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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Shanghai Petrochemical Co Ltd (PK) | USOTC:SPTJF | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.14015 | 0.1165 | 0.1651 | 0.00 | 21:02:10 |
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of September 2023
Commission File Number: 1-12158
Sinopec Shanghai Petrochemical Company Limited
(Translation of registrants name into English)
No. 48 Jinyi Road, Jinshan District, Shanghai, 200540
The Peoples Republic of China
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
EXHIBITS
Exhibit Number | ||
99.1 | 2023 Interim Report |
DisclaimerForward-Looking Statements
We may, in this document, make certain statements that are not historical facts and relate to analyses and other information which are based on forecasts of future results and estimates of amounts not yet determinable. These statements may also relate to our future prospects, expectations, developments and business strategies. Words such as believe, anticipate, expect, intend, seek, will, plan, could, may, endeavor, target, forecast and project and similar expressions are intended to identify such forward-looking statements but are not the exclusive means of identifying such statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and there are risks that the predictions, forecasts, projections, and other forward-looking statements will not be achieved. If one or more of these risks materialize, or should underlying assumptions prove incorrect, our actual results may differ materially from those anticipated. You should understand that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors and others are discussed more fully under the section titled Item 3. Key InformationC. Risk Factors in our most recent annual report on Form 20-F filed on April 26, 2023, and in other filings with the United States Securities and Exchange Commission. The list of factors discussed therein is not exhaustive; when relying on forward-looking statements to make investment decisions, you should carefully consider both these factors and other uncertainties and events. Forward-looking statements apply only as of the date on which they are made, and we do not undertake any obligation to update or revise any of them, whether as a result of new information, future events or otherwise.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SINOPEC SHANGHAI PETROCHEMICAL COMPANY LIMITED | ||||||
Date: September 22, 2023 | By: | /s/ Wan Tao | ||||
Name: |
Wan Tao | |||||
Title: | Chairman of the Board of Directors |
3
Exhibit 99.1
2023 Interim Report ( A joint stock limited company incorporated in the Peoples Republic of China ) Stock code: 00338 Hong Kong 600688 Shanghai
CONTENTS
2 | IMPORTANT MESSAGE | |
3 | DEFINITIONS | |
4 | CORPORATE INTRODUCTION AND MAJOR FINANCIAL INDICATORS | |
8 | REPORT OF THE DIRECTORS | |
26 | MAJOR EVENTS | |
41 | CHANGE IN SHARE CAPITAL OF ORDINARY SHARES AND SHAREHOLDERS | |
45 | DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND OTHERS | |
50 | Report on Review of Interim Financial Information | |
A. Condensed Consolidated Interim Financial Information Prepared under International Financial Reporting Standards (unaudited) | ||
51 | Consolidated Statement of Profit or Loss for the six months ended 30 June 2023 | |
52 | Consolidated Statement of Profit or Loss and Other Comprehensive Income for the six months ended 30 June 2023 | |
53 | Consolidated Statement of Financial Position at 30 June 2023 | |
56 | Consolidated Statement of Changes in Equity for the six months ended 30 June 2023 | |
58 | Condensed Consolidated Cash Flow Statement for the six months ended 30 June 2023 | |
60 | Notes to the unaudited interim financial report | |
B. Interim Financial Statements Prepared under China Accounting Standards for Business Enterprises (unaudited) | ||
87 | Consolidated and Company Balance Sheets As At 30 June 2023 | |
89 | Consolidated and Company Income Statements For The Six Months Ended 30 June 2023 | |
91 | Consolidated and Company Cash Flow Statements For The Six Months Ended 30 June 2023 | |
93 | Consolidated Statement of Changes In Shareholders Equity For The Six Months Ended 30 June 2023 | |
95 | Statement of Changes In Shareholders Equity For The Six Months Ended 30 June 2023 | |
97 | Notes to The Financial Statements | |
252 | C. Supplementary Information to The Financial Statements | |
255 | Written Confirmation Opinions of Directors, Supervisors and Senior Management on the Companys 2023 Interim Report | |
257 | Corporate Information |
2023 Interim Report |
1 |
IMPORTANT MESSAGE
1. | The Board, the Supervisory Committee of Sinopec Shanghai Petrochemical Company Limited (the Company) and the Directors, Supervisors and senior management warrant the truthfulness, accuracy and completeness of the information contained in this 2023 interim report, and warrant that there are no false representations or misleading statements contained in, or material omissions from, the 2023 interim report of the Company, and severally and jointly accept legal responsibility. |
2. | All directors of the Company attended the Second Meeting of the 11th session of the Board, and considered and approved the 2023 Interim Report of the Company at this meeting. |
3. | The interim financial report for the six months ended 30 June 2023 (the Reporting Period) is unaudited. |
4. | Mr. Wan Tao, Chairman and the responsible person of the Company; Mr. Du Jun, Director, Vice President and Chief Financial Officer overseeing the accounting department; and Ms. Yang Yating, person in charge of the Accounting Department (Accounting Chief) and Director of Finance Department hereby warrant the truthfulness, accuracy, and completeness of the financial statements contained in the 2023 interim report. |
5. | The Company did not distribute the half-year profit for 2023 nor was there any capitalization of capital reserves. |
6. | The statements regarding the Companys plans for future development and operation are forward-looking statements and do not constitute any commitments to investors. Investors should pay attention to the relevant investment risks. |
7. | There was no incident of appropriation of funds by the controlling shareholder of the Company and its connected persons for non-operational purposes. |
8. | The Company did not provide external guarantees in violation of the required decision-making procedures. |
9. | Reminder of Major Risks |
Potential risks are elaborated in this interim report. Please refer to Management Discussion and Analysis in section 2 of the Report of the Directors in chapter 3 for details of the potential risks arising from the future development of the Company.
10. | The 2023 interim report is published in both Chinese and English. In the event of any discrepancy between the English and Chinese versions, the Chinese version shall prevail. |
2 | Sinopec Shanghai Petrochemical Company Limited |
DEFINITIONS
In this report, unless the context otherwise specifies, the following terms shall have the following meanings:
Company or Sinopec Shanghai | refers to | Sinopec Shanghai Petrochemical Company Limited | ||
Board | refers to | the Board of Directors of the Company | ||
Director(s) | refers to | the Director(s) of the Company | ||
Supervisory Committee | refers to | the Supervisory Committee of the Company | ||
Supervisor(s) | refers to | the Supervisor(s) of the Company | ||
PRC or China | refers to | the Peoples Republic of China | ||
Reporting Period | refers to | the six months ended 30 June 2023 | ||
Hong Kong Stock Exchange | refers to | The Stock Exchange of Hong Kong Limited | ||
Shanghai Stock Exchange | refers to | The Shanghai Stock Exchange | ||
Group | refers to | the Company and its subsidiaries | ||
Sinopec Group | refers to | China Petrochemical Corporation | ||
Sinopec Corp. | refers to | China Petroleum & Chemical Corporation | ||
Sinopec Finance | refers to | Sinopec Finance Co., Ltd. | ||
Hong Kong Listing Rules | refers to | The Rules Governing the Listing of Securities on the Hong Kong Stock Exchange | ||
Shanghai Listing Rules | refers to | The Rules Governing the Listing of Securities on the Shanghai Stock Exchange | ||
Model Code for Securities Transactions | refers to | the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 to the Hong Kong Listing Rules | ||
Securities Law | refers to | the PRC Securities Law | ||
Company Law | refers to | the PRC Company Law | ||
CSRC | refers to | China Securities Regulatory Commission | ||
Articles of Association | refers to | the articles of association of the Company | ||
Hong Kong Stock Exchange website | refers to | www.hkexnews.hk | ||
Shanghai Stock Exchange website | refers to | www.sse.com.cn | ||
website of the Company | refers to | www.spc.com.cn | ||
HSE | refers to | Health, Safety and Environment | ||
COD | refers to | Chemical Oxygen Demand | ||
VOCs | refers to | Volatile Organic Compounds | ||
SFO | refers to | the Securities and Futures Ordinance of Hong Kong (Chapter 571 of the Laws of Hong Kong) | ||
Corporate Governance Code | refers to | the Corporate Governance Code set out in Appendix 14 to the Hong Kong Listing Rules | ||
Share Option Incentive Scheme | refers to | the A Share Share Option Incentive Scheme of the Company |
2023 Interim Report |
3 |
CORPORATE INTRODUCTION AND MAJOR FINANCIAL INDICATORS
(1) | Major Accounting Data and Financial Indicators (Prepared under China Accounting Standards for Business Enterprises (CAS)) |
Unit: RMB000 | ||||||||||||||||
Corresponding period of the previous year |
Increase/decrease | |||||||||||||||
Major accounting data |
The Reporting Period (January to June) |
After restatement | Before restatement | as compared to the corresponding period of the previous year (After restatement) (%) |
||||||||||||
Revenue |
44,937,051 | 45,900,355 | 45,900,355 | -2.10 | ||||||||||||
Total loss |
-1,211,974 | 442,601 | 442,601 | 173.83 | ||||||||||||
Net loss attributable to equity shareholders of the Company |
-988,277 | 436,042 | 436,009 | 126.65 | ||||||||||||
Net loss attributable to equity shareholders of the Company excluding non-recurring items |
-972,150 | 402,577 | 402,544 | 141.48 | ||||||||||||
Net cash used in operating activities |
-226,882 | 6,405,122 | 6,405,122 | 96.46 | ||||||||||||
As at the end of the previous year | Increase/decrease at the end of the Reporting Period as compared to the end of the previous year (After restatement) (%) |
|||||||||||||||
As at the end of the Reporting Period |
After restatement | Before restatement | ||||||||||||||
Net assets attributable to equity shareholders of the Company |
25,276,032 | 26,243,746 | 26,243,705 | -3.69 | ||||||||||||
Total assets |
41,701,821 | 41,242,782 | 41,242,740 | 1.11 |
4 | Sinopec Shanghai Petrochemical Company Limited |
CORPORATE INTRODUCTION AND MAJOR FINANCIAL INDICATORS (continued)
Corresponding period of the previous year |
Increase/decrease | |||||||||||||||
Major Financial Indicators |
The Reporting Period (January to June) |
After restatement | Before restatement | as compared to the corresponding period of the previous year (After restatement) (%) |
||||||||||||
Basic losses per share (RMB/Share) |
-0.092 | 0.040 | 0.040 | N/A | ||||||||||||
Diluted losses per share (RMB/Share) |
-0.092 | 0.040 | 0.040 | N/A | ||||||||||||
Basic losses per share excluding non- recurring items (RMB/ Share) |
-0.090 | 0.037 | 0.037 | N/A | ||||||||||||
Loss on net assets (weighted average) (%)* |
-3.818 | 1.395 | 1.448 | |
Decreased by 2.42 percentage points |
| ||||||||||
Loss on net assets after non-recurring items (weighted average) (%)* |
-3.755 | 1.288 | 1.337 | |
Decreased by 2.47 percentage points |
|
* | The above-mentioned net assets do not include non-controlling interests. |
** | Explanation of reasons for retroactive adjustment or restatement: |
Since 1 January 2023, the Group has implemented the requirement of the Accounting of deferred income tax related to assets and liabilities arising from an individual transaction not applicable to initial recognition exemption under the Interpretation of Accounting Standards for Business Enterprises No. 16 promulgated by the Ministry of Finance.
2023 Interim Report |
5 |
CORPORATE INTRODUCTION AND MAJOR FINANCIAL INDICATORS (continued)
According to the provisions of Interpretation No. 16, if the individual transaction of the Group is not a business combination, or its occurrence does not affect the accounting profit nor taxable income (or deductible loss), and the initially recognized assets and liabilities result in equal taxable temporary difference and deductible temporary difference, the provisions of Accounting Standards for Business Enterprises No. 18-Income Tax on the exemption from the initial recognition of deferred income tax liabilities and deferred income tax assets are not applicable. According to the Accounting Standards for Business Enterprises No. 18-Income Tax and other relevant regulations, as for the taxable temporary difference and deductible temporary difference arising from the initial recognition of assets and liabilities, the Group recognizes the corresponding deferred income tax liabilities and deferred income tax assets respectively when the transaction occurs.
The above regulations have come into effect on 1 January 2023. The Group has made retrospective adjustments to the individual transactions that occurred between 1 January 2022 and the date of initial implementation to which the regulations apply. For the lease liabilities and right-of-use assets recognized on 1 January 2022 due to the individual transactions subject to the regulations resulting in taxable temporary difference and deductible temporary difference, the Group adjusted the cumulative impact amount to the opening retained earnings and other related financial statement items of the earliest period presented in the financial statements in accordance with the regulations and the Accounting Standards for Business Enterprises No. 18-Income Tax.
(2) | Differences between Financial Statements Prepared under CAS and International Financial Reporting Standards (IFRS) |
Unit: RMB000 | ||||||||||||||||||||||||
Net loss attributable to equity shareholders of the Company |
Net assets attributable to equity shareholders of the Company |
|||||||||||||||||||||||
Corresponding period of the previous year |
At the | At the beginning of the Reporting Period |
||||||||||||||||||||||
The Reporting Period |
After restatement |
Before restatement |
end of the Reporting Period |
After restatement |
Before restatement |
|||||||||||||||||||
Prepared under CAS |
-988,277 | -436,042 | -436,009 | 25,276,032 | 26,243,746 | 26,243,705 | ||||||||||||||||||
Prepared under IFRS |
-966,688 | -426,551 | -426,518 | 25,261,014 | 26,227,723 | 26,227,682 |
For detailed differences between the financial statements prepared under CAS and IFRS, please refer to supplements to the financial statements prepared under CAS.
6 | Sinopec Shanghai Petrochemical Company Limited |
CORPORATE INTRODUCTION AND MAJOR FINANCIAL INDICATORS (continued)
(3) | Non-recurring Profit and Loss Items (Prepared under CAS) |
Unit: RMB000 | ||||
Non-recurring profit and loss items |
Amount | |||
Losses on disposal of non-current assets |
-8,876 | |||
Government grants recognised through profit or loss |
12,399 | |||
Employee reduction expenses |
-9,965 | |||
Discount loss of receivables |
-1,997 | |||
Other non-operating income and expenses other than those mentioned above |
-9,894 | |||
Income tax effect amount |
2,359 | |||
Effect on non-controlling interests (after tax) |
-153 | |||
|
|
|||
Total |
-16,127 | |||
|
|
2023 Interim Report |
7 |
REPORT OF THE DIRECTORS
Section 1 Business Overview
(1) | Description of the principal business, operating model and industry in which the Company operated during the Reporting Period |
Located at Jinshanwei in the southwest of Shanghai, the Company is a highly integrated petrochemical enterprise which mainly processes crude oil into a broad range of petroleum products, intermediate petrochemical products, resins and plastics and synthetic fibers. The Company sells most of its products within the PRC domestic market and derives most of its revenues from customers in Eastern China, one of the fastest growing regions in the PRC.
The Companys high-quality development is supported by the ever-increasing demand in the PRC for high-quality petrochemical products. Relying on the competitive advantage of its high degree of integration, the Company is optimizing its product mix, improving the quality and variety of its existing products, upgrading technology and promoting energy conservation and consumption reduction, and following the path of green and low-carbon development.
In the first half of 2023, the global process of addressing climate change has accelerated, the United States has completed legislation on major climate, the European Union carbon tariffs have been formally introduced, and the pressure on carbon reduction in the energy and chemical industries has continued to increase. Under the influence of uncertain factors such as energy transition, carbon emission reduction and valuation, technological progress, geopolitics and trade policies, the global petrochemical industry has entered a period of drastic changes and is forming new development trends. Tariff and non-tariff trade policies are significantly transforming the competitive landscape of the chemical market. Refining and chemical enterprises have intensified their research efforts on the technologies of the whole industry along the industry chain, which has driven the progressive technical development of refining and chemical industry such as the new techniques for olefin production, the integrated technologies for refining and chemical, the green raw material technologies, the electrification alternative technologies, and the CO2 capture and utilization technologies. Green chemicals are beginning to make its presence.
In the first half of 2023, domestic crude oil production and processing volume, number of enterprises above the designated size and investment, as well as the output and consumption of most products achieved a simultaneous growth. Product prices have decreased year-on-year and month-on-month, imports and exports have decreased synchronously, and revenue and profits have decreased concurrently. The substitution effect of new energy vehicles represented by electric vehicles continues to increase; the release of new production capacity is accelerated, and homogenization competition is becoming increasingly fierce.
8 | Sinopec Shanghai Petrochemical Company Limited |
REPORT OF THE DIRECTORS (continued)
(2) | Analysis of Core Competitiveness During the Reporting Period |
As one of the major integrated petrochemical enterprises in China with an integrated refinery and petrochemical capacity, the Company possesses competitive business scale and strength, which made it a major manufacturer of refined oil, intermediate petrochemicals, synthetic resins and synthetic fibers in China. The Company also has self-owned utilities and environmental protection systems, as well as sea transport, inland shipping, rail transport and road transport ancillary facilities.
The Companys major competitive advantages include quality, geographical location and its vertically integrated production. The Company has over 50 years of petrochemical production and management experience, and has accumulated extensive resources in the petrochemical industry. The Company has won several quality product awards from the central and local governments. Located at the core region of Yangtze River Delta, the most economically active region in China with a strong demand for petrochemical products, the Company has built a comprehensive logistics system and supporting facilities with close geographic proximity with most of its clients which enables the Company to enjoy the convenience of coastal and inland shipping. This gave the Company a competitive edge in terms of transportation costs and timely delivery. The Company has leveraged its advantages in integrated refinery and petrochemical capacity to actively strengthen product structure, while continuously improving products quality and variety. The Company has also improved production technology and boosted capacity of key upstream units to maximize the use and the efficiency in the utilization of its corporate resources, and is therefore able to achieve strong and sustainable development.
Section II Management Discussion and Analysis
(1) | Management Discussion and Analysis of the Overall Operations during the Reporting Period |
(The following discussion and analysis should be read in conjunction with the unaudited interim financial report of the Group and the notes in this interim report. Unless otherwise specified, certain financial data involved hereinafter are extracted from the unaudited interim financial report of the Group prepared in accordance with IFRS.)
2023 Interim Report |
9 |
REPORT OF THE DIRECTORS (continued)
1. | Review of the Companys operations during the Reporting Period |
In the first half of 2023, economy in China has continued to recover with a positive upturn as a whole. However, the global economic recovery continued to be under pressure, encompassing the Russian-Ukrainian conflict and the risk of overflowing financial turbulence in the United States and Europe, the concussive downturn of crude oil price, the chemical market falling consumptive stagnation, and multiple unpredictable uncertainties. In the face of the complicated environment, the Group adhered to the general principle of seeking progress while maintaining stability, tightened internal management, strengthened grassroots construction, basic work and skills training, pressed down on safety and environmental protection responsibilities, and focused on system optimization, and generally maintained stable production and operation, and vigorously and effectively pushed forward key projects, thus continuously building the foundation for high-quality development. As of 30 June 2023, the Group generated revenue of RMB44.889 billion, representing a decrease of RMB0.970 billion or a decrease rate of 2.12%. Loss before taxation amounted to RMB1.190 billion (1H2022: loss before taxation of RMB0.433 billion), representing an increase of RMB0.757 billion from the same period of last year. Loss after taxation and excluding non-controlling shareholders interests was RMB0.967 billion (1H2022: loss after taxation and excluding non-controlling shareholders interests of RMB0.427 billion), representing an increase of RMB0.540 billion from the same period of last year.
In the first half of 2023, the total volume of goods within the main commodity categories produced by the Group increased by 16.30% year-on-year to 6.3172 million tons. The Group processed a total of 7.0939 million tons of crude oil (of which 403.1 thousand tons were processed on order), representing an increase of 22.41% year-on-year. Refined oil output amounted to 4.2661 million tons, representing an increase of 35.29% year-on-year. Among them, the gasoline production increased by 10.80% year-on-year to 1.6047 million tons, the diesel production increased by 40.74% year-on-year to 1.8454 million tons, the jet fuel production increased by 107.24% year-on-year to 816.1 thousand tons, while the liquefied gas production increased by 29.08% year-on-year to 421.2 thousand tons. Ethylene production increased by 1.05% year-on-year to 357.2 thousand tons, and p-xylene production increased by 11.21% year-on-year to 354.1 thousand tons. Production of plastics, resins and copolymers (excluding polyesters and polyvinyl alcohol) increased by 11.92% year-on-year to 504.2 thousand tons, production of raw materials of synthetic fibers reduced by 17.08% year-on-year to 50.5 thousand tons, production of synthetic fibre polymers decreased by 45.04% year-on-year to 37.7 thousand tons, and production of synthetic fibres increased by 12.26% year-on-year to 11.9 thousand tons. The Groups product sale rate for the first half of this year was 98.93% and the payment return rate was 100% (excluding connected companies).
Safety and environmental protection were generally under control. Learning lessons from the accidents, the Group emphasized the strict management and seriously launched the Year of Safety Management Enhancement campaign. Insisting on strict management, strict standards and strict emission reduction; the average value of VOCs concentration at the Companys boundary was 73.4ug/m3; the comprehensive compliance rate of industrial wastewater discharged outward reached 100%, the rate of controlled emissions reached 100%, and the rate of hazardous waste properly handled and disposed of was 100%, and the total amount of COD for major pollutants and ammonia and nitrogen discharged decreased by 7.85% and 61.26% respectively year-on-year.
10 | Sinopec Shanghai Petrochemical Company Limited |
REPORT OF THE DIRECTORS (continued)
Production operations were generally stable. Professional management of process technology and equipment integrity was strengthened to ensure that professional safety and system requirements penetrated to the grassroots level. The cumulative number of shutdowns was reduced by 12 times year-on-year, with no second-tier unplanned shutdowns, and the operation of major plants was generally stable. Among the 58 major technical and economic indicators under monitoring, 16 items reached the advanced level of the industry while the performance of 48 items was better than last year, with a year-on-year progress rate of 82.76%.
System optimization has begun to bear fruit. The Group coordinated and promoted the integrated optimization, cost reduction and fee cutting, reduced crude oil procurement and processing costs, actively promoted refining structure optimization and chemical structure optimization, and increased production of efficiency product lines while limiting production and stopping production of marginal profit devices. The Group optimized business processes, promoted energy saving and consumption reduction, reduced costs and expenses, and took multiple measures to improve production, increase efficiency and reduce losses.
Transformation and development were steadily advanced. In accordance with the Companys 14th Five-Year Plan development idea of oil refining to chemical industry, chemical industry to materials, materials to high-end products, and parks to ecology, the Group optimized its industrial layout and promoted transformation and upgrading for high-quality development. The Group has made every effort to promote comprehensive technological transformation and quality upgrading, and the implementation of 250,000 tons/year thermoplastic elastomer, power units cleaning and efficiency improving, 300,000 tons/year vinyl acetate facility and new energy sources, and other key projects. The Group has been fully promoting the development of carbon fiber industry, with projects such as 48K large tow carbon fiber project (Phase I), 100 tons of high-performance carbon fiber test device, and aerospace composites progressing steadily. Meanwhile, the Group has comprehensively pushed forward the research on the application of composite materials in the fields of aviation, rail transportation, civil engineering, and new energy sources.
Reform and management developed in depth. In accordance with the work deployment of the SASAC of the State Council, the Group comprehensively promoted the work of improving the quality of listed companies and the value creation action against first-class enterprises, and continuously enhanced the standard of corporate governance. The Group has strengthened life-cycle management and professional management of the systems, and enhanced organizational performance, remuneration and labor management. The Group has also strengthened its basic team, improved the incentive and discipline mechanism and continuously upgraded the competence of its cadres and staff.
2023 Interim Report |
11 |
REPORT OF THE DIRECTORS (continued)
The following table sets forth the Groups sales volume and net sales after business tax and surcharges for the Reporting Period:
For the six months ended 30 June | ||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||
Sales volume (000 tons) |
Net sales (RMB million) |
% | Sales volume (000 tons) |
Net sales (RMB million) |
% | |||||||||||||||||||
Synthetic fibers |
13.52 | 223.06 | 0.58 | 11.26 | 229.96 | 0.57 | ||||||||||||||||||
Resins and plastics |
523.53 | 3,845.52 | 9.95 | 502.13 | 4,300.40 | 10.71 | ||||||||||||||||||
Intermediate petrochemicals |
883.05 | 5,435.95 | 14.06 | 908.94 | 6,409.23 | 15.97 | ||||||||||||||||||
Petroleum products |
4,763.85 | 24,470.70 | 63.29 | 3,940.92 | 21,846.67 | 54.42 | ||||||||||||||||||
Trading of petrochemical products |
| 4,257.24 | 11.01 | | 6,950.74 | 17.32 | ||||||||||||||||||
Others |
| 430.06 | 1.11 | | 405.17 | 1.01 | ||||||||||||||||||
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Total |
6,183.95 | 38,662.53 | 100.00 | 5,363.25 | 40,142.17 | 100.00 | ||||||||||||||||||
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In the first half of 2023, the Group achieved a total net sales of RMB38.663 billion, a decrease of 3.69% compared with the same period last year, of which the net sales of synthetic fibers, resins and plastics, intermediate petrochemical products and trading of petrochemical products decreased by 3.0%, 10.58%, 15.19% and 38.75% respectively, while the net sales of petroleum products increased by 12.01%. The sales volume of synthetic fibers, resins and plastics and petroleum products increased by 20.07%, 4.26% and 20.88% respectively due to the increase in production volume. The sales volume of intermediate petrochemical products decreased by 2.85%, mainly due to the decrease in the production volume of ethylene oxide as a result of the shutdown of the ethylene oxide/ethylene glycol facility. The weighted average selling prices of all sectors decreased over the same period of last year due to the decrease in crude oil prices. In the first half of 2023, the Groups cost of sales was RMB39.753 billion, a decrease of 2.28% from the same period last year and accounting for 102.82% of net sales.
In the first half of 2023, the Groups crude oil unit processing cost was RMB4,209.84/ton, a decrease of RMB330.59/ton or 7.28% compared to the same period last year. From January to June this year, the cost of crude oil processing increased by RMB2.639 billion. Among them, the increase of crude oil processing volume resulted in the cost increase of RMB4.851 billion, and the unit processing cost decrease resulted in the cost decrease of RMB2.212 billion. Crude oil costs accounted for 70.86% of the Groups cost of sales in the first half of the year.
In the first half of 2023, the Groups expenditure on other excipients was RMB3.726 billion, a decrease of 23.74% from the same period last year. During the Reporting Period, the Groups depreciation and amortization expenses and maintenance expenses were RMB983 million and RMB480 million respectively. Depreciation and amortization expenses increased by 12.21% year-on-year mainly due to the increase of depreciation expenses as a result of the transfer of precursor fiber (24,000 tons/year) and 48K large tow carbon fiber (12,000 tons/year) project into fixed assets. Maintenance expenses reduced 42.45% year-on-year mainly due to the fact that last years overhaul was concentrated in the second quarter of the year.
12 | Sinopec Shanghai Petrochemical Company Limited |
REPORT OF THE DIRECTORS (continued)
In the first half of 2023, the Group recorded sales expenses of RMB151 million, a decrease of 13.71% from RMB175 million in the same period last year mainly because the transportation fee decreased by RMB14 million due to optimization of the shipping process and the sales commission decreased by RMB8 million due to the decrease in agency sales during the Reporting Period.
In the first half of 2023, the Groups other operating income was RMB62 million, an increase of RMB14 million over the same period last year mainly due to an increase in rental income of RMB7 million and an increase in other income of RMB7 million during the Reporting Period.
In the first half of 2023, the Group reported a financial net income of RMB130 million, compared to net financial income of RMB279 million in the same period last year. The decrease was mainly due to a decrease in interest income of RMB144 million during the Reporting Period. In the first half of 2023, the Group achieved a loss after taxation excluding non-controlling interests of RMB967 million, an increase of RMB540 million from the loss of RMB427 million in the same period last year.
Liquidity and Capital Resources
In the first half of 2023, the Groups net cash outflow from operating activities was RMB280 million, compared with a net cash outflow of RMB6,445 million in the same period last year. This was mainly due to the decrease in payment for goods by the Group of RMB2,078 million and payment for income tax of RMB3,634 million during the Reporting Period as compared to the same period last year.
In the first half of 2023, the Groups net cash inflow from investment activities was RMB503 million, compared with a net cash inflow of RMB1,766 million in the same period last year. This is mainly due to the recovery of RMB5,950 million of time deposits purchased by the Group in previous years in the first half of 2022, as well as the purchase of time deposits and structured deposits of RMB3,600 million, and the recovery of time deposits of RMB1,000 million in the Reporting Period, which resulted in a decrease of RMB1,350 million of net cash inflow from time deposits in the Reporting Period as compared with the same period last year.
In the first half of 2023, the Group generated a net cash inflow of RMB3,491 million from financing activities, compared with a net cash inflow of RMB1,997 million in the same period last year. This is mainly due to an increase of RMB3,563 million in net cash flow generated from borrowings and an increase of RMB2,065 million in cash paid for repayment of borrowings and short-term bonds by the Group during the Reporting Period compared with the same period last year.
Borrowings and Debts
The Groups long-term borrowings are mainly used for capital expansion projects. The Group generally arranges long-term borrowings in accordance with capital expenditure plans. The short-term debt is used to supplement the working capital required by the normal production and operation of the Group. As of 30 June 2023, the total loan balance of the Group increased by RMB3,498 million from the opening balance to RMB5,748 million. The Group had no short-term bonds during the Reporting Period. The Groups total borrowings at fixed interest rates are RMB5,048 million.
2023 Interim Report |
13 |
REPORT OF THE DIRECTORS (continued)
Capital Expenditures
In the first half of 2023, the Groups capital expenditure was RMB365 million. It was mainly used for the construction of the precursor fiber (24,000 tons/year), the 48K large tow carbon fiber (12,000 tons/year) project and the compliance transformation project of control room of the synthetic resin department (the former plastics department) etc.
In the second half of the year, the Group will continue to promote the implementation of precursor fiber (24,000 tons/year) and 48K large tow carbon fiber (12,000 tons/year) project and supporting engineering project of 250,000 tons/year thermoplastic elastomer project, etc. The planned capital expenditure of the Group can be financed from operating cash and bank credit.
Gearing Ratio
As of 30 June 2023, the Groups gearing ratio was 38.97% (as of 30 June 2022: 31.58%). The gearing ratio was calculated as: total liabilities/total assets.
The Groups Employees
As of 30 June 2023, the number of registered employees of the Group was 7,641, among which 4,663 were production personnel, 2,003 were sales, finance and other personnel, and 975 were administrative personnel. 64.53% of the Groups employees were college graduates or above.
The Group determines the remuneration of its employees and directors on the basis of their position, performance, experience and current market pay trends. Other benefits include equity incentive plans and state-administered pension plans. The Group also provides professional and vocational training for its employees.
Income Tax
The Enterprise Income Tax Law of the PRC took effect from 1 January 2008, subsequent to which the income tax rate for enterprises was uniformly adjusted to 25%. As of the half year ended 30 June 2023, the income tax rate applicable to the Group is 25%.
Disclosure Required by the Hong Kong Listing Rules
Save as disclosed herein, pursuant to paragraph 40 of Appendix 16 to the Hong Kong Listing Rules, the Company confirms that there were no material differences between the existing information of the Company relating to the matters as set out in paragraph 32 of Appendix 16 to the Hong Kong Listing Rules and the relevant information disclosed in the Companys 2022 annual report.
14 | Sinopec Shanghai Petrochemical Company Limited |
REPORT OF THE DIRECTORS (continued)
2. | Market Outlook and Work Plans for the Second Half of the Year |
Looking ahead to the second half of the year, under the combined impact of geopolitics, financial turmoil, economic stagflation and other risk factors, the downward pressure on the world economy will continue to increase, and the trend of oil prices will face uncertainties. Chinas economy is expected to continue to upswing in a positive manner. It is estimated that the domestic demand for refined oil products will continue to improve, whereas the demand for chemical products will gradually recover.
In the second half of the year, the Group will continue to adhere to the general principle of seeking progress amidst stability, and insist on being problem-oriented, target-oriented and result-oriented, and coordinate the key work in safety and environmental protection, operation and efficiency creation, key project construction and human resources and team building, so as to make every effort to achieve the annual targets and tasks.
1. | Focusing on safe and stable operation and building a solid foundation for efficiency creation. The Group will strengthen the effectiveness of strict management, consistently implement safety leadership, business and technical support, and effective execution at the grassroots level, and strictly implement localized and professional management responsibilities and the system of responsibility of safety production for all employees, so as to ensure safety production and strengthen the foundation for efficiency creation. |
2. | Focusing on optimization and cost reduction, and digging into the potential for efficiency creation. The Group will adhere to the market-oriented and efficiency-centered approach, and continue to focus on product structural adjustment, optimize refining and chemical integration, and endeavor to reduce losses and increase efficiency. |
3. | Focusing on transformation and development to enhance efficiency creation. The Group will focus on grasping the developmental window of opportunity for transformation and development, accelerating the construction of key projects and tackling key core technologies, and consolidating the foundation for high-quality development. The Group will make every effort to promote comprehensive technological transformation and quality upgrades, cleanliness and efficiency improvement project for thermal power units, 250,000 tons/year thermoplastic elastomer project, 300,000 tons/year vinyl acetate and other key projects. The Group will accelerate the 48K large tow carbon fiber project (Phase I) to reach the production target, and promote the research and development of the 100-ton high-performance carbon fiber test line technology and development and application of carbon fiber thermoplastic composite materials. The Group will enhance the construction of innovation platform and speed up the development of carbon fiber and its composite material industry. |
4. | Focusing on team building to stimulate efficiency creation. The Group will focus on strengthening the foundation, making up for the shortcomings and adjusting the structure, promoting the construction of market-oriented personnel and labor distribution mechanism, improving the talent ladder construction, and enhancing training for post competence to build up a strong talent team. Meanwhile, the Group will further optimize its organization and enhance the efficiency of its operation and management to better serve its corporate development strategy. |
2023 Interim Report |
15 |
REPORT OF THE DIRECTORS (continued)
(2) | Analysis of the Companys Principal Performance during the Reporting Period (Certain of the following financial data is extracted from the unaudited interim report prepared under CAS) |
1. | Analysis of Changes in the Companys Related Financial Data |
Unit: RMB000 | ||||||||||||||
For the six months ended 30 June |
||||||||||||||
Item |
2023 | 2022 (After restatement) |
Change (%) |
Reason for change | ||||||||||
Research and development expenses |
68,062 | 36,426 | 86.85 | R&D projects increased during the Reporting Period. | ||||||||||
Financial expenses (- for income) |
-125,281 | -295,996 | -57.67 | The interest income decreased during the Reporting Period. | ||||||||||
Investment income (- for losses) |
-120,360 | -50,675 | 137.51 | The operating losses of the associates resulted in investment losses. | ||||||||||
Gains from changes in fair value |
| 313 | -100.00 | No derivative investments were made during the Reporting Period. | ||||||||||
Credit losses (- for losses) |
167 | -4,887 | -103.42 | Provision for bad debt recognised in the previous period was recovered during the Reporting Period. | ||||||||||
Gains from asset disposals (- for losses) |
434 | -1,062 | -140.87 | Gains from disposal of fixed assets increased. | ||||||||||
Income tax benefits |
-226,288 | -11,731 | 1,828.97 | Losses increased during the Reporting Period compared with the same period of last year, resulting in income tax benefits. | ||||||||||
Net loss attributable to shareholders of the Company |
-988,277 | -436,042 | 126.65 | Price of crude oil declined slightly compared with the same period of last year, but the decline in selling prices was greater than the decline in cost prices as downstream market demand recovered slowly, resulting in the year-on-year decrease in operating results. | ||||||||||
Other comprehensive income, net of tax (- for losses) |
-21 | 273,513 | -100.00 | No commodities hedging business was carried out during the Reporting Period. | ||||||||||
Net cash used in operating activities |
-226,882 | -6,405,122 | -96.46 | The cash paid for purchasing goods and receiving services and the taxes paid decreased during the Reporting Period compared with the same period last year. | ||||||||||
Net cash generated from investing activities |
513,477 | 1,776,708 | -71.11 | The net cash flow from refund of time deposits in the Reporting Period decreased compared with the same period of last year. | ||||||||||
Net cash generated from financing activities |
3,427,414 | 1,946,321 | 76.10 | The net cash flow generated from and repaid for borrowings by the Group during the Reporting Period increased compared with the same period last year. |
16 | Sinopec Shanghai Petrochemical Company Limited |
REPORT OF THE DIRECTORS (continued)
(3) | Analysis of Business Operations by Industry, Product or Geographical Location Segment (The financial data presented in this section are derived from the Groups unaudited interim report prepared under CAS) |
1. | Principal Operations by Industry or Product |
Unit: RMB000 | ||||||||||||||||||||||
Business Segment/ Product Segment |
Revenue | Cost of sales |
Gross profit margin (%) |
Increase/ decrease in revenue compared to corresponding period of the previous year (%) |
Increase/ decrease in operating cost compared to corresponding period of the previous year (%) |
Increase/decrease in last year | ||||||||||||||||
Petroleum products |
30,675,736 | 24,774,204 | 19.24 | 11.48 | 19.66 | Decreased by 5.52 percentage points | ||||||||||||||||
Intermediate petrochemicals |
5,444,886 | 4,832,795 | 11.24 | -15.35 | -24.03 | Increased by 10.14 percentage points | ||||||||||||||||
Trading of petrochemical products |
4,260,964 | 4,203,453 | 1.35 | -38.74 | -39.07 | Increased by 0.53 percentage point | ||||||||||||||||
Resins and plastics |
3,852,413 | 3,889,805 | -0.97 | -10.71 | -10.48 | Decreased by 0.26 percentage point | ||||||||||||||||
Synthetic fibers |
223,383 | 459,266 | -105.60 | -3.18 | 18.28 | Decreased by 37.30 percentage points | ||||||||||||||||
Others |
252,801 | 249,214 | 1.42 | -2.82 | -16.06 | Increased by 15.54 percentage points |
Note: | This gross profit margin is calculated according to the price of petroleum products which includes consumption tax. Gross profit margin of petroleum products after deducting consumption tax was 1.22%. |
2023 Interim Report |
17 |
REPORT OF THE DIRECTORS (continued)
2. | Revenue by Geographical Location |
Unit: RMB000 | ||||||||
Geographical location segment |
Revenue | Increase/decrease in revenue as compared to the same period last year (%) |
||||||
Eastern China |
41,042,934 | 2.20 | % | |||||
Other regions in the PRC |
452,574 | -14.26 | % | |||||
Exports |
3,214,675 | -36.00 | % |
(4) | Analysis of Assets and Liabilities (The financial data presented in this section are derived from the Groups unaudited interim report prepared under CAS) |
Unit: RMB000 | ||||||||||||||||||||||
As at 30 June 2023 |
As at 31 December 2022 |
Change of amount on 30 June 2023 compared to 31 December 2022 (%) |
||||||||||||||||||||
Item |
Amount | % of total assets |
Amount (After restatement) |
% of total assets |
Main reason for change | |||||||||||||||||
Cash at bank and on hand |
6,931,677 | 16.62 | 3,998,332 | 9.69 | 73.36 | Net cash inflows from financing activities amounted RMB3,427 million during the Reporting Period. | ||||||||||||||||
Other receivables |
87,375 | 0.21 | 190,579 | 0.46 | -54.15 | Receivables related to hedging instruments decreased significantly as hedging business was not conducted during the Reporting Period. | ||||||||||||||||
Other current assets |
340,861 | 0.82 | 1,121,187 | 2.72 | -69.60 | The value-added tax to be deducted decreased. | ||||||||||||||||
Construction in progress |
1,749,110 | 4.19 | 3,748,461 | 9.09 | -53.34 | Part of carbon fiber projects under construction completed intermediate handover during the Reporting Period. | ||||||||||||||||
Short-term borrowings |
5,048,000 | 12.10 | 1,550,000 | 3.76 | 225.68 | Short-term borrowings increased during the Reporting Period to supplement funding needs. | ||||||||||||||||
Bills payable |
103,950 | 0.25 | 40,951 | 0.10 | 153.84 | The number of bills issued during the Reporting Period increased to pay for goods and expenses. | ||||||||||||||||
Employee benefits payable |
680,651 | 1.63 | 317,891 | 0.77 | 114.11 | The year-end bonus accrued during the Reporting Period has not yet been fully paid, resulting in an increase in the balance of employee benefits payable. |
18 | Sinopec Shanghai Petrochemical Company Limited |
REPORT OF THE DIRECTORS (continued)
As of the end of the Reporting Period, there was no case where the Companys main assets were sealed up, seized, frozen, mortgaged or pledged, and there was no case or arrangement where the possession, use, income and disposal rights of main assets were subject to other restrictions.
Overseas assets
During the Reporting Period, the Groups overseas assets were RMB14,573 thousand, accounting for 0.03% of the total assets.
(5) | Analysis of Investments (The financial data presented in this section are derived from the Groups unaudited interim financial report prepared under CAS) |
1. | Entrusted Wealth Managements and Entrusted Loans |
(1) | Entrusted Wealth Managements |
The Company did not engage in entrusted wealth management during the Reporting Period.
(2) | Entrusted Loans |
The Company did not engage in entrusted loans during the Reporting Period.
2. | Projects Funded by Fund Raising Capital |
During the Reporting Period, the Company did not raise funds, nor has it used the funds raised from the previous reporting periods.
2023 Interim Report |
19 |
REPORT OF THE DIRECTORS (continued)
3. | Analysis of the Companies in which the Company has Controlling Interests or Investment Interests |
As at 30 June 2023, the Company had more than 50% equity interest in the following principal subsidiaries:
Company name |
Place of registration |
Principal activities |
Place for principal activities |
Type of legal person |
Percentage of equity held by the Company (%) |
Percentage of equity held by the Group (%) |
Registered capital (000) |
Net (loss)/ profit in the first half of 2023 (RMB000) |
||||||||||||||||
Shanghai Petrochemical Investment Development Company Limited (Shanghai Investment Development) |
China | Investment management |
China | Limited liability company |
100.00 | 100.00 | RMB2,100,000 | 18,667 | ||||||||||||||||
China Jinshan Associated Trading Corporation (Jinshan Associated Trading) |
China | Import and export of petrochemical products and equipment |
China | Limited liability company |
67.33 | 67.33 | RMB25,000 | 22,431 | ||||||||||||||||
Shanghai Jinchang Engineering Plastics Company Limited (Shanghai Jinchang) |
China | Production of polypropylene compound products |
China | Limited liability company |
| 74.25 | USD9,154 | (12,721 | ) | |||||||||||||||
Shanghai Golden Phillips Petrochemical Company Limited (Shanghai Golden Phillips) |
China | Production of polyethylene products |
China | Limited liability company |
| 100.00 | RMB415,623 | 3,820 | ||||||||||||||||
Shanghai Jinshan Trading Corporation (JMGJ) |
China | Import and export of petrochemical products and equipment |
China | Limited liability company |
| 67.33 | RMB100,000 | 5,525 | ||||||||||||||||
Zhejiang Jinlian Petrochemical Storage and Transportation Co., Ltd. (Jinlian) |
China | Trading of Petrochemical Products |
China | Limited liability company |
| 100.00 | RMB400,000 | (7,800 | ) |
Note: | None of the subsidiaries have issued any debt securities. |
The Groups share of interests in associates comprises a 38.26% interest in the Shanghai Chemical Industry Park Development Co., Ltd. (Chemical Industrial Park) established in the PRC in the amount of RMB2,228 million, and a 20% interest in the Shanghai SECCO Petrochemical Company Limited (Shanghai SECCO) established in the PRC in the amount of RMB120 million. The principal businesses of the Chemical Industry Park include the planning, development and operation of a chemical industrial park located in Shanghai of the PRC. The principal business of the Shanghai SECCO is the production and distribution of petrochemical products.
20 | Sinopec Shanghai Petrochemical Company Limited |
REPORT OF THE DIRECTORS (continued)
(1) | Explanation of profits of major controlling companies and investing companies affecting more than 10% of the net profit of the Group |
In the first half of 2023, Shanghai SECCO recorded a revenue of RMB8,352 million, and its loss after tax reached RMB1,068 million, among which RMB214 million was attributed to the Company.
(2) | Analysis of operational performance of major controlling companies and investing companies with a 30% or more year-on-year change |
a) | In the first half of 2023, the operating results of Shanghai Investment Development increased by 30,501.64% year on year, which was mainly due to the increase of investment income in the current period, resulting in an increase in the operating profit in the first half of 2023. |
b) | In the first half of 2023, the operating results of Shanghai Golden Phillips have seen an increase of 133.80% year on year, which was mainly due to the substantial increase in sales by Shanghai Golden Phillips in the current period, resulting in an increase in operating results for the first half of 2023. |
c) | In the first half of 2023, the operating results of Jinshan Associated Trading have seen an increase of 68.01% year on year, which was mainly due to an increase in gross profit of olefin products, resulting in a significant increase in operating results for the first half of 2023. |
d) | In the first half of 2023, the operating results of JMGJ have seen a decrease of 56.69% year on year, which was mainly due to the decrease in export sales in the current period, resulting in a decrease in operating results for the first half of 2023. |
2023 Interim Report |
21 |
REPORT OF THE DIRECTORS (continued)
4. | Projects Funded by Non-fundraising Capital |
Major Project |
Total project investment RMB000 |
Total project investment in the Reporting Period RMB000 |
Status as at 30 June | |||||||
Sinopec Shanghai precursor fiber (24,000 tons/year) and 48K large tow carbon fiber (12,000 tons/year) project |
3,489,638 | 176,439 | Interim delivery of part of the projects | |||||||
Roof distributed photovoltaic power generation project of Southern Suitang River and Acrylic Department of Sinopec Shanghai |
54,759 | 29,990 | Interim delivery | |||||||
Compliance transformation project of control room of the synthetic resin department (the former plastics department) |
121,991 | 24,273 | Under construction | |||||||
Improvement transformation project of clean water and sewage separation of Sinopec Shanghai |
155,293 | 18,795 | Under construction | |||||||
Sinopec Shanghai test line project of aviation carbon fiber reinforced thermoplastic composite material |
87,682 | 13,923 | Interim delivery | |||||||
100 tons high-performance carbon fiber test plant |
566,183 | 7,662 | Interim delivery | |||||||
Supporting engineering project of 250,000 tons/year thermoplastic elastomer project |
201,785 | 4,710 | Preliminary design phase |
22 | Sinopec Shanghai Petrochemical Company Limited |
REPORT OF THE DIRECTORS (continued)
5. | Financial Assets Measured at Fair Value |
Unit: RMB000 | ||||||||||||||||||||||
Project |
Opening amount |
Closing amount |
Profit and loss from changes in fair value in the current period |
Cumulative changes in fair value included in equity |
Impairment accrued in the current period |
Source of | ||||||||||||||||
Financial assets measured at fair value with changes included in current profit or loss |
||||||||||||||||||||||
- Other non-current financial assets |
| 26,500 | | | | Own capital | ||||||||||||||||
Financial assets measured at fair value with changes included in other comprehensive income |
||||||||||||||||||||||
- Receivables financing |
582,354 | 328,879 | | | | Own capital | ||||||||||||||||
- Investment in other equity instruments |
5,000 | 5,000 | | | | Own capital | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
587,354 | 360,379 | | | | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
(6) | Other Disclosure Items |
1. | Possible Risks |
(i) | The cyclical characteristics of the petroleum and petrochemical products market and price volatility in crude oil and petrochemical products may have an adverse impact on the Groups operations. |
A large part of the Groups operating income is derived from the sales of refined oil and petrochemical products. Historically, such products have been cyclical in nature and relatively sensitive to macroeconomic changes. Additionally, changes in regional and global economic conditions, productivity and output, prices and supply of raw materials, consumer demand and prices and supply of substitutes also have an effect. From time to time, these factors have a material impact on the prices of the Groups products in regional and global markets. Given the reduction of tariffs and other import restrictions, a substantial number of the Groups products will increasingly be subject to the cyclical impact in the regional and global markets. In addition, the prices of crude oil and petrochemical products will remain volatile and uncertain. Higher crude oil prices and lower petrochemical products prices are likely to have an adverse impact on the Groups business, operating results and financial condition.
2023 Interim Report |
23 |
REPORT OF THE DIRECTORS (continued)
(ii) | The Group may be exposed to risks associated with the procurement of imported crude oil and may not be able to pass on all increased costs due to rising crude oil price. |
At present, the Group consumes a significant amount of crude oil for the production of petrochemical products. More than 95% of the crude oil consumption is imported. In recent years, crude oil prices have been subject to significant fluctuations due to a variety of factors, and the Group cannot rule out the possibility of any major unexpected event which may cause a suspension in crude oil supply. The Group has attempted to mitigate the effects of increased costs from rising crude oil prices by passing them on to the customers, but the ability to do so is limited because of market conditions and the pricing mechanism of refined oil products. Since there is a time-lag between increases in crude oil prices and increases in petrochemical product prices, higher costs cannot be totally offset by raising the selling prices. In addition, the State also imposes control over the distribution of some petroleum products within China. For instance, some of the Groups petroleum products are required to be sold to designated customers (such as subsidiaries of Sinopec Corp). Hence, when crude oil prices are high, the higher costs cannot be totally offset by raising the selling prices of the Groups petroleum products.
(iii) | Substantial capital expenditures and financing requirements are required for the Groups development plans, presenting a number of risks and uncertainties. |
The petrochemical industry is a capital-intensive industry. The Groups ability to maintain and raise income, net income and cash flows is closely connected with ongoing capital expenditures. The Groups capital expenditures in 2023 will be met by internal funding and bank loans. The Groups effective capital expenditures may vary significantly due to the Groups ability to generate sufficient cash flows from operations, investments and other factors that are beyond control. Furthermore, there is no assurance as to the completion, cost or outcome of the Groups fund raising projects.
The Groups ability to secure external financing in the future is subject to a number of uncertainties which include the Companys operating results, financial conditions and cash flow in the future; Chinas economic conditions and the market conditions for the Groups products; financing costs and conditions of the financial market, and issuance of government approval documents, as well as other risks associated with the development of infrastructure projects in China and so forth. The Groups failure to secure sufficient financing required for its operations or development plans may have an adverse impact on the Groups business, operating results and financial condition.
(iv) | The Groups business operations may be affected by existing or future environmental protection regulations. |
The Group is subject to a number of environmental protection laws and regulations in China. Waste products (waste water, waste gas and waste residue) are generated during the Groups production operations. Currently the Groups operations fully comply with all applicable Chinese environmental protection laws and regulations. However, the Chinese government may further enforce stricter environmental standards, and the Group cannot assure that the central or local governments will not issue more regulations or enforce stricter regulations which may cause the Group to incur additional expenses on environmental protection measures.
24 | Sinopec Shanghai Petrochemical Company Limited |
REPORT OF THE DIRECTORS (continued)
(v) | Changes in the monetary policy and fluctuations in the value of Renminbi may have an adverse impact on the Groups business and operating results. |
The exchange rate of the Renminbi against the US Dollar and other foreign currencies may fluctuate and is subject to alterations due to changes on the Chinese political and economic situations. In July 2005, the PRC government overhauled its policy of pegging the value of the Renminbi to the US dollar by permitting the Renminbi to fluctuate within a certain band against a basket of foreign currencies. Since the adoption of this new policy, the value of the Renminbi against the US dollar fluctuates daily. In addition, the Chinese government has been under international pressure to further ease its exchange rate policy, and may as a result further change its currency policy. A small portion of our cash and cash equivalents are denominated in foreign currencies, including the US dollar. Any increase in the value of Renminbi against other currencies, including the US dollar, may decrease the Renminbi value of our cash and cash equivalents that are denominated in foreign currencies. On the other hand, most of our revenue is denominated in Renminbi, but a major part of our procurement of crude oil, certain equipment and certain debt repayments are denominated in foreign currencies. Any devaluation of Renminbi in the future will increase our costs and jeopardize profitability. Any devaluation of Renminbi may also have an adverse impact on the value of dividends payable in foreign currencies by the Group for H shares and American Depository Securities.
(vi) | Connected transactions may have an adverse impact on the Groups business and economic benefits. |
The Group will, from time to time, continue to conduct transactions with the Groups controlling shareholder Sinopec Corp. and Sinopec Corp.s controlling shareholder Sinopec Group as well as their connected parties (subsidiaries or associates). These connected transactions include the provision of the following services by such connected parties to the Group: raw materials purchases, agency sale of petrochemical products, construction, installation and engineering design services, petrochemical products industry insurance services and financial services, and the sale of petroleum and petrochemical products by the Group to Sinopec Corp. and its connected parties. These connected transactions and services conducted by the Group are carried out under normal commercial terms and in accordance with the relevant agreements. However, if Sinopec Corp. and Sinopec Group refuse to conduct such transactions or revise the agreements between the Group and itself in a manner unfavorable to the Group, the Groups business and business efficiency will be adversely impacted. Furthermore, Sinopec Corp. has an interest in certain sectors that are directly or indirectly competing with or which may compete with the Groups business. Since Sinopec Corp. is the controlling shareholder of the Group and its own interests may conflict with those of the Group, it may act for its own benefit regardless of the Groups interests.
(vii) | Risks associated with control by the majority shareholder |
Sinopec Corp., the controlling shareholder of the Company, owns 5,459 million shares of the Company, which represents 50.55% of the total number of shares of the Company and gives it an absolute controlling position. Sinopec Corp. may, by using its controlling position, exercise influence over the Groups production operations, fund allocations, appointment or removal of senior staff and so forth, thereby adversely affecting the Groups production operations as well as minority shareholders interests.
2023 Interim Report |
25 |
MAJOR EVENTS
(1) | Brief Introduction of General Meeting |
Session of the meeting |
Convening date |
Title of the motions |
Status of the resolutions |
Designated |
Date of publication of resolutions | |||||
The 2022 Annual General Meeting, the First A Shareholders Class Meeting for 2023 and the First H Shareholders Class Meeting for 2023 |
28 June 2023 |
1. THAT the 2022 Work Report of the Board of Directors be considered and approved;
2. THAT the 2022 Work Report of the Supervisory Committee be considered and approved;
3. THAT the 2022 Audited Financial Statements of be considered and approved;
4. THAT the 2022 Profit Distribution Plan be considered and approved;
5. THAT the 2023 Financial Budget Report be considered and approved;
6. THAT the re-appointment of the domestic and international accounting firms for the year 2023 and the authorization of the board of directors to fix their remuneration be considered and approved;
7. THAT the authorization to the Board of Directors to decide on the registration and issuance of ultra short-term financing bonds be considered and approved;
8. THAT the reduction of registered capital and amendments to the articles of association;
9. THAT the proposal to the shareholders at the general meeting to authorize the Board of Directors to repurchase domestic shares and/or overseas-listed foreign shares of the Company be considered and approved;
10. THAT the resolution on the election of the non-independent directors of the Eleventh session of the Board of the Company be considered and approved;
11. THAT the resolution on the election of the independent directors of the Eleventh session of the Board of the Company be considered and approved;
12. THAT the resolution on the election of non-employee representative supervisors of the Eleventh session of the Supervisory Committee be considered and approved. |
Passed | The Shanghai Stock Exchange website, the Hong Kong Stock Exchange website and the website of the Company |
29 June 2023 |
For details of the above meetings, please refer to the resolution announcement published by the Company in China Securities Journal, Securities Times, the Shanghai Stock Exchange website and the Hong Kong Stock Exchange website.
26 | Sinopec Shanghai Petrochemical Company Limited |
MAJOR EVENTS (continued)
(2) | Plan for Profit Distribution or Capital Reserves Capitalization |
1. | Formulation, Implementation of or Amendment to Profit Distribution Plan |
The 2022 Profit Distribution Plan was considered and approved at the 2022 Annual General Meeting held on 28 June 2023 that the Company will not distribute dividend or capitalize capital reserves for the year of 2022. The relevant announcement was published in China Securities Journal and Securities Times on 29 June 2023 and was uploaded to the Hong Kong Stock Exchange website and the Shanghai Stock Exchange on 28 June 2023.
2. | Plan for Profit Distribution or Capital Reserves Capitalization during the Reporting Period |
Nil.
(3) | Performance of Undertakings |
1. | Undertakings Made by De Facto Controller, Shareholders, Connected Parties, Purchaser and the Company during the Reporting Period or Continuing up to the Reporting Period |
Undertakings about share reform
The Company disclosed The Explanatory Memorandum for the Share Reform Scheme of the Company (the Revised Draft) on 20 June 2013, in which the Companys controlling shareholder, Sinopec Corp., made the following major undertakings that continued up to the Reporting Period:
Sinopec Corp. shall continue to support the development of Sinopec Shanghai upon the completion of the share reform scheme, and shall use Sinopec Shanghai as a platform for the development of related businesses in the future.
For details, please refer to The Explanatory Memorandum for the Share Reform Scheme of the Company (the Revised Draft) (Full Version) published in Shanghai Securities News and China Securities Journal on 20 June 2013, as well as the relevant announcements uploaded to the Shanghai Stock Exchange website, the Hong Kong Stock Exchange website and the website of the Company.
2023 Interim Report |
27 |
MAJOR EVENTS (continued)
The share reform scheme was reviewed and approved at the A shares shareholders meeting held on 8 July 2013. After the implementation of the share reform scheme on 20 August 2013, the Companys A shares resumed trading, and non-circulating shares previously held by non-circulating shares shareholders attained the right of circulation. For details of the implementation of the share reform scheme, please refer to the Implementation Report of Sinopec Shanghai Petrochemical Company Limited Share Reform Scheme published in China Securities Journal and Shanghai Securities News on 14 August 2013 and the relevant announcement uploaded to the websites of the Shanghai Stock Exchange and the Hong Kong Stock Exchange.
With regard to the aforementioned undertakings, the Company did not notice any violation in fulfilling the above undertakings by Sinopec Corp.
(4) | Appointment and Dismissal of Accounting Firm |
During the Reporting Period, the Company had not changed its auditors.
(5) | Material Lawsuits or Arbitration |
During the Reporting Period, the Company had no material lawsuits or arbitration.
(6) | Punishment and Reprimand of the Company and its Directors, Supervisors, Senior Management, Controlling Shareholder, De Facto Controller and Purchaser |
As the Company experienced a general work safety responsibility accident on 18 June 2022, the Shanghai Emergency Management Bureau decided to impose an administrative penalty of a fine of RMB400,000 to the Company on 27 June 2023, please refer to the website of the Shanghai Emergency Management Bureau for further details.
