half year report for personal use only2013/02/28 · asf group limited a.b.n. 50 008 924 570 and...
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APPENDIX 4D
Half Year Report ASF Group Limited
ABN 50 008 924 570
Half-year ended 31 December 2012 (Previous corresponding period:
Half-year ended 31 December 2011)
RESULTS FOR ANNOUNCEMENT TO THE MARKET
2012 2011 Change
Revenue from ordinary activities 435,870 $753,149 (42%)
(Loss)/Profit from ordinary activities after tax attributable to members
(1,942,673) $23,666,818 (108%)
Net (loss)/profit for the period attributable to members
(1,942,673) $23,666,818 (108%)
Dividends/distributions Amount per security Franked amount per security
Final dividend (prior year) Nil Nil
Interim dividend No interim dividend proposed
Record date for determining entitlements to the interim dividend
N/A
Explanation of figures reported Refer to the Directors’ Report
NTA Backing 2012 2011
Net tangible asset backing per ordinary share $0.091 $0.105
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APPENDIX 4D Entity over which control has been gained during the period
Name
Date of gain of control
Contribution to net profits/(losses), where material
2012 $
2011 $
N/A
Entities over which control has been lost during the period
Name
Date of loss of control
Contribution to net profits/(losses), where material
2012 $
2011 $
Austin Resources Pty Ltd 31/12/2012 (130) -
ASF Copper Pty Ltd 31/12/2012 (230) -
APEC Coal Pty Ltd 31/12/2012 (230) -
Associates and Joint Venture entities
Name
Ownership
interest
Aggregate share of profits/(losses), where
material
Contribution to net profits/(losses), where
material
2012 %
2011 %
2012 $
2011 $
2012 $
2011 $
China Coal Resources Pty Ltd
25% 45% (27,342) ($17,156) (27,342) ($17,156)
Kaili International Resource Ltd
20% 20% (27,176) ($6,774) (27,176) ($6,774)
ASF Resources Limited 48.95% 48.95% (27,332) ($25,503) (27,332) ($25,503)
Rey Resources Limited 22.74% - (319,724) - (319,724) -
ActivEX Limited 19.9% - (21,723) - (21,723) -
Foreign Accounting standards The results of foreign entities are presented in accordance with the Australian equivalents to International Financial Reporting Standards (AIFRS).
Audit or review status This report is based on accounts that have been reviewed by the Company’s auditors, PricewaterhouseCoopers. This report should be read in conjunction with the 30 June 2012 Annual Report.
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ASF Group Limited
A.B.N. 50 008 924 570
and Controlled Entities
INTERIM REPORT
FOR THE HALF YEAR ENDED 31 DECEMBER 2012
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ASF Group Limited A.B.N. 50 008 924 570
Page 1
DIRECTORS’ REPORT Your Directors present their report on the consolidated entity (‘the Group’) consisting of ASF Group Limited (‘the Company’) and the entities that it controlled during the first half-year ended or as at 31 December 2012. Directors The following persons were Directors of the Company during the half year ended 31 December 2012 and up to the date of this report. Ms Min Yang Mr Nga Fong Lao Mr Quan (David) Fang Mr Wai Sang Ho Mr Geoff Baker Mr Alan Humphris Mr Xin Zhang Mr Yong Jiang (appointed 30 November 2012) Review of operations Financial results For the first half-year ended 31 December 2012, consolidated revenue from operations was $435,870 compared with $753,149 for the first half year in 2011. Consolidated loss after tax for the half-year ended 31 December 2012 attributable to members of the parent entity, amounted to $1,942,673 compared with a profit of $23,666,818 for the first half in the previous year. The prior year, first half profit was generated predominantly from one-off transactions involving ASF Resources Limited and Kaili International Resource Ltd. These transactions were consistent with the Company’s business model, which is to acquire and invest in assets for further development or resale. The Directors believe that similar opportunities will continue to emerge in future when certain of the Company’s investments are realised. The Company’s investments at this time are principally in the resources sector and during the period, the Company increased its shareholding in two listed mineral exploration companies, Rey Resources Limited (“Rey”) and ActivEX Limited (“AIV”), and currently holds a 22.7% interest in Rey and 19.9% interest in AIV. A summary of consolidated revenues and results for the half-year by significant industry segments is set out below: Segment revenues Segment results 2012
