ANNOUNCEMENT OF ANNUAL RESULTS FOR THE YEAR ENDED 31 MARCH 2024

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.NAN NAN RESOURCES ENTERPRISE LIMITED南南资源实业有限公司 (Incorporated in Bermuda with limited liability) (Stock Code: 1229) ANNOUNCEMENT OF ANNUAL RESULTS FOR THE YEAR ENDED 31 MARCH 2024 The board of directors (the “Directors”) (the “Board”) of Nan Nan Resources Enterprise Limited (the “Company”) is pleased to announce the consolidated results of the Company and its subsidiaries (collectively the “Group”) for the year ended 31 March 2024 (the “Year”) together with the comparative figures for the previous year as follows: C O N S O L I D A T E D S T A T E M E N T O F P R O F I T O R L O S S A N D O T H E R COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2024 20242023 Notes HK$’000 HK$’000 Revenue 4 116069 239886 Cost of services and goods sold (72931) (106057) Gross profit 43138 133829 Other revenue 3563 4147 Selling and distribution expenses (1181) (1394) Administrative and other operating expenses (61588) (48896) Exchange (loss)/gain net (3464) 3946 Finance costs 5 (3762) (7214) Gain on fair value change/(Loss on fair value change and loss arising from modification) of convertible bond designated as financial liabilities at fair value through profit or loss (“FVPL”) 62794 (116835) Impairment loss on property plant and equipment (1016) – Profit/(Loss) before tax 5 38484 (32417) Income tax expenses 6 (787) (26621) Profit/(Loss) for the year 37697 (59038) –1–20242023 Notes HK$’000 HK$’000 Other comprehensive income/(loss) net of nil tax Items that will not be reclassified to profit or loss: Exchange differences on translation of the Company’s financial statements to presentation currency 1350 (5318) Gain on fair value change of convertible bond designated as financial liabilities at FVPL arising from change in its credit risk 28429 – Item that may be reclassified subsequently to profit or loss: Exchange differences on translation of functional currency to presentation currency (23018) (32517) Other comprehensive income/(loss) for the year 6761 (37835) Total comprehensive income/(loss) for the year 44458 (96873) Profit/(Loss) for the year attributable to: – Owners of the Company 39095 (58328) – Non-controlling interests (1398) (710) 37697(59038) Total comprehensive income/(loss) for the year attributable to: – Owners of the Company 45952 (96090) – Non-controlling interests (1494) (783) 44458(96873) Earnings/(Loss) per share (expressed in Hong Kong cents) – Basic 8 5.11 (7.62) – Diluted 8 (0.56) (7.62) – 2 –CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2024 20242023 Notes HK$’000 HK$’000 Non-current assets Property plant and equipment 138848 133149 Intangible assets 182121 188899 Goodwill 4229 4229 Prepayments for acquisition of property plant and equipment 9 227 6425 325425332702 Current assets Inventories 2031 6810 Trade and other receivables 9 8229 9989 Cash and cash equivalents 189307 234113 199567250912 Current liabilities Trade and other payables 10 68352 63027 Mining right payables current portion 4541 4379 Interest-bearing borrowings 11 – 3477 Lease liabilities 1029 1660 Tax payables 2599 9857 7652182400 Net current assets 123046 168512 Total assets less current liabilities 448471 501214 –3–20242023 HK$’000 HK$’000 Capital and reserves Share capital 76537 76537 Reserves 94863 48911 Equity attributable to owners of the Company 171400 125448 Non-controlling interests 374 1868 Total equity 171774 127316 Non-current liabilities Convertible bond designated as financial liabilities at FVPL 208149 299372 Provision for close down restoration and environmental costs 2678 2814 Mining right payables non-current portion 62559 70520 Lease liabilities 267 368 Deferred tax liabilities 3044 824 276697373898 448471501214 – 4 –NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 1. BASIS OF COMPLIANCE The consolidated financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”) which collective term includes all applicable individual Hong Kong Financial Reporting Standards Hong Kong Accounting Standards (“HKASs”) and Interpretations issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”) accounting principles generally accepted in Hong Kong and the disclosure requirements of the Hong Kong Companies Ordinance.The consolidated financial statements also comply with the applicable disclosure provisions of the Rules Governing the Listing of Securities on the Stock Exchange (the “Listing Rules”).All amounts have been rounded to the nearest thousand unless otherwise indicated.The consolidated financial statements have been prepared on a basis consistent with the accounting policies adopted in the 2023 consolidated financial statements except for the adoption of the following new/revised HKFRSs that are relevant to the Group and effective from the current year as set out below. 2. ADOPTION OF NEW/REVISED HKFRSs The Group has applied for the first time the following new/revised HKFRSs: Amendments to HKAS 1 Disclosure of Accounting Policies Amendments to HKAS 8 Definition of Accounting Estimates Deferred Tax related to Assets and Liabilities arising from Amendments to HKAS 12 a Single Transaction Amendments to HKAS 12 International Tax Reform – Pillar Two Model Rules Amendments to HKAS 1: Disclosure of Accounting Policies The amendments require companies to disclose their material accounting policy information rather than their significant accounting policies.The amendments have no effect on the measurement recognition or presentation of any items in the consolidated financial statements. Management has reviewed and updated the disclosure of accounting policies to disclose the material accounting policy information.Amendments to HKAS 8: Definition of Accounting Estimates The amendments clarify how companies should distinguish changes in accounting policies from changes in accounting estimates.The adoption of the amendments does not have any significant impact on the consolidated financial statements.Amendments to HKAS 12: Deferred Tax related to Assets and Liabilities arising from a Single Transaction The amendments narrow the scope of the recognition exemption in paragraphs 15 and 24 of HKAS 12 so that it no longer applies to transactions that on recognition give rise to equal taxable and deductible temporary differences.– 5 –The adoption of the amendments does not have any significant impact on the consolidated financial statements.Amendments to HKAS 12: International Tax Reform – Pillar Two Model Rules The amendments provide entities with temporary relief from accounting for deferred taxes arising from the Organisation for Economic Co-operation and Development’s Pillar Two model rules. The Amendments also introduce targeted disclosure requirements to help investors understand an entity’s exposure to income taxes arising from the rules.The adoption of the amendments does not have any significant impact on the consolidated financial statements. 