Almana Limited — Interim / Quarterly Report 2015

Feb 25, 2016

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IR RESOURCES LIMITED 同仁資源有限公司

(Incorporated in the Bermuda with limited liability)

(Stock Code: 8186)

2015 INTERIM RESULTS

CHARACTERISTICS OF THE GROWTH ENTERPRISE MARKET (“GEM”) OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE “STOCK EXCHANGE”)

GEM is positioned as a market designed to accommodate companies to which a higher investment risk may be attached other than companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.

Hong Kong Exchanges and Clearing Limited and the Stock Exchange take no responsibility for the contents of this report, 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.

This announcement, for which the board (the “Board”) of directors (the “Directors”) of IR Resources Limited (the “Company”) collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the GEM (the “GEM Listing Rules”) for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and beliefs: (1) the information contained in this announcement is accurate and complete in all material respects and not misleading; (2) there are no other matters the omission of which would make any statement in this announcement misleading.

— 1 —

INTERIM RESULTS (UNAUDITED)

The Board would like to announce the unaudited consolidated results of the Company and its subsidiaries (the “Group”) for each of the three months and the six months ended 30 June 2015, together with the comparative unaudited figures for the corresponding periods in 2014, as follows:

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS	CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS	CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
For the three months ended 30 June For the six months ended 30 June 2015 2014 2015 2014 Notes HK$’000 HK$’000 HK$’000 HK$’000 (Unaudited) (Unaudited) (Unaudited) (Unaudited) CONTINUING OPERATIONS Revenue 2 — — — — Cost of sales — — — —
Gross profit — Other income and gains 4 — Selling and distribution costs — Administrative expenses (2,137) Finance costs (6,520) Impairment loss on biological assets —	— — 71 583 — — (2,749) (5,786) (6,424) (12,924) — —	— 267 — (6,597) (12,698) (481)
Loss before tax 5 (8,657) Income tax expenses 6 —	(9,102) (18,126) — —	(19,509) —
LOSS FOR THE PERIOD FROM CONTINUING OPERATIONS (8,657)	(9,102) (18,126)	(19,509)
DISCONTINUED OPERATION Share of losses of associates (2) LOSS FOR THE PERIOD (8,659)	— (3) (9,102) (18,129)	— (19,509)

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Interim Report 2015 IR Resources Limited

		For the three months For the six months	For the three months For the six months	For the three months For the six months
		ended	30 June ended 30 June
		2015	2014 2015	2014
	Notes	HK$’000	HK$’000 HK$’000 HK$’000
Loss attributable to:		(Unaudited)	(Unaudited) (Unaudited) (Unaudited)
Equity holders of the
Company		(8,659)	(9,102) (18,129) (19,509)
Non-controllinginterests		—	— —	—
		(8,659)	(9,102) (18,129) (19,509)
		2015	2014 2015	2014
Basic loss per share		HK Cents	HK Cents HK Cents HK	Cents
For loss for the period	7	(0.33)	(0.35) (0.69)	(0.74)
For loss from continuing
operations		(0.33)	(0.35) (0.69)	(0.74)
Diluted loss per share
For loss for the period		(0.33)	(0.35) (0.69)	(0.74)
For loss from continuing
operations		(0.33)	(0.35) (0.69)	(0.74)

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IR Resources Limited Interim Report 2015

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIvE INCOME

For the three months ended 30 June For the six months ended 30 June 2015 2014 2015 2014 Notes HK$’000 HK$’000 HK$’000 HK$’000 (Unaudited) (Unaudited) (Unaudited) (Unaudited) LOSS FOR THE PERIOD (8,659) (9,102) (18,129) (19,509) OTHER COMPREHENSIvE INCOME Other comprehensive income to be reclassified to profit or loss in subsequent periods: Exchange differences on translation of foreign operations 40 (68) 273 (1,230) _Less:_Income tax effect — — — —	For the three months ended 30 June For the six months ended 30 June 2015 2014 2015 2014 Notes HK$’000 HK$’000 HK$’000 HK$’000 (Unaudited) (Unaudited) (Unaudited) (Unaudited) LOSS FOR THE PERIOD (8,659) (9,102) (18,129) (19,509) OTHER COMPREHENSIvE INCOME Other comprehensive income to be reclassified to profit or loss in subsequent periods: Exchange differences on translation of foreign operations 40 (68) 273 (1,230) _Less:_Income tax effect — — — —	For the three months ended 30 June For the six months ended 30 June 2015 2014 2015 2014 Notes HK$’000 HK$’000 HK$’000 HK$’000 (Unaudited) (Unaudited) (Unaudited) (Unaudited) LOSS FOR THE PERIOD (8,659) (9,102) (18,129) (19,509) OTHER COMPREHENSIvE INCOME Other comprehensive income to be reclassified to profit or loss in subsequent periods: Exchange differences on translation of foreign operations 40 (68) 273 (1,230) _Less:_Income tax effect — — — —
OTHER COMPREHENSIvE INCOME FOR THE PERIOD, NET OF TAX 40	(68) 273	(1,230)
TOTAL COMPREHENSIvE INCOME FOR THE PERIOD (8,618)	(9,170) (17,856)	(20,739)
Attributable to: Equity holders of the Company (8,618) Non-controllinginterests —	(9,170) (17,856) — —	(20,739) —
(8,618)	(9,170) (17,856)	(20,739)

