能源及能量环球(01142) - 2024 - 年度业绩

Annual Results Announcement Consolidated Statement of Profit or Loss and Other Comprehensive Income The company reported a substantial 79.9% decrease in profit for the year to HKD 105,630 thousand, with turnover declining 42.18% due to reduced sales prices and Korean Won depreciation | Indicator | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Turnover | 664,701 | 1,149,675 | | Cost of sales | (657,049) | (1,137,389) | | Gross profit | 7,652 | 12,286 | | Other income | 153 | 3,032 | | Other gains and losses | 129,734 | 718,350 | | Selling and distribution costs | (3,769) | (4,036) | | Administrative expenses | (14,992) | (14,716) | | Other expenses | — | (175,921) | | Finance costs | (10,120) | (10,069) | | Profit before income tax | 108,658 | 528,926 | | Income tax expense | (3,028) | (1,430) | | Profit for the year | 105,630 | 527,496 | | Profit attributable to owners of the Company | 106,899 | 550,211 | | Non-controlling interests | (1,269) | (22,715) | | Total comprehensive income for the year | 104,103 | 527,183 | | Basic and diluted earnings per share (HKD) | 0.74 | 3.79 | - Profit for the year significantly decreased by 79.9% year-on-year, from HKD 527,496 thousand to HKD 105,630 thousand[79] - Turnover decreased by 42.18% year-on-year, primarily due to geopolitical tensions in Russia-Ukraine, reduced demand for diesel and gasoline due to inflation, and the depreciation of the Korean Won[403][430] Consolidated Statement of Financial Position The company faces significant going concern uncertainties with net current liabilities of HKD 3,705,062 thousand and an equity deficit of HKD 1,750,802 thousand as of March 31, 2024 | Indicator | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Assets | | | | Non-current assets | 2,149,147 | 2,021,177 | | Current assets | 14,448 | 23,833 | | Liabilities | | | | Current liabilities | 3,719,510 | 3,728,260 | | Non-current liabilities | 194,887 | 171,655 | | Equity | | | | Equity attributable to owners of the Company | (1,714,719) | (1,818,656) | | Non-controlling interests | (36,083) | (36,249) | | Equity deficit | (1,750,802) | (1,854,905) | - As of March 31, 2024, current liabilities exceeded current assets by approximately HKD 3,705,062 thousand (2023: HKD 3,704,427 thousand), with an equity deficit of approximately HKD 1,750,802 thousand (2023: HKD 1,854,905 thousand), indicating significant going concern uncertainties[116] Notes to the Consolidated Financial Statements 1. Company Information The company is an exempted limited company incorporated in the Cayman Islands and listed on the Hong Kong Stock Exchange, primarily engaged in coal mining and trading diesel, gasoline, and other products in Korea - The company is incorporated in the Cayman Islands, with shares listed on the Hong Kong Stock Exchange[82] - Principal activities include coal mining and exploration rights in the Russian Federation, and trading of diesel, gasoline, and other products in Korea[5] 2. Basis of Preparation of Consolidated Financial Statements Despite significant net current liabilities and an equity deficit, the board has implemented cost control measures and secured funding, deeming the going concern basis appropriate for financial statement preparation - The company faces net current liabilities of HKD 3,705,062 thousand and an equity deficit of HKD 1,750,802 thousand, indicating significant going concern uncertainties[116] - The board has implemented cost control, streamlined operations, and obtained agreements from shareholders, directors, and associated companies to extend loan repayment dates to December 31, 2025, to support going concern[31][32][92][118][119][120] - The company has secured sufficient loan financing to support the group's normal operations for at least 12 months after the reporting date[9] 3. Application of New and Revised HKFRSs The company adopted new and revised HKFRSs this year, primarily affecting accounting policy disclosures without significant impact on financial position or performance, with no material future impact anticipated - New and revised Hong Kong Financial Reporting Standards were first applied this year, primarily impacting accounting policy disclosures without significant effect on financial position or performance[10][35][122][123] - Directors anticipate no material impact on the consolidated financial statements from future application of new but not yet effective HKFRS amendments[12] 4. Revenue All group revenue for the year, totaling HKD 664,701 thousand, was generated in Korea, primarily from the sale of diesel, gasoline, and other products, representing a significant year-on-year decrease | Product | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Sale of diesel | 510,957 | 836,329 | | Sale of gasoline | 123,339 | 199,369 | | Sale of others | 30,405 | 113,977 | | Total revenue | 664,701 | 1,149,675 | - All revenue for the year (based on operating location) was generated in Korea[38] - Revenue recognition occurs at a point in time, with all remaining performance obligations having a duration of one year or less[14][99] 5. Segment Information The group operates two reportable segments: mining and trading, with trading contributing all revenue