ASF GROUP LIMITED - Capital/Financing Update 2007

mining | property | travel | ventures

ASF GROUP LIMITED ABN 50 008 924 570

==> picture [118 x 117] intentionally omitted <==

==> picture [119 x 118] intentionally omitted <==

==> picture [112 x 118] intentionally omitted <==

prospectus

FOR AN OFFER OF UP TO 20,000,000 SHARES AT 25 CENTS EACH TO RAISE UP TO $5,000,000 THE MINIMUM SUBSCRIPTION FOR THIS OFFER IS 4,000,000 SHARES RAISING $1,000,000

Important Information: Shares offered by this prospectus should be considered speculative. This document is important and should be read in its entirety. If you do not understand its contents or are in doubt as to the course you should follow, you should consult your stockbroker or professional adviser.

==> picture [6 x 6] intentionally omitted <==

Financial Adviser & Underwriter ABN: 32 006 711 995 ASF Licence No: 238168

Bridging business between Australia & China

==> picture [119 x 113] intentionally omitted <==

==> picture [73 x 113] intentionally omitted <==

Important Information

General

This Prospectus has been issued by ASF Group Limited (“ASF Group” or the “Company”) dated 7 November 2007 . A copy of this Prospectus was lodged with the Australian Securities and Investments Commission (“ASIC”) on 7 November 2007. Neither ASIC nor the Australian Securities Exchange Limited (“ASX”) takes responsibility for the contents of this Prospectus.

No shares will be issued on the basis of this Prospectus later than thirteen months (13) months after the date of this Prospectus. Application will be made within seven (7) days after the date of this Prospectus for permission for the Shares offered by this Prospectus to be admitted for quotation on the ASX.

Applicants should read this document in its entirety and, if in any doubt, consult with their professional advisors before deciding whether to apply for Shares. There are risks associated with an investment in ASF Group and the Shares offered under this Prospectus must be regarded as a speculative investment. The Shares offered under this Prospectus carry no guarantee with respect to return on capital investment, payment of dividends or the future value of the Shares.

The Offer is being made only to persons receiving this Prospectus (including the electronic copy of this Prospectus) in Australia who are Australian residents. No Offer will be made where it would be unlawful to do so.

Defined words and expressions

Some words and expressions used in this Prospectus have defined meanings. These are capitalised and are defined in the Definitions and Interpretations in Section 14 of this Prospectus. A reference to $ in this Prospectus is a reference to Australian currency, unless otherwise indicated. A reference to a time or date in this Prospectus is a reference to the time or date in Sydney, Australia.

Investment advice

This Prospectus does not provide investment advice and has been prepared without taking into account the Applicants investment objectives, financial situation or particular needs (including financial and taxation issues).

This Prospectus, including each of the documents attached to it and which form part of it, is important and should be read in its entirety prior to making an investment decision.

The ASF Group business is associated with both the Australian and Chinese economies. An investment in Shares under this Prospectus must be regarded as a speculative investment involving risks, which are explained further in Section 7.

If Applicants do not fully understand this Prospectus or are in any doubt as to how to deal with it, you should consult your financial adviser.

Prospectus availability

This Prospectus will be made generally available during the Exposure Period by being posted on the Company’s internet site, www.asfgroupltd.com. Copies of the Prospectus will also be available on request by calling (02) 9251 9088 during normal business hours during the Exposure Period.

The Company may not accept applications under this Prospectus until the expiry of the Exposure Period.

The Exposure Period is generally 7 days from the date of lodgement of a prospectus with ASIC. The Exposure Period may be extended to 14 days. The purpose of this Exposure Period is to enable the Prospectus to be examined by market participants prior to the raising of the funds, which examination may result in the identification of deficiencies in this Prospectus.

Electronic prospectus

This Prospectus will be issued in paper form and as an electronic Prospectus, which may be viewed online at www. asfgroupltd.com and at www.novuscapital.com.au. The offer of Shares pursuant to this Prospectus is available to persons receiving an electronic version of this Prospectus in Australia. The Corporations Act 2001 prohibits any person from passing onto another person the Application Form unless it is attached to or accompanied by the complete and unaltered version of this Prospectus. During the Offer Period, any person may obtain a hard copy of this Prospectus by contacting the Company by email at [email protected] or Novus Capital by email at [email protected]

Disclaimer

You should rely only on information contained in this Prospectus. No person is authorised to give any information, or to make any representation, in connection with the Offer that is not contained in this Prospectus. Any information or representation that is not in this Prospectus may not be relied upon as having been authorised by the Company or any other person in connection with the Offer. Except as required by law, and only to the extent so required, neither the Company nor any other person guarantees, warrants or underwrites the performance of the Company or any return on any investment made pursuant to this Prospectus.

The people and assets depicted in photographs in this Prospectus are not employees or assets of ASF Group, unless otherwise stated. Diagrams appearing in this Prospectus are illustrative only and may not be drawn to scale.

Foreign jurisdictions

The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and, therefore, overseas investors should observe any such laws. This Prospectus does not constitute an offer in any jurisdiction where, or to any person to whom, it would be unlawful to issue this Prospectus.

Consolidation

At the date of this Prospectus, it is contemplated that the Shares on issue at the Offer date are to be consolidated into 169,081,117 Shares, at a ratio of 10:1. The resolution to be passed by Shareholders to effect the consolidation will be considered at the Company’s annual general meeting scheduled to be held on 8 November 2007.

Notwithstanding that the resolution giving effect to the proposed consolidation has not yet been passed, all references in this Prospectus to numbers of Shares assumes that the resolution has been passed and that the consolidation has occurred (unless otherwise indicated).

The Offer will not proceed unless Shareholder approvals are obtained for the consolidation resolution to be put at its forthcoming Annual General Meeting to be held on 8 November 2007.

Bridging business between Australia & China

ASF Group Ltd 2007

==> picture [162 x 113] intentionally omitted <==

CORPORATE DIRECTORY	2
CHAIRMAN’S LETTER	3
1. INVESTMENT HIGHLIGHTS	4
2. DETAILS OF THE OFFER	6
3. PROFILE OF THE COMPANY	11
MINERAL RESOURCES & ENERGY	12
PROPERTY MARKETING & SERVICES	13
TRAVEL SERVICES	14
CHINA VENTURES	14
4. CHINA - AUSTRALIA MARKET	15
5. DIRECTORS & MANAGEMENT	18
6. FINANCIAL INFORMATION	20
7. RISK FACTORS	33
8. INDEPENDENT GEOLOGISTS REPORT	38
9. INVESTIGATING ACCOUNTANT’S REPORT	47
10. SOLICITORS REPORT ON TENEMENTS	50
11. MATERIAL CONTRACTS	64
12. CORPORATE GOVERNANCE	70
13. ADDITIONAL INFORMATION	72
14. DEFINITIONS AND INTERPERTATION	78
DIRECTOR’S CONSENT	80
APPLICATIONS AND INSTRUCTIONS TO APPLICANTS	81

mining | property | travel | ventures

�

Corporate Directory

Board of Directors

Min Yang (Chairman - Executive)

Alex Lao

(Vice Chairman - Non-Executive Director)

David Fang (Executive Director)

Geoff Baker (Executive Director)

Wai Sang Ho (Non-Executive Director)

Alan Humphris (Non-Executive Director)

Company Secretary Tony S P Teng

Registered Office:

Australia

Bennelong, Suite 2 3B Macquarie Street Sydney NSW 2000

Telephone: 02 9251 9088 Facsimile: 02 9251 9066 Email [email protected] Web www.asfgroupltd.com

==> picture [118 x 113] intentionally omitted <==

==> picture [75 x 113] intentionally omitted <==

China Offices:

Financial Adviser and Underwriter

Beijing

Novus Capital Limited Level 24, 56 Pitt Street Sydney NSW 2000

Suite 816, Fortune Plaza Office Tower A No.7 Dong Sanhuan Zhonglu, Chao Yang District Beijing, China, Post Code: 100020

Telephone: 02 9375 0100

Facsimile: 02 9247 4844 Email [email protected]

Web www.novuscapital.com.au

Shanghai

Room 1302, Fortune Time Plaza 1438 Shan Xi Road North Shanghai, China, Post Code: 200060

Auditor

Hall Chadwick

Level 29, St. Martin’s Tower 31 Market Street Sydney NSW 2000

Guangzhou

Room 1803, East Tower Tianyu Business Plaza 753 Dongfeng Road East Guangzhou, Guangdong, China, 510080

Independent Accountant

Hall Chadwick Corporate (NSW) Limited

Level 29, St. Martin’s Tower 31 Market Street Sydney NSW 2000

Macau

Avenida da Amizade, Nº1023 Edificio Nam Fong 2ºandar B, C & D Macau

ASX Code: AFA

Australian Legal Adviser

Deacons 1 Alfred Street Sydney NSW 2000

Share Registry

Registries Limited Level 2, 28 Margaret Street Sydney NSW 2000

Chinese Legal Adviser

Guangdong Lingnan Law Office

ZhongShan University, 135 XinGang Road West Guangzhou, PRC

Bridging business between Australia & China

�

ASF Group Ltd 2007

==> picture [44 x 113] intentionally omitted <==

==> picture [119 x 113] intentionally omitted <==

Chairman’s Letter

Dear Investor,

On behalf of the Board of Directors, I am pleased to invite you to become a shareholder of ASF Group Limited through this Prospectus.

Underwritten Offer

By this Prospectus offering, the Company is seeking to have the Company’s shares re-quoted on the ASX and to raise up to $5.0 million by the issue of up to 20 million fully paid shares of the Company at an issue price of 25 cents per share. The Offer is underwritten to $1.0 million by the Company’s Financial Adviser, Novus Capital Limited.

Investment Group

The Company’s activities as an investment group are now focused on the two-way business opportunities between Australia and greater China, which have been emerging alongside the rapid economic growth of China and the increasing capital flows between the two countries. At the present time, we have interests in the mineral resources, property and travel sectors and we are also assessing other business opportunities that fit within our strategy. These activities followed a change of control, change of company name and change of activities of the Company which occurred in early 2006.

Time is Right

I believe the time is right for the Company’s strategy to be further developed and we anticipate that these conditions may continue into the future. Many large companies in China are at early stages of becoming more international and we can play a role, and often co-invest, in this process.

Experienced Team

ASF Group has an experienced Board of Directors with a blend of the skills and backgrounds needed to take the Company forward. Our objectives are to take advantage of the opportunities within our strategy and create wealth for our shareholders.

I urge you to read this Prospectus in its entirety and also recommend that you seek any professional advice that you may require before making any investment decision.

The Company already has more than 3,500 shareholders. I commend this offer to you and look forward to the prospect of welcoming you as a shareholder of ASF Group Limited.

==> picture [93 x 44] intentionally omitted <==

Ms Min Yang

Chairman & President

7 November 2007

mining | property | travel | ventures

�

�. Investment Highlights

==> picture [118 x 113] intentionally omitted <==

==> picture [192 x 113] intentionally omitted <==

Mineral Resources & Energy:

ASF Resources Pty Ltd (“ASFR”) holds:
two Exploration Licences located in the highly mineralized Paleozoic Dundas Trough on the West Coat of Tasmania over areas prospective for tin, zinc, lead, copper and gold; and
six Exploration Licences, one Prospecting Licence and two Exploration Licence Applications prospective for coal and diamonds in the Canning Basin, Western Australia.

■ ASFR has:

entered into a co-operation agreement in 2006 with XinWen Mining Group of Shandong Province, China a major mining and power group whereby the parties agreed to co-operate on development of coal resources in Australia and China together with broad based technology procurement;
entered into an agreement with China Railway Communication International Engineering Technology Corporation. Pursuant to the agreement, a joint venture company has been established by ASFR which is to acquire one exploration licence in the Kimberley’s region of W.A currently held by ASFR and ASFR is to be paid the sum of $1,020,000 for the transfer of a 51% shareholding in the joint venture company to the CRCC associate company. It is proposed that the joint venture company will actively explore the exploration licence area for coal resources; and
established a wholly owned subsidiary, ASF Mongolian Resources Pty Ltd which will be the participating entity for any Mongolian based projects which may be undertaken by the Company. This subsidiary is presently assessing possible co-investment opportunities in the mineral resources sector of Mongolia.

Property Marketing & Services:

ASF Properties Pty Ltd (“ASFP”) has a real estate marketing business which it plans to expand throughout parts of China under a licence/sub-licence structure in China.
It holds marketing rights in China and certain other countries in Asia for 2 Sydney developers, including Rosecorp.
ASF has established property sales centres in China in both Shanghai and Guangzhou.
ASFP is working on the establishment of a managed listed property trust in Australia which is intended to invest in specific property projects in China identified by the ASF Group.

China Ventures

ASF China Holdings Limited, a wholly-owned subsidiary of ASF Group, has formed ASF Ventures Pty Ltd (“ASFV”) together with Avila Limited (holding a 50% interest each) to facilitate investment in China – Australia business opportunities.
ASFV intends to act as a venture investor, along with coinvestors, in early stage or expansion opportunities, involving some form of Australia - China synergy, such as:
Expansion of Australian companies into the China market.
Relocation of operational elements of Australian companies, such as manufacturing or software development, to China; and
The international expansion of private Chinese companies, via a platform incorporating key Australian activities such as product development.

Travel Services

ASF holds a 40% interest in ASF Macau Holdings Multinational Limited which owns a travel agency business based in China and Macau which is conducted by Multinational Youth Travel Agency Company Limited (MYTA).
ASF’s medium term goal for this travel division is to further develop and expand, creating an independent travel company either through a listing or merger.

� Bridging business between Australia & China

ASF Group Ltd 2007

==> picture [44 x 113] intentionally omitted <==

==> picture [119 x 113] intentionally omitted <==

IMPORTANT DOCUMENT

The Shares offered by this Prospectus are of a speculative nature. Prospective investors should carefully consider the risk factors outlined in Section 7 of this Prospectus.

The information in this section is a key points summary only and is not intended to provide comprehensive details of the Offer. Prospective investors should read the full text of this Prospectus and, if in any doubt, consult with their professional advisers before deciding whether to apply for Shares. The Shares offered under this Prospectus carry no guarantee in respect of return of capital, return on investment, payment of dividends or the future value of the Shares.

Indicative Timetable

==> picture [454 x 200] intentionally omitted <==

----- Start of picture text -----

Date Event
7/11/07 Prospectus lodged with ASIC
22/11/07 Prospectus containing Application Forms available for Investors
22/11/07 Offer Opening Date
6/12/07 Offer Closing Date
12/12/07 Despatch of Allotment Statements
18/12/07 Expected date of Re-quotation of Shares and Trading of New Shares on ASX expected to commence
----- End of picture text -----

These dates are indicative only. The Directors reserve the right to vary the dates and times of the Offer without prior notice, which may have a consequential effect on other dates. Investors are encouraged to submit their Application Forms as early as possible.

mining | property | travel | ventures

�

�. Details of the Offer

==> picture [118 x 113] intentionally omitted <==

==> picture [192 x 113] intentionally omitted <==

2.1 Introduction

The information set out in this Section is not intended to be comprehensive and should be read together with the more detailed information appearing elsewhere in this Prospectus.

2.2 Consolidation

At the date of this Prospectus, it is contemplated that the Shares on issue at the Offer date are to consolidated into 169,081,117 Shares, at a ratio of 10:1. The resolution to be passed by Shareholders to effect the consolidation will be considered at the Company’s annual general meeting scheduled to be held on 8 November 2007.

The Offer will not proceed unless Shareholder approvals are obtained for the consolidation resolution to be put at its forthcoming Annual General Meeting to be held on 8 November 2007.

2.3 Shares Offered for Subscription

This Prospectus invites investors to apply for up to 20,000,000 Shares at an issue price of 25 cents for each Share, to raise up to $5,000,000.

All Shares issued pursuant to this Prospectus will be issued as fully paid ordinary shares and will rank equally in all respects with the Shares already on Issue. The rights attaching to the Shares are summarised in Section 13.

Applications for Shares offered under this Prospectus must be:

(a) for a minimum of 4,000 Shares ($1,000);

2.4 Minimum Subscription

The minimum subscription for this Offer is 4,000,000 Shares raising $1,000,000. No Shares will be allotted or issued under the Offer until the minimum subscription is received. If the minimum subscription for the Offer is not achieved and the Application Monies for these Shares are not received by the Company by the Closing Date, the Company will repay all money received from Applicants, without interest.

2.5 Public Offer

This Offer is open to members of the public who are residents of Australia or New Zealand. Existing Shareholders that have registered addresses in Australia or New Zealand are entitled to participate in the Offer.

2.6 Offer Period

The Offer will open on the Opening Date and will remain open until 5.00 pm (EST) on the Closing Date. The Company reserves the right to either close the Offer at an earlier time or date or to extend the closing time or date without prior notice. Applicants are encouraged to submit their Applications as early as possible.

2.7 Purpose of the Offer

The purpose of the Offer is to:

(a) raise the necessary funds to allow the Company in part to achieve its planned objectives and enable it to build a Group that will successfully bridge opportunities between Australia and China through co-investment and other arrangements; and
(b) facilitate the admission to official quotation on the ASX of all the Shares on issue at the Opening Date of the Offer and all Shares to be issued by the Company under this Prospectus.
(b) in multiples of 400 Shares ($100) for any greater amount; and
(c) only be made by completing the relevant Application Form attached or accompanying this Prospectus.

The Directors believe that, on successful closing of this Offer, the Company will have sufficient working capital to carry out its objectives, as stated in this Prospectus.

Bridging business between Australia & China

�

ASF Group Ltd 2007

==> picture [45 x 113] intentionally omitted <==

==> picture [119 x 113] intentionally omitted <==

2.8 Proposed Use of Funds

The proposed application of funds to be raised under the Offer is summarised in the table below. Funds are intended to be expended over a 2 year period as follows:

==> picture [455 x 239] intentionally omitted <==

----- Start of picture text -----

Description Minimum Subscription Maximum Subscription
($1,000,000) ($5,000,000)
Property Business
Real estate License roll out in China $200,000 $1,100,000
Project Marketing/ Management $50,000 $250,000
Property Trust Development $100,000 $250,000
Resources
Mineral exploration (W.A. & Tasmania) $300,000 $1,000,000
Potential acquisitions $100,000 $900,000
Travel Business
Proposed business expansion $80,000 $400,000
Working Capital
ASF Ventures $100,000 $800,000
Corporate $70,000 $200,000
General $100,000
Total $1,000,000 $5,000,000
----- End of picture text -----

Note: Expenses of the Offer and other Working Capital are covered by the Company’s existing cash at bank.

If less than the Maximum Subscription but more than the Minimum Subscription is received then the Offer will be closed and funds raised are proposed to be allocated proportionally.

The above outline of the intended use of funds may be subject to change as the Company is presently in negotiations with potential joint venture partners which may reduce or alter the spending requirements. The above figures are based on the present existing circumstances and are the best estimate of the Board.

2.9 Capital Structure

Following completion of the Offer, the proposed capital structure of the Company will be as set out in the tables below:

==> picture [457 x 147] intentionally omitted <==

----- Start of picture text -----

Description Minimum Subscription Maximum Subscription
($1,000,000) ($5,000,000)
Offer price per Share 25 cents 25 cents
Shares on issue on the Opening Date of the Offer 169,081,117 169,081,117
Novus Capital Shares 100,000 500,000
Shares to be issued pursuant to this Offer 4,000,000 20,000,000
Total Shares on issue at the Listing Date 173,181,117 189,581,117
Market Capitalisation at the Offer price $43,295,279 $47,395,279
----- End of picture text -----

*This figure is based on the Assumption that resolutions to be considered at the Company’s annual general meeting to be held on 8 November 2007 in relation to the consolidation of the Company’s Share capital (basis of 1 share for 10 shares held) and the issue of 50,000,000 Shares (pre-consolidation) are approved, the 50,000,000 Shares are issued and the consolidation implemented subsequently.

mining | property | travel | ventures

�

�. Details of the Offer

- continued

==> picture [118 x 113] intentionally omitted <==

==> picture [74 x 113] intentionally omitted <==

A number of important rights attaching to the Shares are summarised in Section 13 of this Prospectus.

2.10 Restricted Securities

Shares issued to the existing Shareholders totalling approximately 96,420,000 and Novus Capital as shown above, will be subject to the restricted security provisions of the ASX Listing Rules.

2.11 Risk Factors

An investment in the Company has risks associated with share market investment and the risk factors described in Section 7 of this Prospectus, which may affect the future operating and financial performance of the Company. Potential investors should read this Prospectus in full and consult their stockbroker, accountant or independent financial adviser if they require further information on the risks associated with investing in ASF Group, before submitting their Application.

2.12 Exposure Period

In accordance with Chapter 6D of the Corporations Act this Prospectus is subject to an exposure period of 7 days from the date of lodgement with ASIC. This period may be extended by ASIC for a further period of up to 7 days. The purpose of this exposure period is to enable this Prospectus to be examined by market participants prior to the raising of funds. If this Prospectus is found to be deficient, Applications received during the exposure period will be dealt with in accordance with Section 724 of the Corporations Act.

Applications received prior to the expiration of the exposure period will not be processed until after the exposure period. No preference will be conferred on Applications received in the exposure period and all Applications received in the exposure period will be treated as if they were simultaneously received on the Opening Date.

2.13 Investor Enquiries

Additional copies of the Prospectus or further advice on how to complete the Application Form can be obtained by contacting or visiting:

Novus Capital Limited

Level 24, 56 Pitt Street Sydney NSW 2000 Phone: (02) 9375 0100 Fax: (02) 9247 4844 Email: [email protected] Website: www.novuscapital.com.au

2.14 How to Apply

Applications for Shares under this Prospectus must:

(a) be for a minimum of 4,000 Shares ($1,000); and
(b) in multiples of 400 Shares ($100) for any greater amount.

Applications will only be accepted in the following form:

on the Application Form contained in or accompanying this Prospectus;
on a paper copy of the relevant electronic Application Form which accompanies the electronic version of this Prospectus, both of which can be found at and can be downloaded from www.asfgroupltd.com and from www.novuscapital.com.au.

Application Forms must be accompanied by a personal cheque or a bank draft, payable in Australian dollars, for an amount equal to the number of Shares for which you wish to apply multiplied by the Application Price of 25 cents per Share. Cheques or bank drafts should be made payable to “ASF Group Limited Share Application” and crossed “Not Negotiable”. No brokerage or stamp duty is payable by Applicants. The amount payable on Application will not vary during the period of the Offer.