Interim Report 2015 IR Resources Limited

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

	At	At
	30 June	31 December
	2015	2014
	Notes HK$’000	HK$’000
Non-current assets	(Unaudited)	(Audited)
Property, plant and equipment	9 16,095	17,422
Biological assets	—	—
Intangible assets	9 307,164	307,164
Goodwill	—	—
Interest in an associates	3,161	2,889
Total non-current assets	326,420	327,475
Current assets
Inventories	—	—
Trade receivables	10 —	—
Prepayments, deposits and other receivables	10,327	10,545
Cash and bank balances	2,428	2,288
Total current assets	12,755	12,833
Current liabilities
Other loans, otherpayables and accruals	11 143,097	126,377
Total current liabilities	143,097	126,377
Net Current liabilities	(130,342)	(113,544)
Net assets	196,078	213,931
EQUITY
Issued capital	12 131,198	131,198
Reserves	64,883	82,736
Total equity attributable to:
Equity holders of the Company	196,081	213,934
Non-controlling interests	(3)	(3)
Total equity	196,078	213,931

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IR Resources Limited Interim Report 2015

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 June 2015

At 1 January2014 (audited)			Attributable to equity	Attributable to equity	holders of the Company	holders of the Company			Total equity HK$’000 255,976
	Share capital HK$’000 131,198	Share premium HK$’000 972,987	Contributed surplus HK$’000 5,265	Share options reserve HK$’000 1,579	Exchange reserve HK$’000 (179)	Accumulated losses HK$’000 (854,871)	Total HK$’000 255,979	Non- controlling interests HK$’000 (3)
Laspe of share option	—	—	—	(1,579)	—	1,579	—	—	—
Loss for the period Other comprehensive income for the period: Exchange differences on translation of foreign operations	— —	— —	— —	— —	— (1,230)	(19,509) —	(19,509) (1,230)	— —	(19,509) (1,230)
Total comprehensive income for the period	—	—	—	—	(1,230)	(19,509)	(20,739)	—	(20,739)
At 30 June 2014 (unaudited)	131,198	972,987	5,265	—	(1,409)	(872,801)	235,240	(3)	235,237
At 1 January2015 (audited)
	131,198	972,987	5,265	—	(559)	(894,957)	213,934	(3)	213,931
Loss for the period Other comprehensive income for the period: Exchange differences on translation of foreign operations
	—	—	—	—	—	(18,129)	(18,129)	—	(18,129)
	—	—	—	—	273	—	273	—	273
Total comprehensive income for the period
	—	—	—	—	273	(18,129)	(17,856)	—	(17,856)
At 30 June 2015 (unaudited)
	131,198	972,987	5,265	—	(286)	(913,086)	196,078	(3)	196,075

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Interim Report 2015 IR Resources Limited

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 June 2015

For the six months ended 30 June 2015 2014 HK$’000 HK$’000 (Unaudited) (Unaudited) NET CASH FLOWS FROM/(USED IN) OPERATING ACTIvITIES 140 (744) NET CASH FLOWS USED IN INvESTING ACTIvITIES — (481) NET CASH FLOWS FROM FINANCING ACTIvITIES — —	For the six months ended 30 June 2015 2014 HK$’000 HK$’000 (Unaudited) (Unaudited) NET CASH FLOWS FROM/(USED IN) OPERATING ACTIvITIES 140 (744) NET CASH FLOWS USED IN INvESTING ACTIvITIES — (481) NET CASH FLOWS FROM FINANCING ACTIvITIES — —
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIvALENTS 140 Cash and cash equivalents at beginning of the period 2,288 Effect of foreign exchange rate changes —	(1,225) 3,280 —
CASH AND CASH EQUIvALENTS AT END OF THE PERIOD 2,428	2,055
Analysis of cash and cash equivalents Cash and bank balances 2,428	2,055

IR Resources Limited Interim Report 2015

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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2015

1. BASIS OF PREPARATION

The unaudited condensed consolidated financial statements have been prepared in accordance with the applicable disclosure requirements of the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited (the “GEM Rules”) and with Hong Kong Accounting Standard 34 (HKAS 34), Interim Financial Reporting, issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”).

