Astron Annual Report 2011

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22 2 40 2
8 8
10 18
2 10
2
Ti Zr
Titanium Zirconium
47.867 91.224
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Welcome to the titanium and zirconium age

“ China may have a lock on exotic rare earths that go into mobile phones and stealth fighters, but the real money is also being made in the more mundane world of Australian mineral sands that go into bathroom tiles and pacemakers.” REUTERS

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OVERVIEW OF THE ASTRON GROUP 2 CHIEF FINANCIAL OFFICER’S REPORT 14
2011 OVERVIEW 4 SUSTAINABLE DEVELOPMENT 15
PRODUCTS PRODUCED FROM MINERAL SANDS 6 CORPORATE GOVERNANCE 16
CHAIRMAN’S OVERVIEW 10 FINANCIAL STATEMENTS 20
MANAGING DIRECTOR’S REPORT 11 CORPORATE INFORMATION 73
CAUTIONARY STATEMENT
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Certain sections of this report contain forward-looking statements that are subject to risk factors associated with, among others, the economic and business circumstances occurring from time to time in the countries and sectors in which the Astron Group operates. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a wide range of variables which could cause results to differ materially from those currently projected.

“ The global supply of zircon and titanium feedstock is forecast to plateau, leading to significant deficits. Astron is one of the few companies in the world with resources, technical expertise and strong capability in customer support in the mineral sands industry.” ALEX BROWN, MANAGING DIRECTOR, ASTRON

Astron’s uniqueness

Large feedstock resource

Astron owns one of the world’s largest potential zircon and titanium feedstock resources

$147 million in cash

Astron has a quality balance sheet with $147 million of cash

25 years in China

Astron has a strong history and reputation in China

Customer focused

Astron understands its customers and how best to support them

Industry leader

Astron’s name is highly recognised in the mineral sands industry

Technology leader

Astron’s competencies include research and technology development in zircon, titanium and rare earths-related processes

Largest zirconium producer

Astron became one of the world’s largest producers of zirconium chemicals and materials

Well positioned

Astron is positioned to take advantage of the change in market dynamics for zircon and titanium feedstocks

Overview of the Astron group

A company on the move

Astron has one of the world’s largest zircon and titanium feedstock resources. Listed on the Australian Securities Exchange and with a cashed-up balance sheet and solid 23-year history, Astron has technical expertise and excellent customer networks in the zirconium and titanium industry.

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In China, we trade titanium feedstock materials and are developing a titanium base in the country’s northeast. We expect the titanium base to include the production of advanced zirconium, titanium metals and chemicals.

As well as our operations in Shenyang and Yingkou, China, Astron has an office in Sydney, Australia, and a mining development office and site in northwest Victoria, where we are developing the Donald mineral sands project.

The exploration licence for our mineral sands project in Senegal is in the process of being renewed. The Senegal project represents a large coastal-based area ready for exploration.

In addition to our operating subsidiaries, Astron has investment interests in Altona Mining, South American Iron & Steel, Zambezi Resources and Greenpower Energy.

Donald mineral sands project

Donald is to be a standard open-cut mining operation, with an ore resource projected to last over 25 years. The mine site is 17 kilometres southeast of Minyip. During Stage 1, it is expected the mine will initially extract up to 7.5 million tonnes a year and thereafter expand to take advantage of the large ore body. Minerals will be processed by conventional methods to produce heavy mineral concentrate. This will be further processed to recover zircon, rutile, ilmenite, leucoxene and monazite.

China

The China operations are held through two companies, Yingkou Mineral Resources Co Limited (Resources) and Astron Titanium Yingkou Co Limited (Titanium).

“ Given our strong balance sheet and positive outlook for zircon and titanium feedstock products, we look forward to a very exciting year at Astron.”

Gerard King, Chairman, Astron

Resources houses the majority of the infrastructure and employees for the China operations in Shenyang, as well as a portfolio of residential apartments and one block of land.

The second block of land together with the warehouse facility and laboratory at Yingkou is housed in Titanium. Titanium also funds the group’s research and development capability which is key to creating Astron’s competitive advantage.

2 ASTRON LIMITED ANNUAL REPORT 2011

History of Astron

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1992 Established Shenyang Astron 2001 Astron Advanced Materials Ltd 2011 Continued development
Mining Industries Ltd importing zircon in England established to provide direct sales of Donald Project and R&D in China
sand and exporting zircon chemicals and product service for its European markets
1997 Set up new zirconium chemical 2008 Sold Zirconium
production JVs to expand its zirconium oxychloride chemical business to Imerys
and chemical zirconia production capacity
Timeline
1996 Zircon flour factory at 2004 Acquired Zirtanium
Zibo Shandong established Australia, one of the largest enriched
deposits of zircon sand in the world
1988 Astron became involved 2000 The Bayuchuan factory 2009 Donald project
in two zirconium materials projects was substantially expanded to environmental effects statement
in China produce fused zirconia approved
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LEFT TO RIGHT:
Donald Mineral Sands
Project team, Donald
Mining licence area,
test plant at Yingkou,
settling tank at
RJ Robbins
Operations and interests
Astron subsidiary/project Astron investment
Astron
Shenyang
Altona Mining
Astron Advanced
Materials UK
Astron
Yingkou
Niafarang
(Senegal)
Altona Mining
Astron
South American Head Office
Iron and Steel Sydney
Greenpower
Energy
Zambezi
Resources
Donald Mineral Sands
Sovereign Gold
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ASTRON LIMITED ANNUAL REPORT 2011 3

2011 overview

2011: mineral sands supply became critical

Raw materials for next generation high technology materials are titanium, zircon and rare earths. Urbanisation, particularly in emerging economies such as China, has produced explosive demand for titanium, zirconium and rare earths products.

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2011: Astron highlights

Financial performance

Mining Australia

Projects China

2012 Outlook

Share price up 66%
Work done upgrading Donald and Jackson resource
Revenue up 34%
Sales up 23%
Donald workplan lodged
EBITDA up 13%
Net asset value • Phase 1 of cultural of 324cps heritage plan completed
Cash and deposits of $147.4m
Designs completed for four main plants
Construction of additional infrastructure at Yingkou
Laboratory at Yingkou expanded
R&D work on new processes progressed
Prices for zircon and titanium feedstock set to increase
Quality balance sheet
Completion of technical feasibility study at Donald and financing of project
Fruition of R&D projects

ABOVE, FROM LEFT: Research test plant at Yingkou, HMC panning, sand samples

4 ASTRON LIMITED ANNUAL REPORT 2011

Astron’s financial growth

$1,000 invested in Astron in 1992 is worth $204,650 if held to 30 June 2011

10 YEAR GROWTH – (1998 TO 2007FY)* Revenue

31% average growth per annum

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EBITDA

38% average growth per annum

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NAV per share

Increased by 105% from 2002 to 2011

Share price

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Increased 66%
in 2011FY 3.2
3.0
2.8
2.6
2.4
2.2
2.0
1.8
1.6
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CURRENT YEAR GROWTH Revenue

Up 34%

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20.5
15.3
10.6
09 10 11
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EBITDA

Up 13%

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3.5
3.1
0.1
09 10 11
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Breakdown of asset values per share

Cash and term deposits 237cps Donald 43cps PPE & land use rights 33cps Investments 4cps Net current assets 14cps

*Prior to sale to Imerys

ASTRON LIMITED ANNUAL REPORT 2011 5

Zirconium can be found in every room in the house – from the bathroom to the kitchen. It’s in the cars we drive, the buses we travel to work in, the carpets we walk on, the magazines we read and the waterproofs we wear for camping or walking. It’s in hospitals, jewellery, rockets, optic cables and bio ceramics – an essential component of our lives today and in the future.

6 ASTRON LIMITED ANNUAL REPORT 2011

Zirconium products produced from mineral sands

Zircon

Ceramics like dinnerware, kitchen tiles and bathroom products all need zircon in the glaze. It is also the source material for zirconia and zirconium oxychloride. Zircon is used in advanced ceramics, glass, laboratory ware, refractories, electronic applications and industrial chemicals. Zirconium oxychloride is used in making zirconium-based chemicals and zirconium metal.

Zirconium chemicals have a broad range of applications in personal hygiene products, toothpastes, deodorants, computer disc drives, clothing, furnace

linings, TV screens, computer monitors and protective coatings for reflective and scratch resistant lenses.

Zirconium metal is highly resistant to corrosion and, with its low neutron resistance characteristics, is ideal for products used in nuclear applications.

Zirconium metal is also an excellent alloying agent for steel and titanium-based metal alloys for specialised applications such as light bulbs, explosive weapons and chemical getters for vacuum tubes; for applications that require resistance to aggressive corrosive environments

such as sour gas-pump casings and impellers; and those that require retention of sharp edges such as surgical tools and appliances.

Zircon applications

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ZIRCONIA PRODUCTS
Fused zirconia
Refractories Structural ceramics
Ceramic pigments Bioceramics
Chemical purification Glass Electronic ceramics
Gemstones
Zirconia from chemical Catalysts
Oxygem sensors
processing
ZIRCON ZIRCONIUM CHEMICALS
Waterproofing Leather tanning
Zirconium chemicals Inks Paint dryers
Paper products Deodorants
Coatings
ZIRCONIUM METAL
Zirconium metal Reactor tubing Pump impellers
Heat exchangers Structural vessels
Pump casings
ZIRCON
Milled zircon Ceramics Refractories
TV glass Abrasives
Castings
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ASTRON LIMITED ANNUAL REPORT 2011 7

• light weight • high strength • corrosion resistant

Demand for titanium will grow as the world’s passenger jet fleet doubles between now and 2025. The use of titanium in aircraft has grown from less than 4% of the total weight of a Boeing 747 in 1970 to more than 17% of the weight of Boeing’s new 787 Dreamliner.

Titanium products produced from mineral sands

Titanium materials

Rutile, ilmenite, Leucoxene and synthetic rutile are the base materials for high-grade Ti O2 pigments, chemicals and titanium metal. As pigments, they have a wider application in indoor and outdoor paints, plastics, paper, coatings, and textiles. They are the whiteners in paper and textiles and when used in industrial, automotive and aerospace paints, they provide a high-gloss lustre. As additions to ceramic refractories, they provide the resistance to chemical corrosion, metallic erosion and thermal shock. Used in abrasives and anti-skid coatings, they give the wear resistance to sustain a long product life. The high refractive index gives these materials a strong refraction that leads to a diamond-like appearance, resulting in them sometimes being used as diamond substitutes.

Titanium chemicals

Titanium dioxide (Ti O2) is the base material for paints, pigments, paper and plastics.

Due to its reflective properties that scatter light, it imparts a brilliance and opacity to the surface of the base materials. It is the preferred replacement for lead-based pigments. Its bio-neutral properties mean that it has excellent applications in cosmetics and toothpaste whiteners. Since it absorbs UV rays from the sun, it has applications in sunscreens, reflective lenses and coatings.

As an addition in welding rod coatings, it stabilises the arc and protects the molten metal from oxidation.

Titanium metal

In the production of titanium metal, Ti O2 is chlorinated and reduced to a titanium sponge. The titanium sponge is alloyed, melted and forged for applications in aerospace, automotive, military, medical, and general engineering plate and sheet. Due to its low weight-to-strength ratio it is used in structural and aerospace billet, bar, tubing, spacers, and fasteners. It has high strength at elevated temperature properties

and is therefore used in jet engine impellers, rotors and discs. Its biological inert properties make it an excellent application in medical devices such as pacemakers, knee and hip replacements, dental posts, bone reconstruction, and internal staples and fasteners.

Rare earths

Monazite and Rare Earth minerals are a rich source of multi-element applications. Rare Earth elements are typically used in high performance magnets, hybrid batteries, pigments in ceramics, robotic motors, x-ray screens, optical lenses, fibre optics, energy efficient lanthanum lamps and colour television screens. They become the active ingredients in hybrid vehicles, rechargeable batteries, mobile (cell) phones, plasma and LCD screens, laptop computers, disc drives and catalytic converters.

TIO2 applications

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TITANIUM PRODUCTS TITANIUM CHEMICALS
Titanium slag Refractories Inks
Upgraded slag Pigments Paper
Ilmenite Glass Coatings
Welding rods Paint pigments
Deodorants
Synthetic rutile Toothpaste
Cosmetics
Plastics
Leucoxene
TITANIUM METAL
Aerospace Medical
Rotors / discs Military
Impellers & blades Eye glasses
Rutile Titanium tetra chloride
Fasteners Sports equipment
Titanium metal Spacers Structural
Automotive General engineering
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ASTRON LIMITED ANNUAL REPORT 2011 9

Chairman’s overview

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A warm thank you to all our shareholders for your continued support during the current year.

While Astron’s main focus continues to be the development of the Donald project, in China our research and development projects and trading activities are ongoing.

Significant progress was made on the Donald project during the year. The workplan was submitted, we purchased 699 hectares of land in the mining area and completed basic designs for the four plants. In China, we continued the development of our factory at the Yingkou site.

I am pleased to report the group generated revenue of $20.5 million, compared with the previous year’s $15.3 million, largely attributable to an increase in earned interest, increased revenues from trading, and the proceeds from the Matilda legal matter.

Our share buyback continues. We believe it provides liquidity in the market for Astron shareholders wishing to sell their shares and enhances value for current shareholders. The depreciation of the Chinese renminbi against the Australian dollar negatively impacted the net asset value per share by nine cents. However, due to the positive effect of the share buyback, the increase in the share price of our investment in Altona Mining and our profit for the year, the group’s overall net asset value per share decreased only very marginally, from $3.26 in 2010 to $3.24 in 2011.

The outlook for zircon and titanium feedstock products is excellent.

During the next few years we envisage that supply will plateau, while demand will increase along with the production of ceramic-based products. We therefore anticipate that the zircon price will rise as demand grows at a greater rate than supply.

We expect this increased demand to be driven mainly by the Asia-Pacific countries with China leading the way. Given Astron’s strong capabilities and understanding of the Chinese market, we are well positioned to take advantage of this growth.

The demand for titanium feedstocks is driven by their use in TiO2 pigment. Global pricing appears to be moving upwards due to high-cost plants only being ramped up when margins are acceptable.

Given our strong balance sheet and positive outlook for zircon and titanium feedstock products, we look forward to another exciting year at Astron.

Finally, I would like to take this opportunity to wholeheartedly thank my fellow directors and the employees of Astron for their efforts during 2011.

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Gerard King CHAIRMAN

21 September 2011

10 ASTRON LIMITED ANNUAL REPORT 2011

Managing Director’s report

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ALEX BROWN MANAGING DIRECTOR
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Astron in 2011 has focused on preparing to start its Donald mine – currently a 4.2-billion-tonne mineral sands ore deposit in Victoria.

Donald mineral sands project

The development of the Donald project continued during the period under review.

Approvals

The mining licence was approved in August 2010. It has a 20-year renewable term. In accordance with the mining licence, we submitted a workplan to the Victorian Department of Primary Industries for regulatory approval under section 40 of the Mineral Resources (Sustainable Development) Act 1990.

The plan sets out details of the mine, including descriptions of the general layout, plant, geological information, mining methods and mineral recovery. Accompanying the main document is an environmental management plan that has individual plans on how we will manage 19 environmental issues such as air quality, noise, water, traffic management, greenhouse gases, cultural heritage, biodiversity, land management and pest control.

Also included is a rehabilitation management plan and community engagement plan to meet the requirements of the Mineral Resources Act. Stage 1 site surveys were undertaken and completed during the reporting period, and a development plan for Stage 2 is underway.

Our next step is to work in consultation with the department. The current draft workplan, which addresses the first five years of mining, will still require finalisation and approval of the Cultural Heritage Management Plan and the implementation of the Net Gain Offset Management Plan before the department issues final regulatory approval.

Meantime discussions continue on securing a water supply for the project with conceptual designs for delivery systems being completed.

Designs

Also completed during the year were the basic designs for our four main processing plants and the purchase of 699 hectares of land within the mining licence.

The proposed processing plants will capture the fine-grained mineral sands from the Donald deposit. Situated at the proposed mine site, they include a mining unit plant, a wet concentration plant, a concentrate upgrade plant and a mineral separation plant.

Their development was further progressed with the preparation of a definitive engineering study report, prepared by a consulting engineering company specialising in mineral sands processing technology. The study’s purpose is to determine a capital and operating cost estimate for the plants within a +/-10% range.

The comprehensive report also covers equipment lists, data sheets, engineering quotation logs and a drawing package that includes process-flow diagrams, piping, instrumentation, civil, electrical, mechanical and structural drawings.

ASTRON LIMITED ANNUAL REPORT 2011 11

Managing Director’s report continued

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ABOVE: Warehouse facility at Yingkou TOP: Laboratory at Yingkou OPPOSITE PAGE: This drawing of the wet concentrator plant (WCP) is derived from some of the approximately 300 drawings generated as part of the definitive engineering study report. The proposed WCP building comprises an eight stage spiral separation circuit, a fine screening stage at 425mm, and pumps/sumps to transport the sand slurries between these unit operations. The aim of the WCP is to take the de-slimed sand and use gravity separation techniques to produce a Heavy Mineral Concentrate for further downstream processing.

Geology

Additional sampling was undertaken on both the Donald and Jackson mineral sands deposits. Further mine planning continued with the aim of optimising the proposed mine path.

China – Product processing development

Work at Yingkou continued with the construction of additional infrastructure and the purchase of equipment for the laboratory.

Senegal

In Senegal we applied for the renewal of the exploration licence for our mineral-sands project in the Casamance province. Subject to the renewal of the licence, exploration should begin by the end of 2011. A feasibility study is in the process of being revisited and thereafter a mining licence application will be submitted.

Future outlook is exciting

According to a recent Reuters report, the global mineral sands market, worth about $3 billion, is growing rapidly, with prices soaring due to tight supplies and rapidly growing demand for titanium feedstocks and zircon.

There is no doubt that the mineral sands industry is now of critical importance for the modern world.

Urbanisation, particularly in emerging economies, has produced explosive demand for titanium and zirconium products, and 2011 marks the year that obtaining these raw materials for the titanium and zirconium metal industries became a serious future problem.

Selling prices for zircon and titanium based materials continue to improve with high current and high forecast product prices predicted.

Share values of related raw material and producing companies took off as limited supply sources became obvious. Indeed, the limited future global supply of zircon and titanium feedstock is forecast to lead to significant future supply deficits.

It is therefore pleasing to note that we are one of the few companies in the world with resources, technical expertise and experience to assist and support the industry.

Forecasts indicate that global demand for Ti O2 pigment will increase to 5.76 million tonnes in 2012 or 4% above 2011 levels. Most of the increase in demand over the next decade will come from Asia-Pacific, particularly China as it shifts away from traditional markets, increases its manufacturing base and meets the demands for materials from its electronic and nuclear industries. Forecasts on the supply side expect output to grow to 5.8 million tonnes in 2012 or by 4% from 2011.

12 ASTRON LIMITED ANNUAL REPORT 2011

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Donald mineral sands project

3 400kms to Port of Portland, Geelong and Melbourne
3 Located on the southeast Australian coast
3 Close to existing infrastructure
3 Road and rail networks in place
3 Low sovereign risk
3 Skilled workforce availabl e
3 Excellent project development fundamentals

The year ahead will be a busy one for the group. We intend to complete Donald’s technical feasibility work, finance the project, progress the project in Senegal and plan further downstream applications.

Over and above this, we will also continue to focus on ways in which to reflect the real value of our excellent assets.

Along with the Chairman, I thank our shareholders for their ongoing support and commend our people for their hard work.

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Alex Brown MANAGING DIRECTOR

21 September 2011

3 Zircon and titanium are the products of the future
3 Pre-feasibility shows impressive returns
3 Major environmental approvals completed
3 Huge long-life resource
3 Opportunity for expansion of current 33-year plan and value adding to create even greater returns
3 Further mining operations would allow the project to become one of the world’s largest titanium and zircon mining operations

ASTRON LIMITED ANNUAL REPORT 2011 13

Chief Financial Officer’s report

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MARK NIELSEN CHIEF FINANCIAL OFFICER
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During the current financial year Astron’s share price increased from $1.85 to $3.08, representing an increase of 66%.