$ 2011
$ 2012
$ 2011
$ Property marketing and services 162,958 473,149 49,041 21,993 Mineral and resources - - (343,197) (107,090) Resources trading - - (29,492) 11,271 Corporate services 483,599 579,420 (1,307,969) 23,964,203 Fund management and advisory services 48,051 - (328,350) 4,383,262 Eliminations (258,738) (299,420) (11,626) (4,650,625) Total segment revenue/result 435,870 753,149 (1,971,593) 23,623,014
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ASF Group Limited A.B.N. 50 008 924 570
Page 2
DIRECTORS’ REPORT Minerals and Resources Rey Resources Limited The Company announced on 18 June 2012 that it had entered into Subscription Agreements with Rey to subscribe up to $13.8m in Rey shares and the first tranche of 25 million Rey shares for the subscription of $3m was issued to the Company on that date. The second tranche was issued following approval of Rey shareholders at a General Meeting of the company held on 6 September 2012, taking ASF’s shareholding in Rey to 22.7%. ASF has two nominee directors on the board of Rey, ASF Chairman Min Yang and Geoff Baker. Rey has coal exploration assets in the Canning Basin, Western Australia with a tenement base of just over 6,000 square kilometres. Rey's major assets include the Duchess Paradise project, a proposed low-impact coal mining project with 305 million tonne JORC thermal coal resource and a completed Definitive Feasibility Study, which is currently progressing through the Government approvals processes. Rey also holds an existing 10% interest in oil & gas Exploration Permits in joint venture with Buru Fitzroy in this area. ASF continues to seek opportunities to assist Rey with its future growth and development. ActivEX Limited The Company subscribed $0.67m to a placement of ActivEX shares in May 2012 which resulted in ASF holding a 13% interest in ActivEX and ASF Chairman, Min Yang, being appointed to the ActivEX board. In November 2012, ASF subscribed $0.48m for a further placement of ActivEX shares to take its shareholding to 19.9% and gained the right to appoint a second nominee director to the ActivEX board. ActivEx is a successful explorer which holds a portfolio of good quality mineral projects in Queensland, in particular copper-gold-cobalt mineralisation in the Cloncurry district and copper, gold and silver mineralisation in SE Queensland. The stated near-term objective of ActivEX is to establish JORC compliant resources at its key projects. ASF, as a cornerstone investor, seeks to assist ActivEX with its future growth and development. China Coal Resources Pty Ltd The Company holds a 25% interest in China Coal Resources, which holds two mineral exploration tenements (EL15/2007 and EL55/2007) in Tasmania. A program of trenching and sampling continued during the half year under review and a work program for 2013 is currently being finalised, targeting base metals. China Coal Resources also holds two tenements (and four applications for coal permits) in Queensland and was granted a tenement (EL70/4403 Dongara), in Western Australia during the half year under review. Funding for China Coal Resources exploration activities has been from internal cash resources of this company. ASF Resources Limited The company, which is owned 48.95% by ASF holds seven tenements in the Canning Basin, W.A. During the half year under review a drilling program comprising 38 holes across the Exploration Licenses 1670, 1774, 1886 and 1887 was commenced. Signs of intersecting coal at depths between 190m and 250m were recorded from drilling that was completed. The Company announced on 30 October 2012 that it was in discussion with Beijing Guoli Energy Investment Co Ltd (which holds a 45% shareholding in ASF Resources Limited) concerning a possible six month deferral of the agreed timetable for demerging the Company’s shareholding in AFS Resources Limited, and subsequently it has been agreed to extend the demerger date to 30 June 2013.
