SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of April 2008
PETROCHINA COMPANY LIMITED
16 ANDELU, DONGCHENG DISTRICT
BEIJING, THE PEOPLE'S REPUBLIC OF CHINA, 100011
(Address of Principal Executive Offices)
(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.)
Form 20-F X Form 40-F
--- ---
(Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)
Yes No X
--- ---
(If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82- )
-------
PetroChina Company Limited (the "Registrant") is furnishing under the cover
of Form 6-K the Registrant's first quarter report of 2008.
This report contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements
are, by their nature, subject to significant risks and uncertainties. These
forward-looking statements include, without limitation, statements relating to:
-- the Registrant's future plans and prospects.
These forward-looking statements reflect our current views with respect to
future events and are not a guarantee of future performance. Actual results may
differ materially from information contained in these forward-looking statements
as a result of a number of factors, including, without limitation:
- fluctuations in crude oil and natural gas prices;
- failure to achieve continued exploration success;
- failure or delay in achieving production from development projects;
- failure to complete the proposed acquisition of certain overseas
assets as planned;
- change in demand for competing fuels in the target market;
- continued availability of capital and financing;
- general economic, market and business conditions;
- changes in policies, laws or regulations of the PRC and other
jurisdictions in which the Registrant and its subsidiaries conduct
business; and
- other factors beyond the Registrant's control.
We do not intend to update or otherwise revise the forward-looking
statements in this report, whether as a result of new information, future events
or otherwise. Because of these risks, uncertainties and assumptions, the
forward-looking events and circumstances discussed in this report might not
occur in the way we expect, or at all.
You should not place undue reliance on any of these forward-looking
statements.
SIGNATURE
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.
PetroChina Company Limited
Dated: April 30, 2008 By: /s/ Li Huaiqi
------------------
Name: Li Huaiqi
Title: Company Secretary
(PETROCHINA COMPANY LIMITED LOGO)
(CHINESE CHARACTERS)
PETROCHINA COMPANY LIMITED
(A joint stock limited company incorporated in the People's Republic of China
with limited liability)
(Hong Kong Stock Exchange Stock Code: 857; Shanghai Stock Exchange Stock Code:
601857)
ANNOUNCEMENT
FIRST QUARTER REPORT OF 2008
--------------------------------------------------------------------------------
Pursuant to the regulations of the China Securities Regulatory Commission,
PetroChina Company Limited is required to publish a quarterly report for each of
the first and third quarters.
This announcement is made pursuant to Rule 13.09 of the Rules Governing the
Listing of Securities on The Stock Exchange of Hong Kong Limited.
--------------------------------------------------------------------------------
SECTION 1 IMPORTANT NOTICE
1.1 The Board of Directors of PetroChina Company Limited (the "Company"), the
Supervisory Committee and the Directors, Supervisors and Senior Management of
the Company warrant that there are no material omissions from, or
misrepresentation or misleading statements contained in this announcement, and
jointly and severally accept full responsibility for the truthfulness, accuracy
and completeness of the information contained in this announcement.
1.2 This announcement has been approved unanimously at the extraordinary meeting
of the Board of Directors of the Company (the "Board"). No Director has any
doubt as to, or the inability to warrant, the truthfulness, accuracy and
completeness of this announcement.
1.3 The financial statements of the Company and its subsidiaries (the "Group")
are prepared in accordance with the Basic Standard and 38 specific standards of
Accounting Standards for Business Enterprises issued by the Ministry of Finance
for the People's Republic of China (the "PRC") on February 15, 2006, Application
Guidance of Accounting Standard For Business Enterprises, Interpretation of
Accounting Standards For Business Enterprises and other regulations issued
thereafter (collectively, the "CAS") and the International Financial Reporting
Standards (the "IFRS"), respectively. The financial statements in this
announcement have not been audited.
1.4 Mr. Jiang Jiemin, Chairman of the Board and President of the Company, and
Mr. Zhou Mingchun, Chief Financial Officer and Head of the Finance Department of
the Company, warrant the truthfulness and completeness of the financial
statements in this announcement.
1
SECTION 2 BASIC INFORMATION OF THE COMPANY
2.1 Summary of Accounting Data and Financial Indicators
2.1.1 Key Accounting Data and Financial Indicators Prepared under IFRS
Unit: RMB Million
-------------------------------------------------------------------------------------------------
FOR THREE MONTHS ENDED CHANGES COMPARED
MARCH 31, WITH THE SAME PERIOD
---------------------- OF 2007 (%)
ITEMS 2008 2007
-------------------------------------------------------------------------------------------------
Net profit attributable to equity
holders of the Company 28,885 42,140 (31.5)
Basic and diluted earnings per
share for profit attributable to
equity holders of the Company (RMB) 0.16 0.24 (33.0)
Return on net assets (%) 3.8 6.7 (2.9 percentage points)
Net cash flows from operating
activities 31,988 51,399 (37.8)
Net cash flows from operating
activities per share (RMB) 0.17 0.29 (41.4)
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
CHANGES AS AT MARCH
31, 2008 AS COMPARED
AS AT MARCH AS AT DECEMBER WITH DECEMBER 31,
ITEMS 31, 2008 31, 2007 2007 (%)
-------------------------------------------------------------------------------------------------
Total assets 1,125,686 1,060,131 6.2
Equity attributable to equity holders
of the Company 761,419 733,405 3.8
Net assets per share (RMB) 4.16 4.01 3.7
-------------------------------------------------------------------------------------------------
2
2.1.2 Key Accounting Data and Financial Indicators Prepared under CAS
Unit: RMB Million
-------------------------------------------------------------------------------------------------
AS AT THE
END OF THE AS AT THE CHANGES COMPARED
REPORTING YEAR-END OF WITH THE PRECEDING
PERIOD 2007 YEAR-END (%)
-------------------------------------------------------------------------------------------------
Total assets 1,061,357 994,092 6.8
Equity attributable to equity holders of the
Company 703,148 677,367 3.8
Net assets per share (RMB) 3.84 3.70 3.8
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
FROM THE BEGINNING OF CHANGES COMPARED
THE YEAR TO THE END OF WITH THE SAME PERIOD
THE REPORTING PERIOD OF THE PRECEDING YEAR (%)
-------------------------------------------------------------------------------------------------
Net cash flows from operating activities 32,627 (37.9)
Net cash flows per share from operating
activities (RMB) 0.18 (37.9)
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
FROM THE
BEGINNING OF
THE YEAR TO
THE THE END OF THE CHANGES COMPARED
REPORTING REPORTING WITH THE SAME PERIOD
PERIOD PERIOD OF THE PRECEDING YEAR (%)
-------------------------------------------------------------------------------------------------
