能源及能量环球(01142) - 2025 - 年度财报

Company Information The company's board and committee members saw several changes, including new appointments and resignations, during the reporting period - During the reporting period, the company's board of directors and various committee members underwent several changes, including the appointment of Mr. Liao Huicheng and Ms. Sun Meng as directors, Mr. Wang Weihua as an independent non-executive director and chairman of the audit committee, and Mr. Liang Youwen's resignation[3] Chairman's Statement This year, the Group turned from profit to loss, primarily due to a significant non-cash impairment loss on exploration and evaluation assets related to Russian coal mines, while Korean oil trading revenue declined due to geopolitical tensions | Indicator | For the year ended March 31 | | :--- | :--- | | | 2025 | 2024 | | Revenue | Approximately HKD 489 million | Approximately HKD 665 million | | (Loss) Profit Before Income Tax | Approximately (HKD 329 million) | Approximately HKD 109 million | - The annual results turned from profit to loss, primarily due to an increase of approximately HKD 787 million in impairment loss on exploration and evaluation assets related to the mining rights of Russian coal mine Area 2, caused by declining coal prices, ruble appreciation, and anticipated cost inflation[6] - Looking ahead, the Group will focus on its core businesses: (i) trading of diesel and gasoline; and (ii) coal mining, while actively seeking other types of mining development projects in other countries to achieve business diversification[8] Management Discussion and Analysis During the reporting period, the Group's total revenue decreased by 26.37% year-on-year to HKD 489 million, primarily due to geopolitical tensions affecting Korean diesel and gasoline sales, resulting in a pre-tax loss of HKD 329 million mainly driven by a non-cash impairment loss on exploration assets of HKD 787 million, partially offset by other non-cash gains Financial Review This year, total revenue decreased by 26.37% to HKD 489 million, primarily due to reduced diesel sales, and the results turned from profit to loss, recording a pre-tax loss of HKD 329 million mainly dragged by a non-cash impairment loss on exploration assets of up to HKD 787 million | Revenue Composition | 2025 (HKD thousands) | 2024 (HKD thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Diesel Sales | 369,330 | 510,960 | -27.7% | | Gasoline Sales | 90,020 | 123,340 | -27.0% | | Other Related Products and Services | 21,100 | 30,400 | -30.6% | | Total Revenue | 489,450 | 664,700 | -26.37% | - The decline in revenue was primarily due to geopolitical tensions (such as the Russia-Ukraine conflict, Israel-Gaza conflict) and economic uncertainties leading to reduced purchasing appetite from major customers[13] - Significant changes in net other gains and losses were recorded this year, primarily including: - Impairment loss on exploration and evaluation assets of approximately HKD 787 million (compared to a reversal of HKD 143 million last year)[15][19] - Gain from waived interest received on convertible notes of approximately HKD 468 million[15][19] - Gain from write-off of interest-bearing borrowings of approximately HKD 50 million[15][19] Operations Review This year, all of the Group's revenue was derived from its Korean diesel, gasoline, and related product trading business, which was maintained through strategic management despite market volatility, while Russian coal mining operations are progressing with technical designs and environmental assessments - 100% of the Group's revenue was derived from its petroleum product trading business in Korea[23] - To stabilize its trading business, the Group implemented several measures, including: offering competitive prices to gas stations, maintaining stable supply, reducing transportation costs, utilizing social media for "non-contact marketing," and actively pursuing sales[20] - Regarding the Russian coal mining project, the Group is conducting technical design and environmental assessments for mining plans in Area 1 and Area 2, researching new methods such as mine ventilation and backfilling goafs, and evaluating the possibility of complete import substitution for equipment[21][22] Outlook Looking ahead, global economic conditions and geopolitical tensions will continue to pose challenges for the Group, which will focus on optimizing its core trading and coal mining businesses, actively seeking diversification opportunities, and pursuing equity financing to improve its financial position - Facing ongoing global economic volatility, high interest rates, and geopolitical risks (Russia-Ukraine conflict, US-China trade disputes, Middle East conflicts), the Group anticipates a challenging