Columbus Energy S.A.

Quarterly Report • Nov 29, 2021

Unaudited interim consolidated report for the three months FY2022 ended 30th September 2021

Dear Ladies and Gentlemen,

Herewith we are presenting our interim consolidated financial report for the 1Q FY2022 ended 30th September 2021 with updated structure after finalization of business restructuring.

As of the beginning of our Company's 2022 financial year quarantine measures were still in place in Ukraine due to the COVID-19 pandemic.

In the first quarter of financial year 2022, the Company observed a trend towards a significant increase in prices for coking and thermal coal. By the end of Q1 of FY2022, coal prices reached historical maximum. Increase in revenues from coal sales is already reflecting in some extent the higher prices of coal. However greater impact of coal prices will be visible in the coming quarters, when the Company will be selling coal to deliver newly negotiated contracts. Generally we can see that the demand for coal in Ukraine is very high, both for coking and energetic coal and it should sustain on those levels in the coming months.

We are increasing the coal output following completion of restructuring process. Our average monthly output in 1rd quarter 2022 (FY) was 1.1 thousand tones, while in October 1.7 thousand tones and it is growing. While the levels of output are still low, the Company is working on enhancements of its mining capacities. Current coal market conditions also allow to organize a contract based financing to secure the working capital for greater output.

. Summarized highlights of the 1Q FY2022 are presented below:

• Total output. Output of coking coal and thermal coal in the 1Q FY2022 reached 3.3 thousand tonnes, or increased by 65.0% (2.0 thousand tonnes in 4Q FY2021) q-o-q.
• Coal volume sales. In the 1Q FY2022 total coal volume sales composed 3.3 thousand tonnes demonstrating a 52.2% decline q-o-q (in 4Q FY2021 coal sales composed 6.9 thousand tonnes) and improvement by 135.7% y-o-y (in 1Q FY21 coal sales composed 1.4 thousand tonnes).
• Revenue from coal sales. In the 1Q FY2022 coal sales revenue composed US\$0.4 million increasing from US\$0.3 million in 4Q FY2021 or by 33.3% q-o-q due to an increase in coal prices.
• EBITDA. In the 1Q FY2022 the Company recorded EBITDA of US\$0.2 million as compared to US\$0.05 in the 4Q FY2021.

During the 1st quarter of 2022 the Company has been conducting a number of analysis of potential mining licenses for coal and other minerals. Current market conditions allow to receive a trade debt financing to secure sufficient working capital to explore potential opportunities. We are also approaching different potential partners to discuss implementation of our technologies in other mining locations.

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 2020 financial year the Company continued to operate under adverse influence of military conflict and trade blockade in the East of Ukraine where most of the operational assets of the Company are located.

The first three months of FY2022 (3Q 2021 calendar year) for coal and energy industry are defined by preparations for the upcoming heating season. In this regard 0.5 million tonnes of coals were accumulated on warehouses and in storage facilities of power plants as of the 1st November 2021 while guaranteed amount of reserves requires at least 0.8 million tonnes of coal. Meanwhile, for 3Q 2021 calendar year (1Q FY2021) coal production composed 6.49 million tonnes, including 5.09 million of thermal coal and 1,4 million of coking coal, total coal output declined by 18.0% y-o-y and by 12.3% q-o-q . For 9M of 2021 calendar year total coal output amounted to 21.8 million tonnes and increased by 3.7% y-o-y.

For 3Q 2021 calendar year Ukraine imported 4.39 million tonnes coals, demonstrating growth by 7.1% y-o-y. Meanwhile for 9M 2021 calendar year, TPPs generated electricity by 4.9% less than in the corresponding period of 2020 share of Thermal Power Plants in the structure of electricity production composed 29.6% in January-September 2021 (down from 32.9% for 9M 2020 calendar year).

Advance in steel prices contributed to an increase in coking coal prices in all markets. Further China's coal import prices hit 10-year record \$ 585 / t in September 2021.For 9M 2021 calendar year about 79.3% of produced metal products were exported, for 3Q 2021 calendar year 75.1% were exported. Steel production for 9 months of 2021 calendar year increased by 6.3% y-o-y and composed 16.1 million tonnes. For 3Q 2021 calendar year (1Q FY2021) Ukrainian enterprises produced 5.4 million tonnes of steel, demonstrating growth by 3.8% y-o-y Meanwhile, in total for 9 months of 2021, 9.6 million tonnes of coals were supplied to Ukrainian coke-chemical enterprises. The share of imported coals in the total supply volume for mentioned period amounted to 71.7% against 73.6% for the same period of 2020. For 3Q 2021 calendar year (1Q FY2021) 2.95 million tonnes of coals were supplied to Ukrainian coke-chemical enterprises, share of imported coals amounted to 74.6% Demand and prices in the global metal market remain volatile, intensifying competition and protectionism.

General economic outlook for 2021 calendar year by National Bank of Ukraine suggests GDP growth by 3.1% and average annual inflation rate around 9.6%. While expectations for 2022 calendar year according to NBU are as follows: GDP growth will make up 3.8% and inflation is estimated circa 5.0%. According to NBU experts an unfavorable situation in the energy market together with the consequences of logistics problems in the world will restrain the pace of economic recovery next year.

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) FY2022

The following table summarizes the Company's key margins and ratios for the 1Q FY2022, the 4Q FY2021, 1Q FY2021 (numbers are rounded):

in million of US\$	1Q FY2022	4Q FY2021	Relative change q-o-q	1Q FY2021	Relative change y-o-y
Revenue	0.4	0.4	0.0%	0.1	471.4%
Gross profit	(0.04)	(0.1)	n/a	0.03	n/a
EBIT	0.03	(0.2)	n/a	(0.7)	n/a
EBITDA	0.2	0.05	300.0%	(0.1)	(300.0%)
Net profit (loss)	0.01	(0.7)	n/a	(2.8)	n/a
as a percentage of revenue
Gross margin %	(10.0%)	(25.0%)		42.9%
EBIT %	7.5%	(50.0%)		(1000.0%)
EBITDA %	50.0%	12.5%		(142.9%)
Net earnings %	2.5%	(175.0%)		(4000.0%)

Revenue

For the reporting period total revenue comprised US\$0.4 million versus US\$0.1 million for the 1Q FY2021 demonstrating considerable growth y-o-y under recovering of Company's business after business restructurization. At the same time on quarterly basis total revenue remained flat (US\$0.4 million in 1Q FY22).

