Astra Resources
ANNUAL RE·PORT 2013 Astra Resources PlC (CN: 0762(218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
CONTENTS
MESSAGE FROM ASTRA'S CEO , , 3
MESSAGE FROM ASTRA'S MANAGING DIRECTOR , 4
THE ASTRA WAY ...... •..... , ,.., , , , , 5
OUR V1SION •.••••••.••.•.•.,•.•.••••..•..••.••••.•.•.•..,..•.•.•,..•.•.•.•••••,.••.•.•,...... •....••..•.•....•....•.•..••.•.....•••••••.• ,.••.•.•••.•.•••....,.••...•..••..•.•...•..• ,.••.••.•...... •....•.••••...... ••.• 5 OUR MISSION •...... •...... •...... •...... •.....•.•.••.•...... •.•.•.•..•.••.•....•.•.• ,•.....•....•...•.•...•....•.•.• ,.•..•.. 5 OUR GOALS AND VALUES .•.•••••.•,.•••••.•,.••.•.••••....••.•....••....•.•..•.•...•••••.••.•.•...•.•....••.••••..• ,....•.••...•. ,•••••..•,.•.•..•...... •.•...... ••...... •...... •...... 5 HIGHLIGHTS & PRIORITIES 6
2013 HI GHLrGHTS ...... •...... •..•.••...... •...... •...•...... •...... •..•.••.••.•.• ,•.•••,...•..•••••.••••.•••.,.•.•.•.•.•.••..•....••.••.••.•.•.••.• 6 2014 PRIORlTIES ,..,.....•.••.•..••.••••.•.•...••..•.••.•.••.•....•.••.....•.••.•.....••.• ,.•,.•,..••.•...... •.•.••.•...... •..••.••..•.•...... •.••.•.•.••••..•.....•.•..•.••.•••••••...... •...... •...... •.••.•... 8 BUSINESS STRATEGY ...... •...... , 9
DISRUPTING THE STATUS QUO ....••...... •....•.•..•.•.• ,...•. ,•.....•...... •..•..•...... •..••• ,.•...... •..•.••...... •.•...•.••••.....•.••.•.••••.•....••••••.•.•••...... •.••.• ,••.•.••.•••.9 ASTRA'S BUSINESS STRATEGy, •..•.•.••••.••.•..••.•.••..•.•••,.••.•....••....•••••....•..•...... ••.•..•....•..•.••.••.•..•.....•..•.••.••.• ,•...... •.....••.•...... •.••.••..•.•.•.••...... •....••....•...•• 10 DEMAND TARGETING ...... •...... •...... •...... •.•..•...... ••...... ••....••...... •..•.. ,.•••...... • :•..•..•.•....••.•.•. 10 D1VERSIF1CA TION •.•..•.•. ,.•.••.•.,.••...•••.•.••.•.•.•.••••.•.,••••....••.•,.•..•..•....•..•..• ,.••.••.•.•..•.••.•.••....••.•.••..•.••..•.•.•.•.• ' .••••.••.•...•••.••••.••.••..••••••.•.•••••...•.••••.•..•.•...•.•..•...... •• 10 INTEGRATION ...... •....••..•.••...... •..•.•.....•.....•..•.•...... •..•.•..••...... •.•..•.••.•..•.....•.•...... •.••.•..•.•..•..•.••••..• ,•..••.••.•..•..•.•...••. ,.••.•.•..•. ,••••••,.•.•• 11 RISK M1TIGA TION •••.••.•••.•.••••.•.•.•..••..•.•,....•.•..•.•. ,.•.••.•.••.••.••.•...... ••...•..•.•.••..••...••.....••••.•...... •••.•..• ,.•,•...•.....•.••.•.•••••...•.••..•..••.••• ,••..•.•..•...••...... •..•..••...... 11
OUR COMPANy , ,...... •...... 12
THE ASTRA BOARD OF DIRECTORS •...... •...... •.•...... •.•...... •...... •..•.••.•.....•.•.••.••.••.••.•.••.••.••••.•••.•.•.•.••..••.•..••.•.••.••.••.•.•• 12 ABOUT ASTRA .••.,.••..•,•.•••.••..•.••.••.••.•....•...•..•..•....•.••.....•.•..•..•..•.••.....•.• ,.•,.•...... •••...... •.••.•.•.•.•.•...•..•.••.• ,.•.•,•...••.••.....•....••..•.•••••..•....•••.•••....•...... 14 ASTRA'S BUSINESS STRUCTURE ..•.•....••.•.....•..•.••.••.••.•....•••.•.••.••••...•..•••••..••.•...•...•... ,.•.•...••••..•.•.•....•.•....•••..••.•...... •...... •..•.•.•...... •.•••...••...••.•....••.••.•..••..... 15
OPERATIONAL REVIEW ,...... •...... 16 INDUSTRIALANDENERGY TECHNOLOGIES 19
T -STEEL ....•...... •...... •...... •...... •..•...... ••.....•.•.•...•.••.•.•..•.....••.•.•..•.....•.••.•...•....•..•.•..••.• ',..•....•. , 19 CLEAN COAL TECHNOLOGIES ..••••••....,•..•..•.••.•.••..•..• ,••.....•.••.•..•.•...•.•. ,••....•..•.. ,.•.••....•..• ,.•.••.•.....•.••.••..•.••..•••.•.•.•...•..•....••.•...•.•.••.••.••.....•...•..••...... •..•.••.•.•.• 20 COREX STEEL ...•...... •...... •...... •...... •.•..•.•••.•.•...•.•.••.•..•.••..•..•.••.• ,.•.••.•.•.•.•.••..•,..•.•.•...• 21 CARBO N EFFICIENT OPERA TION5. •....•..•..•.••...•.•.•.••...... •.••.••....•...•.. ,.•.•.,.•.•..•..•..•...•.. ,••.•...... ••.••.••.•••.•...... ••.•..•..••••.•.•..••••...... ••.••.••....•.•..• ,.••.•.....••.•....•.•.• 22 GREEN GUM ...•.•..••.•...•.....••.•....••.••..•....• ,.•....•.••..•...... •.• ,•...... •.. ,.•••••...... ••.•....•..•.••.•..• ,.••...•.•.••.•..•.•..•..•...... •.•...... •...... •.••...... •...... 22 CARBO NY ••••.•.•••••••.••••••••••••••••.•.••.••.••...:..••.....•.••••.....•••..•.•...... •.•.•••.•...... •.•.•.••..•..•.•..•••...•...••.••.•..•.•.•••..••••••••••••..••.•.•••••..•••.•.••••••••.••••..••,••,•••••••.•.•••••••..•..•.•••23 GREEN DIESEL ...•..•••.•.••.•.•..•..•.••.••.••...•••.•..•.• ,....•..••.•.••.•.••..•.•••...••.••.•..••••.•.••...... ••.•..••.•..•.••.•.••••.•••.•...••..•••••.•..•...... •..••...... ••...... ••..•.....• 24 THE HYDROFOTON EXTERNALLY ACTIVE DSSC SOLAR CELL ...... ••.•....••.••..•...... •..•.•.....•...... •..•.••••..•..• ,.•.••.••.....••..•.• 24
MINERAL EXPLORATION OPERATIONS , 26
IRON ORE INDIA .•..••...•.• ,•.,....•..•..• ,.••...... •••••.••.•.••....••.•.•.•••.•..••.•..• ,..,.•.•.•.•••...... ••.•..•.•...••••.•.•...•.•..•••..•.••...•.•.•..•.•.•.•.•...•.•..•.•.....••.•...•.• ,..•...•..• :••.•...... •...... • 26 IRON ORE SANDS THE PHIL!PPINES ..•...... •.•..•.....•.•...... ••.•...... •...... •...... •••...... •...... •..••...... •..••....••....•.•.•..•.• 27 THERMAL COAL N1GERlA .•...... •..•...... ••.....•.....••..•...... •.•...... •...••....••.•..•.••...... ••....•.•.••...••...•.•.•.•.•.•...•..• ,.•.••.•....•..••.••.••.•• ,•.••.•.•.•.•.••.•.••••.•.•.•.• 28 GOLD CAMBODIA ..••...... •...... •....•..•.••.•...... •....•...... •...... •.••.•..•.•...•...... •...... •.••.•...... ••.••....••...... ••.•.••.•....•••••.•.. 28
DIRECTORS' REPORT ...... •...."..,...... •...... , ,...... •...... , , 30
1. PRINCIPAL ACTIVITIES ...... •.•...... •...... •.••...... •...... •....•..•.•...... •..•. ,.•.••.•....•••••.••.••.•..••.•.•.•.•..•.•••••.•.•.••.•.• 30 2. BUSINESS REVIEW ,•...•..•.••...••..•.• ,•••..•..•..••.•.....•.•.•.•.••••.••.•..•..•.•...•.•..•.••.••.•.....•..••.•.•...•...•.••..• ,•.•...... •...... •..•••.... 30 3. RESEARCH AND DEVELOPMENT .•.•..•..•....••.•.....•....•..•..•..•.....•...... •...... ••.••...... ••....•...... •...... •...... •.••.•..•....••.•...••..• ,.•,.•.••.•,.••••••••..••.••..••.•.•,.•.•••.•.•.• 32 4. FINANCIAL INSTRUMENTS ...•..••...... •...... •..•..•..•...... •...... •••...... ••.•..•••...... •.•. ,••.••.•..•.•...•.•.•.•...••.•..•.••...... ••.•...• 33 5. DIVIDENDS •.•...... ••.••••.••..•.•...... •.••..•...... ••.•...•••....••.•..•...... •..••••••.•....•.•••.•••...... •.•...•.•.••.•...... •.•.•.••...... •...... •....•...... •.••...•.....•....•...... •.. 33 6. MARKET VALUE OF LAND ..•....••...... •...... •...... •.••...... •...... •...... •...... •.•..••.••.•.....••.•.•.•••....••.•.••.•..• ,••..••...••...••. 33 7. SUPPLIER PAYMENT POLICY ••.•...•..•.•.••.•...... •..•.•.•• ,•....•••.••..•••..••••.•.•••••...... •.•.••.•....•....•..••...... ,•...... ••.•.••...•...... •.•...... •.•...... •...•.•...... •....•.. 33 8. DIRECTORS •.•.•.•••.••••..••.••.••:••,•••.•.••.••.•.•••••,•..••.•.••.•..••..•.•...... •.•.•..•..••.••.•.•..••..•.•..••....•....•••.• ,•.••••••.•....••.•..•..•.• ,.•.....••....•.•.••.•..•..•.•.•.•..••..••.•••..••.•..•...... • 33 g, CORPORATE GOVERNANCE STATEMENT ,.•....••.•.•.....••.••.•...•....•..•.•..••.•.••.••.•.•...• ,.•,.•.••.•.•...•.••..•.•.•...... ••.•.••.•.•...... •...... •.•••...... •...... • 35 Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
10. POLITICAL AND CHARITABLE CONTRIBUTIONS .••.•...... •..••.•..•.•• ,•..•..•.•..•.••.•..•.••.•••••....••••.••••.••.••.••..••••••..•..•.••.••••.••.•..•.••.•.•••.•••...•.•.•.••..•••....••••..•..• 38 11. SOCIAL PERFORMANCE REVIEW ..•.•. ,...... •...... •...... •...... • 38 12. DISCLOSURE OF INFORMATION TO AUDITOR •.•..•..•.•.•.•.•....••••..•...... •..... " .•.•.•.....•.•.•...••••••••.•..•.•.•••..•••••..•.•••.•..•..•.••.•••••••.•..•.••..•..•..•••••..••••.•.•••••.•.•• 38
TOP 20 SHAREHOLDERS , 39
FINANCIAL STATEMENTS 41
STATEMENT OF DIRECTOR'S RESPONSIBLITIES IN RESPECT OF THE DIRECTORS' REpORT AND THE FINANCIAL STATEMENTS •...... 42 C ONSOLrDATED FINANCIAL STATEMENTS ••..•..•.••.•.••..•.••...•...•....•..•.•...... •...•••••....•...... •...... •....•...... ••.••.•••..•.••.•••.•....•...... ••..•.•.•...... ••.•..•.•• 43
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• Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
MESSAGE FROM ASTRA'S CEO
Success happens at the moment when preparation meets opportunity. Financial Year 2013 has been a year of opportunity and promise for the future. We have been able to seize opportunities because we were well prepared. The preparations for Astra Resources PLC ("Company" or "Astra") began in 2009.
Astra Astra's strategic direction is more relevant than ever. This year's activities were driven by deepening relationships with our partners who share the same vision - to capitalise on Astra's strategic positioning as a cutting edge innovator, developing technologies that change industries for maximum retums.
As observed last year, the world is still undergoing tremendous change. Capital markets are under enormous pressure, and growth has shifted from the major developed countries to emerging nations. This is especially true in the resource sector as high operating, logistics and capital costs in traditional mining territories are seeing emerging nations viewed more favourably. Astra has had an early mover advantage in this respect with underdeveloped sites in India, Philippines, Cambodia and Nigeria all demonstrating compelling characteristics.
To maximise the value of these sites, Astra is focused on acquiring, 'disruptive' technologies for the resources sector to build the Intellectual Property (IP) and asset position of the company. These disruptive innovations change the cost structure of end-user demand, frequently reducing the demand for resources.
In addition to our intellectual property in the mining, carbon efficient, steel and clean coal conversion industries.we have acquired a Green Diesel injector system to make vehicle fuel usage more efficient, and a water to atomic hydrogen nanotechnology; .
We have achieved this diversity in acquisitions through identifying worldwide opportunities and seeking out next generation technology from every comer of the globe. Where it balances our long-term portfolio, we have continued to complement these technologies through selective entry into property and renewable resources.
Most importantly, we have never lost sight of our strategic objectives. 2013 has seen Astra further cement the validity of its strategic direction with the acquisition of more potentially innovative technologies and carbon efficient businesses.
These innovations complement our existing asset suite and with the intention to capitalize on demand within the emerging markets of China and India.
Our quest to create a major corporate innovator is also a step closer to fruition this year. Astra is seeking an intermediate board listing in Europe.
Entering a global exchange for registration of the proposed IPO in 2014 will provide the necessary access to capital to transform Astra's Intellectual Property and assets into revenue .
.Achieving our goal is not a quick process, and The Board of Directors wishes to thank our shareholders for their support during this vital growth and acquisition phase. We are on the way to building a strong, global, diversified asset company.
Jaydeep Biswas
Chief Executive Officer/Executive Director
3 Astra Resources PLC (eN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
MESSAGE FROM ASTRA'S MANAGING DIRECTOR
Astra multi-sector, multi-regional approach underpinned by long-term relationships will continue to sustain our strategic initiatives. The last 12 months have been a year of consolidation and incremental improvement but at the same time we have moved substantially closer to both commencing our initiatives and generating revenue from our asset portfolio.
Throughout 2013, our strategic direction has ensured resilience and we are well positioned to continue to capitalise on new opportunities as they arise. We continue to seek out best-in-c1ass assets to create a diversified portfolio providing compelling advantages that best engage target markets. In building the company's diversified, risk-managed, portfolio. Astra's vision has been to redefine industries and knowledge is prized and leveraged by the Company.
In challenging economics times, we have demonstrated we can respond quickly and decisively to new Challenges and opportunities by making high-impact decisions when necessary. This has enabled us to capitalise on further opportunities this year. We have acquired a Green Diesel injector system to make vehicle fuel usage more efficient, and a water to atomic hydrogen nanotechnology, that has global scope. Our disruptive technology holdings are significant in terms of their future revenue and 2013 saw us take this one step further with the strategic acquisition of key projects to support the world's steel and power markets.
The 2014 priority is to list on and intermediate exchange. This is part of dual listing strategy for the future IPO. Astra will then seek a listing On major stock exchanges in Europe. We believe this will help provide a stable foundation for future growth. Across a broad range of resources, technologies, businesses, nations and cultures, Astra uses its vast skill diversity to seek out opportunity.
I am focused on ensuring the experience of the Board reflects industry and market expectations of responsible governance. I have overseen the Board renewal process with the objective that the Board continues to be independent, experienced and suitable for a global company. Our appointments this year reflect the outstanding calibre of our team and promise to keep Astra on its path to a successful listing.
I want to thank our shareholders for continuing to believe in our philosophy and staying true to our strategic direction. And, above all, for placing their trust in our ability to create a company that will reward them long into the future.
Silvana De Cianni
Managing Director
4 Astra Resources PLC (eN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
THE ASTRA WAY
OUR VISION
To be a cutting edge innovator, developing technologies that change industries for maximum returns.
OUR MISSION
• Maximize the impact of our unique T-Steel, clean coal conversion and Green Diesel intellectual property worldwide
• Acquire and commercialize nanotechnoiogies in steel making and clean energy
• Create value through innovative technologies which disrupt the value chain
• Support technology rollout with resource positions to naturally hedge the business
• Maintain a low-risk philosophy through diversification to ensure financial robustness
• Invest in green (carbon-efficient) technologies
• Acquire key skills and operating staff through project acquisitions
OUR GOALS AND VALUES
To achieve this mission Astra has developed a set of goals and values:
EXCELLENCE AND INNOVATION Commit to the highest standards of operational excellence and project innovation to deliver value to our shareholders.
GLOBAL SCALE DIVERSIFICATION Maintain diversified operations globally to reduce risk and ensure financial robustness and longevity.
ENVIRONMENTAL FOCUS Invest in the development and promotion of green (carbon-efficient) technologies to protect the environment.
DEBT-REDUCED BUSINESS
To reduce our debt at the parent company level to an optimum level to enhance shareholder value. Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
HIGHLIGHTS & PRIORITIES
2013 HIGHLIGHTS
2013 has been an exciting year for Astra achieving a number of milestones.
CORPORATE
• Acquisition of tectmologies completed based on cash and shares
• Global distributor of steel products in place
• Initial iron ore, coal and gold mining areas acquired in Nigeria, India, Philippines and Cambodia
• China Railway Financial Group finalises funding agreement with Astra Resources Pic
• Entered into a Euro 80 million equity subscription facility with a leading UK-based investment firm, Global Emerging Markets (GEM) for its upcoming listing
• Prospectus approaching finalisation for globai-IPQ in 2014
PROJECT STATUS
Project name
..Clean Co;!IConversion •.~ (ICSQCCl
Waterto atomic hydrogen at room tern perature (UV. nanotechrlQloQyl -__ I
Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
• Tradihg,andexport licenses obtained in hame otA-sira Minerals (India) Ltd. One mine acquired and othersare in process ofbeihgacquired.
Iron Ore SandEl"" Philippines • JVA signed, major permits/certificates obtained
• JVAsignedand licenses obtained. Further acquisitions in process, Astra Resources PlC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
2014 PRIORITIES
SHORT TERM
• Seeking listing on intermediate stock exchange
• Commercialize the initial operational development of T-SteellCorex Steel technology.
• Further develop Indian iron ore operations.
MIDTERM
• Exploit the Company's thermal coal positions in Africa, and iron ore positions in India and the Far East.
• Establish Joint Ventures with Asian Government companies for commodity import and steel making.
• Commercialize the green diesel technology after receipt of satisfactory independent certification.
• Develop Philfipines iron ore and Nigerian coal operations.
LONG TERM
• Fully commercialize the unique high-strength steel technology of T-Steel and Corex Steel.
• Position Astra to financially benefit in world markets in brown coal conversion to power.
• Commercialize water to hydrogen fuel technology.
KEY OBJECTIVES 3. 1. To exploit the company's thermal coal positions in Africa, and iron ore positions in India and Far East
',' 2.4.6.8. Be global leader in unique high-strength steel technologies: T-Steel and Corex-steel 5.7. Secure a global presence in brown coal conversion to power and Underground Coal Gasification
JV with major Chinese entity for investment, project development, commodity off-take and steel. Distribution agreement for Astra commodities and technology into Chinese Markets.
JV with Indian for high-strength steel
Develop nanotechnology as a core competence for technology extension and acquisitions given it is the primary theme for the existing technologies within Astra
Acquisition of further high value, strategic technologies, and mining of strategic raw materials
Finalise the IPO prospectus for admission to European Major Exchange
8 Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
BUSINESS STRATEGY
DISRUPTING THE STATUS QUO
THE FOCUS ON DISRUPTIVE INNOVATION
Astra is ready to launch into the next phase of its aggressive growth strategy. It moves forward into 2014 with a diversified project base, extensive market opportunities and a clear direction to capitalize on the growth markets of China and India.
Astra recognizes that positioning the company purely as a mining entity would mean competing at the costs and margins of a miner and commodity product provider, thus having the price earnings ratio of a mining company. This is not a strategic direction the company is actively pursuing.
In contrast, Astra's main focus is on acquiring certain technologies that will substantially alter the resources industry by changing end-user demand and costs. It aims to achieve this by identifying inefficient industries, or ones with high cost structures and dominant placers or monopolists, and introducing its revolutionary technologies to disrupt the lifecycle of the produ?t.
This strategy is widely known as disruptive innovation, or disruptive technology, and refers to an innovation that helps to create a new market and value network, eventually changing an existing market and value network by displacing an earlier technology.
Disruptive innovations improve a product or service in ways that the market does not expect, and typically first require product redesign for a different set of consumers, which often leads to lowering prices in the existing market.
