Company: CHNR
Filing Date: 2025-01-27
Form Type: POS AM
Source: 0001079973-25-000143
Chunk: 221

Company: CHINA NATURAL RESOURCES INC
Filing Date: 2025-01-27
Form: POS AM
Chunk 221
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 of financial position if there is a currently enforceable legal right to offset
the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

| F-24 |

| 2.5 |     | MATERIAL ACCOUNTING  
 POLICIES (CONTINUED) |

| (o) | Inventories |

Inventories include materials and spare parts
and are stated at the lower of cost and net realizable values. Cost is determined on a weighted average cost basis and comprises costs
of purchase and transportation costs. Net realizable values are based on the estimated selling expenses less any estimated cost to be
incurred to completion and disposal.

| (p) | Cash and cash equivalents |

Cash and cash equivalents in the statement
of financial position comprise cash on hand and at banks, and short-term highly liquid deposits with a maturity of generally within three
months that are readily convertible into known amounts of cash, subject to an insignificant risk of changes in value held for the purpose
of meeting short-term cash commitments.

For the purpose of the statement of cash
flows, cash and cash equivalents comprise cash on hand and at banks, and short-term deposits as defined above, less bank overdrafts which
are repayable on demand and form an integral part of the Group’s cash management.

| (q) | Employee benefits |

Pension obligations

The Group contributes on a monthly basis
to various defined contribution retirement benefit plans administered by the PRC government. The relevant government agencies undertake
to assume the retirement benefit obligation payable to all existing and future retired employees under these plans and the Group has
no further obligation for post-retirement benefits beyond the contributions made. Further information is set out in Note 6 to the consolidated
financial statements.

Housing funds

All full-time employees of the Group in
mainland China are entitled to participate in various government-sponsored housing funds. The Group contributes on a monthly basis to
these funds based on certain percentages of the salaries of the employees. The Group's liability with respect to these funds is limited
to the contributions payable in each year.

| (r) | Share-based payments |

The Company operates a share option scheme
for the purpose of providing incentives and rewards to employees (including directors) and consultants who contribute to the success of
the Group's business and grants warrants for the Company’s shares for the purpose of paying fees to the placement agent who provided
the professional services during the Company’s private placement. The employees and consultants (