By way of comparison the ASX All Ordinaries increased by 9% over the same period. Astron attributes its share price increase to increased prices for zircon and titanium feedstocks, and a better understanding by investors of the group and its share buyback plan.

The increase in receivables, stock and creditors is attributed to the build-up of stock to provide for anticipated increased sales activity in the 2012 financial year.

Altona Mining and Zambezi Resources increased in value by $1,814,331 from 30 June 2010. The increase resulted in an increase of three cents per Astron share.

As at 30 June 2011, Astron’s share price was trading at a 5% discount to net asset value of $3.24 per share.

During the period under review Donald purchased 699 hectares of land in the mining licence area for $2.4 million. This, together with the construction of facilities at Yingkou in China, accounts for the majority of the expenditure on property, plant and equipment. The increase in intangible assets relates to development expenditure incurred on the Donald project.

It is important to recognise that the net asset value of $3.24 per share is based on a book value for the Donald mineral sands project, which does not take any account of the recent increases in value of other companies in the mineral sands sector.

As at 30 June 2011, the Astron Group had $147,444,493 or $2.37 per share in cash and term deposits on its balance sheet. The tangible net asset value per share (ie excluding the net book value of Donald) is $2.81.

The reduction in Astron’s share capital of $5,058,657 is attributable to the repurchase of 1,937,857 Astron shares at an average share price of $2.61 under the Astron share buyback program. The program resulted in enhancement to net asset value of two cents per current Astron share.

Financial update

Total revenue comprising sales, interest received and other income increased by 34% to $20,488,560. This increase in revenue can mainly be attributed to an increase in trading activity in China, enhanced returns on cash deposits and proceeds from the Matilda legal actions. The increase in interest is attributable to extending the term of deposits and an increase in interest rates.

The reduction in the net asset value from $3.26 at 30 June 2010 to $3.24 at 30 June 2011 results from appreciation of the Australian dollar against the Chinese renminbi and the related conversion of the Chinese assets to Australian dollars as at 30 June 2011.

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The current intention is to locate all processing plants for the Donald project in Australia. It was therefore necessary to impair prior year capitalised development expenditure attributed to the mineral separation pilot plant based in China. The impairment is $1,463,461. The other significant expenditure item was associated with the Gambia and Senegal operations’ legal fees and development costs, which totalled $2,177,140.

Mark Nielsen

CHIEF FINANCIAL OFFICER

21 September 2011

14 ASTRON LIMITED ANNUAL REPORT 2011

Sustainable development

A serious approach to sustainable development

Astron’s sustainable development encompasses our commitment and policy towards our employees, local communities, health and safety and the environment.

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Employees and other stakeholders

Astron group currently has 88 employees. Our responsibility for our Human Resources Policies and the HR Department is important to us.

Astron’s HR policies include care and concern for our staff, training, development and care and concern for our customers, suppliers and shareholders.

In Astron, salaries are based on competitiveness within the local market environment. Additionally, all employees have a variable performance related bonus which is determined by pre-agreed individual and team objectives.

Profit sharing and other bonuses relating to overall group performance and team contribution are paid according to policy.

Astron’s programs are designed to encourage a young generation of local managers to gain experience and provide real prospects of a satisfying and rewarding management position quickly.

Local communities

Astron aims to promote the safety and well being of the communities in which we operate and to ensure that we conduct our business in a way that is open and transparent to our neighbours. We encourage and facilitate employees volunteering or fund raising in support of local community organisations.

Health and safety

Employee health and safety is managed according to our ISO18001 system, which includes rigorous procedures to identify and eliminate health hazards.

Environment

Astron strives to best-in-class performance in all aspects of environmental management. Compliance with all applicable legal requirements and legal codes of practice is seen as a minimum standard and we work to prudently reduce emissions and waste.

Particular emphasis is placed on management’s role under our ISO14001 system.

The group is totally committed to continuing vigilance and improved systems, controls and results in areas such as minimisation of all kind of waste from processes.

ASTRON LIMITED ANNUAL REPORT 2011 15

Corporate governance

The Board of Directors

The Board of Directors of Astron Limited (the “Company”) is responsible for the corporate governance of the consolidated entity and is committed to achieving a high standard of corporate governance.

The Board of Directors at the time of issue of this report comprises:

Gerard (Gerry) King (Chairman of Directors (Non-Executive))
Robert (Bob) John Flew (Non-Executive)
Ronald (Ron) McCullough (Non- Executive)
Alexander (Alex) Brown (Managing Director)
Mdm Kang Rong (Executive)

Details of qualifications and experience of each of the above Directors is set out in the Directors’ report.

Gerard King, Robert Flew and Ronald McCullough are independent Directors in accordance with the guidelines laid out in the ASX guidelines. Further information about the Directors is set out in the Directors’ Report.

Corporate Governance Policy

Astron Limited is committed to implementing the highest standards of corporate governance. In determining what those high standards should involve, the Company has turned to the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (“Recommendations”). The Company is pleased to advise that the Company’s practices are largely consistent with those Recommendations. As consistency with the Recommendations has been a gradual process, where the Company did not have certain policies or committees recommended by the ASX Corporate Governance Council (“the Council”) in place during the reporting period, we have identified such policies or committees.

Where the Company’s corporate governance practices do not correlate with the Recommendations, the Company is working towards compliance. However, it does not consider that all the Recommendations are appropriate for the

Company due to the size and scale of the Company’s operations.

1. Board of Directors

1.1 Role of the Board

The Board’s role is to govern the Company rather than to manage it. In governing the Company, the Directors must act in the best interests of the Company as a whole. It is the role of senior management to manage the Company in accordance with the direction and delegations of the Board and the responsibility of the Board to oversee the activities of management in carrying out these delegated duties. The Board will be responsible for regularly reviewing the performance of its senior management.

In carrying out its governance role, the main task of the Board is to drive the performance of the Company. The Board must also ensure that the Company complies with all of its contractual, statutory and any other legal obligations, including the requirements of any regulatory body. The Board has the final responsibility for the successful operations of the Company.

1.2 Composition of the Board

To add value to the Company, the Board has been formed so that it has effective composition, size and commitment to adequately discharge its responsibilities and duties given its current size and scale of operations. Directors are appointed based on the specific skills required by the Company and on their decision-making and judgment skills.

The Company recognises the importance of Non-Executive Directors and the external perspective and advice that Non-Executive Directors can offer. Mr. Gerard King, Mr. Robert Flew and Mr. Ron McCullough are Non-Executive Directors. Mr. Gerard King is the Chairman (in accordance with Recommendations 2.2 and 2.3). All Non-Executive Directors are independent Directors (meaning a majority of the Board are independent Directors in accordance with Recommendation 2.1) as they meet the following criteria for independence adopted by the Company:

An Independent Director is a NonExecutive Director and:

is not a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company;
within the last three years has not been employed in an executive capacity by the Company or another group member, or been a Director after ceasing to hold any such employment;
within the last three years has not been a principal of a material professional adviser or a material consultant to the Company or another group member or an employee materially associated with the service provided;
is not a material supplier or customer of the Company or another group member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer;
has no material contractual relationship with the Company or other group member other than as a Director of the Company;
has not served on the Board for a period which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of the Company; and
is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of the Company.

1.3 Responsibilities of the Board

In general, the Board is responsible for, and has the authority to determine, all matters relating to the policies, practices, management and operations of the Company. It is required to do all things that may be necessary to be done in order to carry out the objectives of the Company.

Without intending to limit this general role of the Board, the principal functions and responsibilities of the Board for the purpose of Recommendation 1.1 include the following:

Leadership of the Organisation: overseeing the Company and

16 ASTRON LIMITED ANNUAL REPORT 2011

establishing codes that reflect the values of the Company and guide the conduct of the Board.

Strategy Formulation: to set and review the overall strategy and goals for the Company and ensuring that there are policies in place to govern the operation of the Company.
Overseeing Planning Activities: the development of the Company’s strategic plan.
Shareholder Liaison: ensuring effective communications with shareholders through an appropriate communications policy and promoting participation at general meetings of the Company.
Monitoring, Compliance and Risk Management: the development of the Company’s risk management, compliance, control and accountability systems and monitoring and directing the financial and operational performance of the Company. Under Recommendations 7.1 and 7.2, the Company has established policies for the oversight and management of material business risks, and management has an internal control system to manage the Company’s material business risks and reports on whether those risks are being managed effectively. Management reports to the Board on risk issues, including by way of monthly management reporting on all compliance and risk management matters.
Company Finances: approving expenses and approving and monitoring acquisitions, divestitures and financial and other reporting.
Human Resources: appointing, and, where appropriate, removing the Managing Director as well as reviewing his performance and monitoring the performance of senior management in their implementation of the Company’s strategy. The performance of the senior management of the Company is reviewed annually by the Board in accordance with Recommendation 1.2.
Ensuring the Health, Safety and WellBeing of Employees: in conjunction with the senior management team, developing, overseeing and reviewing the effectiveness of the Company’s occupational health and safety systems to ensure the well-being of all employees.
Delegation of Authority: delegating appropriate powers to the Managing Director to ensure the effective day-today management of the Company and establishing and determining the powers and functions of the Committees of the Board.

1.4 Board Policies

1.4.1 Conflicts of Interest

Directors must:

disclose to the Board actual or potential conflicts of interest that may or might reasonably be thought to exist between the interests of the Director and the interests of any other parties in carrying out the activities of the Company;
if requested by the Board, within seven days or such further period as may be permitted, take such necessary and reasonable steps to remove or resolve any conflict of interest; and
if a Director cannot or is unwilling to remove a conflict of interest then the Director must, as per the Corporations Act, absent himself or herself from the room when discussion and/or voting occurs on matters about which the conflict relates.

1.4.2 Commitments

Each member of the Board is committed to spending sufficient time to enable them to carry out their duties as a Director of the Company.

1.4.3 Confidentiality

In accordance with legal requirements and agreed ethical standards, Directors and key executives of the Company have agreed to keep confidential, information received in the course of the exercise of their duties and will not disclose non-public information except where disclosure is authorised or legally mandated.

1.4.4 Continuous Disclosure

The Board has designated the Company Secretary as the person responsible for overseeing and coordinating disclosure of information to the ASX as well as communicating with the ASX. In accordance with Recommendation 5.1 and the ASX Listing Rules the Company immediately notifies the ASX of information:

concerning the Company that a reasonable person would expect to have a material effect on the price or value of the Company’s securities; and
that would, or would be likely to, influence persons who commonly invest in securities in deciding whether to acquire or dispose of the Company’s securities.

In addition each Director of the Company must provide the Company Secretary with details of any interest notifiable to ASX in accordance with Listing Rule 3.19A including:

any relevant interest (within the meaning of section 9 of the Corporations Act) in securities of the Company or a related body Corporate; and
any interest in contracts to which the Director is a party or under which the Director is entitled to benefit, and that confer a right to call for or deliver shares in, debentures of, or interests in a managed investment scheme made available by the Company of a related body corporate.

This information must be provided to the Company Secretary as soon as the Director becomes aware of the circumstances referred to above.

1.5 Education and Induction

It is the policy of the Company that new Directors undergo an induction process in which they are given a full briefing on the Company. Where possible this includes meetings with key executives, tours of the premises, an induction package and presentations. Information conveyed to new Directors includes:

details of the roles and responsibilities of a Director;
formal policies on Director appointment as well as conduct and contribution expectations;
guidelines on how the Board processes function;
details of past, recent and likely future developments relating to the Board;
background information on and contact information for key people in the organisation;
an analysis of the Company;

ASTRON LIMITED ANNUAL REPORT 2011 17

Corporate governance continued

a synopsis of the current strategic direction of the Company; and
a copy of the Constitution of the Company.

In order to achieve continuing improvement in Board performance, all Directors are encouraged to undergo continual professional development. Specifically, Directors are provided with the resources and training to address skills gaps where they are identified.

1.6 Independent Professional Advice

The Board collectively and each Director has the right to seek independent professional advice at the Company’s expense, up to specified limits, to assist them to carry out their responsibilities, subject to the prior approval of the Chairman whose approval will not be unreasonably withheld.

1.7 Related Party Transactions

Related party transactions include any financial transaction between a Director and the Company. Unless there is an exemption under the Corporations Act from the requirement to obtain shareholder approval for the related party transaction, the Board cannot approve the transaction.

1.8 Shareholder Communication

The Company respects the rights of its shareholders. To facilitate the effective exercise of those rights (including under Recommendation 6.1) the Company is committed to:

communicating effectively with shareholders through releases to the market via ASX, information mailed to shareholders and the general meetings of the Company;
giving shareholders ready access to balanced and understandable information about the Company and corporate proposals;
making it easy for shareholders to participate in general meetings of the Company; and
requesting the external auditor to attend the annual general meeting and be available to answer shareholder questions about the conduct of the audit

and the preparation and content of the auditor’s report.

The Company also makes available a telephone number and email address for shareholders to make enquiries of the Company.

1.9 Trading in Company Shares

Effective 1 January 2011 the Board implemented a Share Trading Policy (the Policy). The Policy deals with the manner in which the Company’s Directors and employees can deal in the Company’s shares. The Policy restricts the dealing in shares during Black Out Periods and when Directors and employees are in possession of price sensitive information relating to the Company which is generally not available to the market. Black Out Periods are defined as the 31-day period before the release of the Company’s half year or yearly results.

1.10 Performance Review/Evaluation

It is the policy of the Board to conduct evaluation of its performance in accordance with Recommendation 2.5. The objective of this evaluation will be to provide best practice corporate governance to the Company.

1.11 Attestations by Chairman and Non Executive Director

It is the Board’s policy that one of the Non-Executive Directors will be appointed to make the attestations recommended by the ASX Corporate Governance Council as to the Company’s financial condition prior to the Board signing the Annual Report.

2. Board Committees

2.1 Audit and Finance Committee

Due to the size and scale of operations of the Company the non-executive Directors undertake the role of the Audit and Finance Committee. Below is a summary of the role and responsibilities of an Audit and Finance Committee.

2.1.1 Role

The Audit and Finance Committee, established in accordance with Recommendation 4.1 and structured in accordance with Recommendation 4.2,

is responsible for reviewing the integrity of the Company’s financial reporting and overseeing the independence of the external auditors. Mr Bob Flew is the chairman of the Audit and Finance Committee.

2.1.2 Responsibilities

The Audit and Finance Committee reviews the audited annual and half-yearly financial statements and any reports which accompany published financial statements and recommends their approval to the members.

The Audit and Finance Committee each year reviews the appointment of the external auditor, their independence, the audit fee and any questions of resignation or dismissal.

The Audit and Finance Committee is also responsible for establishing policies on risk oversight and management. Given the size of the company, the Audit and Finance Committee does not currently have a formal charter which is a variation from Recommendation 4.3.

2.1.3 Risk Management Policies

The Board is responsible for ensuring there is a sound system for overseeing and managing risk. As the whole Board only consists of five (5) members, the Company does not have a separate Risk Management Committee because it would not be a more efficient mechanism than the full Board for focusing the Company on specific issues.

2.2 Code of Conduct

The Company has developed a statement of values and a Code of Conduct (the Code) in accordance with Recommendation 3.1 which has been fully endorsed by the board and applies to all Directors and employees. The Code is regularly reviewed and updated as necessary to ensure it reflects the highest standards of behaviour and professionalism and practices necessary to maintain confidence in the Group’s integrity.

The Directors require that at all times all Company personnel act with the utmost integrity, objectivity and in compliance with the spirit of the law and Company policies.

18 ASTRON LIMITED ANNUAL REPORT 2011

The Code requires employees who are aware of unethical practices within the Group or breaches of the Company’s trading policy to report these using the Company’s whistleblower program. This can be done anonymously.

The Directors are satisfied that the Group has complied with its policies on ethical standards, including trading in securities.

2.3 Remuneration Committee

2.3.1 Role

The role of a Remuneration Committee is to assist the Board in fulfilling its responsibilities in respect of establishing appropriate remuneration levels and incentive policies for employees. This includes assisting the Board with gender diversity. Under Recommendation 3.4, the Company notes that out of 2 executive Directors 1 is female and out of 4 senior executives 1 is female. In accordance with Recommendations 3.2 and 3.3, the Company has established a policy concerning diversity and this includes the promotion of gender diversity, and the Board is setting measurable objectives to promote this policy. The Company strives to continue to improve in this area.

Due to the size and scale of operations of the Company the non-executive Directors undertake the role of the remuneration committee, established under Recommendations 8.1 and 8.2.

2.3.2 Responsibilities

The responsibilities of a Remuneration Committee include setting policies for senior officers’ remuneration, reviewing and making recommendations to the Board on the Company’s incentive schemes and superannuation arrangements, reviewing the remuneration of both Executive and Non-Executive Directors and making recommendations on any proposed changes and undertaking reviews of the Managing Director’s performance, including setting with the Managing Director goals and reviewing progress in achieving those goals. The structure of Non-Executive Directors’, Executive Directors’ and senior executives’ remuneration is set in accordance with Recommendation 8.3.

2.3.3 Remuneration Policy

Directors’ Remuneration for the majority of Directors is approved at a Board meeting from time to time.

2.3.3.1 Senior Executive Remuneration Policy

The Company is committed to remunerating its senior executives in a manner that is market-competitive and consistent with best practice as well as supporting the interests of shareholders. Consequently, under the Senior Executive Remuneration Policy the remuneration of senior executives may be comprised of the following:

fixed salary that is determined from a review of the market and reflects core performance requirements and expectations;
a performance bonus designed to reward actual achievement by the individual of performance objectives and for materially improved Company performance;
participation in any share/option scheme with thresholds approved by shareholders; and
statutory superannuation.

By remunerating senior executives through performance and long-term incentive plans in addition to their fixed remuneration, the Company aims to align the interests of senior executives with those of shareholders and increase Company performance.

The value of shares and options were they to be granted to senior executives would be calculated using the Black and Scholes method.

The objective behind using this remuneration structure is to drive improved Company performance and thereby increase shareholder value as well as aligning the interests of executives and shareholders.

The Board may use its discretion with respect to the payment of bonuses, stock options and other incentive payments.

2.3.3.2 Non-Executive Director Remuneration Policy

Non-Executive Directors are to be paid their fees out of the maximum aggregate amount approved by shareholders for the

remuneration of Non-Executive Directors. Non-Executive Directors do not receive performance based bonuses.

Non-Executive Directors are entitled to but not necessarily paid statutory superannuation.

2.3.4 Current Director Remuneration

Full details regarding the remuneration of Directors is included in the Directors’ Report.

2.4 Nomination Committee

2.4.1 Role

The role of a Nomination Committee is to help achieve a structured Board that adds value to the Company by ensuring an appropriate mix of skills are present in Directors on the Board at all times.

As the whole Board only consists of five (5) members, notwithstanding Recommendation 2.4 the Company does not have a nomination committee because it would not be a more efficient mechanism than the full Board for focusing the Company on specific issues.

2.4.2 Responsibilities

The responsibilities of a Nomination Committee include devising criteria for Board membership, regularly reviewing the need for various skills and experience on the Board and identifying specific individuals for nomination as Directors for review by the Board. The Nomination Committee also oversees management succession plans and evaluates the Board’s performance and makes recommendations for the appointment and removal of Directors. Currently the Board as a whole performs this role.

2.4.3 Criteria for selection of Directors

Directors are appointed based on the specific governance skills required by the Company. Given the size of the Company and the business that it operates, the Company aims at all times to have at least two Directors with experience appropriate to the Company’s target market. In addition, Directors should have the relevant blend of personal experience in accounting and financial management and Director-level business experience.