3. SEGMENT INFORMATION Information reported to the executive directors of the Company being identified as the chief operating decision makers (“CODM”) for the purposes of resource allocation and assessment of segment performance focuses on types of goods delivered or services rendered. No operating segments identified by the CODM have been aggregated in arriving at the reportable segments of the Group.Specifically the Group’s reportable and operating segments are as follows: (1) Coal mining business segment: mining and sales of coals in the Mainland China; (2) Renewable energy business segment: service income from renewable energy solutions in Malaysia; and (3) Information technology (“IT”) outsourcing consultancy and technical services (together referred to “IT Services”) business segment: IT consultancy and technical services (including sales of IT hardware products) and IT outsourcing services in Hong Kong Malaysia Singapore and the United Kingdom (the “UK”).Segment revenue represents revenue derived from (i) coal mining business; (ii) renewable energy business; and (iii) IT Services business.Segment results which are the measures reported to the CODM for the purposes of resources allocation and assessment of segment performance represent the profit earned or loss incurred by each segment without allocation of changes in fair value and loss from modification of convertible bond designated as financial liabilities at FVPL and exchange gain or loss.Segment assets include property plant and equipment intangible assets goodwill prepayments for acquisition of property plant and equipment inventories trade and other receivables and cash and cash equivalents. All assets are allocated to operating segments other than unallocated head office and corporate assets as these assets are managed on a group basis.– 6 –Segment liabilities include convertible bond designated as financial liabilities at FVPL trade and other payables interest-bearing borrowings lease liabilities mining right payables tax payables provision for close down restoration and environmental costs and deferred tax liabilities. All liabilities are allocated to operating segments other than unallocated head office and corporate liabilities as these liabilities are managed on a group basis.In addition the directors of the Company consider that the Group’s place of domicile is Hong Kong where the central management and control is located.Segment revenue and results The followings are analysis of the Group’s revenue and results by reportable and operating segments: Coal Renewable IT mining energy Services business business business Unallocated Total HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Year ended 31 March 2024 Revenue from external customers and reportable segment revenue 9806 0 348 7 1452 2 – 11606 9 Gross profit 39975 1633 1530 – 43138 Selling and distribution expenses (107 5) – (10 6) – (118 1) Segment results 38900 1633 1424 – 41957 Other revenue 2361 176 78 948 3563 Administrative and other operating expenses (39174) (1376) (7436) (13602) (61588) Finance costs (3632) – – (130) (3762) Impairment loss on property plant and equipment – – (1016) – (1016) Gain on fair value change of convertible bond designated as financial liabilities at FVPL – – – 62794 62794 Exchange loss net – – – (346 4) (346 4) (Loss)/Profit before tax (1545) 433 (6950) 46546 38484 Income tax expenses (74 1) (2 3) (2 3) – (78 7) (Loss)/Profit for the year (228 6) 41 0 (697 3) 4654 6 3769 7 Additional segment information: Amortisation 7751 66 – – 7817 Depreciation 12149 1507 734 1005 15395 Additions to property plant and equipment 27668 14 1026 310 29018 Additions to intangible assets 10154 – – – 10154 Charge of loss allowance of trade receivables net – 1 424 – 425 Supplemental environmental related fees 704 3 – – – 704 3 – 7 –Coal Renewable IT mining energy Services business business business Unallocated Total HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Year ended 31 March 2023 Revenue from external customers and reportable segment revenue 19919 8 359 4 3709 4 – 23988 6 Gross profit 127577 1649 4603 – 133829 Selling and distribution expenses (130 8) – (8 6) – (139 4) Segment results 126269 1649 4517 – 132435 Other revenue 2819 65 492 771 4147 Administrative and other operating expenses (23638) (1055) (7915) (16288) (48896) Finance costs (7085) – (41) (88) (7214) Loss on fair value change and loss arising from modification of convertible bond designated as financial liabilities at FVPL – – – (116835) (116835) Exchange gain net – – – 394 6 394 6 Profit/(Loss) before tax 98365 659 (2947) (128494) (32417) Income tax expenses (2657 1) – (5 0) – (2662 1) Profit/(Loss) for the year 7179 4 65 9 (299 7) (12849 4) (5903 8) Additional segment information: Amortisation 17582 66 – – 17648 Depreciation 9094 1572 763 948 12377 Additions to property plant and equipment 26614 269 122 1509 28514 Additions to intangible assets 15085 – – – 15085 Charge of loss allowance of trade receivables net – 2 47 5 – 47 7 – 8 –Segment assets and liabilities The followings are analysis of the Group’s assets and liabilities by reportable and operating segments: Coal Renewable IT mining energy Services business business business Unallocated Total HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 As at 31 March 2024 Property plant and equipment 112997 25533 – 318 138848 Intangible assets 180857 1264 – – 182121 Goodwill – 4229 – – 4229 Other assets 17217 8 788 9 596 3 1376 4 19979 4 Total assets 46603 2 3891 5 596 3 1408 2 52499 2 Convertible bond designated as financial liabilities at FVPL – – – (208149) (208149) Mining right payables (67100) – – – (67100) Other liabilities (7228 3) (82 4) (252 6) (233 6) (7796 9) Total liabilities (13938 3) (82 4) (252 6) (21048 5) (35321 8) As at 31 March 2023 Property plant and equipment 102580 28830 727 1012 133149 Intangible assets 187571 1328 – – 188899 Goodwill – 4229 – – 4229 Other assets 20824 4 623 6 696 8 3588 9 25733 7 Total assets 49839 5 4062 3 769 5 3690 1 58361 4 Convertible bond designated as financial liabilities at FVPL – – – (299372) (299372) Mining right payables (74899) – – – (74899) Other liabilities (7695 4) (71 4) (177 3) (258 6) (8202 7) Total liabilities (15185 3) (71 4) (177 3) (30195 8) (45629 8) – 9 –Geographical information The following table sets out information about the geographical location of (i) the Group’s revenue from external customers and (ii) the Group’s property plant and equipment intangible assets goodwill and prepayment for acquisition of property plant and equipment (“Specified Non-current Assets”). The geographical location of the revenue is presented based on the location of the customers. The geographical location of property plant and equipment and prepayments for acquisition of property plant and equipment is presented based on the physical location of the assets and the geographical location of intangible assets and goodwill is presented based on the location of the respective business operations.Location of revenue Revenue from external customers Year ended 31 March 20242023 HK$’000 HK$’000 The Mainland China 98060 199198 Hong Kong 10118 30400 Malaysia 3492 3761 Singapore 4172 5295 The UK 22 7 123 2 116069239886 Location of the Specified Non-current Assets As at 31 March 20242023 HK$’000 HK$’000 The Mainland China 294081 296576 Hong Kong 318 1739 Malaysia 3102 6 3438 7 325425332702 Information about major customers Revenue from external customers contributing 10% or more of the total revenue is as follow: 20242023 HK$’000 HK$’000 Customer A from Coal mining business segment * 26694 Customer B from Coal mining business segment * 2438 9 * The corresponding revenue did not contribute 10% or more of the total revenue of the Group during the year ended 31 March 2024.