Applicants should ensure that cleared funds are available at the time the Application is lodged, as dishonoured cheques will result in the Application being rejected. Application monies will be held in trust in a subscription account established and controlled by the Company until allotment has taken place.

All Application Forms and accompanying cheques must be received by the Closing Date at the following address:

Post to OR deliver to:

ASF Group Ltd Bennelong, Suite 2, 3B Macquarie Street Sydney NSW 2000

Application Forms must be received at the above address by no later than 5.00pm (EST) on the Closing Date.

The Company reserves the right to extend the Offer or to close the Offer early without notice.

Bridging business between Australia & China

�

ASF Group Ltd 2007

==> picture [161 x 113] intentionally omitted <==

Detailed instructions on how to complete paper Application Forms are set out on the reverse of those forms. You are not required to sign the Application Form. The Company, in consultation with Novus Capital, will allocate the Shares and reserves the right to reject any Application (including where an Application has not been correctly completed) or issue any Applicant a number of Shares that is less than that for which an Application was made, to accept a late Application or vary the dates and times of the Offer without prior notice and independently of other parts of the Offer. Where Applications are rejected or fewer Shares are allotted than applied for, surplus Application Monies will be refunded. No interest will be paid on any Application Monies refunded.

If the Application Form is not completed correctly, or if the accompanying payment is for an incorrect amount, it may still be treated by the Company as valid. The decision of the Directors as to whether to treat that Application as valid and how to construe, amend or complete the Application Form is final. However, an Applicant will not be treated as having applied for more Shares than is indicated by the amount of the cheque or bank draft payment for the Application Monies.

An Application may not be withdrawn after lodgement unless the Applicant is permitted to withdraw the Application in accordance with the Corporations Act.

2.15 Allotment and Allocation of Shares

Subject to ASX granting approval for the Company to be admitted to the Official List, the allotment of Shares to Applicants will occur as soon as possible after the Offer is closed, following which statements of Share holdings will be dispatched. It is the responsibility of Applicants to determine their allocation prior to trading in Shares. Applicants who sell their Shares before they receive their holding statements will do so at their own risk. Pending the issue of the Shares or return of the Application Monies, the Application Monies will be held in trust for the Applicants.

2.16 Underwriting

The first $1.0 million of this Offer is conditionally underwritten by Novus Capital Limited under an Underwriting Agreement between Novus Capital Limited and the Company. A summary of the terms and conditions of this underwriting agreement are set out in Section 11 of this Prospectus.

2.17 Quotation of Shares on the ASX

Application will be made within seven days after the date of this Prospectus for the Company to be re-admitted to the Official List of ASX and for official quotation on the ASX of:

(a) all Shares on issue at the Opening Date of the Offer; and
(b) all Shares to be issued by the Company under this Prospectus.

If an application for admission of the Shares offered under this Prospectus to official quotation is not made within seven days after the date of this Prospectus or if Shares offered under this Prospectus are not admitted to official quotation within 3 months after the date of this Prospectus (or such longer period as may be permitted by ASIC), all issues of Shares offered under this Prospectus will be void and the Company will repay all Application Monies without interest as soon as practicable.

The fact that ASX may re-quote the Company to its Official List is not to be taken in any way as an indication of the merits of the Company or the Shares offered pursuant to this Prospectus.

2.18 CHESS

The Company will apply to ASX for the Shares to participate in the Clearing House Electronic Subregister System (“CHESS”). Share certificates will not be provided to successful Applicants. Instead, Applicants who are issued Shares under this Offer will be sent a holding statements that set out the number of Shares allotted and issued to each successful Applicant in accordance with this Prospectus. That statement will also advise Shareholders of their holder identification number (HIN) (in the case of a holding on the CHESS sub-register) or security reference number (SRN) (in the case of a holding on the issuer sponsored sub-register) and sponsoring issuer number. If there is a change in Share holdings during a month, the relevant Shareholder will receive a statement to that effect at the end of that month. That person may also require the Company to provide a statement at other times subject to payment of an administration fee.

mining | property | travel | ventures

�

�. Details of the Offer

- continued

==> picture [235 x 113] intentionally omitted <==

==> picture [75 x 113] intentionally omitted <==

2.19 Overseas Investors

This Prospectus does not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful to make such an offer or invitation. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. It is the responsibility of an overseas applicant to ensure compliance with all applicable laws of any country. Lodgement of a duly completed Application Form will be taken by the Company to constitute a representation and warranty that there has been no breach of such laws and that all necessary approvals and consents have been obtained.

No action has been taken to register or qualify the Shares, or the Offer, or otherwise to permit a public offering of the Shares, in any jurisdiction outside Australia.

The Offer pursuant to an Electronic Prospectus is only available to persons receiving an electronic version of this Prospectus within Australia.

2.20 Privacy Act

The Company collects information about each Applicant from the Application Form for the purposes of processing the Application and, if the Application is successful, to administer the Applicant’s Shareholding in the Company.

By submitting an Application Form, each Applicant agrees that the Company may use the information in the Application Form for the purposes set out in this Prospectus and may disclose it for those purposes to the Share Registry, the Company’s related bodies corporate, agents, contractors and third party service providers (including mailing houses), ASX, ASIC and other regulatory authorities.

If an Applicant becomes a Shareholder of the Company, the Corporations Act requires the Company to include information about the Shareholder (name, address and details of the Shares held) in its public register. This information must remain in the register even if that person ceases to be a Shareholder of the Company. Information contained in the Company’s registers is also used to facilitate distribution payments and corporate communications (including the

Company’s financial results, annual reports and other information that the Company may wish to communicate to its Shareholders) and compliance by the Company with legal and regulatory requirements.

Applicants may request access to their personal information held by (or on behalf of) the Company by telephoning or writing to the Company Secretary. If you do not provide the information required on the Application Form, the Company may not be able to accept or process your Application.

2.21 Taxation

The Australian taxation consequences of any investment in shares will depend upon each investor’s particular circumstances. The Directors do not consider that it is appropriate to give potential Applicants advice in relation to taxation consequences of applying for Shares under this Prospectus as it is not possible to provide a comprehensive summary of the possible taxation consequences. The Company, its officers and advisers do not accept any responsibility or liability for any taxation consequences to Applicants. Investors should therefore consult their own professional tax advisers to obtain advice concerning the taxation consequences of an investment in the Company.

2.22 Dividend Policy

The Company has no immediate intention to declare or distribute dividends. Payment of future dividends will depend upon the future profitability and financial position of the Company.

2.23 Financial Forecasts

The Directors have considered the matters set out in ASIC Policy Statement 170 and believe that they do not have a reasonable basis to forecast future earnings on the basis that the operations of the Company are inherently uncertain. Accordingly, any forecast or projection information would contain such a broad range of potential outcomes and possibilities that it is not possible to prepare a reliable best estimate forecast or projection.

Bridging business between Australia & China

�0

ASF Group Ltd 2007

==> picture [162 x 113] intentionally omitted <==

�. Profile of The Company

ASF Group Limited is an ASX listed Australian company led by a team of experienced managers in business between China and Australia. The Company’s strong Australia-China focus, acts as a bridge in structuring synergies for business opportunities between Australia and China.

As part of ASF’s diversified growth strategy, the Company plans to build upon its business units both organically, and by identifying external opportunities including, acquisitions, joint venture partners and strategic investors.

ASF Group operates in Australia and, through subsidiaries and investments in controlled entities, across China. The principal focus of the Company is as follows:

Mineral Resources & Energy
Property Marketing and Services
● Travel Services; and
China Ventures

3.1 Corporate Structure

==> picture [391 x 319] intentionally omitted <==

----- Start of picture text -----

ASF Group Limited
40%
ASF Corporate ASF Macau ASF Properties ASF China ASF Resources
Pty Ltd Multinational Pty Ltd Holdings Ltd Pty Ltd
Holdings Ltd (incorporated
(incorporated in the in the British Virgin
British Virgin Islands) Islands)
50%
ASF Ventures Ltd
MYTA Aushome China
(incorporated
(incorporated Pty Ltd
in Hong Kong)
in Macau)
Contract
GSITS
(Mmgt GD Coy)
ASF Properties ASF CRCC ASF Mongolian
(Guangzhou) Co. Ltd Resources Resource
(incorporated in China) Pty Ltd Pty Ltd
----- End of picture text -----

MYTA does not own shares in GSITS but operates and consolidates the GSITS business under a management agreement. See Section 9 and 11 for further details.

mining | property | travel | ventures

��

�. Profile Of The Company

- continued

==> picture [118 x 113] intentionally omitted <==

==> picture [192 x 113] intentionally omitted <==

3.2 Business Units

3.2.1 Mineral Resources & Energy

The Company, through its wholly owned subsidiary, ASF Resources Pty Ltd (“ASFR”), has assembled mineral exploration projects in Australia. ASFR’s strategy is to build a portfolio of quality exploration and mining projects and enter partnering and co-investing arrangements with major Chinese mining groups.

The Company has established relationships with a number of major mining groups in China that are interested to invest in Australia’s resources sector and, in this regard, it has entered into Co-operation Agreements with the following:

XinWen Mining Group of Shandong Province, China a major mining and power group where in 2006 the parties agreed to co-operate on development of coal reserves in Australia and China together with broad based technology procurement; and
a Joint Venture with the investment arm of China Railway Construction Corp over one WA tenement of ASFR where it acquires an interest of 51% in the joint venture for $1,020,000 to explore jointly with ASFR coal reserves.

Also ASFR has established a wholly owned subsidiary, ASF Mongolian Resources Pty Ltd which may be the participating entity for any Mongolian based projects undertaken by the Company. This subsidiary is presently assessing possible co-investment opportunities in the mineral resources sector of Mongolia.

ASFR’s current resource interests are:

South Ellendale project which is a large project area in the Canning Basin of Western Australia comprising six Exploration Licences, one Prospecting Licence and two Exploration Licence Applications covering an area of approximately 2,000 square kilometers. These tenements are known to be prospective for coal and diamonds; and

ASFR intends to expand and further investigate this portfolio of resource assets. In doing so, the Company intends to fund most of the required mineral exploration expenditure on these projects by way of co-investing arrangements at either the project level or within ASFR.

Western Australian Tenements: South Ellendale Project

Prior exploration has focused on coal and diamonds in periods since the 1960’s.

Coal

The Independent Geologist’s Report (refer to Section 8) notes that 25 holes have been drilled for coal within the tenement boundaries and 7 oil wells have been drilled. Of these holes, 8 holes that were drilled for coal intersected coal and 4 oil holes intersected coal. The coal deposits intersected occurred at relatively shallow depths and are of variable seam thickness, with seams generally thin. The Independent Geologist concludes that “the potential of the tenements to host large deposits of coal, albeit of currently un-quantified quality, is such as to warrant further exploration.”

Diamonds

Exploration for diamonds on the tenements has been carried out since the mid 1970’s by prior tenement holders, most recently United Minerals Corporation Limited and work accelerated after the discovery of the Ellendale 4 pipe by the Aston Joint Venture, outside of ASFR’s tenement areas in 1976.

Proposed Work Program

The Company through ASFR intends to give priority to coal investigations, rather than diamond exploration, in the immediate future. ASFR intends to carry out an exploration program for coal as recommended in the Independent Geologist’s Report (having an estimated cost of $450,000) in conjunction with one or more industry partners from China.

Two projects in Tasmania that are prospective for base metals and tin in the established mineralised belt of western Tasmania.

Bridging business between Australia & China

��

ASF Group Ltd 2007

==> picture [44 x 113] intentionally omitted <==

==> picture [119 x 113] intentionally omitted <==

List of Tenements – W.A.

The table, below, lists the Western Australian tenements held by ASFR.

==> picture [207 x 19] intentionally omitted <==

----- Start of picture text -----

Tenement Area (HA)
----- End of picture text -----

E04/1428	22,807
E04/1433	22,796
E04/1434	651
E04/1435	22,803
E04/1436	22,793
E04/1512	22,793
EA 04/1670	22,778
E04/1671	17,584
PL 04/212	103

Tasmanian Tenements:

The tenements held by ASFR are located in a highly mineralised region on the west coast of Tasmania. The region as a whole has been the subject of intensive exploration.

The tenement areas have potential for base metal, tin and gold mineralisation. The tenements have been recently granted to ASFR and the Company has not yet fully reviewed and compiled the results of prior exploration work carried out by previous holders on parts of the tenement areas.

The Company intends to undertake the initial program set out by the Independent Geologist’s Report, having a total estimated cost of $310,000 either itself or in conjunction with a China based industry partner.

List of Tenements - Tasmania

Tenement	Area (HA)
EL 14/2007	2,300
EL 15/2007	22,796

Refer to the Independent Geologist’s Report contained in Section 8 of this Prospectus for technical details of ASFR’s tenement areas.

3.2.2 Property Marketing & Services

ASF Properties Pty Limited (“ASFP”)

The Group’s property, marketing and services business division is being further developed by the Group. It consists of property marketing & services, the proposed formation of an ASX listed China property trust; and the roll out of a real estate brand in China. Details of these are set out below:

■ Property Marketing & Services

ASFP undertakes property marketing in China and certain other countries in Asia where it undertakes project marketing for 2 Sydney developers. This includes the Award winning residential development at Breakfast Point, Canada Bay, Sydney – Rose Group’s $1.5 billion development.
ASFP has entered into agreements with various parties under which ASFP holds conditional rights to acquire, and a right to acquire an interest in an entity that holds, land and existing properties in multiple locations around China including He Fei, Yan Cheng and Macau. It is intended that these rights will be transferred or assigned to the China property trust once it is established and capital is raised under the Trust. If the China property trust is not established, the Group does not intend to exercise any of these conditional rights.

■ China Property Trust

ASFP has engaged advisors to assist it in the raising of capital to establish a China focused Property trust. with the present intention of initially raising up to $200 million which will have a focus on land mark commercial, hotel and residential developments in China in the regional areas of China.
The Trust’s Board of Directors is intended to comprise experienced China property directors guiding the development of the Trust.
It is intended that ASFP will become the manager of the proposed China property trust.

mining | property | travel | ventures

��

�. Profile Of The Company

- continued

==> picture [118 x 113] intentionally omitted <==

==> picture [192 x 113] intentionally omitted <==

■ Real Estate Brand in China

ASFP plans to roll out 150 plus licensed regional offices in China in the next three to five years in the major regional centres of China.

Also ASF plans to establish wholly owned International Property Exhibition Centers across Chinese major cities.

3.2.3 Travel Services

ASF Macau Multinational Holdings Limited

ASF Macau Multinational Holdings Limited indirectly owns a travel agency business based in Macau which is conducted by Multinational Youth Travel Agency Company Limited (MYTA), a company incorporated in Macau that is owned by ASF Macau Multinational Holdings Limited. ASF holds a 40% interest in ASF Macau Holdings Multinational Limited and the remaining 60% is held by Alex Lao (ASF Group - Director) who is the original founder of MYTA.

MYTA operates travel agencies in Macau and holds management rights in relation to the business in a Southern China travel operator in Guangdong, namely Guangdong Great Scenery International Travel Service Limited.

The Macau Special Administrative Region of the People’s Republic of China, known as Macau is now one of the world’s hottest tourist destinations with over 20m visitors every year. Gaming revenue alone has surpassed Las Vegas.

ASF’s medium term goal for this travel division is to utilize its existing travel network in the region, further develop and expand MYTA and create an independent travel company either through listing or merger.

3.2.4 China Ventures

ASF Ventures Limited (“ASFV”)

ASFV has been formed with the intention to make minority equity investments in companies that have roots in both Australia and China, often associated with successful Australian entrepreneurs of mainland Chinese background. It is intended to act as a venture investor, along with a group of co-investors, in early stage or expansion opportunities, involving some form of Australia- China synergy, such as:

Expansion of Australian companies into the China market.
Relocation of operational elements of Australian companies, such as manufacturing or software development, to China.
The international expansion of private Chinese companies, via a platform incorporating key Australian activities such as product development; and
Supporting China based start ups of Chinese Australians.

The industries of focus will tend to reflect the background of ASF’s principals and their close advisers, most notably, education services and cleantech associated investments.

ASFV has examined many potential opportunities. A small number are currently being further developed, including, viz:

Large scale energy storage systems – based upon technology from Australia to be manufactured in China and distributed there and internationally.
Educational services – expansion of the domestic adult education and international education arms of a major national Chinese university, in co-operation with an experienced Australian commercial education operator; and
Renewable energy – exploitation in China, via use of Australian technology, of a major new source of clean energy.

Bridging business between Australia & China

��

ASF Group Ltd 2007

==> picture [44 x 113] intentionally omitted <==

==> picture [119 x 113] intentionally omitted <==

China & Australia

As China gained entry to the World Trade Organization earlier this decade, the doors to China’s markets and industries have gradually started to open to international investment. Although it is a challenging business environment, China now provides an enormous opportunity for those willing to do business in one of the world’s largest markets.

Trade

China is one of Australia’s largest export destinations and in 2005 Australia exported goods and services worth over $16 billion to China. In 2005-06 this figure jumped to almost $23 billion, with over 3800 Australian exporters selling to China. Major merchandise exports to China included iron ore, wool and copper ores.

In 2005-06 the trading statistics between Australia and China (supplied by Austrade and the Department of Foreign Affairs [DFAT]):

irs	[DFAT]):
●	Exports to China
	Iron Ore	$7.6 Billion
	Wool	$1.4 Billion
	Copper Ores	$1.2 Billion
	Coal	$598 Million

Chinese student enrolments grew to 81,184 in 2005 (an increase of 18%) making China the largest source market for international student enrolments.
Tourist arrivals from China to Australia rose 13.4 per cent in 2005 to around 285,000 visitors, which increased to 300,000 in 2006.

�. China – Australia Market

Exports

Australia and China have developed a very close relationship over the last 20 years. Education and tourism dominate Australia’s service exports to China, accounting for around two-thirds of services exports in recent years.

Tourism

China is forecast to become Australia’s largest inbound tourism market within six years and its largest trading partner. As a result of rising disposal income in the coastal regions of China – in the bustling richer cities such as Shanghai, Beijing and Guangzhou – many affluent urban Chinese are now coming to Australia. The average expenditure by these Chinese visitors is greater than their American, British or other East Asian counterparts. By 2013 Australia expects to welcome one million Chinese visitors a year, making China the single largest tourism market for Australia.

Education

There is substantial demand in China for overseas education despite the size and diversity of its education system which is due to the relatively small number of places available per capita. Recent surveys have indicated that children’s education is the first choice of investment by Chinese families, ahead of buying houses, saving for retirement and all other investment options.

Most urban families have only one child as a result of China’s family planning policy so parents tend to give their children the best education available. Australia is one of the leading foreign providers of courses in China. During the last five years, there has been a dramatic increase in student visa applications to study in Australia.

mining | property | travel | ventures

��

�. China – Australia Market

- continued

==> picture [236 x 113] intentionally omitted <==

==> picture [75 x 113] intentionally omitted <==

Property

China’s commercial real estate transactions have leapt 68% year-on-year to $9.2 billion in 2006 making it the third largest in the Asia-Pacific. China will play a more active role in global real estate markets after Chinese insurance capital and the state foreign exchange reserve get approval to invest in overseas property assets. The Directors believe that China will become a commercial real estate market as large as that of the US, the UK, Germany and Japan in five years from now.

China’s National Bureau of Statistics (NBS) on property investment in China produced the following figures in relation to the 5 months to June 2007.

Investment in China’s property sector reached RMB721.4 billion in the first five months, an increase of 27.5% from the same period last year.
RMB504.2 billion went into residential property, up 29.5%, of which RMB20.8 billion (around 4%) went into low-cost home construction, up 39.4%.
China’s developers registered RMB1.21 trillion of investment capital, up 26.2% from the same period last year of which foreign investment reached RMB22.2 billion yuan, up 89.9%.

Resources

In the long-term, China’s government plans to invest US$1.2 billion on upgrading technology in 70 coal mines and converting state-owned mining enterprises into shareholding companies.

Given the ongoing efforts of the Chinese government to increase productivity and reduce the environmental impact, there appears to be future opportunities for the supply of more efficient and modern mining equipment and processing technology as well as related environmental technology and expertise.

In Western China, an area rich in mineral resources, there are heavy demands for advanced mining technology and high quality equipment.

The restructuring of the mining industry gives new powers to trading companies and makes importing less restrictive. The increased decision-making power of trading enterprises over commercial matters should also lead to growing demand for imported minerals.

Area of land under development reached 97.75 million square metres, up 11.2%.
Floor space of buildings under construction reached 1.56 billion square metres, up 21.9%.
Floor space of commercial property unsold or unused totalled 127 million square metres, up 4.7%, of which 68.25 million square metres was residential, up 1.4%.

Bridging business between Australia & China

��

ASF Group Ltd 2007

==> picture [44 x 113] intentionally omitted <==

==> picture [118 x 113] intentionally omitted <==

Investment

China’s investment in Australia is significant. Its largest and most high profile investments in Australia are in the resources sector, reflecting its development demands and goal to secure upstream resources for ongoing rapid industrialisation.

China’s foreign exchange reserves of US$1.4 trillion, and a new ‘pro-global’ policy encouraging Chinese companies to invest overseas means that an increase in Chinese investment in Australia can be expected.

In 2006, the Chinese economy continued to grow at a high rate of over 10 per cent GDP growth. The same is projected for 2007. While China remains a complex market in which to do business, the market is becoming more open and international, particularly in the major urban centres.

The size, diversity and varying levels of development across China provide a range of niche and mass market opportunities for Australian companies to provide products and services to meet China’s needs.

mining | property | travel | ventures

��

�. Directors & Management

==> picture [118 x 113] intentionally omitted <==

==> picture [119 x 113] intentionally omitted <==

==> picture [76 x 113] intentionally omitted <==

David Fang

Alex Lao

Min Yang

5.1 The Board of Directors

Min Yang Executive Chairman

Min Yang is Chairman of ASF and is President of Aus-Sino Investment Association. She has extensive corporate and property expertise developed over 15 years of working in Australia, China and many parts of South East Asia. She has an extensive business network in China Macau, Hong Kong and Taiwan, and has undertaken investment banking transactions and deal origination throughout greater China and Asia Pacific. Ms Yang’s experience extends to a number of areas:

Min acquired a major share holding in a Sydney real estate agency and formed Sino Property Network Ltd (trading as Aushome) a company specializing in channelling Chinese investment into properties in Australia.