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ASF Group Limited A.B.N. 50 008 924 570
Page 3
DIRECTORS’ REPORT A strategic plan for ASF Resources Limited is currently being developed by the company’s shareholders with the assistance of consultants, GEOS Mining who is also advising on work programs which are expected to commence in the field during May 2013. Funding of ASF Resources Limited activities is currently undertaken from internal cash resources of the company. ASF Resources (WA) Pty Ltd ASF Resources (WA) has been granted two tenements (EL 04/2146 MEDA 1, EL 04/2147 MEDA 2) in W.A of which an exploration program for 2013 is being developed. ASF Kaili Resource Pty Ltd The company is 20% owned by ASF and holds two tenements (EL1433 and EL1436) in the Canning Basin, W.A. A drilling program commenced in the first half-year under review. The presence of coal was intersected at depths between 220m and 300m. Further drilling is proposed to assess the presence and thickness of seams. Funding for this work was from internal cash resources of ASF Kaili Resource Pty Ltd. Sale of mineral tenements in Queensland and Tasmania As previously announced on 2 January 2013, ASF Group sold two tenements in Queensland and two in Tasmania to Profit Achieve Holdings Ltd. This move was consistent with ASF’s business model, which is to expand its asset base through acquisition or other ventures and to transform them into deliverable projects for further development through joint venturing with its strategic partners or by resale. Property Services ASF Properties continues to provide property marketing and services to property developers in Australia. During the period under review, property projects undertaken by the company include Breakfast Point, Inmark and Hyde Park Residence. The company is actively seeking new property projects in order to enhance its portfolio. Fund Management & Advisory Services ASF Capital Pty Limited (previously known as ASF Balmoral Pty Limited) holds an Australian Financial Services Licence and operates as the financial services arm of the Group. During the half-year under review its main services comprised the marketing of Fund Management products to the Australian wholesale investor markets and also the provision of corporate advisory services. Initial revenues from marketing these products were derived under agreements with LaTrobe Financial Services Pty Ltd and Mutual Limited. ASF Capital also represents Hong Kong based Fund Manager, Marco Polo Pure Asset Management, a specialist award winning China A share manager in the Australian market. It also represents Cadence Capital, a long biased Australian equities manager which has an outstanding 8 year track record of performance. The corporate advisory services are provided both within the Company and to external clients. ASF Capital advises and assists companies with the raising of capital and to implement IPOs, acquisitions and other transactions. Subsequent to the half-year balance date, the Company announced on 9 January 2013 that it had acquired the outstanding shares amounting to 25% of ASF Capital not previously held by the Company such that ASF Capital is now a 100% owned subsidiary of the Company. ASF Capital during the second half-year intends to establish a regulated Managed Fund with a mandate for investing in Australia and designed to attract professional investors from China. In this process ASF Capital will access the Company’s substantial database of Chinese entrepreneurs and investors that has partnered and co-invested with ASF since its inception seven years ago.
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ASF Group Limited A.B.N. 50 008 924 570
Page 4
DIRECTORS’ REPORT Auditor’s independence declaration The auditor’s independence declaration under section 307C of the Corporations Act 2001 is attached. This report is made in accordance with a resolution of the directors.
Min Yang Chairman Sydney 28 February 2013
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the half-year ended 31 December 2012
Half-year Note 31 December 2012
$ 31 December 2011
$
Revenue from continuing operations 3 435,870 753,149 Other income 4 351,878 25,776,521 Cost of sales 5 (82,519) (342,891) Marketing expenses (193,800) (62,591) Consultants expenses (579,421) (561,263) Occupancy expenses 5 (233,472) (169,692) Professional fees (188,473) (28,516) Administration expenses (272,572) (232,271) Employment expenses (640,044) (429,341) Corporate expenses (84,237) (67,710) Depreciation and amortisation expense 5 (21,760) (17,359) Legal expenses (125,338) (53,185) Finance costs 5 (184,583) 23,639 Impairment of goodwill 5 - (141,792) Other expenses (4,143) (5,048) Loss on disposal of fixed assets (431) - Share of net loss of associates (423,297) (49,433) (Loss)/profit before income tax (2,246,342) 24,392,217 Income tax benefit/(expense) 274,749 (769,203) (Loss)/profit for the half-year (1,971,593) 23,623,014 (Loss)/profit is attributable to: Members of the parent entity (1,942,673) 23,666,818 Non-controlling interest (28,920) (43,804) (1,971,593) 23,623,014 Other comprehensive loss Items that may be reclassified to profit or loss Exchange differences on translation of foreign operations (159,663) (88,545) Fair value change in available-for-sale financial assets 1,372,944 - Other comprehensive loss for the half-year 1,213,281 (88,545) Total comprehensive (loss)/profit for the half-year (758,312) 23,534,469 Total comprehensive (loss)/profit for the half-year is attributable to: Members of the parent entity (729,392) 23,578,273 Non-controlling interest (28,920) (43,804) (758,312) 23,534,469