Net profit attributable to
equity holders of the Company 26,519 26,519 (28.6)
Basic earnings per share (RMB) 0.14 0.14 (30.2)
Basic earnings per share
after deducting non-recurring
profit/loss items (RMB) 0.15 0.15 (29.7)
Diluted earnings per share (RMB) 0.14 0.14 (30.2)
Fully diluted return on net
assets (%) 3.8 3.8 (2.6 percentage points)
Fully diluted return on
net assets after deducting
non-recurring profit/loss
items (%) 3.8 3.8 (2.6 percentage points)
-------------------------------------------------------------------------------------------------
Unit: RMB Million
-------------------------------------------------------------------------------------------------
FOR THREE MONTHS ENDED MARCH 31,
NON-RECURRING PROFIT/LOSS ITEMS 2008 (PROFIT)/ LOSS
-------------------------------------------------------------------------------------------------
Loss on disposal of non-current assets* 49
Other non-operating net income and expenses 207
Government grants (44)
Tax effect of non-recurring profit/loss items (82)
--------------------------------
Total 130
-------------------------------------------------------------------------------------------------
*Excluding exploratory dry holes
3
2.1.3 Differences between CAS and IFRS
Unit: RMB Million
--------------------------------------------------------------------------------
CAS IFRS
--------------------------------------------------------------------------------
Net profit (including minority interest) 31,059 33,585
Equity (including minority interest) 749,744 813,194
Analysis of differences See appendix for details
--------------------------------------------------------------------------------
2.2 Number of Shareholders and Top Ten Shareholders Holding Shares Without
Selling Restrictions at the End of the Reporting Period
---------------------------------------------------------------------------------------------------------
Number of shareholders at the end of the 2,138,310 shareholders including 2,132,813 holders of A
reporting period shares and 5,497 holders of H shares (including holders
of the American Depository Shares)
---------------------------------------------------------------------------------------------------------
Top ten shareholders holding shares without selling restrictions
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
NAME OF SHAREHOLDERS QUANTITY OF TRADABLE SHARES IN TYPE OF SHARES
POSSESSION AS AT THE END OF THE
REPORTING PERIOD (SHARE)
---------------------------------------------------------------------------------------------------------
1. HKSCC Nominees Limited 20,924,204,346 H Share
---------------------------------------------------------------------------------------------------------
2. China Life Insurance (Group)
Company-Traditional-Ordinary
Insurance Product 30,000,000 A Share
---------------------------------------------------------------------------------------------------------
3. Ping An Life Insurance Company of
China, Ltd.- Traditional-Ordinary
Insurance Product 27,005,852 A Share
---------------------------------------------------------------------------------------------------------
4. China Life Insurance Company
Limited-Traditional-Ordinary Insurance 25,069,000 A Share
Product-005L-CT001 Shanghai
---------------------------------------------------------------------------------------------------------
5. Ping An Life Insurance Company of
China, Ltd.-Proprietary Funds 25,000,000 A Share
---------------------------------------------------------------------------------------------------------
6. China Life Insurance Company
Limited-Dividends-Personal Dividends-
005L-FH002 Shanghai 23,519,708 A Share
---------------------------------------------------------------------------------------------------------
7. Industrial and Commercial Bank of
China-Shanghai 50 Index ETF Securities
Investment Fund 21,612,640 A Share
---------------------------------------------------------------------------------------------------------
8. China Life Insurance Company
Limited-Dividends-Group Dividends-
005L-FH001 Shanghai 20,000,000 A Share
---------------------------------------------------------------------------------------------------------
9. Bank of China-Shanghai and Shenzhen
300 Index Jiashi Securities Investment
Fund 19,156,213 A Share
---------------------------------------------------------------------------------------------------------
10. CSIC Finance Co. Ltd. 15,935,600 A Share
---------------------------------------------------------------------------------------------------------
4
2.3 Review of Results of Operations
The PRC economy maintained rapid growth during the first quarter of 2008, with
an increase in the GDP of 10.6%. International crude oil prices maintained at a
high level and continuously reached unprecedented record level and prices of
chemical products continue to soar. Faced with the changes in the operating
environment, the Company planned in a scientific manner and responded actively,
and realised a continuous development in the principal operations of the Group,
stable production and operation, steady increase in the output of major products
and further enhancement of the sustainability of the Group. Excluding the
impacts resulted from policy factors such as the special levy on domestic crude
oil sales and the macro economic controls on the prices of refined products, the
efficacy of the Company's operation continues to maintain at a higher level.
In respect of exploration and production, the Group carried out exploration at
the key basins and focused on key exploration projects, enhanced the exploration
of mature oilfields and ventured into the exploration of new oilfields actively.
The Group realised overall discovery and development of new oilfields, fully
activated secondary recovery of mature oilfields, and conducted production in
the oilfields in a safe, steady and orderly manner. During the first quarter of
2008, the crude oil output of the Group was 216 million barrels and the
marketable natural gas output was 484.7 billion cubic feet, representing an
increase of 3.3% and 18.0% from the same period in 2007, respectively.
Faced with growing demand in the market, the Group organised refining process
meticulously, scientifically modified refining arrangements, and optimised
allocation of resources and product mix actively, and thereby realised safe,
stable, long-term, full-load and optimised production. Crude oil processing and
production of key refined products reached a historically high level. During the
first quarter of 2008, the Group's refineries processed 217 million barrels of
crude oil, representing an increase of 7.4% from the same period in 2007,
produced 18.924 million tonnes of gasoline, diesel and kerosene, representing an
increase of 8.8% from the same period in 2007, and produced 709,000 tonnes of
ethylene, representing an increase of 9.2% from the same period in 2007.
In respect of sales of the refined products, the Group thrived to overcome the
adverse impacts resulted from domestic refined product prices being lower than
that in the international market and natural disasters including cold weather,
rain and snow storms, frost and etc., performed our social responsibilities
conscientiously, modified our sales structure and strengthened our operation and
management. During the first quarter of 2008, the Group sold 21.865 million
tonnes of gasoline, diesel and kerosene, representing an increase of 18.5% from
the same period of in 2007.