– 10 –4. REVENUE 20242023 HK$’000 HK$’000 Revenue from contracts with customers within HKFRS 15 Coal mining business – Sales of coals 9806 0 19919 8 Renewable energy business – Service income from renewable energy solutions 348 7 359 4 IT Services business – Sales of IT hardware products 2597 21562 – IT outsourcing services 5081 9139 – IT consultancy and technical services 684 4 639 3 1452237094 116069239886 In addition to the information shown in segment disclosures the revenue from contracts with customers within HKFRS 15 is disaggregated as follows: 20242023 HK$’000 HK$’000 Timing of revenue recognition: – at a point in time Sales of coals 98060 199198 Sales of IT hardware products 259 7 2156 2 100657220760 – over time Service income from renewable energy solutions 3487 3594 IT outsourcing services 5081 9139 IT consultancy and technical services 684 4 639 3 1541219126 116069239886 – 11 –5. PROFIT/(LOSS) BEFORE TAX This is stated at after charging/(crediting): 20242023 HK$’000 HK$’000 Finance costs Interest on interest-bearing borrowings 37 698 Interest on mining right payables 5822 6382 Interest on lease liabilities 15 6 13 4 Total finance costs 6015 7214 Less: Capitalised into construction in progress (Note (i)) (225 3) – 37627214 Staff costs Staff cost (excluding directors’ remuneration) (charged to “cost of services and goods sold” “selling and distributionexpenses” and “administrative and other operating expenses”) Salaries bonus allowance and other short-term employee benefits 30366 37009 Contributions to defined contribution retirement plan 3349 3549 3371540558 Other items Amortisation of intangible assets (charged to “cost of services and goods sold”) 7817 17648 Auditor’s remuneration – audit services 1500 1250 – other services 360 300 18601550 Cost of inventories sold 55080 81554 Depreciation of property plant and equipment and right-of-use assets (charged to “cost of services and goods sold” and “administrative and other operating expenses”) 15395 12377 Charge of loss allowance of trade receivables net 425 477 Exchange loss on financial liabilities at FVPL net 13878 13483 Other exchange gain net (10414) (17429) Expenses recognised payments under short-term leases 788 622 Supplemental environmental related fees (charged to “Administrative and other operating expenses”) (Note (ii)) 704 3 – – 12 –Notes: (i) The borrowing costs have been capitalised at a rate of approximately 7.3% (2023: nil) per annum for the year ended 31 March 2024.(ii) During the year ended 31 March 2024 the relevant authorities in Xinjiang Uygur Autonomous Region of the Mainland China have interpreted the existing rules and regulations on the measurement requirements for the imposition of environmental related fees. The implementation of the new measurement requirements required 木垒县凯源煤炭有限责任公司 (Mulei County Kai Yuan Coal Company Limited* “Kaiyuan Company”) to pay a higher environmental related fees to the local government.Taking into consideration of the potential negative impact on the operation of coal mine from further negotiation with local government about the supplemental environment related fees Kaiyuan Company decided not to further negotiate with the local government and to make an one-off voluntary settlement of approximately HK$7043000 to the local government.* English translation for identification purposes only. 6. INCOME TAX EXPENSES 20242023 HK$’000 HK$’000 Income tax expenses/(credit) comprise: The Mainland China Enterprise Income Tax – Current year 386 22413 – (Over)/Under provision in prior year (1906) 1724 Malaysia corporate income tax 38 14 Singapore corporate income tax (“Singapore CIT”) 2 3 5 0 (1459)24201 Deferred tax – Origination and reversal of temporary differences 224 6 242 0 78726621 The Company is incorporated in Bermuda and is exempted from income tax. The Company’s subsidiaries established in the BVI and Samoa are exempted from income tax of the respective jurisdictions.Under the Law of the Mainland China on Enterprise Income Tax (the “EIT Law”) and Implementation Regulation of the EIT Law the tax rate of the Mainland China subsidiaries is 25% for both years.– 13 –In March 2018 the two-t iered profi ts tax rates regime was s igned into law of Hong Kong under which the first HK$2 million of profits of qualifying corporations will be taxed at 8.25% (the “graduated tax rate”) and profits above HK$2 million will be taxed at 16.5% for the years ended 31 March 2024 and 2023. The profits of corporations in the Group not qualifying for the two-tiered profits tax rates regime will continue to be taxed at a flat rate of 16.5% of the estimated assessable profits for the years ended 31 March 2024 and 2023.Malaysia corporate income tax is calculated at the rate of 24% of the estimated assessable profits of the Group’s entities in Malaysia arising from Malaysia during the years ended 31 March 2024 and 2023. During the years ended 31 March 2024 and 2023 Malaysia incorporated entities with paid-up capital of Malaysia Ringgit (“RM”) 2.5 million or less and gross business income of not more than RM50 million enjoy tax rate of 15% on the first RM150000 and 17% on the next RM450000 and remaining balance of the estimated assessable profits at the standard rate of 24%.During the year ended 31 March 2024 Singapore CIT is calculated at the rate of 17% (2023: 17%) of the estimated chargeable income of the Group’s entities in Singapore arising from Singapore.During the years ended 31 March 2024 and 2023 Singapore incorporated companies can enjoy 75% tax exemption on the first Singapore Dollars (“S$”) 10000 of normal chargeable income and a further 50% tax exemption on the next S$190000 of normal chargeable income.The Group’s entity established in the UK is subject to the corporate income tax at a statutory rate of 25% (2023: 19%) for the year ended 31 March 2024. The income tax expenses for the year can be reconciled to the profit/(loss) before tax as follows: 20242023 HK$’000 HK$’000 Profit/(Loss) before tax 3848 4 (3241 7) Notional tax on profit/loss before tax calculated at the rates applicable to profit in the countries concerned 5960 2976 Tax effect of expenses not deductible for tax purposes 6163 22866 Tax effect of income not taxable for tax purposes (10404) (322) Tax effect of graduated tax rate and tax concession (25) (99) Tax effect of tax losses not recognised 736 492 Utilisation of previously unrecognised tax losses (89) (288) (Over)/Under provision for prior year (1906) 1724 Others 35 2 (72 8) Income tax expenses for the year 78 7 2662 1 7. DIVIDEND No dividend was paid or proposed during the year ended 31 March 2024 nor has any dividend been proposed since the end of the current reporting period (2023: Nil).