ASF GROUP LIMITED — Annual Report 2014

Aug 28, 2014

ASF Group Limited Appendix 4E Preliminary final report

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1. Company details

Name of entity: ASF Group Limited ABN: 50 008 924 570 Reporting period: For the year ended 30 June 2014 Previous period: For the year ended 30 June 2013

2. Results for announcement to the market

2. Results for announcement to the market
			$'000
Revenues from ordinary activities	up	58.3% to	2,767
Profit from ordinary activities after tax attributable to the owners of ASF
Group Limited	up	103.1% to	956
Profit for the year attributable to the owners of ASF Group Limited	up	103.1% to	956

Dividends

There were no dividends paid, recommended or declared during the current financial period.

Comments

The profit for the group after providing for income tax and non-controlling interest amounted to $956,000 (30 June 2013: loss of $30,505,000).

Refer to the attached 'Operating and financial review' for detailed commentary.

3. Net tangible assets

Net tangible assets per ordinary security	Reporting period Cents 4.09	Previous period Cents 0.39

4. Control gained over entities

On 19 December 2013, the group acquired 68.21% of the ordinary shares of Civil & Mining Resources Pty Ltd.

On 19 March 2014, the group acquired 100% of the ordinary shares of Austin Resources Pty Ltd and ASF Copper Pty Ltd

5. Loss of control over entities

Not applicable.

6. Dividends

Current period

There were no dividends paid, recommended or declared during the current financial period.

Previous period

There were no dividends paid, recommended or declared during the previous financial period.

ASF Group Limited Appendix 4E Preliminary final report

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7. Dividend reinvestment plans

Not applicable.

8. Details of associates and joint venture entities

	Reporting	entity's	Contribution to	profit/(loss)
	percentage	holding	(where material)
	Reporting	Previous	Reporting	Previous
	period	period	period	period
Name of associate / joint venture	%	%	$'000	$'000
China Coal Resources Pty Ltd	25.00%	25.00%	(39)	(51)
Kaili International Resource Ltd	20.00%	20.00%	221	(314)
Rey Resources Limited	18.21%	20.51%	(642)	(1,349)
ActivEX Limited	16.10%	42.75%	(334)	(635)
Group's aggregate share of associates and joint venture
entities' profit/(loss) (where material)
Profit/(loss) from ordinary activities before income tax			(794)	(2,349)
Income tax on operating activities			-	-

The above excludes share of loss $Nil (2013: loss $486,000) pertaining to ASF Resources Limited which was an associate of the group for part of the year in June 2013. On 21 June 2013 the group obtained control over ASF Resources Limited.

9. Foreign entities

Details of origin of accounting standards used in compiling the report:

Not applicable.

10. Audit qualification or review

Details of audit/review dispute or qualification (if any):

The financial statements are currently being audited and an unqualified opinion is expected to be issued.

11. Attachments

Details of attachments (if any):

The operating and financial review and Preliminary Financial Report of ASF Group Limited for the year ended 30 June 2014 is attached.

12. Signed

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Signed ________

Date: 29 August 2014

Min Yang Chairman

ASF Group Limited Operating and financial review 30 June 2014

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Financial results and commentary

ASF Group Limited (‘ASF’) is a Sino-Australian investment and trading house which focuses principally on the identification, incubation and realisation of opportunities across various industries including oil & gas, resource, property, infrastructure, travel and financial services.

Revenue from continuing operations of ASF and its controlled entities (together the ‘group’) for the financial year ended 30 June 2014 was $2,767,000 (2013: $1,748,000).

The profit after tax attributable to members of ASF amounted to $956,000, compared with last financial year of a significant loss of $30,505,000, due mainly to the provision for impairment on the group’s investments.

Profit for the year was also contributed by the following items:

• Reversal of impairment of investment in Rey Resources Limited of approximately $6.5 million;

• Profit on partial disposal of investment in ActivEX Limited of approximately $0.5 million; and

• Recognition of $1.2 million arising from the settlement of a misappropriation claim against a major Australian Bank.