A number of key pipeline constructions developed in an orderly manner, and the
Second West-East Pipeline project commenced construction. The storage,
transportation and sale of oil products and natural gas are conducted in a safe
and orderly manner, the Group's ability in ensuring the oil and natural gas
supply was further strengthened, and providing a solid foundation for the
Company's development.
The Group speeded up the international operations and continued to expand the
scale of business. Oil and natural gas output from international operations
continued to grow. The Group has further enhanced its international trading
business and the trading volume and revenue increased rapidly.
5
Summary of Key Operating Data for the Three Months Ended March 31, 2008
--------------------------------------------------------------------------------------------------------
CHANGES
COMPARED
WITH THE
THREE MONTHS SAME
ENDED MARCH 31, PERIOD OF
----------------- 2007
OPERATING DATA UNIT 2008 2007 (%)
--------------------------------------------------------------------------------------------------------
Crude oil output Million barrels 216.0 209.2 3.3
--------------------------------------------------------------------------------------------------------
Marketable natural gas output Billion cubic feet 484.7 410.6 18.0
--------------------------------------------------------------------------------------------------------
Oil and natural gas equivalent output Million barrels 296.8 277.6 6.9
--------------------------------------------------------------------------------------------------------
Average realised price for crude oil USD/barrel 87.93 53.95 63.0
--------------------------------------------------------------------------------------------------------
Average realised price for natural gas USD/ thousand 3.15 2.53 24.5
cubic feet
--------------------------------------------------------------------------------------------------------
Processed crude oil Million barrels 217.0 202.0 7.4
--------------------------------------------------------------------------------------------------------
Output of refined products Thousand tonnes 18,924 17,401 8.8
--------------------------------------------------------------------------------------------------------
of which: Gasoline Thousand tonnes 6,311 5,385 17.2
--------------------------------------------------------------------------------------------------------
Kerosene Thousand tonnes 529 441 20.0
--------------------------------------------------------------------------------------------------------
Diesel Thousand tonnes 12,084 11,575 4.4
--------------------------------------------------------------------------------------------------------
Total sales volume of refined products Thousand tonnes 21,865 18,455 18.5
--------------------------------------------------------------------------------------------------------
Number of service stations Unit 18,406 18,385 0.1
--------------------------------------------------------------------------------------------------------
Output of key chemical products
--------------------------------------------------------------------------------------------------------
Ethylene Thousand tonnes 709 649 9.2
--------------------------------------------------------------------------------------------------------
Synthetic resin Thousand tonnes 1,078 1,011 6.6
--------------------------------------------------------------------------------------------------------
Synthetic fiber raw materials and
polymer Thousand tonnes 439 332 32.2
--------------------------------------------------------------------------------------------------------
Synthetic rubber Thousand tonnes 82 79 3.8
--------------------------------------------------------------------------------------------------------
Urea Thousand tonnes 1,021 988 3.3
--------------------------------------------------------------------------------------------------------
6
SECTION 3 SIGNIFICANT EVENTS
3.1 Significant changes of key accounting items and financial indicators under
CAS and explanation of such changes
[x] Applicable [ ] Inapplicable
Unit: RMB Million
----------------------------------------------------------------------------------------------
CHANGES
ITEMS AS AT MARCH 31, 2008 AS AT DECEMBER 31, 2007 (%)
----------------------------------------------------------------------------------------------
Cash at bank and on hand 116,465 88,589 31.5
----------------------------------------------------------------------------------------------
Notes receivable 6,611 4,735 39.6
----------------------------------------------------------------------------------------------
Accounts receivable 30,407 18,419 65.1
----------------------------------------------------------------------------------------------
Advances to suppliers 41,793 20,386 105.0
----------------------------------------------------------------------------------------------
Short-term borrowings 27,766 18,734 48.2
----------------------------------------------------------------------------------------------
Dividends payable 2,125 89 2,287.6
----------------------------------------------------------------------------------------------
Other payables 27,782 17,849 55.7
----------------------------------------------------------------------------------------------
Current portion of non-
current liabilities 15,431 11,652 32.4
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
FOR THREE MONTHS ENDED MARCH 31,
---------------------------------------------- CHANGES
ITEMS 2008 2007 (%)
----------------------------------------------------------------------------------------------
Operating income 259,048 182,604 41.9
----------------------------------------------------------------------------------------------
Cost of sales 168,787 99,971 68.8
----------------------------------------------------------------------------------------------
Tax and levies on operations 28,878 11,611 148.7
----------------------------------------------------------------------------------------------
Taxation 7,174 12,897 (44.4)
----------------------------------------------------------------------------------------------
Net profit attributable to
equity holders of the Company 26,519 37,136 (28.6)
----------------------------------------------------------------------------------------------
Net profit attributable to
minority interest 4,540 1,953 132.5
----------------------------------------------------------------------------------------------
Net cash flows from
operating activities 32,627 52,511 (37.9)
----------------------------------------------------------------------------------------------
Net cash flows used for
investing activities (19,864) (28,605) (30.6)
----------------------------------------------------------------------------------------------
Net cash flows from
financing activities 15,633 293 5,235.5
----------------------------------------------------------------------------------------------
7
Explanation of significant changes:
The increase in cash at bank and on hand was mainly due to increases in sales
income of the Group and the increase in short-term borrowings undertaken for the
Group's operations.
The increase in notes receivable was mainly due to an increase in sales income.
The increase in accounts receivable was mainly due to the expansion of the scale
of Group's operations and the increase in sales income.
The increase in advances to suppliers was mainly due to increased capital
expenditure and also reflects increases in the prices of raw materials and
supplies.
The increase in short-term borrowings was mainly due to the additional loans
undertaken for the Group's operations.
The increase in dividends payable was mainly due to dividends that have been
declared in the first quarter of 2008 but have not been distributed by the
subsidiaries of the Group to the minority interest.
The increase in other payables was mainly due to increase in liabilities
incurred during the period and increases in safety fund accrual.
The increase in the current portion of non-current liabilities was mainly due to
an increase in long-term borrowings becoming due within a year partially offset
by repayment of the current portion of non-current liabilities in the three
months ended March 31, 2008.
The increase in operating income was mainly due to increases in selling prices
and increases of sales volume of major products of the Group.
The increase in cost of sales was mainly due to an increase in the purchase
prices of crude oil, feedstock oil and other raw materials from external
suppliers as well as an expansion in the production scale of the Group.