year ahead[24] - Core business strategies: - Trading Business: Will strengthen its market position in Korea through ten measures, including offering competitive prices, ensuring stable supply, improving product quality, and operating more gas stations[25] - Coal Mining Business: Will continue to communicate with the government, experts, and local communities to advance the Russian coal mine project, and research introducing automation tools to improve efficiency and reduce costs[26] - To improve its financial position, the company will actively seek potential equity financing opportunities, such as issuing new shares under specific or general mandates[27] Liquidity and Financial Resources As of March 31, 2025, the Group faced liquidity pressure with net current liabilities of approximately HKD 87.12 million, a significant improvement from last year, and has implemented cost controls and sought financing, including issuing new convertible notes to settle old debts | Indicator | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Net Current Liabilities | Approximately HKD 87.12 million | Approximately HKD 3.705 billion | | Current Ratio | Approximately 11.63% | Approximately 0.39% | | Debt-to-Asset Ratio | Approximately 9.90% | Approximately 8.46% | - The Group improved liquidity by implementing cost controls, seeking financing from financial institutions, and pursuing equity fundraising opportunities, raising approximately HKD 13.39 million in loans during the year for daily operations and Russian coal mine preparatory work[30] - To address major liabilities, the company completed the issuance of new convertible notes with a principal amount of USD 400 million in March 2025, fully settling liabilities under the convertible notes issued in 2013, amounting to approximately HKD 3.591 billion[31] Share Capital Structure and Reorganization As of March 31, 2025, the company's authorized share capital was HKD 1 billion, and during the year, it completed a capital reorganization by reducing the par value of issued shares to HKD 0.01 and subdividing authorized but unissued shares, effective March 17, 2025, to improve its financial position - The company proposed in November 2024 and completed in March 2025 a capital reorganization, primarily involving: - Reducing the par value of each issued share from HKD 0.50 to HKD 0.01[35] - Subdividing authorized but unissued shares into shares with a par value of HKD 0.01 each[36] Key Risks and Uncertainties The Group faces multiple significant risks, including reliance on major customers and suppliers, high business and geographical concentration, significant impact of international coal price fluctuations on asset valuation, mining license renewal risks, legal proceedings, debt maturity and financing difficulties, geopolitical tensions, and foreign exchange fluctuation risks - Business and Market Risks: - Revenue is highly dependent on a few customers and suppliers[39] - Trading business is concentrated in Korea, susceptible to local policies[39] - Revenue is entirely from petroleum product trading, overly concentrated[39] - Fluctuations in international coal prices pose significant accounting risks to the valuation of Russian mining assets[39] - Operational and Geopolitical Risks: - The mining license for Russian Area 1 will expire in 2029, with renewal uncertainty[39] - Mining rights are concentrated in Russia, susceptible to local policy and regulatory changes[42] - The Russia-Ukraine conflict and related sanctions continue to negatively impact the Russian economy and the Group's operations (e.g., fund remittances)[42] - Financial and Legal Risks: - The Group is involved in multiple legal proceedings with unknown outcomes[42] - Creditors may not extend debt maturities, and the Group may be unable to obtain additional financing, affecting liquidity[42] - Faces foreign exchange fluctuation risks among HKD, USD, RUB, and KRW[42] Report of the Directors This report outlines the Group's business, performance, and corporate governance status for the year ended March 31, 2025, primarily focusing on Russian coal mining rights and Korean petroleum product trading, with no dividends recommended and disclosures on customer/supplier concentration, director/shareholder changes, and compliance with listing rules Principal Activities, Results, and Appropriations The Company is an investment holding company, with subsidiaries primarily engaged in holding coal mining and exploration rights in Russia and trading petroleum products in Korea, and the Board does not recommend any dividend for the year ended March 31, 2025 - The Group's principal activities are: 1. Holding coal mining and exploration rights in Russia[52] - 2. Trading diesel, gasoline, and other products in Korea[52] - The