At the reporting date, the group has outstanding convertible loan (‘Convertible Loan’) due to Star Diamond Developments Limited (‘Star Diamond’) of $3.1 million, principal and interest. At a general meeting of ASF held on 8 August 2014, shareholders approved the conversion of all outstanding Convertible Loans (including accrued interest) into shares of ASF at the price of $0.18 per share. Accordingly, the Convertible Loan (inclusive of interest) was subsequently repaid in full by the issue of 17,490,411 fully paid ordinary shares of ASF on 8 August 2014.

Finance costs amounted to $897,000 (2013: $1,037,000), which mainly represented accrued interests for the Convertible Loan.

Financial position

On 13 March 2014, ASF announced the extension of its on-market share buyback program for another 12 months. For the year ended 30 June 2014, ASF spent approximately $81,000 on this program and a total of 449,657 shares were bought back.

Net assets as at 30 June 2014 were $18,299,000, compared to $1,159,000 for the previous year. The significant increase in net assets this year was predominantly due to:

• Conversion of the principal amount of $8 million Convertible Loan; and

• Reversal of impairment in Rey Resources Limited.

The group maintains a strong cash position. In July 2014, ASF announced a fully underwritten non-renounceable 1 for 8 Rights Issue which was completed in early August and raised approximately $10 million (before costs).

Principal Investments

ActivEX Limited

ActivEX Limited (‘AIV’) is an ASX listed mineral exploration company holding a number of prospective tenements, principally targeting copper-gold and gold mineralisation in Queensland. AIV also holds a potash project in Western Australia, which has an established resource and a granted mining lease.

In February 2014, the group subscribed for 47,192,105 shares under its entitlement in the non-renounceable 1 for 2 Rights Issue of AIV at a price of $0.012 per share.

During the financial year, the group transferred a total of 58,241,768 fully paid ordinary shares of AIV to the nominee of Star Diamond as partial conversion of the Convertible Loan. Subsequently in June 2014, the group further disposed of 60 million shares of AIV to Great Scheme Investments Limited at a price of $0.0175 per share. The partial disposal of investment in AIV generated a profit of approximately $527,000.

At the reporting date, the group interested in approximately 16.1% in the issued capital of AIV.

ASF Group Limited Operating and financial review 30 June 2014

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Rey Resources Limited

As at 30 June 2014, the group holds approximately 18.21% equity interest in Rey Resources Limited (‘Rey’).

REY is an ASX-listed resource exploration and development company with a large tenement holding in the Canning Basin, Western Australia in both oil & gas plus coal. The principal activity of Rey is exploring for and developing energy resources in Western Australia’s Canning Basin.

Rey holds a 25% interest in the Fitzroy Blocks (petroleum permits EP457 & EP458), coal exploration leases and applications for a Mining Lease (M04/453) and a Miscellaneous Licence (L04/58). On 29 May 2014, Rey announced that it had executed an agreement with Key Petroleum (Australia) Pty Ltd (‘Key’) (a wholly owned subsidiary of Key Petroleum Limited) and Caracal Exploration Pty Ltd to farm-in to Exploration Permit EP437 in the North Perth Basin. This permit is located to the north of the large Dongara Field, which has been producing oil and gas since 1971. As part of the JV agreement, Rey (via its wholly owned subsidiary Rey Oil and Gas Perth Pty Ltd) will earn up to 43.47% in EP437 by contributing 86.94% of the costs. This cost has been capped at $1.7 million for the Dunnart-2 exploration well which is being managed by Key as operator of the permit.

On 16 July 2014, Rey announced that it had entered into a Strategic Cooperation Framework Agreement with China National Fuel Corporation (‘CNFC’) a China based energy company. The agreement formalises discussions that have occurred over the past 12 months and has a key objective that the parties will jointly establish and develop oil and gas opportunities together with associated infrastructure in Western Australia with an emphasis in the Canning Basin. CNFC was established in 1988, and is a state owned corporation with main businesses of petroleum and natural gas distribution, as well as coal mining. As at December 2013, the total assets of CNFC were in excess of RMB¥31 billion with annual turnover over RMB¥10 billion.

On 19 August 2014, the group subscribed for further 15,000,000 fully paid ordinary shares of Rey at a price of $0.10 per share. As a result, the group currently has an interest of approximately 19.84% of the issued capital of Rey.

Key Petroleum Limited

ASF, through its wholly-owned subsidiary, ASF Oil & Gas Holdings Pty Ltd, subscribed for a total of 112,918,070 shares in Key Petroleum Limited (‘KEY’) by two private placements at a price of 1.3 cents per share in January 2014 and became a cornerstone investor holding 19.9% of the equity interest in KEY.

