Unaudited interim consolidated report for the three months FY2023 ended 30th September 2022

Dear Ladies and Gentlemen,

Herewith we are presenting our interim consolidated financial report for the 1Q FY2023 ended 30th September 2022.

The Company continued operating in the extreme circumstances of on-going war with Russia. Maintaining the life of the mine in the face of power outages and the danger of rocket attacks required significant financial resources. In this regard, by the end of 2022 calendar year the Company sold 79.92% of shares in the Svyato-Pokrovska mine (Tekhinovatsiya LLC) that was mining thermal coal. Mine St.Matrona was working on dewatering mode, maintaining systems and ensuring safety and security of facilities of the site during first quarter of FY2022.

It is the Management Board's intention that the funds obtained as a result of the sale of 80% of the Svyato-Pokrovska mine's assets will be used to implement the Company's new strategy for 2023-2026. One of the assumptions of the strategy is to diversify the business by transferring part of the business to one of the European Union countries.

Summarized highlights of the 1Q FY2023 are presented below:

Total output. Output of coal in the 1Q FY2023 reached 5.3 thousand tonnes and remained almost flat q-o-q (5.4 thousand tonnes in 4Q FY2022) while increased by 60.6% y-o-y (3.3 thousand tonnes in 1Q FY2022).
Coal volume sales. In the 1Q FY2023 total coal volume sales composed 4.6 thousand tonnes demonstrating a 27.0% decline q-o-q (in 4QFY2022 coal sales composed 6.3 thousand tonnes) and improvement by 39.4% y-o-y (in 1Q FY2022 coal sales composed 3.3 thousand tonnes).
Revenue from coal sales. In the 1Q FY2023 coal sales revenue composed US\$0.3 million decreasing from US\$0.4 million in 4Q FY2022 or by 25.0% q-o-q as well as y-oy (in 1Q FY2022 coal sales revenue composed US\$0.3 million).
EBITDA. In the 1Q FY2023 the Company recorded negative EBITDA of US\$0.1 million as compared to EBITDA of US\$0.07 in the 4Q FY2022.

The Company strives to preserve business and optimize costs, tends to strengthen trading connections and minimize risks, both connected with economic and political environment as well arising from military conflict. In this respect the Company management has approved new development strategy. In line with the approved strategy as of the day of publication of this report the Company acquired two assets: LLC UKRMINERAL TRADING and ADVANCED INDUSTRIAL TECHNOLOGIES Sp. z o.o.

Viktor Vyshnevetskyy Chairman of the Board of Directors and Chief Executive Officer

General market and economic overview (on available statistical information)

In the first quarter of FY2023 Ukrainian economy was affected by military invasion and hostilities from Russian Federation, starting February 2022.

The first three months of FY2023 (3Q 2023 calendar year) for coal and energy industry are defined by preparations for the upcoming heating season. At the same time Ukrainian energy infrastructure facilities were under Russian crosshairs from the very beginning of the full-scale invasion, and about 50% of the energy infrastructure was damaged by shelling. As of the beginning of September 2022 an amount of 2.0 million tonnes of coals were accumulated on warehouses and in storage facilities of power plants. Meanwhile, for January-September 2022 calendar year Ukraine decreased amounts of imported coals y-o-y down to 4.5 million tonnes of coals. The total production of electricity in Ukraine for 2022 decreased by 27.5% compared to 2021. Electricity production at nuclear power plants fell by 28%, at thermal power plants by 35%, at thermal power plants by 32%, and generation by renewable energy sources decreased by 36%.Electricity consumption has decreased in 2022 by 31.5%, considering more that 50% of total electricity production was used by metallurgy plants, where two of main plants were destroyed by Russian invasion and logistical chains were disrupted by sea blockade. Due to the Russian invasion, the occupation of certain territories and missile attacks, Ukraine lost about 10 GW of various types of generation capacity, 6 GW of which is the Zaporizhzhya NPP. In addition, today about a quarter of the installed capacity of renewable energy sources is located in the occupied territories, including 75% of wind power plants and up to 15% of solar energy facilities.

It should be noted that the massive missile strikes on the energy infrastructure of Ukraine and, as a result, the general deficit in the energy system still affect the work of the Ukrainian metallurgy industry. According to the results of 2022, metallurgical enterprises of Ukraine reduced the production of steel by 70.7% as compared to 2021 down to 6.2 million tonnes, cast iron production decreased by 69.8% down to 6.39 million tonnes.

According to State Statistics Service in July-September 2022, the real GDP of Ukraine decreased by 30.8% as compared to the same period last year at the same time the economy of Ukraine grew by 9% on a quarterly basis. The Ministry of Economy predicted a slowdown in the rate of decline in Ukraine's GDP in 2022 to 33.2% y/y, inflation is expected at the level of 26.0%/.

In general, due to Russian aggression against Ukraine, the IMF expected a decrease in the growth rate of world GDP in 2022 from 4.2% to 3.6%, and in 2023 - from 3.8% to 3.6%. In addition, inflation expectations have been increased in developed countries this year - from 3.9% to 5.7%, in developing countries - from 5.9% to 8.7%.

Review of the financial and operational results of Coal Energy S.A. including parent company and its subsidiaries (hereinafter "Company") for the 3 months (1Q) FY2023

The following table summarizes the Company's key ratios for the 1Q FY2023, the 4Q FY2022, 1Q FY2022 (numbers are rounded):

COAL ENERGY S.A., 1Q FY2023 REPORT

in million of US\$	1Q FY2023	4Q FY2022	Relative change q-o-q	1Q FY2022	Relative change y-o-y
Revenue	0.3	0.4	(25.0%)	0.4	(25.0%)
Gross profit	(0.1)	0.01	n/a	(0.04)	n/a
EBIT	(0.3)	(0.1)	n/a	0.03	n/a
EBITDA	(0.1)	0.07	n/a	0.2	n/a
Net profit (loss)	(1.1)	(0.3)	n/a	0.01	n/a

Revenue

For the reporting period total revenue comprised US\$0.3 million versus US\$0.4 million for the 1Q FY2022 demonstrating a decline both y-o-y and q-o-q under influence of ceased operation in the circumstances of on-going war.

Coal sales volumes dynamics are presented in the table below (numbers are rounded):

in thousand tonnes	1Q FY2023	4Q FY2022	change in %	1Q FY2022	change in %
Thermal	4.6	6.3	(27.0%)	2.1	119.0%
Coking	-	-	-	1.2	-
Total	4.6	6.3	(27.0%)	3.3	39.4%

For the 1Q FY2023 coal sales composed 4.6 thousand tonnes and decreased q-o-q by 27.0%, however increased by 139,0% y-o-y. For the 1Q FY2023 the Company was selling thermal coal only.

Cost of sales and cash cost of production

The following table links cost of sales with total cash cost of production in each business segment of the Company in the 1Q FY2023 and the 4Q FY2022:

in thousand of US\$	1Q FY2023	4Q FY2022
Cost of sales	392	428
Less:
Change in inventories	(49)	(26)
Cost of other services	-	214
Depreciation and amortization	76	76
Total cash cost of production	365	164
Cash cost of mining per 1 tonne of ROM coal	68.9	30.4

Cash cost of mining was under negative influence of expenses of conditionally fixed nature (materials, wages, energy, etc.) factors q-o-q. During 1Q FY2023 cash cost of mining increased by 126.6% q-o-q.

Gross profit

Gross loss comprised US\$0.1 million for the reporting three months of FY2023 as compared to gross loss of US\$0.04 million in 1QFY2022 and declined on a quarterly basis from US\$0.01 million of profit in 4Q FY2022.

Operating profit

The Company recorded operating loss for the 1Q FY2023 amounting to US\$0.3 million thus representing a decline operating result from an operational profit of US\$0.03 million for the 1Q FY2022 and operating loss of US\$0.1 million for the 4Q FY2022 in line with reduction in Company's operational activity.

Financial costs

In the reporting quarter financial costs reached US\$0.8 million thus increasing as opposed to US\$0.02 million in the 1Q FY2022 y-o-y and opposed to US\$0.09 million in the 4Q FY2022 qo-q representing loss from non-operational exchange differences.

Net profit/loss

For the first three months of 2023FY the Company recorded US\$1.1 million of loss as compared to US\$0.01 million of profit for the 1Q FY2022 and US\$0.3 million of losses for the 4Q FY2022.

Production results

Thus coal output in the 1Q FY2023 composed 5.3 thousand tonnes of thermal coal as opposed to 3.3 thousand tonnes (2.1 thousand tonnes of thermal coal and 1.2 thousand tonnes coking coal) in the 1Q FY2022 or increased by 60.0% y-o-y, remaining almost flat q-o-q.

