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Commitments and contingencies
12 Months Ended
Sep. 30, 2023
Commitments And Contingencies Disclosure Abstract  
Commitments and contingencies

Note 22 – Commitments and contingencies

 

(a)  Capital expenditure commitments

 

Except as disclosed elsewhere in the consolidated financial statements, the Company has no other capital expenditure commitment as of September 30, 2023, which are expected to be paid within one year.

 

(b) Contingencies

 

The Company’s subsidiaries, CN Energy Development and Hangzhou Foresan, were named as a defendant in a lawsuit arising in their ordinary course of business. As of the date of this annual report, CN Energy Development and its subsidiary, Hangzhou Foresan, continue to use all commercially reasonable efforts to defend themselves in this proceeding. Ms Yefang Zhang has made a full commitment to provide full cover for the obligation that CN Energy Development and Hangzhou Foresan may require to bear in the case. Therefore, in this case, if the mediation before court hearing fails, the risks and losses of RMB8 million ($1.1 million) will be borne by Ms Yefang Zhang. 

 

The requirement of employee benefit plans has not been implemented consistently by the local governments in China given the different levels of economic development in different locations. Biopower Plant has not paid adequate social insurance for all its employees, and the Company’s PRC subsidiaries have not made adequate housing provident fund payments for all their employees. The relevant PRC authorities may order the Company to make up the contributions to these plans. In addition, failure to make adequate social insurance payments on time may subject the Company to 0.05% late fees per day, starting from the date of underpayment, and fines equal to one to three times the underpaid amount. For failure to make adequate housing provident fund payments as required, the Company may be fined RMB10,000 to RMB50,000. If the Company is subject to late fees or fines in relation to underpaid employee benefits, the financial condition and results of operations may be adversely affected. However, the risk of regulatory penalty that the relevant authorities may impose on the Company’s PRC subsidiaries in relation to its failure to make adequate contributions to the employee benefit plans for all the Company’s employees as required is remote, because the relevant local authorities confirmed in writing that no records of violation were found on the Company’s PRC subsidiaries for social insurance plan and/or housing provident fund contributions.