Min was instrumental in forming a consortium in the acquisition of two Sydney Hotels. She also worked with Guangdong China Travel Service (GDCTS) as business partner in travel opportunities for Chinese traveling overseas.

During this period Min also established a company that became a Licensed telecommunication operator in Australia and later merged with an Australian listed company building it into a telecommunication carrier with over 100,000 customers that specialized in voice and data communications between Asia Pacific and China. Min was the Vice President (China strategy).

David Fang Executive Director

David was born in Shanghai and has worked and operated in Australia since 1988 spending a lot of his entrepreneurial life in Sydney. He is multi lingual speaking Mandarin, Shanghai dialect, Cantonese and English. David has extensive experience in property focusing on property sales/marketing, property development, acquisitions, and syndication of property both in China and Australia.

Alex Lao

Vice Chairman / Non-Executive Director

Mr Lao resides in Macau where he has business interests in the property, travel and retail industries. Alex Lao became a substantial shareholder of ASF pursuant to the acquisition by the Company from Mr Lao in June 2006 of a joint venture interest in the Macau based travel agency business.

The board has appointed Mr. Alex Lao as Vice Chairman effective 30 November 2006 and he is Managing Director of ASF Macau Multinational Holdings Limited and is responsible for the operations in Multinational Youth Travel Agency Limited. Alex Lao is also Chairman of the Macau Travel Agency Association. Mr Lao by virtue of his industry experience and commercial expertise makes a valuable contribution to the Group.

Wai Sang Ho Non-Executive Director

Mr Ho is a Hong Kong resident and large property developer in Southern China. He has substantial property interests in Hong Kong and China and is a major shareholder in the Company. Mr Ho by virtue of his industry experience and commercial expertise makes a valuable contribution to the Group especially to our property division.

Geoff Baker Executive Director

Geoff Baker has responsibility for international operations of the Group. He joined ASF after practising extensively for 28 years as a lawyer in Australia, Japan, Asia and China. Geoff is a qualified lawyer in Australia and Hong Kong with a Commerce degree (Accounting and Financial management), a Law degree and MBA.

Over the past 10 years Geoff has been active in China conducting a practice in assisting companies do business in the region focused on corporate services and inward investment where he has been actively involved in opening offices and investing in building businesses in the region.

Geoff Baker has represented many companies from around the world in operating successfully in China and dealing with the regulatory regime and obtaining all necessary ministerial approvals. He is a director of a number of companies (listed and private) and has been a businessman in China and Asia for many years.

Bridging business between Australia & China

��

ASF Group Ltd 2007

==> picture [42 x 113] intentionally omitted <==

==> picture [119 x 113] intentionally omitted <==

==> picture [117 x 113] intentionally omitted <==

==> picture [119 x 113] intentionally omitted <==

Wai Sang Ho Geoff Baker

Alan Humphris

Alan Humphris Non-Executive Director

Alan Humphris is an Investment Banker with more than 30 years experience in Australian and international markets. He is Managing Director of Balmoral Capital Pty Limited, an investment banking firm specialising in providing corporate advisory services, which he founded in 1997. He is also a non executive director of ASX listed Rey Resources Limited and of several other private companies.

In the period from 1989 to 1996, Alan Humphris was Executive Director of London based merchant bank, Hambros Australia Limited and Head of Hambros Corporate Finance, and earlier he was a director of J P Morgan Australia Limited.

5.2 Executive Management and Administrative Support Services

Group Executive Management

Each of the Business units are supported by the ASF senior management team consisting of the Executive Board members. They provide strategic direction of the group’s development with their specific skills provided to each of the operating business units.

Administrative Support Services

In addition to the Executive Directors ASF Group has approximately 28 staff and contractors fully dedicated to the development of the Group across its offices in Sydney, Beijing, Shanghai and Guangzhou.

He has had long experience in Australia-China business having acted as advisor to CITIC of Beijing in their major investment in the Portland aluminium smelter in Australia in 1985. Subsequently, with the opening of the securities markets of China in the early 1990’s, he established a successful joint venture between CITIC and Hambros which listed an investment company on the ASX to participate in the securities markets of China.

Alan Humphris holds the degrees of Bachelor of Science, Bachelor of Economics (acc/econ), and Master of Laws (dist.) and is an FCPA.

mining | property | travel | ventures

��

�. Financial Information

6.1 Introduction

6.1.1 Basis and method of preparation

This section contains a summary of the historical financial information for ASF Group.

The historical financial information presented comprises the following:

Audited historical Profit & Loss Statement for the financial year ended 30 June 2007;
Audited historical Statement of Cash Flows for the financial year ended 30 June 2007;
Audited Balance Sheet and Pro forma Balance Sheet at 30 June 2007; and
Significant Accounting Policies and Material Accounting Matters.

ASF Group Limited operates in Australia, China and Macau. The focus of the Company is as follows:

Mining, Resource and Energy Exploration and Development: the company has assembled mineral exploration projects in Australia. The strategy is to build a portfolio of quality exploration and mining projects and enter partnership and co-investing arrangements with Major Chinese mining groups.
Property Development and Services: the Company undertakes international property marketing for Australian developers in China. The Company has also engaged advisors to assist in establishing a China focused ASX listed property trust.
Travel Services: the company operates a travel agency business based in Macau and China.
Venture Capital Financial Services: the company intends to act as a venture investor in early stage or expansion opportunities along with a group of co-investors.

6.1.2 Audit of historical financial information

The historical financial information has been extracted from the audited financial statements of ASF Group which were audited by Hall Chadwick Chartered Accountants.

The audit opinion expressed for the 2007 Financial Statements contained certain qualifications as detailed below:

Revenue from travel agency: Included in Note 3 to the financial report is revenue from the group’s travel agency businesses in Macau and Guangdong amounting to $19,625,134. The auditors have been unable to determine if this revenue has been correctly recorded in accordance with AASB 118 “Revenue” which requires revenue to be disclosed as commission where an agency relationship exists. The auditors have been unable to obtain all information and explanations required in order to satisfy themselves as to whether an agency relationship exists in relation to some or all of the revenue from these businesses by other audit procedures.

In addition, the amount of receivables and payables in relation to the group’s travel agency businesses are shown as a gross amount reflecting all asset and liabilities owed from or to third parties. Some of these amounts may reflect transactions on a gross basis which may have been undertaken as an agent.

Whilst this will not have any impact on the group’s profit, the revenue for the group may be overstated by up to $19,625,134 and cost of sales overstated by up to $17,693,984. Also the receivables and payables may be overstated as they would reflect the gross balance in relation to possible agency transactions. The balance of receivables at 30 June 2007 in relation to this business was $1,484,080 and $1,259,948 respectively.

Deposits Paid: Included in Note 9 to the financial report is an amount owed by a hotel operator to the travel agency business in Macau for prepaid hotel rooms amounting to $1,499,293. The auditors have been unable to obtain the necessary information to satisfy themselves as to the accuracy of this balance.

Section 3 of the Prospectus details the group structure and each business segment of ASF.

Bridging business between Australia & China

�0

ASF Group Ltd 2007

Loan Receivables: Included in Note 9 to the financial report are amounts owed by related companies of one of the directors totalling $751,193 in relation to the Macau business. The auditors have been unable to obtain the necessary information to satisfy themselves as to the recoverability of these balances.

The historical financial information should be read in conjunction with the Investigating Accountants Report set out in Section 9.

Information for financial years prior to FY2007 has not been included in the Prospectus as the results for FY2006 would not be indicative of the business conducted today.

Goodwill: Included in Note 16 to the financial report is goodwill relating to the acquisition of the Macau travel agency business amounting to $640,626. Although the directors have provided discounted cash flow projections to support the carrying value of this business, the auditors have been unable to satisfy ourselves as to the basis of the underlying assets upon which the discounted cash flow projections are based.
Included in Note 16 to the financial report is goodwill relating to the acquisition of the real estate business amounting to $2,599,990. Although the directors have provided discounted cash flow projections to support the carrying value of this business, the auditors have been unable to obtain the necessary information to satisfy ourselves as to whether the company has the ability to enable it to meet these projections.
Material Uncertainty Regarding Continuation as a Going Concern: The auditors draw attention to Note 1(a) “Going Concern” which indicates that the group’s ability to continue as a going concern is dependent upon either/or the successful capital raising currently being undertaken; other possible future private placements; the success of business opportunities that the group is pursuing and Goldchoice Investments Limited electing to convert it’s $1.0 million loan facility in the group to equity. Should the group be unable to raise or earn sufficient additional monies as and when required to meet the requirement of it’s ongoing operations, there is significant uncertainty as to whether it will be able to continue as a going concern and therefore realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.

mining | property | travel | ventures

��

�. Financial Information - continued

6.2 Profit & Loss Statement

Set out in the table below is the historical Profit and Loss Statement for ASF Group. This information should be read in conjunction with the information provided elsewhere in this Prospectus.

==> picture [456 x 43] intentionally omitted <==

----- Start of picture text -----

Audited Consolidated
Historical FY2007
$’000
----- End of picture text -----

Revenue from sale of travel services	19,628
Revenue from property services	145
Sub-Licence fees	200
Other income	144
Total Revenue	20,117
Direct costs of travel services	(17,694)
Commissions	(85)
Rent	(281)
Employee benefits expense	(760)
Professional and consulting fees	(1,131)
China based operational costs	(604)
Administrative expenses	(287)
Other expenses	(170)
Total operating expenses	(21,012)
EBITDA	(895)
Depreciation and amortisation expense	(270)
EBIT	(1,165)
Net interest expense	(170)
Loss before income tax	(1,335)
Income tax expense	(18)
Loss attributable to members of the group	(1,353)

Bridging business between Australia & China

��

ASF Group Ltd 2007

6.3 Segment Reporting

Business Segments

The operations of the consolidated entity include Mining, Resource and Energy Development, Property Marketing and Services, Travel Services and Ventures Services. The company has an Australia-China focus, building synergies for business opportunities between Australia and China.

==> picture [455 x 144] intentionally omitted <==

----- Start of picture text -----

Property Mineral and Travel Services Venture and Elimination Total
Marketing and Resources Financial
Services Services
Total Revenue 345,515 - 19,740,358 31,127 - 20,117,000
Segment
(704,154) (369,129) 312,574 (593,160) (187,544) (1,541,413)
Result
Total Assets 255,682 196,864 6,207,158 8,824,658 (4,317,642) 11,166,720
Total Liabilities (1,079,824) (565,989) (4,345,138) (3,887,291) 3,658,250 (6,219,992)
Depreciation 493 - 216,008 53,566 - 270,067
expenses
----- End of picture text -----

Geographical Segments

==> picture [457 x 107] intentionally omitted <==

----- Start of picture text -----

Australia Asia Eliminations Total
$ $ $ $
Total Revenue 376,642 19,740,358 - 20,117,000
Segment Result (1,666,443) 312,574 (187,544) (1,541,413)
Total Assets 9,277,204 6,207,158 (4,317,642) 11,166,720
Total Liabilities (5,533,104) (4,345,138) 3,658,250 (6,219,992)
-
Depreciation expenses 54,059 216,008 270,067
----- End of picture text -----

mining | property | travel | ventures

��

�. Financial Information - continued

6.4 Statement of cash flows

Set out in the table below is the historical Statement of Cash Flows for ASF Group. This information should be read in conjunction with the information provided elsewhere in this Prospectus.

==> picture [457 x 376] intentionally omitted <==

----- Start of picture text -----

Audited Consolidated
Historical FY2007
$’000
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 16,913
Payments to suppliers and employees (16,617)
Interest received 88
Interest paid (170)
Sundry income received 55
Income tax paid/(refund) (18)
Net cash provided by operating activities (1) 251
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for exploration expenditure (180)
Payments for plant and equipment (39)
Net cash provided by (used in) investing activities (219)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares 1,415
Proceeds received pending issue of shares(3) 600
Proceeds from borrowings (1,986)
Net cash provided by financing activities 29
Net increase in cash held 61
Cash acquired on acquisition of controlled entities(2) 1,196
Cash at beginning of financial period 167
Effect of exchange rates on cash holdings in foreign currencies (442)
Cash at end of financial period 982
----- End of picture text -----

Bridging business between Australia & China

��

ASF Group Ltd 2007

Reconciliation of cash flow from operations with profit after income tax:

==> picture [456 x 184] intentionally omitted <==

----- Start of picture text -----

FY2007
$’000
Loss after income tax (1,353)
Non-cash flows in profit
Depreciation and amortisation 270
Loss on sale property, plant and equipment 1
Net Cash used in operating activities before changes in assets and liabilities (1,082)
Changes in assets and liabilities
Decrease in receivables 477
Increase in payables and provisions 858
Increase in provisions (2)
Net cash provided by operating activities (2) 251
----- End of picture text -----

The amount of $1,196,812 cash was acquired as part of the acquisition of the 40% interest in ASF Macau Multinational Holdings Limited for a consideration of $1,300,000 effective 30 June 2006. The assets and liabilities arising from the acquisition are recognised at fair value which is equal to their carrying value.
The cash provided by operating activities differs to that shown in the 2007 Financial Report due to a reclassification of funds held pending the issue of shares.

mining | property | travel | ventures

��

�. Financial Information - continued

6.5 Balance sheet as at 30 June 2007

Set out in the table below is the historical and pro forma Balance Sheets for ASF Group as at 30 June 2007. This information should be read in conjunction with the information provided elsewhere in this Prospectus.

==> picture [456 x 520] intentionally omitted <==

----- Start of picture text -----

$’000 Audited Pro forma Pro forma Pro forma
Historical Adjustments [2] Consolidated Min Consolidated Max
Consolidated [1] Raising [3] Raising [4]
Current Assets
Cash and cash equivalents 2,066 693 2,759 6,559
Trade and other receivables 4,806 4,806 4,806
Inventories 5 5 5
Total Current Assets 6,877 693 7,570 11,370
Non-Current Assets
Trade and other receivables 247 247 247
Plant & equipment 621 621 621
Other Non Current Assets 180 180 180
Intangible assets 3,241 3,241 3,241
Total Non-Current Assets 4,289 4,289 4,289
Total Assets 11,166 693 11,859 15,659
Current Liabilities
Trade and other payables 4,134 4,134 4,134
Financial Liabilities 2,084 2,084 2,084
Current tax liabilities 1 1 1
Total Current Liabilities 6,219 6,219 6,219
Total Liabilities 6,219 6,219 6,219
Net Assets 4,947 693 5,640 9,440
Shareholders Equity
Issued Capital 39,011 1,943 40,954 44,754
Reserves (442) (442) (442)
Retained Earnings (35,141) (1,250) (36,391) (36,391)
Parent Entity Interest 3,428 693 4,121 7,921
Minority Interest 1,519 1,519 1,519
Total Shareholders Equity 4,947 693 5,640 9,440
----- End of picture text -----

Bridging business between Australia & China

��

ASF Group Ltd 2007

Notes :

Column 1 represents the Balance Sheet of ASF Group Limited as at 30 June 2007.
Column 2 represents:
the adjustments required to reflect the conduct of the Offer, comprising the minimum issue of 4,000,000 shares at 25 cents each to raise $1,000,000, less expected costs of the Offer of $308,000. The impact of the Share Offer is to increase issued share capital and cash by $693,000 and;
the adjustments required to reflect the issue of shares to Directors as approved by the Annual General Meeting of the company. The effect of the issue is to increase share capital by $1,250,000 and to reduce earnings by $1,250,000.
Column 3 represents the Balance Sheet of ASF Group and the conduct of the Offer under the minimum subscription and the issue of shares to Directors as disclosed at Note 2.
Column 4 represents the Balance Sheet of ASF Group and the conduct of the Offer under the maximum subscription of 20,000,000 shares at 25 cents each and the issue of shares to Directors as disclosed at Note 2. The maximum subscription will raise $5,000,000, less expected costs of the Offer of $508,000. The impact of the share Offer is to increase issued share capital by $4,931,000. The effect of the issue of shares to directors is as disclosed in Note 2.
Included in the Issued Capital Account are amounts of $25,000 and $125,000 for the minimum and maximum subscriptions respectively. These amounts both increase share capital as they represent the shares issued to Novus Capital and the value of those shares. The ultimate effect on share capital of this transaction is zero

6.5.1 Notes to Balance Sheet Item

6.5.1.1 Trade & Other Receivables

==> picture [264 x 18] intentionally omitted <==

----- Start of picture text -----

$’000
----- End of picture text -----

	$’000

CURRENT
Trade Receivables	1,491
Other Receivables	276
Amount receivable from related companies	751
Receivables and prepayments	2,287
	4,806
NON-CURRENT
Amount owing by Controlled Entities	875
Provision for Doubtful Debt	(875)
Prepayments	247
	247

6.5.1.2 Exploration, and Evaluation Expenditure capitalised

	$’000
Exploration	180

The ultimate recoupment of balances carried forward in relation to areas of interest still in the Exploration or Valuation phase is dependent on successful development and commercial exploitation, or alternatively sales of the respective areas.

The current resource interests are: a project in the Canning Basin of Western Australia and two projects in Tasmania.

mining | property | travel | ventures

��

�. Financial Information - continued

6.5.1.3 Intangible Assets

	$’000
Goodwill	3,241

The recoverable amount of goodwill is determined based on value-in-use calculations. These calculations use cash flow projections on financial budgets approved by management covering a five year period with the period extending beyond five years extrapolated using a terminal value of the year’s cash flow projections. In performing the value-in-use calculations, the economic entity has applied a post-tax discount rate of 25% to discount the forecast future attributable post tax cash flow. The cash flows are based on budgets for each cash generating unit. These budgets use growth rates to project revenue between 10 - 20%. Discount rates are pre-tax and are adjusted to incorporate risks associated with a particular cash generating unit.

6.5.1.4 Trade and Other Payables

==> picture [266 x 18] intentionally omitted <==

----- Start of picture text -----

$’000
----- End of picture text -----

	$’000

CURRENT
Trade Payables	1,419
Sundry Payables and Accrued Expenses	847
Share Subscription money received in advance	600
Amounts payable to: - Related Parties - Director	225 1,043
	4,134

6.5.1.5 Financial Liabilities

==> picture [266 x 18] intentionally omitted <==

----- Start of picture text -----

$’000
----- End of picture text -----

	$’000

CURRENT
Bank Overdraft – secured liability	1,084
Goldchoice Loan – unsecured liability	1,000
	2,084

The Goldchoice Loan is provided with an option to convert to ordinary shares of the company.

Bridging business between Australia & China

��

ASF Group Ltd 2007

6.5.1.6 Controlled Entities – Particulars in relation to controlled entities

==> picture [443 x 31] intentionally omitted <==

----- Start of picture text -----

Domicile 2007
%
----- End of picture text -----

	Domicile	2007 %

ASF Group Limited – Parent Entity
Controlled Entities
ASF Corporate Pty Ltd	Australia	100%
ASF Properties Pty Ltd	Australia	100%
Aushome China Pty Ltd	Australia	100%
Aria Power Products Inc	USA	90%
ASF Resources Pty Ltd	Australia	100%
ASF China Holdings Pty Ltd	BVI	100%
Controlled Entities acquired during the year
ASF Macau Multinational Limited	BVI	40%
Multinational Youth Travel Agency Company Ltd	Macau	40%
Guangdong Great Scenery International Travel Service Co., Ltd	China	-

Controlled entities with Ownership interest of up to 50% or less.

Pursuant to a Share and Sale Agreement dated 28 June 2006 (as amended on 1 July 2006) ASF Group Limited acquired a 40% controlling interest in ASF Macau Multinational Holdings Limited (formerly Aim Jumbo Limited) for a consideration of $1.3 million. ASF Macau Multinational Holdings Limited owns 100% of Multinational Youth Travel Agency Company Limited (MYTA). A management agreement between MYTA and Guangdong Great Scenery International Travel Service Limited (GGSIT) stipulates that MYTA has full power and authority to manage and control all the business and activities of GGSIT and is entitled to all profits and is liable for all losses. These two entities were consolidated effective 1 July 2006 on the basis of board and management control and as specified in agreements provided by the company.

Newly Formed Group Entities

ASF has recently established the following controlled entities. These entities did not contribute to the FY2007 results of the Group.

Ownership %	Ownership %
ASF Ventures Ltd	50%
ASF Properties (Guangzhou) Co. Ltd	100%
ASF CRCC Resources Pty Ltd	100%
ASF Mongolian Resource Pty Ltd	100%

6.6 Review of significant accounting policies and material accounting matters Set out below are a number of significant accounting policies and other material accounting matters relevant to the preparation of the Financial Information above.

6.6.1 Financial Outcomes Associated with the Offer

The Financial Information presented in this section of this Prospectus has been prepared on the basis that Applications totalling $1 million as detailed in this Prospectus will be received (maximum applications of $5 million). It is anticipated that costs associated with the issue of this Prospectus and the conduct of the Offer will total approximately $333,000 if $1 million is raised and $633,000 if $5 million is raised.

mining | property | travel | ventures

��

�. Financial Information - continued

6.6.2 Going Concern

The financial statements have been prepared on the going concern basis of accounting, which assumes the continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business.

The net loss after income tax for the consolidated entity for the financial year ended 30 June 2007 was $1,353,869.

The Directors nevertheless believe that it is appropriate to prepare the financial report on a going concern basis because:

a) Included in the current liabilities is an amount owed to Goldchoice Investment Limited of $1 million which matured on 30 September 2007 under a Convertible Loan Facility established on 1 July 2006. Goldchoice has indicated that it intends to convert all of the outstanding loan to equity in the Company based on the issue price of 0.75 cent per share.
b) The ability to meet operating expenditure is also dependant upon the success of the capital raising currently being undertaken and future fundraising or the company business opportunities generating positive cash flows.

In the event the consolidated entity is unable to raise sufficient funds there is significant uncertainty whether it will be able to continue as a going concern and therefore whether the Company and the consolidated entity can realise its assets and extinguish its liabilities at the amounts stated in the statement of balance sheet. In this situation, the going concern basis would not be appropriate.

6.6.3 Principles of Consolidation

A controlled entity is any entity ASF has the power to control the financial and operating policies of so as to obtain benefits from its activities.