Risks and uncertainties

The Company's financial performance is dependent on the global price of and demand for coal

The Company's business is dependent on the global market price of coal. Sale prices and volumes in the worldwide coal market depend predominantly on the prevailing and expected levels of demand for and supply of coal, mainly from energy and steel manufacturers. Though Ukrainian coal market is a bit isolated, still global financial and economic crises may influence the Ukrainian coal prices.

To mitigate the price risk and risk of lowering demand, the Company endeavours to diversify its customer base both on local and export markets and aims to sign long-term framework contracts for coal supply. While prices are beyond control of the Company we constantly strive to lower and maintain low cost of production with the same level of operations quality.

The Company is subject to particular demands from customers which vary from customer to customer from product to product and from time to time

As the customer may require coal with higher efficiency characteristics the increased demand for higher grade coal may reduce demand and contract prices for coal with reduced energy efficiency.

The Company's production costs and costs of technologies applied by the Company may increase

COAL ENERGY S.A., 1Q FY2023 REPORT

The Company's main production expenses are energy costs, salaries and consumables. Changes in costs of the Group's mining and processing operations could occur as a result of unforeseen events and consequently result in changes in profitability or the feasibility and cost expectations in mining and processing existing reserves. Many of these changes may be beyond the Company's control.

Cost of mining operations per tonne as conditionally fixed (energy, water drainage, ventilation system, etc.) can not be reduced proportionally with the reduction of coal sales as the case may be. These costs need to be incurred in order to maintain certain safety of operations and to secure the Company's ability to increase production after the market revival. If sales for some particular coal grades from a particular asset are not expected to regain back their volume and price the Company may take decision to postpone mining operations on that asset and incur repairing and supportive works and hence incurring idle capacity expenses. Returning to the previous production levels may require additional capital investments amount of which can not be estimated reliably at the moment.

The risk has been realized as most of the Company's assets incurred various levels of damage due to heavy on-going military conflict at assets' locations. Hence various level of reconstruction for renovation of mining and coal waste processing will be needed. Exact amounts are still to be estimated.

Due to the on-going military conflict in the region there is a lack of strong supervision from the local authorities over the businesses as well as over any illegal mining activities in the region which may increase following the coal deficit in the market. Coal from such activities being cheaper in price may create further barriers for coal production restoration at state and privately held mines.

The Company's activity may be impacted by limited banking financing for its projects and operating activity as well as local currency devaluation

In order to continue investment program at the levels which would allow reaching the expected targets the Company needs external financing. Macroeconomic and political instability in the country make the banks reassess their country risk policies and they may either stop providing new financing to customers or even lower their credit exposures.

Macroeconomic instability could also push the population to transfer their savings into US\$ (creating devaluating pressure on the local currency) and/or even to take their savings away from the banking system which may additionally squeeze the banking system's liquidity.

During the last years foreign currency loans had a more attractive interest rate, had longer tenors of financing and were easier available than local currency (hryvnia) loans, hence foreign currency loans may be more attractive in general.

Nevertheless foreign currency loans expose to the exchange rate risks which may inflate liabilities denominated in the foreign currencies in case of local currency devaluation. In order to fulfil obligations under the conditions of limited export proceeds restructuring may be needed with the goal of extending maturities and postponing interest payments until the markets rebound and sufficient resources are accumulated to cover the realized risk.

The risk has been realized: during 2014-2015 local currency has devaluated in more than 3.5 times. Exchange rate remains volatile; this increases the devaluation expectations even higher.

COAL ENERGY S.A., 1Q FY2023 REPORT

Such situation caused huge instability and uncertainty in banking sector; new loan facilities are very limited. Company maintains a constant dialog with its existing creditors. The majority of existing loan facilities is either in the process of restructuring or in the "on hold" status.

The Company's activity may be influenced by political instability and/or uncertainty and escalation of military conflict in Ukraine

The risk has been realized: the ongoing war with Russian Federation may lead to damages to assets and inventories in scope which will make it impossible or economically not viable to restore them.

Mitigation of the risk is mainly outside of control of the Company on macro level at the same time the company has set a course to diversify its business outside of Ukraine (outside the military conflict).

Liquidity risk

As one of the major consequences of decreasing prices and lowering demand for coal is that the Company may need additional means to promote sales, i.e. providing customers with favourable trade credit terms, hence increasing working capital tied up mostly in the trade account receivables. If financial resources from lending institutions are available these additional working capital amounts could be financed respectively. The Company is in constant dialogue with its current financing banks in order to secure timely rolling over and extending of the credit facilities. Nevertheless the ability of banking institutions to lend depends highly on country risks of Ukraine and there own liquidity (UAH liquidity is formed mainly from the deposits of the local individuals and enterprises) which diminishes dramatically in the times of macroeconomic and political instability. In the situation of absence of bank financing to cover the increased trade credit conditions the Company will be forced to decrease sales.

The Company is cooperating with a number of private commercial banks which are subject to the regulations of the Ukrainian authorities. Banks' ability to perform in accordance with such regulations is out of control of the Company. Nevertheless if banks fail to comply with the Ukrainian legislation the regulator may impose various sanctions against them which may influence the ability of such banks to provide financing resources or might force the banks to draw back the financial resources provided to the Company if the Company does not fulfil obligations according to the loan agreements.

The Company can not mitigate the risk that the banks may demand early repayment and the Company will not be able to fund refinancing for such funds.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2022

1q2023FY

Coal Energy S.A. 1q2023FY

CONTENTS	PAGE
Statement of the board of director's responsibilities	3
Interim management report	4
Interim condensed consolidated statement of profit or loss and other comprehensive income	5
Interim condensed consolidated statement of financial position	6
Interim condensed consolidated statement of changes in equity	7
Interim condensed consolidated statement of cash flows	8
Notes to the interim condensed consolidated financial statements	9

STATEMENT OF THE BOARD OF DIRECTOR'S RESPONSIBILITIES

To the best of our knowledge, the interim condensed consolidated financial statements as of 30 September 2022 of Coal Energy S.A.(the "Group") which have been prepared in accordance with the International financial reporting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the both Coal Energy S.A. and its subsidiaries included into the Group, and the interim management report includes a fair review of the development and performance of the business and the position of the both Coal Energy S.A. and its subsidiaries included into the Group together with a description of the principal risks and uncertainties that they face for the three months ended 30 September 2022 as required under article 4(2)c) of the Transparency Law.

While preparing the interim condensed consolidated financial statements, the Board of Directors bears responsibility for the following issues:

selection of the appropriate accounting policies and their consistent application;
making judgments and estimates that are reasonable and prudent;
adherence to IFRS concepts or disclosure of all material departures from IFRS in the consolidated financial statements;
preparation of the consolidated financial statements on the going concern basis.

The Board of Directors confirms that it has complied with the above mentioned principles in preparing the interim condensed consolidated financial statements of the Group.

The Board of Directors is also responsible for:

keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Group;
taking reasonable steps to safeguard the assets of the Group and to prevent and detect fraud and other irregularities;
establishing for such internal controls is necessary to enable the preparation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error.

On behalf of the Board of Directors:

Directors A: Directors B:

__________signed_____________ Chairman of the Board of Directors Viktor Vyshnevetskyy

__________signed_____________ Business Development Director Oleksandr Reznyk

__________signed_____________ Independent Non-executive Director Arthur David Johnson

Luxembourg, 29 December 2023

__________signed_____________ Independent Non-executive Director Diyor Yakubov

INTERIM MANAGEMENT REPORT

Management of the Company hereby presents its interim condensed consolidated financial statements for the three months on 30 September 2022.

1. Results and developments during the three months ended on 30 September 2022.

For the three months ended 30 September 2022, the Group recorded an EBITDA loss amounted USD 107 thousand (EBITDA for the three months ended 30 September 2021 – USD 241 thousand). After depreciation, amortization, finance costs and finance income, the net loss after taxation for the three months ended 30 September 2022 amounted USD 1,097 thousand (net profit for the three months ended 30 September 2021 – USD 14 thousand).

2. Future developments of the Group.

The Group is optimizing internal reserves and is considering remaining options for funding its operations to cover liquidity needs in the environment of continuing military conflict in the Eastern Ukraine.

3. Activity in the field of research and development.

The Group is not involved in any activity in the field of research and development.

4. Own shares.

During the three months ended 30 September 2022, the Company and its affiliates have not repurchased shares of Coal Energy S.A.

5. Group's internal control.

Management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Group;
provide reasonable assurance that transactions are recorded, as necessary, to permit preparation of financial statements in accordance with IFRS;
provide reasonable assurance that receipts and expenditures of the Group are made in accordance with authorizations of Group's management and directors; and
provide reasonable assurance that unauthorized acquisition, use or disposition of Group's assets that could have a material effect on the financial statements would be prevented or detected on a timely basis.

Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

6. Risk Management.

The Group has implemented policies and procedures to manage and monitor financial market risks. Financial market activities are overseen by the CFO and the Group Management Board.

The Group does not use hedging derivatives.

On behalf of management

Directors A: Directors B:

__________signed_____________ Chairman of the Board of Directors Viktor Vyshnevetskyy

__________signed_____________ Business Development Director Oleksandr Reznyk

__________signed_____________

Independent Non-executive Director Arthur David Johnson

Luxembourg, 29 December 2023

__________signed_____________ Independent Non-executive Director Diyor Yakubov

INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

		3 months ended 30 September 2022	Year ended 30 June 2022	3 months ended 30 September 2021
	Note	(unaudited)	(unaudited)	(unaudited)
Revenue	5	285	2,291	432
Cost of sales	6	(392)	(2,106)	(473)
GROSS PROFIT/(LOSS)		(107)	185	(41)

General and administrative expenses	7	(16)	(129)	(17)
Selling and distribution expenses	8	-	-	-
Other operating income/(expenses), net	9	2	302	190
Recovery/(impairment) of financial assets		(34)	(275)	(107)
Idle capacity expenses	10	(106)	(145)	-
OPERATING PROFIT/(LOSS)		(261)	(62)	25
Other non-operating income/(expenses), net	11	(44)	29	-
Finance income	13	2	11	3
Finance expenses	14	(794)	(170)	(15)
Disposal of subsidiaries	32	-	-	-
PROFIT/(LOSS) BEFORE TAX		(1,097)	(192)	13

Income tax benefit/(expenses), net	15	-	(503)	1
NET PROFIT/(LOSS)		(1,097)	(695)	14
NET PROFIT/(LOSS) ATTRIBUTABLE TO:
Equity holders of the parent		(1,067)	(696)	12
Non-controlling interests		(30)	1	2
OTHER COMPREHENSIVE INCOME/(LOSS)
Reclassification of currency translation reserve	32	-	-	-
Effect of foreign currency translation		(1,022)	(428)	145
TOTAL OTHER COMPREHENSIVE INCOME/(LOSS)		(1,022)	(428)	145

TOTAL COMPREHENSIVE INCOME/(LOSS)		(2,119)	(1,123)	159
TOTAL COMPREHENSIVE INCOME/(LOSS)
ATTRIBUTABLE TO:
Equity holders of the parent		(2,119)	(1,135)	160
Non-controlling interests		-	12	(1)
EARNINGS PER SHARE
Weighted average number of ordinary shares		45,011,120	45,011,120	45,011,120
BASIC PROFIT/(LOSS) PER ORDINARY SHARE		(2.37)	(1.55)	0.03
(USD cents) *

* Basic profit/(loss) per ordinary share is equal to diluted profit/(loss) per ordinary share.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

	Note	30 September 2022 (unaudited)	30 June 2022 (unaudited)	30 September 2021 (unaudited)
ASSETS
Non-current assets
Property, plant and equipment	16	7,278	9,227	10,815
Intangible assets	17	79	103	124
Right-of-use assets	26	3,138	3,974	4,065
Financial assets	18	844	872	879
Deferred tax assets	15	-	-	39
		11,339	14,176	15,922
Current assets
Inventories	19	1,711	2,076	1,923
Trade and other receivables	20	1,136	1,978	823
Prepayments and prepaid expenses	21	-	1	27
Other taxes receivables	22	547	653	569
Cash and cash equivalents	23	-	3	3
		3,394	4,711	3,345
TOTAL ASSETS		14,733	18,887	19,267
EQUITY
Share capital	24	450	450	450
Share premium		77,578	77,578	77,578
Retained earnings		(2,599)	(1,532)	(824)
Currency translation reserve		(74,954)	(73,902)	(73,315)
Equity attributable to equity holders of the parent		475	2,594	3,889
Non-controlling interest		(129)	(129)	(142)
TOTAL EQUITY		346	2,465	3,747
LIABILITIES
Non-current liabilities
Lease liabilities	26	1,668	2,085	1,890
Defined benefit obligation		658	623	713
Provisions	27	867	1,042	1,005
Deferred tax liabilities	15	155	195	58
		3,348	3,945	3,666
Current liabilities
Loans and borrowings	25	923	934	930
Lease liabilities	26	327	409	370
Trade and other payables	28	4,880	5,698	5,485
Income tax payables	15	2,545	2,542	2,233
Defined benefit obligation		957	1,197	1,289
Other tax payables	22	1,407	1,697	1,547
		11,039	12,477	11,854
TOTAL LIABILITIES		14,387	16,422	15,520
TOTAL EQUITY AND LIABILITIES		14,733	18,887	19,267

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	Equity attributable to equity holders of the parent
	Share	Share	Retained	Currency		Non-controlling	Total
	capital	premium	earnings	translation reserve	Total	interest	equity
30 June 2021	450	77,578	(836)	(73,463)	3,729	(141)	3,588
Profit/(loss) for the year	-	-	(696)	-	(696)	1	(695)
Other comprehensive income/(loss)	-	-	-	(439)	(439)	11	(428)
Disposal of subsidiaries	-	-	-	-	-	-	-
30 June 2022	450	77,578	(1,532)	(73,902)	2,594	(129)	2,465
Profit/(loss) for the year	-	-	(1,067)	-	(1,067)	(30)	(1,097)
Other comprehensive income/(loss)	-	-	-	(1,052)	(1,052)	30	(1,022)
30 September 2022	450	77,578	(2,599)	(74,954)	475	(129)	346

Notes on pages 9 to 25 are an integral part of these consolidated financial statements.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

	3 months ended 30 September 2022	Year ended 30 June 2022	3 months ended 30 September 2021



































Cash and cash equivalents at the end of the period	-	3	3

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 GENERAL INFORMATION

1.1. Information about the Group

For the purposes of theses consolidated financial statements, Coal Energy S.A. ("Parent company") and its subsidiaries have been presented as the Group as follows:

Parent company and its subsidiaries	Country of incorporation	Group shareholding, % as of
		30 September 2022	30 September 2021
Coal Energy S.A.	Luxembourg	Parent	Parent
Nertera Investments Limited	Cyprus	100,00	100,00
C.E.C. Coal Energy Cyprus Limited	Cyprus	100,00	100,00
Coal Energy Trading Limited	British Virgin Islands	100,00	100,00
Tekhinovatsiya LLC	Ukraine	99,92	99,92
CwAL LE "Mine St.Matrona Moskovskaya"	Ukraine	99,00	99,00
Perspective resources LLC	Ukraine	100,00	100,00

The parent company, Coal Energy S.A., was incorporated in Luxembourg as a joint stock company on 17 June 2010. The registered office is located at 41 rue du Puits Romain, L-8070 Bertrange, Luxembourg and the Company number with the Registre de Commerce is B 154144. Principal activities of the Group are coal mining, coal beneficiation, waste dumps processing and sales of marketable coal. Major production facilities are located in Donetsk region of Ukraine.

1.2. Operating environment

As of 24 February 2022, the Russian Federation launched a large-scale military invasion of Ukraine. Russian missiles began to hit locations across Ukraine as well as Russian ground forces entered the country.

During the three months ended 30 September 2022, Ukrainian hryvna officially devaluated by 25% against USD. National Bank of Ukraine maintained key rate amounted to 25% and continued numerous currency restrictions to stabilize foreign exchange market and inflation rates.

2 BASIS OF PREPARATION OF THE CONSOLIDATED FINANCIAL STATEMENTS

2.1 Basis of preparation

The preparation of financial statements in accordance to International Financial Accounting Standards (IFRS) as adopted by European Union requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying of the Group`s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4.

These consolidated financial statements are presented in thousands of USD, unless otherwise stated.

2.2 Statement of compliance

The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU).

2.3 Going concern

During the three months ended 30 September 2022, the Group recorded USD 1,097 thousand of net loss (during the year ended 30 June 2022, the Group recorded USD 695 thousand of net loss). The Group suspended operation activity of CwAL LE "Mine St.Matrona Moskovskaya" and limited activity of Tekhinovatsiya LLC since the full-scale war actions in Ukraine.

As of the date of publication of these financial statements, the Management has no ability to accurately evaluate losses caused by invasion factors. Management makes the best possible steps to maintain suspended activity.

These consolidated financial statements are prepared on a going concern basis, which contemplates the realisation of assets and the settlement of liabilities in the normal course of business.

2.4 Basis of consolidation

(a) Subsidiaries

Subsidiaries are entities over which the Group has the power to govern the financial and operating policies. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

2 BASIS OF PREPARATION OF THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued, and liabilities incurred or assumed at the date of exchange. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

The excess of the cost of acquisition over the fair value of the group's share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the statement of comprehensive income. Costs appeared in connection with the purchase of subsidiaries are recognized as expenses.