The increase in tax and levies on operations was mainly due to increases in the
payment of the special levy on the sale of domestic crude oil by the Group.
The decrease in taxation was mainly due to both a lower level of profit in the
three months ended March 31, 2008 compared with the same period in 2007 as well
as a reduced corporate income tax rate.
The decrease in the net profit attributable to equity holders of the Company
reflects the effect of the factors discussed above in relation to the income
statement items.
The increase in the net profit attributable to minority interest was mainly due
to the expansion and the increase in profit of the subsidiaries of the Group.
The decrease in net cash flows from operating activities was mainly due to the
increase in cash received from sales of goods and rendering of services being
less than that offset by the cash paid for goods and services purchased.
The decrease in net cash flows used for investing activities was mainly due to a
reduction in capital expenditures paid in cash.
8
The increase in net cash flows from financing activities was mainly due to
increases in capital contributions to subsidiaries from minority interest as
well as a net increase in short-term borrowings undertaken by the Group for the
Group's operations.
3.2 Significant events and their impacts as well as the analysis and
explanation for the solutions
[x] Applicable [ ] Inapplicable
--------------------------------------------------------------------------------
1. In February 2008, the Second West-East Gas Pipeline project commenced
construction. The Second West-East Gas Pipeline project is the first large scale
gas pipeline construction in the PRC which imports natural gas resources from
overseas. The Second West-East Gas Pipeline project starts from Horgas Pass of
Xinjiang Province and ends at Guangzhou of southern China and Shanghai of
eastern China, which the mainline and its eight branches are 9,102 kilometers in
length, passing 14 provinces, autonomous regions and cities including Xinjiang,
Gansu, Ningxia, Shanxi, Henan, Hubei, Jiangxi, Hunan, Guangdong, Guangxi,
Zhejiang, Shanghai, Jiangsu and Anhui. The project is designed to transport 30
billion cubic meters of natural gas per year. The total capital expenditure of
the project is RMB142.2 billion. The west section of the project is expected to
be completed and commence operation by the end of 2009, and the whole pipeline
network is expected to commence operation by the end of 2011.
2. In April 2008, the Company has been notified by the Ministry of Finance of
PRC that in order to ensure supply of crude oil and refined products in the
market, the Ministry of Finance will implement financial support measures.
Please refer to the announcement published by the Company on April 21, 2008 in
the China Securities Journal, Shanghai Securities News and Securities Time and
the websites of the Shanghai Stock Exchange and the Stock Exchange of Hong Kong
Limited for further details.
--------------------------------------------------------------------------------
3.3 Status of commitment issue fulfillment by the Company, shareholder and
actual controller
[x] Applicable [ ] Inapplicable
--------------------------------------------------------------------------------
During the reporting period covered by this announcement, the performance of
specific undertakings made by China National Petroleum Corporation ("CNPC"), the
controlling shareholder of the Company, was consistent with the disclosures made
in the Performance of Commitments section in the Company's Annual Report of
2007. There have been no events affecting the performance of these undertakings
to date.
--------------------------------------------------------------------------------
3.4 Caution and explanation as to the anticipated loss of undistributed profits
from the beginning of the year to the end of the next reporting period or
significant changes over the same period of last year
[ ] Applicable [x] Inapplicable
3.5 Investments in securities
[ ] Applicable [x] Inapplicable
3.6 This announcement is published in English and Chinese. In the event of any
inconsistency between the two versions, the Chinese version will prevail.
By Order of the Board of Directors
PetroChina Company Limited
Jiang Jiemin
Chairman
Beijing, the PRC
April 28, 2008
9
As at the date of this announcement, the Board comprises Mr. Jiang Jiemin as the
Chairman; Mr. Duan Wende as the executive director; Mr. Zheng Hu, Mr. Zhou
Jiping, Mr. Wang Yilin, Mr. Zeng Yukang, Mr. Gong Huazhang and Mr. Jiang Fan as
non-executive directors; and Mr. Chee-Chen Tung, Mr. Liu Hongru and Mr. Franco
Bernabe as independent non-executive directors.
10
Appendix
A. Financial statements for the first quarter of 2008 prepared in accordance
with IFRS
1. Consolidated Profit and Loss Account
----------------------------------------------------------------------------------------
For three months ended March 31,
2008 2007
-------- --------
RMB RMB
Million Million
----------------------------------------------------------------------------------------
TURNOVER 259,048 182,604
-------- --------
OPERATING EXPENSES
Purchases, services and other (134,864) (72,980)
Employee compensation costs (13,791) (10,535)
Exploration expenses, including exploratory
dry holes (6,631) (4,776)
Depreciation, depletion and amortisation (18,903) (15,444)
Selling, general and administrative expenses (13,678) (12,876)
Taxes other than income taxes (30,326) (12,492)
Other income, net 224 475
-------- --------
TOTAL OPERATING EXPENSES (217,969) (128,628)
-------- --------
PROFIT FROM OPERATIONS 41,079 53,976
-------- --------
FINANCE COSTS
Exchange gain 856 215
Exchange loss (1,228) (328)
Interest income 626 320
Interest expense (1,041) (1,054)
-------- --------
TOTAL NET FINANCE COSTS (787) (847)
-------- --------
SHARE OF PROFIT OF ASSOCIATES AND JOINTLY
CONTROLLED ENTITIES 1,218 1,475
-------- --------
PROFIT BEFORE TAXATION 41,510 54,604
TAXATION (7,925) (10,182)
-------- --------
PROFIT FOR THE PERIOD 33,585 44,422
======== ========
ATTRIBUTABLE TO:
Equity holders of the Company 28,885 42,140
Minority interest 4,700 2,282
-------- --------
33,585 44,422
======== ========
BASIC AND DILUTED EARNINGS PER SHARE FOR PROFIT
ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY
DURING THE PERIOD (RMB) 0.16 0.24
======== ========
----------------------------------------------------------------------------------------
---------------------- --------------- ---------------------------
Chairman and President Director Chief Financial Officer
Jiang Jiemin Zhou Jiping Zhou Mingchun
11
2. Consolidated Balance Sheet
----------------------------------------------------------------------------------------
March 31, December 31,
2008 2007
--------- ------------
RMB RMB
Million Million
----------------------------------------------------------------------------------------
NON CURRENT ASSETS
Property, plant and equipment 761,611 762,882
Investments in associates and jointly controlled