ASTRON LIMITED ANNUAL REPORT 2011 19

Financial statements for the year ended 30 June 2011

DIRECTOR’S REPORT	21
AUDITOR’S INDEPENDENCE DECLARATION	30
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	31
CONSOLIDATED STATEMENT OF FINANCIAL POSITION	32
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	33
CONSOLIDATED STATEMENT OF CASH FLOWS	34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	35
DECLARATION BY DIRECTORS	67
INDEPENDENT AUDIT REPORT	68
INVESTOR INFORMATION	70

20 ASTRON LIMITED ANNUAL REPORT 2011

Director’s report 30 JUNE 2011

The Directors of Astron Limited present their report on the consolidated entity (Group), consisting of Astron Limited and the entities it controlled at the end of, and during, the financial year ended 30 June 2011.

Directors

The following persons were Directors of Astron Limited during the whole of the financial year and up to the date of this report, unless otherwise stated:

Names

Mr. Gerard King

Mr. Alexander Brown

Mr. Robert Flew

Mr. Ronald McCullough

Mdm Kang Rong

Principal Activities

The principal activities of the Group during the financial year were:

Evaluation and development of the Donald mineral sands processing project (Donald)
Evaluation and development of downstream applications for mineral sands
Zircon and titanium based materials trading

There have been no significant changes in the nature of the Group’s principal activities during the financial year.

Financial Position

The net assets of the Group have decreased to $201,770,248 a decrease of $7,971,156 from 2010.

The net assets have been affected by:

Repurchase of shares of $5,058,657
Increase in value of financial assets available for sale of $1,814,332
Reduction in values of foreign controlled assets of $5,609,481
Profit after tax for the year of $882,651

Dividends

No final dividend was proposed for the current financial year or the year ended 30 June 2010.

Review of Operations

Financials

Commentary of results

Total revenue comprising sales, interest received and other income increased from the prior year by 34% to $20,488,560. The components of total revenue include:
Revenue from sales of zircon and titanium based materials
Other revenue from the proceeds of the Matilda legal actions and foreign exchange gains
Interest income. Arising from an increase in interest rates and extensions to the term on term deposits interest income increased by $1,303,494 to $8,599,756
Costs associated with Gambia and Senegal comprise legal fees and development costs totalling of $2,177,140.
The current intention is to locate all processing plants in Australia for the Donald project. It was therefore necessary to impair prior year capitalised development expenditure attributed to mineral separation pilot plant based in China. This impairment is $1,463,461.

Commentary on financial position

The increase in receivables, stock and creditors is attributed to the build-up of stock to provide for anticipated increased sales activity in the 2012 financial year. The rationale is to take advantage of the forecast increase in zircon and titanium materials selling prices over the coming six months.
Available for sale financial assets comprise shares in South American Iron & Steel, Altona Mining and Zambezi Resources. The combined market value of the shares in these investments has increased by $1,814,331 from 30 June 2010. This uplift has been credited to the financial assets available for sale reserve in the balance sheet.
The increase in property, plant and equipment arises from land purchases at Donald and construction of facilities at Yingkou in China.

ASTRON LIMITED ANNUAL REPORT 2011 21

Director’s report continued

The increase in intangible assets relates to development expenditure incurred on the Donald project.
Land use rights comprise 50 year land use leases. These leases are capitalised and amortised over the 50 year period. The Group is discussing possible changes to the usage rights with the Chinese Government.
The reduction in Astron’s share capital of $5,058,657 can be explained by the repurchase of 1,937, 857 Astron shares at an average share price of 261cps in terms of the Astron share buy-back programme.
The reduction in the net asset value from 327cps at 30 June 2010 to 324cps at 30 June 2011 results from appreciation of the Australian Dollar against the Chinese Reminbi and the related conversion of the Chinese assets to Australian Dollars as at 30 June 2011.

Operations review

Donald

The development of the Donald project continued during the period under review. Progress was made in the following areas:

Regulatory

The mining licence was approved in August 2010. The mining licence has a 20 year renewable term and has successfully had an environmental effects statement completed over the area.
The next stage in obtaining the right to mine is the completion of a Work Plan. A draft work plan is to be submitted in September 2011. A Cultural Heritage Management Plan is also required prior to obtaining an approved work plan. Stage 1 site surveys were undertaken and completed during the reporting period. A development plan for stage 2 is underway.

Geology and mining

Additional drilling and sampling was undertaken during the period on the Donald and Jackson mineral sands deposits.
Further mine planning continued with the aim being to optimise the proposed mine path.

Plant designs, processes and costs

RJ Robbins has completed basic designs for the main plants. Capital and operating costs have been accurately defined.

Water

Discussions continue on securing a water supply for the project with conceptual designs for delivery systems being completed.

Land

During the year 699 hectares of land within the mining licence area were purchased.

China operations

Work at Yingkou continued with the construction of additional infrastructure and the purchase of equipment for the laboratory.

Product price forecasts

Selling prices for zircon and titanium based materials continues to improve with high current and high forecast product prices predicted.

Gold exploration

Within the mineral sands tenements owned by the Group a number of interesting anomalies exist of the possible presence of gold.
Interpretation of aeromagnetic imagery, coupled with results from (cyanide leach) soil geochemistry led to the recommendation of testing the basement rocks south and north of the town of Rupanyup in Western Victoria for evidence of gold and associated base metal mineralisation in Cambrian shales and sandstones.
A co-funded AirCore program was completed as designed in March 2011 with 40 holes having been drilled for 2,621 metres along three roadside traverses. The average depth to basement is 39 metres, and the maximum drilled depth was 105 metres.
Overall, geochemistry results showed weakly elevated gold and moderately elevated arsenic values occurring close to the basement-cover contact. A follow up program utilising closer drill spacing of 80 metres to 40 meters is being considered.

Investments

During July 2011, Greenpower Energy Limited (Greenpower) issued 9,513,018 shares to Astron for $532,216. Astron holds 13% of Greenpower after the placing. Greenpower made the placement to provide working capital and in particular to assist funding its coals to liquids project involving technology developed at the University of Texas. The placing will further cement the relationship between Astron and Greenpower.

Prospects

The Group’s objectives for the 2012 financial year are to continue with the development of the Donald Project and its downstream applications. The Group will also continue to investigate ways in which to unlock its inherent value for shareholders.

22 ASTRON LIMITED ANNUAL REPORT 2011

Significant Changes in State of Affairs

Contributed equity decreased by $5,058,657 (from $38,216,239 to $33,157,582) as the result of the on market share buy-back.

There have been no other significant changes in the Group’s state of affairs during the financial year.

Matters Subsequent to the end of the Financial Year

There are no matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group in future financial years.

Likely Developments

Other than information disclosed elsewhere in this annual report, information on likely developments in the operations of the Group and the expected results of those operations in future financial years has not been included in this Directors’ report because the Directors believe, on reasonable grounds, that to include such information would be likely to result in unreasonable prejudice to the Group.

Environmental Regulation

The Group’s operations are in China and Australia. In Australia, our Environmental Effects Statement for the Donald mine has been approved. The Group complied with all environmental regulations in relation to mining operations and there were no reportable environmental matters from the Australian operations.

In China, The Group continues to work closely with the local authorities to ensure high standards are maintained. In relation to the proposed manufacturing processes in China, there were no exceptions noted by regular local government environmental testing and supervision. Further the development projects will be implemented with best practice standards carefully monitored by the local authorities.

Once these projects have been developed the Group will if applicable apply the National Greenhouse and Energy Reporting Act of 2007.

To the best of the Directors’ knowledge, the Group has adequate systems in place to ensure compliance with the requirements of all environmental legislation described above and are not aware of any breach of those requirements during the financial year and up to the date of the Directors’ report.

Director Information

Mr. Gerard King	Chairman(Non‑executive)
Qualifcations	LLB
Experience	– Board Member since 5 November 1985
	– Former partner of law frm Phillips Fox and has had over 30 years of experience in
	corporate and business advising including acting as a Director of a number of Australian
	Public Companies
Interest in Shares	24,519 Ordinaryshares
Special Responsibilities	Mr. King is a member of the Audit & Risk Committee and the Chairman of the
	Remuneration & Nomination Committee
Directorships held in other listed entities	Mr. King is a Director of Greenpower Energy Limited (appointed 4 November 1985) which
	was listed on 5 March 2008.

Mr. Alexander Brown	Managing Director(Executive)
Qualifcations	B AgSc
Experience	– Board Member since 4 February 1988
	– Wide commercial experience of over 30 years in construction, mining and exploration
	including developing the Horseshoe Lights Gold Mine at Meekathara W.A., expanding the
	Gunnedah Coal Mine, in NSW, and successfully drilling for oil and gas in Thailand and USA.
	– He also started with others a major advanced plastics pipe company Europipe Sdn Bhd
	in Malaysia in 1987 which manufactured and distributed its products throughout Asia and
	Australasia. In the last 18 years his activities have focused in building the Astron business
	in China.
Interest in Shares	44,055,994 Ordinaryshares
Special Responsibilities	Mr. Brown is the ManagingDirector and responsible for the operations of the Group
Directorships held in other listed entities	Mr. Brown is not currentlya Director of another listed company.

ASTRON LIMITED ANNUAL REPORT 2011 23

Director’s report continued

Mr. Robert Flew	(Non‑executive)
Qualifcations	B Ec(Hons)
Experience	– Board Member since 19 March 2004
	– Mr. Flew brings to Astron in excess of 37 years experience in the resources sector. Mr.
	Flew’s experience includes holding the positions of Company Secretary and Vice President
	Investor Relations of BHP, the Group General Manager of Corporate Development BHP
	Copper, Group General Manager of International BHP and Group General Manager of
	BHP’s coal business in Queensland.
	– He is widely experienced in global issues, in particular the requirements of customers,
	partners, governments, industry associations, corporate governance and shareholders. He
	has had hands on experience in working with large multinational projects in the areas of fnance, general corporate administration, governance and shareholder interaction.
Interest in Shares	170,574 Ordinaryshares
Special Responsibilities	Mr. Flew is the Chairman of the Audit & Risk Committee and a member of the Remuneration
	& Nomination Committee
Directorships held in other listed entities	Mr. Flew is not currently a Director of another listed company. During the period from 1 July
	2008 to 30 June 2011 he was a director of Geodynamics(resigned: May2009).

Mr. Ronald McCullough	(Non‑executive)
Qualifcations	M.B.A.,B.E.(Hons),FAustIMM
Experience	– Appointed to the Board 21 August 2006
	– Ronald Hugh McCullough is an Honours graduate in Engineering from the University of
	Western Australia. He also completed a Master of Business Administration at UWA.
	– Subsequently, Ron has been involved in civil engineering design, and the construction of
	various major engineering works in Western Australia, including water supply dams, major
	water reticulation and suburban infrastructure projects.
	– Ron has extensive mining experience, including bauxite and coal mining. Ron has
	investigated the development of a private power station and the exploitation of coal bed
	methane deposits in the Gunnedah basin on NSW. While involved with the Maitland Main
	Collieries, which held an authorisation to develop a large coal deposit at Glennies Creek,
	near Singleton, in the Hunter Valley, NSW. Ron managed all necessary environmental
	impact studies, authority compliance requirements, mine construction and operation
	feasibility studies and then obtained a mining lease for the deposit.
	– Ron became involved in the sand mining industry in Western Australia with the
	development, in 1994, and management until 2005 of a silica sand mining and exporting
	operation at Albanyin Western Australia,on behalf of Japanese corporations.
Interest in Shares	4,000 Ordinaryshares
Special Responsibilities	Mr. McCullough is a member of the Audit & Risk Committee and Remuneration & Nomination
	Committee
Directorships held in other listed entities	Mr. McCullough is a Director of Greenpower Energy Limited (appointed 26 October 1994)
	which was listed on 5 March 2008.

24 ASTRON LIMITED ANNUAL REPORT 2011

Mdm Kang Rong	(Executive)
Qualifcations	B.E.(Chem)
Experience	– Appointed to the Board 21 August 2006
	– Mdm Kang Rong worked as a Chemical Production Engineer at Shenyang Chemical
	Company (a major Chinese company based in Shenyang (Liaoning Province). She then
	moved to Hainan Island China and worked in sales and administration for the Japanese
	trading co. Nissei, Ltd.
	– She joined Astron in 1995 as marketing manager of Shenyang Astron Mining Industry.
	Since then she has overseen Astron’s China operations and global sales for over 12 years
	and has been largelyresponsible for thegrowth and development of the Company.
Interest in Shares	2,000,000 OrdinaryShares
Special Responsibilities	As Vice General Manager she has been in charge of all Astron’s China operations and global
	sales for over 12years.
Directorships held in other listed entities	Mdm KangRongis not currentlya Director of another listed company.

Mr. Mark Nielsen	Company Secretary
Qualifcations	B.Comm ACA EDP
Experience	– Appointed Company Secretary of Astron Limited on 10 December 2009.
	– Mark Nielsen is a Chartered Accountant with 15 years post qualifying experience in corporate fnance and as a Chief Financial Offcer.
	– His experience has been with multi-national corporations, turnaround situations and start-
	upcompanies.
Interest in Shares	11,750 OrdinaryShares

Meetings of Directors

During the financial year, eight meetings of Directors (excluding committees of Directors) were held. Attendances by each Director at Directors’ meeting, audit and risk committee and remuneration and nominating committee meetings during the year were as follows:

	COMMITTEE MEETINGS	COMMITTEE MEETINGS
DIRECTORS’ MEETINGS	AUDIT & RISK COMMITTEE	REMUNERATION & NOMINATION COMMITTEE
NUMBER ELIGIBLE TO ATTEND NUMBER ATTENDED	NUMBER ELIGIBLE TO ATTEND NUMBER ATTENDED	NUMBER ELIGIBLE TO ATTEND NUMBER ATTENDED
Mr. Gerard King 8 8	2 2	1 1
Mr. Alexander Brown 8 8	– –	– –
Mr. Robert Flew 8 7	2 2	1 1
Mr. Ronald McCullough 8 8	2 2	1 1
Mdm KangRong 8 7	– –	– –

Share Options

No options over issued shares or interests in the Group or a controlled entity were granted during or since the end of the financial year and there were no options outstanding at the date of this report.

Remuneration Report-Audited

1. Policy for determining the nature and amount of Key Management Personnel remuneration

The remuneration policy of the Group has been designed to align Director and executive objectives with shareholder and business objectives by providing a fixed remuneration component and offering potential long term incentives based on key performance areas affecting the Group’s financial results. The board of Astron Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best executives and Directors to run and manage the Group, as well as create goal congruence between Directors, executives and shareholders.

ASTRON LIMITED ANNUAL REPORT 2011 25

Director’s report continued

The board’s policy for determining the nature and amount or remuneration for the board members and senior executives of the Group is as follows:

The remuneration policy for the executive Directors and other senior executives was developed by the remuneration committee and approved by the board after seeking professional advice from an independent external consultant.
All executives receive a market related base salary (which is based on factors such as length of service and experience), other statutory benefits and potential performance incentives.
The remuneration committee reviews executive packages annually by reference to the Group’s performance, executive performance and comparable information from industry sectors.

The performance of executives is measured against criteria agreed with each executive and is based predominantly on the forecast growth of the Group’s profits and shareholders’ value. All bonuses and incentives are linked to the performance of the individual and are discretionary. The objective is designed to attract the highest calibre of executives and reward them for performance that results in long term growth in shareholder wealth.

At the discretion of the Committee from time to time shares are issued to executives to reflect their achievements. There are presently no option based schemes in place.

Where applicable executive Directors and executives receive a superannuation guarantee contribution required by the government, which is currently 9%, and do not receive any other retirement benefits.

Some individuals, however, have chosen to sacrifice part of their salary to increase payments towards superannuation.

If shares are given to Directors and executives are valued at the market price of those shares.

The board policy is to remunerate non-executive Directors at market rates for time, commitment and responsibilities. The remuneration committee determines payments to the non-executive Directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to nonexecutive Directors is subject to approval by shareholders at the Annual General Meeting. Fees for non-executive Directors are not linked to the performance of the Group. However, to align Director’s interests with shareholder interests, the Directors are encouraged to hold shares in the Group.

Performance based remuneration

As part of each executive Director and executives remuneration package there is a discretionary bonus element. The intention of this program is to facilitate goal congruence between Directors/executives with that of the business and shareholders.

In determining whether or not each executive Director and executive’s bonus is due, the remuneration committee bases the assessment on audited figures and independent reports where appropriate.

The remuneration committee reserves the right to award bonuses where performance expectation has prima facie not been met but it is considered in the interests of the Group to continue to reward that individual.

Bonuses are set as a percentage of base remuneration ranging from 0% to 100% of base salary package.

Company performance, shareholder wealth and directors and executives remuneration

The remuneration policy has been tailored to increase goal congruence between shareholders and Directors and executives. This has been achieved by awarding discretionary bonuses to encourage the alignment of personal and shareholder interests. The Group believes this policy to have been effective in increasing shareholder wealth and the Group’s consolidated statement of financial position over the past five years.

The following table shows the gross revenue, profits and dividends for the last five years for the listed entity, as well as the share price at the end of the respective financial years. The successful sale of the Zircon group in 2008 allowed the Directors to pass back to shareholders through ongoing dividends. The board is of the opinion that these results clearly demonstrate the statements made above.

	2007	2008	2009	2010	2011
	$	$	$	$	$
Revenue(‘000)	181,744	90,818	10,657	15,102	20,489
Net Proft/(Loss) (‘000)	11,432	111,887	(2,498)	1,190	883
Share Price at Year-end	2.63	2.05	1.75	1.85	3.08
Dividends Paid(‘000)	5,832	12,087	6,490	–	–

All share buy backs were on-market buy backs at market share prices. No premium was returned to shareholders on the shares bought back.

26 ASTRON LIMITED ANNUAL REPORT 2011

2. Key Management Personnel

The following persons were key management personnel (KMP) of the Group during the financial year:

	POSITION HELD
Mr. Gerard King	Chairman – Non-executive
Mr. Alexander Brown	ManagingDirector
Mr. Robert Flew	Director – Non-executive
Mr. Ronald McCullough	Director – Non-executive
Mdm KangRong	Executive Director – Vice General Manager China
Mr. Mark Nielsen	Chief Financial Offcer and CompanySecretary
Mr. Simon Peters	Project Manager – Donald Mineral Sands Project
Ms Emma Vogel	Development Manager – Mining
Mr. Scott McDaniel	Technical Manager
Mr. WangXuedong#	Vice President – China Operations

There are no additional persons not disclosed above that are among the five highest remunerated Group executives. # Wang Xuedong renegotiated his contract with the Group and ceased to be a KMP effective 1 October 2010.

3. Details of Remuneration

Details of compensation by key management personnel and other executives of Astron Limited Group are set out below:

			POST
	SHORT TERM		EMPLOYMENT	TOTAL
		BENEFITS	BENEFITS	$
	CASH, SALARY &	NON‑CASH	SUPER‑
	COMMISSIONS	BENEFITS/ OTHER	ANNUATION
YEAR ENDED 30 JUNE 2011	$	$	$
Directors
Mr. Gerard King	127,492	–	49,508	177,000
Mr. Alexander Brown	350,000	–	–	350,000
Mr. Robert Flew	55,044	–	4,956	60,000
Mr. Ronald McCullough	60,000	–	–	60,000
Mdm KangRong	250,000	–	–	250,000
Other key managementpersonnel
Mr. Mark Nielsen*	170,000	–	25,000	195,000
Mr. Simon Peters	159,633	3,636	14,367	177,636
Ms. Emma Vogel	114,495	2,050	10,305	126,850
Mr. Scott McDaniel	126,175	41,022	963	168,160
Mr. WangXuedong#	44,204	–	242	44,446
*Denotes company executive	1,457,043	46,708	105,341	1,609,092

Ceased to be a KMP effective 1 October 2010

The above other key management personnel are the only executives in the Group or company and are the highest paid executives.

No other payments including share based payments were paid to the above employees during the year.

None of the above payments were performance related.