All inter-company balances and transactions between entities in the consolidated group, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those policies applied by the parent entity.

Where controlled entities have entered or left the consolidated group during the year, their operating results have been included/excluded from the date control was obtained or until the date control ceased.

Minority equity interests in the equity and results of the entities that are controlled are shown as a separate item in the consolidated financial report.

6.6.4 Income Tax

The charge for current income tax expense is based on the profit for the year adjusted for any non-assessable or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be 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 is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the consolidated group will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

6.6.5 Inventories

Inventories are measured at the lower of cost and net realisable value. Overheads are applied on the basis of normal operating capacity. Costs are assigned on the basis of weighted average costs.

The cost of mining stocks includes direct materials, direct labour, transportation costs and variable and fixed overhead costs relating to mining activities.

Bridging business between Australia & China

�0

ASF Group Ltd 2007

6.6.6 Plant and Equipment

Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses.

Plant and equipment are measured on the cost basis.

The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

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 income statement during the financial period in which they are incurred.

The depreciable amount of all fixed assets including building and capitalised lease assets, but excluding freehold land, is depreciated on a straight-line basis over their useful lives 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 assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

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 and losses are included in the income statement. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.

6.6.7 Exploration and Development Expenditure

Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made.

When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

Costs of site restoration are provided over the life of the facility from when exploration commences and are included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building structures, waste removal, and rehabilitation of the site in accordance with clauses of the mining permits. Such costs have been determined using estimates of future costs, current legal requirements and technology on an undiscounted basis.

Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation. Accordingly the costs have been determined on the basis that the restoration will be completed within one year of abandoning the site.

mining | property | travel | ventures

��

�. Financial Information - continued

6.6.8 Impairment of Assets

At each reporting date, the group reviews the carrying values of its intangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the income statement.

Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.

Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

6.6.9 Intangibles – Goodwill

Goodwill and goodwill on consolidation are initially recorded at the amount by which the purchase price for a business or for an ownership interest in a controlled entity exceeds the fair value attributed to its net assets at date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

6.6.10 Foreign Currency Transactions and Balances

6.6.10.1 Functional and presentation currency

The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity’s functional and presentation currency.

6.6.10.2 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 year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Nonmonetary 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 income statement, except where deferred in equity as a qualifying cash flow or net investment hedge.

Exchange differences arising on the translation of nonmonetary 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 income statement.

6.6.10.3 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 year-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 balance sheet. These differences are recognised in the income statement in the period in which the operation is disposed.

Bridging business between Australia & China

��

ASF Group Ltd 2007

�. Risk Factors

7.1 Introduction

There are a number of risks which may affect the future operating and financial performance of the Company and the value of Shares. Some of these risks can be mitigated by appropriate commercial action. However, many are outside the control of the Company or otherwise cannot be mitigated. These risks include, but are not limited to, the risks set out in this Section.

In this Section, the risks associated with an investment in Shares have been divided into two types of risks:

general investment risks; and
specific risks related to the Company.

Before deciding whether to invest in Shares, investors should consider all of these risks carefully, as well as the other information contained in this Prospectus, and if they consider it appropriate, take professional advice from their accountant, stockbroker, solicitor or other professional adviser.

7.2 General Risks

Economic Risks

Economic factors beyond the control of the Company, such as changes in commodity prices, property prices, interest rates, inflation, exchange rates and taxation, may negatively impact on the Company’s exploration & resource, property, travel, corporate and venture divisions as well as its ability to fund those activities, plus revenue and profitability of the Company.

Share Market Conditions

The market price of the Shares may fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general.

Limited Liquidity

Whilst the Company will proceed with an application to the ASX to have its Shares admitted to official quotation by the ASX, there is no recognised market for buying and selling the Shares at this time.

Changes in Law

Changes in government legislation, regulation and policy, introduction of new legislation or regulations or further developments in common law, including in China and

Australia, may adversely impact on ASF Group’s business divisions, future earnings, value of its investment properties and the market value of its Shares.

Taxation

The Company’s business could be materially affected by changes to federal, state and local government policies and tax regimes.

Currency Risk

Changes in foreign currency exchange rates can affect the value of the Company’s assets and liabilities, revenues and costs. The Company may in appropriate circumstances in the future, use hedging transactions to reduce its exposure to these risks. The results of the Company may therefore be affected as a result of exchange rate fluctuations.

IT Systems

Companies today rely heavily on the efficiency and reliability of their administrative systems. Breakdowns, etc, can have adverse consequences.

Jurisdictional Risk

The Company operates in foreign jurisdictions including in the People’s Republic of China and Macau. There are jurisdictional and sovereign risks associated with the Company operating in any foreign jurisdiction over and above those which might be expected to be encountered in Australia, such as unanticipated legislative change (including retrospective change) or intervention.

There are certain risks inherent in doing business on an international level, such as unexpected changes in regulatory requirements, tariffs, customs, duties and other trade barriers, difficulties in staffing and managing foreign operations, longer payment cycles, problems in collecting accounts receivable, political instability, expropriation, nationalisation and war. There may also be fluctuations in currency exchange rates (see below), foreign exchange controls which restrict or prohibit repatriation of funds, technology export and import restrictions or prohibitions and delays from customers, brokers or government agencies. The Company could also be adversely affected by seasonal reductions in business activity and potentially adverse tax consequences, any of which could adversely impact the success of ASF Group’s international operations.

mining | property | travel | ventures

��

�. Risk Factors - continued

In some countries, the Company may need to enter a joint venture or other strategic relationship with one or more third parties in order to successfully conduct its operations, and may be required by law to hold only a minority interest in any operating entity. To the extent it is a party to joint ventures, the Company may be subject to loss of proprietary information and other assets, risky business practices and other strategic decisions contrary to the Company’s interests. In addition, any international expansion could require a significant diversion of financial and technical resources and management attention from operations in Australia. There can be no assurance that laws or administrative practice relating to taxation, foreign exchange or other matters of countries in which the Company operates or intends to operate will not change.

There is also a risk that Australian government policies in relation to particular regions may change, affecting trade and investment opportunities in that region.

7.3 Specific Risks

Investment Risks

The value and performance of the Company is reliant on the performance and value of its business divisions. An investment in the Company is relatively high risk given that its operations will be focused on Chinese emerging markets. Although the Company seeks to mitigate these risks by using the past China experience of its management and with a spread of exposures over different sectors of the economy, these risks remain. Chinese culture and business practices are different to Western norms and thus pose a specific business management risk. Over the last 10 years and post WTO, Chinese business practices and legal infrastructure have, and continue to, achieve widespread improvement however counterparty risk can be high in many situations.

Key Person Risk

The key people identified in Sections 5 are being relied upon to maintain the performance of the Company. The success of the Company and its ability to effectively continue operations is dependent on its ability to retain or replace the services of those key people. There can be no guarantee as to their continuity of service, particularly with the absence of any employment contracts with the Company and replacement of these skills may take time to arrange.

Chinese Economic, Political and Regulatory Risks

The laws, regulations, government policies and political and economic climate in China may change without notice. Any such changes could adversely affect the performance of the Chinese economy and the value and performance of the Company.

The Chinese economy is transitioning from a centrally planned to a more market-oriented economy, allowing more private economic activity and foreign investment. However, through its policies, the Chinese government may provide preferential treatment to particular industries or companies, and there is no guarantee that China’s economic, political or legal systems will develop in a way that is beneficial to the Company and its businesses.

While the Chinese economy has been growing, there is no guarantee that this economic growth will continue as in past years. There is also no guarantee that growth in the Chinese economy will necessarily lead to equivalent growth (or any growth) in the value of ASF Group.

Changes to the regulatory environment in the Chinese markets in which the Company is involved as well as changes in taxation and foreign exchange rulings and procedures, may significantly affect the performance of the Company. China is changing rapidly as markets are opened up under WTO auspices. Unexpected changes frequently occur. Regulations and their enforcement practices vary from province to province and (as is the case in Australia) requires local enquiry. Failure to comply with regulatory requirements could adversely impact on the Company.

Although the Chinese legal system is undergoing a modernisation programme, it is immature and inconsistent by Western standards. There may be uncertainty regarding the interpretation and implementation of the laws and compliance and effectiveness may differ from province to province. Following China’s admission to the WTO, the Chinese legal system is rapidly developing. For example, intellectual property laws are being brought into compliance with the WTO’s Trade-Related Aspects of Intellectual Property Rights. However Chinese laws providing protection to investors, such as disclosure provisions and laws regarding the fiduciary duties of officers and directors, are undeveloped, and may not provide the Company with the same protection as in Australia. It may also be difficult for the Company to enforce its rights as an investor under Chinese corporate and securities laws.

Bridging business between Australia & China

��

ASF Group Ltd 2007

Investments in Chinese businesses may require approval from government and regulatory authorities. There is no guarantee such approvals will be obtained in a timely manner or at all.

In China, legal rights are often enforced with the assistance of good counterparty and/or community “relationships”. An absence of such relationships (as seen quite frequently with newly arrived foreign investors in China) is a specific area of risk.

7.3.1 Exploration Risks

Mineral and Exploration Risk

The business of exploration, project development and mining contains risks by its very nature. To prosper, it depends on the successful exploration and/or acquisition of reserves, design and construction of efficient production/processing facilities, competent operation and managerial performance and proficient marketing of the product. In particular, exploration is a speculative endeavour and force majeure circumstances, cost over runs and other unforeseen events can hamper mining operations. The exploration costs of ASFR are based on certain assumptions and are subject to significant uncertainties. The actual costs of exploration may materially differ from the estimates and assumptions. There can be no assurance that the cost estimates and supporting assumptions will be realized.

Potential investors should understand that diamond, coal and base metals exploration and development is a high-risk undertaking.

There can be no assurance that exploration of acquired projects or any other exploration properties that may be acquired in the future, will result in the discovery of an economic resource. Even if an apparently viable resource is identified, there is no certainty that it can be economically explored. Most exploration projects do not result in the discovery of commercially viable deposits. There can be no assurance that exploration of the mining tenements of ASFR or any other tenements that may be acquired in the future will result in the discovery of commercially viable deposits.

Environmental Impact Constraints

The Company’s exploration programs will, in general, be subject to approval by state and federal governmental authorities. Many of the activities and operations of the Company may not be carried out without the prior approval

from, and compliance with, all relevant authorities. The Company intends to conduct its activities in an environmentally responsible manner and in accordance with all applicable laws. However, the Company may become subject to liability due to risk inherent to its activities such as leakages or other unforeseen circumstances.

Operating Risks

The operations of the Company may be affected by various factors, including failure to locate or identify mineral deposits; failure to achieve predicted grades in exploration and mining; operational and technical difficulties encountered in mining; difficulties in commissioning and operating plant and equipment; mechanical failure or plant breakdown; unanticipated metallurgical problems which may affect extraction costs; adverse weather conditions; industrial and environmental accidents; industrial disputes; and unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment.

No assurances can be given that ASF Group or ASFR will achieve commercial viability through the successful exploration and/or mining of its tenement interests. Until ASF Group and ASFR is able to realise value from its projects, it is likely to incur ongoing operating losses.

Resource Estimates

Resource estimates are expressions of judgment based on knowledge, experience and industry practice. Estimates which were valid when originally calculated may alter significantly when new information or techniques become available. In addition, by their very nature, resource estimates are imprecise and depend to some extent on interpretations, which may prove to be inaccurate. As further information becomes available through additional fieldwork and analysis, the estimates are likely to change. This may result in alterations to development and mining plans which may, in turn, adversely affect the Company’s operations.

Title Risks and Native Title

Interests in tenements in Australia are governed by the respective State legislation and are evidenced by the granting of licenses or leases. Each license or lease is for a specific term and carries with it annual expenditure and reporting commitments, as well as other conditions requiring compliance. Consequently, the Company could lose title to or its interest in tenements if license conditions are not met or if insufficient

mining | property | travel | ventures

��

�. Risk Factors - continued

funds are available to meet expenditure commitments. The expenditure commitments of all of ASFR’s Tenements in Western Australia (except for prospecting licence P04/212) have not been complied with for various periods ending in 2007. On that basis, the Minister responsible for the Mining Act 1978 (WA) has the option of forfeiture of the relevant tenements or alternatively the Minister can impose a penalty on ASFR (not exceeding $50,000) or he can impose no penalty. The Directors believe that provided ASFR lodges a submission detailing a work program on the tenements for the coming year which will meet or exceed the minimum expenditure requirements, then ASFR can expect that a penalty equal to 10% of the expenditure shortfall for the tenement year ending in 2007 will be imposed in respect of each tenement in lieu of forfeiture.

It is also possible that, in relation to tenements which ASFR or the Company has an interest in or will in the future acquire such an interest; there may be areas over which legitimate common law native title rights of Aboriginal Australians exist. If native title rights do exist, the ability of the Company to gain access to tenements (through obtaining consent of any relevant landowner), or to progress from the exploration phase to the development and mining phases of operations may be adversely affected. The Directors will closely monitor the potential effect of native title claims involving tenements in which the Company has or may have an interest.

In accordance with Commonwealth and State legislation, the Company is obliged to protect any sites of significance to Aboriginal custom and tradition.

Reference should be made to the relevant section of the Solicitor’s Report on Tenements set out in Section 10 of this Prospectus for information on the issue of title and a description of the native title regime and Aboriginal cultural heritage regime in Western Australia and Tasmania.

Joint Venture Default

Financial failure or default by any participant in the joint ventures to which the Company or any of its Subsidiaries is (or becomes) a party may have a significant and adverse impact on the Company or Subsidiary insofar as the Company or Subsidiary would have to bear that share of the joint venture costs which would otherwise have been borne by the relevant joint venture participant.

7.3.2 Property Market Risks

Property Market Fluctuations

ASF Group’s property division is dependent upon the conditions of property market including fluctuations in property prices in China and Australia. Factors relevant to determining value include supply and demand dynamics in a particular market, rental, occupancy levels and expected yield, and these may change significantly over time for a variety of reasons. Valuations represent only the analysis and opinion of qualified experts at a certain date – they are not guarantees of present or future values. The valuation of a property may be materially higher than the amount that can be obtained from the sale of a property in certain circumstances, such as under a distressed or liquidation sale.

Environmental

Unforeseen environmental issues may affect any of ASF Group’s property divisions. These liabilities may be imposed irrespective of whether or not ASF Group is responsible for the circumstances in which they relate. ASF Group may also be required to remediate sites with environmental problems. The cost of remediation of sites could be substantial. In addition, if ASF Group is not able to remediate the site properly, this may adversely affect its ability to sell the relevant property or to use it as collateral for debt.

Force Majeure Risks

Force majeure events, which are events beyond the control of a party, including fire, flood, earthquake and other acts of God, terrorist attacks and war may affect property operations or the performance of any contractual obligations or may lead to a capital loss or a reduction in income, and AFG Group’s insurance may not cover these acts or events.

Additional Requirements for Capital

The Company’s capital requirements depend on numerous factors. Depending on the Company’s ability to continue to generate income from its operations, the Company may require further financing in addition to amounts raised under the capital raising. Any additional equity financing will dilute shareholdings, and debt financing, if available, may involve restrictions on financing and operating activities. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations and scale back its planned programs as the case may be.

Bridging business between Australia & China

��

ASF Group Ltd 2007

7.3.3 Travel Industry Risks

Downturn in the Tourism Market

The performance of the travel businesses conducted by Multinational Youth Travel Agency Company Limited, including the business of Guangdong Great Scenery International Travel Service Limited, for which Multinational Youth Travel Agency Company Limited holds the sole management rights, may be influenced by the overall China tourism and travel industry. The tourism industry may be heavily influenced by the general condition of the Chinese economy, which by its nature is cyclical and subject to change. A reduction in the level of economic activity in ASF’s travel businesses key markets may reduce the total level of turnover in the travel industry and in turn have the potential to impact on the total bookings made through the travel businesses conducted by Multinational Youth Travel Agency Company Limited.

Also, the travel industry worldwide has been materially affected by external factors. These have in the past included restrictions on travel caused by terrorist activity, war, political instability and the outbreak of illness. The timing and impact of such external factors on the travel industry generally and on the Company’s travel businesses in particular, is beyond the control of the Company and may have a material adverse effect on the Company’s financial performance, financial position, cash flows, growth prospects or the share price.

Licences

The MYTA travel business operates under various statutory and semi-governmental licences issued in China and Macau. Each license is for a specific term and carries with it fees and reporting commitments, as well as other conditions requiring compliance. Consequently, MYTA could lose the license if license conditions are not met and there are no guarantees that they will be renewed

Travel Agency Company Limited (including the business of Guangdong Great Scenery International Travel Service Limited, for which Multinational Youth Travel Agency Company Limited holds the sole management rights) could be adversely affected if existing competitors engage in more aggressive marketing or pricing behaviour, or if new competitors enter the market.

Threat of New Technology

The travel businesses of Multinational Youth Travel Agency Company Limited (including the business of Guangdong Great Scenery International Travel Service Limited, for which Multinational Youth Travel Agency Company Limited holds the sole management rights) and their financial performance or operating margins could be adversely affected if the popularity of the internet as a medium for buying and selling travel were to increase further within China.

Regulatory Changes

Any regulatory reforms affecting the Chinese travel industry may have a material adverse impact on the financial performance of the travel businesses of Multinational Youth Travel Agency Company Limited (including the business of Guangdong Great Scenery International Travel Service Limited, for which Multinational Youth Travel Agency Company Limited holds the sole management rights) and/or the Share price.

Diminution of Customer Satisfaction and Loyalty

Multinational Youth Travel Agency Company Limited is a customer service business and is therefore dependent on customer satisfaction and loyalty. Any diminution in customer sentiment towards Multinational Youth Travel Agency Company Limited may have an adverse impact on the financial performance of Multinational Youth Travel Agency Company Limited or ASF Group and/or its Share price.

Competition

The travel industry is highly competitive and there is no guarantee that the travel businesses of Multinational Youth Travel Agency Company Limited (including the business of Guangdong Great Scenery International Travel Service Limited, for which Multinational Youth Travel Agency Company Limited holds the sole management rights) will maintain their position. The financial performance or operating margins of travel businesses of Multinational Youth

mining | property | travel | ventures

��

�. Independent Geologists Report

26 October 2007

The Directors ASF Group Limited Suite 2, 3B Macquarie Street Sydney NSW 2000 Australia

==> picture [102 x 102] intentionally omitted <==

SINRMS Swensson Integrated Natural Resource Management Services ABN 11 933 423 042 P.O. Box 334 Bermagui NSW 2546 Phone/Fax: +612 64940087 Email: [email protected]

Dear Sirs,

Independent Geologist Report on the South Ellendale Project, Western Australia and Mt. Read Volcanics Projects, Tasmania.

1.0 Introduction

ASF Group Limited (ASF) has requested Swensson Integrated Natural Resource Management Services (SRM) to prepare an Independent Technical Expert Report on the South Ellendale coal and diamond project in the Canning Basin of Western Australia and on two projects located in the Mt. Read Volcanic Arc in Western Tasmania. The report is to be included in a prospectus for a capital raising and re-quotation of ASF’s securities on the ASX.

ASF has requested SRM to address the following through a desk top study of the available data:

A general synthesis of the regional and tenement geology and mineralisation.
A brief assessment of previous exploration on the projects.
An assessment of the exploration potential of the projects.
Recommendations for a 12 month exploration program for the projects.

SRM did not visit any of the projects in the field as the brief was for a desk top study only. However SRM has had professional in-field experience in both project locations and is familiar with the geology, geography and geomorphology of the areas. SRM has not conducted due diligence on the status of the tenements including any exclusion zones which may apply.

Publicly available information was used in the preparation of this report and SRM’s professional knowledge of both areas. While reports on prior exploration over the project areas were examined briefly, no warranty can be given that such a review has examined and assessed all the material pertinent to the areas of interest.

SRM has not had or does have any relationship with ASF or its subsidiary companies that may affect SRM’s ability to provide an unbiased report. Other than receiving a fee for producing this report that is not dependant on the content, SRM has received no other benefit from ASF nor does it hold any interest in ASF or its subsidiaries.

2.0 Summary

ASF Resources (ASFR) holds title to tenements over ground prospective for coal and diamonds in the Fitzroy Trough region of NW Australia and over areas prospective for tin, zinc, lead, copper and gold in the Mt. Read Volcanic Belt of Western Tasmania. Potential exists for the discovery of economic coal accumulations in the South Ellendale tenements if future work returns favourable coal quality analyses and sufficient thicknesses of coal seams are confirmed.

Bridging business between Australia & China

��

ASF Group Ltd 2007

Subject to a detailed review of previous exploration on the Tasmanian properties, EL 14/2007 has potential for tin replacement mineralisation of the Renison Bell style and EL 15/2007 has potential for Rosebery style Zn-Pb-Cu-Ag-Au mineralisation and potentially for Henty style gold mineralisation along the southern extensions of the Rosebery Fault. The potential on all three areas is such as to warrant the exploration expenditure recommended in this report.

3.0 South Ellendale Project

3.1 Introduction

On 9 March 2007 ASF Resources (ASFR), a wholly owned subsidiary of ASF, acquired approximately 2000km[2] of tenements located in the West Kimberly region of Western Australia from United Minerals Corporation N.L. (Figure 1). The tenements comprise six granted Exploration Licences, two Exploration Licence Applications and one Prospecting Licence (Table 1). Access to the tenements is good with the port of Derby 150km to the west. The area of tenure covers Permian sediments of the Canning Basin in which coal has been intercepted by previous explorers. The tenements also locate in the Calwynyardah lamproite field in which diamond-bearing lamproite pipes have been discovered. The tenements have exploration potential for both coal and diamond resources.

