Positioning for growth

Annual Report

2013

02 Key objectives and outlook

04 Chairman’s report

05 Managing Director’s report

09 Sustainable development

10 Corporate governance

16 Financial statements

78 Corporate directory

Cautionary statement

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.

Competent Person’s Statement

The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Dr Boris Matveev, who is a Member of The Australian Institute of Geoscientists. Dr Matveev is a full-time employee of Astron Ltd and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resource and Ore Reserves’. Dr Matveev consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

“Completion of the DFS for the Donald Project is a significant milestone in Astron developing Donald as a world-class mineral sands asset. The DFS gives us a clear pathway to pursue Astron’s growth for all shareholders. Backed by Astron’s Chinese track record and R&D facilities, we look forward to taking the Donald Project to the next step.” Alex Brown, Managing Director

About Astron

Astron Corporation Ltd (“Astron”) is domiciled in Hong Kong and listed on the ASX. Astron is a zircon and titanium mineral sands focused business.

Astron’s main focus is developing its two wholly owned mineral sands projects, the Donald Project in Australia and the Niafarang Project in Senegal. Astron has spent a considerable part of the last year completing the definitive feasibility study for the Donald Project.

The Donald Project is in Australia’s Murray basin, and is a tier 1 zirconium and titanium project. The definitive feasibility study sets out a plan for stages 1a and 1b, with initial production of 475ktpa heavy mineral concentrate production (Stage 1a) ramping up to 950ktpa HMC (Stage 1b) (subject to appropriate approvals) over a period of the next four years. The Donald Project is one of the largest known zircon and titanium resources in the world.

The Niafarang Project in Senegal, West Africa, is a large coastal mineral sands high-grade deposit, to be exploited using simple dredge mining and processing method. Astron is currently undertaking further work on the application for a mining licence for the Niafarang Project.

Astron has continued to build on its unique 25 year track record in China as a ChineseAustralian company in developing, selling and marketing zirconium and titanium products. Astron has significant research and technology capabilities in titanium and zirconium metal and chemical processes. Astron continues its Chinese mineral sands trading business to maintain close relationships with all of its key customers. Astron continues to develop its technical capabilities of producing zircon and titanium metals and chemicals, and at the same time maintaining a strong balance sheet with the cash and cash equivalents holding of about $108 million.

Astron is also considering other projects, including investigating possibilities in the United States of America. Astron will separately announce if any prospective projects are identified for further investigation.

As Astron is incorporated in Hong Kong, it is not subject to chapters 6, 6A, 6B and 6C of the Corporations Act dealing with the acquisition of its shares or CDIs (including substantial holdings and takeovers).

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 1

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Astron Shenyang Astron Yingkou Astron Corporation Niafarang Limited Hong Kong (Senegal) Astron Corporate Office Sydney Donald Mineral Sands

Key objectives and outlook

Astron’s key objectives for the next 12 months are focusing on developing the Donald Project and the Niafarang Project. This includes arranging funding and EPCM contracts for the Donald Project, and any contract mining arrangements for the Niafarang Project. Astron’s Chinese activities will be focused on marketing, developing markets for the Donald and Niafarang Projects and ongoing research and development. Astron will also consider any other opportunities.

revenue

cash

NAV share (c) Revenue ($) Profit/loss before tax ($)

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$million $million
163 25 4
$3,096m
162.5 162.4 $20,993m $20,489m 3
20 2
162 161.9 1
$0.071m
15 0
161.5 $12,970m
-1
161 10 -2
160.6
160.5 -3
5 -4
160
-5
159.5 0 -6 $5,450m
2013 2012 2011 2013 2012 2011 2013 2012 2011
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2 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

Highlights

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The Niafarang Project, in Senegal, has issued the proven ore reserve. Further work is continuing for the application for a mining licence for the Niafarang Project, which is anticipated later this year.
Astron has commenced an investor relations and fund raising program for the Donald Project, including appointment of financial advisers. Astron has also undertaken further land purchases for the Donald Project.
Astron’s expenditure has been focused on developing the Donald Project, the Niafarang Project and continued research and development.
Astron continued its trading activities in China, but at subdued levels due to price declines, resulting in a loss for the period.

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NAV per share

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Asset value per share (cps) Share price
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Share Price (A$) Volume
1.5 350000
Cash
26500
Land 1.2
Net current
assets & PPE 175000
Donald and 0.9
Niafarang 87500
Land use
rights
0.6 JUL12 AUG12 SEP12 OCT12 NOV12 DEC12 JAN13 FEB13 MAR13 APR13 MAY13 JUN13 0
Last Close Volume
ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 3
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Chairman’s report

“Announcement of a definitive feasibility study for our Donald Mineral Sands Project”

Dear Shareholder,

Astron remained focused during the year on the development of the Donald Project in Victoria, Australia as well as progressing operations in China and Senegal.

Astron recently achieved a key milestone with announcement of a definitive feasibility study (DFS) for our Donald Project. This DFS sets out a detailed plan for development of the Donald Project. This follows on from announcing proven ore reserves for the Donald Project and sign off by experts regarding the zircon washing process and the feasibility and capability for reducing impurities in zircon from the Donald Project.

As part of this process, Astron appointed financial advisers to assist in fundraising for the development of the Donald Project. Astron continues to work with its financial advisers for this fundraising process. Astron has also continued with its land purchases for the Donald Project.

We also announced an updated ore reserve for our Niafarang Project in Senegal. This project should enable the group to generate cash flow before the completion of the construction of the Donald Project. Further work is being undertaken in relation to the application for a mining licence for the Niafarang Project.