Intragroup transactions, balances and unrealized gains on transactions between Group companies are eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. A change in the ownership interest of a subsidiary, without a change of control, is accounted for as an equity transaction. Subsequent to the loss of control of a subsidiary the value of remained share is revalued at fair value that influences the amount of income/loss from the disposal.

Before June 30, 2010 the Parent company did not have direct or indirect ownership interest in consolidated entities included in the consolidated financial statements. The pooling of interest method was applied for business combinations under common control for the earlier periods.

Financial statements of Parent company and its Subsidiaries, which are used while preparing the consolidated financial statements, should be prepared as at the same date on the basis of consistent application of accounting policy for all companies of the Group.

(b) Transactions with non-controlling interests

The Group applies a policy of treating transactions with non-controlling interests as transactions with parties external to the Group. The result of disposals to non-controlling interests being the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary are reflected in statements of changes in equity. Losses are attributed to the non-controlling interests even if that results in a deficit balance.

Non-controlling interests are derecognized when purchased, a subsidiary sold or liquidated and profit or loss on de-recognition is recorded in the consolidated statements of changes in equity.

2.5 Changes in accounting policy and disclosures

The Group has not applied the following standards and IFRIC interpretations and amendments to them that have been issued but are not yet effective:

IFRS 17 "Insurance Contracts" (effective for annual periods beginning on or after 1 January 2023);
IAS 1 "Presentation of Financial Statements" (Amendments): Classification of Liabilities as Current or Non-Current (effective for annual periods beginning on or after 1 January 2023);

The Group anticipates that the adoption of these standards and amendments in future periods will have no material impact on its financial statements. The Group currently does not plan early application of the above standards and interpretations.

3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3.1 Currency translation

(a) Functional and presentation currency

All items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entities operate (the "functional currency"). The national currency of Ukraine, Ukrainian Hryvnia ("UAH") is the functional currency for the Group's entities that operate in Ukraine. For the entities that operate in Cyprus, Luxembourg and British Virgin Islands (BVI) the functional currency is US dollar ("USD"). These consolidated financial statements are presented in thousands of US dollars, unless otherwise stated.

(b) Foreign currency transactions

Exchange rates used in the preparation of these interim condensed consolidated financial statements were as follows:

Date/period	UAH/USD
As of:
- 30 September 2022	36.5686
- 30 June 2022	29.2549
- 30 September 2021	26.5760
Average for the:
- three months ended 30 September 2022	34.9787
- three months ended 30 September 2021	26.9110

(c) Translation into presentation currency

all assets and liabilities, both monetary and non-monetary, are converted at closing exchange rates at the dates of each statements of financial position presented;
income and expense items are converted at the average exchange rates for the period, unless exchange rates fluctuate significantly during the period, in which case exchange rates at the date of transactions are used;
all equity items are converted at the historical exchange rates;
all resulting exchange differences are recognized as a separate component in other comprehensive income;
in the consolidated statements of cash flows, cash balances and beginning and end of each period presented are converted at exchange rates at the respective dates. All cash flows are converted at the average exchange rates for the periods presented. Resulting exchange differences are presented as effect of conversion to presentation currency.

3.2 Revenue from contracts with customers

The Group mines and sells coal commodities. Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services.

Revenue from rendering services is recognized based on the stage of work completion under each contract. When financial result can be measured reliably, revenue is recognized only to the extent of the amount of incurred charges, which can be recovered.

3.3 Income tax expense

Income tax expense represents the sum of the tax currently payable and deferred tax.

Income tax is recognized as an expense or income in profit and loss in the consolidated statements of comprehensive income, except when it relates to items recognized directly in other comprehensive income, or where they arise from the initial accounting for a business combination.

(a) Current tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to estimate the amount are those that are enacted or substantively enacted, by the reporting date, in the countries where the Group operates and generates taxable income. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

(b) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss;
in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized except:

where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss;
in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction either in other comprehensive income or directly in equity.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

3.4 Property, plant and equipment

Property, plant and equipment are stated at cost, net of accumulated depreciation and/or accumulated impairment losses, if any. Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to the statements of comprehensive income during the financial period in which they are incurred. Major renewals and improvements are capitalized, and the assets replaced are retired. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized in item 'Other non-operating income (expenses)' in the statement of comprehensive income.

Depreciation is calculated using the straight-line method over their estimated useful lives, as follows:

Underground mining	40 - 80 years
Buildings and constructions	35 - 50 years
Machinery, equipment and vehicles	5 - 10 years
Other	3 - 5 years

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each financial year end.

Mine development costs are capitalized and classified as capital construction-in-progress. Mine development costs are transferred to mining assets when a new mine reaches commercial production quantities. Capital construction-in-progress comprises costs directly related to construction of buildings, infrastructure, machinery and equipment. Cost also includes finance charges capitalized during construction period where such costs are financed by borrowings. Depreciation of these assets commences when the assets are put into operation

3.5 Lease

All leases are accounted for by recognizing a right-of-use asset and a lease liability except for:

– Leases of low-value assets;

– Leases with a duration of twelve months or less.

Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily determinable, in which case the Group's incremental borrowing rate on commencement of the lease is used. Variable lease payments are only included in the measurement of the lease liability if they depend on an index or rate. In such cases, the initial measurement of the lease liability assumes the variable element will remain unchanged throughout the lease term. Other variable lease payments are expensed in the period to which they relate.

On initial recognition, the carrying value of the lease liability also includes:

Amounts expected to be payable under any residual value guarantee;
The exercise price of any purchase option granted in favor of the Group if it is reasonable certain to assess that option;
Any penalties payable for terminating the lease, if the term of the lease has been estimated based on termination option being exercised.

Right-of-use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for:

– Lease payments made at or before commencement of the lease;

Initial direct costs incurred;
The amount of any provision recognized where the Group is contractually required to dismantle, remove or restore the leased asset.

Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made. Right-of-use assets are amortized on a straight-line basis over the remaining term of the lease or over the remaining economic life of the asset if, rarely, this is judged to be shorter than the lease term.

When the Group revises its estimate of the term of any lease (because, for example, it re-assesses the probability of a lessee extension or termination option being exercised), it adjusts the carrying amount of the lease liability to reflect the payments to make over the revised term, which are discounted at the same discount rate that applied on lease commencement. The carrying value of lease liabilities is similarly revised when the variable element of future lease payments dependent on a rate or index is revised. In both cases an equivalent adjustment is made to the carrying value of the right-of-use asset, with the revised carrying amount being amortized over the remaining (revised) lease term.

3.6 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

3.7 Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is reflected in profit or loss in the period in which the expenditure is incurred. Research costs are recognized as an expense as incurred. Costs incurred on development (relating to the design, construction and testing of new or improved devices, products, processes or systems) are recognized as intangible assets only when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of adequate resources to complete the development, and the ability to measure reliably the expenditure during the development. Other development expenditures are recognized as an expense as incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. Amortization is charged on a straight-line basis over the following economic useful lives of these assets:

Licenses, special permissions and patent rights	5 - 20 years
Other intangible assets	5 - 10 years

Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the cash generating unit level.

3.8 Impairment of non-current assets

The carrying amounts of the Group's assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Recoverable amount is the higher of fair value less cost to sell and value-in-use.

An impairment loss is recognized whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognized in the consolidated statements of comprehensive income.

Where an impairment loss subsequently reversed, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the original carrying amount that would have been determined had no impairment loss been recognized in prior periods. A reversal of an impairment loss is recognized in the consolidated statements of the comprehensive income.

3.9 Financial assets

Initial recognition and measurement

The Group classifies its financial assets as financial assets at fair value through profit or loss; loans and receivables; held-to-maturity investments; available for-sale financial assets. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of financial assets at initial recognition and re-evaluates this designation at every reporting date. The Group's financial assets include cash and short-term deposits, trade and other receivables, loan and other receivables. All financial assets are recognized initially at fair value plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. Fair value at initial recognition is best evidenced by the transaction price. A gain or loss on initial recognition is only recorded if there is a difference between fair value and transaction price which can be evidenced by other observable current market transactions in the same instrument or by a valuation technique whose inputs include only data from observable markets. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognized on the trade date, i.e., the date that the Group commits to purchase or sell the asset.

Subsequent measurement

The subsequent measurement of financial assets depends on their classification as follows:

(a) Financial assets at fair value through profit or loss. This category includes financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term.

(b) Loans and receivables. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Receivables include trade and other receivables. Loans are financial assets arising as a result of provision of funds to borrower.

(c) Held-to-maturity investments. Investments with fixed or determinable payments and fixed maturity that management has the positive intent and ability to hold to maturity, other than loans and receivables originated by the Group, are classified as held-to-maturity investments. Such investments are included in non-current assets, except for maturities within twelve months from the reporting date, which are classified as current assets.