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

in thousand tonnes	1Q FY2022	4Q FY2021	change in %	1Q FY2021	change in %
Thermal	2.1	3.3	n/a	-	n/a
Coking	1.2	3.6	(66.7%)	1.4	(14.3%)
Total	3.3	6.9	(52.2%)	1.4	135.7%

For the 1Q FY2022 coal sales composed 3.3 thousand tonnes and decreased q-o-q as in the 4Q FY2021 additional volumes from warehouses have been sold. However increased by 135,7% yo-y.

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 FY2022 and the 4Q FY2021:

COAL ENERGY S.A., 1Q FY2022 REPORT

in thousand of US\$	1Q FY2022	4Q FY2021
Cost of sales	473	522
Less:
Cost of merchandising inventory	-	145
Change in inventories	-	121
Cost of other services	16	31
Depreciation and amortization	216	102
Total cash cost of production	241	123
Cash cost of mining per 1 tonne of ROM coal	73.0	61.5

During 1Q FY2022 cash cost of mining increased by 18.7% q-o-q under influence of fixed costs per 1 tonne of coal and conditionally fixed expenditures.

Gross profit

Gross loss comprised US\$0.04 million for the reporting three months of FY2022 as opposed to gross profit US\$0.03 million in 1QFY2021 and improved on a quarterly basis from US\$0.1 million of loss in 4Q FY21.

Operating profit

The Company recorded operating profit for the 1Q FY2022 amounting to US\$0.03 million thus improving operating result from an operational loss of US\$0.7 million for the 1Q FY2021 and operating loss of US\$0.1 million in the 4Q FY2021.

Financial costs

In the reporting quarter financial costs reached US\$0.015 million thus decreasing considerably as opposed to US\$2.5 million in the 1Q FY2021 y-o-y and opposed to US\$0.1 million in the 4Q FY2021 q-o-q in line with decreased debt obligations and decline of loss from non-operational exchange differences.

. Net profit/loss

For the first three months of 2022FY, the Company recorded US\$0.01 million of profit as compared to US\$2.8 million of loss for the 1Q FY2021 and US\$0.7 million of losses for the 4Q FY2021.

Production results

Thus coal output in the 1Q FY2022 composed 3.3 thousand tonnes (2.1 thousand tonnes of thermal coal and 1.2 thousand tonnes coking coal) of as opposed to 2.0 thousand tonnes in the 4Q FY2021, increasing by 65.0% 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

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

COAL ENERGY S.A., 1Q FY2022 REPORT

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. 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

Failure to achieve political consensus necessary to support and implement reforms and any resulting instability could adversely affect the country's macroeconomic indices, economic growth, business climate, social and living standards, postpone business decisions by customer and major industrial groups. Such increased uncertainties will definitely affect the industrial output level in the country, electricity, heat and steel production and consumption as well as construction plans and metallurgic industry performance (being directly or indirectly the core consumers for the Company's products), tax payments to the state budget.

The military conflict in the region of the Company's assets allocation may lead to damages to assets and inventories. Furthermore, depending on the severity of the conflict the assets/inventories may be damaged in scope which will make it impossible or economically not viable to restore them.

The realization of the risk is considered to be high. Mitigation of the risk is mainly outside of control of the Company on macro level.

CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021

1q2022FY

Coal Energy S.A. 1q2022FY

1

CONTENTS	PAGE
Statement of management responsibility	3
Management report	4
Consolidated statement of profit or loss and other comprehensive income	5
Consolidated statement of financial position	6
Consolidated statement of changes in equity	7
Consolidated statement of cash flows	8
Notes to the consolidated financial statements	9

STATEMENT OF MANAGEMENT RESPONSIBILITY

To the best of our knowledge, consolidated financial statements as of 30 September 2021 of Coal Energy S.A. 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 result of its operations for the three months ended 30 September 2021 as required under the applicable Law. The interim management report includes a fair review of the information required under the applicable Law.

While preparing these consolidated financial statements, the Management 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.

Management confirms that it has complied with the above-mentioned principles in preparing the consolidated financial statements of the Group.

The Management 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.

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 November 2021

__________signed_____________ Independent Non-executive Director Diyor Yakubov

MANAGEMENT REPORT

Management of the Company hereby presents its interim consolidated financial statements for the three months on 30 September 2021.

1. Results and developments during the three months ended on 30 September 2021.

For the three months ended 30 September 2021, the Group recorded an EBITDA amounted USD 241 thousand (EBITDA loss for the three months ended 30 September 2020 – USD 139 thousand). After depreciation, amortization, finance costs and finance income, the net profit after taxation for the three months ended 30 September 2021 amounted USD 14 thousand (net loss for the three months ended 30 September 2020 – USD 2,816 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 2021, 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 November 2021