Our other focus has been in the research and development of new production processes for the manufacturing of advanced chemicals and metals. We are currently investigating new technologies to produce lower cost metals and chemicals.

Finally, I provide an updated financial report on Astron’s performance during the year. Astron’s net asset value per share decreased marginally to 160.6 cents. The group generated $12,969,611 in revenue during the year, a 38% decrease from the previous year, which resulted in a loss the year of $5,465,643.

During the coming year, we will remain focused on developing our mineral sands mining assets, with a particular focus on fundraising activity for the Donald Project, and continuing the work done on developing processes to produce low-cost high-quality zircon and titanium chemicals and metals.

Together with Astron’s other board members, I thank you for your continued support as a shareholder.

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Gerard King CHAIRMAN 17 October 2013

4 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

Managing Director’s report

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“Now that the DFS for the Donald Project has been completed, Astron and its financial advisers are focusing on achieving a positive funding outcome for the Donald Project”

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This financial year has been both a challenging and a successful one for Astron. Pleasingly, Astron has delivered on its plans to progress its Donald Project by announcing its definitive feasibility study and has also updated its proven reserve for its Niafarang Project. The Group had a loss of $5.465 million from operating activities which was due primarily to poorer trading conditions, additional capital expenditure and increased remuneration during the financial year. At 30 June 2013, the Group had $108,123,735 of cash on its statement of financial position.

Definitive feasibility study (DFS) for Donald Project

The company has been working on the DFS for the Donald Project for some time. The DFS was initially prepared for a predominantly Australia built process plant with the MUP, WCP, CUP and MSP located in Australia, with only the ZWP to be located in China. The opportunity to potentially reduce costs and increase revenue was identified, which lead to the DFS being reconsidered for further study. As a result further work was undertaken regarding moving the CUP and MSP to China to consider the cost and revenue impact.

ACTIVITIES IN VICTORIA AND THE DONALD PROJECT

As part of this work, the study in relation to the relocation of the CUP and MSP to China identified Putian, Fujian province as the most appropriate site, particularly given the development of a new port precinct. The plan evolved such that all HMC would be transported to China and processed into final products. This had the benefit of introducing two new products, being magnetic and nonmagnetic tailings. Further, off-take agreements confirmed that the revenue realised from the sale of these additional products would more than account for the increase in transport costs. Further savings were realised with reduced capital and operating costs. The capital cost savings were realised with all major plant being designed and manufactured in China.

Zircon wash process

Donald Mineral Sands has had success with the Zircon Wash Plant (ZWP) test using a batch reactor acid leach process. This included obtaining competent person sign off for this process. The batch process required a demonstration plant to be constructed to prove that the engineering for the batch reactors was achievable. Astron then embarked on a rotary kiln acid leach process plant test trial with bench scale and then pilot plant rotary kiln acid leach plants being built. The results were successful and the continuous process produced a premium grade product (with less than 500ppm Uranium and Thorium in the final Zircon product). Competent person sign off was given and because rotary kiln technology is well developed the requirement for a demonstration plant was satisfied.

As part of the DFS, SRK were engaged as independent technical experts to do a technical review of the project and sign an independent report. SRK’s report confirmed the improved economics of the DFS referred to above based on the assumptions contained in the DFS.

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 5

Managing Director’s report continued

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“Astron’s unique Chinese track record and R&D focus have allowed optimisation of technical processes and ongoing market development for products from the Donald Project”

Jackson and regional exploration

Infill drilling on the Jackson Deposit was undertaken during early 2013. The purpose of this was to further define the mineralisation zone, with the aim to upgrade a large portion of the current Inferred mineral resource at the Jackson Deposit to an Indicated mineral resource category. This will allow for further feasibility and mine planning works to be undertaken with the increase in geological knowledge gained from drilling. 136 holes for 3,810 meters were drilled with no safety incidents. The assaying of the drill samples continues along with geological interpretation of the results.

Exploration drilling on the Company’s tenements neighbouring Donald and Jackson was undertaken in January 2013. 152 holes for 3,204 meters were drilled with no safety incidents. All substantial mineralisation intercepts encountered during that drilling program are being interpreted to further delineate areas of high prospectivity. This drilling has also provided Astron with information to assist in mandatory relinquishment as required.

Metallurgical test work

Metallurgical test work has been conducted to compare the performance of a number of spirals including the Chinese Alicoco spiral. This test established that the Chinese spiral (which are lower cost) had very similar performance characteristics to more costly Australia built spirals and offered an opportunity to reduce costs, whilst maintaining recoveries. These test results were confirmed by test work done in Guanzhou, China by the Guangzhou Non-ferrous Metal Research Institute.

Metallurgical tests to firm up the engineering parameters for the project were managed by Robbins Metallurgical, which enables design to be carried out for our specific ore type.

Land

Astron purchased a further three parcels of land with a total area of 1280 acres for $1.69M during the financial year. One of the parcels is located within the mining licence area and provides the location for the processing plant, while the other parcels are near the mining licence area.

Regulatory & Approvals

Astron has largely completed a draft Cultural Heritage Management Plan and Work Plan. The Cultural Heritage Management Plan must be submitted to Aboriginal Affairs Victoria (AAV) for approval once complete. The work plan can then be submitted to the Victorian State Government Department of State Development and Business Innovation (DSDBI). Further work is required to finalise these plans for submission and subsequent approval once mining development plans are completed

UPDATE ON ACTIVITIES OF PROJECT DEPARTMENT

After many visits and study of a number of potential sites, Astron has decided to build the MSP for Donald Project at Meizhou Bay industry park Putian, Fujian Province, China. Astron is currently negotiating the terms including the land price and supporting facilities with the Putian Government. Astron is concurrently undertaking the preparatory work for the environmental assessment.