Earnings per Share for (loss)/profit attributable to the ordinary equity holders of the Company:
Basic (cents per share) (0.63) 7.66
Diluted (cents per share) (0.63) 7.66
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2012
Note 31 December 2012
$ 30 June 2012
$
ASSETS
Current assets Cash and cash equivalents 1,307,046 7,103,469 Trade and other receivables 300,525 755,678 Held-for-distribution investment 6 14,015,555 14,015,555 Other current assets 98,428 87,464
Total current assets 15,721,554 21,962,166
Non-current assets Other receivables 142,395 159,616 Plant and equipment 119,269 128,028 Investment in associates 7 20,468,560 5,974,127 Available-for-sale financial assets 8 - 2,296,505 Mining tenements and exploration 9 503,840 657,272 Deferred tax assets 55,536 -
Total non-current assets 21,289,600 9,215,548
Total assets 37,011,154 31,177,714
LIABILITIES
Current liabilities Trade and other payables 1,488,178 1,745,715 Deferred revenue - - Provisions 14,940 13,480 Borrowings 10 7,289,973 -
Total current liabilities 8,793,091 1,759,195 Non-current liabilities Deferred tax liabilities - 219,214 Total non-current liabilities - 219,214
Total liabilities 8,793,091 1,978,409
Net assets 28,218,063 29,199,305
EQUITY
Contributed equity 11 54,360,352 54,583,282 Reserves 12 4,146,225 2,932,944 Accumulated losses 12 (30,138,177) (28,195,504) Capital and reserves attributable to members of the parent entity 28,368,400 29,320,722 Non-controlling interest 13 (150,337) (121,417)
Total equity 28,218,063 29,199,305
The above consolidated statement of financial position should be read in conjunction with the accompanying notes. For
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the half-year ended 31 December 2012
Contributed equity
Reserves
Accumulated losses
Total
Non-
controlling interest
Total equity
Note $ $ $ $ $ $
Balance at 1 July 2011 54,258,787 4,152,370 (49,439,503) 8,971,654 (303,832) 8,667,822
Profit for the half-year - - 23,666,818 23,666,818 (43,804) 23,623,014
Other comprehensive income/(loss) for the half-year - (88,545) - (88,545) - (88,545)
Total comprehensive profit/(loss) for the half-year - (88,545) 23,666,818 23,578,273 (43,804) 23,534,469
Transaction with owners in their capacity as owners:
Non-controlling interest on disposal of subsidiary - - - - 257,077 257,077
- - - - 257,077 257,077
Balance at 31 December 2011 54,258,787 4,063,825 (25,772,685) 32,549,927 (90,559) 32,459,368
Balance at 1 July 2012 54,583,282 2,932,944 (28,195,504) 29,320,722 (121,417) 29,199,305
Loss for the half-year - - (1,942,673) (1,942,673) (28,920) (1,971,593)
Exchange differences on translation of foreign currency - (159,663) - (159,663) - (159,663)
Available-for-sale financial assets reserve 12(a) - 1,372,944 - 1,372,944 - 1,372,944
Total comprehensive profit/(loss) for the half-year - 1,213,281 (1,942,673) (729,392) (28,920) (758,312)
Transaction with owners in their capacity as owners:
Share buy-back (222,930) - - (222,930) - (222,930)
(222,930) - - (222,930) - (222,930)
Balance at 31 December 2012 54,360,352 4,146,225 (30,138,177) 28,368,400 (150,337) 28,218,063
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
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CONSOLIDATED STATEMENT OF CASH FLOWS For the half-year ended 31 December 2012
Half-year 31 December 2012
$ 31 December 2011
$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 840,965 849,794 Payments to suppliers and employees (2,719,224) (3,046,598)
Interest received 53,692 142,960
Income tax paid - - Net cash outflow from operating activities (1,824,567) (2,053,844)
CASH FLOWS FROM INVESTING ACTIVITIES Payments for exploration expenditure (116,881) (1,231,798) Payments for plant and equipment (13,850) (15,539) Investment in listed company shares (11,278,539) - Proceeds for disposal of subsidiary 600,000 4,804,237 Loan to related parties - (304,842) Repayment of loans by related parties 80,016 4,982,892 Net cash (outflow)/inflow from investing activities (10,729,254) 8,234,950
CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings 7,000,000 - Payment for share buyback (222,930) - Net cash inflow from financing activities 6,777,070 - Net decrease in cash and cash equivalents (5,776,751) 6,181,106
Cash and cash equivalents at the beginning of the half-year 7,103,469 5,888,769 Effect of exchange rate changes on cash and cash equivalents (19,672) 28,559 Cash and cash equivalents at the end of the half-year 1,307,046 12,098,434
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