KEY is a publicly listed Australian oil and gas operating company focused on exploration in conventional and unconventional projects in the North Perth and Canning Basins in Western Australia. Acreage within the Canning Basin portfolio consists of a number of exciting development and exploration opportunities.

Omnitech Holdings Limited

In April 2014, the group disposed of its 20% interest in ASF Kaili Resource Pty Ltd, holder of two tenements in the Western Australia, to Omnitech Holdings Limited (‘OHL’) for 2.2 million fully paid ordinary shares of OHL representing approximately 3.3% of the issued capital of OHL.

OHL is an investment holding company, which is listed (but not trading) on the ASX and currently holds mineral exploration tenements in Queensland and WA.

Civil & Mining Resources Pty Ltd

In December 2013, the group acquired 68.205% equity interest in Civil & Mining Resources Pty Ltd (‘CMR’) for a cash consideration of $1,079,270.50. Pursuant to the agreement, the group will grant a convertible loan facility of up to $5 million to CMR over 2 years, which will be converted into shares of CMR at the group’s option. If the group does not elect to convert upon maturity, the said loan will be repayable together with interest of 10% per annum.

CMR is a coal exploration company incorporated in Queensland. The major assets of which comprise 25 Exploration Permits for Coal (EPCs) in Queensland. CMR offers a significant portfolio of prospective further hard coking, PCI and thermal coal projects ranging from potentially immediate to longer-term development timeframes.

On 12 August 2014, ASF announced that CMR had defined an 119Mt maiden JORC Inferred thermal coal resource at its Dawson West Project in the Bowen Basin, central Queensland. The Project is a new coal precinct close to operating coalmines, road and rail infrastructure and the townships of Moura and Theodore.

ASF Group Limited Operating and financial review 30 June 2014

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Metaliko Resources Limited

On 18 August 2014 ASF announced that it had subscribed for 22,195,557 shares representing approximately 7% in the issued capital of Metaliko Resources Limited (‘MKO’) at a price of $0.03 per share. MKO was incorporated in October 2010 with a focus on advanced stage gold exploration projects with identified gold mineralization and the potential for further significant discoveries.

Its project portfolio is located in the Eastern Goldfields of Western Australia. The projects are located on, or adjacent to, the regional structures associated with the world class and major gold deposits of the Eastern Goldfields.

Minerals and Resources

ASF Resources Limited (Thermal Coal)

The projects held by ASF Resources Ltd are located 150km east of Derby in Western Australia within the northern Canning Basin. During 2014 further tenement rationalisation was carried out with the relinquishment of E04/1887 (Verity Bore), E04/1428 (Gum Bore), E04/1435 (Merilee Bore). In addition E04/1670 was significantly reduced with the portion retained being adjacent and to the east of the Rey Resources Duchess Paradise thermal coal project. Ongoing review of the overall coal prospectively continued in 2014.

ASF Kaili Resource Pty Limited (Thermal Coal)

ASF Kaili comprises two tenements located in the northern Canning Basin adjacent and to the east of the Rey Resources Duchess Paradise thermal coal project. There was no field based exploration in 2014 and all prior exploration results we compiled and reviewed resulting in significant portions of both E04/1433 (Annette Bore) and E04/1436 (Lucky Bore) being relinquished.

In April 2014, the group disposed of its 20% interest in ASF Kaili to OHL for 2.2 million fully paid ordinary shares of OHL at a price of $0.055 each.

China Coal Resources Pty Limited (‘CCR’) (Thermal Coal and Base Metals)

CCR manages several joint ventures with the group in Western Australia, Queensland and Tasmania.

In Western Australia, CCR manage the Dongara Project located in the north Perth Basin 250km north of Perth. GEOS Mining has completed a prospectively review of the Dongara Project with several possible drill sites to test the sub surface thermal coal mineralisation. Following the review CCR will be relinquishing the southern portion of E70/4403 where potential coal mineralisation is at uneconomic depth based on current market conditions to focus on shallower coal mineralisation in the north of the project.