The unaudited condensed consolidated financial statements have been prepared in accordance with the same accounting policies adopted in the 2014 annual consolidated financial statements.

In the current period, the Group has adopted all the new and revised HKFRSs issued by the HKICPA that are relevant to its operations and effective for its accounting period beginning on 1 January 2015. HKFRSs comprise Hong Kong Financial Reporting Standards (“HKFRSs”); Hong Kong Accounting Standards (“HKASs”); and Interpretations. The adoption of these new and revised HKFRSs did not result in significant changes to the Group’s consolidated financial statements.

The Group has not applied the new HKFRSs that have been issued but are not yet effective. The Group has already commenced an assessment of the impact of these new HKFRSs but is not yet in a position to state whether these new HKFRSs will have a material impact on its results of operations and financial position.

As at 30 June 2015, the Group had cash and bank balances of approximately HK$2.4 million and recorded net current liabilities of approximately HK$130.3 million. The Directors of the Company are of the opinion that the Group would be able to continue as a going concern and to meet in full their financial obligations as the Directors considered the following factors:

(a) Attainment of profitable operations and improvement of operating cash flows

(i) Forestry and agricultural segment

(1) In July 2015, the Company entered into a subscription agreement as supplemented by a supplemental agreement dated 30 September 2015 (collectively, the “Subscription Agreements”) with six subscribers (the “Subscribers”), who are independent third parties and have substantial experience in the timber industry with sales network. The relevant Subscribers (the “Timber Logging Subscribers”) will collaborate with a team of experienced personnel to establish an operating management team to revitalise the timber logging activities of the Group. Pursuant to the Subscription Agreements,(a) the Company will undergo an internal restructuring (the “Restructuring”); (b) the Timber Logging Subscribers will enter into working capital loan agreements with the Company, pursuant to which, the Timber Logging Subscribers will in aggregate provide an working capital loan up to HK$51,750,000 for the carrying out of the

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Interim Report 2015 IR Resources Limited

timber logging activities; and (c) the Timber Logging Subscribers have guaranteed that for the six-month period immediately after completion of the Subscription Agreements,the six-month period commencing on the seventh month after completion of the Subscription Agreements and the twelve-month period commencing on the thirteen month after completion of the Subscription Agreements, revenue derived from the timber logging activities will not be less than HK$50,000,000, HK$50,000,000 and HK$100,000,000, respectively; and

(2)

In November 2015, the Group entered into a cooperation agreement (the “Plantation Cooperation Agreement”) with an experienced plantation operator (the “Plantation Partner”), which has substantial experience in the business of plantation and has operations in Southeast Asia. Pursuant to the Plantation Cooperation Agreement, the Plantation Partner will engage in the plantation business of the Group and, together with the relevant Subscribers (the “Plantation Subscribers”), will provide funding to carry out the plantation business of the three forests and will undertake that the annual plantation volume of each of the three forests will be no less than those required by the local registration under the investment contracts. In addition, the Plantation Partner and the Plantation Subscribers will compensate the Company any penalty imposed by the Cambodian government for reasons that the annual plantation volume cannot be met.

(ii) Disposal of associates

The Group had disposed of its loss-making associates (the “Associates”) which is engaged in the processing and distribution of basic goods for a cash consideration of HK$2,500,000 in August 2015.

(b) Loan facilities

In November 2014, the Company entered into a loan facility agreement with its related company (“RC”, with a director of the Company was also a sole director and sole shareholder of RC who (i) resigned as a sole director of RC; and (ii) disposed of all equity interests in RC on 14 November 2014. RC ceased to be a related company of the Company since then) for a loan amount up to HK$25,000,000 (the “RC Loan”). As 30 June 2015, the Group had withdrawn approximately HK$8,600,000 (note 11). The lender has agreed not to demand for repayment until the completion of the fund raising exercise after the shares of the Company have been resumed for trading and the Company is in a position to do so.