==> picture [452 x 28] intentionally omitted <==

----- Start of picture text -----

Tenement Area (HA) Rent Exploration Commitment
----- End of picture text -----


E04/1428	22,807 $7.099.40 $63,000
E04/1433	22,796 $6,693.72 $59,400
E04/1434	651 $202.84 $15,000
E04/1435	22,803 $7.099.40 $63,000
E04/1436	22,793 $7,099.40 $63,000
E04/1512	22,793 $7,099.40 $70,000
E04/1670	22,778 $7,099.40 $70,000
E04/1671	17,584 $5,476.68 $54,000
PL 04/212	103 $192.61 $4,120

3.2 Geology

The tenements locate in the Fitzroy Trough, one of four sub-basins separated by basement highs that together comprise the Canning Basin (Figure 2). The basin fill is of Permian age, similar to the Sydney Basin in Eastern Australia and comprises a sequence of continental sediments dominated by mudstones to cross-bedded fine sandstones with occasional coarser units (Table 2). Thin coal seams and measures are reported from most of the units in the Fitzroy Trough; however the most persistent and thicker seams has been reported from the Hardman and Lightjack Formations of the Liveringa Group. The geology of the tenement area is dominated by these Formations and the Noonkanbah Formation. The depth of weathering is reported as generally shallow (<25m) and despite the presence of gentle E-SE trending anticlines and synclines, bedding is generally shallow dipping at <6[o] .

In the tenement area the Permian sequence has been intruded lamproite pipes and dykes during the Miocene. The lamproite pipes tend to group into three distinct fields; Ellendale to the north of the tenement area, Calwynyardah which locates in the centre of the tenement area and Noonkanbah to the south of the tenement area. The age of the lamproite pipes exhibit a decrease from north to south with pipes at Ellendale giving ages from 20-22 million years to an age of 18-20 million years at Noonkanbah.

Numerous pipes have been discovered in all three fields and while all fields have recorded diamonds, only the Ellendale Lamproite Field has produced economic diamond pipes. Diamonds tend to be associated with the olivine rich lamproites but many of the lamproites discovered to date, particularly in the Calwynyardah Field tend to be leucite rich and generally low in diamond content.

The area is of generally low relief with little outcrop. The geomorphology of the area has been mapped by UMC (Vanderhor, 2007).

mining | property | travel | ventures

��

�. Independent Geologists Report - continued

Table 2

==> picture [455 x 192] intentionally omitted <==

----- Start of picture text -----

Early Triassic Blina Shale Grey and brown siltstone and sandy shale.
Mudstone, fine sandstone, cross-bedded.
Hardman Formation
Coal intersected.
Late Permian
Medium to coarse sandstones, cross-
Condren Sandstone
Liveringa Group bedded, poorly sorted, minor coal
Lower shale and siltstone, middle and
Lightjack
Early to Late Permian upper fine cross-bedded sandstone. Coal
Formation
intersected in middle and upper.
Noonkanbah Interbedded mudstone, shale, fine grained
Early Permian
Formation sandstone. Minor coal intersections
Micaeceous silty sandstone, cross-bedded,
Early Permian Poole Sandstone
ripple marked. Minor coal intersected.
Poorly sorted silty and conglomeratic
Late Carboniferous to Early Permian Grant Group sandstone, siltstone, shale. Minor coal
intersected.
----- End of picture text -----

3.3 Previous Exploration

The area has been the subject of intensive diamond exploration from the mid 1970’s to the present. Coal had been intersected in oil and coal wells drilled from the mid 1960’s to the early 1990’s although the main period of activity was during the 1960’s. Coal exploration specifically focused on coking quality coal (Vanderhor, 2007).

Exploration for diamonds commenced in the mid 1970’s and became intensive after the discovery of Ellendale 4 pipe by the Ashton Joint Venture in 1976. Exploration has continued to the present.

3.3.1 Coal

Exploration for coal concentrated on coking quality coal and within the tenement area exploration was conducted by Premier Mining, Australian Inland Mining, Esso Exploration and Dampier Mining. A total of 25 holes drilled by these companies fall within the tenement boundaries, mostly drilled by Premier Mining which focused on the Mount Wynne anticline where the prospective Lightjack Formation is shallow. In addition to holes drilled specifically for coal, a further seven oil wells have been drilled on the tenements.

Coal intersections are reported from eight of the coal holes with seam intersections of 0.6 - 2.1m and four of the oil holes intersected coal intersections. Because mud drilling was used for the oil wells accurate seam thicknesses are not recorded and intersections range from 10m of 5% to 36m of 5-20% coal. This work showed that coal occurred in both the Lightjack and Hardman Formations of the Liveringa Group at relatively shallow depths of 18-175m with an average depth in the Mount Wynne Anticline area of 20-30m.

In summary, previous exploration has demonstrated the presence of coal in the Liveringa Group over large distances within the tenements, seam thickness is variable and generally thin to the extent of drilling to date and that the coal seams are at relatively shallow depth. Little information on coal quality can be found from existing data. However coal quality tests conducted on material from petroleum well Petaluma#1 showed the coal to be suitable for thermal coal utilization (Knight 2003).

3.3.2 Diamonds

The Calwynyardah Lamproite Field was discovered by the Ashton JV after investigation of aeromagnetic anomalies following the discovery of the Ellendale Lamproite Field. Further exploration was undertaken by Selection Trust (Australia) Ltd, Gem Exploration and others (Jacques et al., 1986). More recent work has been undertaken by UMC (Vanderhor, 2007). A total of 20 pipes have been discovered on the tenements through the exploration efforts of these companies including the Calwynyardah pipe with a surface area of 124 acres and by far the largest of the pipes discovered in the filed. While testing of some of the pipes has shown that some are diamond bearing, they are uneconomic which may be a function of their chemistry which is dominantly leucite bearing (Vanderhor, 2007).

UMC commissioned a high resolution aerial magnetic survey over the northern two thirds of the tenement area in 2005 with 50m line spacing and 20m flying height. A total of 48 of the 57 dipole anomalies identified from the interpretation of the

Bridging business between Australia & China

�0

ASF Group Ltd 2007

survey were found to be caused by cultural sources and the remaining 19 anomalies were followed up by geochemical sampling of termite mounds. This work resulted in the discovery of a small (0.5ha) phlogopite-leucite lamproite body, UKD 1 and a possible inferred lamproite at anomaly MAG 54.

In 2006 the magnetic data were interpreted again for more subtle dipole signatures and a total of 47 weak anomalies were identified, 40 of which were followed up using similar methodology to the previous year. This work resulted in the discovery of UKD 2, a small dyke-like lamproite body of some 0.25ha in inferred area. The lamproite is olivine poor and crops out at the western end of the magnetic anomaly. Petrographic work indicated a low MgO content of 7.5%, well below the MgO threshold of 45% established for diamond bearing lamproites in the Ellendale Field. The 2006 work also resulted in the discovery of a “likely” lamproite dyke under cover at magnetic anomaly WM08. Neither the lamproites at UKD1 and UKD2 nor the inferred lamproites at anomalies MAG54 and WM08 have been bulk sampled or drilled.

In addition to the work described above, geochemical sampling of termite mounds was undertaken over 45 targets. While some targets were anomalous in one element, UMC concluded that none of the targets exhibited an anomalous multi-element response that would be expected of a lamproite.

3.4 Exploration Potential

The tenements have exploration potential for both coal and diamonds. This potential is summarized below with the attendant risks.

3.4.1 Coal

The Fitzroy Trough has demonstrated coal measures over extensive areas and has the right geology for potentially large coal deposits. This potential has been demonstrated in ASF’s tenement area with a significant cumulative strike extent of prospective Lightjack and Hardman Formations with coal intercepts at relatively shallow depths. Previous exploration was directed at the coking coal potential of the Fitzroy Trough which proved to be negative. However, the potential for steaming coal has not been assessed, particularly with regard to proximal SE Asian markets.

The uncertainties associated with this potential include the thickness of the coal seams intersected to date over the tenement area, the quality of the coal and suitability for export purposes and the depth of the coal seams.

Coal intercepts within the tenement area intersected to date are thin (<2m). However these data are based on relatively few holes and the great variability in thickness demonstrated from coal intersections throughout the Fitzroy Trough and the geological setting suggests the potential for thicker accumulations as indicated by the 15m coal intercept in Petaluma #1, a petroleum hole on Deep Well Anticline to the immediate west of ASF’s tenements (MBA, 2007).

Data on coal quality is very limited and this can only be ascertained from analysis from quality core samples. This question can be resolved with relatively few data points if the results are reasonably uniform. The intersections to date are relatively shallow and providing areas of reasonable seam thickness can be located (>10m), an open pit operation is possible provided the quality of the coal meets the export criteria.

In conclusion the potential of the tenements to host large deposits of coal, albeit of currently un-quantified quality, is such as to warrant further exploration.

3.4.2 Diamonds

The northern two thirds of the tenement area have been subjected to intensive and good quality exploration to the extent that the potential for an economic diamond deposit is considered low. Four identified targets remain essentially untested in this area; demonstrated lamproite bodies UKD1 and UKD2 and inferred potential lamproite bodies at magnetic anomalies MAG54 and WM08. However the leucite composition and chemistry of UKD1 and UKD2 together with their small size limits the potential for an economic diamond deposit. While the nature of the bodies associated with MAG54 and WM08 is unknown, the small size of the bodies also limits the economic potential of these occurrences.

The discovery of lamproite bodies in the Calwynyardah Field has been primarily through the application and interpretation of high resolution aerial magnetic surveys. Except for a small area excised from ASF’s tenements to the south of UMC’s original aerial magnetic survey, the southern third of the tenement area appears not to be covered by such a survey. If this is the case, the potential for the discovery of diamondiferous lamproites remains in this area of the tenement block. However, given the history of exploration to date in the Calwynyardah and Noonkanbah Lamproite Fields, this potential is considered limited.

mining | property | travel | ventures

��

�. Independent Geologists Report - continued

3.5 Proposed Exploration Program

Exploration over the tenements should focus on the coal potential in the Lightjack and Hardman Formations. The exploration program should be directed at ascertaining if the quality of the coal is suitable for export purposes and to determining if the potential for thicker coal seams exist. If positive results are returned for both these criteria, a systematic assessment program to quantify resources may be implemented in stages.

A detailed review of previous coal and oil exploration results is required with particular emphasis on the interpretation of any existing seismic surveys in the tenement area. Any seismic data should be interpreted against available drill hole data to identify the development of thicker coal seams in the Hardman and Light Jack Formations. The following program is recommended:

Regional drilling of 2 lines each over the Hardman and Lightjack Formations with air core at 2km hole spacing. Traverse locations to be biased by the seismic data if available. Approximately 60 line km, 30 holes at 150m each for 4,500m
● Core drilling of five holes repeated on best intercepts to obtain quality samples for coal analysis. Approximately 750m core drilling.
Geophysical logging of all holes for coal seam thickness confirmation and correlation with seismic data.
Interpretation of data, reporting and future recommendations.

The estimated expenditure of such a program is $450,000.

4.0 Tasmanian Projects

4.1 Introduction

ASFR was granted two Exploration Licences on 7 August 2007 in the west coast region of Tasmania. Details of the tenements are summarized below:

	Tenement	Area (HA)	Rent	Exploration Commitment
	EL 14/2007	2,300	N.A	N.A
	EL 15/2007	22,796	N.A	N.A

The tenements are located in the highly mineralized Paleozoic Dundas Trough on the West Coast of Tasmania (Figure 3). The region is host to a number of significant Cambrian age volcanogenic base metal and gold deposits (Hellyer, Que River, and Henty (?)), porphyry associated copper-gold deposits (Mt. Lyell) and numerous epigenetic deposits associated with Devonian granite intrusions including tin, lead – silver and skarn tin/zinc deposits (Mt. Bischoff, Cleveland, Renison Bell, Razorback, and Oceana).

The region has been subjected to extensive exploration in the past with exploration based primarily on a volcanogenic model for base metal mineralisation in the Mt. Read Volcanics. “Modern” exploration has been undertaken from the late 1950’s to the mid to late 1990’s and includes a large amount of ground and airborne geophysics. A detailed analysis of past exploration results is beyond the scope of this review and only a cursory inspection of some reports has been undertaken by SRM.

4.2 Regional Geology Mineralisation

The oldest rocks in the region are the Meso to Neoproterozoic quartzitic rocks of the Tyennan Block which provide basement to the younger sequences in western and southwestern Tasmania. In the area of interest the Tyennan Group is overlain by the quartzwacke turbidite rocks of the Oonah Formation (1000-750Ma) which we deposited in a N-S trending basin which was probably a precursor to the later Dundas Trough. The upper sequence of the Oonah Formation is dominated by peelites and/or carbonates with some mafic rocks and conglomerates. This part of the sequence provides an important host to vein, skarn and replacement tin deposits at Zeehan and Mt. Bischoff.

The Oonah Formation is disconformably or unconformably overlain by the Success Creek and Crimson Creek Groups of the Togari Group of Upper Neoproterozoic to Lower Cambrian age (750-520Ma). In the area of interest these rocks tend to comprise a lower sequence of dolomitic shallow water sediments resting on basal conglomeratic sandstone followed by an upper mafic rift volcanics and associated volcaniclastic sediments. The lower dolomitic sequence is important hosts to the tin replacement deposits of Renison Bell.

The above sequence was subjected to a number of major deformations during the Tyennan Orogeny commencing with west

Bridging business between Australia & China

��

ASF Group Ltd 2007

the south directed compression (515 – 510Ma) followed by E-W extension from the Middle Cambrian which produced the linear narrow Dundas Trough. The Dundas Trough was an important depositional site for the Mount Read Volcanics and associated sediments and their associated polymetallic mineralisation.

The Mount Read Volcanics (MRV) are divided into three sequences. The Central Volcanic Sequence (CVS) is comprised of marine, proximal volcanics comprised of rhyolite and dacite domes and cryptodomes, massive pumice breccias, andesites and rare basalts. The CVS is host to most of the polymetallic volcanogenic mineralisation in the Dundas Trough (Rosebery, Hellyer, and Que River). The CVS inter fingers with the Western Volcano-Sedimentary Sequence to the west comprised of lithicwacke turbidites, mudstones, siltstones, shale with subordinate intrusive rocks and lavas. The CVS inter fingers with the Eastern Quartz Phyric Sequence (EQPS) to the east, comprised of quartz phyric lavas, intrusive porphyries and volcaniclastics intruded by magnetite series granite.

The MRV on the western side of the Dundas Trough is overlain by the Tyndall Group comprised of quartz bearing volcaniclastic sandstone and conglomerates of mixed felsic and andesitic provenance. Some workers (Seymour et al, 2007) have suggested that the Tyndall Group is a time correlate of the EQPS to the east.

In the Late Cambrian – Lower Ordovician, a period of E-W compression caused basin inversion of the Dundas Trough, resulting in uplift of the Tyennan Block to the west and subsequent deposition of the Owen Group conglomerate in a half graben on the western side of the Dundas Trough. Basin inversion also caused reactivation of the major faults in the Dundas Trough.

In the Middle Devonian, Tasmania was affected by polyphase deformation, attendant folding and intrusion by major I – type granite batholiths. In the west most of the intrusions post date the folding event and are represented by reduced, moderately to strongly fractionated I-type granite.

4.3 Mineralisation

The rocks of the Dundas Trough are host to significant polymetallic (Pb, Zn, Cu, Sn, Ag, Au) mineralisation including Mt. Lyell (311Mt @ 0.97%Cu, 0.31g/tAu), Rosebery (34.03Mt @ 13.8%zn, 4.1%Pb, 0.57%Cu, 143g/tAg, 2.2g/tAU) and Hellyer (16.5Mt @ 13.9%Zn, 7.2%Pb, 0.38%Cu, 169g/tAg, 2.55g/tAu). Mineralisation can be broadly classified into two associations:

base metal and gold mineralisation related to volcanogenic process associated with the emplacement of the MRV rocks, particularly the CVS, during the middle to late Cambrian;
epigenetic Zn, Cu, Sn Pb, Ag mineralisation associated with the intrusion of the Devonian Granites.

While it is generally accepted that the polymetallic mineralisation in the MRV is volcanogenic in nature, this has been questioned on the basis of observations that much of this mineralisation (eg Rosebery, Hercules) was emplaced subsequent to the main cleavage forming event and controlled by the interplay of cleavage and bedding in pure shear zones associated with carbonate altered lithologies (Dr. M. Tomkinson per.com.). If true then this model implies that lithologies in such settings outside the CVS may be prospective. Prior exploration has concentrated on the CVS based on a volcanogenic model.

The Henty Fault, reactivated during the Tyennan Orogeny tends to divide mineralisation of a Zn-Pb-Cu-Au volcanagenic association to the NW of the fault from a Cu-Au-Fe association to the SE of the fault. The Henty gold mine (2.83Mt @ 12.5g/tAu) is unusual for the region, being a gold only deposit located within the Henty Fault.

The Devonian granites have mineralized a broad range of lithologies, generally close to and within the contact aureoles of the batholiths. Mineralisation is represented by simple high angle veins (Pb, Ag, Zn, Sn), skarns (Zn, Sn) and replacement bodies (Sn) which have resulted in some significant deposits such as Renison Bell (24.54Mt @ 1.41%Sn), Mt. Bischoff (10.54Mt @ 1.1%Sn) and Oceana (2.6Mt @7.7%Pb, 2.5%Zn, 55g/tAg). The larger granite related deposits tend to be associated with reactive and or replaceable host rocks, usually carbonates.

4.4 Mt Dundas EL 14/2007

The tenement is located approximately 7km east of Zeehan and access to the centre of the tenement is via gravel road from the Murchison Highway to the mining centre of Dundas. The eastern area of the EL is heavily vegetated and access is limited.

mining | property | travel | ventures

��

�. Independent Geologists Report - continued

4.4.1 Geology and Mineralisation

The western portion of the EL is comprised of the Western Volcano- Sedimentary Sequence (WVS) described above. The sequence includes parts of the White Spur Formation and the Hercules hanging wall sequence, both mineralized units in the Rosebery area. The WVS is overlain immediately to the east by Tyndall Group volcaniclastics on the western side of Mt. Dundas. The Tyndall Group is overlain unconformably by the Owen conglomerates and coarse sandstones over the remaining western half of the EL, separated from the Tyndall Group in the northern section of the tenement by the extension of the Rosebery Fault.

There is no mapped mineralisation within the tenement application. However within 1500m of the northern boundary, the Dundas Mining district hosts a large number of high-grade, generally small Pb-Ag vein occurrences related to Devonian Granite mineralizing processes including the Platt, Kominsky and Comet group of mines. These deposits are hosted dominantly in Owen Group and Oonah Formation sediments.

4.4.2. Previous Exploration

Parts of the area of EL 14/2007 have been held by at least 11 companies since 1959, generating many annual reports. The most comprehensive exploration appears to have been undertaken by RGC from 1987-1995 under EL’s 101/87 and 13/88 (Crossing, 1992). Despite this considerable history of exploration, work has tended to be focused on known mineral occurrences to the north of the current ELA boundaries such as the Dundas, Razorback and Moore Pimple areas.

No drilling appears to be undertaken in the tenement area. RGC explored parts of EL’s 101/87 and 13/88 for replacement tin mineralisation similar to Renison Bell and also explored the southern continuation of the Rosebery Fault for Henty style gold mineralisation using grid soil geochemistry. Stream sediment geochemistry was also undertaken (-200# analysed by NAA) in the Moores Pimple area on streams draining the Rosebery Fault to the east. SRM is unsure of the location of the stream samples in relation to the EL but at least part of the soil grid appears to plot within the northern part of the EL.

Soil results report up to 20ppb Au which SRM considers of interest, particularly with the analytical method used at the time. The stream sediment samples also report results to 13.5ppb Au, which may also be considered anomalous considering the mesh fraction and the analytical method used. Also of interest is a report of strong sericite–pyrite-carbonate alteration on the Rosebery Fault in the area around Moores Pimple – Mt Dundas area. It is not known if this reported occurrence is within the area of the EL.

4.4.3 Exploration Potential of E.L. 14/2007

A preliminary review of previous exploration indicates that except for a small area of the Rosebery Fault in the northern part of the EL, little systematic exploration appears to have been undertaken. However this requires confirmation by a detailed study. Conceptually there is potential for three styles of mineralisation within the EL:

Epigenetic Pb-Zn-Ag and Sn mineralization associated with Devonian granite emplacement as vein and replacement deposits in the Owen and Tyndal Group Rocks (as exemplified by the Dundas and Moore’s Pimple occurrences).
“Rosebery” style Pb-Zn- Cu-Ag-Au remobilized volcanogenic mineralisation in the Tyndal and WVS rocks within the western part of the ELA.
“Henty” style Au mineralisation along the Rosebery Fault.

The potential for an economic deposit of epigenetic mineralisation in the Owen and Tyndal Groups is considered low because of the intensive prospecting that would have been undertaken in the past due to the proximity of the Dundas Field. The potential for the remaining two style of mineralisation depend on a review of previous exploration, although the gold results and the discovery of alteration in the vicinity of the Rosebery Fault are encouraging.

4.5 EL 15/2007

The centre of this large tenement is located approximately 15km west of Renison Bell tin mine. Lake Pieman, a narrow lake on the Pieman River, runs through the EL. Access north and south of the lake through the tenement is via sealed road from Zeehan on the Granville Harbour Road and west from Tullah on the Pieman Dam road. However access through most of the tenement is limited due to the steep topography of the Pieman Valley.

Bridging business between Australia & China

��

ASF Group Ltd 2007

4.5.1 Geology and Mineralisation

The geology of the EL is dominated by the Late Cambrian Oonah Formation, a sequence of greywacke, pelites, siltstones and quartz sandstones. In the NE sector of the EL, the overlying Success Creek Formation is present: a sequence of sandstones, siltstones, volcaniclastics with minor carbonate beds and tholeiitic basalts. An unprospective Jurassic dolerite sill is present in the far west of the EL.

To the immediate south of the EL, tin mineralisation is developed within the aureole of the Devonian Heemskirk Granite as both veins associated with tourmaline and as alluvial deposits (Laffers, St. Dizier, and Tasman River). Similar tin deposits occur to the immediate north of the EL associated with large Devonian granite (Livingston Creek). The large replacement tin deposit of Renison Bell locates approximately 5km to the east of the EL eastern boundary.

Within the EL, the only known mineral occurrences are alluvial tin workings at the Eureka alluvial tin field near Heemskirk Falls, two minor lead prospects and two pyrite prospects.

4.5.2 Previous Exploration

An initial search of previous exploration reports produced 102 references from Mineral Resources Tasmania data base. However a cursory scan of this material indicates that most prior exploration was to the south and east of the tenement area. Except for some engineering drilling by the HEC at Pieman Dam, no exploration drill holes are recorded for the tenement application area.