In Tasmania, CCR manage two base metal projects located in north (Wilmont) and west (Lake Pieman) Tasmania. Both projects have been reviewed in light of recent encouraging field work with a view to further field work in the second half of 2014. Both Wilmont (June 2014) and Lake Pieman (July 2014) have been partially relinquished with renewal documents having been lodged with Mines and Resources Tasmania (MRT).

In Queensland CCR manage 2 EPCs at Nelgai Creek (EPC 2820) and Two Mile Creek (EPC 2821). GEOS Mining has completed a prospective review of the 2 licences and has recommended a two phase drilling program to explore for thermal coal. CCR is has reviewed the proposal and will be relinquishing the eastern portion of both EPC 2820 and 2821 with a view to drill testing there areas in line with the GEOS Mining review.

ASF Coal Pty Limited (Thermal Coal)

ASF coal has 4 licences in SE Queensland including the newly granted tenements EPCs 1861(Mt Hope), 2110(Cooya Creek) and 2094(Glenrowan) and EPC 1508(Leyburn). A thorough review of the 3 newly granted tenements was carried out with preliminary work programs developed leading to drill testing of the Walloon Coal Measures.

ASF Group Limited Operating and financial review 30 June 2014

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Victory Coal Pty Limited (Thermal Coal)

Victory Coal has 1 licence located north of the Queensland town of Roma in the Surat Basin. Victory Coal is considering drill testing for thermal coal in the second half of 2014 to first half of 2015 based on a prospectively review carried out by GEOS Mining.

Basin Coal Pty Limited (Thermal Coal)

Basin Coal is focussed on coal exploration in Victoria and have a single exploration licence in the South Gippsland Region located east of Melbourne. A work program and budget have been submitted to the Victorian Mines Department for review ahead of planned field work in the second of 2014 to first half of 2015. During the year all historical exploration was reviewed and prospective coal areas delineated for ongoing exploration and drill testing.

ASF Metals Pty Limited (Base Metals)

ASF Metals are currently carrying out base metal exploration in western Tasmania and are planning further exploration in the second half of 2014 to the first half of 2015 as a follow up to recent positive exploration results.

ASF Copper (Base Metals)

ASF Copper manages a single tenement in Western Tasmania EL44/2011(Temma), which is prospective for copper and iron. Limited exploration to date has delineated several copper/iron anomalies and a work program has been submitted to Mines Resources Tasmania, which has been approved. Exploration is planned for later in 2014 to the first half of 2015

Austin Resource (Tin and Gold)

Austin Resources manage a single tenement in northern Tasmania EL23/2011 Derby, which is located in an area of alluvial tin mining. A phase 1 budget comprising geological mapping and gravity survey traverses has been approved. Exploration is planned for later in 2014 to the first half of 2015

Property Marketing and Services

ASF Properties Pty Ltd is 100% owned by ASF and continues to provide property and marketing services to investors in China. ASF is actively engaged in real estate marketing and sales for a number of prestigious brands in Australia such as Rose Group, Meriton and PBD Developments.

In November 2013, ASF entered into a long-term and strategic cooperative ‘partnership’ with E-house (China) Holdings Limited (‘E-house’), a leading real estate services company in China with a diverse range of services, strong brand recognition and a broad geographic presence. E-house is listed on the New York Stock Exchange and their clients include leading domestic and international real estate developers. From September to November 2013, E-house and ASF Properties have jointly held or participated in three property roadshows in Shanghai, China. The property projects presented on the roadshows include Yang Land Point Cook and Breakfast Point. Recently ASF Properties is planning another series of marketing activities with E-house for the other Australian properties, which include Hope Island project.

During the same period, ASF has also formed a strategic partnership with Century China First Group Limited (‘Century China’), a Hong Kong based property-consulting company with years’ experience in overseas property investment services for clients. With their success in the Hong Kong market, Century China has extended their service to Macau and Mainland China market since 2013.

In addition, ASF maintains a good partnership with China Real Estate Association, which is the peak industry body and which has a large network and significant influence in the Chinese real estate sector.

ASF believes that ASF Properties represents an important strategic platform in ASF’s role as a means for China-based investors to access the Australian real estate market.

ASF Group Limited Operating and financial review 30 June 2014

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Fund Management and Advisory Services

As part of ASF group the role of ASF Capital Pty Limited is to facilitate the group’s core strategy of participating in the two way capital flows between Australia and China.