(c) Rights issue

On 24 February 2016, the Company entered into an underwriting agreement with an underwriter to raise fund of approximately HK$262 million (before expenses) by way of a rights issue (the “Rights Issue”), which, subject to fulfillment of certain conditions precedent pursuant to the underwriting agreement, is expected to be completed in May 2016, for purposes of general working capital and debt repayment.

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IR Resources Limited Interim Report 2015

(d) Further funding from the Timber Logging Subscribers, the Plantation Partner and Plantation Subscribers

As mentioned above, the working capital loans provided by the Timber Logging Subscribers and further funding provided by the Plantation Partner and the Plantation Subscribers will be applied to carry out the plantation business of the three forests.

In light of all the measures adopted and arrangements implemented, the Group will have sufficient cash resources to satisfy its future working capital and other financial requirements, the Directors are of the opinion that it is appropriate to prepare the consolidated financial statements on a going concern basis, notwithstanding the Group’s financial and liquidity position as at 30 June 2015. Should the Group be unable to continue as a going concern, adjustments would have to be made to restate the value of assets to their recoverable amounts, to provide for any further liabilities which might arise, and to reclassify non-current assets and liabilities as current assets and liabilities, respectively. The effects of these potential adjustments have not been reflected in these consolidated financial statements.

2. REvENUE

Revenue recognised during the period is analysed as follows:

	Continuing operations
	For the three months For the six months
	ended 30 June ended 30 June
	2015 2014 2015	2014
Sales of wood and	HK$’000 HK$’000 HK$’000	HK$’000
agricultural products	— — —	—
	— — —	—

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Interim Report 2015 IR Resources Limited

3. OPERATING SEGMENT INFORMATION

For management purposes, the Group is organised into business units based on their products and services and has the following reportable operating segments:

• (a) the forestry and agricultural segment is the timber logging, plantation and sales of wood and agricultural products;

• (b) the resources and logistics segment is the provision of resources and logistics business; and

• (c) the basic goods business segment is the processing and distribution of basic goods which had been discontinued during the year ended 31 December 2014.

Management monitors the results of the Group’s operating segments separately for the purpose of making decisions about resources allocation and performance assessment. Segment performance is evaluated based on reportable segment loss, which is a measure of adjusted loss before tax from continuing operations. The adjusted loss before tax from continuing operations is measured consistently with the Group’s loss before tax from continuing operations except that interest income and finance costs, as well as head office and corporate expenses are excluded from such measurement.

Segment assets exclude unallocated head office and corporate assets as these assets are managed on a group basis.

Segment liabilities exclude unallocated head office and corporate liabilities as these liabilities are managed on a group basis.

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IR Resources Limited Interim Report 2015

SEGMENT REvENUE AND RESULTS

The following is an analysis of the Group’s revenue and results by reportable segment:

For the six months ended 30 June 2015 (unaudited)

Segment revenue: Sales of wood and agricultural products Sales of coal	Continuing operations	Continuing operations	Discontinued operation
	Forestry and agricultural segment	Resources and logistics segment	Basic goods business segment	Total
	HK$’000	HK$’000	HK$’000	HK$’000
	—	—	—	—
	—	—	—	—
	—	—	—	—
Segment results
	(1,623)	(33)	—	(1,656)
Share of loss of associates Unallocated expenses
	—	—	(3)	(3)
				(3,547)
Loss from operations Finance costs
				(5,206)
	(12,923)	—	—	(12,923)
Loss before tax Income tax expense
				(18,129)
				—
Loss for the period
				(18,129)

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Interim Report 2015 IR Resources Limited

For the six months ended 30 June 2014 (unaudited)

Segment revenue: Sales of wood and agricultural products Sales of coal	Continuing operations Forestry and agricultural Resources and logistics segment segment HK$’000 HK$’000 — — — —	Discontinued operation Basic goods business segment Total HK$’000 HK$’000 — — — —
	— —	— —
Segment results	(4,745) —	— (4,745)
Other income and gains Impairment loss on biological assets Unallocated expenses	(481) —	108 — (481) (1,693)
Loss from operations Finance costs	(12,698) —	(6,811) — (12,698)
Loss before tax Income tax expense		(19,509) —
Loss for the period		(19,509)

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IR Resources Limited Interim Report 2015

SEGMENT ASSETS AND LIABILITIES

The following is an analysis of the Group’s assets and liabilities by reportable segment:

