N NAN NAN RESOURCES ENTERPRISE LIMITED 南 南 資 源 實 業 有 限 公 司 (於百慕達註冊成立之有限公司) (股份代號：1229) 2020/21 TERREAL 38 目錄 獨立核數師之審閱報告 簡明綜合損益及其他全面收益表 簡明綜合財務狀況表 簡明綜合權益變動表 簡明綜合現金流量表 簡明綜合中期財務資料附註 10 管理層討論及分析 其他資料 47 本中期報告以中英文編製。如有任何歧義，敬請參閱英文版本，並以英文版本為準。 本中期報告以環保紙張印製。 公司資料 2 3 4 5 7 9 公司資料 | --- | --- | |--------------------------------------|--------------------------------------| | 董事會 | 主要往來銀行 | | 執行董事 | 中信銀行（國際）有限公司 | | 關文輝（主席兼董事總經理） | 中國工商銀行（亞洲）有限公司 | | 王翔飛 | | | 王四維 | 註冊辦事處 | | 獨立非執行董事 | Clarendon House | | 黃文顯 | 2 Chur ...

Financial Performance - The Group recorded a revenue of approximately HK$127,989,000 for the year ended 31 March 2020, an increase of 69.2% compared to HK$75,625,000 in 2019[10] - Gross profit for the year was approximately HK$52,214,000, up 68.0% from HK$31,083,000 in the previous year[10] - The net loss for the year was approximately HK$24,604,000, a downturn of approximately HK$53,447,000 compared to a profit of HK$28,843,000 in 2019[10] - The increase in finance costs was approximately HK$5,988,000, compared to approximately HK$964,000 in 2019, reflecting a significant rise in financial expenses[10] - Administrative and other operating expenses increased by approximately HK$20,723,000 during the year[10] - A supplemental resources fee of approximately HK$85,688,000 was incurred in the current year, compared to nil in 2019[10] - The impairment loss on goodwill was approximately HK$3,831,000, with no such loss reported in the previous year[10] - The change in fair value of financial liabilities at fair value through profit or loss was approximately HK$71,443,000, compared to HK$29,373,000 in 2019[10] - The Group did not recommend the payment of any dividend for the year, consistent with the previous year[10] - The increase in gross profit was approximately HK$21,131,000, indicating improved operational efficiency despite the net loss[10] Business Segments and Operations - The Group operates in three business segments: coal mining, renewable energy, and IT services, with a primary focus on coal mining in Xinjiang, China[12] - The revenue from the coal mining business was approximately HK$73,910,000, a decrease of approximately HK$1,324,000 or approximately 1.76% compared to approximately HK$75,234,000 last year[36] - The Group sold approximately 1,037,492 tonnes of coal during the Year, a decrease of approximately 41.20% in volume compared to approximately 1,764,591 tonnes in the previous year[36] - The renewable energy business achieved a turnover of approximately HK$775,000, up from approximately HK$391,000 in the previous year, primarily due to the acquisition of this business segment[39] - The IT services business contributed revenue of approximately HK$53,304,000, compared to nil in the previous year[39] Mining Rights and Permits - The acquisition of the New Mining Right for the Enlarged Kaiyuan Mine includes an enlarged mining area of 4.1123 km², with an estimated coal resource of 41.6433 million tonnes for a mining life of 30 years[14] - The consideration for the New Mining Right is RMB 160,978,000, to be paid in fifteen instalments, with the first instalment of RMB 32,200,000 already paid[14] - The New Mining Permit for the Enlarged Kaiyuan Mine was granted for a term of one year and has been renewed for two additional years, expiring on 21 December 2021[14] - A supplemental resources fee of RMB 76,502,500 is required for 19.8 million tonnes of coal, representing the difference between the accumulated output and the output of the Kaiyuan Mine[16] - The sales and operation of the Enlarged Kaiyuan Mine have been temporarily suspended since 21 December 2019 due to the expiry of the New Mining Permit[17] - The New Mining Permit was renewed in March 2020, but the resumption application has not been approved due to ongoing safety requirement rectifications[18] - The Temporary Suspension is expected to negatively impact the financial results for the first half of the financial year 2020/2021[19] Acquisitions and Investments - The acquisition of 80% shareholding interest in Harbour Group Holdings was completed for HK$35,712,000, with an additional subscription of 450 ordinary shares for HK$2,008,800[25] - The company indirectly holds an 80.86% interest in Harbour Group Holdings after the completion of the acquisition and subscription[25] - The Harbour Group Acquisition was settled with HK$28,512,000 in cash and HK$7,200,000 through promissory notes[25] - The Directors believe that the Harbour Group Acquisition and Subscription can broaden the Group's revenue base and benefit from diversified returns in the future[27] - The Group plans to invest in capital assets for new plants and machines for environmental protection and safety improvements, with funding expected from coal sales revenue and external banking facilities[29] - The Group is exploring new markets and seeking to extend its business coverage in technological and renewable energy sectors, including acquisitions of Harbour Group and NEFIN Group[29] Governance and Management - Mr. Kwan has been the chairman and managing director since March 2017, with over 10 years of experience in corporate finance and banking[112] - The company has several cross-directorships among its key executives, indicating a closely-knit