entities 26,553 26,535
Available-for-sale financial assets 2,280 2,581
Advance operating lease payments 23,147 23,417
Intangible and other assets 8,849 8,488
Time deposits with maturities over one year 4,784 5,053
--------- ------------
TOTAL NON CURRENT ASSETS 827,224 828,956
--------- ------------
CURRENT ASSETS
Inventories 92,377 88,467
Accounts receivable 30,407 18,419
Prepaid expenses and other current assets 57,386 36,018
Notes receivable 6,611 4,735
Time deposits with maturities over three
months but within one year 18,022 18,042
Cash and cash equivalents 93,659 65,494
--------- ------------
TOTAL CURRENT ASSETS 298,462 231,175
--------- ------------
CURRENT LIABILITIES
Accounts payable and accrued liabilities 160,870 144,353
Income tax payable 9,109 11,709
Other taxes payable 19,786 11,099
Short-term borrowings 43,724 30,934
--------- ------------
TOTAL CURRENT LIABILITIES 233,489 198,095
--------- ------------
NET CURRENT ASSETS /(LIABILITIES) 64,973 33,080
--------- ------------
TOTAL ASSETS LESS CURRENT LIABILITIES 892,197 862,036
========= ============
---------------------------------------------------------------------------------------
12
2. Consolidated Balance Sheet (continued)
--------------------------------------------------------------------------------
March 31, December 31,
2008 2007
--------- ------------
RMB RMB
Million Million
--------------------------------------------------------------------------------
EQUITY
Equity attributable to equity holders of the
Company:
Share capital 183,021 183,021
Retained earnings 361,317 332,432
Reserves 217,081 217,952
-------- -----------
761,419 733,405
Minority interest 51,775 42,942
-------- -----------
TOTAL EQUITY 813,194 776,347
-------- -----------
NON CURRENT LIABILITIES
Long-term borrowings 34,751 39,688
Asset retirement obligations 25,158 24,761
Deferred taxation 18,078 20,205
Other long-term obligations 1,016 1,035
-------- -----------
TOTAL NON CURRENT LIABILITIES 79,003 85,689
-------- -----------
TOTAL EQUITY AND NON CURRENT LIABILITIES 892,197 862,036
======== ===========
--------------------------------------------------------------------------------
---------------------- --------------- ---------------------------
Chairman and President Director Chief Financial Officer
Jiang Jiemin Zhou Jiping Zhou Mingchun
13
3. Consolidated Cash Flow Statement
----------------------------------------------------------------------------------------------------
For three months ended March 31,
2008 2007
------- -------
RMB RMB
Million Million
----------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES (a) 31,988 51,399
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (19,492) (28,187)
Acquisition of investments in associates and jointly
controlled entities (114) (264)
Acquisition of available-for-sale financial assets (5) (288)
Acquisition of intangible assets (161) (129)
Acquisition of other non-current assets (562) (81)
Other purchase of minority interest (700) (2)
Proceeds from disposal of property, plant and equipment 25 236
Proceeds from disposal of investments in associates and
jointly controlled entities -- 4
Proceeds from disposal of available-for-sale financial
assets -- 144
Dividends received 749 90
Decrease/(Increase) in time deposits with maturities over
three months 93 (25)
------- -------
NET CASH USED FOR INVESTING ACTIVITIES (20,167) (28,502)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of short-term borrowings (18,523) (12,698)
Repayments of long-term borrowings (1,331) (10,499)
Dividends paid to minority interest (210) (37)
Increase in short-term borrowings 27,765 13,562
Increase in long-term borrowings 696 11,098
Capital contribution from minority interest 8,197 14
Change in other long-term obligations (19) (138)
------- -------
NET CASH FROM FINANCING ACTIVITIES 16,575 1,302
------- -------
TRANSLATION OF FOREIGN CURRENCY (231) (9)
------- -------
Increase in cash and cash equivalents 28,165 24,190
Cash and cash equivalents at beginning of the period 65,494 48,559
------- -------
Cash and cash equivalents at end of the period 93,659 72,749
======= =======
----------------------------------------------------------------------------------------------------
------------------------- ------------ -----------------------------
Chairman and President Director Chief Financial Officer
Jiang Jiemin Zhou Jiping Zhou Mingchun
14
3. Consolidated Cash Flow Statement (continued)
(a) Cash flows from operating activities
-------------------------------------------------------------------------------------------------
For three months ended March 31,
2008 2007
------- -------
RMB RMB
Million Million
-------------------------------------------------------------------------------------------------
PROFIT FOR THE PERIOD 33,585 44,422
Adjustments for:
Taxation 7,925 10,182
Depreciation, depletion and amortisation 18,903 15,444
Capitalised exploratory costs charged to expense 2,571 1,755
Share of profit of associates and jointly controlled
entities (1,218) (1,475)
Reversal of provision for impairment of receivables, net (31) (41)
Write down in inventories, net -- (35)
Impairment of investments in associates and jointly
controlled entities 20 --
Loss on disposal of property, plant and equipment 90 61
Profit on disposal of available-for-sale financial assets -- (107)
Dividend income (8) (8)
Interest income (626) (320)
Interest expense 1,041 1,054
Advance payments on long-term operating leases (150) (459)
Changes in working capital:
Accounts receivable and prepaid expenses and other current
assets (35,067) (16,323)
Inventories (3,910) (5,629)
Accounts payable and accrued liabilities 21,858 13,998
------- -------
CASH GENERATED FROM OPERATIONS 44,983 62,519
Interest received 453 356
Interest paid (964) (999)
Income taxes paid (12,484) (10,477)
------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 31,988 51,399
======= =======
-------------------------------------------------------------------------------------------------
15
B. Financial statements for the first quarter of 2008 prepared in accordance
with CAS
1. Consolidated Balance Sheet
--------------------------------------------------------------------------
March 31, December 31,
2008 2007
--------- ------------
RMB RMB
ASSETS Million Million
--------------------------------------------------------------------------
Current assets
Cash at bank and on hand 116,465 88,589
Notes receivable 6,611 4,735
Accounts receivable 30,407 18,419
Advances to suppliers 41,793 20,386
Interest receivable 282 109
Dividends receivable 19 18
Other receivables 15,236 15,444
Inventories 92,377 88,467
Current portion of non-current assets 39 59
Other current assets 17 2
--------- ------------
Total current assets 303,246 236,228
--------- ------------
Non-current assets
Available-for-sale financial assets 2,234 2,530
Long-term equity investments 22,827 22,686
Fixed assets 243,367 247,803
Oil and gas properties 318,559 326,328
Construction in progress 114,660 105,634
