATION ON OIL AND GAS PRODUCING ACTIVITIES (UNAUDITED) (CONTINUED) Table IV: Changes in the standardised measure of discounted cash flows 2024 2023 RMB million RMB million The Group Sales and transfers of oil and gas produced, net of production costs (132,173) (121,932) Net changes in prices and production costs (3,560) (75,738) Net changes in estimated future development cost (22,786) (21,664) Net changes due to extensions, discoveries and improved recoveries 77,661 61,899 Revisions of previous quantity estimates 35,705 40,389 Previously estimated development costs incurred during the year 24,928 21,883 Accretion of discount 48,768 52,985 Net changes in income taxes (6,996) 10,690 Net changes for the year 21,547 (31,488) Equity method investments Sales and transfers of oil and gas produced, net of production costs (2,247) (1,443) Net changes in prices and production costs 2,001 (6,646) Net changes in estimated future development cost (232) 335 Net changes due to extensions, discoveries and improved recoveries 272 329 Revisions of previous quantity estimates 381 94 Previously estimated development costs incurred during the year 464 343 Accretion of discount 964 1,411 Net changes in income taxes (488) 1,107 Net changes for the year 1,115 (4,470) Total of the Group’s and its equity method investments’ results of net changes for the year 22,662 (35,958) 219 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Corporate Information CORPORATE INFORMATION STATUTORY NAME 中國石油化工股份有限公司 ENGLISH NAME China Petroleum & Chemical Corporation CHINESE ABBREVIATION 中國石化 ENGLISH ABBREVIATION Sinopec Corp. LEGAL REPRESENTATIVE Mr. Ma Yongsheng AUTHORISED REPRESENTATIVES Mr. Zhao Dong Mr. Huang Wensheng SECRETARY TO THE BOARD Mr. Huang Wensheng REPRESENTATIVE ON SECURITIES MATTERS Mr. Zhang Zheng REGISTERED ADDRESS AND PLACE OF BUSINESS No.22 Chaoyangmen North Street, Chaoyang District Beijing, PRC Postcode : 100728 Tel. : 86-10-59960028 Fax : 86-10-59960386 Website : http://www.sinopec.com E-mail addresses : ir@sinopec.com REGISTERED ADDRESS CHANGE INFORMATION No change during the reporting period PLACE OF BUSINESS IN HONG KONG 20th Floor, Office Tower Convention Plaza 1 Harbour Road Wanchai Hong Kong CHANGES IN THE PLACES FOR INFORMATION DISCLOSURE AND THE PROVISION OF REPORTS No change during the reporting period LEGAL ADVISORS Domestic China: Haiwen & Partners 20th Floor, Fortune Financial Centre No. 5, Dong San Huan Central Road Chaoyang District Beijing PRC Postcode: 100020 Hong Kong, China: Zhong Lun Law Firm LLP 4th Floor, Jardine House 1 Connaught Plaza Central, Hong Kong REGISTRARS A Shares: China Securities Registration and Clearing Company Limited Shanghai Branch Company 188 Yanggao South Road Shanghai Pilot Free Trade Zone, PRC H Shares: Computershare Hong Kong Investor Services Limited Shops 1712-1716, 17th Floor, Hopewell Centre 183 Queen’s Road East Wan Chai, Hong Kong COPIES OF THIS ANNUAL REPORT ARE AVAILABLE AT The PRC: China Petroleum & Chemical Corporation Board Secretariat No.22 Chaoyangmen North Street, Chaoyang District Beijing, PRC PLACES OF LISTING OF SHARES, STOCK NAMES AND STOCK CODES A Shares: Shanghai Stock Exchange Stock short name: SINOPEC CORP Stock code: 600028 H Shares: Hong Kong Stock Exchange Stock short name: SINOPEC CORP Stock code: 00386 NAMES AND ADDRESSES OF AUDITORS OF SINOPEC CORP. Domestic Auditors : KPMG Huazhen LLP Certified Public Accountants in China Address : 8th Floor KPMG Tower Oriental Plaza 1 East Chang An Avenue, Beijing, PRC Postcode : 100738 Overseas Auditors : KPMG Public Interest Entity Auditor registered in accordance with the Accounting and Financial Reporting Council Ordinance Address : 8th Floor, Prince’s Building 10 Chater Road Central, Hong Kong 220 CHINA PETROLEUM & CHEMICAL CORPORATION Annual Report 2024 Documents for Inspection DOCUMENTS FOR INSPECTION The Company’s 2024 annual report is disclosed on the website of the SSE (http://www.sse.com.cn) and the Company’s designated information disclosure media China Securities News, Shanghai Securities News and Securities Times. The following documents will be available for inspection during normal business hours after 21 March 2025 at the registered address of Sinopec Corp. upon requests by the relevant regulatory authorities and shareholders in accordance with the Articles of Association and the laws and regulations of PRC: a) The original copies of the 2024 annual report signed by Mr. Ma Yongsheng, the Chairman; b) The original copies of the audited financial statements and consolidated financial statements as of 31 December 2024 prepared under CASs and IFRS Accounting standard, signed by Mr. Ma Yongsheng, the Chairman, Mr. Zhao Dong, the Vice Chairman and President, Ms. Shou Donghua, the Chief Financial Officer and head of the financial department of Sinopec Corp.; c) The above original auditors’ reports signed by the auditors; and d) Copies of the documents that Sinopec Corp. has published during the reporting period. By Order of the Board Ma Yongsheng Chairman Beijing, PRC, 21 March 2025 If there is any inconsistency between the Chinese and English versions of this annual report, the Chinese version shall prevail. Printed on environmentally friendly paper 中國北京市朝陽區朝陽門北大街22 號 22 Chaoyangmen North Street, Chaoyang District, Beijing, China www.sinopec.com