__________signed_____________ Independent Non-executive Director Diyor Yakubov

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

		3 months ended 30 September 2021	Year ended 30 June 2021	3 months ended 30 September 2020
	Note	(unaudited)	(unaudited)	(unaudited)
Revenue	5	432	850	72
Cost of sales	6	(473)	(855)	(43)
GROSS PROFIT/(LOSS)		(41)	(5)	29
General and administrative expenses	7	(17)	(124)	(16)
Selling and distribution expenses	8	-	(1)	(1)
Other operating income/(expenses), net	9	190	26	4
Recovery/(impairment) of financial assets		(107)	-	-
Idle capacity expenses	10	-	(2,398)	(748)
OPERATING PROFIT/(LOSS)		25	(2,502)	(732)
Other non-operating income/(expenses), net	11	-	(53,694)	156
Finance income	13	3	8,626	250
Finance expenses	14	(15)	(3,352)	(2,490)
Disposal of subsidiaries	32	-	99,319	-
PROFIT/(LOSS) BEFORE TAX		13	48,397	(2,816)
Income tax benefit/(expenses), net	15	1	(757)	-
NET PROFIT/(LOSS)		14	47,640	(2,816)
NET PROFIT/(LOSS) ATTRIBUTABLE TO:
Equity holders of the parent		12	47,746	(2,799)
Non-controlling interests		2	(106)	(17)
OTHER COMPREHENSIVE INCOME/(LOSS)
Reclassification of currency translation reserve	32	-	(4,528)	-
Effect of foreign currency translation		145	1,889	(2,531)
TOTAL OTHER COMPREHENSIVE INCOME/(LOSS)		145	(2,639)	(2,531)
TOTAL COMPREHENSIVE INCOME/(LOSS)		159	45,001	(5,357)
TOTAL COMPREHENSIVE INCOME/(LOSS)
ATTRIBUTABLE TO:
Equity holders of the parent		160	45,009	(5,328)
Non-controlling interests		(1)	(8)	(19)
EARNINGS PER SHARE
Weighted average number of ordinary shares		45,011,120	45,011,120	45,011,120
BASIC PROFIT/(LOSS) PER ORDINARY SHARE (USD cents) *		0.03	106.08	(6.22)

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

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

	Note	30 September 2021 (unaudited)	Restated 30 June 2021 (unaudited)	30 September 2020 (unaudited)
ASSETS
Non-current assets
Property, plant and equipment	16	10,815	10,678	23,691
Intangible assets	17	124	125	310
Right-of-use assets	26	4,065	4,026	3,730
Financial assets	18	879	872	41,400
Deferred tax assets	15	39	36	2,309
		15,922	15,737	71,440
Current assets
Inventories	19	1,923	1,930	22,470
Trade and other receivables	20	823	320	19,577
Prepayments and prepaid expenses	21	27	-	2,914
Other taxes receivables	22	569	538	324
Cash and cash equivalents	23	3	3	11
		3,345	2,791	45,296
TOTAL ASSETS		19,267	18,528	116,736
EQUITY
Share capital	24	450	450	450
Share premium		77,578	77,578	77,578
Retained earnings		(824)	(836)	(50,251)
Currency translation reserve		(73,315)	(73,463)	(73,255)
Equity attributable to equity holders of the parent		3,889	3,729	(45,478)
Non-controlling interest		(142)	(141)	(888)
TOTAL EQUITY		3,747	3,588	(46,366)
LIABILITIES
Non-current liabilities
Lease liabilities	26	1,890	1,849	3,477
Defined benefit obligation		713	863	8,461
Provisions	27	1,005	972	2,571
Deferred tax liabilities	15	58	55	10
		3,666	3,739	14,519
Current liabilities
Loans and borrowings	25	930	925	64,566
Lease liabilities	26	370	362	253
Trade and other payables	28	5,485	5,224	78,993
Income tax payables	15	2,233	2,233	1,339
Defined benefit obligation		1,289	1,096	-
Provisions	27	-	-	1,793
Other tax payables	22	1,547	1,361	1,639
		11,854	11,201	148,583
TOTAL LIABILITIES		15,520	14,940	163,102
TOTAL EQUITY AND LIABILITIES		19,267	18,528	116,736

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	Equity attributable to equity holders of the parent
				Currency		Non
	Share	Share	Retained	translation		controlling	Total
	capital	premium	earnings	reserve	Total	interest	equity
30 June 2020	450	77,578	(47,452)	(70,726)	(40,150)	(869)	(41,019)
Profit/(loss) for the year	-	-	47,746	-	47,746	(106)	47,640
Other comprehensive income/(loss)	-	-	-	1,791	1,791	98	1,889
Disposal of subsidiaries	-	-	(736)	(4,528)	(5,264)	736	(4,528)
30 June 2021	450	77,578	(442)	(73,463)	4,123	(141)	3,982
Effect of misstatements correction	-	-	(394)	-	(394)	-	(394)
Restated 30 June 2021	450	77,578	(836)	(73,463)	3,729	(141)	3,588
Profit/(loss) for the year	-	-	12	-	12	2	14
Other comprehensive income/(loss)	-	-	-	148	148	(3)	145
30 September 2020	450	77,578	(824)	(73,315)	3,889	(142)	3,747

CONSOLIDATED STATEMENT OF CASH FLOWS

	Note	3 months ended 30 September 2021 (unaudited)	Year ended 30 June 2021 (unaudited)	3 months ended 30 September 2020 (unaudited)
OPERATING ACTIVITIES
Profit/(loss) before tax		13	48,397	(2,816)
Adjustments to reconcile profit before tax to net cash flows:
Depreciation and amortization expenses	12	216	1,607	593
Finance income	13	(3)	(8,626)	(250)
Finance costs	14	15	3,352	2,490
Expenses for doubtful debts/(Recovery of doubtful debts)	11	(55)	-	(4)
(Recovery)/Impairment of financial assets		107
Impairment of non-current loans issued	11	-	55,801	-
(Profit)/Loss from disposal of property, plant and equipment	16	-	267	-
Impairment of current assets	11	-	8,442	-
Accounts payable write-off	9, 11	(126)	(8,420)	-
Recovery of previously impaired assets	11	-	(2,089)	-
(Profit)/Loss from exchange differences	9	-	-	-
Changes in defined benefits plan obligations		-	191	-
Disposal of subsidiaries	32	-	(99,319)	-
		167	(397)	13
Working capital adjustments:
Change in trade and other receivables		(610)	681	(240)
Change in prepayments made and prepaid expenses		28	340	(509)
Change in inventories		(43)	1,518	(43)
Change in trade and other payables		303	(3,728)	798
Change in tax balances		155	1,642	-
		-	56	19
Income tax paid		-	-	-
Net cash flow from operating activity		-	56	19
INVESTING ACTIVITIES
Purchase of property, plant and equipment and intangible assets		-	(75)	(24)
Net cash flow from investing activity		-	(75)	(24)
FINANCING ACTIVITIES
Repayment of loans and borrowings		-	-	-
Net cash flow from financial activity		-	-	-
NET CASH FLOWS		-	(19)	(5)
Cash and cash equivalents at the beginning of the period		3	16	16
Cash disposed with subsidiaries		-	(3)	-
Cash received as consideration of subsidiaries disposal		-	9	-
Effect of currency translation		-	-	-
Cash and cash equivalents at the end of the period		3	3	11