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NOTES TO THE FINANCIAL STATEMENTS 1 Basis of preparation of half-year report This condensed consolidated interim financial report for the half-year reporting period ended 31 December 2012 has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001. This condensed consolidated interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2012 and any public announcements made by the Company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001. The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period. In August 2012, the Company received a $7 million convertible loan facility from Star Diamond Developments Limited (“Star Diamond”). The Company also in February 2013 received a further convertible loan facility of $1 million from Star Diamond which agreed to extend the loan maturity date for the entire funds to 23 August 2013. In addition, the Company is also in discussion with investors for the raising of capital by private placement of shares. Accordingly, this financial report is appropriately prepared on a going concern basis. (a) Impact of standards issued but not yet applied by the entity (i) AASB 9 Financial Instruments, AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 and AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) (effective from 1 January 2013*) AASB 9 Financial Instruments addresses the classification, measurement and derecognition of financial assets and financial liabilities. The standard is not applicable until 1 January 2013 but is available for early adoption. When adopted, the standard will affect in particular the group’s accounting for its available-for-sale financial assets, since AASB 9 only permits the recognition of fair value gains and losses in other comprehensive income if they relate to equity investments that are not held for trading. Fair value gains and losses on available-for-sale debt investments, for example, will therefore have to be recognised directly in profit or loss. There will be no impact on the Group’s accounting for financial liabilities, as the new requirements only affect the accounting for financial liabilities that are designated at fair value through profit or loss and the Group does not have any such liabilities. The derecognition rules have been transferred from AASB 139 Financial Instruments: Recognition and Measurement and have not been changed. The Group has not yet decided when to adopt AASB 9. *In December 2011, the IASB delayed the application date of IFRS 9 to 1 January 2015. The AASB is expected to make an equivalent amendment to AASB 9 shortly. (ii) AASB 10 Consolidated Financial Statements, AASB 11 Joint Arrangements, AASB 12 Disclosure of Interests in Other Entities, revised AASB 127 Separate Financial Statements and AASB 128 Investments in Associates and Joint Ventures and AASB 2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards (effective from 1 January 2013) In August 2011, the AASB issued a suite of five new and amended standards which address the accounting for joint arrangements, consolidated financial statements and associated disclosures. AASB 10 replaces all of the guidance on control and consolidation in AASB 127 Consolidated and Separate Financial Statements, and Interpretation 12 Consolidation Special Purpose Entities. The core principle that a consolidated entity presents a parent and its subsidiaries as if they are a single economic entity remains unchanged, as do the mechanics of consolidation. However, the standard introduces a single definition of control that applies to all entities. It focuses on the need to have both power and rights or exposure to variable returns. Power is the current ability to direct the activities that significantly influence returns. Returns must vary and can be positive, negative or both. Control exists when the investor can use its power to affect the amount of its returns. There is also new guidance on participating and protective rights and on agent/principal relationships. While the group does not expect the new standard to have a significant impact on its composition, it has yet to perform a detailed analysis of the new guidance in the context of its various investees that may or may not be controlled under the new rules.
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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 1 Basis of preparation of half-year report (continued) (a) Impact of standards issued but not yet applied by the entity (continued) AASB 11 introduces a principles based approach to accounting for joint arrangements. The focus is no longer on the legal structure of joint arrangements, but rather on how rights and obligations are shared by the parties to the joint arrangement. Based on the assessment of rights and obligations, a joint arrangement will be classified as either a joint operation or a joint venture. Joint ventures are accounted for using the equity method, and the choice to proportionately consolidate will no longer be permitted. Parties to a joint operation will account their share of revenues, expenses, assets and liabilities in much the same way as under the previous standard. AASB 11 also provides guidance for parties that participate in joint arrangements but do not share joint control. There will be no impact on any of the amounts recognised in the financial statements as the Group does not have any joint arrangements. AASB 12 sets out the required disclosures for entities reporting under the two new standards, AASB 10 and AASB 11, and replaces the disclosure requirements currently found in AASB 127 and AASB 128. Application of this standard by the group will not affect any of the amounts recognised in the financial statements, but will impact the type of information disclosed in relation to the group’s investment. Amendments to AASB 128 provide clarification that an entity continues to apply the equity method and does not remeasure its