4.5.3 Exploration Potential

There is exploration potential for epigenetic vein style tin deposits hosted by the Oonah Formation sourced from both the Heemskirk and “Mt. Livingston” Granite to the south and north of the EL respectively. Most of the tenement area is probably outside of the mineralizing envelope of the granites unless there are granite cupolas at shallow depth within the tenement area. However such vein style tin mineralisation, if present, will probably be limited in size.

Potential for more significant replacement style tin deposits (e.g. Renison Bell) is associated with carbonate horizons within the Success Creek Formation in the NE section of the EL.

The potential for both styles of mineralisation depends on the exploration previously conducted over the area and to the extent that carbonate horizons are present in the Success Creek Formation in this area.

4.6 Proposed Exploration Programs

The following programs are developed for an initial 12 month period.

4.6.1 EL 15/2007

A complete review of previous exploration should be undertaken with systematic compilation of relevant data onto a GIS data base. Providing this review indicates that the potential targets outlined in 4.4.3 remain effectively untested the following program is recommended:

Implementation of a BLEG (for Au) stream sediment sampling program for drainages off the Rosebery Fault Zone.
Follow up of any anomalies using 500x500m soil BLEG sampling. Coincident with this program mapping of the Rosebery Fault zone, particularly for alteration should be conducted.
Grid soil sampling on 100x25m over any anomalies defined from the initial soil program.
Interpretation of any previous geochemical programs (stream or soil) which may have been conducted over the Tyndall Group and WVS rocks in the eastern sector of the EL. Implementation of detailed stream sediment geochemical program over prospective lithologies if previous work is inadequate to define initial targets foe follow up by soil sampling and detailed mapping.

The estimated cost for such a program is $170,000.

mining | property | travel | ventures

��

�. Independent Geologists Report - continued

4.6.2 EL 15/2007

As recommended for EL 14/2007, a complete review of previous exploration should be undertaken with systematic compilation of relevant data onto a GIS data base. Attention should be directed at any magnetic surveys which may indicate the presence of a shallow granite cupola within the Oonah Formation and the presence of pyrrhotite in carbonate-rich units of the Success Creek Formation, potentially indicative of Renison Bell style tin mineralisation. If the conclusions of the review warrant, then the following program is recommended:

Detailed stream geochemistry for tin with geological mapping within a 2km distance of any inferred cupola features identified from existing magnetic surveys.
Follow up detailed mapping and 100x50m soil sampling on any targets identified from the stream sediment program.
● Detailed stream sediment sampling of the Success Creek Formation in the NE of the ELA for tin. Investigation of any magnetic anomalies identified from the review.
Any anomalies identified from this work should be followed up with detailed mapping and rock chip sampling, particularly of any carbonate rich units.

The estimated cost for such a program is $140,000.

==> picture [136 x 81] intentionally omitted <==

Carl Swensson BSc.Hons. (Geol)., Mem. AUSIMM.

5.0 References

Crossing, D.J.F., E.L. 101/87 Dundas and E.L. 13/88 Moores Pimple Partial Relinquishment Report for the Period 1988 to 1992. RGC Exploration Report M.R.T. Open File Report 92-3358.

Jaques, A.L., Lewis, J.D., Smith, C.B., 1986. The Kimberlites and Lam E04/1392proites of Western Australia. Geological Survey of Western Australia, Bulletin 132.

Knight, J., 2003 Liveringa Final Report for the Period Ended June 2003. BHP Billiton Minerals Exploration Report CR 10739.

MBA Petroleum Consultants., 2006 Independent Technical Expert’s Report, Rey Resources Limited Prospectus.

Seymour, D.B., Green, G.R., Calver,C.R, 2007. The Geology and Mineral Deposits of Tasmania: a Summary. Geological Survey Bulletin 72, Mineral Resources Tasmania.

Vanderhor, F., South Ellendale Project. Exploration Licences E04/1392, E04/1428, E04/1429, E04/14332, E04/1434, E04/1435, E04/1436 and E04/1512 and Prospecting Licence: P04/212. Combined Annual Geological Report No. C28/2006 for the Period Ended 28 February 2007. United Minerals Corporation.

The Directors consider that the material contracts described below and elsewhere in the Prospectus are the contracts which an investor would reasonably expect to find described in the Prospectus for the purpose of making an informed assessment of the Offer.

This section only contains a summary of the material contracts and their substantive terms. To obtain a complete understanding of the contracts it is necessary to fully read them. Complete copies of the material contracts that are not confidential will be available for inspection without charge during the offer period in normal office hours at the office of the Company at Suite 2, 3B Macquarie Street, Sydney, NSW 2000.

11.1 Loan Agreement

Under the loan agreement between ASF Group and Goldchoice Investments Limited (Goldchoice) dated 1 July 2006, ASF Group was able to drawdown at its sole discretion amounts not exceeding $250,000 up to a maximum of $1,000,000.

At the maturity date of the loan (being 30 September 2007 – which has now been extended to 28 February 2008), $1,000,000 was outstanding. Goldchoice has given an informal notice to ASF Group of its intention to convert the entire outstanding amount into Shares at an issue price of $0.75 for each Share issued on conversion but, as at the date of this Prospectus, the loan has not been converted and, unless and until the loan is formally converted, the loan remains a debt of the Company. The ability to convert the outstanding loan into equity in ASF Group is subject to Goldchoice’s shareholding in ASF Group not exceeding 20% of the total number of Shares on issue.

Shareholder approval of the conversion will be required for the purposes of ASX Listing Rule 7.1, which provides that an ASX listed company may not issue equity securities comprising more than 15% of its issued shares in any 12 month period without obtaining shareholder approval (unless the issue comes within certain limited exceptions).

11.2 Share Sale and Purchase Agreement

(as varied on 1 July 2006)

On 28 June 2006, ASF Group and Lao Nga Fong entered into a share sale and purchase agreement pursuant to which ASF Group acquired a 40% interest in AIM Jumbo Limited (now known as ASF Macau Multinational Holdings Limited). ASF Macau Multinational Holdings Limited holds 97% of the

shares in Multinational Youth Travel Agency Limited (“MYTA”), with the other 3% being held by Lao Nga Fong as trustee for ASF Macau Multinational Holdings Limited. The consideration paid to Lao Nga Fong for the 40% interest in ASF Macau Multinational Holdings Limited consisted of 130,000,000 fully paid ordinary shares in the capital of ASF Group at an issue price of $0.01 per share.

11.3 Shareholders’ Agreement in respect of ASF Macau Multinational Holdings Limited (as varied on 1 July 2006 and 2 July 2006)

The shareholders agreement governs the funding, management and administration of ASF Macau Multinational Holdings Limited and the relationship between the shareholders of ASF Macau Multinational Holdings Limited (namely, Lao Nga Fong and ASF Group).

The shareholders agreement provides that the number of directors of ASF Macau Multinational Holdings Limited is to be 3 – ASF Group is entitled to appoint 2 directors and Lao Nga Fong 1 director.

The Shareholders Agreement otherwise deals with the transfer of shares and restrictions upon the shareholders competing with ASF Macau Multinational Holdings Limited.

11.4 Management Agreement between Multinational Youth Travel Agency Company Limited and Guangdong Great Scenery International Travel Service Limited

MYTA has full power and authority to manage and control all the business operations and activities of GSITS. MYTA is entitled to receive from GSITS the management fees which shall be equivalent to 100% of the profits of GSITS. MYTA is also required to account for any losses incurred by GSITS. The term of the management agreement is 10 years commencing from May 2006 to May 2016. GSITS has no right to terminate the management agreement in any circumstances.

11.5 Agreement between ASF Properties Pty Limited and Yancheng Xinriyue Real Estate Development Co, Ltd

Under this agreement dated 10 August 2007, Yancheng Xinriyue Real Estate Development Co, Ltd has agreed to transfer ownership of a commercial and residential development project in the land area adjacent to the Yancheng Yingbin Hospital to ASF Properties. In turn, ASF Properties has agreed to lease back the commercial and residential development project to Yancheng Xinriyue Real Estate Development Co.

Bridging business between Australia & China

��

ASF Group Ltd 2007

This agreement is conditional on, amongst other things, the approval of ASF Group shareholders and the supervision and administration authorities of China.

The consideration payable by ASF Properties for the transfer is US$965 per square metre. Under the terms of the proposed property lease agreement to be entered into by the parties, Yancheng Xinriyue Real Estate Development Co will pay ASF Properties 2 RMB per day per square metre for the residential property and 3 RMB per day per square metre.

It is intended that this agreement will be assigned to the China Property Trust once it is established and capital is raised under the Trust. If the China Property Trust is not established, the Group does not intend to exercise the conditional rights under this agreement.

11.6 Cooperation Agreement between ASF Properties Pty Limited and Mr Huijun Zhang

Under this agreement dated 10 August 2007, Mr Huijun Zhang has agreed to transfer ownership of the Yancheng Yingbin Hospital property to ASF Properties. In turn, ASF Properties has agreed to lease back the hospital property to Mr Zhang’s hospital management company.

This agreement is conditional on, amongst other things, the approval of ASF Group shareholders and the supervision and administration authorities of China.

The consideration payable by ASF Properties for the transfer is US$965 per square metre. Under the terms of the proposed property lease agreement to be entered into by the parties, Mr Zhang will pay ASF Properties 2 RMB per day per square metre.

11.7 Cooperation Agreement between ASF Properties Pty Limited and China Charm Investments Ltd

Under this agreement dated 28 August 2007, China Charm Investments Ltd (CCI) has agreed to transfer its 50% interest in United Investments Holdings Group Ltd (UIH) to ASF Properties. UIH, through its wholly-owned vehicle, ASF (He Fei) Investment Estate Co. Ltd, has been successful in tendering for the ASF Fortune Plaza development in He Fei City of Anhui Province, China.

The consideration payable by ASF Properties for the transfer of the UIH shares is to be calculated based on the total costs to develop the He Fei Development to the date of transfer, the successful tender and the exclusive right to proceed with the He Fei Development and adequate profit on transfer for CCI.

This agreement is subject to a number of conditions which are yet to be satisfied.

11.8 Cooperation Agreement between ASF Properties Pty Limited and HF Chan

This agreement dated 30 August 2007 between ASF Properties and Mr Chan sets out the terms by which Mr Chan agrees to transfer ownership of his 49% interest in the Property Company (PCO) to ASF Properties. PCO is the owner of a development site in Macau (Macau Development).

The consideration payable by ASF Properties for the transfer of the PCO shares is to be calculated based on the total costs to develop the Macau Development to the date of transfer, the approved right to proceed with the Macau Development and adequate profit on transfer for the PCO shares.

This agreement is subject to a number of conditions which are yet to be satisfied.

11.9 Cooperation Agreement relating to development of a coal tenement in South Ellendale, Australia

The cooperation agreement between ASFR and China Railway Transportation International Engineering Technology Corporation (China Railway) dated 23 September 2007 sets out the responsibilities of both parties in relation to a cooperative coal exploration venture in South Ellendale, Australia.

Under the agreement, ASFR will incorporate a wholly-owned subsidiary to be named “ASF CRCC Resource Pty Ltd” and transfer its title in EL04/1436 to that new company. China Railway will then pay ASFR $1,020,000 for the purchase of

mining | property | travel | ventures

��

��. Material Contracts - continued

51% of the shares in the capital of ASF CRCC Resource Pty Ltd. A third party will then be used to conduct the exploration of the EL04/1436 coal tenement.

11.10 Management and Infrastructure Services Agreement

This agreement dated 16 February 2006 between Ao Zhong Cai Fu Zi Xun (Beijing) Youxian Gongsi (“China Management”), ASF Properties Pty Limited and PRD Nationwide sets out the terms upon which China Management will provide certain administrative and infrastructure services to ASF Properties Pty Limited and PRD Nationwide. The term of the agreement is 3 years and the total fees payable by ASF Properties Pty Limited and PRD Nationwide is $480,000 per annum for the first 12 months of this agreement and then to be negotiated for subsequent years. In respect of the current year ending 15 February 2008, the fees remain payable at $480,000 per annum.

11.11 Trade Mark and Trade Name Licence Agreement

Pursuant to this trade mark and trade name licence agreement dated 30 November 2005, PRD Realty Pty Ltd has agreed to licence PRD Nationwide China Pty Ltd (now known as Aushome China Pty Limited), a company ultimately owned by ASF Group Limited, to use the trademarks “PRD” and “PRDnationwide” and the trade name “PRDnationwide” in relation to the sale in China and Macau of real estate located in Australia.

The agreement continues in operation until either party gives 12 months’ written notice or until the agreement is terminated for default. Aushome China Pty Limited is required to pay PRD Realty Pty Ltd a licence fee comprising of a royalty of 4% of all commissions received by Aushome China Pty Limited on the sale in China and Macau of real estate wherever located and an additional royalty of 50% of any profits received by Aushome China Pty Limited from consultancy activities where PRD Realty Pty Ltd has provided the expertise for that consultancy.

PRD Realty Pty Ltd, has purported to terminate the agreement requesting immediate cessation by Aushome China Pty Limited of use of the PRD Nationwide trade mark. PRD Realty has also indicated an intention to initiate legal action against Aushome China Pty Limited seeking an account of royalties allegedly payable on commissions derived by Aushome China Pty Limited for Australian property sales effected in the licensed territory and damages for breach of contract.

Given its dispute with PRD Realty Pty Ltd, the Group may be exposed to liability under its sub-licence arrangement with its sub-licensee in China.

11.12 Novus Capital Agreements

11.12.1 Underwriting Agreement

The Company has entered into an underwriting agreement dated 7 November 2007 (“Underwriting Agreement”) with the Underwriter, Novus Capital Limited, under which the Underwriter has agreed to underwrite the Offer of 4,000,000 Shares in the Company to be offered at $0.25 per Share to raise a total of $1,000,000.

Commissions and Fees

The Underwriter will receive an underwriting commission of 6.5% of the Underwritten funds and 5% on the balance of the total funds raised by the Issue. In addition the Underwriter will be reimbursed certain costs and expenses in relation to the Offer.

Termination Events

The Underwriter may terminate the Underwriting Agreement by notice in writing given on or at any time before the allotment of all the Shares, without cost or liability to itself.

The Underwriter may terminate its obligations under the Underwriting Agreement if any of the following events happens after the date of the Underwriting Agreement:

1 Listing Rule requirements: the Company fails to lodge any notice required on time under the Listing Rules in relation to the Offer or the Shares with ASX after lodgement of the Prospectus;

2 Misleading statement in the Prospectus: a statement in the Prospectus is found to be untrue, misleading or deceptive or it is found that the Prospectus contains a material omission or a new circumstance arises after lodgement of the Prospectus which would be required under the Corporations Act to have been included in the Prospectus if it had arisen before lodgement (and no supplementary or replacement Prospectus (in a form agreed by the Underwriter) has been lodged in accordance with the Corporations Act;

3 ASIC stop order, hearing or investigation: ASIC exercises any powers under the Corporations Act in connection with the Prospectus or the Offer, including a stop order under sections 739(1) or (3), gives notice of intention to hold a hearing in relation to the Prospectus pursuant to

Bridging business between Australia & China

��

ASF Group Ltd 2007

section 739(2) of the Corporations Act, applies for an order under Part 9.5 of the Corporations Act in relation to the Prospectus or the Offer or commences any investigation, examination or hearing or gathers information under Part 3 of the ASIC Act in connection with the Prospectus or the Offer;

4 Takeovers Panel: the Takeovers Panel makes a declaration that circumstances in relation to the affairs of the Company are unacceptable circumstances under Part 6.10 of the Corporations Act, or an application for such a declaration is made to the Takeovers Panel;

5 Notices concerning the Prospectus: any person (provided that if that person is the Underwriter, the Underwriter must act in good faith) gives a notice under section 730 or section 733(3) of the Corporations Act or withdraws a consent previously given under section 720 of the Corporations Act, in relation to the Prospectus;

6 Supplementary Prospectus required but not issued: the Underwriter reasonably forms the view that a supplementary or replacement Prospectus in relation to the Offer is required under the Corporations Act and the Company fails to lodge a supplementary Prospectus in a form reasonably acceptable to the Underwriters;

7 Lodgement or issue of supplementary Prospectus: a supplementary or replacement Prospectus is lodged or issued under the Corporations Act without the prior written approval of the Underwriter (which approval may be withheld acting in its absolute discretion);

8 Changes in the Company: any adverse change occurs in the assets, liabilities, trading results, profits, forecasts, losses, business, operations, condition, financial position or prospects of the Company or a related body corporate that is, in the Underwriter’s reasonable opinion, material;

9 Breach of constitution: the Company or any of its subsidiaries (if any) breaches its constitution which would, in the Underwriter’s reasonable opinion, materially and adversely affect the Company or the Offer;

10 Breach of Law or regulation: the Company or any of its subsidiaries or any officer of the Company or a related body corporate of the Company contravenes any provision of the Corporations Act, ASIC policy or any ASIC class order (including any conditions to that ASIC class order), the Listing Rules or any other legislation of the Commonwealth of Australia or any State or Territory of Australia which would, in

the Underwriter’s reasonable opinion, materially and adversely affect the Company or the Offer;

11 Prescribed Occurrence: a prescribed occurrence occurs in relation to the Company or any of the Company’s subsidiaries which would, in the Underwriter’s reasonable opinion, materially and adversely affect the Company or the Offer;

12 Insolvency: an insolvency event occurs in respect of the Company;

13 Breach of agreement: the Company or any of its subsidiaries is in breach of any provision of the Underwriting Agreement that, in the Underwriter’s reasonable opinion, is material. Without limiting what else may be material, a breach of any of the following provisions is deemed to be material for the purposes of this termination event: certain warranty or undertaking given by the Company; the Company’s obligation to give the shortfall notice in accordance with the terms of the Underwriting Agreement; the Company’s obligation to give a closing certificate in accordance with the terms of the Underwriting Agreement;

14 Modification or Breach of Material Contracts: any of the material contracts set out in Section 11 is varied, repudiated, rescinded or terminated without the Underwriter’s written consent, or there is a default under any material contract;

15 Breach of laws : there occurs a contravention by the Company or any of its related bodies corporate of the Corporations Act, or their constitutions;

16 No quotation: approval to the re-quotation of all of the Shares on issued at the Opening Date and the quotation of the Shares under this Prospectus on the ASX is refused, not granted within 30 days of the lodgement of the Prospectus or granted subject to any condition which is unacceptable to the Underwriter (acting reasonably) or subsequently withdrawn;

17 Breach of warranty: any warranty given by the Company under this agreement is not true or has ceased to be true in any respect which would, in the Underwriter’s reasonable opinion, materially and adversely affect the Company or the Offer;

18 Conviction of Officers: any officer of the Company or any of its subsidiaries is charged with or convicted of any criminal offence involving fraudulent or dishonest conduct;

19 Unapproved alteration of capital: the Company alters, or announces an intention to alter, its capital structure or its constitution without the prior consent of the

mining | property | travel | ventures

��

��. Material Contracts - continued

Underwriter (such consent not to be unreasonably withheld) which would, in the Underwriter’s reasonable opinion, materially and adversely affect the Company or the Offer;

20 Unapproved encumbrances: the Company or any of its subsidiaries gives security in favour of any person who is not a security holder at the date of this agreement which would, in the Underwriter’s reasonable opinion, materially and adversely affect the Company or the Offer;

21 Due Diligence Committee Report: the report of the due diligence committee established in relation to the Offer is false or misleading or there is an omission from the report which is, in the Underwriter’s reasonable opinion, material;

22 False or misleading information given to the

Underwriter: any information that is, in the Underwriter’s reasonable opinion, material that was supplied at any time by or on behalf of the Company to the Underwriter in respect of any aspect of the Company or any of its subsidiaries or the offer is or becomes misleading or deceptive or contains a material omission;

23 Force Majeure: any act of God, war, revolution, or any other unlawful act against public order or authority, an industrial dispute, a governmental restraint, or any other event which is not within the control of the parties, affecting the Company’s business or any obligation under the Underwriting Agreement lasting in excess of 7 days occurs;

24 Commencement of hostilities: an outbreak of

hostilities not presently existing or an escalation of hostilities occurs (whether war has been declared or not) or a terrorist act is committed involving any one or more of Australia, New Zealand, the United Kingdom, the United States of America, the Peoples Republic of China (including the Special Administrative Regions of Hong Kong and Macau), the countries of the former Union of Soviet Socialist Republics (excluding wars or hostilities within those countries), Indonesia, Japan, or the Middle East which would, in the Underwriter’s reasonable opinion, materially and adversely affect the Company or the Offer;

25 Changes of Law: any of the Australian, Chinese, British Virgin Islands, Hong Kong or Macau Governments adopts or announces any change in any applicable laws or governmental policies which would, in the Underwriter’s reasonable opinion, materially and adversely affect the Company or the Offer;

26 Quotation on ASX: 3 months or such other period agreed by the Underwriter elapses after the date of issue of the Prospectus without ASX granting quotation of the Shares offered under the Prospectus on the securities market operated by ASX;

27 Grant by ASX: any grant by ASX referred to directly above is withdrawn or is made subject to any conditions other than standard conditions imposed by ASX;

28 Statements issued in breach of agreement: during the term of the Underwriting Agreement, the Company or one of its officers which is prejudicial or which the Company might reasonably expect to be prejudicial to the prospects of the Offer being fully subscribed by persons other than the Underwriter;

29 Changes in shareholdings: there is a material change in the major or controlling shareholdings of the Company or any of its related bodies corporate or a takeover offer or scheme of arrangement pursuant to Chapters 5 or 6 of the Corporations Act is publicly announced in relation to the Company or any of its related bodies corporate;

30 Significant Change to Management or Board: there is a significant change to the composition of the senior executives of the Company or of its board of directors without the approval of the Underwriter (which approval may not be unreasonably withheld);

31 Judgement: A judgement in an amount exceeding $50,000 is obtained against the Company or any related body corporate of the Company and is not set aside or satisfied within 5 business days;

32 Requirement to repay Application Money: any circumstance arises after the Prospectus is lodged a consequence of which is either that the Company is required to repay the money received from Applicants or to offer Applicants an opportunity to withdraw their Applications and receive a refund of their application money;

33 Movement in the All Ordinaries Index: the All

Ordinaries Index of ASX is at any time on any 3 consecutive Business Days prior to allotment of the Shares offered under the Prospectus is 90% or less of the level that Index attained at the close of trading on the business day before the date of the Underwriting Agreement;

Bridging business between Australia & China

��

ASF Group Ltd 2007

34 Authorisation: any authorisation which is material to anything referred to in the Prospectus is repealed, revoked or terminated or expires, or is modified or amended in a manner unacceptable to the Underwriter;

35 No sub-underwriting agreement: any of the following occurs in respect of an entity acting as subunderwriter:

The entity does not comply with their obligations under the subunderwriting agreements or threaten not to comply with their respective obligations under the subunderwriting agreements;
The entity terminates its subunderwriting agreement with the Underwriter;
The entity does not subscribe for its pro rata share of any shortfall within 3 Business Days of the Underwriter receiving a shortfall notice;
The entity subscribes for its pro rata share of any shortfall on terms that are not acceptable to the Underwriter;
The Underwriter reasonably forms the opinion that the entity will not, or is unlikely to, subscribe for its pro rata share of any shortfall on terms acceptable to the Underwriter.

