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Financial Reports &
Governance HENGYUAN REFINING COMPANY BERHAD l ANNUAL REPORT 2023 139
Other Information
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
21 SHARE CAPITAL
2023 2022
RM’000 RM’000
Issued and fully paid 300,000,000 units of ordinary shares
At 1 January/At 31 December 300,000 300,000
22 RETAINED EARNINGS
The Company is able to distribute dividends out of its retained earnings under the single-tier system.
23 OTHER RESERVES
(a) Cash flow hedge reserve and cost of hedging reserve
The cash flow hedge reserve is used to record gains and losses on derivatives that are designated and qualify as cash
flow hedges and that are recognised in other comprehensive income. Amounts are reclassified to profit or loss when the
associated hedged transaction affects profit or loss.
The cost of hedging is seen as cost of achieving the risk mitigation inherent in the hedge. It is incurred to protect the
Company against unfavourable changes in price. The changes in the cost of hedging is initially recognised in other
comprehensive income and removed from equity and recognised in profit or loss in the same period that the hedged cash
flows affect profit or loss.
Cash flow Cost of
hedge reserve hedging reserve
2023 RM’000 RM’000
At 1 January (629,118) (1,156)
Refining margin swap contracts (11,984) (19,189)
Recycled to profit or loss, included in purchases (Note 9) 711,882 -
Deferred tax (167,975) 4,605
At 31 December (97,195) (15,740)
2022
At 1 January (77,063) (62,678)
Interest rate swap contracts 2,059 -
Refining margin swap contracts (2,191,570) 80,950
Recycled to profit or loss, included in finance cost 3,297 -
Recycled to profit or loss, included in purchases (Note 9) 1,459,890 -
Deferred tax 174,269 (19,428)
At 31 December (629,118) (1,156)
(b) Exchange translation reserve
The exchange translation reserve represents the exchange differences arising from the translation of the financial
statements of the Company whose functional currency is different from the presentation currency.