management structure[117] - The company is focused on business development and legal aspects through its executive team, which includes professionals with diverse backgrounds[117] - The management team has a strong educational background, with degrees from prestigious institutions such as the University of Hong Kong and McMaster University[117] - The independent non-executive directors are involved in key committees such as the audit, remuneration, and nomination committees, ensuring corporate governance[119][120][124] - The Company has complied with the Corporate Governance Code throughout the year, except for a deviation from code provision A.2.1[130] - The Board consists of three executive Directors, three independent non-executive Directors, and one alternate Director, ensuring a balance of skills and experience[136] Financial Position and Liabilities - As of March 31, 2020, the Group reported net current assets of approximately HK$127,070,000, an increase from approximately HK$84,255,000 in 2019[100] - The Group's cash and cash equivalents were approximately HK$235,126,000, down from approximately HK$416,662,000 in 2019, with restricted bank balances of approximately HK$73,760,000[100] - Current liabilities decreased to approximately HK$132,624,000 from approximately HK$348,204,000 in 2019, primarily due to a reduction in trade and other payables[100] - Non-current liabilities surged to approximately HK$233,637,000 from approximately HK$3,257,000 in 2019, largely due to the issuance of a convertible bond[102] - The Group's gearing ratio increased to approximately 1.98 in 2020 from 1.55 in 2019, indicating a higher level of debt relative to equity[102] Board Diversity and Composition - The Company adopted a policy on Board diversity in June 2014, revised in January 2019, considering factors such as gender, age, and professional experience for appointments[137] - The Board includes members with professional experience in multinational entrepreneurship, legal practices, corporate finance, accounting, and financial management[185] - The Company has a total of 8 directors, with 4 having over 10 years of service and 2 having 1-5 years of service[185] - The Nomination Committee evaluates candidates based on integrity, industry experience, and relevant skills[200] - Diversity in gender, age, cultural background, and professional experience is emphasized for board composition[200]

Financial Performance - Revenue for the six months ended September 30, 2019, was HKD 63,665,000, an increase from HKD 16,079,000 in the same period last year, representing a growth of 295%[13] - Gross profit for the same period was HKD 30,459,000, compared to HKD 4,255,000 in the previous year, indicating a significant increase[13] - The net profit for the period was HKD 32,425,000, down from HKD 34,573,000 year-over-year, reflecting a decrease of approximately 6.2%[13] - Total comprehensive income for the period was HKD 24,019,000, an increase from HKD 19,152,000 in the prior year, showing a growth of 25.1%[13] - Basic earnings per share for the period was HKD 4.31, compared to HKD 4.52 in the previous year, indicating a slight decline[13] - Operating cash flow for the six months ended September 30, 2019, was HKD 42,950,000, compared to a cash outflow of HKD 2,731,000 in the same period of 2018[27] - Net cash from operating activities amounted to HKD 39,068,000, a significant improvement from a net cash outflow of HKD 8,116,000 in the previous year[27] - The company reported a profit before tax of HKD 36,294,000, with HKD 18,932,000 from coal business, a loss of HKD 54,000 from renewable energy, and HKD 2,740,000 from IT services[46] Assets and Liabilities - The company’s total assets as of September 30, 2019, were not detailed in the provided content, but the financial position reflects ongoing operational activities[13] - As of September 30, 2019, non-current assets totaled HKD 149,685,000, an increase from HKD 103,685,000 as of March 31, 2019, representing a growth of approximately 44.4%[15] - Current assets amounted to HKD 410,361,000, a slight decrease from HKD 432,459,000, indicating a decline of about 5.1%[15] - Total liabilities decreased to HKD 342,270,000 from HKD 348,204,000, showing a reduction of about 1.7%[15] - The equity attributable to owners of the company rose to HKD 208,248,000 from HKD 183,639,000, marking an increase of approximately 13.3%[17] - The company’s total assets less current liabilities improved to HKD 217,776,000 from HKD 187,940,000, reflecting an increase of approximately 15.9%[17] - The company’s total equity increased to HKD 209,532,000 from HKD 184,683,000, representing a growth of approximately 13.4%[17] Expenses and Costs - The company reported a financing cost of HKD (2,758,000) for the period, compared to HKD 44,148,000 in the previous year, showing a significant reduction[13] - Administrative and other operating expenses increased to HKD (19,513,000) from HKD (12,221,000), reflecting a rise of 59%[13] - The company incurred capital expenditures of HKD 20,528,000 for the purchase of property, plant, and equipment, compared to HKD 1,852,000 in the prior year[27] - The group incurred a cost of HKD 16,471,000 for sold inventory during the six months ended September 