30 June 2015 (unaudited)

Segment assets Unallocated assets	Continuing operations	Continuing operations	Discontinued operation
	Forestry and agricultural segment	Resources and logistics segment	Basic business segment	Total
	HK$’000	HK$’000	HK$’000	HK$’000
	326,675	5,924	3,161	335,760
				3,415
Total assets
				339,175
Segment liabilities Unallocated liabilities
	(113,463)	(5,799)	—	(119,262)
				(23,835)
Total liabilities
				(143,097)
Capital expenditure Unallocated capital expenditure
	—	—	—	—
				—
				—
Depreciation and amortisation
	1,328	—	—	1,328

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Interim Report 2015 IR Resources Limited

31 December 2014 (Audited)

Segment assets Unallocated assets	Continuing operations Forestry and Resources agricultural and logistics segment segment HK$’000 HK$’000 329,054 5,842	Discontinued operation Basic business segment Total HK$’000 HK$’000 2,889 337,785 2,523
Total assets		340,308
Segment liabilities Unallocated liabilities	(101,389) (5,742)	— (107,131) (19,246)
Total liabilities		(126,377)
Capital expenditure Unallocated capital expenditure	529 —	— 529 —
		529
Depreciation and amortisation	3,053 —	— 3,053

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IR Resources Limited Interim Report 2015

4. OTHER INCOME AND GAINS

	For the three months	For the six months	For the six months
	ended 30 June	ended 30 June
	2015 2014 2015		2014
Gain on the deregistration of	HK$’000 HK$’000 HK$’000		HK$’000
a subsidiary	—	— —	32
Others	—	71 583	235
	—	71 583	267

5.

LOSS BEFORE TAX FROM CONTINUING OPERATIONS

Loss before tax from continuing operations is arrived at after charging:

For the three months	For the six months	For the six months
ended 30 June	ended 30 June
2015 2014 2015		2014
HK$’000 HK$’000 HK$’000		HK$’000
Finance costs Interest on loans 6,520 6,424 12,924		12,698
Staff costs (excluding directors’ emoluments) Wages and salaries 434	787 838	1,838
Pension scheme contributions 16	7 30	16
Other items Auditors’ remuneration 250	258 587	516
Depreciation of property, plant and equipment 617 Impairment loss on biological assets —	330 1,328 — —	677 481
Minimum lease payments under operating lease: land and buildings 108	198 319	456

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Interim Report 2015 IR Resources Limited

6. INCOME TAX EXPENSES

(a) Hong Kong Profits Tax

No provision for Hong Kong Profits Tax has been made for the three months and the six months ended 30 June 2015 (2014: Nil) as the Group did not generate any assessable profits arising in Hong Kong during the Reporting Period.

(b) PRC Corporate Income Tax

No provision for the PRC corporate income tax has been made for the subsidiaries of the Company in the People’s Republic of China (the “PRC”) as they did not generate any assessable profits arising in the PRC for the three months and the six months ended 30 June 2015 (2014: Nil) determined in accordance with the relevant income tax rules and regulations in the PRC.

(c) Cambodia Corporate Income Tax

No provision for Cambodia corporate income tax has been made for the subsidiaries of the Company in the Kingdom of Cambodia (“Cambodia”) as they did not generate any assessable profits arising in Cambodia for the three months and the six months ended 30 June 2015 (2014: Nil) determined in accordance with the relevant tax rules and regulations in Cambodia.

(d) Deferred Taxation

No provision for deferred taxation is deemed necessary as the Group does not have any material deductible or taxable temporary differences for the three months and the six months ended 30 June 2015 (2014: Nil).

7. LOSS PER SHARE

The calculations of the basic and diluted loss per share for the three months and the six months ended 30 June 2015 are based on the loss attributable to equity holders of the Company being HK$8.7 million (2014: HK$9.1 million) and HK$18.1 million (2014: HK$19.5 million), respectively, divided by the weighted average number of 2,623,950,965 ordinary shares for the three months and the six months ended 30 June 2015 (2014: 2,623,950,965 ordinary shares) in issue during the relevant periods.

No adjustment has been made to the basic loss per share amounts presented for the three months and the six months ended 30 June 2015 and 30 June 2014 in respect of a dilution as the impact of the share options outstanding had an anti-dilutive effect on the basic loss per share amounts presented.

8. DIvIDENDS

The directors do not recommend the payment of an interim dividend for the six months ended 30 June 2015 (2014: Nil).

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IR Resources Limited Interim Report 2015

9. MOvEMENT OF PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS

There was no additions to the property, plant and equipment of the Group during the six months ended 2014 and 30 June 2015.

There was no additions to the intangible assets of the Group during the six months ended 30 June 2014 and 2015.

