Financial Performance - For the year ended March 31, 2019, the Group recorded a revenue of approximately HK$75,625,000, a decrease of 58.5% from HK$182,445,000 in 2018[8] - The profit for the year was approximately HK$28,843,000, down 21.4% from HK$36,678,000 in the previous year[8] - The decrease in profit was primarily due to a reduction in gross profit and a turnaround from exchange gain to exchange loss of approximately HK$15,041,000 compared to last year[8] - The Group recorded a revenue of approximately HK$75,625,000 for the Year, representing a decrease of approximately HK$106,820,000 or approximately 59% compared to last year[74] - The Group sold approximately 1,764,591 tonnes of coal, a decrease of approximately 44.6% in volume from the previous year[75] - The cost of sales for the Year was approximately HK$44,542,000, which decreased in line with the reduction in sales volume[76] - The gross profit decreased to approximately HK$31,083,000, a decrease of approximately HK$20,964,000 or approximately 40%, while the gross profit margin increased to approximately 41.1%[77] - Other revenue increased to approximately HK$10,438,000, representing an increase of approximately HK$4,106,000 or approximately 64.8% compared to last year[78] - Administrative and operating expenses increased to approximately HK$28,688,000, representing an increase of approximately HK$6,232,000 or approximately 28% compared to the previous year[84] - Profit for the Year was approximately HK$28,843,000, a decrease of approximately HK$7,835,000 compared to last year[85] - The total sales volume of coal for the year was 1,764,591 tonnes, with a gross revenue of HK$75,234,000, representing a decrease of 45% compared to the previous year[93] - The company focused on selling slack coal and weathered coal, resulting in gross sales revenue more than doubling compared to the previous year[95][97] - The production cost per ton of coal remained constant, with post-tax discount rates at 14.60% for the year ended March 31, 2019, down from 15.20% the previous year[96][98] - The sales volume of mixed coal was 169,644 tonnes, with a selling price of HK$88 per ton, generating gross revenue of HK$14,925,000[93] - The sales volume of slack coal was 62,882 tonnes, with a selling price of HK$58 per ton, generating gross revenue of HK$3,630,000[93] - The sales volume of weathered coal was 1,531,874 tonnes, with a selling price of HK$37 per ton, generating gross revenue of HK$56,660,000[93] - The company reported a significant decline in sales for large coal, middle coal, and small medium coal, with gross revenues dropping to zero for these categories[93] - The fair value of the Convertible Bond decreased from approximately HK$247,242,000 as of March 31, 2018, to approximately HK$217,869,000 as of March 31, 2019, representing a change of approximately HK$29,373,000[105] - The discount rate for the Convertible Bond was concluded to be 9.40% for the year, up from 7.62% in the previous year[106] - The closing stock prices of the Company were HK$0.42 and HK$0.24 as of March 31, 2018, and March 31, 2019, respectively[105] - The expected volatility of the stock price was 65.46% for the year ended March 31, 2018, and 64.00% for the year ended March 31, 2019[105] - The valuation report indicated that the value-in-use of the Coal Mining Assets approximated its carrying amount as of March 31, 2019[102] - The coal mining business generated approximately HK$75,234,000 in revenue for the year, representing a 59% decrease compared to HK$182,445,000 in the previous year[109] - The Group sold approximately 1.76 million tonnes of coal during the year, down from approximately 3.18 million tonnes in 2018[109] Operational Adjustments - The Group continued to focus on coal resources mining while starting to invest in other businesses during the year[8] - The demand for coal has been decreasing gradually due to fewer large-scale industrial projects and the promotion of clean energy by the PRC government[8] - The management adjusted short-term operational strategies and modified production plans in response to local government policies[8] - The Group aims to maintain strict control over costs and expenses to ensure financial stability[8] - The company is focused on expediting resource restructuring work in the Zhundong Meitian Xiheishan Coal Mining Area[12] - The exploration permit for the Kaiyuan Mine will be terminated as part of the restructuring process[10] - The company aims to accelerate and complete the process of fixing the mining area for each mining right owner in the region[12] - The company is conducting frequent meetings with the Xinjiang Land Department to protect its interests regarding the exploration permit of the Zexu Mine[10] - The company has entered into four undisputed agreements to dispose of the Zexu Mine and acquire the Kaiyuan Extended Area[12] - The Company will appoint professional parties to evaluate possible coal reserves and perform valuation on the First Extended Area and Second Extended Area once the exploration or mining rights are obtained[18] - The company is actively seeking legal opinions to navigate the requirements set forth by the Zhundong Division of the Ministry of Land and Resources[25] - The company plans to cooperate with relevant government departments to complete the requested environmental protection works[34] - The management has been actively communicating with government departments to protect the company's interests in the Outstanding Mining Area[27] - The company is in the process of fulfilling necessary requirements to obtain the relevant mining permit following the receipt of the Exploration Permit[29] - The company has undergone an Optimization and Upgrading Plan, previously referred to as the Management Restructuring Plan[29] - The company is committed to adhering to all necessary regulations and procedures to secure its mining rights and permits[29] Acquisitions and Investments - The company has not commenced mining in the First Extended Area and Second Extended Area, and is awaiting the acquisition