(d) Available-for-sale financial assets. Investments intended to be held for an indefinite period of time, which may be sold in response to needs for liquidity or changes in interest rates, are classified as available-for-sale; these are included in non-current assets unless management has the express intention of holding the investment for less than 12 months from the reporting date or unless they will need to be sold to raise operating capital, in which case they are included in current assets. Available-for-sale financial assets are accounted at fair value through equity.

Subsequent to initial recognition all financial assets at fair value through profit or loss and all available-for-sale instruments are measured at fair value, except that any instrument that does not have a quoted market price in an active market and whose fair value cannot be reliably measured is stated at cost, including transaction costs, less impairment losses.

Loans and receivables and held-to-maturity assets are measured at amortized cost less impairment losses. Amortized cost is calculated using the effective interest rate method. Premiums and discounts, including initial transaction costs, are included in the carrying amount of the related instrument and amortized based on the effective interest rate of the instrument.

Receivables are accounted at net realizable value, less the allowance for doubtful debts. The amount of allowance for doubtful debts is accounted by using the method of total amount of doubtful debts.

Impairment of financial assets

The Group assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred 'loss event') and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganization and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

For financial assets carried at amortized cost, the amount of the impairment is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the financial asset's original effective interest rate.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of receivables, loans issued where the carrying amount is reduced through the use of an allowance for impairment. When a trade or other or loans issued receivables is considered uncollectible, it is written off against the allowance. On basis of the facts confirming that receivables or loans issued, previously recognized as doubtful, at the reporting date are not doubtful, the amount of previously charged reserve is reflected in income of the reporting period. Except for available-for-sale assets, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss reverses directly through profit and loss account. The reversal shall not result in a carrying amount of the financial asset that exceeds what the amortized cost would have been had the impairment not been recognized at the date the impairment is reversed.

When a decline in fair value of an available-for-sale investment has been recognized directly in other comprehensive income and there is objective evidence that investment is impaired, the cumulative loss that had been recognized directly in other comprehensive income is removed from other comprehensive income and recognized in profit or loss in the consolidated statements of comprehensive income even though the investment has not been derecognized. Impairment losses previously recognized through profit or loss in the consolidated statements of comprehensive income are not reversed. Any increase in fair value subsequent to an impairment loss is recognized directly in other comprehensive income.

Derecognition of financial assets

The Group derecognizes financial assets when:

the assets are redeemed or the rights to cash flows from the assets have otherwise expired;
or the Group has transferred substantially all the risks and rewards of ownership of the assets;
or the Group has neither transferred not retained substantially all risks and rewards of ownership but has not retained control. Control is retained if the counterparty does not have the practical ability to sell the asset in its entirety to an unrelated third party without needing to impose additional restrictions on the sale.

3.10 Financial liabilities

Initial recognition and measurement

The Group classifies its contractual obligations as financial liabilities at fair value through profit or loss, loans and borrowings. The Group classifies its financial liabilities at initial recognition. Financial liabilities, including borrowings, are initially measured at fair value, net of transaction cost. The Group's financial liabilities include trade and other payables, bank overdraft, loans and borrowings.

Subsequent measurement

The subsequent measurement of financial liabilities depends on their classification as follows:

(a) Financial liabilities at fair value through profit or loss. Financial liabilities at fair value through profit or loss include financial liabilities held for trading and those designated at initial recognition as liabilities at fair value through profit or loss;

(b) Loans and borrowings. Loans and borrowings are financial liabilities which the Group has after borrowings attraction. Loans and borrowings are classified as current liabilities except when the Group has unconditional right to delay settlement of obligation at least for 12 months.

Derecognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized through profit or loss.

3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

3.11 Inventories

Inventories are recorded at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. The cost of inventories is assigned by using the FIFO cost formula.

The cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The cost of work in progress and finished goods includes costs of raw materials, direct labor and other direct productions costs and related production overheads (based on normal operating capacity).

The Group periodically analyses inventories to determine whether they are damaged, obsolete or slow-moving or if their net realizable value has declined and makes an allowance for such inventories. If such situation occurred, the sum remissive the cost of inventories should be reflected in statements of comprehensive income. If the circumstances that caused the write-down no longer exist, the amount of the write-down is reversed.

At the date of financial statements preparation, the Group estimates the balances of finished products to determine whether there is any evidence of impairment. Amount of impairment is measured based on the analysis of prices in the market of such inventories, existed at the reporting date and issued in official sources.

3.12 Value added tax

Value added tax (VAT) output equals the total amount of VAT collected within a reporting period and arises on the earlier of the date of shipping goods to a customer or the date of receiving payment from the customer. VAT input is the amount that a taxpayer is entitled to offset against his VAT liability in a reporting period. Rights to VAT input arise on the earlier of the date of payment to the supplier or the date goods are received. Revenue, expenses and assets are recognized less VAT amount, except cases, when VAT arising on purchases of assets or services, is not recoverable by tax authority; in this case VAT is recognized as part of purchase costs or part of item of expenses respectively. Net amount of VAT, recoverable by tax authority or paid, is included into accounts receivable and payable, reflected in consolidated statements of financial position.

3.13 Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short term highly liquid investments with original maturities of six months or less.

For the purpose of the consolidated statements of cash flows, cash and cash equivalents comprise cash and short-term deposits as defined above, net of outstanding bank overdrafts.

3.14 Share capital

Ordinary shares are classified as equity. Nominal value of share capital of Parent company is specified in Note 24.

3.15 Legal reserve

Luxembourg companies are required to allocate to a legal reserve a minimum of 5% of the annual net income, until this reserve equals 10% of the subscribed share capital. This reserve may not be distributed.

3.16 Defined benefits plan obligations

The Group contributes to the Ukrainian state pension scheme, social insurance and employment funds in respect of its employees. The Group's pension scheme contributions are expensed as incurred. The contributions are included in expenses for wages and salaries. Companies comprising the Group provide additional post-employment benefits to those employees who are engaged in the industry with particularly detrimental and oppressive conditions of work. Under the Ukrainian legislation employees engaged in hazardous industry may retire earlier than usual terms stipulated by Employee Retirement Income Security Law. The Group reimburses to the State Pension Fund all pension payments which are to be paid to the employees until usual statutory date of retirement. In addition, according to the legislation, the Group makes payments related to providing the employees with domestic fuel (coal). The Group recognizes the liabilities in amount of this payment.

The liability recognized in the statement of financial position in respect of post-employment benefits is the present value of the defined benefit obligation at the balance sheet date together with adjustments for unrecognized actuarial gains or losses. The cost of providing benefits under the defined benefit plans is determined using the projected unit credit method. Actuarial gains and losses are recognized in the other comprehensive income statements in the period in which they occur.

3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

3.17 Provisions

Provisions are recognized when the Group has legal or constructive obligations as the result of past event for which it is probable that an outflow of economic benefits can be required to settle the obligations, and the amount of the obligations can be reliably estimated. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the statement of financial position date, considering the risks and uncertainties surrounding obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, it's carrying amount is the present value of those cash flows. Use of discounting results in recognition of financial expenses and increase in provision.

Management created provision for the payment of potential tax liabilities related to settlement of financial assets and liabilities. Though if the controlling authorities classify such transactions as a subject of taxation and apply such classification to the companies of the Group, actual taxes and penalties may differ from the Management assessment.

3.18 Environmental obligations

Environmental obligations include decommissioning and land restoration costs. The Group evaluates the provisions associated with ecological problems separately on every occasion taking into account the requirements of the relevant legislative acts.

Future decommissioning costs, discounted to net present value, are capitalized and the corresponding decommissioning obligations are raised as soon as the constructive obligation to incur such costs arises and the future decommissioning cost can be reliably estimated. Decommissioning costs are provided at the present value of expected costs to settle the obligation using estimated cash flows and are recognized as part of the cost of the asset.

The cash flows are discounted at a current pre-tax rate that reflects the risks specific to the decommissioning liability. The unwinding of the discount is expensed as incurred and recognized in the comprehensive income statement as a finance cost. The estimated future costs of decommissioning are reviewed annually and adjusted as appropriate. Changes in the estimated future costs or in the discount rate applied are added to or deducted from the cost of the asset. The amount deducted from the cost of the asset shall not exceed it's carrying amount. If a decrease in the liability exceeds the carrying amount of the asset, the excess shall be recognized immediately in profit or loss.

Provision for land restoration, representing the cost of restoring land damage after the commencement of commercial production, is estimated at net present value of the expenditures expected to settle the obligation. Change in provision and unwinding of discount on land restoration are recognized in the consolidated statements of comprehensive income. Ongoing rehabilitation costs are expensed when incurred.