ASF Capital assists in providing services to selected Chinese businesses on matters such as public listing, investment and funds management opportunities in Australia.

ASF Capital holds an Australian Financial Services Licence (‘ASFL’) and operates as the investment banking arm of ASF Group Limited.

After a successful application in May 2013 ASF Capital was granted a modified AFSL which enables the group to work with Chinese groups in expanding their activities in Australia especially in the Funds Management Sector.

With the establishment of the ASF Capital Investment Fund a number of opportunities have been investigated designed to provide Chinese entrepreneurs and other high net worth individuals participation in the recently introduced Significant Investor Visa (‘SIV’) programme. The Fund will seek to make direct and indirect investments in infrastructure and real estate in Australia and in other assets permitted under the SIV programme.

ASF Capital also formed a Venture Fund in which it will seek to make invest into Australian and overseas innovative technologies.

ASF Capital is also involved in Funds Management through its role in marketing selective international and domestic Funds to the Australian investor markets

Broadwater Marine Project, Queensland

In February 2014, ASF Consortium Pty Ltd, a wholly owned subsidiary of ASF, was announced as the Proponent by the Queensland Government and the Gold Coast City Council for the proposed multi-billion dollar “Broadwater Marine Project” (‘BMP’). The project is located on The Spit and Wave Break Island in the Broadwater area of the Gold Coast of Australia.

As the Proponent, ASF Consortium Pty Ltd, has been invited to further develop a detailed proposal for an “Integrated Resort Development” (‘IRD’) that builds upon the city’s history of tourism innovation, creates significant new jobs, drives tourism growth and underpins the local economy.

The entirely private sector funded BMP project will deliver a cruise ship terminal and other multi-billion dollar integrated tourism components, including a world-class casino. It represents potentially the largest piece of integrated tourism infrastructure in Queensland’s history.

The projected $7.5 billion dollar IRD will provide an estimated $14.6 billion economic benefit, 12,275 jobs on completion and 477,000 extra visitor nights on the Gold Coast each year.

ASF Consortium is currently stepping through the “Request For Design Proposal” (‘RFDP’) of the IRD with expected proposal submission in late October 2014.

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ASF Group Limited ABN 50 008 924 570

Preliminary Financial Report - 30 June 2014

ASF Group Limited Statement of profit or loss and other comprehensive income For the year ended 30 June 2014

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Note Revenue 1 Other income 2 Expenses Commission and fee expenses Consultancy expenses Marketing expenses Employee benefits expense Depreciation and amortisation expense Impairment of investments Impairment of assets Loss on disposal of assets Legal and professional fees Corporate and administration expenses Occupancy Impairment of exploration expense Share of loss of associates Other expenses Finance costs Loss before income tax benefit Income tax benefit Loss after income tax benefit for the year Other comprehensive income Items that may be reclassified subsequently to profit or loss Gain on the revaluation of available-for-sale financial assets, net of tax Foreign currency translation Other comprehensive income for the year, net of tax Total comprehensive income for the year Loss for the year is attributable to: Non-controlling interest Owners of ASF Group Limited Total comprehensive income for the year is attributable to: Non-controlling interest Owners of ASF Group Limited Basic earnings per share 13 Diluted earnings per share 13	Consolidated 30/06/2014 30/06/2013 $'000 $'000 2,767 1,748 6,757 298 (93) (168) (3,068) (1,346) (323) (403) (1,698) (1,342) (145) (46) - (14,872) (866) (8,564) - (1) (991) (1,030) (567) (576) (610) (483) - (20) (794) (2,835) (49) (81) (897) (1,037)	Consolidated 30/06/2014 30/06/2013 $'000 $'000 2,767 1,748 6,757 298 (93) (168) (3,068) (1,346) (323) (403) (1,698) (1,342) (145) (46) - (14,872) (866) (8,564) - (1) (991) (1,030) (567) (576) (610) (483) - (20) (794) (2,835) (49) (81) (897) (1,037)
	(577) -	(30,758) 219
	(577) - 154	(30,539) 1,373 270
	154	1,643
	(423)	(28,896)
	(1,533) 956	(34) (30,505)
	(577)	(30,539)
	(1,533) 1,110	(34) (28,862)
	(423)	(28,896)
	Cents 0.25 0.25	Cents (9.82) (9.82)