while mining contributes most of the segment profit, and non-current assets are primarily located in Russia - The group has two reportable operating segments: the mining segment (coal mining and exploration rights in the Russian Federation) and the trading segment (sale of diesel, gasoline, and other products in Korea)[15][101] Segment Revenue and Profit (2024) | Indicator | Mining (HKD '000) | Trading (HKD '000) | Total (HKD '000) | | :--- | :--- | :--- | :--- | | Segment revenue | — | 664,701 | 664,701 | | Segment profit (loss) | 136,346 | (10,843) | 125,503 | | Unallocated corporate expenses | | | (6,725) | | Unallocated finance costs | | | (10,120) | | Profit before income tax | | | 108,658 | Segment Assets (2024) | Segment | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Mining | 2,120,872 | 1,986,047 | | Trading | 41,054 | 57,181 | | Total segment assets | 2,161,926 | 2,043,228 | | Corporate and other assets | 1,669 | 1,782 | | Total assets | 2,163,595 | 2,045,010 | Geographical Revenue and Non-current Assets (2024) | Indicator | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Revenue from external customers | | | | Korea | 664,701 | 1,149,675 | | Non-current assets | | | | Russia | 2,120,224 | 1,984,830 | | Korea | 28,736 | 36,049 | | Total | 2,148,960 | 2,020,879 | - Two major customers (Customer A and Customer B) contributed over 10% of the group's total revenue for the year[109] 6. Other Income Other income for the year totaled HKD 153 thousand, primarily from interest and miscellaneous income, a significant decrease from the prior year due to the absence of net exchange gains | Item | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Interest income | 98 | 173 | | Miscellaneous income | 55 | 58 | | Net exchange gains | — | 2,801 | | Total | 153 | 3,032 | 7. Other Gains and Losses Other gains and losses for the year amounted to HKD 129,734 thousand, mainly comprising a reversal of impairment loss on exploration and evaluation assets of HKD 142,912 thousand, partially offset by a fair value loss on investment properties of HKD 13,186 thousand, a significant reduction from the prior year | Item | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Reversal of impairment loss on exploration and evaluation assets | 142,912 | 717,456 | | Reversal of impairment loss on trade and other receivables | 8 | 832 | | Fair value change of investment properties | (13,186) | — | | Gain on disposal of property, plant and equipment | — | 62 | | Total | 129,734 | 718,350 | - Reversal of impairment loss on exploration and evaluation assets significantly decreased year-on-year, from HKD 717,456 thousand to HKD 142,912 thousand[50] - A fair value loss on investment properties of HKD 13,186 thousand was recorded this year, with no comparable item in the prior year[50] 8. Finance Costs Total finance costs for the year were HKD 10,120 thousand, largely consistent with the prior year, primarily from interest on loans from third parties, shareholders, directors, and associated companies | Item | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Interest on loans from third parties | 3,233 | 3,207 | | Interest on loans from shareholders | 6,067 | 5,795 | | Interest on loans from a director | 80 | — | | Interest on loans from an associate company | 683 | 1,032 | | Interest on lease liabilities | 57 | 35 | | Total | 10,120 | 10,069 | 9. Income Tax Expense Income tax expense for the year was HKD 3,028 thousand, an increase from the prior year, mainly comprising Korean corporate tax and deferred tax | Item | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Current tax: Korean corporate tax | 563 | 1,361 | | Over-provision in prior years: Korean corporate tax | — | (44) | | Deferred tax | 2,465 | 113 | | Total | 3,028 | 1,430 | 10. Profit for the Year Profit for the year is stated after deducting (crediting) various expenses and income, including employee benefit expenses, depreciation, amortisation, and reversal of impairment losses, with cost of inventories recognised as an expense of HKD 657,049 thousand | Item | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Salaries and wages | 3,727 | 3,596 | | Pension contributions | 80 | 212 | | Amortisation of intangible assets | — | 175,921 | | Depreciation of property, plant and equipment | 251 | 268 | | Depreciation of right-of-use assets | 947 | 879 | | Auditor's remuneration | 1,410 | 1,270 | | Reversal of impairment loss on exploration and evaluation assets | (142,912) | (717,456) | | Reversal of impairment loss on trade and other receivables | (8) | (832) | | Net exchange loss (gain) | 4,646 | (2,801) | | Cost of inventories recognised as an expense | 657,049 | 1,137,389 | 11. Dividends No dividends were paid or declared by the company for the year ended March 31, 2024 - No dividends were paid or declared by the company for the year ended March 31, 2024 (2023: HKD nil)[70] 12. Earnings Per Share Basic and diluted earnings per share for the year ended March 31, 2024, were both HKD 0.74, a significant decrease from HKD 3.79 in the prior year, primarily due to reduced profit attributable to owners of the Company | Indicator | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Profit attributable to owners