11.12.2 .Other Fees and Arrangements with Novus Capital

The Company has signed a Mandate Letter with Novus Capital Limited dated 13 July 2007 whereby ASF will pay Novus Capital $100,000 for acting as financial adviser to the Offer.

Novus Capital and/or its nominees will receive one (1) Share for every forty (40) Shares issued under the Offer.

The agreement is conditional upon the following material conditions:

i) Novus Capital being retained as the exclusive investor relations advisor to the Company for a minimum period of 12 months, after the successful completion of the Offer for a monthly fee of $5,000; and
ii) Novus Capital being retained as exclusive financial advisers and brokers in Australia to the Company in respect to capital raisings by ASF for a minimum period of 12 months after the successful completion of the Offer.

This agreement otherwise contains terms and conditions which are considered standard in an agreement of this type.

11.13. Deed of Company Arrangement (DOCA)

a) Background to the DOCA

The then Directors of ASF resolved on 8 July 2004 that the Company was insolvent or was likely to become insolvent, pursuant to section 436A of the Corporations Act.

Martin John Green and Peter Paul Krejci were appointed the voluntary administrators of the Company at the same meeting of the Directors.

Consequently, at the second meeting of creditors held on 4 August 2004, the creditors resolved that the Company execute the DOCA which appointed the voluntary administrators the deed administrators.

Relevantly, under the terms of the DOCA, a company called Ilham Interaktif SDN BHD:

(i) lent $500,000 to the Company paid into a deed fund for distribution to creditors in settlement of their claims (see paragraph (ii) below);
(ii) lent $120,000 to the Company to fund the continued trading of the Company by the Directors (the deed administrators were to play no part in the trading of the company); and
(iii) obtained the right to convert these loans to equity within 90 days according to a formula contained in the DOCA.

Having been executed and commenced operation on 24 August 2004, the deed administrators of the Company certified to ASIC by letter dated 23 October 2006 that the DOCA had been wholly effectuated.

b) Effect of DOCA on claims against ASF
The creditors bound by the DOCA:
(a) received a distribution according to their participation in a proof of debt process administered by the deed administrators, under which they received, from the $500,000 deed fund referred to in paragraph (i) above, a proportionate dividend of the debt claimed after administrators’ remuneration and expenses and outstanding employee superannuation had been paid.
(b) accepted the dividend in full satisfaction and complete discharge of all debts owed prior to 8 July 2004; and
(c) forfeited their rights to sue for their debts.

mining | property | travel | ventures

��

��. Corporate Governance

The Directors are committed to the principles underpinning the best practice in corporate governance.

A description of the Company’s main corporate governance practices is set out below.

12.1 Board of Directors

a) Director education

The consolidated entity has an informal process to educate new directors about the nature of the business, current issues, the corporate strategy and the expectations of the consolidated entity concerning performance of directors. Directors also have the opportunity to visit consolidated entity facilities and meet with management to gain a better understanding of business operations.

b) Independent professional advice and access to Company information

Each Director has the right of access to all relevant Company information and to the Company’s executives and, subject to prior consultation with the Chairman, may seek independent professional advice from a suitably qualified adviser at the Company’s expense. A copy of the advice received by the Director is to be made available to all other members of the board.

c) Composition of the Board

The composition of the board is determined using the following principles:

(i) a majority of independent non-executive directors; the Company is working towards satisfying this principle;
(ii) a majority of directors having extensive knowledge of the Company’s industries, and those which do not, have extensive expertise in significant aspects of auditing and financial reporting, or risk management of large companies; and
(iii) a non-executive independent director as Chairperson; the Company will work towards this principle, however at this time while the Company is in the reconstruction and development phase, the Board believes is not appropriate to meet this criterion.

d) Nomination of directors

The Board oversees the appointment and induction process for directors and committee members, and the selection, appointment and succession planning process of the Company.

e) Audit Committee Work

The Company has not established an Audit Committee and the Board performs this role. The Board advises on the establishment and maintenance of a framework of internal control and appropriate ethical standards for the management of the consolidated entity. After expansion of the number of Directors, the Board intends to establish an Audit Committee. Currently the Board:

(i) reviews the annual, half-year and concise financial reports and other financial information distributed externally. This includes approving new accounting policies to ensure compliance with Australian Accounting Standards and generally accepted accounting principles, and assessing whether the financial information is adequate for shareholder needs;
(ii) assesses whether non-audit services provided by the external auditor are consistent with maintaining the external auditor’s independence. Each reporting period the external auditor provides an independence declaration in relation to the audit or review;
(iii) assesses the adequacy of the internal control framework and the Company’s code of ethical standards;
(iv) discusses the external audit and internal audit plans, identifying any significant changes in structure, operations, internal controls or accounting policies likely to impact the financial statements and to review the fees proposed for the audit work to be performed;
(v) monitors the procedures to ensure compliance with the Corporations Act 2001 and the ASX Listing Rules and all other regulatory requirements; and
(vi) addresses any matters with the auditors, Australian Taxation Office, Australian Securities and Investments Commission, and ASX; and

Bridging business between Australia & China

�0

ASF Group Ltd 2007

(vii) reviews the nomination and performance of the external auditor. The current external auditor was appointed at the Company’s 28 March 2006 General Meeting.

12.2 Risk Management

a) Overview of the risk management system

The board oversees the establishment, implementation, and annual review of the Company’s Risk Management System, including assessing, monitoring and managing operational, financial reporting, and compliance risks for the consolidated entity. The financial reporting risk management and associated compliance and controls have been assessed and found to be operating efficiently and effectively. The operational and other compliance risk management have also been assessed and found to be operating efficiently and effectively. All risk assessments covered the whole financial year and the period up to the signing of the annual financial report for all material operations in the consolidated entity, and material associates and joint ventures.

(vi) financial reporting accuracy and compliance with the financial reporting regulatory framework.
c) Financial reporting

Monthly actual results are reported against budgets approved by the directors and revised forecasts for the year are prepared regularly.

d) Ethical standards

All directors, managers and employees are expected to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of the consolidated entity.

e) Conflict of interest

Directors must keep the board advised, on an ongoing basis, of any interest that could potentially conflict with those of the Company. The board has developed procedures to assist directors to disclose potential conflicts of interest and all employees have signed non-disclosure agreements.

f) Communication with shareholders
b) Risk management and compliance and control

The consolidated entity strives to ensure that its products are of the highest standard. The board is responsible for the overall internal control framework, but recognises that no cost-effective internal control system will preclude all errors and irregularities. Practices have been established to ensure:

(i) capital expenditure and revenue commitments above a certain size obtain prior board approval;
(ii) financial exposures are controlled, including the use of derivatives. Further details of the Company’s policies relating to interest rate management, forward exchange rate management and credit risk management are included in the financial statements;

The board provides shareholders and investors with information as required in accordance with the ASX Continuous Disclosure Policy which includes identifying matters that may have a material effect on the price of the Company’s securities and notifying them to the ASX.

The board encourages full participation of shareholders at the Annual General Meeting to ensure a high level of accountability and identification with the consolidated entity’s strategy and goals. Important issues are presented to the shareholders as single resolutions.

(iii) occupational health and safety standards and management systems are monitored and reviewed to achieve high standards of performance and compliance with regulations;
(iv) business transactions are properly authorised and executed;
(v) t he quality and integrity of personnel;

mining | property | travel | ventures

��

��. Additional Information

13.1 Registration

ASF Group Ltd is a public company limited by shares incorporated on 16 April 1980 and is taken to be registered in Western Australia.

13.2 Tax Status and Financial Year

The Company is taxed in Australia as a public company. The financial year of the Company ends on 30 June annually.

13.3 Litigation

The Directors are not aware of any legal proceedings which have been threatened or actually commenced against the Company other than in relation to the Trade Mark and Trade Name Licence Agreement summarised in Section 11.

The licensor of the “PRD Nationwide” name under the Trademark and Trade Name Licence Agreement, PRD Realty, has purported to terminate the Licence Agreement requesting immediate cessation by PRD Nationwide China Pty Limited (now called Aushome China Pty Limited) of use of the PRD Nationwide trade mark. PRD Realty has also indicated an intention to initiate legal action against Aushome China Pty Limited seeking an account of royalties allegedly payable on commissions derived by Aushome China Pty Limited for Australian property sales effected in the licensed territory and damages for breach of contract.

13.4 Rights Attaching To Shares

For details of rights attaching to the Shares, investors should refer to the Company’s Constitution (a copy of which is available for inspection at the Company’s registered office during normal business hours).

The Shares to be issued under this Prospectus will rank equally with the issued fully paid ordinary shares in the Company. The rights attaching to Shares are set out in the Company’s Constitution and, in certain circumstances, are regulated by the Corporations Act, the Listing Rules and General Law.

The following is a summary of the more significant rights and liabilities attaching to the Shares. This summary is not exhaustive and does not purport to constitute a definitive statement of the rights and liabilities of the Company’s members. The summary is based on the Company being admitted to the Official List of ASX.

a) General Meeting

Each member is entitled to receive notice of, and to attend and vote at, general meetings of the Company and to receive all notices, accounts and other documents required to be sent to members under the Company’s Constitution, the Corporations Act or the Listing Rules.

b) Voting

Subject to any rights or restrictions for the time being attached to any class or classes of shares whether by the terms of their issue, the Constitution, the Corporations Act or the ASX Listing Rules, at a general meeting of the Company every holder of fully paid ordinary shares present in person or by a representative, proxy or attorney has one vote on a show of hands and every such holder present in person or by a representative, proxy or attorney has one vote per fully paid share held by that member on a poll. A member is not entitled to vote unless all calls and other sums presently payable by the member in respect of shares in the Company have been paid. Where there are two or more joint holders of the share and more than one of them is present at a meeting (whether in person or by proxy or attorney), only the member whose name appears before the other(s) in the Company’s register of members shall be entitled to vote in respect of the share.

c) Issues of Further Shares

The Directors may, on behalf of the Company, issue, grant options over or otherwise dispose of unissued shares to any person on the terms, with the rights, and at the times that the Directors decide. However, the Directors must act in accordance with the restrictions imposed by the Company’s Constitution, the ASX Listing Rules, the Corporations Act and any rights for the time being attached to the shares in special classes of shares.

d) Variation of Rights

At present, the Company has on issue one class of shares only, namely ordinary shares. The rights attached to the shares in any class may be altered only by a special resolution passed at a separate meeting of the holders of the issued shares of the affected class, or with the written consent of the holders of at least three quarters of the issued shares of the affected class.

Bridging business between Australia & China

��

ASF Group Ltd 2007

e) Transfer of Shares

Subject to the Company’s Constitution, the Corporations Act, the ASTC Settlement Rules and the ASX Listing Rules, ordinary shares are freely transferable.

The shares may be transferred by a proper transfer effected in accordance with ASTC Settlement Rules, by any other method of transferring or dealing introduced by ASX and as otherwise permitted by the Corporations Act or by a written instrument of transfer in any usual form or in any other form approved by the Directors that is permitted by the Corporations Act. The Company may decline to register a transfer of shares in the circumstances described in the Company’s Constitution and where permitted to do so under the ASX Listing Rules. If the Company declines to register a transfer, the Company must, within five business days after the transfer is lodged with the Company, give the lodging party written notice of the refusal and the reasons for refusal. The Directors must decline to register a transfer of shares when required by law, by the ASX Listing Rules or by the ASTC Settlement Rules.

h) Dividend Plans

The Directors or the members of the Company, in general meeting, may establish and maintain dividend plans under which (among other things) a member may elect that dividends payable by the Company be reinvested by way of subscription for shares in the Company or a member may elect to forego any dividends that may be payable on all or some of the shares held by that member and to receive instead some other entitlement, including the issue of shares.

i) Directors

The Company’s Constitution states that the minimum number of Directors is three.

j) Powers of the Board

The Directors have power to manage the business of the Company and may exercise that power to the exclusion of the members, except as otherwise required by the Corporations Act, any other law, the ASX Listing Rules or the Company’s Constitution.

f) Dividends

The Company in general meeting may declare a dividend if the Directors have recommended a dividend, and a dividend shall not exceed the amount recommended by the Directors. The Directors may authorise the payment to the members of such interim dividends as appear to the Directors to be justified by the Company’s profits and for that purpose may declare such interim dividends.

Subject to the rights of members entitled to shares with special rights as to dividend (if any), all dividends in respect of shares (including ordinary shares) are to be declared and paid proportionally to the amount paid up or credited as paid up on the shares.

g) Winding Up

Subject to the rights of holders of shares with special rights in a winding up, if the Company is wound up, members (including holders of ordinary shares) will be entitled to participate in any surplus assets of the Company in proportion to the shares held by them respectively irrespective of the amount paid up or credited as paid up on the shares.

mining | property | travel | ventures

��

��. Additional Information - continued

13.5 Directors’ Interests

a) Remuneration of Directors

The following table provides the details of remuneration or fees received by Directors (directly or indirectly):

==> picture [205 x 44] intentionally omitted <==

----- Start of picture text -----

Consulting or service fees
per month
Directors $
----- End of picture text -----

Executive
Min Yang	$4,900
David Fang	$4,900
Geoff Baker	$15,000
Wai Sang Ho	Nil
Alan Humphris	$9,870
Alex Lao	Nil

Shareholder approval is being sought at the Company’s annual general meeting to be held on 8 November 2007 for the issue of 50,000,000 (pre-consolidation) Shares to Gold Star Industry Limited.

The Constitution further provides that the Directors may be reimbursed for expenses properly incurred as a Director in connection with the affairs of the Company.

b) Directors’ Interests in Company’s Securities

The interests of the Directors in Shares as at the date of this Prospectus either directly or indirectly held areas set out below:

==> picture [219 x 35] intentionally omitted <==

----- Start of picture text -----

Pre Consolidated Number of shares held
Direct indirect
----- End of picture text -----

Min Yang		650,000,000
David Feng Alex Lao	129,280,000	650,000,000
Wai Sang Ho	83,333,333
Geoff Baker		2,345,165*
Alan Humphris	2,000,000	5,000,000

This figure does not include 50,000,000 (pre-consolidation) Shares proposed to be issued to Gold Star Industry Limited, a company owned and controlled by Geoff Baker. Shareholder approval is being sought at the Company’s annual general meeting to be held on 8 November 2007 for the issue of 50,000,000 (pre-consolidation) Shares to Gold Star Industry Limited.

c) Interests of Directors

Other than as set out above, or elsewhere in this Prospectus:

(a) no Director or proposed Director holds at the date of this Prospectus, or held at any time during the last 2 years before the date of lodgement of this Prospectus with ASIC, any interest in:
(i) the formation or promotion of the Company;
(ii) any property acquired or proposed to be acquired by the Company in connection with its formation or in connection with the Offer; or
(iii) the Offer; and
(b) no amounts have been paid or agreed to be paid by any person and no benefits have been given or agreed to be given by any person:
(i) to a Director or proposed Director to induce him to become, or to qualify as, a Director; or
(ii) for services provided by a Director or proposed Director in connection with the formation or promotion of the Company or in connection with the Offer.

13.6 Interests of Named Persons

Novus Capital Limited has acted as Financial Adviser and Underwriter to the Offer. For these services, the Company has agreed to pay the fees set out in Section 11.

Hall Chadwick Corporate (NSW) Pty Limited has acted as the Investigating Accountant in relation to the Offer. As the Investigating Accountant, Hall Chadwick Corporate (NSW) Pty Limited has been involved in undertaking due diligence in relation to financial and tax matters and has prepared an Investigating Accountant’s Report included in Section 9 of this Prospectus. In respect of this work, the Company has agreed to pay Hall Chadwick Corporate (NSW) Pty Limited a total of $67,000 up to the date of this Prospectus. Hall Chadwick may receive further payments in accordance with their normal time based charges.

Deacons has acted as Australian legal advisers in relation to the Offer and in that capacity, Deacons have been involved in undertaking due diligence enquiries in relation to Australian legal matters, providing legal advice to the Company in relation to the Offer and providing the Solicitor’s Report included in Section 10 of this Prospectus. In respect of this work, the Company has agreed to pay Deacons $85,000 up to the date of this Prospectus. Deacons may receive

Bridging business between Australia & China

��

ASF Group Ltd 2007

further payments in accordance with their normal time based charges.

Guangdong Lingnan Law Office has acted as Chinese legal advisers in relation to the Offer and in that capacity, Guangdong Lingnan Law Office have been involved in undertaking due diligence enquiries in relation to Chinese and Macau legal matters, providing legal advice to the Company in relation to the Offer. In respect of this work, the Company has agreed to pay Guangdong Lingnan Law Office HK$35,166 up to the date of this Prospectus. Guangdong Lingnan Law Office may receive further payments in accordance with their normal time based charges.

Swensson Integrated Natural Resource Management Services (SINRMS) has prepared the Independent Geologists Report included in Section 8 of this Prospectus. The Company has agreed to pay SINRMS $11,545.60 for this service.

Except as disclosed in this section or elsewhere in the Prospectus, no expert, promoter or any other person named in this Prospectus as performing a function in a professional advisory or other capacity in connection with the preparation or distribution of the Prospectus, nor any firm in which any of those persons is or was a partner nor any company in which any of those persons is or was associated with, has now, or has had, in the 2 year period ending on the date of this Prospectus, any interest in:

the formation or promotion of the Company; or
property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Offer of the Shares; or
● the Offer of the Shares.

Except as disclosed in this Prospectus, no amounts of any kind (whether in cash, Shares, options or otherwise) have been paid or given or agreed to be paid or given to any expert, promoter or any other person named in this Prospectus as performing a function in a professional advisory or other capacity in connection with the preparation or distribution of the Prospectus, or to any firm in which any of those persons is or was a partner or to any company in which any of those persons is or was associated with, for services rendered by that person in connection with the formation or promotion of the Company or the Offer under this Prospectus.

13.7 Employee Share Plan

The terms of the ASF Employee Share Plan are summarised below.

Staff, executive and Directors can be rewarded through an incentive share plan, which awards incentive shares or rights to shares to them. Thus, they are given an incentive to improve the Company’s performance benefiting both themselves and shareholders. Accordingly, in line with industry practice, investors should consider providing incentives for further efforts by staff, executives and directors to continue the advances made by the Company by approving incentive shares or rights in the Company.

Under this Plan, the Directors not only have a tool to improve the Company’s performance but can attract key executives and directors to strengthen the company. Shareholders benefit if the Company’s share price improves as a result of better performance from the staff, executive and directors.

The ASF Share Plan enables the Company to issue shares to Directors, executives and employees of the Company as part of a performance based incentive program. Directors will be able to participate in the ASF Share Plan. However, under the Corporations Act and the ASX Listing Rules, no shares can be issued to a Director without shareholder approval for the number of shares to be issued.

As the ASF Share Plan is a new incentive plan, no securities have yet been issued under the Plan.

Summary of the ASF Share Plan:

The Board may in its sole discretion invite any director, executive, manager or employee to apply for shares or rights in the Company pursuant to the Plan. These shares or rights will be issued on such terms and conditions prescribed by the Board in accordance with the terms of the Plan.
The Company may not invite participation in the Plan other than in accordance with the requirements of the Corporations Act or by fulfilling the conditions and requirements of an applicable exemption from the Corporations Act.
Once the Directors have determined the terms of issue of shares, number of shares or rights and the class of members who are eligible for those shares, then staff executives or Directors, depending on eligibility may

mining | property | travel | ventures

��

��. Additional Information - continued

apply for the shares according to those terms. A “member” extends to any director, executive, manager or employee of the company.

The company may reject any application where the Member has received a termination of his or her engagement with the Company e.g. he or she is dismissed as an employee.
Shares or rights will be subject to such escrow requirement as may be imposed by the ASX, but otherwise listing of shares will be subject to policy adopted by the Directors.
There are the other provisions concerning the keeping of registers, issue of certificates or holding statements and application procedures etc as are normally used with administering such incentive share plans.
The Plan may be amended by the Board subject to the ASX Listing Rules, the Corporations Act and all other applicable laws.
The Plan will be administered by the Board or an administrator appointed by the Board. The Board may make such rules for the conduct of the plan as it thinks fit.

Complete copies of the ASF Share Plan will be available for inspection without charge during the offer period in normal office hours at the office of the Company at Suite 2, 3B Macquarie Street, Sydney NSW 2000.

13.8 Consents

The following parties have given, and have not, before the issue of this Prospectus, withdrawn their written consent to being named in the Prospectus and to the inclusion of the following information in the form and context in which it is included. Each of the parties referred to below, to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any part of this Prospectus other than the reference to its name and the statement or report included in this Prospectus with the consent of that party as described below:

Hall Chadwick Corporate (NSW) Pty Limited to the inclusion of its Investigating Accountant’s Report on historical financial information in Section 9 of this Prospectus in the form and context in which they appear, but it does not otherwise make or purport to make any other statement in this Prospectus.
Hall Chadwick has consented to being named in the Corporate Directory as the Company’s Auditor in the form and context in which it appears, but it does not otherwise make or purport to make any other statement in this Prospectus.
Deacons has consented to being named in the Corporate Directory of this Prospectus as Australian legal advisers to the Company and to the inclusion of the Solicitor’s Report included in Section 10 of this Prospectus, but it does not make any statement in this Prospectus, nor is any statement in this Prospectus based on any statement by it. Deacons did not carry out any legal work in relation to ASF’s operations outside of Australia.
Guangdong Lingnan Law Office has consented to being named in the Corporate Directory of this Prospectus as Chinese legal advisers to the Company, but it does not make any statement in this Prospectus, nor is any statement in this Prospectus based on any statement by it.
Novus Capital Limited has consented to being named as financial adviser to the Company and Underwriter to the Offer, for the minimum subscription amount but it does not make any statement in this Prospectus, nor is any statement in this Prospectus based on any statement by Novus Capital Limited.
Registries Limited has consented to being named in the Corporate Directory as the Share Registry for the Company. Registries Limited has had no involvement in the preparation of any part of this Prospectus and its name appears for information purposes only.
Swensson Integrated Natural Resource Management Services to the inclusion of its Investigating Geologist’s Report in Section 8 of this Prospectus and to statements attributed to it in Section 3 in the form and context in which they appear, but it does not otherwise make or purport to make any other statement in this Prospectus.