The above statement of profit or loss and other comprehensive income should be read in conjunction with the

accompanying notes

1

ASF Group Limited Statement of financial position As at 30 June 2014

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Note Assets Current assets Cash and cash equivalents 3 Trade and other receivables 4 Other Total current assets Non-current assets Receivables Investments accounted for using the equity method 5 Other financial assets - at fair value through profit or loss 6 Property, plant and equipment Exploration and project costs 7 Total non-current assets Total assets Liabilities Current liabilities Trade and other payables 8 Borrowings 9 Provisions Total current liabilities Total liabilities Net assets Equity Issued capital 10 Reserves Accumulated losses Equity attributable to the owners of ASF Group Limited Non-controlling interest Total equity	Consolidated 30/06/2014 30/06/2013 $'000 $'000 2,309 2,410 1,276 236 140 87	Consolidated 30/06/2014 30/06/2013 $'000 $'000 2,309 2,410 1,276 236 140 87
	3,725	2,733
	306 13,187 1,589 102 5,465	198 8,468 - 115 1,360
	20,649	10,141
	24,374	12,874
	880 5,142 53	1,910 9,776 29
	6,075	11,715
	6,075	11,715
	18,299	1,159
	73,029 2,686 (57,745)	55,283 4,352 (58,701)
	17,970 329	934 225
	18,299	1,159

The above statement of financial position should be read in conjunction with the accompanying notes

2

ASF Group Limited Statement of changes in equity For the year ended 30 June 2014

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Consolidated Balance at 1 July 2012 Loss after income tax benefit for the year Other comprehensive income for the year, net of tax Total comprehensive income for the year Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs (note 10) Share buy-back Acquisition of shares in subsidiary from non- controlling interests Non-controlling interest Balance at 30 June 2013 Consolidated Balance at 1 July 2013 Profit/(loss) after income tax benefit for the year Other comprehensive income for the year, net of tax Total comprehensive income for the year Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs (note 10) Share buy-back Change in non-controlling interests Reserves reclassified to contributed equity Balance at 30 June 2014	Issued capital $'000 54,583 - -	Reserves $'000 2,933 - 1,643	Accumulated losses $'000 (28,196) (30,505) -	Non- controlling interest $'000 (121) (34) -	Total equity $'000 29,199 (30,539) 1,643
	- 1,045 (345) - -	1,643 - - (224) -	(30,505) - - - -	(34) - - - 380	(28,896) 1,045 (345) (224) 380
	55,283	4,352	(58,701)	225	1,159
	Issued capital $'000 55,283 - -	Reserves $'000 4,352 - 154	Accumulated losses $'000 (58,701) 956 -	Non- controlling interest $'000 225 (1,533) -	Total equity $'000 1,159 (577) 154
	- 15,592 (81) - 2,235	154 - - 415 (2,235)	956 - - - -	(1,533) - - 1,637 -	(423) 15,592 (81) 2,052 -
	73,029	2,686	(57,745)	329	18,299

The above statement of changes in equity should be read in conjunction with the accompanying notes

3

ASF Group Limited Statement of cash flows For the year ended 30 June 2014

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Note Cash flows from operating activities Receipts from customers (inclusive of GST) Payments to suppliers (inclusive of GST) Interest received Other revenue Interest and other finance costs paid Net cash used in operating activities Cash flows from investing activities Payment for purchase of assets of subsidiaries, net of cash acquired Payments for investment in subsidiaries Payments for investment in other financial assets Payments for property, plant and equipment Payments for investment in exploration and related assets Payments for investment in associates Payments for purchase of subsidiary, net of cash acquired Proceeds from sale of subsidiary Proceeds from sale of investments in associates Repayment of loans by related entities Net cash used in investing activities Cash flows from financing activities Proceeds from borrowings Proceeds from issue of shares 10 Payments for share buy-backs Share issue transaction costs 10 Net cash from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the financial year 3	Consolidated 30/06/2014 30/06/2013 $'000 $'000 390 1,948 (5,820) (5,583)	Consolidated 30/06/2014 30/06/2013 $'000 $'000 390 1,948 (5,820) (5,583)
	(5,430) 30 1,235 (728)	(3,635) 66 - -
	(4,893)	(3,569)
	(1,228) - (1,468) (26) (2,526) (561) - - 1,050 -	- (75) - (27) (214) (12,751) 1,502 600 - 125
	(4,759)	(10,840)
	300 9,310 (81) (32)	9,000 1,045 (345) -
	9,497	9,700
	(155) 2,410 54	(4,709) 7,103 16
	2,309	2,410