30, 2019, compared to HKD 11,824,000 in the previous year[63] - The group’s employee costs, excluding directors' remuneration, totaled HKD 23,312,000 for the period, significantly higher than HKD 4,165,000 in the prior year[63] Business Segments - For the six months ended September 30, 2019, total revenue from external customers was HKD 63,665,000, with contributions of HKD 38,166,000 from coal business, HKD 388,000 from renewable energy, and HKD 25,111,000 from IT services[46] - The gross profit for the same period was HKD 30,459,000, with HKD 25,159,000 from coal business, HKD 303,000 from renewable energy, and HKD 4,997,000 from IT services[46] - The renewable energy business recorded revenue of approximately HKD 388,000 during the reporting period, while the IT services business generated revenue of approximately HKD 25,111,000[143][144] - The coal mining business generated revenue of approximately HKD 38,166,000 during the reporting period, an increase of about 137.37% compared to HKD 16,079,000 in the previous year[157] Acquisitions and Investments - The company acquired a 90% stake in a renewable energy leasing technology company, resulting in goodwill of HKD 4,229,000, with no impairment losses reported[76] - The company’s cash outflow for the acquisition of Hong Kong Marine Holdings was HKD 30,521,000, resulting in a net cash outflow of HKD 24,494,000 after accounting for cash acquired[130] - The identifiable net assets acquired from Hong Kong Marine Holdings amounted to HKD 9,613,000, with goodwill generated from the acquisition being HKD 24,148,000[130] - The acquisition of New Energy Group is expected to enhance the company's innovative and renewable energy business[189] - The company believes that the acquisition of Honghai Holdings will broaden its revenue base and benefit from diversified returns[193] Cash Flow and Financing - The company reported a net cash outflow from financing activities of HKD 2,306,000, an improvement from HKD 7,937,000 in the previous year[27] - The company has a zero-coupon convertible bond with a principal amount of HKD 200,000,000, with an extended maturity date to March 13, 2020[200] - The fair value of the third convertible bond as of September 30, 2019, is approximately HKD 189,385,000, down from HKD 217,869,000 as of March 31, 2019, reflecting a decrease of about 13.1%[101] - The company recognized a loss increase of approximately HKD 992,000 if the expected stock price volatility increases by 5% for the six months ending September 30, 2019[119] Operational Developments - The company has expanded the mining area of the Kaiyuan coal mine from approximately 1.1596 square kilometers to 4.1123 square kilometers, with an estimated coal resource of 41.6433 million tons[138] - The company has initiated an optimization upgrade plan for coal mining operations in Xinjiang, aiming to consolidate smaller mines for increased efficiency[165] - The proposed expansion of the Kaiyuan Coal Mine's mining area from 1.1596 square kilometers to 4.12 square kilometers is expected to yield approximately 131.18 million tons of coal resources[167] - The company has signed agreements with other mining companies to facilitate the optimization and expansion of its coal mining operations[168][169] Regulatory and Compliance - The company did not adopt any new or revised Hong Kong Financial Reporting Standards that have been issued but are not yet effective as of the date of the interim financial information approval[39] - The company is currently in the process of obtaining the necessary approvals for the expanded mining rights from the relevant authorities[184]

Financial Performance - For the year ended March 31, 2019, the Group recorded a revenue of approximately HK$75,625,000, a decrease of 58.5% from HK$182,445,000 in 2018[8] - The profit for the year was approximately HK$28,843,000, down 21.4% from HK$36,678,000 in the previous year[8] - The decrease in profit was primarily due to a reduction in gross profit and a turnaround from exchange gain to exchange loss of approximately HK$15,041,000 compared to last year[8] - The Group recorded a revenue of approximately HK$75,625,000 for the Year, representing a decrease of approximately HK$106,820,000 or approximately 59% compared to last year[74] - The Group sold approximately 1,764,591 tonnes of coal, a decrease of approximately 44.6% in volume from the previous year[75] - The cost of sales for the Year was approximately HK$44,542,000, which decreased in line with the reduction in sales volume[76] - The gross profit decreased to approximately HK$31,083,000, a decrease of approximately HK$20,964,000 or approximately 40%, while the gross profit margin increased to approximately 41.1%[77] - Other revenue increased to approximately HK$10,438,000, representing an increase of approximately HK$4,106,000 or approximately 64.8% compared to last year[78] - Administrative and operating expenses increased to approximately HK$28,688,000, representing an increase of approximately HK$6,232,000 or approximately 28% compared to the previous year[84] - Profit for the Year was approximately HK$28,843,000, a decrease of approximately HK$7,835,000 compared to last year[85] - The total sales volume of coal for the year was 1,764,591 