6 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

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The Chinese side of the DFS was conducted by the Guangzhou Non-ferrous Metal Research Institute, which carried out verification tests of the entire process to be undertaken in China. The results of this process were positive and provided a convincing report for local Chinese investors.

Astron further developed the beneficiation process for the WCP and set up a pilot plant in Hainan Province China. This process is currently being commissioned.

The Project Department has been focusing on assisting other parts of Astron with each of the major projects currently underway. This includes working on the optimisation on capital expenditure and equipment selection for the Donald Project, assisting the project team in Senegal with selecting mining contractors and other candidates, and assisting in search for strategic partners in developing the titanium pigment project.

SUMMARY OF RUTILE TRADING FOR THE FINANCIAL YEAR

Rutile market summary

Based on performance by foreign companies and Chinese suppliers, the price of 95% rutile rose in the second half of 2011. In April 2012 the price peaked, and from that time the price has fallen. The price was stable in the period between May to October 2012, however it has continued to fall from November 2012 to the end of the financial year. Astron had purchased rutile at relatively high prices and has been seeking to trade products, however this has led to a trading loss given the continued decline in pricing.

In Astron’s view, since the second half of 2012, the main factors leading to the rutile sales decline relate to oversupply of the product.

Figure 1: Specifications of Rutile sales distribution

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Rutile 95 [%]
Rutile 94 [%]
Rutile 92 [%]
Rutile 90 [%]
Rutile 87 [%]
Rutile 85 [%]
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This has included entry into the Chinese market from Ukraine and Sierra Leone and higher production from the traders and processing factories. Coupled with activity from Astron’s competitors and issues with the Chinese domestic market, this has led to a continued decline in demand, with no opportunity for a rebound in demand.

In Astron’s view, the short-term rutile market is still very difficult and continues to weaken. This is due to unseasonably hot weather in southern China and the solder wire production companies suspending operation or slashing production. However, Astron does expect that the market to stabilise after October 2013.

Financial performance

As at 30 June 2013, the Astron Group had a net asset value of $196,653,014 or $1.60 per share. Around $0.88 of this amount is cash. It is important to recognise that the net asset value of $1.60 per share is based on a book value for the Donald and Niafarang Projects,

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 7

Managing Director’s report continued

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which does not take any account of comparable valuations of other mineral sands projects.

Total revenue comprising sales, interest received and other income decreased from the prior year by 38% to $12,969,611. This was mainly due to the substantial reduction in interest rates and lower trading volume and prices.

The decrease in inventory and payables is attributed to lower sales activity in the 2013 financial year. Available-for-sale financial assets comprise shares in South American Iron & Steel, Altona Mining, Zambezi Resources and Greenpower Energy. The combined market value of these investments has decreased by $1,000,578 from 30 June 2012. This decrease has been debited to the financial assets available-for-sale reserve in the consolidated statement of financial position and impairment of available-for-sale financial assets expense account in the consolidated statement of profit and other comprehensive income.

The increase in property, plant and equipment arises from land purchases at the Donald Project. The increase in intangible assets arises from development expenditure capitalised in respect of the Donald and Niafarang Projects.

The marginal decrease in the net asset value from 162.4cps at 30 June 2012 to 160.6cps at 30 June 2013 results from appreciation of the Chinese Renminbi against the Australian Dollar and the related conversion of the Chinese assets to Australian Dollars at 30 June 2013 but this is offset by the comprehensive losses for the year to 30 June 2013.

these projects, there are some that may be worth pursuing further. Once a decision is made by Astron regarding any of these projects we will announce the scope of further study and the prospects regarding the project.

THE YEAR AHEAD

For the coming year, Astron will be focused on the financing of the Donald Project in Victoria by working with its financial advisers, bringing the Niafarang Project in Senegal closer towards production by obtaining a mining licence and commencing contract mining and continuing development of our research capability for zircon and titanium metals in China.

During the financial year, the Chief Executive Officer and Chief Financial Officer departed. Since those departures, the executive directors of Astron have been covering the roles previously performed by those executive officers. Astron continues to monitor its staffing levels and is considering its long-term structure in light of those departures, and other requirements. It has not yet been determined whether any change to Astron’s structure will be implemented and this is a matter currently being considered by the Board.

Finally, I thank my team at Astron for their continued support, hard work and enthusiasm and I look forward to entering an exciting new phase with you.

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OTHER OPPORTUNITIES

Astron has identified a strategy to consider other projects. It is currently identifying a number of possible projects in the USA that appear to be worthy of further investigation. While no firm decision has been made in respect of any of

Alex Brown

MANAGING DIRECTOR 17 October 2013

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

Sustainable development

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EMPLOYEES AND OTHER STAKEHOLDERS

Astron Group currently has 71 employees. We take our responsibility to our staff seriously through our human resources policies.

Astron’s HR policies demonstrate care and concern for our staff and their training, development and happiness, as well as 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 performancerelated bonus which is determined by pre-agreed individual and team objectives. Profit-sharing and other bonuses relating to team contribution and the overall performance of the Astron Group are paid according to policy.

Astron’s programs are designed to encourage a young generation of local managers to gain experience quickly and to quickly provide real prospects of a satisfying and rewarding management position. Accordingly, Astron is a young person’s company – dynamic, vibrant, and enthusiastic.