The above statement of cash flows should be read in conjunction with the accompanying notes

4

ASF Group Limited Notes to the financial statements 30 June 2014

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Note 1. Revenue

Sales revenue Commission revenue Fund management and advisory service Corporate services Other revenue Interest Other revenue Revenue Note 2. Other income Net gain on disposal of other assets Reversal of impairment in equity accounted investments Other income Refer to note 5 for details of reversal of impairment in equity accounted investments. Note 3. Current assets - cash and cash equivalents Cash at bank Note 4. Current assets - trade and other receivables Trade receivables Other receivables	Consolidated 30/06/2014 30/06/2013 $'000 $'000 95 348 548 204 589 1,130	Consolidated 30/06/2014 30/06/2013 $'000 $'000 95 348 548 204 589 1,130
	1,232	1,682
	30 1,505	66 -
	1,535	66
	2,767	1,748
	Consolidated 30/06/2014 30/06/2013 $'000 $'000 286 298 6,471 -
	6,757	298
	Consolidated 30/06/2014 30/06/2013 $'000 $'000 2,309 2,410
	Consolidated 30/06/2014 30/06/2013 $'000 $'000 15 166 1,261 70
	1,276	236

5

ASF Group Limited Notes to the financial statements 30 June 2014

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Note 5. Non-current assets - investments accounted for using the equity method

Note 5. Non-current assets - investments accounted for using the equity method
Kaili International Resource Ltd China Coal Resources Pty Ltd Rey Resources Limited (ASX: REY) ActivEX Limited (ASX: AIV)	Consolidated 30/06/2014 30/06/2013 $'000 $'000 217 - 467 503 11,808 5,980 695 1,985
	13,187	8,468

The increase in the carrying value of the investment in Rey Resources Limited was predominately due to the reversal of the impairment charge by $6,471,000.

Note 6. Non-current assets - other financial assets - at fair value through profit or loss

Note 6. Non-current assets - other financial assets - at fair value through profit or loss
Investment in Omnitech Holdings Limited (ASX: OHL) Investment in Key Petroleum Ltd (ASX: KEY) Note 7. Non-current assets - exploration and project costs Mining exploration and evaluation expenditures Capitalised project costs Note 8. Current liabilities - trade and other payables Trade payables Other payables	Consolidated 30/06/2014 30/06/2013 $'000 $'000 121 - 1,468 -
	1,589	-
	Consolidated 30/06/2014 30/06/2013 $'000 $'000 4,500 1,360
	965	-
	5,465	1,360
	Consolidated 30/06/2014 30/06/2013 $'000 $'000 609 350 271 1,560
	880	1,910

Note 7. Non-current assets - exploration and project costs

Note 8. Current liabilities - trade and other payables

6

ASF Group Limited Notes to the financial statements 30 June 2014

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Note 9. Current liabilities - borrowings

Note 9. Current liabilities - borrowings
Convertible notes payable Loan payable	Consolidated 30/06/2014 30/06/2013 $'000 $'000 3,330 9,776 1,812 -
	5,142	9,776

Of the $3,330,000 convertible notes payable, $3,110,000 represented convertible loan due from the company to Star Diamond Developments Limited (‘Star Diamond’).

On 23 August 2012, the company entered into a Loan Agreement with Star Diamond on pursuant to which Star Diamond agreed to grant a Convertible Loan Facility of $7 million which can be converted into either one or a combination of the company’s shares or into new shares of the company’s subsidiaries or investments held by such subsidiaries. The Convertible Loan Facility was subsequently increased to $10 million and the expiry date extended to 30 September 2014.

In May 2014, the company obtained a further $1 million Convertible Loan Facility from Star Diamond with maturity date of 31 December 2014.

