Operations and Market Position - The Group's operations focus on the manufacture and sales of liquefied coalbed gas, primarily located in the Shanxi Qinshui Basin, which is known for its rich reserves [19]. - Significant investments have been made in resource exploration and exploitation at coalbed methane blocks in Yangcheng, Shanxi, since July 2011, enhancing the Group's position in China's unconventional gas market [21]. - The Group aims to stabilize natural gas supply and increase utilization of its liquefied natural gas (LNG) plant through successful gas supply initiatives [21]. - The Group's distribution network extends to various regions, including Shanxi Province, ensuring a broad market reach [20]. - The Group's commercial production of coalbed gas has transformed it into a vertically integrated natural gas company [21]. - The Group's commitment to enhancing its leading position in the market is reflected in its ongoing investments and strategic initiatives [21]. - The Group has developed a diversified customer base, including industrial, commercial, and residential customers, optimizing its sales mix to reduce uncertainty in future natural gas sales [32]. - The Group has established a complete business process covering CBM extraction, liquefaction, pipelines, transportation, distribution, and technical services [26]. Financial Performance - The Group recorded a consolidated turnover of approximately RMB243,568,000 for the year ended 31 December 2024, representing an increase of approximately 1.73% compared to the previous year [49]. - The Group reported a loss attributable to equity shareholders of approximately RMB34,645,000 for the year ended 31 December 2024, compared to a profit of approximately RMB2,530,000 for the year ended 31 December 2023 [50]. - The value-added tax refund decreased from RMB7,723,000 to RMB2,439,000, and government grants decreased from RMB3,607,000 to RMB1,014,000 in 2024 [51]. - The Group's profitability and cash flow position are projected to improve as the number of production wells increases and their capabilities are enhanced [27]. - The Group's natural gas extraction business has generated revenue, profit, and cash flow, with expectations for further improvement as the number and capabilities of production wells increase [27]. - As of December 31, 2024, the Group had net assets of approximately RMB 123,052,000, including cash and bank balances of approximately RMB 48,484,000 [65]. - The Group's gearing ratio was approximately 20.98% as of December 31, 2024, compared to 11.78% in 2023 [65]. Research and Development - The Group commenced R&D on a new technology for natural gas production in 2016, which is currently under development and aims to achieve stable long-term operation at reduced temperatures [42]. - The Group discovered a thermal extraction technology that enhances reserves and increases production through thermal transformation of underground coal minerals, which is expected to positively impact upstream wellhead gas output [44]. - The thermal extraction technology is still in the preparatory stage, but its successful development is anticipated to provide stable gas supply for the Group's liquefied natural gas plants [45]. - The Group's R&D on the ultra-high-temperature steam-induced coal mineral transformation technology began in 2016, with pilot operations starting in June 2021 [80][81]. - By the end of 2024, the small-scale pilot unit using domestically produced heat-resistant steel failed to achieve stable long-term operation at 1,100°C [80][81]. - The Group shifted its focus to reducing reaction temperatures, achieving a basic operating environment of 1,000°C as of January 2025 [80][81]. - Successful development of the thermal extraction technology will ensure a stable gas supply for the Group's liquefied natural gas plants, enhancing profitability [83]. Corporate Governance - The Group has complied with all provisions in the Company Code and the Code Provisions during the year ended December 31, 2024, except for specific provisions related to the Chairman and Chief Executive [94]. - The Board consists of nine Directors, including five executive Directors and three independent non-executive Directors, ensuring compliance with GEM Listing Rules [98]. - The Company has adhered to all provisions of the corporate governance code for the year ending December 31, 2024, except for specific deviations noted in the corporate governance report [99]. - The independent non-executive Directors have confirmed their independence in accordance with Rule 5.09 of the GEM Listing Rules, ensuring at least one-third of the Board is independent [104]. - The Board is responsible for the overall leadership and control of the Company, including setting objectives, strategies, and monitoring financial performance through annual budgets [114]. - The Company has delegated day-to-day management responsibilities to management staff under the supervision of the Board, ensuring effective operational oversight [116]. - The roles of the chairman and chief executive are separated, with Mr. Wang Zhong Sheng serving as chairman and other executive Directors undertaking CEO duties [117]. - The Company has complied with GEM Listing Rules regarding the appointment and rotation of independent non-executive Directors, ensuring proper governance practices [108]. - The Board has reviewed corporate governance policies, training for directors, and compliance with legal requirements in 2024 [109]. Environmental and Social Responsibility - The Group emphasizes social responsibility while developing in the new energy sector, aiming to provide high-quality clean energy [22]. - The Group emphasizes its commitment to environmental and social responsibility, ensuring compliance with relevant laws and regulations [37]. - The Environmental, Social, and Governance (ESG) report reflects the Board's dedication to minimizing environmental impact and addressing climate change challenges [200]. - The Company is committed to sustainable development in the natural gas sector, focusing on extraction, liquefaction, production, and sale of natural gas [200]. Workforce and Diversity - The current Board consists of nine Directors aged between 38 and 77, with diverse experience in natural gas, engineering, and finance [156]. - The Company aims to maintain a diverse Board composition based on various factors including skills, knowledge, and experience [155]. - The Group has a workforce gender ratio of approximately 2:1, favoring males [160]. - The Remuneration Committee reviewed the remuneration packages of Directors considering market conditions and individual contributions [150]. - The Board Diversity Policy aims to achieve gender balance by December 31, 2024, and includes members with diverse industry experience [160]. Audit and Compliance - The Audit Committee conducted two meetings in 2024, reviewing the Group's quarterly, half-yearly, and annual results [175]. - The Group's results for the year ended December 31, 2024, were deemed compliant with applicable accounting standards and GEM Listing Rules [177]. - The external auditors, KTC Partners CPA Limited, received approximately RMB1,250,000 for audit services in 2024, with no non-audit services provided [187]. - The Audit Committee concluded that the Group has established a sound internal control environment and complied fully with the internal control and risk management code provisions in 2024 [186]. - The Company has published annual, interim, and quarterly reports containing detailed information about the Group, emphasizing the importance of shareholder feedback [193].
中国煤层气(08270) - 2024 - 年度财报