of the Company for basic and diluted earnings per share calculation | 106,899 | 550,211 | | Weighted average number of ordinary shares | 145,017,062 | 145,017,062 | | Basic and diluted earnings per share (HKD) | 0.74 | 3.79 | - There were no potential dilutive ordinary shares during the year, thus diluted earnings per share are the same as basic earnings per share[72] 13. Property, Plant and Equipment As of March 31, 2024, the carrying amount of property, plant and equipment decreased to HKD 12,411 thousand, mainly due to transfers from construction in progress, exchange realignment, and depreciation Carrying Amount of Property, Plant and Equipment | Indicator | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Carrying amount | 12,411 | 17,989 | - Additions to construction in progress amounted to HKD 7,452 thousand and transfers out were HKD 10,237 thousand during the year[58] - Depreciation is calculated on a straight-line basis: furniture and fixtures 20%, equipment 10% to 20%, and motor vehicles 10% to 30%[59][75] 14. Right-of-use Assets and Lease Liabilities As of March 31, 2024, the carrying amount of right-of-use assets decreased to HKD 755 thousand, with total lease liabilities of HKD 777 thousand, of which HKD 750 thousand is current, and new leased equipment additions were approximately HKD 278 thousand Carrying Amount of Right-of-use Assets | Indicator | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Carrying amount | 755 | 1,360 | Lease Liabilities | Item | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Total lease liabilities | 777 | 1,357 | | Less: Current portion | (750) | (686) | | Non-current portion | 27 | 671 | | Amounts payable within one year | 750 | 686 | | Amounts payable after one year but within two years | 10 | 644 | | Amounts payable after two years but within five years | 17 | 27 | - Additions to leased equipment amounted to approximately HKD 278 thousand during the year (2023: HKD 48 thousand)[76][380] - Total cash outflow for leases for the year ended March 31, 2024, was approximately HKD 978 thousand (2023: HKD 1,114 thousand)[381] 15. Intangible Assets As of March 31, 2024, intangible assets (mining rights) have been fully amortised to zero, resulting in no amortisation expense, impairment loss, or reversal for the current year Cost and Accumulated Amortisation of Mining Rights | Item | Mining Rights (HKD '000) | | :--- | :--- | | Cost as at March 31, 2024 | 1,063,895 | | Accumulated amortisation as at March 31, 2024 | 1,063,895 | | Carrying amount as at March 31, 2024 | — | | Carrying amount as at March 31, 2023 | — | - Intangible assets (related to mining rights for Block 1 and Block 1 Extension in the Russian coal mine) were fully amortised as of March 31, 2024, resulting in no impairment loss or reversal[157] - Mining rights were acquired as part of the acquisition of a 90% equity interest in Langfeld Group, initially recognised at fair value[382] 16. Exploration and Evaluation Assets As of March 31, 2024, exploration and evaluation assets had a carrying amount of HKD 2,107,606 thousand, with a reversal of impairment loss of HKD 142,912 thousand recorded this year, primarily influenced by increased coal prices, Ruble appreciation against the USD, and a lower discount rate Carrying Amount of Exploration and Evaluation Assets | Indicator | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Carrying amount | 2,107,606 | 1,969,122 | | Reversal of impairment loss | (142,912) | (717,456) | - The reversal of impairment loss on exploration and evaluation assets is primarily due to the net effect of a change in the first year of expected coal production to 2025, increased coal prices, appreciation of the Ruble against the USD, and a lower post-tax discount rate[188] - The cash flow forecast period is 12 years up to 2035, with the first year of production expected in 2026[160] - Coal sales prices increased by approximately 10% to 17% compared to the prior year, and the post-tax discount rate was 37.00% (2023: 38.16%)[163][186] 17. Inventories As of March 31, 2024, inventories primarily consisted of gasoline products for sale, amounting to HKD 1,799 thousand | Item | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Gasoline products for sale | 1,799 | — | 18. Trade Receivables As of March 31, 2024, total trade receivables amounted to HKD 4,999 thousand, predominantly within 0 to 90 days, with no specific credit period granted by the company Ageing Analysis of Trade Receivables | Ageing | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | 0 to 90 days | 4,994 | 3,489 | | 91 to 180 days | 5 | — | | 181 to 365 days | — | 41 | | Total | 4,999 | 3,530 | - The group does not grant specific credit periods to its trade customers[190] 19. Other Receivables As of March 31, 2024, the current portion of other receivables was HKD 7,422 thousand, a significant decrease from the prior year, mainly due to reduced prepayments | Item | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Deposits | 187 | 299 | | Other loans receivable | 1,827 | 1,878 | | Other receivables | 883 | 1,240 | | Prepayments | 3,049 | 10,027 | | Prepayments | 1,663 | 1,808 | | Less: Lease deposits classified as non-current assets | (187) | (298) | | Current