MANGANESE Single largest shareholder of CITIC Dameng Holdings Limited (SEHK: 1091), one of the largest vertically integrated manganese OIL producers in the world. Major income driver with steady production and development in oilfields located in Kazakhstan, China and Indonesia. ALUMINIUM (1) a 22.5% participating interest in the Portland Aluminium Smelter joint venture, one of the largest and most efficient aluminium smelting operations in the world; and (2) a 9.6846% equity interest in Alumina Limited (ASX: AWC), one of IMPORT AND Australia’s leading companies with significant EXPORT OF global interests in bauxite COMMODITIES mining, alumina refining COAL and selected aluminium smelting operations. An import and export of commodities business, A 14% participating based on strong expertise interest in the Coppabella and established marketing and Moorvale coal mines networks, with a focus on joint venture (a major international trade. producer of low volatile pulverized coal injection coal in the international seaborne market) and interests in a number of coal exploration operations in Australia with significant resource potential. MANGANESE Single largest shareholder of CITIC Dameng Holdings Limited (SEHK: 1091), one Contents of the largest vertically integrated manganese 目錄 OIL producers in the world. Corporate Information 公司資料 Major income driver with Chairman’s Statement 01 主席致辭 steady production and 管理層討論和分析 development in oilfields Management’s Discussion and Analysis 04 located in Kazakhstan, Board of Directors and Senior Management 17 董事會和高級管理人員 China and Indonesia. ALUMINIUM Corporate Governance Report 21 企業管治報告 Report of the Directors 32 董事會報告 (1) a 22.5% participating interest in the Portland Aluminium Smelter joint venture, one of the largest and most efficient aluminium smelting operations in the world; Financial Results and (2) a 9.6846% equity 財務業績 interest in Alumina Limited (ASX: AWC), one of IMPORT AND Independent Auditor’s Report 42 獨立核數師報告 Australia’s leading Consolidated Income Statement 47 綜合利潤表 companies with significant EXPORT OF 綜合全面利潤表 global interests in bauxite Consolidated Statement of Comprehensive Income 48 COMMODITIES 綜合財務狀況報表 COAL mining, alumina refining Consolidated Statement of Financial Position 49 and selected aluminium Consolidated Statement of Changes in Equity 51 綜合權益變動表 smelting operations. An import and export of commodities business, Consolidated Statement of Cash Flows 53 綜合現金流量表 A 14% participating based on strong expertise 55 財務報表附註 interest in the Coppabella and established marketing Notes to Financial Statements and Moorvale coal mines networks, with a focus on Five Year Financial Summary 157 五年財務資料概要 joint venture (a major international trade. 儲量資料 producer of low volatile Reserve Quantities Information 157 pulverized coal injection Glossary of Terms 158 詞滙表 coal in the international seaborne market) and interests in a number of coal exploration operations in Australia with significant resource potential. Corporate Information Board of Directors Company Secretary Mr. Wong Wai Kwok Executive Directors Mr. Sun Yufeng (Chairman) Registered Office Mr. Suo Zhengang (Vice Chairman and Chief Executive Officer) Clarendon House Mr. Sun Yang (Vice Chairman) 2 Church Street, Hamilton HM 11, Bermuda Non-executive Director Head Office and Mr. Chan Kin Principal Place of Business Independent Non-executive Directors Suites 6701-02 & 08B 67/F, International Commerce Centre Mr. Fan Ren Da, Anthony 1 Austin Road West, Kowloon, Hong Kong Mr. Gao Pei Ji Mr. Look Andrew Telephone : (852) 2899 8200 Facsimile : (852) 2815 9723 E-mail : [email protected] Audit Committee Website : http://resources.citic Mr. Fan Ren Da, Anthony (Chairman) Mr. Gao Pei Ji Hong Kong Branch Share Registrar and Mr. Look Andrew Transfer Office Tricor Tengis Limited Remuneration Committee Level 54, Hopewell Centre 183 Queen’s Road East, Hong Kong Mr. Gao Pei Ji (Chairman) Mr. Fan Ren Da, Anthony Mr. Look Andrew Auditor Mr. Suo Zhengang Ernst & Young Nomination Committee Certified Public Accountants 22/F, CITIC Tower Mr. Sun Yufeng (Chairman) 1 Tim Mei Avenue, Central, Hong Kong Mr. Fan Ren Da, Anthony Mr. Gao Pei Ji Principal Bankers Risk Management Committee Bank of China (Hong Kong) Limited China CITIC Bank International Limited Mr. Look Andrew (Chairman) China Construction Bank Corporation Hong Kong Branch Mr. Fan Ren Da, Anthony China Development Bank Hong Kong Branch Mr. Gao Pei Ji Mizuho Bank, Ltd., Hong Kong Branch Mr. Sun Yufeng Sumitomo Mitsui Banking Corporation Mr. Suo Zhengang Chairman’s Statement Dear Shareholders, First of all, on behalf of the Board, I would like to express my sincere appreciation to my fellow directors, management and all of my colleagues for their concerted effort and relentless