During the financial year, the group repaid an aggregate amount of $9,314,000 (inclusive of interest) of the Convertible Loan by way of cash and conversion into shares of the company and the company’s subsidiaries and investment. On 8 August 2014, upon approval by the shareholders at the general meeting of the company, all outstanding Convertible Loan (inclusive of accrued interest) due to Star Diamond were converted into 17,490,411 fully paid ordinary shares of the company at an issue price of $0.18 per share.

The loan payable of $1,812,000 represented loans due by a subsidiary, which is repayable on or before 14 November 2014.

Note 10. Equity - issued capital

Note 10. Equity - issued capital
30/06/2014 Shares Ordinary shares - fully paid 446,961,296 Movements in ordinary share capital Details Date Balance 1 July 2012 Share placement 4 March 2013 Share buy-back 1 July 2013 - 30 June 2014 Balance 30 June 2013 Transfer from reserves 1 July 2013 Share placement 10 September 2013 Share placement 30 September 2013 Rights issue 19 December 2013 Star Diamond conversion 30 December 2013 Star Diamond conversion 20 January 2014 Share buy-back 1 July 2013 - 30 June 2014 Balance 30 June 2014	30/06/2014 Shares 446,961,296		Consolidated 30/06/2013 30/06/2014 Shares $'000 295,824,532 73,029	30/06/2013 $'000 55,283
			Shares Issue price 292,403,709 5,000,000 $0.22 (1,579,177) $0.00 295,824,532 17,467,645 $0.13 10,545,222 $0.22 3,091,142 $0.22 63,078,685 $0.10 36,363,636 $0.11 21,040,091 $0.11 (449,657) $0.00 446,961,296	$'000 54,583 1,045 (345)
				55,283 2,235 2,290 680 6,308 4,000 2,314 (81)
				73,029

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ASF Group Limited Notes to the financial statements 30 June 2014

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Note 10. Equity - issued capital (continued)

Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company does not have a limited amount of authorised capital.

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

Share buy-back

During the year, the company spent $81,000 on share buy-backs. The buy-back program is expected to expire on 27 March 2015 and it is the company’s present intention to extend the program for another year.

Note 11. Equity - dividends

There were no dividends paid, recommended or declared during the current or previous financial year.

Note 12. Events after the reporting period

On 2 July 2014, the company announced a fully underwritten pro-rata non-renounceable 1 for 8 rights issue at $0.18 per share ('Offer'). The Offer closed on Thursday, 31 July 2014, raising the amount of $10,057,000 for the company, before costs.

At the general meeting of the company held on 8 August 2014, shareholders' approval had been sought for the conversion of all outstanding convertible loan in the amount of $3,148,000 (inclusive of accrued interest) due to Star Diamond into 17,490,411 fully paid ordinary shares of the company at an issue price of $0.18 per share. Shareholders also approved at the general meeting that an aggregate of 12,300,000 fully paid ordinary shares be issued to the directors and employees of the company.

On 18 August 2014, the company announced that it had subscribed for 22,195,557 shares representing approximately 7% in the issued capital of Metaliko Resources Limited at a price of $0.03 per share.

On 19 August 2014, ASF Canning Basin Energy Pty Ltd ('ASFCBE'), a wholly owned subsidiary of the company, subscribed for 15,000,000 fully paid ordinary shares of Rey Resources Limited at a price of $0.10 per share. As a result, ASFCBE currently has an interest of approximately 19.84% of the issued capital of Rey Resources Limited.

No other matter or circumstance has arisen since 30 June 2014 that has significantly affected, or may significantly affect the group's operations, the results of those operations, or the group's state of affairs in future financial years.

Note 13. Earnings per share

Loss after income tax Non-controlling interest Profit/(loss) after income tax attributable to the owners of ASF Group Limited Weighted average number of ordinary shares used in calculating basic earnings per share Weighted average number of ordinary shares used in calculating diluted earnings per share	Consolidated 30/06/2014 30/06/2013 $'000 $'000 (577) (30,539) 1,533 34	Consolidated 30/06/2014 30/06/2013 $'000 $'000 (577) (30,539) 1,533 34
	956	(30,505)
	Number 384,544,282	Number 310,552,466
	384,544,282	310,552,466

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ASF Group Limited Notes to the financial statements 30 June 2014

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Note 13. Earnings per share (continued)

Basic earnings per share Diluted earnings per share

Cents	Cents
0.25	(9.82)
0.25	(9.82)

9