ASTRON LIMITED ANNUAL REPORT 2011 27

Director’s report continued

			POST
	SHORT TERM		EMPLOYMENT	TOTAL
		BENEFITS	BENEFITS	$
	CASH, SALARY &	NON‑CASH	SUPER‑
	COMMISSIONS	BENEFITS/ OTHER	ANNUATION
YEAR ENDED 30 JUNE 2010	$	$	$
Directors
Mr. Gerard King	120,000	–	–	120,000
Mr. Alexander Brown	350,000	–	–	350,000
Mr. Robert Flew	55,044	–	4,956	60,000
Mr. Ronald McCullough	60,000	–	–	60,000
Mdm KangRong	250,000	–	–	250,000
Other key managementpersonnel
Mr. Mark Nielsen*#	155,000	–	25,000	180,000
Mr. JerryNg*(1)#	75,895	12,707	41,667	130,269
Mr. Boris Matveev*(2)	75,000	–	6,750	81,750
Mr. Simon Peters#	125,994	–	11,339	137,333
Ms Emma Vogel#	127,901	–	11,511	139,412
Mr. SongHongxing (3)	–	50,000	–	50,000
Mr. Scott McDaniel(4)	91,608	–	–	91,608
Mr. WangXuedong#	193,014	26,885	11,581	231,480
Other executive
Mr. Matt Suttling*(5)	42,000	–	–	42,000
*Denotes company executives	1,721,456	89,592	112,804	1,923,852

Top 5 highest paid Group executives There are no Group or company executives other than set out above.

No other payments including share based payments were paid to the above employees during the year

None of the above payments were performance related

Note reference: 1. Resigned 30 April 2011 2. Resigned 31 December 2010 3. Resigned 1 July 2010 4. Appointed 7 November 2010 5. Resigned 5 February 2010

4. Cash Bonuses

No cash bonuses were paid during the current year or the year ended 30 June 2010.

5. Share Based Payment Bonuses

No share based payment bonuses were paid during the current year or the year ended 30 June 2010.

6. Service Contracts

Service contracts (or letters of engagement) have been entered into by the Group, or are in the process of being entered into, with all key management personnel and executives, describing the components and amounts of remuneration applicable on their initial appointment, including terms, other than non-executives who have long established understanding of arrangements with the Group. These contracts do not fix the amount of remuneration increases from year to year. Remuneration levels are reviewed generally each year by the Remuneration Committee to align with changes in job responsibilities and market salary expectations. There is an understanding of arrangement with respect to the services of the Managing Director, Alexander Brown who has a 3 year service contract, expiring May 2012, the period of notice required to terminate this contract is twelve months. Other than repayment of loans and management fees there is no further payment required to terminate this contract.

All other key management personnel have ongoing contracts with a notice period of three months. There are no non-standard termination clauses in any of these contracts.

Employment contract arrangements were reviewed in the 2007 year by external consultants for consistency and appropriateness to the Group’s needs. The Remuneration Committee considered that this was appropriate for 2011 remuneration requirements.

End of audited remuneration report

28 ASTRON LIMITED ANNUAL REPORT 2011

Indemnifying Officers or Auditors

Insurance premiums paid for Directors

During the year Astron Limited paid a premium of $53,322 (2010: $50,359) in respect of a contract insuring Directors, secretaries and executive officers of the company and its controlled entities against a liability incurred as Director, secretary or executive officer, and to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability.

The company has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of the company or any of its controlled entities against a liability incurred as such an officer or auditor.

Non-audit services

During the financial year, the following fees for non-audit services were paid or payable to the auditor, BDO, or their related practices:

	2011	2010
	$	$
Audit related services
Due diligence assistance	–	14,000
Other Services
Taxation services	36,760	17,980
Corporate fnance services	55,338	–
Secretarial services	4,297	5,590

The Directors are satisfied that the provision of non-audit services, during the year, by the auditor (or by another person or firm on behalf of the auditor), is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.

On the advice of the audit committee, the Directors are satisfied that the provision of non-audit services by the auditor, as set out above, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

all non-audit services have been reviewed by the audit committee to ensure that they do not impact the integrity and objectivity of the auditor; and
none of the non-audit services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants.

Auditors’ Independence Declaration

The lead auditors’ independence declaration for the year ended 30 June 2011 has been received and can be found on page 30 of the financial report.

Directors’ declaration regarding IFRS compliance statement

The Directors’ declare that these annual financial statements have been prepared in compliance with International Financial Reporting Standards.

Proceedings on Behalf of Company

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the company, or to intervene in any proceedings to which the company is a party, for the purpose of taking responsibility on behalf of the company for all or part of those proceedings.

No proceedings have been brought or intervened in on behalf of the company with leave of the Court under section 237 of the Corporations Act 2001.

Signed in accordance with a resolution of Directors:

==> picture [81 x 22] intentionally omitted <==

Mr Gerard King

CHAIRMAN

Dated this 21[st] day of September 2011

ASTRON LIMITED ANNUAL REPORT 2011 29

Auditor’s Independence Declaration UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF ASTRON LIMITED

==> picture [503 x 90] intentionally omitted <==

DECLARATION OF INDEPENDENCE BY JEFF ABELA TO THE DIRECTORS OF ASTRON LIMITED

As lead auditor of Astron Limited for the year ended 30 June 2011, I declare that, to the best of my knowledge and belief, there have been no contraventions of:

the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Astron Limited and the entities it controlled during the period.

==> picture [79 x 32] intentionally omitted <==

Jeff Abela DIRECTOR

==> picture [47 x 26] intentionally omitted <==

BDO Audit (NSW‑VIC) Pty Ltd

Sydney, dated this 21[st] day of September 2011.

==> picture [499 x 90] intentionally omitted <==

30 ASTRON LIMITED ANNUAL REPORT 2011

Consolidated Statement of Comprehensive Income

FOR THE YEAR ENDED 30 JUNE 2011

		CONSOLIDATED	CONSOLIDATED
		2011	2010
	NOTE	$	$
Sales revenue	5	9,571,095	7,787,905
Cost of sales		(7,705,360)	(5,916,556)
Grossproft		1,865,735	1,871,349
Interest income	5	8,599,756	7,296,262
Other income	5	2,317,709	211,426
Distribution expenses		(235,172)	(205,743)
Marketingexpenses		(106,159)	(139,603)
Occupancyexpenses	6	(80,222)	(159,163)
Administrative expenses		(4,990,615)	(4,497,389)
Write down of stock	6	–	(18,237)
Costs associated withproject development expenditure	6	(321,856)	(140,973)
Impairment of available-for-sale fnancial assets	6	–	(434,026)
Impairment of capital works inprogress	6	(1,463,461)	(80,900)
Costs associated with Gambian and Senegal Investments	6	(2,177,140)	(693,674)
Finance costs		(36,806)	(69,127)
Other expenses	6	(275,040)	(192,518)
Proft before income tax expense		3,096,729	2,747,684
Income tax expense	7	(2,214,078)	(1,557,398)
Proft from continuing operations		882,651	1,190,286
Netproft for theyear		882,651	1,190,286
Other comprehensive loss
Increase in fair value of available-for-sale fnancial assets		1,814,331	–
Foreign currencytranslation differences		(5,609,481)	(1,455,158)
Other comprehensive loss for theyear, net of tax		(3,795,150)	(1,455,158)
Total comprehensive loss for theyear		(2,912,499)	(264,872)
Proft for theyear attributable to:
Owners of Astron Limited		882,651	1,190,286
Total comprehensive loss for theyear attributable to:
Owners of Astron Limited		(2,912,499)	(264,872)

		CONSOLIDATED
		2011	2010
	NOTE	CENTS	CENTS
EARNINGS PER SHARE	9
Forproft from continuing operations
Basic earningsper share(centsper share)		1.4	1.8
Diluted earningsper share(centsper share)		1.4	1.8
Forproft for theyear
Basic earningsper share(centsper share)		1.4	1.8
Diluted earningsper share(centsper share)		1.4	1.8

The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

ASTRON LIMITED ANNUAL REPORT 2011 31

Consolidated Statement of Financial Position

FOR THE YEAR ENDED 30 JUNE 2011

		CONSOLIDATED	CONSOLIDATED
		2011	2010
	NOTE	$	$
ASSETS
Current assets
Cash and cash equivalents	11	87,110,656	113,759,616
Term depositsgreater than 90 days	12	60,333,837	52,744,908
Trade and other receivables	13	7,479,528	2,610,404
Inventories	14	3,685,640	1,283,123
Available-for-sale fnancial assets	16	2,480,042	665,710
Total current assets		161,089,703	171,063,761
Non‑current assets
Property, plant and equipment	18	12,386,037	11,421,853
Intangible assets	19	26,950,894	21,768,367
Land use rights	20	8,352,354	10,055,400
Total non‑current assets		47,689,285	43,245,620
TOTAL ASSETS		208,778,988	214,309,381
LIABILITIES
Current liabilities
Trade and otherpayables	21	2,154,267	1,447,396
Current tax liabilities	23(a)	221,518	153,872
Provisions	22	18,546	18,546
Total current liabilities		2,394,331	1,619,814
Non‑current liabilities
Deferred tax liabilities	23(a)	4,574,409	2,908,163
Long-termprovisions	22	40,000	40,000
Total non‑current liabilities		4,614,409	2,948,163
TOTAL LIABILITIES		7,008,740	4,567,977
NET ASSETS		201,770,248	209,741,404
EQUITY
Contributed equity	24	33,157,582	38,216,239
Reserves	25	1,681,259	5,476,409
Retained earnings		166,931,407	166,048,756
TOTAL EQUITY		201,770,248	209,741,404

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

32 ASTRON LIMITED ANNUAL REPORT 2011

Consolidated Statement of Changes in Equity

FOR THE YEAR ENDED 30 JUNE 2011

			FINANCIAL ASSETS	FOREIGN CURRENCY
		RETAINED	AVAILABLE FOR	TRANSLATION
	ORDINARY SHARES	EARNINGS	SALE RESERVE	RESERVE	TOTAL EQUITY
YEAR ENDED 30 JUNE 2011	$	$	$	$	$
Equity as at 1 July 2010	38,216,239	166,048,756	–	5,476,409	209,741,404
Proft for theyear	–	882,651	–	–	882,651
Other comprehensive income
Increase in fair value of available-for-sale fnancial assets	–	–	1,814,331	–	1,814,331
Exchange differences on translation of foreign operations	–	–	–	(5,609,481)	(5,609,481)
Total comprehensive income for theyear	–	882,651	1,814,331	(5,609,481)	(2,912,499)
Transactions with owners in their capacity as owners
Shares repurchased duringtheyear	(5,058,657)	–	–	–	(5,058,657)
Total of transactions with owners in their
capacity as owners	(5,058,657)	–	–	–	(5,058,657)
Equity as at 30 June 2011	33,157,582	166,931,407	1,814,331	(133,072)	201,770,248

			FOREIGN CURRENCY
		RETAINED	TRANSLATION
	ORDINARY SHARES	EARNINGS	RESERVE	TOTAL EQUITY
YEAR ENDED 30 JUNE 2010	$	$	$	$
Equity as at 1 July 2009	39,376,051	164,858,470	6,931,567	211,166,088
Proft for theyear	–	1,190,286	–	1,190,286
Other comprehensive income
Exchange differences on translation of foreign operations	–	–	(1,455,158)	(1,455,158)
Total comprehensive income for theyear	–	1,190,286	(1,455,158)	(264,872)
Transactions with owners in their capacity as owners
Shares repurchased duringtheyear	(1,159,812)	–	–	(1,159,812)
Total of transactions with owners in their capacity as owners	(1,159,812)	–	–	(1,159,812)
Equity as at 30 June 2010	38,216,239	166,048,756	5,476,409	209,741,404

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

ASTRON LIMITED ANNUAL REPORT 2011 33

Consolidated Statement of Cash Flows

FOR THE YEAR ENDED 30 JUNE 2011

		CONSOLIDATED	CONSOLIDATED
		2011	2010
	NOTE	$	$
Cash fows from operating activities:
Receipts from customers		9,184,860	9,083,204
Payments to suppliers and employees		(20,764,622)	(10,546,647)
Interest received		8,286,253	6,347,672
Interestpaid		(36,806)	(69,127)
Income taxespaid		(480,184)	(1,029,645)
Other income		2,317,709	169,443
Net cash(outfow)/ infow from operating activities	30(a)	(1,492,790)	3,954,900
Cash fows from investing activities:
Investments in short term deposits		(7,588,929)	(52,694,908)
Acquisition ofproperty, plant and equipment		(2,888,004)	(20,717)
Payment for deposit on investment	29(c)	–	(500,000)
Construction in works inprogress		(2,211,935)	(3,335,934)
Proceeds from disposal ofproperty, plant and equipment		–	12,986
Deferred exploration,evaluation expenditure and development costs	19	(5,204,948)	(1,311,559)
Net cash outfow from investing activities		(17,893,816)	(57,850,132)
Cash fows from fnancing activities:
Payment for share buy-back		(5,058,657)	(1,159,812)
Net cash outfow from fnancing activities		(5,058,657)	(1,159,812)
Net decrease in cash held		(24,445,263)	(55,055,044)
Cash and cash equivalents at beginningofyear		113,759,616	168,766,405
Effect of exchange rates on cash held in foreign currencies – beginningofyear		(2,203,697)	48,255
Cash and cash equivalents at end of fnancialyear	30(b)	87,110,656	113,759,616

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

34 ASTRON LIMITED ANNUAL REPORT 2011

Notes to the financial statements

FOR THE YEAR ENDED 30 JUNE 2011

1. Corporate Information

The financial statements of Astron Limited for the year ended 30 June 2011 were authorised for issue in accordance with a resolution of the Directors on 21 September 2011 and relates to the consolidated entity consisting of Astron Limited and its subsidiaries. Separate financial statements for Astron Limited as an individual entity are no longer presented as the consequence of a change to the Corporations Act 2001, however, limited financial information for Astron Limited as an individual entity are included in Note 33.

The financial statements are presented in Australian dollars.

Astron Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Stock Exchange.

2. Summary of Significant Accounting Policies

a. Basis of Preparation

The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

The financial statements also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.

The financial statements have also been prepared on a historical cost basis, except for investment properties, land and buildings, plant and equipment deemed to be at fair value on transition to AIFRS, derivatives, available-for-sale financial assets and held for trading investments that have been measured at fair value. The carrying values of recognised assets and liabilities that are hedged are adjusted to record changes in the fair value attributable to the risks that are being hedged. Non-current assets and disposal groups held for sale are measured at the lower of carrying amounts and fair value less costs to sell.

The following significant accounting policies have been adopted in the preparation and presentation of the financial statements.

b. Basis of Consolidation

Subsidiaries

The consolidated financial statements comprise the financial statements of Astron Limited and its subsidiaries at 30 June each year (“the Group”). Subsidiaries are entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. Potential voting rights that are currently exercisable or convertible are considered when assessing control. Consolidated financial statements include all subsidiaries from the date that control commences until the date that control ceases. The financial statements of subsidiaries are prepared for the same reporting period as the parent, using consistent accounting policies.

All intercompany balances and transactions, including unrealised profits arising from intragroup transactions have been eliminated. Unrealised losses are also eliminated unless costs cannot be recovered.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of comprehensive income and consolidated statement of financial position respectively. A list of subsidiary entities is contained in Note 17 to the financial statements.

c. Foreign Currency Translation

The functional and presentation currency of Astron Limited and its Australian subsidiaries is Australian dollars (A$).

Foreign currency transactions are translated into the functional currency using the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the end of the reporting period. Foreign exchange gains and losses resulting from settling foreign currency transactions, as well as from restating foreign currency denominated monetary assets and liabilities, are recognised in profit or loss except when they are deferred in other comprehensive income as qualifying cash flow hedges or where they relate to differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity.

Non monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when fair value was determined.

The functional currency of the overseas subsidiaries is primarily Chinese Renminbi. The assets and liabilities of these overseas subsidiaries are translated into the presentation currency of Astron Limited at the closing rate at the end of the reporting period and income and expenses are translated at the weighted average exchange rates for the year. All resulting exchange differences are recognised in other comprehensive income as a separate component of equity (foreign currency translation reserve). On disposal of a foreign entity, the cumulative exchange differences recognised in foreign currency translation reserves relating to that particular foreign operation are recognised in the profit and loss.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

ASTRON LIMITED ANNUAL REPORT 2011 35

Notes to the financial statements continued

d. Revenue Recognition

Revenue is recognised at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances and duties and taxes paid. The following specific recognition criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of products is recognised when the significant risks and rewards of ownership have passed to the buyer i.e. when control of the goods is passed to the buyer.

Rendering of services

Revenue from the rendering of services such as management fees are recognised upon the rendering of the service to the customers in accordance with the agreements.

Interest

Revenue is recognised as interest accrues using the effective interest method. The effective interest method uses the effective interest rate which is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial asset.

Rental income

Rental income is accounted for on a straight line basis over the lease term. Contingent rentals are recognised as income in the periods when they are earned.

Government grant

Grants from the government are recognised on receipt. These grants are intended to compensate for tax paid.

e. Income Tax

The income tax expense for the period is the tax payable on the current period’s taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax base of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.

Deferred tax assets and liabilities are recognised for all temporary differences, between carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases, at the tax rates expected to apply when the assets are recovered or liabilities settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. Exceptions are made for certain temporary differences arising on initial recognition of an asset or a liability if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit.

Deferred tax assets are only recognised for deductible temporary differences and unused tax losses if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax assets and liabilities are not recognised for temporary differences between the carrying amount and tax bases of investments in subsidiaries, associates and interests in joint ventures where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Astron Limited and its wholly owned Australian subsidiaries have implemented the tax consolidation legislation for the whole of the financial year. Astron Limited is the head entity in the tax consolidated group. The stand alone taxpayer within a group approach has been used to allocate current income tax expense and deferred tax balances to wholly owned subsidiaries that form part of the tax consolidated group. Astron Limited has assumed all the current tax liabilities and the deferred tax assets arising from unused tax losses for the tax consolidated group via intercompany receivables and payables because a tax funding arrangement has been in place for the whole financial year. The amounts receivable/payable under tax funding arrangements are due upon notification by the head entity, which is issued soon after the end of each financial year. Interim funding notices may also be issued by the head entity to its wholly owned subsidiaries in order for the head entity to be able to pay tax installments. These amounts are recognised as current intercompany receivables or payables.

f. Impairment of Assets

At the end of each reporting period the Group assesses whether there is any indication that individual assets are impaired. Where impairment indicators exist, recoverable amount is determined and impairment losses are recognised in the profit and loss where the asset’s carrying value exceeds its recoverable amount. Recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purpose of assessing value in use, the estimated future cash flows are discounted to their present value using a pre tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

Where it is not possible to estimate recoverable amount for an individual asset, recoverable amount is determined for the cash generating unit to which the asset belongs.

36 ASTRON LIMITED ANNUAL REPORT 2011

g. Cash and Cash Equivalents

For the purposes of the Consolidated Statement of Cash Flows, cash and cash equivalents includes cash on hand and at bank, deposits held at call with financial institutions, other short term, highly liquid investments with maturities of three months or less, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value and bank overdrafts.

Term deposits with maturity over three months include bank deposits with fixed terms over three months period. For the purpose of the Consolidated Statement of Cash Flows, term deposits with maturity over three months are shown as cash flows from investing activities.

h. Trade Receivables

Trade receivables are recognised at original invoice amounts less an allowance for uncollectible amounts and have repayment terms between 0 and 90 days. Collectability of trade receivables is assessed on an ongoing basis. Debts which are known to be uncollectible are written off. An allowance is made for doubtful debts where there is objective evidence that the Group will not be able to collect all amounts due according to the original terms. Objective evidence of impairment include financial difficulties of the debtor, default payments or debts more than 180 days overdue. On confirmation that the trade receivable will not be collectible the gross carrying value of the asset is written off against the associated provision.

From time to time, the Group elects to renegotiate the terms of trade receivables due from customers with which it has previously had a good trading history. Such renegotiations will lead to changes in the timing of payments rather than changes to the amounts owed and are not, in the view of the Directors, sufficient to require the de-recognition of the original instrument.