– 14 –8. EARNINGS/(LOSS) PER SHARE (a) Basic earnings/(loss) per share The calculation of the basic earnings/(loss) per share attributable to the owners of the Company for the year is based on the following data: 20242023 HK$’000 HK$’000 Profit/(Loss) Profit/(Loss) for the purpose of basic earnings/(loss) per share (Profit/(Loss) for the year attributable to owners of the Company) 3909 5 (5832 8) 20242023 Number of Number of shares shares Weighted average number of ordinary shares Weighted average number of ordinary shares for the purpose of basic earnings/(loss) per share 76537358 4 76537358 4 (b) Diluted (loss)/earnings per share The calculation of the diluted (loss)/earnings per share attributable to the owners of the Company for the year is based on the following data: (i) (Loss)/Profit for the year attributable to owners of the Company 20242023 HK$’000 HK$’000 Profit/(Loss) for the year attributable to owners of the Company 39095 (58328) (Gain on fair value change)/Loss on fair value change and loss from modification of convertible bond designated as financial liabilities at FVPL (62794) 116835 Exchange loss on convertible bond designated as financial liabilities at FVPL 1387 8 1348 3 (9821)71990 – 15 –(ii) Weighted average number of ordinary shares 20242023 Number of Number of shares shares Weighted average number of ordinary shares for the purpose of basic (loss)/earnings per share 765373584 765373584 Effect of conversion of convertible bond 100000000 0 100000000 0 Weighted average number of ordinary shares for the purpose of diluted (loss)/earnings per share 176537358 4 176537358 4 For the year ended 31 March 2023 the Company’s outstanding convertible bond had an anti- dilutive effect to the basic loss per share calculation the conversion of the above potential dilutive shares is not assumed in the computation of diluted loss per share. Therefore the basic and diluted loss per share for the year ended 31 March 2023 were the same. 9. TRADE AND OTHER RECEIVABLES 20242023 Note HK$’000 HK$’000 Trade receivables from third parties 9(a) 4159 4105 Prepayments deposits and other receivables 3959 5749 Other taxes receivables 111 135 Prepayments for acquisition of property plant and equipment 227 6425 845616414 Analysed by: 20242023 HK$’000 HK$’000 Non-current assets 227 6425 Current assets 8229 9989 845616414 All of the trade and other receivables that are classified as current assets are expected to be recovered or recognised as expense within one year.– 16 –9(a) Trade receivables from third parties The Group’s sales to customers from coal mine business segment are largely done on payment in advance basis. For certain well-established customers the Group allows an average credit period of 90 days. The Group grants credit period up to 60 days from the date of issuance of invoice to its customers from Renewable energy business segment and IT Services business segment.Included in the balances are the trade receivables from contracts with customers within HKFRS 15: 20242023 HK$’000 HK$’000 At the beginning of the reporting period 4105 4770 At the end of the reporting period 4159 4105 For the year ended 31 March 2024 a charge of loss allowance of approximately HK$425000 (2023: approximately HK$477000) is recognised for the trade receivables from contracts with customers within HKFRS 15.Ageing analysis At the end of reporting period the ageing analysis of the trade receivables (presented based on the invoice date) net of loss allowance was as follows: 20242023 HK$’000 HK$’000 Within 30 days 1142 1722 31 – 60 days 895 1878 61 – 90 days 273 344 91 – 365 days 2194 672 Over 1 year 611 20 51154636 Less: Loss allowance (956) (531) 41594105 – 17 –10. TRADE AND OTHER PAYABLES At the end of reporting period the ageing analysis of the trade payables (presented based on the invoice date) is as follows: 20242023 Note HK$’000 HK$’000 Within 90 days 11494 5976 91 – 180 days 1213 1533 181 – 365 days 3569 4778 Over 1 year 3571 3045 Trade payables 19847 15332 Contract liabilities 10(a) 3300 4778 Government levies payable – Economic development fees in coal resources areas 25471 26769 – Others – 459 Accrued expenses 4269 3635 Other taxes payable 5863 3511 Other payables 9602 8543 6835263027 All of the trade and other payables that are classified as current liabilities are expected to be settled on demand or within one year.The average credit period of purchases of goods is up to 180 days. The Group has financial risk management policies in place to ensure that all payables are settled within the credit timeframe.– 18 –10(a) Contract liabilities The movements (excluding those arising from increases and decreases both occurred within the same year) of contract liabilities from contracts with customers within HKFRS 15 during the years ended 31 March 2024 and 2023 are as follows: 20242023 HK$’000 HK$’000 At the beginning of the reporting period 4778 6414 Receipts in advance 3300 4778 Recognised as revenue (4778) (6414) At the end of the reporting period 3300 4778 The Group applies the practical expedient and does not disclose information about remaining performance obligations that have original expected durations of one year or less.The significant amount of contract liabilities was mainly due to the significant receipts from the customers in advance for purchase of coal resources which is the normal practice of Coal mining business to make sales in advance basis. 11. INTEREST-BEARING BORROWINGS 20242023 HK$’000 HK$’000 Current portion Interest-bearing borrowings secured – 347 7 The interest-bearing borrowings with a clause in their terms that give the banks an overriding right to demand for repayment without notice at their sole discretion are classified as current liabilities as at 31 March 2023 even though the directors of the Company do not expect that the bank would exercise their right to demand repayment.As at 31 March 2023 the interest-bearing borrowings were secured by the mining right with carrying amount of approximately HK$109410000.As at 31 March 2023 the interest-bearing borrowings were repayable within one year since their inception.The average effective interest rates on the interest-bearing borrowings were 3.3% to 6.0% per annum. All the interest-bearing borrowings were denominated in RMB.– 19 –MANAGEMENT DISCUSSION AND ANALYSIS BUSINESS OVERVIEW For the Year the Group was engaged in three business segments (1) Coal mining business; (2) Renewable energy business; and (3) IT Services (as defined below) business. Our main business is coal mining and sales of coal in Xinjiang Uygur Autonomous Region (“Xinjiang”) of the People’s Republic of China (the “Mainland China”). Xinjiang is remote from major industrial cities in the Mainland China and hence coal produced in Xinjiang is mainly consumed locally due to the logistic and the transportation costs. During the Year we achieved a significant milestone by successfully completing the final tests checking verification and procedures of attaining the Work Safety Permit* ( 安全生产许可证 ) which represents an important breakthrough for the Company’s compliance and future development. In recent years we have increased investment in Kaiyuan Company (as defined below) annually in accordance with government requirements gaining recognition from the local government and providing an important basis for increasing our production capacity. Our Group will continue our focus on developing the existing business including coal mining capacity upgrades while in the long run we continue to maintain a diversified business.MAJOR EVENTS Acquisition of the New Mining Right of the Enlarged Kaiyuan Mine As disclosed in the announcements of the Company dated 11 November 2011 21 March 2012 15 June 2012 21 March 2014 15 August 2017 28 March 2018 14 December 2018 31 December 2018 15 May 2019 31 May 2019 4 November 2019 and 15 November 2019 the Group negotiated with the Department of Natural Resources of Xinjiang Uygur AutonomousRegion* (新疆维吾尔自治区自然资源厅 ) of the Mainland China (the “Xinjiang NaturalResources Department”) regarding the Optimization and Upgrading Plan# relating to the Kaiyuan Open Pit Coal Mine (the “Kaiyuan Mine”) (i.e. the operating coal mine of the Group in Xinjiang) in particular to increase the mining area of the Kaiyuan Mine and obtain the corresponding new mining right.