Board does not recommend the payment of any dividend for the year ended March 31, 2025[55] Major Customers and Suppliers This year, the Group's reliance on major customers and suppliers increased, with the top five customers contributing 42.42% of total revenue and the top five suppliers accounting for 51.51% of total purchases | Concentration Indicators | 2025 | 2024 | | :--- | :--- | :--- | | Customers | | | | Top Five Customers as % of Total Revenue | 42.42% | 39.06% | | Largest Customer as % of Total Revenue | 12.69% | 11.30% | | Suppliers | | | | Top Five Suppliers as % of Total Purchases | 51.51% | 48.42% | | Largest Supplier as % of Total Purchases | 13.70% | 13.34% | Directors and Major Shareholders During and after the reporting period, the Board of Directors underwent several changes, including new appointments, resignations, and re-designations, with the report confirming the independence of all independent non-executive directors and identifying Space Hong Kong Enterprise Limited, E-tron Co., Ltd, and Solidarity Partnership as major shareholders as of March 31, 2025 - Director changes during the year included: - Mr. Liang Youwen resigned as an independent non-executive director on October 18, 2024[65] - Mr. Liao Huicheng and Ms. Sun Meng were appointed as executive director and non-executive director, respectively, on November 4, 2024[66] - Mr. Wang Weihua was appointed as an independent non-executive director on January 17, 2025[66] - Ms. Sun Meng was re-designated from non-executive director to executive director on July 15, 2025[66] | Major Shareholder Name | Capacity | Percentage of Shareholding | | :--- | :--- | :--- | | Space Hong Kong Enterprise Limited | Beneficial Owner | 29.74% | | E-tron Co., Ltd | Beneficial Owner | 16.67% | | Solidarity Partnership | Beneficial Owner | 12.00% | | Kim Wuju | Beneficial Owner | 5.13% | Compliance and Other Matters During the reporting period, the company temporarily failed to fully comply with listing rules regarding independent non-executive directors and audit committee composition but restored compliance on January 17, 2025, following a new appointment, and maintained sufficient public float - The company previously failed to comply with Listing Rules 3.10(1), 3.10(2), and 3.21, but compliance was restored on January 17, 2025, following the appointment of Mr. Wang Weihua as an independent non-executive director and chairman of the audit committee[93] - Subsequent to the reporting period, Ms. Sun Meng was re-designated from non-executive director to executive director, effective July 15, 2025[98] - Based on available information, the company maintained a sufficient public float of over 25%, complying with Listing Rules[100] Corporate Governance Report This year, the company committed to maintaining a high level of corporate governance, complying with most provisions of the Corporate Governance Code, with deviations only in failing to arrange appropriate liability insurance for directors during a specific period, while detailing Board composition, committee functions, risk management, and shareholder communication policies Board of Directors and Directors As of March 31, 2025, the Board of Directors comprised seven directors with a balanced structure, held seven meetings with high attendance, adopted a Board Diversity Policy with a 30% female representation, and ensured all directors participated in continuous professional development activities - The company failed to arrange appropriate legal liability insurance for directors between February 20, 2024, and November 28, 2024, deviating from Corporate Governance Code provision C.1.8, but a new policy became effective on November 29[107] | Director Name | Board Meeting Attendance Rate | | :--- | :--- | | Mr. Lee Jaeseong | 7/7 | | Mr. Im Jonghak | 7/7 | | Mr. Liao Huicheng | 4/4 | | Ms. Sun Meng | 4/4 | | Ms. Chan Tai | 7/7 | | Mr. Kim Sung Rae | 7/7 | | Mr. Liang Youwen (resigned) | 1/1 | | Mr. Wang Weihua (newly appointed) | 0/0 | Board Committees The Board has three committees: Remuneration, Audit, and Nomination, all composed primarily of independent non-executive directors, which held meetings to review director and senior management remuneration, financial statements and internal controls, and the Board's structure and composition, respectively - The Remuneration Committee comprises Ms. Chan Tai (Chairperson), Mr. Kim Sung Rae, and Mr. Wang Weihua, all of whom are independent non-executive directors[125] - The Audit Committee comprises Mr. Wang Weihua (Chairman), Ms. Chan Tai, and Mr. Kim Sung Rae, all of whom are independent non-executive directors, with Chairman Mr. Wang possessing appropriate accounting professional qualifications[129] - The Nomination Committee comprises Mr. Lee Jaeseong (Chairman) and three independent non-executive directors (Ms. Chan Tai, Mr. Kim Sung Rae, and Mr. Wang Weihua)[132] Accountability, Risk Management, and Shareholder Rights The Board confirms its responsibility for preparing true and fair financial statements and overseeing the Group's risk management and internal control systems, with internal audit services provided by an external firm, and the Articles of Association safeguard shareholder rights to convene extraordinary general meetings and provide clear communication channels - The Board is fully responsible for overseeing the Group's risk management policies, risk register, and internal controls, reviewing their effectiveness annually, and during the year, the company engaged BDO Limited to provide internal audit services[135] - Shareholders holding not less than one-tenth of the company's paid-up share capital have the right to request the Board to convene an extraordinary general meeting[138] - To align with the paperless listing mechanism, the company adopted the second revised and restated Articles of Association through an amendment passed at the Annual General Meeting on September 27, 2024[141] Independent Auditor's Report The auditor, BDO Limited, issued an unmodified opinion on the Group's consolidated financial statements for the year ended March 31, 2025, but highlighted a material uncertainty related to going concern due to the Group's annual loss, net current liabilities, and net liabilities, also emphasizing the potential impact of the Russia-Ukraine war and identifying key audit matters including asset impairment and convertible note valuations Opinion and Emphasis of Matter The auditor issued an unmodified opinion, deeming the financial statements true and fair, but emphasized the potential impact of the Russia-Ukraine war and a material uncertainty related to going concern, noting the Group's loss and liability position may cast significant doubt on its ability to continue as a going concern - The auditor believes the consolidated financial statements present a true and fair view of the Group's financial position and performance in accordance with Hong Kong Financial Reporting Standards[144] - Material Uncertainty Related to Going Concern: As of March 31, 2025, the Group recorded a loss attributable to owners of approximately HKD 329 million, net current liabilities of approximately HKD 87.12 million, and net liabilities of approximately HKD 1.978 billion, indicating a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern[147] Key Audit Matters The auditor identified three key audit matters: the impairment assessment of exploration and evaluation assets due to their materiality and significant management judgment, the valuation of investment properties assessed by external valuers, and the valuation of convertible notes calculated by external valuers using an option pricing model - Impairment Assessment of Exploration and Evaluation Assets: As of March 31, 2025, the net book value of these assets was approximately HKD 1.423 billion, considered a key audit matter due to their materiality and the significant management judgments involved in the assessment (e.g., coal prices, reserves, discount rates)[150][153] - Valuation of Investment Properties: As of March 31, 2025, the net book value of these assets was approximately HKD 26.01 million, constituting a key audit matter as their fair value was determined by external independent valuers using the comparative approach[152][154] - Valuation of Convertible Notes: As of March 31, 2025, the net book value of this liability was approximately HKD 3.170 billion, considered a key audit matter as its fair value at the issuance date was calculated by external independent valuers using a binomial option pricing model, involving complex estimations[157][158] Consolidated Financial Statements This section contains the Group's four core financial statements and their detailed notes for the year ended March 31, 2025, showing a shift from profit to loss primarily due to non-operating items, a net liability position with significantly reduced current liabilities, and net cash inflow from financing activities, with notes explaining accounting policies, key estimates, and emphasizing going concern uncertainty Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended March 31, 2025, the Group's revenue was HKD 489 million, a decrease from HKD 665 million last year, and due to significant net other losses, the Group turned from a profit last year to a loss this year, with a loss attributable to owners of HKD 329 million and basic and diluted loss per share of HKD 2.27 | Item (HKD thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 489,447 | 664,701 | | Gross Profit | 6,187 | 7,652 | | Net Other Gains