(7) | Credit Status of the Company and its Controlling Shareholder and De Facto Controller during the Reporting Period |
During the Reporting Period, the Company and its controlling shareholder and de facto controller of the Company were not involved in any events regarding failure to perform obligations under a judgement of courts, nor have they had any relatively large amount of debts which have become due and outstanding.
28 | Sinopec Shanghai Petrochemical Company Limited |
MAJOR EVENTS (continued)
(8) | Share Option Incentive Scheme |
During the Reporting Period, the Company did not grant A-share stock options under the Share Option Incentive Plan, nor did the granted persons exercise A-share stock options, and no A-share stock options were cancelled or lapsed. No H-share stock options were granted, exercised or cancelled.
(9) | Major Connected Transactions of the Company |
1. | Connected Transactions in relation to Daily Operations |
Continuing connected transactions under Chapter 14A of the Hong Kong Listing Rules
The Board of the Company resolved on 10 November 2022 to approve the New Mutual Product Supply and Sale Services Framework Agreement and the New Comprehensive Services Framework Agreement entered into by the Company, Sinopec Group and Sinopec Corp. for a term of three years expiring on 31 December 2025; and the Financial Services Framework Agreement entered into by the Company and Sinopec Group for a term of one year expiring on 31 December 2023. The Company has disclosed the three agreements and each of the Continuing Connected Transactions under the agreements in the announcement dated 10 November 2022. The New Mutual Product Supply and Sale Services Framework Agreement, the New Comprehensive Services Framework Agreement, Financial Services Framework Agreement, each of the Continuing Connected Transactions under the agreements and the annual caps were considered and approved at the Third Extraordinary General Meeting for 2022 of the Company.
On 31 December 2020, the Company entered into a storage service agreement with Sinopec Petroleum Reserve Company Limited, a wholly-owned subsidiary of Sinopec Group (which is the de facto controller of the Company), and its subordinate Baishawan Branch (the Baishawan Branch). Pursuant to which the Baishawan Branch provided storage services to the Company, for a service term from 1 January 2021 to 31 December 2023 with a maximum annual storage fee of RMB114.00 million (inclusive of value-added tax). For details, please refer to the announcements published on the websites of the Shanghai Stock Exchange and the Hong Kong Stock Exchange on 8 December 2020.
2023 Interim Report |
29 |
MAJOR EVENTS (continued)
The table below sets out the amounts of the continuing connected transactions of the Company with Sinopec Corp., Sinopec Group and their associates during the Reporting Period:
Unit: RMB000 | ||||||||
Type of connected transaction |
Connected person |
Annual cap |
Transaction |
Percentage | ||||
Mutual Product Supply and Sales Services Framework Agreement |
||||||||
Purchases of raw materials |
Sinopec Group, Sinopec Corp. and their associates |
121,171,000 | 30,617,595 | 76.35% | ||||
Sales of petroleum products and petrochemicals |
Sinopec Corp. and its associates |
91,003,000 | 32,720,074 | 72.90% | ||||
Agency sales of petrochemical products |
Sinopec Corp. and its associates |
212,000 | 50,602 | 100.00% | ||||
Comprehensive Services Framework Agreement |
||||||||
Construction, installation and engineering design services |
Sinopec Group and its associates |
1,548,000 | 97,372 | 16.02% | ||||
Petrochemical industry insurance services |
Sinopec Group |
120,000 | 58,121 | 100.00% | ||||
Property leasing |
Sinopec Corp. and its associates |
42,000 | 17,250 | 35.73% | ||||
Comprehensive services |
Sinopec Group and its associates |
58,000 | 22,598 | 24.52% | ||||
Financial Services Framework Agreement |
||||||||
Financial services |
Associate of Sinopec Group (Sinopec Finance) |
200,000 | 176 | 0.10% | ||||
Storage services agreement |
||||||||
Storage services |
Associate of Sinopec Group (Baishawan Branch) |
114,000 | 57,000 | 88.05% |
30 | Sinopec Shanghai Petrochemical Company Limited |
MAJOR EVENTS (continued)
The transactions between the Company and Sinopec Group, Sinopec Corp. and their associates as disclosed in Note 19 to the financial statements prepared under IFRS in the 2023 Interim report of the Company constituted connected transactions under Chapter 14A of the Hong Kong Listing Rules. The above-mentioned continuing connected transactions have been disclosed in accordance with Chapter 14A of the Hong Kong Listing Rules.
2. | Connected Transactions Related to Acquisition or Disposal of Assets or Equity Interests |
Connected transaction under Chapter 14A of the Hong Kong Listing Rules
As considered and approved by the 26th Meeting of the Tenth Session of the Board of Directors of the Company, the Company and ZhongKe (Guangdong) Refinery & Petrochemical Company Limited (ZhongKe Refinery & Petrochemical) entered into the Assets Transfer Agreement for Shanghai Petrochemical EVA Plant, pursuant to which the Company proposes to transfer the assets of the 100,000 tonnes/year EVA plant under construction held by the Company to ZhongKe Refinery & Petrochemical, and ZhongKe Refinery & Petrochemical shall pay the transfer price of RMB263.29 million (including tax in total) to the Company by way of installment payments. Since ZhongKe Refinery & Petrochemical is a subsidiary of Sinopec Corp., a controlling shareholder of the Company, the aforesaid transaction constitutes a connected transaction of the Company. Pursuant to Chapter 14A of the Hong Kong Listing Rules, as the applicable percentage ratio in respect of the aforesaid connected transaction exceeds 0.1% but is less than 5%, the transaction is subject to the reporting and announcement requirements but is exempted from the independent shareholders approval requirement under Chapter 14A of the Hong Kong Listing Rules. The relevant announcements have been published on the websites of the Shanghai Stock Exchange and Hong Kong Stock Exchange on 19 January 2023 and 18 January 2023, respectively. As of the date of this report, the signing of the said agreement has been completed.
3. | Material connected transactions of joint external investment |
During the Reporting Period, the Company had no material connected transactions of joint external investment.
2023 Interim Report |
31 |
MAJOR EVENTS (continued)
4. | Credits and Liabilities with Connected Parties |
Unit: RMB000 | ||||||||||||||||||||||||||
Funds provided by connected parties to | ||||||||||||||||||||||||||
Funds provided to connected parties | the listed company | |||||||||||||||||||||||||
Connected | Opening | Amount of | Closing | Opening | Amount of | Closing | ||||||||||||||||||||
Connected party |
relationship | balance | transaction | balance | balance | transaction | balance | |||||||||||||||||||
Sinopec Corp., its subsidiaries, joint ventures and associates & Sinopec Group and its subsidiaries |
Controlling shareholder, de facto controller and their related parties |
137,476 | (134,017 | ) | 3,459 | 1,235,222 | (927,169 | ) | 1,008,053 |
Note 1: | The period-end balance of the funds provided by the Group to the connected parties was mainly unsettled receivables arising from the provision of services and pipeline leases to Sinopec Corp., its subsidiaries and associates. |
Note 2: | The period-end balance of the funds provided by the connected parties to the Group was mainly unsettled payables arising from the provision of construction, installation and engineering design services by Sinopec Group and its subsidiaries, and long-term borrowings arising from the Groups acceptance of loans from Sinopec Corp and its subsidiaries. |
The prices of the continuing connected transactions conducted by the Company with Sinopec Group, Sinopec Corp. and their associates were determined, upon negotiations between both parties, on the basis of (i) state tariffs; or (ii) state guidance prices; or (iii) market prices. Such agreements of connected transactions were entered into in line with the Companys production and operational needs. Accordingly, the aforementioned continuing connected transactions did not have a significant adverse impact on the Companys independence.
32 | Sinopec Shanghai Petrochemical Company Limited |
MAJOR EVENTS (continued)
5. | Financial Business between the Company and the Related Financial Company, the Companys Holding Financial Company and Related Parties |
(1) | Deposit business |
Unit: RMB0000 | ||||||||||||||||||||||||||
Maximum | Amount incurred in the current period | |||||||||||||||||||||||||
daily | Total deposit | Total withdrawn | ||||||||||||||||||||||||
deposit | Deposit interest | amount in the | amount in current | |||||||||||||||||||||||
Related Party |
Relationship |
limit | rate range | Opening balance | current period | period | Closing balance | |||||||||||||||||||
Sinopec Finance |
Subsidiary of the ultimate holding company |
None | 0.35%-1.30% | | 8,413,208.56 | 8,413,208.56 | | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total |
/ | / | / | | 8,413,208.56 | 8,413,208.56 | | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: | As of 30 June 2023, the deposit amount and closing balance between the Company and its subsidiaries and Sinopec Finance were all current deposits. |
(2) | Loan business |
Unit: RMB0000 | ||||||||||||||||||||||||||
Amount incurred in the current period | ||||||||||||||||||||||||||
Total loan amount | Total repayment | |||||||||||||||||||||||||
Loan interest rate | in the current | amount of the | ||||||||||||||||||||||||
Related Party |
Relationship |
Loan limit | range | Opening balance | period | current period | Closing balance | |||||||||||||||||||
Sinopec Finance |
Subsidiary of the ultimate holding company |
70,000.00 | 1.08 | % | 70,000.00 | | | 70,000.00 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total |
/ | / | / | 70,000.00 | | | 70,000.00 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 Interim Report |
33 |
MAJOR EVENTS (continued)
(10) | Material Contracts and Their Performances |
1. | Entrustments, Sub-contracts and Lease Arrangements |
During the Reporting Period, the Company had no entrustments, sub-contracts or lease arrangements that generated 10% or more (including 10%) of the gross profit of the Company for the Reporting Period.
2. | Guarantees |
The Company did not provide guarantees during the Reporting Period.
3. | Other Material Contracts |
There were no other material contracts during the Reporting Period.
(11) | Environmental Information and Social Responsibilities |
1. | Environmental protection situation of key pollutant-discharging companies and their subsidiaries as announced by the Ministry of Environmental Protection |
The Company is one of the polluting enterprises under Intensive Monitoring and Control by the State proclaimed by the Ministry of Environmental Protection. According to the Measures for Self-Monitoring and Information Disclosure of the Enterprises subject to Intensive Monitoring and Control by the State (Trial Implementation), the Company has disclosed to the public on the website of the National Pollution Source Monitoring Information Management and Sharing Platform about the sites of the pollution sources, the types and concentration of pollutants which are subject to intensive monitoring and control by the state.
The Company, as a manufacturing enterprise in the petrochemical industry, consistently places environmental protection as its priority. It has continually received ISO14001 Environmental Management System Certification. In January 2013, it obtained the certifications from the Shanghai Audit Center of Quality in different areas, including quality (GB/T19001: 2008), environment (GB/T24001: 2004) and occupational health and safety (GB/T28001: 2011). On 16 September 2019, it was approved the continuing use of the title of All-China Environmentally Friendly Enterprise. On 13 January 2023, the Company was awarded the title of Sinopec Green Enterprise for 2023 by Sinopec Group.
In the first half of the year, Sinopec Shanghai actively practised the green development concept, stepped up pollution prevention and control efforts, drove clean production, consolidated the achievements for green enterprise development and continued to promote green infrastructure construction. It ensured the effective operation of HSE management system and reinforced its capability to execute HSE system. The Company strengthened source control and implemented environmental protection standards which were stricter than national, industrial and local standards, thereby reducing emission volume and intensity as well as preventing related impact. Strict measures were taken to ensure pollutants to be discharged in an orderly manner and meet the discharge standards so as to contribute its efforts to improve the regional ecological environment quality.
34 | Sinopec Shanghai Petrochemical Company Limited |
MAJOR EVENTS (continued)
2. | Pollutant treatment information |
(a) | Details of air pollutant emissions1 |
No. |
Category |
Discharge outlet 2 |
Discharge |
Emission standard under implementation 4 |
Permissible |
Actual |
Approved |
Emission | ||||||||
1 | SO2 | 70 | Continuous | Air Pollutant Emission Standard for Coal-fired Power Plants in Shanghai (DB31/963-2016), Air Pollutant Emission Standard for Coal-fired Power Plants (GB 13223- 2011), Air Pollutant Emission Standard (DB31/933- 2015), Shanghai Municipal Emission Standards for Boiler Pollutants (DB31/387-2018), Pollutant Emission Standards for Petroleum Refining Industry (GB31570- 2015), Pollutant Emission Standard for Petrochemical Industry (GB31571-2015), Pollutant Emission Standards for Synthetic Resin Industry (GB31572-2015) |
10-100 mg/m3 | 0.01-30 mg/m3 | 88.51 tons | Standard compliance rate: 100%, subject to the announcement of the competent department of ecological environment. | ||||||||
2 | NOX | 68 | Continuous | Air Pollutant Emission Standard for Coal-fired Power Plants in Shanghai (DB31/963-2016), Air Pollutant Emission Standard for Coal-fired Power Plants (GB 13223- 2011), Air Pollutant Emission Standard (DB31/933- 2015), Shanghai Municipal Emission Standards for Boiler Pollutants (DB31/387-2018), Pollutant Emission Standards for Petroleum Refining Industry (GB31570- 2015), Pollutant Emission Standard for Petrochemical Industry (GB31571-2015), Pollutant Emission Standards for Synthetic Resin Industry (GB31572-2015) |
50-150mg/m3 | 0.1-85mg/m3 | 564.73 tons | Standard compliance rate: 100%, subject to the announcement of the competent department of ecological environment. |
Note 1: | This report discloses the exhaust emissions that the Company has included in the key management items of pollution discharge permits. The data is calculated based on self-monitoring data, and the final data released by the local ecological environment department shall prevail. | |
Note 2: | This item is designed to count the number of organized discharge outlets in relation to respective pollutant. | |
Note 3: | Some outlets discharge intermittently. | |
Note 4: | For the names of the main industry emission standards, the local emission standards and other standards under implementation, please refer to the public information of the ecological environment department. | |
Note 5: | The industry discharge standard concentration prevails, and for other standard concentrations implemented, please refer to the public information of the ecological environment department. | |
Note 6: | The annual average discharge concentrations of major discharge outlets in the first half of the year are all within the corresponding range as disclosed. For details, please refer to the public information of the ecological environment department. |
2023 Interim Report |
35 |
MAJOR EVENTS (continued)
(b) | Details of water pollutant emissions 1 |
No. |
Category of |
Discharge outlet |
Discharge |
Emission standard under implementation 2 |
Permissible |
Actual |
Approved |
Emission standard compliance | ||||||||
1 | COD | 2 | Intermittent | Pollutant Emission Standards for Petroleum Refining Industry (GB31570-2015), Pollutant Emission Standard for Petrochemical Industry (GB31571-2015), Pollutant Emission Standards for Synthetic Resin Industry (GB31572-2015) | 60mg/L | 20-50 mg/L | 299.25 tons | 100% up-to-standard daily average. | ||||||||
2 | Ammonia nitrogen | 2 | Intermittent | Pollutant Emission Standards for Petroleum Refining Industry (GB31570-2015), Pollutant Emission Standard for Petrochemical Industry (GB31571-2015), Pollutant Emission Standards for Synthetic Resin Industry (GB31572-2015) | 8mg/L | 0.02-2mg/L | 2.27 tons | 100% up-to-standard daily average. |
Note 1: | This report discloses the exhaust emissions that the Company has included in the key management items of pollution discharge permits. The data is calculated based on self-monitoring data, and the final data released by the local ecological environment department shall prevail. | |
Note 2: | For the names of the main industry emission standards, the local emission standards and other standards under implementation, please refer to the public information of the ecological environment department. | |
Note 3: | The industry discharge standard concentration prevails, and for other standard concentrations implemented, please refer to the public information of the ecological environment department. | |
Note 4: | The average discharge concentrations of major discharge outlets in the first half of the year are all within the corresponding range as disclosed. For details, please refer to the public information of the ecological environment department. |
36 | Sinopec Shanghai Petrochemical Company Limited |
MAJOR EVENTS (continued)
3. | Construction and operation of pollution prevention facilities |
Main pollution facilities |
Pollutant |
Emission limits (mg/m3) |
Actual in 1H 2023 (mg/m3) |
Reach (or not reach) the standard | ||||||||
Thermoelectric boiler | SO2 | 35 | 6.39 | Reach | ||||||||
NOX | 50 | 16.46 | Reach | |||||||||
Particulate matter | 10 | 0.89 | Reach | |||||||||
2#sulfur | SO2 | 100 | 13.65 | Reach | ||||||||
3#sulfur | SO2 | 100 | 1.92 | Reach | ||||||||
4#sulfur | SO2 | 100 | 25.09 | Reach | ||||||||
Catalytic cracking | SO2 | 50 | 6.29 | Reach | ||||||||
NOX | 100 | 8.50 | Reach | |||||||||
Particulate matter | 30 | 8.67 | Reach | |||||||||
Process heating furnace | SO2 | 50 | 1.62 | Reach | ||||||||
NOX | 100 | 36.27 | Reach | |||||||||
Particulate matter | 20 | 1.55 | Reach | |||||||||
Sewage treatment plant | COD mg/l | 60 | 31.47 | Reach | ||||||||
Ammonia nitrogen mg/l | 8 | 0.22 | Reach |
2023 Interim Report |
37 |
MAJOR EVENTS (continued)
4. | Environmental Impact Assessment and Other Environmental Protection Administrative Licensing of Construction Projects |
According to the requirements of laws and regulations such as the Environmental Impact Assessment Law, the Regulations on Environmental Protection Management of Construction Projects and the Classified Management Directory of Environmental Impact Assessment of Construction Projects, the Company actively promoted the triple simultaneous working principles for environmental protections in tandem with construction projects. In the first half of 2023, Shanghai Petrochemicals thermoelectric generator cleaning and efficiency improvement project was approved by Shanghai Municipal Bureau of Ecology and Environment (approval number: Hu Huan Bao Xu Ping [2023] No.3), and the research and development project of heat-resistant pultruded epoxy resin with high toughness was approved by Shanghai Jinshan Ecological Environment Bureau (approval number: Jin Huan Xu [2023] No.53).
The Companys existing sewage discharge licence is valid from 28 June 2023 to 27 June 2028. In 2023, the Company carried out self-monitoring, reporting of pollutant discharge permit implementation reports and information disclosure to strictly comply with the management requirements of sewage discharge licence.
In the first half of the year, due to the coordinated treatment on transporting waste gas to thermoelectric boiler from the waste gas recovery device in the Sixth Workshop of the Storage and Transportation Department, the Company completed the re-application for the sewage discharge permit on 28 June 2023.
5. | Emergency response plan for emergent environmental incidents |
According to the three-year validity requirement in the Administrative Measures for Emergency Preparedness for Environmental Incidents of Sinopec, the Company completed the revision of the Shanghai Petrochemicals Comprehensive Emergency Response Plan for Environmental Emergencies and filed a report to Shanghai Municipal Bureau of Ecology and Environment in December 2022. Its emergency response plan for environmental emergencies covers 7 areas, including General Principles, Emergency Organization and Responsibility, Environmental Risk Analysis and Forewarning, Emergency Response and Subsequent Work. The specific emergency plan includes 9 contingency plans, including Specific Emergency Plan for Water Environment Risk, Specific Emergency Plan for Long-Distance Pipeline Leakage, Specific Emergency Response Plan for Fire and Explosion Accidents, Specific Emergency Response Plan for Hazardous Chemicals Leakage Incident, Specific Plan for Pipe Gallery Leakage Incident, Specific Emergency Response Plan for Oil and Gas Pipeline Leakage Incident, Specific Emergency Plan for Soil (Underground Water) Pollution Prevention, Shanghai Petrochemical Specific Emergency Plan for Hazardous Waste Disposal and Specific Emergency Response Plan for Trans-Regional (Jiaxing, Zhejiang) Environmental Emergencies.
38 | Sinopec Shanghai Petrochemical Company Limited |
MAJOR EVENTS (continued)
In the first half of 2023, the Company studied the Notice on Completing Risk Assessment of Environmental Incidents in 2022, the Sinopecs Guide on Risk Assessment of Environmental Incidents (March 2022) and the Evaluation Form on Risk Index for Environmental Incidents (March 2022) issued by Sinopec. At present, the Company has 0 extremely high environmental risk source, 16 high environmental risk sources, 51 relatively high environmental risk sources, 77 medium environmental risk sources, and 15 low environmental risk sources. Total environmental risk sources are 159.
The Company carried out regular environmental emergency drills. At 13:00 on 22 May 2023, the Company conducted the emergency response drill for T-20 Tank fire incident in the Seventh Workshop under the Storage and Transportation Department. This drill was based on the Comprehensive Emergency Response Plan of Shanghai Petrochemical, the Specific Emergency Response Plan for Fire and Explosion Accidents, and the Specific Emergency Response Plan for Oil and Gas Pipeline Leakage Incident. The incident handling procedure was rehearsed through a simulated large-scale tank fire accident caused by lightning strike under realistic scenarios, combining with the experience and achievements of the desktop drill, so as to improve the decision making and execution ability of relevant personnel to deal with emergencies quickly. The drill proved that the aforementioned emergency plans were sufficient and effective.
6. | Environmental self-monitoring programme |
In accordance with Sinopec Shanghais Self-Monitoring Program for Pollutant Discharge Permit, Sinopecs Provisions on the Management of Environmental Monitoring and Sinopec Shanghais Provisions on the Management of Environmental Monitoring, the Company organized and published the Shanghai Petrochemicals 2021 Environmental Monitoring Plan and Emission Implementation Standards at the end of 2020. They covered the following nine areas: water quality (rain water) monitoring plan, air monitoring plan (atmospheric PM10, unorganized emission monitoring), exhaust gas monitoring plan, noise monitoring plan, radioactive instrument monitoring plan, water quality (sewage) monitoring plan, soil and groundwater monitoring plan. They monitored the Companys various pollution sources such as sewage, unpolluted water, waste gas, noise and radioactivity, as well as environmental quality monitoring of the atmosphere and groundwater. Daily environmental monitoring was carried out according to the monitoring plan. In the first half of 2023, a total of 36,048 items of water quality data (including 572 items from outsourced projects), 5,123 items of air and waste gas data (including 2,468 items from outsourced projects) and 208 items of noise data were monitored; and the detection on outsourced projects of groundwater and soil in raining season has been completed.
2023 Interim Report |
39 |
MAJOR EVENTS (continued)
7. | Measures and effects taken to reduce carbon emissions during the Reporting Period |
During the Reporting Period, the Thermal Power Department applied approximately 2,692 tons of biomass fuel-blended combustion for CFB boiler, and the carbon emission was reduced by approximately 4,038 tons. The 220KV roof 400KW Photovoltaic Power Plants (No. 1 Photovoltaic Power Plant) in western parts of Thermal Power Department were in stable operation. The 1.53MW Photovoltaic Power Plants (No. 2 Photovoltaic Power Plant) at Huanjiang Road have been established and completed the grid-connected power generation. The installation and construction of Nansuitang River and acrylic fiber roof 8.76MW Photovoltaic Power Plants and carbon-fiber large tow 1.66MW Photovoltaic Power Plants have basically been completed. No. 1 Photovoltaic Power Plant generated a total of 234,200 kWh, and No. 2 Photovoltaic Power Plant generated a total of 529,800 kWh, with a total of 764,000 kWh, reducing carbon emissions by 436 tons in the first half of the year. The low-temperature heat utilization project (Phase I) of aromatic division has been used on 14 March, saving 9T/h of 1.3MPa steam. The Company strengthened energy-saving on-site management and managed the phenomenon of running, flowing, dripping and leaking, which led to a significant improvement in on-site appearance while saving steam consumption. The Company strengthened operation optimization and took a series of energy-saving measures to reduce steam consumption, resulting in a year-on-year reduction of 62,500 tons of coal (including petroleum coke) consumption.
8. | Administrative penalties for environmental problems during the Reporting Period |
During the Reporting Period, the Company was not subject to administrative punishment for environmental problems.
9. | Consolidate and expand the achievements in poverty alleviation and Rural Revitalization |
The Company partnered with Bange Middle School in Tibet for education assistance and further improved the measures for education assistance in the first half of the year. It successfully organized a number of activities including on-site research, backbone teachers training in Shanghai, repairing reading rooms, building cultural propaganda walls, donating books, honoring the most beautiful rural teachers and online book clubs.
40 | Sinopec Shanghai Petrochemical Company Limited |
CHANGE IN SHARE CAPITAL OF ORDINARY SHARES AND SHAREHOLDERS
(1) | Changes in Share Capital of Ordinary Shares during the Reporting Period |
Before changes | Changes | After changes | ||||||||||||||||||
Number | Percentage (%) |
NumberNote | Number | Percentage (%) |
||||||||||||||||
Ordinary shares denominated in RMB |
7,328,813,500 | 67.71 | % | | 7,328,813,500 | 67.86 | % | |||||||||||||
Domestically listed foreign shares |
| | | | | |||||||||||||||
Overseas listed foreign shares |
3,495,000,000 | 32.29 | % | (24,528,000 | ) | 3,470,472,000 | 32.14 | % | ||||||||||||
Others |
| | | | | |||||||||||||||
Total number of shares |
10,823,813,500 | 100 | % | (24,528,000 | ) | 10,799,285,500 | 100 | % |
Note: | On 17 February 2023, the Company cancelled all H shares repurchased up to that date totaling 24,528,000 shares. There was no issuance of new shares, stock dividend or capital reserve capitalisation during the Reporting Period. |
(2) | Issue of Shares |
1. | Issue of Shares during the Reporting Period |
During the Reporting Period, the Group didnt issue any shares.
2. | Changes in the Companys Total Number of Ordinary Shares, Shareholding Structure and the Companys Assets and Liabilities |
During the Reporting Period, save as disclosed above, there was no change in the Companys total number of shares, shareholding structure and Companys assets and liabilities due to reasons such as stock dividend and allotment of shares.
3. | Employees Shares |
The Company had no employees shares as at the end of the Reporting Period.
(3) | Shareholders |
1. | Total Number of Shareholders |
Number of shareholders of ordinary shares as at the end of the Reporting Period |
94,357 |
2023 Interim Report |
41 |
CHANGE IN SHARE CAPITAL OF ORDINARY SHARES AND SHAREHOLDERS (continued)
2. | Shareholding of the Top Ten Shareholders as at the end of the Reporting Period |
Unit: Shares
Shareholding of the top ten shareholders | ||||||||||||||||||||||||||||
Increase/decrease | Number of | Pledged/frozen | ||||||||||||||||||||||||||
of shareholding | Number of shares | shares held | ||||||||||||||||||||||||||
during the | held at the end | Percentage of | with selling | |||||||||||||||||||||||||
Name of shareholders (Full |
Class of shares |
Reporting Period (shares) |
of the Reporting Period (shares) |
Shareholding (%) |
restrictions (shares) |
Status of shares |
Number of shares |
Nature of shareholders | ||||||||||||||||||||
China Petroleum & Chemical Corporation |
A shares | 0 | 5,459,455,000 | 50.55 | % | 0 | None | 0 | State- owned legal person | |||||||||||||||||||
HKSCC (Nominees) Limited |
H shares | -1,199,000 | 3,451,316,030 | 31.96 | % | 0 | Unknown | | Overseas legal person | |||||||||||||||||||
HKSCC Limited |
A shares | -4,797,256 | 91,748,532 | 0.85 | % | 0 | None | 0 | Overseas legal person | |||||||||||||||||||
Wang Lei |
A shares | 0 | 46,120,300 | 0.43 | % | 0 | None | 0 | Domestic natural person | |||||||||||||||||||
China Southern Fund- Agricultural Bank of China - China Southern CSI Financial Asset Management Plan |
A shares | -4,024,500 | 39,059,200 | 0.36 | % | 0 | None | 0 | Others | |||||||||||||||||||
GF Fund - Agricultural Bank of China - GF CSI Financial Asset Management Plan |
A shares | -6,882,300 | 38,340,000 | 0.36 | % | 0 | None | 0 | Others | |||||||||||||||||||
Dacheng Fund - Agricultural Bank of China - Dacheng CSI Financial Asset Management Plan |
A shares | -5,959,600 | 37,571,869 | 0.35 | % | 0 | None | 0 | Others | |||||||||||||||||||
Yinhua Fund- Agricultural Bank of China - Yinhua CSI Financial Asset Management Plan |
A shares | -5,800,200 | 37,251,516 | 0.34 | % | 0 | None | 0 | Others | |||||||||||||||||||
China Merchants Bank Co., Ltd. - Wanjia CSI 1000 Index Enhanced Initiated Securities Investment Fund |
A shares | 20,266,198 | 29,036,198 | 0.27 | % | 0 | None | 0 | Others | |||||||||||||||||||
Bosera Fund - Agricultural Bank of China - Bosera CSI Financial Asset Management Plan |
A shares | -14,265,900 | 28,409,800 | 0.26 | % | 0 | None | 0 | Others | |||||||||||||||||||
Note on connected relations or acting in concert of the above shareholders |
|
Among the above-mentioned shareholders, Sinopec Corp, a State-owned legal person, does not have any connected relationship with the other shareholders, and does not constitute an acting-in-concert party under the Administrative Measures on Acquisition of Listed Companies. Among the above-mentioned shareholders, HKSCC (Nominees) Limited is a nominee. HKSCC Limited is the nominal holder for Shanghai-Hong Kong Stock Connect Program of the Company. Apart from the above, the Company is not aware of any connected relationship among the other shareholders, or whether any other shareholder constitutes an acting-in-concert party under the Administrative Measures on Acquisition of Listed Companies. |
Note: | Sinopec Group held 44,660,000 H shares of the Company through its overseas wholly-owned subsidiary Sinopec Century Bright Capital Investment Limited, accounting for 0.4135% of the total shares of the Company. These shares were included in the total shares held by HKSCC (Nominees) Limited. |
42 | Sinopec Shanghai Petrochemical Company Limited |
CHANGE IN SHARE CAPITAL OF ORDINARY SHARES AND SHAREHOLDERS (continued)
(4) | Change in Controlling Shareholder or De Facto Controller |
During the Reporting Period, there was no change in the controlling shareholder or the de facto controller of the Company.
(5) | Interests and Short Positions of the Substantial Shareholders of the Company in Shares and Underlying Shares of the Company |
As at 30 June 2023, so far as was known to the Directors or chief executive of the Company, the interests and short positions of the Companys substantial shareholders (being those who are entitled to exercise or control the exercise of 5% or more of the voting power at any general meeting of the Company but excluding the Directors, chief executive and Supervisors) in the shares and underlying shares of the Company who are required to disclose their interests pursuant to Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance (the SFO) or as recorded in the register of interests required to be kept under section 336 of the SFO were as set out below:
Interests in ordinary shares of the Company
Percentage of | ||||||||||||||
Percentage of | total issued | |||||||||||||
total issued | shares of the | |||||||||||||
Interests held or deemed | shares of the | relevant class | ||||||||||||
Name of shareholder |
as held (shares) |
Note | Company (%) | (%) | Capacity | |||||||||
China Petroleum & Chemical Corporation (Sinopec Corp.) |
5,459,455,000 A shares (L) Shares of legal person |
(1) | 50.55 | 74.49 | Beneficial owner | |||||||||
Corn Capital Company Ltd |
211,008,000 H shares (L) | (2) | 1.95 | 6.04 | Beneficial owner | |||||||||
200,020,000 H shares (S) | 1.85 | 5.72 | ||||||||||||
Hung Hin Fai |
211,008,000 H shares (L) | (2) | 1.95 | 6.04 | Interests of controlled | |||||||||
200,020,000 H shares (S) | 1.85 | 5.72 | corporation | |||||||||||
Yardley Finance Limited |
200,020,000 H shares (L) | (3) | 1.85 | 5.72 | Secured equity holders | |||||||||
Chan Kin Sun |
200,020,000 H shares (L) | (3) | 1.85 | 5.72 | Interests of controlled corporation |
(L): Long position; (S): Short position
2023 Interim Report |
43 |
CHANGE IN SHARE CAPITAL OF ORDINARY SHARES AND SHAREHOLDERS (continued)
Notes:
(1) | Based on the information obtained by the Directors from the Hong Kong Stock Exchange website and as far as to the knowledge of the Directors, Sinopec Group directly and indirectly owned 67.84% of the issued share capital of Sinopec Corp. as at 30 June 2023. By virtue of such relationship, Sinopec Group is deemed to have an interest in the 5,459,455,000 A shares of the Company directly owned by Sinopec Corp. |
(2) | These shares were held by Corn Capital Company Limited. Hung Hin Fai held 100% interests in Corn Capital Company Limited. Pursuant to the SFO, Hung Hin Fai was deemed to be interested in the shares held by Corn Capital Company Limited. |
(3) | These shares were held by Yardley Finance Limited. Chan Kin Sun held 100% interests in Yardley Finance Limited. Pursuant to the SFO, Chan Kin Sun was deemed to be interested in the shares held by Yardley Finance Limited. |
Save as disclosed above, as at 30 June 2023, the Directors have not been notified by any person (other than the Directors, chief executive and Supervisors) who had interests or short positions in the shares or underlying shares of the Company which would fall to be disclosed to the Company pursuant to Divisions 2 and 3 of Part XV of the SFO or as recorded in the register of interests required to be kept by the Company under Section 336 of the SFO.
44 | Sinopec Shanghai Petrochemical Company Limited |
DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND OTHERS
(1) | Changes in Shareholdings |
1. | Changes in Shareholdings of the Current Directors, Supervisors and Senior Management and those Resigned during the Reporting Period |
Unit: Shares | ||||||||||||
Name |
Position |
Number of shares held at the beginning of the Reporting Period |
Number of shares held at the end of the Reporting Period |
Change in | ||||||||
Wan Tao |
Executive Director and Chairman | Nil | Nil | No change | ||||||||
Guan Zemin |
Executive Director, Vice Chairman and President | Nil | Nil | No change | ||||||||
Du Jun |
Executive Director, Vice President and Chief Financial Officer | Nil | Nil | No change | ||||||||
Huang Xiangyu |
Executive Director and Vice President | 140,000 | 140,000 | No change | ||||||||
Xie Zhenglin |
Non-executive Director | Nil | Nil | No change | ||||||||
Qin Zhaohui |
Non-executive Director | Nil | Nil | No change | ||||||||
Tang Song |
Independent Non-executive Director | Nil | Nil | No change | ||||||||
Chen Haifeng |
Independent Non-executive Director | Nil | Nil | No change | ||||||||
Yang Jun |
Independent Non-executive Director | Nil | Nil | No change | ||||||||
Zhou Ying |
Independent Non-executive Director | Nil | Nil | No change | ||||||||
Huang Jiangdong |
Independent Non-executive Director | Nil | Nil | No change | ||||||||
Xie Li |
Supervisor and Chairman of the Supervisory Committee | Nil | Nil | No change | ||||||||
Zhang Feng |
Supervisor | 10,000 | 10,000 | No change | ||||||||
Chen Hongjun |
Supervisor | 31,400 | 31,400 | No change |
2023 Interim Report |
45 |
DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND OTHERS (continued)
Name |
Position |
Number of shares held at the beginning of the Reporting Period |
Number of shares held at the end of the Reporting Period |
Change in | ||||||||
Zhang Xiaofeng |
Supervisor | Nil | Nil | No change | ||||||||
Zheng Yunrui |
Independent Supervisor | Nil | Nil | No change | ||||||||
Choi Ting Ki |
Independent Supervisor | Nil | Nil | No change | ||||||||
Zhou Jijun |
Vice President | Nil | Nil | No change | ||||||||
Huang Fei |
Vice President | Nil | Nil | No change | ||||||||
Liu Gang |
Joint Company Secretary, Board Secretary, General Manager Assistant and General Counsel | Nil | Nil | No change | ||||||||
Peng Kun |
Resigned Non-executive Director | Nil | Nil | No change | ||||||||
Li Yuanqin |
Resigned Independent Non-executive Director | Nil | Nil | No change | ||||||||
Gao Song |
Resigned Independent Non-executive Director | Nil | Nil | No change | ||||||||
Ma Yanhui |
Resigned Supervisor and Chairman of the Supervisory Committee | Nil | Nil | No change | ||||||||
Jin Qiang |
Resigned Vice President | 301,000 | 301,000 | No change | ||||||||
Jin Wenmin |
Resigned Vice President | 175,000 | 175,000 | No change |
(2) | Share Options Held by the Directors, Supervisors and Senior Management during the Reporting Period |
During the Reporting Period, the Companys Directors, Supervisors and senior management did not hold Companys share options.
46 | Sinopec Shanghai Petrochemical Company Limited |
DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND OTHERS (continued)
(3) | Changes in Directors, Supervisors and Senior Management during the Reporting Period |
Name |
Position |
Change |
Date of change |
Reason | ||||
Qin Zhaohui |
Non-executive Director | Elected | 28 June 2023 | | ||||
Zhou Ying |
Independent Non-executive Director | Elected | 28 June 2023 | | ||||
Huang Jiangdong |
Independent Non-executive Director | Elected | 28 June 2023 | | ||||
Xie Li |
Supervisor and Chairman of the Supervisory Committee | Elected | 11 May 2023, 15 May 2023 | | ||||
Zhou Jijun * |
Vice President | Appointed | 18 January 2023 | | ||||
Peng Kun |
Non-executive Director | Resigned | 28 June 2023 | Resignation on expiration of term of office | ||||
Li Yuanqin |
Independent Non-executive Director | Resigned | 28 June 2023 | Resignation on expiration of term of office | ||||
Gao Song |
Independent Non-executive Director | Resigned | 28 June 2023 | Resignation on expiration of term of office | ||||
Ma Yanhui |
Supervisor and Chairman of the Supervisory Committee | Resigned | 4 May 2023 | Job change | ||||
Jin Qiang |
Vice President | Resigned | 28 June 2023 | Resignation on expiration of term of office | ||||
Jin Wenmin |
Vice President | Resigned | 28 June 2023 | Resignation on expiration of term of office |
* | Zhou Jijun resigned as a vice president of the Company on 3 August 2023 due to job adjustment. |
2023 Interim Report |
47 |
DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND OTHERS (continued)
(4) | Interests and Short Positions of the Directors, Chief Executives and Supervisors in the Shares, Underlying Shares and Debentures of the Company or its Associated Corporations |
As at 30 June 2023, the interests and short positions of the Directors, chief executive and Supervisors of the Company in the shares, underlying shares and debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or to be recorded in the register of interests required to be kept under Section 352 of the SFO; or as otherwise notified to the Company and the Hong Kong Stock Exchange pursuant the Model Code for Securities Transactions set out in Appendix 10 to the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (Hong Kong Listing Rules) were as follows:
Interests in the Shares and Underlying Shares of the Company
Name |
Position |
Number of shares held |
Percentage of total |
Percentage of total |
Capacity | |||||
Huang Xiangyu |
Executive Director and Vice President | 140,000 A shares (L) | 0.0013 | 0.0019 | Beneficial owner | |||||
Zhang Feng |
Supervisor | 10,000 A shares (L) | 0.0001 | 0.0001 | Beneficial owner | |||||
Chen Hongjun |
Supervisor | 31,400 A shares (L) | 0.0003 | 0.0004 | Beneficial owner |
(L): Long position
Save as disclosed above, as at 30 June 2023, so far as was known to the Directors, chief executive and Supervisors of the Company, none of the Directors, chief executive or Supervisors of the Company had any interests or short positions in the shares, underlying shares and debentures of the Company or its associated corporations which were required to be disclosed or recorded pursuant to the SFO and the Hong Kong Listing Rules as mentioned above.
48 | Sinopec Shanghai Petrochemical Company Limited |
DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND OTHERS (continued)
(5) | Changes in Directors and Supervisors Information |
During the Reporting Period, there was no change in the information of Directors and Supervisors in accordance with Rule 13.51B(1) of the Hong Kong Listing Rules that needs to be disclosed.
(6) | Audit and Compliance Committee |
On 22 August 2023, the Audit and Compliance Committee of the Eleventh Session of the Board held its first meeting, primarily to review the financial report of the Group for the Reporting Period, and discussed matters relating to the risk management, internal control, compliance management and financial reporting.
(7) | Purchase, Sale and Redemption of the Companys Securities |
During the Reporting Period, the Company did not purchase, sell or redeem any of the Companys securities (for the definition of securities, please refer to paragraph 1 of Appendix 16 to the Hong Kong Listing Rules).
(8) | Compliance with Corporate Governance Code |
During the Reporting Period, the Company applied and complied with all code provisions as set out in the Corporate Governance Code contained in Appendix 14 to the Hong Kong Listing Rules.
(9) | Compliance with Model Code for Securities Transactions |
The Company has adopted and implemented the Model Code for Securities Transactions to regulate the securities transactions of the Directors and Supervisors of the Company. After making specific enquiries with all Directors and Supervisors, the Company has obtained written confirmation from all the Directors and Supervisors as to their full compliance with the Model Code for Securities Transactions by the Directors and Supervisors of the Company during the Reporting Period.
The Model Code for Securities Transactions is also applicable to the senior management who may be in possession of unpublished inside information of the Company. The Company is not aware of any incident of non-compliance with the Model Code for Securities Transactions by the senior management of the Company.
2023 Interim Report |
49 |
Review report
to the board of directors of Sinopec Shanghai Petrochemical Company Limited
(Incorporated in the Peoples Republic of China with limited liability)
Introduction
We have reviewed the interim financial report set out on pages 51 to 85 which comprises the consolidated statement of financial position of Sinopec Shanghai Petrochemical Company Limited (the Company) as of 30 June 2023 and the related consolidated statement of profit or loss, the statement of profit or loss and other comprehensive income, the statement of changes in equity and the condensed consolidated cash flow statement for the six month period then ended and explanatory notes. The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited require the preparation of an interim financial report to be in compliance with the relevant provisions thereof and International Accounting Standard 34, Interim financial reporting issued by the International Accounting Standards Board. The directors are responsible for the preparation and presentation of the interim financial report in accordance with International Accounting Standard 34.
Our responsibility is to form a conclusion, based on our review, on the interim financial report and to report our conclusion solely to you, as a body, in accordance with our agreed terms of engagement, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.
Scope of Review
We conducted our review in accordance with Hong Kong Standard on Review Engagements 2410, Review of interim financial information performed by the independent auditor of the entity, issued by the Hong Kong Institute of Certified Public Accountants. A review of the interim financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the interim financial report as at 30 June 2023 is not prepared, in all material respects, in accordance with International Accounting Standard 34, Interim financial reporting.
Certified Public Accountants
8th Floor, Princes Building
10 Chater Road
Central, Hong Kong
23 August 2023
50 | Sinopec Shanghai Petrochemical Company Limited |
A. | Condensed Consolidated Interim Financial Information Prepared under International Financial Reporting Standards (unaudited) |
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE SIX MONTHS ENDED 30 JUNE 2023 UNAUDITED
(Expressed in Renminbi Yuan)
Six months ended 30 June | ||||||||||||
2022 | ||||||||||||
2023 | (Restated) | |||||||||||
Note | RMB000 | RMB000 | ||||||||||
Revenue |
3 | 44,889,109 | 45,859,205 | |||||||||
Taxes and surcharges |
(6,226,581 | ) | (5,717,033 | ) | ||||||||
|
|
|
|
|||||||||
Net sales |
38,662,528 | 40,142,172 | ||||||||||
Cost of sales |
(39,752,809 | ) | (40,681,204 | ) | ||||||||
|
|
|
|
|||||||||
Gross loss |
(1,090,281 | ) | (539,032 | ) | ||||||||
Selling and administrative expenses |
(150,736 | ) | (179,494 | ) | ||||||||
Other operating income |
62,021 | 47,661 | ||||||||||
Other operating expenses |
(14,878 | ) | (9,448 | ) | ||||||||
Other losses net |
4 | (b) | (12,653 | ) | (4,522 | ) | ||||||
|
|
|
|
|||||||||
Loss from operations |
3 | (1,206,527 | ) | (684,835 | ) | |||||||
|
|
|
|
|||||||||
Finance income |
4 | (a) | 185,052 | 329,305 | ||||||||
Finance expenses |
4 | (a) | (55,547 | ) | (50,043 | ) | ||||||
|
|
|
|
|||||||||
Finance income net |
129,505 | 279,262 | ||||||||||
|
|
|
|
|||||||||
Share of net losses of associates and joint ventures accounted for using the equity method |
(113,363 | ) | (27,537 | ) | ||||||||
|
|
|
|
|||||||||
Loss before taxation |
3 | (1,190,385 | ) | (433,110 | ) | |||||||
Income tax |
5 | 226,288 | 11,731 | |||||||||
|
|
|
|
|||||||||
Loss for the period |
(964,097 | ) | (421,379 | ) | ||||||||
|
|
|
|
|||||||||
Attributable to: |
||||||||||||
Equity shareholders of the Company |
(966,688 | ) | (426,551 | ) | ||||||||
Non-controlling interests |
2,591 | 5,172 | ||||||||||
|
|
|
|
|||||||||
(964,097 | ) | (421,379 | ) | |||||||||
|
|
|
|
|||||||||
Losses per share | ||||||||||||
Basic |
6 | RMB (0.090) | RMB (0.039) | |||||||||
Diluted |
6 | RMB (0.090) | RMB (0.039) | |||||||||
|
|
|
|
The notes on pages 60 to 85 form part of this interim financial report.
2023 Interim Report |
51 |
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2023 UNAUDITED
(Expressed in Renminbi Yuan)
Six months ended 30 June | ||||||||
2022 | ||||||||
2023 | (Restated) | |||||||
RMB000 | RMB000 | |||||||
Loss for the period |
(964,097 | ) | (421,379 | ) | ||||
|
|
|
|
|||||
Other comprehensive income for the period (after tax and reclassification adjustments) |
||||||||
Items that are or may be reclassified subsequently to profit or loss |
||||||||
Share of other comprehensive income of associates accounted for using the equity method |
(21 | ) | (22,558 | ) | ||||
Losses on cash flow hedges |
| 394,762 | ||||||
Income tax relating to these items |
| (98,691 | ) | |||||
|
|
|
|
|||||
Other comprehensive income for the period |
(21 | ) | 273,513 | |||||
Total comprehensive income for the period |
(964,118 | ) | (147,866 | ) | ||||
|
|
|
|
|||||
Attributable to: |
||||||||
Equity shareholders of the Company |
(966,709 | ) | (153,038 | ) | ||||
Non-controlling interests |
2,591 | 5,172 | ||||||
|
|
|
|
|||||
Total comprehensive income for the period |
(964,118 | ) | (147,866 | ) | ||||
|
|
|
|
The notes on pages 60 to 85 form part of this interim financial report.
52 | Sinopec Shanghai Petrochemical Company Limited |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 30 JUNE 2023 UNAUDITED
(Expressed in Renminbi Yuan)
At 30 June | At 31 December | |||||||||||
2023 | 2022 | |||||||||||
(Restated) | ||||||||||||
Note | RMB000 | RMB000 | ||||||||||
Non-current assets |
||||||||||||
Property plant and equipment |
8 | 13,699,012 | 12,179,504 | |||||||||
Right-of-use assets |
369,488 | 379,805 | ||||||||||
Investment property |
328,657 | 336,863 | ||||||||||
Construction in progress |
8 | 1,749,110 | 3,748,461 | |||||||||
Investments accounted for using the equity method |
3,299,009 | 3,504,393 | ||||||||||
Deferred tax assets |
1,226,394 | 991,892 | ||||||||||
Financial assets measured at fair value through other comprehensive income |
9 | 5,000 | 5,000 | |||||||||
Financial assets measured at fair value through profit or loss |
13 | 26,500 | | |||||||||
Time deposits with banks |
10 | 3,235,907 | 3,389,559 | |||||||||
Other non-current assets |
661,691 | 835,400 | ||||||||||
|
|
|
|
|||||||||
24,600,768 | 25,370,877 | |||||||||||
|
|
|
|
|||||||||
Current assets |
||||||||||||
Inventories |
11 | 7,662,790 | 7,294,060 | |||||||||
Trade receivables |
12 | 40,304 | 69,351 | |||||||||
Other receivables |
12 | 137,879 | 107,507 | |||||||||
Amounts due from related parties |
12,19 | (c) | 1,604,454 | 2,638,983 | ||||||||
Prepayments |
17,474 | 17,832 | ||||||||||
Value added tax recoverable |
277,578 | 1,057,463 | ||||||||||
Financial assets measured at fair value through other comprehensive income |
9 | 328,879 | 582,354 | |||||||||
Time deposits with banks |
10 | 2,320,919 | 3,108,919 | |||||||||
Cash and cash equivalents |
14 | 4,610,758 | 889,413 | |||||||||
|
|
|
|
|||||||||
17,001,035 | 15,765,882 | |||||||||||
|
|
|
|
The notes on pages 60 to 85 form part of this interim financial report.
2023 Interim Report |
53 |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
AT 30 JUNE 2023 UNAUDITED
(Expressed in Renminbi Yuan)
At 30 June | At 31 December | |||||||||||
2023 | 2022 | |||||||||||
(Restated) | ||||||||||||
Note | RMB000 | RMB000 | ||||||||||
Current liabilities |
||||||||||||
Trade and other payables |
15 | 2,162,096 | 2,926,534 | |||||||||
Contract liabilities |
359,283 | 372,760 | ||||||||||
Amounts due to related parties |
15,19 | (c) | 6,106,612 | 7,887,809 | ||||||||
Staff salaries and welfares payable |
680,651 | 317,891 | ||||||||||
Borrowings |
16 | 5,048,000 | 1,550,000 | |||||||||
Lease liabilities |
9,982 | 8,738 | ||||||||||
Income tax payable |
4,187 | 2,754 | ||||||||||
Current tax liabilities |
1,057,529 | 931,852 | ||||||||||
|
|
|
|
|||||||||
15,428,340 | 13,998,338 | |||||||||||
|
|
|
|
|||||||||
Net current assets |
1,572,695 | 1,767,544 | ||||||||||
|
|
|
|
|||||||||
Total assets less current liabilities |
26,173,463 | 27,138,421 | ||||||||||
|
|
|
|
|||||||||
Non-current liabilities |
||||||||||||
Borrowings |
16 | 700,000 | 700,000 | |||||||||
Lease liabilities |
4,656 | 7,513 | ||||||||||
Deferred tax liabilities |
31,910 | 30,898 | ||||||||||
Deferred income |
45,613 | 44,608 | ||||||||||
|
|
|
|
|||||||||
782,179 | 783,019 | |||||||||||
|
|
|
|
|||||||||
NET ASSETS |
25,391,284 | 26,355,402 | ||||||||||
|
|
|
|
The notes on pages 60 to 85 form part of this interim financial report.
54 | Sinopec Shanghai Petrochemical Company Limited |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
AT 30 JUNE 2023 UNAUDITED
(Expressed in Renminbi Yuan)
At 30 June | At 31 December | |||||||||||
2023 | 2022 | |||||||||||
(Restated) | ||||||||||||
Note | RMB000 | RMB000 | ||||||||||
CAPITAL AND RESERVES |
||||||||||||
Share capital |
10,799,286 | 10,823,814 | ||||||||||
Reserves |
17 | 14,461,728 | 15,403,909 | |||||||||
Total equity attributable to equity shareholders of the Company |
25,261,014 | 26,227,723 | ||||||||||
Non-controlling interests |
130,270 | 127,679 | ||||||||||
TOTAL EQUITY |
25,391,284 | 26,355,402 |
Approved and authorized for issue by the Board of Directors on 23 August 2023.
Wan Tao | Du Jun | |
Director |
Director |
The notes on pages 60 to 85 form part of this interim financial report.
2023 Interim Report |
55 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2023 UNAUDITED
(Expressed in Renminbi Yuan)
Attributable to equity shareholders of the Company | ||||||||||||||||||||||||||||
Share | Other | Retained | Non-controlling | |||||||||||||||||||||||||
capital | reserves | earnings | Total | interests | Total equity | |||||||||||||||||||||||
Note | RMB000 | RMB000 | RMB000 | RMB000 | RMB000 | RMB000 | ||||||||||||||||||||||
Balance at 31 December 2021 |
10,823,814 | 7,038,975 | 12,379,350 | 30,242,139 | 135,259 | 30,377,398 | ||||||||||||||||||||||
Change in accounting policy |
2 | | (5 | ) | (57 | ) | (62 | ) | (5 | ) | (67 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at 1 January 2022 (Restated) |
10,823,814 | 7,038,970 | 12,379,293 | 30,242,077 | 135,254 | 30,377,331 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Changes in equity for the six months ended 30 June 2022: |
||||||||||||||||||||||||||||
(Loss)/profit for the period |
| | (426,551 | ) | (426,551 | ) | 5,172 | (421,379 | ) | |||||||||||||||||||
Other comprehensive income |
17 | | 273,513 | | 273,513 | | 273,513 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total comprehensive income for the period |
| 273,513 | (426,551 | ) | (153,038 | ) | 5,172 | (147,866 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Amounts transferred from hedging reserve to initial carrying amount of hedged items |
| (151,817 | ) | | (151,817 | ) | | (151,817 | ) | |||||||||||||||||||
Dividends proposed and approved |
7 | | | (1,082,381 | ) | (1,082,381 | ) | (11,434 | ) | (1,093,815 | ) | |||||||||||||||||
Appropriation of safety production fund |
17 | | 38,672 | (38,672 | ) | | | | ||||||||||||||||||||
Others |
| 3,860 | | 3,860 | | 3,860 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at 30 June 2022 (Restated) |
10,823,814 | 7,203,198 | 10,831,689 | 28,858,701 | 128,992 | 28,987,693 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at 30 June 2022 (Restated) |
10,823,814 | 7,203,198 | 10,831,689 | 28,858,701 | 128,992 | 28,987,693 | ||||||||||||||||||||||
Changes in equity for the six months ended 31 December 2022: |
||||||||||||||||||||||||||||
Loss for the period |
| | (2,419,502 | ) | (2,419,502 | ) | (1,313 | ) | (2,420,815 | ) | ||||||||||||||||||
Other comprehensive income |
17 | | (95,765 | ) | | (95,765 | ) | | (95,765 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total comprehensive income for the period |
| (95,765 | ) | (2,419,502 | ) | (2,515,267 | ) | (1,313 | ) | (2,516,580 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Amounts transferred from hedging reserve to initial carrying amount of hedged items |
| (86,162 | ) | | (86,162 | ) | | (86,162 | ) | |||||||||||||||||||
Purchase of own shares |
| (25,689 | ) | | (25,689 | ) | | (25,689 | ) | |||||||||||||||||||
Appropriation of safety production fund |
17 | | 15,420 | (15,420 | ) | | | | ||||||||||||||||||||
Others |
| (3,860 | ) | | (3,860 | ) | | (3,860 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at 31 December 2022 (Restated) |
10,823,814 | 7,007,142 | 8,396,767 | 26,227,723 | 127,679 | 26,355,402 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
The notes on pages 60 to 85 form part of this interim financial report.
56 | Sinopec Shanghai Petrochemical Company Limited |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023 UNAUDITED
(Expressed in Renminbi Yuan)
Attributable to equity shareholders of the Company | ||||||||||||||||||||||||||||
Non- | ||||||||||||||||||||||||||||
Share | Retained | controlling | ||||||||||||||||||||||||||
capital | Other reserves | earnings | Total | interests | Total equity | |||||||||||||||||||||||
Note | RMB000 | RMB000 | RMB000 | RMB000 | RMB000 | RMB000 | ||||||||||||||||||||||
Balance at 1 January 2023 |
10,823,814 | 7,007,142 | 8,396,767 | 26,227,723 | 127,679 | 26,355,402 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Changes in equity for the six months ended 30 June 2023: |
||||||||||||||||||||||||||||
(Loss)/profit for the period |
| | (966,688 | ) | (966,688 | ) | 2,591 | (964,097 | ) | |||||||||||||||||||
Other comprehensive income |
17 | | (21 | ) | | (21 | ) | | (21 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total comprehensive income for the period |
| (21 | ) | (966,688 | ) | (966,709 | ) | 2,591 | (964,118 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Appropriation of safety production fund |
17 | | 20,584 | (20,584 | ) | | | | ||||||||||||||||||||
Cancellation of repurchased own shares |
17 | (24,528 | ) | 24,528 | | | | | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at 30 June 2023 |
10,799,286 | 7,052,233 | 7,409,495 | 25,261,014 | 130,270 | 25,391,284 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
The notes on pages 60 to 85 form part of this interim financial report.
2023 Interim Report |
57 |
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2023 UNAUDITED
(Expressed in Renminbi Yuan)
Six months ended 30 June | ||||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
Operating activities |
||||||||
Cash used in operations |
(167,151 | ) | (6,035,723 | ) | ||||
Interest paid |
(53,368 | ) | (39,711 | ) | ||||
Income tax paid |
(59,732 | ) | (369,399 | ) | ||||
|
|
|
|
|||||
Net cash used in operating activities |
(280,251 | ) | (6,444,833 | ) | ||||
|
|
|
|
|||||
Investing activities |
||||||||
Dividends received from joint ventures and associates |
92,000 | 576,138 | ||||||
Interest received |
58,168 | 218,238 | ||||||
Net proceeds from disposal of property, plant and equipment |
24,589 | 8,882 | ||||||
Cash received from time deposits with maturity less than one year |
1,000,000 | 5,950,000 | ||||||
Cash received from refund of investment deposits |
50,000 | | ||||||
Cash payment for investment in structured deposits |
| (1,000,000 | ) | |||||
Cash payment for investment in time deposits |
| (2,600,000 | ) | |||||
Cash payment for investment in entrusted loans |
| (150,000 | ) | |||||
Cash payment for investment deposits |
| (53,500 | ) | |||||
Payment for the purchase of property, plant and equipment and other long-term assets |
(693,175 | ) | (1,059,504 | ) | ||||
Payment for investment in an associate and a joint venture |
| (130,000 | ) | |||||
Cash payment for redeemable preference share investments |
(26,500 | ) | | |||||
Other cash flows arising from investing activities |
(1,997 | ) | 5,677 | |||||
|
|
|
|
|||||
Net cash generated from investing activities |
503,085 | 1,765,931 | ||||||
|
|
|
|
The notes on pages 60 to 85 form part of this interim financial report.