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

LOCAL COMMUNITIES

Astron is committed to bringing positive change to the communities surrounding its mining operations. Astron’s Donald Project has been planned in close consultation with the local community to provide significant economic and social benefits to the community. Astron is also in the process of planning a community fruit farming initiative in Senegal, nearby Astron’s Niafarang Project. The social impact of the Niafarang Project and acceptance of it has been the focus point during the year, in particular by focusing on communication strategies and information drives on small groups. The social campaign completion should coincide with the mining licence process. The EIA and EMP have been approved by the environmental technical team.

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.

The Group is totally committed to continuing environmental vigilance and improved systems, controls and results such as the minimisation of all kinds of waste from mining and downstreaming processes.

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 9

Corporate governance

THE BOARD OF DIRECTORS

1. BOARD OF DIRECTORS

The Board of Directors of Astron Corporation 1.1 Role of the Board 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’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 annually in accordance with Principle 1.2 and by way of both regular and annual performance review meetings. Annual performance reviews have occurred during the current reporting period in accordance with this process.

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/President)
Mdm Kang Rong (Executive)

Details of the qualifications and experience of each of the above Directors are available in the Directors’ report.

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.

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

1.2 Composition of the Board

CORPORATE GOVERNANCE POLICY

Astron Corporation Limited (“the Company”) 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 (“Principles”). The Company is pleased to advise that the Company’s practices are largely consistent with those Principles. As gaining consistency with the Principles 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 Principles, the Company is working towards compliance. However, it does not consider that all the Principles are appropriate for the Company due to the size and scale of the Company’s operations.

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 the 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 Principles 2.2 and 2.3). All Non-Executive Directors are Independent Directors (meaning a majority of the Board are independent Directors in accordance with Principle 2.1) as they meet the following criteria for independence adopted by the Company:

10 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

An Independent Director is a Non-Executive 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.
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.
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.
Ensuring the Health, Safety and Well-Being 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-to-day management of the Company and establishing and determining the powers and functions of the Committees of the Board.

1.4 Board Policies

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 Principle 1.1 include the following:

Leadership of the Organisation: overseeing the Company and 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 ensure that there are policies in place to govern the operation of the Company.

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 Hong Kong Companies Ordinance, absent himself or herself from the room when discussion and/or voting occurs on matters about which the conflict relates.
Overseeing Planning Activities: the development of the Company’s strategic plan.

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 11

Corporate governance continued

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 information received in the course of the exercise of their duties confidential 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 Principle 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 or 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;
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 Hong Kong Companies Ordinance from the requirement to obtain shareholder approval for the related party transaction, the Board cannot approve the transaction.

12 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

1.8 Shareholder Communication

The Company respects the rights of its shareholders. To facilitate the effective exercise of those rights (including under Principle 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, including by making a broadcast of the meetings by video-screening available for shareholders in Australia to observe the meeting where general meetings are held outside of Australia; 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.

1.11 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. The Audit and Finance Committee has a formal charter. Below is a summary of the role and responsibilities of the Audit and Finance Committee.

2.1.1 Role

The Audit and Finance Committee, established in accordance with Principle 4.1 and structured in accordance with Principle 4.2, is responsible for reviewing the integrity of the Company’s financial reporting and overseeing the independence of the external auditors. Mr Robert Flew is the chairman of the Audit and Finance Committee.

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 blackout 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. Blackout 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 Principle 2.5. The objective of this evaluation will be to provide best practice corporate governance to the Company. The Board has conducted a review during the relevant financial year and that review confirmed compliance with the stated objectives.

2.1.2 Responsibilities

The Audit and Finance Committee reviews the 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, their process for rotation of audit engagement partners and any questions of resignation or dismissal.

The Audit and Finance Committee is also responsible for establishing policies on risk oversight and management.

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 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. Under Principles 7.1 and 7.2, the Company has established policies for the oversight and management of material business

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 13

Corporate governance continued

risks, and management has internal control system to manage the Company’s material business risks and report 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. The monthly management reports include a report on the effectiveness of the Company’s risk management processes. The Board also receives an annual assurance from the managing director and any chief financial officer to the effect that in their opinion the Company’s financial records and financial statements comply with the accounting standards and give a true and fair view of the Company’s financial position, that the basis of their view is founded on a sound system of risk management and internal controls, and that such system is operating effectively in all material respects in relation to risks associated with financial reporting.

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 Principle 3.4, the Company notes that out of two (2) Executive Directors, one (1) is female. In accordance with Principles 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 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.

2.3.2 Responsibilities

2.2 Code of Conduct

The Company has developed a statement of values and a Code of Conduct (the Code) in accordance with Principle 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 behavior 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.

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.

The responsibilities of the 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 goals with the Managing Director and reviewing progress in achieving those goals. The structure of Non-Executive Directors’, Executive Directors’ and senior executives’ remuneration is set in accordance with Principle 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 marketcompetitive and consistent with best practice as well as supporting the interests of shareholders. Consequently, under the Senior Executive

14 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

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 of performance objectives by the individual 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–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.

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 5 members, notwithstanding Principle 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 the 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. In relation to the procedure for re-election of incumbent directors, the Nomination Committee considers the incumbent director’s performance against the current criteria for selection of directors, to ensure that the incumbent is still an appropriate candidate for the role. 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

Non-Executive Directors are entitled to but not necessarily paid statutory superannuation. The Non-Executive Directors are not entitled to any other retirement benefits.

2.3.4 Current Director Remuneration

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

None of the Directors have any unvested entitlements in relation to any equity securities in the Company, so there is no need to prohibit Directors from transactions in relation to unvested entitlements.