Astra's T-Steel, Clean Coal Conversion and carbon-efficient technologies are prime examples of disruptive innovations, and are therefore pivotal to the success of the Company. As part of Astra's business strategy, these innovative technologies are supported by worldwide activities in exploration and related opportunities.
The company's ownership of innovative technologies allows it to significantly impact end-user product costs. For example, strengthening steel technologies results in lower raw materials costs, energy input costs and steel requirement for any application.
It also means Astra's royalty structure can potentially generate margins significantly higher than mining and commodity margins, and provide a price earnings ratio comparable to a high growth technology company. The combination of assets in mining and technology therefore hedges the business.
Astra's strategy also embraces the fact that as more and more governments around the world commit to increasing total energy output generated by renewable sources, there will be a proportional increase in the number of opportunities for economically viable commercialization of renewable energy production.
An increase will also be seen in opportunities to implement clean and carbon efficient technologies in existing industries, such as steel and energy, and also to reduce raw material type and per capita cost and use. Examples of this are the str.engtheningof steel for any given application and the effective use of brown coal for power generation in developing markets.
By focussing on both ends of the supply chain through supplying raw materials and utilizing ground-breaking technologies, such as T-Steel, carbon efficient operations and Clean Coal Conversion, Astra is able to meet the evolving demands of end-users while avoiding costly investment in the manufacturing step of a process. This hedges the business at high margins.
Astra's current asset base comprises a number of potentially industry changing technologies which will help drive the advancement of emerging markets.
------45-,0& Astra Resources PLC (eN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
ASTRA'S BUSINESS STRATEGY
A VIGOROUS STRATEGY FOUNDED IN A PIONEERING SPIRIT
Astra has a vigorous overarching strategy to invest in and develop a high-performing, diversified, long-term asset portfolio to generate continual shareholder value and revenue, and to reinforce its positioning as a major participant in the global resources market.
Astra's strategy is founded on a pioneering spirit and executed through a process-driven, four-pronged strategic approach:
1. Capitalizing on the emerging markets' rapidly growing demand for resources by targeting and consuming growth markets.
2. Investing in diversified assets (technology-led) to generate value revenue.
3. Building a commodity trading business to market and sell Astra assets in emerging markets.
4. Mitigating risk through joint venturing and diversification.
DEMAND TARGETING
TARGETING DEVELOPING AND CONSUMING GROWTH MARKETS
Astra has a demand-driven focus: emerging economies are essential to building its diverse and dynamic asset base. Astra has positioned itself - and its assets - to satisfy the strong resource demand from the world's major urbanization growth markets: China, India, Southeast Asia, the Middle East and Eastem Europe.
in particuiar, Astra's strategy is to capitalize on the coal, iron ore and gold resources and energy markets in developing and consuming countries. It achieves this through:
• Capitalizing on expansive commodity and product demand from India and China using a technology-led resources strategy
• Securing high value assets and projects in Africa, Eastem Europe, india, Australia and South East Asia
• Partnering with strategically located mines and businesses to service growth markets.
DIVERSIFICATION
INVESTMENT IN DIVERSE ASSET CLASSES TO GENERATE VALUE AND REVENUE
The second prong of Astra's strategic approach is its investment in diverse assets around the world to ensure exposure to the best projects, create value and generate revenue for shareholders. Astra's strategic investment aims to achieve diversified returns and is also designed to reduce risk.
Astra has an asset base that is diverse in both product and location, with project locations spanning from Hungary to Nigeria, and ranging from iron ore production to carbon credit technologies.
Astra's diversification strategy is achieved through: • Focussing on disruptive technology for operational, cost and business advantage • Continuing to leverage geographic scope and diversification of operations • Capitalizing on strategic investments throughout its portfolio
10 •
Astra Resources PlC (CN: 07(20218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
INTEGRATION
BUILDING A COMMODITY TRADING BUSINESS TO MARKET AND SELL ASTRA ASSETS IN DEVELOPING COUNTRIES
Astra will build a commodity marketing and trading business to act as primary sales agent for the diverse range of Astra products in developing nations.
Astra's trading operations will focus on supplying products - Including minerals and steel - essential to the growth of emerging countries.
Astra's trading arm will not take positions in the market, but rather, act as a principal sales agent for Astra assets and establish a major footprint throughout the Asian region. This strategic approach supports and is complementary to Astra's focus on supplying demand in the world's largest developing nations, while also balancing risk through shoring up off-take agreements for Astra commodities.
RISK MITIGATION
MITIGATING RISK THROUGH JOINT VENTURING AND DIVERSIFICATION
Profiling and mitigating risk is a key plank of Astra's successful strategy. Astra employs three main tactics to minimize risk and create a solid, long-term asset base: .
1. Developed a Risk Management Framework Policy
2. Joint venturing with local partners in countries where it operates to reduce operational and other risks
3. Diversifying exposure to assets around the world to broaden returns
11 Astra Resources PLC (eN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
OUR COMPANY
THE ASTRA BOARD OF DIRECTORS
• Dr Jaydeep Biswas (BE, PhD, MBA) - Chief Executive Officer/Executive Director
• Silvana De Cianni - Managing Director
• Daniel Ghee Chong Yeah - Non-Executive Director (appointed 19 June 2012)
• Maxwell Francis - Non-Executive Director (appointed 9 September 2013)
• Daniel Justyn Peters - Non-Executive Director (appointed 9 September 2013)
• Niren Raj - Non-Executive Director (appointed 29 July 2013)
• Davld Shearwood - Non-Executive Director (appointed 9 September 2013)
A short bio of each Director is provided below:
Ms Silvana De Cianni
Managing Director
As Managing Director and co-founder of Astra, Ms De Cianni is responsible for the company's strategic direction, growth and development. Ms De Cianni has guided Astra from what was principally a resource commodities business to a diversified global asset and technology development company that reaches into India, Eastern Europe, South East Asia, Africa and Australia.
Ms De Cianni is an internationally experienced business executive with a proven track record in the mining industry. With many years of experience in contract mining, corporate finance, mining project development and commodities management, Ms De Cianni has a unique understanding of the global resources and mining services industries.
She has undertaken extensive management of complex financial and corporate activities, and has had significant exposure to the investment, mergers and acquisitions, braking and commodities sectors, making her ideally positioned to identify and successfully capitalise on opportunities for Astra.
Daniel Justyn Peters
Non-Executive Director
Justyn is a Barrister and Solicitor who has had extensive experience in senior management in both Government Departments and in Public listed companies. He is MD and Chairman of several privately owned resource companies in Coal, Gas and Petroleum. Justyn was manager of compliance and investigation, and NDirector for the Queensland EPA. He was the Environment Advisor for the Qld Mining Council and Head of Environment and Property for Air services Australia. Over the last 6 years Justyn was General Manager of Government and Environment, Business Development and Executive General Manager Asia, and then Executive General Manager Investor relations for Line Energy an ASX 200 company. His corporate experience in governance, business development, investor relations and his detailed knowledge of Asia will be invaluable to ASTRA as it seeks to comercialise both its assets and teChnology over the next few years.
12 Astra Resources PLC (eN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
Maxwell Francis Venning
Non-Executive Director and Chairman
Mr Venning first became a director in 2002 when elected by growers to Ausbulk and United Grower Holdings. Eighteen months later in 2004 became chairman and led Ausbulk through the acquisition of Abb Grain a smaller ASX listed company which after a reverse take over became the surviving entity. Abb Grain owned seven grain export terminals had a statutory monopoly on the export of barley in SA and Victoria, owned malt manufacturing company Joe White Malt. Grain storage and feed mills in New Zealand and numerous container packing facilities.
Mr Venning was deputy chairman of ABB Grain until the company was acquired by Canadian grain company Viterra in September 2009 He served on the Viterra board for thirty nine months and up until Viterra was acquired by Glencore in 2012
Mr Venning has served on board committees
• Finance and audit
• Human resources and compensation
• Safety health environment and sustainability
He is a member of the Australian Institute of Company Directors
David Kit Shearwood
B Eng (Mining honors) - University of Sydney, ASIA, GAICD (order of merit), PDipHR.
David has 27 years' experience across funds management and investment banking and a proven track record of asset identification, outperformance of benchmark indices and business building (in Australia and India).
He is presently CEO and co-founder of Allied Resource Partners Pty Ltd, based in Sydney, a venture capital orientated operation which identifies projects and co-invests with funding partners across mining, energy and infrastructure investments, as well as new technologies (most notably underground coal gasification).
David has worked for firms including; Macquarie Bank, Westpac Bank, QBE Insurance, DuPont, Rio Tinto and Atom Funds Management.
David has travelled the world looking at assets and brings with him extensive knowledge of natural resources and investment institutions. His decades as an analyst have allowed him to gather insight into how company's best pursue their competitive advantage whilst mitigating risks and similarly his knowledge of good board performance supports the strategic direction and assurance requirements of a well-functioning board.
Dr Jaydeep Biswas
Chief Executive Officer B.Eng, MBA, Ph.D
Dr Jaydeep Biswas (BE, PhO. MBA) is the Chief Executive Officer and co-founder of Astra, and responsible for guiding the company in its future direction and long-term growth. Dr Biswas is behind the tactical execution of lhe Astra vision through to a successful Frankfurt stock exchange listing.
Dr Biswas brings a wealth of international business experience from the past 20 years with a distinguished career with the Royal Dutch Shell Group of Companies in Europe and Asia Pacific, including running its Corporate Planning and M&A operation in Australia. Since 2001, he has been involved with advising and directing early slage companies including sustainable development company EnergyMad Ltd.
Dr Biswas adds significant commercial mining and finance expertise invaluable in the rollout of the Astra business. His expertise includes mining tenement acquisition, budgets and strategic plans; liaising and negotiating with mining departments and other officials; negotiating directly with foreign governments and joint venture partners; sourcing geological, management and statutory reports; and presentations to companies, stockbrokers and financial institutions. g.\) 13 --- .
Astra Resources PLC (eN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
Dr Siswas was born in India and maintains business and political relationships in that country that facilitate the growth of Astra and its subsidiaries in the region. Dr Biswas holds a Bachelor of Engineering (Chemical) and Ph.D. from the University of Queensland and an MBA from Queensland University ofTechnology.
Dr Daniel Ghee Chong Yeah
Non-Executive Finance Director PhD (Finance), B. Commerce (Hans), B. Economics
Dr Yeah possesses extensive experience in a range of investment banking and management positions, including seven years of investment banking experience in one of the premier investment banks, CiMS Investment Bank.
During his time at CIMB Dr Yeoh was involved in a wide range of financial products such as initial public offerings, mergers and takeovers, fund raising, and various other corporate advisories. In his last two years at elMS Dr Yeah established the investment banking business in the Northern Region of Malaysia, where he was responsible for managing over 300 corporate clients.
Currently acting as a Director - Investment & Corporate Finance for Tune Service SON SHD, Dr Yeoh is involved in analysing, recommending and executing investment proposals to the Tune Group, including Tune Hotets.com and Tune Talk, amongst others. Dr Yeoh brings a wealth of real-world experience to his position, backed by a doctorate degree in Finance from the Australian National University and two degrees from the University of Adelaide, including Bachelor of Economics and Bachelor of Commerce (Hans).
Mr Niren Raj
Non-Executive Director & Legal Counsel
Mr Raj has carved out a reputation for being a legal entrepreneur. His devotion to focusing on results, cost certainty and urgency has set him apart from his peers. It is his style of operating thatatlracts atlention from legal commentators and has drawn like minded service driven entrepreneurs to him.
Mr Raj began working as a lawyer in 1989 and then established a debt recovery, commercial dispute and insolvency practice with a well-known firm in Brisbane. His experience to date, has seen him act for major real estate investment trusts and Companies on the Australian Stock Exchange.
Mr Raj brings to the Astra board a commercial and legal expertise to enhance Astra Resources as it seeks to build a global business.
ABOUT ASTRA
The Company has a philosophy of seeking to create value through the use of its diversified asset base and an entrepreneurial vision. These attributes have the potential to position the company as a significant participant in the global resources market, and distinguishes Astra apart from other resource companies.
In particular, Astra is committed to becoming a specialist in efficient and disruptive technologies including high-quality steel manufacturing and clean coal conversion for power generation to supply the rapidly expanding coal and steel demands of the world's largest developing economies.
Astra has a demand-driven focus: emerging economies are essential to buiiding its diverse and dynamic asset base. It has positioned itself - and its assets - to satisfy the strong resource demand from the worid's major urbanization growth markets: China, India, Southeast Asia, the Middle East and Eastern Europe.
Astra was founded in 2009 by current Managing Director Ms Silvana De Cianni and Chief Executive Officer/Executive Director Dr Jaydeep Biswas. Their focus was to service the flourishing commodities demand in growth markets - a direction which continues to be a pivotal part of the Company's strategic approach today.
While Astra has not shifted its fundamental focus on growth markets, within three short years it has transformed from a small company dealing in resource commodities into a diversified global asset group with a presence in seven countries. During this time, the Company has strategically positioned itself to exploit global demand. >? .\) 14 Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
Astra's early focus was resource commodities, particularly iron ore and coal, but soon grew to embrace an emerging green technology in the world, T-Steel. This evolution quickly delivered new assets into the fold in the form of hedging commodities such as gold and silver, along with high-value ancillary projects including carbon emission reduction technologies, principally Clean Coal Conversion, Green Diesel fuel injector and C02 separation technology.
In the past year, Astra has continued to redefine itself, moving beyona the duality of a start-up mining exploration and IP development company with global aspirations.
Astra has achieved global diversification through asset acquiSitions in countries around the world including Australia, India, Hungary, Nigeria and Russia. Its diverse asset portfolio now extends from exploration tenement rights and IP development to land acquired for mining housing and lifestyle development.
ASTRA'S BUSINESS STRUCTURE
Astra's structure reflects its portfolio of four business asset classes: technology, carbon efficient operations, exploration and property.
Diversified business projects fall under four categories, mirroring the range of successful and high performing businesses. technologies, initiatives and opportunities within each asset class.
Astra will establish a stand-alone business unit committed to commodity trading operations within the Company's overall corporate structure.
Astra's primary focus is to become a leader in efficient, high quality steel manufacturing and clean coal conversion technologies for power generation. Astra intends to take a multi-faceted approach to steel making through securing raw materials required for majority of aspects of production, and close to markets, while capitalizing on high value business opportunities which focus on resource demand for global markets. This primary development activity is actively hedged by responding to diversified opportunities in mining, property development in industrializing areas, commodities trading and green technologies.
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15 Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
OPERAllONAL REVIEW
The Astra Resources strategy centres on developing a high-performing portfolio of long-term assets in key classes to reinforce its positioning as a major participant in the global resources market. Astra's main focus is on acquiring disruptive technologies which will substantiaily alter the resources industry by changing end-user demand and costs.
Also referred to as disruptive innovations, the term describes innovations that improve a product or service in ways that the market does not expect by displacing an earlier technology, a move that often leads to lowering prices in an existing market.
By focusing on both ends of the supply chain through supplying raw materials and utilising ground breaking technologies, Astra is able to meet the evolving demands of end-users while avoiding costly investment in the manufacturing step of a process.
Astra's current asset base includes the successful acquisition of a number of industry changing technologies that wili help drive the advancement of developing countries.
Industri~I&EoargyTe¢.hnolo9ies
LT~Steelisa newsjeel process producing grades of steel proveh tbhavejmprov~dphysi6al• : characteristics using fewer raw materials, therebyconsidtirablyIoweringcostarid CO2 ernlssions··p.er.tonne.· .This .•technoJogy·.aUows. high.strength·steel •.ofeslabl.ishe(Lgradeslb.~ -... prOducedOfriacommod itysteel plant with minor process modificatlonsandmimaJorcapital . . expenditure, . - , , " , " " Anunptecedehtedc::05tlvaluelberiefitratiol"llakes.T~Steelac::ompellihg ..technology With .an IrnmediateeffectinC;hina& If1qia, inkeyseptors,Clstl1eywlllbeableJojncreas~tile· •... strength of st$el frornexislirigoperaUons (lJptq50%),reducirig the need fbtthe·riurnbetof newsteeLplant$, andailigberoutputfrorn current rawmateri;:lJ$usage.
n ••••• _._.·.·0.· .... ·- -.... iQC'irex$teelisa hew type of steel. that is high strength (up to 300%),air-corrosionre~i5tant (and Ie:ssexpensive,energy-sa\lingspecificsteels. Depending on the. typeofGorE;l)«(Steelm . ,prOOucElcl, average specific cOSt savingsinexces$ of ~O-30%,andtotal enElrgy $!i:lvirigsyp ,to 50%. MajOr process steps in steel making are made redundant.with-the useofa . ;nanoteCl1nqlogy additive in a simple steel mill. This is a new grade of steeL .
Revenue pathway: Providing technology on royalty basis to steel product manufacturers
· - .. 'l.ll1iformActivated Coal Water Fuel{"UACWF") is rnanufactured from low rankingbfackanl::l brown,coal which can be used as.Cl high quality. lowc;ost feedstOCk replacement foi'e:nergy i··produc::ersof.coalwater.slurry; ••pulveriied coal •.and ••heavyjrlC.lustriaLoils.m • lntegratedCoaf$lurry~ai;;mGalionCombined-C;yCle("ICS.GCC").jsa unique ·coal·gasifiCation · method utilisingUACWF,Jotthe- ptoductionofsynthetic gas ('Syng'as') and electricity.
As part of its disruptive technologies strategy Astra has been closely following the growing focus on renewable energy sources, and has incorporated carbon efficient businesses, with a focus on creating significant carbon offsets. Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
Carbon Efficient Operations ...------,." ------•...... - -..- . - . . . - ,.. ,GreenGum technology processes scrap rub6ertomanufaCture ruober'gra'n'ules,t(ibe used:',' '.in the rubber, paints and plastics indl.fstries. Green.Gum is the:first offts kind in .ptodllcingc superfine granule siZe of rubberand wiil be avaiiable in Industriai quantities,
.. i,car66iJy'isa cost~effectiv~ C02 and gas separation technolOgY. The technology of 'clean e:mr~~i6ris';te.rern6vingCQ~ and the reduction Qrcomplete elimination of other noXious: : sUbstances;,has alWaYsproved complex, Carbony ·hasfoundal6w"power, efficient method .. ;fQr:~mRretio'gjhi$:Rr%~S$:'Carb(my has no competitoravailabletoaJow oost or are ,,' : ...: '~fT1~~t(;i~lr~;)(i~~Jei:lnalarge scale... _ ''_':'::::',. ,., ,. ---, .....•.•...••,.._.'._::',:.:~~~':•
";Tfje'ernissiQii 0 of theenilirQnmeritally dama~ih9hitri:igen,COmpd\Jnd$;:S(jrph(j(di(ixide;:djjst:. and heaVymetals are substanliallyreduced, orelimrnated;Carh6nYis e>ipgctedt(j nave a . major impact on in heavy manufacturing and power Qenetation industries.'
Green Diesel w.asformed to supply Ihe,g!obalrequiremeiiJotaCleaii~burn, cost~effective
VPieseI Injector-System ("GD!") thatsatisflestl1e cummtalid planned International 00 .' :.Government legislationoh die$eiEiriglrieemi~~iQns:·GDJ j$f~~oniy glol:!alJec::hnolo'gyJof j=cohy.erslonofa petrol.enginet()uiesE3E',c::::,, ,·.:'c.:'""" ,::~:
"------~ - -~-- .---_ . __ ,... _ ... •••....." .u ••••••••••- . l=rifr:=s:=~y;~~~~~~~S~~~~~~~~~••••••••••• n ••••••• _ ••• .- - -. .- - _ ...... _ _._._._ _ _. - ._'.'n _ _ .. _ .•. _ .•.... ._ _. __ ._.n._._._ ...•.•.•. _._ _ .. _ _.. _ . •Astra has invl;!sted in HydrbfotonSA, a newly patented:thltdget1ed~tion'sdla:rtectiJ;1616gy·.: •• ··ready to capitalize on theworldwide riiar~E!ffor hyqrogel1(frqmWl:iter)andin¢reaseq' .,"... demand toJe~ucegre~~~()LJ~e.9,ases:c- ;" .. ' ... ThePrQguC!j,~,R9i~E!(@)(jgliyeraviabl,e clean alt~matIve fOr (jisinfectant and self-cleaning, l;l(~c;t~l?ilyg,~,ne~~lti,~~~~_?"~,~x~r2QenmarKets: ...... __._.n .•.•...•.•.. __....._.. __ ._...... •.. _ ...... -- ..... -.... --.... -..-.-.--.-.-.-.-
By identifying mines that are geographically diverse with assets close to end-users and, where possible, vertical integration to create a business hedge with internal revenues and annuity streams such as mining services, Astra has aimed to protect itself against the adverse effects of commOdity cycles.