3.19 Financial guarantee contracts

Management on annual basis assesses probability of risks that can be arising in relation of financial guarantee contracts through financial analysis of counterparties. If the risk is significant – financial guarantee contracts must be recognized as liabilities in notes to consolidated financial statements in accordance with IAS 37. Otherwise – if risk is insignificant – financial guarantee contracts liabilities must be disclosed as off-balance sheet liabilities.

4 SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES

The preparation of the Group's consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

In the process of applying the Group's accounting policies, management has made the following judgments, estimates and assumptions, which have the most significant effect on the amounts recognized in these consolidated financial statements:

Remaining useful life of property, plant and equipment

Management assesses the remaining useful life of property, plant and equipment in accordance with the current technical conditions of assets and estimated period when these assets bring economic benefit to the Group.

Impairment of non-current assets

An impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The fair value less costs to sell calculation is based on available data from binding sales transactions in an arm's length transaction of similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a discounted cash flow model. The recoverable amount is most sensitive to the growth rate used for extrapolation purposes (coal price, sales volume) and to the discount rate used for the discounted cash flow model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes.

4 SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (CONTINUED)

Defined benefits plan obligations

For the purpose of estimation of defined benefit obligation, the projected unit credit method was used, which includes the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

In determining the appropriate discount rate, management considers the interest rates of high-quality government bonds with extrapolated maturities corresponding to the expected duration of the defined benefit obligation. Future salary increases and pension increases are based on expected future inflation rates.

Environmental obligations

The Group's mining and processing activities are susceptible to various environmental laws and regulations changes. The Group estimates environmental obligations based on management's understanding of the current legal requirements, terms of the license agreements and internally generated estimates. Provision is made, based on net present values, for decommissioning and land restoration costs as soon as the obligation arises. Actual costs incurred in future periods could differ materially from the amounts provided. Additionally, future changes to environmental laws and regulations, life of mine estimates and discount rates could affect the carrying amount of this provision.

Income taxes

The Group is subject to income taxes in numerous jurisdictions. Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. The differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective Group company's domicile.

Deferred tax assets are recognized for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. If actual results differ from these estimates or if these estimates must be adjusted in future periods, the financial position and results of operations may be negatively affected.

Idle capacity expenses

Due to volatility of the coal market production capacity of the Group's individual Companies in some periods could be operated not according to its normal capacity of the production facilities. In the case of significant deviation of the actual capacity from the normal capacity, part of the fixed production overheads is reflected in item "Idle capacity expenses".

Management of the Group uses estimations and judgments to determine the following items: normal capacity of the individual companies, the period of the partial exploitation of the production capacity, amount of overheads that should be allocated.

Expected credit losses measurement

Measurement of expected credit losses (ECL) is a significant estimate that involves determination methodology, models and data inputs. The Group regularly reviews and validates the models and inputs to the models to reduce any differences between expected credit loss estimates and actual credit loss experience.

Legal proceedings

The Group's management applies significant assumptions in measurement and reflection of reserves and risks of exposure to contingent liabilities, related to existing legal proceedings and other unsettled claims, and also other contingent liabilities. Management's judgment is required in estimating the probability of a secured claim against the Group or incurring material liabilities, and in determining feasible amount of the final settlement or liabilities. Due to uncertainty inherent to the process of estimation, actual expenses may differ from the initial estimates. Such preliminary estimates may alter as far as new information is received, from internal specialists within the Group, if any, or from third parties, such as lawyers. Revision of such estimates may have significant effect on the future results of operating activity.

Contingent liabilities

Contingent liabilities are determined by the occurrence or non-occurrence of one or more future events. Measurement of contingent liabilities is tightly connected with development of significant judgments and estimates relating to the consequences of such future events.

5 INFORMATION ON OPERATING SEGMENTS

The group defines the following business segments that include goods and services distinguished by the level of risk and terms of income:

mineral resource and processing industry includes income from sale of own coal products and income from coal beneficiation;
trade activity includes income from sale of merchandises;
other activity includes income from rendering of other works and services.

Management controls the results of operating segments separately for the purpose of decision making about allocation of resources and performance measurement. The results of segments are estimated on profit/(loss) before tax.

Information about the segments of business for the three months ended 30 September 2022:

	Business segments
	Mineral resource and processing industry	Trade activity	Other activity	Non-allocated	Total
Revenue
Sales to external customers	284	-	1	-	285
(Loss)/profit before tax of the segment	(997)	15	(115)	-	(1,097)
Depreciation and amortization expenses	(154)	-	-	-	(154)
Defined benefits plan obligations expenses	(167)	-	-	-	(167)
Operational assets	13,342	-	-	1,391	14,733
Operational liabilities	8,843	36	1,401	4,107	14,387
Disclosure of other information
Capital expenditure	-	-	-	-	-

As of 30 September 2022 assets of segments do not include financial assets (USD 844 thousand), cash, other taxes receivable (USD 547 thousand) and deferred tax assets, since management of these assets is carried out at the Group's level.

As of 30 September 2022 liabilities of segments do not include deferred tax liabilities (USD 155 thousand), other taxes payable (USD 1,407 thousand) and income tax payables (USD 2,545 thousand), since management of these liabilities is carried out at the Group's level.

Information about the segments of business for the three months ended 30 September 2021:

	Business segments
	Mineral resource and processing industry	Trade activity	Other activity	Non-allocated	Total
Revenue
Sales to external customers	430	-	2	-	432
(Loss)/profit before tax of the segment	19	-	(6)	-	13
Depreciation and amortization expenses Defined benefits plan obligations expenses	(216) -	- -	- -	- -	(216) -
Operational assets	17,751	-	26	1,490	19,267
Operational liabilities	10,332	49	1,301	3,838	15,520
Disclosure of other information
Capital expenditure	58	-	-	-	58

As of 30 September 2021 assets of segments do not include financial assets (USD 879 thousand), cash (USD 3 thousand), other taxes receivable (USD 569 thousand) and deferred tax assets (USD 39 thousand), since management of these assets is carried out at the Group's level.

As of 30 September 2021 liabilities of segments do not include deferred tax liabilities (USD 58 thousand), other taxes payable (USD 1,547 thousand) and income tax payables (USD 2,233 thousand), since management of these liabilities is carried out at the Group's level.

	3 months ended 30 September 2022	Year ended 30 June 2022	3 months ended 30 September 2021
Revenue received from sale of finished goods	284	2,284	430
Revenue from trading activity	-	-	-
Revenue from other activity	1	7	2
	285	2,291	432

During the reviewed periods sales were performed on the territory of Ukraine exclusively. All non-current assets of the Group are located in Ukraine.

COAL ENERGY S.A. Interim Condensed Consolidated Financial Statements for the three months ended 30 September 2022 (all amounts in USD thousand, unless otherwise stated)

6 COST OF SALES

	3 months ended		3 months ended
	30 September	Year ended	30 September
	2022	30 June 2022	2021
Cost of merchandising inventory	-	-	-
Raw materials	(2)	(7)	-
Wages and salaries of operating personnel	(8)	(106)	(26)
Change in finished goods	49	190	-
Energy supply	(180)	(785)	(182)
Depreciation and amortization expenses	(76)	(727)	(216)
Subcontractors services	(169)	(542)	(16)
Other expenses	(6)	(129)	(33)
	(392)	(2,106)	(473)

7 GENERAL AND ADMINISTRATIVE EXPENSES

	30 September 2022	Year ended 30 June 2022	30 September 2021
Subcontractors services	(3)	(61)	(3)
Wages and salaries of administrative personnel	(13)	(60)	(13)
Depreciation and amortization expenses	-	(1)	-
Other expenses	-	(7)	(1)
	(16)	(129)	(17)

3 months ended

8 SELLING AND DISTRIBUTION EXPENSES

	3 months ended 30 September 2022	Year ended 30 June 2022	3 months ended 30 September 2021
Delivery costs	-	-	-
Subcontractors services	-	-	-
Wages and salaries of distribution personnel	-	-	-
Depreciation and amortization expenses	-	-	-
	-	-	-

9 OTHER OPERATING INCOME/EXPENSES, NET

	30 September 2022	Year ended 30 June 2022	30 September 2021
Doubtful debts income/(expenses)	-	46	55
Writing-off of VAT	-	(2)	-
Income from lease	8	34	9
Accounts payable write-off	24	241	126
Other operating income	-	-	-
Other operating expenses	(30)	(17)
	2	302	190

10 IDLE CAPACITY EXPENSES

	3 months ended		3 months ended
	30 September	Year ended	30 September
	2022	30 June 2022	2021
Depreciation and amortization expenses	(78)	(103)	-
Wages and salaries	(4)	(4)	-
Energy supply	(19)	(33)	-
Other expenses	(5)	(5)	-
	(106)	(145)	-