NOTES TO THE 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 2021	30 September 2020
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
Donugletekhinvest LLC	Ukraine	-	99,00
Nedra Donbasa LLC	Ukraine	-	99,00
Donprombiznes LLC	Ukraine	-	99,00
Ugledobycha LLC	Ukraine	-	99,99
Donantracit LLC	Ukraine	-	99,99
Tekhinovatsiya LLC	Ukraine	99,92	99,99
Eximenergo LLC	Ukraine	-	99,00
Antratcit LLC	Ukraine	-	99,00
CwAL LE "Sh/U Blagoveshenskoe"	Ukraine	-	99,00
CwAL LE "Mine St.Matrona Moskovskaya"	Ukraine	99,00	99,00
Coal Energy Ukraine LLC	Ukraine	-	99,99
Progress-Vugillya LLC	Ukraine	-	99,99
Perspective resources LLC	Ukraine	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 205, route d`Arlon L-1150 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

Since 2016, the Ukrainian economy has demonstrated signs of stabilization after years of political and economic tension. During the year ended 30 June 2021, the Ukrainian economy has quite a stable real GDP with 0.3% decline (2020: real GDP growth of around 2%), annual inflation comprised of 9.5% (2020: 2.4%), with devaluation of the national currency (by around 9.8% to USD and 18.5% to EUR comparing to previous year averages).

Ukraine continues to limit its political and economic ties with Russia, given annexation of Crimea, an autonomous republic of Ukraine, and an armed conflict with separatists continued in certain parts of Luhansk and Donetsk regions. As a result of this, the Ukrainian economy is continuing refocusing on the European Union (the "EU") market by realizing potentials of established Deep and Comprehensive Free Trade Area with the EU as well as other markets.

To further facilitate business activities in Ukraine, the National Bank of Ukraine (the "NBU") in 2019 has lifted the surrender requirement for foreign currency proceeds, cancelled all limits on repatriation of dividends and gradually decreased its discount rate for the first time during the recent two years, from 18.0% in April 2019 to 11.0% in January 2020. The discount rate was further decreased during 2020, with 6.0% valid from 12 June 2020 till 5 March 2021. Since 5 March 2021 it is started increasing to current 8.5% from 10 September 2021.

The degree of macroeconomic uncertainty in Ukraine in 2020 still remains high due to a significant amount of public debt scheduled for repayment in 2021, which requires mobilizing substantial domestic and external financing in an increasingly challenging financing environment for emerging markets. Further economic growth depends, to a large extent, upon success of the Ukrainian government in realization of planned structural reforms and effective cooperation with the International Monetary Fund (the "IMF").

Fitch's current rating of Ukraine's Long-Term Foreign- revised from stable to positive in August 2021, while Ukraine's Local-Currency Issuer Default Ratings was stated as "B" with stable outlook since April 2020.

Starting from early 2020, a new coronavirus disease (COVID-19) has begun rapidly spreading all over the world, resulting in announcement of the pandemic status by the World Health Organization (the "WHO") in March 2020. Responses put in place by many countries to contain the spread of COVID-19 are resulting in significant operational disruption for many companies and have a significant impact on global financial markets. As the situation is rapidly evolving, it may have a significant effect on business of many companies across a wide range of sectors, including, but not limited to, such impacts as disruption of business operations as a result of interruption of production or closure of facilities, supply chain disruptions, quarantines of personnel, reduced demand and difficulties in raising financing. In addition, the Group may face the increasingly broad effects of COVID-19 as a result of its negative impact on the global economy and major financial markets. The significance of the effect of COVID-19 on the Group's business largely depends on the duration and the incidence of the pandemic effects on the world and Ukrainian economy.

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 US dollars (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 (IFRS) adopted by the European Union (EU).

2.3 Going concern

During the three months ended 30 September 2021, the Group renewed operation activity and recorded USD 14 thousand of net profit (during the three months ended 30 September 2020, the Group recorded USD 2,816 thousand of new loss). The Group renewed operation activity during the 3 months ended 30 September 2021, mining output is increasing, and appropriate budgets and plans are approved.

Since 2014 the Group's financial position and financial performance are significantly affected by military conflict in the East of Ukraine. As of 30 September 2021, the Group's current liabilities exceeded its current assets by USD 8,509 thousand. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Group's ability to continue as a going concern.

Management believes that the renewed operation activity will allow the Group to maintain the positive working capital and operate on a going concern basis in the foreseeable future.

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.

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.

Inter-Group 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 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 of 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 BASIS OF PREPARATION OF THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

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);
• IFRS 3 "Business Combinations" (Amendments): Reference to the Conceptual Framework (effective for annual periods beginning on or after 1 January 2022);
• IAS 16 "Property, Plant and Equipment" (Amendments): Property, Plant and Equipment Proceeds before Intended Use (effective for annual periods beginning on or after 1 January 2022);
• IAS 37 "Provisions, Contingent Liabilities and Contingent Assets" (Amendments): Onerous Contracts Cost of Fulfilling a Contract (effective for annual periods beginning on or after 1 January 2022);
• Annual Improvements to IFRS Standards 2018–2020 (effective for annual periods beginning on or after 1 January 2022).