58 | Sinopec Shanghai Petrochemical Company Limited |
CONDENSED CONSOLIDATED CASH FLOW STATEMENT (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023 UNAUDITED
(Expressed in Renminbi Yuan)
Six months ended 30 June | ||||||||||||
2023 | 2022 | |||||||||||
Note | RMB000 | RMB000 | ||||||||||
Financing activities |
||||||||||||
Proceeds from borrowings |
16,018,000 | 9,455,000 | ||||||||||
Proceeds from short-term bonds |
| 3,000,000 | ||||||||||
Repayments of borrowings |
(12,520,000 | ) | (8,955,200 | ) | ||||||||
Repayments of short-term bonds |
| (1,500,000 | ) | |||||||||
Principal elements of lease payments |
(6,825 | ) | (2,991 | ) | ||||||||
|
|
|
|
|||||||||
Net cash generated from financing activities |
3,491,175 | 1,996,809 | ||||||||||
|
|
|
|
|||||||||
Net increase/(decrease) in cash and cash equivalents |
3,714,009 | (2,682,093 | ) | |||||||||
Cash and cash equivalents at 1 January |
889,413 | 5,112,010 | ||||||||||
Effect of foreign exchange rates changes |
7,336 | 8,733 | ||||||||||
|
|
|
|
|||||||||
Cash and cash equivalents at 30 June |
14 | 4,610,758 | 2,438,650 | |||||||||
|
|
|
|
The notes on pages 60 to 85 form part of this interim financial report.
2023 Interim Report |
59 |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT
(Expressed in Renminbi Yuan unless otherwise indicated)
1 | General information and basis of preparation |
Sinopec Shanghai Petrochemical Company Limited (the Company), located in Jinshan District of Shanghai, is one of the largest refining-chemical integrated petrochemical companies in China. It is one of the subsidiaries of China Petroleum & Chemical Corporation (Sinopec Corp.). The Company and its subsidiaries (the Group) are principally engaged in processing the crude oil into synthetic fibres, resins and plastics, intermediate petrochemical and petroleum products.
This interim financial report has been prepared in accordance with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, including compliance with International Accounting Standard (IAS) 34, Interim Financial Reporting, issued by the International Accounting Standards Board (IASB). It was authorised for issue on 23 August 2023.
The interim financial report has been prepared in accordance with the same accounting policies adopted in the 2022 annual financial statements, except for the accounting policy changes that are expected to be reflected in the 2023 annual financial statements. Details of any changes in accounting policies are set out in note 2.
The preparation of an interim financial report in conformity with IAS 34 requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses on a year to date basis. Actual results may differ from these estimates.
This interim financial report contains condensed consolidated financial statements and selected explanatory notes. The notes include an explanation of events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the 2022 annual financial statements. The condensed consolidated interim financial statements and notes thereon do not include all of the information required for a full set of financial statements prepared in accordance with International Financial Reporting Standards (IFRSs).
The interim financial report is unaudited, but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410, Review of interim financial information performed by the independent auditor of the entity, issued by the Hong Kong Institute of Certified Public Accountants. KPMGs independent review report to the Board of Directors is included on Page 50.
60 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (continued)
(Expressed in Renminbi Yuan unless otherwise indicated)
2 | Changes in accounting policies |
The Group has applied the following amendments to IFRSs issued by the IASB to this interim financial report for the current accounting period:
| IFRS 17, Insurance contracts |
| Amendments to IAS 8, Accounting policies, changes in accounting estimates and errors: Definition of accounting estimates |
| Amendments to IAS 12, Incomes taxes: Deferred tax related to assets and liabilities arising from a single transaction |
| Amendments to IAS 12, Incomes taxes: International tax reform-Pillar Two model rules |
Except for Amendments to IAS 12, Incomes taxes: Deferred tax related to assets and liabilities arising from a single transaction, none of these developments have had a material effect on how the Groups results and financial position for the current or prior periods have been prepared or presented in this interim financial report. The Group has not applied any new standard or interpretation that is not yet effective for the current accounting.
Amendments to IAS 12, Incomes taxes: Deferred tax related to assets and liabilities arising from a single transaction
The amendments narrow the scope of the initial recognition exemption such that it does not apply to transactions that give rise to equal and offsetting temporary differences on initial recognition such as leases and decommissioning liabilities. For leases and decommissioning liabilities, the associated deferred tax assets and liabilities are required to be recognized from the beginning of the earliest comparative period presented, with any cumulative effect recognized as an adjustment to retained earnings or other components of equity at that date. For all other transactions, the amendments are applied to those transactions that occur after the beginning of the earliest period presented.
2023 Interim Report |
61 |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (continued)
(Expressed in Renminbi Yuan unless otherwise indicated)
2 | Changes in accounting policies (continued) |
Prior to the amendments, the Group applied the initial recognition exemption to lease transactions and has not recognized the related deferred tax. Following the amendments, the Group has determined the temporary difference in relation to right-of-use assets and lease liabilities separately. This change in policy has been applied retrospectively by restating the balances at 1 January 2022 and 31 December 2022, with consequential adjustments to comparatives for the period ended 30 June 2022 as follows:
Effect of adoption | ||||||||||||
As previously | of amendments to | |||||||||||
reported | IAS 12 | As restated | ||||||||||
RMB000 | RMB000 | RMB000 | ||||||||||
Consolidated income statement for the six months ended 30 June 2022: |
||||||||||||
Income tax |
(11,780 | ) | 49 | (11,731 | ) | |||||||
Loss for the period |
(421,330 | ) | (49 | ) | (421,379 | ) | ||||||
Attributable to: |
||||||||||||
Equity shareholders of the Company |
(426,518 | ) | (33 | ) | (426,551 | ) | ||||||
Non-controlling interests |
5,188 | (16 | ) | 5,172 | ||||||||
Basic losses per share |
RMB(0.039 | ) | | RMB(0.039 | ) | |||||||
Diluted losses per share |
RMB(0.039 | ) | | RMB(0.039 | ) | |||||||
|
|
|
|
|
|
|||||||
Consolidated statement of financial position as at 31 December 2022: |
||||||||||||
Deferred tax assets |
991,850 | 42 | 991,892 | |||||||||
Total non-current assets |
25,370,835 | 42 | 25,370,877 | |||||||||
Total assets less current liabilities |
27,138,379 | 42 | 27,138,421 | |||||||||
Deferred tax liabilities |
30,895 | 3 | 30,898 | |||||||||
Total non-current liabilities |
783,016 | 3 | 783,019 | |||||||||
Net assets |
26,355,363 | 39 | 26,355,402 | |||||||||
Reserves |
15,403,868 | 41 | 15,403,909 | |||||||||
Total equity attributable to equity shareholders of the Company |
26,227,682 | 41 | 26,227,723 | |||||||||
Non-controlling interests |
127,681 | (2 | ) | 127,679 | ||||||||
Total equity |
26,355,363 | 39 | 26,355,402 | |||||||||
|
|
|
|
|
|
|||||||
Consolidated statement of financial position as at 1 January 2022: |
||||||||||||
Deferred tax liabilities |
33,344 | 67 | 33,411 | |||||||||
Total non-current liabilities |
747,448 | 67 | 747,515 | |||||||||
Net assets |
30,377,398 | (67 | ) | 30,377,331 | ||||||||
Reserves |
19,418,325 | (62 | ) | 19,418,263 | ||||||||
Total equity attributable to equity shareholders of the Company |
30,242,139 | (62 | ) | 30,242,077 | ||||||||
Non-controlling interests |
135,259 | (5 | ) | 135,254 | ||||||||
Total equity |
30,377,398 | (67 | ) | 30,377,331 | ||||||||
|
|
|
|
|
|
62 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (continued)
(Expressed in Renminbi Yuan unless otherwise indicated)
3 | Segment information and revenue |
3.1 | Segment information |
The Group manages its business by divisions, which are organized by business lines. In view of the fact that the Company and its subsidiaries operate mainly in the PRC, no geographical segment information is presented.
In a manner consistent with the way in which information is reported internally to the Groups chief operating decision maker, Board of Directors, 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.
The basis of segmentation and the basis of measurement of segment profits or losses, and assets and liabilities are consistent with those of the annual financial statements for the year ended 31 December 2022.
Trading of | ||||||||||||||||||||||||||||
Petroleum | Intermediate | petrochemical | Resins and | Synthetic | ||||||||||||||||||||||||
products | petrochemicals | product | plastics | fibres | Others | Total | ||||||||||||||||||||||
Six months ended 30 June 2023 |
RMB000 | RMB000 | RMB000 | RMB000 | RMB000 | RMB000 | RMB000 | |||||||||||||||||||||
Total segment revenue |
41,283,131 | 10,363,735 | 4,492,096 | 3,998,321 | 223,383 | 857,330 | 61,217,996 | |||||||||||||||||||||
Inter segment revenue |
(10,607,395 | ) | (4,918,849 | ) | (231,132 | ) | (145,908 | ) | | (425,603 | ) | (16,328,887 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Revenue from external customers |
30,675,736 | 5,444,886 | 4,260,964 | 3,852,413 | 223,383 | 431,727 | 44,889,109 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Timing of revenue recognition |
||||||||||||||||||||||||||||
At a point in time |
30,675,736 | 5,444,886 | 4,230,925 | 3,852,413 | 223,383 | 431,727 | 44,859,070 | |||||||||||||||||||||
Over time |
| | 30,039 | | | | 30,039 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
30,675,736 | 5,444,886 | 4,260,964 | 3,852,413 | 223,383 | 431,727 | 44,889,109 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Segment result (loss)/profit from operations |
(475,365 | ) | 91,258 | 5,808 | (262,462 | ) | (514,194 | ) | (51,572 | ) | (1,206,527 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Impairment of plant and machinery |
| | | | | | | |||||||||||||||||||||
As at 30 June 2023 |
||||||||||||||||||||||||||||
Segment assets |
15,060,217 | 3,650,358 | 1,036,357 | 1,294,322 | 2,806,709 | 2,687,982 | 26,535,945 | |||||||||||||||||||||
Segment liabilities |
7,036,540 | 600,510 | 1,073,207 | 1,198,316 | 409,090 | 35,702 | 10,353,365 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 Interim Report |
63 |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (continued)
(Expressed in Renminbi Yuan unless otherwise indicated)
3 | Segment information and revenue (continued) |
3.1 | Segment information (continued) |
Trading of | ||||||||||||||||||||||||||||
Petroleum | Intermediate | petrochemical | Resins and | |||||||||||||||||||||||||
products | petrochemicals | product | plastics | Synthetic fibres | Others | Total | ||||||||||||||||||||||
Six months ended 30 June 2022 |
RMB000 | RMB000 | RMB000 | RMB000 | RMB000 | RMB000 | RMB000 | |||||||||||||||||||||
Total segment revenue |
34,221,223 | 11,911,697 | 7,484,773 | 4,350,398 | 230,753 | 730,640 | 58,929,484 | |||||||||||||||||||||
Inter segment revenue |
(6,703,682 | ) | (5,479,120 | ) | (528,814 | ) | (35,990 | ) | (30 | ) | (322,643 | ) | (13,070,279 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Revenue from external customers |
27,517,541 | 6,432,577 | 6,955,959 | 4,314,408 | 230,723 | 407,997 | 45,859,205 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Timing of revenue recognition |
||||||||||||||||||||||||||||
At a point in time |
27,517,541 | 6,432,577 | 6,915,528 | 4,314,408 | 230,723 | 407,997 | 45,818,774 | |||||||||||||||||||||
Over time |
| | 40,431 | | | | 40,431 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
27,517,541 | 6,432,577 | 6,955,959 | 4,314,408 | 230,723 | 407,997 | 45,859,205 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Segment result profit/(loss) from operations |
464,776 | (556,193 | ) | 19,821 | (220,997 | ) | (320,684 | ) | (71,558 | ) | (684,835 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Impairment of plant and machinery |
| | | | | | | |||||||||||||||||||||
As at 31 December 2022 |
||||||||||||||||||||||||||||
Segment assets (Restated) |
16,021,111 | 3,803,989 | 1,391,104 | 1,359,796 | 2,734,193 | 2,765,693 | 28,075,886 | |||||||||||||||||||||
Segment liabilities (Restated) |
8,159,960 | 801,787 | 1,370,346 | 1,309,344 | 531,455 | 251,328 | 12,424,220 |
Six months ended 30 June | ||||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
Segment result (loss)/profit from operations |
||||||||
Petroleum products |
(475,365 | ) | 464,776 | |||||
Intermediate petrochemicals |
91,258 | (556,193 | ) | |||||
Trading of petrochemical product |
5,808 | 19,821 | ||||||
Resins and plastics |
(262,462 | ) | (220,997 | ) | ||||
Synthetic fibres |
(514,194 | ) | (320,684 | ) | ||||
Others |
(51,572 | ) | (71,558 | ) | ||||
|
|
|
|
|||||
Segment result loss from operations |
(1,206,527 | ) | (684,835 | ) | ||||
Finance income net |
129,505 | 279,262 | ||||||
Share of net losses of associates and joint ventures accounted for using the equity method |
(113,363 | ) | (27,537 | ) | ||||
|
|
|
|
|||||
Loss before taxation |
(1,190,385 | ) | (433,110 | ) | ||||
|
|
|
|
64 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (continued)
(Expressed in Renminbi Yuan unless otherwise indicated)
3 | Segment information and revenue (continued) |
3.2 | Revenue |
The Groups revenue from external customers are substantially all within Mainland China for the six months ended 30 June 2023 and 2022. As at 30 June 2023 and 31 December 2022, assets are also substantially all within Mainland China.
Revenue of approximate RMB31,462,732 thousand (six months ended 30 June 2022: RMB29,555,589 thousand) are derived from a single customer. These revenues are attributable to the petroleum products and other segments.
4 | Loss before taxation |
Loss before taxation is arrived at after charging/(crediting):
(a) | Finance income net |
Six months ended 30 June | ||||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
Interest income from time deposits with maturity more than 3 months |
116,491 | 261,964 | ||||||
Interest income from time deposits with maturity less than 3 months |
66,336 | 62,652 | ||||||
Others |
2,225 | 4,689 | ||||||
|
|
|
|
|||||
Finance income |
185,052 | 329,305 | ||||||
|
|
|
|
|||||
Interest and finance charges paid/payable for lease liabilities and financial liabilities not at fair value through profit or loss |
(65,940 | ) | (60,820 | ) | ||||
Less: interest expense capitalized into construction in progress |
10,393 | 10,777 | ||||||
|
|
|
|
|||||
Finance expenses |
(55,547 | ) | (50,043 | ) | ||||
|
|
|
|
|||||
Finance income net |
129,505 | 279,262 | ||||||
|
|
|
|
2023 Interim Report |
65 |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (continued)
(Expressed in Renminbi Yuan unless otherwise indicated)
4 | Loss before taxation (continued) |
(b) | Other losses net |
Six months ended 30 June | ||||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
Gains from structured deposits |
| 9,300 | ||||||
Net losses on disposal of property, plant and equipment |
(8,876 | ) | (5,960 | ) | ||||
Net gains on foreign exchange option/forward contracts |
| 7,583 | ||||||
Net losses on commodity swaps contracts not qualified for hedging accounting |
| (35,188 | ) | |||||
Net foreign exchange (losses)/gains |
(1,780 | ) | 20,082 | |||||
Net losses on selling of financial assets at fair value through other comprehensive income (FVOCI) |
(1,997 | ) | (2,187 | ) | ||||
Net losses on disposal of inventory |
| (819 | ) | |||||
Interest income on entrusted loans |
| 2,667 | ||||||
|
|
|
|
|||||
(12,653 | ) | (4,522 | ) | |||||
|
|
|
|
(c) | Other items |
Six months ended 30 June | ||||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
Depreciation of property, plant and equipment |
811,678 | 716,213 | ||||||
Depreciation of right-of-use assets |
15,710 | 16,130 | ||||||
Depreciation of investment properties |
7,650 | 7,661 | ||||||
Amortization of other non-current assets |
146,944 | 136,125 | ||||||
Research and development costs (other than depreciation and amortization) |
66,689 | 34,884 | ||||||
Provision of inventory write-down |
190,486 | 177,777 | ||||||
|
|
|
|
66 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (continued)
(Expressed in Renminbi Yuan unless otherwise indicated)
5 | Income tax |
Six months ended 30 June | ||||||||
2023 | 2022 | |||||||
(Restated) | ||||||||
RMB000 | RMB000 | |||||||
Current tax: |
||||||||
Provision for PRC current income tax for the period |
(7,429 | ) | (8,737 | ) | ||||
Tax filing difference |
227 | (54,017 | ) | |||||
|
|
|
|
|||||
(7,202 | ) | (62,754 | ) | |||||
Deferred tax: |
||||||||
Origination and reversal of temporary differences |
233,490 | 74,485 | ||||||
|
|
|
|
|||||
226,288 | 11,731 | |||||||
|
|
|
|
The provision for PRC income tax is calculated at the rate of 25% (six months ended 30 June 2022: 25%) on the estimated taxable income of the six months ended 30 June 2023 determined in accordance with relevant income tax rules and regulations. The Company did not carry out business overseas and therefore does not incur overseas income taxes.
6 | Losses per share |
(a) | Basic losses per share |
The calculation of basic losses per share is based on the loss attributable to equity shareholders of the Company for the six months ended 30 June 2023 of RMB966,688 thousand (six months ended 30 June 2022: loss of RMB426,551 thousand) and 10,799,285,500 shares (six months ended 30 June 2022: 10,823,813,500 shares) in issue during the interim period.
Six months ended 30 June | ||||||||
2023 | 2022 | |||||||
(Restated) | ||||||||
RMB000 | RMB000 | |||||||
Loss attributable to equity shareholders of the Company |
(966,688 | ) | (426,551 | ) | ||||
|
|
|
|
|||||
Weighted average number of ordinary shares in issue (thousands of shares) |
10,799,286 | 10,823,814 | ||||||
|
|
|
|
|||||
Basic losses earnings per share (RMB per share) |
RMB (0.090 | ) | RMB (0.039 | ) | ||||
|
|
|
|
2023 Interim Report |
67 |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (continued)
(Expressed in Renminbi Yuan unless otherwise indicated)
6 | Losses per share (continued) |
(b) | Diluted losses per share |
There were no dilutive potential ordinary shares for the six months ended 30 June 2023 and 2022, therefore diluted losses per share is the same as basic losses per share.
7 | Dividends |
(a) | Dividends payable to equity shareholders of the Company attributable to the interim period |
The Board of Directors did not propose any dividend in respect of the six months ended 30 June 2023 (six months ended 30 June 2022: Nil).
(b) | Dividends payable to equity shareholders of the Company attributable to the previous financial year, approved during the interim period |
Six months ended 30 June | ||||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
No final dividend in respect of the previous financial year was approved during the following interim period (six months ended 30 June 2022: RMB0.10 per ordinary share) |
| 1,082,381 | ||||||
|
|
|
|
8 | Property, plant and equipment and construction in progress |
(a) | Acquisitions and disposals of owned assets |
During the six months ended 30 June 2023, acquisitions of property, plant and equipment and additions of construction in progress of the Group amounted to RMB64,251 thousand (six months ended 30 June 2022: RMB59,943 thousand) and RMB300,493 thousand (six months ended 30 June 2022: RMB911,640 thousand), respectively.
68 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (continued)
(Expressed in Renminbi Yuan unless otherwise indicated)
9 | Financial assets measured at fair value through other comprehensive income |
As at | As at | |||||||
30 June | 31 December | |||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
Trade and bills receivable (i) |
||||||||
Amounts due from third parties |
328,879 | 582,354 | ||||||
|
|
|
|
|||||
328,879 | 582,354 | |||||||
Equity investments |
5,000 | 5,000 | ||||||
|
|
|
|
|||||
333,879 | 587,354 | |||||||
|
|
|
|
(i) | As at 30 June 2023 and 31 December 2022, certain trade receivables and bills receivable were classified as financial assets at FVOCI, as the Groups business model is achieved both by collecting contractual cash flows and selling of these assets. |
(ii) | As at 30 June 2023, the Group discounted certain bank acceptance bills to banks for cash proceeds and endorsed certain bank acceptance bills to suppliers for settling trade payables of the same amount on a full recourse basis. The Group has derecognized these bills receivable and the payables to suppliers in their entirety. These derecognized bank acceptance bills had a maturity date less than twelve months from the end of the reporting period. In the opinion of the directors, the Group has transferred substantially all the risks and rewards of ownership of these bills to its suppliers, and the Group has limited exposure in respect of the settlement obligation of these bills receivable under the relevant PRC rules and regulations should the issuing banks fail to settle the bills on maturity date. The Group considered the issuing banks of the bills are of good credit rating and the non-settlement of these bills by the issuing banks on maturity is not probable. |
As at 30 June 2023, the Groups maximum exposure to loss and undiscounted cash outflow, which is same as the amounts payable by the Group to banks or suppliers in respect of the discounted bills and endorsed bills, should the issuing banks fail to settle the bills on maturity date, amounted to RMB192,687 thousand and RMB119,870 thousand (31 December 2022: RMB196,667 thousand and RMB178,369 thousand) respectively.
2023 Interim Report |
69 |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (continued)
(Expressed in Renminbi Yuan unless otherwise indicated)
10 | Time deposits with banks |
As at | As at | |||||||
30 June | 31 December | |||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
Time deposits with maturity |
||||||||
More than three months and less than one year |
2,320,919 | 3,108,919 | ||||||
More than one year |
3,235,907 | 3,389,559 | ||||||
|
|
|
|
|||||
5,556,826 | 6,498,478 | |||||||
|
|
|
|
As at 30 June 2023, interest rates of time deposits with maturity more than three months and less than one year ranged from 3.85% to 3.99% per annum (31 December 2022: 3.85% to 4.13% per annum), which were presented as current assets. Time deposits with maturity of more than one year were time deposits of three years to five years with the interest rates from 3.55% to 4.20% per annum, which were presented as non-current assets in the statement of financial position (31 December 2022: 3.55% to 4.20% per annum).
11 | Inventories |
(a) | Inventories in the consolidated statements of financial position comprise: |
As at | As at | |||||||
30 June | 31 December | |||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
Raw materials |
5,774,610 | 5,673,724 | ||||||
Work in progress |
441,412 | 518,048 | ||||||
Finished goods |
1,251,152 | 914,588 | ||||||
Spare parts and consumables |
195,616 | 187,700 | ||||||
|
|
|
|
|||||
7,662,790 | 7,294,060 | |||||||
|
|
|
|
70 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (continued)
(Expressed in Renminbi Yuan unless otherwise indicated)
11 | Inventories (continued) |
(b) | The analysis of the amount of inventories recognized as expenses and included in profit or loss is as follows: |
Six months ended 30 June | ||||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
Carrying amount of inventories sold |
38,159,523 | 38,698,220 | ||||||
Provision of inventory write-down |
190,486 | 177,777 | ||||||
Cost of inventories directly recognized as research and development expenses |
10,027 | 6,761 | ||||||
Cost of inventories directly recognized as other losses-net |
| 819 | ||||||
|
|
|
|
|||||
38,360,036 | 38,883,577 | |||||||
|
|
|
|
12 | Trade and other receivables |
As at | As at | |||||||
30 June | 31 December | |||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
Trade receivables |
42,877 | 72,110 | ||||||
Less: loss allowance |
(2,573 | ) | (2,759 | ) | ||||
|
|
|
|
|||||
40,304 | 69,351 | |||||||
|
|
|
|
|||||
Amounts due from related parties excluded prepayments and bills receivable (*) |
1,595,923 | 2,583,289 | ||||||
Less: loss allowance (*) |
(2,818 | ) | (2,802 | ) | ||||
|
|
|
|
|||||
1,633,409 | 2,649,838 | |||||||
|
|
|
|
|||||
Other receivables |
139,815 | 109,440 | ||||||
Less: loss allowance |
(1,936 | ) | (1,933 | ) | ||||
|
|
|
|
|||||
137,879 | 107,507 | |||||||
|
|
|
|
|||||
Financial assets measured at amortized cost |
1,771,288 | 2,757,345 | ||||||
|
|
|
|
|||||
Amounts due from related parties prepayments (*) |
11,349 | 58,496 | ||||||
|
|
|
|
|||||
1,782,637 | 2,815,841 | |||||||
|
|
|
|
|||||
Amounts due from related parties (summary of *) |
1,604,454 | 2,638,983 | ||||||
|
|
|
|
Amounts due from related parties mainly represent trade-related balances, unsecured in nature and bear no interest.
2023 Interim Report |
71 |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (continued)
(Expressed in Renminbi Yuan unless otherwise indicated)
12 | Trade and other receivables (continued) |
The aging analysis based on invoice date of trade receivables and amounts due from related parties excluded prepayments and bills receivable (net of allowance for doubtful debts) is as follows:
As at | As at | |||||||
30 June | 31 December | |||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
Within one year |
1,632,940 | 2,649,673 | ||||||
Over one year within two years |
469 | 165 | ||||||
|
|
|
|
|||||
1,633,409 | 2,649,838 | |||||||
|
|
|
|
Movements in the loss allowance account in respect of trade and other receivables during the period is as follows:
Six months ended 30 June |
||||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
Balance at 1 January |
7,494 | 2,128 | ||||||
Impairment losses recognized during the period |
19 | 4,887 | ||||||
Recoveries or reversals during the period |
(186 | ) | | |||||
|
|
|
|
|||||
Balance at 30 June |
7,327 | 7,015 | ||||||
|
|
|
|
As at 30 June 2023 and 31 December 2022, no trade receivable was pledged as collateral.
Sales to third parties are generally on cash basis or on letter of credit. Subject to negotiation, credit is generally only available for major customers with well-established trading records.
13 | Financial assets measured at fair value through profit or loss |
As at | As at | |||||||
30 June | 31 December | |||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
Redeemable preference share investments |
26,500 | | ||||||
|
|
|
|
As at 30 June 2023, financial assets at fair value through profit or loss are mainly preference shares investments that are redeemable at the option of the Group, which are presented as non-current assets since the management does not have intention to dispose of the investments within one year.
72 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (continued)
(Expressed in Renminbi Yuan unless otherwise indicated)
14 | Cash and cash equivalents |
As at | As at | |||||||
30 June | 31 December | |||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
Cash at bank and on hand |
4,610,758 | 889,413 | ||||||
|
|
|
|
|||||
4,610,758 | 889,413 | |||||||
|
|
|
|
i. | As at 30 June 2023, cash and cash equivalents situated in Mainland China amounted to RMB4,610,758 thousand (31 December 2022: RMB889,413 thousand). Remittance of funds out of Mainland China is subject to relevant rules and regulations of foreign exchange control. |
15 | Trade and other payables |
As at | As at | |||||||
30 June | 31 December | |||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
Trade payables |
1,364,570 | 1,818,453 | ||||||
Bills payable |
103,950 | 24,951 | ||||||
Amounts due to related parties exclude advances received (*) |
6,098,966 | 7,877,323 | ||||||
|
|
|
|
|||||
7,567,486 | 9,720,727 | |||||||
|
|
|
|
|||||
Dividends payable |
31,631 | 31,631 | ||||||
Construction payable |
454,816 | 831,422 | ||||||
Accrued expenses |
136,442 | 143,299 | ||||||
Other liabilities |
70,687 | 76,778 | ||||||
|
|
|
|
|||||
693,576 | 1,083,130 | |||||||
|
|
|
|
|||||
Financial liabilities measured at amortized cost |
8,261,062 | 10,803,857 | ||||||
Amounts due to related parties advances received (*) |
7,646 | 10,486 | ||||||
|
|
|
|
|||||
8,268,708 | 10,814,343 | |||||||
|
|
|
|
|||||
Less: total amount due to related parties (summary of *) |
6,106,612 | 7,887,809 | ||||||
|
|
|
|
|||||
Trade and other payables |
2,162,096 | 2,926,534 | ||||||
|
|
|
|
2023 Interim Report |
73 |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (continued)
(Expressed in Renminbi Yuan unless otherwise indicated)
15 | Trade and other payables (continued) |
As at 30 June 2023 and 31 December 2022, all trade and other payables of the Group were non-interest bearing, and their fair value, approximated their carrying amounts due to their short maturities.
As at 30 June 2023 and 31 December 2022, the ageing analysis of the trade payables (including amounts due to related parties of trading in nature) and bills payable based on invoice date were as follows:
As at | As at | |||||||
30 June | 31 December | |||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
Within one year |
7,556,208 | 9,708,441 | ||||||
Between one and two years |
336 | 2,524 | ||||||
Over two years |
10,942 | 9,762 | ||||||
|
|
|
|
|||||
7,567,486 | 9,720,727 | |||||||
|
|
|
|
16 | Borrowings |
As at | As at | |||||||
30 June | 31 December | |||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
Credit loans due within one year Short-term bank loan |
5,048,000 | 1,550,000 | ||||||
|
|
|
|
|||||
Credit loans due over one year but within three years Long-term borrowings from a related party (Note 19(c)) |
700,000 | 700,000 | ||||||
|
|
|
|
|||||
5,748,000 | 2,250,000 | |||||||
|
|
|
|
(a) | The analysis of the repayment schedule of borrowings are as follows: |
As at | As at | |||||||
30 June | 31 December | |||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
Within 1 year or on demand |
5,048,000 | 1,550,000 | ||||||
Over one year but within two years |
700,000 | 700,000 | ||||||
|
|
|
|
|||||
5,748,000 | 2,250,000 | |||||||
|
|
|
|
74 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (continued)
(Expressed in Renminbi Yuan unless otherwise indicated)
16 | Borrowings (continued) |
(a) | The analysis of the repayment schedule of borrowings are as follows: (continued) |
The weighted average interest rate for the Groups short-term bank loan was 1.99% as at 30 June 2023 (31 December 2022: 2.35%). The interest rate of the Groups long-term borrowings was 1.08% as at 30 June 2023 (31 December 2022: 1.08%).
As at 30 June 2023 and 31 December 2022, no borrowings were secured by property, plant and equipment.
17 | Reserves |
Safety | ||||||||||||||||||||||||||||||||||||||||
Legal | Capital | Surplus | Other | Share | production | Treasury | Retained | |||||||||||||||||||||||||||||||||
surplus | surplus | reserve | reserve | premium | fund | shares | earnings | |||||||||||||||||||||||||||||||||
(note(a)) | (note(b)) | (note(c)) | (note(d)) | Hedging | (note(e)) | (note(f)) | (note(g)) | (note(h)) | Total | |||||||||||||||||||||||||||||||
RMB000 | RMB000 | RMB000 | RMB000 | RMB000 | RMB000 | RMB000 | RMB000 | RMB000 | RMB000 | |||||||||||||||||||||||||||||||
Balance at 31 December 2021 |
6,571,284 | 13,739 | 101,355 | 22,965 | 36,460 | 106,846 | 186,326 | | 12,379,350 | 19,418,325 | ||||||||||||||||||||||||||||||
Change in accounting policy (Note 2) |
(5 | ) | | | | | | | | (57 | ) | (62 | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance at 1 January 2022 (Restated) |
6,571,279 | 13,739 | 101,355 | 22,965 | 36,460 | 106,846 | 186,326 | | 12,379,293 | 19,418,263 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total comprehensive income for the period attributable to shareholders of the Company |
| | | (22,558 | ) | 296,071 | | | | (426,551 | ) | (153,038 | ) | |||||||||||||||||||||||||||
Amounts transferred from hedging reserve to initial carrying amount of hedged items |
| | | | (151,817 | ) | | | | | (151,817 | ) | ||||||||||||||||||||||||||||
Dividends declared and approved in respect of previous year |
| | | | | | | | (1,082,381 | ) | (1,082,381 | ) | ||||||||||||||||||||||||||||
Appropriation of safety production fund |
| | | | | | 38,672 | | (38,672 | ) | | |||||||||||||||||||||||||||||
Others |
| 3,860 | | | | | | | | 3,860 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance at 30 June 2022 and 1 July 2022 (Restated) |
6,571,279 | 17,599 | 101,355 | 407 | 180,714 | 106,846 | 224,998 | | 10,831,689 | 18,034,887 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total comprehensive income for the period attributable to shareholders of the Company |
| | | (1,213 | ) | (94,552 | ) | | | | (2,419,502 | ) | (2,515,267 | ) | ||||||||||||||||||||||||||
Amounts transferred from hedging reserve to initial carrying amount of hedged items |
| | | | (86,162 | ) | | | | | (86,162 | ) | ||||||||||||||||||||||||||||
Purchase of own shares |
| | | | | | | (25,689 | ) | | (25,689 | ) | ||||||||||||||||||||||||||||
Appropriation of safety production fund |
| | | | | | 15,420 | | (15,420 | ) | | |||||||||||||||||||||||||||||
Others |
| (3,860 | ) | | | | | | | | (3,860 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance at 31 December 2022 (Restated) |
6,571,279 | 13,739 | 101,355 | (806 | ) | | 106,846 | 240,418 | (25,689 | ) | 8,396,767 | 15,403,909 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance at 1 January 2023 |
6,571,279 | 13,739 | 101,355 | (806 | ) | | 106,846 | 240,418 | (25,689 | ) | 8,396,767 | 15,403,909 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total comprehensive income for the period attributable to shareholders of the Company |
| | | (21 | ) | | | | | (966,688 | ) | (966,709 | ) | |||||||||||||||||||||||||||
Cancellation of repurchased own shares |
| | | | | (1,161 | ) | | 25,689 | | 24,528 | |||||||||||||||||||||||||||||
Appropriation of safety production fund |
| | | | | | 20,584 | | (20,584 | ) | | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance at 30 June 2023 |
6,571,279 | 13,739 | 101,355 | (827 | ) | | 105,685 | 261,002 | | 7,409,495 | 14,461,728 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 Interim Report |
75 |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (continued)
(Expressed in Renminbi Yuan unless otherwise indicated)
17 | Reserves (continued) |
Notes:
(a) | Under PRC rules and regulations, the Company and its PRC subsidiaries are required to set aside 10% of the net income determined in accordance with the PRC accounting rules and regulations to a legal surplus reserve. The transfer to this reserve must be made before distribution of any dividend to shareholders. |
The legal surplus reserve is non-distributable other than in liquidation and can be used to make good of previous years losses, if any, and may be utilized for business expansion or converted into ordinary shares by the issuance of new shares to shareholders in proportion to their existing shareholdings or by increasing the par value of the shares currently held by the shareholders, provided that the balance after such issuance is not less than 25% of the registered capital.
In accordance with PRC rules and regulations, the Company has set aside RMB6,571,279 thousand of legal surplus as of 30 June 2023.
(b) | This reserve represents gifts or grants received from China Petrochemical Corporation, the ultimate parent company and which are required to be included in this reserve fund by PRC regulations. |
(c) | The transfer to this reserve from the retained profits is subject to the approval by shareholders at general meetings. Its usage is similar to that of legal surplus reserve. |
(d) | Other reserve comprises share of post-acquisition movements in other comprehensive income from associates and joint ventures using the equity methods of accounting with a corresponding adjustment to the carrying amount of the investment. |
(e) | The application of the share premium account is governed by Sections 167 and 168 of the PRC Company Law. |
(f) | According to the relevant PRC regulations, the Group is required to transfer an amount to specific reserve for the safety production fund based on the turnover of certain refining and chemicals products. This reserve represents unutilized safety production fund. |
(g) | The proposal to authorize the board of directors to repurchase domestic shares and/or overseas-listed foreign shares of the Company was approved at the 2021 Annual General Meeting, the Second A Shareholders Class Meeting for 2022 and the Second H Shareholders Class Meeting for 2022 on 22 June 2022. According to the authorization, the Company repurchased shares in call auction since 27 October 2022. As of 31 December 2022, the Company has repurchased 24,528,000 H-share ordinary shares on the Hong Kong Stock Exchange for an aggregate consideration of RMB25,689 thousand. |
On 17 February 2023, the Company cancelled 24,528,000 H shares repurchased. After the cancellation, the total number of issued share capital reduced by RMB24,528 thousand, and the share premium reduced by RMB1,161 thousand.
(h) | According to the Companys Articles of Association, the reserve available for distribution is the lower of the amount determined under China Accounting Standards for Business Enterprises and the amount determined under IFRS. The Board of Directors did not propose any dividend in respect of the six months ended 30 June 2023 (six months ended 30 June 2022: Nil). |
76 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (continued)
(Expressed in Renminbi Yuan unless otherwise indicated)
18 | Fair value measurement of financial instruments |
The table below analyses the Groups financial instruments carried at fair value as at 30 June 2023 and 31 December 2022 by level of the inputs to valuation techniques used to measure fair value. Such inputs are categorized into three levels within a fair value hierarchy as follows:
| The fair value of financial instruments traded in active markets (such as publicly traded derivatives and equity securities) is based on quoted market prices at the end of the reporting period. The quoted marked price used for financial assets held by the Group is the current bid price. These instruments are included in level 1. |
| The fair value of financial instruments that are not traded in an active market (for example, overthecounter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. |
| If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities. |
As at 30 June 2023 | ||||||||||||||||||||
Recurring fair value measurements |
||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Note | RMB000 | RMB000 | RMB000 | RMB000 | ||||||||||||||||
Financial assets |
||||||||||||||||||||
Financial assets measured at fair value through profit or loss |
||||||||||||||||||||
Redeemable preference share investments |
13 | | | 26,500 | 26,500 | |||||||||||||||
Financial assets at fair value through other comprehensive income |
||||||||||||||||||||
Trade and bills receivable |
9 | | 328,879 | | 328,879 | |||||||||||||||
Equity investments |
9 | | | 5,000 | 5,000 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
| 328,879 | 31,500 | 360,379 | |||||||||||||||||
|
|
|
|
|
|
|
|
2023 Interim Report |
77 |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (continued)
(Expressed in Renminbi Yuan unless otherwise indicated)
18 | Fair value measurement of financial instruments (continued) |
As at 31 December 2022 | ||||||||||||||||||||
Recurring fair value measurements | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||
Note | RMB000 | RMB000 | RMB000 | RMB000 | ||||||||||||||||
Financial assets |
||||||||||||||||||||
Financial assets at fair value through other comprehensive income |
||||||||||||||||||||
Trade and bills receivable |
9 | | 582,354 | | 582,354 | |||||||||||||||
Equity investments |
9 | | | 5,000 | 5,000 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
| 582,354 | 5,000 | 587,354 | |||||||||||||||||
|
|
|
|
|
|
|
|
Valuation techniques and inputs used in Level 2 fair value measurements
The fair value of trade and bills receivable is estimated as the present value of the future cash flows, discounted at the market interest rates at the balance sheet date.
Valuation techniques and inputs used in Level 3 fair value measurements
For redeemable preference share investments, the fair value is determined using most recent transaction price.
For equity investment, as the operating environment, operating status and financial position of the investee do not have significant change, the fair value is measured at its investment cost.
During the six month period ended 30 June 2023, there were no transfers between Level 1 and Level 2, or transfers into or out of Level 3. The Groups policy is to recognize transfers between levels of fair value hierarchy as at the end of the reporting period in which they occur.
78 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (continued)
(Expressed in Renminbi Yuan unless otherwise indicated)
18 | Fair value measurement of financial instruments (continued) |
Valuation techniques and inputs used in Level 3 fair value measurements (continued)
The following table presents the changes in level 3 items for the period ended 30 June 2023:
Preferred | ||||||||||||||||
Equity | Structured | share | ||||||||||||||
investments | deposits | investments | Total | |||||||||||||
RMB000 | RMB000 | RMB000 | RMB000 | |||||||||||||
As at 1 January 2022 |
5,000 | | | 5,000 | ||||||||||||
Acquisitions |
| 1,000,000 | | 1,000,000 | ||||||||||||
Disposals |
| | | | ||||||||||||
Fair value change |
| 9,300 | | 9,300 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
As at 30 June 2022 |
5,000 | 1,009,300 | | 1,014,300 | ||||||||||||
Acquisitions |
| | | | ||||||||||||
Disposals |
| (1,009,300 | ) | | (1,009,300 | ) | ||||||||||
Fair value change |
| | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
As at 31 December 2022 |
5,000 | | | 5,000 | ||||||||||||
Acquisitions |
| | 26,500 | 26,500 | ||||||||||||
Disposals |
| | | | ||||||||||||
Fair value change |
| | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
As at 30 June 2023 |
5,000 | | 26,500 | 31,500 | ||||||||||||
|
|
|
|
|
|
|
|
Financial assets and financial liabilities not measured at fair value mainly represent trade receivables, other receivables, amounts due from related parties excluded prepayments, trade payables, amounts due to related parties, other payables (except for the staff salaries and welfare payables and taxes payables) and borrowings. The carrying amounts of these financial assets and liabilities not measured at fair value are a reasonable approximation of their fair value.
2023 Interim Report |
79 |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (continued)
(Expressed in Renminbi Yuan unless otherwise indicated)
19 | Related-party transactions |
The following is a list of the Groups major related parties:
Names of related parties |
Relationship with the Company | |
China Petrochemical Corporation (Sinopec Group) | Ultimate parent company | |
Sinopec Corp. | Immediate parent company | |
Sinopec Chemical Commercial Holding Company Limited | Subsidiary of the immediate parent company | |
China International United Petroleum and Chemical Company Limited | Subsidiary of the immediate parent company | |
China Petrochemical International Company Limited | Subsidiary of the immediate parent company | |
Sinopec Chemical Commercial Company Limited | Subsidiary of the immediate parent company | |
Sinopec Refinery Product Sales Company Limited | Subsidiary of the immediate parent company | |
Sinopec Petroleum Commercial Reserve Company Limited | Subsidiary of the ultimate parent company | |
Sinopec Finance Company Limited (Sinopec Finance) | Subsidiary of the ultimate parent company | |
Shanghai Secco Petrochemical Co., Ltd. (Shanghai Secco) | Associate of the Group | |
Shanghai Nanguang Petrochemical Co., Ltd. | Associate of the Group | |
Linde-SPC Gases Company Limited | Joint venture of the Group |
The following is a summary of significant balances and transactions between the Group and its related parties except for the dividends payable as disclosed in Note 7 and Note 15.
Most of the transactions undertaken by the Group during the six months ended 30 June 2023 have been affected on such terms as determined by Sinopec Corp. and relevant PRC authorities.
Sinopec Corp. negotiates and agrees the terms of crude oil supply with suppliers on a group basis, which is then allocated among its subsidiaries, including the Group, on a discretionary basis. Sinopec Corp. also owns a widespread petroleum products sales network and possesses a fairly high market share in domestic petroleum products market, which is subject to extensive regulation by the PRC government.
The Group has entered into a mutual product supply and sales services framework agreement with Sinopec Corp. Pursuant to the agreement, Sinopec Corp. provides the Company with crude oil, other petrochemical raw materials and agent services. On the other hand, the Group provides Sinopec Corp. with petroleum products, petrochemical products and property leasing services.
80 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (continued)
(Expressed in Renminbi Yuan unless otherwise indicated)
19 | Related-party transactions (continued) |
The pricing policy for these services and products provided under the agreement is as follows:
| if there are applicable State (central and local government) tariffs, the pricing shall follow the State tariffs; |
| if there are no State tariffs, but there are applicable States guidance prices, the pricing shall follow the States guidance prices; or |
| if there are no State tariffs or States guidance prices, the pricing shall be determined in accordance with the prevailing market prices (including any bidding prices). |
(a) | Transactions between the Group and Sinopec Corp, its subsidiaries and joint ventures during the six months ended 30 June 2023 and the six months ended 30 June 2022 were as follows: |
Six months ended 30 June | ||||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
Sales of petroleum products |
26,956,045 | 23,930,464 | ||||||
Sales other than petroleum products |
4,679,998 | 4,512,258 | ||||||
Purchases of crude oil |
25,775,081 | 28,137,012 | ||||||
Purchases other than crude oil |
3,548,884 | 8,244,423 | ||||||
Sales commissions |
50,602 | 58,868 | ||||||
Rental income |
17,011 | 17,023 |
2023 Interim Report |
81 |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (continued)
(Expressed in Renminbi Yuan unless otherwise indicated)
19 | Related-party transactions (continued) |
(b) | Other transactions between the Group and Sinopec Group and its subsidiaries, associates and joint ventures of the Group during the six months ended 30 June 2023 and the six months ended 30 June 2022 were as follows: |
Six months ended 30 June | ||||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
Sales of goods and service fee income |
||||||||
Sinopec Group and its subsidiaries |
29,289 | 4,626 | ||||||
Associates and joint ventures of the Group |
1,054,742 | 1,796,612 | ||||||
|
|
|
|
|||||
1,084,031 | 1,801,238 | |||||||
|
|
|
|
|||||
Purchases |
||||||||
Sinopec Group and its subsidiaries |
1,163,231 | 817,614 | ||||||
Associates and joint ventures of the Group |
218,022 | 1,738,709 | ||||||
|
|
|
|
|||||
1,381,253 | 2,556,323 | |||||||
|
|
|
|
|||||
Insurance premium expenses |
||||||||
Sinopec Group and its subsidiaries |
58,121 | 52,906 | ||||||
|
|
|
|
|||||
Addition to right-of-use assets |
||||||||
Sinopec Group and its subsidiaries |
1,388 | 20,023 | ||||||
|
|
|
|
|||||
Interest expense of lease liabilities |
||||||||
Sinopec Group and its subsidiaries |
290 | 441 | ||||||
Joint ventures of the Group |
6 | 10 | ||||||
|
|
|
|
|||||
296 | 451 | |||||||
|
|
|
|
|||||
Interest income |
||||||||
Sinopec Finance |
176 | 141 | ||||||
Joint ventures of the Group |
| 2,667 | ||||||
|
|
|
|
|||||
176 | 2,808 | |||||||
|
|
|
|
|||||
Construction and installation cost |
||||||||
Sinopec Group and its subsidiaries |
93,856 | 706,002 | ||||||
Sinopec Corp., its subsidiaries and joint ventures |
3,516 | | ||||||
|
|
|
|
|||||
97,372 | 706,002 | |||||||
|
|
|
|
|||||
Rental income |
||||||||
Associates and joint ventures of the Group |
12,573 | 8,767 | ||||||
Sinopec Group and its subsidiaries |
239 | 232 | ||||||
|
|
|
|
|||||
12,812 | 8,999 | |||||||
|
|
|
|
|||||
Entrusted loans |
||||||||
Joint ventures of the Group |
| 150,000 | ||||||
|
|
|
|
82 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (continued)
(Expressed in Renminbi Yuan unless otherwise indicated)
19 | Related-party transactions (continued) |
(b) | Other transactions between the Group and Sinopec Group and its subsidiaries, associates and joint ventures of the Group during the six months ended 30 June 2023 and the six months ended 30 June 2022 were as follows: (continued) |
The directors of the Company are of the opinion that the transactions with Sinopec Corp., its subsidiaries and joint ventures, Sinopec Group and its subsidiaries, associates and joint ventures of the Group as disclosed in Notes 19(a) and 19(b) were conducted in the ordinary course of business, on normal commercial terms and in accordance with the agreements governing such transactions.
(c) | The relevant amounts due from/to Sinopec Corp., its subsidiaries and joint ventures, Sinopec Group and its subsidiaries, associates and joint ventures of the Group, arising from purchases, sales and other transactions as disclosed in Notes 19(a) and 19(b), are summarized as follows: |
As at | As at | |||||||
30 June | 31 December | |||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
Amounts due from related parties |
||||||||
Sinopec Corp., its subsidiaries and joint ventures |
1,567,128 | 2,593,908 | ||||||
Associates and joint ventures of the Group |
37,326 | 45,075 | ||||||
|
|
|
|
|||||
1,604,454 | 2,638,983 | |||||||
|
|
|
|
|||||
Amounts due to related parties |
||||||||
Sinopec Corp., its subsidiaries and joint ventures |
5,770,467 | 6,569,219 | ||||||
Sinopec Group and its subsidiaries |
302,561 | 1,232,589 | ||||||
Associates and joint ventures of the Group |
33,584 | 86,001 | ||||||
|
|
|
|
|||||
6,106,612 | 7,887,809 | |||||||
|
|
|
|
|||||
Lease liabilities |
||||||||
Sinopec Group and its subsidiaries |
10,348 | 12,714 | ||||||
Joint ventures of the Group |
135 | 290 | ||||||
|
|
|
|
|||||
10,483 | 13,004 | |||||||
|
|
|
|
|||||
Long-term borrowings |
||||||||
Sinopec Finance |
700,000 | 700,000 | ||||||
|
|
|
|
2023 Interim Report |
83 |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (continued)
(Expressed in Renminbi Yuan unless otherwise indicated)
19 | Related-party transactions (continued) |
(d) | Key management personnel compensation, post-employment benefit plans and share options |
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 personnel compensations are as follows:
Six months ended 30 June | ||||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
Short-term employee benefits |
8,189 | 9,428 | ||||||
Post-employment benefits |
368 | 318 | ||||||
|
|
|
|
|||||
8,557 | 9,746 | |||||||
|
|
|
|
(e) | Commitments with related parties |
(i) | Construction and installation cost |
As at | As at | |||||||
30 June | 31 December | |||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
Sinopec Group and its subsidiaries |
872,647 | 930,665 | ||||||
|
|
|
|
Except for the above, the Group had no other material commitments with related parties as at 30 June 2023 and 31 December 2022, which are contracted, but not included in the interim financial report.
84 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE UNAUDITED INTERIM FINANCIAL REPORT (continued)
(Expressed in Renminbi Yuan unless otherwise indicated)
19 | Related-party transactions (continued) |
(f) | Investment commitments with related parties |
As at | As at | |||||||
30 June | 31 December | |||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
Capital contribution to Shanghai Secco (i) |
111,263 | 111,263 | ||||||
Capital contribution to Baling Materials (ii) |
150,000 | 150,000 | ||||||
|
|
|
|
|||||
261,263 | 261,263 | |||||||
|
|
|
|
(i) | Pursuant to the resolution of the 18th meeting of the 7th term of Board of Directors on 5 December 2013, the Group was approved to make capital contribution of USD30,017,000 (RMB182,804,000 equivalent) to Shanghai Secco, an associate of the Group. As at 30 June 2023, the Company has contributed RMB71,541,000 to Shanghai Secco. According to the approval by Shanghai Municipal Commission of Commerce as issued on 19 October 2015, the rest of the capital contribution to Shanghai Secco should be within 50 years starting from its registration date. |
(ii) | Sinopec Baling Petrochemical Co., Ltd. and the Company jointly established Baling Materials on 7 September 2021, each with a cash contribution of RMB400,000 thousand. As at 30 June 2023, the Company has made a paid-up capital contribution of RMB250,000 thousand. |
Except for the above disclosed in Notes 19(e) and 19(f), the Group had no other material commitments with related parties as at 30 June 2023, which are contracted, but not included in the financial statements.
20 | Commitments |
Capital commitments outstanding at 30 June 2023 not provided for in the interim financial report
As at | As at | |||||||
30 June | 31 December | |||||||
2023 | 2022 | |||||||
RMB000 | RMB000 | |||||||
Property, plant and equipment contracted for |
2,192,695 | 1,783,781 | ||||||
|
|
|
|
2023 Interim Report |
85 |
Review Report
畢馬威華振專字第2301572號
To the Shareholders of Sinopec Shanghai Petrochemical Company Limited,
We have reviewed the accompanying interim financial statements of Sinopec Shanghai Petrochemical Company Limited (hereinafter SPC), which comprise the consolidated and company balance sheets as at 30 June 2023, and the consolidated and company income statements, the consolidated and company cash flow statements and the consolidated and company statements of changes in shareholders equity for the period from 1 January 2023 to 30 June 2023, and the notes to the financial statements. Management of SPC is responsible for the preparation of these financial statements in accordance with the requirements of Accounting Standards for Business Enterprises. Our responsibility is to issue a report on these financial statements based on our review.
We conducted our review in accordance with China Standard on Review No. 2101Engagements to Review Financial Statements. This standard requires that we plan and perform the review to obtain limited assurance as to whether the financial statements are free of material misstatement. A review is limited primarily to inquiries of SPC personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared in accordance with the requirements of Accounting Standards for Business Enterprises issued by the Ministry of Finance of the Peoples Republic of China, and cannot present fairly, in all material respects, the consolidated and the companys financial position of SPC as at 30 June 2023, and their financial performance and cash flows for the period from 1 January 2023 to 30 June 2023 in accordance with the requirements of Accounting Standards for Business Enterprises.
KPMG Huazhen LLP | Certified Public Accountants | |
Registered in the Peoples Republic of China | ||
Wang Wenli | ||
(Engagement Partner) | ||
Beijing, China | Zhang Lin | |
23 August 2023 |
86 | Sinopec Shanghai Petrochemical Company Limited |
B. | Interim Financial Statements Prepared under China Accounting Standards for Business Enterprises (unaudited) |
CONSOLIDATED AND COMPANY BALANCE SHEETS
AS AT 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
Assets |
Note | 30 June 2023 (unaudited) Consolidated |
31 December 2022 (restated) Consolidated |
30 June 2023 (unaudited) Company |
31 December 2022 (restated) Company |
|||||||||||||
Current Assets |
||||||||||||||||||
Cash at bank and on hand |
V.1 | 6,931,677 | 3,998,332 | 6,627,460 | 3,780,454 | |||||||||||||
Accounts receivable |
V.2, XIII.1 | 1,629,950 | 2,512,362 | 1,472,545 | 2,334,828 | |||||||||||||
Receivables under financing |
V.3, XIII.2 | 328,879 | 582,354 | 137,200 | 127,558 | |||||||||||||
Prepayments |
V.4 | 19,503 | 67,008 | 13,724 | 55,961 | |||||||||||||
Other receivables |
V.5, XIII.3 | 87,375 | 190,579 | 69,216 | 172,076 | |||||||||||||
Inventories |
V.6 | 7,662,790 | 7,294,060 | 7,491,623 | 7,043,613 | |||||||||||||
Other current assets |
V.7 | 340,861 | 1,121,187 | 326,816 | 1,108,285 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total Current Assets |
17,001,035 | 15,765,882 | 16,138,584 | 14,622,775 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Non-Current Assets |
||||||||||||||||||
Long-term equity investments |
V.8, XIII.4 | 3,384,009 | 3,594,393 | 4,646,390 | 4,837,366 | |||||||||||||
Investments in other equity instruments |
5,000 | 5,000 | | | ||||||||||||||
Other non-current financial assets |
V.9 | 26,500 | | | | |||||||||||||
Investment properties |
V.11 | 328,657 | 336,863 | 356,407 | 365,147 | |||||||||||||
Fixed assets |
V.10, XIII.5 | 13,714,030 | 12,195,527 | 13,382,022 | 11,839,585 | |||||||||||||
Construction in progress |
V.12 | 1,749,110 | 3,748,461 | 1,645,005 | 3,647,200 | |||||||||||||
Right-of-use assets |
V.13 | 14,290 | 16,085 | 12,921 | 13,494 | |||||||||||||
Intangible assets |
V.14 | 362,656 | 372,640 | 255,289 | 261,432 | |||||||||||||
Long-term deferred expenses |
V.15 | 654,233 | 776,480 | 649,813 | 771,397 | |||||||||||||
Deferred tax assets |
V.16 | 1,226,394 | 991,892 | 1,221,718 | 986,870 | |||||||||||||
Other non-current assets |
V.17 | 3,235,907 | 3,439,559 | 3,235,907 | 3,189,559 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total Non-current Assets |
24,700,786 | 25,476,900 | 25,405,472 | 25,912,050 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total Assets |
41,701,821 | 41,242,782 | 41,544,056 | 40,534,825 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Liabilities and shareholders equity |
||||||||||||||||||
Current Liabilities |
||||||||||||||||||
Short-term loans |
V.19 | 5,048,000 | 1,550,000 | 5,000,000 | 1,500,000 | |||||||||||||
Bills payable |
V.20 | 103,950 | 40,951 | 103,950 | | |||||||||||||
Accounts payable |
V.21 | 7,155,483 | 9,144,554 | 6,573,081 | 8,295,462 | |||||||||||||
Contract liabilities |
V.22 | 366,929 | 383,246 | 280,334 | 300,168 | |||||||||||||
Employee benefits payable |
V.23 | 680,651 | 317,891 | 664,750 | 307,190 | |||||||||||||
Taxes payable |
V.24 | 1,020,888 | 889,856 | 1,008,901 | 874,213 | |||||||||||||
Other payables |
V.25 | 1,001,629 | 1,618,352 | 2,361,946 | 2,721,047 | |||||||||||||
Non-current liabilities due within one year |
V.26 | 9,982 | 8,738 | 9,303 | 7,172 | |||||||||||||
Other current liabilities |
V.27 | 40,828 | 44,750 | 36,444 | 39,018 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total Current Liabilities |
15,428,340 | 13,998,338 | 16,038,709 | 14,044,270 | ||||||||||||||
|
|
|
|
|
|
|
|
The notes on pages 97 to 251 form part of these financial statements.
2023 Interim Report |
87 |
CONSOLIDATED AND COMPANY BALANCE SHEETS (continued)
AS AT 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
Assets |
Note | 30 June 2023 (unaudited) Consolidated |
31 December 2022 (restated) Consolidated |
30 June 2023 (unaudited) Company |
31 December 2022 (restated) Company |
|||||||||||||
Non-Current Liabilities |
||||||||||||||||||
Long-term loans |
V.28 | 700,000 | 700,000 | 700,000 | 700,000 | |||||||||||||
Lease liabilities |
V.29 | 4,656 | 7,513 | 4,103 | 6,481 | |||||||||||||
Deferred income |
V.30 | 130,613 | 134,608 | 130,483 | 134,494 | |||||||||||||
Deferred tax liabilities |
V.16 | 31,910 | 30,898 | | | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total Non-Current Liabilities |
867,179 | 873,019 | 834,586 | 840,975 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total Liabilities |
16,295,519 | 14,871,357 | 16,873,295 | 14,885,245 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Shareholders equity |
||||||||||||||||||
Share capital |
I, V.31 | 10,799,286 | 10,823,814 | 10,799,286 | 10,823,814 | |||||||||||||
Capital reserve |
V.32 | 609,166 | 610,327 | 599,607 | 600,768 | |||||||||||||
Less: Treasury stock |
V.33 | | 25,689 | | 25,689 | |||||||||||||
Other comprehensive income |
V.34 | (827 | ) | (806 | ) | (827 | ) | (806 | ) | |||||||||
Specific reserve |
V.35 | 261,002 | 240,418 | 260,996 | 239,689 | |||||||||||||
Surplus reserve |
V.36 | 6,672,634 | 6,672,634 | 6,672,634 | 6,672,634 | |||||||||||||
Retained earnings |
V.37 | 6,934,771 | 7,923,048 | 6,339,065 | 7,339,170 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total equity attributable to shareholders of the Company |
25,276,032 | 26,243,746 | | | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Non-controlling interests |
V.38 | 130,270 | 127,679 | | | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total Shareholders Equity |
25,406,302 | 26,371,425 | 24,670,761 | 25,649,580 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total Liabilities and Shareholders Equity |
41,701,821 | 41,242,782 | 41,544,056 | 40,534,825 | ||||||||||||||
|
|
|
|
|
|
|
|
These financial statements were approved by the Board of Directors of the Company on 23 August 2023.
