Nan Nan Resources : Interim results announcement for the six months ended 30/9/2018

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NAN NAN RESOURCES ENTERPRISE LIMITED یی༟๕ྼุϞࠢʮ̡

(Incorporated in Bermuda with limited liability)

(Stock Code: 1229)

INTERIM RESULTS ANNOUNCEMENT

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2018

The board of directors (the "Board") of Nan Nan Resources Enterprise Limited (the "Company") is pleased to announce the unaudited condensed consolidated interim results of the Company and its subsidiaries (collectively the "Group") for the six months ended 30 September 2018 (the "Reporting Period") together with the comparative figures for the corresponding period in 2017 as follows:

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the six months ended 30 September 2018

Six months ended

30 September 2018

2017

Notes	HK$'000	HK$'000
(unaudited)	(unaudited)
Revenue	16,079	72,832
Cost of sales	(11,824)	(54,264)
Gross profit	4,255	18,568
Other revenue	5,836	2,181
Selling and distribution expenses	(183)	(202)
Administrative and other operating expenses	(12,221)	(10,804)
Exchange (loss)/gain, net	(6,971)	3,426
Impairment loss on property, plant and equipment	-	(3,511)
Impairment loss on intangible assets	-	(12,618)
Change in fair value of convertible bond	44,148	27,856
Profit before tax	34,864	24,896
Income tax expense	4	(291)	(1,314)
Profit for the period	5	34,573	23,582

Six months ended

30 September 2018

Notes

HK$'000 (unaudited)

2017

HK$'000 (unaudited)

Other comprehensive (loss)/income

Item that may be reclassified subsequently to profit or loss:

Exchange difference on translation of functional currency to presentation currency

(15,421) 5,250

Other comprehensive (loss)/income for the period (net of nil tax)

(15,421) 5,250

Total comprehensive income for the period

19,152 28,832

Profit for the period attributable to: - Owners of the Company

34,573 23,582

Total comprehensive income for the period attributable to: - Owners of the Company

Earnings/(Loss) per share

(expressed in Hong Kong cents) - Basic

19,152 28,832

7 7

4.52 3.08

- Diluted

0.61 (0.79)

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 September 2018

30 September	31 March
2018	2018
Notes	HK$'000	HK$'000
(unaudited)	(audited)
Non-current assets
Property, plant and equipment	8	8,137	9,166
Intangible assets	9	19,309	23,095
Goodwill	-	-
Deposits paid for acquisition of subsidiaries	10	2,500	-
Prepayments for acquisition of property,
plant and equipment	10	28,349	-
Security deposits	5,389	5,048
Non-refundable deposits	10	2,380	2,604
Deferred tax assets	1,769	1,940
67,833	41,853
Current assets
Inventories	11,810	7,221
Trade and other receivables	10	5,779	4,209
Restricted bank balances	11	75,968	-
Cash and cash equivalents	355,559	440,437
449,116	451,867
Current liabilities
Trade and other payables	12	55,857	69,798
Interest bearing borrowings	13	68,031	-
Tax payable	2,289	7,890
126,177	77,688
Net current assets	322,939	374,179
Total assets less current liabilities	390,772	416,032
Capital and reserves
Share capital	14	76,537	76,537
Reserves	108,331	89,179
Equity attributable to owners of the Company	184,868	165,716
Non-current liabilities
Convertible bond designated as financial
liabilities at fair value through profit or loss	203,094	247,242
Provision for close down, restoration and
environmental costs	2,810	3,074
205,904	250,316
390,772	416,032

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION For the six months ended 30 September 2018

1.

GENERAL INFORMATION AND BASIS OF PREPARATION

Nan Nan Resources Enterprise Limited (the "Company") was incorporated in Bermuda as an exempted company with limited liability. The shares of the Company are listed on the Main Board of The Stock Exchange of Hong Kong Limited (the "Stock Exchange"). In the opinion of the directors of the Company, the Group's parent company is Ascent Goal Investments Limited ("Ascent Goal"), a company incorporated in the British Virgin Islands with limited liability and its ultimate holding company is New Bright International Development Limited ("New Bright"), a company incorporated in Hong Kong with limited liability. Its ultimate controlling party is Ms. Fung Yuen Kwan Veronica.

The address of the Company's registered office is Clarendon House, 2 Church Street, Hamilton HM11, Bermuda and its principal place of business is 8/F., Tower 2, Admiralty Centre, 18 Harcourt Road, Admiralty, Hong Kong. The functional currency of the Company is Renminbi ("RMB"). The condensed consolidated interim financial information is presented in Hong Kong dollars ("HK$") for convenience of the shareholders as the Company is listed in Hong Kong.

The Company is an investment holding company. The subsidiaries of the Company are principally engaged in mining and sales of coal.

The condensed consolidated interim financial information has been prepared in accordance with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange, including compliance with Hong Kong Accounting Standard ("HKAS") 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants (the "HKICPA").

Preparation of the condensed consolidated interim financial information requires the directors of the Company to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The condensed consolidated interim financial information includes an explanation of events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since 31 March 2018, and therefore, do not include all of the information required for full set of financial statements prepared in accordance with the Hong Kong Financial Reporting Standards ("HKFRSs") which collective term includes all applicable individual HKFRSs, HKASs and Interpretations issued by the HKICPA. They shall be read in conjunction with the Group's annual consolidated financial statements for the year ended 31 March 2018 (the "2017/2018 Audited Financial Statements").

In preparing these condensed consolidated interim financial information, significant judgements made by the directors of the Company in applying the Group's accounting policies and the key sources of estimation uncertainty are the same as those that applied in the 2017/2018 Audited Financial Statements.

The condensed consolidated interim financial information is unaudited, but has been reviewed by the Company's audit committee and the Company's external auditor in accordance with Hong Kong Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity, issued by the HKICPA.

2.

PRINCIPAL ACCOUNTING POLICIES

The condensed consolidated interim financial information has been prepared on the historical cost basis except for certain financial instruments, which are measured at fair values.

Except as described below, the accounting policies and methods of computation used in the condensed consolidated interim financial information for the six months ended 30 September 2018 are consistent with those followed in the preparation of the 2017/2018 Audited Financial Statements.

In the current interim period, the Group has applied the following new/revised HKFRSs issued by the HKICPA.

Annual Improvements to HKFRSs	2014 - 2016 Cycle: HKFRS 1 and HKAS 28
Amendments to HKFRS 2	Classification and Measurement of Share-based Payment
Transactions
Amendments to HKFRS 4	Applying HKFRS 9 Financial Instruments with HKFRS 4
Insurance Contracts
HKFRS 9	Financial Instruments
HKFRS 15	Revenue from Contracts with Customers
HK(IFRIC) - Int 22	Foreign Currency Transactions and Advance Consideration

Apart from the impact on adoption of HKFRS 9 and HKFRS 15 as set out below, the adoption of those new and revised HKFRSs has no material impact on the Group's results and financial position for the current or prior periods and does not result in any significant change in accounting policies of the Group.

HKFRS 9 "Financial Instruments"

HKFRS 9 introduces new requirements for recognising and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items.