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 15

Astron Corporation Limited Company Number: 1687414 Annual Financial statements

for the year ended 30 June 2013

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17 Directors’ report

27 Auditor’s independence declaration

28 Consolidated statement of Profit or Loss and other comprehensive income
30 Consolidated statement of financial position
31 Consolidated statement of changes in equity

32 Consolidated statement of cash flows

33 Notes to the financial statements

71 Declaration by directors

72 Independent audit report
74 Investor information
78 Corporate information

16 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

Directors’ Report

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The Directors of Astron Corporation Limited (the ‘Company’) present their report on the consolidated entity (‘Group’ or ‘Astron’), consisting of Astron Corporation Limited and the entities it controlled at the end of, and during, the financial year ended 30 June 2013.

DIRECTORS

The following persons were Directors of Astron Corporation Limited for part of the financial year and up to the date of this report:

NAMES

Mr. Gerard King (Appointed 6 December 2011) Mr. Alexander Brown (Appointed 6 December 2011) Mr. Robert Flew (Appointed 31 January 2012) Mr. Ronald McCullough (Appointed 31 January 2012) Mdm. Kang Rong (Appointed 31 January 2012)

PRINCIPAL ACTIVITIES

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

Evaluation and development of the Donald mineral sands mining and processing project (Donald or Donald Project)
Evaluation and development of the Niafarang mineral sands mining processing project (Niafarang)
Evaluation and development of downstream applications for zircon and titanium
Titanium based materials trading

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

SIGNIFICANT CHANGES TO GROUP STRUCTURE

There have been no significant changes to the Astron group structure in the financial year ending 30 June 2013.

FINANCIAL POSITION

The net assets of the Group have decreased to $196,653,014 a decrease of $2,287,995 from 2012. The net assets have been affected by:

Decrease in value of financial assets available for sale of $701,466
Increase in the values of foreign controlled assets of $4,004,364
Decrease in share based payment reserve of $125,250
Net loss for the year of $5,465,643

DIVIDENDS

No final dividend was proposed for the current financial year or the year ended 30 June 2012.

REVIEW OF OPERATIONS

Financials

Consolidated Statement of Profit or Loss and other Comprehensive Income

Total revenue comprising sales, interest received and other income decreased from the prior year by 38% to $12,969,611. This is largely due to poorer trading conditions and substantial reduction in interest rates on our cash fund.
Gross margins from the trading business decreased from 35% to (5)% due to market condition in the second half of financial year. The higher volume of inventory bought at the close of the first half of financial year in anticipation of a price rebound that did not eventuate.
Administration expenditure increased by $829,608 to $8,333,938. This increase can be explained mainly due to Senegal expenditure of $446,739 being written off, and increase of remuneration of key management personnel for the year.
Costs associated with Gambia litigation comprise legal fees and associated advisors’ costs and costs pertaining to expert witnesses.

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 17

Directors’ report continued

Consolidated Statement of Financial Position

The decrease in inventories and payables is attributed to lower sales activity in the 2013 financial year.
Available for sale financial assets comprise shares in South American Iron & Steel, Altona Mining, Zambezi Resources and Greenpower Energy. The combined market value of these investments has decreased by $1,000,578 from 30 June 2012. This decrease has been debited to the financial assets available-for-sale reserve in the consolidated statement of financial position and impairment of available-for-sale financial assets expense account in the consolidated statement of profit or loss and other comprehensive income.
The increase in property, plant and equipment arises from further land purchases at the Donald Project.
The increase in intangible assets arises from further development expenditure capitalised in respect of the Donald and Niafarang Projects.
Land use rights comprise 50 year land use leases. These leases are capitalised and amortised over the 50 year period.
With the resignation of the CEO, the balance of the share-based payment reserve has been credited back to income, as management has assessed that the probability of those options not forfeited by the CEO on his departure have a 0% probability of vesting.
The marginal decrease in the net asset value from 162.4cps at 30 June 2012 to 160.6cps at 30 June 2013 results mainly from appreciation of the Chinese Reminbi against the Australian Dollar and the related conversion of the Chinese assets to Australian Dollars as at 30 June 2013, but this is offset by the comprehensive losses for the year to 30 June 2013.

Operations review

Donald

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

Regulatory

The next stage in obtaining the right to mine is the completion of a work plan. A draft work plan has been submitted to the Department of Primary Industries. A Cultural Heritage Management Plan is 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 has been completed and work continues.

Geology and mining

Work was undertaken to complete the definitive feasibility study in respect of the Donald Mineral Sands project, which was announced after the 30 June 2013 year end, in July 2013.

Plant designs, processes and costs

Further engineering design for all plant was undertaken, along with revision of operational and capital costs.

Land

DMS purchased 3 blocks of land totalling 1,280 acres for $1,692,435. These blocks of land neighbour the mining licence.

China operations

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

Senegal

Work continued on the components required to apply for the mining licence. The most significant of which are:
Completing the environmental impact assessment;
Completing the business model for sustainable development plan;
Completing the mining license feasibility study;
The award of the small mine license is expected by the end of year 2013; and
Tender for the mining and processing is in the final stages to completion and the contract will be appointed on receipt of the small mine license.

18 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

Mining and processing is expected to commence during the second quarter of 2014.
Exploration work continued on the 410 sq km license area, focusing on the southern area.
The exploration license to be extended on its expiry at the end of November 2013.

Prospects

The Group’s objectives for the 2014 financial year are to continue with exploring funding options for the Donald Mineral Sands project, developing the Donald and the Niafarang projects and associated downstream research and development activities.

Significant Changes in State of Affairs

Cash and term deposits decreased by $13,033,946.

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

As has previously been noted, the definitive feasibility study for the Donald Mineral Sands project was completed and announced in July 2013. There are 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.