11 OTHER NON-OPERATING INCOME/EXPENSES, NET

	30 September 2022	Year ended 30 June 2022	30 September 2021
Impairment of non-current loans issued	-	-	-
Impairment of current assets	-	-	-
Recovery of previously impaired assets	-	-	-
Other payables write-off	-	-	-
Other non-operating income	120	29	-
Other non-operating expenses	(164)	-	-
	(44)	29	-

3 months ended

12 DEPRECIATION AND AMORTIZATION EXPENSES

	3 months ended 30 September 2022	Year ended 30 June 2022	3 months ended 30 September 2021
Depreciation
Idle capacity: depreciation expenses	(78)	(102)	-
Cost of sales	(73)	(713)	(212)
General and administrative expenses	-	(1)	-
	(151)	(816)	(212)
Amortization
Idle capacity: amortization expenses	-	(1)	-
Cost of sales	(3)	(14)	(4)
	(3)	(15)	(4)
	(154)	(831)	(216)

13 FINANCIAL INCOME

	3 months ended 30 September 2022	Year ended 30 June 2022	3 months ended 30 September 2021
Gain from non-operational exchange differences	-	-	-
Interests received	-	-	-
Income from measurement of financial instruments at amortized cost	2	11	3
Income from loans restructuring	-	-	-
	2	11	3

14 FINANCIAL EXPENSES

	3 months ended 30 September 2022	Year ended 30 June 2022	3 months ended 30 September 2021
Interest expenses	-	-	-
Loss from non-operational exchange differences	(790)	-	-
Unwinding of discount expenses	(1)	-	(11)
Loss from measurement of financial instruments at amortized cost	(3)	(170)	(4)
	(794)	(170)	(15)

15 INCOME TAX

	3 months ended		3 months ended
	30 September	Year ended	30 September
	2022	30 June 2022	2021
Current income tax	-	(309)	-
Deferred tax	-	(194)	1
Income tax income/(expenses)	-	(503)	1
At the beginning of the period	2,542	2,233	2,233
Current income tax charge	-	309	-
Disposal of subsidiaries	-	-	-
Effect of translation to presentation currency	3	-	-
At the end of the period	2,545	2,542	2,233
Effect
Profit/(loss) before tax	(1,097)	(192)	13
Income tax (18%)	197	35	(2)
Disposal of subsidiaries effect	-	-	-
Effect of different statutory tax rates of overseas jurisdictions	-	12	-
Tax effect of permanent differences	(197)	(356)	3
Income tax income/(expenses)	-	(309)	1

According to the Tax Code of Ukraine, a tax rate of 18% is applied starting from 1 January 2014.

15 INCOME TAX (continued)

Deferred tax assets and liabilities are measured at the income tax rates, which are expected to be applied in the periods when an asset is realized, or liability is calculated in accordance with the tax rates provided by the Tax Code of Ukraine.

		Effect of
	30 June 2022	Recognized in profit/(loss)	currency translation	30 September 2022
Effect of temporary differences on deferred tax assets
Intangible assets	15	-	(3)	12
Defined benefit plan obligations	34	-	(7)	27
Folded on individual Companies' level	(49)	-	10	(39)
Total deferred tax assets	-	-	-	-
Effect of temporary differences on deferred tax liabilities
Property, plant and equipment	(244)	-	50	(194)
Folded on individual Companies' level	49	-	(10)	39
Total deferred tax liabilities	(195)	-	(40)	(155)
Net deferred tax asset/(liability)	(195)	-	(40)	(155)

		Effect of
		Recognized in	currency	30 September
	30 June 2021	profit/(loss)	translation	2021
Effect of temporary differences on deferred tax assets
Inventories	17	-	-	17
Provisions	175	2	4	181
Defined benefit plan obligations	37	-	-	37
Folded on individual Companies' level	(193)	(3)	-	(196)
Total deferred tax assets	36	(1)	4	39
Effect of temporary differences on deferred tax liabilities
Property, plant and equipment, intangible assets	(248)	(1)	(5)	(254)
Folded on individual Companies' level	193	3	-	196
Total deferred tax liabilities	(55)	2	(5)	(58)
Net deferred tax asset/(liability)	(19)	1	(1)	(19)

16 PROPERTY, PLANT AND EQUIPMENT

			Machinery,
	Underground	Buildings and	equipment,		Construction
Historical cost	mining	constructions	vehicles	Other	in progress	Total
30 June 2021	7,139	1,551	2,107	77	3,304	14,178
Additions	58	-	-	-	25	83
Disposals	-	-	(49)	-	-	(49)
Effect of currency translation	(512)	(110)	(146)	(6)	(397)	(1,171)
30 June 2022	6,685	1,441	1,912	71	2,932	13,041
Additions	-	-	-	-	-	-
Disposals	-	-	-	-	-	-
Effect of currency translation	(1,337)	(288)	(383)	(14)	(587)	(2,609)
30 September 2022	5,348	1,153	1,529	57	2,345	10,432
Accumulated depreciation
30 June 2021	(1,515)	(574)	(1,338)	(73)	-	(3,500)
Depreciation charge for the period	(340)	(102)	(171)	(2)	-	(615)
Disposals	-	-	23	-	-	23
Effect of currency translation	125	45	102	6	-	278
30 June 2022	(1,730)	(631)	(1,384)	(69)	-	(3,814)
Depreciation for the period	(68)	(20)	(20)	-	-	(108)
Disposals	-	-	-	-	-	-
Effect of currency translation	349	127	278	14	-	768
30 September 2022	(1,449)	(524)	(1,126)	(55)	-	(3,154)
Net book value
30 June 2021	5,624	977	769	4	3,304	10,678
30 June 2022	4,955	810	528	2	2,932	9,227
30 September 2022	3,899	629	403	2	2,345	7,278

As of 30 September 2022 and 30 September 2021, property, plant and equipment were not pledged under loans and agreements. During the reporting period, there were no capitalized borrowing costs. During the reporting period, there were no capitalized research and development costs. The Group's mining activity currently relates to exploitation of the existing mines and mined beds. As of 30 September 2022 and 30 September 2021, contractual commitments for property, plant and equipment of the Group were immaterial.

As of the date of publication of these financial statements, the Group`s management has no possibility to estimate impact of military conflict on impairment of property, plant and equipment considering uncertainties of their future economic benefits.

17 INTANGIBLE ASSETS

	Licenses, special
	permissions and	Other intangible	Other projects and
Historical cost	patent rights	assets	permissions	Total
30 June 2021	287	11	1	299
Effect of currency translation	(20)	(1)	-	(21)
30 June 2022	267	10	1	278
Effect of currency translation	(54)	(2)	-	(56)
30 September 2022	213	8	1	222
Accumulated amortization
30 June 2021	(162)	(11)	(1)	(174)
Amortization charge for the period	(15)	-	-	(15)
Effect of currency translation	13	1	-	14
30 June 2022	(164)	(10)	(1)	(175)
Amortization charge for the period	(3)	-	-	(3)
Effect of currency translation	33	2	-	35
30 September 2022	(134)	(8)	(1)	(143)
Net book value
30 June 2021	125	-	-	125
30 June 2022	103	-	-	103
30 September 2022	79	-	-	79

Licenses, special permissions and patent rights are represented by special permissions for subsurface use # 5098 as of 30 December 2009 issued by Ministry of ecology and natural resources of Ukraine for 20 years.

18 FINANCIAL ASSETS

	30 September 2022	30 June 2022	30 September 2021
Non-current financial assets
Held-to-maturity investments	124	152	159
Loans issued	720	720	720
	844	872	879
Current financial assets
Loans issued	-	-	-
Allowance for loans issued	-	-	-
	-	-	-

Held-to maturity investments are non-interest notes, issued to related parties and discounted using effective interest rate of 18%. Management of the Group has the intention to hold these notes to maturity. Loans issued are interest-free loans issued to related parties.

19 INVENTORIES

	30 September		30 September
	2022	30 June 2022	2021
Merchandise	3	4	5
Finished goods	237	238	61
Raw materials	1,021	1,272	902
Spare parts	444	555	947
Other inventories	6	7	8
	1,711	2,076	1,923

As of 30 September 2020, loans were not secured by inventories (30 September 2020: USD 5,500 thousand).

As of the date of publication of financial statements, Management has no possibility to assess inventory damage and theft probability.

20 TRADE AND OTHER RECEIVABLES

	30 September		30 September
	2022	30 June 2022	2021
Trade receivables	3,558	4,102	3,094
ECL allowance for trade receivables	(2,422)	(2,124)	(2,327)
Other receivables	4,233	4,969	1,922
ECL allowance for other receivables	(4,233)	(4,969)	(1,866)
	1,136	1,978	823

As of 30 September 2022 and 30 September 2021, loans were not secured by trade and other receivables.