A summary of Astra's strict screening criteria for prospective global mining projects and opportunities is outlined below:
17 Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
'.SOOmillion tonnes future (estimated) " Key trading andexpbrtlicenses acquired. In process (If acquisition of irOflOre mines : with high grade reSOurce(61 c64+ per cent Fe).. . . '..:!-13i)iIliPn tonnes of iron sands (estimated) VAwbridscale iron sands.oeveloprnentin l\lorthEa$fF>hjlfpR[ne~.,J\I~greemellt \'.Iit~ iCagayan .RiverConstruction,&··DevelopmentCorporalionover':30DJlectares;Fl.iti.l~e:::
: extensionp(anned ..JOR9~~quiva]~jjtr~portsfor:i[({n'~~Msi:lv~i)i3pl~::...... •••••..•c::-
;.500milli6ritorinEl:~,()f.coai(eStiiitatEld) .... Nigeria>hasma]orunderexploredand under-developed high quality coal resol.Jrceswith the Niger'ia(f~OVemmeH'itisfbCUsingortrevilalizing the.caaJmining Industry, Initial' acquisitlorICOi!lpleteilOWl.iilcler expansion.• . .. n _._._._. _ . _._._._._.n._.- _... _. __ _ ._. • •••_. __ m ••• _._ •••• _••• ,_•••••• o.o.o.o_.o __ 0 ••• _._u _.__
:J,C.~::m!mQn.',Qun.ce~_:9(gQlc:I(estimated) 'p;worldtlassJhtrusiohRelated Gold System that may be developed into a signIficant ;9P.$n:~l,ltIQW~Qst9QI(jmine(s1~pwjs~acqll'$iti()n,inprClgre~};U- .. , ... , ...
18 I
Astra Resources PLC (CN: 0762(218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
INDUSTRIALANDENERGY TECHNOLOGIES
Astra's current asset base includes a number of innovative or disruptive industrial and energy technologies which will help drive the advancement of developing countries.
Astra's revolutionary T-Steel, Clean Coal Conversion and Corex Steel are prime examples of disruptive innovations and are therefore key to the success of the business.
T-STEEL
T-steel is a unique steel technology proven to be significantly stronger than regular steel (subject to steel plant age, configuration and steel type) and cheaper, resulting in considerable savings. Astra owns 45% of the IP for T-Steel, has full management control and retains a number of experts involved in its original development.
CLEAN COAL CONVERSION TECHNOLOGY
Clean coal conversion technology is a process that utilizes poor quality coals for the production of Activated Coal Water Fuel (ACWF) and low cost hydrogen enriched Syngas, with the resulting products offering a long-term, and cheaper, alternative to oil, and resulting in an attractive fuel for the power generation industry.
COREXSTEEL
Corex Steel produces high strength, air-corrosion resistant, less expensive, energy-saving specific steels with the added environmental benefits of reduced C02 and dust emissions which will address and alleviate current C02 emission issues that plague the industry. The end product delivers an increase in technical quality and a significant decrease in cost and energy requirements ..
T-STEEL
Steel is a key driver of the world's economy and it is Astra's goal to maximize the impact of its unique T-SteeiIP worldwide.
T-Steel is an innovative steel process producing grades of steel proven to have improved physical characteristics using fewer raw materials, thereby considerably iowering cost and C02 emissions per tonne. This technology allows high usability strength steel of established grades to be produced in a commodity steel plant with minor process modifications and no major capital expenditure.
Astra takes a multi-faceted approach to steel making through securing raw materials required for majority of aspects of production, and close to markets, while capitalizing on high value business opportunities which focus on resource demand for global markets.
An unprecedented cost/value/benefit ratio makes T-Steel a compelling technology with an immediate effect in China and India, in key sectors, projected to be able to increase the usability strength of steel from existing operations (up to 50%), reducing the need for the number of new steel plants, and a higher output from current raw materials usage.
T-Steel technology is a generic code name for top grade special steels. In very general terms, the technology involves enhancements to the actual manufacturing process, including the additions of certain appropriate standard alloys, where this is required.
Astra's revolutionary T-Steel technology enables old and underperforming steel mills, with low profitability, to produce high margin premium grade steels without major capital expenditure.
T-Steel can replace many other steels in any application, has a longer fatigue life and provides for higher profitability.
Stronger steel means less steel needs to be produced and technology to convert local low quality coal for power means less imports, lower operating costs and environmental benefits.
19 Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
Otl1er benefits include up to 30% lower emissions, improved hardness, tensile strength and malleability, fewer raw materials required, and higher elongation.
Astra has strategically supported T-Steel and the Company's focus on steel and power through the acquisition of a number of other complementary technologies, including the recent joint venture with Interecotech for their clean coal conversion technology.
LOCATION
Astra has developed practical and cost effective business models for steel manufacturers to be able to take advantage of the technology. Existing factories will be able to produce improved quality steels and hence enter into markets which were previously not available.
CLEAN COAL TECHNOLOGIES
Activated Coal Water Fuel ("ACWF") is manufactured from low ranking black and brown coal which can be used as a high quality, low cost feedstock replacement for energy producers of coal water slurry, pulverized coal and heavy industrial oils.
Integrated Coal Slurry Gasification Combined Cycle ("ICSGCC") is a unique coal gasification metl10d utilizing Uniform Activated Coal Water Fuel (UACWF), for the production of synthetic gas CSyngas') and electricity.
Astra has acquired the IP (Russian Patent) for the ICSGCC technology. Astra Interecotech Pty Ltd was formed to acquire the ICSGCC technology and commercialize technology specializing in the manufacture and combustion of ACWF and ICSGCC.
Astra's ACWF coal conversion strategy will enable countries with a heavy reliance on importing costly high quality coal, which is unsustainable in the long term due to the expense and process, to use locally mined brown coal reserves for power generation. This will have an immediate and profound effect as the coal conversion technoiogy will help turn low quality coal reserves into a useable product.
The process utilizes poor quality coals for the production of ACWF and low cost hydrogen enriched Syngas, with the resulting product offering a long-term, and cheaper, alternative to oil and is an attractive fuel for the power generation industry.
The Pseudo Detonated Gasification ("PDG") process can be used to turn brown coal and low ranking black coal reserves into energy by gasifying the coal to produce a hydrogen-enriched synthetic gas that has approximately four times the level of hydrogen that exists in synthetic gases produced commercially today. The resulting gas, called Syngas, can be used as feedstock for a:
• Gas to Liquids (GTL) processing plant to produce diesel and jet fuels; and
• Gas Turbine Generator (GTG) to generate electricity.
The cheap and abundant Syngas that can be delivered by the PDG process will enable Astra to cost-effectively produce ultra• clean diesel fuels.
This application of patented technologies can be replicated and rolled out around tl1e world, particularly in strategic locations such as China, Japan, India and the USA.
LOCATION
Astra Interecotech is currently establishing a Scientific and Engineering Facility in Eastern Russia.
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Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
COREXSTEEL
Corex Steel™ as a revolutionary new type of high strength steel. Corex Steel produces high strength, air-corrosion resistant, less expensive, energy-saving specific steels with the added environmental benefits of reduced C02 and dust emissions which will address and alleviate current C02 emission issues that plague the industry.
Depending on the type of Corex Steel used, average specific cost savings in excess of 20 to 30%, as well as weight savings up to 300%, will be realised by end users who replace conventional steel with Corex Steel. In addition to major energy savings, Corex Steel significantly reduce C02 and dust emissions as a result of significantly lower specific energy requirements during production. The total combined energy savings from manufacturing to product use exceed up to 50%.
The resultant effect on the whole product is not oniy an increase in the technical quality, but a significant decrease in the specific cost and energy requirements for product use. On top of the manufacturing savings, a manufacturer can realise further specific cost savings due to lower costs and energy associated with manpower, shipping and warehousing smaller, lighter material. More of these savings can be realised by the end users of the various products produced by the Corex Steel process - giving users access to higher profit margins relative to its competitors.
The Corex Steel developed over the past decades has no true competitor, despite a number of other lightweight and speciality steels on the market. This is because Corex Steel technology is based on a complex metallurgical theory while other steel producers focus on improving equipment to increase the quality of steel. Corex Steel is based on the strengthening mechanism combination of the metal lattice structure and further opportunity for advancement to ensure it stays ahead of its competitors.
Corex Steel has six families of steel, with 25 grades of steel. The characteristic features of Corex Steel are:
High load bearing capacity of permanent strain
High usability strength level
High strength level that does not require quenching
Good weldability in the weldable range, even at high yield point
Wear-resistant
Several Corex Steel grades are air corrosion resistant
High fatigue strength levels
Good ductility and machinability as compared to their strength levels
Fine-grained structure and good formability both in hot and cold conditions.
LOCATION
Corex Steel will be formed as a 50/50 joint venture between Astra and Corex Steel. The company will be incorporated in Hong Kong and will have operations in Europe in a location yet to be determined (possibly Italy). The company currently has a warehouse based in Miskolc, Hungary.
Corex Steel has aspirations to grow globally and develop a network of steel production and manufacturing facilities within close proximity to the end users. The product can be manufactured in any steel plant by adding a chemical formula, meaning a steel plant can be leased for the production period, hence reducing capital outlays required for manufacturing. Corexsteel will be marketed with royalty agreements with end-users.
21 Astra Resources PlC (eN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
CARBON EFFICIENT OPERATIONS
As part of its disruptive technology strategy, Astra has been closely following the growing focus on renewable energy sources, and has incorporated carbon efficient businesses, with a focus on creating significant carbon offsets.
Astra recognizes that governments worldwide are becoming increasingly committed to a clean energy future. As such, Astra is working to ensure renewable energy plays a growing part in the Company's business model with the goal to create significant internal carbon offsets.
GREEN GUM
Astra Innovations Ply Ltd has acquired a controlling interest in Green Gum that has the potential to generate carbon credits and large margins in converting waste from rubber tyres into tine and superfine rubber granules.
This technology claims to use low amounts of energy and environmentally friendly recycling process, with the resulting products used in a variety of industries.
CARBONY
Astra has acquired 76% of Carbony pty Ltd, the technology company that is in the process of acquiring the intellectual property for a C02 reduction technology.
The technology separates the C02 from sulfur dioxide (802) prior to combustion of carbon-containing matter, and is an attractive technology for heavy industries.
GREEN DIESEL
Astra has a controlling interest in Green Diesel Corp Limited, which supplies a clean-burn, cost-effective diesel injector system which satisfies current and planned international legislation on diesel engine emissions and reduces fuel consumption.
Green Diesel's technology is being developed to produce diesel emissions which are significantly better then mandatory targets set by governments internationally.
THE HYDROFOTON EXTERNALLY ACTIVE DSSC SOLAR CELL
Astra has invested in Hydrofoton SA, a newly patented third generation solar technology ready to capitalize on the worldwide market for hydrogen and increased demand to reduce greenhouse gases. The product is poised to deliver a viable clean alternative for disinfectant and self-cleaning, electricity generation and hydrogen markets from water.
GREEN GUM
Green Gum technology processes scrap rubber to manufacture rubber granules to be used in the rubber, paints, plastics, and associated industries.
Green Gum is an industry innovator in producing super fine granule size of rubber and will be available in industrial quantities. It is a process that is able to produce fine rubber granules of 200 and 500 microns and superfine granules of 150 to 180 microns with a small carbon footprint.
Indicated demand from parties is that rubber granules in road building and road maintenance alone is expected to be in excess of 35,000 tonnes per year over the next five years in Central Europe alone.
Astra is in the final setup stages of plant production infrastructure development for this technology, which operates in the area of waste recycling of rubber tyres into high value products.
22 Astra Resources PLC (CN: 0762(218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
One of the main advantages of the Green Gum Technology is that it uses substantially less energy for the production of the granules than the traditional "energy hungry" methods which utilize either a cryogenic freezing process or a very high-pressure water cutting process.
Plant machinery will be able to produce various grades of rubber granules in sizes from 500 microns (fine) to 150 microns, the latter being superfine granules which are similar to talcum powder in quality.
LOCATION
The existing Green Gum manufacturing plant is located in Western Hungary approximately 150km from Budapest, and approximately 130km from Vienna. The plant is located in a local government designated Green Belt area which further enhances the Company's green credentials.
CARBONY
Carbony is a cost-effective C02 and gas separation technology. The technology of 'clean emissions', i.e. removing C02 and the reduction or complete elimination of other noxious substances, has always proved complex. Carbony however has found a low• power, efficient method for completing this process.
Carbony is expected to have a major impact in the heavy manufacturing and power generation industries - and Astra's prototype is expected to be completed by the end of Q4 2013.
The technology acquired by Astra will separate the nitrogen from the oxygen at low cost prior to the power station, with pure oxygen strongly supporting combustion; condensing the water vapour, and the remaining pure C02, which would otherwise be emitted, can be captured from the emissions. The project adds to the Company's energy-efficient technology portfolio, ensuring the C02 and gas separation technology provides carbon credits for Astra and aHowingthe Company to take advantage of an important and emerging market.
The power station industry and other heavy industries are the main target markets for the technology, with carbon credits and carbon trading arrangements over the next ten years critical for these heavy industries in terms of taxes and operating and consumer costs.
Its advantage lies in the fact that the major cost component of the operation only consists of the energy costs related to the starting of the cycle, which are minimal due to low energy requirements. Once started, the cycle can continue with minimal self• sustaining energy requirements ..
The process is self-sustaining since the energy required to convert the gas mixture to a liquid (to enable the separation of various components) is fed by the evaporation of the liquid gas mixture at a lower pressure in a special process.
The current design allows the equipment to be built in a modular fashion so it can be transported in various configurations and enabling the physical size to vary in order to suit various application requirements, ie a small manufacturing plant will have the same opportunity to reduce its emissions in a cost effective manner as a large power plant.
The project has substantial interest in the energy industry, due to its inherent flexibility, its global presence and its ability to deal with the development and implementation of new technologies.
LOCATION
Astra's Carbony - C02 separation capabilities are being developed in Hungary for roll out around the world.
g) .((} 23 •
Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
GREEN DIESEL
Green Diesel was formed to supply the global requirement of a clean-bum, cost-effective Diesel Injector System ("GDI") that satisfies the current and planned International Government legislation on diesel engine emissions.
Technically referred to as a High Pressure Diesel Injection System, the product is being deveioped for commercial sale to satisfy market demand for a clean-burn, cost-effective diesel injector system.
Green Diesel is commercializing the GDI technology in the traditionally conservative global motor vehicle engine market to demonstrate its use across multiple engines and types, promote it to government authorities, and build alliances with Tier 1 suppliers and after-market suppliers.
The acquisition is a strategic move designed to complement the company's focus on carbon efficient businesses, aimed at Offsetting its mining and steel making portfolio.
Astra will benefit twofold from this acquisition, firstly from the financial upside of the commercialisation process, and secondly from the carbon credits offset against the technologies outcome.
GDI is projected to provide 30% more power, 30% increased torque and 30% improved fuel economy, and reduces engine structural stresses by 60%. GO! reduces or eliminates diesel knock. GDI reduces pollutants caused by engines minimizing emissions to community.
The global demand for diesel vehicles is expected to nearly double over the next 10 years. The petrol motor conversion market size is 20 times larger than the entire diesel market, with the main market segment attraction being the large market to install in diesel trucks.
Global trucking companies have expressed Interest in purchasing this product.
LOCATION
Green Diesel is an Australian based company.
THE HYDROFOTON EXTERNALLY ACTIVE essc SOLAR CELL
Astra has invested in Hydrofoton SA, a newly patented third generation solar technology ready to capitalize on the worldwide market for hydrogen and increased demand to reduce greenhouse gases.
The Hydrofoton Externally Active DSSC Solar Cell is poised to deliver a viable clean alternative for disinfectant and self• cleaning, electricity generation and hydrogen markets.
The device adopts PVD deposition tecl1niques and has the potential to reduce internal working temperatures, reduce degradation, be capable of bacteriai decontamination with self-cleaning surface properties, and be more robust with longer lifetimes.
Uses in electricity generation could also expand to tinted building windows, while the ceramic backed version could be highly effective as electricity generating roof tiles.
An as yet unrealized version of the device is likely to be able to produce molecular hydrogen and a new variant is expected to produce highly reactive atomic hydrogen which has a much higher energy density (more energy, less space) to molecular hydrogen.
Hydrogen is regarded as the fuel of tomorrow because it could displace the use of oil and petrol for transport and for other uses of power. Today there are hydrogen fuelled cars and busses running in many towns with fuel cells converting the hydrogen to electrical energy and then via DC motors to drive vehicles. Hydrogen can also be used to produce heat. gs-24 Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
Normal hydrogen production methods (from natural gas) not only consume energy but produce C02. Production from water by solar means and at ambient temperatures can provide a viable clean alternative which could see hydrogen being produced in the home and local to its use. The new technology, with its low-cost constituents, holds the promise of low-cost generation with huge positive environmental impacts which could be adopted on a worldwide scale.
The advantages of DSSC Technology include:
Less sensitivity to angle of radiation incidences and shadowing
Performance over large range of light conditions with option for transparent modules to enable wider applications
Low sensitivity to ambient temperature changes
Truly bifacial, absorbing light from both faces which can be inverted
Low cost production.
In the future, hydrogen could also join electricity as an important energy carrier. An energy carrier moves and delivers energy in a usable form to consumers.
Renewable energy sources, like the sun and wind, can't produce energy all the time. A device that can directly produce hydrogen from solar energy will be a major advance as the hydrogen can be stored until it's needed. Hydrogen can also be transported in tankers or pipelines.
LOCATION
Astra and Hydrofoton are now looking to establish and maximize this patent potential with the creation of application prototypes. The company is located in Spain with a production facility planned ..
25 Astra Resources PLC {eN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
MINERAL EXPLORATION OPERATIONS
Astra has signed a global joint venture with China Rail Finance Group for development and marketing of the mining assets. often in developing countries, to identify open-cut mines where mining licenses re in place (or are imminent), sites are operational (or within 12 months of operation) and no major logistical or infrastructure investment is required to bring tile mined products to market.
IRON ORE, INDIA
Astra has identified a cluster of iron ore mines in Orissa. India. Astra has acquired key licenses for export, trading and logistics which allows sale of the mined products. Astra has acquired a revenue earning operation, a second mine and is in the process of acquiring a major global mine.
IRON SANDS, PHILIPPINES
Astra is part of a JV owning a supermajority interest in an iron sands development in North East Philippines which is production ready.
THERMAL COAL, NIGERIA
Astra owns a supermajority interest in two sites in Nigeria, with a combined area of 10.4 square kilometres. An exploration license has been granted for one of the sites with full mining license imminent. Astra is in the process of purchasing additional sites.
GOLD, CAMBODIA
Astra is incrementally acquiring an exploration license covering 222 square kilometres with a potential to host a significant gold reserve (project subject to final due diligence)..
IRON ORE INDIA
Orissa is one of the largest producers and leading exporters of iron ore. Iron ore produced is used domestically in Indian steel mills and the fines generated are exported, mainly to China.
Astra now owns its firstsmallr iron ore mine in Orissa, India.
Orissa's iron ore mines are of generally high grade with large reserves located in the three districts of Mayurbhanj, Keonjhar and Sundergarh. These three districts constitute the major iron ore producing regions of Orissa and produce the majority of the ore mined in the state.
The iacquisition agreement for a major mine is subject to and conditional upon satisfactory due diligence and valuation conditions, JORC drilling steps, and staged payments. Only upon satisfactory completion of such conditions to the initial agreement will there be a formal sale and purchase agreement.
There is estimated to be over 500 million MT of proven, probable and estimated reserves of iron ore within the mine site, with a hematite grade of 62 per cent to 68 per cent Fe. The estimates are based on previous GSI historical data, satellite surveys and drilling.
The mine was previously in operation, and can be brought into operation within 12 months with the renewal of mining license (RML) and application for an environmental permit. Satisfaction of such RML will be a further condition of the completion of the sale and purchase agreement (see newsletter dated 15th January 2013).
26 Astra Resources PLC (eN: 0762(218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
The mining scenario in Orissa compares very favourably to larger areas such as the world-class iron ore precinct of Western Australia. The low cost of operation and infrastructure costs enable mines in Orissa to operate profitably.
The availability of local logistics infrastructure allows profitable mining (since primarily marginal cost of mining) at lower reserves compared to a Greenfield site where dedicated infrastructure needs to be built and amortised over mine-life.
The mine has road access and utilities, and access to the national rail network to local (where there is significant growth in the steel industry) and international markets is approximately four kilometres away with a new spur to be built at the standard government construction costs.
The cost of contract mining on-site is expected to be between $20-25 per tonne at mine-head.
Astra is negotiating an option over a second ore mine with an estimated iron are reserve of 500 million tonnes, with similar characteristics.
LOCATION
Orissa is a coastal state in the eastern region of India. It is adjacent to four other states: West Bengal and Jharkhand to its north, Chhattisgarh to its west and Andhra Pradesh to Its south. It is bounded by the Bay of Bengal on the east and has an extensive coastline of 482km.
IRON ORE SANDS THE PHILIPPINES
Astra has a Joint Venture Agreement between Cagayan River Construction & Development Corporation (CRCDC) and Astra Philippines Pty Ltd, a subsidiary of Astra Resources, to develop an iron sands project over 300 hectares in North Eastern Philippines.
The ultimate goal of the Joint Venture Company Cagayan River Astra Philippines is off-shore mining of magnetite sand.
Current investigation of Magnetite Concentrates indicates potential resource of 2-13 billion tonnes of iron sands (estimated) - a world class iron sands development in North East Philippines. JORC-equivalent reports for iron sands available.
The JV entity has lodged all the required paperwork to establish Phase 1 of its dredging operations, which covers 12 kilometres of river and ocean mining, an operation that is expected to return 135 million tonnes of iron sands. This is the final permit required to start on site operations for the Cagayan river project.