Wan Tao | Du Jun | Yang Yating | ||
Chairman | Director and Chief Financial Officer | Accounting Chief |
The notes on pages 97 to 251 form part of these financial statements.
88 | Sinopec Shanghai Petrochemical Company Limited |
CONSOLIDATED AND COMPANY INCOME STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
Six months ended 30 June | Six months ended 30 June | |||||||||||||||||||
Note |
2023 (unaudited) Consolidated |
2022 (unaudited) (restated) Consolidated |
2023 (unaudited) Company |
2022 (unaudited) (restated) Company |
||||||||||||||||
I. |
Operating income | V.39, XIII.6 | 44,937,051 | 45,900,355 | 40,895,068 | 39,106,248 | ||||||||||||||
Less: Operating costs | V.39, XIII.6 | 38,555,927 | 39,118,453 | 34,593,186 | 32,381,777 | |||||||||||||||
Taxes and surcharges |
V.40 | 6,226,581 | 5,717,033 | 6,220,308 | 5,710,416 | |||||||||||||||
Selling and distribution expenses |
V.41 | 148,459 | 171,259 | 107,411 | 127,442 | |||||||||||||||
General and administrative expenses |
V.42 | 958,227 | 1,347,594 | 911,458 | 1,292,155 | |||||||||||||||
Research and development expenses |
V.43 | 68,062 | 36,426 | 65,181 | 32,725 | |||||||||||||||
Financial expenses (- for income) |
V.44 | (125,281 | ) | (295,996 | ) | (118,283 | ) | (271,812 | ) | |||||||||||
Including: Interest expense |
55,547 | 50,043 | 54,622 | 48,935 | ||||||||||||||||
Interest income |
185,052 | 329,305 | 173,082 | 320,891 | ||||||||||||||||
Add: Other income | V.45 | 7,399 | 5,905 | 5,481 | 4,524 | |||||||||||||||
Investment income (- for losses) |
V.46, XIII.7 | (120,360 | ) | (50,675 | ) | (145,974 | ) | (46,913 | ) | |||||||||||
Including: Loss from investment in associates and joint ventures |
(118,363 | ) | (32,537 | ) | (144,851 | ) | (53,346 | ) | ||||||||||||
Gains from changes in fair value (- for losses) |
V.47 | | 313 | | 313 | |||||||||||||||
Credit losses (- for losses) |
V.48 | 167 | (4,887 | ) | (13 | ) | (4,877 | ) | ||||||||||||
Impairment losses of assets (- for losses) |
V.49 | (190,486 | ) | (177,777 | ) | (190,486 | ) | (177,777 | ) | |||||||||||
Gains from asset disposals (- for losses) |
V.50 | 434 | (1,062 | ) | | | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
II. |
Operating profit (- for loss) | (1,197,770 | ) | (422,597 | ) | (1,215,185 | ) | (391,185 | ) | |||||||||||
Add: Non-operating income |
V.51 | 14,505 | 11,594 | 8,920 | 11,594 | |||||||||||||||
Less: Non-operating expenses |
V.52 | 28,709 | 31,598 | 28,688 | 31,510 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
III. |
Profit before income tax (- for loss) | (1,211,974 | ) | (442,601 | ) | (1,234,953 | ) | (411,101 | ) | |||||||||||
Less: Income tax benefits | V.53 | (226,288 | ) | (11,731 | ) | (234,848 | ) | (15,979 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
IV. |
Net profit (- for net loss) | (985,686 | ) | (430,870 | ) | (1,000,105 | ) | (395,122 | ) | |||||||||||
(1) Net profit classified by continuity of operations: |
||||||||||||||||||||
1. Net profit from continuing operations (- for net loss) |
(985,686 | ) | (430,870 | ) | (1,000,105 | ) | (395,122 | ) | ||||||||||||
2. Net profit from discontinued operations (- for net loss) |
| | | | ||||||||||||||||
(2) Net profit classified by ownership: | ||||||||||||||||||||
1. Shareholders of the Company (- for net loss) |
(988,277 | ) | (436,042 | ) | | | ||||||||||||||
2. Non-controlling interests (- for net loss) |
2,591 | 5,172 | | | ||||||||||||||||
|
|
|
|
|
|
|
|
The notes on pages 97 to 251 form part of these financial statements.
2023 Interim Report |
89 |
CONSOLIDATED AND COMPANY INCOME STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
Six months ended 30 June | Six months ended 30 June | |||||||||||||||||||
Note |
2023 (unaudited) Consolidated |
2022 (unaudited) (restated) Consolidated |
2023 (unaudited) Company |
2022 (unaudited) (restated) Company |
||||||||||||||||
V. |
Other comprehensive income, net of tax | (21 | ) | 273,513 | (21 | ) | 273,513 | |||||||||||||
(1) Other comprehensive income (net of tax) attributable to shareholders of the Company |
(21 | ) | 273,513 | (21 | ) | 273,513 | ||||||||||||||
Items that may be reclassified to profit or loss |
(21 | ) | 273,513 | (21 | ) | 273,513 | ||||||||||||||
1. Other comprehensive income recognized under equity method |
(21 | ) | (22,558 | ) | (21 | ) | (22,558 | ) | ||||||||||||
2. Cash flow hedge reserve |
| 296,071 | | 296,071 | ||||||||||||||||
(2) Other comprehensive income (net of tax) attributable to non-controlling interests |
| | | | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
VI. |
Total comprehensive income | (985,707 | ) | (157,357 | ) | (1,000,126 | ) | (121,609 | ) | |||||||||||
(1) Attributable to shareholders of the Company | (988,298 | ) | (162,529 | ) | | | ||||||||||||||
(2) Attributable to non-controlling interests | 2,591 | 5,172 | | | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
VII. |
Losses per share | |||||||||||||||||||
(1) Basic losses per share (RMB Yuan) | V.54 | (0.092 | ) | (0.040 | ) | | | |||||||||||||
(2) Diluted losses per share (RMB Yuan) | V.54 | (0.092 | ) | (0.040 | ) | | | |||||||||||||
|
|
|
|
|
|
|
|
These financial statements were approved by the Board of Directors of the Company on 23 August 2023.
Wan Tao | Du Jun | Yang Yating | ||
Chairman | Director and Chief Financial Officer | Accounting Chief |
The notes on pages 97 to 251 form part of these financial statements.
90 | Sinopec Shanghai Petrochemical Company Limited |
CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
Six months ended 30 June | Six months ended 30 June | |||||||||||||||||||
Note |
2023 (unaudited) Consolidated |
2022 (unaudited) Consolidated |
2023 (unaudited) Company |
2022 (unaudited) Company |
||||||||||||||||
I. |
Cash flows from operating activities | |||||||||||||||||||
Proceeds from sale of goods and rendering of services |
50,445,781 | 50,088,166 | 45,897,646 | 43,170,120 | ||||||||||||||||
Refund of taxes |
241,174 | 432,955 | 143,615 | 289,064 | ||||||||||||||||
Proceeds from other operating activities |
V.56 | 131,515 | 111,725 | 119,982 | 108,602 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Sub-total of cash inflows |
50,818,470 | 50,632,846 | 46,161,243 | 43,567,786 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Payment for goods and services |
(43,541,676 | ) | (45,620,035 | ) | (39,086,208 | ) | (38,852,353 | ) | ||||||||||||
Payment to and for employees |
(1,407,170 | ) | (1,526,165 | ) | (1,330,011 | ) | (1,443,976 | ) | ||||||||||||
Payment of various taxes |
(5,844,435 | ) | (9,728,629 | ) | (5,810,905 | ) | (9,693,475 | ) | ||||||||||||
Payment for other operating activities |
V.56 | (252,071 | ) | (163,139 | ) | 24,177 | (299,371 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Sub-total of cash outflows |
(51,045,352 | ) | (57,037,968 | ) | (46,202,947 | ) | (50,289,175 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net cash flows used in operating activities |
V.57, XIII.8 | (226,882 | ) | (6,405,122 | ) | (41,704 | ) | (6,721,389 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
II. |
Cash flows from investing activities | |||||||||||||||||||
Cash received from recovery of investment |
50,000 | | | | ||||||||||||||||
Cash received from returns on investments |
92,000 | 584,002 | 46,262 | 561,947 | ||||||||||||||||
Net cash received from disposal of fixed assets and other long-term assets |
24,589 | 8,882 | 23,654 | 8,877 | ||||||||||||||||
Proceeds from other investing activities |
V.56 | 1,058,167 | 6,168,238 | 1,054,114 | 6,164,397 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Sub-total of cash inflows |
1,224,756 | 6,761,122 | 1,124,030 | 6,735,221 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Payment for acquisition of fixed assets, intangible assets and other long-term assets |
(682,782 | ) | (1,048,727 | ) | (678,135 | ) | (1,037,357 | ) | ||||||||||||
Payment of structured deposits |
| (1,000,000 | ) | | (1,000,000 | ) | ||||||||||||||
Payment for cash |
(26,500 | ) | | | | |||||||||||||||
Payment for establishing of a subsidiary and an associate |
| (130,000 | ) | | (50,000 | ) | ||||||||||||||
Payment for other investing activities |
V.56 | (1,997 | ) | (2,805,687 | ) | (1,123 | ) | (2,750,827 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Sub-total of cash outflows |
(711,279 | ) | (4,984,414 | ) | (679,258 | ) | (4,838,184 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net cash flows generated from investing activities |
513,477 | 1,776,708 | 444,772 | 1,897,037 | ||||||||||||||||
|
|
|
|
|
|
|
|
The notes on pages 97 to 251 form part of these financial statements.
2023 Interim Report |
91 |
CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
Six months ended 30 June | Six months ended 30 June | |||||||||||||||||||
Note |
2023 (unaudited) Consolidated |
2022 (unaudited) Consolidated |
2023 (unaudited) Company |
2022 (unaudited) Company |
||||||||||||||||
III. |
Cash flows from financing activities |
|||||||||||||||||||
Proceeds from borrowings |
16,018,000 | 9,455,000 | 16,000,000 | 9,435,000 | ||||||||||||||||
Proceeds from short-term bonds |
| 3,000,000 | | 3,000,000 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Sub-total of cash inflows |
16,018,000 | 12,455,000 | 16,000,000 | 12,435,000 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Repayments of borrowings |
(12,520,000 | ) | (8,955,200 | ) | (12,500,000 | ) | (8,935,000 | ) | ||||||||||||
Repayments of short-term bonds |
| (1,500,000 | ) | | (1,500,000 | ) | ||||||||||||||
Payment for dividends, profit distributions or interest |
(63,761 | ) | (50,488 | ) | (62,864 | ) | (49,419 | ) | ||||||||||||
Including: Dividends paid by subsidiaries to non-controlling interests |
| | | | ||||||||||||||||
Payment for other financing activities |
V.56 | (6,825 | ) | (2,991 | ) | (5,198 | ) | (1,115 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Sub-total of cash outflows |
(12,590,586 | ) | (10,508,679 | ) | (12,568,062 | ) | (10,485,534 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net cash flows generated from financing activities |
3,427,414 | 1,946,321 | 3,431,938 | 1,949,466 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
IV. |
Effect of foreign exchange rate changes on cash and cash equivalents |
7,336 | 8,733 | | | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
V. |
Net increase in cash and cash equivalents (- for decrease) |
3,721,345 | (2,673,360 | ) | 3,835,006 | (2,874,886 | ) | |||||||||||||
Add: Cash and cash equivalents at the beginning of the period |
V.57, XIII.8 | 889,413 | 5,112,010 | 671,538 | 4,927,519 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
VI. |
Cash and cash equivalents at the end of the period |
V.57, XIII.8 | 4,610,758 | 2,438,650 | 4,506,544 | 2,052,633 | ||||||||||||||
|
|
|
|
|
|
|
|
These financial statements were approved by the Board of Directors of the Company on 23 August 2023.
Wan Tao | Du Jun | Yang Yating | ||
Chairman | Director and Chief Financial Officer | Accounting Chief |
The notes on pages 97 to 251 form part of these financial statements.
92 | Sinopec Shanghai Petrochemical Company Limited |
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
Attributable to equity shareholders of the Company | ||||||||||||||||||||||||||||||||||||||||||
Note | Share capital |
Capital reserve |
Less: Treasury stock |
Other comprehensive income |
Specific reserve |
Surplus reserve |
Retained earnings |
Sub-total | Non- controlling interests |
Total | ||||||||||||||||||||||||||||||||
I. Balance at 1 January 2023 |
10,823,814 | 610,327 | 25,689 | (806 | ) | 240,418 | 6,672,639 | 7,923,002 | 26,243,705 | 127,681 | 26,371,386 | |||||||||||||||||||||||||||||||
Add: Changes in accounting policies |
III.33 | | | | | | (5 | ) | 46 | 41 | (2 | ) | 39 | |||||||||||||||||||||||||||||
Adjusted balance at the beginning of the current period |
10,823,814 | 610,327 | 25,689 | (806 | ) | 240,418 | 6,672,634 | 7,923,048 | 26,243,746 | 127,679 | 26,371,425 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
II. Changes in equity for the six months ended 30 June 2023 (unaudited) (- for decreases) |
||||||||||||||||||||||||||||||||||||||||||
(1) Total comprehensive income |
||||||||||||||||||||||||||||||||||||||||||
1. Net profit (- for net loss) |
| | | | | | (988,277 | ) | (988,277 | ) | 2,591 | (985,686 | ) | |||||||||||||||||||||||||||||
2. Other comprehensive income |
V.34 | | | | (21 | ) | | | | (21 | ) | | (21 | ) | ||||||||||||||||||||||||||||
(2) The capital of shareholders reduction |
||||||||||||||||||||||||||||||||||||||||||
1. Cancellation of treasury stock repurchase |
V.33 | (24,528 | ) | (1,161 | ) | (25,689 | ) | | | | | | | | ||||||||||||||||||||||||||||
(3) Specific reserve |
||||||||||||||||||||||||||||||||||||||||||
1. Accrued |
V.35 | | | | | 76,290 | | | 76,290 | | 76,290 | |||||||||||||||||||||||||||||||
2. Utilized |
V.35 | | | | | (55,706 | ) | | | (55,706 | ) | | (55,706 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
III. Balance at 30 June 2023 (unaudited) |
10,799,286 | 609,166 | | (827 | ) | 261,002 | 6,672,634 | 6,934,771 | 25,276,032 | 130,270 | 25,406,302 | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
These financial statements were approved by the Board of Directors of the Company on 23 August 2023.
Wan Tao | Du Jun | Yang Yating | ||
Chairman | Director and Chief Financial Officer | Accounting Chief |
The notes on pages 97 to 251 form part of these financial statements.
2023 Interim Report |
93 |
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
Attributable to equity shareholders of the Company | ||||||||||||||||||||||||||||||||||||||||
Note | Share capital |
Capital reserve |
Other comprehensive income |
Specific reserve |
Surplus reserve |
Retained earnings |
Sub-total | Non-controlling interests |
Total | |||||||||||||||||||||||||||||||
I. Balance at 1 January 2022 |
10,823,814 | 610,327 | 59,425 | 216,512 | 6,672,639 | 11,877,455 | 30,260,172 | 135,259 | 30,395,431 | |||||||||||||||||||||||||||||||
Add: Changes in accounting policies |
III.33 | | | | | (5 | ) | (57 | ) | (62 | ) | (5 | ) | (67 | ) | |||||||||||||||||||||||||
Adjusted balance at the beginning of the current period |
10,823,814 | 610,327 | 59,425 | 216,512 | 6,672,634 | 11,877,398 | 30,260,110 | 135,254 | 30,395,364 | |||||||||||||||||||||||||||||||
II. Changes in equity for the six months ended 30 June 2022 (unaudited) (- for decreases) |
||||||||||||||||||||||||||||||||||||||||
(1) Total comprehensive income |
||||||||||||||||||||||||||||||||||||||||
1. Net profit (- for net loss)(restated) |
| | | | | (436,042 | ) | (436,042 | ) | 5,172 | (430,870 | ) | ||||||||||||||||||||||||||||
2. Other comprehensive income |
V.34 | | | 273,513 | | | | 273,513 | | 273,513 | ||||||||||||||||||||||||||||||
(2) Amounts transferred from hedging reserve to initial carrying amount of hedged items |
| | (151,817 | ) | | | | (151,817 | ) | | (151,817 | ) | ||||||||||||||||||||||||||||
(3) Appropriation of profits |
||||||||||||||||||||||||||||||||||||||||
1. Distributions to shareholders |
V.37 | | | | | | (1,082,381 | ) | (1,082,381 | ) | (11,434 | ) | (1,093,815 | ) | ||||||||||||||||||||||||||
(4) Specific reserve |
||||||||||||||||||||||||||||||||||||||||
1. Accrued |
V.35 | | | | 68,912 | | | 68,912 | | 68,912 | ||||||||||||||||||||||||||||||
2. Utilized |
V.35 | | | | (60,426 | ) | | | (60,426 | ) | | (60,426 | ) | |||||||||||||||||||||||||||
(5) Others |
| 3,860 | | | | | 3,860 | | 3,860 | |||||||||||||||||||||||||||||||
III. Balance at 30 June 2022 (unaudited)(restated) |
10,823,814 | 614,187 | 181,121 | 224,998 | 6,672,634 | 10,358,975 | 28,875,729 | 128,992 | 29,004,721 |
These financial statements were approved by the Board of Directors of the Company on 23 August 2023.
Wan Tao | Du Jun | Yang Yating | ||
Chairman | Director and Chief Financial Officer | Accounting Chief |
The notes on pages 97 to 251 form part of these financial statements.
94 | Sinopec Shanghai Petrochemical Company Limited |
STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
Less: | Other | |||||||||||||||||||||||||||||||||||
Capital | Treasury | comprehensive | Specific | Surplus | Retained | |||||||||||||||||||||||||||||||
Note | Share capital | reserve | stock | income | reserve | reserve | earnings | Total | ||||||||||||||||||||||||||||
I. Balance at 1 January 2023 |
10,823,814 | 600,768 | 25,689 | (806 | ) | 239,689 | 6,672,639 | 7,339,125 | 25,649,540 | |||||||||||||||||||||||||||
Add: Changes in accounting policies |
III.33 | | | | | | (5 | ) | 45 | 40 | ||||||||||||||||||||||||||
Adjusted balance at the beginning of the current period |
10,823,814 | 600,768 | 25,689 | (806 | ) | 239,689 | 6,672,634 | 7,339,170 | 25,649,580 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
II. Changes in for the six months ended 30 June 2023 (unaudited) (- for decreases) |
||||||||||||||||||||||||||||||||||||
(1) Total comprehensive income |
||||||||||||||||||||||||||||||||||||
1. Net profit (- for net loss) |
| | | | | | (1,000,105 | ) | (1,000,105 | ) | ||||||||||||||||||||||||||
2. Other comprehensive income |
| | | (21 | ) | | | | (21 | ) | ||||||||||||||||||||||||||
(2) The capital of shareholders reduction |
||||||||||||||||||||||||||||||||||||
1. Cancellation of treasury stock repurchase |
(24,528 | ) | (1,161 | ) | (25,689 | ) | | | | | | |||||||||||||||||||||||||
(3) Specific reserve |
||||||||||||||||||||||||||||||||||||
1. Accrued |
| | | | 73,200 | | | 73,200 | ||||||||||||||||||||||||||||
2. Utilized |
| | | | (51,893 | ) | | | (51,893 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
III. Balance at 30 June 2023 (unaudited) (restated) |
10,799,286 | 599,607 | | (827 | ) | 260,996 | 6,672,634 | 6,339,065 | 24,670,761 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
These financial statements were approved by the Board of Directors of the Company on 23 August 2023.
Wan Tao | Du Jun | Yang Yating | ||
Chairman | Director and Chief Financial Officer | Accounting Chief |
The notes on pages 97 to 251 form part of these financial statements.
2023 Interim Report |
95 |
STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2022
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
Other | ||||||||||||||||||||||||||||||||
Capital | comprehensive | Specific | Surplus | Retained | ||||||||||||||||||||||||||||
Note | Share capital | reserve | income | reserve | reserve | earnings | Total | |||||||||||||||||||||||||
I. Balance at 1 January 2022 |
10,823,814 | 600,768 | 59,425 | 216,508 | 6,672,639 | 11,240,259 | 29,613,413 | |||||||||||||||||||||||||
Add: Changes in accounting policies |
III.33 | | | | | (5 | ) | (44 | ) | (49 | ) | |||||||||||||||||||||
Adjusted balance at the beginning of the current period |
10,823,814 | 600,768 | 59,425 | 216,508 | 6,672,634 | 11,240,215 | 29,613,364 | |||||||||||||||||||||||||
II. Changes in equity for the six months ended 30 June 2022 (unaudited) (- for decreases) |
||||||||||||||||||||||||||||||||
(1) Total comprehensive income |
||||||||||||||||||||||||||||||||
1. Net profit (- for net loss)(restated) |
| | | | | (395,122 | ) | (395,122 | ) | |||||||||||||||||||||||
2. Other comprehensive income |
| | 273,513 | | | | 273,513 | |||||||||||||||||||||||||
(2) Amounts transferred from hedging reserve to initial carrying amount of hedged items |
| | (151,817 | ) | | | | (151,817 | ) | |||||||||||||||||||||||
(3) Appropriation of profits |
||||||||||||||||||||||||||||||||
1. Distributions to shareholders |
| | | | | (1,082,381 | ) | (1,082,381 | ) | |||||||||||||||||||||||
(4) Specific reserve |
||||||||||||||||||||||||||||||||
1. Accrued |
| | | 65,279 | | | 65,279 | |||||||||||||||||||||||||
2. Utilized |
| | | (56,957 | ) | | | (56,957 | ) | |||||||||||||||||||||||
(5) Others |
| 3,860 | | | | | 3,860 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
III. Balance at 30 June 2022 (unaudited)(restated) |
10,823,814 | 604,628 | 181,121 | 224,830 | 6,672,634 | 9,762,712 | 28,269,739 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
These financial statements were approved by the Board of Directors of the Company on 23 August 2023.
Wan Tao | Du Jun | Yang Yating | ||
Chairman | Director and Chief Financial Officer | Accounting Chief |
The notes on pages 97 to 251 form part of these financial statements.
96 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
I. | General information |
Sinopec Shanghai Petrochemical Company Limited (the Company), formerly Shanghai Petrochemical Company Limited, was established in the Peoples Republic of China (the PRC) on 29 June 1993 with registered capital of RMB4,000,000,000, invested by its holding company-China National Petrochemical Corporation (Sinopec Group); these shares were converted from assets of former Shanghai Petrochemical Complex.
H shares were listed on the Hong Kong Stock Exchange on 26 July 1993 and listed on the New York Stock Exchange in the form of American Depositary Shares at the same time; the A shares were listed on the Shanghai Stock Exchange on 8 November 1993.
Sinopec Group completed its reorganisation on 25 February 2000. After the reorganisation, China Petroleum & Chemical Corporation (Sinopec Corp.) was established. As part of the reorganisation, Sinopec Group transferred its 4,000,000,000 of the Companys state-owned legal shares, which represented 55.56 percent of the issued share capital of the Company, to Sinopec Corp. Sinopec Corp. became the largest shareholder of the Company. The Company changed its name to Sinopec Shanghai Petrochemical Company Limited on 12 October 2000.
Additional A shares of RMB14,176,600 and RMB9,636,900 were registered on 27 September 2017 and 12 January 2018.
At 22 June 2022, the 2021 General Meeting of shareholders, the 2022 Second General Meeting of A-share Shareholders, and the 2022 Second General Meeting of H-share Shareholders approved the proposal to authorize the board of directors to repurchase domestic shares or overseas listed foreign shares of the company. According to this authorization, at 17 February 2023 the company cancelled 24,528,000 H-shares that had been repurchased, accounting for 0.23% of the total issued shares of the company.
As at 30 June 2023, total share capital of the Company were RMB10,799,285, 500 Yuan per share. Detailed changes to share capital refers to Note V.31.
The Company and its subsidiaries (the Group) is a highly integrated entity which processes crude oil into synthetic fibres, resins and plastics, intermediate petrochemicals and petroleum products.
Details of the Companys principal subsidiaries are set out in Note VI.
II. | Basis of preparation |
1. | Preparation basis |
The interim financial statements are prepared in accordance with the requirements of the Accounting Standards for Business Enterprises and other relevant regulations issued by the Ministry of Finance (hereinafter MOF). Except for the changes in accounting policies disclosed in Note III. 33, the accounting policies adopted in the interim financial statements are consistent with those adopted by the Group in preparing the 2022 financial statements. This interim financial statement should be read in conjunction with the Groups 2022 financial statements.
2023 Interim Report |
97 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
II. | Basis of preparation (continued) |
2. | Going concern |
The financial statements have been prepared on the going concern basis.
III. | Summary of significant accounting policies and accounting estimates |
Accounting policies for the provision for impairment of inventories, depreciation of fixed assets, impairment of long-term assets of the Group are adopted according to the specific characteristics of the Groups operations. Please refer to the relevant notes on accounting policies.
1. | Statement of compliance |
The financial statements have been prepared in accordance with the requirements of Accounting Standards for Business. These financial statements present truly and completely the consolidated financial position and financial position of the Company as at 30 June 2023, and the consolidated financial performance and financial performance and the consolidated cash flows and cash flows of the Company for the six months from 1 January 2023 to 30 June 2023.
These financial statements also comply with the disclosure requirements of Regulation on the Preparation of Information Disclosures by Companies Issuing Securities, No.15: General Requirements for Financial Reports as revised by the China Securities Regulatory Commission (CSRC) in 2014.
2. | Accounting period |
The Companys accounting year starts on 1 January and ends on 31 December.
3. | Operating cycle |
The Company takes the period from the acquisition of assets for processing to until the ultimate realization of cash or cash equivalents as a normal operating cycle. The operating cycle of the Company is usually less than 12 months.
4. | Functional currency |
The Companys functional currency is Renminbi and these financial statements are presented in Renminbi. Functional currency is determined by the Company and its subsidiaries on the primary economic environment in which they operate.
98 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
5. | Accounting treatments for business combinations involving entities under common control and not under common control |
A transaction constitutes a business combination when the Group obtains control of one or more entities (or a group of assets or net assets). Business combination is classified as either business combinations involving enterprises under common control or business combinations not involving enterprises under common control.
For a transaction not involving enterprises under common control, the acquirer determines whether acquired set of assets constitute a business. The Group may elect to apply the simplified assessment method, the concentration test, to determine whether an acquired set of assets is not a business. If the concentration test is met and the set of assets is determined not to be a business, no further assessment is needed. If the concentration test is not met, the Group shall perform the assessment according to the guidance on the determination of a business.
When the set of assets the Group acquired does not constitute a business, acquisition costs should be allocated to each identifiable assets and liabilities at their acquisition-date fair values. It is not required to apply the accounting of business combination described as below.
(1) | Business combinations involving entities under common control |
A business combination involving entities under common control is a business combination in which all of the combining entities are ultimately controlled by the same party or parties both before and after the business combination, and that control is not transitory. The assets acquired and liabilities assumed are measured based on their carrying amounts in the consolidated financial statements of the ultimate controlling party at the combination date. The difference between the carrying amount of the net assets acquired and the consideration paid for the combination (or the total par value of shares issued) is adjusted against share premium in the capital reserve, with any excess adjusted against retained earnings. Any costs directly attributable to the combination are recognized in profit or loss when incurred. The combination date is the date on which one combining entity obtains control of other combining entities. Transaction costs associated with the issue of equity or debt securities for the business combination are included in the initially recognized amounts of the equity or debt securities.
2023 Interim Report |
99 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
5. | Accounting treatments for business combinations involving entities under common control and not under common control (continued) |
(2) | Business combinations involving entities not under common control |
A business combination involving entities not under common control is a business combination in which all of the combining entities are not ultimately controlled by the same party or parties both before and after the business combination. Where (1) the aggregate of the acquisition-date fair value of assets transferred (including the acquirers previously held equity interest in the acquiree), liabilities incurred or assumed, and equity securities issued by the acquirer, in exchange for control of the acquiree, exceeds (2) the acquirers interest in the acquisition-date fair value of the acquirees identifiable net assets, the difference is recognized as goodwill. If (1) is less than (2), the difference is recognized in profit or loss for the current period. The costs of issuing equity or debt securities as a part of the consideration for the acquisition are included in the carrying amounts of these equity or debt securities upon initial recognition. Acquisition-related costs are expensed when incurred. Any difference between the fair value and the carrying amount of the assets transferred as consideration is recognized in profit or loss. The acquirees identifiable asset, liabilities and contingent liabilities, if the recognition criteria are met, are recognized by the Group at their acquisition-date fair value. The acquisition date is the date on which the acquirer obtains control of the acquiree.
For a business combination involving entities not under common control and achieved in stages, the Group remeasures its previously-held equity interest in the acquiree to its acquisition-date fair value and recognizes any resulting difference between the fair value and the carrying amount as investment income or other comprehensive income for the current period. In addition, any amount recognized in other comprehensive income and other changes in the owners equity under equity accounting in prior reporting periods relating to the previously-held equity interest that may be reclassified to profit or loss are transferred to investment income at the date of acquisition; Any previously-held equity interest that is designated as equity investment at fair value through other comprehensive income, the other comprehensive income recognized in prior reporting periods is transferred to retained earnings and surplus reserve at the date of acquisition.
6. | Consolidated financial statements |
(1) | General principles |
The scope of consolidated financial statements is based on control and the consolidated financial statements comprise the Company and its subsidiaries. Control exists when the investor has all of following: power over the investee; exposure, or rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. When assessing whether the Group has power, only substantive rights (held by the Group and other parties) are considered. The financial position, financial performance and cash flows of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.
100 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
6. | Consolidated financial statements (continued) |
(1) | General principles (continued) |
Non-controlling interests are 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. Total comprehensive income attributable to non-controlling shareholders is presented separately in the consolidated income statement below the total comprehensive income line item.
When the amount of loss for the current period attributable to the non-controlling shareholders of a subsidiary exceeds the non-controlling shareholders share of the opening owners equity of the subsidiary, the excess is still allocated against the non-controlling interests.
When the accounting period or accounting policies of a subsidiary are different from those of the Company, the Company makes necessary adjustments to the financial statements of the subsidiary based on the Companys own accounting period or accounting policies. Intra-group balances and transactions, and any unrealized profit or loss arising from intra-group transactions, are eliminated when preparing the consolidated financial statements. Unrealized losses resulting from intra-group transactions are eliminated in the same way as unrealized gains, unless they represent impairment losses that are recognized in the financial statements. Unrealized profits and losses resulting from the sale of assets by a subsidiary to the Company are eliminated and allocated between net profit attributable to owners of the parent and non-controlling interests in accordance with the allocation proportion of the parent in the subsidiary. Unrealized profits and losses resulting from the sale of assets by one subsidiary to another are eliminated and allocated between net profit attributable to owners of the parent and non-controlling interests in accordance with the allocation proportion of the parent in the subsidiary. If the accounting treatment of a transaction which considers the Group as an accounting entity is different from that considers the Company or its subsidiaries as an accounting entity, it is adjusted from the perspective of the Group.
(2) | Subsidiaries acquired through a business combination |
Where a subsidiary was acquired 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 based on the carrying amounts of the assets and liabilities of the subsidiary in the financial statements of the ultimate controlling party as if the combination had occurred at the date that the ultimate controlling party first obtained control. The opening balances and the comparative figures of the consolidated financial statements are also restated.
Where a subsidiary was acquired during the reporting period, through a business combination involving entities not under common control, the identifiable assets and liabilities of the acquired subsidiaries are included in the scope of consolidation from the date that control commences, based on the fair value of those identifiable assets and liabilities at the acquisition date.
2023 Interim Report |
101 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
6. | Consolidated financial statements (continued) |
(3) | Disposal of subsidiaries |
When the Group loses control over a subsidiary, any resulting disposal gains or losses are recognized as investment income for the current period. The remaining equity interests is re-measured at its fair value at the date when control is lost, any resulting gains or losses are also recognized as investment income for the current period.
When the Group loses control of a subsidiary in multiple transactions in which it disposes of its long-term equity investment in the subsidiary in stages, the following are considered to determine whether the Group should account for the multiple transactions as a bundled transaction:
| arrangements are entered into at the same time or in contemplation of each other; |
| arrangements work together to achieve an overall commercial effect; |
| the occurrence of one arrangement is dependent on the occurrence of at least one other arrangement; |
| one arrangement considered on its own is not economically justified, but it is economically justified when considered together with other arrangements. |
If each of the multiple transactions does not form part of a bundled transaction, the transactions conducted before the loss of control of the subsidiary are accounted for in accordance with the accounting policy for partial disposal of equity investment in subsidiaries where control is retained (see Note III.6(4)).
If each of the multiple transactions forms part of a bundled transaction which eventually results in the loss of control in the subsidiary, these multiple transactions are accounted for as a single transaction. In the consolidated financial statements, the difference between the consideration received and the corresponding proportion of the subsidiarys net assets (calculated continuously from the acquisition date) in each transaction prior to the loss of control shall be recognized in other comprehensive income and transferred to profit or loss when the parent eventually loses control of the subsidiary.
(4) | Changes in non-controlling interests |
Where the Company acquires a non-controlling interest from a subsidiarys non-controlling shareholders or disposes of a portion of an interest in a subsidiary without a change in control, the difference between the proportion interests of the subsidiarys net assets being acquired or disposed and the amount of the consideration paid or received is adjusted to the capital reserve (share premium) in the consolidated balance sheet, with any excess adjusted to retained earnings.
102 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
7. | Cash and cash equivalents |
Cash and cash equivalents comprise cash on hand, deposits that can be readily withdraw on demand, and short-term, highly liquid investments that are readily convertible into known amounts of cash and are subject to an insignificant risk of change in value.
8. | Foreign currency transactions |
When the Group receives capital in foreign currencies from investors, the capital is translated to Renminbi at the spot exchange rate at the date of the receipt. Other foreign currency transactions are, on initial recognition, translated to Renminbi at the spot exchange rates on the dates of the transactions.
Monetary items denominated in foreign currencies are translated to Renminbi at the spot exchange rate at the balance sheet date. The resulting exchange differences are generally recognized in profit or loss, unless they arise from the re-translation of the principal and interest of specific borrowings for the acquisition of qualifying assets (see Note III.15). Non-monetary items that are measured at historical cost in foreign currencies are translated to Renminbi using the exchange rate at the transaction date. Effect of foreign exchange rate changes on cash is presented separately in the cash flow statement.
9. | Financial instruments |
Financial instruments include cash at bank and on hand, account receivables, account payables, borrowings, and share capital, etc.
(1) | Recognition and initial measurement of financial assets and financial liabilities |
A financial asset or financial liability is recognized in the balance sheet when the Group becomes a party to the contractual provisions of a financial instrument.
A financial asset or financial liability is measured initially at fair value. For financial assets and financial liabilities at fair value through profit or loss, any related directly attributable transaction costs are charged to profit or loss; for other categories of financial assets and financial liabilities, any related directly attributable transaction costs are included in their initial costs. A trade receivable, without significant financing component or practical expedient applied for one year or less contracts, is initially measured at the transaction price in accordance with Note III.21.
(2) | Classification and subsequent measurement of financial assets |
(a) | Classification of financial assets |
The classification of financial assets is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics. On initial recognition, a financial asset is classified as measured at amortized cost, at fair value through other comprehensive income (FVOCI), or at fair value through profit or loss (FVTPL).
2023 Interim Report |
103 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
9. | Financial instruments (continued) |
(2) | Classification and subsequent measurement of financial assets (continued) |
(a) | Classification of financial assets (continued) |
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.
A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:
| it is held within a business model whose objective is to hold assets to collect contractual cash flows; and |
| its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. |
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
| it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and |
| its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. |
On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investments fair value in other comprehensive income, and listed them as other equity instrument investments. This election is made on an investment-by-investment basis. The instrument meets the definition of equity from the perspective of the issuer. The relevant dividend income of such financial assets is included in the current profit and loss.
All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
104 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
9. | Financial instruments (continued) |
(2) | Classification and subsequent measurement of financial assets (continued) |
(a) | Classification of financial assets (continued) |
The business model refers to how the Group manages its financial assets in order to generate cash flows. That is, the Groups business model determines whether cash flows will result from collecting contractual cash flows, selling financial assets or both. The Group determines the business model for managing the financial assets according to the facts and based on the specific business objective for managing the financial assets determined by the Groups key management personnel.
In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms of the instrument. For the purposes of this assessment, principal is defined as the fair value of the financial asset on initial recognition. Interest is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs, as well as a profit margin. The Group also assesses whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition.
(b) | Subsequent measurement of financial assets |
| Financial assets at FVTPL |
These financial assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss unless the financial assets are part of a hedging relationship. Those maturing more than one year from the balance sheet date and expected to be held for more than one year shall be listed as other non-current financial assets, while the rest shall be listed as trading financial assets.
2023 Interim Report |
105 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
9. | Financial instruments (continued) |
(2) | Classification and subsequent measurement of financial assets (continued) |
(b) | Subsequent measurement of financial assets (continued) |
| Financial assets at amortized cost |
These assets are subsequently measured at amortized cost using the effective interest method. A gain or loss on a financial asset that is measured at amortized cost and is not part of a hedging relationship shall be recognized in profit or loss when the financial asset is derecognized, reclassified, through the amortization process or in order to recognize impairment gains or losses. Such financial assets mainly include cash at bank and on hand, accounts receivable, other receivables and investments in debt securities, etc. The Group shall list the investments in debt securities that is due within one year (including one year) from the date of balance sheet as non-current assets that are due within one year; The investments in debt securities that is due within one year (including one year) at the time of acquisition is listed as other current assets. The investments in debt securities that is due more than one year from the date of balance sheet is listed as other non-current assets.
| Debt investments at FVOCI |
These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, impairment and foreign exchange gains and losses are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss. Such financial assets are listed as receivables under financing, other investments in debt securities, and other investments in debt securities that are due within one year (including one year) from the date of balance sheet are listed as non-current assets that are due within one year; Other investments in debt securities with a maturity of one year (including one year) at the time of acquisition are listed as other current assets.
| Equity investments at FVOCI |
These assets are subsequently measured at fair value. Dividends are recognized as income in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to retained earnings.
106 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
9. | Financial instruments (continued) |
(3) | Classification and subsequent measurement of financial liabilities |
Financial liabilities are classified as measured at FVTPL or amortized cost.
| Financial liabilities at FVTPL |
A financial liability is classified as at FVTPL if it is classified as held-for-trading (including derivative financial liability) or it is designated as such on initial recognition.
Financial liabilities at FVTPL are subsequently measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss, unless the financial liabilities are part of a hedging relationship.
| Financial liabilities at amortized cost |
These financial liabilities are subsequently measured at amortized cost using the effective interest method.
The financial liabilities of the Group are mainly financial liabilities measured by amortized cost, including bills payable and accounts payable, other payables, borrowings, etc. Such financial liabilities are initially measured according to their fair value after deducting transaction costs and are subsequently measured by the effective interest rate method. Where the term is less than one year (including one year), it shall be listed as current liabilities; If the term is more than one year, but the term is due within one year (including one year) from the balance sheet date, it shall be listed as non-current liabilities that are due within one year; The rest are shown as non-current liabilities.
(4) | Offsetting |
Financial assets and financial liabilities are generally presented separately in the balance sheet and are not offset. However, a financial asset and a financial liability are offset and the net amount is presented in the balance sheet when both of the following conditions are satisfied:
| the Group currently has a legally enforceable right to set off the recognized amounts; |
| the Group intends either to settle on a net basis, or to realize the financial asset and settle the financial liability simultaneously. |
2023 Interim Report |
107 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
9. | Financial instruments (continued) |
(5) | Derecognition of financial assets and financial liabilities |
Financial asset is derecognized when one of the following conditions is met:
| the Groups contractual rights to the cash flows from the financial asset expire; |
| the financial asset has been transferred and the Group transfers substantially all of the risks and rewards of ownership of the financial asset; or; |
| the financial asset has been transferred, although the Group neither transfers nor retains substantially all of the risks and rewards of ownership of the financial asset, it does not retain control over the transferred asset. |
Where a transfer of a financial asset in its entirety meets the criteria for derecognition, the difference between the two amounts below is recognized in profit or loss:
| the carrying amount of the financial asset transferred measured at the date of derecognition; |
| the sum of the consideration received from the transfer and, when the transferred financial asset is a debt investment at FVOCI, any cumulative gain or loss that has been recognized directly in other comprehensive income for the part derecognized. |
The Group derecognizes a financial liability (or part of it) only when its contractual obligation (or part of it) is extinguished. The difference between the carrying amount of the part to be recognized and the consideration paid shall be recorded into the profit and loss of the current period.
108 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
9. | Financial instruments (continued) |
(6) | Impairment |
The Group recognizes loss allowances for expected credit loss (ECL) on:
| financial assets measured at amortized cost; |
| debt investments measured at FVOCI. |
Financial assets measured at fair value, including equity securities designated at FVOCI and derivative financial assets, are not subject to the ECL assessment.
Measurement of ECLs
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 maximum period considered when estimating ECLs is the maximum contractual period (including extension options) over which the Group is exposed to credit risk.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.
12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the balance sheet date (or a shorter period if the expected life of the instrument is less than 12 months).
2023 Interim Report |
109 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
9. | Financial instruments (continued) |
(6) | Impairment (continued) |
Measurement of ECLs (continued)
Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime ECL. ECLs on these financial assets are estimated using a provision matrix based on the Groups historical credit loss experience, adjusted for factors that are specific to the debtors and an assessment of both the current and forecast general economic conditions at the balance sheet date.
Except for trade receivables and contract assets, the Group measures loss allowance at an amount equal to 12-month ECL for the following financial instruments, and at an amount equal to lifetime ECL for all other financial instruments.
| If the financial instrument is determined to have low credit risk at the balance sheet date; |
| If the credit risk on a financial instrument has not increased significantly since initial recognition. |
Financial instruments that have low credit risk
The credit risk on a financial instrument is considered low if the financial instrument has a low risk of default, the borrower has a strong capacity to meet its contractual cash flow obligations in the near term and adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce the ability of the borrower to fulfil its contractual cash flow obligations.
Significant increases in credit risk
In assessing whether the credit risk of a financial instrument has increased significantly since initial recognition, the Group compares the risk of default occurring on the financial instrument assessed at the balance sheet date with that assessed at the date of initial recognition.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort, including forward-looking information. In particular, the following information is taken into account:
| failure to make payments of principal or interest on their contractually due dates; |
| an actual or expected significant deterioration in a financial instruments external or internal credit rating (if available); |
| an actual or expected significant deterioration in the operating results of the debtor; and |
110 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
9. | Financial instruments (continued) |
(6) | Impairment (continued) |
Significant increases in credit risk (continued)
| existing or forecast changes in the technological, market, economic or legal environment that have a significant adverse effect on the debtors ability to meet its obligation to the Group. |
Depending on the nature of the financial instruments, the assessment of a significant increase in credit risk is performed on either an individual basis or a collective basis. When the assessment is performed on a collective basis, the financial instruments are grouped based on shared credit risk characteristics, such as past due status and credit risk ratings.
The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.
Credit-impaired financial assets
At each balance sheet date, the Group assesses whether financial assets carried at amortized cost and debt investments at FVOCI are credit-impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data:
| significant financial difficulty of the borrower or issuer; |
| a breach of contract, such as a default or delinquency in interest or principal payments; |
| for economic or contractual reasons relating to the borrowers financial difficulty, the Group having granted to the borrower a concession that would not otherwise consider; |
| it is probable that the borrower will enter bankruptcy or other financial reorganization; or |
| the disappearance of an active market for that financial asset because of financial difficulties. |
Presentation of allowance for ECL
ECLs are remeasured at each balance sheet date to reflect changes in the financial instruments credit risk since initial recognition. Any change in the ECL amount is recognized as an impairment gain or loss in profit or loss. The Group recognizes an impairment gain or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for debt investments that are measured at FVOCI, for which the loss allowance is recognized in other comprehensive income.
2023 Interim Report |
111 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
9. | Financial instruments (continued) |
(6) | Impairment (continued) |
Write-off
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. A write-off constitutes a derecognition event. This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Groups procedures for recovery of amounts due.
Subsequent recoveries of an asset that was previously written off are recognized as a reversal of impairment in profit or loss in the period in which the recovery occurs.
(7) | Equity instrument |
The consideration received from the issuance of equity instruments net of transaction costs is recognized in shareholders equity. Consideration and transaction costs paid by the Company for repurchasing self-issued equity instruments are deducted from shareholders equity.
When the Company repurchases its own shares, those shares are treated as treasury shares. All expenditure relating to the repurchase is recorded in the cost of the treasury shares, with the transaction recording in the share register. Treasury shares are excluded from profit distributions and are presented as a deduction under shareholders equity in the balance sheet.
When treasury shares are cancelled, the share capital should be reduced to the extent of the total par value of the treasury shares cancelled. Where the cost of the treasury shares cancelled exceeds the total par value, the excess is deducted from capital reserve (share premium), surplus reserve and retained earnings sequentially. If the cost of treasury shares cancelled is less than the total par value, the difference is credited to the capital reserve (share premium).
When treasury shares are disposed of, any excess of proceeds above cost is recognized in capital reserve (share premium); otherwise, the shortfall is deducted against capital reserve (share premium), surplus reserve and retained earnings sequentially.
112 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
10. | Inventories |
(1) | Classification and cost |
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.
Inventories are initially measured at cost. Cost of inventories comprises all costs of purchase, costs of conversion and other expenditure incurred in bringing the inventories to their present location and condition. In addition to the purchase cost of raw materials, work in progress and finished goods include direct labor costs and an appropriate allocation of production overheads.
(2) | Measurement method of cost of inventories |
Cost of inventories recognized is calculated using the weighted average method.
Consumables including low-value consumables and packaging materials are charged to profit or loss upon receipt. The amortization charge is included in the cost of the related assets or recognized in profit or loss for the current period.
(3) | Basis for determining the net realizable value and method for provision for obsolete inventories |
At the balance sheet date, inventories are carried at the lower of cost and net realizable value.
Net realizable 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 and relevant taxes. The net realizable value of materials held for use in the production is measured based on the net realizable value of the finished goods in which they will be incorporated. The net realizable value of the inventory held to satisfy sales or service contracts is measured based on the contract price, to the extent of the quantities specified in sales contracts, and the excess portion of inventories is measured based on general selling prices.
Any excess of the cost over the net realizable value of each item of inventories is recognized as a provision for obsolete inventories, and is recognized in profit or loss.
(4) | Inventory count system |
The Group maintains a perpetual inventory system.
2023 Interim Report |
113 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
11. | Long-term equity investments |
(1) | Investment cost of long-term equity investments |
(a) | Long-term equity investments acquired through a business combination |
| The initial cost of a long-term equity investment acquired through a business combination involving entities under common control is the Companys share of the carrying amount of the subsidiarys equity in the consolidated financial statements of the ultimate controlling party at the combination date. The difference between the initial investment cost and the carrying amount of the consideration given is adjusted to the share premium in the capital reserve, with any excess adjusted to retained earnings. For a long-term equity investment in a subsidiary acquired through a business combination achieved in stages which do not form a bundled transaction and involving entities under common control, the Company determines the initial cost of the investment in accordance with the above policies. The difference between this initial cost and the sum of the carrying amount of previously-held investment and the consideration paid for the shares newly acquired is adjusted to capital premium in the capital reserve, with any excess adjusted to retained earnings. |
| For a long-term equity investment obtained through a business combination not involving entities under common control, the initial cost comprises the aggregate of the fair value 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 entities under common control and achieved through multiple transactions in stages which do not form a bundled transaction, the initial cost comprises the carrying amount of the previously-held equity investment in the acquiree immediately before the acquisition date, and the additional investment cost at the acquisition date. |
(b) | Long-term equity investments acquired other than through a business combination |
| A long-term equity investment acquired other than through a business combination is initially recognized at the amount of cash paid 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. |
114 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
11. | Long-term equity investments (continued) |
(2) | Subsequent measurement of long-term equity investment |
(a) | Investments in subsidiaries |
In the Companys separate financial statements, long-term equity investments in subsidiaries are accounted for using the cost method for subsequent measurement. Except for cash dividends or profit distributions declared but not yet distributed that have been included in the price or consideration paid in obtaining the investments, the Company recognizes its share of the cash dividends or profit distributions declared by the investee as investment income for the current period.
The investments in subsidiaries are stated in the balance sheet at cost less accumulated impairment losses.
For the impairment of the investments in subsidiaries, refer to Note III.18.
In the Groups consolidated financial statements, subsidiaries are accounted for in accordance with the policies described in Note III.5.
(b) | Investment in joint ventures and associates |
A joint venture is an arrangement whereby the Group and other parties have joint control (see Note III.11(3)) and rights to the net assets of the arrangement.
An associate is an entity over which the Group has significant influence (see Note III.11(3)).
A long-term investment in a joint venture or an associate is accounted for using the equity method for subsequent measurement.
The accounting treatments under the equity method adopted by the Group are as follows:
| Where the initial cost of a long-term equity investment exceeds the Groups interest in the fair value of the investees identifiable net assets at the date of acquisition, the investment is initially recognized at cost. Where the initial investment cost is less than the Groups interest in the fair value of the investees identifiable net assets at the date of acquisition, the investment is initially recognized at the investors share of the fair value of the investees identifiable net assets, and the difference is recognized in profit or loss. |
2023 Interim Report |
115 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
11. | Long-term equity investments (continued) |
(2) | Subsequent measurement of long-term equity investment (continued) |
(b) | Investment in joint ventures and associates (continued) |
| After the acquisition of the investment, the Group recognizes its share of the investees profit or loss and other comprehensive income as investment income or losses and other comprehensive income respectively, and adjusts the carrying amount of the investment accordingly. Once the investee declares any cash dividends or profit distributions, the carrying amount of the investment is reduced by the amount attributable to the Group. Changes in the Groups share of the investees owners equity, other than those arising from the investees net profit or loss, other comprehensive income or profit distribution (referred to as other changes in owners equity), is recognized directly in the Groups equity, and the carrying amount of the investment is adjusted accordingly. |
| In calculating its share of the investees net profits or losses, other comprehensive income and other changes in owners equity, the Group recognizes investment income and other comprehensive income after making appropriate adjustments to align the accounting policies or accounting periods with those of the Group based on the fair value of the investees identifiable net assets at the date of acquisition. Unrealized profits and losses resulting from transactions between the Group and its associates or joint ventures are eliminated to the extent of the Groups interest in the associates or joint ventures. Unrealized losses resulting from transactions between the Group and its associates or joint ventures are eliminated in the same way as unrealized gains but only to the extent that there is no impairment. |
| The Group discontinues recognizing its share of further losses of the investee after the carrying amount of the long-term equity investment and any long-term interest that in substance forms part of the Groups net investment in the joint venture or associate is reduced to zero, except to the extent that the Group has an obligation to assume additional losses. However, if the Group has obligations for additional losses and the criteria with respect to recognition of provisions under the accounting standards on contingencies are satisfied, the Group continues recognizing the investment losses and the provisions. If the joint venture or associate subsequently reports net profits, the Group resumes recognizing its share of those profits only after its share of the profits has fully covered the share of losses not recognized. |
For the impairment of the investments in joint ventures and associates, refer to Note III.18.
116 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
11. | Long-term equity investments (continued) |
(3) | Criteria for determining the existence of joint control or significant influence over an investee |
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities (activities with significant impact on the returns of the arrangement) require the unanimous consent of the parties sharing control.
The following factors are usually considered when assessing whether the Group can exercise joint control over an investee:
| Whether no single participant party is in a position to control the investees related activities unilaterally; |
| Whether strategic decisions relating to the investees related activities require the unanimous consent of all participant parties that sharing of control. |
Significant influence is the power to participate in the financial and operating policy decisions of an investee but does not have control or joint control over those policies.
12. | Investment properties |
Investment properties are properties held either to earn rental income or for capital appreciation or for both. Investment properties are accounted for using the cost model and stated in the balance sheet at cost less accumulated depreciation, amortization and impairment losses. The cost of investment property, less its estimated residual value and accumulated impairment losses, is depreciated or amortized using the straight-line method over its estimated useful life, unless the investment property is classified as held for sale. For the impairment of the investment properties, refer to Note III.18.
Class |
Estimated useful life (years) |
Residual value rate (%) |
Depreciation rate (%) |
|||||||
Plant and buildings |
30-40 years | 3 | % | 2.4%-3.2% |
When an investment property is transferred to owner-occupied properties, it is reclassified as fixed asset or intangible asset at the date of the transfer. When an owner-occupied property is transferred out for earning rentals or for capital appreciation, the fixed asset or intangible asset is reclassified as investment properties at its carrying amount at the date of the transfer.
The investment propertys estimated useful life, net residual value and depreciation method applied are reviewed and adjusted as appropriate at each year-end.
An investment property is derecognized on disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposal. The net amount of proceeds from sale, transfer, retirement or damage of an investment property after its carrying amount and related taxes and expenses is recognized in profit or loss for the current period.
2023 Interim Report |
117 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
13. | Fixed assets |
(1) | Recognition of fixed assets |
Fixed assets represent the tangible assets held by the Group for use in production of goods or for administrative purposes with useful lives over one accounting year.
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 is measured in accordance with the policy set out in Note III.14. The fixed assets injected by the state-owned shareholder during the restructuring were initially recorded at the valuated amount approved by the relevant authorities managing state-owned assets.
Where the parts of an item of fixed assets have different useful lives or provide benefits to the Group in a different pattern, thus necessitating use of different depreciation rates or methods, each part is recognized as a separate fixed asset.
Any subsequent costs including the cost of replacing part of an item of fixed assets are recognized as assets when it is probable that the economic benefits associated with the costs will flow to the Group, and the carrying amount of the replaced part is derecognized. The costs of the day-to-day maintenance of fixed assets are recognized in profit or loss as incurred.
Fixed assets are stated in the balance sheet at cost less accumulated depreciation and impairment losses.
(2) | Depreciation of fixed assets |
The cost of a fixed asset, less its estimated residual value and accumulated impairment losses, is depreciated using the straight-line method over its estimated useful life.
The estimated useful lives, residual value rates and depreciation rates of each class of fixed assets are as follows:
Class |
Estimated useful life (years) |
Residual value rate (%) |
Depreciation rate (%) | |||||
Buildings |
12-40 years | 0%-5% | 2.4%-8.3% | |||||
Plant and machinery |
5-20 years | 0%-5% | 4.8%-20.0% | |||||
Vehicles and other equipment |
4-20 years | 0%-5% | 4.8%-25.0% |
Useful lives, estimated residual values and depreciation methods are reviewed at least at each year-end.
118 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
13. | Fixed assets (continued) |
(3) | For the impairment of the fixed assets, refer to Note III.18. |
(4) | Disposal of fixed assets |
The carrying amount of a fixed asset is derecognized:
| when the fixed asset is holding for disposal; or |
| when no future economic benefit is expected to be generated from its 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 recognized in profit or loss on the date of retirement or disposal.
14. | Construction in progress |
The cost of self-constructed assets includes the cost of materials, direct labour, capitalized borrowing costs (see Note III.15), and any other costs directly attributable to bringing the asset to working condition for its intended use.
A self-constructed asset is classified as construction in progress and transferred to fixed asset when it is ready for its intended use, and depreciation begins from the following month. No depreciation is provided against construction in progress.
Construction in progress is stated in the balance sheet at cost less accumulated impairment losses (see Note III.18).
The Group sells the products or by-products produced before the fixed assets are ready for their intended use. In accordance with CAS No.14 Revenue, CAS No.1 Inventory and other standards, the relevant income and cost are accounted for separately and recognized in profit or loss.
2023 Interim Report |
119 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
15. | Borrowing costs |
Borrowing costs incurred directly attributable to the acquisition and construction of a qualifying asset are capitalized as part of the cost of the asset. Other borrowing costs are recognized as financial expenses when incurred.
During the capitalization period, the amount of interest (including amortization of any discount or premium on borrowing) to be capitalized in each accounting period is determined as follows:
| Where funds are borrowed specifically for the acquisition, and construction or production of a qualifying asset, the amount of interest to be capitalized is the interest expense calculated using effective interest rates during the period less any interest income earned from depositing the borrowed funds or any investment income on the temporary investment of those funds before being used on the asset. |
| To the extent that the Group borrows funds generally and uses them for the acquisition, and construction or production of a qualifying asset, the amount of borrowing costs eligible for capitalization is determined by applying a capitalization rate to the weighted average of the excess amounts of cumulative expenditure on the asset over the above amounts of specific borrowings. The capitalization rate is the weighted average of the interest rates applicable to the general-purpose borrowings. |
The effective interest rate is determined as the rate that exactly discounts estimated future cash flow through the expected life of the borrowing or, when appropriate, a shorter period to the initially recognized amount of the borrowings.
During the capitalization period, exchange differences related to the principal and interest on a specific-purpose borrowing denominated in foreign currency are capitalized as part of the cost of the qualifying asset. The exchange differences related to the principal and interest on foreign currency borrowings other than a specific-purpose borrowing are recognized as a financial expense when incurred.
The capitalization period is the period from the date of commencement of capitalization of borrowing costs to the date of cessation of capitalization, excluding any period over which capitalization is suspended. Capitalization of borrowing costs commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities of acquisition and construction that are necessary to prepare the asset for its intended use are in progress, and ceases when the assets become ready for their intended use. Capitalization of borrowing costs is suspended when the acquisition and construction activities are interrupted abnormally for a period of more than three months.
120 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
16. | Intangible assets |
Intangible assets are stated in the balance sheet at cost less accumulated amortization (where the estimated useful life is finite) and impairment losses (see Note III.18). For an intangible asset with finite useful life, its cost less estimated residual value and accumulated impairment losses is amortized using the straight-line method over its estimated useful life, unless the intangible asset is classified as held for sale. The intangible assets injected by the state-owned shareholder during the restructuring were initially recorded at the valuated amount approved by the relevant authorities managing state-owned assets.
The respective amortization periods for intangible assets are as follows:
Item |
Amortization period (years) |
|||
Land-use right |
20-50 years | |||
Other intangible assets |
2-28 years |
Useful lives and amortization methods of intangible asset with finite useful life are reviewed at least at each year-end.