portion included in other receivables | 7,422 | 14,954 | 20. Trade Payables As of March 31, 2024, trade payables amounted to HKD 10,771 thousand, primarily due within 0 to 90 days, with an average credit period of 30 to 90 days Ageing Analysis of Trade Payables | Ageing | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | 0 to 90 days | 10,771 | 8,929 | - The average credit period for purchases of goods is 30 to 90 days[219] 21. Other Payables As of March 31, 2024, the current portion of other payables was HKD 28,828 thousand, mainly comprising accrued expenses and interest payable | Item | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Other payables | 279 | 416 | | Accrued expenses | 7,400 | 4,145 | | Interest payable | 24,379 | 21,226 | | Less: Other payables classified as non-current liabilities | (3,230) | (2,126) | | Current portion included in other payables | 28,828 | 23,661 | 22. Interest-bearing Borrowings As of March 31, 2024, total interest-bearing borrowings were HKD 62,096 thousand, with HKD 28,561 thousand classified as current liabilities due to loan defaults, though most repayment dates have been extended to December 31, 2025 Total Interest-bearing Borrowings | Item | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Other loan 1 | 28,561 | 28,561 | | Other loan 2 | 13,131 | 12,467 | | Other loan 3 | 17,404 | 17,404 | | Other loan 4 | 3,000 | 3,000 | | Total | 62,096 | 61,432 | Repayment Terms of Interest-bearing Borrowings | Term | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Within one year | 28,561 | 41,028 | | After one year but within two years | 33,535 | 20,404 | | Total | 62,096 | 61,432 | | Less: Amounts presented under non-current liabilities | (33,535) | (20,404) | | Amounts presented under current liabilities | 28,561 | 41,028 | | Less: Carrying amount of other borrowings repayable on demand due to loan default | (28,561) | (12,467) | - The effective interest rate ranges from 4.6% to 6%[195] - A total of HKD 28,561 thousand in borrowings defaulted and was classified as current liabilities, with the company negotiating refinancing with lenders[200][224] - Lenders for Other Loans 2, 3, and 4 have agreed to extend repayment dates to December 31, 2025[198][199][226] 23. Amounts Due to Shareholders As of March 31, 2024, amounts due to shareholders totaled HKD 39,097 thousand, with most repayment dates extended to December 31, 2025 | Item | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Amounts due to shareholders (current) | 39,097 | 38,622 | | Amounts due to shareholders (non-current) | 133,559 | 127,475 | - One shareholder has agreed not to demand repayment of amounts due before December 31, 2025[32] - A total of approximately HKD 133,559 thousand bears interest at 5% to 6% per annum, and shareholders have agreed to extend all loan repayment dates to December 31, 2025[202] 24. Amount Due to a Director As of March 31, 2024, the amount due to a director was HKD 2,596 thousand, bearing interest at 5% per annum, with the director agreeing to extend the repayment date to December 31, 2025 | Item | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Amount due to a director (non-current) | 2,596 | — | - The amount due to a director is HKD 2,596 thousand, bearing interest at 5% per annum, and the director has agreed to extend the repayment date to December 31, 2025[119][229] 25. Amount Due to an Associate Company As of March 31, 2024, the amount due to an associate company was HKD 16,167 thousand, with the associate company agreeing to extend the repayment date to December 31, 2025 | Item | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Amount due to an associate company (non-current) | 16,167 | 16,863 | - The associate company has agreed not to demand repayment of amounts due before December 31, 2025[120] - The company obtained an unsecured loan of approximately HKD 14,500 thousand from an associate company during the year, bearing interest at 4.6% per annum[258] 26. Acquisition Consideration Payable for Additional Acquisition As of March 31, 2024, the acquisition consideration payable for an additional acquisition was HKD 3,338 thousand, with no further payments made during the year | Item | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Acquisition consideration payable for additional acquisition (current) | 3,338 | 3,349 | - No further payment was made for the fourth adjusted consideration during the year[231] - The acquisition consideration relates to the remaining 30% equity interest in LLC "Shakhta Lapichevskaya" (Lapi), with partial payment contingent on obtaining new exploration and mining licenses and tax confirmation[259] 27. Convertible Bonds Payable As of March 31, 2024, the total principal amount of convertible bonds payable was HKD 3,591,498 thousand, with an effective interest rate of 12.01%, reflecting complex history of revisions, transfers, and conversion attempts that were ultimately rescinded due to regulatory rejections and subsequent agreements Carrying Amount of Convertible Bonds Payable | Item | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Convertible bonds payable (current) | 3,591,498 | 3,591,498 | - As of March 31, 2024, the total outstanding principal amount was