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.

2.6 Correction of misstatements

During the preparation of the consolidated financial statements for three months ended 30 September 2021, the Group identified a computational misstatement in calculations of deferred tax assets and liabilities, as well as in valuation of the right-of-use assets existed as of 30 June 2021. Abovementioned misstatements resulted understatement of right-of-use assets and overstatement of deferred tax assets and liabilities. Misstatements have been corrected by restating of the affected consolidated financial statement items as of 30 June 2021 as follows:

			Restated
Corrected items in the statement of financial position	30 June 2021	Correction	30 June 2021
Right-of-use assets	3,730	296	4,026
Deferred tax assets	738	(702)	36
Deferred tax liabilities	54	1	55
Defined benefit obligation	876	(13)	863
Retained earnings	(442)	(394)	(836)

The correction further affected some of the amounts disclosed in appropriate notes to the consolidated financial statements.

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 in annual consolidated financial statements were as follows:

Date/period	UAH/USD
As of:
- 30 September 2021	26.5760
- 30 September 2020	28.2989
Average for the:
- three months ended 30 September 2021	26.9110
- three months ended 30 September 2020	27.5996

(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 to allocate their revalued amounts to their residual values over their estimated useful lives, as follows:

-	Underground mining	5 - 80 years
-	Buildings and constructions	10 - 80 years
-	Machinery, equipment and vehicles	2 - 20 years
-	Other	2 - 20 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. In addition, 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 Leases

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 of 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	2 - 20 years
-	Other intangible assets	2 - 20 years
-	Other projections and permissions	2 - 20 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.

3.11 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.

3.17 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:

Fair value of financial instruments

Where the fair value of financial assets and financial liabilities recognized in the statements of financial position cannot be derived from active markets, they are determined using valuation techniques including the discounted cash flows model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. The judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the recognized fair value of financial instruments.

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.

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.

4 SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (CONTINUED)

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.

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.

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 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

5 INFORMATION ON OPERATIONAL SEGMENTS (continued)

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.

Information about the segments of business for the three months ended 30 September 2020:

	Business segments
	Mineral resource and processing industry	Trade activity	Other activity	Non-allocated	Total
Revenue
Sales to external customers	56	-	16	-	72
(Loss)/profit before tax of the segment	(2,436)	248	234	-	(2,918)
Depreciation and amortization expenses Defined benefits plan obligations expenses	(593) -	- -	- -	- -	(593) -
Operational assets	71,654	939	99	44,044	116,736
Operational liabilities	156,802	1,356	163	4,781	163,102
Disclosure of other information
Capital expenditure	24	-	-	-	24

As of 30 September 2020 assets of segments do not include financial assets (USD 41,400 thousand), cash (USD 11 thousand), other taxes receivable (USD 324 thousand) and deferred tax assets (USD 2,309 thousand), since management of these assets is carried out at the Group's level.

As of 30 September 2020 liabilities of segments do not include deferred tax liabilities (USD 10 thousand), other taxes payable (USD 1,639 thousand), income tax payables (USD 1,339 thousand) and provision on tax liabilities (USD 1,793 thousand), since management of these liabilities is carried out at the Group's level.

	3 months ended 30 September 2021	Year ended 30 June 2021	3 months ended 30 September 2020
Revenue received from sale of finished goods	430	552	56
Revenue from trading activity	-	146	-
Revenue from other activity	2	152	16
	432	850	72

During the reviewed periods sales were performed on the territory of Ukraine exclusively.

All non-current assets of the Group are located in Ukraine.

6 COST OF SALES

	3 months ended		3 months ended
	30 September	Year ended	30 September
	2021	30 June 2021	2020
Cost of merchandising inventory	-	(309)	-
Raw materials	-	(1)	-
Wages and salaries of operating personnel	(26)	(2)	-
Change in finished goods	-	(285)	(43)
Energy supply	(182)	(90)	-
Depreciation and amortization expenses	(216)	(102)	-
Subcontractors services	(16)	(31)	-
Other expenses	(33)	(35)	-
	(473)	(855)	(43)

7 GENERAL AND ADMINISTRATIVE EXPENSES

	3 months ended 30 September 2021	Year ended 30 June 2021	3 months ended 30 September 2020
Subcontractors services	(3)	(18)	(5)
Wages and salaries of administrative personnel	(13)	(86)	(6)
Depreciation and amortization expenses	-	(10)	(5)
Other expenses	(1)	(10)	-
	(17)	(124)	(16)

8 SELLING AND DISTRIBUTION EXPENSES

	3 months ended 30 September 2021	Year ended 30 June 2021	3 months ended 30 September 2020
Delivery costs	-	-	(1)
Subcontractors services	-	(1)	-
Wages and salaries of distribution personnel	-	-	-
Depreciation and amortization expenses	-	-	-
	-	(1)	(1)

9 OTHER OPERATING INCOME/EXPENSES, NET

	30 September 2021	Year ended 30 June 2021	30 September 2020
Doubtful debts income/(expenses)	55	-	4
Writing-off of VAT	-	(10)	-
Income from lease	9	-
Profit/(loss) from exchange differences	-	-	-
Accounts payable write-off	126	-
Other operating income	-	36	-
	190	26	4

3 months ended

3 months ended

10 IDLE CAPACITY EXPENSES

	3 months ended 30 September 2021	Year ended 30 June 2021	3 months ended 30 September 2020
Depreciation and amortization expenses	-	(1,495)	(588)
Wages and salaries	-	(427)	(54)
Energy supply	-	(262)	-
Other expenses	-	(214)	(106)
	-	(2,398)	(748)