An intangible asset is regarded as having an indefinite useful life and is not amortized when there is no foreseeable limit to the period over which the asset is expected to generate economic benefits for the Group. At the balance sheet date, the Group does not have any intangible assets with indefinite useful lives.
Expenditure on an internal research and development project is classified into expenditure incurred during the research phase and expenditure incurred during the development phase.
Expenditure during the research phase is expensed when incurred. Expenditure during the development phase is capitalized if development costs can be measured reliably, the product or process is technically and commercially feasible, and the Group intends to and has sufficient resources to complete the development. Capitalized development costs are stated in the balance sheet at cost less impairment losses (see Note III.18). Other development expenditure is recognized as an expense in the period in which it is incurred.
For the external sales of products or by-products produced in the research and development process, the relevant income and cost are accounted for separately and recognized in profit or loss in accordance with CAS No.14 Revenue, CAS No.1 Inventory and other standards.
2023 Interim Report |
121 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
17. | Long-term deferred expenses |
Long-term prepaid expenses mainly include the catalyst expenditures, leasehold improvements and other expenditures that have been incurred but should be recognized as expenses over more than one year in the current and subsequent periods.
Long-term deferred expenses are amortized using a straight-line method within the benefit period. The respective amortization periods for such expenses are as follows:
Item |
Amortization period |
|||
Catalysts |
1.5-10 years | |||
Leasehold improvements |
15-27 years |
18. | Impairment of assets other than inventories and financial assets |
The carrying amounts of the following assets are reviewed at each balance sheet date based on internal and external sources of information to determine whether there is any indication of impairment:
| fixed assets |
| construction in progress |
| right-of-use assets |
| intangible assets |
| investment properties measured using a cost model |
| long-term equity investments |
| long-term deferred expenses, etc. |
If any indication exists, the recoverable amount of the asset is estimated. In addition, the Group estimates the recoverable amounts of intangible assets not ready for use at least annually at each year-end, irrespective of whether there is any indication of impairment.
The recoverable amount of an asset (or asset group, set of asset groups) is the higher of its fair value (see Note III.19) less costs to sell and its present value of expected future cash flows.
An asset group is composed of assets directly related to cash generation and is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or asset groups.
122 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
18. | Impairment of assets other than inventories and financial assets (continued) |
The present value of expected future cash flows of an asset is determined by discounting the future cash flows, estimated to be derived from continuing use of the asset and from its ultimate disposal, to their present value using an appropriate pre-tax discount rate.
An impairment loss is recognized in profit or loss when the recoverable amount of an asset is less than its carrying amount. A provision for impairment of the asset is recognized accordingly. Impairment losses related to an asset group or a set of asset groups are allocated first to reduce the carrying amount of any goodwill allocated to the asset group or set of asset groups, and then to reduce the carrying amount of the other assets in the asset group or set of asset groups on a pro rata basis. However, such allocation would not reduce the carrying amount of an asset below the highest of its fair value less costs to sell (if measurable), its present value of expected future cash flows (if determinable) and zero.
Once an impairment loss is recognized, it is not reversed in a subsequent period.
19. | Fair value measurement |
Unless otherwise specified, the Group measures fair value as follows:
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
When measuring fair value, the Group takes into account the characteristics of the particular asset or liability (including the condition and location of the asset and restrictions, if any, on the sale or use of the asset) that market participants would consider when pricing the asset or liability at the measurement date, and uses valuation techniques that are appropriate in the circumstances and for which sufficient data and other information are available to measure fair value. Valuation techniques mainly include the market approach, the income approach and the cost approach.
20. | Provisions |
A provision is recognized for an obligation related to a contingency if the Group has a present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
A provision is initially measured at the best estimate of the expenditure required to settle the related present obligation. Where the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows. The increase in the discounted amount of the provision arising from passage of time is recognized as interest expense. Factors pertaining to a contingency such as the risks, uncertainties and time value of money are taken into account as a whole in reaching the best estimate. Where there is a continuous range of possible outcomes for the expenditure required, and each possible outcome in that range is as likely as any other, the best estimate is the mid-point of that range. In other cases, the best estimate is determined according to the following circumstances:
2023 Interim Report |
123 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
20. | Provisions (continued) |
| Where the contingency involves a single item, the best estimate is the most likely outcome. |
| Where the contingency involves a large population of items, the best estimate is determined by weighting all possible outcomes by their associated probabilities. |
The Group reviews the carrying amount of a provision at the balance sheet date and adjusts the carrying amount to the current best estimate. The estimated liabilities expected to be paid within one year from the balance sheet date are listed as current liabilities.
21. | Revenue recognition |
Revenue is the gross inflow of economic benefits arising in the course of the Groups ordinary activities when the inflows result in increase in shareholders equity, other than increase relating to contributions from shareholders.
Revenue is recognized when the Group satisfies the performance obligation in the contract by transferring the control over relevant goods or services to the customers.
Where a contract has two or more performance obligations, the Group determines the stand-alone selling price at contract inception of the distinct good or service underlying each performance obligation in the contract and allocates the transaction price in proportion to those stand-alone selling prices. The Group recognizes as revenue the amount of the transaction price that is allocated to each performance obligation. The stand-alone selling price is the price at which the Group would sell a promised good or service separately to a customer. If a stand-alone selling price is not directly observable, the Group considers all information that is reasonably available to the entity, maximizes the use of observable inputs to estimate the stand-alone selling price.
For the contract with a warranty, the Group analyses the nature of the warranty provided, if the warranty provides the customer with a distinct service in addition to the assurance that the product complies with agreed-upon specifications, the Group recognizes for the promised warranty as a performance obligation. Otherwise, the Group accounts for the warranty in accordance with the requirements of CAS No.13 Contingencies.
124 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
21. | Revenue recognition (continued) |
The transaction price is the amount of consideration to which the Group expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties. The Group recognizes the transaction price only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Where the contract contains a significant financing component, the Group recognizes the transaction price at an amount that reflects the price that a customer would have paid for the promised goods or services if the customer had paid cash for those goods or services when (or as) they transfer to the customer. The difference between the amount of promised consideration and the cash selling price is amortized using an effective interest method over the contract term. The Group does not adjust the consideration for any effects of a significant financing component if it expects, at contract inception, that the period between when the Group transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less.
The Group satisfies a performance obligation over time if one of the following criteria is met; or otherwise, a performance obligation is satisfied at a point in time:
| the customer simultaneously receives and consumes the benefits provided by the Groups performance as the Group performs; |
| the customer can control the asset created or enhanced during the Groups performance; or |
| the Groups performance does not create an asset with an alternative use to it and the Group has an enforceable right to payment for performance completed to date. |
For performance obligation satisfied over time, the Group recognizes revenue over time by measuring the progress towards complete satisfaction of that performance obligation. When the outcome of that performance obligation cannot be measured reasonably, but the Group expects to recover the costs incurred in satisfying the performance obligation, the Group recognizes revenue only to the extent of the costs incurred until such time that it can reasonably measure the outcome of the performance obligation.
For performance obligation satisfied at a point in time, the Group recognizes revenue at the point in time at which the customer obtains control of relevant goods or services. To determine whether a customer has obtained control of goods or services, the Group considers the following indicators:
| the Group has a present right to payment for the goods or services; |
| the Group has transferred physical possession of the goods to the customer; |
| the Group has transferred the legal title of the goods or the significant risks and rewards of ownership of the goods to the customer; and |
| the customer has accepted the goods or services, etc. |
2023 Interim Report |
125 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
21. | Revenue recognition (continued) |
The Group determines whether it is a principal or an agent, depending 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 recognizes revenue in the gross amount of consideration to which it has received (or receivable). Otherwise, the Group is an agent, and recognizes 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 the established amount or proportion.
A contract asset is the Groups right to consideration in exchange for goods or services that it has transferred to a customer when that right is conditional on something other than the passage of time. The Group recognizes loss allowances for expected credit loss on contract assets (see Note III 9(6)). Accounts receivable is the Groups right to consideration that is unconditional (only the passage of time is required). A contract liability is the Groups obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount of consideration is due) from the customer.
The following is the description of accounting policies regarding revenue from the Groups principal activities:
(1) | Sale of goods |
Revenue from sale is recognized when all of the general conditions stated above and the following conditions are satisfied: the significant risks and rewards of ownership of goods have been transferred to the buyer, as well as the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold. The Group recognizes revenue when goods are sent to designated place or customer take delivery of the goods from Groups designated warehouse, and confirmed receipt by customers according to the terms of contract.
The Group provides discounts based on the sales amount, and recognizes revenue based on the contract value exclude expected discounts.
(2) | Rendering of overseas shipping services |
Revenue from the rendering of overseas shipping services is recognized using the percentage of completion method, with the stage of completion being determined based on proportion of shipping time incurred to date to the estimated total shipping time.
(3) | Interest income |
Interest income is calculated by the time of lending money and the actual interest rate.
126 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
22. | Contract costs |
Contract costs are either the incremental costs of obtaining a contract with a customer or the costs to fulfil a contract with a customer.
Incremental costs of obtaining a contract are those costs that the Group incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained (e.g., sales commission). The Group recognizes as an asset the incremental costs of obtaining a contract with a customer if it expects to recover those costs. Other costs of obtaining a contract are expensed when incurred.
If the costs to fulfil a contract with a customer are not within the scope of inventories or other accounting standards, the Group recognizes an asset from the costs incurred to fulfil a contract only if those costs meet all of the following criteria:
| the costs relate directly to an existing contract or to a specifically identifiable anticipated contract, including direct labor, direct materials, allocations of overheads (or similar costs), costs that are explicitly chargeable to the customer and other costs that are incurred only because the Group entered into the contract; |
| the costs generate or enhance resources of the Group that will be used in satisfying performance obligations in the future; |
| the costs are expected to be recovered. |
Assets recognized for the incremental costs of obtaining a contract and assets recognized for the costs to fulfil a contract (the assets related to contract costs) are amortized on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the assets relate and recognized in profit or loss for the current period. The Group recognizes the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less.
The Group recognizes an impairment loss in profit or loss to the extent that the carrying amount of an asset related to contract costs exceeds:
| remaining amount of consideration that the Group expects to receive in exchange for the goods or services to which the asset relates; less |
| the costs that relate directly to providing those goods or services that have not yet been recognized as expenses. |
2023 Interim Report |
127 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
23. | Employee benefits |
(1) | Short-term employee benefits |
Employee wages or salaries, bonuses, social security contributions such as medical insurance, work injury insurance, maternity insurance and housing fund, measured at the amount incurred or accrued at the applicable benchmarks and rates, are recognized as a liability as the employee provides services, with a corresponding charge to profit or loss or included in the cost of assets where appropriate. Employee benefits which are non-monetary benefits are measured at fair value.
(2) | Post-employment benefits-defined contribution plans |
Pursuant to the relevant laws and regulations of the Peoples Republic of China, the Group participated in a defined contribution basic pension insurance plan in the social insurance system established and managed by government organisations. The Group makes contributions to basic pension insurance plans based on the applicable benchmarks and rates stipulated by the government. When employees retire, the relevant local authorities are obliged to pay the basic pensions to them. Basic pension insurance contributions payable are recognized as a liability as the employee provides services, with a corresponding charge to profit or loss or included in the cost of assets where appropriate.
(3) | Termination benefits |
When the Group terminates the employment with employees before the employment contracts expire, or provides compensation under an offer to encourage employees to accept voluntary redundancy, a provision is recognized with a corresponding expense in profit or loss at the earlier of the following dates:
| When the Group cannot unilaterally withdraw the offer of termination benefits because of an employee termination plan or a curtailment proposal; |
| When the Group has a formal detailed restructuring plan involving the payment of termination benefits and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement that plan or announcing its main features to those affected by it. |
Termination benefits expected to be paid in one year are listed as current liabilities.
128 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
24. | 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. Special funds such as investment grants allocated by the government, if clearly defined in official documents as part of capital reserve are dealt with as capital contributions, are not regarded as government grants.
A government grant is recognized when there is reasonable assurance that the grant will be received and that the Group will comply with the conditions attaching to the grant.
If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount received or receivable. If a government grant is in the form of a transfer of a non-monetary asset, it is measured at fair value.
Government grants related to assets are grants whose primary condition is that the Group qualifying for them should purchase, construct or otherwise acquire long-term assets. Government grants related to income are grants other than those related to assets. A government grant related to an asset is offset against the carrying amount of the related asset or recognized as deferred income and amortized over the useful life of the related asset on a reasonable and systematic manner as other income or non-operating income. A grant that compensates the Group for expenses or losses to be incurred in the future is recognized as deferred income, and included in other income or non-operating income offset against related expense in the periods in which the expenses or losses are recognized. Or included in other income or non-operating income offset against the related expenses directly. The Group uses the same reporting method for similar government subsidies.
Government subsidies related to daily activities are included in operating profit, while government subsidies unrelated to daily activities are included in non-operating income and expenditure.
25. | Specific reserve |
The Group recognizes 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, and accrues in the specific reserve.
When the safety fund is subsequently used for revenue expenditure, the specific reserve is reduced accordingly. On utilization of the safety fund for fixed assets, the specific reserve is reduced as the fixed assets are recognized, which is the time when the related assets are ready for their intended use; in such cases, an amount that corresponds to the reduction in the specific reserve is recognized in accumulated depreciation with respect to the related fixed assets. As a consequence, such fixed assets are not depreciated in subsequent periods.
2023 Interim Report |
129 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
26. | Income tax |
Current tax and deferred tax are recognized in profit or loss except to the extent that they relate to a business combination or items recognized 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 only if the Group has a legally enforceable right to set them off and also intends either to settle on a net basis or to realize 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 the deductible losses and tax credits carried forward to subsequent periods. Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which deductible temporary differences can be utilized.
Deferred tax is not recognized for the temporary differences arising from the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting profit nor taxable profit (or deductible loss). Deferred tax is not recognized 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 utilized. Such reduction is reversed to the extent that it becomes probable that sufficient taxable profits will be available.
Deferred tax liabilities are recognized for temporary differences arising from investments in subsidiaries, associates and joint ventures, except where the Group is able to control the timing of reversal of the temporary difference, and it is probable that the temporary difference will not reverse in the foreseeable future. When it is probable that the temporary differences arising from investments in subsidiaries, associates and joint ventures will be reversed in the foreseeable future and that the taxable profit will be available in the future against which the temporary differences can be utilized, the corresponding deferred tax assets are recognized.
130 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
26. | Income tax (continued) |
At the balance sheet date, deferred tax assets and deferred tax liabilities are offset if all of the following conditions are met:
| the taxable entity has a legally enforceable right to offset current tax liabilities and current tax assets; |
| they relate to income taxes levied by the same tax authority on either: |
| 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 realize 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. |
27. | Leases |
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:
| the contract involves the use of an identified asset. An identified asset may be specified explicitly or implicitly specified in a contract and should be physically distinct, or capacity portion or other portion of an asset that is not physically distinct, but it represents substantially all of the capacity of the asset and thereby provides the customer with the right to obtain substantially all of the economic benefits from the use of the asset. If the supplier has a substantive substitution right throughout the period of use, then the asset is not identified; |
| the lessee has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; |
| the lessee has the right to direct the use of the asset. |
2023 Interim Report |
131 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
27. | Leases (continued) |
For a contract that contains more separate lease components, the lessee and the lessor separate lease components and account for each lease component as a lease separately. For a contract that contains lease and non-lease components, the lessee and the lessor separate lease components from non-lease components. However, for the leases of land and buildings in which it is a lessee, the Group has elected not to separate lease components from non-lease components and account for the lease and non-lease components as a single lease component. For a contract that contains lease and non-lease components, the lessee allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components. The lessor allocates the consideration in the contract in accordance with the accounting policy in Note III.21.
(1) | As a lessee |
The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability, any lease payments made at or before the commencement date (less any lease incentives received), any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease.
The right-of-use asset is depreciated using the straight-line method. If the lessee is reasonably certain to exercise a purchase option by the end of the lease term, the right-of-use asset is depreciated over the remaining useful lives of the underlying asset. Otherwise, the right-of-use asset is depreciated from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. Impairment losses of right-of-use assets are accounted for in accordance with the accounting policy described in Note III.18.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date. Lease payments include fixed payments and payments to be made if it is reasonably determined that the option to buy or to terminate the lease option will be exercised. The variable rent, which is determined by a certain percentage of sales, is not included in the lease payment and is recorded into the current profit and loss when it actually occurs. The Group will be paid from the balance sheet date within one year (including one year) of the lease liabilities, as a non-current liability due within one year. Discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Groups incremental borrowing rate.
A constant periodic rate is used to calculate the interest on the lease liability in each period during the lease term with a corresponding charge to profit or loss or included in the cost of assets where appropriate. Variable lease payments not included in the measurement of the lease liability is charged to profit or loss or included in the cost of assets where appropriate as incurred.
132 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
27. | Leases (continued) |
(1) | As a lessee (continued) |
Under the following circumstances after the commencement date, the Group remeasures lease liabilities based on the present value of revised lease payments:
| there is a change in the amounts expected to be payable under a residual value guarantee; |
| there is a change in future lease payments resulting from a change in an index or a rate used to determine those payments; |
| there is a change in the assessment of whether the Group will exercise a purchase, extension or termination option, or there is a change in the exercise of the extension or termination option. |
When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets. The Group recognizes the lease payments associated with these leases in profit or loss or as the cost of the assets where appropriate using the straight-line method over the lease term.
(2) | As a lessor |
All lease contracts where the Group is a lessor are operating leases.
Lease receipts from operating leases is recognized as income using the straight-line method over the lease term. The initial direct costs incurred in respect of the operating lease are initially capitalized and subsequently amortized in profit or loss over the lease term on the same basis as the lease income. Variable lease payments not included in lease receipts are recognized as income as they are earned.
2023 Interim Report |
133 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
28. | Hedge accounting |
Hedge accounting is a method which recognizes in profit or loss (or other comprehensive income) the gain or loss on the hedging instrument and the hedged item in the same accounting period(s) to represent the effect of risk management.
Hedged items are items that expose the Group to risks of changes in cash flows and that are designated as being hedged and can be reliably measured. The Groups 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 financial instrument whose changes in cash flows are expected to offset changes in the fair value or cash flows of the hedged item.
The Group assesses at the inception of a hedging relationship, and on an ongoing basis, whether the hedging relationship meets the hedge effectiveness requirements. A hedging relationship is regarded as having met the hedge effectiveness requirements if all of the following conditions are satisfied:
| There is an economic relationship between the hedged item and the hedging instrument. The economic relationship causes the value of the hedging instrument and the hedged item to move in opposite directions due to the same exposure to the hedged risk; |
| The effect of credit risk does not dominate the value changes that result from the economic relationship; |
| 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 the hedged item. |
When a hedging relationship no longer meets the hedge effectiveness requirements due to the hedge ratio, but the risk management objective of the designated hedging relationship remains unchanged, the Group rebalances the hedging relationship. Rebalancing refers to the adjustments made to the designated quantities of the hedged item or the hedging instrument of an already existing hedging relationship for the purpose of maintaining a hedge ratio that complies with the hedge effectiveness requirements.
134 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
28. | Hedge accounting (continued) |
The Group discontinues applying hedge accounting in any of the following circumstances:
| The hedging relationship no longer meets the risk management objective on the basis of which it qualified for hedge accounting; |
| The hedging instrument expires or is sold, terminated or exercised; |
| 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; |
| The hedging relationship no longer meets other criteria for applying hedge accounting. |
(1) | Cash flow hedges |
A cash flow hedge is a hedge of the exposure to variability in cash flows. The portion of the gain or loss on a hedging instrument that is determined to be an effective hedge is recognized in other comprehensive income as a cash flow hedge reserve. The amount of 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 change in the amount of the cash flow hedge reserve is recognized in other comprehensive income in each period.
The portion of the gain or loss on the hedging instrument that is determined to be ineffectiveness is recognized 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 non-financial liability becomes a firm commitment for which fair value hedge accounting is applied, the Group removes that amount from the cash flow hedge reserve and includes it in the initial cost or other carrying amount of the asset or liability. This is not a reclassification adjustment and will not affect other comprehensive income.
2023 Interim Report |
135 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
28. | Hedge accounting (continued) |
(1) | Cash flow hedges (continued) |
For cash flow hedges other than those covered above, that amount is 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.
When the Group discontinues hedge accounting for a cash flow hedge, the amount of the accumulated cash flow hedge reserve recognized in other comprehensive income is accounted for as follows:
| If the hedged future cash flows are still expected to occur, that amount will remain in the cash flow hedge reserve and be accounted for in accordance with the above policy; |
| 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. |
29. | Profit distributions |
Dividends or profit distributions proposed in the profit appropriation plan, which will be approved after the balance sheet date, are not recognized as a liability at the balance sheet date but are disclosed in the notes separately.
30. | 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 or joint control from another party, they are considered to be related parties. Related parties may be individuals or enterprises. Enterprises with which the Company is under common control only from the State and that have no other related party relationships are not regarded as 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.
136 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
31. | Segment reporting |
Reportable segments are identified based on operating segments which are determined based on the structure of the Groups internal organization, management requirements and internal reporting system after taking the materiality principle into account. An operating segment is a component of the Group that satisfies all of the following conditions:
| the component is able to earn revenues and incur expenses from its ordinary activities; |
| whose operating results are regularly reviewed by the Groups management to make decisions about resources to be allocated to the segment and to assess its performance; |
| for which the information on financial position, operating results and cash flows is available to the Group. Two or more operating segments may be aggregated into a single operating segment if the segments have the similar economic characteristics and are same or similar in respect of the nature of each segments products and services, the nature of production processes, the types or classes of customers for the products and services, the methods used to distribute the products or provide the services, and the nature of the regulatory environment. The Group determines the reporting segments based on the operating segments and the principle of materiality. |
Inter-segment revenues are measured on the basis of the actual transaction prices for such transactions for segment reporting. Segment accounting policies are consistent with those for the consolidated financial statements.
32. | Significant accounting estimates and judgements |
The preparation of the financial statements requires management to make estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates as well as underlying assumptions and uncertainties involved are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected.
(1) | Significant accounting estimates |
(a) | Accounting estimate of Inventory provision |
Any excess of the cost over the net realizable value of each item of inventories is recognized as a provision for diminution in the value of inventories. Net realizable 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 cost of sales. 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.
2023 Interim Report |
137 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
32. | Significant accounting estimates and judgements (continued) |
(1) | Significant accounting estimates (continued) |
(b) | Impairment of assets other than inventories and financial assets |
As described in Note III.18, at the end of each reporting period, the Group estimates the recoverable amount of an asset or a cash-generating unit (CGU) (a portion of which related to certain production facilities), at the higher of its fair value less costs of disposal and its value in use, to determine the impairment losses. If circumstances indicate that the carrying amount of the asset or CGU may not be recoverable, the asset or CGU may be considered impaired, and an impairment loss may be recognized.
The recoverable amount of assets or CGUs is the higher of the fair value less costs of disposal and value in use. As the fair value of certain assets or CGUs may not be publicly available, 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 for projections of product sales and operating costs and discount rate. In particular, in determining the value in use of the Groups specific CGUs, significant judgements are required on the accounting estimates which are based on the assumptions relating to product sales growth rates, related costs growth rates and discount rate applied.
(c) | Estimated useful life and residual value of fixed assets |
The Group assessed the reasonableness of estimated useful life of fixed assets in line with the historical experience on the basis of similar function or characteristic for the assets. If there are significant changes in estimated useful lives and residual value from previous years, the depreciation expenses for future periods are adjusted.
The Group reviews and adjusts the useful lives and estimated residual value of the assets regularly at the end of each year end.
138 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
32. | Significant accounting estimates and judgements (continued) |
(1) | Significant accounting estimates (continued) |
(d) | Estimation of deferred income tax assets |
When estimating that sufficient taxable income can be obtained in the future period to utilize the outstanding tax losses and deductible temporary differences, the Group is limited to the taxable income that is likely to be obtained to offset the outstanding tax losses and deductible temporary differences and calculates and recognizes the relevant deferred income tax assets based on the applicable income tax rate during the expected period of asset recovery. The Group needs to use judgment to estimate the time and amount of future taxable income and make reasonable estimates and judgments on the future applicable income tax rates based on current tax policies and other relevant policies to determine the amount of deferred income tax assets to be recognized. If there is a difference between the actual time and amount of profits generated in the future period or the actual applicable income tax rate and the managements estimate, the difference will have an impact on the amount of deferred income tax assets.
(2) | Significant accounting judgements |
(a) | Classification of financial assets |
The classification depends on the Groups business model for managing the financial assets and the contractual terms of the cash flows. The Group determines the business model of managing financial assets at the level of financial asset portfolio, taking into account such factors as the way of evaluating and reporting the performance of financial assets to key managers, the risk and management methods that affect the performance of financial assets, and the ways in which relevant business managers are paid, etc.
When the Group evaluates whether the contract cash flow of financial assets is consistent with the basic lending arrangement, there are the following main judgments: whether the time distribution or amount of principal may change within the duration due to prepayment or other reasons; Does interest include only the time value of money, credit risk, other basic lending risks, and consideration of costs and profits? For example, does the prepayment amount reflect only the principal outstanding and the interest based on the principal outstanding, as well as the reasonable compensation paid for the early termination of the contract.
2023 Interim Report |
139 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
33. | Changes in significant accounting policies and accounting estimates |
(1) | Description of and reasons for changes in accounting policies |
In 2023, the Group has adopted the accounting requirements and guidance under CAS newly issued by the Ministry of Finance:
| Accounting treatment of deferred tax related to assets and liabilities arising from a single transaction for which initial recognition exemption does not apply in CAS Bulletin No.16. |
(a) | Accounting treatment of deferred tax related to assets and liabilities arising from a single transaction for which initial recognition exemption does not apply: |
In accordance with CAS Bulletin No.16, the provisions of the Accounting Standards for Business Enterprises No. 18 Income Taxes on exemption from initial recognition of deferred tax liabilities and deferred tax assets shall not apply to single transactions that are not business combinations, that do not affect accounting profits or taxable income (or deductible losses) upon transactions occurrence, and result in equal amount of taxable temporary differences and deductible temporary differences caused by initially recognised assets and liabilities. As for the taxable temporary differences and deductible temporary differences arising from the initial recognition of assets and liabilities in a single transaction, the Group shall, according to the Accounting Standards for Business Enterprises No. 18 Income Taxes and other relevant provisions, respectively recognise the corresponding deferred tax liabilities and deferred tax assets upon the occurrence of the transaction.
The Group has made retrospective adjustments in accordance with these requirements for applicable single transactions occurring between 1 January 2022 and the date of initial implementation. With regard to deductible temporary differences and taxable temporary differences arising from lease liabilities and right-of-use assets recognised as at 1 January 2022 as a result of single transactions to which these provisions apply, the Group shall, in accordance with CAS Bulletin No.16 and Accounting Standards for Business Enterprises No. 18 Income Taxes, adjust the cumulative effect amount with the retained earnings at the beginning of the earliest period presented in the financial statements and other relevant items of the financial statements.
140 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
33. | Changes in significant accounting policies and accounting estimates (continued) |
(1) | Description of and reasons for changes in accounting policies (continued) |
(b) | The effects on the financial statements |
The effects of the above changes in accounting policies on each item of the consolidated balance sheet as at 30 June 2023 and the Companys balance sheet are summarized as follows:
Increase/(decrease) in the line items as a result of applying new accounting policies |
||||||||
The Group | The Company | |||||||
Assets: |
||||||||
Deferred tax assets |
122 | 121 | ||||||
Liabilities: |
||||||||
Deferred tax liabilities |
35 | | ||||||
Shareholders equity: |
||||||||
Surplus reserve |
(5 | ) | (5 | ) | ||||
Retained earnings |
95 | 126 | ||||||
Non-controlling interests |
(3 | ) | |
The effects of the above changes in accounting policies on each item of the consolidated income statement and company income statement for the six-months ended 30 June 2023 are as follows:
Increase/(decrease) in the line items as a result of applying new accounting policies |
||||||||
The Group | The Company | |||||||
Less: Income tax benefits |
48 | 81 | ||||||
Net loss |
(48 | ) | (81 | ) | ||||
Attributable to: Shareholders of the Company |
(49 | ) | | |||||
Non-controlling interests |
1 | | ||||||
Total comprehensive income for the year |
(48 | ) | (81 | ) | ||||
Attributable to: Shareholders of the Company |
(49 | ) | | |||||
Non-controlling interests |
1 | |
2023 Interim Report |
141 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
33. | Changes in significant accounting policies and accounting estimates (continued) |
(1) | Description of and reasons for changes in accounting policies (continued) |
(c) | The effects on the comparative financial statements |
The effects of these changes in accounting policies on the net loss for the six-months ended 30 June 2022, and opening and closing balances of shareholders equity as at 1 January and 31 December 2022 are summarised as follows:
The Group | ||||||||||||
Net loss for the six-months ended 30 June 2022 |
2022 Closing balance of shareholders equity |
2022 Opening balance of shareholders equity |
||||||||||
Net loss and shareholders equity before adjustments |
430,821 | 26,371,386 | 30,395,431 | |||||||||
Deferred income tax relating to assets and liabilities arising from an individual transaction does not apply to the impact of initial recognition exemptions |
49 | 39 | (67 | ) | ||||||||
Net loss and shareholders equity after adjustments |
430,870 | 26,371,425 | 30,395,364 |
The Company | ||||||||||||
Net loss for the six-months ended 30 June 2022 |
2022 Closing balance of shareholders equity |
2022 Opening balance of shareholders equity |
||||||||||
Net loss and shareholders equity before adjustments |
395,145 | 25,649,540 | 29,613,413 | |||||||||
Deferred income tax relating to assets and liabilities arising from an individual transaction does not apply to the impact of initial recognition exemptions |
(23 | ) | 40 | (49 | ) | |||||||
Net loss and shareholders equity after adjustments |
395,122 | 25,649,580 | 29,613,364 |
142 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
33. | Changes in significant accounting policies and accounting estimates (continued) |
(1) | Description of and reasons for changes in accounting policies (continued) |
(c) | The effects on the comparative financial statements (continued) |
The effects on each of the line items in the consolidated balance sheet and company balance sheet as at 31 December 2022 are as follows:
The Group | ||||||||||||
Before adjustments |
The amounts of adjustments |
After adjustments |
||||||||||
Assets: |
||||||||||||
Deferred tax assets |
991,850 | 42 | 991,892 | |||||||||
Liabilities: |
||||||||||||
Deferred tax liabilities |
30,895 | 3 | 30,898 | |||||||||
Shareholders equity: |
||||||||||||
Surplus reserve |
6,672,639 | (5 | ) | 6,672,634 | ||||||||
Retained earnings |
7,923,002 | 46 | 7,923,048 | |||||||||
Non-controlling interests |
127,681 | (2 | ) | 127,679 |
The Company | ||||||||||||
Before adjustments |
The amounts of adjustments |
After adjustments |
||||||||||
Assets: |
||||||||||||
Deferred tax assets |
986,830 | 40 | 986,870 | |||||||||
Shareholders equity: |
||||||||||||
Surplus reserve |
6,672,639 | (5 | ) | 6,672,634 | ||||||||
Retained earnings |
7,339,125 | 45 | 7,339,170 |
2023 Interim Report |
143 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
33. | Changes in significant accounting policies and accounting estimates (continued) |
(1) | Description of and reasons for changes in accounting policies (continued) |
(c) | The effects on the comparative financial statements (continued) |
The effects on each of the line items in the consolidated income statement and company income statement for the six-months ended 30 June 2022 are as follows:
The Group | ||||||||||||
Before adjustments |
The amounts of adjustments |
After adjustments |
||||||||||
Less: Income tax benefits |
(11,780 | ) | 49 | (11,731 | ) | |||||||
Net profit for the year (- for losses) |
(430,821 | ) | (49 | ) | (430,870 | ) | ||||||
Attributable to: Shareholders of the Company |
(436,009 | ) | (33 | ) | (436,042 | ) | ||||||
Non-controlling interests |
5,188 | (16 | ) | 5,172 | ||||||||
Total comprehensive income for the year |
(157,308 | ) | (49 | ) | (157,357 | ) | ||||||
Attributable to: Shareholders of the Company |
(162,496 | ) | (33 | ) | (162,529 | ) | ||||||
Attributable to: non-controlling interests |
5,188 | (16 | ) | 5,172 |
The Company | ||||||||||||
Before adjustments |
The amounts of adjustments |
After adjustments |
||||||||||
Less: Income tax benefits |
(15,956 | ) | (23 | ) | (15,979 | ) | ||||||
Net profit for the year (- for losses) |
(395,145 | ) | 23 | (395,122 | ) | |||||||
Total comprehensive income for the year |
(121,632 | ) | 23 | (121,609 | ) |
144 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Summary of significant accounting policies and accounting estimates (continued) |
33. | Changes in significant accounting policies and accounting estimates (continued) |
(1) | Description of and reasons for changes in accounting policies (continued) |
(d) | After retrospective adjustments of the above accounting policy changes, the consolidated balance sheet and company balance sheet as at 1 January 2021 are as follows: |
The Group | The Company | |||||||
Assets |
||||||||
Deferred tax assets |
184,143 | 178,035 | ||||||
Total non-current assets |
26,106,346 | 26,612,539 | ||||||
Total assets |
47,038,622 | 46,488,789 | ||||||
Liabilities and shareholders equity Deferred tax liabilities |
33,411 | | ||||||
Total non-current liabilities |
847,515 | 813,119 | ||||||
Total liabilities |
16,643,258 | 16,875,425 | ||||||
Shareholders equity: |
||||||||
Surplus reserve |
6,672,634 | 6,672,634 | ||||||
Retained earnings |
11,877,398 | 11,240,215 | ||||||
Total equity attributable to shareholders of the Company |
30,260,110 | 29,613,364 | ||||||
Non-controlling interests |
135,254 | | ||||||
Total shareholders equity |
30,395,364 | 29,613,364 | ||||||
Total liabilities and shareholders equity |
47,038,622 | 46,488,789 |
2023 Interim Report |
145 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
IV. | Taxation |
Main types of taxes and corresponding tax rates:
Tax type |
Tax basis |
Tax rate | ||
Corporate income tax (1) | Based on taxable profits | 25% | ||
Value-added tax (VAT) | Output VAT is calculated on product sales and taxable services revenue. The basis for VAT payable is to deduct input VAT from the output VAT for the period | 5%.6%.9% and 13% | ||
Consumption tax | Based on taxable revenue | Gasoline: RMB2,109.76 per ton; | ||
Diesel oil: RMB1,411.20 per ton; | ||||
Naphtha: RMB2,105.20 per ton; | ||||
Urban maintenance and construction tax | Based on VAT and consumption tax paid | Fuel oil: RMB1,218.00 per to 5% and 7% |
(1) | Pursuant to the Circular on Enterprise Income Tax Policy concerning Deductions for Equipment and Appliances (Cai Shui [2018] 54) issued by the State Administration of Taxation, during the period from 1 January 2018 to 31 December 2020, the cost of newly purchased equipment with the original cost less than RMB5 million can be fully deducted against taxable profit in the next month after the asset is put into use, instead of being depreciated annually for tax filing. Pursuant to the Announcement on the extension of the implementation period of some tax incentives (Cai Shui [2021] 6) issued by the State Administration of Taxation, the implementation period of Cai Shui [2018] 54 is extended to December 31, 2023. |
V. | Notes to the consolidated financial statements |
1. | Cash at bank and on hand |
Item |
30 June 2023 (unaudited) |
31 December 2022 | ||||||
Deposits with banks |
6,931,674 | 3,998,329 | ||||||
Other monetary funds |
3 | 3 | ||||||
|
|
|
|
|||||
Total |
6,931,677 | 3,998,332 | ||||||
|
|
|
|
146 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
1. | Cash at bank and on hand (continued) |
Cash and cash equivalents shown in the cash flow statement:
Item |
30 June 2023 (unaudited) |
31 December 2022 | ||||||
Deposits with banks |
6,931,674 | 3,998,329 | ||||||
Less: Time deposits (1) |
(2,320,916 | ) | (3,108,916 | ) | ||||
|
|
|
|
|||||
Ending balance of cash and cash equivalents |
4,610,758 | 889,413 | ||||||
|
|
|
|
(1) | As at 30 June 2023, time deposits are three-year term deposits that will mature in one year, with annual interest rate of 3.85%- 3.99%. |
As at 31 December 2022, time deposits are time deposits of 1,080 days to three years, with annual interest rate of 3.85%-4.125%.
2. | Accounts receivable |
(1) | Accounts receivable by customer type are as follows: |
Category |
30 June 2023 (unaudited) |
31 December 2022 | ||||||
Amounts due from related parties (Note VIII.6) |
1,589,669 | 2,443,018 | ||||||
Amounts due from third parties |
42,877 | 72,110 | ||||||
Sub-total |
1,632,546 | 2,515,128 | ||||||
Less: Provision for bad and doubtful debts |
(2,596 | ) | (2,766 | ) | ||||
|
|
|
|
|||||
Total |
1,629,950 | 2,512,362 | ||||||
|
|
|
|
(2) | The ageing analysis of accounts receivable is as follows: |
Aging |
30 June 2023 (unaudited) |
31 December 2022 |
||||||
Within 1 year (inclusive) |
1,629,531 | 2,512,964 | ||||||
Over 1 year but within 2 years (inclusive) |
901 | 50 | ||||||
Over 2 years but within 3 years (inclusive) |
| | ||||||
Over 3 years |
2,114 | 2,114 | ||||||
|
|
|
|
|||||
Total |
1,632,546 | 2,515,128 | ||||||
|
|
|
|
The ageing is counted starting from the date when accounts receivables are recognized.
2023 Interim Report |
147 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
2. | Accounts receivable (continued) |
(3) | Accounts receivable by provisioning method |
30 June 2023 (unaudited) |
31 December 2022 | |||||||||||||||||||||||
Book value | Provision for bad and doubtful debts |
Book value | Provision for bad and doubtful debts |
|||||||||||||||||||||
Category |
Amount |
Percentage (%) |
Percentage |
Amount | Carrying |
Amount |
Percentage |
Percentage |
Amount | Carrying | ||||||||||||||
Individual assessment |
339 | 0.02 | 339 | 100 | | 489 | 0.02 | 489 | 100 | | ||||||||||||||
Collective assessment |
1,632,207 | 99.98 | 2,257 | 0.14 | 1,629,950 | 2,514,639 | 99.98 | 2,277 | 0.09 | 2,512,362 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total |
1,632,546 | 100.00 | 2,596 | 0.16 | 1,629,950 | 2,515,128 | 100.00 | 2,766 | 0.11 | 2,512,362 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(i) | As at 30 June 2023, the reason for provision for bad debts on a single basis is as follows: |
Name |
Book value | Provision for impairment |
Percentage (%) |
Reason | ||||||||||
Ningbo Hezhong Auto Parts Co., Ltd. |
339 | 339 | 100.00 | It is estimated ultimately irrecoverable |
(ii) | The recognition standard and instruction of provision for bad debts on combination: |
According to the historical experience of the Group, there is no significant difference in the occurrence of losses among different customer segments, so different customer groups are not further differentiated in the calculation of bad debt reserve.
(iii) | Assessment of ECLs on accounts receivable: |
At all times the Group measures the impairment loss for accounts receivable at an amount equal to lifetime ECLs, and the ECLs are based on the number of overdue days and the expected loss rate.
The loss given default is measured based on the actual credit loss experience in the past years, and is adjusted taking into consideration the differences among the economic conditions during the historical data collection period, the current economic conditions and the economic conditions during the expected lifetime.
148 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
2. | Accounts receivable (continued) |
(4) | Movements of provisions for bad and doubtful debts: |
For the six months ended 30 June |
||||||||
Provisions for bad and doubtful debts |
2023 (unaudited) |
2022 (unaudited) |
||||||
Balance at the beginning |
2,766 | 1,988 | ||||||
Additions during the period |
16 | 162 | ||||||
Recoveries or reversals during the period |
(186 | ) | | |||||
|
|
|
|
|||||
Balance at the end |
2,596 | 2,150 | ||||||
|
|
|
|
(5) | As at 30 June 2023, Five largest accounts receivable by debtor at the end of the period: |
Amount | Provision | Percent of total amount |
||||||||||
Total amount of five largest accounts receivable by debtor of the Group |
1,597,296 | 29 | 97.84 | % |
(6) | Derecognition of accounts receivable due to transfer of financial assets |
(i) | For the six months ended 30 June 2023, the Group has no accounts receivable derecognized due to transfer of financial assets. |
(ii) | For the six months ended 30 June 2023, the Group has recovered accounts receivable of RMB150 thousand that have been fully provisioned for bad debts in previous. (For the six months ended 30 June 2022: Nil). |
(iii) | For the six months ended 30 June 2023, the Group has not written off significant accounts receivable. (For the six months ended 30 June 2022: Nil) |
(iv) | At 30 June 2023, the Group has no pledged accounts receivable. (31 December 2022: Nil) |
2023 Interim Report |
149 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
3. | Receivables under financing |
Item |
Note | 30 June 2023 (unaudited) |
31 December 2022 | |||||||||
Bills receivable |
(1 | ) | 165,770 | 136,945 | ||||||||
Accounts receivable |
(2 | ) | 163,109 | 445,409 | ||||||||
|
|
|
|
|||||||||
Total |
328,879 | 582,354 | ||||||||||
|
|
|
|
(1) | Bills receivable |
(i) | Due to the requirement of cash management, the Group discounted and endorsed part of the bank acceptance notes. The business model of bank acceptance notes management is for the purpose of collecting cash flow of contracts and sales. Therefore, as at 30 June 2023, the Group classified RMB165,770 thousand bills receivable to financial assets measured at fair value and whose changes are included in other comprehensive income and disclosed in bills receivable and accounts receivable (31 December 2022: RMB136,945 thousand). |
(ii) | The Group has no individually impaired bank acceptance notes, with all provision was accrued by their expected credit loss. As at 30 June 2023 and 31 December 2022, the Group considers no significant credit risk of the bank acceptance notes and the Group has limited exposure to losses arising from banks breach of contract. |
(iii) | As at 30 June 2023, the Group had no pledged bank acceptance notes (31 December 2022: Nil). |
(iv) | As at 30 June 2023, unmatured bills receivable that have been endorsed or discounted by the Group is as follows: |
Item |
Derecognized | Not derecognized | ||||||
Bank acceptance notes |
312,557 | |
As at 30 June 2023, the Group endorsed and discounted the undue bills receivable of RMB312,557 thousand (31 December 2022: RMB375,036 thousand). The Group derecognized such bills receivable, accounts payable to suppliers and short-term loans as a whole by considering that the risks and rewards of ownership of such unmatured bills had been substantially transferred. The Groups continued involvement in the unexpired bills receivable whose overall derecognition is limited to the extent that the issuing bank is unable to settle the amount to the bill holder. The maximum exposure to loss caused by the Groups continued involvement is the amount of outstanding bills receivable endorsed to the supplier of RMB312,557 thousand (31 December 2022: RMB375,036 thousand). The term of the outstanding bills receivable is within one year.
150 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
3. | Receivables under financing (continued) |
(2) | Accounts receivable |
(i) | The Groups subsidiaries Shanghai Jinshan Trading Corporation Limited (JMGJ) and Shanghai Jinmao International Trading Corporation Limited (Jinmao International) derecognized part of the accounts receivable for the non-recourse forfaiting business based on the requirement of daily cash management. The business model of accounts receivable management is for the purpose of collecting cash flow of contracts and sales. Therefore, as at 30 June 2023, the Group classified RMB163,109 thousand third party accounts receivable of subsidiaries to financial assets measured at fair value and whose changes are included in other comprehensive income and disclosed in bills receivable and accounts receivable (31 December 2022, RMB445,409 thousand). |
(iv) | The analysis of accounts receivable derecognized due to the transfer of financial assets is as follows: |
For the six months ended 30 June 2023, the Groups subsidiaries JMGJ and Jinmao International derecognized RMB143,216 thousand-yuan accounts receivable due to the non-recourse forfaiting. (For the six months ended 30 June 2022: RMB166,343 thousand).
4. | Prepayments |
(1) | Prepayments by category: |
Item |
30 June 2023 (unaudited) |
31 December 2022 | ||||||
Amounts advance to related parties (Note VIII.6) |
11,349 | 58,496 | ||||||
Amounts advance to third parties |
8,154 | 8,512 | ||||||
|
|
|
|
|||||
Total |
19,503 | 67,008 | ||||||
|
|
|
|
(2) | The ageing analysis of prepayments is as follows: |
30 June 2023 (unaudited) | 31 December 2022 | |||||||||||||||
Aging |
Amount | Percentage | Amount | Percentage | ||||||||||||
Within 1 year |
19,503 | 100 | % | 67,008 | 100 | % |
The ageing is counted starting from the date when prepayments are recognized.
(3) | As at 30 June 2023, the total amount of the top five prepayments to suppliers are summarised as follows: |
Amount | Percentage of total advances to suppliers |
|||||||
Total amount of the top five prepayments to suppliers |
14,962 | 76.72 | % |
2023 Interim Report |
151 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
5. | Other receivables |
Note | 30 June 2023 (unaudited) |
31 December 2022 |
||||||||||
Amounts due from related parties |
VIII.6 | 6,254 | 140,271 | |||||||||
Amounts due from third parties |
85,852 | 55,036 | ||||||||||
Sub-total |
92,106 | 195,307 | ||||||||||
Less: Provision for bad and doubtful debts |
(4,731 | ) | (4,728 | ) | ||||||||
|
|
|
|
|||||||||
Total |
87,375 | 190,579 | ||||||||||
|
|
|
|
(1) | The aging analysis is as follows: |
Aging |
30 June 2023 (unaudited) |
31 December 2022 |
||||||
Within 1 year (inclusive) |
87,368 | 193,228 | ||||||
Over 1 year but within 2 years (inclusive) |
4,733 | 2,074 | ||||||
Over 2 years but within 3 years (inclusive) |
| 5 | ||||||
Over 3 years |
5 | | ||||||
|
|
|
|
|||||
Total |
92,106 | 195,307 | ||||||
|
|
|
|
The ageing is counted starting from the date when other receivables are recognized.
152 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
5. | Other receivables (continued) |
(2) | Others by provisioning method: |
30 June 2023 (unaudited) |
31 December 2022 | |||||||||||||||||||||||
Book value | Provision for bad and doubtful debts |
Book value | Provision for bad and doubtful debts |
|||||||||||||||||||||
Category |
Amount |
Percentage (%) |
Percentage |
Amount | Carrying |
Amount |
Percentage |
Percentage |
Amount | Carrying | ||||||||||||||
Individual assessment |
4,725 | 5.13 | (4,725) | 100.00 | | 4,725 | 2.42 | (4,725) | 100.00 | | ||||||||||||||
Collective assessment |
87,381 | 94.87 | (6) | 0.01 | 87,375 | 190,582 | 97.58 | (3) | 0.00 | 190,579 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total |
92,106 | 100.00 | (4,731) | 5.14 | 87,375 | 195,307 | 100.00 | (4,728) | 2.42 | 190,579 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(i) | As at 30 June 2023, the reason for provision for bad debts on a single basis is as follows: |
Name |
Book value | Provision for impairment |
Percentage (%) |
Reason | ||||||||||||
Sinopec Materials & Equipment Co., Ltd. |
2,795 | 2,795 | 100.00 | |
It is estimated ultimately irrecoverable |
| ||||||||||
Beijing Zhongli Machinery Engineering Technology Co., Ltd. |
1,930 | 1,930 | 100.00 | |
It is estimated ultimately irrecoverable |
| ||||||||||
|
|
|
|
|
|
|||||||||||
Total |
4,725 | 4,725 | 100.00 | |||||||||||||
|
|
|
|
|
|
2023 Interim Report |
153 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
5. | Other receivables (continued) |
(3) | Movements of provisions for bad and doubtful debts |
Stage 1 | Stage 3 | |||||||||||||||||||||||||||||||
12-month ECL (collective) |
12-month ECL (individual) |
Sub-total | Lifetime ECL Credit impaired |
Total | ||||||||||||||||||||||||||||
Book value |
Provision for bad and doubtful debts |
Book value |
Provision for bad and doubtful debts |
Provision for bad and doubtful debts |
Book value |
Provision for bad and doubtful debts |
Provision for bad and doubtful debts |
|||||||||||||||||||||||||
Balance at 31 December 2022 |
190,582 | (3 | ) | | | (3 | ) | 4,725 | (4,725 | ) | (4,728 | ) | ||||||||||||||||||||
Additions during the period |
| (3 | ) | | | (3 | ) | | | (3 | ) | |||||||||||||||||||||
Recoveries or reversals during the period |
| | | | | | | | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at 30 June 2023 (unaudited) |
87,381 | (6 | ) | | | (6 | ) | 4,725 | (4,725 | ) | (4,731 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at 30 June 2023 and 31 December 2022, the Group has no other receivables under Stage 2.
(i) | For the six months ended 30 June 2023, the Group has no other receivables that have fully accrued or accrued a large proportion of bad and doubtful debts in previous years, but fully recovered or reversed, or have a large proportion of recovered or reversed in the current period(For the six months ended 30 June 2022: Nil). |
(ii) | For the six months ended 30 June 2023, the Group has not written off significant other receivables(For the six months ended 30 June 2022: Nil). |
154 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
5. | Other receivables (continued) |
(4) | Others categorised by nature |
Nature of other receivables |
30 June 2023 (unaudited) |
31 December 2022 |
||||||
Advance payment for compensation |
32,311 | 4,380 | ||||||
Prepayment for share repurchase |
27,573 | 27,573 | ||||||
Export tax rebate |
14,237 | 13,711 | ||||||
Amounts due from related parties |
6,254 | 140,271 | ||||||
Others |
11,731 | 9,372 | ||||||
|
|
|
|
|||||
Sub-total |
92,106 | 195,307 | ||||||
|
|
|
|
|||||
Less: Provision for bad and doubtful debts |
(4,731 | ) | (4,728 | ) | ||||
|
|
|
|
|||||
Total |
87,375 | 190,579 | ||||||
|
|
|
|
(5) | Five largest other receivables-by debtors as at 30 June 2023 |
Name |
Nature of the receivable |
Balance at the end of the period |
Aging | Percentage of ending balance of other receivables |
Provision for bad and doubtful debts |
|||||||||
Pacific Anxin Crop Insurance Co., Ltd. |
Advance payment of compensation |
32,311 | Within 1 year (inclusive) |
35.08 | % | | ||||||||
China International Capital Corporation |
Prepayment for share |
27,573 | Within 1 year |
29.94 | % | | ||||||||
Hong Kong Securities Limited |
repurchase | (inclusive) | ||||||||||||
State Administration of Taxation, |
Export tax rebate |
14,237 | Within 1 year |
15.46 | % | | ||||||||
Shanghai Jinshan |
(inclusive) | |||||||||||||
Sinopec Materials & Equipment Co., Ltd. |
Business transaction |
2,795 | Over 1 year but within 2 years (inclusive) |
3.03 | % | (2,795 | ) | |||||||
Linde-SPC Gases Company Limited |
Business transaction |
2,388 | Within 1 year (inclusive) |
2.59 | % | | ||||||||
|
|
|
|
|
||||||||||
Total |
79,304 | 86.10 | % | | ||||||||||
|
|
|
|
|
2023 Interim Report |
155 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
6. | Inventories |
(1) | Inventories by categories are as follows: |
30 June 2023 (unaudited) | 31 December 2022 | |||||||||||||||||||||||
Inventories by categories |
Book value | Provision for impairment of inventories |
Carrying amount |
Book value | Provision for impairment of inventories |
Carrying amount |
||||||||||||||||||
Raw materials |
5,797,553 | (22,943 | ) | 5,774,610 | 5,700,215 | (26,491 | ) | 5,673,724 | ||||||||||||||||
Work in progress |
633,472 | (192,060 | ) | 441,412 | 756,007 | (237,959 | ) | 518,048 | ||||||||||||||||
Finished goods |
1,477,721 | (226,569 | ) | 1,251,152 | 1,096,623 | (182,035 | ) | 914,588 | ||||||||||||||||
Spare parts and consumables |
254,077 | (58,461 | ) | 195,616 | 246,161 | (58,461 | ) | 187,700 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
8,162,823 | (500,033 | ) | 7,662,790 | 7,799,006 | (504,946 | ) | 7,294,060 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
The balance of inventories of the Group does not include the capitalized interest at 30 June 2023 (31 December 2022: Nil).
The Group has no inventory for guarantee as at 30 June 2023 (31 December 2022: Nil).
(2) | Provision for impairment of inventories is analysed as follows: |
Inventories by categories |
31 December 2022 |
Increases during the period |
Decreases during the period |
30 June 2023 (unaudited) |
||||||||||||
Raw materials |
26,491 | 5,243 | (8,791 | ) | 22,943 | |||||||||||
Work in progress |
237,959 | 56,159 | (102,058 | ) | 192,060 | |||||||||||
Finished goods |
182,035 | 129,084 | (84,550 | ) | 226,569 | |||||||||||
Spare parts and consumables |
58,461 | | | 58,461 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
504,946 | 190,486 | (195,399 | ) | 500,033 | |||||||||||
|
|
|
|
|
|
|
|
156 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
6. | Inventories (continued) |
(3) | Provision for impairment of inventories are analysed as follows: |
Inventories by categories |
Basis for determining net realizable value |
Main reasons
for | ||
Raw materials | The estimated selling price in the ordinary course of business, less the estimated costs to completion and estimated costs to make the sale and related taxes. | Not applicable | ||
Work in progress | The estimated selling price in the ordinary course of business, less the estimated costs to completion and estimated costs to make the sale and related taxes. | Sold in current period | ||
Finished goods | The estimated selling price in the ordinary course of business, less the estimated costs to make the sale and related taxes. | Sold in current period | ||
Spare parts and consumables | The estimated selling price in the ordinary course of business, less the estimated costs to make the sale and related taxes. | Used for repair and sold in current period |
7. | Other current assets |
Item |
30 June 2023 (unaudited) |
31 December 2022 | ||||||
VAT deductible |
277,578 | 1,057,463 | ||||||
Corporate income tax prepaid |
53,963 | 54,404 | ||||||
Others |
9,320 | 9,320 | ||||||
|
|
|
|
|||||
Total |
340,861 | 1,121,187 | ||||||
|
|
|
|
2023 Interim Report |
157 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
8. | Long-term equity investments |
Item |
Note | 30 June 2023 (unaudited) |
31 December 2022 | |||||||||
Joint ventures |
(1 | ) | 468,241 | 476,761 | ||||||||
Associates |
(2 | ) | 2,944,160 | 3,146,024 | ||||||||
|
|
|
|
|||||||||
Sub-total |
3,412,401 | 3,622,785 | ||||||||||
Less: Provision for impairment |
||||||||||||
Joint ventures |
| | ||||||||||
Associates |
28,392 | 28,392 | ||||||||||
|
|
|
|
|||||||||
Total |
3,384,009 | 3,594,393 | ||||||||||
|
|
|
|
(1) | Joint ventures |
Current period movement | ||||||||||||||||||||||||||||
Investee |
31 December 2022 |
Additional/ (negative) investment |
Investment income recognized under equity method |
Cash dividends declared in current period |
Impairment provision |
30 June 2023 (unaudited) (未經審計) |
Ending balance of impairment provision 30 June 2023 (unaudited) (未 經審計) |
|||||||||||||||||||||
Joint venture of the Company Shanghai Jinshan Baling New Material Co., Ltd. (Baling Materials) |
250,000 | | | | | 250,000 | | |||||||||||||||||||||
Joint ventures of subsidiaries Shanghai Petrochemical Equipment Inspection and Testing Co., Ltd. (Inspection and Testing company) |
9,845 | | 206 | (697 | ) | | 9,354 | | ||||||||||||||||||||
Shanghai Petrochemical Yangu Gas Development Company Limited (Yangu Gas) |
40,218 | | 1,268 | | | 41,486 | | |||||||||||||||||||||
Linde-SPC Gases Company Limited (Linde), formerly known as BOC-SPC Gases Company Limited) |
176,698 | | 10,403 | (19,700 | ) | | 167,401 | | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
476,761 | | 11,877 | (20,397 | ) | | 468,241 | | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interests in joint ventures, refer to Note VI.2.
158 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
8. | Long-term equity investments (continued) |
(2) | Associates |
Current period movement | ||||||||||||||||||||||||||||||||||||
Investee |
31 December 2022 |
Additional/ (negative) investment |
Investment (loss)/incomes recognized under equity method |
Cash dividends declared in current period |
Impairment provision |
Change in other equity |
Others | 30 June 2023 (unaudited) |
Ending balance of impairment provision 30 June 2023 (unaudited) |
|||||||||||||||||||||||||||
Associates of the Company Shanghai Secco |
333,896 | | (213,656 | ) | | | | | 120,240 | | ||||||||||||||||||||||||||
Shanghai Chemical Industry Park Development Company Limited (Chemical Industry) |
2,205,142 | | 68,804 | (46,103 | ) | | (21 | ) | | 2,227,822 | | |||||||||||||||||||||||||
Associates of subsidiaries Shanghai Jinsen Hydrocarbon Resins Company Limited (Jinsen) |
4,514 | | (4,407 | ) | | | | | 107 | 28,392 | ||||||||||||||||||||||||||
Shanghai Azbil Automation Company Limited (Azbil) |
63,324 | | 14,695 | (20,000 | ) | | | | 58,019 | | ||||||||||||||||||||||||||
Shanghai Shidian Energy Company Limited (Shidian Energy) |
404,663 | | 5,326 | (4,000 | ) | | | | 405,989 | | ||||||||||||||||||||||||||
Others |
106,093 | | (1,002 | ) | (1,500 | ) | | | | 103,591 | | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total |
3,117,632 | | (130,240 | ) | (71,603 | ) | | (21 | ) | | 2,915,768 | 28,392 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interests in associates, refer to Note VI.2.
9. | Other non-current financial properties |
Item |
30 June 2023 (unaudited) |
31 December 2022 | ||||||
Financial assets measured at fair value through profit or loss |
26,500 | |
The Group invested RMB26,500 thousand in HENGRUI CORPORATION LIMITED in May 2023.
