Financial Performance - For the year ended March 31, 2023, the Group recorded a revenue of approximately HK$239,886,000, a decrease of 20.1% from HK$300,241,000 in 2022[14] - Gross profit for the year was approximately HK$133,829,000, down 17.8% from HK$162,596,000 in the previous year[14] - The Group reported a net loss of approximately HK$59,038,000, compared to a net profit of approximately HK$66,000,000 in 2022, representing a downturn of approximately HK$125,038,000[16] - The downturn in performance was primarily attributed to the net effects of various factors, including decreased gross profit and increased expenses[16] - Revenue from the coal mining business decreased by approximately HK$76,265,000 or approximately 27.69%, totaling approximately HK$199,198,000, primarily due to the COVID-19 outbreak and lockdown in Xinjiang[39] - The Group sold approximately 1,059,859 tonnes of coal during the Year, a decrease of approximately 46.69% compared to approximately 1,988,282 tonnes in the previous year, although the average selling price increased by approximately HK$49.41 per tonne or approximately 35.66%[39] - The gross profit for the Year decreased to approximately HK$133,829,000, a decrease of approximately HK$28,767,000 or approximately 17.69%, while the gross profit margin increased by approximately 1.63% to approximately 55.79%[51] - The IT Services business revenue increased by approximately HK$16,097,000 or approximately 76.66%, totaling approximately HK$37,094,000, due to recovery from COVID-19[41] - Other revenue for the Year was approximately HK$4,147,000, representing an increase of approximately HK$2,842,000 or approximately 217.78% compared to the previous year, mainly due to interest income and government grants[52] Expenses and Losses - Administrative and other operating expenses increased by approximately HK$6,812,000, from HK$42,084,000 in 2022 to HK$48,896,000 in 2023[17] - Loss on fair value and loss arising from modification of convertible bonds was approximately HK$116,835,000, significantly higher than the loss of approximately HK$11,254,000 in 2022[17] - Finance costs decreased by approximately HK$3,128,000, from HK$10,342,000 in 2022 to HK$7,214,000 in 2023[17] - Income tax expenses increased by approximately HK$3,681,000, from HK$22,940,000 in 2022 to HK$26,621,000 in 2023[17] - The loss was influenced by a fair value loss on convertible bonds of approximately HK$116,835,000, compared to a loss of approximately HK$11,254,000 in 2022, reflecting a significant increase in fair value[59] 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[19] - The Group aims to diversify its business in the long run while continuing to develop its existing operations[19] - The coal produced in Xinjiang is primarily consumed locally due to high logistics and transportation costs[19] - The Group's strategy includes optimizing and upgrading the Kaiyuan Mine to increase its mining area and efficiency[20] - The Group completed the acquisition of NEFIN Group in October 2018, focusing on renewable energy solutions in Malaysia, and has since allocated resources to solar energy projects[19] - The acquisition of Harbour Group Holdings in April 2019 expanded the Group's IT services business into the UK, Malaysia, and Singapore[19] Mining Rights and Resources - The acquisition of the new mining right for the Enlarged Kaiyuan Mine includes an expanded mining area of 4.1123 km², with an estimated coal resource of 41.6433 million tonnes over a mining life of 30 years[26] - The total consideration for the new mining right acquisition is RMB 160,978,000, to be paid in fifteen installments, with the first installment of RMB 32,200,000 already paid[26] - The new mining permit for the Enlarged Kaiyuan Mine has been renewed for ten years, extending the mining term to October 2031[26] - The estimated remaining coal reserve in the Xinjiang mine as of March 31, 2023, was approximately 63.91 million tonnes, a decrease from approximately 65.22 million tonnes in the previous year[84] - As of March 31, 2023, the estimated remaining coal reserves of the Group's Kaiyuan Mine are approximately 5.11 million tons, while the total estimated reserves in Xinjiang are approximately 63.91 million tons[88] - The current mining right is set to expire in August 2049, and the Group is eligible for renewal without significant incremental costs[98] Financial Position and Borrowings - As of March 31, 2023, the Group's total interest-bearing borrowings amounted to approximately HK$3,477,000, a significant decrease from approximately HK$37,254,000 in 2022[118] - The average effective interest rates on the interest-bearing borrowings ranged from 3.3% to 6.0% per annum, compared to 3.9% to 9.7% in 2022[118] - Non-current liabilities increased to approximately HK$373,898,000 in 2023 from approximately HK$85,091,000 in 2022, primarily due to the non-current portion of Convertible Bonds[118] - The Group's gearing ratio rose to approximately 2.98 in 2023 from approximately 1.37 in 2022, indicating a higher level of debt relative to equity[118] - Net current assets increased to approximately HK$168,512,000 in 2023 from net current liabilities of approximately HK$32,068,000 in 2022[120] - Cash and cash equivalents decreased to approximately HK$234,113,000 in 2023 from approximately HK$260,753,000 in 2022, contributing to total current assets of approximately HK$250,912,000[120] - Current liabilities significantly reduced to approximately HK$82,400,000 in 2023 from approximately HK$306,990,000 in 2022, mainly due to a decrease in interest-bearing borrowings[120] Corporate Governance - The company is committed to maintaining statutory and regulatory standards and adherence to corporate governance principles emphasizing transparency, independence, accountability, responsibility, and fairness[151] - The Board is collectively responsible for promoting the success of the company by directing and supervising its affairs[153] - The executive Directors and senior management are responsible for the day-to-day operations of the company, while independent non-executive Directors ensure high standards of financial and management reporting[154] - The Company has complied with the code provisions set out in the Corporate Governance Code throughout the year, with a noted deviation from code provision C.2.1[152] - The Board consists of three executive directors and three independent non-executive directors, ensuring a balance of skills and diversity[158] - The Company held four regular board meetings and one ad-hoc meeting during the year, with all directors attending 100% of the meetings[168] - The independent non-executive directors represent half of the Board, with two holding appropriate professional qualifications in accounting or related financial management expertise[175] - The Board Diversity Policy was adopted on January 1, 2022, focusing on gender, age, cultural background, and professional experience for board appointments[159] - The Nomination Committee is responsible for implementing and monitoring the Board Diversity Policy, with annual reviews to ensure effectiveness[163] - The Company complies with Listing Rules requiring at least three independent non-executive directors, constituting one-third of the Board[167] - Directors are subject to retirement by rotation at least once every three years during the annual general meeting[174] - The minutes of Board meetings are maintained by the company secretary and are available for inspection by any director[173] - The Company has extended service agreements for two independent non-executive directors for one year starting March 25, 2023[176] - The Board ensures that all members receive timely and necessary information to fulfill their duties effectively[170] - The Company has received annual confirmations of independence from all independent non-executive directors, and the Nomination Committee has assessed their independence as of June 27, 2023[177] - The Board comprises three independent non-executive directors, representing 50% of the Board, with two having appropriate professional qualifications in accounting or related financial management[180] - The Independent View Policy requires at least three independent non-executive directors, with at least one serving less than nine years on the Board[186] - All directors have confirmed compliance with the Model Code for Securities Transactions throughout the year[196] - The Company provides appropriate insurance cover for directors and officers against potential legal actions[182] - The Board is satisfied with the implementation and effectiveness of the Independent View Policy for the year[195] - The Company has adopted a code of conduct regarding securities transactions by directors as per the Listing Rules[199] - The Board committees are required to comprise a majority of independent non-executive directors[187] - The Company conducts internal Board evaluations led by an independent non-executive director to assess performance[193] - The roles of chairman and chief executive are separated as per the Code provision C.2.1[200]
南南资源(01229) - 2023 - 年度财报