tonnes, with a gross revenue of HK$75,234,000, representing a decrease of 45% compared to the previous year[93] - The company focused on selling slack coal and weathered coal, resulting in gross sales revenue more than doubling compared to the previous year[95][97] - The production cost per ton of coal remained constant, with post-tax discount rates at 14.60% for the year ended March 31, 2019, down from 15.20% the previous year[96][98] - The sales volume of mixed coal was 169,644 tonnes, with a selling price of HK$88 per ton, generating gross revenue of HK$14,925,000[93] - The sales volume of slack coal was 62,882 tonnes, with a selling price of HK$58 per ton, generating gross revenue of HK$3,630,000[93] - The sales volume of weathered coal was 1,531,874 tonnes, with a selling price of HK$37 per ton, generating gross revenue of HK$56,660,000[93] - The company reported a significant decline in sales for large coal, middle coal, and small medium coal, with gross revenues dropping to zero for these categories[93] - The fair value of the Convertible Bond decreased from approximately HK$247,242,000 as of March 31, 2018, to approximately HK$217,869,000 as of March 31, 2019, representing a change of approximately HK$29,373,000[105] - The discount rate for the Convertible Bond was concluded to be 9.40% for the year, up from 7.62% in the previous year[106] - The closing stock prices of the Company were HK$0.42 and HK$0.24 as of March 31, 2018, and March 31, 2019, respectively[105] - The expected volatility of the stock price was 65.46% for the year ended March 31, 2018, and 64.00% for the year ended March 31, 2019[105] - The valuation report indicated that the value-in-use of the Coal Mining Assets approximated its carrying amount as of March 31, 2019[102] - The coal mining business generated approximately HK$75,234,000 in revenue for the year, representing a 59% decrease compared to HK$182,445,000 in the previous year[109] - The Group sold approximately 1.76 million tonnes of coal during the year, down from approximately 3.18 million tonnes in 2018[109] Operational Adjustments - The Group continued to focus on coal resources mining while starting to invest in other businesses during the year[8] - The demand for coal has been decreasing gradually due to fewer large-scale industrial projects and the promotion of clean energy by the PRC government[8] - The management adjusted short-term operational strategies and modified production plans in response to local government policies[8] - The Group aims to maintain strict control over costs and expenses to ensure financial stability[8] - The company is focused on expediting resource restructuring work in the Zhundong Meitian Xiheishan Coal Mining Area[12] - The exploration permit for the Kaiyuan Mine will be terminated as part of the restructuring process[10] - The company aims to accelerate and complete the process of fixing the mining area for each mining right owner in the region[12] - The company is conducting frequent meetings with the Xinjiang Land Department to protect its interests regarding the exploration permit of the Zexu Mine[10] - The company has entered into four undisputed agreements to dispose of the Zexu Mine and acquire the Kaiyuan Extended Area[12] - The Company will appoint professional parties to evaluate possible coal reserves and perform valuation on the First Extended Area and Second Extended Area once the exploration or mining rights are obtained[18] - The company is actively seeking legal opinions to navigate the requirements set forth by the Zhundong Division of the Ministry of Land and Resources[25] - The company plans to cooperate with relevant government departments to complete the requested environmental protection works[34] - The management has been actively communicating with government departments to protect the company's interests in the Outstanding Mining Area[27] - The company is in the process of fulfilling necessary requirements to obtain the relevant mining permit following the receipt of the Exploration Permit[29] - The company has undergone an Optimization and Upgrading Plan, previously referred to as the Management Restructuring Plan[29] - The company is committed to adhering to all necessary regulations and procedures to secure its mining rights and permits[29] Acquisitions and Investments - The company has not commenced mining in the First Extended Area and Second Extended Area, and is awaiting the acquisition of exploration and mining rights[18] - The compensation amount for the Second Undisputed Agreement is RMB4,391,982, calculated based on an area of 2.582 km² at a rate of RMB486,000 per km² with a compensation multiple of 3.5[14] - The compensation amount for the Third Undisputed Agreement is RMB2,197,692, calculated based on an area of 1.292 km² at the same rate and multiple[14] - The compensation amount for the Fourth Undisputed Agreement is RMB27,216, calculated based on an area of 0.016 km² at the same rate and multiple[16] - The Company has recorded non-refundable deposits of approximately RMB2,099,000 (equivalent to approximately HK$2,604,000) for the First Extended Area and Second Extended Area in its consolidated statement of financial position[18] - The acquisition of NEFIN Group, engaged