Construction materials 7,447 6,927
Fixed assets pending disposal 448 287
Intangible assets 20,065 20,022
Goodwill 148 --
Long-term prepaid expenses 11,928 12,028
Deferred tax assets 15,754 12,871
Other non-current assets 674 748
--------- ------------
Total non-current assets 758,111 757,864
--------- ------------
TOTAL ASSETS 1,061,357 994,092
========= ============
--------------------------------------------------------------------------
16
1. Consolidated Balance Sheet (continued)
-----------------------------------------------------------------------------
March 31, December 31,
2008 2007
--------- ------------
LIABILITIES AND RMB RMB
SHAREHOLDERS' EQUITY Million Million
-----------------------------------------------------------------------------
Current liabilities
Short-term borrowings 27,766 18,734
Notes payable 564 1,143
Accounts payable 109,466 104,460
Advances from customers 14,670 12,433
Employee compensation payable 11,029 11,585
Taxes payable 28,895 22,808
Interest payable 234 173
Dividends payable 2,125 89
Other payables 27,782 17,849
Provisions 670 715
Current portion of non-current liabilities 15,431 11,652
Other current liabilities 12 13
--------- ------------
Total current liabilities 238,644 201,654
--------- ------------
Non-current liabilities
Deferred income 75 76
Long-term borrowings 30,403 35,305
Debentures payable 4,348 4,383
Long-term payables 57 57
Grants payable 755 774
Provisions 25,158 24,761
Deferred tax liabilities 12,044 11,883
Other non-current liabilities 129 128
--------- ------------
Total non-current liabilities 72,969 77,367
--------- ------------
TOTAL LIABILITIES 311,613 279,021
--------- ------------
-----------------------------------------------------------------------------
17
1. Consolidated Balance Sheet (continued)
-------------------------------------------------------------------------------
March 31, December 31,
2008 2007
--------- ------------
RMB RMB
Million Million
-------------------------------------------------------------------------------
Shareholders' equity
Share capital 183,021 183,021
Capital surplus 122,079 122,192
Surplus reserves 102,696 102,696
Undistributed profits 297,063 270,544
Currency translation differences (1,711) (1,086)
--------- ------------
Equity attributable to equity holders of the Company 703,148 677,367
--------- ------------
Minority interest 46,596 37,704
--------- ------------
Total shareholders' equity 749,744 715,071
--------- ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 1,061,357 994,092
========= ============
-------------------------------------------------------------------------------
-------------------------- --------------- -------------------------
Chairman and President Director Chief Financial Officer
Jiang Jiemin Zhou Jiping Zhou Mingchun
18
2. Company Balance Sheet
--------------------------------------------------------------------------------
March 31, December 31,
2008 2007
---------- -------------
RMB RMB
ASSETS Million Million
--------------------------------------------------------------------------------
Current assets
Cash at bank and on hand 101,105 78,332
Notes receivable 6,078 3,988
Accounts receivable 3,523 2,131
Advances to suppliers 28,396 16,086
Interest receivable 282 109
Dividends receivable 60 85
Other receivables 21,122 24,173
Inventories 81,435 70,284
Current portion of non-current assets 37 59
Other current assets 15 2
-------- -------------
Total current assets 242,053 195,249
-------- -------------
Non-current assets
Available-for-sale financial assets 1,167 1,456
Long-term equity investments 120,276 104,691
Fixed assets 195,665 199,411
Oil and gas properties 227,227 231,921
Construction in progress 93,067 85,597
Construction materials 5,741 5,455
Fixed assets pending disposal 443 282
Intangible assets 16,292 16,356
Long-term prepaid expenses 9,827 9,924
Deferred tax assets 9,773 9,048
-------- -------------
Total non-current assets 679,478 664,141
-------- -------------
TOTAL ASSETS 921,531 859,390
======== =============
--------------------------------------------------------------------------------
19
2. Company Balance Sheet (continued)
--------------------------------------------------------------------------------
March 31, December 31,
2008 2007
---------- -------------
RMB RMB
LIABILITIES
AND SHAREHOLDERS' EQUITY Million Million
--------------------------------------------------------------------------------
Current liabilities
Short-term borrowings 31,198 17,898
Accounts payable 64,950 66,877
Advances from customers 10,755 10,443
Employee compensation payable 10,114 10,751
Taxes payable 19,464 13,793
Interest payable 147 61
Other payables 67,291 46,582
Provisions 70 75
Current portion of non-current liabilities 13,046 9,029
---------- -------------
Total current liabilities 217,035 175,509
---------- -------------
Non-current liabilities
Deferred income 61 62
Long-term borrowings 23,642 29,044
Debentures payable 3,500 3,500
Long-term payables 56 56
Grants payable 678 710
Provisions 15,590 15,307
Deferred tax liabilities 7,021 6,598
Other non-current liabilities 124 123
---------- -------------
Total non-current liabilities 50,672 55,400
---------- -------------
TOTAL LIABILITIES 267,707 230,909
---------- -------------
--------------------------------------------------------------------------------
20
2. Company Balance Sheet (continued)
--------------------------------------------------------------------------------
March 31, December 31,
2008 2007
---------- -------------
RMB RMB
Million Million
--------------------------------------------------------------------------------
Shareholders' equity
Share capital 183,021 183,021
Capital surplus 125,721 125,848
Surplus reserves 91,596 91,596
Undistributed profits 253,486 228,016
---------- -------------
Total shareholders' equity 653,824 628,481
---------- -------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 921,531 859,390
========== =============
--------------------------------------------------------------------------------
-------------------------- --------------- ---------------------------
Chairman and President Director Chief Financial Officer
Jiang Jiemin Zhou Jiping Zhou Mingchun
21
3. Consolidated Income Statements
--------------------------------------------------------------------------------
For three months ended March 31,
2008 2007
--------- --------
RMB RMB
ITEMS Million Million
--------------------------------------------------------------------------------
1. Operating income 259,048 182,604
Less: Cost of sales (168,787) (99,971)
Tax and levies on operations (28,878) (11,611)
Selling expenses (10,497) (9,069)
General and administrative expenses (13,157) (10,571)
Finance expenses (872) (828)
Asset impairment losses 11 76
Add: Investment income 1,270 1,151
--------- --------
2. Operating profit 38,138 51,781
--------- --------
Add: Non-operating income 537 505
Less: Non-operating expenses (442) (300)
--------- --------
3. Profit before taxation 38,233 51,986