and Losses | (305,504) | 129,734 | | (Loss) Profit Before Income Tax | (329,014) | 108,658 | | (Loss) Profit for the Year | (329,342) | 105,630 | | (Loss) Profit Attributable to Owners of the Company | (329,045) | 106,899 | | Basic (Loss) Earnings Per Share (HKD) | (2.27) | 0.74 | Consolidated Statement of Financial Position As of March 31, 2025, the Group's total assets were HKD 1.477 billion and total liabilities were HKD 3.455 billion, resulting in net liabilities of HKD 1.978 billion, an increase from last year, with current liabilities significantly decreasing due to the restructuring of convertible notes payable into non-current liabilities, while exploration and evaluation assets remain the largest asset item despite substantial impairment | Item (HKD thousands) | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Non-current Assets | 1,465,045 | 2,149,147 | | Current Assets | 11,470 | 14,448 | | Total Assets | 1,476,515 | 2,163,595 | | Liabilities | | | | Current Liabilities | 98,589 | 3,719,510 | | Non-current Liabilities | 3,356,084 | 194,887 | | Total Liabilities | 3,454,673 | 3,914,397 | | Net Liabilities | (1,978,158) | (1,750,802) | | Equity Attributable to Owners of the Company | (1,941,077) | (1,714,719) | Consolidated Statement of Cash Flows For the year ended March 31, 2025, the Group generated a net cash outflow of HKD 4.30 million from operating activities and HKD 2.50 million from investing activities, but a net cash inflow of HKD 9.94 million from financing activities, resulting in a HKD 3.14 million increase in cash and cash equivalents at year-end, with a balance of HKD 2.44 million | Item (HKD thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | (4,302) | 190 | | Net Cash Used in Investing Activities | (2,498) | (7,358) | | Net Cash Generated from Financing Activities | 9,942 | 2,706 | | Increase (Decrease) in Cash and Cash Equivalents | 3,142 | (4,462) | | Cash and Cash Equivalents at Year-End | 2,443 | 228 | Notes to the Consolidated Financial Statements The notes to the financial statements provide detailed explanations of the Group's financial position and performance, highlighting material uncertainty related to going concern, revenue entirely from Korean oil trading, significant asset impairment in Russian mining, restructuring of old debt via new convertible notes, resolution of major legal proceedings, and post-reporting period events including new loan financing and convertible note conversions Note 2: Basis of Presentation of Consolidated Financial Statements This note emphasizes that despite the Group recording an annual loss, net current liabilities, and capital deficiency, indicating a material uncertainty regarding its ability to continue as a going concern, the directors believe that through measures such as cost controls, financial support commitments, and successful issuance of new convertible notes, the Group will have sufficient funds to meet its future financial obligations, thus making the preparation of financial statements on a going concern basis appropriate - As of March 31, 2025, the Group recorded a loss attributable to owners of approximately HKD 329 million, current liabilities exceeding current assets by approximately HKD 87.12 million, and a capital deficiency of approximately HKD 1.978 billion, indicating a material uncertainty regarding its ability to continue as a going concern[179] - To improve liquidity, the Group has obtained agreements from major shareholders, a director, and an associated company to extend the repayment periods of their matured debts and secured new loan financing support[185] - In December 2024, the company entered into an agreement to issue new convertible notes with a principal amount of USD 400 million to fully settle old convertible note liabilities of approximately HKD 3.59 billion, aiming to improve its financial position[182] Note 9: Segment Information The Group's reportable segments are "Mining" and "Trading," with all revenue this year derived from the Korean Trading segment, amounting to HKD 489 million, while the Mining segment recorded a HKD 786 million loss primarily from asset impairment, and the Trading segment recorded a HKD 1.56 million profit | Segment (HKD thousands) | Revenue | (Loss) Profit | | :--- | :--- | :--- | | 2025 | | | | Mining | — | (786,012) | | Trading | 489,447 | 1,560 | | 2024 | | | | Mining | — | 136,346 | | Trading | 664,701 | (10,843) | - All of the Group's revenue was derived from the Korean market, while non-current assets were primarily located in Russia (approximately HKD 1.437 billion) and Korea (approximately HKD 27.73 million)[327] Note 23: Exploration and Evaluation Assets As of March 31, 2025, the net book value of exploration and evaluation assets (Lapichevskaya Mine-2 