in renewable energy solutions and solar farm development, is expected to enhance the company's innovative and renewable energy business expansion[61] - The acquisition of NEFIN Group is expected to enhance the Group's expansion in innovative and renewable energy business[70] - The Group plans to invest in upgrading eco-friendly equipment to mitigate emissions from coal mining operations[66] - The Group is applying for exploration and mining rights in the extended areas as part of its Updated Optimization and Upgrading Plan[69] - Funding for new capital assets is expected to come primarily from coal sales revenue and external banking facilities[70] - Ample Talent Ventures Limited agreed to acquire 80% equity interest in Harbour Group for a total consideration of HK$35,712,000[63] - The vendor guarantees that the audited consolidated net profit of the Target Group will be no less than HK$7,200,000 per annum for the years ending 31 December 2018, 2019, and 2020[63] - As of 31 March 2019, a deposit of approximately HK$3,571,000 was paid for the acquisition of the Target Group[65] - The acquisition of the Target Group will be accounted for using the acquisition method under HKFRS 3 Business Combinations[65] Governance and Management - The Company is committed to maintaining statutory and regulatory standards and adherence to corporate governance principles emphasizing transparency, independence, accountability, responsibility, and fairness[163] - The Board is collectively responsible for promoting the success of the Company by directing and supervising its affairs[165] - The Company has complied with the Corporate Governance Code throughout the year, except for a deviation from code provision A.2.1[164] - The independent non-executive Directors ensure high standards of financial and management reporting to the Board and shareholders[166] - The Company has independent non-executive directors serving on various listed companies, enhancing its governance structure[158] - The Board sets strategies for the Company and monitors the performance of senior management[165] - The Company emphasizes a balanced composition in the Board to maintain a strong independent element[166] - The Board held four regular meetings and two ad-hoc meetings during the year, with attendance records indicating that Kwan Man Fai attended all six meetings[172] - Independent non-executive Directors represent half of the Board, with two holding appropriate professional qualifications in accounting or related financial management expertise[176] - The Company has a policy for Board diversity, considering factors such as gender, age, and professional experience for appointments and succession planning[172] - All independent non-executive Directors have confirmed their independence annually, and the Company considers them independent after assessment[178] - At each annual general meeting, one-third of the Directors must retire by rotation, ensuring regular re-election[175] - The Company Secretary ensures that Board procedures are followed and all applicable rules and regulations are complied with[174] - The minutes of Board meetings are kept by the Company Secretary and are available for inspection by any Director[174] - The Company has appointed three independent non-executive Directors, fulfilling the requirements of the Listing Rules[176] - The service agreements of independent non-executive Directors have been extended for one year, subject to retirement by rotation[177] - The Board comprises three executive Directors and three independent non-executive Directors, providing a balance of skills and perspectives[172] - The Audit Committee consists of three independent non-executive directors, who attended all three meetings held during the year[194] - The Audit Committee reviewed the Group's consolidated financial statements for the year, ensuring compliance with applicable accounting standards and disclosure requirements[195] - The company did not have a designated Chief Executive Officer during the year, with the Chairman also fulfilling the CEO responsibilities, which the board deemed suitable for operational efficiency[186] - The Remuneration Committee was established in July 2005 and has undergone amendments to its terms of reference to comply with Listing Rules[196] - The company has provided appropriate insurance coverage for potential legal actions against directors and officers[183] - The independent non-executive directors have confirmed their independence in accordance with the listing rules[182] - The company has established three committees to oversee specific aspects of its affairs, ensuring high corporate governance standards[187] - The Audit Committee endorsed the accounting treatment adopted by the company during the year[195] - The company has conducted regular reviews of the structure and composition of its committees, focusing on the skills and experience of individual members[191] - The Compensation Committee was established in July 2005 with a specific scope of authority[198] - The scope of the Compensation Committee was revised on March 27, 2012, to comply with amendments to the listing rules[198] - The corporate governance report outlines the responsibilities as per the code provisions[200]