11 OTHER NON-OPERATING INCOME/EXPENSES, NET

	30 September	Year ended	30 September
	2021	30 June 2021	2020
Impairment of non-current loans issued	-	(55,801)	-
Impairment of current assets	-	(8,442)	-
Recovery of previously impaired assets	-	2,089	-
Other payables write-off	-	8,420	-
Other non-operating income	-	45	156
Other non-operating expenses	-	(5)	-
	-	(55,694)	156

12 DEPRECIATION AND AMORTIZATION EXPENSES

	3 months ended 30 September 2021	Year ended 30 June 2021	3 months ended 30 September 2020
Depreciation
Idle capacity: depreciation expenses	-	(1,392)	(523)
Cost of sales	(212)	(98)	-
General and administrative expenses	-	(10)	(5)
	(212)	(1,500)	(528)
Amortization
Idle capacity: amortization expenses	-	(103)	(65)
Cost of sales	(4)	(4)	-
	(4)	(107)	(65)
	(216)	(1,607)	(593)

3 months ended

3 months ended

13 FINANCIAL INCOME

	3 months ended
	30 September	Year ended	3 months ended
	2021	30 June 2021	30 September 2020
Gain from non-operational exchange differences	-	539	247
Interests received	-	-	-
Income from measurement of financial instruments at amortized cost	3	11	3
Income from loans restructuring	-	8,076	-
	3	8,626	250
14 FINANCIAL EXPENSES
	3 months ended
	30 September	Year ended	3 months ended
	2021	30 June 2021	30 September 2020
Interest expenses	-	(653)	(323)
Loss from non-operational exchange differences	-	(2,394)	(2,149)
Unwinding of discount expenses	(11)	-	-
Loss from measurement of financial instruments at amortized cost	(4)	(305)	(18)

(15) (3,352) (2,490)

15 INCOME TAX

	3 months ended
	30 September	Year ended	3 months ended
	2021	30 June 2021	30 September 2020
Current income tax	-	(502)	-
Deferred tax	1	(255)	-
Income tax income/(expenses)	1	(757)	-
At the beginning of the period	2,233	1,420	(1,420)
Current income tax charge	-	502	-
Disposal of subsidiaries	-	28	-
Effect of translation to presentation currency	-	283	81
At the end of the period	2,233	2,233	(1,339)
Effect
Profit/(loss) before tax	13	49,367	(2,816)
Income tax (18%)	(2)	(8,886)	507
Disposal of subsidiaries effect	-	17,877	-
Effect of different statutory tax rates of overseas jurisdictions	-	(7,730)	-
Tax effect of permanent differences	3	(2,018)	(507)
Income tax income/(expenses)	1	(757)	-

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

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
		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)

15 INCOME TAX (continued)

			Effect of
		Recognized in	currency	30 September
	30 June 2020	profit/(loss)	translation	2020
Effect of temporary differences on deferred tax assets
Property, plant and equipment, intangible assets	253	-	(14)	239
Inventories	66	-	(4)	62
Provisions	491	-	(28)	463
Defined benefit plan obligations	1,615	-	(92)	1,523
Charged vacation expenses	26	-	(1)	25
Folded on individual Companies' level	(3)	-	-	(3)
Total deferred tax assets	2,448	-	(139)	2,309
Effect of temporary differences on deferred tax liabilities
Property, plant and equipment, intangible assets	(14)	-	1	(13)
Folded on individual Companies' level	3	-	-	3
Total deferred tax liabilities	(11)	-	1	(10)
Net deferred tax asset/(liability)	2,437	-	(138)	2,299

16 PROPERTY, PLANT AND EQUIPMENT

	Underground	Buildings and	Machinery, equipment,		Construction
Historical cost	mining	constructions	vehicles	Other	in progress	Total
as of 30 June 2020	33,190	7,095	10,684	509	277	51,755
Additions	50	-	40	-	3,251	3,341
Disposals	-	-	(9)	(1)	(265)	(275)
Disposal of subsidiaries	(23,976)	(4,095)	(6,837)	(396)	-	(35,304)
Effect of currency translation	(2,125)	(1,449)	(1,771)	(35)	50	(5,339)
as of 30 June 2021	7,139	1,551	2,107	77	3,304	14,178
Additions	58	-	-	-	-	58
Disposals	-	-	(11)	-	-	(11)
Effect of currency translation	163	35	47	1	74	320
as of 30 September 2021	7,360	1,586	2,143	78	3,378	14,545

Accumulated depreciation as of 30 June 2020 (12,823) (3,269) (9,523) (495) - (26,110) Depreciation for the period (900) (175) (218) (6) - (1,299) Disposals - - 7 1 - 8 Disposal of subsidiaries 10,144 2,047 6,777 393 - 19,361 Effect of currency translation 2,064 823 1,619 34 - 4,540 as of 30 June 2021 (1,515) (574) (1,338) (73) - (3,500) Depreciation for the period (87) (26) (47) (1) - (161) Disposals - - 11 - - 11 Effect of currency translation (35) (14) (30) (1) - (80) as of 30 September 2021 (1,637) (614) (1,404) (75) - (3,730) Net book value as of 30 June 2020 20,367 3,826 1,161 14 277 25,645 as of 30 June 2021 5,624 977 769 4 3,304 10,678

As of 30 September 2021, property, plant and equipment were not pledged under loans and borrowings agreements (as of 30 September 2020: USD 5,633 thousand). 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 2021 and 30 September 2020, contractual commitments for property, plant and equipment of the Group were immaterial.