USD 460,448,500 (approximately HKD 3,591,498 thousand), with an effective interest rate of 12.01%[246] - The third batch of convertible bonds was re-evaluated following the withdrawal of the House Report and underwent principal adjustments[208][234][261][262] - Attempts to convert portions of the convertible bonds into shares were rescinded due to HKEX rejection and subsequent cancellation agreements, restoring issued shares to their original state[90][91][245][274] - The terms of the convertible bonds were revised, including an extension of the maturity date to October 19, 2019, and the release of share charges[268][269] 28. Promissory Notes Payable As of March 31, 2024, promissory notes payable had a carrying amount of HKD 15,600 thousand, consistent with the prior year, with some notes converted into ordinary shares in previous years | Item | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Promissory notes payable (current) | 15,600 | 15,600 | - The revised promissory notes are non-interest bearing and payable in a lump sum on the maturity date of May 25, 2015, with an effective interest rate of 10.5% per annum[278] - Three promissory note holders converted all revised promissory notes into ordinary shares during the year ended March 31, 2013[302] 29. Provision for Decommissioning, Restoration and Environmental Costs As of March 31, 2024, the provision for decommissioning, restoration, and environmental costs was HKD 1,315 thousand, related to the Russian coal mine, determined by management's best estimate and reviewed annually | Item | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Provision as at April 1 | 1,585 | 1,305 | | Provision during the year | — | 158 | | Exchange realignment | (270) | 122 | | Provision as at March 31 | 1,315 | 1,585 | - The provision relates to the Russian coal mine, and while management believes significant adverse financial impact from environmental liabilities is unlikely, cost estimates may be revised in the future due to stricter environmental standards[252][281][304] 30. Deferred Tax Liabilities As of March 31, 2024, deferred tax liabilities amounted to HKD 4,458 thousand, with the company possessing unutilised tax losses of approximately HKD 28,232 thousand, for which no deferred tax asset was recognised due to uncertain future profit streams | Item | 2024 (HKD '000) | 2023 (HKD '000) | | :--- | :--- | :--- | | Deferred tax liabilities as at April 1 | 2,531 | 2,170 | | Charged to profit or loss | 2,465 | 113 | | Exchange realignment | (538) | 248 | | Deferred tax liabilities as at March 31 | 4,458 | 2,531 | - The company has unutilised tax losses of approximately HKD 28,232 thousand that can be carried forward indefinitely to offset future profits, but no deferred tax asset has been recognised[253] - The company has deductible temporary differences of approximately HKD 3,173,830 thousand, but no deferred tax asset has been recognised[255] 31. Share Capital The company completed a capital reorganisation on October 2, 2023, involving a reduction in share par value from HKD 2.00 to HKD 0.50 and a share split, resulting in issued share capital decreasing from HKD 290,034 thousand to HKD 72,509 thousand Share Capital Movement | Item | Par Value Per Share (HKD) | Number of Shares | Amount (HKD '000) | | :--- | :--- | :--- | :--- | | Authorised share capital as at March 31, 2024 | 0.05 | 2,000,000,000 | 1,000,000 | | Issued share capital as at April 1, 2023 | 2.00 | 145,017,062 | 290,034 | | Capital reduction | Not applicable | — | (217,525) | | Issued share capital as at March 31, 2024 | 0.05 | 145,017,062 | 72,509 | - The capital reorganisation became effective on October 2, 2023, including a reduction in the par value of each issued share from HKD 2.00 to HKD 0.50 and a subdivision of each authorised but unissued share into four shares[286][287][311] - The capital reorganisation itself does not alter the company's underlying assets, business operations, management, financial position, or shareholders' proportionate interests[313] 32. Litigation The company is involved in multiple legal proceedings, including claims from former shareholders, disputes over convertible bond ownership, technical and valuation report controversies, and civil lawsuits against former directors, with many cases progressing slowly or being stayed due to plaintiff bankruptcy or court backlogs, and some cases consolidated for trial - The company is involved in multiple legal proceedings, including claims from former shareholders, disputes over convertible bond ownership, and technical and valuation report controversies[35][288][330][353] - Several lawsuits against the company (e.g., HCA 3190, HCA 47, HCMP 701, HCA 814, HCA 1050, HCA 2633, HCA 3148, HCA 3160) are stalled due to the bankruptcy of plaintiff Kim Sungho, with his property vested in the Official Receiver, and the company is liaising to terminate these proceedings[127][131][142][143][168][171][172][173][184][212][331][332][336][351][352][355][361][386] - The convertible bond ownership dispute involving Daily Loyal Limited (HCA 1071, HCA 2501 counterclaim, HCA 2520) has been consolidated for trial, expected to commence as early as 2024[7][132][137][339][358][365][389][390] - The