华荣能源年度报告2023

(Incorporated in the Cayman Islands with limited liability)Stock Code: 01101 ANNUAL REPORT2023 CHAIRMAN’S STATEMENT3MANAGEMENT DISCUSSION AND ANALYSIS6DIRECTORS AND SENIOR MANAGEMENT21REPORT OF THE DIRECTORS26CORPORATE GOVERNANCE REPORT38ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT63CONSOLIDATED FINANCIAL STATEMENTSINDEPENDENT AUDITOR’S REPORT91CONSOLIDATED STATEMENT OF FINANCIAL POSITION95CONSOLIDATED STATEMENT OF PROFIT OR LOSS97CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME98CONSOLIDATED STATEMENT OF CHANGES IN EQUITY99CONSOLIDATED STATEMENT OF CASH FLOWS101NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS102FIVE-YEAR FINANCIAL SUMMARY214GLOSSARY215INFORMATION FOR SHAREHOLDERS218CORPORATE INFORMATION219 CONTENTS CHAIRMAN’SSTATEMENT Dear Shareholders, I would like to thank you for your long term trust and support ofHuarong Energy. On behalf of the Huarong Energy Board, I ampleased to present our results for the year ended 31 December2023. In 2023, the international situation was uncertain and fluctuated,with the impact of the geopolitical turmoil of the Russia-Ukraineconflict and the Israeli-Palestinian conflict, as well as the impactof high interest rates due to the Fed’s interest rate hike, whichresulted in a precarious global economy due to a slowdown inthe growth of demand, weakened upstream investment, and theexpansion of debt. Crude oil and its downstream products, as themost important commodities, also experienced macroeconomicpressures, risks of supply disruptions and constraints fromexpectations of falling demand. At the same time, the Group’s oil extraction segment has been,to a certain extent, troubled with the recurrence of the COVID-19pandemic and under the impact of the crude oil export ban byKyrgyzstan and the war between Russia and Ukraine. Looking forward, the prospects for the oilfield development inKyrgyzstan remain positive with the increasing demand for fossilfuels in the global market, particularly in developing countries inCentral Asia, and the expected stabilization of oil and gas prices.However, the economy and energy market in Kyrgyzstan may bealso subjected to uncertainties from factors, such as geopoliticalconflicts, high inflation and high interest rate pressures, whichmay affect the situation of oilfield development and operation.Therefore, for the management of the Group, it is necessary to payclose attention to market dynamics and technological developmenttrends in order to formulate reasonable strategies and plans tocope with challenges and opportunities in the future. In terms of the oil storage segment of the Group, the managementbelieves that China’s economy will continue to rebound and supportthe growth of oil demand, and that China’s oil demand will risesteadily. As a storage enterprise of oil, we need to seize the marketopportunities, improve our storage services, enhance our corecompetitiveness and seek development amidst opportunities andchallenges. CHAIRMAN’S STATEMENT Acknowledgements I would like to take this opportunity to express my sincere gratitudeto the Directors and the employees for their dedicated andconcerted effort, and to our shareholders and all creditors andrelevant institutions for their patience and ardent support to theGroup. Niu JianminChairman MANAGEMENTDISCUSSION ANDANALYSIS MANAGEMENT DISCUSSION AND ANALYSIS Business Review 82.6102.831.545.8 Under tough industrial market in China and escalation ofgeopolitical tensions, the Group’s revenue decreased to RMB82.6million for the year ended 31 December 2023 (the “Year”),compared to revenue of approximately RMB102.8 million for theyear ended 31 December 2022 (the “Comparative Year”). The Groupgenerated a gross profit of RMB31.5 million (for the ComparativeYear: RMB45.8 million) from the oil exploration business, as well asthe oil storage business. 526.4682.7 Loss attributable to the equity holders of the Company wasapproximately RMB526.4 million for the Year, while loss attributableto the equity holders of the Company was RMB682.7 million for theComparative Year. 125.5332.4 The decrease of loss attributable to equity holders of the Companywas mainly driven by the stabilization of currency exchangefluctuation. The Group recorded a net foreign exchange loss ofRMB125.5 million during the Year, which was mainly caused by thesignificant appreciation of borrowings denominated in USD andHong Kong dollar. This is compared with a foreign exchange loss ofthe Group of RMB332.4 million for the Comparative Year. Disposal and Relevant Guarantee On 9 October 2018, the Company entered into a conditional saleand purchase agreement (the “Agreement”) to dispose of the coreassets and liabilities of its shipbuilding, offshore engineering,engineering machinery and marine engine building segments (the“Shipbuilding and Engineering Businesses”, together with theholding company of the Shipbuilding and Engineering Businesses,referred to as the “Disposal Group”) with an independent thirdparty, Unique Orien