retained interest as part of ownership changes where a joint venture becomes an associate, and vice versa. The amendments also introduce a “partial disposal” concept. There will be no impact on any of the amounts recognised in the financial statements as the Group does not have any joint venture becomes an associate. (iii) AASB 13 Fair Value Measurement and AASB 2011-8 Amendments to Australian Accounting Standards arising from AASB 13 (effective 1 January 2013) AASB 13 was released in September 2011. It explains how to measure fair value and aims to enhance fair value disclosures. The group has yet to determine which, if any, of its current measurement techniques will have to change as a result of the new guidance. It is therefore not possible to state the impact, if any, of the new rules on any of the amounts recognised in the financial statements. However, application of the new standard will impact the type of information disclosed in the notes to the financial statements. The group does not intend to adopt the new standard before its operative date, which means that it would be first applied in the annual reporting period ending 30 June 2014. (iv) Revised AASB 119 Employee Benefits, AASB 2011-10 Amendments to Australian Accounting Standards arising from AASB 119 (September 2011) and AASB 2011-11 Amendments to AASB 119 (September 2011) arising from Reduced Disclosure Requirements (effective 1 January 2013) In September 2011, the AASB released a revised standard on accounting for employee benefits. It requires the recognition of all remeasurements of defined benefit liabilities/assets immediately in other comprehensive income (removal of the so-called ‘corridor’ method) and the calculation of a net interest expense or income by applying the discount rate to the net defined benefit liability or asset. This replaces the expected return on plan assets that is currently included in profit or loss. The standard also introduces a number of additional disclosures for defined benefit liabilities/assets and could affect the timing of the recognition of termination benefits. The amendments will have to be implemented retrospectively. There will be no impact on any of the amounts recognised in the financial statements as the Group does not have any defined benefit liabilities/assets. There are no other standards that are not yet effective and that are expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions. 2 Segment information (a) Description of segments
Management has determined the operating segments based on the reports received by the Board that are used to make strategic decisions. The Board considers the business from both a business and geographic perspective. F
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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 2 Segment information (continued) (b) Segment information – operating segments
The segment information provided to the Board for the half-year ended 31 December 2012 is as follows:
Half-year 2012
Property
marketing and services
Mineral and resources
Resources trading
Corporate services
Fund management and advisory
services
Eliminations Total
$ $ $ $ $ $ $
Segment revenue
Sales 162,958 - - 483,599 48,051 (258,738) 435,870
Other income 27 229 35 66,488 321 (13,309) 53,791
Total segment revenue 162,985 229 35 550,087 48,372 (272,047) 489,661
Gain on loss of controls over
subsidiaries
- - - 298,087 - - 298,087
Share of loss from associate - (341,447) - (54,674) (27,176) - (423,297)
Segment result 49,041 (343,197) (29,492) (1,307,969) (328,350) (11,626) (1,971,593)
Half-year 2011
Segment revenue
Sales 473,149 - - 579,420 - (299,420) 753,149
Other income 18 81 35 152,824 1,002 (11,000) 142,960
Total segment revenue 473,167 81 35 732,244 1,002 (310,420) 896,109
Gain on loss of controls over
subsidiaries
- - - 25,633,561 - - 25,633,561
Share of loss from associate - - - (42,659) (6,774) - (49,433)
Segment result 21,993 (107,090) 11,271 23,964,203 4,383,262 (4,650,625) 23,623,014
Total segment assets
31 December 2012 188,128 19,272,953 591,041 47,950,463 28,228 (31,019,659) 37,011,154
30 June 2012 203,572 6,435,861 851,298 39,724,633 49,095 (16,086,745) 31,177,714
(c) Segment information – geographical segments
Segment revenue from sales to external customers
Segment assets
31 December 30 June
2012
$ 2011
$ 2012
$ 2012
$
Australia 278,701 564,268 62,976,602 41,853,365
China 415,907 488,301 5,054,211 5,411,094
Eliminations – intercompany balances (258,738) (299,420) (31,019,659) (16,086,745)
TOTAL 435,870 753,149 37,011,154 31,177,714
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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 2 Segment information (continued)
(d) Other segment information
Revenue for property marketing and services represents commission income received from the sale of properties owned by customers in Australia. Revenue for corporate services represents corporate fees charged to other subsidiaries. The corporate fees were based on the estimation of time spent and works undertaken by the management of the Group. The revenue from external parties reported to the Board is measured in a manner consistent with that in the income statement. Revenues from external customers are derived from property marketing and services, provision of corporate advisory services and fund management and advisory services.