COAL ENERGY S.A. Interim Condensed Consolidated Financial Statements for the three months ended 30 September 2022 (all amounts in USD thousand, unless otherwise stated)

21 PREPAYMENTS AND PREPAID EXPENSES

	30 September 2022	30 June 2022	30 September 2021
Prepayments made and prepaid expenses	1,787	2,220	6,073
Allowance for prepayments made	(1,787)	(2,219)	(6,046)
	-	1	27
22 TAXES RECEIVABLE AND PAYABLE
	30 September		30 September
	2022	30 June 2022	2021
Current taxes receivable
VAT recoverable	547	653	569
	547	653	569
Current taxes payable
VAT payable	550	648	464
Payable for wages and salaries related taxes	504	623	644
Payables for other taxes	353	426	439
	1,407	1,697	1,547
23 CASH AND CASH EQUIVALENTS
	30 September		30 September
	2022	30 June 2022	2021
Cash in bank	-	2	2
Cash in hand	-	1	1
	-	3	3
24 SHARE CAPITAL
	30 September 2022	30 June 2022	30 September 2021

		30 September 2022		30 June 2022		2021
	%	Amount	%	Amount	%	Amount
Lycaste Holding Limited	60.15	271	60.15	271	75.00	338
Free float	25.00	112	25.00	112	25.00	112
Management of subsidiaries	14.85	67	14.85	67	-	-
	100.00	450	100.00	450	100.00	450

As of 15 December 2021, Lycaste Holdings Limited transferred 14.85% of total shares as bonus remuneration to the five Management members of the Ukrainian subsidiaries.

During the years ended 30 June 2022 and 30 June 2021, quantity of shares has not been changed.

25 LOANS AND BORROWINGS

		30 September
		2021

864	864	864
59	70	66
923	934	930
	2022	30 September 30 June 2022

Notes issued are presented by the interest-free notes. These notes are reflected at amortized cost using effective interest rate of 18%.

26 LEASE

	30 September		30 September
	2022	30 June 2022	2021
Due within 1 year	327	409	370
From 1 to 5 years	853	1,066	967
More than 5 years	815	1,019	923
	1,995	2,494	2,260

There are fixed payments on this contract, but each consequent lease payment is determined by correction of previous month payment on current month inflation rate. Amendments, addendums or cancellation of this contract are possible under agreement of both parties.

Right-of-use assets

	30 September		30 September
	2022	30 June 2022	2021
Property, plant and equipment	3,138	3,974	4,065
	3,138	3,974	4,065

COAL ENERGY S.A. Interim Condensed Consolidated Financial Statements for the three months ended 30 September 2022 (all amounts in USD thousand, unless otherwise stated)

27 PROVISIONS
	30 September		30 September
	2022	30 June 2022	2021
Non-current provisions
Provision for land restoration	852	1,024	987
Dismantling provision	15	18	18
	867	1,042	1,005

The Group liabilities, connected with environmental restoration, notably decommission of property, plant and equipment and land restoration under waste dumps. Estimation of liability bases on estimated prices of decommissions of property, plant and equipment and land restoration under waste dumps procedures. Discount rate used by the Group is 18%.

Management recognized provision for the payment of potential tax liabilities. However, if the tax authorities classify such transactions as subject to taxation and apply such classification to the companies of the Group, actual taxes and penalties may differ from the Management assessment.

28 TRADE AND OTHER PAYABLES

	30 September 2022	30 June 2022	30 September 2021
Trade payables	3,279	3,592	3,050
Payables for unused vacations	23	27	34
Payables for wages and salaries	785	969	986
Other payables	742	1,059	1,067
Advances received	51	51	348
	4,880	5,698	5,485

29 TRANSACTIONS WITH RELATED PARTIES

According to existing criteria of determination of related parties, the related parties of the Group are divided into the following categories:

Entities - related parties under common control with the Companies of the Group;
Entities - related parties, which have joint key management personnel with the Companies of the Group.

Ultimate controlling party is Mr. Vyshnevetskyy V.

The sales of finished goods, merchandises and rendering of the services to related parties are made at terms equivalent to those that prevail in arm's length transactions on market price basis.

Details of transactions between entities - related parties under common control with the Companies of the Group are disclosed below:

	3 months ended 30 September 2022	Year ended 30 June 2022	3 months ended 30 September 2021
Income from sales of finished products, goods	-	-	-
Income from rendering of services	-	54	-
Purchases of inventories	-	-	-

Details of balances between entities - related parties under common control with the Companies of the Group are disclosed below:

	30 September 2022	30 June 2022	30 September 2021
Held-to-maturity investments	124	152	-
Trade receivables	1	1	2
Allowances for trade receivables	(1)	(1)	(1)
Prepayments made	15	19	1,228
Allowances for prepayments made	(15)	(19)	(1,228)
Other receivables	989	1,236	197
Allowance for other receivables	(989)	(1,236)	(197)
Other payables	297	298	279
Current notes issued	59	70	-
Trade payables	3	3	3

30 CONTINGENT ASSETS AND LIABILITIES

In 2021 the Group has been involved in legal processes regarding non-compliance with the lease agreement terms by CwAL LE "Mine St.Matrona Moskovskaya" due to overdue payables for salaries and related contributions.

31 SUBSEQUENT EVENTS

As of 22 December 2022, the Group had sold 79.92% of shares in Tekhinovatsiya LLC for consideration amounted USD 1,300 thousand and Tekhinovatsiya LLC has been disposed from the Group. Detailed description of the following disposal will be presented in the appropriate financial statements.

As of 31 January 2023, the Supreme Court completely rejected the legal claim to the Group, described in the Note 30.

As of 15 December 2023, the Group has acquired a new subsidiary – Ukrmineral Trading LLC with the main purpose of obtaining licenses for the mining of mineral resources in Ukraine. Detailed description of the following acquisition will be presented in the appropriate financial statements.

As of 21 December 2023, the Group has acquired a new subsidiary – Advanced Industrial Technologies Sp. z.o.o. with the main purpose of providing underground mining services to coal mines in Poland. Detailed description of the following acquisition will be presented in the appropriate financial statements.

AI Terminal

Columbus Energy S.A.

6303_rns_2023-12-29_88890020-3540-4fa7-af08-a369c4a5b630.pdf

Dear Ladies and Gentlemen,

General market and economic overview (on available statistical information)

Review of the financial and operational results of Coal Energy S.A. including parent company and its subsidiaries (hereinafter "Company") for the 3 months (1Q) FY2023

COAL ENERGY S.A., 1Q FY2023 REPORT

Revenue

Cost of sales and cash cost of production

Gross profit

Operating profit

Financial costs

Net profit/loss

Production results

Risks and uncertainties

The Company's financial performance is dependent on the global price of and demand for coal

The Company is subject to particular demands from customers which vary from customer to customer from product to product and from time to time

COAL ENERGY S.A., 1Q FY2023 REPORT

The Company's activity may be impacted by limited banking financing for its projects and operating activity as well as local currency devaluation

COAL ENERGY S.A., 1Q FY2023 REPORT

Liquidity risk

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2022

1q2023FY

STATEMENT OF THE BOARD OF DIRECTOR'S RESPONSIBILITIES

INTERIM MANAGEMENT REPORT

1. Results and developments during the three months ended on 30 September 2022.

2. Future developments of the Group.

3. Activity in the field of research and development.

4. Own shares.

5. Group's internal control.

6. Risk Management.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 GENERAL INFORMATION

1.1. Information about the Group

1.2. Operating environment

2 BASIS OF PREPARATION OF THE CONSOLIDATED FINANCIAL STATEMENTS

2.1 Basis of preparation

2.2 Statement of compliance

2.3 Going concern

2.4 Basis of consolidation

(a) Subsidiaries

2 BASIS OF PREPARATION OF THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(b) Transactions with non-controlling interests

2.5 Changes in accounting policy and disclosures

3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3.1 Currency translation

(a) Functional and presentation currency

(b) Foreign currency transactions

(c) Translation into presentation currency

3.2 Revenue from contracts with customers

3.3 Income tax expense

(a) Current tax

(b) Deferred tax

3.4 Property, plant and equipment

3.5 Lease

3.6 Borrowing costs

3.7 Intangible assets

3.8 Impairment of non-current assets

3.9 Financial assets

Initial recognition and measurement

Subsequent measurement

Impairment of financial assets

Derecognition of financial assets

3.10 Financial liabilities

Initial recognition and measurement

Subsequent measurement

Derecognition

3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

3.11 Inventories

3.12 Value added tax

3.13 Cash and cash equivalents

3.14 Share capital

3.15 Legal reserve

3.16 Defined benefits plan obligations

3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

3.17 Provisions