in Russia) was HKD 1.423 billion, a significant decrease from last year, with an impairment loss of approximately HKD 787 million recognized this year due to factors such as delayed expected production, declining coal prices, cost inflation, and increased discount rates | Exploration and Evaluation Assets (HKD thousands) | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Cost | 3,636,396 | 3,634,450 | | Accumulated Impairment Loss | (2,213,231) | (1,526,844) | | Net Book Value | 1,423,165 | 2,107,606 | - An impairment loss of approximately HKD 787 million was recognized this year, primarily due to: - Change in the expected first production year[360] - Decline in relevant coal prices[362] - Changes in expected future cost inflation rates and increased production costs[362] - Increase in post-tax discount rate from 37.00% to 38.00%[362] Note 36: Convertible Notes Payable This year, the Group made significant progress in addressing its substantial convertible note liabilities by entering into an agreement in December 2024 to issue new convertible notes with a principal amount of USD 400 million to fully settle approximately HKD 3.591 billion of liabilities under the original third tranche, converting a significant current liability into a five-year non-current liability and greatly improving liquidity - On December 2, 2024, the company entered into an agreement to issue new convertible notes to fully settle approximately HKD 3.591 billion of liabilities under the third tranche of convertible notes[398] | Changes in Convertible Notes Liability Component (HKD thousands) | Amount | | :--- | :--- | | As of March 31, 2024 | 3,591,498 | | Settled during the year | (3,123,042) | | Waived interest received | (468,456) | | Issuance of new convertible notes | 3,160,314 | | Estimated interest deducted during the year | 9,917 | | As of March 31, 2025 | 3,170,231 | Note 44: Litigation This note details several legal proceedings involving the Group, with a significant development being the termination by consent order on November 13, 2024, of multiple major lawsuits concerning the ownership of the third tranche of convertible notes and related matters, marking the resolution of complex legal disputes and significantly reducing legal risks and uncertainties - Multiple consolidated lawsuits (HCA 1071/2017, HCA 2501/2017, HCA 2520/2018) involving Daily Loyal, China Panda (Golden China), and Gold Ocean (Solidarity Partnership) regarding the ownership of the third tranche of convertible notes were terminated by consent order on November 13, 2024[451][464][470] - Two counterclaims (HCA 2077/2017, HCA 2079/2017) filed by Lucrezia Limited and Token Century Limited were also terminated by consent on November 13, 2024[455][457] - A civil lawsuit (HCA 706/2010) filed by the company against three former directors was dismissed by judgment on July 18, 2023, marking the conclusion of a decade-long litigation[475] Note 48: Events After the Reporting Period Subsequent to the reporting period, the Group had two significant events: the company received conversion notices from new convertible note holders, which, if fully converted, would result in the issuance of up to approximately 6.7 billion new shares, and it entered into a loan financing agreement with an independent party, securing a financial support commitment of up to USD 12 million - In March and May 2025, the company received conversion notices from convertible note holders, and upon fulfillment of conditions, up to 6,698,640,000 conversion shares will be issued[490] - On April 7, 2025, the company entered into a loan financing agreement with an independent party, securing a financial support commitment of up to approximately USD 12 million to support the company's operations[490] Financial Summary This summary presents the Group's key performance and financial position over the past five fiscal years, indicating a two-year decline in revenue since 2023, significant fluctuations between profit and loss with a substantial loss in 2025, a peak in total assets in 2024 followed by a decline, and a consistent net liability position with continuously negative equity attributable to owners | Item (HKD thousands) | 2025 | 2024 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | Results | | | | | | | Revenue | 489,447 | 664,701 | 1,149,675 | 1,168,035 | 1,243,111 | | (Loss) Profit Attributable to Owners of the Company | (329,045) | 106,899 | 550,211 | (343,499) | 524,584 | | Assets and Liabilities | | | | | | | Total Assets | 1,476,515 | 2,163,595 | 2,045,010 | 1,469,641 | 1,843,934 | | Total Liabilities | 3,454,673 | 3,914,397 | 3,899,915 | 3,851,729 | 3,836,867 | | Equity Attributable to Owners of the Company | (1,941,077) | (1,714,719) | (1,818,656) | (2,368,641) | (1,988,443) |