company, as plaintiff, initiated civil proceedings against three former executive directors (HCA 706) to recover approximately HKD 18,980 thousand in damages, with pre-trial hearings completed and a judgment expected in mid-July 2023[369][391][395] - The company filed legal actions against Jian Xin New Energy Limited and Herman Tso (HCA 1016, HCA 51) alleging misrepresentation, seeking repayment and damages, with some proceedings currently being terminated[383][396][398][423][424] 33. Significant Events After Reporting Period Subsequent to the reporting period, the company entered into a loan financing agreement with an independent party for up to approximately USD 32,623 thousand in financial assistance and received a HKD 1,060 thousand loan from a shareholder - The company entered into a loan financing agreement with an independent party for up to approximately USD 32,623 thousand (approximately HKD 254,459 thousand) in financial assistance[377] - A company shareholder granted a loan of HKD 1,060 thousand to the company[399] Independent Auditor's Report The independent auditor's report highlights significant going concern uncertainties, including substantial net current liabilities and an equity deficit, the impact of the Russia-Ukraine war on the Russian economy and group activities, and the uncertain outcome of litigation against the group, without issuing a modified opinion on these matters - The auditor emphasizes significant going concern uncertainties due to the company's net current liabilities of approximately HKD 3,705,062 thousand and an equity deficit of approximately HKD 1,750,802 thousand[428] - The auditor draws attention to the geopolitical tensions related to the Russia-Ukraine situation and sanctions impacting the Russian economy and the group's activities[379] - The auditor highlights the uncertainties regarding the outcome of litigation initiated against the group[402] - The auditor did not modify their opinion regarding the aforementioned emphasis of matter[379][402][428] Management Discussion and Analysis Financial Review Turnover for the year decreased by 42.18% to HKD 664.7 million, primarily affected by the Russia-Ukraine war, inflation, and Korean Won depreciation, while other gains and losses mainly comprised a reversal of impairment loss on exploration and evaluation assets, and administrative and finance costs remained stable - Total turnover was approximately HKD 664.7 million, a 42.18% year-on-year decrease, mainly due to geopolitical tensions in Russia-Ukraine, reduced demand for diesel and gasoline due to inflation, and the depreciation of the Korean Won[403][430] Turnover Product Mix | Product | 2024 (HKD million) | 2023 (HKD million) | 2024 % | 2023 % | | :--- | :--- | :--- | :--- | :--- | | Diesel sales | 510.96 | 836.33 | 76.87% | 72.75% | | Gasoline sales | 123.34 | 199.37 | 18.56% | 17.34% | | Other petroleum products and services | 30.40 | 113.98 | 4.57% | 9.91% | - Other gains and losses primarily refer to a reversal of impairment loss on exploration and evaluation assets of approximately HKD 142.91 million, partially offset by a fair value loss on investment properties of approximately HKD 13.19 million[432] - Total administrative expenses were approximately HKD 14.99 million, largely stable year-on-year; total finance costs were approximately HKD 10.12 million, also largely stable year-on-year[407][409] - Profit before income tax was approximately HKD 108.66 million, mainly due to a decrease in reversal of impairment loss on exploration and evaluation assets, partially offset by reduced amortisation of intangible assets[409] Operations Review The group's turnover for the year primarily stemmed from its diesel, gasoline, and related petroleum product trading business in Korea, while for its coal mining operations, the group is consulting experts to mitigate environmental impact and assessing equipment import alternatives - The trading business of diesel, gasoline, and related petroleum products in Korea is the primary source of the group's turnover[436] - The group stabilises its trading business through time-managed procurement, maintaining stable supply, direct refinery delivery, social media marketing, concentrated sales at petrol stations, and inventory management[437] - For the coal mining business (Block 1 and Block 1 Extension), the first year of coal production is anticipated around 2030, with the group consulting experts to reduce environmental impact and evaluating equipment import alternatives[437] - For Block 2 open-pit and underground mining, the group is analysing technical documents to meet environmental standards and researching new methods for mine ventilation, backfilling mined-out areas, and establishing underground repair shops and fuel storage points[413][414] Outlook Looking ahead, the global economy faces uncertainties from geopolitical conflicts, high interest rates, and trade disputes, posing challenges to the group's trading and coal mining businesses, which the group plans to address by enhancing services, reducing costs, expanding markets, and introducing automation tools - The global economic outlook is volatile and uncertain due to conflicts in Israel-Hamas and Russia-Ukraine, US-China