Less: Taxation (7,174) (12,897)
--------- --------
4. Net profit 31,059 39,089
--------- --------
Net profit attributable to equity
holders of the Company 26,519 37,136
Minority interest 4,540 1,953
5. Earnings per share (based on Group's
net profit attributable to equity
holders of the Company)
Basic earnings per share (RMB) 0.14 0.21
Diluted earnings per share (RMB) 0.14 0.21
========= ========
--------------------------------------------------------------------------------
------------------------ ------------- -------------------------
Chairman and President Director Chief Financial Officer
Jiang Jiemin Zhou Jiping Zhou Mingchun
22
4. Company Income Statement
--------------------------------------------------------------------------------
For three months ended March 31,
2008 2007
--------- --------
RMB RMB
ITEMS Million Million
--------------------------------------------------------------------------------
1. Operating income 184,541 123,586
Less: Cost of sales (140,267) (75,850)
Tax and levies on operations (17,407) (7,102)
Selling expenses (8,375) (7,159)
General and administrative expenses (10,347) (7,921)
Finance expenses (266) (556)
Asset impairment losses 11 71
Add: Investment income 18,170 15,191
--------- --------
2. Operating profit 26,060 40,260
--------- --------
Add: Non-operating income 438 493
Less: Non-operating expenses (390) (247)
--------- --------
3. Profit before taxation 26,108 40,506
Less: Taxation (638) (4,398)
--------- --------
4. Net profit 25,470 36,108
--------- --------
5. Earnings per share
Basic earnings per share (RMB) 0.14 0.20
Diluted earnings per share (RMB) 0.14 0.20
========= ========
--------------------------------------------------------------------------------
------------------------ ------------- -------------------------
Chairman and President Director Chief Financial Officer
Jiang Jiemin Zhou Jiping Zhou Mingchun
23
5. Consolidated Cash Flow Statement
--------------------------------------------------------------------------------
For three months ended March 31,
2008 2007
--------- --------
RMB RMB
ITEMS Million Million
--------------------------------------------------------------------------------
1. CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from sales of goods and
rendering of services 290,804 203,203
Refund of taxes and levies 351 257
Cash received relating to other operating
activities 1,640 237
--------- --------
SUB-TOTAL OF CASH INFLOWS 292,795 203,697
--------- --------
Cash paid for goods and services (187,888) (97,262)
Cash paid to and on behalf of employees (14,347) (10,764)
Payments of taxes and levies (45,310) (30,471)
Cash paid relating to other operating
activities (12,623) (12,689)
--------- --------
SUB-TOTAL OF CASH OUTFLOWS (260,168) (151,186)
--------- --------
NET CASH FLOWS FROM OPERATING ACTIVITIES 32,627 52,511
--------- --------
2. CASH FLOWS FROM INVESTING ACTIVITIES
Cash received from disposal of investments -- 148
Cash received from returns on investments 1,202 446
Net cash received from disposal of fixed
assets, oil and gas properties, intangible
assets and other long-term assets 25 236
--------- --------
SUB-TOTAL OF CASH INFLOWS 1,227 830
--------- --------
Cash paid to acquire fixed assets, oil and
gas properties, intangible assets and
other long term assets (20,365) (28,856)
Cash paid to acquire investments (726) (579)
--------- --------
SUB-TOTAL OF CASH OUTFLOWS (21,091) (29,435)
--------- --------
NET CASH FLOWS USED FOR INVESTING ACTIVITIES (19,864) (28,605)
========= ========
--------------------------------------------------------------------------------
24
5. Consolidated Cash Flow Statement (continued)
--------------------------------------------------------------------------------
For three months ended March 31,
2008 2007
--------- --------
RMB RMB
ITEMS Million Million
--------------------------------------------------------------------------------
3. CASH FLOWS FROM FINANCING ACTIVITIES
Cash received from capital contributions 8,197 14
Including: Cash received from minority
shareholders' capital contributions to
subsidiaries 8,197 14
Cash received from borrowings 28,461 24,660
Cash received relating to other financing
activities 19 --
--------- --------
SUB-TOTAL OF CASH INFLOWS 36,677 24,674
--------- --------
Cash repayments of borrowings (19,833) (23,191)
Cash payments for interest expenses and
distribution of dividends or profits (1,174) (1,036)
Including: Subsidiaries' cash payments
for distribution of dividends or
profits to minority shareholders (210) (37)
Cash payments relating to other financing
activities (37) (154)
--------- --------
SUB-TOTAL OF CASH OUTFLOWS (21,044) (24,381)
--------- --------
NET CASH FLOWS FROM FINANCING ACTIVITIES 15,633 293
--------- --------
4. EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS (231) (9)
--------- --------
5. NET INCREASE IN CASH AND CASH
EQUIVALENTS 28,165 24,190
--------- --------
Add: Cash and cash equivalents at
beginning of the period 65,494 48,559
--------- --------
6. CASH AND CASH EQUIVALENTS AT END OF THE
PERIOD 93,659 72,749
========= ========
--------------------------------------------------------------------------------
------------------------ ------------- -------------------------
Chairman and President Director Chief Financial Officer
Jiang Jiemin Zhou Jiping Zhou Mingchun
25
6. Company Cash Flow Statement
--------------------------------------------------------------------------------------
For three months ended March 31,
2008 2007
-------- --------
RMB RMB
ITEMS Million Million
--------------------------------------------------------------------------------------
1. CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from sales of goods and
rendering of services 212,172 140,987
Refund of taxes and levies 307 246
Cash received relating to other operating
activities 9,941 1,797
-------- --------
SUB-TOTAL OF CASH INFLOWS 222,420 143,030
-------- --------
Cash paid for goods and services (166,230) (77,843)
Cash paid to and on behalf of employees (10,502) (7,895)
Payments of taxes and levies (18,611) (13,595)
Cash paid relating to other operating
activities (3,101) (9,652)
-------- --------
SUB-TOTAL OF CASH OUTFLOWS (198,444) (108,985)
-------- --------
NET CASH FLOWS FROM OPERATING ACTIVITIES 23,976 34,045
-------- --------
2. CASH FLOWS FROM INVESTING ACTIVITIES
Cash received from disposal of investments -- 135
Cash received from returns on investments 18,263 14,988
Net cash received from disposal of fixed
assets, oil and gas properties, intangible
assets and other long-term assets 22 8
-------- --------
SUB-TOTAL OF CASH INFLOWS 18,285 15,131
-------- --------
Cash paid to acquire fixed assets, oil and
gas properties, intangible assets and
other long-term assets (15,735) (25,944)
Cash paid to acquire investments (15,464) (404)
-------- --------
SUB-TOTAL OF CASH OUTFLOWS (31,199) (26,348)
-------- --------
NET CASH FLOWS USED FOR INVESTING ACTIVITIES (12,914) (11,217)
-------- --------