2023 Interim Report | 159 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
10. | Fixed assets |
(1) | Fixed assets situation |
Buildings | Plant and machinery |
Vehicles and other equipment |
Total | |||||||||||||
Cost |
||||||||||||||||
31 December 2022 |
4,480,502 | 45,299,395 | 2,114,644 | 51,894,541 | ||||||||||||
Reclassification in current period |
55,308 | (77,759 | ) | 22,451 | | |||||||||||
Increase in current period |
||||||||||||||||
Purchase |
89 | 37,172 | 26,990 | 64,251 | ||||||||||||
Transfer from CIP (Note V.12) |
195,415 | 2,044,396 | 60,033 | 2,299,844 | ||||||||||||
Transfer from investment properties (Note V.11) |
3,491 | | | 3,491 | ||||||||||||
Decrease in current period |
||||||||||||||||
Disposal |
(3,132 | ) | (160,829 | ) | (24,594 | ) | (188,555 | ) | ||||||||
Transfer out to investment properties (Note V.11) |
(270 | ) | | | (270 | ) | ||||||||||
30 June 2023 (unaudited) |
4,731,403 | 47,142,375 | 2,199,524 | 54,073,302 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Accumulated depreciation |
||||||||||||||||
31 December 2022 |
2,790,861 | 33,591,549 | 1,596,395 | 37,978,805 | ||||||||||||
Reclassification in current period |
37,727 | (40,936 | ) | 3,209 | | |||||||||||
Increase in current period |
||||||||||||||||
Charge for current period |
54,093 | 688,205 | 70,385 | 812,683 | ||||||||||||
Transfer from investment properties (Note V.11) |
2,708 | | | 2,708 | ||||||||||||
Decrease in current period |
||||||||||||||||
Disposal |
(3,023 | ) | (122,199 | ) | (22,406 | ) | (147,628 | ) | ||||||||
Transfer out to investment properties (Note V.11) |
(43 | ) | | | (43 | ) | ||||||||||
30 June 2023 (unaudited) |
2,882,323 | 34,116,619 | 1,647,583 | 38,646,525 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Provision for impairment |
||||||||||||||||
31 December 2022 |
83,848 | 1,625,798 | 10,563 | 1,720,209 | ||||||||||||
Reclassification in current period |
14,492 | (21,332 | ) | 6,840 | | |||||||||||
Decrease in current period |
||||||||||||||||
Disposal |
| (7,462 | ) | | (7,462 | ) | ||||||||||
30 June 2023 (unaudited) |
98,340 | 1,597,004 | 17,403 | 1,712,747 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Carrying amount |
||||||||||||||||
30 June 2023 (unaudited) |
1,750,740 | 11,428,752 | 534,538 | 13,714,030 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
31 December 2022 |
1,605,793 | 10,082,048 | 507,686 | 12,195,527 | ||||||||||||
|
|
|
|
|
|
|
|
160 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
10. | Fixed assets (continued) |
(2) | For the six months ended 30 June 2023, there is no provision for impairment of fixed assets (30 June 2022: Nil). As at June 30, 2023, the impairment provision for fixed assets was RMB1,712,747 thousand. |
(3) | As at 30 June 2023, the cost of temporarily idle fixed assets was RMB3,318,987 thousand, the accumulated depreciation was RMB2,667,541 thousand, related impairment provision was RMB475,444 thousand and the carrying amount of these assets was RMB176,002 thousand (31 December 2022: the cost of temporarily idle fixed assets was RMB3,358,312 thousand, accumulated depreciation was RMB2,685,006 thousand, related impairment provision was RMB493,944 thousand, and the carrying amount of these assets was RMB179,362 thousand, respectively). |
As at 30 June 2023 and 31 December 2022, the Group had no fixed assets as collateral.
For the six months ended 30 June 2023, amount of RMB2,299,844 thousand was transferred from construction in progress to fixed assets(for the six months ended 30 June 2022: RMB159,676 thousand).
(4) | As at 30 June 2023, the carrying amount of fixed assets leased out under operating leases was RMB71,751 thousand (31 December 2022: RMB54,110 thousand). |
(5) | As at 30 June 2023 and 31 December 2022, the Group had no fixed assets pending certificates of ownership. |
2023 Interim Report |
161 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
11. | Investment properties |
Buildings | ||||
Cost |
||||
31 December 2022 |
626,367 | |||
Additions during the period |
||||
Transfer in to fixed assets (Note V.10) |
270 | |||
Decrease during the period |
||||
Transfer out to fixed assets (Note V.10) |
(3,491 | ) | ||
30 June 2023 (unaudited) |
623,146 | |||
|
|
|||
Accumulated depreciation |
||||
31 December 2022 |
289,504 | |||
Additions during the period |
||||
Charge for current period |
7,650 | |||
Transfer in to fixed assets (Note V.10) |
43 | |||
Decrease during the period |
||||
Transfer out to fixed assets (Note V.10) |
(2,708 | ) | ||
30 June 2023 (unaudited) |
294,489 | |||
|
|
|||
Carrying amount |
||||
30 June 2023 (unaudited) |
328,657 | |||
31 December 2022 |
336,863 | |||
|
|
For the six months ended 30 June 2023, the depreciation amount of the investment properties is RMB7,650 thousand (for the six months ended 30 June 2022, depreciation amount is RMB7,661 thousand). No provision for impairment has been made (For the six months ended 30 June 2022: Nil).
As at 30 June 2023 and 31 December 2022 the Group had no investment properties pending certificates of ownership.
12. | Construction in progress |
(1) | Construction in progress |
30 June 2023 (unaudited) | 31 December 2022 | |||||||||||||||||||||||
Original cost | Provision for impairment |
Carrying amount | Original cost | Provision for impairment |
Carrying amount | |||||||||||||||||||
Construction in progress |
1,773,596 | (24,486 | ) | 1,749,110 | 3,772,947 | (24,486 | ) | 3,748,461 |
162 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
12. | Construction in progress (continued) |
(2) | The movement of the Groups major construction in progress is listed as follows: |
Percentage | Including: | |||||||||||||||||||||||||||||||||||||||||||
Increase | Transfer to | 30 June | of actual | Accumulative | Capitalized | Interest rate for | ||||||||||||||||||||||||||||||||||||||
31 December | during the | fixed Assets | 2023 | cost to | Project | capitalized | interest in | capitalization in | ||||||||||||||||||||||||||||||||||||
Project |
Budget | 2022 | period | (Note V.10) | (unaudited) | budget | progress | interest | current period | current period | Sources of funding | |||||||||||||||||||||||||||||||||
Third circuit 220KV power supply line project |
507,120 | 449,487 | | | 449,487 | 88.64 | % | 88.64 | % | 4,740 | | | |
own funds and borrowings |
| |||||||||||||||||||||||||||||
100,000 tons/year EVA production equipment |
1,131,520 | 257,853 | | | 257,853 | 20.79 | % | 20.79 | % | 1,081 | | | |
own funds and borrowings |
| |||||||||||||||||||||||||||||
Sewage diversion and perfect transformation project |
155,293 | 80,000 | 18,795 | | 98,795 | 63.62 | % | 63.62 | % | | | | own funds | |||||||||||||||||||||||||||||||
T-121~1 of petrochemical storage and transportation department, Jinshan Area environmental |
156,259 | 80,000 | | | 80,000 | 51.20 | % | 51.20 | % | | | | own funds | |||||||||||||||||||||||||||||||
comprehensive improvement |
||||||||||||||||||||||||||||||||||||||||||||
Shanghai petrochemical test line project of aviation carbon fibre reinforced thermoplastic |
87,682 | 30,520 | 13,923 | (2,921 | ) | 41,522 | 84.31 | % | 84.31 | % | | | | own funds | ||||||||||||||||||||||||||||||
composite material 2022 Heat and power department equipment renewal |
50,000 | 29,188 | 3,860 | | 33,048 | 66.10 | % | 66.10 | % | | | | own funds | |||||||||||||||||||||||||||||||
Additional online monitoring project for Suitang River stormwater outfall |
43,392 | 26,679 | 1,594 | | 28,273 | 65.16 | % | 65.16 | % | | | | own funds | |||||||||||||||||||||||||||||||
2# 3# aromatics joint unit energy saving renovation |
954,240 | 27,145 | | | 27,145 | 2.85 | % | 2.85 | % | | | | own funds | |||||||||||||||||||||||||||||||
2022 olefin Department equipment update |
50,000 | 26,044 | | (1,551 | ) | 24,493 | 73.94 | % | 73.94 | % | | | | own funds | ||||||||||||||||||||||||||||||
Hidden danger rectification project of mobile and fixed packaging machine in packaging workshop |
26,731 | 22,179 | 1,090 | | 23,269 | 87.05 | % | 87.05 | % | | | | own funds | |||||||||||||||||||||||||||||||
of synthetic resin Department 2022 equipment update |
40,000 | 22,220 | 328 | | 22,548 | 56.79 | % | 56.79 | % | | | | own funds | |||||||||||||||||||||||||||||||
Hidden danger control project of 220 kV system in East Area of Thermoelectric Department |
85,813 | 15,483 | 3,791 | | 19,274 | 22.46 | % | 22.46 | % | 54 | 54 | 1.88 | % | |
own funds and borrowings |
| ||||||||||||||||||||||||||||
Carbon Fiber Division 5.25 MW roof distributed photovoltaic power generation project |
30,278 | 16,523 | 413 | | 16,936 | 55.93 | % | 55.93 | % | | | | own funds | |||||||||||||||||||||||||||||||
2022 Oil refining department equipment renewal |
50,000 | 19,559 | | (2,703 | ) | 16,856 | 44.91 | % | 44.91 | % | | | | own funds | ||||||||||||||||||||||||||||||
2022 Utility department equipment renewal |
50,000 | 29,609 | 360 | (22,401 | ) | 7,568 | 59.49 | % | 59.49 | % | | | | own funds | ||||||||||||||||||||||||||||||
Three workshop fire hidden danger rectification project |
19,875 | 17,639 | | (13,699 | ) | 3,940 | 88.75 | % | 88.75 | % | | | | own funds |
2023 Interim Report |
163 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
12. | Construction in progress (continued) |
(2) | The movement of the Groups major construction in progress is listed as follows: (continued) |
Percentage | Including: | |||||||||||||||||||||||||||||||||||||||||||
Increase | Transfer to |
30 June | of actual | Accumulative | Capitalized | Interest rate for | ||||||||||||||||||||||||||||||||||||||
31 December | during the | fixed Assets |
2023 | cost to | Project | capitalized | interest in | capitalization in | ||||||||||||||||||||||||||||||||||||
Project |
Budget | 2022 | period | (Note V.10) |
(unaudited) | budget | progress | interest | current period | current period | Sources of funding | |||||||||||||||||||||||||||||||||
Oil refining department upgrading project of high-pressure air-cooling materials for medium |
32,829 | 27,056 | | (24,795 | ) | 2,261 | 82.41 | % | 82.41 | % | | | | own funds | ||||||||||||||||||||||||||||||
pressure hydrocracking unit 100-ton high performance carbon fiber plant |
566,183 | 493,407 | 7,662 | (500,527 | ) | 542 | 88.50 | % | 88.50 | % | 8,845 | 5,098 | 1.88 | % | |
own funds and borrowings |
| |||||||||||||||||||||||||||
24000 tons/year of precursor fiber, 12000 tons/year of 48 K Large tow carbon fiber project |
3,489,638 | 1,035,672 | 176,439 | (1,212,104 | ) | 7 | 73.26 | % | 73.26 | % | 32,672 | 5,241 | 1.49 | % | |
own funds and borrowings |
| |||||||||||||||||||||||||||
Coal electric unit energy consumption meets standard 2 × CC100 steam turbine |
93,260 | 84,000 | | (83,998 | ) | 2 | 90.07 | % | 90.07 | % | | | | own funds | ||||||||||||||||||||||||||||||
(No.5, No.6) |
||||||||||||||||||||||||||||||||||||||||||||
Compliance renovation project of control room of Ministry of Chemical Industry |
16,760 | 15,700 | 40 | (15,739 | ) | 1 | 93.91 | % | 93.91 | % | | | | own funds | ||||||||||||||||||||||||||||||
Flue gas online monitoring system (CEMS) instrument hidden danger control |
20,020 | 17,016 | | (17,016 | ) | | 85.00 | % | 85.00 | % | | | | own funds | ||||||||||||||||||||||||||||||
Compliance renovation project of control room of Synthetic Resin Department |
121,991 | | 24,273 | (24,273 | ) | | 69.08 | % | 69.08 | % | | | | own funds | ||||||||||||||||||||||||||||||
(former Plastic Department) |
||||||||||||||||||||||||||||||||||||||||||||
Other projects |
949,968 | 47,925 | (378,117 | ) | 619,776 | | | | own funds | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Sub-total |
| 3,772,947 | 300,493 | (2,299,844 | ) | 1,773,596 | 47,392 | 10,393 | 1.66 | % | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Less: Provision for impairment |
| (24,486 | ) | | | (24,486 | ) | | | | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total |
| 3,748,461 | 300,493 | (2,299,844 | ) | 1,749,110 | | | 47,392 | 10,393 | 1.66 | % | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
164 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
12. | Construction in progress (continued) |
(2) | The movement of the Groups major construction in progress is listed as follows: (continued) |
For the six months ended 30 June 2023, the capitalized interest of the Group is RMB10,393 thousand (for the six months ended 30 June 2022: RMB10,777 thousand).
As at 30 June 2023 and 31 December 2022, the balance of the impairment provision for the Groups construction in progress was for the long-term suspended energy saving transformation of No. 2 and No. 3 aromatics combined plant with the amount of RMB24,486 thousand.
13. | Right-of-use assets |
Buildings | Plant and machinery |
Vehicles and other equipment |
Total | |||||||||||||
Cost |
||||||||||||||||
31 December 2022 |
36,438 | 1,602 | 3,677 | 41,717 | ||||||||||||
Increase in current period |
4,158 | 1,145 | 291 | 5,594 | ||||||||||||
Decrease in current period |
(13,597 | ) | (1,305 | ) | (2,142 | ) | (17,044 | ) | ||||||||
30 June 2023 (unaudited) |
26,999 | 1,442 | 1,826 | 30,267 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Accumulated depreciation |
||||||||||||||||
31 December 2022 |
21,898 | 1,229 | 2,505 | 25,632 | ||||||||||||
Increase in current period |
6,349 | 264 | 575 | 7,188 | ||||||||||||
Decrease in current period |
(13,554 | ) | (1,256 | ) | (2,033 | ) | (16,843 | ) | ||||||||
30 June 2023 (unaudited) |
14,693 | 237 | 1,047 | 15,977 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Carrying amount |
||||||||||||||||
30 June 2023 (unaudited) |
12,306 | 1,205 | 779 | 14,290 | ||||||||||||
31 December 2022 |
14,540 | 373 | 1,172 | 16,085 |
2023 Interim Report |
165 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
14. | Intangible assets |
Intangible assets situation
Land-use rights | Other intangible assets |
Total | ||||||||||
Cost |
||||||||||||
31 December 2022 |
785,567 | 100,193 | 885,760 | |||||||||
Increase in current period |
| | | |||||||||
Disposal in current period |
| | | |||||||||
30 June 2023 (unaudited) |
785,567 | 100,193 | 885,760 | |||||||||
|
|
|
|
|
|
|||||||
Accumulated amortization |
||||||||||||
31 December 2022 |
421,847 | 91,273 | 513,120 | |||||||||
Charge for current period |
8,522 | 1,462 | 9,984 | |||||||||
Disposal in current period |
| | | |||||||||
30 June 2023 (unaudited) |
430,369 | 92,735 | 523,104 | |||||||||
|
|
|
|
|
|
|||||||
Carrying amount |
||||||||||||
30 June 2023 (unaudited) |
355,198 | 7,458 | 362,656 | |||||||||
|
|
|
|
|
|
|||||||
31 December 2022 |
363,720 | 8,920 | 372,640 | |||||||||
|
|
|
|
|
|
As at 30 June 2023 and at 31 December 2022, the Group had no land-use right without property right certificate.
As at 30 June 2023 and at 31 December 2022, the Group has no intangible assets formed through internal research and development.
166 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
15. | Long-term deferred expenses |
31 December 2022 |
Increase during the period |
Amortization during the period |
30 June 2023 (unaudited) |
|||||||||||||
Catalysts |
771,395 | 23,235 | 144,818 | 649,812 | ||||||||||||
Lease holding improvements |
4,550 | | 555 | 3,995 | ||||||||||||
Others |
535 | | 109 | 426 | ||||||||||||
Less: Provision for impairment |
| | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
776,480 | 23,235 | 145,482 | 654,233 | ||||||||||||
|
|
|
|
|
|
|
|
16. | Deferred tax assets and deferred tax liabilities |
(1) | Deferred tax assets before offsetting |
30 June 2023 (unaudited) | 31 December 2022 (restated) | |||||||||||||||
Deductible | Deductible | |||||||||||||||
temporary | temporary | |||||||||||||||
differences | differences | |||||||||||||||
and deductible | Deferred tax | and deductible | Deferred tax | |||||||||||||
Item |
losses | assets | losses | assets | ||||||||||||
Provision for bad debts |
7,318 | 1,830 | 7,491 | 1,873 | ||||||||||||
Provision for inventory |
500,033 | 125,008 | 504,946 | 126,237 | ||||||||||||
Provision for impairment of fixed assets |
1,682,891 | 420,723 | 1,690,353 | 422,588 | ||||||||||||
Provision for impairment of construction in progress |
24,486 | 6,122 | 24,486 | 6,122 | ||||||||||||
Accrued expenses |
48,111 | 12,028 | 48,111 | 12,028 | ||||||||||||
Deductible loss |
4,710,942 | 1,177,735 | 3,490,594 | 872,648 | ||||||||||||
Rental liabilities |
14,638 | 3,660 | 15,494 | 3,873 | ||||||||||||
Other deferred tax assets |
56,418 | 14,103 | 57,110 | 14,277 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
7,044,837 | 1,761,209 | 5,838,585 | 1,459,646 | ||||||||||||
|
|
|
|
|
|
|
|
2023 Interim Report |
167 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
16. | Deferred tax assets and deferred tax liabilities (continued) |
(2) | Deferred tax liabilities before offsetting |
30 June 2023 (unaudited) | 31 December 2022 (restated) | |||||||||||||||
Taxable | Taxable | |||||||||||||||
temporary | Deferred tax | temporary | Deferred tax | |||||||||||||
Item |
differences | liabilities | differences | liabilities | ||||||||||||
Capitalized interest |
(4,594 | ) | (1,149 | ) | (5,018 | ) | (1,255 | ) | ||||||||
Difference in fixed assets depreciation and intangible assets amortization |
(2,248,016 | ) | (562,004 | ) | (1,974,253 | ) | (493,563 | ) | ||||||||
Right-of-use assets |
(14,290 | ) | (3,572 | ) | (15,336 | ) | (3,834 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
(2,266,900 | ) | (566,725 | ) | (1,994,607 | ) | (498,652 | ) | ||||||||
|
|
|
|
|
|
|
|
(3) | Deductible temporary differences and deductible losses that are not recognized as deferred tax assets are analysed as follows: |
Item |
30 June 2023 (unaudited) |
31 December 2022 | ||||||
Deductible temporary differences |
29,865 | 29,859 | ||||||
Deductible losses |
436,863 | 393,896 | ||||||
|
|
|
|
|||||
Total |
466,728 | 423,755 | ||||||
|
|
|
|
In accordance with the accounting policy set out in Note III.26, it is unlikely that some of the Groups subsidiaries will obtain sufficient future taxable profits to be used to offset the deductible temporary differences and deductible losses. Therefore, the Group has not recognized deferred income tax assets for the deductible temporary differences and deductible losses of the following subsidiaries. Under current tax law, these deductible losses expire between 2023 and 2028.
168 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
16. | Deferred tax assets and deferred tax liabilities (continued) |
V. | Notes to the consolidated financial statements (continued) |
(3) | Deductible temporary differences and deductible losses that are not recognized as deferred tax assets are analysed as follows: (continued) |
The breakdown of deductible losses by subsidiaries is as follows:
Name of subsidiaries |
30 June 2023 (unaudited) |
31 December 2022 | ||||||
Shanghai Petrochemical Investment Development Company Limited (Toufa) |
120,718 | 112,386 | ||||||
Shanghai Jinchang Engineering Plastics Company Limited (Jinchang) |
121,172 | 102,262 | ||||||
Shanghai Jinshan Hotel Company Limited (Jinshan Hotel) |
6,938 | 7,685 | ||||||
Zhejiang Jinlian Petrochemical Storage and |
||||||||
Transportation Co., LTD. (Jinlian) |
188,035 | 171,563 | ||||||
|
|
|
|
|||||
Total |
436,863 | 393,896 | ||||||
|
|
|
|
(4) | Deductible losses that are not recognized as deferred tax assets will expire in the following years: |
Year |
30 June 2023 (unaudited) |
31 December 2022 | ||||||
2023 |
64,838 | 65,585 | ||||||
2024 |
91,901 | 91,901 | ||||||
2025 |
41,475 | 41,475 | ||||||
2026 |
95,144 | 95,144 | ||||||
2027 |
107,558 | 99,791 | ||||||
2028 |
35,947 | | ||||||
|
|
|
|
|||||
Total |
436,863 | 393,896 | ||||||
|
|
|
|
2023 Interim Report |
169 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
16. | Deferred tax assets and deferred tax liabilities (continued) |
(5) | The net balance of deferred tax assets and liabilities after offsetting is as follows: |
30 June 2023 (unaudited) | 31 December 2022 (restated) | |||||||||||||||
Offsetting | Offsetting | |||||||||||||||
amount of | amount of | |||||||||||||||
deferred tax | deferred tax | |||||||||||||||
assets and | assets and | |||||||||||||||
deferred tax | Deferred tax | deferred tax | Deferred tax | |||||||||||||
Item |
liabilities | assets net | liabilities | assets net | ||||||||||||
Deferred tax assets |
(534,815 | ) | 1,226,394 | (467,754 | ) | 991,892 | ||||||||||
Deferred tax liabilities |
534,815 | (31,910 | ) | 467,754 | (30,898 | ) |
17. | Other non-current assets |
30 June 2023 | 31 December 2022 | |||||||
Item |
(unaudited) |
|
||||||
Time deposit |
3,235,907 | 3,389,559 | ||||||
Investment security deposits |
| 50,000 | ||||||
Total |
3,235,907 | 3,439,559 |
As at 30 June 2023, other non-current assets of the Group is three-year or five-year time deposit with interest rate range from 3.55% to 4.20% per annum (31 December 2022: from 3.55% to 4.20% per annum).
170 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
18. | Provision for assets impairment |
Decrease in current period | ||||||||||||||||||||||||
31 December 2022 |
Increase in current period |
Reverse | Sold | Written-off | 30 June 2023 (unaudited) |
|||||||||||||||||||
Provision for accounts receivable (Note V.2) |
2,766 | 16 | (186 | ) | | | 2,596 | |||||||||||||||||
Provision for other receivable (Note V.5) |
4,728 | 3 | | | | 4,731 | ||||||||||||||||||
Sub-total |
7,494 | 19 | (186 | ) | | | 7,327 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Provision for inventory (Note V.6) |
504,946 | 190,486 | | (195,399 | ) | | 500,033 | |||||||||||||||||
Provision for fixed assets (Note V.10) |
1,720,209 | | | | (7,462 | ) | 1,712,747 | |||||||||||||||||
Provision for CIP (Note V.12) |
24,486 | | | | | 24,486 | ||||||||||||||||||
Impairment loss of investments accounted for using equity method (Note V.8) |
28,392 | | | | | 28,392 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Sub-total |
2,278,033 | 190,486 | | (195,399 | ) | (7,462 | ) | 2,265,658 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
2,285,527 | 190,505 | (186 | ) | (195,399 | ) | (7,462 | ) | 2,272,985 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
19. | Short-term loans |
Item |
Currency | 30 June 2023 (unaudited) |
31 December 2022 |
|||||||||
Credit loans |
||||||||||||
bank loans |
RMB | 5,048,000 | 1,550,000 |
As at 30 June 2023, the interest rate of short-term loans ranged from 1.90% to 3.45% per annum (31 December 2022: from 2.10% to 3.50% per annum).
As at 30 June 2023 and 31 December 2022, there was no short-term loans which are due but have not been repaid.
2023 Interim Report |
171 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
20. | Bills payable |
Item |
30 June 2023 (unaudited) |
31 December 2022 | ||||||
Bank acceptance notes |
103,950 | 40,951 |
The bills above are all due within one year.
21. | Accounts payable |
Item |
30 June 2023 (unaudited) |
31 December 2022 | ||||||
Amount due to related parties (Note VIII.6) |
5,790,913 | 7,326,101 | ||||||
Amount due to third parties |
1,364,570 | 1,818,453 | ||||||
|
|
|
|
|||||
Total |
7,155,483 | 9,144,554 | ||||||
|
|
|
|
As at 30 June 2023 and 31 December 2022, there was no individually significant accounts payable aged over one year.
22. | Contract liabilities |
Item |
30 June 2023 (unaudited) |
31 December 2022 | ||||||
Advance from related parties (Note VIII.6) |
7,646 | 10,486 | ||||||
Advance from third parties |
359,283 | 372,760 | ||||||
|
|
|
|
|||||
Total |
366,929 | 383,246 | ||||||
|
|
|
|
As at 30 June 2023 and 31 December 2022, there was no individually significant contract liabilities aged over one year.
Contract liabilities primarily relate to the Groups advances from product sales contracts. The Group receives 100% of the contract consideration as advances when entering into the contract with customers. The revenue related to the contracts will be recognized until the Group satisfies its performance obligation.
172 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
22. | Contract liabilities (continued) |
Changes in the contract liabilities of the Group are as follows:
For the six months | For the six months | |||||||
ended 30 June | ended 30 June | |||||||
Item |
2023 (unaudited) | 2022 (unaudited) | ||||||
Balance at the beginning of the period |
383,246 | 430,882 | ||||||
Revenue recognized that was included in the contract liability balance at the beginning of the period |
(381,235 | ) | (409,218 | ) | ||||
Net increase due to cash received during the period |
364,918 | 353,348 | ||||||
|
|
|
|
|||||
Balance at the end of the period |
366,929 | 375,012 | ||||||
|
|
|
|
23. | Employee benefits payable |
(1) | Employee benefits payable: |
Note | 30 June 2023 (unaudited) |
31 December 2022 | ||||||||||
Short-term employee benefits |
(2 | ) | 652,493 | 289,102 | ||||||||
Post-employment benefits |
||||||||||||
defined contribution plans |
(3 | ) | 28,158 | 28,789 | ||||||||
|
|
|
|
|||||||||
Total |
680,651 | 317,891 | ||||||||||
|
|
|
|
2023 Interim Report |
173 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
23. | Employee benefits payable (continued) |
(2) | Short-term employee benefits |
31 December 2022 |
Increase in current period |
Decrease in current period |
30 June 2023 (unaudited) |
|||||||||||||
Salaries, bonuses, allowances |
265,200 | 1,075,262 | (710,912 | ) | 629,550 | |||||||||||
Staff welfare |
3,569 | 108,930 | (108,930 | ) | 3,569 | |||||||||||
Social insurances |
19,726 | 115,886 | (116,513 | ) | 19,099 | |||||||||||
Including: Medical insurance |
17,989 | 95,114 | (95,747 | ) | 17,356 | |||||||||||
Work injury insurance |
1,724 | 9,498 | (9,542 | ) | 1,680 | |||||||||||
Maternity insurance |
13 | 76 | (26 | ) | 63 | |||||||||||
Supplementary medical insurance |
| 11,198 | (11,198 | ) | | |||||||||||
Housing funds |
8 | 113,598 | (113,606 | ) | | |||||||||||
Termination benefits |
| 9,965 | (9,965 | ) | | |||||||||||
Labour union fee, staff and workers education fee |
599 | 31,456 | (31,780 | ) | 275 | |||||||||||
Non-monetary benefits |
| 52,508 | (52,508 | ) | | |||||||||||
Others |
| 20,524 | (20,524 | ) | | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
289,102 | 1,528,129 | (1,164,738 | ) | 652,493 | |||||||||||
|
|
|
|
|
|
|
|
(3) | Defined contribution plans |
31 December 2022 |
Increase in current period |
Decrease in current period |
30 June 2023 (unaudited) |
|||||||||||||
Basic pensions |
27,915 | 152,370 | (152,982 | ) | 27,303 | |||||||||||
Unemployment insurance |
874 | 4,759 | (4,778 | ) | 855 | |||||||||||
Supplemental basic pensions |
| 84,672 | (84,672 | ) | | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
28,789 | 241,801 | (242,432 | ) | 28,158 | |||||||||||
|
|
|
|
|
|
|
|
As stipulated by the regulations of the PRC, the Group participates in a defined contribution retirement plan organised by the Shanghai Municipal Government for its staff.
174 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
23. | Employee benefits payable (continued) |
(3) | Defined contribution plans (continued) |
In addition, pursuant to the document Order of the Ministry of Labour and Social Security No.20 dated 6 January 2004 issued by the Ministry of Labour of the PRC, the Group has set up a supplementary defined contribution retirement plan for the benefit of employees. Employees who have served the Group for more than one year may participate in this plan. The Group and participating employees make defined contributions to their pension saving accounts according to the plan.
The Group has no other material obligation for the payment of pension benefits associated with these plans beyond the annual contributions described above. For the six months ended 30 June 2023, the Groups contribution to the above two plans amounted to RMB152,370 thousand and RMB84,672 thousand respectively (for the six months ended 30 June 2022: RMB142,543 thousand and RMB77,810 thousand respectively).
24. | Taxes payable |
30 June 2023 (unaudited) |
31 December 2022 | |||||||
Consumption tax payable |
885,030 | 733,334 | ||||||
Value-added tax payable |
4,767 | 5,277 | ||||||
Educational surcharge payable |
44,464 | 36,868 | ||||||
Urban maintenance and construction tax payable |
62,210 | 51,557 | ||||||
Corporate income tax payable |
4,187 | 2,754 | ||||||
Land-use tax payable |
5,200 | 12,149 | ||||||
Individual income tax payable |
885 | 28,032 | ||||||
Others |
14,145 | 19,885 | ||||||
|
|
|
|
|||||
Total |
1,020,888 | 889,856 | ||||||
|
|
|
|
2023 Interim Report |
175 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
25. | Other payables |
30 June 2023 (unaudited) |
31 December 2022 | |||||||
Dividends payable on ordinary shares |
31,631 | 31,631 | ||||||
Amounts due to related parties (Note VIII.6) |
308,053 | 535,222 | ||||||
Amounts due to third parties |
661,945 | 1,051,499 | ||||||
|
|
|
|
|||||
Total |
1,001,629 | 1,618,352 | ||||||
|
|
|
|
(1) | As at 30 June 2023, the Group has no other payables that are individually significant aged over 1 year except unpaid project guaranty deposit. (Ended 31 December 2022: Nil). |
(2) | Other payables by categories are analysed as follows: |
Item |
30 June 2023 (unaudited) |
31 December 2022 | ||||||
Accrued expenses |
137,361 | 143,299 | ||||||
Equipment project payables |
752,839 | 1,251,897 | ||||||
Closed derivative gains and losses to be settled |
| 102,068 | ||||||
Dividends payable on ordinary shares |
31,631 | 31,631 | ||||||
Withholding social insurance |
16,126 | 18,254 | ||||||
Sales discount |
5,204 | 5,968 | ||||||
Warranty payable |
10,535 | 9,353 | ||||||
Deposits |
9,751 | 10,346 | ||||||
Others |
38,182 | 45,536 | ||||||
|
|
|
|
|||||
Total |
1,001,629 | 1,618,352 | ||||||
|
|
|
|
176 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
26. | Non-current liabilities due within one year |
Item |
30 June 2023 (unaudited) |
31 December 2022 | ||||||
Lease liabilities due within one year (Note V.29) |
9,982 | 8,738 |
27. | Other current liabilities |
Item |
30 June 2023 (unaudited) |
31 December 2022 | ||||||
Output VAT to be transferred |
40,828 | 44,750 | ||||||
|
|
|
|
|||||
Total |
40,828 | 44,750 | ||||||
|
|
|
|
28. | Long-term loans |
Item |
Currency | 30 June 2023 (unaudited) |
31 December 2022 | |||||||||
Credit loans |
||||||||||||
Borrowing from a related party (Note VIII.6) |
RMB | 700,000 | 700,000 |
The interest rate of the Groups long-term borrowings was 1.08% as at 30 June 2023 (31 December 2022: 1.08%).
2023 Interim Report |
177 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
29. | Lease liabilities |
30 June 2023 (unaudited) |
31 December 2022 | |||||||
Lease liabilities |
14,638 | 16,251 | ||||||
Less: Non-current liabilities due within one year (Note V.26) |
(9,982 | ) | (8,738 | ) | ||||
|
|
|
|
|||||
Total |
4,656 | 7,513 | ||||||
|
|
|
|
30. | Deferred income |
Item |
31 December 2022 |
Increase in current period |
Decrease in current period |
30 June 2023 (unaudited) |
Cause | |||||||||||||
Government grants |
134,608 | 1,005 | (5,000 | ) | 130,613 | related to assets/income |
Liability Items |
31 December 2022 |
Increase in current period |
Deduct from Property plant and Equipment |
Include in other income |
Deduct from general and administrative expenses |
Deduct from financial expenses |
Include in non-operating income |
Deduct from non-operating expense |
30 June 2023 (unaudited) |
Related to assets/income | ||||||||||||||||||||||||||||
Investment subsidy for Chemical Industry |
90,000 | | |
|
|
|
|
|
|
|
|
|
|
|
(5,000 | ) | |
|
|
85,000 | related to assets | |||||||||||||||||
Other government subsidy related to assets |
22,985 | | |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
22,985 | related to assets | ||||||||||||||||||
Other government subsidy related to income |
21,623 | 1,005 | |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
22,628 | related to income | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total |
134,608 | 1,005 | |
|
|
|
|
|
|
|
|
|
|
|
(5,000 | ) | |
|
|
130,613 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
178 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
31. | Share capital |
Increase or decrease in current period | ||||||||||||||||||||||||||||
31 December 2022 |
Issue new share |
Stock dividend |
Transfer from capital surplus to paid-in capital |
Other | Sub-total | 30 June 2023 (unaudited) |
||||||||||||||||||||||
Non-restricted Shares |
||||||||||||||||||||||||||||
Ordinary A shares listed in PRC |
7,328,814 | | | | | | 7,328,814 | |||||||||||||||||||||
Foreign investment H shared listed overseas |
3,495,000 | | | | (24,528 | ) | (24,528 | ) | 3,470,472 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Shares |
10,823,814 | | | | (24,528 | ) | (24,528 | ) | 10,799,286 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company was founded in Shanghai, PRC on 29 June 1993 with registered capital of RMB4,000,000,000 invested by its holding company-China National Petrochemical Corporation; these shares were converted from assets of former Shanghai Petrochemical Complex.
Approved by Zheng Wei Fa No. [1993] 30 issued by the State Council Securities Committee, the Company launched its Initial Public Offering (IPO) in July 1993 and September 1993 in Hong Kong, New York and Shanghai to issue 2.23 billion shares, including 1.68 billion H shares and 550 million A shares. The 550 million A shares included 400 million individual shares (including 150 million shares issued to SPC employees) and 150 million legal person shares. H shares were listed on the Hong Kong Stock Exchange on 26 July 1993 and listed on the New York Stock Exchange in the form of American Depositary Shares at the same time; the A shares were listed on the Shanghai Stock Exchange on 8 November 1993.
After the IPO, the total quantity of shares issued by the Company was 6.23 billion, including 4 billion state owned shares, 150 million legal person shares, 400 million individual shares, and 1.68 billion H shares.
According to the plan stated in the prospectus issued in July 1993, and approved by the China Securities Regulatory Commission, the Company issued 320 million ordinary A shares with a par value of RMB1 each at an issuing price of RMB2.4 each during the period from 5 April to 10 June 1994. These shares were listed on the Shanghai Stock Exchange on 4 July 1994. By then, the total quantity of shares issued was expanded from 6.23 billion to 6.55 billion.
2023 Interim Report |
179 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
31. | Share capital (continued) |
On 22 August 1996, the Company issued 500 million H shares to overseas investors; on 6 January 1997, another 150 million H shares were issued to overseas investors. By then, the total quantity of shares issued was expanded to 7.2 billion, including 2.33 billion H shares.
In 1998, China National Petrochemical Corporation was restructured to Sinopec Group.
Sinopec Corp. was founded on 28 February 2000 based on the approved assets restructuring of Sinopec Group. As part of the restructuring, the shares of the Company held by the Sinopec Group were injected in Sinopec Corp.; after the restructuring, the ownership of 4 billion state-owned shares of the Company held by the Sinopec Group were transferred to Sinopec Corp., and the shares were changed to state owned legal person shares in nature.
All the A and H shares rank pari passu in all respects.
Pursuant to the Approval on matters relating to the Share Segregation Reform of Sinopec Shanghai Petrochemical Company Limited issued by the State-owned Assets Supervision and Administration Commission of the State Council (State Owned Property [2013] No.443), a General Meeting of A share shareholders was held on 8 July 2013 and passed the resolution of Share Segregation Reform of Sinopec Shanghai Petrochemical Company Limited (Amendment) (the share segregation reform resolution) which was published by the Company on the Shanghai Stock Exchange (SSE) website on 20 June 2013. According to the Share Segregation Reform Resolution, the controlling shareholder of the Company, Sinopec Corp., offered shareholders of circulating A shares 5 shares for every 10 circulating A shares they held on 16 August 2013, aggregating 360,000,000 A shares, for the purpose of obtaining the listing rights of its noncirculating shares in the A Shares market. From 20 August 2013 (the circulation date), all the Companys non-circulating A shares have been granted circulating rights on the Shanghai Stock Exchange (SSE). As part of the restricted conditions, Sinopec Corp. committed that all the 3,640,000,000 A shares held were not allowed to be traded on SSE or transferred within 12 months from the circulation date (the restriction period). After the restriction period, Sinopec Corp. can only sell no more than 5 and 10 percent of its total shares within 12 and 24 months, respectively. The former 150,000,000 non-circulating A shares held by social legal persons were also prohibited to be traded on SSE or transferred within 12 months from the circulation date. Meanwhile, Sinopec Corp. also committed in the Share Segregation Reform Resolution that a scheme of converting surplus to share capital (no less than 4 shares for every 10 shares) will be proposed on the board of directors and shareholders meetings within 6 months after the circulation date.
On 22 October 2013, Sinopec Corp. passed the Share Reform Commitment Scheme added up to 3,600,000,000 shares, after deliberation of temporary shareholders meeting, A share class shareholders meeting and H share class shareholders meeting.
180 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
31. | Share capital (continued) |
Since the Company share reform, which was executed after 20 August 2013, the Companys non-circulating A shares have been granted circulating rights on the Shanghai Stock Exchange (SSE). As part of the restricted conditions, all the 5,460,000,000 A shares held by Sinopec Corp. and 225,000,000 A shares held by social legal persons had been realized circulation as at 31 December 2016.
On 23 August 2017, the first Share Option Incentive Scheme of A shares was passed according to board resolution. On 27 September 2017, the Company increased newly registered capital of RMB14,177 thousand, which was paid in cash amount to RMB54,580 thousand by 199 grantees. The difference between actual capital contribution and registered capital amount to RMB40,403 thousand was included in share premium, and the confirmed capital reserve employee equity option plan in the waiting period is RMB21,916 thousand, which is transferred to the capital reserve equity premium. As to 31 December 2017, total equity capital was 10,814,176,600 shares.
On 8 January 2018, according to the resolution of the board of directors of the Company, the second exercise period exercise plan of the Companys common a-share stock option incentive plan was adopted. On 12 January 2018, the new registered capital of the Company is RMB9,637 thousand, which is fully paid in cash of RMB37,102 thousand by 185 equity incentive objects who meet the conditions for exercise. The difference between the actual capital contribution and the subscribed registered capital is RMB27,465 thousand, which is included in the Companys capital reserve equity premium, and the confirmed capital reserve employee equity option plan in the waiting period is RMB17,062 thousand, which is transferred to the capital reserve equity premium.
According to the board resolution of the Company on 28 December 2018, the third exercise period of the stock option incentive plan for A shares of the common stock of the Company will not be exercised because the non-market exercise conditions are not met. As at 30 June 2023 and 31 December 2022, the total share capital of the Company was 10,823,813,500 shares.
At 22 June 2022, the 2021 General Meeting of shareholders, the 2022 Second General Meeting of A-share Shareholders, and the 2022 Second General Meeting of H-share Shareholders approved the proposal to authorize the board of directors to repurchase domestic shares or overseas listed foreign shares of the company. According to this general authorization, our company repurchased shares by call auction starting from 27 October 2022. As of 31 December 2022, our company has repurchased 24,528,000 H-share ordinary shares on the Hong Kong Stock Exchange, with consideration of RMB25,689 thousand. At 17 February 2023, the company cancelled 24,528,000 H shares repurchased, accounting for 0.23% of the total issued shares of the company. After this cancellation, the total number of issued shares has been reduced to 10,799,285,500, including 7,328,813,500 A-shares and 3,470,472,000 H-shares. As at 30 June 2023, total share capital of the Company were RMB10,799,285, 500 Yuan per share.
2023 Interim Report |
181 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
32. | Capital reserve |
Item |
31 December 2022 |
Increase in current period |
Decrease in current period |
30 June 2023 (unaudited) |
||||||||||||
Government grants |
412,370 | | | 412,370 | ||||||||||||
Refund of harbour construction charge |
32,485 | | | 32,485 | ||||||||||||
Share premium (Note V.33) |
106,846 | | (1,161 | ) | 105,685 | |||||||||||
Others |
58,626 | | | 58,626 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
610,327 | | (1,161 | ) | 609,166 | |||||||||||
|
|
|
|
|
|
|
|
As at 30 June 2023 and 31 December 2022, there were no outstanding share options.
33. | Treasury stock |
Item |
31 December 2022 |
Increase in current period |
Decrease in current period |
30 June 2023 (unaudited) |
||||||||||||
Repurchase of Hong Kong ordinary shares |
25,689 | | 25,689 | |
At 22 June 2022, the 2021 General Meeting of shareholders, the 2022 Second General Meeting of A-share Shareholders, and the 2022 Second General Meeting of H-share Shareholders approved the proposal to authorize the board of directors to repurchase domestic shares or overseas listed foreign shares of the company. According to this general authorization, our company repurchased shares by call auction starting from 27 October 2022. As of 31 December 2022, our company has repurchased 24,528,000 H-share ordinary shares on the Hong Kong Stock Exchange, with consideration of RMB25,689 thousand. In February 2023, the company cancelled 24,528,000 H shares repurchased. After this cancellation, the total number of issued shares has been reduced RMB24,528 thousand, and the capital reserve has been reduced RMB1,161 thousand.
182 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
34. | Other comprehensive income |
Other comprehensive income in Balance Sheet |
Other comprehensive income in six months ended 30 June 2023 Income Statement |
|||||||||||||||||||||||||||||||||||
31 December 2022 |
Net-of-tax amount attributable to shareholders of the Company |
Less: Amounts transferred from hedging reserve to initial carrying amount of hedged items |
30 June 2023 (unaudited) |
Before-tax amount |
Less: Previously recognized amount transferred to profit or loss |
Less: income tax expense |
Net-of-tax amount attributable to shareholders of the Company |
Net-of-tax amount attributable to non- controlling interests |
||||||||||||||||||||||||||||
Items that may be reclassified to profit or loss |
||||||||||||||||||||||||||||||||||||
Cash flow hedge reserves |
| | | | | | | | | |||||||||||||||||||||||||||
Other comprehensive income recognized under equity method |
(806 | ) | (21 | ) | | (827 | ) | (21 | ) | | | (21 | ) | | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total |
(806 | ) | (21 | ) | | (827 | ) | (21 | ) | | | (21 | ) | | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income in Balance Sheet |
Other comprehensive income in six months ended 30 June 2022 Income Statement |
|||||||||||||||||||||||||||||||||||
31 December 2021 |
Net-of-tax amount attributable to shareholders of the Company |
Less: Amounts transferred from hedging reserve to initial carrying amount of hedged items |
30 June 2022 (unaudited) |
Before-tax amount |
Less: Previously recognized amount transferred to profit or loss |
Less: income tax expense |
Net-of-tax amount attributable to shareholders of the Company |
Net-of-tax amount attributable to non- controlling interests |
||||||||||||||||||||||||||||
Items that may be reclassified to profit or loss |
||||||||||||||||||||||||||||||||||||
Cash flow hedge reserves |
36,460 | 144,254 | | 180,714 | 394,762 | | (98,691 | ) | 296,071 | | ||||||||||||||||||||||||||
Other comprehensive income recognized under equity method |
22,965 | (22,558 | ) | | 407 | (22,558 | ) | | | (22,558 | ) | | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total |
59,425 | 121,696 | | 181,121 | 372,204 | | (98,691 | ) | 273,513 | | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 Interim Report |
183 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
35. | Specific reserve |
Item |
31 December 2022 |
Accrued in current period |
Utilized in current period |
30 June 2023 (unaudited) |
||||||||||||
Safety fund |
240,418 | 76,290 | (55,706 | ) | 261,002 | |||||||||||
Item |
31 December 2021 |
Accrued in current period |
Utilized in current period |
30 June 2022 (unaudited) |
||||||||||||
Safety fund |
216,512 | 68,912 | (60,426 | ) | 224,998 |
Specific reserve represents unutilized safety fund accrued in accordance with state regulations (Note III.25).
184 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
36. | Surplus reserve |
Item |
31 December 2022 (restated) |
Increase in current period |
Decrease in current period |
30 June 2023 (unaudited) |
||||||||||||
Statutory surplus reserve |
6,571,279 | | | 6,571,279 | ||||||||||||
Discretionary surplus reserve |
101,355 | | | 101,355 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
6,672,634 | | | 6,672,634 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Item |
31 December 2021 (restated) |
Increase in current period |
Decrease in current period |
30 June 2022 (unaudited) (restated) |
||||||||||||
Statutory surplus reserve |
6,571,279 | | | 6,571,279 | ||||||||||||
Discretionary surplus reserve |
101,355 | | | 101,355 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
6,672,634 | | | 6,672,634 | ||||||||||||
|
|
|
|
|
|
|
|
In accordance with the Company Law and the Companys Articles of Association, the Company should appropriate 10% of net profit for the year to the statutory surplus reserve. The statutory surplus reserve can be used to make up for the loss or increase the share capital after approval from the appropriate authorities. No statutory surplus reserve was appropriated in current period (for the six months ended 30 June 2022: Nil).
The Company appropriates for the discretionary surplus reserve should be proposed by the board of directors and approved by the shareholders meeting. The discretionary surplus reserve can be used to make up for the loss or increase the share capital after approval from the appropriate authorities. No discretionary surplus reserve was appropriated in current period (for the six months ended 30 June 2022: Nil).
2023 Interim Report |
185 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
37. | Retained earnings |
For the six months ended 30 June | ||||||||
Item |
2023 (unaudited) |
2022 (unaudited) |
||||||
Retained earnings at the end of the period before adjustment |
7,923,002 | 11,877,455 | ||||||
Total undistributed profits at the beginning of the adjustment period (increase+, decrease -) (Note lll. 33) |
46 | (57 | ) | |||||
Retained earnings at the beginning of the period after adjustment |
7,923,048 | 11,877,398 | ||||||
Add: Net loss attributable to shareholders of the Company |
(988,277 | ) | (436,042 | ) | ||||
Less: Appropriation to statutory reserve (Note V. 36) |
| | ||||||
Dividend to ordinary shares (1) |
| (1,082,381 | ) | |||||
|
|
|
|
|||||
Retained earnings at the end of the period |
6,934,771 | 10,358,975 | ||||||
|
|
|
|
(1) | Pursuant to the resolution of the General Meeting of shareholders at 28 June 2023, the company did not distribute cash dividends for the year 2022. |
Pursuant to the resolution of the General Meeting of shareholders 22 June 2022, the company distributed a cash dividend of RMB0.1 per share (including tax) to all shareholders for the year 2021, totalling RMB1,082,381 thousand. The dividend was paid in July 2022.
The board of directors did not propose to distribute an interim dividend for the 6-month period ending 30 June 2023 (6-month period ending June 30, 2022: Nil).
(2) | Retained earnings at the end of the year |
As at 30 June 2023, the consolidated retained earnings attributable to the Group included appropriation to surplus reserves made by the Companys subsidiaries amounting to RMB296,083 thousand (31 December 2022: RMB296,083 thousand).
186 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
38. | Non-controlling interests |
Attributable to the non-controlling interests of the Group:
Name of subsidiaries |
30 June 2023 (unaudited) |
31 December 2022 (restated) |
||||||
China Jinshan Associated Trading Corporation (Jinmao) |
107,314 | 101,448 | ||||||
Shanghai Jinchang Engineering Plastics Company Limited (Jinchang) |
22,956 | 26,231 | ||||||
|
|
|
|
|||||
Total |
130,270 | 127,679 | ||||||
|
|
|
|
39. | Operating income and operating costs |
For the six months ended 30 June |
||||||||||||
Item |
Note | 2023 (unaudited) |
2022 (unaudited) |
|||||||||
Income from principal activities |
(1 | ) | 44,710,183 | 45,711,357 | ||||||||
Income from other operating activities |
226,868 | 188,998 | ||||||||||
|
|
|
|
|||||||||
Total |
44,937,051 | 45,900,355 | ||||||||||
|
|
|
|
For the six months ended 30 June | ||||||||||||
Item |
Note | 2023 (unaudited) |
2022 (unaudited) |
|||||||||
Cost of principal activities |
(1 | ) | 38,408,737 | 38,995,106 | ||||||||
Cost of other operating activities |
147,190 | 123,347 | ||||||||||
|
|
|
|
|||||||||
Total |
38,555,927 | 39,118,453 | ||||||||||
|
|
|
|
2023 Interim Report |
187 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
39. | Operating income and operating costs (continued) |
(1) | Income and cost from principal activities |
The principal business of the Group mainly belongs to the petrochemical industry. Analysis by product is as following:
For the six months ended 30 June | ||||||||||||||||
2023 (unaudited) | 2022 (unaudited) | |||||||||||||||
Product Description |
Income from principal activities |
Cost of principal activities |
Income from principal activities |
Cost of principal activities |
||||||||||||
Petroleum products |
30,675,736 | 24,774,204 | 27,517,541 | 20,704,410 | ||||||||||||
Intermediate petrochemicals |
5,444,886 | 4,832,795 | 6,432,577 | 6,361,481 | ||||||||||||
Trading of petrochemical products |
4,260,964 | 4,203,453 | 6,955,959 | 6,898,958 | ||||||||||||
Resins and plastics |
3,852,413 | 3,889,805 | 4,314,408 | 4,345,070 | ||||||||||||
Synthetic fibres |
223,383 | 459,266 | 230,723 | 388,301 | ||||||||||||
Others |
252,801 | 249,214 | 260,149 | 296,886 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
44,710,183 | 38,408,737 | 45,711,357 | 38,995,106 | ||||||||||||
|
|
|
|
|
|
|
|
188 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
39. | Operating income and operating costs (continued) |
(2) | For the six months ended 30 June 2023, analysis of revenue is as following: |
For the six months ended 30 June 2023 (unaudited) | ||||||||||||||||||||||||||||
Classification |
Petroleum products |
Intermediate petrochemicals |
Trading of petrochemical products |
Resins and plastics |
Synthetic fibres |
Others | Total | |||||||||||||||||||||
Income from principal activities |
30,675,736 | 5,444,886 | 4,260,964 | 3,852,413 | 223,383 | 252,801 | 44,710,183 | |||||||||||||||||||||
Including: Recognized at a point in time |
30,675,736 | 5,444,886 | 4,230,925 | 3,852,413 | 223,383 | 252,801 | 44,680,144 | |||||||||||||||||||||
Recognized over time |
| | 30,039 | | | | 30,039 | |||||||||||||||||||||
Income from other operating activities |
| | | | | 226,868 | 226,868 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
30,675,736 | 5,444,886 | 4,260,964 | 3,852,413 | 223,383 | 479,669 | 44,937,051 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended 30 June 2022, analysis of revenue is as following:
For the six months ended 30 June 2022 (unaudited) | ||||||||||||||||||||||||||||
Classification |
Petroleum products |
Intermediate petrochemicals |
Trading of petrochemical products |
Resins and plastics |
Synthetic fibres |
Others | Total | |||||||||||||||||||||
Income from principal activities |
27,517,541 | 6,432,577 | 6,955,959 | 4,314,408 | 230,723 | 260,149 | 45,711,357 | |||||||||||||||||||||
Including: Recognized at a point in time |
27,517,541 | 6,432,577 | 6,915,528 | 4,314,408 | 230,723 | 260,149 | 45,670,926 | |||||||||||||||||||||
Recognized over time |
| | 40,431 | | | | 40,431 | |||||||||||||||||||||
Income from other operating activities |
| | | | | 188,998 | 188,998 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
27,517,541 | 6,432,577 | 6,955,959 | 4,314,408 | 230,723 | 449,147 | 45,900,355 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 Interim Report |
189 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
40. | Taxes and surcharges |
For the six months ended 30 June |
||||||||||
2023 | 2022 | |||||||||
Item | (unaudited) | (unaudited) | Tax base and rate | |||||||
Consumption tax |
5,527,498 | 5,026,114 | According to relevant PRC tax regulations, since 1 January 2009, the Group required to pay consumption tax based on the Groups sales of gasoline, diesel, naphtha and fuel oil rate according to the applicable tax rate (Note IV) | |||||||
Urban maintenance and construction tax |
383,292 | 377,722 | 5% or 7% of actual payments of consumption tax and VAT during the period | |||||||
Education surcharges |
277,558 | 275,514 | 3% of actual payments of consumption tax and VAT during the period | |||||||
Stamp tax |
8,694 | 16,946 | Applicable tax rate | |||||||
Property tax |
16,132 | 8,504 | 1.2% of taxable property value or 12% of rental expense | |||||||
Land use tax |
8,992 | 4,893 | Applicable tax rate | |||||||
Others |
4,415 | 7,340 | ||||||||
|
|
|
|
|||||||
Total |
6,226,581 | 5,717,033 | ||||||||
|
|
|
|
41. | Selling expenses |
For the six months ended 30 June | ||||||||
2023 | 2022 | |||||||
Item | (unaudited) | (unaudited) | ||||||
Transportation fee |
27,812 | 42,181 | ||||||
Sales commission |
50,602 | 58,868 | ||||||
Staff costs |
38,058 | 39,165 | ||||||
Storage and logistics expenses |
21,155 | 22,925 | ||||||
Others |
10,832 | 8,120 | ||||||
|
|
|
|
|||||
Total |
148,459 | 171,259 | ||||||
|
|
|
|
190 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
42. | General and administrative expenses |
For the six months ended 30 June | ||||||||
2023 | 2022 | |||||||
Item | (unaudited) | (unaudited) | ||||||
Staff costs |
572,225 | 639,092 | ||||||
Repair and maintenance expense |
134,015 | 475,154 | ||||||
Depreciation and amortization |
93,666 | 83,302 | ||||||
Security and fire fighting expenses |
20,948 | 21,714 | ||||||
Information system operation maintenance |
21,992 | 19,147 | ||||||
Depreciation of right-of-use assets |
6,139 | 6,433 | ||||||
Others |
109,242 | 102,752 | ||||||
|
|
|
|
|||||
Total |
958,227 | 1,347,594 | ||||||
|
|
|
|
43. | Research and development expenses |
For the six months ended 30 June | ||||||||
2023 | 2022 | |||||||
Item | (unaudited) | (unaudited) | ||||||
Equipment process and product technology research and development |
64,227 | 34,025 | ||||||
System application development |
3,724 | 2,356 | ||||||
Others |
111 | 45 | ||||||
|
|
|
|
|||||
Total |
68,062 | 36,426 | ||||||
|
|
|
|
2023 Interim Report |
191 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
44. | Financial expenses (- for income) |
For the six months ended 30 June | ||||||||
2023 | 2022 | |||||||
Item |
(unaudited) | (unaudited) | ||||||
Interest expenses from loans and payables |
65,529 | 60,247 | ||||||
Less: Capitalized borrowing costs |
(10,393 | ) | (10,777 | ) | ||||
Add: Interest expenses from lease liabilities |
411 | 573 | ||||||
Interest income from deposits and receivables |
(185,052 | ) | (329,305 | ) | ||||
Net exchange losses/(gains) |
1,780 | (20,082 | ) | |||||
Others |
2,444 | 3,348 | ||||||
|
|
|
|
|||||
Total |
(125,281 | ) | (295,996 | ) | ||||
|
|
|
|
The interest rate per annum, at which the borrowing costs were capitalized by the Group, was 1.66% for 2023 (for the six months ended 30 June 2022: 2.13%).
45. | Other income |
For the six months ended 30 June | ||||||||||||
2023 | 2022 | |||||||||||
Item |
(unaudited) | (unaudited) | related to asset/related to income | |||||||||
Subsidy income |
2,808 | 680 | related to income | |||||||||
Tax refunds |
484 | 503 | related to income | |||||||||
Others |
4,107 | 4,722 | related to income | |||||||||
|
|
|
|
|||||||||
Total |
7,399 | 5,905 | ||||||||||
|
|
|
|
192 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
46. | Investment income (- for losses) |
For the six months ended 30 June | ||||||||
2023 | 2022 | |||||||
Item |
(unaudited) | (unaudited) | ||||||
(Losses)/gains from investment in associates and joint ventures |
(118,363 | ) | (32,537 | ) | ||||
Losses from disposal of derivative financial instruments |
| (18,618 | ) | |||||
Discount loss of receivables |
(1,997 | ) | (2,187 | ) | ||||
Others |
| 2,667 | ||||||
|
|
|
|
|||||
Total |
(120,360 | ) | (50,675 | ) | ||||
|
|
|
|
There was no significant restriction on the repatriation of investment income.