* English translation for identification purposes only.# “Optimization and Upgrading Plan” was previously referred to as “Management Restructuring Plan” in the announcement of the Company dated 11 November 2011 and in the announcements notices circulars interim reports and annual reports of the Company thereafter.– 20 –(i) Mulei County Kai Yuan Company Limited* ( 木 垒 县 凯 源 煤 炭 有 限 责 任 公 司 ) (“Kaiyuan Company”) an indirect wholly-owned subsidiary of the Company as the transferee and Xinjiang Natural Resources Department as the transferor entered into the transfer agreement (the “Transfer Agreement”) dated 2 December 2019 pursuant to which Kaiyuan Company acquired the new mining right (the “New Mining Right”) of the Kaiyuan Mine with an enlarged mining area (including the original mining area of approximately 1.1596 km2) of 4.1123 km2 in Xinjiang (the “Enlarged Kaiyuan Mine”) for 30 years from August 2019 to August 2049 from the Xinjiang Natural Resources Department to conduct mining activities at the Enlarged Kaiyuan Mine at a consideration of Renminbi (“RMB”) 160978000 (the “Acquisition”); (ii) the estimated coal resources of the Enlarged Kaiyuan Mine are 41.6433 million tonnes for the mining life of 30 years under the Transfer Agreement; (iii) the new mining permit (the “New Mining Permit”) in respect of the New Mining Right with mining term of 1 year from 21 December 2018 to 21 December 2019 regarding the New Mining Right was granted to Kaiyuan Company on 3 November 2018 which has been renewed for two years from 21 December 2019 to 21 December 2021; On 10 October 2021 the New Mining Right has been further renewed for ten years from 11 October 2021 to 11 October 2031; (iv) Kaiyuan Company has the right to apply for the renewal of New Mining Permit for the remaining period of the New Mining Right under the Transfer Agreement; (v) the consideration of RMB160978000 shall be settled in cash and paid by Kaiyuan Company to the Xinjiang Natural Resources Department in fifteen instalments: (a) the first instalment in an amount of RMB32200000 was paid by Kaiyuan Company; (b) the second to fourteenth instalments in an amount of RMB9200000 each shall be paid before 20 November of every year from 2020 to 2032; and (c) the last instalment in an amount of RMB9178000 shall be paid before 20 November 2033; (vi) the Acquisition constituted a very substantial acquisition for the Company under the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (the “Listing Rules”) and further information on the Acquisition was disclosed in the circular dated 19 August 2020; and * English translation for identification purposes only.– 21 –(vii) as part of the Transfer Agreement Kaiyuan Company is required to pay a supplemental resources fee of RMB76502500 (the “Resources Fee”) to the Xinjiang Natural Resources Department for 19.8 million tonnes of coal of Kaiyuan Mine which represented the difference between the accumulated output of 23.65 million tonnes of the Kaiyuan Mine at the end of 2017 and the output of 3.8819 million tonnes (Resources Fee of such output had been paid by Kaiyuan Company to the Xinjiang Natural Resources Department) and recognised in the profit or loss for the year ended 31 March 2020. Based on the advice given by the legal adviser of the Company as to the laws of the Mainland China other than the payment of the Resources Fee Kaiyuan Company will not be subject to any fees relating to the original Kaiyuan Mine pursuant to the terms of the Transfer Agreement.The Testing Checking and Verification of the 900000 Tonnes/Year Expansion Project Since 2010 Kaiyuan Company had been applying for the expansion project to upgrade the coal mine capacity to 900000 tonnes/year. Due to the time constraints of planning policies and other procedures the Kaiyuan Mine’s expansion project experienced several years’ time to obtain approval from the local authorities. After the project approval Kaiyuan Company still needed to undergo the process of obtaining the mining permit and other relevant licences and documentations in order to complete the project. In late 2019 the 900000 tonnes/year New Mining Permit with mining term of 1 year from 21 December 2018 to 21 December 2019 was obtained.References are made to the announcements of the Company dated 11 November 2011 12 March 2012 21 March 2012 15 June 2012 21 March 2014 28 March 2018 14 December 2018 31 December 2018 15 May 2019 31 May 2019 4 November 2019 and 15 November 2019 respectively (collectively the “Announcements”). In late 2019 Kaiyuan Company had been granted the New Mining Permit in respect of the Kaiyuan Extended Area Mining Right for the Kaiyuan Mine with an enlarged mining area (including the original mining area) from the original mining area of approximately 1.1596 km2 (the “Original Kaiyuan Mine”) to 4.1123 km2 (the “Enlarged Kaiyuan Mine”). The New Mining Permit covered a mining area of approximately 4.1123 km2 with designed capacity of 900000 tonnes/year representing ten times of the designed annual capacity of 90000 tonnes of the Original Kaiyuan Mine.Kaiyuan Company then started to build the necessary facilities to cater for the increased mining capacities. All facilities built needed to be checked tested and approved by the relevant government authorities and their experts. All building checking and testing processes were slowed down during the Covid-19 period but eventually the final checking and testing processes were done and completed in late 2023.– 22 –After completing the design the construction of the 900000 tonnes/year expansion project started in early 2021. From June to November 2022 the project officially entered the trial operation phase of the 900000 tonnes/year expansion project. Since the construction period testing checking and verification were conducted by experts which were filed to the local government authorities and relevant opinion letters and certificates were issued implying steps forward to the completion of expansion project. In September 2023 a specialized checking of the documents was conducted by a group of experts and it successfully passed the expert group’s evaluation. At the same time a comprehensive completion testing checking and verification of the 900000 tonnes/year expansion project was conducted by a group of experts and a completion verification opinion letter for the project was issued. In October and November 2023 the Changji Emergency Bureau and Autonomous Region Emergency Department (“Changji EBARED”)* (昌吉州应急局及自治区应急厅) organized experts to perform the inspection of the application for the Work Safety Permit and it was successfully approved. The Changji EBARED agreed to issue