trade tensions, and high interest rates[464] - The group will strengthen its Korean trading business by offering competitive prices, stable supply, improved product quality, excellent customer service, reduced cost of sales, operating more petrol stations, and engaging in advertising and social media interaction[465] - The coal mining business will focus more on environmental compliance and explore introducing automation tools to enhance production efficiency and reduce labor costs[418][467] - The group will continue to consult government officials and experts and plans to hold more public hearings to gain local community support[442] - The group will consider exploring other business areas for diversification when opportunities arise[440] Liquidity and Financial Resources For the year ended March 31, 2024, the group recorded a net cash outflow of HKD 9.19 million, reducing total cash and cash equivalents to HKD 0.23 million, and faces net current liabilities of HKD 3,705.06 million, which it addresses through cost control, seeking financing, and communicating with convertible bondholders - The year recorded a net cash outflow of HKD 9.19 million (2023: HKD 2.82 million), reducing total cash and cash equivalents to approximately HKD 0.23 million (2023: HKD 5.35 million)[420] - Net current liabilities amounted to HKD 3,705.06 million, with a current ratio of 0.39% and a gearing ratio of 8.46%[167] - Interest-bearing borrowings totaled HKD 62.1 million, and amounts due to shareholders were HKD 172.66 million, with most repayable after one year but within two years[445] - The group has implemented cost control measures and is actively seeking financing from financial institutions and equity fundraising opportunities, including placing new shares and other preferential offers[470] - The company will communicate with third-batch convertible bondholders to attempt conversion of a substantial portion of outstanding convertible bonds to improve its balance sheet and strengthen its equity base[419][470] Share Capital Structure The company completed a capital reorganisation in 2023, maintaining authorised share capital at HKD 1,000 million but with an increased number of shares and reduced par value per share, resulting in issued share capital decreasing from HKD 290.03 million to HKD 72.51 million - Authorised share capital is HKD 1,000 million, divided into 2,000 million shares of HKD 0.5 par value each (2023: 500 million shares of HKD 2.0 par value each)[446] - Issued share capital is approximately HKD 72.51 million (2023: HKD 290.03 million)[446] - The capital reorganisation, involving share reduction and share subdivision, became effective on October 3, 2023[447][473] Exchange Rate Fluctuation Risk and Related Hedging Instruments The group's turnover, expenses, assets, and liabilities are denominated in HKD, USD, Ruble, and Korean Won, and while fluctuations in Ruble and Korean Won exchange rates against HKD may impact operating results, the group currently does not intend to hedge these risks - The group's turnover, expenses, assets, and liabilities are denominated in Hong Kong Dollars, US Dollars, Russian Rubles, and Korean Won[473] - Fluctuations in the exchange rates of the Ruble and Korean Won against the Hong Kong Dollar may have a favorable or unfavorable impact on the group's operating results[473] - Considering the amounts involved, the group currently does not intend to hedge against Ruble and Korean Won foreign currency exchange rate risks but will continuously review and consider using financial instruments for hedging when necessary[449] Litigation (MDA) The group has been involved in multiple legal proceedings during the year and up to the date of this announcement, with details provided in Note 32 to the financial statements - The group has been involved in multiple legal proceedings during the year and up to the date of this announcement, with details provided in Note 32 to the financial statements[450] Capital Commitments As of March 31, 2024, the group had no capital commitments for exploration-related contracts or the acquisition of property, plant, and equipment - As of March 31, 2024, the group had no capital commitments for exploration-related contracts (2023: nil)[451] - As of March 31, 2024, the group had no capital commitments for the acquisition of property, plant and equipment (2023: nil)[451] Contingent Liabilities As of March 31, 2024, the group had no significant contingent liabilities or guarantees - As of March 31, 2024, the group had no significant contingent liabilities or guarantees (2023: nil)[452] Assets Pledged As of March 31, 2024, the group had not pledged any assets to secure bank financing - As of March 31, 2024, the group had not pledged any assets to secure bank financing[476] Major Acquisitions and Disposals For the year ended March 31, 2024, the group was not involved in any other major investments, acquisitions, or disposals of subsidiaries or joint ventures - For the year ended March 31, 2024, the group was not involved in any other major investments, acquisitions, or disposals of any subsidiaries or joint ventures[477] Employees and Remuneration Policy As of March 31, 2024, the group employed approximately 