Receivables from related parties are recognised and carried at the nominal amount due.

i. Inventories

Raw materials, works in progress and finished goods

Inventories are stated at the lower of cost and net realisable value. Cost comprises all direct materials, direct labour and an appropriate portion of variable and fixed overheads. Fixed overheads are allocated on the basis of normal operating capacity. Costs are assigned to inventories using the first in first out basis. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated selling cost of completion and selling expenses.

j. Non-current Assets Classified as Held For Sale

Non-current assets classified as held for sale are those assets whose carrying amounts will be recovered principally through a sale transaction rather than through continuing use. These assets are stated at the lower of their carrying amount and fair value less costs to sell and are not depreciated or amortised. Interest expense continues to be recognised on liabilities of a disposal group classified as held for sale.

An impairment loss is recognised for any initial or subsequent write down of the asset to fair value less costs to sell. A gain is recognised for subsequent increases in fair value less costs to sell of an asset but not exceeding any cumulative impairment losses previously recognised.

A discontinued operation is a component of the Group that has been disposed of or is classified as held for sale and that represents a separate major line of business or geographical operations, is part of a single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately in profit or loss.

k. Investments and Other Financial Assets

All investments and other financial assets are initially stated at cost, being the fair value of consideration given plus acquisition costs. Purchases and sales of investments are recognised on trade date which is the date on which the Group commits to purchase or sell the asset. Accounting policies for each category of investments and other financial assets subsequent to initial recognition are set out below.

Available‑for‑sale financial assets

Available-for-sale financial assets comprise investments in listed and unlisted entities and any non-derivatives that are not classified as any other category of financial assets, and are classified as non-current assets (unless management intends to dispose of the investment within 12 months of the end of the reporting period). After initial recognition, these investments are measured at fair value with gains or losses recognised in other comprehensive income (available-for-sale investments revaluation reserve). Where there is a significant or prolonged decline in the fair value of an available-for-sale financial asset (which constitutes objective evidence of impairment) the full amount including any amount previously charged to other comprehensive income is recognised in profit or loss. Purchases and sales of available-for-sale financial assets are recognised on settlement date with any change in fair value between trade date and settlement date being recognised in other comprehensive income. On sale, the amount held in available-for-sale reserves associated with that asset is recognised in profit or loss as a reclassification adjustment. Interest on corporate bonds classified as available-for-sale is calculated using the effective interest rate method and is recognised in finance income in profit or loss.

The fair value of quoted investments are determined by reference to Stock Exchange quoted market bid prices at the close of business at the end of the reporting period. For investments where there is no quoted market price, fair value is determined by reference to the current market value of another instrument which is substantially the same or is calculated based on the expected cash flows of the underlying net asset base of the investment.

Investments in subsidiaries, associates and joint venture entities are accounted for in the consolidated financial statements as described in note 2(b).

ASTRON LIMITED ANNUAL REPORT 2011 37

Notes to the financial statements continued

Loans and receivables

Impairment losses are measured as the difference between the carrying amount and the present value of the estimated future cash flows, excluding future credit losses that have not been incurred. The cash flows are discounted at the investment’s original effective interest rate. Impairment losses are recognised in profit or loss.

Non-current loans and receivables include loans due from related parties repayable within 366 days of the end of the reporting period. These are interest bearing using a market rate of interest for a similar instrument with a similar credit rating. In the case of loans and receivables, objective evidence of impairment includes confirmation that the company will not be able to collect all amounts due according to the original terms.

l. Fair Values

Fair values may be used for financial asset and liability measurement and well as for sundry disclosures.

Fair values for financial instruments traded in active markets are based on quoted market prices at the end of the reporting period. The quoted market price for financial assets is the current bid price.

The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their short term nature. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments.

m. Property, Plant and Equipment

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

All other plant and equipment is stated at historical cost, including costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management, less depreciation and any impairments.

Land is not depreciated. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

Depreciation on other assets is calculated on a straight line basis over the estimated useful life of the asset as follows:

CLASS OF ASSET
Leasehold Buildings		50years
Freehold Land		Indefnite
Plant and Equipment		3-20 Years

The assets’ residual value and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

Gains and losses on disposals are calculated as the difference between the net disposal proceeds and the asset’s carrying amount and are included in profit or loss in the year that the item is de-recognised.

The cost of fixed assets constructed within the Group includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads.

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.

Additional costs incurred on the impaired capital works in progress are expensed in profit or loss.

n. Leases

Leases where the lessor retains substantially all the risks and rewards of ownership of the net asset are classified as operating leases. Payments made under operating leases (net of incentives received from the lessor) are charged to profit or loss on a straight line basis over the period of the lease.

o. Land Use Rights

The upfront prepayments made for land use rights are expensed in profit or loss on a straight line basis over the period of the lease or, when there is impairment, it is expensed immediately. The period of the lease is 50 years.

p. Intangibles

i. Research and development costs

Research costs are expensed as incurred. Development expenditure incurred on an individual project is capitalised if the product or service is technically feasible, adequate resources are available to complete the project, it is probable that future economic benefits will be generated and expenditure attributable to the project can be measured reliably. Expenditure capitalised comprises costs of services and direct labour. Other development costs are expensed when they are incurred. The carrying value of development costs is reviewed annually when the asset is not yet available for use, or when events or circumstances indicate that the carrying value may be impaired.

The project is in the development phase and hence no amortisation has been brought to account. An amortisation policy has yet to be determined.

38 ASTRON LIMITED ANNUAL REPORT 2011

q. Exploration and Evaluation Expenditure

i. Costs carried forward

Costs arising from exploration and evaluation activities are carried forward provided that the rights to tenure of the area of interest are current and such costs are expected to be recouped through successful development, or by sale, or where exploration and evaluation activities have not, at reporting date, reached a stage to allow a reasonable assessment regarding the existence of economically recoverable reserves. Expenditure incurred is accumulated in respect of each identifiable area of interest.

ii. Costs abandoned area

Costs carried forward in respect of an area of interest that is abandoned are written off in the year in which the decision to abandon is made.

iii. Regular review

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.

iv. Costs of site restoration

Costs of site restoration are to be provided once an obligation presents. 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 will be determined using estimates of future costs, current legal requirements and technology on a discounted basis.

r. Trade and Other Payables

Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of the reporting period and which are unpaid. These amounts are unsecured and have 30 to 90 day payment terms.

Payables to related parties are carried at the principal amount.

s. Interest Bearing Liabilities

All loans and borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the loans and borrowings using the effective interest method.

All borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.

t. Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

u. Provisions

Provisions for legal claims, service warranties and make good obligations are recognised when the Group has a present legal or constructive obligation as a result of a past event, it is probable that that an outflow of economic resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.

Where the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

v. Employee Benefit Provisions

Wages and salaries, annual leave and sick leave

Liabilities for wages and salaries, including non monetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months of the end of the reporting period are recognised in respect of employees’ services rendered up to the end of the reporting period and measured at amounts expected to be paid when the liabilities are settled. Liabilities for non accumulating sick leave are recognised when leave is taken and measured at the actual rates paid or payable. Liabilities for wages and salaries and annual leave are included as part of Other Payables.

Bonus plan

The Group recognises an expense and a liability for bonuses when the entity is contractually obliged to make such payments or where there is past practice that has created a constructive obligation.

Retirement benefit obligations

The Group contributes to employee superannuation funds in accordance with its statutory obligations. Contributions are recognised as expenses as they become payable.

ASTRON LIMITED ANNUAL REPORT 2011 39

Notes to the financial statements continued

w. Contributed Equity

Ordinary shares are classified as equity.

Costs directly attributable to the issue of new shares are shown as a deduction from the equity proceeds, net of any income tax benefit. Costs directly attributable to the issue of new shares associated with the acquisition of a business are included as part of the purchase consideration.

x. Share Based Payments

The Group provides benefits to employees (including Directors) of the Group in the form of share based payment transactions, whereby employees render services in exchange for shares (“equity settled transactions”). To date share based payments have been undertaken at the discretion of the Remuneration Committee. For shares issued to employees as remuneration, the market value of the shares issued is recognised as an employee benefits expense with a corresponding increase in equity. There is not an Employee Share Option Plan (ESOP) in operation.

y. Dividends

Provision is made for dividends declared and no longer at the discretion of the Group, on or before the end of the reporting period but not distributed at the end of the reporting period.

z. Segment Reporting

Segment revenues, expenses, assets and liabilities are those that are directly attributable to a segment and the relevant portion that can be allocated to the segment on a reasonable basis. Segment assets include all assets used by a segment and consist primarily of operating cash, receivables, inventories, property, plant and equipment and other intangible assets. Segment liabilities consist primarily of trade and other creditors, employee benefits and provisions.

aa. Earnings Per Share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to owners of Astron Limited by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares during the year.

Diluted earnings per share

Earnings used to calculate diluted earnings per share are calculated by adjusting the basic earnings by the after tax effect of dividends and interest associated with dilutive potential ordinary shares. The weighted average number of shares used is adjusted for the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.

bb. Goods and Services Tax (GST)

Revenues, expenses are recognised net of GST except where GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item.

Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the consolidated statement of financial position.

Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority is classified as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

cc. Change in Accounting Policy

The accounting policies adopted are consistent with those of the previous financial year

dd. Standards Issued but not yet Effective

The following amended accounting standards and interpretations have been issued, but are not mandatory for financial years ended 30 June 2011. They have not been adopted in preparing the financial statements for the year ended 30 June 2011 and are expected to impact the entity in the period of initial application. In all cases the entity intends to apply these standards from application date as indicated in the table below.

40 ASTRON LIMITED ANNUAL REPORT 2011

AASB REFERENCE	TITLE AND EFFECTED STANDARDS	NATURE OF CHANGE	APPLICATION DATE:	IMPACT ON INITIAL APPLICATION
AASB 13 (issued September 2011)	Fair Value Measurement	Currently, fair value measurement requirements are included in several Accounting Standards. AASB 13 establishes a single framework for measuring fair value of fnancial and non-fnancial items recognised at fair value in the statement of fnancial position or disclosed in the notes in the fnancial statements.	Annual reporting periods commencing on or after 1 January 2013	Due to the recent release of this standard, the entity has yet to conduct a detailed analysis of the differences between the current fair valuation methodologies used and those required by AASB 13. However, when this standard is adopted for the frst time for the year ended 30 June 2014, there will be no impact on the fnancial statements because the revised fair value measurement requirements apply prospectively from 1 July 2013.
AASB 2011- 9 (issued September 2011)	Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income	Amendments to align the presentation of items of other comprehensive income (OCI) with US GAAP. Various name changes of statements in AASB 101 as follows: • 1 statement of comprehensive income – to be referred to as ‘statement of proft or loss and other comprehensive income’ • 2 statements – to be referred to as ‘statement of proft or loss’ and ‘statement of comprehensive income’. OCI items must be grouped together into two sections: those that could subsequently be reclassifed into proft or loss and those that cannot.	Annual periods commencing on or after 1 July 2012	When this standard is frst adopted for the year ended 30 June 2013, there will be no impact on amounts recognised for transactions and balances for 30 June 2013 (and comparatives). However, the statement of comprehensive income will include name changes and include subtotals for items of OCI that can subsequently be reclassifed to proft or loss in future (e.g. foreign currency translation reserves) and those that cannot subsequently be reclassifed (e.g. fxed asset revaluation surpluses).
AASB 119 (reissued September 2011)	Employee Benefts	Main changes include: • Elimination of the ‘corridor’ approach for deferring gains/losses for defned beneft plans • Actuarial gains/losses on remeasuring the defned beneft plan obligation/asset to be recognised in OCI rather than in proft or loss, and cannot be reclassifed in subsequent periods • Subtle amendments to timing for recognition of liabilities for termination benefts • Employee beneftsexpected to be settled(as opposed todue to settledunder current standard) within 12 months after the end of the reporting period are short- term benefts, and therefore not discounted when calculating leave liabilities. Annual leave not expected to be used within 12 months of end of reporting period will in future be discounted when calculating leave liability.	Annual periods commencing on or after 1 January 2013	The entity currently calculates its liability for annual leave employee benefts on the basis that it is due to be settled within 12 months of the end of the reporting period because employees are entitled to use this leave at any time. The amendments to AASB 119 require that such liabilities be calculated on the basis of when the leave is expected to be taken, i.e. expected settlement. When this standard is frst adopted for 30 June 2014 year end, annual leave liabilities will be recalculated on 1 July 2012. Leave liabilities for any employees with signifcant balances of leave outstanding who are not expected to take their leave within 12 months will be discounted, which may result in a reduction of the annual leave liabilities recognised on 1 July 2012, and a corresponding increase in retained earnings at that date.

ASTRON LIMITED ANNUAL REPORT 2011 41

Notes to the financial statements continued

AASB REFERENCE	TITLE AND EFFECTED STANDARDS	NATURE OF CHANGE	APPLICATION DATE:	IMPACT ON INITIAL APPLICATION
AASB 1054 (issued May 2011)	Australian Additional Disclosures	Moves additional Australian specifc disclosure requirements for for-proft entities from various Australian Accounting Standards into this Standard as a result of the Trans-Tasman Convergence Project. Removes the requirement to disclose each class of capital commitment and expenditure commitment contracted for at the end of the reporting period (other than commitments for the supply of inventories).	Annual reporting periods commencing on or after 1 July 2011	When this Standard is adopted for the frst time for the year ended 30 June 2012, the fnancial statements will no longer include disclosures about capital and other expenditure commitments as these are no longer required by AASB 1054.
AASB 9 (issued December 2009 and amended December 2010)	Financial Instruments	Amends the requirements for classifcation and measurement of fnancial assets. The following requirements have generally been carried forward unchanged from AASB 139_Financial_ Instruments: Recognition and _Measurement_into AASB 9. These include the requirements relating to: • Classifcation and measurement of fnancial liabilities; and • Derecognition requirements for fnancial assets and liabilities. However, AASB 9 requires that gains or losses on fnancial liabilities measured at fair value are recognised in proft or loss, except that the effects of changes in the liability’s credit risk are recognised in other comprehensive income.	Periods beginning on or after 1 January 2013	Unless the entity makes an irrevocable election to present gains and losses in other comprehensive income (which is unlikely as these investments are classifed as short-term and are therefore not considered to be long-term strategic investments), gains on available-for- sale fnancial assets under AASB 9 will be recognised in proft or loss, instead of in other comprehensive income. When this standard is frst applied, any remaining balance on the Financial Assets Available for Sale Reserve will be transferred to retained earnings. The entity does not have any fnancial liabilities measured at fair value through proft or loss. There will therefore be no impact on the fnancial statements when these amendments to AASB 9 are frst adopted.
AASB 13 (issued September 2011)	Fair Value Measurement	Additional disclosures required for items measured at fair value in the statement of fnancial position, as well as items merely disclosed at fair value in the notes to the fnancial statements. Extensive additional disclosure requirements for items measured at fair value that are ‘level 3’ valuations in the fair value hierarchy that are not fnancial instruments, e.g. land and buildings, investment properties etc.	Annual reporting periods commencing on or after 1 January 2013	When this standard is adopted for the frst time on 1 July 2013, additional disclosures will be required about fair values.
AASB 2010- 8 (issued December 2010)	Amendments to Australian Accounting Standards – Deferred Tax: Recovery of Underlying Assets [AASB 112]	For investment property measured using the fair value model, deferred tax assets and liabilities will be calculated on the basis of a rebuttable presumption that the carrying amount of the investment property will be recovered through sale. This presumption is rebutted if the investment property is depreciable and is held within a business model whose objective is to consume substantially all of the economic benefts embodied in the investment property over time, rather than through sale. However, this presumption cannot be rebutted for the land portion of investment property which is not depreciable.	Periods commencing on or after 1 January 2012	The entity does not have any investment property measured using the fair value model. There will therefore be no impact on the fnancial statements when these amendments are frst adopted.

42 ASTRON LIMITED ANNUAL REPORT 2011

AASB REFERENCE	TITLE AND EFFECTED STANDARDS	NATURE OF CHANGE	APPLICATION DATE:	IMPACT ON INITIAL APPLICATION
AASB 2010-4 (issued June 2010)	Further Amendments to Australian Accounting Standards arising from the Annual Improvements Process	Deletes various disclosures from AASB 7 Financial Instruments: Disclosures relating to credit risk, renegotiated loans and receivables and the fair value of collateral held.	Periods commencing on or after 1 January 2011	There will be no impact on initial adoption to amounts recognised in the fnancial statement as the amendments result in fewer disclosures only.
AASB 2010-4 (issued June 2010)	Pres Further Amendments to Australian Accounting Standards arising from the Annual Improvements Process	Amends AASB 101 Presentation of Financial Statements so that a detailed reconciliation of each item of other comprehensive income may be included in the statement of changes in equity or in the notes to the fnancial statements	Periods commencing on or after 1 January 2011	There will be no impact on initial adoption of this amendment as a detailed reconciliation of each item of other comprehensive income has always been included in the statement of changes in equity.

3. Critical Accounting Estimates and Judgments

The Directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events based on current trends and economic data, obtained both externally and within the Group.

a. Key estimates: Impairment

The Group assesses impairment at the end of each reporting period by evaluating conditions specific to the Group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value in use calculations performed in assessing recoverable amounts incorporate a number of key estimates.

Impairment has been recognised in respect of the Group’s costs incurred in developing the Senegal project and the TiO2 project (note 19(b)), capital works in progress (note 18), the impairment of available-for-sale investments (note 16) and prepayments (note 13) in terms of the relevant accounting standards.

b. Capitalisation of Exploration and Evaluation Assets

The Group has continued to capitalise expenditure, in terms of AASB 6, incurred on the exploration and evaluation of the Donald Mineral Sands project in Victoria, Australia, This has been done as the technical feasibility and economic viability of extracting the mineral resources is not demonstrable. The Group has assessed that the balances capitalised will be recoverable through the projects successful development (refer note 19 for further details).

c. Deferred Tax Assets

Deferred tax assets have not been recognised for capital losses and China revenue losses as the utilisation of these losses is not considered probable at this stage.

d. Available-for sale Financial Assets

Available-for-sale financial assets have been classified as current assets as it is the Group’s intention to dispose of these assets within one year.

4. Segment Information

a. Description of Segments

The Group has adopted AASB 8 Operating Segments from 1 July 2009 whereby segment information is presented using a ‘management approach’, i.e. segment information is provided on the same basis as information used for internal reporting purposes by the managing Director (chief operating decision maker) who monitors the segment performance based on the net profit before tax for the period. Operating segments have been determined on the basis of reports reviewed by the managing Director who is considered to be the chief operating decision maker of the Group. The reportable segments are as follows:

Astron Corporate: Group treasury and head office activities
Donald Mineral Sands: development of the Donald Mineral Sands Mine
Titanium: Development of mineral processing plant and mineral trading
Mineral Resources: Mineral trading and construction of the mineral separation plant

ASTRON LIMITED ANNUAL REPORT 2011 43

Notes to the financial statements continued

ASTRON CORPORATE DONALD MINERAL SANDS MINERAL RESOURCES TITANIUM TOTAL OF CONTINUING OPERATIONS CONSOLIDATED	30 JUNE 2011 $ 2010 $ 2011 $ 2010 $ 2011 $ 2010 $ 2011 $ 2010 $ 2011 $ 2010 $ 2011 $ 2010 $	Revenue from external customers	Sales – 2,244 – – 7,698,425 7,350,563 1,872,670 435,098 9,571,095 7,787,905 9,571,095 7,787,905	Interest revenue 8,543,219 7,180,692 5,062 683 10,269 13,250 41,206 101,637 8,599,756 7,296,262 8,599,756 7,296,262	Rent – – 79,152 17,411 – – – – 79,152 17,411 79,152 17,411	Total revenue 8,543,219 7,182,936 84,214 18,094 7,708,694 7,363,813 1,913,876 536,735 18,250,003 15,101,578 18,250,003 15,101,578	Segment proft before income tax expense	Segment proft/ (loss) 5,057,288 3,430,094 84,214 18,094 (2,256,844) (313, 635) 212,071 (386 ,869) 3,096,729 2, 747,684 3,096,729 2, 747,684	3,096,729 2, 747,684 3,096,729 2, 747,684	Assets	Segment assets 147,178,149 152,326,946 30,078,972 23,568,629 14,351,836 14,000,584 17,170,031 24,413,222 208,778,988 214,309,380 208,778,988 214,309,380	Total segment assets 147,178,149 152,326,946 30,078,972 23,568,629 14,351,836 14,000,584 17,170,031 24,413,222 208,778,988 214,309,380 208,778,988 214,309,380	Liabilities	Segment liabilities 1,431,911 1,579,819 4,015,550 2,276,445 1,157,916 666,108 403,363 45,605 7,008,740 4,567,977 7,008,740 4,567,977	Total segment liabilities 1,431,911 1,579,819 4,015,550 2,276,445 1,157,916 666,108 403,363 45,605 7,008,740 4,567,977 7,008,740 4,567,977	Impairment losses 50,911 523,016 – – 1,738,501 – – – 1,789,412 523,016 1,789,412 523,016	Acquisition of PPE, Intangible assets and other non- current segment assets 2,204 17,238 7,640,634 1,315,036 1,167,737 373,107 704,993 2,963,279 9,515,568 4,668,660 9,515,568 4,668,660	Depreciation and amortisation 4,610 6,232 20,229 8,197 116,706 153,766 222,518 149,399 364,063 317,594 364,063 317,594

44 ASTRON LIMITED ANNUAL REPORT 2011

c. Geographical Information

Although the Group is managed globally, it operates in the following main geographical areas:

Australia

The home country of the parent entity and one of the subsidiaries which performs evaluation and exploration activities. Rental income all comes from Australian source.