Bridging business between Australia & China

��

ASF Group Ltd 2007

13.9 Related Party Disclosures

Min Yang is the sole director and company secretary and sole shareholder of the lessor of ASF’s Sydney office, S.P.C. Investments Pty Limited.

Min Yang and David Fang are both directors and shareholders of Sino Property Networks Pty Limited. Under an agreement for the transfer of business assets, ASF Properties is required to pay a fee to Sino for introducing ASF Properties to the business of marketing the Breakfast Point residential development as agent of Rosecorp Marketing Pty Limited to the geographic markets in PRC China, Hong Kong SAR, Macau SAR, Taiwan and South Korea.

David Fang is a director and shareholder of the V Property Group Pty Limited which provides consulting services to ASFP.

Geoff Baker is a director of Gold Star Industry Limited which provides consulting services to the Company.

Alan Humphris is a director of Balmoral Capital Limited which provides consulting services to the Company.

13.10 Documents Available for Inspection

Copies of the following documents will be available for inspection during normal office hours free of charge at the registered office of the Company until the Closing Date:

the constitution of the Company; and
the terms and conditions of the ASF Share Plan.

13.11 Costs of the Offer

The total expenses connected with the Offer are estimated at approximately $308,000.

mining | property | travel | ventures

��

��. Definitions and Interpretation

In this Prospectus, unless the context otherwise requires:

“ASX”

means Australian Securities Exchange Limited ACN 008 624 691.

“A$” and “$”

means Australian dollars, unless otherwise stated.

“Board of Directors” and “Board”

means Board of Directors of the Company unless the context indicates otherwise.

“Applicant”

means a person who submits an Application.

“Business Day”

“Application” means a valid application to subscribe for Shares.

means a day on which the trading banks are open in Sydney, New South Wales Australia.

“CHESS”

“Application Form”

means the application form contained in this Prospectus or a copy of the application form contained in this Prospectus or a direct derivative of the application form which is contained in this Prospectus.

“Application Monies”

means $0.25 being the amount payable in respect of each Share under the Offer.

means ASX Clearing House Electronic Subregistry System.

“Closing Date”

means the date on which the Offer closes.

“Company”

means ASF Group Limited ABN 50 008 924 570.

“Completion of the Offer”

“ASF Group”

means ASF Group Limited ABN 50 008 924 570.

“ASFP”

means ASF Properties Pty Limited ABN 79 117 117 183.

“ASFR”

means ASF Resources Pty Limited ACN 121 465 405.

means the allotment of all the Shares offered under this Prospectus.

“Corporations Act”

means the Corporations Act 2001 of Australia.

“Directors”

means directors of the Company unless the context indicates otherwise.

“ASFV”

means ASF Ventures Limited a company incorporated in Hong Kong (company No 1167766).

“email”

means an electronic mail service that allows users to send and receive messages via the Internet.

“ASIC” or “Commission”

means Australian Securities and Investments Commission.

“ASTC”

“EST”

means Eastern Standard Summer Time as applicable in Sydney, New South Wales Australia and references to time in this Prospectus are references to EST.

means ASX Settlement and Transfer Corporation Pty Ltd ACN 008 504 532.

“Exposure Period”

“ASTC Settlement Rules”

means the operating rules of the ASTC and, to the extent that they are applicable, the operating rules of ASX and the operating rules of Australian Clearing House Pty Ltd.

means the period of seven days (or longer as ASIC may direct) from the date of lodgement of the Prospectus with ASIC.

Bridging business between Australia & China

��

ASF Group Ltd 2007

“Group”

means ASF Group, its subsidiaries, ASFV, ASF Macau Multinational Ltd and Multinational Youth Travel Agency Company Limited.

“Prospectus”

means this disclosure document.

“Quotation”

means quotation of the Shares on the Official List.

“HIN”

means holder identification number.

“Rose Group”

means Rosecorp Marketing Pty Limited ABN 78 092 138 479.

“Issue”

means the issue of Shares pursuant to this Prospectus.

“Share”

“Issue Sponsored”

means securities issued by an issuer that are held in uncertificated form without the holder entering into a sponsorship agreement with a broker or without the holder being admitted as an institutional participant in CHESS.

“Listing Date”

means the date the Company is admitted to the Official List.

“Listing Rules”

means listing rules of the ASX.

means a fully paid ordinary share in the capital of the Company.

“Shareholder”

means a holder of Shares in the Company.

“Share Registry”

means Registries Limited ABN 14 003 209 836.

“Subsidiary”

means the same as that term is defined under Section 9 of the Corporations Act.

“Novus Capital” means Novus Capital Limited ABN 32 006 711 995.

“Offer”

means the invitation to apply for Shares pursuant to this Prospectus.

“Offer Period”

means the period commencing on the Opening Date and ending on the Closing Date.

“Official List”

means the Official List of the ASX.

“Opening Date”

means the date immediately following the expiry of the Exposure Period.

“Participant”

means a participant for the purpose of CHESS.

“Proper ASTC transfer”

has the same meaning given in the Corporations Act.

mining | property | travel | ventures

��

Director’s Consent

The Directors state that they have made all reasonable enquiries and on that basis have reasonable grounds to believe that any statements by the Directors in this Prospectus are not misleading or deceptive and that with respect to any other statements made in this Prospectus by persons other than Directors, the Directors have made reasonable enquiries and on that basis have reasonable grounds to believe that persons making those other statements were competent to make such statements, those persons having given their consent to the issue of this Prospectus and not withdrawn that consent before lodgement of this Prospectus with ASIC. This Prospectus is prepared on the basis that certain matters may be reasonably expected to be known to likely investors or their professional advisers.

Each of the Directors, listed below has consented in writing to the lodgement of this Prospectus with ASIC in accordance with Section 720 of the Corporations Act and has not withdrawn that consent.

Min Yang, (Chairman - Executive)

Alex Lao, (Vice Chairman - Non-Executive Director)

David Fang, (Executive Director)

Geoff Baker, (Executive Director)

Wai Sang Ho, (Non-Executive Director)

Alan Humphris, (Non-Executive Director)

Dated: 7 November 2007

Signed for and on behalf of the Company

==> picture [95 x 44] intentionally omitted <==

Min Yang

Chairman - Executive

==> picture [123 x 34] intentionally omitted <==

Geoff Baker Executive Director

Bridging business between Australia & China

�0

APPLICATION FORM AND GUIDE TO THE APPLICATION FORM

					Share Registrar’s use only	Share Registrar’s use only
Pin cheques here. Do not staple.
				Broker Reference -		Stamp Only
	ASF Group Limited ABN 50 008	924 570		Broker Code	Advisor Code
INSTRUCTIONS FOR A TO J ARE SET OUT ON THE REVERSE SIDE OF THIS FORM					Company’s use only
PLEASE	USE BLOCK LETTERS
All applications must be for a minimum of 4,000 Shares ($1,000) and in multiples of 400 Shares ($100)
for any greater amount and accompanied by payment of $0.25 per Share.
A	WRITE YOUR NAME– refer to the guide (reverse side) for correct forms of registrable title(s)			C	Tax File Number(s) or exemption category
	Title Given Names/Company Name		Surname/ACN
	JOINT APPLICATION
B
	Title Joint Application Account Designation
	Title Joint Application Account Designation
D	POSTAL AND EMAIL ADDRESS
	Address		Suburb/Town		State	Postcode
	email address
	CONTACT DETAILS
E
	Contact Name		Telephone (Work)	Telephone (Home)
F	CHESS DETAILS
	PID		HIN
	NUMBER OF SHARES		TOTAL AMOUNT
G			H
				Application Monies		Date
	I/We apply for	Shares and contemporaneously transmit Application Monies in full at $0.25 per Share		$A
I	CHEQUE DETAILS
					$
	Drawer	Bank	Branch		Amount of Cheque
					$
	Drawer	Bank	Branch		Amount of Cheque
	Cheques should be made payable to “ASF Group Limited Share Application”		and be crossed “Not Negotiable”		$
					TOTAL
J	This Application Form does not need to be signed. By lodging this Application Form and contemporaneously transmitting the Application Monies, the Applicant (a) applies for the number of Shares in the Application Form or such lesser number as may be allocated by the Directors as determined by the Directors;				hereby:

INSTRUCTIONS FOR A TO J ARE SET OUT ON THE REVERSE SIDE OF THIS FORM
PLEASE USE BLOCK LETTERS
All applications must be for a minimum of 4,000 Shares ($1,000) and in multiples of 400 Shares ($100) for any greater amount and accompanied by payment of $0.25 per Share.
(b) agrees to be bound by the terms and conditions set out in the Prospectus and the constitution of ASF Group Limited;
(c) authorises the Directors to complete or amend this Application Form where necessary to correct any errors or omissions; and
(d) (if this Application Form is a paper copy of an electronic Application Form) acknowledges having received personally an electronic version of the Prospectus, or a copy of it, accompanied by or attached to the Application Form or a copy of the Application Form or a direct derivative of the Application Form, before applying for Shares.

Important Notice

This Application Form relates to a Prospectus dated 7 November 2007 pursuant to which ASF Group Limited invites investors to subscribe for up to a total of 20,000,000 fully paid ordinary Shares in ASF Group Limited at an issue price of $0.25 per Share. The Prospectus expires on the date which is 13 months after the date of this Prospectus.

The Prospectus contains detailed information about ASF Group Limited and it is advisable to read the Prospectus before completing this Application Form.

If you have received this Prospectus electronically please ensure that you have received the entire Prospectus accompanied by the Application Form or a copy of the Application Form or a direct derivation of the Application Form. If you have not, please email the Company at [email protected] and the Company will send to you for free, either a hard copy or a further electronic copy of the Prospectus or both. Any person who passes on to another person the Application Form must at the same time and by the same means give the other person a complete and unaltered copy of the Prospectus.

APPLICATION FORM AND GUIDE TO THE APPLICATION FORM

Please complete all relevant sections of the Application Form using BLOCK LETTERS. Please post or deliver to ASF Group Limited the completed Application Form together with your Application Monies to one of the addresses listed below. If you have any questions on how to complete this Application Form please telephone Novus Capital on 02 9375 0100 or ASF Group Limited on (02) 9251 9088 or email the Company at [email protected] or Novus Capital at [email protected]. Applications for the Shares offered by this Prospectus can only be accepted on the Application Form which is included in the Prospectus or on a copy of or direct derivation of the Application Form which is included in the Prospectus.

By mail: ASF Group Limited Suite 2, 3B Macquarie Street Sydney, 2000

By delivery:

ASF Group Limited Suite 2, 3B Macquarie Street Sydney, 2000

Application Forms must be received by no later than 5.00pm (EST) on the Closing Date or as otherwise advised by ASF Group Limited. If you have received this Prospectus electronically via the Internet please ensure that you have received the entire Prospectus accompanied by the Application Form. If you have not please email the Company at [email protected] and the Company will send to you, free of charge, either a hard copy or a further electronic copy of the Prospectus, or both.

Write your FULL NAME in Box A. This must be either your own name or the name of a company. You should refer to the bottom of
A this page for the correct forms which can be registered. Applications using the incorrect forms may be rejected. If your Application Form is not completed correctly, or if the accompanying payment is for the wrong amount, it may still be accepted by ASF Group Limited. Any decision as to whether to accept your form as valid, and how to constitute, amend or complete it, shall be final. You will not, however, be treated as having offered to subscribe for more Shares than is indicated by the amount of the accompanying cheque for the Application Monies referred to in Box H.
B If you are applying as JOINT APPLICANTS, complete Boxes A and B. You should refer to the bottom of this page for instructions on the correct form of name. Up to three Joint Applicants may register.

==> picture [10 x 10] intentionally omitted <==

----- Start of picture text -----

C
----- End of picture text -----

Enter your TAX FILE NUMBER (TFN) or exemption category beside your name. Where applicable, please enter the TFN for each Joint Applicant. Collection of TFNs is authorised by taxation laws. Quotation of your TFN is not compulsory and will not affect your Application Form.
D Enter your POSTAL AND EMAIL ADDRESS for all correspondence. All communications to you from ASF Group Limited share registry, Registries Limited (shareholding statement, annual/interim reports, correspondence etc) will be mailed to the person(s) and address as shown. For Joint Applications, only one address can be entered.
E Please let us know your TELEPHONE NUMBER(S) and contact name in case we need to contact you in relation to your Application Form.

==> picture [10 x 60] intentionally omitted <==

----- Start of picture text -----

F
G
H
----- End of picture text -----

ASF Group Limited will participate in the ASX CHESS System. If you are participating in this system, you may complete this section. If you are not a participant in the CHESS System do not complete this box. It will not affect your application.

Insert the NUMBER OF SHARES you wish to apply for in Box G.

Enter the amount of your Application Monies here. The amount must be equal to the number of Shares applied for (see Box G) multiplied by $0.25 per Share.
I

==> picture [8 x 9] intentionally omitted <==

----- Start of picture text -----

J
----- End of picture text -----

Complete cheque details as required. Cheques must be drawn on an Australian bank in Australian currency and made payable to “ASF Group Ltd Share Account” and crossed “Not Negotiable”. Do not send cash. A separate cheque should accompany each Application Form lodged.

The Application Form does not need to be signed.

CORRECT FORMS OF REGISTRABLE TITLE

Note that only legal entities are allowed to hold securities. Applications must be in the name(s) of a natural person(s), companies or other legal entities acceptable to ASF Group Limited. At least one full given name and the surname is required for each natural person. Applications cannot be made by persons under 18 years of age. Examples of the correct form of registrable title are set out below.

Type of Applicant Trusts Deceased Estates Partnerships Clubs/Unincorporated Bodies Superannuation Funds

Correct Form of Registrable Title

Mr John David Smith (John David Smith A/c) Mr Michael Peter Smith (Est John David Smith A/c) Mr John David Smith and Mr Michael Peter Smith Mr John David Smith (ABC Tennis Association A/c) John Smith Pty Ltd (Super Fund A/c)

Incorrect Form of Registrable Title John Smith Family Trust John Smith (deceased) John Smith and Son Smith Investment Club or ABC Tennis Association John Smith Superannuation Fund

APPLICATION FORM AND GUIDE TO THE APPLICATION FORM

==> picture [482 x 654] intentionally omitted <==

----- Start of picture text -----

Share Registrar’s use only
Pin cheques here. Do not staple.
Broker Reference - Stamp Only
ASF Group Limited ABN 50 008 924 570 Broker Code Advisor Code
INSTRUCTIONS FOR A TO J ARE SET OUT ON THE REVERSE SIDE OF THIS FORM Company’s use only
PLEASE USE BLOCK LETTERS
All applications must be for a minimum of 4,000 Shares ($1,000) and in multiples of 400 Shares ($100)
for any greater amount and accompanied by payment of $0.25 per Share.
WRITE YOUR NAME – refer to the guide (reverse side) for correct forms of registrable title(s) Tax File Number(s) or exemption category
A
C
Title Given Names/Company Name Surname/ACN
JOINT APPLICATION
B
Title Joint Application Account Designation
Title Joint Application Account Designation
POSTAL AND EMAIL ADDRESS
D
Address Suburb/Town State Postcode
email address
CONTACT DETAILS
E
Contact Name Telephone (Work) Telephone (Home)
CHESS DETAILS
F
PID HIN
NUMBER OF SHARES TOTAL AMOUNT
G H
Application Monies Date
I/We apply for Shares and contemporaneously transmit Application Monies in full at $0.25 per Share $A
I CHEQUE DETAILS
$
Drawer Bank Branch Amount of Cheque
$
Drawer Bank Branch Amount of Cheque
Cheques should be made payable to “ASF Group Limited Share Application” and be crossed “Not Negotiable” $
TOTAL
This Application Form does not need to be signed. By lodging this Application Form and contemporaneously transmitting the Application Monies, the Applicant hereby:
J (a) applies for the number of Shares in the Application Form or such lesser number as may be allocated by the Directors as determined by the Directors;
----- End of picture text -----

INSTRUCTIONS FOR A TO J ARE SET OUT ON THE REVERSE SIDE OF THIS FORM
PLEASE USE BLOCK LETTERS
All applications must be for a minimum of 4,000 Shares ($1,000) and in multiples of 400 Shares ($100) for any greater amount and accompanied by payment of $0.25 per Share.
(b) agrees to be bound by the terms and conditions set out in the Prospectus and the constitution of ASF Group Limited;
(c) authorises the Directors to complete or amend this Application Form where necessary to correct any errors or omissions; and
(d) (if this Application Form is a paper copy of an electronic Application Form) acknowledges having received personally an electronic version of the Prospectus, or a copy of it, accompanied by or attached to the Application Form or a copy of the Application Form or a direct derivative of the Application Form, before applying for Shares.

Important Notice

The Prospectus contains detailed information about ASF Group Limited and it is advisable to read the Prospectus before completing this Application Form.

APPLICATION FORM AND GUIDE TO THE APPLICATION FORM

By mail: ASF Group Limited Suite 2, 3B Macquarie Street Sydney, 2000

By delivery:

ASF Group Limited Suite 2, 3B Macquarie Street Sydney, 2000

Write your FULL NAME in Box A. This must be either your own name or the name of a company. You should refer to the bottom of
A this page for the correct forms which can be registered. Applications using the incorrect forms may be rejected. If your Application Form is not completed correctly, or if the accompanying payment is for the wrong amount, it may still be accepted by ASF Group Limited. Any decision as to whether to accept your form as valid, and how to constitute, amend or complete it, shall be final. You will not, however, be treated as having offered to subscribe for more Shares than is indicated by the amount of the accompanying cheque for the Application Monies referred to in Box H.
B If you are applying as JOINT APPLICANTS, complete Boxes A and B. You should refer to the bottom of this page for instructions on the correct form of name. Up to three Joint Applicants may register.

==> picture [10 x 10] intentionally omitted <==

----- Start of picture text -----

C
----- End of picture text -----

Enter your TAX FILE NUMBER (TFN) or exemption category beside your name. Where applicable, please enter the TFN for each Joint Applicant. Collection of TFNs is authorised by taxation laws. Quotation of your TFN is not compulsory and will not affect your Application Form.
D Enter your POSTAL AND EMAIL ADDRESS for all correspondence. All communications to you from ASF Group Limited share registry, Registries Limited (shareholding statement, annual/interim reports, correspondence etc) will be mailed to the person(s) and address as shown. For Joint Applications, only one address can be entered.
E Please let us know your TELEPHONE NUMBER(S) and contact name in case we need to contact you in relation to your Application Form.

==> picture [10 x 60] intentionally omitted <==

----- Start of picture text -----

F
G
H
----- End of picture text -----

ASF Group Limited will participate in the ASX CHESS System. If you are participating in this system, you may complete this section. If you are not a participant in the CHESS System do not complete this box. It will not affect your application.

Insert the NUMBER OF SHARES you wish to apply for in Box G.

Enter the amount of your Application Monies here. The amount must be equal to the number of Shares applied for (see Box G) multiplied by $0.25 per Share.
I

==> picture [8 x 9] intentionally omitted <==

----- Start of picture text -----

J
----- End of picture text -----

The Application Form does not need to be signed.

CORRECT FORMS OF REGISTRABLE TITLE

Type of Applicant Trusts Deceased Estates Partnerships Clubs/Unincorporated Bodies Superannuation Funds

Correct Form of Registrable Title

Incorrect Form of Registrable Title John Smith Family Trust John Smith (deceased) John Smith and Son Smith Investment Club or ABC Tennis Association John Smith Superannuation Fund

ASF Group Ltd 2007

mining | property | travel | ventures

AI assistant

ASF GROUP LIMITED — Capital/Financing Update 2007

64323_rns_2007-11-21_1ded5791-1cee-454e-9836-828c8d96d944.pdf

prospectus

Important Information

General

Defined words and expressions

Investment advice

Prospectus availability

Electronic prospectus

Disclaimer

Foreign jurisdictions

Consolidation

Table of Contents

Corporate Directory

Board of Directors

Alex Lao

Registered Office:

Australia

China Offices:

Financial Adviser and Underwriter

Beijing

Shanghai

Auditor

Guangzhou

Independent Accountant

Macau

ASX Code: AFA

Australian Legal Adviser

Share Registry

Chinese Legal Adviser

Guangdong Lingnan Law Office

Chairman’s Letter

Dear Investor,

Underwritten Offer

Investment Group

Time is Right

Experienced Team

Chairman & President

�. Investment Highlights

Mineral Resources & Energy:

Property Marketing & Services:

China Ventures

Travel Services

IMPORTANT DOCUMENT

Indicative Timetable

�. Details of the Offer

2.1 Introduction

2.2 Consolidation

2.3 Shares Offered for Subscription

2.4 Minimum Subscription

2.5 Public Offer

2.6 Offer Period

2.7 Purpose of the Offer

2.8 Proposed Use of Funds

2.9 Capital Structure

�. Details of the Offer

- continued

2.10 Restricted Securities

2.11 Risk Factors

2.12 Exposure Period

2.13 Investor Enquiries

Novus Capital Limited

2.14 How to Apply

Post to OR deliver to:

ASF Group Ltd Bennelong, Suite 2, 3B Macquarie Street Sydney NSW 2000

2.15 Allotment and Allocation of Shares

2.16 Underwriting

2.17 Quotation of Shares on the ASX

2.18 CHESS

�. Details of the Offer

- continued

2.19 Overseas Investors

2.20 Privacy Act

2.21 Taxation

2.22 Dividend Policy

2.23 Financial Forecasts

�. Profile of The Company

3.1 Corporate Structure

�. Profile Of The Company

ASF GROUP LIMITED Capital/Financing Update 2007