10. TRADE RECEIvABLES

Trade debtors _Less:_Impairment	At 30 June 2015 At 31 December 2014 HK$’000 HK$’000 (Audited) 2,001 2,001 (2,001) (2,001)
	— —

11. OTHER LOANS, OTHER PAYABLES AND ACCRUALS

Other payables and accrued liabilities	At 30 June 2015 At 31 December 2014 HK$’000 HK$’000 (Audited) 38,672 39,486
Related parties
Due to a director KW Loan_(note 14(i)(a))_	4,727 4,717
— Principal	46,787 46,787
— Accrued interest RC Loan	44,142 31,366
— Principal	8,600 4,000
— Accrued interest	169 21
	104,425 86,891
	143,097 126,377

Note:

(a) RC further provided the RC Loan to the Group, for the loan amount up to HK$25,000,000. As at 30 June 2015, the Group had withdrawn approximately HK$8,600,000 (31 December 2014: HK$4,000,000). The RC Loan bears interest at 5% per annum and unsecured. During the period ended 30 June 2015, interest accrued on the RC Loan of approximately HK$148,000 was further recognised in the condensed consolidated statement of profit or loss.

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Interim Report 2015 IR Resources Limited

12. SHARE CAPITAL

At 30 June 2015	At 31	December 2014	(Audited)
Amount		Amount
No. of shares per share Amount	No. of shares	per share	Amount
’000 HK$ HK$’000	’000	HK$	HK$’000
Authorised At beginning and at the end of the year/ period 4,000,000 0.05 200,000	4,000,000	0.05	200,000
Issued and fully paid At beginning and at the end of the year/ period 2,623,951 0.05 131,198	2,623,951	0.05	131,198

13. OPERATING LEASE COMMITMENTS

As lessee

The Group leases certain of its office properties under operating lease arrangements. Leases for properties are negotiated for terms of two years.

At 30 June 2015, the Group had total future minimum lease payments under non-cancellable operating leases falling due as follows:

At	At
30 June	31 December
2015	2014
HK$’000	HK$’000
	(Audited)
Within 1 year 184 In the second to fifth years, inclusive —	268 29
184	297
Continuing operations 184 Discontinued operation —	297 —
184	297

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IR Resources Limited Interim Report 2015

14. RELATED PARTY TRANSACTIONS

• (i) Save as those transactions and balances disclosed elsewhere in the Interim report, the Group had the following material transactions with related parties during the reporting period:

For the six months ended 30 June	For the six months ended 30 June
2015	2014
HK$’000	HK$’000
Interest on the KW Loan —	12,698
—	12,698

Notes:

• (a) As detailed in note 11, Mr. Zhang Zhenzhong (“Mr Zhang”) would provide 2 loans facilities (the “KW Loan”) in an aggregate principal amount of up to HK$76,300,000 to Keen Wood Group Limited (“Keen Wood”) which was interest bearing at 5% per annum, secured by 100% of the shares in Forest Glen Group Limited (“Forest Glen”) and China Cambodia Resources Limited (“China Cambodia”). On 31 October 2014, RC (a related party of the Company until 14 November 2014) acquired the KW Loan from Mr. Zhang and, therefore, Mr. Zhang was no longer a creditor of the Group as at 30 June 2015. During the period ended 30 June 2014, interest accrued on the KW Loan of approximately HK$12,698,000 was further recognised in the condensed consolidated statement of profit or loss which was classified as related party transactions.

The related party transactions were conducted on terms negotiated between the Group and the related parties.

• (ii) Compensation of key management personnel of the Group:

	For the six months ended 30 June	For the six months ended 30 June
	2015	2014
	HK$’000	HK$’000
Short term employee benefits	727	974
Post-employment benefits	—	—
Equity-settled share option expenses	—	—
Total compensation paid to key management
personnel	727	974

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Interim Report 2015 IR Resources Limited

15. EvENTS AFTER THE REPORTING PERIOD

Subsequent to the end of the reporting period, the Group had the following material events:

• (i) As detailed in notes 1(a)(i) and 1(b) to the Interim report, the Company entered into (1) a loan facility of the RC Loan in November 2015; and (2) the Subscription Agreements with the Subscribers in July and September 2015; and (3) the Plantation Agreement with the Plantation Planter in November 2015, for the purpose of the attainment of profitable operations and improvement of operating cash flows of the Group;

• (ii) As detailed in note 1(a)(ii) to the Interim report, the disposal of the Associates was completed in August 2015; and

• (iii) As detailed in note 1(c) to the Interim report, the Company entered into an underwriting agreement with an underwriter subsequent to the end of the reporting period on 24 February 2016 regarding the Rights Issue of approximately HK$262 million (before expenses). At the date of the Interim report, the Rights Issue was not yet been completed.