Future extension planned with adjoining sites demonstrating similar characteristics.
Once the Notice to proceed has been received Astra will be funding the establishment and operation of the cagayim mining opportunity through a bond that is close at hand, and the Company expects to have the site ready for exporting iron sands in the second half of 2014.
LOCATION
The Philippines 'IS an archipelago of 7,000 islands north of the equator and home to 96 million Filipinos of divergent cultures.
The province of Cagayan lies in a strategic location at the northernmost tip of the island of Luzon. It is closer and more accessible to the markets of Taiwan, Hong Kong and Japan than any other point in the Philippines.
The province is easily accessed via a network of good roads linked to the Maharlika Highway system. Land travel is the main means of moving people, commodities and supplies in and out of Cagayan. There are commercial airlines that service Tuguegarao from Manila and Laoag City, while Aparri and Port Irene in Sta. Ana currently serve as important seaports linking Cagayan to other points of northern Luzon.
27 Astra Resources PLC {CN: 07G20218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
THERMAL COAL NIGERIA
Nigeria has major underexplored and under-developed high quality coal resources, and the Nigerian government is focusing on revitalizing the coal mining industry. Astra is aggressively focusing on production, distribution and power production in Nigeria.
Astra Coal Nigeria Ltd, has signed a MOU to enter into a JV agreement giving the company access to a possible reserve of 250 million tonnes of thermal coal. Astra's JV plays into the Company's long-term strategy to acquire a total reserve of 500 million tonnes of coal. Preliminary geologIcal investigation has commenced on the sites, and these studies provide the basis for JORC reserve calculation exercises available in 2014.
Astra Coal Nigeria Ud has signed a MOU to set up a coal briquette factory in Kogi State, Nigeria. The agreement, signed between Astra and Kogi State, is based on a Public-Private Partnership. A Joint Venture (JV) Company will be created locally between the two entities, of which Astra Coal Nigeria will retain 75 per cent. Astra plans to build a coal briquette plant within three years which will have the capacity to produce 5,000 tonnes of briquette per month. The government has allocated land for the factory and they will negotiate land compensation with the local community on Astra's behalf. Astra will be the first in Nigeria to develop such a project.
The Company has also acquired a permit for the establishment of coal power plants in Kogi State, Nigeria.Nigeria has a stable resources export economy and adequate infrastructure to support mining development projects. There is a sizable international market for seaborne trade in coal, exceeding 300 million tonnes per annum. The major exporters of coal are Australia, South Africa, Indonesia and the United States with Nigeria having the potential to become a major player in the international traded coal market to Europe due to its close proximity. A major emphasis on power generation is likely to also create a strong internal demand for coal
LOCATION
The area of study within the Ogboyoga coal field is located at the northern ending of the Anambra basin where the escarpment has been interrupted by hills and ridges. The geology is predominantly of the Ajali Sandstone (False Bedded Sandstone), and the Mamu Formation (Lower Coal Measures). The top of the hills and ridges are at elevation ranging from 310m to 330m above sea level while the coal bearing horizon are observed at elevation range of 265m to 295m above sea Jevel.
The country is generally hilly and the Enugu Escarpment is indented by steep sided drainages. Coal crops out in the creeks at the base of the Enugu Escarpment at approximately 250m to 300m above sea level.
The area basically reveals high potential for opencast or surface mining method.
GOLD CAMBODIA
Astra's gold project is located in the Ouyadav District in the Ratanakiri Province (222 square kilo metres) in north east Cambodia.
A new gold province is beginning to emerge associated with an Intrusive Related Gold System (IRGS) across the northern part of Cambodia where the Ratanakiri Gold Project is located. A trend of gold occurrences and artisanal mining centres follows a west/north west structurally controlled trend spanning Cambodia. This includes the recently announced resource at Okvan (605,OOOoz, Oz Minerals March, 2010).
The Ratanakiri Gold Project has the hallmarks of an IRGS. Similar systems overseas typically host between 1 and 3 million ounces of gold.
Potential also exists· for a quick, modest, cashtlow from alluvial-placer gold deposits on the project site derived from this mineralisation. The project site is close to the Vietnam border and an inexpensive supply of electricity. Office, workforce and mine camps have already been established on the project site.
28 I
Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
LOCATION
Cambodia is considered an underexplored region for are deposits with virtually no coverage by modern exploration techniques. Cambodia has typical mining characteristics found elsewhere including an abundant water supply, electricity supply and close proximity to Vietnam.
The project is located close to the Vietnam border, electricity supply, abundant water and an established workforces/mine camps.
29 Astra Resources PLC (eN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
DIRECTORS' REPORT
The directors present their report together with the consolidated financial statements of the Group comprising Astra Resources PLC (the Company), and its subsidiaries, and the Group's interest in associates and jointly controlled entities (the Group) for the financial period from incorporation to 30 June 2013 and the auditor's report thereon.
1. PRINCIPAL ACTIVITIES
The principal activities of Astra are the acquisition and planned future development of a range of mineral exploration, technology (industrial, energy and environment) and property projects, including:
• Exploration for coal, iron ore and gold;
• Commercialisation of steel and carbon efficient technology; and
• Development of property for residential and mining accommodation.
• Commodity trading.
As a start-up entity, Astra has had no revenue and undertaken no commodity trading to date, incurring costs only.
2. BUSINESS REVIEW
REVIEW OF PRINCIPAL BUSINESSES
The Company has acquired a number of new projects to support and underpin the Company's growth strategy and exploit global opportunities in:
• Innovative technologies - acquisition and development to aid the resources industry.
• Mineral Exploration -leading t6 bringing mines into development and/or production.
• Carbon efficient operations.
• Carbon efficient businesses - acquisition and development.
Astra has interest in countries such as Australia, Hungary, India, Cambodia, Nigeria, and Philippines. Further growth and international expansion is planned for the coming year by:
1. Targeting emerging and consuming growth markets;
2. Investing in diversified assets to generate value and revenue;
3. Building a commodity trading business to market and sell Astra's assets in developing countries; and
4. Mitigating risk through currency hedging, joint venturing and diversification.
The Company's strategy is simple; to develop a portfolio of long-term assets in four key classes. Spanning technology, mining,
peopertyeod eeo""b!e ffiSOO""", the Comp,,,y'. g!oba!a"et be", ;. demaod-orlven, e!,' "'"'~"" ~""'me~ 30 Astra Resources PLC (eN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
KEY HIGHLIGHTS
Corporate
Astra has transformed into a diversified global asset group with a presence in countries strategically positioned to exploit growing demand. Astra plans to list on a major exchange in 2014. A brief outline of the listing history and strategy is provided:
Frankfurt History
• On 30 September 2011, Astra Resources listed on the Frankfurt Stock Exchange with shares opening at €1.50. Astra Mining's symbol is FWB:9AR through Renell Bank.
Danish GXG
In December 2012, Astra applied for and is now quoted on GXG Markets Exchange (GXG: 9AR). Astra will request to be upgraded on this exchange and eventually lodge a EU-regulated prospectus.
Astra will be launching the next phase of its growth strategy - seeking listing on major stock exchanges such as the Prime Standard Board of the Frankfurt Stock Exchange.The Company has revealed the scope of the projects being included in its upcoming prospectus, reconfirming its commitment to building a diversified, risk managed portfolio of innovative technologies and assets which span across four key areas.
From technology that is intended to revolutionize the steel and coal Industries, close to market raw material supply to these industries, carbon efficient operations, and property projects that will deliver highly sought-after outcomes, each project within each asset class has been carefully selected for its value.
The ownership of innovative technologies allows Astra to significantly impact end-user product costs (for example, strengthening steel technologies results in lower raw materials costs, energy input costs and lower steel requirement for any application) and the royalty structure can potentially have access to margins significantly higher than mining and commodity margins, and potentially provide a price earnings ratio comparable to a high growth technology company. The combination of assets in mining and technology is intended to hedge the business risks.
Astra recognizes that as more and more governments around the world commit to increasing the amount of energy generated by renewable sources there will be a proportional increase in the number of opportunities for the economically viable commercialisation of renewable energy opportunities.
An increase wHI also be seen in opportunities to implement clean and carbon efficient technologies in existing industries, such as steel and energy, and also to reduce raw material type and per capita cost and use. Examples of this are the strengthening of steel for any given application and the effective use of brown coal for power generation in developing markets.
Astra's intent is a vigorous overarching strategy to invest in and develop a high-performing, diversified, long-term asset portfolio which is naturally hedged to generate continual shareholder value.
FINANCIAL OVERVIEW OF THE GROUP
The Astra group of companies recorded a consolidated loss after tax of Euro 3,953 thousand. Net administration costs of Euro 8,051 thousand were incurred and related to operating and project costs.
The Group ended the period with a net cash position of Euro 270 thousand.
The Group's non-current assets at the end of the period were Euro 17,687 thousand, including Euro 14,563 thousand of intangible assets associated with the acquisition of the T-Steel, Green Diesel and clean coal technology based on IFRS 2 valuation.
Inventory levels ended the period at Euro 1009 thousand, representing land held for development.
o.e,.11the '",,,ial ,,,OJ,, ofthe OW", " '0 ,oro,d.,,,, withthe Boaro',"",e"'"o", g.V ~ 31 Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
PRINCIPAL BUSINESS RISKS
Risk management is an essential element of how Astra runs its business and is a Board level responsibility. The Company has a formal risk management process and the risk register.
The principal risks and uncertainties have been identified as follows:
• Strategy - the risk that our strategy fails to deliver the potential of the business.
• Funding and liquidity - the Company has just commenced the Green Gum project, and will shortly receive its first cash inflows, but none of the other projects of Astra generate cash inflows. This is due to their early stage of development. To enable future growth, the Company will require access to new equity.
• Partner performance and alignment - Astra has a shared equity interest in most of its assets. The Company is also reliant on contractors and service suppliers. These relationships are given a lot of attention and actively managed to ensure alignment of objectives as much as possible.
• Currency fluctuation - Our activities take place in different countries, resulting in sales and costs in various currencies. Fluctuations in the respective exchange rates of these currencies can affect the Group in a variety of ways.
• Economic uncertainty -The global economic situation remains subject to significantly abnormal levels of volatility.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
No significant changes in the Group's state of affairs have occurred during the financial period.
EVENTS SUBSEQUENT TO BALANCE DATE
There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial years.
LIKELY DEVELOPMENTS
The Group is now ready to launch into the next phase of its growth strategy. Astra has signed a binding termsheet for a Main Board listing on the SGX through Reverse Takeover. This is part of dual listing strategy for the future IPO. Astra will then seek to list on major stock exchanges such as the Prime Standard Board of the Frankfurt Stock Exchange and subsequently, the London Stock Exchange to fund the next step in the Company's operations.
Astra will continue to pursue its policy of increasing the profitability and market share of its major business sectors during the .next financial year. This will require further investment in areas such as resources, technology and property development, which offer solid opportunities for future development.
3. RESEARCH AND DEVELOPMENT
Astra is committed to investing in world-class technology development and each Company within the Group carries out exploration, and research and development necessary to support their activities.
Research and development efforts enable new levels of performance and address areas such as energy efficiency, performance, scalab!lity and cost. Activities are directed toward developing disruptive technology innovations that support the Company's strategic plan. Further details are discussed above in Section 2 Business Review.
32 Astra Resources PLC (eN: (7620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
4. FINANCIAL INSTRUMENTS
The financial risk management objectives and policies of the Company, and, the exposure of the Company to price risk, credit risk, liquidity risk and cash flow risks are detailed at note 26 of the financial statements.
5. DIVIDENDS
The Board anticipates that cash resources will be used for reinvestment and will not be distributed until the Company has an appropriate level of distributable profits. The declaration and payment by the Company of any dividendS and the amount thereof will depend on the results of the Company's operations, its financial position, cash requirements, prospects, profits available for distribution and other factors deemed to be relevant at the time.
6. MARKET VALUE OF LAND
Land is held for property development purposes, and is accounted for as inventory at the lower of cost and net realisable value. As at 30 of June 2013, there was no significant difference between the carrying amount of land and market value.
7. SUPPLIER PAYMENT POLICY
The Company's policy, which is also applied by the Group, is to settle supplier invoices within 14 days of the month in which the invoice was received. The Company, may by exception, pay individual suppliers on different terms.
Trade creditors of the Group at 30 June 2013 were Euro 1,104 thousand.
8. DIRECTORS
The Directors of the Company as at15 November 2013, were as follows:
NAME, QUALIFICATIONS AND INDEPENDENCE STATUS
Jaydeep Biswas (appointed 13 June 2011) Chairman/Chief Executive Officer/Executive Director
Silvana De Cianni (appointed 13 June 2011) Managing Director/Executive Director
Daniel Ghee Chong Yeah (appointed 14 June 2012) Non-Executive Director
Maxwell Francis (appointed 9 September 2013) Non-Executive Director .
Daniel Peters (appointed 9 September 2013)
NirenNon-ExecutiveRaj (appointedDirector29 July 2013) >J -'I' Non-Executive Director ~ 33 Astra Resources PlC (eN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
David Shearwood (appointed 9 September 2013) Non-Executive Director
Clifford Co Secretaries were appointed to the position of company secretary on 7th March 2012.
No persons were officers of the Company during the financial year and were previously partners of the current audit firm.
DIRECTORS' INTERESTS
The relevant interest of each director in the shares within the Group and other related bodies corporate, as at the date of this report is as follows: '
Units-3,300,00026,400,000750,0006,400,0008,000,000380,000,000 , Niren Raj AstraDavidMaxwellJustynSilvanaDanielJaydeepIndustriesShearwoodGheeDanielDeFrancisBiswasCianniChongPetersPtyVenningLtdYeoh
NB Maxwell Venning has an. interest in the hydrogen clean energy project and can convert this interest into shares in Astra Resources Pic based on independent valuation. Justyn Peters and David Shearwood have material interest in an Underground Coal Gasification Project in South Australia where Astra has an MOU for acquisition. If this occurs they will receive shares in Astra Resources Pic based on independent valuation. Justyn Peters and David Shearwood also are eligible for shares for being appointed as Directors from Astra Resources Pic shares held by Astra Consolidated Nominees Ply Ltd.
SHARE OPTIONS
Astra Industries Pty Ltd. has in June 2012 converted 180 Million options @ $ 0.0001 as part of a pertormance agreement agreed by shareholders and directors in 2010 and 2012 and forms part of 30 June 2012 capital structure The conversion fee of $ 18,000 was paid by Astra Industries at conversion by loan reduction of Astra Industries to Astra Resources PLc
INDEMNIFICATION AND INSURANCE OF OFFICERS
Indemnification
The Company has a~reed to indemnify the following current directors of the Company -Jaydeep Biswas, Silvana De Cianni, Daniel Ghee Chong Yeoh, Maxwell Francis, Daniel Peters, Niren Raj and David Shearwood and former directors, Richard Walker and Barrie Meerkin, against all liabilities to another person (other than the Company or a related body corporate) that may arise from their position as directors of the Company and its controlled entities, except where the liability arises out of
liabilities, including costs and expenses. . ~/7 -~ conduct involving a lack of good faith. The agreement stipulates that the Company will meet the full amount34of an~Ysuc I
Astra Resources PLC (CN: 07620218)and Controlled Entities Financial Report for the Period Ended on 30 June 2013
The Company has also agreed to indemnify the current directors of its controlled entities for all liabilities to another person (other than the Company or a related body corporate) that may arise from their position, except where the liability arises out of conduct involving a lack of good faith. The agreement stipulates that the Company will meet the full amount of any such liabilities, including costs and expenses.
Insurance premiums
Since the end of the previous financial year the Company has paid insurance premiums of $114,025 in respect of directors' and officers' liability and legal expenses insurance contracts, for current and former directors and officers, including senior executives of the Company and directors, senior executives and secretaries of its controlled entities. Independent legal advice has confirmed there are no major litigation risks for the Group.
9. CORPORATE GOVERNANCE STATEMENT
DIRECTORS/NON-EXECUTIVE DIRECTORS
The group is committed to maintaining high standards of corporate governance. The directors have chosen to provide a selection of disclosures which they believe may be useful to members and potential investors.
DIRECTORS
Astra has a one-tier Board compnslng both Executive and Non-Executive Directors. The Board is presided over by the Executive Chairman, Dr Jaydeep Biswas. The Board meets 4 times a year and additionally as issues arise which require the attention of the Board. As at 30 June 2013, the Board comprised two Executive and two Non-Executive Directors.
The Board sets the Group's strategy and policy, and reviews management and financial performance. Its role is to create and deliver strong financial performance and long-term shareholder value whilst protecting the interest of the Group and other stakeholders. Matters specifically reserved for the Board's decision-making include:
• Approval of the overall strategy and annual budgets of the Group;
• Approval of major business project acquisitions of the Group; and
• Approval of intemal policies (such as corporate governance policy, code of ethics and business conduct).
Contrary to the provisions of A.2.1.and A.3.1 of the UK Corporate Governance Code, Dr Jaydeep Biswas has been appointment by the Company to act as the Executive Chairman, who upon his appointment did not meet the independence criteria as set out in the UK Corporate Governance Code. The Company is searching for a Non-Executive Chairman.
The Board has overall responsibility for the Group's system of internal controls and risk management policies and is also responSible for reviewing their effectiveness. During the period, the Board has reviewed the effectiveness of the systems of internal controls, risk management and the Group's high level internal control processes. The system of internal control is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable assurance of effective operation and compliance with laws and regulations.
The Directors believe t/18t the Group maintains an effective, embedded system of internal controls and in the view of the Directors, no significant deficiencies have been identified in the system.
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS
There are three committees of the Board, the Audit Committee, the Remuneration Committee and the Nominations Committee. Attendance at Board meetings held during the period from incorporation is outlined below. A description of the activities of these Committees is included in separate sections of this statement.
The number of Directors' meetings (including meetings of committees of Directors) and number of meetings attended by each of the Directors of the Company during the financial year are shown in the table below.
35 Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
The Board has delegated speCific responsibilities to the committees described below. Audit Committee
Following the incorporation of the Company in the UK, the main responsibilities of the Audit Committee are as follows:
• Overseeing the integrity of the consolidated financial statements
• Approving the remuneration and terms of engagement of the external auditor
• Reviewing the Annual Audit Plan and the reports of the external auditor on internal control systems and procedures
• Monitoring the provision of non-audit services by the extemal auditor
• Reviewing and monitoring the external auditor's independence and objectivity, and the effectiveness of the audit process
• Reviewing the company's internal financial controls and internal control and risk management systems.
The members of the audit committee are:
• Maxwell Venning (Chairman)
• C. De Cianni
Remuneration Committee
The Remuneration Committee consists of one Non-Executive Director and two external members appointed by the Board. The two external members of the Remuneration Committee are independent; this committee structure was implemented due to the composition of the Board during the financial year. The members of the remuneration committee are:
• Maxwell Venning (Chairman)
• C. De Cianni
Provision D.2.1 of the UK Corporate Governance Code recommends that the remuneration committee should be comprised entirely of independent non-executive directors. The Company does not comply with this provision as Barrie Meerkin is a non• executive director and considered not to be independent. However, the Board regards Barrie Meerkin's membership of the Remuneration Committee as critical to the further alignment of Directors' remuneration with shareholder interests.
Following the incorporation of the Company in the UK, the main responsibilities ofthe Remuneration Committee are as follows:
•• To recommend the levels of remuneration for the Chairman, non-executive directors and executive directors
• To monitor the level and structure of remuneration for senior management.
The Remuneration Committee met twice during the financial year.
Nomination Committee
The Nomination Committee consists of one Non-Executive Director and two external members appointed by the Board. The two external members of the Nomination Committee are independent; this committee structure was implemented due to the composition of the Board during the financial year. The members of the Nomination committee are:
• Maxwell Venning (Chairman)
• C De Cianni
iltee ace >5 . V_~ 36 --I
Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
• Reviewing the structure, size and composition (including the skills, knowledge, experience and diversity) of the Board, to ensure that the Board has the appropriate mix of skills and experience to fulfil its responsibilities
• Ensuring there are formal, rigorous and transparent procedures for the appointment of new directors to the board.
The Nominations Committee is delegated with the role of evaluating the performance of the Board, its Committees and its Directors. Given the recent incorporation of the Group, there has been no evaluation performed, which is not in compliance with provision 8.6.1 of the UK Corporate Governance Code. While not haVing conducted a formal evaluation of the Board, its Committees and its Directors, the Nomination Committee is of the view that the composition is appropriate and that its members have carried out all duties and responsibilities set out in the charter.
In the process of incorporation, the Company did not use an external search agency nor open advertising for the Board appointments (contrary to provision B.2.4 of the UK Corporate Governance Code)..
Both the Company and the Directors have the power at any time to elect any person to be a Director. Anyone appointed as a Directorwill retire at the next Annual General Meeting and shall then be eligible for election by the shareholders. It is the role of the Nominations Committee to identify suitable candidates for appointment to the position of Director and evaluating the balance of skills, knowledge and experience of the members of the Board.
INTERNAL AUDIT
Provision C.3.6 of the UK Corporate Governance Code recommends the presence of an Internal Audit function. The Company does not comply with this provision due to the current size of the business, and the Board do not consider it necessary at the current time.