3 Revenue
2012
$ 2011
$ Revenue from continuing operations - Commission revenue 162,958 473,149 - Corporate services 224,861 280,000 - Fund management and advisory service 48,051 - 435,870 753,149
4 Other Income
2012
$ 2011
$ Interest received 53,692 142,960 Gain on loss of control over subsidiaries (i) 298,087 25,633,561 Others 99 - 351,878 25,776,521 (i) This represents gain on disposal of three wholly owned subsidiaries, which are holders of four tenements
in Queensland and Tasmania, to Profit Achieve Holdings Limited. 5 Expenses
2012
$ 2011
$ (Loss)/profit before income tax includes the following specific expenses: Cost of sales 82,519 342,891 Finance costs/(income) 184,583 (23,639) Occupancy expenses 233,472 169,692 Impairment of goodwill - 141,792 Depreciation and amortisation expense 21,760 17,359
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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 6 Non-current assets – Investment held for distribution
31 December 2012
$ 30 June 2012
$ Investment held for distribution 14,015,555 14,015,555 Pursuant to the initial agreement with Guoli, the Company shall within 12 months after completion demerge ASFR by way of distribution of not less than 80% of its interest in ASFR to shareholders of the Company (“Demerger”). However due to the uncertain economic circumstances and the current weakness in the capital markets, Guoli agreed that the time period for the Demerger be extended by six months to 30 June 2013. The interest to be distributed to shareholders under the proposed Demerger was classified as an investment held for distribution. 7 Non-current assets – Investment in associates
31 December 2012
$ 30 June 2012
$ China Coal Resources Pty Ltd 1,196,071 1,223,413 ASF Resources Ltd 3,186,331 3,213,663 Kaili International Resource Ltd 1,479,617 1,537,051 Rey Resources Limited 13,480,276 - ActivEx Limited 1,126,265 -
20,468,560 5,974,127 In July 2012, China Coal Geology Engineering Corporation (“CCGEC”) increased in stakes in China Coal Resources Pty Ltd (“CCR”) by subscribing 800,000 new ordinary shares representing 20% of the enlarged issued capital of CCR for $600,000 and, as a consequence, CCGEC is now holding 75% interest in CCR. In May 2012, the Company subscribed for 24,794,398 shares in ActivEX Limited (“AIV”) at 2.7 cents per share. The Company subscribed for further 23,926,951 shares at 2 cents per share in November 2012 and became a major shareholder holding 19.9% interest in AIV. In June 2012, the Company entered into two subscription agreements with Rey Resources Limited (“Rey”) for the subscriptions of 115 million shares in the capital of Rey by two tranches at $0.12 per share. The first subscription of 25 million shares occurred on 18 June 2012 while the second subscription of 90 million shares were allotted on 11 September 2012 upon approval by Rey’s shareholders at its general meeting held on 6 September 2012. The Company now holds an interest of approximately 22.7% in the issued capital of Rey. As the Company has nominated two directors to the board of both Rey and AIV, the Company is regarded as having significant influence over these companies under the Australian Accounting Standards. The investments in Rey and AIV were accordingly reclassified as associates of the Company and equity accounted. 8 Non-current assets – Available-for-sale financial assets
31 December 2012
$ 30 June 2012
$ Investment in MYTA - - Investment in ActivEX Limited - 421,505 Investment in Rey Resources Limited - 1,875,000
- 2,296,505 The Company has no participation or influence on the decision making process of Macau Multinational Travel Agency Limited (“MYTA”). The management is of the view that MYTA will not be able to provide any profit contribution to the Company and it is unlikely that the fair value of the investment can be recovered. Full impairment on the investment was made accordingly. The investments in AIV and Rey have been reclassified as associates of the Company. Details as per note 7 above.