16. LITIGATIONS

The Group has certain litigations arising from its former landlord and staff regarding the settlement of the accrued salaries, rental and other outstanding balances of approximately HK$2,480,000. The litigation with the former landlord and the staff have been settled in January 2016 and March 2016. Such amounts have been fully provided in the consolidated financial statements of the Group and did not have further material financial impact of the Group.

17. FAIR vALUE AND FAIR vALUE HIERARCHY

Management has assessed that the fair values of cash and bank balances, the current portion of trade receivables and financial assets included in deposits and other receivables, financial liabilities included in other loans, other payables and accruals approximate to their carrying amounts largely due to the short term maturities of these instruments.

The fair value of the financial assets are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Fair value hierarchy

The Group did not have any financial instrument which are measured in fair value as at the end of the reporting period.

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IR Resources Limited Interim Report 2015

MANAGEMENT DISCUSSION AND ANALYSIS

FINANCIAL AND BUSINESS REvIEW

The Group is principally engaged in (i) forestry and agricultural business in Cambodia (logging of existing trees from and subsequent plantation of rubber trees or other agricultural produce on the three forests (the “Three Forests”) for which the Group has been granted the exploitation concession right and the subsequent sale of wood and agricultural products); and (ii) resources and logistics business.

The Group did not generate revenue for the six months ended 30 June 2015 (2014: Nil) from sales of wood products and agricultural in Cambodia. During the period, no revenue was generated from the Group’s coal and logistics business.

The consolidated loss attributable to its owners of the Company for the six months ended 30 June 2015 amounted to HK$18.1 million (2014: HK$19.5 million).

The basic and diluted loss per share for the six months ended 30 June 2015 was HK0.69 cents (2014: HK0.74 cents).

FINANCIAL RESOURCES, BORROWINGS, BANKING FACILITIES AND LIQUIDITY

During the period ended 30 June 2015, the net cash from operating activities amounted to HK$0.1 million (2014: net cash used in of HK$0.7 million) and the net cash used in investing activities amounted to nil (2014: HK$0.5 million) and net cash inflow from financing activities was nil (2014: nil). As a result of the cumulative effect described above, the Group recorded a net cash inflow of HK$0.1 million (2014: net cash outflow of HK$1.2 million).

As at 30 June 2015, the Group had total assets of HK$339.2 million (31 December 2014: HK$340.3 million) and total liabilities of HK$143.1 million (31 December 2014: HK$126.4 million). The Groups gearing ratio (calculated as percentage of the Group’s total liabilities to total assets) was 42.2% (31 December 2014: 37.1%). As at 30 June 2015, the Group did not have any outstanding bank borrowings (31 December 2014: Nil).

As at 30 June 2015, the Group’s current assets amounted to HK$12.8 million (31 December 2014: HK$12.8 million), of which HK$2.4 million (31 December 2014: HK$2.3 million) was cash and bank deposits, and current liabilities amounted to HK$143.1 million (31 December 2014: HK$126.4 million).

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Interim Report 2015 IR Resources Limited

As at 30 June 2015, the net asset value of the Group amounted to HK$196.1 million (including non-controlling interest) (31 December 2014: HK$213.9 million) and the net asset value per Share amounted to HK$0.07 (31 December 2014: HK$0.08).

CAPITAL COMMITMENT

During the period ended 30 June 2015, the Group did not have any capital commitment.

SIGNIFICANT INvESTMENTS AND MATERIAL ACQUISITIONS AND DISPOSALS

During the period, the Group did not make any significant investment and any material acquisition/disposal.

CHARGE ON ASSETS OF THE GROUP

The issued share capital of Forest Glen and China Cambodia were pledged to secure the RC Loan as at 30 June 2015.

RISKS

Exposure to Exchange Fluctuation

The Group mainly operates in Hong Kong, Cambodia and the PRC and is exposed to foreign exchange risk. The Group does not have a foreign currency hedging policy but it continuously monitors its foreign exchange exposure and will apply appropriate measures if necessary. The Group’s business is also subject to a number of risks including the weather conditions, natural hazards and, illegal loggings in the Three Forests and the price movement of the wooden products.

CONTINGENT LIABILITIES

As at 30 June 2015, the Group and the Company did not have any material outstanding contingent liabilities.

LITIGATION

Details of the litigations of the Group are disclosed in note 16 to the Interim report.