China

The home country of subsidiaries which operate in the mineral trading and downstream development segment.

	SALES REVENUES	SALES REVENUES	INTEREST REVENUE	INTEREST REVENUE	NON-CURRENT ASSETS	NON-CURRENT ASSETS
	2011	2010	2011	2010	2011	2010
	$	$	$	$	$	$
Australia	–	–	8,548,273	7,181,360	29,708,416	22,089,132
China	9,571,095	7,785,661	51,475	114,888	17,980,869	21,156,488
Other countries	–	2,244	8	14	–	–
Total	9,571,095	7,787,905	8,599,756	7,296,262	47,689,285	43,245,620

d. Major customers

Revenues of $1,759,387 and $1,460,517 were derived from sales to SuPaiTe Metal (Kunshan) Company Limited and Zunbao Titanium Industry Limited respectively, (2010: $1,873,973: SuPaiTe Metal (Kunshan) Company Limited). These revenues are part of the sales by the Mineral Resources Segment. These revenues amount to more than 10% of the group’s sales revenues from external customers.

5. Revenue and Other Income

	CONSOLIDATED	CONSOLIDATED
	2011	2010
	$	$
Continuing operations
Revenue
– sale ofgoods	9,571,095	7,787,905
– interest income	8,599,756	7,296,262
Total revenue: continuing	18,170,851	15,084,167
Other income: continuing operations
–gains on foreign exchange	529,495	63,494
– legal actions	1,519,740	–
– rental income	79,152	17,411
– other income	189,322	130,521
Total other income: continuing	2,317,709	211,426

ASTRON LIMITED ANNUAL REPORT 2011 45

Notes to the financial statements continued

6. Profit Before Income Tax

a. Profit before income tax includes the following specific expenses:

	CONSOLIDATED	CONSOLIDATED
	2011	2010
	$	$
Interestpaid	36,806	69,127
Foreign currencytranslation losses	–	160,682
Bad and doubtful debts
– trade receivables	–	70,753
Premises-contractual amounts	80,222	159,163
Research and development costs	265,857	327,075
Depreciation and amortisation	364,063	317,594
Superannuation	94,399	102,372
Employee benefts	760,945	983,746
Impairment of available-for sale investments(note 16)	–	434,026
Costs associated with Gambia and Senegal Investments(note 15)	2,177,140	693,674
Costs associated withproject development expenditure	321,856	140,973
Impairment of capital works inprogress(note 18)	1,463,461	80,900
Write down of stock(note 14)	–	18,237
Impairment ofprepayments	275,040	–

7. Income Tax Expense

a. The components of tax expense comprise:

	CONSOLIDATED	CONSOLIDATED
	2011	2010
	$	$
Current tax expense in respect of currentyear	561,542	262,531
Adjustments recognised in the currentyear in relation to theprioryear	(13,710)	–
Recognition of deferred tax liability	1,666,246	1,294,867
Total	2,214,078	1,557,398
Attributable to:
Continuingoperations	2,214,078	1,557,398
Total	2,214,078	1,557,398

46 ASTRON LIMITED ANNUAL REPORT 2011

b. The prima facie tax on profit before income tax is reconciled to the income tax as follows:

	CONSOLIDATED	CONSOLIDATED
	2011	2010
	$	$
Prima facie taxpayable onproft 30%(2011: 30%)
– continuingoperations	929,019	824,305
	929,019	824,305
Add/(Less)Tax effect of:
– deferred tax asset not brought to account	–	130,208
– non-deductible items	662,256	351,228
– deferred tax asset not recognized for China losses and temporarydifferences	521,431	206,020
– underprovision for income tax inprioryear	(2,914)	–
– Impact of overseas tax differential	104,286	45,637
Income tax attributable to entity	2,214,078	1,557,398
The applicable weighted average effective tax rates are as follows:	71%	57%

The increase in the weighted average effective consolidated tax rate for 2011 is mainly due to utilisation of tax losses in the year ended 30 June 2010.

c. Income tax rates

Australia

In accordance with the Australian Income Tax Act, Astron Limited and its 100% owned Australian subsidiaries have formed a tax consolidated group, tax funding or sharing agreements have been entered into. Australia has a double tax agreement with China and there are currently no impediments to repatriating profits from China to Australia. Dividends paid to Astron Limited from Chinese subsidiaries are non assessable under current Australian Income Tax Legislation.

China

Astron Limited’s subsidiaries in China and are subject to Chinese income tax laws.

Chinese taxation obligations have been fully complied with, confirmed by regular audits completed by the Chinese tax authorities.

d. Items not chargeable or not deductible for tax purposes

Items not chargeable or deductible for tax purposes for the Group principally represent profits derived in China which receive a number of tax concessions (such as accelerated depreciation allowances) and are not required to be assessed at the Australian Corporate Income Tax rate of 30%. With respect to the parent entity, items not chargeable or deductible for tax purposes relate to non deductible items.

e. Tax on other comprehensive items

There is no tax impact of the other comprehensive item: increase in available-for-sale financial assets because no deferred tax has been recognised for this temporary difference.

No tax is applicable to other comprehensive item: foreign currency translation differences.

8. Discontinued Operations

No operations were discontinued in the 2011 or 2011 financial years.

ASTRON LIMITED ANNUAL REPORT 2011 47

Notes to the financial statements continued

9. Earnings Per Share

a. Reconciliation of earnings used in the calculation of earnings per share to Profit:

	CONSOLIDATED	CONSOLIDATED
	2011	2010
	$	$
Proft attributable to owners	882,651	1,190,286
Earnings used to calculate basic EPS	882,651	1,190,286
Earnings used in calculation of dilutive EPS	882,651	1,190,286
Proft from continuingoperations	882,651	1,190,286
Proft used to calculate basic EPS from continuingoperations	882,651	1,190,286
Proft used in the calculation of dilutive EPS from continuingoperations	882,651	1,190,286
b. Weighted average number of ordinary shares (diluted):
	CONSOLIDATED
	2011	2010
	$	$
Weighted average number of ordinary shares outstanding during the year
– used in calculatingbasic EPS	62,823,934	64,644,545
Weighted average number of ordinary shares outstanding during the year
– used in calculatingdilutive EPS	62,823,934	64,644,545

c. Dilutive shares

There were no shares issued under escrow at or post year end.

10. Auditors’ Remuneration

	CONSOLIDATED	CONSOLIDATED
	2011	2010
	$	$
Remuneration of the auditor
For auditingor reviewingthe fnancial statements
BDO	108,576	94,500
BDO network frm	32,088	11,290
	140,664	105,790
Other services – BDO
– taxation services	36,760	17,980
– due diligence assistance	–	14,000
– secretarial services	4,297	5,590
– corporate fnance services	55,338	–

48 ASTRON LIMITED ANNUAL REPORT 2011

11. Cash and Cash Equivalents

11. Cash and Cash Equivalents
	CONSOLIDATED
	2011	2010
	$	$
Cash on hand	2,289	10,647
Current & call account balances	13,437,165	16,265,569
Short term deposits	73,671,202	97,483,400
Total	87,110,656	113,759,616

Cash on hand is non interest bearing. Bank balances and short term deposits at call bear floating interest rates between 0.0% and 5.9% (2010: 0.0% and 5.8%). Deposits have an average maturity of 90 days (2010: 90 days). Bank balances included letter of credit deposits of $639,274 as at 30 June 2011 (2010: $1,103,981).

a. Geographic concentration of risk

	CONSOLIDATED	CONSOLIDATED
	2011	2010
	$	$
Australia	82,705,935	98,675,650
China	4,371,388	15,048,483
United Kingdom	5,113	26,882
Senegal	28,220	8,601
Total	87,110,656	113,759,616

b. Concentration of risk by bank

	CONSOLIDATED	CONSOLIDATED
	2011	2010
	$	$
Australia
Commonwealth Bank-S&P ratingof AA(2010:AA)	70,552,461	69,074,073
Goldman Sachs JB Were-unrated	11,983,035	20,944,264
Bank of China-S&P ratingof A-(2010:A-)	1,701	7,365,883
Other Australian banks	168,738	1,291,430
	82,705,935	98,675,650
China
Bank of China-S&P ratingof A-(2010:A-)	4,067,877	14,228,807
Construction Bank-S&P ratingof A-(2010:A-)	34,599	755,835
Other Chinese banks	268,912	63,841
	4,371,388	15,048,483

ASTRON LIMITED ANNUAL REPORT 2011 49

Notes to the financial statements continued

12. Term deposits greater than 90 days

			CONSOLIDATED	CONSOLIDATED
			2011	2010
			$	$
Term deposits with maturityover	90	days	60,333,837	52,744,908

As at 30 June 2011, term deposits with maturity over three months of $60,333,837 (2010: $52,744,908) bear fixed interest rates of 5.3% to 6.3% (2010: 5.8%) and have a maturity of 6 months.

a. Geographic concentration of risk

	CONSOLIDATED	CONSOLIDATED
	2011	2010
	$	$
Australia	60,333,837	52,744,908

b. Concentration of risk by bank

	CONSOLIDATED	CONSOLIDATED
	2011	2010
	$	$
Australia
Commonwealth Bank-S&P ratingof AA(2010:AA)	47,577,059	52,744,908
Bank of China-S&P ratingof A-(2010 A-)	12,756,778	–
	60,333,837	52,744,908

13. Trade and Other Receivables

13. Trade and Other Receivables
		CONSOLIDATED
		2011	2010
	NOTE	$	$
Current
Trade debtors(gross)		577,211	215,682
Allowance for doubtful debts	13(c)	–	(70,513)
Trade debtors(net)	13(b)	577,211	145,169
Drafts and other receivables	13(a)	2,834,313	2,074,269
Prepayments	13(d)	4,343,044	390,966
Impairments	13(d)	(275,040)	–
Netprepayments		4,068,004	390,966
Total		7,479,528	2,610,404

a. Drafts and other receivables

This amount includes drafts receivable which are bank guarantees on behalf of trade and other debtors with current maturity dates. Settlement through bank draft is common trading practise in China. All the drafts are with the counterparties in China. There is no industry concentration of risk in respect to these drafts.

During the year the Group entered into purchase, processing and sale arrangement. A working capital loan of $882,352 was advanced to this party as part of this transaction. This amount was repaid to the Group subsequent to year end.

50 ASTRON LIMITED ANNUAL REPORT 2011

b. Ageing analysis

The ageing analysis of trade receivables is as follows:

	CONSOLIDATED	CONSOLIDATED
	2011	2010
	$	$
0-30 days(notpast due)	528,272	65,090
31-60 days(past due not impaired)	48,939	19,202
61-90 days(past due not impaired)	–	60,407
91+ days(past due not impaired)	–	470
91 + days(past due impaired)	–	70,513
Total	577,211	215,682

At the end of the reporting period the Group’s trade debtors are predominantly receivable from Chinese trading partners. The Group considers that its history of trading indicates that there are no impairment indicators at the end of the reporting period. The Chinese debtors are regularly reviewed and as is common practise in China the terms maybe extended without which there would be overdue balances, however, the Group is satisfied that payment will be received in full.

It is the Group’s policy that where possible that sales are made in exchange for notes (guaranteed by a Chinese bank) ensuring that the Group does not have an impairment issue.

c. Analysis of allowance for trade debtors

	CONSOLIDATED	CONSOLIDATED
	2011	2010
	$	$
Openingbalance	70,513	–
(Receivables written off)/provisions raised duringtheyear	(70,513)	70,513
Total	–	70,513

d. Prepayments

At year end the Group had made advances to suppliers for stock purchases to secure the stock at favourable prices.

Included in prepayments is an amount of $275,040 which is the prepayment for construction. This amount has been impaired due to low possibility of collection.

14. Inventories

14. Inventories
	CONSOLIDATED
	2011	2010
	$	$
Raw Materials	1,418,210	427,741
Finishedgoods – at cost	2,207,067	855,382
Goods In transit	60,363	–
Total	3,685,640	1,283,123

There were no write downs of inventories to net realisable value during the current financial year (2010: 18,237).

15. Investments in Gambia and Senegal

Carnegie Minerals (Gambia) Limited is 100% subsidiary of Astron Limited. It was incorporated to commence mining activities in The Gambia. The investments and receivables associated with the company have been impaired in full. The original agreement prior to the seizure of the assets was that Astron Limited had an obligation to fund the development and operating costs of the mine by way of loans.

Furthermore, expenditure of $2,177,140 (2010: $693,674) relating to Gambia and Senegal has been expensed directly to profit and loss.

ASTRON LIMITED ANNUAL REPORT 2011 51

Notes to the financial statements continued

16. Available-For-Sale Financial Assets

16. Available-For-Sale Financial Assets
	CONSOLIDATED
	2011	2010
	$	$
Listed Securities
Current listed investments,at fair value shares in listed corporations	2,480,042	665,710
Total available‑for‑sale fnancial assets	2,480,042	665,710

Available-for-sale financial assets comprise investments in the ordinary issued capital of three public companies listed on the Australian Stock Exchange (ASX). The cost of these investments was $1,912,086. There are no fixed returns or fixed maturity date attached to these investments. The increase in market value of these investments during the current year of $1,814,331 has been recorded as a Financial Assets Available for Sale Reserve under AASB 139. In respect of the previous year, an amount of $434,026 was recorded in profit or loss as relating to an impairment under AASB 139.

There will be no capital gains tax payable on the sale of these assets due to existing capital losses carried forward.

For listed equity securities and preference shares, fair value is determined by reference to closing bid prices on the ASX.

17. Subsidiaries

17. Subsidiaries
		PERCENTAGE	PERCENTAGE
		OWNED ORDINARY	OWNED ORDINARY
	COUNTRY OF	SHARES	SHARES
	INCORPORATION	2011	2010
Parent entity
Astron Limited	Australia
Subsidiaries ofparent entity
Astron Advanced Materials Limited	UK	100	100
Astron Mineral Sands PtyLimited	Australia	100	–
Astron Titanium(Yingkou)Co Ltd	China	100	100
Carnegie Minerals(Gambia)Limited	The Gambia	100	100
Coast Resources Limited	Isle of Man	100	100
Dickson & Johnson PtyLimited	Australia	100	100
Donald Mineral Sands PtyLtd	Australia	100	100
Sovereign Gold NL	Australia	100	100
WIM 150 PtyLimited	Australia	100	100
Yingkou Astron Mineral Resources Co Ltd	China	100	100
Zirtanium PtyLimited	Australia	100	100

a. Equity

The proportion of ownership interest is equal to the proportion of voting power held.

b. Acquisition and incorporation of subsidiaries

On 19 May 2011, the Group incorporated Astron Mineral Sands Pty Limited as a wholly owned subsidiary of Astron Limited. The purpose of this company is to possibly hold ML 5532.

On 24 March 2010 the Group incorporated WIM 150 Pty Limited. WIM 150 Pty Limited is a wholly owned subsidiary of Zirtanium Pty Limited, which in turn is a wholly owned subsidiary of Astron Limited. The purpose of this company is to hold the WIM 150 Project.

c. Disposal of subsidiaries

During the current year and prior years no subsidiaries were of disposed of or wound up.

52 ASTRON LIMITED ANNUAL REPORT 2011

18. Property, Plant and Equipment

18. Property, Plant and Equipment
	CONSOLIDATED
	2011	2010
	$	$
Land and buildings
Land
At cost	2,897,330	537,981
Total land	2,897,330	537,981
Leasehold buildings
At cost	2,006,092	2,355,929
Less accumulated depreciation	(211,603)	(208,974)
Less accumulated impairment losses	(48,645)	–
Total leasehold buildings	1,745,844	2,146,955
Total land and buildings	4,643,174	2,684,936
Plant and equipment and works inprogress
Capital works inprogress
At cost	7,378,455	8,260,205
Less accumulated impairment losses	(216,080)	–
Total capital works inprogress	7,162,375	8,260,205
Plant and equipment
At cost	1,094,523	925,915
Less accumulated depreciation	(514,035)	(449,203)
Totalplant and equipment	580,488	476,712
Totalplant and equipment and works inprogress	7,742,863	8,736,917
Totalproperty, plant and equipment	12,386,037	11,421,853

a. Assets pledged as security

As at 30 June 2011 and 30 June 2010 there were no mortgages granted as security over bank loans.

b. Capital works in progress

Capital works in progress are not ready for use and not yet being depreciated.

ASTRON LIMITED ANNUAL REPORT 2011 53

Notes to the financial statements continued

c. Movements in carrying amounts

Movement in the carrying amount for each class of property, plant and equipment between the beginning and the end of the current financial year.

			CONSOLIDATED
	CAPITAL WORKS IN			PLANT AND
	PROGRESS	LAND	BUILDINGS	EQUIPMENT	TOTAL
	$	$	$	$	$
Year ended 30 June 2011
Balance at the beginningofyear	8,260,205	537,981	2,146,955	476,712	11,421,853
Additions	1,622,017	2,359,349	–	341,031	4,322,397
Depreciation expense	–	–	(35,212)	(137,282)	(172,494)
Impairment	(1,463,461)	–	(50,911)	–	(1,514,372)
Disposal	–	–	–	(21,660)	(21,660)
Foreign exchange movements	(1,256,386)	–	(314,988)	(78,313)	(1,649,687)
Carrying amount at the end ofyear	7,162,375	2,897,330	1,745,844	580,488	12,386,037
Year ended 30 June 2010
Balance at the beginningofyear	5,494,137	537,981	2,348,487	618,066	8,998,671
Additions	3,335,934	–	–	20,717	3,356,651
Depreciation expense	–	–	(38,859)	(160,609)	(199,468)
Transfers	(300,024)	–	–	–	(300,024)
Impairment	(80,900)	–	–	–	(80,900)
Disposals	–	–	(10,236)	(2,750)	(12,986)
Foreign exchange movements	(188,942)	–	(152,437)	1,288	(340,091)
Carryingamount at the end ofyear	8,260,205	537,981	2,146,955	476,712	11,421,853

d. Impairment of capital works in progress

The total impairment loss recognized in profit or loss during the year amounted to $1,463,461 and is separately presented in profit or loss as “impairment of capital works in progress”.

During the year, the board resolved to move the Mineral Separation Plant project (MSP project) from China to Australia for the purpose of saving transportation costs. The Mineral Separation Plan project was accounted for as capital works in progress in prior years. The major components of the capital works in progress include project management costs, fee of perambulation, off-set facility fee, etc.

The recoverable amount of the above capitalised costs is determined to be nil since new costs will be incurred to set up the MSP project in Australia.

The impairment loss has been included in the Mineral Resources segment for segmental reporting purpose.