of exploration and mining rights[18] - The compensation amount for the Second Undisputed Agreement is RMB4,391,982, calculated based on an area of 2.582 km² at a rate of RMB486,000 per km² with a compensation multiple of 3.5[14] - The compensation amount for the Third Undisputed Agreement is RMB2,197,692, calculated based on an area of 1.292 km² at the same rate and multiple[14] - The compensation amount for the Fourth Undisputed Agreement is RMB27,216, calculated based on an area of 0.016 km² at the same rate and multiple[16] - The Company has recorded non-refundable deposits of approximately RMB2,099,000 (equivalent to approximately HK$2,604,000) for the First Extended Area and Second Extended Area in its consolidated statement of financial position[18] - The acquisition of NEFIN Group, engaged in renewable energy solutions and solar farm development, is expected to enhance the company's innovative and renewable energy business expansion[61] - The acquisition of NEFIN Group is expected to enhance the Group's expansion in innovative and renewable energy business[70] - The Group plans to invest in upgrading eco-friendly equipment to mitigate emissions from coal mining operations[66] - The Group is applying for exploration and mining rights in the extended areas as part of its Updated Optimization and Upgrading Plan[69] - Funding for new capital assets is expected to come primarily from coal sales revenue and external banking facilities[70] - Ample Talent Ventures Limited agreed to acquire 80% equity interest in Harbour Group for a total consideration of HK$35,712,000[63] - The vendor guarantees that the audited consolidated net profit of the Target Group will be no less than HK$7,200,000 per annum for the years ending 31 December 2018, 2019, and 2020[63] - As of 31 March 2019, a deposit of approximately HK$3,571,000 was paid for the acquisition of the Target Group[65] - The acquisition of the Target Group will be accounted for using the acquisition method under HKFRS 3 Business Combinations[65] Governance and Management - The Company is committed to maintaining statutory and regulatory standards and adherence to corporate governance principles emphasizing transparency, independence, accountability, responsibility, and fairness[163] - The Board is collectively responsible for promoting the success of the Company by directing and supervising its affairs[165] - The Company has complied with the Corporate Governance Code throughout the year, except for a deviation from code provision A.2.1[164] - The independent non-executive Directors ensure high standards of financial and management reporting to the Board and shareholders[166] - The Company has independent non-executive directors serving on various listed companies, enhancing its governance structure[158] - The Board sets strategies for the Company and monitors the performance of senior management[165] - The Company emphasizes a balanced composition in the Board to maintain a strong independent element[166] - The Board held four regular meetings and two ad-hoc meetings during the year, with attendance records indicating that Kwan Man Fai attended all six meetings[172] - Independent non-executive Directors represent half of the Board, with two holding appropriate professional qualifications in accounting or related financial management expertise[176] - The Company has a policy for Board diversity, considering factors such as gender, age, and professional experience for appointments and succession planning[172] - All independent non-executive Directors have confirmed their independence annually, and the Company considers them independent after assessment[178] - At each annual general meeting, one-third of the Directors must retire by rotation, ensuring regular re-election[175] - The Company Secretary ensures that Board procedures are followed and all applicable rules and regulations are complied with[174] - The minutes of Board meetings are kept by the Company Secretary and are available for inspection by any Director[174] - The Company has appointed three independent non-executive Directors, fulfilling the requirements of the Listing Rules[176] - The service agreements of independent non-executive Directors have been extended for one year, subject to retirement by rotation[177] - The Board comprises three executive Directors and three independent non-executive Directors, providing a balance of skills and perspectives[172] - The Audit Committee consists of three independent non-executive directors, who attended all three meetings held during the year[194] - The Audit Committee reviewed the Group's consolidated financial statements for the year, ensuring compliance with applicable accounting standards and disclosure requirements[195] - The company did not have a designated Chief Executive Officer during the year, with the Chairman also fulfilling the CEO responsibilities, which the board deemed suitable for operational efficiency[186] - The Remuneration Committee was established in July 2005 and has undergone amendments to its terms of reference to comply with Listing Rules[196] - The company has provided appropriate insurance coverage for potential legal actions against directors and officers[183] - The independent non-executive directors have confirmed their independence in accordance with the listing rules[182] - The company has established three committees to oversee specific aspects of its affairs, ensuring high corporate governance standards[187] - The Audit Committee endorsed the accounting treatment adopted by the company during the year[195] - The company has conducted regular reviews of the structure and composition of its committees, focusing on the skills and experience of individual members[191] - The Compensation Committee was established in July 2005 with a specific scope of authority[198] - The scope of the Compensation Committee was revised on March 27, 2012, to comply with amendments to the listing rules[198] - The corporate governance report outlines the responsibilities as per the code provisions[200]
南南资源(01229) - 2019 - 年度财报