--------------------------------------------------------------------------------------
26
6. Company Cash Flow Statement (continued)
----------------------------------------------------------------------------------------
For three months ended March 31,
2008 2007
------- -------
RMB RMB
ITEMS Million Million
----------------------------------------------------------------------------------------
3. CASH FLOWS FROM FINANCING ACTIVITIES
Cash received from capital contributions -- --
Cash received from borrowings 24,898 20,541
Cash received relating to other financing
activities 3 --
------- -------
SUB-TOTAL OF CASH INFLOWS 24,901 20,541
------- -------
Cash repayments of borrowings (12,565) (20,125)
Cash payments for interest expenses and
distribution of dividends or profits (591) (834)
Cash payments relating to other financing
activities (34) (64)
------- -------
SUB-TOTAL OF CASH OUTFLOWS (13,190) (21,023)
------- -------
NET CASH FLOWS FROM/(USED FOR) FINANCING ACTIVITIES 11,711 (482)
------- -------
4. EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS -- --
5. NET INCREASE IN CASH AND CASH EQUIVALENTS 22,773 22,346
------- -------
Add: Cash and cash equivalents at beginning
of the period 60,332 45,029
------- -------
6. CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 83,105 67,375
======= =======
----------------------------------------------------------------------------------------
-------------------------- --------------- -------------------------
Chairman and President Director Chief Financial Officer
Jiang Jiemin Zhou Jiping Zhou Mingchun
27
C. Significant differences between CAS and IFRS
The financial statements of the Group prepared in accordance with CAS differ in
certain material aspects from those in accordance with IFRS. A statement of
reconciliation of such differences is set out below:
-----------------------------------------------------------------------------------------------------------
For three months ended March 31,
2008 2007
----------- -----------
Notes RMB million RMB million
-----------------------------------------------------------------------------------------------------------
Consolidated profit for the period under IFRS 33,585 44,422
Adjustments:
Depletion of oil and gas properties (1) (1,597) (2,477)
Amortisation of revaluation for assets other than
fixed assets and oil and gas properties in 1999 (2) (37) (19)
Depreciation and depletion of revaluation for fixed
assets and oil and gas properties in 2003 (3) (59) (29)
Difference on disposal of non-current assets
related to the reversal of reversed impairment
for non-current assets (4) 5 --
Reversal of safety fund accrued under CAS which
does not meet the definition of a liability under
IFRS (5) (1,596) --
Other 6 (93)
Deferred taxation (6) 752 (2,715)
----------- -----------
Consolidated profit for the period under CAS 31,059 39,089
=========== ===========
-----------------------------------------------------------------------------------------------------------
28
--------------------------------------------------------------------------------------------------------
March 31, December 31,
2008 2007
----------- ------------
Notes RMB million RMB million
--------------------------------------------------------------------------------------------------------
Consolidated shareholders' equity under IFRS 813,194 776,347
Adjustments:
Depletion of oil and gas properties (1) (81,259) (79,662)
Revaluation, amortisation of and disposal of assets
other than fixed assets and oil and gas properties
revalued in 1999 (2) 372 409
Revaluation, and depreciation and depletion of
fixed assets and oil and gas properties revalued in
2003 (3) 278 337
Reversal of reversed impairment for non-current
assets and related difference on disposal of such
non-current assets (4) (87) (92)
Reversal of safety fund accrued under CAS which does
not meet the definition of a liability under IFRS (5) (5,155) (3,559)
Currency translation differences (38) (390)
Other 531 525
Deferred taxation (6) 21,908 21,156
------------ -------------
Consolidated shareholder's equity under CAS 749,744 715,071
============ =============
--------------------------------------------------------------------------------------------------------
(1) Depletion of oil and gas properties is provided using the unit of
production method under IFRS, while the straight-line method is used under CAS.
(2) During the restructuring of CNPC and establishment of the Company in
1999, a valuation was carried out on June 30, 1999 for the assets and
liabilities CNPC invested in the Company. The valuation results from China
Enterprise Appraisals are all recognised in the financial statements under CAS.
However, in the financial statements under IFRS, revaluation model is used in
subsequent measurement by the Group only for fixed assets and oil and gas
properties. Consequently, valuation results other than for fixed assets and oil
and gas properties are not recognised in the financial statements under IFRS.
(3) As the revaluation model is used in subsequent measurement for fixed
assets and oil and gas properties by the Group under IFRS, revaluations were
carried out by independent appraisers with sufficient regularity. In order to
meet the requirements of IFRS, on September 30, 2003, a revaluation of the
Group's refining and chemical production equipment was undertaken by a firm of
independent valuers, China United Assets Appraiser Co., Ltd., in the PRC on a
depreciated replacement cost basis. The results of the revaluation were
recognised in the financial statements under IFRS. However, fixed assets and oil
and gas properties are recognised using the historical cost model under CAS.
Consequently, these revaluation results were not recognised in the financial
statements under CAS.
29
(4) Under CAS, once recognised, any impairment losses for long-term assets,
such as fixed assets, oil and gas properties, intangible assets and long-term
equity investments, cannot be reversed in subsequent accounting periods.
However, under IFRS, if there are changes to the factors which resulted in the
original impairment of the long-term asset which result in the recoverable
amount being higher than the carrying amount the impairment loss previously
recognised shall be reversed.
(5) In accordance with the "Temporary regulation for safety expense
financial management of high risk industry" issued by the Ministry of Finance
and State Administration of Work Safety of PRC, a safety fund has been accrued
for the Group's oil and gas exploration, refinery and chemical production
activities within the PRC from January 1, 2007. This safety fund has been
recognised into the Group's income statement. The accrued safety fund will be
used for improving the safety conditions of production. As the Group did not
have a specific utilisation plan for this accrued safety fund as at March 31,
2008, it was reversed under IFRS.
(6) The consequences of (1)-(5) and other differences between IFRS and CAS
on deferred taxation.
30