47. | Gains from changes in fair value(- for losses) |
For the six months ended 30 June | ||||||||
2023 | 2022 | |||||||
Item |
(unaudited) | (unaudited) | ||||||
Financial assets measured at fair value through profit or lossstructured deposits |
| 9,300 | ||||||
Derivative financial assets and derivative financial liabilities commodity swaps contracts |
| (8,987 | ) | |||||
|
|
|
|
|||||
Total |
| 313 | ||||||
|
|
|
|
2023 Interim Report |
193 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
48. | Credit losses |
For the six months ended 30 June | ||||||||
2023 | 2022 | |||||||
Item |
(unaudited) | (unaudited) | ||||||
Accounts receivable credit loss (Note V. 2) |
170 | (162 | ) | |||||
Other receivable credit loss (Note V. 5) |
(3 | ) | (4,725 | ) | ||||
|
|
|
|
|||||
Total |
167 | (4,887 | ) | |||||
|
|
|
|
49. | Impairment losses |
For the six months ended 30 June | ||||||||
2023 | 2022 | |||||||
Item |
(unaudited) | (unaudited) | ||||||
Impairment loss on inventories (Note V. 6) |
(190,486 | ) | (177,777 | ) |
50. | Gains from asset disposals |
For the six months ended 30 June |
Amount recognised in ended 30 June 2023 |
|||||||||||
2023 | 2022 | |||||||||||
Item |
(unaudited) | (unaudited) | (unaudited) | |||||||||
Gains from disposal of fixed assets |
434 | | 434 | |||||||||
Losses from disposal of fixed assets |
| (1,062 | ) | | ||||||||
|
|
|
|
|
|
|||||||
Total |
434 | (1,062 | ) | 434 | ||||||||
|
|
|
|
|
|
194 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
51. | Non-operating income |
For the six months ended 30 June | Amount recognised in extraordinary gain and loss for six months ended 30 June 2023 (unaudited) |
|||||||||||||||
Item |
Note | 2023 (unaudited) |
2022 (unaudited) |
|||||||||||||
Government grants |
(1 | ) | 5,000 | 5,000 | 5,000 | |||||||||||
Others |
9,505 | 6,594 | 9,505 | |||||||||||||
|
|
|
|
|
|
|||||||||||
Total |
14,505 | 11,594 | 14,505 | |||||||||||||
|
|
|
|
|
|
(1) | Government grants mainly include: |
For the six months ended 30 June | ||||||||
Item |
2023 (unaudited) |
2022 (unaudited) |
||||||
Amortization of deferred income (Note V.30) |
5,000 | 5,000 |
52. | Non-operating expenses |
For the six months ended 30 June | Amount recognised in extraordinary gain and loss for six months ended 30 June 2023 (unaudited) |
|||||||||||
Item |
2023 (unaudited) |
2022 (unaudited) |
||||||||||
Losses from scrapping of fixed assets |
12,135 | 10,886 | 12,135 | |||||||||
Allowances |
9,290 | 18,091 | 9,290 | |||||||||
Others |
7,284 | 2,621 | 7,284 | |||||||||
|
|
|
|
|
|
|||||||
Total |
28,709 | 31,598 | 28,709 | |||||||||
|
|
|
|
|
|
2023 Interim Report |
195 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
53. | Income tax benefits |
For the six months ended 30 June | ||||||||
Item |
2023 (unaudited) |
2022 (unaudited) |
||||||
Current tax expense for the period based on tax law and regulations |
7,429 | 8,737 | ||||||
Changes in deferred tax assets/liabilities |
(233,490 | ) | (74,485 | ) | ||||
Tax filing differences |
(227 | ) | 54,017 | |||||
|
|
|
|
|||||
Total |
(226,288 | ) | (11,731 | ) | ||||
|
|
|
|
Reconciliation between income tax expenses and accounting loss:
For the six months ended 30 June | ||||||||
Item |
2023 (unaudited) |
2022 (unaudited) |
||||||
Total Losses profit before income tax |
(1,211,974 | ) | (442,601 | ) | ||||
Expected income tax expense at applicable tax rates |
(302,994 | ) | (110,650 | ) | ||||
Tax effect of investment income accounted for using the equity method |
30,011 | 8,134 | ||||||
Other non-taxable profit |
(2,637 | ) | (6,109 | ) | ||||
Costs, expenses and losses not deductible |
37,532 | 33,627 | ||||||
Difference in settlement of income tax in previous years and the supplementary income tax |
(227 | ) | 54,017 | |||||
Deductible loss of unrecognized deferred income tax assets in the previous years |
(1,118 | ) | (563 | ) | ||||
Derecognition of previously recognized tax losses |
4,074 | | ||||||
Tax losses for which no deferred income tax asset was recognized |
8,986 | 9,764 | ||||||
Confirmation of temporary differences not confirmed in previous periods |
85 | 49 | ||||||
|
|
|
|
|||||
Income tax revenue |
(226,288 | ) | (11,731 | ) | ||||
|
|
|
|
196 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
54. | Calculation of basic losses per share and diluted losses per share |
(1) | Basic losses per share |
Basic losses per share is calculated by dividing the consolidated net loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding:
For the six months ended 30 June | ||||||||
Item |
2023 (unaudited) |
2022 (unaudited) (restated) |
||||||
Consolidated net loss attributable to ordinary shareholders of the Company |
(988,277 | ) | (436,042 | ) | ||||
Weighted average number of the Companys ordinary shares outstanding (thousand share) |
10,799,286 | 10,823,814 | ||||||
Basic losses per share (RMB per share) |
(0.092 | ) | (0.040 | ) |
(2) | Diluted losses per share |
For the six months ended 30 June 2023, there are no diluted ordinary shares outstanding, the diluted losses per share equals the basic losses per share.
2023 Interim Report |
197 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
55. | Supplementary information on income statement |
Expenses on income statement are analysed by their nature:
For the six months ended 30 June | ||||||||
Item |
2023 (unaudited) |
2022 (unaudited) |
||||||
Operating income |
44,937,051 | 45,900,355 | ||||||
Less: Changes in inventories of finished goods and work in progress |
(259,928 | ) | (862,745 | ) | ||||
Consumed raw materials and low value consumables, etc. |
31,893,403 | 30,413,727 | ||||||
Cost of purchasing products |
4,203,453 | 6,898,958 | ||||||
Employee benefits |
1,769,930 | 1,778,926 | ||||||
Depreciation and amortization expenses |
982,987 | 877,134 | ||||||
Taxes and surcharges |
6,226,581 | 5,717,033 | ||||||
Repair and maintenance expenses |
479,778 | 834,245 | ||||||
Other expenses |
661,052 | 733,487 | ||||||
Finance expenses (- for income) |
(125,281 | ) | (295,996 | ) | ||||
Add: Gains from changes in fair value |
| 313 | ||||||
Gains from asset disposals (- for loss) |
434 | (1,062 | ) | |||||
Other income |
7,399 | 5,905 | ||||||
Investment income |
(120,360 | ) | (50,675 | ) | ||||
Impairment losses (- for loss) |
(190,486 | ) | (177,777 | ) | ||||
Credit losses (- for loss) |
167 | (4,887 | ) | |||||
Operating loss |
(1,197,770 | ) | (422,597 | ) |
198 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
56. | Notes to cash flow statement |
(1) | Proceeds from other operating activities |
For the six months ended 30 June | ||||||||
Item |
2023 (unaudited) |
2022 (unaudited) |
||||||
Subsidy income |
6,915 | 5,402 | ||||||
Others |
124,600 | 106,323 | ||||||
|
|
|
|
|||||
Total |
131,515 | 111,725 | ||||||
|
|
|
|
(2) | Payments for other operating activities |
For the six months ended 30 June | ||||||||
Item |
2023 (unaudited) |
2022 (unaudited) |
||||||
Agency fee |
(50,602 | ) | (58,868 | ) | ||||
Research and development expenses |
(20,281 | ) | (10,896 | ) | ||||
Information system operation maintenance |
(21,992 | ) | (19,147 | ) | ||||
Commodity storage and logistics fee |
(21,155 | ) | (22,925 | ) | ||||
Security and fire fighting expenses |
(20,948 | ) | (21,714 | ) | ||||
Others |
(117,093 | ) | (29,589 | ) | ||||
|
|
|
|
|||||
Total |
(252,071 | ) | (163,139 | ) | ||||
|
|
|
|
2023 Interim Report |
199 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
56. | Notes to cash flow statement (continued) |
(3) | Proceeds from other investing activities |
For the six months ended 30 June | ||||||||
Item |
2023 (unaudited) |
2022 (unaudited) |
||||||
Time deposits due within one-year receipts |
1,000,000 | 5,950,000 | ||||||
Interest income |
58,167 | 218,238 | ||||||
|
|
|
|
|||||
Total |
1,058,167 | 6,168,238 | ||||||
|
|
|
|
(4) | Payments for other investing activities |
For the six months ended 30 June | ||||||||
Item |
2023 (unaudited) |
2022 (unaudited) |
||||||
Payments for time deposits due over one-year |
| (2,600,000 | ) | |||||
Entrusted loan |
| (150,000 | ) | |||||
Others |
(1,997 | ) | (55,687 | ) | ||||
|
|
|
|
|||||
Total |
(1,997 | ) | (2,805,687 | ) | ||||
|
|
|
|
(5) | Payments for other financing activities |
For the six months ended 30 June | ||||||||
Item |
2023 (unaudited) |
2022 (unaudited) |
||||||
Lease liabilities payment |
(6,825 | ) | (2,991 | ) |
For the six months ended 30 June 2023, cash payment of the Group related to lease activities is RMB15,051 thousand (for the six months ended 30 June 2022: RMB11,498 thousand), except for the above amount included in financing activities, the rest are included in operating activities.
200 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
57. | Supplementary information on cash flow statement |
(1) | Supplement to cash flow statement |
i. | Reconciliation of net loss to cash flows from operating activities: |
For the six months ended 30 June | ||||||||
Item |
2023 (unaudited) |
2022 (unaudited) (restated) |
||||||
Net loss |
(985,686 | ) | (430,870 | ) | ||||
Add: Provisions for impairment of assets |
190,486 | 177,777 | ||||||
(Recovery)/provision of credit losses |
(167 | ) | 4,887 | |||||
Depreciation of investment properties |
7,650 | 7,661 | ||||||
Depreciation of fixed assets |
812,683 | 717,218 | ||||||
Depreciation of right-of-use assets |
7,188 | 7,608 | ||||||
Amortization of intangible assets |
9,984 | 9,984 | ||||||
Amortization of long-term deferred expenses |
145,482 | 134,663 | ||||||
Losses on disposal of fixed assets |
8,876 | 5,960 | ||||||
Gains from changes in fair value |
| (313 | ) | |||||
Finance expenses (- for income) |
(68,305 | ) | (220,654 | ) | ||||
Investment loss (- for income) |
120,360 | 50,675 | ||||||
Decrease in deferred tax assets (- for increase) |
(234,502 | ) | (73,138 | ) | ||||
Increase/(decrease) in deferred tax liabilities (- for decrease) |
1,012 | (1,347 | ) | |||||
(Decrease)/increase in deferred income (- for decrease) |
(3,995 | ) | 7,200 | |||||
Decrease in inventories (- for increase) |
(559,216 | ) | (801,951 | ) | ||||
Decrease in operating receivables (- for increase) |
2,393,905 | 376,022 | ||||||
Increase in operating payables (- for decrease) |
(2,093,221 | ) | (6,384,990 | ) | ||||
Increase in specific reserve |
20,584 | 8,486 | ||||||
|
|
|
|
|||||
Net cash flows used in operating activities |
(226,882 | ) | (6,405,122 | ) | ||||
|
|
|
|
2023 Interim Report |
201 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
57. | Supplementary information on cash flow statement (continued) |
(1) | Supplement to cash flow statement (continued) |
ii. | Change in cash and cash equivalents: |
For the six months ended 30 June |
||||||||
Item |
2023 (unaudited) |
2022 (unaudited) |
||||||
Cash and cash equivalents at end of the period |
4,610,758 | 2,438,650 | ||||||
Less: Cash and cash equivalents at beginning of the period |
(889,413 | ) | (5,112,010 | ) | ||||
|
|
|
|
|||||
Net increase/(decrease) in cash and cash equivalents |
3,721,345 | (2,673,360 | ) | |||||
|
|
|
|
(2) | Details of cash and cash equivalents |
30 June 2023 (unaudited) |
31 December 2022 | |||||||
Cash at bank and on hand |
| | ||||||
Including: Bank deposits available on demand |
4,610,758 | 889,413 | ||||||
|
|
|
|
|||||
Cash and cash equivalents at the end of the period/ year |
4,610,758 | 889,413 | ||||||
|
|
|
|
202 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
58. | Foreign monetary items |
30 June 2023 (unaudited) | ||||||||||||
Foreign currency | Exchange rate | RMB currency | ||||||||||
Cash at bank and on handUSD |
11,090 | 7.2258 | 80,134 | |||||||||
Accounts receivableUSD |
3,320 | 7.2258 | 23,990 | |||||||||
Other receivableUSD |
40 | 7.2258 | 289 | |||||||||
Other receivableHKD |
30,328 | 0.9220 | 27,962 | |||||||||
Receivables under financingUSD |
22,067 | 7.2258 | 159,452 | |||||||||
Accounts payableUSD |
(47,971 | ) | 7.2258 | (346,629 | ) | |||||||
Other payablesUSD |
(477 | ) | 7.2258 | (3,447 | ) | |||||||
Gross balance sheet exposureUSD |
(11,931 | ) | (86,211 | ) | ||||||||
Gross balance sheet exposureHKD |
30,328 | 27,962 |
31 December 2022 |
||||||||||||
Foreign currency | Exchange rate | RMB currency | ||||||||||
Cash at bank and on handUSD |
28,084 | 6.9646 | 195,594 | |||||||||
Accounts receivable USD |
113 | 6.9646 | 787 | |||||||||
Other receivable USD |
40 | 6.9646 | 279 | |||||||||
Other receivableHKD |
30,328 | 0.8933 | 27,092 | |||||||||
Receivables under financingUSD |
55,589 | 6.9646 | 387,155 | |||||||||
Accounts payable -USD |
(92,502 | ) | 6.9646 | (644,239 | ) | |||||||
Other payableUSD |
(1,917 | ) | 6.9646 | (13,351 | ) | |||||||
Gross balance sheet exposure USD |
(10,593 | ) | (73,775 | ) | ||||||||
Gross balance sheet exposureHKD |
30,328 | 27,092 |
2023 Interim Report |
203 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
59. | Leases |
(1) | As a lessor |
(a) | Operating lease |
For the six months ended 30 June | ||||||||
Item |
2023 (unaudited) |
2022 (unaudited) |
||||||
Lease income |
47,942 | 41,150 |
The Group leases out some land, buildings and machinery. The lease period ranges from 1 to 20 years. The Group has classified these leases as operating leases, because they do not transfer substantially all of the risks and rewards incidental to the ownership of the assets.
(2) | As a lessee |
For the six months ended 30 June | ||||||||
Item |
2023 (unaudited) |
2022 (unaudited) |
||||||
Short-term lease expenses applied the practical expedient |
8,226 | 8,507 | ||||||
Total cash outflow for leases |
15,051 | 11,498 | ||||||
|
|
|
|
204 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
V. | Notes to the consolidated financial statements (continued) |
60. | Government grants |
(1) | Details of government grants |
Category |
Amount | Presentation item | Amount recognized in profit or loss for the current period |
|||||||||
Investment subsidy for Chemical Industry |
85,000 | |
Deferred income/ non-operating income |
|
5,000 | |||||||
Others subsidy relating to assets |
22,985 | Deferred income | | |||||||||
Others subsidy relating to income |
22,628 | Deferred income | | |||||||||
Local education surcharge special fund subsidy |
2,808 | Other income | 2,808 | |||||||||
Commission for withholding tax refund |
484 | Other income | 484 | |||||||||
Others subsidy relating to income |
4,107 | Other income | 4,107 |
(2) | For the six months ended 30 June 2023, there is no repayment of government grants. |
2023 Interim Report |
205 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
VI. | Interests in other entities |
1. | Interests in subsidiaries |
(1) | Main components of the Groups subsidiaries as at 30 June 2023: |
Name of enterprise |
Main business area |
Place of registration |
Principal activities |
Registered capital (thousands) |
Percentage of equity% |
Way of acquisition | ||||||||||||||||||||
Directly | Indirectly | |||||||||||||||||||||||||
Toufa |
Shanghai | Shanghai | Investment | RMB2,100,000 | 100.00 | % | | Establish | ||||||||||||||||||
Jinmao |
Shanghai | Shanghai | Trading | RMB25,000 | 67.33 | % | | Establish | ||||||||||||||||||
Jinchang |
Shanghai | Shanghai | Manufacturing | USD9,154 | | 74.25 | % | Establish | ||||||||||||||||||
Shanghai Golden Phillips Petrochemical |
Shanghai | Shanghai | Manufacturing | RMB415,623 | | 100.00 | % | Establish | ||||||||||||||||||
Company Limited (Jinfei) |
||||||||||||||||||||||||||
Jinmao International |
Shanghai | Shanghai | Trading | RMB100,000 | | 67.33 | % | Establish | ||||||||||||||||||
Jinlian |
Zhejiang Jiaxing | |
Zhejiang Jiaxing |
|
Trading | RMB400,000 | | 100.00 | % | Business combinations involving entities not under common control |
(2) | As at 30 June 2023 and 31 December 2022, non-controlling interests of subsidiaries non-controlling shareholders were not significant (Note V.38). |
206 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
VI. | Interests in other entities (continued) |
2. | Interests in joint ventures or associates |
(1) | Nature of interest in major joint ventures and associates at 30 June 2023: |
Name of enterprise |
Place of main business |
Place of registry |
Principal activities |
Whether it is strategic to group activities |
% of ownership interest | Registered capital (thousands) |
||||||||||||||||||||
Directly | Indirectly | |||||||||||||||||||||||||
Joint ventures |
||||||||||||||||||||||||||
Linde |
Shanghai | Shanghai | Production and sales of industrial gases | Yes | | 50.00 | % | USD 32,000 | ||||||||||||||||||
Inspection and Testing Company |
Shanghai | Shanghai | Inspect and test chemical equipment | Yes | | 50.00 | % | RMB10,000 | ||||||||||||||||||
Yangu Gas |
Shanghai | Shanghai | Production and sales of industrial gases | Yes | | 50.00 | % | USD 10,560 | ||||||||||||||||||
Baling Materials |
Shanghai | Shanghai | Production and sales of new styrene thermoplastic elastomer materials | Yes | 50.00 | % | | RMB800,000 | ||||||||||||||||||
Associates |
||||||||||||||||||||||||||
Shanghai Secco |
Shanghai | Shanghai | Manufacturing and distribution of chemical products | Yes | 20.00 | % | | RMB3,115,180 | ||||||||||||||||||
Chemical Industry |
Shanghai | Shanghai | Planning, development and operation of the Chemical Industry Park in Shanghai, PRC | Yes | 38.26 | % | | RMB2,372,439 | ||||||||||||||||||
Jinsen |
Shanghai | Shanghai | Production of resins products | Yes | | 40.00 | % | RMB193,756 | ||||||||||||||||||
Azbil |
Shanghai | Shanghai | Service and maintenance of building automation systems and products | | 40.00 | % | USD 3,000 | |||||||||||||||||||
Shidian Energy |
Shanghai | Shanghai | Electricity supply | | 40.00 | % | RMB1,000,000 |
The Group applies the equity method to measure these equity investments.
2023 Interim Report |
207 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
VI. | Interests in other entities (continued) |
2. | Interests in joint ventures or associates (continued) |
(2) | Key financial information of material joint ventures |
30 June 2023 (unaudited) | 31 December 2022 | |||||||||||||||||||||||||||||||
Linde Gases Company |
Inspection and Testing Company |
Yangu Gas |
Baling Materials |
Linde Gases Company |
Inspection and Testing Company |
Yangu Gas |
Baling Materials |
|||||||||||||||||||||||||
Current assets |
298,637 | 18,037 | 74,961 | 137,266 | 310,928 | 20,649 | 69,062 | 74,191 | ||||||||||||||||||||||||
Including: Cash and cash equivalents |
219,005 | 12,793 | 69,538 | 11,260 | 237,902 | 11,482 | 62,639 | 13,948 | ||||||||||||||||||||||||
Non-current assets |
85,056 | 1,547 | 10,195 | 646,518 | 92,325 | 1,478 | 13,765 | 626,761 | ||||||||||||||||||||||||
Total assets |
383,693 | 19,584 | 85,156 | 783,784 | 403,253 | 22,127 | 82,827 | 700,952 | ||||||||||||||||||||||||
Current liabilities |
(35,666 | ) | (876 | ) | (2,184 | ) | (136,850 | ) | (32,670 | ) | (2,437 | ) | (2,392 | ) | (153,952 | ) | ||||||||||||||||
Non-current liabilities |
(11,458 | ) | | | (146,934 | ) | (17,016 | ) | | | (47,000 | ) | ||||||||||||||||||||
Total liabilities |
(47,124 | ) | (876 | ) | (2,184 | ) | (283,784 | ) | (49,686 | ) | (2,437 | ) | (2,392 | ) | (200,952 | ) | ||||||||||||||||
Net assets |
336,569 | 18,708 | 82,972 | 500,000 | 353,567 | 19,690 | 80,435 | 500,000 | ||||||||||||||||||||||||
Groups share of net assets (i) |
168,285 | 9,354 | 41,486 | 250,000 | 176,784 | 9,845 | 40,218 | 250,000 | ||||||||||||||||||||||||
Adjustments-elimination of unrealized profit or loss on intra-group transactions |
(884 | ) | | | | (86 | ) | | | | ||||||||||||||||||||||
Carrying amount of interests in joint ventures |
167,401 | 9,354 | 41,486 | 250,000 | 176,698 | 9,845 | 40,218 | 250,000 |
For the six months ended 30 June 2023 (unaudited) |
For the six months ended 30 June 2022 (unaudited) |
|||||||||||||||||||||||||||||||
Linde Gases Company |
Inspection and Testing Company |
Yangu Gas |
Baling Materials |
Linde Gases Company |
Inspection and Testing Company |
Yangu Gas |
Baling Materials |
|||||||||||||||||||||||||
Operating income |
192,968 | 7,755 | 17,164 | |
|
|
203,300 | 9,590 | 19,123 | |
|
| ||||||||||||||||||||
Financial income |
311 | 30 | 157 | |
|
|
1,424 | 37 | 808 | |
|
| ||||||||||||||||||||
Income tax expenses |
7,467 | 11 | | |
|
|
11,956 | (42 | ) | | |
|
| |||||||||||||||||||
Net profit |
22,402 | 412 | 2,537 | |
|
|
35,869 | 1,199 | 283 | |
|
| ||||||||||||||||||||
Other comprehensive income |
| | | |
|
|
| | | |
|
| ||||||||||||||||||||
Total comprehensive income |
22,402 | 412 | 2,537 | |
|
|
35,869 | 1,199 | 283 | |
|
| ||||||||||||||||||||
Dividends received from joint ventures of this period |
19,700 | 697 | | |
|
|
11,200 | | | |
|
|
(i) | The Group calculated shares of assets by its shareholding ratio, based on the amount from financial statements in joint ventures. The amount in financial statements of joint ventures based on the impacts of identifiable assets when obtained investment, fair value of liabilities, and consistency of accounting policies. |
208 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
VI. | Interests in other entities (continued) |
2. | Interests in joint ventures or associates (continued) |
(3) | Key financial information of material associates |
30 June 2023 (unaudited) | 31 December 2022 | |||||||||||||||||||||||||||||||||||||||
Shanghai Secco |
Chemical Industry |
Jinsen | Azbil | Shidian Energy |
Shanghai Secco |
Chemical Industry |
Jinsen | Azbil | Shidian Energy |
|||||||||||||||||||||||||||||||
Current assets |
4,099,757 | 4,107,657 | 38,747 | 254,914 | 935,725 | 4,941,394 | 4,327,622 | 49,810 | 276,707 | 950,614 | ||||||||||||||||||||||||||||||
Including: Cash and cash equivalents |
1,912,759 | 2,360,787 | 8,623 | 120,076 | 886,158 | 822,431 | 2,555,041 | 8,623 | 173,106 | 897,544 | ||||||||||||||||||||||||||||||
Non-current assets |
4,982,907 | 6,655,327 | 50,360 | 18,400 | 185,183 | 5,683,409 | 6,294,394 | 50,360 | 12,338 | 166,068 | ||||||||||||||||||||||||||||||
Total assets |
9,082,664 | 10,762,984 | 89,107 | 273,314 | 1,120,908 | 10,624,803 | 10,622,016 | 100,170 | 289,045 | 1,116,682 | ||||||||||||||||||||||||||||||
Current liabilities |
(5,693,360 | ) | (1,986,688 | ) | (17,859 | ) | (123,803 | ) | (43,224 | ) | (8,977,030 | ) | (1,765,771 | ) | (17,905 | ) | (125,216 | ) | (38,133 | ) | ||||||||||||||||||||
Non-current liabilities |
(2,809,807 | ) | (726,517 | ) | | (4,463 | ) | (34,922 | ) | (1 | ) | (651,729 | ) | | (5,518 | ) | (35,355 | ) | ||||||||||||||||||||||
Total liabilities |
(8,503,167 | ) | (2,713,205 | ) | (17,859 | ) | (128,266 | ) | (78,146 | ) | (8,977,031 | ) | (2,417,500 | ) | (17,905 | ) | (130,734 | ) | (73,488 | ) | ||||||||||||||||||||
Net assets |
579,497 | 8,049,779 | 71,248 | 145,048 | 1,042,762 | 1,647,772 | 8,204,516 | 82,265 | 158,311 | 1,043,194 | ||||||||||||||||||||||||||||||
Non-controlling interests |
| 1,365,180 | | | | | 1,578,714 | | | | ||||||||||||||||||||||||||||||
Net assets attributable to equity shareholders of the Company |
579,497 | 6,684,599 | 71,248 | 145,048 | 1,042,762 | 1,647,772 | 6,625,802 | 82,265 | 158,311 | 1,043,194 | ||||||||||||||||||||||||||||||
Groups share of net assets (i) |
115,898 | 2,557,528 | 28,499 | 58,019 | 417,104 | 329,554 | 2,535,032 | 32,906 | 63,324 | 417,278 | ||||||||||||||||||||||||||||||
Adjustment- elimination of unrealized profit or loss on intra- group transactions |
4,342 | | | | (11,115 | ) | 4,342 | | | | (12,615 | ) | ||||||||||||||||||||||||||||
Adjustment (ii) |
| (329,706 | ) | | | | | (329,890 | ) | | | | ||||||||||||||||||||||||||||
impairment loss |
| | (28,392 | ) | | | | | (28,392 | ) | | | ||||||||||||||||||||||||||||
Carrying amount of interests in associates |
120,240 | 2,227,822 | 107 | 58,019 | 405,989 | 333,896 | 2,205,142 | 4,514 | 63,324 | 404,663 |
For the six months ended 30 June 2023 (unaudited) | For the six months ended 30 June 2022 (unaudited) | |||||||||||||||||||||||||||||||||||||||
Shanghai Secco |
Chemical Industry |
Jinsen | Azbil | Shidian Energy |
Shanghai Secco |
Chemical Industry |
Jinsen | Azbil | Shidian Energy |
|||||||||||||||||||||||||||||||
Operating income |
8,351,897 | 897,511 | 22,673 | 212,652 | 263,992 | 12,927,302 | 815,947 | 63,447 | 129,485 | 235,735 | ||||||||||||||||||||||||||||||
Net (loss)/profit |
(1,068,275 | ) | 270,164 | (11,017 | ) | 36,737 | 9,568 | (663,042 | ) | 247,517 | (16,459 | ) | 5,151 | 10,179 | ||||||||||||||||||||||||||
Other comprehensive income |
| (56 | ) | | | | | (732 | ) | | | | ||||||||||||||||||||||||||||
Total comprehensive income |
(1,068,275 | ) | 270,108 | (11,017 | ) | 36,737 | 9,568 | (663,042 | ) | 246,785 | (16,459 | ) | 5,151 | 10,179 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Dividends received from associates |
| 46,103 | | 20,000 | 4,000 | 554,438 | | | | |
2023 Interim Report |
209 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
VI. | Interests in other entities (continued) |
2. | Interests in joint ventures or associates (continued) |
(3) | Key financial information of material associates (continued) |
(i) | The Group calculates its share of assets based on the amount attributable to the parent company in the consolidated financial statements of associates in proportion to its shareholding. The key financial information of associates is adjusted for fair value adjustments at the time of acquisition and any differences in accounting policies of the Group. |
(ii) | Unentitled portion represented some piece of lands injected by Government in Chemical Industry as capital reserve and the earnings from this land cannot be shared by other shareholders. |
(4) | Summarised financial information of immaterial associates |
For the six months ended 30 June (unaudited) |
||||||||
Items |
2023 | 2022 | ||||||
Aggregate carrying amount of investments as at 30 June |
103,591 | 90,409 | ||||||
Aggregate amount of share of |
||||||||
Net (loss)/profit (i) |
(1,002 | ) | 1,819 | |||||
Other comprehensive income (i) |
| | ||||||
Total comprehensive income |
(1,002 | ) | 1,819 | |||||
|
|
|
|
|||||
Dividends received from immaterial associates |
1,500 | 10,500 | ||||||
|
|
|
|
(i) | Net profit and other comprehensive income had been adjusted for fair value adjustments of identifiable assets and liabilities at the time of acquisition and any differences in accounting policies of the Group. |
(ii) | Unrecognized commitments related to investments in associates refer to Note IX. |
210 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
VII. | Segment information |
Segment information is presented in respect of the Groups business segments, the format of which is determined based on the structure of the Groups internal organisation, management requirement, and internal reporting system.
In a manner consistent with the way in which information is reported internally to the Groups chief operating decision maker for the purposes of resource allocation and performance assessment, the Group identified the following five reportable segments. No operating segments have been aggregated to form the following reportable segments.
The Group evaluates the performance and allocates resources to its operating segments on an operating income basis, without considering the effects of finance expenses, investment income, non-operating income and non-operating expenses. The accounting policies adopted by the operating segments are the same with the policies in summary of significant accounting policies. The transfer price of intersegment is recognized with cost plus profit method.
The Group principally operates in five operating segments: petroleum products, intermediate petrochemicals, synthetic fibers, resins and plastics and trading of petrochemical products. Petroleum products, intermediate petrochemicals, synthetic fibers and resins and plastics are produced through intermediate steps from crude oil, the principal raw material. The specific products of each segment are as follows:
(i) | The Groups petroleum products segment is equipped with crude oil distillation facilities to produce qualified refined gasoline, kerosene, diesel, heavy oil and liquefied petroleum, in addition to producing feedstocks of the Groups downstream processing facilities. |
(ii) | The intermediate petrochemicals segment primarily produces p-xylene, benzene and ethylene oxide. Most of the intermediate petrochemicals produced by the Group are used by the Group as raw materials in the production of other petrochemicals, resins, plastics and synthetic fibres. A portion of the intermediate petrochemicals as well as certain by-products of the production process are sold to outside customers. |
(iii) | The resins and plastics segment produces primarily polyester chips, low-density polyethylene resins and films, polypropylene resins and PVA granules. The polyester chips are used to produce polyester fibres, coating and containers. Polyethylene resins and plastics are used to produce insulated cable, mulching films and moulded products such as housewares and toys. Polypropylene resins are used for films, sheets and moulded products such as housewares, toys, consumer electronics and automobile parts. |
(iv) | The synthetic fibres segment produces primarily polyester, acrylic fibres and carbon fibres, which are mainly used in the textile and apparel industries. |
2023 Interim Report |
211 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
VII. | Segment information (continued) |
(v) | Groups trading of petrochemical products segment primarily engages in importing and exporting of petrochemical products. |
(vii) | All other operating segments represent the operating segments which do not meet the quantitative threshold for determining reportable segments. These include rental, providing services and a variety of other commercial activities, which are not allocated to the above five operating segments. |
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise long-term equity investments, deferred tax assets and income tax expenses, cash at band and on hand and its related interest income, interest-bearing borrowings, and interest expenses, invest income, deferred income, other income, gains from asset disposals, non-operating income and expenses and related expenses.
i. | Segment information as at 30 June 2023 (unaudited) and for the six months ended 30 June 2023 (unaudited) is as follows: |
Item |
Petroleum products |
Intermediate petrochemicals |
Resins and plastics |
Synthetic fibres |
Trading of petrochemical products |
Others | Unallocated | Elimination | Total | |||||||||||||||||||||||||||
Revenue from external customers |
30,675,736 | 5,444,886 | 3,852,413 | 223,383 | 4,260,964 | 479,669 | | | 44,937,051 | |||||||||||||||||||||||||||
Inter-segment revenue |
10,607,395 | 4,918,849 | 145,908 | | 231,132 | 425,603 | | (16,328,887 | ) | | ||||||||||||||||||||||||||
Operating costs |
(24,774,204 | ) | (4,832,795 | ) | (3,889,805 | ) | (459,266 | ) | (4,203,453 | ) | (396,404 | ) | | | (38,555,927 | ) | ||||||||||||||||||||
Interest income |
| | | | | | 185,052 | | 185,052 | |||||||||||||||||||||||||||
Interest expenses |
| | | | | | (55,547 | ) | | (55,547 | ) | |||||||||||||||||||||||||
Investment income |
| | | | | (1,997 | ) | (118,363 | ) | | (120,360 | ) | ||||||||||||||||||||||||
Impairment losses |
(25,179 | ) | (43,272 | ) | (6,618 | ) | (115,417 | ) | | | | | (190,486 | ) | ||||||||||||||||||||||
Impairment and expected credit losses |
| (19 | ) | 185 | | | 1 | | | 167 | ||||||||||||||||||||||||||
Depreciation and amortization |
(518,251 | ) | (184,858 | ) | (36,933 | ) | (133,137 | ) | (16,361 | ) | (93,447 | ) | | | (982,987 | ) | ||||||||||||||||||||
(Loss)/profit before income tax |
(475,364 | ) | 96,258 | (262,462 | ) | (515,206 | ) | 5,808 | (69,703 | ) | 8,695 | | (1,211,974 | ) | ||||||||||||||||||||||
Income tax expenses |
| | | | | | 226,288 | | 226,288 | |||||||||||||||||||||||||||
Net (loss)/profit |
(475,364 | ) | 96,258 | (262,462 | ) | (515,206 | ) | 5,808 | (69,703 | ) | 234,983 | | (985,686 | ) | ||||||||||||||||||||||
Total assets |
15,060,217 | 3,650,358 | 1,294,322 | 2,809,935 | 1,036,357 | 2,699,774 | 15,150,858 | | 41,701,821 | |||||||||||||||||||||||||||
Total liabilities |
7,036,540 | 600,510 | 1,198,316 | 409,090 | 1,073,207 | 35,702 | 5,942,154 | | 16,295,519 | |||||||||||||||||||||||||||
Investment in associates and joint ventures |
| | | | | | 3,384,009 | | 3,384,009 | |||||||||||||||||||||||||||
Non-current assets increase (i) |
38,539 | 28,989 | 37,093 | 210,536 | 407 | 78,008 | | | 393,572 |
(i) | Non-current assets do not include financial assets, long-term equity investments or deferred tax assets. |
212 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
VII. | Segment information (continued) |
ii. | Segment information as at 30 June 2022 (unaudited) and for the six months ended 30 June 2022 (unaudited) is as follows: |
Item |
Petroleum products |
Intermediate petrochemicals |
Resins and plastics |
Synthetic fibres |
Trading of petrochemical products |
Others | Unallocated | Elimination | Total | |||||||||||||||||||||||||||
Revenue from external customers |
27,517,541 | 6,432,577 | 4,314,408 | 230,723 | 6,955,959 | 449,147 | | | 45,900,355 | |||||||||||||||||||||||||||
Inter-segment revenue |
6,703,682 | 5,479,120 | 35,990 | 30 | 528,814 | 322,643 | | (13,070,279 | ) | | ||||||||||||||||||||||||||
Operating costs |
(20,704,410 | ) | (6,361,481 | ) | (4,345,070 | ) | (388,301 | ) | (6,898,958 | ) | (420,233 | ) | | | (39,118,453 | ) | ||||||||||||||||||||
Interest income |
| | | | | | 329,305 | | 329,305 | |||||||||||||||||||||||||||
Interest expenses |
| | | | | | (50,043 | ) | | (50,043 | ) | |||||||||||||||||||||||||
Investment income |
(19,737 | ) | | | | (1,068 | ) | 2,667 | (32,537 | ) | | (50,675 | ) | |||||||||||||||||||||||
Impairment losses |
(7,137 | ) | (61,174 | ) | (40,146 | ) | (67,220 | ) | | (2,100 | ) | | | (177,777 | ) | |||||||||||||||||||||
Impairment and expected credit losses |
| (2,947 | ) | (10 | ) | (1,930 | ) | | | | | (4,887 | ) | |||||||||||||||||||||||
Gains from changes in fair value |
(8,987 | ) | | | | | 9,300 | | | 313 | ||||||||||||||||||||||||||
Depreciation and amortization |
(448,689 | ) | (228,779 | ) | (18,626 | ) | (47,295 | ) | (52,075 | ) | (81,670 | ) | | | (877,134 | ) | ||||||||||||||||||||
Loss before income tax |
464,776 | (551,193 | ) | (220,997 | ) | (321,696 | ) | 19,821 | (80,037 | ) | 246,725 | | (442,601 | ) | ||||||||||||||||||||||
Income tax expenses |
| | | | | | 11,731 | | 11,731 | |||||||||||||||||||||||||||
Net profit/(loss) (restated) |
464,776 | (551,193 | ) | (220,997 | ) | (321,696 | ) | 19,821 | (80,037 | ) | 258,456 | | (430,870 | ) | ||||||||||||||||||||||
Total assets (restated) |
13,099,536 | 4,021,519 | 1,288,776 | 2,140,493 | 1,680,894 | 2,357,367 | 17,892,528 | | 42,481,113 | |||||||||||||||||||||||||||
Total liabilities (restated) |
3,798,267 | 1,008,218 | 1,226,642 | 549,547 | 1,309,209 | 38,952 | 5,545,557 | | 13,476,392 | |||||||||||||||||||||||||||
Investment in associates and joint ventures |
| | | | | | 3,691,515 | | 3,691,515 | |||||||||||||||||||||||||||
Non-current assets increase (i) |
305,042 | 52,495 | 19,405 | 686,604 | 469 | 75,518 | | | 1,139,533 |
(i) | Non-current assets do not include financial assets, long-term equity investments, and deferred income assets. |
As the Group operates mainly in the PRC, no geographical segment information is presented.
For the six months ended 30 June 2023, revenue from the same customer accounted for 70% of total Group revenue (for the six months ended 30 June 2022: 64%). The revenue from the customer derived from the following segments: petroleum products and other segment.
2023 Interim Report |
213 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
VIII. | Related parties and related party transactions |
1. | Information about the parent of the Company |
(1) | General information of the parent company |
Name of parent company |
Place of registration |
Business nature | ||
China Petroleum & Chemical Corporation | No.22 Chaoyangmen North Street, Chaoyang District, Beijing |
Exploring for, extracting and selling crude oil and natural gas; oil refining; production, sale and transport of petrochemical, chemical fibres and other chemical products; pipe transport of crude oil and natural gas; research and development and application of new technologies and information. |
The Companys ultimate controlling party is China Petrochemical Corporation.
(2) | Registered capital and changes in registered capital of the parent company |
31 December 2022 | Increase in current period |
Decrease in current period |
30 June 2023 (unaudited) |
|||||||||||||
China Petroleum & Chemical Corporation |
121.1 billion | | | 121.1 billion |
(3) | The percentages of shareholding and voting rights in the Company held by the parent company |
30 June 2023 (unaudited) | 31 December 2022 | |||||||||||||||
Share holding | Voting rights | Share holding | Voting rights | |||||||||||||
China Petroleum & Chemical Corporation |
50.55 | % | 50.55 | % | 50.44 | % | 50.44 | % |
214 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
VIII. | Related parties and related party transactions (continued) |
2. | Information about the subsidiaries of the Company |
For basic information about the subsidiaries of the Company, refer to Note VI.
3. | Basic information about joint ventures and associates of the Company |
In addition to the major joint ventures and associates disclosed in Note VI.2, related parties transactions between the Group and other associates are as follows:
Place of business |
Place of registration |
Business nature |
Whether it is |
% of ownership interest | ||||||||
Directly |
Indirectly | |||||||||||
Shanghai Nanguang Petrochemical Co., Ltd. |
Shanghai | Shanghai | Petrochemical products import and export | Yes | | 35.00% | ||||||
Shanghai Jinhuan Petroleum Naphthalene Development Company Limited |
Shanghai | Shanghai | Production of petrochemical products | Yes | | 25.00% | ||||||
Shanghai Chemical Industry Park Logistics Company Limited |
Shanghai | Shanghai | Products freight | Yes | | 33.33% | ||||||
Pinghu China Aviation Oil Port Co., Ltd. (Pinghu Port) |
Zhejiang Jiaxing | Zhejiang Jiaxing | Products freight | Yes | | 29.00% |
2023 Interim Report |
215 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
VIII. | Related parties and related party transactions (continued) |
4. | Information on other related parties |
Names of other related parties |
Relationship with the Group | |
China Sinopec Pipeline Storage and Transportation Co., Ltd. |
Associate of the ultimate parent company | |
Yihua Bonar Yarns and Fabrics Co., Ltd. |
Associate of the ultimate parent company | |
Shanghai Petroleum & Natural Gas General Co., Ltd. |
Subsidiary of the ultimate parent company | |
Yihua Tory Polyester Film Company Limited |
Joint venture of the ultimate parent company | |
Unipec Singapore |
Subsidiary of the ultimate parent company | |
Unipec America, Inc |
Subsidiary of the ultimate parent company | |
Sinopec Japan Company Limited |
Subsidiary of the ultimate parent company | |
Sinopec Europe Company Limited |
Subsidiary of the ultimate parent company | |
Sinopec Chemical Commercial Holding |
Subsidiary of the ultimate parent company | |
Sinopec International (Australia) Pty. Ltd. |
Subsidiary of the ultimate parent company | |
Sinopec Jianghan Petroleum Administration Co., Ltd. |
Subsidiary of the ultimate parent company | |
Sinopec America Company Limited |
Subsidiary of the ultimate parent company | |
Sinopec (Beijing) Chemical Research Institute Co., Ltd. |
Subsidiary of the ultimate parent company | |
Sinopec-Sk (Wuhan) Petrochemical Company |
Subsidiary of the ultimate parent company | |
Beijing Heyuan Royal Garden Hotel (Cancelled) |
Subsidiary of the ultimate parent company | |
Sinopec Henan Oilfield Training Center |
Subsidiary of the ultimate parent company | |
Sinopec Jiangsu Petroleum Exploration Bureau Co., Ltd. Training Center |
Subsidiary of the ultimate parent company | |
Sinopec Capital Co., Ltd. |
Subsidiary of the ultimate parent company | |
Sinopec Chemical Commercial Holding Company Limited |
Subsidiary of the ultimate parent company | |
Sinopec Nanjing Chemical Research Institute Co., Ltd. |
Subsidiary of the ultimate parent company | |
China Economy Phulishing House Co., Ltd. |
Subsidiary of the ultimate parent company | |
Sinopec Publishing House Co., Ltd. |
Subsidiary of the ultimate parent company | |
Sinopec International Travel Service Company Limited |
Subsidiary of the ultimate parent company | |
Sinopec Assets Management Co., Ltd. |
Subsidiary of the ultimate parent company | |
Ningbo Engineering Company of Sinopec |
Subsidiary of the ultimate parent company | |
Sinopec Shared Service Co., Ltd. |
Subsidiary of the ultimate parent company | |
Sinopec Petroleum Engineering Geophysics Ltd. |
Subsidiary of the ultimate parent company | |
Sinopec Baichuan Economic and Trade Co., Ltd. |
Subsidiary of the ultimate parent company | |
Sinopec Group Jiangsu Petroleum Exploration Bureau Co., Ltd. |
Subsidiary of the ultimate parent company | |
Sinopec Newspaper Office |
Subsidiary of the ultimate parent company | |
Sinopec Energy Saving Technology Service Co., Ltd. |
Subsidiary of the ultimate parent company | |
Sinopec Luoyang Engineering Company Limited |
Subsidiary of the ultimate parent company |
216 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
VIII. | Related parties and related party transactions (continued) |
4. | Information on other related parties (continued) |
Names of other related parties |
Relationship with the Group | |
Sinopec Chemical Commercial Holding (Singapore) Pte. Ltd. |
Subsidiary of the ultimate parent company | |
Sinopec Finance Co., Ltd. |
Subsidiary of the ultimate parent company | |
Sinopec Group Economic and Technology Research Institute Co., Ltd. |
Subsidiary of the ultimate parent company | |
Beijing Petro-Chemical Construction Consulting Co., Ltd. |
Subsidiary of the ultimate parent company | |
China Economic books Co., Ltd. |
Subsidiary of the ultimate parent company | |
Petrol-Chemical Industry Management Cadre College |
Subsidiary of the ultimate parent company | |
Petrochemical Engineering Quality Supervision Terminal |
Subsidiary of the ultimate parent company | |
Sinopec Group Shanghai Training Center Ltd. |
Subsidiary of the ultimate parent company | |
Sinopec Beijing Yanshan Petrochemical Co., Ltd. |
Subsidiary of the ultimate parent company | |
Sinopec Zhongyuan Petroleum Exploration Bureau Co., Ltd. |
Subsidiary of the ultimate parent company | |
Sinopec Shengli Petroleum Administrative Bureau Co., Ltd. |
Subsidiary of the ultimate parent company | |
The Fourth Construction Company of Sinopec |
Subsidiary of the ultimate parent company | |
Sinopec Tending Co., Ltd. |
Subsidiary of the ultimate parent company | |
Sinopec Shanghai Engineering Co., Ltd. |
Subsidiary of the ultimate parent company | |
Sinopec Engineering Incorporation |
Subsidiary of the ultimate parent company | |
Sinopec Engineering Quality Monitoring Co., Ltd. |
Subsidiary of the ultimate parent company | |
Sinopec engineering (Group) Co., Ltd. |
Subsidiary of the ultimate parent company | |
National Petrochemical Project Risk Assessment Technology Center |
Subsidiary of the ultimate parent company | |
The Tenth Construction Company of Sinopec |
Subsidiary of the ultimate parent company | |
The Fifth Construction Company of Sinopec |
Subsidiary of the ultimate parent company | |
Shanghai Petrochemical Machinery Manufacturing Co., Ltd. |
Subsidiary of the ultimate parent company | |
Sinopec Nanjing Engineering Company Limited |
Subsidiary of the ultimate parent company | |
Jiangsu Jinling Opta Polymer Company Limited |
Subsidiary of the ultimate parent company | |
Shanghai Petro-Chemical Haidi Administration Co., Ltd. |
Subsidiary of the ultimate parent company | |
Sinopec Sichuan Uinylon Works |
Subsidiary of the ultimate parent company | |
China Petrochemical Corp. Nanjing Chemistry Industrial Co., Ltd. |
Subsidiary of the ultimate parent company | |
Sinopec Group International Petroleum Exploration And Production Limited |
Subsidiary of the ultimate parent company |
2023 Interim Report |
217 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
VIII. | Related parties and related party transactions (continued) |
4. | Information on other related parties (continued) |
Names of other related parties |
Relationship with the Group | |
Sinopec Consulting Company Limited |
Subsidiary of the ultimate parent company | |
China Petrochemical Corp. Engineering Ration Management Station |
Subsidiary of the ultimate parent company | |
Beijing Victory Hotel Company Limited |
Subsidiary of the ultimate parent company | |
Maoming Shihua Dongcheng Chemical Co., Ltd. |
Subsidiary of the ultimate parent company | |
Sinopec Hunan Petrochemical Co., Ltd. |
Subsidiary of the ultimate parent company | |
CHINA PETRO-CHEMICAL TECHNOLOGY CO., LTD. |
Subsidiary of the ultimate parent company | |
Sinopec (Shanghai) Petrochemical Research Institute Co., Ltd. |
Subsidiary of the ultimate parent company | |
Shanghai Changshi Shipping Co., Ltd. |
Associate of the immediate parent company | |
Shanghai KSD Bulk Solids Engineering Co., Ltd. |
Associate of the immediate parent company | |
Basf Gao-Qiao Performance Chemicals (Shanghai) Company Limited |
Associate of the immediate parent company | |
BASF-YPC Company Limited |
Joint venture of the immediate parent company | |
Zhejiang Baling Hengyi Caprolactam Co., Ltd. |
Joint venture of the immediate parent company | |
Shanghai Sinopec Mitsui Chemicals, Co., Ltd. |
Joint venture of the immediate parent company | |
Rizhao Shihua Crude Oil Terminal Co., Ltd. |
Joint venture of the immediate parent company | |
Lianhua (Ningbo) International Logistics Co., Ltd. |
Subsidiary of the immediate parent company | |
Zhongke (Guangdong) Refining & Chemical Co., Ltd. |
Subsidiary of the immediate parent company | |
Sinopec Marketing Co., Ltd. |
Subsidiary of the immediate parent company | |
Sinopec Fuel Oil Sales Co., Ltd. |
Subsidiary of the immediate parent company | |
Sinopec Lubricant Co., Ltd. |
Subsidiary of the immediate parent company | |
China Petrochemical International (Beijing) Co., Ltd. |
Subsidiary of the immediate parent company | |
Sinopec Catalysts Co., Ltd. |
Subsidiary of the immediate parent company | |
China Petrochemical International (Shanghai) Co., Ltd. |
Subsidiary of the immediate parent company | |
Zhoushan Shihua Crude Oil Terminal Co., Ltd. |
Subsidiary of the immediate parent company | |
China Petrochemical International (Ningbo) Co., Ltd. |
Subsidiary of the immediate parent company | |
Dalian Sinopec Material Equip Company |
Subsidiary of the immediate parent company | |
Sinopec Materials & Equipment (Dalian) Co., Ltd. |
Subsidiary of the immediate parent company | |
Sinopec Materials & Equipment (East China) Co., Ltd. |
Subsidiary of the immediate parent company | |
China Petrochemical International (Nanjing) Co., Ltd. |
Subsidiary of the immediate parent company | |
Sinopec Honeywell (Tianjin) Company Limited |
Subsidiary of the immediate parent company | |
China Petrochemical International (Wuhan) Co., Ltd. |
Subsidiary of the immediate parent company | |
China Petrochemical International Co., Ltd. |
Subsidiary of the immediate parent company | |
Sinopec Refinery Product Sales Co., Ltd. |
Subsidiary of the immediate parent company | |
Sinopec Shanghai Gaoqiao Petrochemical Co., Ltd. |
Subsidiary of the immediate parent company | |
China Petrochemical International (Tianjin) Co., Ltd. |
Subsidiary of the immediate parent company | |
Ningbo Eastsea Line fan Technology Co., Ltd. |
Subsidiary of the immediate parent company |
218 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
VIII. | Related parties and related party transactions (continued) |
4. | Information on other related parties (continued) |
Names of other related parties |
Relationship with the Group | |
Sinopec Petroleum & Chemical Scientific Research Institute Dadi Company |
Subsidiary of the immediate parent company | |
Sinopec Shanghai Research Institute of Petrochemical Technology |
Subsidiary of the immediate parent company | |
Sinopec Lubricating Oil Shanghai Research Institute Company Limited |
Subsidiary of the immediate parent company | |
Dalian Furuipu Technology Co., Ltd. |
Subsidiary of the immediate parent company | |
Nantong Donghai Petrochemical Co., Ltd. |
Subsidiary of the immediate parent company | |
China Petroleum and Chemical Corporation Qingdao Security Engineering Research Institute |
Subsidiary of the immediate parent company | |
Sinopec (Shanghai) Energy Trade Co., Ltd. |
Subsidiary of the immediate parent company | |
Storage And Transportation Installation Company of Ningbo Engineering Company Limited |
Subsidiary of the immediate parent company | |
Sinopec Chemical Commercial Holding (Hong Kong) Company Limited |
Subsidiary of the immediate parent company | |
Sinopec Yizheng Chemical Fibre Limited Liability Company |
Subsidiary of the immediate parent company | |
Fujian Gulei Petrochemical Company Limited |
Subsidiary of the immediate parent company | |
Sinopec East China Chemical Sales Co., Ltd. |
Subsidiary of the immediate parent company | |
Unipec Singapore |
Subsidiary of the immediate parent company | |
China Yanshan United Foreign Trade Co., Ltd. |
Subsidiary of the immediate parent company | |
Sinopec Chemical Commercial Holding (Wuhan) Company Limited |
Subsidiary of the immediate parent company | |
Nanjing Yangzi Petrol-chemical Industry Co., Ltd. |
Subsidiary of the immediate parent company | |
Sinopec Baling Petrochemical Co., Ltd. |
Subsidiary of the immediate parent company | |
Shengli Oil Field Exploration And Development Research Institute |
Subsidiary of the immediate parent company | |
Shanghai Lide Catalyst Co., Ltd. |
Subsidiary of the immediate parent company | |
Sinopec Jianghan Salt Chemical Hubei Co., Ltd. |
Subsidiary of the immediate parent company | |
Sinopec Great Wall Energy and Chemical Co., Ltd. |
Subsidiary of the immediate parent company | |
Sinopec (Shenzhen) E-Commerce Company Limited |
Subsidiary of the immediate parent company | |
Sinopec Research Institute of Safety Engineering |
Subsidiary of the immediate parent company | |
Ningbo Minggang Gas Company Limited |
Subsidiary of the immediate parent company | |
Sinopec Zhongyuan Petrol-Chemical Industry Co., Ltd. |
Subsidiary of the immediate parent company | |
Epec E-commerce Co., Ltd. |
Subsidiary of the immediate parent company | |
Sinopec Oil Refining and Marketing (Shanghai) Co., Ltd. |
Subsidiary of the immediate parent company | |
Sinopec Chemical Sales (Guangdong) Co., Ltd. |
Subsidiary of the immediate parent company |
2023 Interim Report |
219 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
VIII. | Related parties and related party transactions (continued) |
4. | Information on other related parties (continued) |
Names of other related parties |
Relationship with the Group | |
Unipec (Qingdao) International Logistics Company Limited |
Subsidiary of the immediate parent company | |
Qingdao Zhonghua Sunshine Management System Certification Center |
Subsidiary of the immediate parent company | |
Sinopec Easy Joy sales CO., Ltd. |
Subsidiary of the immediate parent company | |
Sinopec National Petrochemical Project Risk Assessment Technology Center Co., Ltd. |
Subsidiary of the immediate parent company | |
Sinopec International (Russia) Pty. Ltd. |
Subsidiary of the immediate parent company | |
China International United Petroleum and Chemicals Co., Ltd. |
Subsidiary of the immediate parent company | |
Sinopec Chemical Sales Company Limited |
Subsidiary of the immediate parent company | |
Sinopec Chemical Commercial Holding Company Limited |
Subsidiary of the immediate parent company | |
Petro-cyberworks Information Technology Co., Ltd. |
Subsidiary of the immediate parent company | |
Sinopec Yangzi Petrochemical Co., Ltd. |
Subsidiary of the immediate parent company | |
Sinopec Beijing Research Institute of Chemical Industry |
Subsidiary of the immediate parent company | |
Ypc-gpro (Nanjing) Rubber Co., Ltd. |
Subsidiary of the immediate parent company | |
Fujian Refining & Petrochemical Company Limited |
Subsidiary of the immediate parent company | |
Sinopec Dalian (Fushun) Research Institute of Petroleum and Petrochemicals |
Subsidiary of the immediate parent company | |
Sinopec Guangzhou Engineering Co., Ltd. |
Subsidiary of the immediate parent company | |
Sinopec JinLing Petrochemical Corporation |
Subsidiary of the immediate parent company | |
Yipaike Business Factoring Co., Ltd. |
Subsidiary of the immediate parent company |
220 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
VIII. | Related parties and related party transactions (continued) |
5. | Material related party transactions |
Most of the transactions undertaken by the Group affected on such terms as determined by Sinopec Corp. and relevant PRC authorities.
Sinopec Corp. negotiates and agrees the terms of crude oil supply with suppliers on a group basis, which is then allocated among its subsidiaries, including the Group, on a discretionary basis. Sinopec Corp. also owns a widespread petroleum products sales network and possesses a fairly high market share in domestic petroleum products market, which is subject to extensive regulation by the PRC government.
The Group has entered into a mutual product supply and sales services framework agreement with Sinopec Corp. Pursuant to the agreement, Sinopec Corp. provides the Group with crude oil, other petrochemical raw materials and agent services. On the other hand, the Group provides Sinopec Corp. with petroleum products, petrochemical products and property leasing services.
The pricing policy for these services and products provided under the agreement is as follows:
| If there are applicable State (central and local government) tariffs, the pricing shall follow the State tariffs; |
| If there are no State tariffs, but there are applicable States guidance prices, the pricing shall follow the States guidance prices; or |
| If there are no State tariffs or States guidance prices, the pricing shall be determined in accordance with the prevailing market prices (including any bidding prices). |
In addition to the related transaction disclosed in Note V.8, other material related party transactions of the Group are as follows:
2023 Interim Report |
221 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
VIII. | Related parties and related party transactions (continued) |
5. | Material related party transactions (continued) |
(1) | Purchases and sales of goods, rendering and receiving services |
Purchases of goods and receiving services:
For the six months ended 30 June (unaudited) | ||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||
Name of Related Parties |
Category |
Transaction type |
Amount |
Percentage |
Amount |
Percentage |
||||||||||||||
Sinopec Corp., its subsidiaries and joint ventures |
Purchases | Trade | 29,323,965 | 73.13 | % | 36,381,435 | 73.26 | % | ||||||||||||
Sinopec Group and its subsidiaries |
Purchases | Trade | 1,154,873 | 2.88 | % | 817,614 | 1.65 | % | ||||||||||||
Associates of the Group |
Purchases | Trade | 37,264 | 0.09 | % | 1,512,953 | 3.05 | % | ||||||||||||
Joint ventures of the Group |
Purchases | Trade | 180,758 | 0.45 | % | 225,756 | 0.45 | % | ||||||||||||
Key management personnel |
Short-term employee benefits |
Compensation for services |
8,189 | 0.54 | % | 9,428 | 0.55 | % | ||||||||||||
Key management personnel |
Retirement scheme contributions |
Compensation for services |
368 | 0.15 | % | 318 | 0.41 | % |
Sales of goods, rendering services:
For the six months ended 30 June (unaudited) | ||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||
Name of Related Parties |
Category |
Transaction type |
Amount |
Percentage |
Amount |
Percentage |
||||||||||||||
Sinopec Corp., its subsidiaries and joint ventures |
Sales/Service | Trade | 31,636,043 | 70.48 | % | 28,442,722 | 62.02 | % | ||||||||||||
Sinopec Group and its subsidiaries |
Sales/Service | Trade | 29,289 | 0.07 | % | 4,626 | 0.01 | % | ||||||||||||
Associates of the Group |
Sales/Service | Trade | 1,029,429 | 2.29 | % | 1,777,052 | 3.88 | % | ||||||||||||
Joint ventures of the Group |
Sales/Service | Trade | 25,313 | 0.06 | % | 19,560 | 0.04 | % |
222 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
VIII. | Related parties and related party transactions (continued) |
5. | Material related party transactions (continued) |
(2) | Lease |
The Group as the lessor:
For the six months ended 30 June (unaudited) |
||||||||||
Name of lessee |
Type of leasing |
Rental income |
Rental income |
|||||||
Sinopec Corp., its subsidiaries and joint ventures |
Properties | 17,011 | 17,023 | |||||||
Joint ventures of the Group |
Equipment | 6,182 | 5,964 | |||||||
Associates of the Group |
Properties and equipment | 6,391 | 2,803 | |||||||
Sinopec Group and its subsidiaries |
Properties | 239 | 232 | |||||||
|
|
|
|
|||||||
Total |
29,823 | 26,022 | ||||||||
|
|
|
|
The increased right-of-use assets in the current period of the Group as lessor:
For the six months ended 30 June (unaudited) |
||||||||||
Name of lessee |
Type of leasing |
2023 | 2022 | |||||||
Sinopec Group and its subsidiaries |
Renting equipment, houses, and land | 1,388 | 20,023 |
2023 Interim Report |
223 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
VIII. | Related parties and related party transactions (continued) |
5. | Material related party transactions (continued) |
(2) | Lease (continued) |
Lease liabilities interest expense of the Group as lessor:
For the six months ended 30 June (unaudited) |
||||||||
Name of Related Parties |
2023 | 2022 | ||||||
Sinopec Group and its subsidiaries |
290 | 441 | ||||||
Associates of the Group |
6 | 10 | ||||||
|
|
|
|
|||||
Total |
296 | 451 | ||||||
|
|
|
|
(3) | Funds Borrowing and Lending |
During 2022, the Group borrowed entrust loans of RMB150,000 thousand to Baling New Materials, and it was withdrawn in July 2022.
