Company: CHNR
Filing Date: 2025-01-27
Form Type: POS AM
Source: 0001079973-25-000143
Chunk: 219

Company: CHINA NATURAL RESOURCES INC
Filing Date: 2025-01-27
Form: POS AM
Chunk 219
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 and they are classified within the following
stages for measurement of ECLs except for trade receivables and contract assets which apply the simplified approach as detailed below:

Stage 1 – Financial instruments for
which credit risk has not increased significantly since initial recognition and for which the loss allowance is measured at an amount
equal to 12-month ECLs;

Stage 2 – Financial instruments for
which credit risk has increased significantly since initial recognition but that are not credit-impaired financial assets and for which
the loss allowance is measured at an amount equal to lifetime ECLs.

Stage 3 – Financial assets that are
credit-impaired at the reporting date (but that are not purchased or originated credit-impaired) and for which the loss allowance is measured
at an amount equal to lifetime ECLs;

Simplified approach

For trade receivables and contract assets
including those containing a significant financing component, the Group applies the simplified approach in calculating ECLs. Therefore,
the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date.
The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors
specific to the debtors and the economic environment.

| (l) | Financial liabilities |

Initial recognition and measurement

Financial liabilities are classified, at
initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives
designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognized
initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

| F-23 |

| 2.5 |     | MATERIAL ACCOUNTING  
 POLICIES (CONTINUED) |

| (l) | Financial liabilities (continued) |

The Group’s financial liabilities include
trade payables, financial liabilities included in other payables and accruals, dividends payable, derivative financial liabilities, interest-bearing
loans and borrowings, due to related companies and due to the shareholders.

Subsequent measurement

The subsequent measurement of financial liabilities
depends on their classification as follows:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through
profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair
value through profit or loss.

Financial liabilities are classified as held
for trading if they are incurred