GOING CONCERN
The Directors consider that the Group has adequate financial resources to continue operating for the foreseeable future and that it is, therefore, appropriate to adopt the going concern basis in the preparation of the financial statements. The Directors have satisfied themselves that the Group is in a sound financial position and that it has access to funds to meet the Group's foreseeable cash requirements, particularly those relating to major investments.
THE SHARE DEALING CODE
In compliance with the relevant laws and regulationS in the UK and Australia, the Company has a Share Dealing Code that covers dealing in Astra Resources PLC's shares and other securities. The Company takes all reasonable steps to ensure compliance by the Directors and the Company's employees and agents.
RELATIONSHIP WITH SHAREHOLDERS
The Board is fully committed to maintaining regular communication with its shareholders. There is regular dialogue with major shareholders and meetings are offered following significant announcements.
Press releases have been issued throughout the periOd and the Company maintains a website (www.astraresources.co.uk) on which al] press releases, investor presentations and financial reports are posted.
UK CORPORATE GOVERNANCE CODE
In accordance with the UK Corporate Governance Code, Astra Resources PLC follows the 'comply or explain' approach and states in its Annual Report whether it complied or will comply with the principles of good corporate governance set out in the UK Corporate Governance Code·and, if it does not comply, Astra Resources PLC will explain the reasons for such non-compliance in the relevant sections of this Annual Report.
~.-) t1?37 Astra Resources PLC (eN: 07(20218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
10. POLITICAL AND CHARITABLE CONTRIBUTIONS
Neitller the Company nor any of its subsidiaries made any political or charitable donations or incurred any political expenditure during the period.
11. SOCIAL PERFORMANCE REVIEW
The management and Board-consider the risks to the Company's value which may arise from social, environmental and ethical issues and in particular health, safety and environment (HS&E) risks are taken very seriously.
During the year, the Company's pOliciesand procedures relating to bribery were reviewed and updated for both employees and contractors and these reflect the requirements of the UK Bribery Act.
The Group is an equal opportunities employer and all staff are offered equal access to training, career development and promotion opportunities. The Company recognizes its staff as stakeholders in the business and provides a healthy and safe working environment for staff including regular occupational health assessments.
There is no pension scheme in place.
12. DISCLOSURE OF INFORMATION TO AUDITOR
The Directors who held office at the date of approval of this Directors' Report confirm that, so far as they are each aware, there is no relevant audit information of which the Company's auditor is unaware; and each Director has taken all the steps that he or she ought to have taken as a Director to make himself/herself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
Jaydeep Biswas Director
Dated this 10 day of
Silvana De Cianni Director
Dated this 10 day of December2013.
38 •
Astra Resources PLC (eN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
TOP 20 SHAREHOLDERS
Ordinary shares of 0.001 GBP (par value) as of 05 November 2013
, 1. MrAstraSilvanaBeaufortPaulRonaldDanielCzislowskiResourcesDeNomineesDeKuklerCianniCianniPic I AdeleTheAstraLynchwoodBPSMarleneNRGFeniceNewInternationalTechnologiesIndustriesConsolidatedNomineesIneLopreteSMSF(inNomineesTrustpty(SA)ptyIncforLtdAustralia,Virgin3/685830Wales,PO9055C/-Suite13184614Gordon,PIc)83609,3/18012F,145-157,LtdBordeauxMainMoorgate,ReefTynteSymondsBoxBoxFinsburyRundleNewE1acI-BondiIslands2026,USA2nd498,North498,Street,NewLevelChandlerStreet,St5067,5006,VictoryStreet,Drive,JohnStreet,Road,North&Pavement,Australia4thSouth(In2,Zilzie,Associates,RoadAustraliaNorthTrustI119,500,000112,953,815802-808Floor,House,Street,68,781,41861,184,72220,000,00021,340,14226,400,000380,000,00044,000,000Waurn16,400,000Adelaide,9,300,00013,819,70012,500,000ConsultingCasper,Adelaide,Bondi,KentWales,Town,Queensland,Adelaide,ForLondon,London,Town,London,93-103Ponds,PacificNewAstraWyoming,Australia,SuiteTortoia,SouthSouthLtd,SouthSouthEC2RSouthResourcesWing204Victoria,EC2AHighway,UnitedUnit4710,British2072L2,Lok6PA1206-7INT 12. Nominees Pty Ltd I 48,855,704 i (XYZSF)SinoAstra(AIUAC)Limited(in(DCSAC)(TNAC)
q.y 39 Astra Resources PLC (eN: 07(20218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
17. Elite Premium GPO Box 2221, Sydney, New South Wales, 19. SpadinaMingela PtyEnterprisesLId (BSFAC); PtyVictoria,Street,52Watson32/325Kew Sydney,BeaconsfieldRoad,House,3182, AustraliaGraceville,NewSuite8,848,7006,245,3578,000,0006,803,895SouthParade,3 LevelQueensland,Wales,St3, 13Kilda2000,GeorgeWest, 822,734,311325,328,724 iI Gratus Pty Ltd LtdInvestments Pty LId I 4075,2001, Australia Australia Total Remaining Holders Balance Totals:20.18. Top 20 Holders Of Ordinary Shares Of 0.001 GBP
40 Astra Resources PlC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
FINANCIAL STATEMENTS
41 Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
STATEMENT OF DIRECTOR'S RESPONSIBLITIES IN RESPECT OF THE DIRECTORS' REPORT AND THE FINANCIAL STATEMENTS
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable laws and regulations.
Company law requires the directors to prepare group and parent company financial statements for each financial year. Under that law they are required to prepare group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and applicable law and have also chosen to prepare the parent company financial statements under IFRSs as adopted by the European Union.
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the company for that period. In preparing each of the group and parent company financial statements, the Directors are required to:
Ii! Select suitable accounting policies and then apply them consistently; III Make judgements and estimates that are reasonable and prudent; m State whether they have been prepared in accordance with IFRSs as adopted by the EU; and
!!S Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and the parent company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the group and to prevent and detect fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
We confirm to the best of our knowledge:
III The financial statements, prepared in accordance with International Financial Reporting Standards as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and
III The directors' report includes a fair review of the development and performance of the business and the position of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
42 Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
CONSOLIDATED FINANCIAL STATEMENTS
ASTRA RESOURCES PLC AND CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2013
Consolidated(18,924)GroupConsolidatedEuro30..Jun-12(1,302,284)(2,240,227)(8,062,604)(728.147)(7,807,728)(254,876)(1,422,138)(256,251)(1,119,301)(760,614)(183,343)NoteGroup423 (8,051,390)(1,429,228)(8,272,583)(2,407,736)(2,014,207)(221,193)(831,072)(644,698)(47,981)76,548 (51,674) operations expenses - (7~4,O91) 13 (8,272,583) 1,375 Employee expenses operation,accounted netinvestees,of tax net of tax FinanceProfessionalDepreciationNetTravelConsultingForeignLeasefinancecostsexpensesandcurrencyfeescostsfeesaccommodationand amortisationgains/(Iosses) Euro Profit (loss) from discontinued ShareOtherIncomeContinuingoperatingof profittax (expense)/benefitofexpensesoperationsequity- CostProfit/(Ioss)of sales from continuing30..Jun-13 OtherProfit/(Ioss}Revenueincome before tax ResultsFinancefromincomeoperating activities Gross profit Discontinued operation
Profit/(Ioss) for the year (8,272,583) (8,062,604)
43
• Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
reserve movements Other comprehensive4,319,479income(843,045)(7,797,143)(7,219,559)(8,062,604)265,461 21 (7,910,244)(8,272,583)(362,339) thetheyear,yearnet of tax income (3,953,104)4,319,479 TaxequipmentRevaluationMemberson otherof theofcomprehensiveproperty,Parent plant and LossNon-controllingfor the year interest OtherTotalForeigncomprehensivecomprehensivecurrency exchangeincomeincome forfor Loss attributable to:
Total comprehensive(0.01)(0.Q1)income (7,797,143)(6,982,011)(815,132) 30 (3,779,958)(173,146) the year (0.01) (3,953,104) attributableMembers of to:the Parent DilutedTotalNon.controllingearningscomprehensiveper shareinterestincome for Basic earnings per share Earnings per share
44 Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
ASTRA RESOURCES PLC AND CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2013
45 638,11518,282,63818,920,75312,636,57412,314,4691,611,861322,1053,162,0386,935,49318,531,8203,773,45511,596,3271,515,30834,869 16181917 5,082,3341,104,671Astra175,73556,890Resources PLC (CN: 07620218)18,734,09812,314,4695.082,3346.419,6291,337,295 and Controlled Entities TotalBorrowingsliabilities CurrentCurrentDeferredliabilitiestaxtaxliabilitiesliabilities Financial Report for the Period Ended on 30 June 2013 Total equity and liabilities ProvisionsNon-current liabilities Trade and other payables LIABILITIES Trade and other payables Total equity
46 Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
ASTRA RESOURCES PLC AND CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2013 Total 64,206 Other Retained Consolidated(7,219,559)11,596,327(7,029,778)(122,166)19,393,469(11,447,768)1,227,335(408,611)(8,062,604)(7,797,143)(4,228,209)27,913(7,029,778)265,461(843,045)(815,132)(6,982,011)(7,219,559)(476,298)18,510,539FCTR3,166,15264,206(884,909)882,93011,528,5291,938,817ParentEquity(1,590,690)67,798397,835160,287(135,393). (3,751,911)Equity18,625,483(122,166)(1,455,297)(122,166)Note 237,54831,321,096 (1,455,297)Earnings 18,625,4831 Euros cost capitalNelStep-up Reserves 1 12,695,61218,625,483 (1,455,297) 237,548 (122,166) (7,219,559)(476,298) - OtherBalance at 30 June 2012 Transaction ownerstherecordedperiodof directlythe companyin equity SharesTransferTransactionTotalShareothercomprehensiveissuedbuyin ofbackcomprehensivecostsretained lossesincomeincomeTransactionsfor with owners, Balance at 3 May 2011 (Incorp) RollContributionsIssueProfitupandofofsharesAstralossbyinMiningandsubsidiariesdistributionsLtd to Issued 31,321,095 237,548 ~ %?,~
- ,,>
Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
Balance at 30 June 2013 36,865,735 (2,464,083) (7.029.778) 4,717,314 (122,166) (19,358,012) 12,609,010 (294,541) 12,314,469 55} cP • Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
ASTRA RESOURCES PLCAND CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2013 Parent Entity Issued Retained Euros Note Reserves Parent Equity capital Earnings Transaction Other cost Step-up FCTR
Balance at 3 May 2011 (Incorp) Transactions with owners, recorded directly in equity Contributions by and distributions to owners of the company
Roll up of Astra Mining Ltd 12,695,612 (135,393) 160,287 (3,751,911) 8,968,595 Transfer in of retained losses (476,298) (476,298) Shares issued 18,625,483 18,625,483 Transaction costs (1,455,297) (1,455,297) Share buy back' 122,166) (122,166) Other
Issue of shares in subsidiaries
31,321,095 (1,590,690) 160,287 (122,166)__ (4,228,209) 25,540,317 Total comprehensive income for the period Profit and loss (7,219,559) (7,219,559)
Total other comprehensive income 237,548 237,548
237,548 (7,219,559) (6,982,011)
Balance at 30 June 2012 31,321,096 (1,590,690) 397,83!L (122,166) (11,447,7(38) 18,558,307
)(J.y Astra Resources PLC (eN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013
Issued Retained Euros Reserves Parent Equity Note capital Eamings Transaction FCTR Other cost Step-up
Balance at 1 July 2012 31,321,096 {1,SJlO,690) - 397,835 (122,166) J11,447,168) 18,558,307 Transactions with owners, recorded directly in equity Contributions by and distributions to owners of the company Transfer in of retained losses
Shares issued/(cancelled) (807,950) (807,950) Paid in capital- sale of treasury stock 6,352,589 6,352,589 Transaction costs (873,393) (873,393) Share buy back
Other (3,004,840) (3,004,840)
Treasury stock reserve
Issue of shares in subsidiaries
5,544,639 (873,393) (3,004,840) 1,666,406
Total comprehensive income for the period
Profit and loss (7,910,244) (7,910.244) Total other comprehensive income
(7,910,244) (7,910,244) Balance at 30 June 2013 36,865,735 (2,464,083) - (2,607,005) (122,166) (19,358,012) 12,314,469
~ ."j Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period End~d on 30 June 2013 ASTRA RESOURCES PLC AND CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2013 assetspayment transactions - - - (50,674)(50.674) - receivables 30-Jun-13 -Euro(8,272,583)(8,272.583)ParentEuro30-Jun-13ConsolidatedEuroGroup(8,062,604)51.674(6.140,584)879,34530-Jun-12Entity 13 Consolidated Group 18.924Parent Entity 221,193 (8,272,583) Impairment loss on related partyNote ACTIVITIES 30-Jun-12 1,126,784(845,360)213,271496.306 CASH FLOWS FROM OPERATINGTransferAmortisationof retainedof intangibleearningsNetassetsfinance costs Euro Equity- settled share-based Non Cash flows in operating profits (8,032,466) AdjustmentsImpairmentProfit/(Ioss) lossesfor:forDepreciationtheonyearintangible Changes in Assets and Liability: (Increase)/Decrease in receivables (278,603) 72.474 (1) (Increase). Decrease in other assets (793,357) (122,019) (11,003) Foreign currency gains in reserves (lncrease)/Decrease in inventories 150.815 (Increase)/Decrease in prepaid expenses (20.375) - (lncrease)/Decrease in income taxes balances 12,971 Increase/(Decrease) in payables 586.222 898,242 847,186 (316,010) lncrease/(Decrease) in provisions 22.021 31.187 - Cash generated from operating activities 535,548 (8,033,349) (5,319,160) (8,599,597) Interest paid (845,727) - Income taxes paid Net cash from operating activities 535,548 51 Astra Resources PLC (CN: (7620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 -(306,393)448,496142,014(7,519,452)6,960,6936,960,693(23,211)27,463 50,674 Loans to related companyfinancial period - 2,653,2792,653,2795,950,578(8,599,597)(48,477)1,245,584(381,147)4,260(251,523)(6,164,887)31,7235,950,578(43,553)(982,616) 27,463 13 -270,805(8,033,349) - period Proceeds from sale of property, plant5,950,5785,661,742& (297,415) 1,320,884 8 (288,836)(1,050,079)1,321,5281,671,664(52,720) 8,393,08875,3001,147,2891,321,054(127,023)(1,450,958)6,960,693 PaymentPayments forforinvestmentsdevelopmentTransactionMoniesstockreceivedcostsinCashadvanceand cash equivalents at end of financial equipment 1,320,884 Cash and cash equivalentsNetatcashbeginningused offrom investingNetProceedsPaymentLoansPaidcashinfromcapitalactivitiesfromoffromrelatedborrowings(used-salecashSharecompanyof(rollin)ACNstockfinancingup)buy-back activities Payments for property, plant & equipment (7,519,452) PaymentProceedsInvestingEffect of exchangeforActivitiesfromintangiblesBorrowingsfluctuations on cash held Net decrease in cash and cash equivalents CASH FLOWS FROMCASHFINANCINGFLOWS FROMACTIVITIESINVESTING ACTIVITIES 52 ~... Astra Resources PLC (CN: (1620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 The consolidated financial statements and notes represent those of Astra Resources PLC and Controlled Entities (the "Consolidated Group" or "Group") for the period ended on 30 June 2013. The group financial statements consolidate those of the Company and its subsidiaries (together referred to as the "Group") and equity account the Group's interest in associates and jointly controlled entities. The parent company financial statements present information about the Company as a separate entity and not about its group. NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Preparation Both the parent company financial statements and the group financial statements have been prepared and approved by the directors in accordance with International Financial Reporting Standards as adopted by the EU ("Adopted IFRSs"). On publishing the parent company financial statements here together with the group financial statements, the Company is taking advantage of the exemption in s408 of the Companies Act 2006 not to present its individual income statement and related notes that form a part of these approved financial statements. Material accounting policies adopted in the preparation of the financial statements are presented below and have been consistently applied unless otherwise stated. The financial statements have been prepared on an accruals basis and are based on historical costs principles. The financial statements are presented in Euros due to Company's intention to undertake an Initial Public Offering (IPO) on a European Stock Exchange. Basis of Going Concern The consolidated financial statements have been prepared on a going concern basis which contemplates the realisation of assets and settlement of liabilities in the ordinary course of business. The Group has incurred losses for the period ended on 30 June 2013 of€8,272,583 (2012: €8,062,604) and has accumulated losses at 30 June 2013 of€19,358,012 (2012: €11,447,768). The Group has cash on hand at 30 June 2013 of€270,805 (2012: €1 ,320,884). These conditions give rise to a material uncertainty that may cast significant doubt upon the Group's ability to continue as a going concern. The ongoing operation of the Group is dependent upon: • The Group raising additional funding from shareholders or other parties; and/or • The Group reducing expenditure in-line with available funding • The starting of mining/trading activity immedietly. During the period ended 30 June 2013 the Group raised €6,352,589 through the sale of Astra Resources Pic shares held by Astra Consolidated Nominees pty Ltd (ACN stock). Refer note 20. In addition, the Group entered into conditional agreements to acquire certain intangible assets, the ·completion of these acquisitions is dependent upon the Group raising equity funding through the planned IPO. The Directors have prepared cash flow projections that support the ability of the Group to continue as a going concern. These cash flow proJections assume the Group obtains further funding from shareholders or other parties or through anticipated revenue from operations until the planned IPO is completed. If such funding is not achieved, the Group plans to reduce expenditures significantly and this will likely result in non-completion of certain asset acquisition agreements and/or divestment of projects. ln the event that the Group does not obtain additional funding and reduce expenditure In-line with available funding, it may not be able to continue its operations as a going concern and therefore may not be able to realise its assets and .extinguish its liabilities in the ordinary course of operations and at the amounts stated in the financial report. -~ Astra Resources PLC (eN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CaNT) NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT) The financial statements were aulhorised for issue on the 15 November 2013 by the Directors of the company. a. Principles of Consolidation The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by Astra Resources PLC at the end of the reporting period. A controlled entity is any entity over which Astra Resources PLC has the power to govern the financial and operating policies so as to obtain benefits from its activities. Where controlled entities have entered or left the Group during the period, the financial performance of those entities is included only for the period of the period that they were controlled. A list of controlled entities is contained in Note 11 to the financial statements. In preparing the consolidated financial statements, ail inter-Group balances and transactions between entities in the Consolidated Group have been eliminated in full on consolidation. Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are shown separately within the equity section of the consolidated statement of financial position and statement of comprehensive income. The non-controlling interests in the net assets comprise their interests at the date of the original business combination and their share of changes in equity since that date. Changes in the ownership interests in a SUbsidiary are accounted for as equity transactions and do not affect the carrying values of assets and liabilities. Business combinations Business combinations occur where an acquirer obtains control over one or more businesses A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The business combination will be accounted for from the date that control is attained, whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities) assumed is recognised (subject to certain limited exceptions). When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent consideration arrangement is also included. Subsequent to initial recognition, contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability is remeasured each reporting period to fair value, recognising any change to fair value in profit or loss, unless the change in value can be identified as existing at acquisition date. All transaction costs incurred in relation to the business combination are expensed to the statement of comprehensive income. The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase. Roll up of Astra Mining Limited The pre-existing operations of Astra Mining Limited were rolled Lip into Astra Resources PLC through a 1 for 1 exchange of shares effective 8 September 2011. The roll up of the existing assets and liabilities of Astra Mining Ud at that date was undertaken at their carrying book value on the basis that Astra Resources PLC was created as a shell company for the purposes of restructuring the group and the future IPO. Refer to Note 20 for further details. 54 Astra Resources PLC (CN: 0762(218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 {CO NT) NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT) b. Income Tax The income tax expense (revenue) for the period comprises current income tax expense (income) and deferred tax expense (inccme). Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax liabilities (assets) are measured at the amounts expected to be paid to (reccvered from) the relevant taxation authority. Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the period as well as unused tax losses. Current and deferred inccme tax expense (income) is charged or credited outside profit or loss when the tax relates to items that are reccgnised outside profit or loss. Except for business combinations, no deferred income tax is recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled and their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability. Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be avaiiable against which the benefits of the deferred tax asset can be utilised. Where temporary differences exist in relation to investments in subsidiaries, branches, associates and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable tl:1at the reversal will occur in the foreseeable future. Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where: (a) a legally enforceable right of set-off exists; and (b) the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities, where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled. C. Inventories - General Inventories are measured at the lower of cost and net realisable value. The cost of manufactured products includes direct materials, direct labour and an appropriate portion of variable and fixed overheads. Overheads are applied on the basis of normal operating capacity. Costs are assigned on the basis of weighted average costs. d. Inventories - Land Held for Development Land held for development and sale is valued at the lower of cost and net realisable value. Cost includes the cost of acquisition, development, borrowing costs and holding costs until completion of development. Borrowing costs and holding charges incurred after development is completed are expensed. 55 • Astra Resources PLC (eN: (7620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CO NT) e. Construction Contracts and Work in Progress Construction work in progress is valued at cost, plus profit recognised to date, less any provision for anticipated future losses. Cost includes both variable and fixed costs relating to specific contracts, and those costs that are attributable to the contract activity in general and that can be allocated on a reasonable basis. Construction profits are recognised at the stage of completion basis and measured using the proportion of costs incurred to date as compared to expected actual costs. Where losses are anticipated, they are provided for in full. Construction revenue has been recognised on the basis of the terms of the contract adjusted for any variations or claims allowable under the contract. f. Property, Plant and Equipment Property, plant and equipment is carried at cost less accumulated depreciation and impairment losses. In the event the carrying amount of plant and equipment is greater than the estimated recoverable amount, the carrying amount is written down immediately to the estimated recoverable amount and impairment losses are recognised either in profit or loss or as a revaluation decrease if the impairment losses relate to a revalued asset. A formal assessment of recoverable amount is made when impairment indicators are present (refer to Note 1(i) for details of impairment). The cost of fixed assets constructed within the Consolidated Group includes the cost of materials, direct labour, borrowing costs and an appropriate proportion offixed and variable overhead.s. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred. Depreciation The depreciable amount of all fixed assets, including buildings and capitalised lease assets but excluding freehold land, is depreciated on a straight-Une basis over the asset's useful life to the Consolidated Group commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Depreciation Rate Property 2% Plant and Equipment 20% The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset's carrying amount is wrItten down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are included in the statement of comprehensive income. When revalued assets are sold, amounts included in the revaluation surplus relating to that asset are transferred to retained earnings. 56 _ 1 Astra Resources PLC (CN: 07(20218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CaNT) NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT) g.Leases Leases of fixed assets, where substantially all the risks and benefits incidental to the ownership of the asset - but not the legal ownership, which are transferred to entities in the Consolidated Group, are classified as finance leases. Finance leases are capitalised by recognising an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period. Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term. Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are recognised as expenses on a straight-line basis over the lease term. Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term. h. Financial Instruments Initial recognition and measurement Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions of the instrument. For financial assets, this is equivalent to the date that the company commits itsel.f to either purchase or sell the asset (ie, trade date accounting is adopted). Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified "at fair value through profit or loss", in which case transaction costs are expensed to profit or loss immediately. Classification and subsequent measurement Financial instruments are subsequently measured at fair value, amortised cost using the effective interest rate method, or cost. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted. Amortised cost is the amount. at which the financial asset or financial liability is measured at initial recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative amortisation of the difference between that initial amount and the maturity amount calculated using the effective interest method. The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactiy discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense item in profit or Joss. Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm's length transactions, reference to similar instruments and option pricing models ._-----".__._---~---- 9> _) 57 ---_._"_._~----~--_._--_.• Astra Resources PLC (CN: 0762(218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT) (i) Financial assets at fair value through profit or loss Financial assets are classified at "fair value through profit or loss" when they are held for trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a Group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carryIng value being included in profit or loss. (ii) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost. (iii) Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Group's intention to hold these investments to maturity. They are subsequently measured at amortised cost. (iv) Available-for-sale financial assets Available-far-sale financial assets are non-derivative financial assets that are either not capable of being classified into other categories of financial assets due to their nature or they are designated as such by management. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments. h. Financial Instruments (cont) They are subsequently measured at fair value with changes in such fair value (ie gains or losses) recognised in other comprehensive income (except for impairment losses and foreign exchange gains and losses). When the financial asset is derecognised, the cumulative gain or loss pertaining to that asset previously recognised in other comprehensive income is reclassified into profit or loss.. (v) Financial liabilities Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost. Impairment At the end of each reporting period, the Group assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-far-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are immediately recognised in profit or loss. Also. any cumulative decline in fair value previously recognised in other comprehensive income is reclassified to profit or loss at this point. Financial guarantees Where material, financial guarantees issued that require the issl,ler to make specified payments to reimburse the holder for a [ass it incurs because a specified debtor fails to make payment when due are recognised as financial liabilities at fair value on initial recognition. The guarantee is subsequently measured at the higher of the best estimate of the obligation and the amount initially recognised less, when appropriate, cumulative amortisation in accordance with IAS 18: Revenue. Where the entity gives guarantees in exchange for a fee, revenue is recognised under IAS 18. ·58 ...... g.') pj5 . Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CO NT) NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT) The fair value of financial guarantee contracts has been assessed using the probability-weighted discounted cash flow approach. The probability has been based on: The likelihood ofthe guaranteed party defaulting during the next reporting period; The proportion of the exposure that is not expected to be recovered due to the guaranteed party defaulting; and The maximum loss exposure if the guaranteed party were to default. Derecognition Financial assets are derecognised when the contractual rights to receipt of cash flows expire or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised when the related obligations are discharged, cancelled or expire. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss. i. Impairment of Assets At the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired. The assessment will include considering external sources of information and internal sources of information, including dividends received from subsidiaries, associates or jointly controlled entities deemed to be out of pre-acquisition profrts. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset's fair value less costs to sell and value in use to the asset's carrying amount. Any excess of the asset's carrying amount over its recoverable amount is recognised immediately in profit or loss, unless the asset is carried at a revalued amount in accordance with another Standard (e.g. in accordance with the revaluation model in IAS 16). Any impairment loss of a revalued asset is treated as a revaluation decrease in accordance with that other Standard. Other intangible assets Other intangible assets that have been acquired by the Group and have finite useful lives are measured at cost less accumulated amortisation and accumulated impairment losses. j. Investments in Associates Associates are companies over whIch the Group has significant influence through holding, directly or indirectly, 20% or more of the voting power of the company. Investments in associates are accounted for in the financial statements by applying the equity method of accounting, whereby the investment is initially recognised at cost and adjusted thereafter for the post-acquisition change in the Group's share of net assets of the associate company. In addition, the Group's share of the profit or loss of the associate company is included in the Group's profit or loss. The carrying amount of the investment includes goodwill relating to the associate. Any discount on acquisition, whereby the Group's share of the net fair value of the associate exceeds the cost of investment, is recognised in profit or loss in the period in which the investment is acquired. Profits and losses resulting from transactions between the Group and the associate are eliminated to the extent of the Group's interest in the associate .. When the Group's share of losses in an associate equals or exceeds its interest in the associate, the Group discontinues recognising its share of further losses unless it has incurred legal or constructive obligations or made payments on b~ha[f of the associate. Upon the associate SUbsequently making profits, the Group will resume recognising its share of those profits once its share of the profits equals the share of the losses not recognised . ... 59--.--. "n •.nn·· •••• n_ Astra Resources PLC (eN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT) k. Interests in Joint Ventures The Group's shares of the assets, liabilities. revenue and expenses of jointly controlled operations have been included in the appropriate line items of the consolidated financial statements. The Group's interests in joint venture entities are brought to account using the equity method of accounting in the consolidated financial statements. Where the Group contributes assets to the joint venture or ifthe Group purchases assets from the joint venture, only the portion of the gain or loss that is not attributable to the Group's share of the joint venture shall be recognised. The Group, however, will recognise the full amount of any loss when the contribution results in a reduction in the net realisable value of current assets or an impairment loss. I. Intangibles Other than Goodwill Research and development Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised only when technical feasibility studies identify that the project will deliver future economic benefits and these benefits can be measured reliably. Development costs are amortised on a systematic basis matched to the future economic benefits over the useful life of the project. Acquired intangible assets Intangible assets that are acquired by the Group and have finite lives are measured at cost less amortisation and accumulated losses. Subsequent expenditure Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset which it relates. All other expenditure. including expenditure on internally' generated goodwill and brands, is recognised in profit and loss as incurred. Amortisation Intangible assets are amortised from the date that they are available for use, that is when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. Except for goodwill, intangible assets are amortiSi?d on a straight-line basis in profit or loss over their estimated useful lives. The estimated useful lives for the current and comparative years are as follows: patents and trademarks 3-20 years capitalised deveiopment costs. 2-5 years Amortisation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate. m. Foreign Currency Transactions and Balances Functional and presentation currency The functional currency of each Group entity is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in the parent entity's presentation currency which is Euros. The presentation currency differs from the functional currency of Astra Resources PLC which is Australian dollars due the Company's intention to undertake an IPO on a European Stock Exchange. 60 Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT) Transactions and balances Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the period-end exchange rate. Non• monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined. Exchange differences arising on the translation of monetary items are recognised in the statement of comprehensive income, except where deferred in equity as a qualifying cash flow or net investment hedge. Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the statement of comprehensive income. Group companies The financial results and position of foreign operations whose functional currency is different from the Group's presentation currency are translated as follows: - Assets and liabilities are translated at period-end exchange rates prevailing at that reporting date; - Income and expenses are translated at average exchange rates for the period; and - Retained earnings are translated at the exchange rates prevailing at the date of the transaction. Exchange differences arising on translation of foreign operations are transferred directly to the Group's foreign currency translation reserve in the statement of financial position. These differences are recognised in profit or loss in the period in which the operation is disposed .. n. Employee Benefits Provision is made for the company's liability for employee benefits anslng from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. In detennining the liability, consideration is given to employee wage increases and the probability that the employee may not satisfy vesting requirements. Those cash flows are discounted using market yields on national govemment bonds with terms to maturity that match the expected timing of cash flows. o. Provisions Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which IT is probable that an outflow of economic benefits will result and that outflow can be reliably measured. Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period .. p. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of financial position. q. Revenue and Other Income Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and volume rebates allowed. Any consideration deferred is treated as the provision of finance and is discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference between the amount initially recognised and the amount ultimately received is interest revenue . • Astra Resources PLC (eN: 0762(218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CaNT) NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CaNT) Sale of goods Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of significant risks and rewards of ownership of the goods and the cessation of all involvement in those goods. Interest Interest revenue is recognised using the effective interest rate method, which for floating rate financial assets is the rate inherent in the instrument. Dividend Dividend revenue is recognised when the right to receive a dividend has been established. Dividends received from associates and joint venture entities are accounted for in accordance with the equity method of accounting. Services Revenue recognition relating to the provision of services is determined with reference to the stage of completion of the transaction at the end of the reporting period and where outcome of the contract can be estimated reliably. Stage of completion is determined with reference to the services performed to date as a percentage of total anticipated services to be performed. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent that related expenditure is recoverable. All revenue is stated net of the amount of goods and services tax or value added tax or other similar taxes. Land development Revenue and costs of sales are brought to account when the significant risks and rewards of ownership and effective control over the goods have passed to the buyer. The significant risks and rewards are considered to be transferred to the buyer when the Group retains neither continuing managerial involvement to the degree usually associated with ownership or control. This is considered to be when the contract becomes unconditional or on settlement depending on the terms of the contract, and when it is probable that the economic benefits associated with the transaction will flow to the Group. r. Trade and Other Payables Trade and other payables represent the liabilities for goods and services received by the Group that remain unpaid at the end of the reporting period. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability. s. Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. t. Goods and Services Tax (GST) and Value Added Tax (VAT) Revenues, expenses and assets are recognised net of the amount of tax, except where the amount of tax incurred is not recoverable from the regulatory taxing body. Receivables and payables are stated inclusive of the amount of tax receivable or payable. The net amount of tax recoverable from, or payable to, the regulatory taxing body is included with other receivables or payables in the statement of financial position. ___ ~~ -~'2--gg 62 Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT) u. Critical Accounting Estimates and Judgments The directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group. Key estimates Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year are incl~ded in the following notes: note 31 measurement of share-based payments Key judgements Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following notes: note 31 Classification of asset acquisitions negotiated through issues of shares note 1 Going concern v. Segment reporting An operating segment is a component of the Group that engages in business activities whose operating results are reviewed regulariy by the Group's Board of Directors and for which discrete financial information is available. The Group has a single operating segment that its Board of Directors reviews regularly to make decisions about resources to be allocated to the segment and to assess its performance. As the Group has yet to start revenue generating operations, the Group has a single operating segment reporting expenditure on all projects. w. Share-based payment transactions Transactions with Employees The grant date fair value of share-based payment granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that do not meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes. Transactions with parties other than employees The Group The Group measures the fair value of goods or services, including intangibles, received as part of a share-based payment transaction with parties other than employees, and the corresponding increase in equity, directly, at the fair value of the goods or services received at the date the Company receives the goods or services, unless that fair value cannot be estimated reliably. If the entity cannot estimate reliably the fair value.of the goods or services received, the entity measures their value, and the corresponding increase in equity, indirectly, by reference to the fair value of the equity instruments granted. ---~-~-.------_._--_._----.------;S;'-9-~-~-63-~- Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT) The Company The Company issues certain shares to parties other than employees in exchange for the acquisition of certain intangible assets by its subsidiaries, and recognises a receivable from its subsidiaries in relation to these issues. Such transactions are reflected by the company on initial recognition at the fair value of the intangibles acquired at the date the subsidiary acquires the intangibles, unless that fair value cannot be estimated reliably. If the entity cannot estimate reliably the fair value of the intangibles, the entity measures the receivable from the subsidiary, and the corresponding increase in equity, indirectly, by reference to the fair value of the equity instruments granted. x. Exploration and evaluation expenditure Exploration for and evaluation of mineral resources is the search for mineral resources after the entity has obtained legal rights to explore in a specific area, as well as the determination of the technical feasibility and commercial viability of extracting the mineral resource. Accordingly, exploration and evaluation expenditures are those expenditures incurred by the Company in connection with the exploration for and evaluation of minerals resources before the technical feasibility and commercial viability of extracting a mineral resources are demonstrable. Accounting for exploration and evaluation expenditures is assessed separately for each 'area of interest'. An 'area of interest' is an individual geological area which is considered to constitute a favourable environment for the presence of a mineral deposit or has been proved to contain such a deposit. Expenditure incurred on activities that precede exploration and evaluation of mineral resources, including all expenditure incurred prior to securing legal rights to explore an area, is expensed as incurred. For each area of interest the expenditure is recognised as an exploration asset where the following conditions are satisfied. a) The rights to tenure of the area of interest are current; and b) At least one of the following conditions is also met: i. The expenditure is expected to be recouped through successful development and commercial exploitation of an area of interest, or alternatively by its sale; and Ii. Exploration and evaluation activities in the area of interest have not, at reporting date, reached a stage which permits a reasonable assessment of the existence or otherwise of 'economically recoverable reserves' and active and significant operations in, or in relation to, the area of interest continuing. Exploration and evaluation asses include: Acquisition of rights to explore Topographical, geological, geochemical and geophysical studies; Exploratory drilling, trenching, and sampling; and Activities in relation to evaluating the technical feasibility and commercial viability of extracting the mineral resources. General and administrative costs are allocated to, and included in, the cost of exploration and evaluation assets only to the extent that those costs can be related directly to the operational activities in the area if interest to which the exploration and evaluation assets relate. In all other instances, these costs are expensed as incurred. Exploration and evaluation assets are classified as tangible or intangible according to the nature of the assets. As the assets are not yet ready for use, they are not depreciated. Borrowing costs incurred in connection with the financing of exploration and evaluation activities are expensed as incurred. Exploration and evaluation assets are transferred to Tangible or Intangible assets (depending on their nature) once technical feasibility and commercial viability of an area of interest is demonstrable. Exploration recognised, prior to being reclassified. -----~ -- ~- - <;5--c'f)- # --64------Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT) Impairment testing of exploration and evaluation assets Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical feasibility and commercial viability or facts and circumstances suggest that the carrying amount exceeds the recoverable amount. Exploration and evaluation assets are tested for impairment when any of the following facts and circumstances exist: The term of exploration license in the specific area of interest has expired during the reporting period or will expire in the near future, and is not expected to be renewed; Substantive expenditure on further exploration for and evaluation of mineral resources in the specific area are not budgeted or planned; Exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the decision was made to discontinue such activities in the specified area; and Sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale. Where a potential impairment is indicated, as assessment is performed for each CGU which is no larger than the area of interest. The company performs impairment testing in accordance with accounting policy. y. New Accounting Standards for Application in Future Periods There are new Accounting Standards that have mandatory application dates for future reporting periods, some of which are relevant to the Company. The Company has decided not to early adopt any of the new and amended pronouncements .. NOTE 2: REVENUE Consolidated Consolidated Group Group 30 June 2013 30 June 2012 Note Euro Euro Revenue: -Other Revenue Astra Resources PLC (eN: 07620218) and Controlled Entities Financial Report for the Period Ended 011 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) NOTE 3: EMPLOYEE EXPENSES Consolidated Group Consolidated Group 30-Jun-13 30-Jun-12 Note Euro Euro Employee expenses Employee expenses 734,091 453,969 Director fees 306,645 734,091 760,614 The average number of persons employed by the group during the period was as follows: Employee numbers (average) 10 During the period, contributions to defined contributions schemed totalled €53,332 and an amount of€12,334 was outstanding as at 30 June 2013. NOTE 4: INCOME TAX EXPENSE Consolidated Consolidated Group Group 30-Jun·13 30-Jun-12 Note Euro Euro The components of tax expense comprise: Current tax Deferred tax - capital raising cost Deferred tax - accruals Recoupment of prior period tax losses Under-provision in respect of prior periods 16 The prima facie tax on profit from ordinary activities before income tax is reconciled to income tax as follows: Prima facie tax payable on profit from ordinary activities before income tax at 20% (2012: 20%): -Consolidated .Group Add: Tax effect of: -----~------_.