Likely Developments

The Group continues to explore funding options for the Donald Mineral Sands project. The Group has engaged a financial adviser to assist with funding options and expects to finalise funding options within the current financial year. Subject to adequate financing, the Group proposes to construct all plant to permit the Donald Mineral Sands project to commence production from the first quarter 2016. Ore from the mine will be processed into a heavy mineral concentrate at site at Donald, Victoria, which will then be transported to a processing plant in China for further processing into final products.

The Group proposes to develop the Niafarang project following the anticipated award of the small mine license by end of 2013, moving to contract mining in 2014. Once the Niafarang project is in production, the Group will have an additional revenue source, which will have an immediate impact on the financial position of the Group. The Group’s business strategies continue to be based on being a high-quality producer of zircon and titanium (together with associated products) focused on sales and marketing activities in China.

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.

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

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.

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.

Occupational Health and Safety

During the period under review there were no lost time injuries.

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 19

Directors’ report continued

DIRECTOR INFORMATION

DIRECTOR INFORMATION
Mr. Gerard King	Chairman (Non-executive)
Qualifcations	LLB
Experience	•Board Member since 6 December 2011 (Astron Limited: 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	49,038 Ordinary shares
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 6 December 2011 (Astron Limited: 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.
	•Mr Brown 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	94,165,972 Ordinary shares
Special Responsibilities	Mr. Brown is the Managing Director and responsible for the operations of
	the Group.
Directorships held in other listed entities	Mr. Brown is not currently a Director of another listed company.

Mr. Robert Flew	(Non-executive)
Qualifcations	B Ec (Hons), FAICD, FAusIMM
Experience	•Board Member since 31 January 2012 (Astron Limited: 19 March 2004)
	•Mr. Flew brings to Astron in excess of 39 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	341,148 Ordinary shares
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.

20 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

Mr. Ronald McCullough	(Non-executive)
Qualifcations	M.B.A., B.E. (Hons), FAustIMM
Experience	•Board member since 31 January 2012 (Astron Limited: 21 August 2006)
	•Mr. McCullough is an Honours graduate in Engineering from the University
	of Western Australia. He also completed a Master of Business Administration
	at UWA.
	•Subsequently, he 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.
	•Mr. McCullough 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 he managed all necessary environmental impact studies, authority
	compliance requirements, mine construction and operation feasibility studies
	and then obtained a mining lease for the deposit.
	•Mr. McCullough 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 Albany in Western Australia, on behalf
	of Japanese corporations.
Interest in Shares	8,000 Ordinary shares
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.

Mdm Kang Rong	(Executive)
Qualifcations	B.E.(Chem)
Experience	•Board member since 31 January 2012 (Astron Limited: 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 largely responsible for the growth and
	development of the Company.
Interest in Shares	4,000,000 Ordinary Shares
Special Responsibilities	As Vice General Manager she has been in charge of all Astron’s China operations.
Directorships held in other listed entities	Mdm Kang Rong is not currently a Director of another listed company.

Interest in Shares includes directly, indirectly, beneficially or potentially beneficially held shares.

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 21

Directors’ report continued

MEETINGS OF DIRECTORS

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


Astron Corporation Limited	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	10 10 2 2 2 2
Mr. Alexander Brown	10 7 0 N/A 0 N/A
Mr. Robert Flew	10 10 2 1 2 1
Mr. Ronald McCullough	10 10 2 2 2 2
Mdm Kang Rong	10 10 0 N/A 0 N/A

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

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 Corporation 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.

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/or executives, these shares are issued 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 non-executive 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.

22 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

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.

The bonus arrangements have been entered into with the following key management personnel (KMP):

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Executive Amount of bonus
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Allen Cauvin	12.5% of annual salary as a discretionary bonus based on pre-determined KPIs
	125% of one year’s base salary
Mark Coetzee	50% of annual salary for achievement of pre-determined KPIs

Other KMPs are entitled to the annual bonus program of the Group, which will be based on the performance of the group and at the discretion of the Board. The terms of the bonus program are in the process of being defined.

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.

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

2009 2010 2011 2012 2013
$ $ $ $ $
----- End of picture text -----

Revenue (‘000)	10,657	15,102	20,489	20,993	12,970
Net (Loss)/ Proft (‘000)	(2,498)	1,190	883	(1,003)	(5,466)
Share Price at Year end*	0.88	0.93	1.54	1.26	0.71
Dividends Paid (‘000)	6,490	–	–	–	–

*Adjusted assuming 2 for 1 share swap took place on 30 June 2009

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

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 23

Directors’ report continued

2. Key Management Personnel

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

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

Position held
----- End of picture text -----

Mr. Gerard King	Chairman – Non-executive
Mr. Alexander Brown	Managing Director
Mr. Robert Flew	Director – Non-executive
Mr. Ronald McCullough	Director – Non-executive
Mdm Kang Rong	Executive Director – Vice General Manager China
Mr. Hayden Stockdale(1)	Chief Executive Offcer
Mr. Mark Nielsen(2)	Chief Financial Offcer
Mr. Allen Cauvin	Executive General Manger – Mining
Mr. Mark Coetzee	Project Executive – Senegal
Mr. Joshua Theunissen(3)	Company Secretary

Note reference:

Resigned 13 March 2013
Resigned 31 March 2013
Appointed 1 March 2013

3. Details of Remuneration

Details of compensation by key management personnel of Astron Corporation Limited Group are set out below:

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

Short term benefits Post-employment benefits
Cash, fees salary Non-cash Share Based % of remuneration
& commissions Benefits/Other Payments Superannuation Total that is performance
Year ended 30 June 2013 $ $ $ $ $ based
Directors
Mr. Gerard King 119,500 – – 20,000 139,500 0%
Mr. Alexander Brown [(#)] 496,909 – – – 496,909 0%
Mr. Robert Flew 39,046 – – 20,954 60,000 0%
Mr. Ronald McCullough [(#)] 60,000 – – – 60,000 0%
Mdm Kang Rong [(#)] 385,275 – – – 385,275 0%
Other key management personnel
Mr. Hayden Stockdale [(1)] 288,749 – – 18,750 307,499 0%
Mr. Mark Nielsen [(2)] 275,452 – – 17,350 292,802 0%
Mr. Allen Cauvin 383,530 – – 16,470 400,000 0%
Mr. Mark Coetzee 230,042 14,028 – – 244,070 0%
Mr. Joshua Theunissen [(# 3)] 19,993 – – – 19,993 0%
–
2,298,496 14,028 93,524 2,406,048
----- End of picture text -----

Note reference:

– paid to management company

Resigned 13 March 2013
Resigned 31 March 2013
Appointed 1 March 2013

None of the above payments were performance related.

24 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

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

Short term benefits Post-employment benefits
Cash, fees salary Non-cash Share Based % of remuneration
& commissions Benefits/Other Payments Superannuation Total that is performance
Year ended 30 June 2012 $ $ $ $ $ based
Directors
Mr. Gerard King 114,992 – – 49,508 164,500 0%
Mr. Alexander Brown [(#)] 350,000 – – – 350,000 0%
Mr. Robert Flew 25,046 – – 34,954 60,000 0%
Mr. Ronald McCullough [(#)] 60,000 – – – 60,000 0%
Mdm Kang Rong [(#)] 250,000 – – – 250,000 0%
Other key management personnel
Mr. Hayden Stockdale [(1)] 168,500 – 125,250 25,000 318,750 39%
Mr. Mark Nielsen 173,000 – – 25,000 198,000 0%
Mr. Allen Cauvin [(2)] 50,059 – – 2,629 52,688 0%
Mr. Mark Coetzee [(3)] 223,519 17,669 – – 241,188 0%
1,415,116 17,669 125,250 137,091 1,695,126
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Note reference:

– paid to management company

Appointed 1 January 2012
Appointed 15 May 2012
Appointed 1 July 2011

4. Cash Bonuses

A cash bonus of $75,000 was paid during the current financial year to the departing Chief Financial Officer.

5. Share Based Payment Bonuses

No share based payment bonuses were paid during the current year or the year ended 30 June 2012.

During the year only one key executive was entitled to participate in the Company’s share-based payment scheme for employee remuneration and with his resignation, provision for the scheme is no longer deemed necessary.

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 arrangement with respect to the services of the Managing Director, Alexander Brown, provided by a management company through a 3 year service contract, expiring May 2015, 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.

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

The Remuneration Committee considers the appropriate remuneration requirements. In August 2012, the Group engaged external consultants to review the Group’s salary and incentive benchmarks.

Indemnifying Officers or Auditors

Insurance premiums paid for Directors

During the year Astron Limited paid a premium of $53,288 (2012: $57,152) 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.

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 25

Directors’ report continued

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.

Voting and comments at the Company’s 2012 Annual General Meeting

The Company received 83% of “yes” votes on its remuneration report for the 2012 financial year.

The Company did not receive any specific feedback at the AGM on its remuneration report.

Non-audit services

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

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2013 2012
$ $
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Audit related services
Due diligence assistance	–	20,209
Other Services
Taxation services	12,100	8,550
Corporate fnance services	–	107,504
Secretarial services	7,933	5,135

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 2013 has been received and can be found on page 15 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 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.

Signed in accordance with a resolution of Directors: Director:

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Mr. Ronald McCullough

Mr. Robert Flew

Dated this 27 September 2013

26 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

Auditor’s Independence Declaration

Under Section 307C of the Corporations Act 2001

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ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 27

Consolidated Statement of Profit or Loss and Other Comprehensive Income For The Year Ended 30 June 2013

	CONSOLIDATED	CONSOLIDATED
	Note 2013 $	2012 $
Sales revenue	5 7,917,878	13,591,574
Cost of sales	(8,295,654)	(8,794,386)
Grossproft	(377,776)	4,797,188
Interest income	5 4,756,319	7,261,191
Other income	5 295,414	140,238
Distribution expenses	(266,241)	(159,869)
Marketingexpenses	(42,761)	(74,256)
Occupancyexpenses	6 (203,934)	(180,945)
Administrative expenses	6 (8,333,938)	(7,504,330)
Write down of stock	6 (537,920)	(331,504)
Impairment of available-for-sale fnancial assets	6 (299,112)	(169,803)
Impairment of capital works inprogress	6 –	(88,745)
Costs associated with Gambian litigation	6 (328,491)	(3,323,866)
Finance costs	(96,669)	(30,964)
Other expenses	6 (15,520)	(263,316)
(Loss)/proft before income tax expense	(5,450,629)	71,019
Income tax expense	7 (15,014)	(1,074,187)
Net(loss) for theyear	(5,465,643)	(1,003,168)
Other comprehensiveproft/(loss)
Items that may be reclassifed subsequently toproft or loss
Decrease/(increase)in fair value of available-for-sale fnancial assets(tax: nil)	(701,466)	(849,680)
Foreign currency translation differences(tax: nil)	4,004,364	1,994,022
Items that will not be reclassifed subsequentlytoproft or loss
Increase/(decrease)in share basedpayment reserve(tax: nil)	(125,250)	125,250
Other comprehensive income/(loss) for theyear, net of tax	3,177,648	1,269,592
Total comprehensiveproft/(loss) for theyear	(2,287,995)	266,424
(Loss)/proft for theyear attributable to:
Owners of Astron Corporation Limited	(5,465,643)	(1,003,168)
Total comprehensiveproft/(loss) for theyear attributable to:
Owners of Astron Corporation Limited	(2,287,995)	266,424

