08:31 SINOPEC CORP<00386> - Results Announcement (2) As the Group, Tianjin Petrochemcial, Luoyang Petrochemical, Zhongyuan Petrochemical, Guangzhou Petrochemical and Catalyst Plants are under the common control of Sinopec Group Company, the Acquistion of Petrochemical and Catalyst Assets are considered as "combination of entities under common control" which are accounted in a manner similar to a pooling-of- interests ("as-if pooling-of-interests accounting"). Accordingly, the assets and liabilities acquired from Tianjin Petrochemical, Luoyang Petrochemical, Zhongyuan Petrochemical, Guangzhou Petrochemical and Catalyst Plants have been accounted for at historical cost and the financial statements of the Group for periods prior to the combination have been restated to include the results of operations of Tianjin Petrochemical, Luoyang Petrochemical, Zhongyuan Petrochemical, Guangzhou Petrochemical and Catalyst Plants on a combined basis. In connection with these acquistions, certain assets, primarily property, plant and equipment and construction in progress, were retained by Sinpec Group Company. The assets retained by Sinopec Group Company were reflected as a distribution in the shareholders' funds. The consideration for this acquisition was treated as an equity transaction. The results of operations previously reported by the Group for the year ended 31 December 2003 have been restated to include the results of Tianjin Petrochemical, Luoyang Petrochemical, Zhongyuan Petrochemical, Guangzhou Petrochemical and Catalyst Plants (collectively the "Acquired Group") as set out below. The Group without the Acquired Group The Acquired Group Combined RMB RMB RMB millions millions millions Results of operations: Operating revenue 443,136 5,865 449,001 Net income 21,593 831 22,424 Basic earnings per share (RMB) 0.25 0.01 0.26 2. EMPLOYEE REDUCTION EXPENSE During the year ended 31 December 2004, in accordance with the Group's voluntary employee reduction plan, and in connection with the Acquisition of Petrochemical and Catalyst Assets from the Disposal of Downhole Assets to Sinopec Group Company, the Group recorded employee reduction expenses of RMB 919 million (2003: RMB 1,040 million) relating to the reduction of approximately 24,000 employees (2003: 21,500 employees). 3. BASIC EARNING PER SHARE The calculation of basic earnings per share for the year ended 31 December 2004 is based on the profit attributable to shareholders of RMB 36,019 million (2003: RMB 22,424 million) and the weighted average number of shares of 86,702,439,000 (2003: 86,702,439,000) during the year. The amount of diluted earnings per share is not presented as there were no dilutive potential ordinary shares in existence during the years presented. 4. DIVIDENDS Pursuant to the shareholders' approval at the Annual General Meeting on 18 May 2004, the Board of Directors was authorised to declare the interim dividends for the year ended 31 December 2004. According to the resolution passed at the Directors' meeting on 27 August 2004, an interim dividend of RMB 0.04 (2003: RMB 0.03) per share totalling RMB 3,468 million (2003: RMB 2,601 million) was declared and paid on 30 September 2004. Pursuant to a resolution passed at the Directors' meeting on 25 March 2005, a final dividend in respect of the year ended 31 December 2004 of RMB 0.08 (2003: RMB 0.06) per share totalling RMB 6,936 million (2003: RMB 5,202 million) was proposed for shareholders' approval at the Annual General Meeting. Final dividend of RMB 6,936 million (2003: RMB 5,202 million) proposed after the balance sheet date has not been recognised as a liability at the balance sheet date. For more details, please refer to the press announcement today.