------~)J-----713----66 ~~--~----~ . Astra Resources PLC (eN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 -under-provision for income tax in prior periods -other non-deductible items -deferred taxes for capital raising costs -deferred taxes for accruals -tax losses not recognized Income tax attributable to the Group Franking account balance NOTE 5: KEY MANAGEMENT PERSONNEL COMPENSATION Consolidated Consolidated Group Group 30-Jun-13 30-Jun-12 Note Euro Euro Key Management Personnel (KMP) include: Jaydeep Biswas (CEO) Silvana De Cianni (Managing Director) Barrie Meerkin (Legal Advisor) Daniel Yea (Finance Director) The total of remuneration paid to KMP of the Group during the period are as follows: Short-term employee benefits 306,645 Post-employment benefits Termination benefits Other long term benefits 306,645 All key management personnel remuneration is approved by the Board. other KMP transactions For details of other transactions with KMP, refer to Note 25: Related Party Transactions. --- ..------~-~----.--~~--~-~-~~---.----~--- ~------~------~-~------<;J-.")l---tJv--/=A112-----67--~----- Astra Resources PLC (CN: 07620218) a'nd Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) NOTE 6: AUDITORS' REMUNERATION Consolidated Consolidated Group Group 30-Jun-13 30-Jun-12 Note Euro Euro Remuneration of the auditor of the parent entity for: -auditing or reviewing the financial statements 100,000 Remuneration of the former auditor of the parent entity for: -auditing or reviewing the financial statements preliminary works 465,965 Remuneration of a related practice of the auditor of the parent entity for: -Non-audit services • Taxation services Remuneration of other auditors of subsidiaries for: -auditing or reviewing the financial statements 565,965 NOTE 7: DIVIDENDS Consolidated Consolidated Parent Parent Group Group Entity Entity 30-Jun-13 30-Jun-12 30-Jun-13 30-Jun-12 Note Euro Euro Euro Euro Dividends paid No dividends were paid during or subsequent to the 30 June 2013 period end. Astra Resources PLC (CN: 01(20218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THEParent27,463Euro30-Jun-12EntityEuroFINANCIAL31,72330-Jun-13EuroEntity1,32D,8841,320,8841,320,480ParentGroupEuroConsolidated40430-Jun-12STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) 270,805270,454351 Reconciliation of cash 30-Jun-13Group cashNOTEperiodthefollows:Cashstatementflowsat8;astheCASHshownisendreconciledof ANDoffinancialin thetheCASHfinancialstatementtopositionitemsEQUIVALENTSinofas Cash at bank Note Cash aton bankhand and on hand Consolidated CURRENT 270,805 NOTE 9: TRADE AND OTHER RECEIVABLE Consolidated Consolidated Parent Parent Group Group Entity Entity 30-Jun-13 30-Jun-12 30-Jun-13 30-Jun-12 Note Euro Euro Euro Euro CURRENT Accounts receivable 17,573 7,858 Other receivables 126,586 61,847 GSTNAT receivables 349,276 282,873 Impairment of receivables (141,406) 493,435 211,172 NON-CURRENT Loans to related parties - unsecured 138,722 355,653 Impairment of receivables (213,271) 138,722 142,382 Total 632,157 353,554 A provision for impairment is recognised when there is objective evidence that a receivable is impaired. An Impairment of receivables of€O has been noted at 30 June 2013 (2012: €354,677). ------~--_._-_._------~~-.~.~ ..._------~------g.,) __69 Astra Resources PLC (CN: (7620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) NOTE 10: OTHER ASSETS . Consolidated Consolidated Parent Parent Group Group Entity Entity 30-Jun-13 30-Jun-12 30-Jun-13 30-Jun·12 Note Euro Euro Euro Euro Country of CURRENT 12,22145%**100%75%76%30-Jun-121,21812,221OwnedPercentage45%**100%75%76% 282,76320,375306,393(%)*25,015614,171589,1564,640 Australia 1,407,529266,588217,047822,43635,90965,549 NON-CURRENTSubsidiaries of Astra Resources Incorporation PLC: OtherAstraO'ShanesyAstraAstraassetsMiningProjectResourcesVietnamNigeriaGoldOreCapricorilSteelworksCoalSteelptyPtyPlaceptyMillsServicesFinancePtyUdPlyUdUdInvestments(Australia)UdptyPtyptyUdUdPty UdptyPlyTotalHidrofotonUdGifloUd Steel NamDeposit/project30-Jun-13Hai acquisition Note 282,596 1,124,933ControlledPrepaymentsEntities Consolidated NOTE 11: CONTROLLED ENTITIES Astra Mining pty Ud 70 Astra Resources PLC (eN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 Village on Johnson49%*·75%55%56%51%57%75%76%100%68%90%30%66%76%75%89%0%66%68%38%"*100%90%57%75%80%56%76%57%75%30%50%75%0%pty Ud CambodiaAustraliaAustr<;lliaAustraliaUSAIndia AmericasAstraUd ChilePtyptyUd)Ud) HongPhilippinesSingaporeAustraliaHungaryNigeriaKong •AstraMuyiwaPercentageAstraBarjalexGreenGifloHenleyCagayanCarbonyNanosteelOuyanBareeAstraAstraOreCoalEnterprisesTullimbarAgriculturalMineralsGoldCoalOreSpainJanayanHungaryRatanaFarEnergyScandinaviaCambodiaGroupIPInnovationsMiningConsolidatedlnterecotechDevelopmentsGumDevelopmentsPteInvestmentNigeriaptyPtyUdRiverEastIndiaTechnologiesPtyNigeriaIndiaUdofLtdTechnologiesptyUdInvestmentsUdTechnologyHungary(Cambodia)votingUd(India)PtyPteInvestmentsAstraPtypvtUdPvtPtyUdResourcesptyptyUdGroupUdLtdptyNomineesUdpowerPhilippinesptyUdPvtPty(formerlyUdKftLtdptyPtyUdPtyLLCLtdUdKftinptyUdPtyLtdUdproporlionPtyUdUdInc to ownership Astra PhilippinesAfricaInternationalpty UdPtyTrading(formerlyUd ptyAstraUd Green Diesel Ud •• These entities are regarded as being controlled irrespective of voting power being less than 50% because of the Groups control over the Board and shareholders of these entities. Astra Resources PLC (eN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) NOTE 12: INVENTORIES - DEVELOPMENT LAND STOCK Consolidated Consolidated Parent Parent Group Group Entity Entity 30-Jun-13 30-Jun-12 30·Jun-13 30-Jun-12 Note Euro Euro Euro Euro NON-CURRENT Vacant Land - O'Shanesy Place* 397,977 457,431 Vacant Land - Lot 2, Johnson Road· 333,896 383,777 Vacant Land - Lots 1,2,3 at 14 Riflerange Road* 277,661 319,140 1,009,533 1,160,348 *The development land is held at lower of cost and net realisable value, based on independent real estate appraisals A nominee of the vendor became a shareholder of various subsidiary companies in order to effect a joint venture agreemenUo develop the land. Shares in Astra Mining Limited in May 2011 were issued in consideration for. land acquired at Johnson Rd and Riflerange Rd. ' Mortoaoe A mortgage is held over property; Lot 2 Johnson Road relating to a loan with a private lender. See note 18. NOTE 13: PROPERTY, PLANT AND EQUIPMENT Euro30-Jun-12EuroEntityParentEuro30-Jun-13Entity630,069572.322(57,747)EuroGroupConsolidated30-Jun-12Parent Consolidated 927,484 Group EQUIPMENT (76,671) Accumulated depreciationNote 30-Jun-13 Property, Plant & Equipment - at cost 850,814 PROPERTY, PLANT AND 72 • Astra Resources PLC (eN: 0762(218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 Plant230,591282,883580,298225,136503,628and282,88318,924 - NOTESEuro630,0691,99452,29276,671927,484850,81457,7474,07951,674572,322577,777630,069297,41518,924TOEuroTHE FINANCIAL STATEMENTS FOR THE PERIOD297,41576,67157,74751,67452,2924,0791,994ENDED ON 30 JUNE 2013 (CONT) - Equipment ForeignTotalexchange 347,186- 347,186347,186 ., Movements in carrying amountsBalance at 1 July 2012 Euro NOTECostConsolidated13: PROPERTY,Group PLANT AND EQUIPMENT(CONT) BalanceAdditionsatAdditions30 Juneat 302013June 2012 Balanceat 30 Juneat 2012303 MayJune20112012(Incorp) DepreciationDepreciationForeignDisposalsBalanceexchangeatexpense1expenseJuly 2012 Carrying amounts BalanceForeign exchangeat 30acquisitionJune 2013of Astra Mining Ud Depreciation and impainnent losses Property As at 30 June 2013 (30 June 2012: nil) ,the parent entity had no property, plant or equipment. ~3 Astra Resources PLC (CN: 0762(218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CaNT) NOTE 14: INVESTMENT Euro30-Jun-13EuroEntityParent30-Jun-12EuroEntity30-Jun-1230-Jun-12EuroGroupConsolidatedParentParentEntity Consolidated 1,663,149 1,663,149 1,663,149 Group (1,663,149) NoteBalanceBalance30-Jun-13atatacquisitionyear end of Astra Mining LtdEuro30-Jun-13 AtIncrease/decreasethe beginning of intheinvestmentreporting period Jmpairment1,663,149 Investment in Astra Mining Pty Ltd Parent Entity 14,510,541 NOTE 15: INTANGIBLESEuroEuro30-Jun-1230·Jun·13EntityParentEuroEntity30-Jun-12GroupConsolidatedEuroParent 14,563,261- Note Group30-Jun-13 Amortisation 14,563,261 Intangibles Consolidated 74 Astra Resources PLC (CN: 07(20218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) 14,510,54152,7203,534,78214,563,261411,8093,635,7766,928,174 Intellectual NOTEEuro15: INTANGIBLES(CONT)Balance at 1 July 2012 Property Total 6,928,1743,534,7823,635,776411,80914,563,26114,510,54152;720 CostImpairmentEuro loss AsAdditionsMovementsat 30 June 2013,in carryingthe parentamountsentity had no intangible-~' assets. AmortisationBalanceConsolidatedT-SteelInterecotech*at 303acquisitionforMayJuneGroupthe20112012periodof(Incorp)(Incorp)Astra Mining LId DisposalsBalanceAdditionsAmortisationBalanceat 30JuneGreenDevelopmentat 30atDiese]*2013June1 Julyandexpenditure20122012impairment losses BalanceDepreciationCarryingatForeign30 Juneexchangeatamounts201230acquisitionexpenseJune 2013of Astra Mining LId Consolidated Group 75 Astra Resources PLC (eN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) NOTE 16: CURRENT AND DEFERRED TAXES Consolidated Consolidated Parent Parent Group Group Entity Entity 30-Jun-13 30-Jun-12 30-Jun-13 30-Jun.12 Note Euro Euro Euro Euro CURRENT Current tax liabilities Charged Charged Changes Opening to in Tax Exchange Closing Balance Directly Differences Balance Income to Equity Rate $ $ $ $ $ $ Consolidated Group Deferred tax assets Balance at 3 May 2011 (Incorp) Other Balance at 30 June 2012 Balance at 1 July 2012 Other Balance at 30 June 2013 Deferred tax liabilities Balance at 3 May 2011 (Incorp) Other Balance at 30 June 2012 Balance at 1 July 2012 Other Balance at 30 June 2013 Astra Resources PLC (eN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CaNT) NOTE 16; CURRENT AND DEFERRED TAXES(CONT) Parent Entity Deferred tax assets Balance at 3 May 2011 (Incorp) Other Balance at 30 June 2012 Balance at 1 July 2012 Other Balance at 30 June 2013 Deferred tax liabilities Balance at 3 May 2011 (Incorp) Other Balance at 30 June 2012 Balance at 1 July 2012 Other Balance at 30 June 2013 NOTE 17: TRADE AND OTHER PAYABLES Consolidated Group Consolidated Group Parent Entity Parent Entity 30-Jun-13 30-Jun-12 30-Jun-13 30-Jun-12 Note Euro Euro Euro Euro CURRENT Trade payables 553,423 930,758 9.291 Other payables & accruals 551,248 584,550 322,105 628,824 1,104,671 1,515,308 322,105 638,115 NON-CURRENT Loans from related parties - unsecured* 5,082,334 3,773,455 5,082,334 3,773,455 Total 6,187,005 5,288,763 322,105 638~ Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) 'The related party loans are repayable at call or on demand, however the Directors have confinned that the loans will not be called upon within the next 12 months. NOTE 18: BORROWINGS Consolidated Group Consolidated Group Parent Entity Parent Entity 30..Jun-13 30..Jun-12 30..Jun-13 30..Jun-12 Note Euro Euro Euro Euro CURRENT Loans from private lender' 175,735 464,571 Loans from convertible note - unsecured** 1,147,290 175,735 1,611,861 'The private lender loan has a mortgage over the property and involves the use of Astra Inventory; Lot 2 Johnson Rd. See note 12. "Convertible Notes at 30 June 2013 have an interest rate per annum between 1a to 12 percent. All convertible notes are repayable within 12 months. NOTE 19: PROVISIONS Consolidated Group Consolidated Group Parent Entity Parent Entity 30..Jun-13 30..Jun-12 30..Jun-13 30..Jun-12 Note Euro Euro Euro Euro Annual leave 56,890 34,869 56,890 34,869 Annualleave Total provision Euro Euro Consolidated Group Balance at 3 May 2011 (Incorp) Provision at roHup 12,625 12,625 Additional provisions raised during the period 26,781 26,781 Amounts used 4,537 4,537 78 ---~--. Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 18,625,483 12,695,612 period - Balance31,321,096at 30EuroEntityParent30-Jun-12Euro36,865,73531,321,09630-Jun·12June6,352,58930-Jun-13EuroEntity201218,625,483EuroGroup30-Jun-12Consolidated30·Jun·1230-Jun-12EuroParent34,86931,321,09640,317(12,281)(6,015)56,8901 1 (807,950) - 36,865,73536,865,73531,321,0966,352,589(807,950)(12,281)(6,015)34,86956,89056,890 12,695,612 Additional provisionsSharesraisedissued/(canceiled)30-Jun-13.30-Jun-1330-Jun-13duringGroupGroupEurothe during period 40,317 Shares transferredAtAnalysisRetainedthe beginningoffromearningstotalPaidtheofprovisionstherollinreportingcapitalup Non-currentBalance-ForeignsaleperiodofatatexchangeACNstock130JulyJuneNote20122013 Euro 56,890AmountsCurrent used At the end of the reportingNOTEAsperiodat 3020:JuneISSUED2013CAPITAL(30 JuneConsolidated2012: nil), the parent entity had no provisions. TotalLess: ACN stock ConsolidatedConsolidated Issued capital at period end [)IL-/~- 79 Astra Resources PLC (CN: 07620218) and Contwlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) NOTE 20: ISSUED CAPITAL(CONT) 30-Jun-13 30-Jun-12 No. No. Ordinary Shares - Ultimate Holding Entity At the beginning of the reporting period 1,153,203,966 2 Shares transferred from the roll up 941,088,466 Shares issued/(cancelled) during period (5,140,931) .212,115,498 At the end of the reporting period 1,148,063,035 1,153.203,966 "Note that the total authorised capital of the group is 5,000,000,000 shares. Ordinary shares participate in dividends and are distributed in proportion to the number of shares held. At the shareholders' meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands. Note that there are shares in the parent company held by a subsidiary entity - Astra Consolidated Nominees Options On the 28 June 2012, 180,000,000 options were exercised. No options were exercised in the 30 June 2013 period or subsequent to period end. Roll up of Astra Mining Limited The pre-existing operations of Astra Mining Limited were rolled up into Astra Resources PLC through a 1 for 1 exchange of shares effective 8 September 2011. The roll up of the existing assets and liabilities of Astra Mining Ltd at that date was undertaken at their carrying book value on the basis that Astra Resources PLC was created as a shell company for the purposes of restructuring the group and the future IPO. Capital Management Management controls the capital of the Group in order to ensure that the Group can fund its operations and continue as a going concern, to maintain an adequate debt to equity ratio, and provide shareholders with a capital base to generate returns once the Group commences its operations. The Group's debt and capital includes ordinary share capital and financial liabilities, supported by financial assets. There are no externally imposed capital requirements. Management effectively manages the Group's capital by assessing the Group's financial risks and adjusting its capital structure in response to changes in these risks and in the market. This complies with Astra's the overall Risk Management Framework that Astra has implemented. ------~ .J) f!fi 80 Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) NOTE 20: ISSUED CAPITAL(CONT) The gearing36,865,735ratios0.0136,865,735Euro30..Jun-12Euro290,382322,1050.02638,11531,321,096(27,463)610,652Entity(31,723)ParentEntity30..Jun-13forEuroParent(1,320,884)1,611,861Group30-Jun-12ConsolidatedEurothe31,321,0965,288.7635,579,7400.18period ended_ 30 June18178 2013 and 30 June 2012 are as follows: (270,805)6,187,005175,735 20 6,091,9350.17 30..Jun-13Group NetIssuedLessGearingdebtcashcapitalandratiocash(netequivalentsdebt/total equity)Trade and otherNotepayables Total borrowings Consolidated NOTE 21: RESERVES(2,607,005)Euro(5,193,254)30-Jun-13(122,166)(2,464,083)EntityParentEuro(1,590,690)30-Jun-12EuroEntityConsolidatedEuroGroupParent(1,590,690)(7,029,778)(122,166)30..Jun-12(8,344.799)397,835 (2,464,083)(7,029,778)4,717,314 Group30..Jun-13 (122,166) Step-up Other Foreign currencyNote translation reserve (4,898,713) Consolidated Fundraising share issue expenses Foreign currency translation reserve The foreign currency translation reserve comprises all foreign currency differences ariSing from the translation of the financial statements of the Group into the presentation currency. Reserve for own shares The reserve for the Company's own shares comparises the cost of the Company's shares held by the Group 81 Astra Resources PlC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) NOTE 22: CAPITAL AND LEASING COMMITMENTS 30-Jun·13 30-Jun-12 Note Euro Euro Operating Lease Commitments Non-cancellable operating leases contracted for but not recognised in the financial statements Payable - minimum lease payments: Not later than 12 months 42,284 40,222 Between 12 months and five years 47,600 97,122 Greater than five years 89,884 137,344 The operating lease commitment consists of three leases including a property lease, vehicle lease and office photocopier lease. The property lease is a non-cancellable lease with a five-year term, with rent payable monthly in advance. The lease will expire on 16 December 2014. The vehicle lease contact is paid on a monthly basis with a contract end date on the 10 April 2015. The office photocopier lease is paid on a monthly basis with a contact end date of 2 April 2014. Capital Commitments The Group has entered into the following contractual agreements: 30-Jun-13 30-Jun-12 Note Euro Euro Payable - minimum capital payments: Not later than 12 months 891,745 599,625 Between 12 months and five years 915,615 Greater than five years 891,745 1,515,240 • Sale and Purchase Agreement between Nguyen Thanh Son (vendor) and Astra Ratana Cambodia Co Ud (purchaser) signed 29th August 2012 for the purchase of 100% share holding of company Nam Hai Mineral Joint Stock Company Ltd. As 30 June 2012 a total of US$ 350,000 had been paid based on a prior superseded agreement that was rolled into the new agreement. o For a total of US$ 1,870,000, the capital commitments at 30 June 2012 include: Second payment: US$200,000 to be paid by 31 August 2012 Third payment: US$300,000 to be paid by 30 September 2012 Fourth payment: US$1 ,020,000 90 days after the Third payment. -M'<--71'L/ 82 Astra Resources PLC (CN: (7620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) NOTE 22: CAPITAL AND LEASING COMMITMENTS(CONT) o During the perioed ended on 30 June 2013, US$750,000 has been paid towards this project. o A total of US$ 1,100,000 has been paid this project to date. The capital commitments at 30 June 2013 include: A total of US$770,000 is remaining to be paid on this project. . Joint Venture Agreement between Interecotech Pty LId and Astra Energy Technologies Ply Ltd signed on the 24th February 2012 for the acquisition of clean coal technology. _ The capital commitments at 30 June 2013 include: Final payment: €300,000 NOTE 23: CONTINGENT LIABILITIES Contingent liabilities No contingent liabilities have been noted. NOTE 24: EVENTS AFTER THE REPORTING PERIOD Astra Resources PLC Group entities Subsequent to 30 June 2013 no new entities were incorporated/acquired that formed part of the Group. Subsequent to 30 June 2013 the following entities were de-registered/sold and no longer form part of the Group. These entities include: • Astra Janayen Investments Ply LId (Australian entity) New Arrangements and Agreements Subsequent to 30 June 2013, Astra Resources PLC has entered into a funding agreement with CRFG Sino Construction Investment LId (& China Railway Financial Group LId), related parties to China Railway Goup. The party is likely to become a major Shareholder prior to the intended IPO. Termination of Arrangements and Agreements There has been no termination of arrangements or agreements. Capital Raising Subsequent to 30 June 2013, €2,906, 100 has been raised through sale of ACN stock up to 9 December 2013 (2013: €6,352,589). Funds received through Directors Loans Subsequent to 30 June 2013, €140,135 has been obtained through director loans (2013: €1,982,755). NOTE 25: RELATED PARTY TRANSACTIONS Related Parties The Group's main related parties are as follows: a. Entities exercising control over the Group There are no entities exercising control over the group -- fS'7 ~-83 Astra Resources PLC (eN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) NOTE 25: RELATED PARTY TRANSACTIONS(CONT) b. Key management personnel Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity, is considered key management personnel. For details of disclosures relating to key management personnel, refer to note 5: key management personnel compensation. c. Entities subject to significant influence by the Group An entity which has the power to participate in the financial and operating policy decisions of an entity, but does not have control over those policies, is an entity which holds significant influence. Significant influence may be gained by share ownership, statute or agreement. d. Other related parties Other related parties include immediate family members of key management personnel and entities that are controlled or significantly influenced by those key management personnel, individually or collectively with their immediate family members. e. Transactions with related parties Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. Key management personnel and related party transactions Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity, is considered key management personnel. Related parties also include close family members of key management personnel and entities that· are controlled or significantly influenced by those key management personnel, individually or collectively with their immediate familY members A number of key management personnel, or their close family members hold positions in other entities that result in them having control or joint control over the financial or operating policies of these entities. A number of these entities transacted with the Group in the reporting period. Except where stated, the terms and conditions of the transactions with key management personnel and their related parties were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-key management personnel related entities on an arm's length basis. Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CaNT) NOTE 25: RELATED PARTY TRANSACTlONS(CONT) - 8,88759,278434,890260,881transactions for Funds for 1,613,95730EuroTotaltransactionsthe Juneperiodof 2012endedfor InitialDescriptionLoanInitialOperationsGroup105,034repaymentInvestmentrestructure808 290 operations The aggregate value1,982,465. 484,701of10,3601,596transactions- and outstanding807,948806,009 balances relating to key management personnel and entities operations operations 30 June 2013 " De Cianni Family Trust Astra Industries Unit Trust the period ended over which they have control or joint control were as follows: PaymentsRelated Silvanapartyto: De Cianni Asansol Trust 1,982,755TestarossaSDJB(JaydeepBarrie UnitMeerkinBiswasTrustMinex - Director) BengalMingela(SilvanaReceipts(SilvanaCommoditiesDefrom:CianniGianni -PL- Director) Richard Walker Euro Jaydeep Biswas 496,657 Total of Note: Mr Barry Meerkin resigned as a director of Astra Resources PLC on 16 April 2013. Mr Meerkin is associated with the firm MSL Lawyers who provided legal services to the Astra Group of companies totaling €452,787, during the year ended 30 June 2013 (period ended 30 June 2012: €408,401). -/UZ--[}IIJ 85 Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CaNT) NOTE 25: RELATED PARTY TRANSACTIONS(CONT) The following balances were outstanding at period end: Balance Balance outstanding at outstanding at 30 June 2013 30 June 2012 Related party Euro Euro Receivables'" Barrie Meerkin Richard Walker 1,071,2448,88768,16759,2783,585,205807,948806,009899,196808 Testarossa Minex 9,124 98,584114,518 702 Bengal Commodities PL 702,937494,001 5,022,2291,982,46562,21571,341700,980 928,042 Payables* Astra Industries Unit Trust Astra Industries Ply Ud SDJB Unit Trust SDJB Pty Ud Jaydeep Biswas Silvana De Cianni Asansol Trust Mingela The amounts receivable from and payable to key management personnel, their close family members and entities are controlled or jointly controlled by them and are repayable on demand. The amounts may accrue interest at the lender's discretion. No interest was charged during the period. There were no commitments or guarantees given to or received from the Group from key management personnel,their related parties, and entities are controlled or joint controlled enitites. No expense was recognised during the period in respect of bad and doubtful debts due from the above related parties. The balance of receivables from receivables is net of a provison for doubtful debts of €O. Astra Resources PLC (eN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CaNT) NOTE 25: RELATED PARTY TRANSACTIONS(CONT} Other related party transactions Other related parties include entities that have significant influence over the entity, associates and joint ventures. The aggregate value of transactions and outstanding balances relating to other related parties were as follows: 303,35126,680transactions24 for the 75,105transactionsperiodTotalJuneEuro of2012ended for30 the OperationsGroupDescriptionInitialInitialInitia/lnvestmentInitial InvestmentInvestmentInvestmentrestructurerestructure213,27346,80126,22848,1956,0669,368485.24418359740452 Total of --- - 5.6915,2651,27818 Operations YunusaSundaySheiduNancyRockyInterecotechYoungAguialdoAlfaOruma periodJune 2013ended 30 PaymentRelated toparty Euro 5,265Chaela ArnoldAjayChaelaRonAlinAkoneTOJanayanKapoorAssociatesHanoiFlorianInvestcraftAngelKuklerReceiptRamilBernabeGoldBJoselitoRealYoungfromEstateTamayo Ademola6,987 Kukoyi £------t)!L..