19. Intangible Assets

19. Intangible Assets
		CONSOLIDATED
		2011	2010
	NOTE	$	$
Development costs
Cost	19(b)	7,373,355	7,855,501
Accumulated impairment loss	19(b)	(7,141,215)	(7,600,940)
Net carryingvalue	19(d)	232,140	254,561
Exploration expenditure capitalized
Exploration and evaluationphases	19(a)(c)	26,718,754	21,513,806
Net carryingvalue		26,718,754	21,513,806
Total Intangibles	19(d)	26,950,894	21,768,367

54 ASTRON LIMITED ANNUAL REPORT 2011

a. Intangible assets

Movements during the year ended 30 June 2011 in intangible assets represent additions only. No amortisation has been brought to account. For capital expenditure commitments refer note 29(b).

b. Development costs and impairment losses

These costs relate to the development of the mineral projects in Senegal and the TiO2 project which were fully impaired in 2009. The remaining balance of $232,140 (2010: $254,461) relates to capitalised testing and design fees for the MSP.

Movements during the year ended 30 June 2011 in the cost of the development costs represent additions disclosed in note 19 (d) and foreign exchange impacts. Movements during the year ended 30 June 2011 in the accumulated impairment loss represent the foreign exchange impact.

c. Exploration and evaluation expenditure

This expenditure relates to the Group’s investment in the Donald Mineral Sands Project. As at 30 June 2011 the Group has complied with the conditions of the granting of EL4432, EL4433, EL5255, EL5263, EL5186, EL5261, EL5262, EL5353, EL5354 and ML5532. As such the Directors believe that the tenements are in good standing with the Department of Primary Industries in Victoria, who administers the Mineral Resources Development Act 1990.

The recoverability of the carrying amount of the exploration and evaluation assets is dependent upon the successful development and commercial exploitation or alternatively sale of the area of interest.

d. Movement in net carrying value

		CONSOLIDATED
	EXPLORATION AND	DEVELOPMENT
	EVALUATION PHASE	COSTS	TOTAL
	$	$	$
Year ended 30 June 2010
Openingbalance	21,513,806	254,561	21,768,367
Additions	5,204,948	16,808	5,221,756
Foreign exchange movements	–	(39,229)	(39,229)
Balance at 30 June 2011	26,718,754	232,140	26,950,894
Year ended 30 June 2009
Openingbalance	20,201,797	269,508	20,471,305
Additions	1,312,009	–	1,312,009
Foreign exchange movements	–	(14,947)	(14,947)
Balance at 30 June 2010	21,513,806	254,561	21,768,367

e. Finite lives

Intangible assets, other than goodwill have finite useful lives. To date no amortisation has been charged in respect of intangible assets due to the stage of development for each project.

ASTRON LIMITED ANNUAL REPORT 2011 55

Notes to the financial statements continued

20. Land Use Rights

20. Land Use Rights
	CONSOLIDATED
	2011	2010
	$	$
Land use rights	8,352,354	10,055,400
a. Reconciliation
	CONSOLIDATED
	2011	2010
	$	$
Openingbalance	10,055,400	10,770,472
Additions	–	4,068
Amortisation	(191,568)	(118,126)
Foreign exchange movements	(1,511,478)	(601,014)
Closingbalance	8,352,354	10,055,400

21. Trade and Other Payables

	CONSOLIDATED	CONSOLIDATED
	2011	2010
	$	$
Unsecured liabilities
Tradepayables	1,424,450	1,027,291
Otherpayables	729,817	420,105
Total	2,154,267	1,447,396

22. Provisions

		CONSOLIDATED	CONSOLIDATED
		2011	2010
	NOTE	$	$
Current
Provision for indemnifcation on discontinued operations		18,546	18,546
		18,546	18,546
Non‑current
Environmental rehabilitation	22(a)	40,000	40,000
		40,000	40,000

56 ASTRON LIMITED ANNUAL REPORT 2011

a. Movement in carrying amounts

		CONSOLIDATED
	ENVIRONMENTAL
	REHABILITATION	INDEMNIFICATION	TOTAL
	$	$	$
Opening balance at 1 July 2010	40,000	18,546	58,546
Amounts used	–	–	–
Balance at 30 June 2011	40,000	18,546	58,546

	ENVIRONMENTAL
	REHABILITATION	INDEMNIFICATION	TOTAL
	$	$	$
Opening balance at 1 July 2009	40,000	100,000	140,000
Amountspaid	–	(81,454)	(81,454)
Balance at 30 June 2010	40,000	18,546	58,546

b. Provision for environmental rehabilitation

The provision for rehabilitation represents the estimated costs to rehabilitate the Donald Mineral Sands evaluation excavation.

23. Taxation

a. Liabilities

	CONSOLIDATED	CONSOLIDATED
	2011	2010
	$	$
Current tax liability	221,518	153,872
Deferred tax liabilityarises from the following:
Capitalised expenditure	4,221,273	2,650,243
Interest accrued	378,628	284,577
Provisions	(25,492)	(26,657)
	4,574,409	2,908,163

b. Deferred tax assets not brought to account

Deferred tax assets not brought to account, the benefits of which will only be realised if the conditions for deductibility set out in note 2(e) occur.

	CONSOLIDATED	CONSOLIDATED
	2011	2010
	$	$
temporarydifferences unrecognized	1,376,669	1,376,669
tax losses:
– Revenue losses(China)	1,859,638	1,620,550
– capital losses	17,735,827	17,960,959

ASTRON LIMITED ANNUAL REPORT 2011 57

Notes to the financial statements continued

24. Issued Capital

24. Issued Capital
	CONSOLIDATED
	2011	2010
	$	$
62,294,366(2010: 64,232,223)FullyPaid OrdinaryShares – nopar value	33,157,582	38,216,239
Total	33,157,582	38,216,239
a. Reconciliation of ordinary shares (number)
	CONSOLIDATED
	2011	2010
	$	$
At the beginningofyear	64,232,223	64,824,502
Shares issued duringtheyear
– Shares bought back duringtheyear	(1,937,857)	(592,279)
At reporting date	62,294,366	64,232,223
b. Reconciliation of ordinary shares (value)
	CONSOLIDATED
	2011	2010
	$	$
At the beginningof theyear	38,216,239	39,376,051
Shares issued duringtheyear
– Shares bought back duringtheyear	(5,058,657)	(1,159,812)
Total	33,157,582	38,216,239

c. Ordinary shares

Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held.

At the shareholders meetings, each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

d. Capital risk management

The Group considers its capital to comprise its ordinary share capital, reserves, accumulated retained earnings and net debt.

In managing its capital, the Group’s primary objective is to ensure its continued ability to provide a consistent return for its equity shareholders through a combination of capital growth and dividends. In order to achieve this objective, the Group has made decisions to adjust its capital structure to achieve these aims, either through altering its dividend policy, new share issues, or share buy backs, the Group considers not only its short term position but also its long term operational and strategic objectives.

	CONSOLIDATED	CONSOLIDATED
	2011	2010
	$	$
Net debt	–	–
Total equity	201,770,248	209,741,404

There have been no significant changes to the Group’s capital management objectives, policies and processes in the year nor has there been any change in what the Group considers to be its capital.

e. Share based payments

During the year and the previous year no bonuses in cash or in shares were paid to employees.

No share based payment expense was recognised during the current financial year or during the 2010 financial year.

58 ASTRON LIMITED ANNUAL REPORT 2011

25. Reserves

a. Foreign currency translation reserve

The foreign currency translation reserve records exchange differences arising on translation of foreign controlled subsidiaries.

26. Dividends

During the current and prior years no dividend was proposed or paid.

	CONSOLIDATED	CONSOLIDATED
	2011	2010
	$	$
Franking account balance
Frankingcredits available for the subsequent fnancialyears based on a tax rate of 30%(2010:30%)	1,837,719	1,357,760

The above amount represents the balance on the franking account at the end of the financial year arising from income tax payable.

27. Key Management Personnel Disclosures

a. Key management personnel compensation

	CONSOLIDATED	CONSOLIDATED
	2011	2010
	$	$
Short-term employee benefts	1,503,751	1,769,049
Post-employment benefts	105,341	112,804
Total	1,609,092	1,881,853

Further information regarding the identity of key management personnel and their compensation can be found in the Audited Remuneration Report contained in the Directors’ Report.

b. Shareholdings

Details of equity instruments (other than options and rights) held directly, indirectly or beneficially by key management personnel and their related parties are as follows:

	BALANCE	RECEIVED AS	DIVIDEND	NET CHANGE*/	BALANCE
30 JUNE 2011	1/07/2010	REMUNERATION	REINVESTMENT	OTHER	30/06/2011
Key Management Personnel
Mr. Gerard King	274,519	–	–	(250,000)	24,519
Mr. Alexander Brown	44,055,994	–	–	–	44,055,994
Mr. Robert Flew	170,574	–	–	–	170,574
Mr. Ronald McCullough	4,000	–	–	–	4,000
Mdm KangRong	2,000,000	–	–	–	2,000,000
Mr. Mark Nielsen	11,750	–	–	–	11,750
Mr. Simon Peters	21,268	–	–	(5,850)	15,418
Ms Emma Vogel	20,018	–	–	2,150	22,168
Mr. Scott McDaniel	–	–	–	–	–
Total	46,558,123	–	–	(253,700)	46,304,423

ASTRON LIMITED ANNUAL REPORT 2011 59

Notes to the financial statements continued

	BALANCE	RECEIVED AS	DIVIDEND	NET CHANGE*/	BALANCE
30 JUNE 2010	1/07/2009	REMUNERATION	REINVESTMENT	OTHER	30/06/2010
Key Management Personnel
Mr. Gerard King	274,519	–	–	–	274,519
Mr. Alexander Brown	45,055,994	–	–	(1,000,000)	44,055,994
Mr. Robert Flew	170,574	–	–	–	170,574
Mr. Ronald McCullough	–	–	–	4,000	4,000
Mdm KangRong	–	–	–	2,000,000	2,000,000
Mr. Mark Nielsen	10,000	–	–	1,750	11,750
Mr. WangXuedong	–	–	–	–	–
Mr. JerryNg	–	–	–	–	–
Mr. Boris Matveev	–	–	–	–	–
Mr. Simon Peters	12,700	–	–	8,568	21,268
Ms Emma Vogel	11,450	–	–	8,568	20,018
Mr. Scott McDaniel	–	–	–	–	–
Mr. SongHongxing	–	–	–	–	–
	45,535,237	–	–	1,022,886	46,558,123

Net change other refers to shares purchased or sold during the financial year.

c. Loans to/from key management personnel

No loans were provided to/from Key Management Personnel during the current or previous reporting periods.

During the current and prior years there was no interest paid on loans

28. Related party transactions

a. Parent entity

Astron Limited is the parent entity of the Group.

b. Subsidiaries

Interests in subsidiaries are disclosed in note 17.

c. Interest free loans

All subsidiary companies are wholly owned with any interest free loans being eliminated on consolidation.

d. Management services provided

Management and administrative services are provided at no cost to subsidiaries.

29. Capital and Leasing Commitments

a. Operating lease commitments

There are no non cancellable operating leases contracted for but not capitalised in the financial statements (2010: Nil)

60 ASTRON LIMITED ANNUAL REPORT 2011

b. Capital expenditure commitments

	CONSOLIDATED	CONSOLIDATED
	2011	2010
	$	$
Capital expenditure commitments contracted for:
Chinese capitalprojects	889,451	523,993
Chinese subsidiarycapitalization	497,250	3,859,500
Donald Mineral Sands	50,000	50,000
Purchase of Land in Victoria Australia	–	1,261,052
	1,436,701	5,694,545
Payable:
– not later than 12 months	1,436,701	5,694,545
	1,436,701	5,694,545

c. Other commitments and contingencies

Land

In 2008 Astron Titanium (Yingkou) Co Ltd acquired a land site from the Chinese Government. The Group is discussing possible changes to the usage rights with the Government. The Directors believe that no significant loss will be incurred by the Group in relation to the land use rights. As at the 30 June 2011 the net book value of this land is $7,241,130 (2010: $8,724,134).

The intention for the block of land held by Yingkou Astron Mineral Resources Co Ltd is currently being evaluated. As at 30 June 2011 the net book value of the land is $1,111,224 (2010: $1,331,266)

Acquisition of the Business of WIM 150

In March 2010 Astron entered into an agreement to acquire the WIM 150 Project for $5,000,000. $500,000 of this amount has been paid as a refundable deposit which is included in prepayments.

Minimum expenditure on Exploration and Mining Licences

To maintain the Exploration and Mining Licences the Group is required to spend $2,248,090 on development over the next year (2010: $1,880,785). The minimum expenditure amount per annum will normally increase over the life of an exploration licence. The minimum expenditure on the mining licence is $556,800 per annum. The amount of this expenditure could be reduced should the Group decide to relinquish land.

30. Cash Flow Information

a. Reconciliation of cash provided by operating activities with profit attributable to members

	CONSOLIDATED	CONSOLIDATED
	2011	2010
	$	$
Netproft for theyear	882,651	1,190,286
Non‑cash fows inproft from ordinary activities
Depreciation and amortization	364,063	317,594
Impairment of capital works inprogress	1,463,461	80,900
Impairment toproperty, plant and equipment	50,911	–
Development expenditure	321,856	–
Impairment ofprepayments	275,040	–
Impairment of available-for-sale assets	–	434,026
(Increase)/decrease in trade and other receivables	(4,621,157)	417,462
(Increase)/decrease in inventories	(2,717,409)	1,382,364
Increase/(decrease)in tradepayables and accruals	871,463	(395,485)
Increase/(decrease)in income taxespayable	67,646	(767,114)
Increase in deferred tax liabilities	1,666,246	1,294,867
Effects on foreign exchange rate movement	(117,561)	–
	(1,492,790)	3,954,900

ASTRON LIMITED ANNUAL REPORT 2011 61

Notes to the financial statements continued

b. Reconciliation of cash

		CONSOLIDATED	CONSOLIDATED
		2011	2010
	NOTE	$	$
Cash at the end of the fnancial year as shown in the cash fow statement is reconciled to items in the consolidated statement of fnancialposition as follows:
Cash on hand	11	2,289	10,647
Current & call account balances	11	13,437,165	16,265,569
Short term deposits	11	73,671,202	97,483,400
		87,110,656	113,759,616

c. Loan facilities

As at 30 June 2011 and 30 June 2010 the Group does not have any loan facilities.

d. Non cash financing and investing activities

No dividends were paid in cash or by the issue of shares under a dividend reinvestment plan during the current year and prior year.

e. Acquisition of entities

During the year Astron Limited did not invest any funds into Chinese subsidiaries (2010: $5,997,759). A new wholly owned subsidiary company, Astron Mineral Sands Pty Limited, was incorporated during the year (refer Note 17). In the prior year WIM 150 Pty Limited was incorporated (refer Note 17).

f. Disposal of entities

There were no disposals of entities in the current or prior financial years.

g. Restrictions on cash

The short term deposits include $60,000 (2010: $60,000) of cash backed Bank Guarantees for the operations of the Donald Mineral Sands project and WIM 150 Pty Limited.

Bank balances also include letter of credit deposits of $639,274 at 30 June 2011 (2010: $1,103,981). These are pledged as collateral for letters of credit and are therefore not available for drawdown.

31. Employee Benefit Obligations

As at 30 June 2011 and 30 June 2010, the majority of employees are employed in China. It is not normal business practice to remunerate employees in China with employee benefits including superannuation. Any Chinese provisions for employee entitlements at year end would be insignificant.

32. Subsequent events

The financial statements were authorised for issue on 21 September 2011 by the board of Directors.

No other matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group in future financial years.

62 ASTRON LIMITED ANNUAL REPORT 2011

33. Parent Company Disclosure

The following information relates to the parent entity, Astron Limited. The information presented has been prepared using accounting policies that are consistent with those presented in Note 1.

	ASTRON LIMITED	ASTRON LIMITED
	2011	2010
	$	$
Current assets	161,376,863	160,794,577
Non-current assets	51,772,162	52,440,272
Total assets	213,149,025	213,234,849
Current liabilities	7,573,890	6,731,886
Non-current liabilities	766,933	270,456
Total liabilities	8,340,823	7,002,342
Contributed equity	33,157,581	38,216,239
Reserves	1,814,331	–
Retained earnings	169,836,290	168,016,268
Total equity	204,808,202	206,232,507
Proft for theyear	1,820,022	1,551,758
Other comprehensive income for theyear	1,814,331	–
Total comprehensive income	3,634,353	1,551,758

a. Guarantees in relation to subsidiaries

Astron Limited has provided a letter of support to the Victorian Department of Primary Industries to fund any expenditure incurred by Donald Mineral Sands Pty Limited.

b. Contingent liabilities

The contingency set out in Note 29 (c) in respect of the acquisition of the WIM 150 Project is attributable to Astron Limited.

c. Capital Commitments

Astron Limited is committed to adequately capitalise its Chinese subsidiaries to the amount of $497,250 (2010: $3,859,500).

34. Financial Instruments

a. General objectives, policies and processes

In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note describes the Group’s objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these financial statements.

There have been no substantive changes in the Group’s exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note. The principal financial instruments from which financial instrument risk arises are cash at bank, term deposits greater than 90 days, trade receivables and payables and available-for-sale investments.

The disposal of the Chinese subsidiaries in 2008 resulted in substantial scale down of both imports and exports to and from China which significantly reduced the Group’s exposure to foreign currency risk. This disposal of the Zircon businesses allowed borrowings to be assumed by the purchaser reducing the Group’s exposure to interest rate risk.

The Board has overall responsibility for the determination of the Group’s risk management objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Group’s finance function. The Groups’ risk management policies and objectives are therefore designed to minimise the potential impacts of these risks on the results of the Group where such impacts may be material. The Group has significant experience in its principal markets which provides the Directors with assurance as to the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets. The Group engages a number of external professionals to ensure compliance with best practise principles.

The overall objective of the Board is to set polices that seek to reduce risk as far as possible without unduly affecting the Group’s competitiveness and flexibility. Further details regarding these policies are set out below:

ASTRON LIMITED ANNUAL REPORT 2011 63

Notes to the financial statements continued

b. Credit risk

Credit risk is the risk that the other party to a financial instrument will fail to discharge their obligation resulting in the Group incurring a financial loss. This usually occurs when debtors or counterparties to derivative contracts fail to settle their obligations owing to the Group.

In respect of cash investments the majority of cash, cash equivalents and term deposits greater than 90 days are held with institutions with a AA to A-credit rating.

In respect of trade receivables, there is no concentration of credit risk as the Group has a large number of customers. Group policy is that sales are only made to customers that are credit worthy. Trade receivables are predominantly situated in China.

Credit risk is managed on a Group basis and reviewed regularly by management and Audit & Risk Committee. It arises from exposures to customers as well as through certain derivative financial instruments and deposits with financial institutions.

Refer to note 11 (a) & (b) for concentration of credit risk for cash and cash equivalents. Refer to Note 12 for concentration of credit risk for term deposits with maturity over 3 months.

The maximum exposure of the Group to credit risk at the end of the reporting period is as follows:

	CONSOLIDATED	CONSOLIDATED
	2011	2010
	$	$
Cash & cash equivalents	87,110,656	113,759,616
Term deposits with maturityover 90 days	60,333,837	52,744,908
Receivables	3,411,524	2,171,050
Total	150,856,017	168,675,574

c. Liquidity risk

Liquidity risk is the risk that the Group may encounter difficulties raising funds to meet commitments associated with financial instruments, e.g. borrowing repayments. The Group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate unutilised borrowing facilities are maintained. As at the year end the Group had cash of $87,110,656 (2010: $113,759,616).