the Work Safety Permit the final permit required to complete the 900000 tonnes/year expansion plan.Currently Kaiyuan Mine is a coal mine operating in compliance with local rules and regulations with complete documentation and permits (including business licence 900000 tonnes/year mining permit and Work Safety Permit) which has laid a solid foundation for future capacity upgrades and sustainable development.PROSPECTS The Group actively proceeded with the Optimization and Upgrading Plan since 2011 in relation to the New Mining Right of the Enlarged Kaiyuan Mine. The Acquisition enlarged the Group’s coal resources and allowed the Group to enhance the development of its sales operations of Kaiyuan Mine in the future. The Directors consider that the transaction is in line with the Group’s strategy to expand the Coal mining business of the Group. In 2021 Kaiyuan Company successfully renewed and received the renewed New Mining Permit issued by the Xinjiang Natural Resources Department pursuant to which the term of the mining right of the Enlarged Kaiyuan Mine is renewed for a period of 10 years from 11 October 2021 to 11 October 2031.* English translation for identification purpose only – 23 –After Kaiyuan Company’s achievement in obtaining complete documentation and permits including the New Mining Permit and the Work Safety Permit in 2019 and 2023 respectively looking ahead we will strive to further increase production capacity maintain financial stability and continue to ensure proper compliance and governance at the same time. In the coming years there will be (i) a reasonable expected amount of expenditure in capital assets in particular for the new plants machines and facilities for the continuous environmental protection works and potential future capacity upgrades and sustainable development and (ii) reasonable expenditure for works required by the Safety Bureau to maintain safety standard of our coal mine. Sources of funding are expected to come primarily from the coal sales revenue and external banking facilities of the Group if necessary.In addition to coal mining the Group has been exploring new markets and developing its business coverage on technological and renewable energy sectors. It is one of the objectives of the Group to diversify its business portfolio into sectors offering higher growth momentum.Due to the adverse economic climate in Hong Kong and worldwide we are facing a difficult business environment which has negatively impacted our IT Services business. In the future we would continue to evaluate the model and strategy of our IT Services business to ensure they align with current market conditions and future trends.The Board will use its best endeavors to manage the Group’s business portfolio with a view to improving the Group’s financial performance and enhance shareholders’ value.– 24 –Financial review Revenue The Group recorded a revenue of approximately HK$116069000 for the Year (2023: approximately HK$239886000). It represents a decrease of approximately HK$123817000 or approximately 51.61% as compared with the previous year.Coal Mining Business During the Year revenue of approximately HK$98060000 of the Coal mining business is decreased by approximately HK$101138000 or approximately 50.77% as compared to approximately HK$199198000 in the previous year. The decrease in revenue was mainly due to the decrease in sales volume and average selling price of coal during the Year. The Group sold approximately 630302 tonnes (2023: approximately 1059859 tonnes) of coal during the Year decreased by 429557 tonnes or approximately 40.53% compared to that in the previous year. The revenue decreased significantly in proportion to the volume decrease and the average selling prices per ton decreased from HK$187.95 to HK$155.58 that is by approximately HK$32.37 per ton or 17.2% per ton during the Year.Renewable Energy Business During the Year the Renewable energy business recorded a revenue of approximately HK$3487000 (2023: approximately HK$3594000). The decrease in revenue of the renewable energy business amounting to approximately HK$107000 or 2.98% was mainly due to the adverse effect of exchange rate during the Year.IT Services Business During the Year the IT Services business contributed a revenue of approximately HK$14522000 (2023: approximately HK$37094000). The decrease in revenue of approximately HK$22572000 or approximately 60.85% was mainly due to the adverse economic climate in Hong Kong and worldwide and keen competition in IT service sector in which the business of IT Services experienced challenges.– 25 –Cost of services and goods sold Coal Mining Business The cost of sales of the Coal mining business for the Year was approximately HK$58085000 (2023: approximately HK$71621000). The cost mainly comprises direct labor cost cost for explosive works depreciation amortisation and cost of materials etc. The slighter decrease in cost of sales when compared to the greater drop in revenue during the Year was mainly a result of the increase of production cost during the Year.Renewable Energy Business During the Year the cost of services of the Renewable energy business was approximately HK$1854000 (2023: approximately HK$1945000). The decrease in cost of services of the renewable energy business was mainly due to the adverse effect of exchange rate during the Year.IT Services Business During the Year the cost of services and goods sold of the IT Services business is approximately HK$12992000 (2023: approximately HK$32491000). The decrease in cost of services and goods sold was largely in line with the decrease of revenue during the Year.Gross profit The gross profit of the Group for the Year decreased to approximately HK$43138000 (2023: approximately HK$133829000). It represents a decrease of approximately HK$90691000 or approximately 67.77% and gross profit margin decreased by approximately 18.62 percentage points from approximately 55.79% for the previous year to approximately 37.17% for the Year.Coal mining business contributed significantly amounting to approximately HK$39975000 (2023: approximately HK$127577000); IT Services business contributed approximately HK$1530000 (2023: approximately HK$4603000); and renewable energy business contributed approximately HK$1633000 (2023: approximately HK$1649000).