Financial Performance - The Group recorded a revenue of approximately HK$127,989,000 for the year ended 31 March 2020, an increase of 69.2% compared to HK$75,625,000 in 2019[10] - Gross profit for the year was approximately HK$52,214,000, up 68.0% from HK$31,083,000 in the previous year[10] - The net loss for the year was approximately HK$24,604,000, a downturn of approximately HK$53,447,000 compared to a profit of HK$28,843,000 in 2019[10] - The increase in finance costs was approximately HK$5,988,000, compared to approximately HK$964,000 in 2019, reflecting a significant rise in financial expenses[10] - Administrative and other operating expenses increased by approximately HK$20,723,000 during the year[10] - A supplemental resources fee of approximately HK$85,688,000 was incurred in the current year, compared to nil in 2019[10] - The impairment loss on goodwill was approximately HK$3,831,000, with no such loss reported in the previous year[10] - The change in fair value of financial liabilities at fair value through profit or loss was approximately HK$71,443,000, compared to HK$29,373,000 in 2019[10] - The Group did not recommend the payment of any dividend for the year, consistent with the previous year[10] - The increase in gross profit was approximately HK$21,131,000, indicating improved operational efficiency despite the net loss[10] Business Segments and Operations - The Group operates in three business segments: coal mining, renewable energy, and IT services, with a primary focus on coal mining in Xinjiang, China[12] - The revenue from the coal mining business was approximately HK$73,910,000, a decrease of approximately HK$1,324,000 or approximately 1.76% compared to approximately HK$75,234,000 last year[36] - The Group sold approximately 1,037,492 tonnes of coal during the Year, a decrease of approximately 41.20% in volume compared to approximately 1,764,591 tonnes in the previous year[36] - The renewable energy business achieved a turnover of approximately HK$775,000, up from approximately HK$391,000 in the previous year, primarily due to the acquisition of this business segment[39] - The IT services business contributed revenue of approximately HK$53,304,000, compared to nil in the previous year[39] Mining Rights and Permits - The acquisition of the New Mining Right for the Enlarged Kaiyuan Mine includes an enlarged mining area of 4.1123 km², with an estimated coal resource of 41.6433 million tonnes for a mining life of 30 years[14] - The consideration for the New Mining Right is RMB 160,978,000, to be paid in fifteen instalments, with the first instalment of RMB 32,200,000 already paid[14] - The New Mining Permit for the Enlarged Kaiyuan Mine was granted for a term of one year and has been renewed for two additional years, expiring on 21 December 2021[14] - A supplemental resources fee of RMB 76,502,500 is required for 19.8 million tonnes of coal, representing the difference between the accumulated output and the output of the Kaiyuan Mine[16] - The sales and operation of the Enlarged Kaiyuan Mine have been temporarily suspended since 21 December 2019 due to the expiry of the New Mining Permit[17] - The New Mining Permit was renewed in March 2020, but the resumption application has not been approved due to ongoing safety requirement rectifications[18] - The Temporary Suspension is expected to negatively impact the financial results for the first half of the financial year 2020/2021[19] Acquisitions and Investments - The acquisition of 80% shareholding interest in Harbour Group Holdings was completed for HK$35,712,000, with an additional subscription of 450 ordinary shares for HK$2,008,800[25] - The company indirectly holds an 80.86% interest in Harbour Group Holdings after the completion of the acquisition and subscription[25] - The Harbour Group Acquisition was settled with HK$28,512,000 in cash and HK$7,200,000 through promissory notes[25] - The Directors believe that the Harbour Group Acquisition and Subscription can broaden the Group's revenue base and benefit from diversified returns in the future[27] - The Group plans to invest in capital assets for new plants and machines for environmental protection and safety improvements, with funding expected from coal sales revenue and external banking facilities[29] - The Group is exploring new markets and seeking to extend its business coverage in technological and renewable energy sectors, including acquisitions of Harbour Group and NEFIN Group[29] Governance and Management - Mr. Kwan has been the chairman and managing director since March 2017, with over 10 years of experience in corporate finance and banking[112] - The company has several cross-directorships among its key executives, indicating a closely-knit management structure[117] - The company is focused on business development and legal aspects through its executive team, which includes professionals with diverse backgrounds[117] - The management team has a strong educational background, with degrees from prestigious institutions such as the University of Hong Kong and McMaster University[117] - The independent non-executive directors are involved in key committees such as the audit, remuneration, and nomination committees, ensuring corporate governance[119][120][124] - The Company has complied with the Corporate Governance Code throughout the year, except for a deviation from code provision A.2.1[130] - The Board consists of three executive Directors, three independent non-executive Directors, and one alternate Director, ensuring a balance of skills and experience[136] Financial Position and Liabilities - As of March 31, 2020, the Group reported net current assets of approximately HK$127,070,000, an increase from approximately HK$84,255,000 in 2019[100] - The Group's cash and cash equivalents were approximately HK$235,126,000, down from approximately HK$416,662,000 in 2019, with restricted bank balances of approximately HK$73,760,000[100] - Current liabilities decreased to approximately HK$132,624,000 from approximately HK$348,204,000 in 2019, primarily due to a reduction in trade and other payables[100] - Non-current liabilities surged to approximately HK$233,637,000 from approximately HK$3,257,000 in 2019, largely due to the issuance of a convertible bond[102] - The Group's gearing ratio increased to approximately 1.98 in 2020 from 1.55 in 2019, indicating a higher level of debt relative to equity[102] Board Diversity and Composition - The Company adopted a policy on Board diversity in June 2014, revised in January 2019, considering factors such as gender, age, and professional experience for appointments[137] - The Board includes members with professional experience in multinational entrepreneurship, legal practices, corporate finance, accounting, and financial management[185] - The Company has a total of 8 directors, with 4 having over 10 years of service and 2 having 1-5 years of service[185] - The Nomination Committee evaluates candidates based on integrity, industry experience, and relevant skills[200] - Diversity in gender, age, cultural background, and professional experience is emphasized for board composition[200]
南南资源(01229) - 2020 - 年度财报