as of 30 September 2021 5,723 972 739 3 3,378 10,815

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
as of 30 June 2020	3,231	16	33	3,280
Disposal of subsidiaries	(2,787)	(4)	(19)	(2,810)
Effect of currency translation	(157)	(1)	(13)	(171)
as of 30 June 2021	287	11	1	299
Effect of currency translation	6	-	-	6
as of 30 September 2021	293	11	1	305
Accumulated amortization
as of 30 June 2020	(2,737)	(16)	(32)	(2,785)
Amortization charge for the period	(107)	-	-	(107)
Disposal of subsidiaries	2,519	4	17	2,540
Effect of currency translation	163	1	14	178
as of 30 June 2021	(162)	(11)	(1)	(174)
Amortization charge for the period	(4)	-	-	(4)
Effect of currency translation	(3)	-	-	(3)
as of 30 September 2021	(169)	(11)	(1)	(181)
Net book value
as of 30 June 2020	494	-	1	495
as of 30 June 2021	125	-	-	125
as of 30 September 2021	124	-	-	124

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		30 September
	2021	30 June 2021	2020
Non-current financial assets
Held-to-maturity investments	159	152	5
Loans issued	720	720	41,395
	879	872	41,400
Current financial assets
Loans issued	-	-	4,829
Allowance for loans issued	-	-	(4,829)
	-	-	-

Held-to maturity investments are non-interest notes, issued generally by third parties. These notes are discounted using effective interest rate of 18% and accompanied expenses (incomes) are presented in items 'Finance costs' and 'Finance income'. Management of the Group has the intention to hold these notes to maturity. Held-to maturity investments are not overdue. Loans issued are interest-free loans, generally issued to related parties.

19 INVENTORIES

	30 September		30 September
	2021	30 June 2021	2020
Merchandise	5	4	10,041
Finished goods	61	60	1,745
Raw materials	902	932	8,730
Spare parts	947	926	1,786
Goods on commission	-	-	149
Other inventories	8	8	19
	1,923	1,930	22,470

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
	2021	30 June 2021	2020
Trade receivables	3,094	2,513	11,225
Allowance for trade receivables	(2,327)	(2,193)	(3,298)
Receivables under factoring contracts	-	-	462
Receivables on sale of property, plant and equipment	-	-	43
Other receivables	1,922	1,837	11,145
Allowance for other receivables	(1,866)	(1,837)	-
	823	320	19,577

As of 30 September 2020, loans were secured by trade receivables amounted USD 4,751 thousand (30 September 2019: USD 5,037 thousand).

21 PREPAYMENTS AND PREPAID EXPENSES

	30 September		30 September
	2021	30 June 2021	2020
Prepayments made and prepaid expenses	6,073	5,968	3,568
Allowances for prepayments made	(6,046)	(5,968)	(654)
	27	-	2,914

22 TAXES RECEIVABLE AND PAYABLE

	30 September 2021	30 June 2021	30 September 2020
Current taxes receivable
VAT recoverable	569	538	324
	569	538	324
Current taxes payable
VAT payable	464	360	626
Payable for wages and salaries related taxes	644	617	574
Payables for other taxes	439	384	439
	1,547	1,361	1,639

23 CASH AND CASH EQUIVALENTS

	30 September		30 September
	2021	30 June 2021	2020
Cash in bank	2	2	11
Cash in hand	1	1	-
	3	3	11

24 SHARE CAPITAL

	30 September 2021			30 June 2021		30 September 2020
	%	%	%	Amount	%	Amount
Lycaste Holding Limited*	75	75	75	338	75	338
Free float	25	25	25	112	25	112
	100	100	100	450	100	450

* - according to pledge agreement signed as of 11 February 2013 between Lycaste Holding Limited, European Bank For Reconstruction and Development and Coal Energy S.A. 6747167 shares owned by Lycaste Holding Limited are pledged. During the three months ended 30 September 2020 and 30 September 2019, quantity of shares has not been changed.

25 LOANS AND BORROWINGS

	30 September 2021	30 June 2021	30 September 2020
Non-current loans and borrowings
Loans received	-	-	35,000
Current portion of long-term loans and borrowings	-	-	(35,000)
Total non-current loans and borrowings	-	-	-
Current loans and borrowings
Bank loans	-	-	29,146
Current portion of long-term loans and borrowings	-	-	35,000
Current portion of payables under factoring contract	-	-	348
Current borrowings	864	864	-
Notes issued	66	61	72
Total current loans and borrowings	930	925	64,566

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

	26 LEASE
--	----------

	30 September 2021	30 June 2021	30 September 2020
Due within 1 year	370	362	253
From 1 to 5 years	967	945	903
More than 5 years	923	904	2,574
	2,260	2,211	3,730

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
	2021	30 June 2021	2020
Property, plant and equipment	4,065	4,026	3,730
	4,065	4,026	3,730
27 PROVISIONS
	30 September		30 September
	2021	30 June 2021	2020
Non-current provisions
Provision for land restoration	987	955	2,187
Dismantling provision	18	17	384
	1,005	972	2,571
Current provisions
Provision on tax liabilities	-	-	1,793
	-	-	1,793

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		30 September
	2021	30 June 2021	2020
Trade payables	3,050	3,070	9,679
Interest due	-	-	43,946
Payables for unused vacations	34	33	136
Payables for wages and salaries	986	940	1,287
Interest due to factoring contract	-	-	1,133
Other payables	1,067	1,036	19,337
Payables for acquisition property, plant and equipment	-	-	501
Advances received	348	145	2,974
	5,485	5,224	78,993

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 2021	Year ended 30 June 2021	3 months ended 30 September 2020
Income from sales of finished products, goods	-	660	56
Income from rendering of services	-	36	9
Purchases of inventories	-	(146)	-

29 TRANSACTIONS WITH RELATED PARTIES (continued)

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

	30 September 2021	30 June 2021	30 September 2020
Current loans issued	-	-	4,829
Allowances for loans issued	-	-	(4,829)
Non-current loans issued	-	-	41,395
Held-to-maturity investments	-	-	5
Trade receivables	2	2	6,786
Allowances for trade receivables	(1)	(1)	(358)
Prepayments made	1,228	1,201	305
Allowances for prepayments made	(1,228)	(1,20)	(25)
Other receivables	197	219	3,619
Allowance for other receivables	(197)	(219)	-
Advances received	-	-	588
Other payables	279	281	2,565
Trade payables	3	3	106