– 26 –Other revenue The Group’s other revenue for the Year was approximately HK$3563000 (2023: approximately HK$4147000) representing a decrease of approximately HK$584000 or approximately 14.08% as compared with the previous year. This is mainly due to the net effect of 1) net increase of interest income on bank deposits substantially from the Coal mining business and in Hong Kong of approximately HK$1452000; 2) government grants from the Anti-epidemic Fund set up by the Hong Kong government under an Employment Support Scheme as time-limited financial support to employers to retain employees who may otherwise be made redundant for the Year to be Nil (2023: approximately HK$567000); and 3) government grants from the Mainland China Government for the restructuring of Enlarged Kaiyuan Mine during the Year to be Nil (2023: approximately HK$1744000).Administrative and other operating expenses The Group’s administrative and other operating expenses for the Year was approximately HK$61588000 (2023: approximately HK$48896000) representing an increase of approximately HK$12692000 or approximately 25.96% as compared with the previous year. This was mainly due to the net effect of 1) the decrease in salaries and bonus of approximately HK$4250000; 2) the increase in supplemental environmental related fees of approximately of HK$7043000; 3) the increase in amortisation and depreciation charged by approximately HK$4345000; and 4) the increase of other operating expenses of approximately HK$4428000. – 27 –Profit for the Year Profit for the Year of the Group was approximately HK$37697000 (2023: loss of approximately HK$59038000) representing a turnaround from loss to profit of approximately HK$96735000 as compared with the previous year. The upturn was mainly due to the net effect of the following: a) the exchange loss of approximately HK$3464000 (2023: exchange gain of approximately HK$3946000); b) the decrease in gross profit by approximately HK$90691000; c) the decrease in other revenue by approximately HK$584000; d) the increase in administrative and other operating expenses by approximately HK$12692000; e) gain on fair value change of convertible bond designated as financial liabilities at fair value through profit or loss (“FVPL”) of approximately HK$62794000 (2023: loss on fair value change and loss arising from modification of convertible bond designated as financial liabilities at FVPL of approximately HK$116835000); f) the decrease in the finance costs by approximately HK$3452000; g) impairment loss on property plant and equipment of approximately HK$1016000 during the Year (2023: Nil); and h) the decrease in income tax expenses by approximately HK$25834000.– 28 –Segment information Business segment Information reported to the executive directors being identified as the chief operating decision makers (the “CODM”) for the purposes of resource allocation and assessment of segment performance focuses on types of goods delivered or services rendered. No operating segments identified by the CODM have been aggregated in arriving at the reportable segments of the Group.Specifically the Group’s reportable and operating segments are as follows: (1) Coal mining business segment: mining and sales of coal mine in the Xinjiang of the Mainland China; (2) Renewable energy business segment: service income from renewable energy solutions in Malaysia; and (3) IT Services business segment: provision of IT Services in Hong Kong Singapore Malaysia and the UK.Segment revenue and results Segment revenue represents revenue derived from (i) Coal mining business (ii) Renewable energy business and (iii) IT Services business.(i) Coal Mining Business Coal mining is the major business of the Group at present. It contributed a revenue of approximately HK$98060000 for the Year (2023: approximately HK$199198000) representing a decrease of approximately 50.77% as compared with the previous year.– 29 –Sale and Production of Coals During the Year the Group sold approximately 630302 tonnes of coals (2023: approximate ly 1 059859 tonnes) wi th to ta l sa les income of approximate ly HK$98060000 (2023: approximately HK$199198000). Details of sales of coals in tonnes are listed in the below table: 20242023 6303021059859 Sales of coals tonnes tonnes Coal Sales (tonnes) and Percentage of Coal Sales Coal Sales Coal Sales (tonnes) in % Mixed Coal 618483 98.12 Slack Coal 11819 1.88 Total 630302 100 (ii) Renewable Energy Business Service income from Renewable energy business contributed a revenue of approximately HK$3487000 for the Year (2023: approximately HK$3594000). The decrease in revenue of the renewable energy business was mainly due to the adverse effect of exchange rate during the Year.(iii) IT Services Business Service income from IT Services business contributed a revenue of approximately HK$14522000 for the Year (2023: approximately HK$37094000). The decrease in revenue was due to adverse economic climate in Hong Kong and worldwide and keen competition in IT Service sector.– 30 –Reserves and Resources The Group owns a mining right located in Xinjiang. The estimated remaining reserve in Kaiyuan Mine (excluding the Enlarged Kaiyuan Mine (as defined in “Major Events”)) was approximately 5.11 million tonnes as at 31 March 2020.On 2 December 2019 the Transfer Agreement was officially passed by the Xinjiang Natural Resources Department to Kaiyuan Company. According to the Competent Person’s report and valuation report of the Enlarged Kaiyuan Mine dated 19 August 2020 the probable reserve in the Enlarged Kaiyuan Mine was approximately 63.48 million tonnes as at the date of acquisition of the Enlarged Kaiyuan Mine.During the Year approximately 0.63 million tonnes of coal was extracted (2023: approximately 1.31 million tonnes). Total approximate reserve of the mine in Xinjiang as at 31 March 2024 is equivalent to 63.28 million tonnes (i.e. the sum of the estimated remaining coal reserve in Kaiyuan Mine including the Enlarged Kaiyuan Mine) (2023: approximately 63.91 million tonnes).Coal Reserve as at 31 March 2024 = Coal Reserve as at 31 March 2023 – Amount of coal extracted by the Group during the Year.The geographical location of customers is determined based on the location where the goods are delivered or services are rendered. The Group’s revenue and results from operations are mainly derived from activities in the Mainland China Hong Kong Singapore the UK and Malaysia.Activities outside these five locations are insignificant. The principal assets of the Group are located in the Mainland China Hong Kong and Malaysia.Significant Investments held Material Acquisitions and Disposals of Subsidiaries and Future Plans for Material Investments or Capital Assets Save as otherwise disclosed there were neither significant investments held as at 31 March 2024 nor material acquisitions and disposals of subsidiaries during the Year. Save as otherwise disclosed the Group does not have any future plans for material investments.There will however be a reasonable expected amount of expenditure in capital assets in particular for the new plants and machines for the environmental protection works and reasonable expenditure for works required by the Safety Bureau to improve safety standard of our coal mine. Sources of funding are expected to come primarily from the coal sales revenue and also external banking facilities of the Group if necessary.– 31 –Liquidity and Financial Resources As at 31 March 2024 the Group had: * net current asse ts of approximately HK$123046000 (2023: approximately HK$168512000).* cash and cash equivalents of approximately HK$189307000 (2023: approximately HK$234113000) which comprised the bank balances and cash of approximately HK$189307000 (2023: approximately HK$234113000) were the major components of the Group’s current assets of approximately HK$199567000 (2023: approximately HK$250912000). All the cash and cash equivalents are denominated in HK$ Malaysian Ringgit (“RM”) Singapore Dollars (“S$”) Great Britain Pound (“GBP”) United States Dollars (“US$”) and RMB (2023: HK$ RM S$ GBP US$ and RMB).