-/ 87 Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) NOTE 25: RELATED PARTY TRANSACTIONS(CONT) The following balances were outstanding at period end: Balance outstanding Balance outstanding at 30 June 2013 at 30 June 2012 Receivables* Capricorn Property Developments 35 Chaela 6,060 BPS 2,325 2,666 Stirling 8 10 Janayan Real Estate 35 40 Interecotech 39 24 Alin Akone 235 244 Yunusa Oruma 177 183 Sheidu Alfa 177 183 Sunday 488 485 Rocky Young 2 213,271 Rami! Joselito Tamayo 44,402 46,861 Florian B Young 8,877 9,368 Nancy Aguialdo 2 2 Arnold Bernabe 2 2 Investcraft 1,278 Henrik Giflo 10 58,092 279,400 Payables* TO Angel 26,228 Ron Kukler 597 25,248 J. Smith 10,184 Associate 952 987 Ajay Kapoor 17,293 25,296 53,677 53,108 All outstanding balances with other related parties are priced on an arm's length basis and are to be settled in cash within 18 months of the reporting date. None of the balances are secured. There were no commitments or guarantees given to or received from other related parties. An expense of ~O (2012: €213.271) was recognised during the period in respect of bad and doubtful debts due from the above related parties. Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) NOTE 26: FINANCIAL RISK MANAGEMENT The Group's financial instruments consist mainly of deposits with banks, accounts receivable and payable and loans to and from subsidiaries and related party balances. Consolidated638,11527,46317,228,92317,257,6041,611,8611,320,8842,288,609353,5546,900,6245,288,763 The totals for each30-Jun-12EntityEuroParent1,21812,22130-Jun-13EuroEntityConsolidated30-Jun-12GroupEurocategoryParent614,171 of financial1817instruments,1089 measured in accordance with IAS 39 as detailed in the 6,187,0051,407,529632,157270,80512,636,574175,735322,10531,723 2,310,4906,362,740 12,592,629 Group TotalFinancialfinancialassetsassets 30-Jun-13Euro Financialaccountingliabilitiespoliciesattoamortisedthese financialcost: statements, are as follows: FinancialOther assetsliabilities LoansTotalwithfinancialsubsidiariesliabilitIes CashTradeand cashand otherequivalentspayables TradeBorrowingsand other receivables Note FINANCIAL RISK MANAGEMENT POLICIES The directors' overall risk management strategy seeks to assist the company in meeting its financial targets, while minimising potential adverse effects on financial performance. Risk management policies are approved and reviewed by the Board of Directors on a regular basis The main purpose of non-derivative financial instruments is to raise finance for company operations. The finance committee, consisting of senior management of the Group, meets on a regular basis to analyse financial risk exposure and to evaluate treasury management strategies in the context of the most recent economic conditions and forecasts. The finance committee's overall risk management strategy seeks to assist the Consolidated Group in meeting its financial targets, while minimising potential adverse effects on financial performance. The finance committee operates under policies approved by the Board of Directors. Specific Financial Risk Exposures and Management The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk relating to interest. a. Credit risk Exposure to creait risk relating to financial assets arises from the potential non-performance by counterparties of contract obligations that could lead to a financial loss to the Group. 89 Astra Resources PLC (CN: 07(20218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) NOTE 26: FINANCIAL RISK MANAGEMENT(CONT) Credit risk is managed through maintaining procedures ensuring, to the extent possible, that customers and counterparties to transactions are of sound credit worthiness and includes the utilisation of systems for the approval, granting and renewal of credit limits, the regular monitoring of exposures against such limits and the monitoring of the financial stability of significant customers and counterparties. RiSk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating or in entities that the finance committee has otherwise cleared as being financially sound. Credit risk exposures The maximum exposure to credit risk by class of recognised financial assets at the end of the reporting period, excluding the value of any collateral or other security held, is equiv!:!lent to the carrying value and classification of those financial assets (net of any provisions) as presented in the statement of financial position. The Group has no significant concentrations of credit risk with any single counterparty or Group of counterparties. Trade and other receivables that are neither past due nor impaired are considered to be of high credit quality. Credit risk related to balances with banks and other financial institutions is managed by the finance committee in accordance with approved. Consolidated27,4631,320,884 ParentEuroEntity30-Jun-12Euro30-Jun-13EntityConsolidatedGroup30-Jun-12EuroParent 1,320,88427,46331,723 270,805 institution 31.723 Note8 30-Jun-13Group Cash and cash equivalents: Euro Funds held with an approved deposit 270,805 b. Liquidity risk Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group manages this risk through the following mechanisms: - Preparing forward-looking cash flow analyses; - Monitoring undrawn credit facilities; - Obtaining funding from a variety of sources; and - Maintaining a reputable credit profile. The table below reflects an undiscounted contractual maturity analysis for financial liabilities. Bank overdrafts have been deducted in the analysis as management does not consider that there is any material risk that the bank will terminate such facilities. Cash flows realised from financial assets reflect management's expectation as to the timing of realisation. Actual timing may therefore differ from that disclosed. The timing of cash flows presented in the table to settle financial liabilities refiect the earliest contractual settlement dates and do not reflect management's expectations that banking facilitie~ will be rolled forward. ijb--90 Astra Resources PLC (eN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) NOTE 26: FINANCIAL RISK MANAGEMENT(CONT) " - - 5,082,3341,611,8616,187,0051,699,4531,515,30825,015 - 2,310,4901,407,5283,773,455 2012€ 20131,124,933€20131,611,8611,320,884€5,082,3343,773,45520121,263,654138,722(3,818,680)€20136,900,624353,5543,773,455(4,612,015)2,288,6091,515,3082012€ 614,171FinancialOver1,320,884-353,554liability5Total171018Years1 to-6,362,7405andYears1,280,406(233,570)493,435270,805financialWIthin(3,184,299)-632,157(4,052,250)5,082,3341assetYear maturity analysis270,805175,735 receivablesequivalentsoutflowsrelatedfinancialpartiesinstruments 1,104,671282,596175,735589,156 1789 1,046,836 (1,427,7163,127,169 ) Annual & sick leave) Trade,Financialtermassetsand loan-Totalcashcontractual flowsTradeforCashpayablespaymentandrealisableand(excludingcashother est. FinancialAmountsNet (outflow)finflowliabilitiespayable dueto on Other Noteassets€ Borrowings Total anticipated inflows Consolidated Group 85-91 Astra Resources PlC (eN: 0762(218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 322,105- - - 322,105-12,22131,72312,314,46927,463638,115- - OverS12,592,629 - - - - 12,592,6292012€ €2013Within(609,434)€201228,68112,592,630€1,218201317,228,923€16,619,482012NOTES-1 YearTONoteTHE1 to 5FINANCIALYears18171089 - STATEMENTS43,944- FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) instruments Years - 12,636,574·322,10531,72312,221638,1117.228,9227,461,2117,257,60Total - 17 322,105 - leave) Net (outflow)/inflow on financial parties realisable 12,592,630 (278,161) Financial liabilities due for LoanTotal withanticipatedsubsidiariesTrade,inflowsterm and loan receivables2013 Tradepayment(excludingand otherest. Annualpayables& sick Other assets € Borrowings Amounts payable to related CashTotal contractualand cash equivalentsoutflows Financial assets - cash flows NOTE 26: FINANCIAL RISK MANAGEMENT(CONT) Parent Entity Financial assets pledged as collateral Certain financial assets have been pledged as security for debt and their realisation into cash may be restricted subject to terms and conditions attached to the relevant debt contracts. c. Market risk i. Interest rate risk Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting period whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments. The Group has exposure to earnings volatility on floating rate instruments in the form of bank accounts and related party loans. ii. Price risk Price risk relates to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices of securities held. Such risk is managed through diversification of investments across industries and geographic locations . • Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CaNT) NOTE 26: FINANCIAL RISK MANAGEMENT(CONT) Interest rate risk The Group's income statement is affected by changes in interest rates due to the impact of such changes on interest income and expenses from cash and cash equivalents. With the exception of cash and cash equivalents, all the Group's financial assets and liabilities are non• interest bearing. At reporting date, the Group's cash and cash_ equivalents and certain security deposits exposed to variable interest rate risk that are not designated as cash flow hedges were: Financial assets pledged as collateral Certain financial assets have been pledged as security for debt and their realisation into cash may be restricted subject to terms and conditions attached to the relevant debt contracts Consolidated Group Consolidated Group 30-Jun-13 30-Jun-12 Euro Euro Financial Assets Cash and cash equivalents 8 270,805 1,350,0001,320,884 270,805175,735 175,735 Financial Uabilities Loan Payable Sensitivity analysis A change of 100 basis points in interest rates at the current and prior reporting date would have increased/(decreased) equity and loss for the period by an immaterial amount. d. Foreign exchange risk Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial instrument fluctuating due to movement in foreign exchange rates of currencies in which the Group holds financial instruments that are other than in the AUD functional currency oftha Group. With instruments being held by overseas operations, fluctuations in the US dollar, HK dollar, Singapore dollar and Indian rupee may impact on the Group's financial results unless those exposures are appropriately hedged. The Group's exposure to foreign currency risk at reporting date was as follows, based on nollonal amounts: 1,320,88430-Jun-12EuroConsolidated 8 Consolidated 270,805 270,805 Financial assets 30-Jun-13Euro Gross financial position exposure Cash and cash equivalents ---- - ~---~q.,)~-;3 Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CO NT) NOTE 26: FINANCIAL RISK MANAGEMENT(CONT) Sensitivity analysis A 10% strengthening of the Australian dollar against the Euro at 30 June 2013 would have decreased net assets of the Group by €1,933,289. A 10% weakening of the Australian dollar against the Euro at 30 June 2013 would have had the equal but opposite effect to the Group's net assets, on the basis that all other variables remain constant. Net Fair Values Fair value estimation The fair values of financial assets and financial liabilities are presented in the following table and can be compared to their carrying values as presented in the statement of financial position. Fair values are those amounts at which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction. Fair values derived may be based on information that is estimated or subject to judgment, where changes in assumptions may have a material impact on the amounts estimated. Areas of judgment and the assumptions have been detailed below. Where possible, valuation information used to calculate fair value is extracted from the market, with more reliable information available from markets that are actively traded. In this regard, fair values for listed securities are obtained from quoted market bid prices. Where securities are unlisted and no market quotes are available, fair value is obtained using discounted cash flow analysis and other valuation techniques commonly used by market participants. Differences between fair values and carrying values of financial instruments with fixed interest rates are due to the change in discount rates being applied by the market since their initial recognition by the Group. Most of these instruments, which are carried at amortised cost (ie trade receivables, loan liabilities), are to be held until maturity and therefore the net fair value figures calculated bear little relevance to the Group. 94 Astra Resources PlC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CaNT) NOTE 26: FINANCIAL RISK MANAGEMENT(CONT) CarryingCarryingNetNet CarryingNet 1,611,8611,320,884€27,4631,218638,115€5,288,763614,1712,288,6096,900,6241,320,884353,554175,7356,362,740270,8051,611,861632,1576,187,0051,407,5292,310,491€322,10531,723€12,22127,463638,11517,257,617,228,9614,17112,2211,218322,10531,723 181030-Jun-12ConsolidatedValueValue30-Jun-13Parent12,636,57430-Jun-1217,228,92317,257,604Value6,362,7406,187,0052,310,491Consolidated632,157270,805Parent GroupGroup 12,592,629 subsidiariesassets Value equivalentsreceivablespayables 1,407,529Net175,735NetNetFairFairFairValueValueValue 1789 2304 12,592,62912,636,574 TradeGroupand other Total financial Tradeliabilitiesand other OtherTotalFinancialBorrowingsfinancialassets 30-Jun-13 Loans with Cash and cash Note Financial liabilitiesConsolidated The fair values disclosed in the above table have been determined based on the following methodologies: (i) Cash and cash equivalents, trade and other receivables and trade and other payables are short• term instruments in nature whose carrying value is equivalent to fair value. Trade· and other payables exclude amounts relating to the provision of annual leave, which is outside the scope of IAS 39. NOTE 27: INTERESTS IN JOINT VENTURES • Joint Venture Agreement between Prince Yunusa Cruma and Astra Nigeria pty Ud signed on the 23 November 2011 for an interest in Ba~alex Nigeria Ltd. o Interest is equal to 87.5% in Barjalex Nigeria Ltd. o Due to the early stages of the development of the Joint Venture, this arrangement has a minor impact on the financial statements at 30 June 2013. o No significant commitments and/or contingencies are noted at period end. _.-- .~.) . 95 _._-~-----_. __ .._------_ .._-~~ Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CaNT) NOTE 27: INTERESTS IN JOINT VENTURES(CONT) • Joint Venture Agreement between Interecotech Pty Ud and Astra Energy Technologies Pty Ud signed on the 24th February 2012 for the acquisition of clean coal technology. o Interest is equal to 75% in Astra Interecotech Ply Ltd. o Due to the early stages of the development of the Joint Venture, this arrangement has a minor impact on the financial statements at 30 June 2013. o No significant commitments and/or contingencies are noted at period end. Note 28: Company Details The registered office of the company is: The principal place of business is 145-157 St. John Street 46 Tynte St London, United Kingdom, North Adelaide, SA, 5006 EC1V4PW Australia NOTE 29: SEGMENT REPORTING The results and financial position of the Company's single operating segment are prepared for the Board of Directors on a basis consistent with International Financial Reporting Standards and thus no additional disclosures in relation to the revenues, profit or loss, assets and liabilities and other material items have been made. Entity-wide disclosures in relation to Group's product and services, geographical areas, and major customers are detailed below. Products and services The Group has yet to commence operations, and thus no revenue from the sale of products and services was recognised for the period. Geographical information The operating segment is managed on a worldwide basis, but has its head office in Australia. In presenting information on the basis of geographical areas, revenue is based on the geographical location of customers and assets are based on geographical location of the assets. fS.1) ~--;6 . Astra Resources PlC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) NOTE 29: SEGMENT REPORTING(CONT) Consolidated Group Consolidated Group 30-Jun-13 30-Jun-12 Non-current Euros Revenues Non-current Revenues assets assets Australia 16,290,554 16,286,548 Hungary 684,195 824,270 Other countries 576,445 Total 16,974,749 17,687,263 (i) The non-current assets presented consist of inventory, property, plant and equipment and intangible assets. Major customer To date there are no major customers to be disciosed. NOTE 30: EARNINGS PER SHARE Basic earnings per share The calculation of basic earnings per share at 30 June 2013 was based on the profit/(Ioss) attributable to ordinary shareholders and a weighted average number of ordinary shares (calculated as follows): 941,088,466Continuing (7,219,559)30-Jun-12699,814,307(0.01)(7,910,244)212,115,4982 Note30-Jun-12operationsContinuingoperations(7,910,244)(5,140,9311,153,203,9661,152,499,72930-Jun-13) - ordinaryordinaryshareholdersshareholders of ordinary shares parlperiodbeginningof roll ofupthe period TotalTotar 20 (0.01)30-Jun-13 (7,219,559) Profit attributableProfitEffect(loss)toofattributablesharesEffectissuedof tosharesas issued in the Numberordinary ofsharesshares WeightedNet earningsaverageper shareof Issued ordinary shares at Weighted average number ~7 Astra Resources PLC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) NOTE 30: EARNINGS PER SHARE(CONTj Diluted earnings per share The calculation of diluted earnings per share at 30 June 2013 was based on the profit/(Ioss) attributable to ordinary shareholders and a weighted average number of ordinary shares (calculated as follows): 941,088,466 operations 30.,Jun-12(7,219,559)699,814,307(7,910,244)(0.01)212,115,4982 TotalNote30..Jun-12operationsContinuing(5,140,931(7,910,244)1,153,203,9661,152,499,72930..Jun-13) - Total ordinary shareholdersordinary of ordinary shares(diluted) periodpartbeginningof roll ofupthe period 20 Continuing(0.01)30-Jun-13 (7,219,559) shareholders(diluted}Profit attributableEffect toof sharesEffectissuedof sharesas issued in the Numberordinary ofsharesshares Profit (loss) attributableWeightedNet earningstoaverageper shareof Issued ordinary shares at Weighted average number At 30 June 2013 options were excluded from the diluted weighted average number of ordinary shares calculation as their effect would have been anti-dilulive. NOTE 31: SHARE-BASED PAYMENT ARRANGEMENTS Transaction with employees There was no formal employee share scheme in place during the period ended 30 June 2013. This is consistent with 30 June 2012. Transactions with parties other than employees During the period ended 30 June 2013, the Group entered into share-based payment transactions with parties other than employees such as suppliers of goods and services. The number of shares and fair value of shares issued that was issued during the period was as follows: Astra Resources PlC (CN: 07620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) NOTE 31: SHARE-BASED PAYMENT ARRANGEMENTS(CONT) No of shares atFair$date$402,011$198$8,866$2,000$$1,000$2,500$8,000$26,670$22,5002,50013,0525,5885,28029,244nilvalue30-Jun-133,5642,0808,7011,8013,3001,0239,27972,50094,0005,23672,227902issuedof shares 30-Jun-13145,000144,455188,00045,00058,48853,34010,47218,55713,05216,0004,1604,0003,5648,8662,0002,0468,7015,5885,2803,6023,3005,0001,804396nil issued BreffanyDavidAndrewMarybernTobyPaulDavidJohannesJeremyIggyBreffanyKelle-AnnLiseBernieJohannesTimothyDavidKimFengjiBairdSmithKosNatoliAtterburyMichelleBairdSuppliersGormanGaynorBairdWangZuoLeunglIesGormanVueptyWhitneyHendrikusHendrikusUdTim So 755,671 AUO David Baird Patents and other intangible rights Nature of acquisition Patent and other intangible rights The fair value of patents and other intangible rights obtained through share based payments during the period were based on the fair value of equity instruments granted by the Group. The fair value was calculated by reference to the cash transaction price of shares issued during the period. The Company considered that the cash transaction price represented a more reliable measure of the fair value of the intangibles acquired due to the variability in the range of valuations obtained in relation to the intangible assets acquired. Astra Resources PLC (CN: 01620218) and Controlled Entities Financial Report for the Period Ended on 30 June 2013 NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED ON 30 JUNE 2013 (CONT) NOTE 31: SHARE-BASED PAYMENT ARRANGEMENTS(CONT) Suppliers The fair value of services obtained from suppliers through share based payments was based on the stated terms of invoices from suppliers that were settled through share based payments. Where no invoice was provided, the fair value was calculated by reference to the cash transaction price of shares issued during the period. gg-100 ASTRA RESOURCES PlC AND CONTROllED ENTITIES Independent Auditor's Report to the Members of Astra Resources Pic We have audited the financial statements of Astra Resources Pic for the period from 01st July 2012 to 30th June 2013 which are set out on pages 1 to 100 and which comprise the Group consolidated statement of comprehensive income, the Group and Parent Company statements of Financial Position, the Group and Parent Company Statements of Changes in Equity, and the Group and Parent Company Statements of Cash Flow. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006. This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our Audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of directors and auditor As explained more fully in the Directors' Responsibilities Statement set out on page 42, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the AudIting Practices Board's (APB's) Ethical Standards for Auditors. Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud Of error. This includes an assessment of: whether the accounting pOliciesare appropriate to the group's and the parent company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. Basis for qualified opinion on consolidated financial statements and disclaimer of opinion on company financial statements The company owns varying percentages of contro!Hnginterests in over 47 entities spread across the world. The controlled entities have a complex ownership structure whereby we have been unable to obtain sufficient appropriate audit evidence regarding the accuracy of the parent's interest or valuation of shareholding in them. Qualified opinion on consolidated financial statements In our opinion except for the possible effects of the matters described in the basis for qualified opinion paragraph; •• the financial statements give a true and fair view of the state of the group's affairs as at 30th June 2013 and of the group's loss for the year then ended; •• the group and parent company financial statements have been properly prepared in accordance with !FRSs as adopted the European Union; 101 Independent Auditor's Report to the Members of Astra Resources Pic (contil'll.led) • the group and parent company financial statements have been prepared in accordance with the requirements of the Companies Act 2006 and, as regards the group financial statements, Article 4 of the lAS Regulation. Disclaimer of opinion on the company financial statements Because of the significance of the matter prescribed in the basis for disclaimer of opinion paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on the company financial statements. Accordingly we do not express an opinion on the company financial statements. Emphasis of matter - going concern In forming our opmlon on the financial statements we have considered the adequacy of the disclosures regarding going concern and draw your attention to note 1. The group's abmty to continue as going concern is dependent on its ability to raise finance, reducing expenditure and commencement of trading activities. Opinion on other matter prescribed by the Companies Act 2006 In our opinion the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements. We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: •• certain disclosures of directors' remuneration specified by law are not made. Gurjinders~~Singh For and on behalf of GSK Accountancy Umited, Statutory Auditor Regus House Victory Way, Admirals Park, Crossways Damard, Kent, DA2 SOD United Kingdom 23m December 2013 102