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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 9 Non-current assets – Mining tenements and exploration
31 December 2012
$ 30 June 2012
$
Exploration and development costs 503,840 657,272
503,840 657,272 10 Current liabilities – Borrowings
31 December 2012
$ 30 June 2012
$ Borrowings 7,289,973 - In August 2012, the Company received a $7 million loan facility from Star Diamond Developments Limited (“Star Diamond”). The Company further entered into a new loan agreement (“New Loan Agreement”) with Star Diamond in February 2013, which supersedes the previous agreement. Pursuant to the New Loan Agreement, Star Diamond agrees to grant an additional convertible loan facility of $1 million to the Company and also to extend the loan maturity date for the entire funds to 23 August 2013. Under the New Loan Agreement, interest will be payable at the rate of 1% per month, accrued monthly. Any loan amount outstanding at the loan maturity date will be satisfied by the issue of the Company’s shares at an issue price equal to a 10% discount below the 30-day VWAP in the period up to one trading day immediately prior to loan maturity. Alternatively, subject to further agreement between the parties, the loan facility can be fully repaid prior to loan maturity by conversion of the loan into either one or combination of the Company’s shares or into new shares of the Company’s subsidiary or investments held by such subsidiaries. 11 Contributed equity
Notes
31 December 2012
Shares
30 June 2012
Shares
31 December 2012
$
30 June 2012
$ Fully paid ordinary shares (a), (b) 291,411,718 292,403,709 54,360,352 54,583,282 (a) Movements in ordinary share capital:
Date
Details
Number of shares
$
1 July 2012 Opening balance 292,403,709 54,583,282 July-December 2012 Shares bought back on-market
and cancelled (991,991) (222,930) 31 December 2012 Balance 291,411,718 54,360,352
(b) Ordinary shares Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the company in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy or attorney or representative, is entitled to one vote, and upon a poll each share is entitled to one vote. Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 12 Reserves and accumulated losses (a) Reserves
31 December 2012
$ 30 June 2012
$ Share based payments 2,235,261 2,235,261 Foreign currency translation (95,477) 64,186 Transactions with non-controlling interests 2,006,441 2,006,441 Revaluation reserve - (1,372,944) (4,146,225) 2,932,944 Movements:
31 December 2012
$ 30 June 2012
$ Share-based payments Beginning balance 2,235,261 2,235,261 Ending balance 2,235,261 2,235,261 Foreign currency translation Beginning balance 64,186 (89,332) Exchange differences on translation of foreign currency (159,663) 153,518 Ending balance (95,477) 64,186 Transactions with non-controlling interests Beginning balance 2,006,441 2,006,441 Ending balance 2,006,441 2,006,441 Available-for-sale financial assets reserve Beginning balance (1,372,944) - Reclassification of investment - ActivEX Limited 247,944 (247,944) Reclassification of investment - Rey Resources Limited 1,125,000 (1,125,000) Ending balance - (1,372,944) (b) Accumulated losses
31 December 2012
$ 30 June 2012
$ Beginning balance (28,195,504) (49,439,503) Net (loss)/profit for the period (1,942,673) 21,243,999 Ending balance (30,138,177) (28,195,504) 13 Non-controlling interests
31 December 2012
$ 30 June 2012
$ Interest in: Share capital - - Retained earnings (150,337) (121,417) (150,337) (121,417) 14 Dividends No dividends have been declared during the period (2011: Nil). 15 Contingent liabilities There were no contingent liabilities at balance sheet date.
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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 16 Related party transactions All arrangements with related parties are consistent with those disclosed in the 2012 Annual Report. 17 Events occurring after the reporting period The Company acquired the remaining 25% shareholding interest in ASF Balmoral Pty Ltd (“ASF Balmoral”) from Mr Alan Humphris and his associates in January 2013. Following the acquisition, ASF Balmoral changed its name to ASF Capital Pty Ltd and became a wholly owned subsidiary of the Company. In February 2013, the Company entered into New Loan Agreement with Star Diamond, which supersedes the previous agreement. Pursuant to the New Loan Agreement, Star Diamond agrees to grant an additional convertible loan facility of $1 million to the Company and also to extend the loan maturity date for the entire funds to 23 August 2013. Under the New Loan Agreement, interest will be payable at the rate of 1% per month, accrued monthly. Any loan amount outstanding at the loan maturity date will be satisfied by the issue of the Company’s shares at an issue price equal to a 10% discount below the 30-day VWAP in the period up to one trading day immediately prior to loan maturity. Alternatively, subject to further agreement between the parties, the loan facility can be fully repaid prior to loan maturity by conversion of the loan into either one or combination of the Company’s shares or into new shares of the Company’s subsidiary or investments held by such subsidiaries. There are no circumstances that have arisen since the end of the financial period which significantly affect or may significantly affect the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial periods other than as disclosed in this Appendix 4D and Directors’ Report. 18 Review of accounts This report is based on accounts that have been reviewed. Copies of the review report and independence declaration from PricewaterhouseCoopers are attached.
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Page 18
DIRECTORS’ DECLARATION In the directors’ opinion: (a) The financial statements and notes set out on pages 6 to 17 are in accordance with the
Corporations Act 2001, including;
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and
(ii) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2012 and of its performance for the half-year ended on that date, and
(b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the directors.
Min Yang Chairman Sydney 28 February 2013
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