13 staff, with remuneration policies determined by the Remuneration Committee based on market practice, individual qualifications, and performance to retain and motivate directors - As of March 31, 2024, the group had approximately 13 employees in Hong Kong, Russia, and Korea (2023: 10 employees)[477] - Remuneration policy is determined by the Remuneration Committee based on market practice, individual qualifications, directors' time commitment, responsibilities, performance, and contributions, aiming to retain and motivate directors[454] - The remuneration package includes salaries, commissions, and performance-based bonuses, with employee benefit schemes including provident fund plans, medical insurance, and subsidised training programs[477] Amendments to Articles of Association The company proposed amendments to its Articles of Association to comply with revisions to Appendix A1 of the HKEX Listing Rules, which were approved by a special resolution of shareholders on September 27, 2023 - The company proposed amendments to its Memorandum and Articles of Association to comply with revisions to Appendix A1 of the Listing Rules and reflect relevant legal updates[478] - The proposed amendments were duly passed as a special resolution by way of poll at the Annual General Meeting held on September 27, 2023[479] Corporate Governance Purchase, Sale or Redemption of Listed Securities For the year ended March 31, 2024, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - For the year ended March 31, 2024, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[480] Dividends (Corporate Governance) The Board does not recommend the payment of any dividend for the financial year ended March 31, 2024 - The Board does not recommend the payment of any dividend for the financial year ended March 31, 2024 (2023: nil)[481] Corporate Governance Code The company generally complied with the Corporate Governance Code during the year, with deviations including the Chairman and some independent non-executive directors' absence from general meetings, and a temporary lapse in Directors' and Officers' liability insurance due to sanctions - The company has complied with the Corporate Governance Code as set out in Appendix C1 to the Listing Rules throughout the review year[457] - Mr Lee Jaeseong, the Chairman of the Board, was unable to attend the 2023 Annual General Meeting due to other commitments and courses[457] - Some independent non-executive directors were unable to attend the Extraordinary General Meeting and Annual General Meeting due to scheduling conflicts[482] - Directors' and Officers' liability insurance was refused renewal by international insurers due to sanctions against Russia, resulting in no coverage from December 22, 2022, to August 22, 2023, but a new insurer has since been found[483] Model Code for Securities Transactions by Directors All directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers throughout the year ended March 31, 2024 - All directors confirmed full compliance with the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules throughout the year ended March 31, 2024[490] Audit Committee The company has established an Audit Committee, comprising three independent non-executive directors, which has reviewed the group's annual results for the year ended March 31, 2024 - The Audit Committee comprises Mr Leung Yau Wan (Chairman), Ms Chan Toi, and Mr Kim Sung Rae, all of whom are independent non-executive directors[459] - The Audit Committee has reviewed the group's annual results for the year ended March 31, 2024[459] Closure of Register of Members To determine eligibility for attending and voting at the 2024 Annual General Meeting, the company will suspend its register of members from September 24 to September 27, 2024 - To determine eligibility for attending and voting at the 2024 Annual General Meeting, the company will suspend its register of members from September 24, 2024, to September 27, 2024 (both dates inclusive)[485] Auditor The consolidated financial statements for the year ended March 31, 2024, were audited by UHY CPA Limited, which will retire and is eligible and willing to be re-appointed - The consolidated financial statements for the year ended March 31, 2024, were audited by UHY CPA Limited, which will retire and is eligible and willing to be re-appointed at the upcoming Annual General Meeting[492] - The auditor agrees that the figures in the preliminary announcement are consistent with the amounts in the consolidated financial statements, but their work does not constitute an assurance engagement and therefore no assurance is provided[493] Publication of Annual Results and Annual Report This annual results announcement will be published on the HKEX and company websites, and the annual report will be dispatched to shareholders and made available for viewing in due course - This annual results announcement will be published on the HKEX website http://www.hkexnews.hk and the company website http://enp.todayir.com[462](index=462&type=chunk) - The company's annual report for the year ended March 31, 2024, will be dispatched to company shareholders and made available for viewing on the HKEX and company websites in due course[462]