Maturity analysis

			CONSOLIDATED
		CARRYING	CONTRACTUAL
		AMOUNT	CASH FLOWS	< 6 MONTHS
	NOTE	$	$	$
Year ended 30 June 2011
Non‑derivatives
Tradepayables	21	1,424,450	1,424,450	1,424,450
Otherpayables and accruals	21	220,645	220,645	220,645
Total Non‑interest bearing liabilities		1,645,095	1,645,095	1,645,095
Total liabilities		1,645,095	1,645,095	1,645,095
Year ended 30 June 2010
Non‑derivatives
Tradepayables	21	1,027,291	1,027,291	1,027,291
Otherpayables and accruals	21	57,808	57,808	57,808
Total Non‑interest bearing liabilities		1,085,099	1,085,099	1,085,099
Total liabilities		1,085,099	1,085,099	1,085,099

d. Fair value

The fair values of

Term receivables, government and fixed interest securities and bonds are determined by discounting the cash flows, at the market interest rates of similar securities, to their present value.
Listed investments have been valued at the quoted market bid price at the end of the reporting period. For unlisted investments where there is no organised financial market the fair value has been based on a reasonable estimation of the underlying net assets or discounted cash flows of the investment.
Other loans and amounts due are determined by discounting the cash flows, at market interest rates of similar borrowings to their present value.
Other assets and other liabilities approximate their carrying value.

64 ASTRON LIMITED ANNUAL REPORT 2011

At 30 June 2011 and 30 June 2010, the aggregate fair values and carrying amounts of financial assets and financial liabilities approximate their carrying amounts.

Available-for-sale financial instruments are recognised in the statement of financial position of the Group according to the hierarchy stipulated in AASB7.

As at 30 June 2011, the Group only had one hierarchy being the investments with quoted prices (unadjusted) in active markets for identical assets or liabilities.

	CONSOLIDATED	CONSOLIDATED
	2011	2010
	$	$
Available‑for‑sale fnancial assets
ASX Listed equityshares Level 1	2,480,042	665,710
	2,480,042	665,710

e. Interest rate risk

The Group manages its interest rate risk by continuously monitoring available interest rates while maintaining an overriding position of security whereby the majority of cash and cash equivalents and term deposits are held with institutions with a AA-to A – credit rating.

The Groups’ exposure to interest rate risk and the effective weighted average interest rate by maturity periods is set out in the tables below:

	WEIGHTED AVERAGE	WEIGHTED AVERAGE			FIXED INTEREST	FIXED INTEREST
	EFFECTIVE INTEREST		FLOATING INTEREST		RATE MATURING		NON-INTEREST
		RATE		RATE	WITHIN 1 YEAR		BEARING			TOTAL
	2011	2010	2011	2010	2011	2010	2011	2010	2011	2010
	%	%	$	$	$	$	$	$	$	$
Financial Assets:
Cash and cash
equivalents	5.41%	5.4%	13,437,165	28,183,122	73,671,202	85,565,847	2,289	10,647	87,110,656	113,759,616
Term deposits
greater than
90 days	6.03%	5.9%	–	–	60,333,837	52,744,908	–	–	60,333,837	52,744,908
Receivables	–	–	–	–	–	–	3,411,524	2,171,050	3,411,524	2,171,050
Available-for-sale
investments	–	–	–	–	–	–	2,480,042	665,710	2,480,042	665,710
Total Financial
Assets			13,437,165	28,183,122	134,005,039	138,310,755	5,893,855	2,847,407	153,336,059	169,341,284
Financial
Liabilities:
Trade and sundry
payables	–	–	–	–	–	–	1,645,095	1,085,099	1,645,095	1,085,099
Total Financial
Liabilities	–	–	–	–	–	–	1,645,095	1,085,099	1,645,095	1,085,099

Sensitivity analysis

The following table shows the movements in profit due to higher/lower interest costs from variable interest rate financial instruments in Australia and China.

		CONSOLIDATED	CONSOLIDATED
	+ 1%	(100 BASIS POINTS)	‑1%	(100 BASIS POINTS)
	2011	2010	2011	2010
	$	$	$	$
Cash at bank	217,204	1,032,408	(217,204)	(1,032,408)
Term depositsgreater than 90 days	194,011	323,747	(194,011)	(323,747)
	411,215	1,356,155	(411,215)	(1,356,155)
Tax charge of 30%	(123,365)	(406,847)	123,365	406,847
Total	287,850	949,308	(287,850)	(949,308)

ASTRON LIMITED ANNUAL REPORT 2011 65

Notes to the financial statements continued

f. Foreign currency risk

The Group is exposed to fluctuations in foreign currencies arising from the sale and purchase of goods and services in currencies other than the Group’s measurement currency, however, this exposure has reduced following the scale down of operations after the sale of the Zirconium group. The Group manages this risk through the offset of Trade receivables and payables where the majority of trading is undertaken in either the USD or Chinese Reminbi which is pegged to the USD. Current trading terms ensure that foreign currency risk is reduced by not trading on terms but cash on delivery.

g. Price risk

Given that price movements are not considered material to the Group, the Group does not have a risk management policy for price risk. However, the Group’s management regularly review the risks associated with fluctuating input and output prices.

As at 30 June 2011, the maximum exposure of price risk to the Group was the available-for-sale investments for $2,480,042 (2010: $665,710). 100% of the Group’s holding is in the mining sector.

The Group’s exposure to equity price risk is as follows:

				CONSOLIDATED	CONSOLIDATED
				2011	2010
				$	$
Carryingamount of listed equityshares on ASX				2,480,042	665,710
				2,480,042	665,710
Sensitivity Analysis
			CONSOLIDATED
		2011			2010
		$			$
	INCREASE/(DECREASE) IN			INCREASE/(DECREASE) IN
		SHARE PRICE			SHARE PRICE
	+10%	-10%		+10%	‑10%
Listed equity shares on ASX
Proft before tax – decrease	–	(248,004)		–	(66,571)
Other comprehensive income – increase	248,004	–		66,571	–

The above analysis assumes all other variables remain constant.

35. Company details

a. Registered office

Astron Limited C/ BDO Level 19, 2 Market Street Sydney NSW 2000

b. Principal places of business

China

Level 18, Building B, Fortune Plaza 53 Beizhan Road Shenhe District, Shenyang Liaoning Province, China 110016

Australia

Level 29 2 Chifley Square Sydney, NSW 2000

66 ASTRON LIMITED ANNUAL REPORT 2011

Declaration by directors

FOR THE YEAR ENDED 30 JUNE 2011

The Directors of the company declare that:

The financial statements, comprising the consolidated statement of comprehensive income, consolidated statement of financial position, consolidated statement of cash flows, consolidated statement of changes in equity, accompanying notes, are in accordance with the Corporations Act 2001 and:
a. comply with Accounting Standards and the Corporations Regulations 2001; and
b. give a true and fair view of the consolidated entity’s financial position as at 30 June 2011 and of its performance for the year ended on that date.
The company has included in the notes to the financial statements an explicit and unreserved statement of compliance with International Financial Reporting Standards.
In the Directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
The remuneration disclosures included in pages 25 to 28 of the Directors’ report (as part of audited Remuneration Report), for the year ended 30 June 2011, comply with section 300A of the Corporations Act 2001.
The Directors have been given the declarations by the chief executive officer and chief financial officer required by section 295A.

This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the Directors by:

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GA King DIRECTOR

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AG Brown DIRECTOR

Sydney, 21st September 2011

ASTRON LIMITED ANNUAL REPORT 2011 67

Independent auditor’s report

TO THE MEMBERS OF ASTRON LIMITED

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INDEPENDENT AUDITOR’S REPORT To the members of Astron Limited

Report on the Financial Report

We have audited the accompanying financial report of Astron Limited, which comprises the consolidated statement of financial position as at 30 June 2011, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements , that the financial statements comply with International Financial Reporting Standards .

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of Astron Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.

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68 ASTRON LIMITED ANNUAL REPORT 2011

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Opinion

In our opinion:

a. the financial report of Astron Limited is in accordance with the Corporations Act 2001 , including:
i. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2011 and of its performance for the year ended on that date; and
ii. complying with Australian Accounting Standards and the Corporations Regulations 2001 ; and
b. the financial report also complies with International Financial Reporting Standards as disclosed in Note 2.

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 25 to 28 of the directors’ report for the year ended 30 June 2011. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Opinion

In our opinion, the Remuneration Report of Astron Limited for the year ended 30 June 2011 complies with section 300A of the Corporations Act 2001.

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BDO Audit (NSW‑VIC) Pty Ltd

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Jeff Abela

DIRECTOR

Sydney, dated this 21[st] day of September 2011.

ASTRON LIMITED ANNUAL REPORT 2011 69

Investor information

2011/12 Financial Calendar (on or before)

Release ofquarterlyreport	28 October 2011
2011 Annualgeneral meeting	17 November 2011
Release ofquarterlyreport	27 January2012
Release of halfyear report	24 February2012
Release ofquarterlyreport	27 April 2012
Release of Appendix 4E	24 August 2012

Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this report is as follows. The information is current as at 20 September 2011.

Shareholders’ interests

a. Distribution of equity securities

The number of shareholders by size of holding in each class of share are:

			% OF ISSUED
RANGE	TOTAL HOLDERS	UNITS	CAPITAL
1 – 1,000	192	83,412	0.13
1,001 – 5,000	220	587,940	0.94
5,001 – 10,000	79	576,383	0.93
10,001 – 100,000	118	3,212,455	5.16
100,001 – 9,999,999,999	26	57,834,176	92.84
Total	635	62,294,366	100.00
Unmarketable Parcels
	MINIMUM PARCEL
	SIZE	HOLDERS	UNITS
Minimum $ 500.00parcel at $ 3.00per unit	167	39	1,073

70 ASTRON LIMITED ANNUAL REPORT 2011

b. Twenty largest shareholders

The twenty largest shareholders are as follows:

RANK	NAME	NAME	UNITS	% OF UNITS
1.	FIRBACK FINANCE LIMITED		27,866,296	44.73
2.	P T ARAFUA MINING LIMITED		16,180,972	25.98
3.	FSC INVESTMENT HOLDINGS LTD		3,718,546	5.97
4.	JUHUA INTERNATIONAL LIMITED		2,000,000	3.21
5.	QUERION PTY LTD		1,613,408	2.59
6.	GCC ASSET HOLDINGS PTY LTD		1,292,250	2.07
7.	COMBINED OIL & GAS PTY LTD		1,000,000	1.61
8.	ABN AMRO CLEARING SYDNEY NOMINEES PTY LTD		691,005	1.11
9.	MR DARRELL VAUGHAN MANTON + MRS VERONICA JOSEPHINE MANTON		466,682	0.75
10.	MR DONALD ALEXANDER BLACK		361,014	0.58
11.	FYLPANE PTY LTD		326,995	0.52
12.	MR ADRIAN ROBERT NIJMAN + MRS JENNY ANN NIJMAN		250,000	0.40
13.	NITCO PTY LIMITED		208,304	0.33
14.	ELLROCK PTY LTD		200,000	0.32
15.	COGNITION AUSTRALIA PTY LTD		190,734	0.31
16.	NAVIGATOR AUSTRALIA LTD		188,060	0.30
17.	3RD PULITANO INCORPORATION PTY LTD		164,372	0.26
18.	BRESRIM PTY LTD		164,171	0.26
19.	MR PETER HENRY HAWKINS + MRS ANN HAWKINS		154,200	0.25
20.	DFC MANAGEMENT PTY LTD		150,000	0.24
Top 20	holders of ORDINARY SHARES		57,187,009	91.79
Total Remaining Holders Balance			5,107,357	8.21
TOTAL		ORDINARY SHARES	62,294,366	100.00

c. Voting rights

All ordinary shares (whether fully paid or not) carry one vote per share without restriction.

d. Schedule of interests in mining tenements

		PERCENTAGE
LOCATION	TENEMENT	HELD
Victoria Australia	EL4432	100
Victoria Australia	EL4433	100
Victoria Australia	EL5255	100
Victoria Australia	EL5263	100
Victoria Australia	EL5353	100
Victoria Australia	EL5186	100
Victoria Australia	EL5261	100
Victoria Australia	EL5262	100
Victoria Australia	EL5354	100
Victoria Australia	MIN5532	100

Information policy

It is the policy of the Company to conform with the highest reporting and information standards to its shareholders. Company spokespeople are available and pleased to respond to queries from financial community, investors and shareholders.

During the year, the Company held one shareholder meeting and at the meeting active discussions took place and questions were answered.

All these initiatives will continue to be improved and expanded in the coming year with the objective of providing the fullest and most detailed information to shareholders consistent with the Company’s objectives.

Information on the group and presentations to analysts can be obtained from the Company’s Website www.astronlimited.com.

To assist and improve service to shareholders related to the administration of the fully registered shares shareholders can contact our share registry service.

Shareholders can also contact the Company directly by telephone in Australia +61 2 9375 2361

ASTRON LIMITED ANNUAL REPORT 2011 71

Investor information continued

Salient financials

Salient fnancials
30 JUNE	2011	2010	2009	2008	2007	2006	2005	2004
Shareprice	3.1	1.9	1.8	2.1	2.6	3.1	3.0	2.7
EPS(Overall)	1.4	1.8	(3.9)	178.0	0.2	0.4	0.5	0.3
Price Earnings Ratio	221.4	105.6	n/a	n/a	13.7	8.9	6.6	8.9
Interest Cover	n/a	n/a	n/a	115.0	12.6	n/a	135.0	26.7
No of shares on issue(m)	62.3	64.2	64.8	64.7	60.4	58.3	57.6	57.6
Proft and Loss
Revenue	20.5	15.3	10.6	204.2	181.7	151.9	140.7	104.9
Costs	(17.0)	(12.2)	(9.9)	(87.4)	(164.5)	(130.5)	(112.4)	(87.8)
EBITDA	3.5	3.1	0.7	116.8	17.2	21.4	28.3	17.1
Depreciation & Amortisation	(0.4)	(0.3)	(0.3)	(2.9)	(2.1)	(1.8)	(1.3)	(1.1)
EBIT	3.1	2.8	0.4	113.9	15.1	19.6	27.0	16.0
BorrowingCosts	–	(0.1)	–	(1.0)	(1.2)	–	(0.2)	(0.6)
NPBT	3.1	2.7	0.4	112.9	13.9	19.6	26.8	15.4
Income tax expenses	(2.2)	(1.5)	(2.9)	(1.0)	(2.5)	1.0	(0.7)	(0.2)
NPAT	0.9	1.2	(2.5)	111.9	11.4	20.6	26.1	15.2
Balance Sheet
Cash & Term deposits	147.4	166.5	168.8	185.6	15.9	20.8	13.4	15.6
Receivables	7.5	2.6	2.5	8.4	29.7	21.5	16.7	12.4
Inventories	3.7	1.3	2.9	3.4	50.0	28.6	25.9	20.3
Other Financial Assets	2.5	0.7	1.1	–	6.1	8.3	–	–
Total Current Assets	161.1	171.1	175.3	197.4	101.7	79.2	56.0	48.3
Property,Plant & Equipment	12.4	11.4	9.0	6.6	21.7	21.1	14.9	12.6
Investments	–	–	–	–	2.2	–	6.6	14.1
Intangible assets	27.0	21.8	20.4	19.9	24.6	18.3	15.4	–
Land use rights	8.3	10.0	10.8	9.0	–	0.3	0.5	1.9
Deferred Tax Assets	–	–	–	–	0.7	1.1	–	–
Total Non Current Assets	47.7	43.2	40.2	35.5	49.2	40.8	37.4	28.6
TOTAL ASSETS	208.8	214.3	215.5	232.9	150.9	120.0	93.4	77.0
Payables	2.2	1.5	1.8	21.0	31.9	20.6	20.2	17.5
Borrowings	–	–	–	–	13.6	3.5	–	9.1
Tax Liabilities	0.2	0.2	0.9	–	0.3	0.1	1.4	1.4
Total Current Liabilities	2.4	1.7	2.7	21.0	45.8	24.2	21.6	28.1
Deferred Tax	4.6	2.9	1.6	–	1.1	1.1	–	–
Total Non‑Current Liabilities	4.6	2.9	1.6	–	1.1	1.1	–	–
Total liabilities	7.0	4.6	4.3	21.0	46.9	25.3	21.6	–
NET ASSETS	201.8	209.7	211.2	211.9	104.0	94.7	71.8	48.9
Cash fows
OperatingActivities	(1.5)	4.0	0.8	27.3	(6.5)	15.0	19.5	17.7
InvestingActivities	(17.9)	(57.8)	(13.5)	157.6	(12.7)	(7.2)	(12.6)	(6.0)
FinancingActivities	(5.1)	(1.2)	(6.2)	(8.9)	9.9	(1.0)	(8.3)	(1.5)

72 ASTRON LIMITED ANNUAL REPORT 2011

Corporate information

Aston Limited ABN 97 000 285 272

Directors

Mr Gerard King (Chairman) Mr Alexander Brown (Managing Director) Mr Robert Flew (Non executive Director) Mr Ronald McCullough (Non executive Director) Mdm Kang Rong (Executive Director)

Company Secretary

Mr Mark Nielsen

Registered Office

Level 19, 2 Market Street Sydney 2000 Australia

Australian Business Office

Level 29, 2 Chifley Square Sydney 2000 Australia Telephone: 61 2 9375 2361 Fax: 61 2 9375 2121

China Business Office

c/ Yingkou Astron Mineral Resources Co Ltd Level 18, Building B, Fortune Plaza 53 Beizhan Road, Shenhe District, Shenyang Liaoning Province, China 110016 Telephone: 86 24 3128 6222 Fax: 86 24 3128 6222

Bankers

Commonwealth Bank of Australia 48 Martin Place Sydney NSW 2000

Share Registrar

Computershare Investor Services Limited Level 3, 60 Carrington Street Sydney NSW 2001 Telephone: 61 2 8234 5000

Auditors

BDO Audit (NSW-VIC) Pty Ltd Level 19, 2 Market Street Sydney NSW 2000

Internet Address

www.astronlimited.com

==> picture [596 x 842] intentionally omitted <==

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

22 2 40 2 ATOMIC VALENCE
8 8 NUMBER NO. OF
10 18 ELECTRONS
2 10 PER SHELL
2
CHEMICAL
Ti Zr SYMBOL
Titanium Zirconium
ATOMIC
47.867 91.224 MASS
----- End of picture text -----

AI assistant

ASTRON LIMITED — Annual Report 2011

64449_rns_2011-10-16_0eb378fc-9ca1-48ae-a402-9f1bc58aa523.pdf

Astron Annual Report 2011

Contents

Astron’s uniqueness

A company on the move

Donald mineral sands project

China

History of Astron

2011: mineral sands supply became critical

2011: Astron highlights

Financial performance

Mining Australia

Projects China

2012 Outlook

Breakdown of asset values per share

Zircon

Zircon applications

Titanium materials

Titanium chemicals

Titanium metal

Rare earths

TIO2 applications

A warm thank you to all our shareholders for your continued support during the current year.

Donald mineral sands project

Approvals

Designs

Geology

China – Product processing development

Senegal

Future outlook is exciting

Donald mineral sands project

Financial update

Mark Nielsen

A serious approach to sustainable development

Employees and other stakeholders

Local communities

Health and safety

Environment

The Board of Directors

Corporate Governance Policy

1. Board of Directors

1.1 Role of the Board

1.2 Composition of the Board

1.3 Responsibilities of the Board

1.4 Board Policies

1.4.1 Conflicts of Interest

1.4.2 Commitments

1.4.3 Confidentiality

1.4.4 Continuous Disclosure

1.5 Education and Induction

1.6 Independent Professional Advice

1.7 Related Party Transactions

1.8 Shareholder Communication

1.9 Trading in Company Shares

1.10 Performance Review/Evaluation

1.11 Attestations by Chairman and Non Executive Director

2. Board Committees

2.1 Audit and Finance Committee

2.1.1 Role

2.1.2 Responsibilities

2.1.3 Risk Management Policies

2.2 Code of Conduct

2.3 Remuneration Committee

2.3.1 Role

2.3.2 Responsibilities

2.3.3 Remuneration Policy

2.3.3.1 Senior Executive Remuneration Policy

2.3.3.2 Non-Executive Director Remuneration Policy

2.3.4 Current Director Remuneration

2.4 Nomination Committee

2.4.1 Role

2.4.2 Responsibilities

2.4.3 Criteria for selection of Directors

Directors

Names

Principal Activities

Financial Position

Dividends

ASTRON LIMITED Annual Report 2011