(4) | Other related transactions |
For the six months ended 30 June (unaudited) |
||||||||||
Name of Related Parties |
Type of transaction |
2023 | 2022 | |||||||
Sinopec Group and its subsidiaries |
Insurance premiums | 58,121 | 52,906 | |||||||
Sinopec Finance Company Limited |
Interests received and receivable |
176 | 141 | |||||||
Sinopec Corp., its subsidiaries and joint ventures |
Interests received and receivable |
| 2,667 | |||||||
Sinopec Group and its subsidiaries |
Construction, installation and inspection cost |
93,856 | 706,002 | |||||||
Sinopec Corp., its subsidiaries and joint ventures |
Construction, installation and inspection cost |
3,516 | | |||||||
Sinopec Corp., its subsidiaries and joint ventures |
Sales commission | 50,602 | 58,868 |
224 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
VIII. | Related parties and related party transactions (continued) |
6. | Receivables from and payables to related parties |
Receivables from related parties:
30 June 2023 (unaudited) | 31 December 2022 | |||||||||||||||||
Item |
Name of Related Parties |
Book value | Provision for bad and doubtful debts |
Book value | Provision for bad and doubtful debts |
|||||||||||||
Accounts receivable |
Sinopec Corp., its subsidiaries and joint ventures |
1,555,523 | | 2,403,649 | | |||||||||||||
Associates of the Group |
25,301 | 17 | 38,777 | | ||||||||||||||
Joint ventures of the Group |
8,845 | 6 | 592 | 7 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Sub-total |
1,589,669 | 23 | 2,443,018 | 7 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Other receivables |
Sinopec Corp., its subsidiaries and joint ventures |
3,399 | 2,795 | 137,902 | 2,795 | |||||||||||||
Joint ventures of the Group |
2,388 | | 2,190 | | ||||||||||||||
Associates of the Group |
467 | | 179 | | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Sub-total |
6,254 | 2,795 | 140,271 | 2,795 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Prepayments |
Sinopec Corp. and its subsidiaries |
11,001 | | 55,152 | | |||||||||||||
Associates of the Group | 348 | | 3,344 | | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Sub-total |
11,349 | | 58,496 | | ||||||||||||||
|
|
|
|
|
|
|
|
2023 Interim Report |
225 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
VIII. | Related parties and related party transactions (continued) |
6. | Receivables from and payables to related parties (continued) |
Payables to related parties:
Item |
Name of Related Parties |
30 June 2023 (unaudited) |
31 December 2022 | |||||||
Accounts payable |
Sinopec Corp., its subsidiaries and joint ventures | 5,747,814 | 6,445,704 | |||||||
Sinopec Group and its subsidiaries | 10,538 | 819,648 | ||||||||
Associates of the Group | 2,160 | 19,076 | ||||||||
Joint ventures of the Group | 30,401 | 41,673 | ||||||||
|
|
|
|
|||||||
Sub-total |
5,790,913 | 7,326,101 | ||||||||
|
|
|
|
|||||||
Bills payable |
Associates of the Group | | 16,000 | |||||||
|
|
|
|
|||||||
Sub-total |
| 16,000 | ||||||||
|
|
|
|
|||||||
Other payables |
Sinopec Group and its subsidiaries | 291,993 | 412,917 | |||||||
Sinopec Corp., its subsidiaries and joint ventures | 16,060 | 122,305 | ||||||||
|
|
|
|
|||||||
Sub-total |
308,053 | 535,222 | ||||||||
|
|
|
|
|||||||
Contract liabilities |
Associates of the Group | 1,023 | 9,252 | |||||||
Joint ventures of the Group | | | ||||||||
Sinopec Corp., its subsidiaries and joint ventures | 6,593 | 1,210 | ||||||||
Sinopec Group and its subsidiaries | 30 | 24 | ||||||||
|
|
|
|
|||||||
Sub-total |
7,646 | 10,486 | ||||||||
|
|
|
|
|||||||
Lease liabilities |
Sinopec Group and its subsidiaries | 10,348 | 12,714 | |||||||
Joint ventures of the Group | 135 | 290 | ||||||||
|
|
|
|
|||||||
Sub-total |
10,483 | 13,004 | ||||||||
|
|
|
|
|||||||
Long-term loans |
Sinopec Finance | 700,000 | 700,000 | |||||||
|
|
|
|
226 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
VIII. | Related parties and related party transactions (continued) |
7. | Commitments with related parties |
Commitments with related parties contracted for by the Group at the balance sheet date but are not yet necessary to be recognized on the balance sheet are as follows:
(1) | Construction and installation cost: |
30 June 2023 (unaudited) |
31 December 2022 | |||||||
Sinopec Group and its subsidiaries |
872,647 | 930,665 | ||||||
|
|
|
|
(2) | Investment commitments with related parties |
30 June 2023 (unaudited) |
31 December 2022 | |||||||
Capital contribution to Shanghai Secco (Note IX.2(i)) |
111,263 | 111,263 | ||||||
Capital contribution to Baling Materials (Note IX.2(ii)) |
150,000 | 150,000 | ||||||
|
|
|
|
|||||
Total |
261,263 | 261,263 | ||||||
|
|
|
|
As at 30 June 2023 and 31 December 2022, except for the information disclosed above, the Group and the Company had no other material commitments with related parties, which are contracted, but not included in the financial statements.
2023 Interim Report |
227 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
IX. | Commitments |
1. | Capital commitments |
Capital expenditures contracted for by the Group at the balance sheet date but are not yet necessary to be recognized on the balance sheet are as follows:
30 June 2023 (unaudited) |
31 December 2022 | |||||||
Signed purchase contract of fixed assets |
2,192,695 | 1,783,781 | ||||||
|
|
|
|
2. | Investment commitments |
(i) | The Company held the 18th meeting of the seventh board of directors on 5 December 2013, and reviewed and approved the capital increase of USD30,017,124 (about RMB182,804 thousand) for Shanghai Secco based on the equity ratio of the affiliated company held by the Company. The Company will make capital contribution to Shanghai Secco in equal amounts in stages. |
As at 30 June 2023 and 31 December 2022, the Company has completed the first phase of its investment in Shanghai Secco with totally RMB71,541 thousand. In accordance with the approval of Shanghai municipal commission of commerce received by Shanghai secco on 19 October 2015, the remaining capital contribution of the Company and other shareholders of Shanghai Secco can be paid within the term of the joint venture of Shanghai Secco. As at 30 June 2023, the Company has not made a resolution to revoke this investment.
(ii) | Sinopec Baling Petrochemical Co., Ltd. and the Company jointly established Baling Materials on 7 September 2021, each with a cash contribution of RMB400,000 thousand. As at 30 June 2023, the Company has made a paid-up capital contribution of RMB250,000 thousand (As at 31 December 2022: RMB250,000 thousand). |
228 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
X. | Risk related to financial instruments |
The Groups normal course of operations expose it to a variety of financial risks: market risk (primarily foreign currency risk, interest rate risk and commodity price risk), credit risk and liquidity risk. The Groups overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Groups financial performance.
1. | Market risk |
(1) | Foreign currency risk |
The Groups major operational activities are carried out in Mainland China and a majority of the transactions are denominated in RMB. Nevertheless, the Group is exposed to foreign currency risk arising from the recognized assets and liabilities, and future transactions denominated in foreign currencies, primarily with respect to US dollars. The Groups finance department at its headquarters is responsible for monitoring the amount of assets and liabilities, and transactions denominated in foreign currencies to minimise the foreign currency risk. Therefore, the Group would sign forward exchange contracts or foreign exchange option contracts to avoid foreign exchange risks. As at 30 June 2023 and 31 December 2022, the Group has not signed any currency swaps. As at 30 June 2023 and 31 December 2022, the Group has no unexpired foreign exchange contract and foreign exchange option contract.
As at 30 June 2023 and 31 December 2022, the Groups exposure to currency risk arising from recognized financial assets or financial liabilities denominated in foreign currencies is presented in the following tables:
30 June 2023 (unaudited) | 31 December 2022 | |||||||||||||||
Foreign currency |
RMB equivalent |
Foreign currency |
RMB equivalent |
|||||||||||||
Cash at bank and on hand-USD |
11,090 | 80,134 | 28,084 | 195,594 | ||||||||||||
Receivables under financing-USD |
22,067 | 159,452 | 55,589 | 387,155 | ||||||||||||
Accounts receivable-USD |
3,320 | 23,990 | 113 | 787 | ||||||||||||
Other receivables-USD |
40 | 289 | 40 | 279 | ||||||||||||
Other receivables-HKD |
30,328 | 27,962 | 30,328 | 27,092 | ||||||||||||
Accounts payable-USD |
(47,971 | ) | (346,629 | ) | (92,502 | ) | (644,239 | ) | ||||||||
Other payables-USD |
(477 | ) | (3,447 | ) | (1,917 | ) | (13,351 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
||||||||||||||||
USD |
(11,931 | ) | (86,211 | ) | (10,593 | ) | (73,775 | ) | ||||||||
HKD |
30,328 | 27,962 | 30,328 | 27,092 | ||||||||||||
|
|
|
|
|
|
|
|
2023 Interim Report |
229 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
X. | Risk related to financial instruments (continued) |
1. | Market risk (continued) |
(1) | Foreign currency risk (continued) |
The following are the exchange rates for Renminbi against foreign currencies applied by the Group:
Average rate | Balance sheet date mid-spot rate | |||||||||||||||
For the six months ended 30 June | 30 June 2023 |
31 December 2022 |
||||||||||||||
2023 | 2022 | |||||||||||||||
USD |
7.0952 | 6.5436 | 7.2258 | 6.9646 | ||||||||||||
HKD |
0.9077 | 0.8364 | 0.9220 | 0.8933 | ||||||||||||
|
|
|
|
|
|
|
|
Assuming all other risk variables remained constant, a 5% strengthening or weaken of the Renminbi against foreign currencies at 30 June 2023 would have decreased or increased the Groups net loss by the amount of RMB2,184 thousand (31 December 2022: decreased or increased net loss by RMB1,751 thousand).
(2) | Interest rate risk |
The interest rate risk of the Group is mainly generated by interest-bearing short-term loan and short-term bonds. Financial liabilities with floating interest rate expose the Group to cash flow interest rate risk, while financial liabilities with fixed interest rate expose the Group to cash fair value interest risk. The Group determines the appropriate weightings of fixed and floating rate contracts based on the current market conditions.
The financial department of the Group headquarters continuously monitor the interest rate level of the Group. The increase of interest rate will increase the cost of new interest-bearing debt and the interest expense of the Groups outstanding interest-bearing debt with floating interest rate and have a significant adverse impact on the financial performance of the Group. The management makes timely adjustments according to the latest market conditions, which may be reducing interest rate risk by entering into interest rate swaps. The Group does not enter any interest rate swap arrangement for the six months ended 30 June 2023 and 2022.
As at 30 June 2023 and 31 December 2022, the Group held the following interest-bearing financial instruments:
230 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
X. | Risk related to financial instruments (continued) |
1. | Market risk (continued) |
(2) | Interest rate risk (continued) |
Fixed rate instruments:
30 June 2023 (unaudited) |
31 December 2022 |
|||||||||||
Item |
Effective |
Amounts | Effective |
Amounts | ||||||||
Financial assets |
||||||||||||
Cash at bank and on hand |
3.85%-4.125% | 2,200,000 | 3.85%-4.13% | 3,000,000 | ||||||||
Other non-current assets |
3.55%-4.20% | 3,100,000 | 3.55%-4.20% | 3,300,000 | ||||||||
Financial liabilities |
||||||||||||
Short-term loans |
1.90%-3.45% | (5,048,000 | ) | 2.10%-3.50% | (1,550,000 | ) | ||||||
Lease liabilities |
4.35%-4.90% | (14,638 | ) | 4.35%-4.90% | (16,251 | ) | ||||||
|
|
|
|
|||||||||
Total |
237,362 | 4,733,749 | ||||||||||
|
|
|
|
Variable rate instruments:
30 June 2023 (unaudited) |
31 December 2022 |
|||||||||||
Item |
Effective interest rate |
Amounts | Effective interest rate |
Amounts | ||||||||
Financial assets |
||||||||||||
Cash at bank and on hand |
0.30%-2.00% | 4,610,761 | 0.30%-2.00% | 889,416 | ||||||||
Financial liabilities |
||||||||||||
Long-term loans |
1.08% in the first year, with regular annual adjustments thereafter |
(700,000 | ) | 1.08% in the first year, with regular annual adjustments thereafter |
(700,000 | ) | ||||||
|
|
|
|
|||||||||
Total |
3,910,761 | 189,416 | ||||||||||
|
|
|
|
2023 Interim Report |
231 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
X. | Risk related to financial instruments (continued) |
1. | Market risk (continued) |
(2) | Interest rate risk (continued) |
As at 30 June 2023, if interest rates on the floating rate borrowings had risen or fallen by 100 basis points while all other variables had been held constant, the Groups equity would increase or decrease by approximately RMB29,388 thousand, and net losses would decrease or increase by approximately RMB29,388 thousand (31 December 2022: the Groups equity would increase or decrease by approximately RMB1,460 thousand, and net losses would decrease or increase by approximately RMB1,460 thousand).
(3) | Commodity price risk |
The Group principally engages in processing crude oil into synthetic fibers, resins and plastics, intermediate petrochemicals and petroleum products. The Group is exposed to commodity price risks related to the price of crude oil, refined oil and other chemical products. The fluctuation of the price of crude oil, refined oil and other chemical products may have a significant impact on the Group. The Group uses derivative financial instruments such as commodity swap contracts to avoid some of these risks.
As at June 30, 2023, the Group did not hold commodity swap contracts designated as effective cash flow hedges and economic hedges, as well as accounts payable to related parties measured at fair value.
2. | Credit risk |
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Groups credit risk is primarily attributable to cash at bank, derivative financial assets, accounts receivable, other receivables and receivables under financing, etc. As at balance sheet date, the maximum exposure to credit risk is represented by the carrying amount of financial assets in the balance sheet.
The cash at bank, derivative financial assets, and receivables under financing of the Group is mainly held with state-owned banks and other large and medium-sized listed banks with good reputation and high credit rating. Management does not foresee any significant credit risks from these deposits and does not expect that these financial institutions may default and cause losses to the Group.
232 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
X. | Risk related to financial instruments (continued) |
2. | Credit risk (continued) |
The Groups exposure to credit is influenced mainly by the individual characteristics of each customer rather than the industry or country/region in which the customers operate. Therefore, significant concentrations of credit risk primarily arise when the Group has significant exposure to individual customers. As at the balance sheet date, 95.28% (31 December 2022: 95.57%) and 97.84% (31 December 2021: 97.65%) of total accounts receivable were due from the Groups largest and five largest customers respectively.
In respect of receivables, the Group establishes relevant policies to control credit risk exposure. The Group assesses customers credit qualifications and sets corresponding credit periods based on their financial status, the possibility of obtaining guarantees from third parties, credit records and other factors such as current market conditions. The Group will regularly monitor customers credit records. For customers with poor credit records, the Group will use written reminders, shorten the credit period or cancel the credit period to ensure that the Groups overall credit risk is within a controllable range.
As at 30 June 2023 and 31 December 2022, the Group has no material collateral mortgaged by the debtor or credit enhancement.
3. | Liquidity risk |
Liquidity risk is the risk that an enterprise will encounter difficulty in meeting obligations that are settled by delivering cash or another financial asset. Cash flow forecast is performed by the operating entities of the Group and aggregated by Group finance. Group finance monitors rolling forecasts of the Groups liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities from major financial institution so that the Group does not breach borrowing limits or covenants on any of its borrowing facilities to meet the short-term and long-term liquidity requirements.
As at 30 June 2023, the Group obtained standby lines of credit from certain financial institutions in China, allowing the Group to borrow up to a total amount of RMB13,998,000 thousand (31 December 2022: RMB9,200,000 thousand), of which the Groups unused standby line of credit is RMB8,250,000 thousand (31 December 2022: RMB6,950,000 thousand).
2023 Interim Report |
233 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
X. | Risk related to financial instruments (continued) |
3. | Liquidity risk (continued) |
The following tables set out the remaining contractual maturities at the balance sheet date of the Groups financial liabilities, which are based on contractual undiscounted cash flows:
30 June 2023 (unaudited) | ||||||||||||||||||||||||
Within 1 year or demand |
More than 1 year but less than 2 years |
More than 2 years but less than 5 years |
More than 5 years |
Total | Carrying amount at balance sheet date |
|||||||||||||||||||
Short-term loans |
5,105,580 | | | | 5,105,580 | 5,048,000 | ||||||||||||||||||
Long-term loans |
3,843 | 704,935 | | | 708,778 | 700,000 | ||||||||||||||||||
Lease liabilities |
10,524 | 4,447 | 695 | | 15,666 | 14,638 | ||||||||||||||||||
Accounts payable |
7,155,483 | | | | 7,155,483 | 7,155,483 | ||||||||||||||||||
Bills payable |
103,950 | | | | 103,950 | 103,950 | ||||||||||||||||||
Other payables |
1,001,629 | | | | 1,001,629 | 1,001,629 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
13,381,009 | 709,382 | 695 | | 14,091,086 | 14,023,700 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
31 December 2022 | ||||||||||||||||||||||||
Within 1 year or demand |
More than 1 year but less than 2 years |
More than 2 years but less than 5 years |
More than 5 years |
Total | Carrying amount at balance sheet date |
|||||||||||||||||||
Short-term loans |
1,562,617 | | | | 1,562,617 | 1,550,000 | ||||||||||||||||||
Long-term loans |
7,665 | 704,914 | | | 712,579 | 700,000 | ||||||||||||||||||
Lease liabilities |
9,395 | 7,531 | 655 | | 17,581 | 16,251 | ||||||||||||||||||
Accounts payable |
9,144,554 | | | | 9,144,554 | 9,144,554 | ||||||||||||||||||
Bills payable |
40,951 | | | | 40,951 | 40,951 | ||||||||||||||||||
Other payables |
1,618,352 | | | | 1,618,352 | 1,618,352 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
12,383,534 | 712,445 | 655 | | 13,096,634 | 13,070,108 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
234 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
XI. | Fair value disclosure |
The following table presents the fair value information and the fair value hierarchy, at the end of the current reporting period, of the Groups assets and liabilities which are measured at fair value at each balance sheet date on a recurring or non-recurring basis. The level in which fair value measurement is categorised is determined by the level of the fair value hierarchy of the lowest level input that is significant to the entire fair value measurement. The levels are defined as follows:
Level 1 inputs: | unadjusted quoted prices in active markets that are observable at the measurement date for identical assets or liabilities. | |
Level 2 inputs: | inputs other than Level 1 inputs that are either directly or indirectly observable for underlying assets or liabilities. | |
Level 3 inputs: | inputs that are unobservable for underlying assets or liabilities. |
1. | Assets recurring measured at fair value |
As at 30 June 2023, assets and liabilities recurring measured at fair value are presented in the above three levels as follows:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Financial assets |
||||||||||||||||
FVTPL |
||||||||||||||||
Other non-current financial assets |
| | 26,500 | 26,500 | ||||||||||||
FVOCI |
||||||||||||||||
Receivables under financing |
| 328,879 | | 328,879 | ||||||||||||
Investments in other equity instruments |
| | 5,000 | 5,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
| 328,879 | 31,500 | 360,379 | ||||||||||||
|
|
|
|
|
|
|
|
2023 Interim Report |
235 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
XI. | Fair value disclosure (continued) |
1. | Assets recurring measured at fair value (continued) |
As at 31 December 2022, assets and liabilities recurring measured at fair value are listed as follows according to the above three levels:
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Financial assets |
||||||||||||||||
FVOCI |
||||||||||||||||
Receivables under financing |
| 582,354 | | 582,354 | ||||||||||||
Investments in other equity instruments |
| | 5,000 | 5,000 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
| 582,354 | 5,000 | 587,354 | ||||||||||||
|
|
|
|
|
|
|
|
For the six months ended 30 June 2023, there were no transfers between different levels (for the six months ended 30 June 2022: Nil).
The Group uses discounted cash flow model to evaluate the fair value of the receivables under financing classified as level 2 financial assets.
The primary input to the receivables financing valuation is the discount rate for counterparty credit risk.
Investments in other equity instruments and other non-current financial asset investments that continue to be measured at fair value at the third level are unlisted equity investments and redeemable preferred share investments held by the Group, respectively, among them:
(i) | For the unlisted equity investments, as the operating environment, operating status and financial position of the investee do not have significant change, the fair value is measured at its investment cost. |
(ii) | For redeemable preference share investments, the fair value is determined using most recent transaction price. |
236 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
XI. | Fair value disclosure (continued) |
1. | Assets recurring measured at fair value (continued) |
The reconciliation information between the book value at the beginning of the period and the book value at the end of the period for the items measured by continuous Level 3:
31 December 2022 |
Purchase | Sell | Changes in fair value |
30 June 2023 (unaudited) |
Unearned profits or losses for assets held at the end of the period |
|||||||||||||||||||
Investments in other equity instruments |
5,000 | | | | 5,000 | | ||||||||||||||||||
Other non-current financial assets |
| 26,500 | | | 26,500 | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
5,000 | 26,500 | | | 31,500 | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
2. | Fair values of financial assets and liabilities not measured at fair value |
Financial assets and liabilities measured at amortized cost mainly include trade receivables, other receivables, other current assets, short-term loans, trade payables, long-term loans, lease liabilities and other current liabilities.
As at 30 June 2023 and 31 December 2022, the carrying amount of these financial assets and financial liabilities not measured at fair value are a reasonable approximation of their fair value.
XII. | Capital management |
The Groups objectives when managing capital are to safeguard the Groups ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The Groups total capital is calculated as shareholders equity and net liabilities as shown in the consolidated balance sheet. The Group is not subject to external mandatory capital requirements, and monitors capital on the basis of gearing ratio.
During 2023, the Groups strategy, which was unchanged from 2022, was to maintain a reasonable range of net debt-to-capital ratio by the management.
2023 Interim Report |
237 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
XIII. | Notes to the Companys financial statements |
1. | Accounts receivable |
(1) | Accounts receivable by customer type are as follows: |
Type of customers |
30 June 2023 (unaudited) |
31 December 2022 |
||||||
Amounts due from related parties |
1,472,562 | 2,334,835 | ||||||
Amounts due from third parties |
2,114 | 2,114 | ||||||
|
|
|
|
|||||
Sub-total |
1,474,676 | 2,336,949 | ||||||
|
|
|
|
|||||
Less: provision for bad and doubtful debts |
(2,131 | ) | (2,121 | ) | ||||
|
|
|
|
|||||
Total |
1,472,545 | 2,334,828 | ||||||
|
|
|
|
(2) | The ageing analysis of accounts receivable is as follows: |
Aging |
30 June 2023 (unaudited) |
31 December 2022 |
||||||
Within 1 year (inclusive) |
1,472,562 | 2,334,835 | ||||||
Over 1 year but within 2 years (inclusive) |
| | ||||||
Over 2 years but within 3 years (inclusive) |
| | ||||||
Over 3 years |
2,114 | 2,114 | ||||||
|
|
|
|
|||||
Total |
1,474,676 | 2,336,949 | ||||||
|
|
|
|
The ageing is counted starting from the date when accounts receivable are recognized.
238 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
XIII. | Notes to the Companys financial statements (continued) |
1. | Accounts receivable (continued) |
(3) | Accounts receivable by provisioning method |
30 June 2023 (unaudited) | 31 December 2022 | |||||||||||||||||||||||||||||||||||||||
Book value | Provision for bad and doubtful debts |
Book value | Provision for bad and doubtful debts |
|||||||||||||||||||||||||||||||||||||
Category |
Amount | Percentage (%) | Amount | Percentage (%) | Carrying amount |
Amount | Percentage (%) | Amount | Percentage (%) | Carrying amount |
||||||||||||||||||||||||||||||
Individual assessment |
| | | | | | | | | | ||||||||||||||||||||||||||||||
Collective assessment |
1,474,676 | 100.00 | 2,131 | 0.14 | 1,472,545 | 2,336,949 | 100.00 | 2,121 | 0.09 | 2,334,828 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total |
1,474,676 | 100.00 | 2,131 | 0.14 | 1,472,545 | 2,336,949 | 100.00 | 2,121 | 0.09 | 2,334,828 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) | As at 30 June 2023, the Company has no individually impaired accounts receivable (as at 31 December 2022: Nil). |
(ii) | Criteria for collective assessment for the year ended 31 December 2022 and details: |
According to the historical experience of the Company, there are no significant differences in the losses of different customer groups. Therefore, different customer groups are not further distinguished when calculating impairment loss based on the overdue information.
(iii) | Assessment of ECLs on accounts receivable: |
At all times the Company measures the impairment loss for accounts receivable at an amount equal to lifetime ECLs, and the ECLs are based on the number of overdue days and the expected loss rate.
The loss given default is measured based on the actual credit loss experience in the past years, and is adjusted taking into consideration the differences among the economic conditions during the historical data collection period, the current economic conditions and the economic conditions during the expected lifetime.
2023 Interim Report |
239 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
XIII. | Notes to the Companys financial statements (continued) |
1. | Accounts receivable (continued) |
(4) | Movements of provisions for bad and doubtful debts: |
For the six months ended 30 June | ||||||||
(unaudited) | ||||||||
Provisions for bad and doubtful debts |
2023 (unaudited) |
2022 (unaudited) |
||||||
Balance at the beginning of the period |
2,121 | 1,965 | ||||||
Additions during the period |
10 | 152 | ||||||
Recoveries or reversals during the period |
| | ||||||
Balance at the end of the period |
2,131 | 2,117 | ||||||
|
|
|
|
(i) | For the six months ended 30 June 2023, the Company has no accounts receivable that have fully accrued or accrued a large proportion of bad and doubtful debts in previous years, but fully recovered or reversed, or have a large proportion of recovered or reversed in the current period (For the six months ended 30 June 2022: Nil). |
(ii) | For the six months ended 30 June 2023, the Company has not written off significant accounts receivable (For the six months ended 30 June 2022: Nil). |
(5) | Five largest accounts receivable by debtor as at 30 June 2023 (unaudited) |
Item |
Amount | Provision | Percent of total amount |
|||||||||
Total amount of five largest accounts receivable by debtor of the Company |
1,463,189 | 17 | 99.22 | |||||||||
|
|
|
|
|
|
(6) | For the six months ended 30 June 2023, the Company has no accounts receivable derecognized due to transfer of financial assets (for the six months ended 30 June 2022: Nil). |
(7) | As at 30 June 2023, the Company has no pledged accounts receivable (31 December 2022: Nil). |
240 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
XIII. | Notes to the Companys financial statements (continued) |
2. | Receivables under financing |
Note | 30 June 2023 (unaudited) |
31 December 2022 | ||||||||||
Bills receivable |
(1 | ) | 137,200 | 127,558 | ||||||||
|
|
|
|
|
|
(1) | Bills receivable |
(i) | Due to the requirement of cash management, the Company discounted and endorsed part of the bank acceptance notes. The business model of bank acceptance notes management is for the purpose of collecting cash flow of contracts and sales. Therefore, as at 30 June 2023, the Company classified RMB137,200 thousand bills receivable to financial assets measured at fair value and whose changes are included in other comprehensive income and disclosed in bills receivable (31 December 2022: RMB127,558 thousand). |
(ii) | The Company has no single provision for impairment of the bank acceptance notes, with all provision was accrued by their expected credit loss. As at 30 June 2023 and 31 December 2022, the Company considers that no bank acceptance notes has significant credit risk and will not suffer significant loss due to the violation of banks. |
(iii) | As at 30 June 2023, the Company had no pledged bills receivable (31 December 2022: Nil). |
(iv) | As at 30 June 2023, unmatured notes receivable that have been endorsed or discounted by the Company is as follows: |
Item |
Derecognized | Not derecognized | ||||||
Bank acceptance notes |
284,755 | | ||||||
|
|
|
|
As at 30 June 2023, the Company endorsed and discounted the undue bills receivable of RMB284,755 thousand (31 December 2022:RMB244,589 thousand). The Company derecognized such bills receivable, accounts payable to suppliers and short-term loans as a whole by considering that the risks and rewards of ownership of such unmatured bills had been substantially transferred. The Companys continued involvement in the unexpired bills receivable whose overall derecognition is limited to the extent that the issuing bank is unable to settle the amount to the bill holder. The maximum exposure to loss caused by the Companys continued involvement is the amount of outstanding bills receivable endorsed to the supplier of RMB284,755 thousand (31 December 2022: RMB244,589 thousand). The term of the outstanding bills receivable is within one year.
2023 Interim Report |
241 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
XIII. | Notes to the Companys financial statements (continued) |
3. | Other receivables |
(1) | Analysis by customer type: |
Customer type |
30 June 2023 (unaudited) |
31 December 2022 | ||||||
Amounts due from related parties |
6,254 | 139,995 | ||||||
Amounts due from third parties |
824,037 | 793,153 | ||||||
|
|
|
|
|||||
Sub-total |
830,291 | 933,148 | ||||||
|
|
|
|
|||||
Less: Provision for bad and doubtful debts |
(761,075 | ) | (761,072 | ) | ||||
|
|
|
|
|||||
Total |
69,216 | 172,076 | ||||||
|
|
|
|
(2) | The ageing analysis is as follows: |
Aging |
30 June 2023 (unaudited) |
31 December 2022 | ||||||
Within 1 year (inclusive) |
69,211 | 174,866 | ||||||
Over 1 year but within 2 years (inclusive) |
4,733 | 1,935 | ||||||
Over 2 years but within 3 years (inclusive) |
| | ||||||
Over 3 years |
756,347 | 756,347 | ||||||
|
|
|
|
|||||
Total |
830,291 | 933,148 | ||||||
|
|
|
|
The ageing is counted starting from the date when other receivables are recognized.
242 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
XIII. | Notes to the Companys financial statements (continued) |
3. | Other receivables (continued) |
(3) | Others by provisioning method: |
30 June 2023 (unaudited) | 31 December 2022 | |||||||||||||||||||||||||||||||||||||||
Book value | Provision for bad and doubtful debts |
Book value | Provision for bad and doubtful debts |
|||||||||||||||||||||||||||||||||||||
Category |
Amount | Percentage (%) | Amount | Percentage (%) | Carrying amount |
Amount | Percentage (%) | Amount | Percentage (%) | Carrying amount |
||||||||||||||||||||||||||||||
Individual assessment |
761,072 | 91.66 | 761,072 | 100.00 | | 761,072 | 81.56 | 761,072 | 100.00 | | ||||||||||||||||||||||||||||||
Collective assessment |
69,219 | 8.34 | 3 | 0.00 | 69,216 | 172,076 | 18.44 | | | 172,076 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total |
830,291 | 100.00 | 761,075 | 91.66 | 69,216 | 933,148 | 100.00 | 761,072 | 81.56 | 172,076 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) | Movements of provisions for bad and doubtful debts |
Stage 1 | Stage 3 | |||||||||||||||||||||||||||||||
12-month ECL (collective) | 12-month ECL (individual) | Sub-total | Lifetime ECL-Credit impaired | Total | ||||||||||||||||||||||||||||
Book value | Provision for bad and doubtful debts |
Book value | Provision for bad and doubtful debts |
Provision for bad and doubtful debts |
Book value | Provision for bad and doubtful debts |
Provision for bad and doubtful debts |
|||||||||||||||||||||||||
Balance at 31 December 2022 |
172,076 | | | | | 761,072 | (761,072 | ) | (761,072 | ) | ||||||||||||||||||||||
Additions during the period |
| (3 | ) | | | (3 | ) | | | (3 | ) | |||||||||||||||||||||
Recoveries or reversals during the period |
| | | | | | | | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at 30 June 2023 (unaudited) |
69,219 | (3 | ) | | | (3 | ) | 761,072 | (761,072 | ) | (761,075 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023 Interim Report |
243 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
XIII. | Notes to the Companys financial statements (continued) |
3. | Other receivables (continued) |
(4) | Movements of provisions for bad and doubtful debts (continued) |
As at 30 June 2023 and 31 December 2022, the Company has no other receivables under Stage 2.
As at 30 June 2023, the amount receivable from Jinyong company, a subsidiary within the original scope of merger, was RMB756,347 thousand (31 December 2022: RMB756,347 thousand). Jinyong company started to stop production in August 2008 and entered bankruptcy liquidation procedure in August 2019. The Company believes that the other receivables are difficult to recover, so the bad debt provision are fully accrued. As at 30 June 2023, the bankruptcy liquidation procedure has not been completed.
For the six months ended 30 June 2023, the Company has no other receivables that have fully accrued or accrued a large proportion of bad and doubtful debts in previous years, but fully recovered or reversed, or have a large proportion of recovered or reversed in the current period.. (for the six months ended 30 June 2022: Nil)
For the six months ended 30 June 2023, the Company has not written off significant other receivables (for the six months ended 30 June 2022: Nil).
244 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
XIII. | Notes to the Companys financial statements (continued) |
3. | Other receivables (continued) |
(5) | Others categorised by nature |
Nature of other receivables |
30 June 2023 (unaudited) |
31 December 2022 | ||||||
Receivable from Jinyong company |
756,347 | 756,347 | ||||||
Advance payment of compensation |
32,311 | 4,380 | ||||||
Prepayment for share repurchase |
27,573 | 27,573 | ||||||
Accounts due from related parties |
6,254 | 139,995 | ||||||
Rent receivable |
460 | 140 | ||||||
Water, electricity and gas charges receivable |
17 | 278 | ||||||
Others |
7,329 | 4,435 | ||||||
|
|
|
|
|||||
Sub-total |
830,291 | 933,148 | ||||||
|
|
|
|
|||||
Less: provisions for bad and doubtful debts |
(761,075 | ) | (761,072 | ) | ||||
|
|
|
|
|||||
Total |
69,216 | 172,076 | ||||||
|
|
|
|
(6) | Five largest others by debtor as at 30 June 2023 |
Debtor |
Nature of the receivable |
Balance at the end of the period |
Ageing |
Percentage of ending balance of others (%) |
Ending balance of provision for bad and doubtful debts |
|||||||||||
Zhejiang Jinyong Acrylic Fiber Co., Ltd |
Prepaid expenses | 756,347 | Over 3 years | 91.09 | % | (756,347 | ) | |||||||||
Pacific Anxin Crop Insurance Co., Ltd |
Advance payment of compensation | 32,311 | Within 1 year (inclusive) | 3.89 | % | | ||||||||||
China International Capital Corporation Hong Kong Securities Limited |
Prepayment for share repurchase | 27,573 | Within 1 year (inclusive) | 3.32 | % | | ||||||||||
Sinopec Materials & Equipment Co., Ltd. |
Business transaction | 2,795 | Over 1 year but within 2 years (inclusive) | 0.34 | % | (2,795 | ) | |||||||||
Linde-SPC Gases Company Limited |
Business transaction | 2,388 | Within 1 year (inclusive) | 0.29 | % | | ||||||||||
|
|
|
|
|
|
|||||||||||
Total |
821,414 | 98.93 | % | (759,142 | ) | |||||||||||
|
|
|
|
|
|
2023 Interim Report |
245 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
XIII. | Notes to the Companys financial statements (continued) |
4. | Long-term equity investment |
Item |
Note | 30 June 2023 (unaudited) |
31 December 2022 | |||||||||
Subsidiaries |
(1 | ) | 2,048,328 | 2,048,328 | ||||||||
Associates |
(2 | ) | 2,348,062 | 2,539,038 | ||||||||
Joint ventures |
(3 | ) | 250,000 | 250,000 | ||||||||
|
|
|
|
|||||||||
Sub-total |
4,646,390 | 4,837,366 | ||||||||||
|
|
|
|
|||||||||
Less: Impairment provision for long-term equity investment |
| | ||||||||||
|
|
|
|
|||||||||
Total |
4,646,390 | 4,837,366 | ||||||||||
|
|
|
|
(1) | Subsidiaries |
Name of subsidiaries |
31 December 2022 |
Additional/ negative investment |
30 June 2023 (unaudited) |
Impairment Provision Ending balance |
Cash dividends declared in current period |
|||||||||||||||
Toufa |
2,031,496 | | 2,031,496 | | | |||||||||||||||
Jinmao |
16,832 | | 16,832 | | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
2,048,328 | | 2,048,328 | | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
(2) | Associates |
The information relating to the associates of the Company, Shanghai Secco and Chemical Industry is disclosed in Note VI.2.
(3) | Joint venture |
The information relating to the joint venture of the Company, Shanghai Jinshan Baling New Materials Co., Ltd., is disclosed in Note VI.2.
246 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
XIII. | Notes to the Companys financial statements (continued) |
5. | Fixed assets |
(1) | Fixed assets |
Buildings | Plant and machinery |
Vehicles and other equipment |
Total | |||||||||||||
Cost 31 December 2022 |
3,924,468 | 44,186,806 | 2,046,695 | 50,157,969 | ||||||||||||
Reclassification in current period |
55,308 | (77,759 | ) | 22,451 | | |||||||||||
Increase |
||||||||||||||||
Purchase |
89 | 37,172 | 26,990 | 64,251 | ||||||||||||
Transfer from construction in progress |
195,415 | 2,044,396 | 60,033 | 2,299,844 | ||||||||||||
Transfer from investment properties |
3,491 | | | 3,491 | ||||||||||||
Decrease |
||||||||||||||||
Disposal |
(3,132 | ) | (160,829 | ) | (24,746 | ) | (188,707 | ) | ||||||||
Transfer to investment properties |
(270 | ) | | | (270 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
30 June 2023 (unaudited) |
4,175,369 | 46,029,786 | 2,131,423 | 52,336,578 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Accumulated depreciation 31 December 2022 |
2,449,275 | 32,631,340 | 1,538,454 | 36,619,069 | ||||||||||||
Reclassification in current period |
37,727 | (40,936 | ) | 3,209 | | |||||||||||
Increase |
||||||||||||||||
Charge for current period |
49,889 | 670,820 | 68,541 | 789,250 | ||||||||||||
Transfer from investment properties |
2,708 | | | 2,708 | ||||||||||||
Decrease |
||||||||||||||||
Disposal |
(3,023 | ) | (122,852 | ) | (22,406 | ) | (148,281 | ) | ||||||||
Transfer to investment properties |
(43 | ) | | | (43 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
30 June 2023 (unaudited) |
2,536,533 | 33,138,372 | 1,587,798 | 37,262,703 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Provision for impairment 31 December 2022 |
62,842 | 1,625,798 | 10,675 | 1,699,315 | ||||||||||||
Reclassification in current period |
14,492 | (21,332 | ) | 6,840 | | |||||||||||
Decrease |
||||||||||||||||
Disposal |
| (7,462 | ) | | (7,462 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
30 June 2023 (unaudited) |
77,334 | 1,597,004 | 17,515 | 1,691,853 | ||||||||||||
Carrying amount 30 June 2023 (unaudited) |
1,561,502 | 11,294,410 | 526,110 | 13,382,022 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
31 December 2022 |
1,412,351 | 9,929,668 | 497,566 | 11,839,585 | ||||||||||||
|
|
|
|
|
|
|
|
2023 Interim Report |
247 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
XIII. | Notes to the Companys financial statements (continued) |
5. | Fixed assets (continued) |
(1) | Fixed assets (continued) |
(i) | During the six-month period ending 30 June 2023, the Company has not made any provision for impairment of fixed assets. As of 30 June 2023, the impairment provision for fixed assets of the Company was RMB1,691,853 thousand. |
(ii) | As at 30 June 2023 and 31 December 2022 the Company had no pledged fixed assets. |
(iii) | For the six months ended 30 June 2023, the amount of fixed assets transferred from construction in progress was RMB2,299,844 thousand (for the six months ended 30 June 2022: RMB159,635 thousand). |
(iv) | As at 30 June 2023, the cost of temporarily idle fixed assets was RMB3,318,987 thousand, the accumulated depreciation was RMB2,667,541 thousand, the provision for impairment was RMB475,444 thousand and the carrying amount was RMB176,002 thousand (31 December 2022: the cost of temporarily idle fixed assets was RMB3,358,312 thousand, accumulated depreciation was RMB2,685,006 thousand, related impairment provision was RMB493,944 thousand, and the carrying amount of these assets was RMB179,362 thousand, respectively). |
(v) | As at 30 June 2023, the carrying amount of fixed assets leased out under operating leases was RMB68,662 thousand (31 December 2022: RMB50,923 thousand). |
(vi) | As at 30 June 2023 and 31 December 2022, the Company had no fixed assets pending certificates of ownership. |
6. | Operating income and operating costs |
For the six months ended 30 June |
||||||||||||
Items | Note | 2023 | 2022 | |||||||||
(unaudited) | (unaudited) | |||||||||||
Income from principal activities |
(1 | ) | 40,683,967 | 38,927,560 | ||||||||
Income from other operating activities |
211,101 | 178,688 | ||||||||||
|
|
|
|
|||||||||
Total |
40,895,068 | 39,106,248 | ||||||||||
|
|
|
|
248 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
XIII. | Notes to the Companys financial statements (continued) |
6. | Operating income and operating costs (continued) |
For the six months ended 30 June |
||||||||||||
Items | Note | 2023 | 2022 | |||||||||
(unaudited) | (unaudited) | |||||||||||
Cost of principal activities |
(1 | ) | 34,457,837 | 32,270,127 | ||||||||
Cost of other operating activities |
135,349 | 111,650 | ||||||||||
|
|
|
|
|||||||||
Total |
34,593,186 | 32,381,777 | ||||||||||
|
|
|
|
(1) | Income and cost from principal activities |
The principal business of the Company mainly belongs to the petrochemical industry.
Analysis by product is as follows:
For the six months ended 30 June | ||||||||||||||||
2023 (unaudited) | 2022 (unaudited) | |||||||||||||||
Items | Income from principal activities |
Cost from principal activities |
Income from principal activities |
Cost from principal activities |
||||||||||||
Petroleum products |
30,675,736 | 24,774,204 | 27,517,541 | 20,704,410 | ||||||||||||
Intermediate petrochemicals |
6,147,402 | 5,577,560 | 7,031,777 | 6,989,582 | ||||||||||||
Resins and plastics |
3,380,866 | 3,393,814 | 3,884,093 | 3,887,671 | ||||||||||||
Synthetic fibres |
223,383 | 459,266 | 230,753 | 388,331 | ||||||||||||
Others |
256,580 | 252,993 | 263,396 | 300,133 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
40,683,967 | 34,457,837 | 38,927,560 | 32,270,127 | ||||||||||||
|
|
|
|
|
|
|
|
The operating income of the Company is recognized at a point in time.
2023 Interim Report |
249 |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
XIII. | Notes to the Companys financial statements (continued) |
7. | Investment income (- for losses) |
For the six months ended 30 June |
||||||||||||
Items | Note | 2023 | 2022 | |||||||||
(unaudited) | (unaudited) | |||||||||||
Investment accounted for using the cost method |
| 23,566 | ||||||||||
Investment accounted for using the equity method |
(1 | ) | (144,851 | ) | (53,346 | ) | ||||||
Loss on disposal of derivative financial instruments |
| (18,973 | ) | |||||||||
Discount loss of receivables |
(1,123 | ) | (827 | ) | ||||||||
Others |
| 2,667 | ||||||||||
|
|
|
|
|||||||||
Total |
(145,974 | ) | (46,913 | ) | ||||||||
|
|
|
|
There are no severe restrictions on the investees ability to transfer investment income to the Company.
(1) Income from investment in associates accounted for using the equity method is as follow:
For the six months ended 30 June |
||||||||
2023 | 2022 | |||||||
(unaudited) | (unaudited) | |||||||
Shanghai Secco |
(213,655 | ) | (132,608 | ) | ||||
Chemical Industry |
68,804 | 79,262 | ||||||
|
|
|
|
|||||
Total |
(144,851 | ) | (53,346 | ) | ||||
|
|
|
|
250 | Sinopec Shanghai Petrochemical Company Limited |
NOTES TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
XIII. | Notes to the Companys financial statements (continued) |
8. | Supplementary information on cash flow statements |
(1) | Reconciliation from net loss to cash flow from operating activities |
For the six months ended 30 June |
||||||||
2023 (unaudited) |
2022 (unaudited) (restated) |
|||||||
Item | ||||||||
Net loss |
(1,000,105 | ) | (395,122 | ) | ||||
Add: Provisions for impairment of assets |
190,486 | 177,777 | ||||||
Impairment credit losses |
13 | 4,877 | ||||||
Depreciation of investment properties |
8,184 | 8,195 | ||||||
Depreciation of fixed assets |
789,250 | 688,465 | ||||||
Depreciation of right-of-use assets |
5,751 | 6,060 | ||||||
Amortization of intangible assets |
6,143 | 6,143 | ||||||
Amortization of long-term deferred expense |
144,819 | 133,954 | ||||||
Net losses on disposal of long-term assets |
9,310 | 4,810 | ||||||
Losses/(gains) from changes in fair value |
| (313 | ) | |||||
Financial expenses (- for income) |
(57,840 | ) | (209,285 | ) | ||||
Investment income |
145,974 | 46,913 | ||||||
Decrease in deferred tax assets (- for increase) |
(234,848 | ) | (69,959 | ) | ||||
Increase in deferred income (- for decrease) |
(4,011 | ) | 7,200 | |||||
Decrease in inventories (- for increase) |
(638,496 | ) | (696,905 | ) | ||||
Decrease in operating receivables (- for increase) |
2,091,807 | 621,546 | ||||||
Increase in operating payables (- for decrease) |
(1,519,448 | ) | (7,064,067 | ) | ||||
Increase of reserve |
21,307 | 8,322 | ||||||
Net cash outflow used in operating activities |
(41,704 | ) | (6,721,389 | ) |
(2) | Movement of cash and cash equivalent |
For the six months ended 30 June |
||||||||
2023 | 2022 | |||||||
Item |
(unaudited) | (unaudited) | ||||||
Cash and cash equivalents at the end of the period |
4,506,544 | 2,052,633 | ||||||
Less: Cash and cash equivalents at the beginning of the period |
(671,538 | ) | (4,927,519 | ) | ||||
Net decrease in cash and cash equivalents |
3,835,006 | (2,874,886 | ) |
2023 Interim Report |
251 |
C. SUPPLEMENTARY INFORMATION TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
I. | Non-recurring items |
For the six months ended 30 June |
||||||||
2023 | 2022 | |||||||
(unaudited) | (unaudited) | |||||||
Losses on disposal of non-current assets |
(8,876 | ) | (5,960 | ) | ||||
Government grants recorded in profit or loss |
12,399 | 10,905 | ||||||
Employee reduction expenses |
(9,965 | ) | (8,251 | ) | ||||
Losses from changes in fair value of financial assets and liabilities |
| (8,987 | ) | |||||
Gains from structured deposits income |
| 9,300 | ||||||
Losses from disposal of derivative financial instruments |
| (18,618 | ) | |||||
Discount loss of receivables |
(1,997 | ) | (2,187 | ) | ||||
Gains on entrusted loans |
| 2,667 | ||||||
Other non-operating income and expenses other than those mentioned above |
(9,894 | ) | (20,106 | ) | ||||
Income tax effect for the above items |
2,359 | 7,706 | ||||||
Effect on non-controlling interests after tax |
(153 | ) | 66 | |||||
|
|
|
|
|||||
Total |
(16,127 | ) | (33,465 | ) | ||||
|
|
|
|
Basis of preparation for extraordinary profit and loss
Pursuant to Announcement [2008] Explanatory Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public issued by China Securities regulatory commission (CSRC), extraordinary profit and loss arises in various trading and issues that have no direct relation with the normal operations of a company, or that are related with normal operations but affect the users of the statement to make reasonable judgment of the Companys operation performance and profitability due to the special and occasional nature of such trading and issues.
252 | Sinopec Shanghai Petrochemical Company Limited |
C. SUPPLEMENTARY INFORMATION TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
II. | Reconciliation between financial statements prepared under CAS and IFRS |
The Company is listed on the Stock Exchange of Hong Kong. The Group prepared financial statements under International Financial Reporting Standards (IFRS) which has been audited. There are reconciliation items in the consolidated financial report prepared under CAS and IFRS, the reconciliation items and the amount are listed as follows:
Net loss | Net assets | |||||||||||||||
For the six months ended 30 June |
2023 30 June (unaudited) |
2022 31 December (restated) |
||||||||||||||
2023 (unaudited) |
2022 (unaudited) (restated) |
|||||||||||||||
Under CAS |
(985,686 | ) | (430,870 | ) | 25,406,302 | 26,371,425 | ||||||||||
Difference items and amounts |
||||||||||||||||
Government grants (1) |
1,005 | 1,005 | (15,018 | ) | (16,023 | ) | ||||||||||
Safety production costs (2) |
20,584 | 8,486 | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Under IFRS |
(964,097 | ) | (421,379 | ) | 25,391,284 | 26,355,402 | ||||||||||
|
|
|
|
|
|
|
|
Notes in relation to the reconciliation items:
(1) | Government grants |
Under CAS, government subsidies defined as capital contributions according to the relevant government requirements are not considered a government grant, but instead should be recorded as an increase in capital reserves.
Under IFRS, such grants are offset against the cost of asset to which the grants are related. Upon transfer to property, plant and equipment, the grant is recognized as income over the useful life of the property, plant and equipment by way of a reduced depreciation charge.
(2) | Safety production costs |
Under CAS, safety production costs should be recognized 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, expenses are recognized in profit or loss when incurred, and property, plant and equipment are depreciated with applicable methods.
2023 Interim Report |
253 |
C. SUPPLEMENTARY INFORMATION TO THE FINANCIAL STATEMENTS (continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2023
(All amounts in thousands of Renminbi Yuan unless otherwise stated)
III. | Loss on net assets and loss per share |
Weighted average loss on net assets (%) |
Loss per share (RMB per share) | |||||||||||||||||||||||
Basic | Diluted | |||||||||||||||||||||||
For the six months ended 30 June |
For the six months ended 30 June |
For the six months ended 30 June |
||||||||||||||||||||||
Items |
2023 (unaudited) |
2022 (unaudited) (restated) |
2023 (unaudited) |
2022 (unaudited) (restated) |
2023 (unaudited) |
2022 (unaudited) (restated) |
||||||||||||||||||
Net loss attributable to shareholders of the Company |
(3.818 | ) | (1.395 | ) | (0.092 | ) | (0.040 | ) | (0.092 | ) | (0.040 | ) | ||||||||||||
Net loss attributable to shareholders of the Company excluding non-recurring items |
(3.755 | ) | (1.288 | ) | (0.090 | ) | (0.037 | ) | (0.090 | ) | (0.037 | ) |
254 | Sinopec Shanghai Petrochemical Company Limited |
WRITTEN CONFIRMATION OPINIONS OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT ON THE COMPANYS 2023 INTERIM REPORT
Pursuant to the relevant requirements of Article 82 of the Securities Law, Standards for the Contents and Formats of Information Disclosure by Companies Offering to the Public No.3Contents and Formats of Interim Reports (2021 Revision), and the Shanghai Listing Rules, as the Companys Directors, Supervisors and senior management, we fully understood and reviewed the Companys 2023 Interim Report and issued the written opinions as follows:
1. | Confirmation opinions by Directors and senior management |
The Company operated in strict accordance with the financial system of listed companies, and the 2023 Interim Report fully, truly and fairly reflected the Companys financial performance and operating results. The formulation and review procedures of the Companys 2023 Interim Report were in compliance with laws and regulations, regulations of CSRC, Articles of Association and relevant internal control systems.
2. | Review opinions by Supervisors |
(1) | The formulation and review procedures of the Companys 2023 Interim Report were in compliance with laws and regulations, Articles of Association and relevant internal control systems. |
(2) | The contents and formats of the Companys 2023 Interim Report met the relevant regulations of CSRC and the Shanghai Stock Exchange. |
(3) | No violation of information confidentiality was found in the Companys personnel involved in the formulation, review and information disclosure of the Companys 2023 Interim Report. |
(4) | The Companys 2023 Interim Report fully, truly and fairly reflected the Companys financial performance and operating results. |
3. | All Directors, Supervisors and senior management guarantee that the information disclosed in the Companys 2023 Interim Report and summary is true, accurate and complete, promise that there are no false records, misleading statements or major omissions, and bear the separate and joint legal liabilities for the authenticity, exactness and completeness of the contents. |
2023 Interim Report |
255 |
WRITTEN CONFIRMATION OPINIONS OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT ON THE COMPANYS 2023 INTERIM REPORT (continued)
Sign by directors:
Sign by supervisors:
Sign by Senior Management:
256 | Sinopec Shanghai Petrochemical Company Limited |
CORPORATE INFORMATION
(1) | Corporate Information |
Chinese Name of the Company | 中國石化上海石油化工股份有限公司 | |
Chinese Short Name of the Company | 上海石化 | |
English name of the Company | Sinopec Shanghai Petrochemical Company Limited | |
Abbreviation of the English Name of the Company | SPC | |
Legal representative of the Company | Wan Tao |
(2) | Contact Persons and Contact Details |
Secretary to the Board | Securities Affairs Representative | |||
Name | Liu Gang | Yu Guangxian | ||
Address | No.48 Jinyi Road, Jinshan District, Shanghai, PRC, Postal Code: 200540 | |||
Tel | 8621-57943143 | 8621-57933728 | ||
Fax | 8621-57940050 | 8621-57940050 | ||
liugang@spc.com.cn | yuguangxian@spc.com.cn |
(3) | Basic Information |
Registered Address | No.48 Jinyi Road, Jinshan District, Shanghai, PRC | |
Postal code of the registered office of the Company | 200540 | |
Office address of the Company | No.48 Jinyi Road, Jinshan District, Shanghai, PRC | |
Postal Code of Office Address | 200540 | |
Room 605, Island Place Tower, 510 Kings Road, | ||
Principal Place of Business in Hong Kong | Hong Kong | |
Website of the Company | www.spc.com.cn | |
E-mail address | spc@spc.com.cn |
* | There was no change in registered address of the Company during the Reporting Period |
(4) | Information Disclosure and Access |
Designated newspapers for the publication of the Companys announcements |
China Securities Journal and Securities Times | |
Websites for the publication of the Companys interim reports | Shanghai Stock Exchange website, Hong Kong Stock Exchange website and the website of the Company | |
Place for access to the Companys interim reports | Secretariat Office to the Board, No.48 Jinyi Road, Jinshan District, Shanghai, PRC |
2023 Interim Report |
257 |
CORPORATE INFORMATION (continued)
(5) | Shares Profile of the Company |
Share Type | Place of Listing | Stock Short Name | Stock Code | |||
A Shares | Shanghai Stock Exchange | 上海石化 | 600688 | |||
H Shares | Hong Kong Stock Exchange | SHANGHAI PECHEM | 00338 |
(6) | Other Relevant Information |
Auditor engaged by the | Name | KPMG Huazhen LLP | ||
Company (Domestic) |
Address | 8th floor, KPMG building, Oriental Plaza, No. 1, East Changan Street, Dongcheng District, Beijing, PRC | ||
Auditor Engaged by the Company (Overseas) |
Name | KPMG Public Interest Entity Auditor registered in accordance with the Accounting and Financial Reporting Council Ordinance | ||
Address | 8th Floor, Prince Building, 10 Chater Road, Central, Hong Kong |
Legal Advisors: | ||||
PRC Law: | Haiwen & Partners | |||
20th Floor, Fortune & Finance Center | ||||
No.5 Dong San Huan Central Road | ||||
Chaoyang District, Beijing, PRC | ||||
Postal Code: 100020 | ||||
Hong Kong Law: | Zhong Lun Law Firm | |||
4th floor, Jardine house, 1 Connaught Plaza, central, Hong Kong | ||||
United States Law: | Morrison & Foerster | |||
425 Market Street | ||||
San Francisco, California 94105-2482 | ||||
U.S.A. |
Joint Company Secretaries: | ||||||
Liu Gang, Chan Sze Ting | ||||||
Authorised Representatives for Hong Kong Stock Exchange: | ||||||
Wan Tao, Chan Sze Ting | ||||||
H Shares Share Registrar: | ||||||
Hong Kong Registrars Limited | ||||||
Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queens Road East, Wan Chai, Hong Kong | ||||||
ADR Depositary: | ||||||
The Bank of New York Mellon | ||||||
Computershare | ||||||
P.O. Box 30170 | ||||||
College Station, TX 77842-3170 | ||||||
U.S.A | ||||||
Number for International Calls: 1-201-680-6921 | ||||||
Email:shrrelations@cpushareownerservices.com | ||||||
Website:www.mybnymdr.com |
258 | Sinopec Shanghai Petrochemical Company Limited |
1 Year Shanghai Petrochemical (PK) Chart |
1 Month Shanghai Petrochemical (PK) Chart |
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