dedication in delivering our development strategy under such challenging market environment. I would also like to extend my heartfelt gratitude to all our shareholders, customers, suppliers, bankers and business associates for their trust and support throughout these years. After several years of perseverance and endeavour, the Group’s business operations have achieved steady growth, with solid cash position and gradual decrease in reliance on financial leverages. Although the global economic situation has been subject to uncertainties, CITIC Resources has continued to focus on its self-developed intrinsic growth drivers. It has progressively enhanced its risk-resistance capability by exerting huge efforts in reducing costs and increasing efficiency as well as continuously improving the professional, refining and scientific levels of management, and it has vigorously promoted the increase in reserves and production of oil and gas properties by striving for technical efficiency, thereby determined to enhance corporate values. Over the past year, the external macro-environment, especially the volatility of commodities and crude oil prices, had been the major factor affecting the Group’s results of operations. The slowdown in global economic growth and the intensifying trade tensions had led to a larger extent of decline in commodity prices of our major businesses – crude oil, aluminium and coal. During the year, the Group’s revenue decreased 22.6% year-on-year to HK$3,425.5 million, profit attributable to shareholders decreased 33.7% year-on-year to HK$600.3 million. Exploring Potential of Existing Assets to Enhance the Corporate Values During the year, the Group’s average daily production of crude oil was 48,320 barrels (100% basis), representing a slight decrease of 2.2% when compared to 2018. This was mainly attributable to the production of new wells which partially offset the natural declination of existing wells, which in turn maintained our overall production of crude oil at a relatively stable level. Development of new wells in the Yuedong oilfield in Liaoning Province, China and the Seram Block in Indonesia recommenced in the fourth quarter of 2019 and the first quarter of 2020 respectively. Drilling progress was better than expected, which can potentially be the key growth driver for future production. With the increase in number of wells put into production in 2020, it is expected that the production volume of new wells will increase accordingly. In addition, the Group’s new production sharing contract in Indonesia was in force in November 2019, and the technical and economic assessment of natural gas resources in Lofin area has also commenced. We plan to commence the gas test and trial production of natural gas in 2020, striving to materialise commercial values sooner. 01 CITIC Resources Holdings Limited Chairman’s Statement Optimise Debt Structure and Reduction of Financial Costs The Group’s financial position remained strong on the back of robust cash flows. Debts had been repaid by our internal generated cash flow. As of the end of this year, our net debt to net total capital dropped to 36.2%, and interest expenses for bank and other borrowings decreased by 10.2% when compared to last year. Professional rating agency, Moody’s upgraded the Group’s corporate credit rating for two consecutive years in 2018 and 2019. Costs Reduction and Increase Efficiency to Cope with Risk Under the premise of ensuring a smooth production, the Group strictly controlled costs, avoided unnecessary expenses, fostered bargaining power, trimmed down drilling costs, revisited existing contracts to enhance profitability. Some employees in the Seram block in Indonesia were dismissed during the transitional period between to the existing and the new PSCs to increase efficiency and hence minimising labour costs. Commitment to Energy Conservation, Emission Reduction and Social Responsibilities The Group strictly complied with the relevant environmental protection regulations, formulated environmental management rules that meet with respective project features, regularly monitored environmental performances, applied various green low-carbon technologies, reduced consumption of resources such as electricity, fuel and water, as well as reduced emission of air pollutants and greenhouse gases, with an aim to integrate the environmental protection responsibilities into its daily operations and to work towards minimising the impact on and improving the surrounding natural environment. The Group abided different laws and regulations and requirements of regulatory authorities at its places of its operations, as well as focused on risk management and internal control, thus ensuring that no production accidents or material risk events