* cur ren t l i ab i l i t i e s o f approx imate ly HK$76521 000 (2023: approx imate ly HK$82400000) which comprised mainly trade and other payables of approximately HK$68352000 (2023: approximately HK$63027000) and interest-bearing borrowings of Nil (2023: approximately HK$3477000).Interest-bearing borrowings for the year in 2023 were approximately HK$3477000 (2024: Nil) which were repayable within one year since their inception. The average effective interest rates on the interest-bearing borrowings in the previous year were ranging from 3.3% to 6.0% (2024: Nil) per annum. The interest-bearing borrowings in the previous year were denominated in RMB.* non-current liabilities of approximately HK$276697000 (2023: approximately HK$373898000) which comprised non-current portion of Convertible Bond of approximately HK$208149000 (2023: approximately HK$299372000) and non-current portion payable related to mining right payables of approximately HK$62559000 (2023: approximately HK$70520000).The Group’s gearing ratio was approximately 1.61 (2023: approximately 2.98). The computation is based on total debt (Convertible Bond mining right payables lease liabilities and interest-bearing borrowings) divided by total equity.– 32 –Capital Structure The capital of the Group comprises only ordinary shares.As at 31 March 2024 there were 765373584 ordinary shares of the Company in issue.The Convertible Bond of the Company with an aggregate principal amount of HK$200000000 were issued on 14 March 2008 the maturity date of which was approved to be further extended for 36 months to 13 March 2026 by the shareholders of the Company on 9 December 2022.Reference could be made to the announcement on 9 December 2022.Charges on Group’s Assets As at 31 March 2023 the Group had pledged its mining right with carrying amount of approximately HK$109410000 to the bank as a security for interest-bearing borrowings.During the Year the interest-bearing borrowings were fully settled and the pledge of the mining right was released. As at 31 March 2024 there were no assets pledged by the Group.Foreign Exchange Exposure The Group mainly earns revenue in RMB HK$ and RM and incurs costs in RMB HK$ and RM. The Group is exposed to foreign exchange risk based on fluctuations between HK$ and RMB arising from its core operation in the Mainland China as well as HK$ and RM arising from its operation in Malaysia. The currency exchange risk for the Year is mainly derived from the net exchange difference on Convertible Bond which is a result from the currency depreciation of RMB against HK$. In order to minimise the foreign currency risk exposure between these two currencies the Group maintained cash balances in both currencies that are sufficient to meet several months’ operating cash flows requirements of the Group.Treasury Policies Apart from the issuance of Convertible Bond at their face value of HK$200000000 and the interest-bearing borrowings amounting to Nil (2023: approximately HK$3477000) the Group finances its operation mainly by internal generated resources.– 33 –Contingent Liabilities As at 31 March 2024 the Group did not have any material contingent liabilities (2023: Nil).Employees As at 31 March 2024 the Group had 136 employees (2023: 145) spreading amongst Hong Kong Malaysia Singapore the UK and the Mainland China. Total staff costs (excluding directors’ emoluments) for the Year amounted to approximately HK$33715000 (2023: approximately HK$40558000) representing the decrease in salaries and bonus of the Group and a decrease in number of staff in the IT Services Business. Employment relationship has been well maintained by the Group with its employees.DIVIDEND The Board does not recommend the payment of any dividend for the Year (2023: Nil).PURCHASE SALE OR REDEMPTION OF THE COMPANY’S LISTED SECURITIES Neither the Company nor any of its subsidiaries purchased sold or redeemed any of the Company’s listed securities during the Year.COMPLIANCE WITH CORPORATE GOVERNANCE CODE In the opinion of the Directors the Company has complied with the code provisions as set out in the Corporate Governance Code (the “Code”) contained in Appendix C1 to the Listing Rules during the Year save for the deviation from code provision C.2.1 as disclosed below: Code provision C.2.1 of the Code stipulates that the roles of chairman and chief executive (the “CE”) should be separate and should not be performed by the same individual. During the Year the Company did not have any officer with CE title. Mr. Kwan Man Fai the chairman and managing director of the Company also carried out the responsibility of CE during the Year.In view of the size of operation of the Group the Board considered that this structure is more suitable for the Company as it can promote the efficient formulation and implementation of the Company’s strategies.– 34 –COMPLIANCE WITH MODEL CODE The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) as set out in Appendix C3 to the Listing Rules as its code of conduct regarding securities transactions by the Directors. All Directors have confirmed following specific enquiry by the Company that they have complied with the required standard as set out in the Model Code throughout the Year.AUDIT COMMITTEE The audit committee of the Company (the “Audit Committee”) was set up in March 1999 with specific terms of reference. The terms of reference of the Audit Committee which are available on the websites of the Stock Exchange and the Company have included the duties which are set out in code provision D.3.3 of the Code with appropriate modifications when necessary. The terms of reference of the Audit Committee were amended on 15 March 2016 in order to comply with the amendments to the Listing Rules.The Audit Committee currently consists of three independent non-executive directors namely Mr. Pak Wai Keung Martin the chairman of the Audit Committee Dr. Wong Man Hin Raymond and Mr. Chan Yiu Fai Youdey.SCOPE OF WORK OF MAZARS CPA LIMITED The figures in respect of this announcement of the Group for the Year have been reviewed and agreed by the Company’s auditor Mazars CPA Limited (“Mazars”) to the amounts set out in the Group’s draft consolidated financial statements for the Year. The work performed by Mazars in this respect did not constitute an assurance engagement in accordance with Hong Kong Standards on Auditing Hong Kong Standards on Review Engagements or Hong Kong Standards on Assurance Engagements issued by the Hong Kong Institute of Certified Public Accountants and consequently no assurance has been expressed by Mazars on this announcement.– 35 –PUBLICATION OF ANNUAL RESULTS ANNOUNCEMENT AND DESPATCH OF ANNUAL REPORT This announcement is published on the websites of the Hong Kong Exchanges and Clearing Limited at https://www.hkexnews.hk and the Company at https://www.nannanlisted.com.The annual report of the Company for the Year containing all the information required by the Listing Rules will be despatched to the shareholders of the Company and available on the above websites in due course.By Order of the Board Nan Nan Resources Enterprise Limited Kwan Man Fai Chairman and Managing Director Hong Kong 21 June 2024 As at the date of this announcement the Board comprises three executive Directors namely Mr. Kwan Man Fai Mr. Wong Sze Wai and Mr. Li Chun Fung; and three independent non- executive Directors namely Dr. Wong Man Hin Raymond Mr. Chan Yiu Fai Youdey and Mr. Pak Wai Keung Martin.–36–