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IR Resources Limited Interim Report 2015

EvENTS AFTER THE REPORTING PERIOD

Details of the events after the reporting period of the Group are disclosed in note 15 to the Interim report.

SUSPENSION IN TRADING IN THE SHARES

Trading in the shares of the Company has been suspended since April 2013 and will remain suspended pending the fulfillment of the resumption conditions.

PROSPECTS

Looking forward, the Group will (i) continue to implement strategies to strengthen its forestry and agricultural business and (ii) seize appropriate investment/business in its resources and logistics business as well as debt/equity fund raising opportunities so as to enhance the financial condition of the Group for continuous development.

EMPLOYEES’ INFORMATION AND BENEFIT SCHEMES FOR THE EMPLOYEES

As at 30 June 2015, the Group had 12 (2014: 25) employees. The Group remunerates its employees based on their performance, working experience and the prevailing market condition.

OTHER INFORMATION

DIRECTORS’ AND CHIEF EXECUTIvE’S INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES

As at 30 June 2015, the interests and short positions of the Directors and the chief executive of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (“SFO”)) as recorded in the register required to be kept under Section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the minimum standards of dealings by directors as referred to in Rules 5.46 to 5.67 of the GEM Listing Rules were as follows:

				Approximate
				Percentage of
		Number of	Number of	shareholding
		Ordinary	underlying	in the
Name	Capacity Interest	Shares held	Shares held	Company
Ms. Yu Xiao Min	Beneficial owner	120,000,000	—	4.57%

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Interim Report 2015 IR Resources Limited

DIRECTORS’ RIGHTS TO ACQUIRE SHARES OR DEBT SECURITIES

Save as disclosed above, as at 30 June 2015, no other directors or the chief executive of the Company or their associates had any interests or rights to subscribe for any securities of the Company or any of its associated corporations as defined in the SFO.

At no time during the period was the Company or any of its subsidiaries a party to any arrangement to enable the directors or the chief executive of the Company or any of their respective associates, including spouses or children under eighteen years of age, to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

INTERESTS OF SUBSTANTIAL SHAREHOLDERS

As at 30 June 2015, so far as is known to any of the directors or the chief executive of the Company, the following persons (other than a director and the chief executive of the Company as disclosed above) had any interest or short position in the shares or underlying shares of the Company as recorded in the register required to be kept under Section 336 of the SFO, who is interested in 10% or more of any class of share capital carrying rights to vote at general meetings of the Company.

				Approximately
				percentage of
		Number of	Number of	shareholding
	Capacity of	ordinary	underlying	in the
Name of shareholders	interests	shares held	shares held	Company
China Wah Yan Healthcare	Corporate owner	768,698,967	—	29.30%
Limited and its subsidiaries

INTERIM DIvIDENDS

The Board does not recommend the payment of any interim dividends for the six months ended 30 June 2015 (2014: Nil).

DIRECTORS’ INTEREST IN CONTRACTS

No contract, commitment or agreement of significance in relation to the Company’s business, to which the Company or any of its subsidiaries was a party and in which any of the Directors had a material interest, either directly or indirectly, subsisted as at 30 June 2015 or during the six months ended 30 June 2015.

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IR Resources Limited Interim Report 2015

PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SECURITIES

During the six months ended 30 June 2015, neither the Company nor any of its subsidiaries purchased, redeemed or sold any of the Company’s listed securities.

COMPETING INTERESTS

None of the directors, or substantial shareholders of the Company or any of their respective associates (as defined in the GEM Listing Rules), engaged in any businesses that compete or may compete with the business of the Group or have any other conflicts of interests with the Group for the six months ended 30 June 2015.

CORPORATE GOvERNANCE

During the six months ended 30 June 2015, the Company has complied with the Code on Corporate Governance Practices as set out in Appendix 15 of the GEM Listing Rules, except for the office of the chief executive officer of the Company is vacated.

The Board will keep reviewing the current structure of the Board from time to time and should candidate with suitable knowledge, skill and experience be identified, the Company will make appointment to fill the post as appropriate. APPROvAL OF THE INTERIM REPORT 2015

The audit committee has reviewed the Company’s unaudited interim financial report for the six months ended 30 June 2015 and was of the opinion that the preparation of the Interim Results complied with applicable accounting standards, the GEM Listing Rules and that adequate disclosures had been made.

By order of the Board

Yu Xiao Min

Chairperson of the Board

Hong Kong, 24 February 2016

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Interim Report 2015 IR Resources Limited