31 CONTINGENT ASSETS AND LIABILITIES

Taxation

The operations and earnings of the Group are affected by political, legislative, fiscal and regulatory developments. It is impossible to predict the nature and frequency of these developments and events associated with these risks as well as their effect on future operations and earnings of the Group. Ukrainian tax legislation is characterized by frequent changes is subject to controversial interpretations. Tax authorities may be taking a more assertive position in their interpretation of the legislation and tax assessments. Such cases create a taxation risk exposure which considerably exceeds that of the countries with more advanced tax systems. Management believes that its interpretation of the relevant legislation as of 30 June 2021 is appropriate and all of the Croup's tax will be sustainable. Though, amount of VAT recoverable, as well as terms of such refunds substantially depends on the position of tax authorities. The Group is continuing to be subject to reform initiatives in the Ukraine. The future direction and effects of any reforms are the subject of political considerations, which could have a significant but undeterminable, effect on entities operating in the Group.

Legal cases

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 that can affect the Group's ability to continue as going concern.

Capital commitments

As of 30 June 2021, contractual commitments for property, plant and equipment of the Group were immaterial.

32 DISPOSALS OF SUBSIDIARIES

During the three months ended 31 March 2021, the Group sold its 100% shares in the three subsidiaries: Nedra Donbasa LLC with total consideration of UAH 20 thousand, Progress-Vugillya LLC with total consideration of UAH 52 thousand, CwAL LE "Sh/U Blagoveshenskoe" with no consideration. Net assets and results of disposals are presented as follows:

		CwAL LE "Sh/U	Progress-Vugillya
	Nedra Donbasa LLC	Blagoveshenskoe"	LLC	Total
Property, plant, equipment	671	6,009	-	6,680
Intangible assets	103	108	-	211
Financial assets	-	45	-	45
Deferred tax asset	81	788	-	869
Inventories	2,592	1,726	-	4,318
Trade and other receivables	389	4,819	-	5,208
Prepayments and prepaid expenses	7	1,962	-	1,969
Financial assets	423	-	-	423
Non-current loans and borrowings	(47)	(17,569)	-	(17,616)
Lease liabilities	-	(1,564)	-	(1,564)
Defined benefit obligation	(315)	(1,987)	-	(2,302)
Non-current provisions	(20)	(1,205)	-	(1,225)
Loans and borrowings	-	(20,000)	-	(20,000)
Trade and other payables	(4,532)	(18,087)	(10)	(22,629)
Current provisions	(70)	-	-	(70)
Other tax payable	(106)	(228)	-	(334)
Net assets at the date of disposal	(824)	(45,183)	(10)	(46,017)
Consideration received	1	-	2	3
Net assets disposed	(825)	(45,183)	(12)	(46,020)
Reclassification of currency translation reserve of disposed subsidiaries	(39)	(4,246)	4	(4,281)
Profit from disposal	864	49,429	8	50,301

32 DISPOSALS OF SUBSIDIARIES (continued)

During the six months ended 31 December 2020, the Group sold its 100% shares in the six subsidiaries: Donugletekhinvest LLC with total consideration of UAH 26 thousand, Donprombiznes LLC with total consideration of UAH 15 thousand, Ugledobycha LLC with total consideration of UAH 16 thousand, Donantracit LLC with total consideration of UAH 46 thousand, Eximenergo LLC with total consideration of UAH 7 thousand, Coal Energy Ukraine LLC with total consideration of UAH 16 thousand. Net assets and results of disposals are presented as follows:

						Coal
						Energy
	Donugletekhinvest	Donprombiznes	Ugledobycha	Donantracit	Eximenergo	Ukraine	Total
Property, plant, equipment	513	3,187	553	-	5,006	4	9,263
Intangible assets	-	44	4	-	11	-	59
Deferred tax asset	92	14	214	9	190	4	523
Inventories	438	1,404	413	253	10,334	12	12,854
Trade and other receivables	4,306	5,446	494	4,903	8,308	127	23,584
Prepayments and prepaid expenses	(21)	4,051	3,311	(36)	566	799	8,670
Other taxes receivable	11	-	38	(14)	146	15	196
Cash and cash equivalents	-	3	-	-	-	-	3
Non-current loans and borrowings	(2,498)	(14,103)	(11,046)	-	(12,738)	-	(40,385)
Defined benefit obligation	(188)	(1,929)	(959)	-	(1,415)	-	(4,491)
Non-current provisions	(59)	(119)	(256)	-	(88)	-	(522)
Loans and borrowings	-	(1,089)	-	(1,324)	(5,192)	(1,290)	(8,895)
Trade and other payables	(5,932)	(7,505)	(1,362)	(6,286)	(20,429)	(5,676)	(47,190)
Current provisions	(256)	(395)	(618)	(57)	(400)	-	(1,726)
Other tax payable	(46)	(191)	(85)	(1)	(364)	(21)	(708)
Net assets at the date of disposal	(3,640)	(11,182)	(9,299)	(2,553)	(16,065)	(6,026)	(48,765)
Consideration received	1	1	1	2	-	1	6
Net assets disposed	(3,641)	(11,183)	(9,300)	(2,555)	(16,065)	(6,027)	(48,771)
Reclassification of currency
translation reserve of	(217)	347	291	(258)	51	(461)	(247)
disposed subsidiaries
Profit from disposal	3,858	10,836	9,009	2,813	16,014	6,488	49,018

33 SUBSEQUENT EVENTS

According to the Management's opinion there were no events after the reporting date known to the Management which would substantially influence the financial position and financial results of the Group.