ASF GROUP LIMITED — Interim / Quarterly Report 2012

Jan 30, 2012

Appendix 4C Quarterly report for entities admitted on the basis of commitments

Rule 4.7B

Appendix 4C

Quarterly report for entities admitted on the basis of commitments

Introduced 31/3/2000. Amended 30/9/2001, 24/10/2005.

Name of entity

ASF Group Limited

ABN 50 008 924 570	Quarter ended (“current quarter”)
50 008 924 570	31 December 2011

Consolidated statement of cash flows

Cash flows related to operating activities 1.1 Receipts from customers 1.2 Payments for (a) staff costs (b) advertising and marketing (c) research and development (d) leased assets (e) other working capital 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (GST refund) Net operating cash flows	Current quarter $	Year to date (6 months) $
	18,543 (374,516) (5,435) ‐ ‐ (506,474) ‐ 85,804 ‐ ‐ 35,327	234,108 (721,333) (7,143) ‐ ‐ (1,935,779) ‐ 142,435 ‐ ‐ 15,783
	(746,751)	(2,271,929)

• See chapter 19 for defined terms.

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Quarterly report for entities admitted on the basis of commitments
	Current quarter $	Year to date (6 months) $
1.8 Net operating cash flows (carried forward)	(746,751)	(2,271,929)
Cash flows related to investing activities 1.9 Payment for acquisition of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non‐current assets (e) other non‐current assets 1.10 Proceeds from disposal of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non‐current assets (e) other non‐current assets 1.11 Loans to other entities 1.12 Loans repaid by other entities (see Explanatory Note on page 6) 1.13 Other Net investing cash flows 1.14 Total operating and investing cash flows	‐ ‐ ‐ ‐ (507,329) ‐ ‐ ‐ ‐ ‐ (452,900) 5,065,563 (3,700)	‐ ‐ ‐ ‐ (949,919) 6,000,000 ‐ ‐ ‐ ‐ (664,951) 5,069,695 (37,347)
	4,101,634	9,417,478
	3,354,883	7,145,549
Cash flows related to financing activities 1.15 Proceeds from issues of shares, options, etc. 1.16 Proceeds from sale of forfeited shares 1.17 Proceeds from borrowings 1.18 Repayment of borrowings 1.19 Dividends paid 1.20 Other (security term deposit) Net financing cash flows	‐ ‐ ‐ ‐ ‐ ‐	‐ ‐ ‐ ‐ ‐ 26,605
	‐	26,605
Net increase (decrease) in cash held 1.21 Cash at beginning of quarter/year to date 1.22 Adjustment to opening balance due to deconsolidation of ASF Resources Ltd_(see_ Explanatory Note on page 6) 1.23 Cash at end ofquarter	3,354,883 9,669,367 (1,123,110)	7,172,154 5,852,096 (1,123,110)
	11,901,140	11,901,140

• See chapter 19 for defined terms.

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Payments to directors of the entity and associates of the directors

Payments to related entities of the entity and associates of the related entities

1.24 1.25	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.11	Current quarter $
		(194,266)
		‐
1.26	Explanation necessaryfor an understandingof the transactions
	Consulting and directors fees ($126,410), Office lease ($67,856)

Non‐cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

• n/a

• 2.2 Details of outlays made by other entities to establish or increase their share in businesses in which the reporting entity has an interest n/a

Financing facilities available

Add notes as necessary for an understanding of the position. (See AASB 1026 paragraph 12.2).

3.1	Loan facilities
3.2	Credit standby arrangements

Amount available	Amount used
$	$
‐	‐
‐	‐

• See chapter 19 for defined terms.

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Reconciliation of cash

admitted on the basis of commitments Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $	Previous quarter $
4.1 Cash on hand and at bank 4.2 Deposits at call 4.3 Bank overdraft 4.4 Other (provide details)	7,891,989	9,669,367
	4,009,151	‐
	‐	‐
	‐	‐
Total: cash at end of quarter(item 1.23)	11,901,140	9,669,367

Acquisitions and disposals of business entities

5.1 Name of entity 5.2 Place of incorporation or registration 5.3 Consideration for acquisition or disposal 5.4 Total net assets 5.5 Nature of business	Acquisitions (Item 1.9(a))	Disposals (Item 1.10(a))
	n/a	n/a
	n/a	n/a
	n/a	n/a
	n/a	n/a
	n/a	n/a

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act (except to the extent that information is not required because of note 2) or other standards acceptable to ASX.

• 2 This statement does give a true and fair view of the matters disclosed.

Sign here: ............................................................ Date: 31 January 2012 Company Secretary

Print name: William Kuan

• See chapter 19 for defined terms.

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Notes

1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

2. The definitions in, and provisions of, AASB 1026: Statement of Cash Flows apply to this report except for the paragraphs of the Standard set out below.

3. 6.2 ‐ reconciliation of cash flows arising from operating activities to operating profit or loss

4. 9.2 ‐ itemised disclosure relating to acquisitions

5. 9.4 ‐ itemised disclosure relating to disposals

6. 12.1(a) ‐ policy for classification of cash items

7. • 12.3 ‐ disclosure of restrictions on use of cash • 13.1 ‐ comparative information

8. Accounting Standards. ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

• See chapter 19 for defined terms.

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Explanatory Note

ASF Resources Ltd (“ASFR”)

ASFR accounts will not be consolidated into the accounts of the ASF Group Ltd (the "Company") in the future.

As announced by the Company on 5 January 2012, completion of the subscription by Beijing Guoli Energy Investment Co., Ltd. ("Guoli") for 81,818,182 new shares of ASFR representing 45% of the equity interest in ASFR occurred in December 2011. As a result, the Company's interest in ASFR was diluted to 48.95% and the accounts of ASFR will no longer be consolidated into the consolidated financial statements of the Company. Please refer to the announcement of the Company dated 5 January 2012 for more details on the completion of Guoli’s subscription in ASFR.

• Item 1.22 ‐ As ASFR will no longer be consolidated into the Company’s accounts, the opening cash balance in this Appendix 4C was accordingly adjusted by excluding ASFR from the group’s consolidated cash flow report.

• Item 1.12 ‐ ‘Loans repaid by other entities’ included A$5.0 million repayment of intercompany loans from ASFR upon completion of the Guoli’s subscription as described above.

Exploration Activities: Quarter ended 31 December 2011

ASFR

ASFR holds 8 tenements in the Canning Basin, W.A.

During the Quarter, drilling was started in Exploration Licenses; 1670 and 1435. Due to the onset of the wet season and a break down on the rig works could not be completed and will resume at the conclusion of the wet season in 2012. The drilling that was completed did show signs of intersecting coal both at P1 and P2 seams at depth between 190m and 250m. Further drilling by ASFR is required to determine the seam thickness, Core drilling was not carried out

Work Programs for 2012 have been lodged with the Kimberley Land Council for approval and provisioning of clearance teams. The majority of drilling will be over Exploration Licences: 1887 and 1886 and will commence in May 2012 (subject to the clearance being granted).

• See chapter 19 for defined terms.

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Tasmania

During the Quarter, China Coal Resources Pty Limited (a 45% owned associate of the Company), carried out further soil sampling on tenement EL55/2007 with the objective of assisting in the identification of base metal drill targets. Work programs are now being formalised for lodgement with the MRT in early 2012.

ASF Metals Pty Limited

ASF Metals, a wholly owned subsidiary of the Company, holds tenement EL14/2007 on the West Coast of Tasmania.

During the Quarter, further soil sampling of the north western corner of the tenement was carried out by our strategic partner Heilongjiang. Results will be released as they become available.

• See chapter 19 for defined terms.

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