The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

28 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

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CONSOLIDATED
2013 2012
Note cents cents
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EARNINGS PER SHARE
For(loss)/proft from continuing operations
Basic(loss)/earningsper share(centsper share)	(4.46)	(0.8)
Diluted(loss)/earningsper share(centsper share)	(4.46)	(0.8)
For(loss)/proft for theyear
Basic(loss)/ earningsper share(centsper share)	(4.46)	(0.8)
Diluted(loss)/earningsper share(centsper share)	(4.46)	(0.8)

The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 29

Consolidated Statement of Financial Position

For The Year Ended 30 June 2013

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CONSOLIDATED
2013 2012
Note $ $
ASSETS
Current assets
Cash and cash equivalents 10 45,790,618 58,787,135
Term deposits greater than 90-days 10 62,333,117 62,370,546
Trade and other receivables 11 5,007,469 4,178,092
Inventories 12 2,184,447 5,090,733
Available-for-sale financial assets 14 983,198 1,983,776
Current tax assets 22 282,505 –
Total current assets 116,581,354 132,410,282
Non-current assets
Property, plant and equipment 16 21,091,882 16,705,390
Intangible assets 17 56,247,132 48,559,413
Land use rights 18 10,012,664 8,712,067
Total Non-current assets 87,351,678 73,976,870
TOTAL ASSETS 203,933,032 206,387,152
LIABILITIES
Current liabilities
Borrowings 20 301,909 –
Trade and other payables 19 1,882,980 2,188,375
Current tax liabilities 22 – 221,023
Provisions 21 18,546 18,546
Total current liabilities 2,203,435 2,427,944
Non-current liabilities
Deferred tax liabilities 22 5,036,583 4,978,199
Long-term provisions 21 40,000 40,000
Total Non-current liabilities 5,076,583 5,018,199
TOTAL LIABILITIES 7,280,018 7,446,143
NET ASSETS 196,653,014 198,941,009
EQUITY
Issued capital 23 30,061,919 30,061,919
Reserves 24 6,128,499 2,950,851
Retained earnings 160,462,596 165,928,239
TOTAL EQUITY 196,653,014 198,941,009
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The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

30 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

Consolidated Statement of Changes in Equity For The Year Ended 30 June 2013

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Financial Assets Foreign Currency
Retained Share-based Available-for-sale Translation Total
Issued Capital Earnings Payment Reserve Reserve Reserve Equity
Year Ended 30 June 2013 $ $ $ $ $ $
Equity as at 1 July 2012 30,061,919 165,928,239 125,250 964,651 1,860,950 198,941,009
Loss for the year – (5,465,643) – – – (5,465,643)
Other comprehensive income
Decrease in fair value of
available-for-sale financial
assets – – – (701,466) – (701,466)
Exchange differences
on translation of foreign
operations – – – – 4,004,364 4,004,364
Unvested forfeited rights – – (125,250) – – (125,250)
Total comprehensive
income for the year – (5,465,643) (125,250) (701,466) 4,004,364 (2,287,995)
Transactions with owners in their capacity as owners
Shares repurchased
during the year – – – – – –
Total of transactions
with owners in their
capacity as owners – – – – – –
Equity as at
30 June 2013 30,061,919 160,462,596 – 263,185 5,865,314 196,653,014
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Financial Assets Foreign Currency
Retained Share-based Available-for-sale Translation Total
Issued Capital Earnings Payment Reserve Reserve Reserve Equity
Year Ended 30 June 2012 $ $ $ $ $ $
Equity as at 1 July 2011 33,157,582 166,931,407 – 1,814,331 (133,072) 201,770,248
Loss for the year – (1,003,168) – – – (1,003,168)
Other comprehensive income
Decrease in fair value of
available-for-sale financial
assets – – – (849,680) – (849,680)
Exchange differences
on translation of foreign
operations – – – – 1,994,022 1,994,022
Increase in share-based
payments reserve – – 125,250 – – 125,250
Total comprehensive
income for the year – (1,003,168) 125,250 (849,680) 1,994,022 266,424
Transactions with owners in their capacity as owners
Shares repurchased
during the year (3,095,663) – – – – (3,095,663)
Total of transactions
with owners in their
capacity as owners (3,095,663) – – – – (3,095,663)
Equity as at
30 June 2012 30,061,919 165,928,239 125,250 964,651 1,860,950 198,941,009
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The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 31

Consolidated Statement of Cash Flows

For The Year Ended 30 June 2013

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CONSOLIDATED
2013 2012
Note $ $
Cash flows from operating activities:
Receipts from customers 6,374,033 15,331,526
Payments to suppliers and employees (14,684,366) (18,883,318)
Interest received 5,299,763 7,294,588
Interest paid (96,669) (30,964)
Income taxes paid (460,158) (670,892)
Other income 250,441 140,238
Net cash inflow/(outflow) from operating activities 29a (3,316,956) 3,181,178
Cash flows from investing activities:
Investment/(Repayment) of short term deposits 37,429 (2,036,709)
Refund for cancellation of acquisition of mining licence – 500,000
Acquisition of available for sale investment – (523,216)
Acquisition of property, plant and equipment (2,264,384) (1,181,712)
Construction in works in progress (1,234,738) (2,923,938)
Purchase of computer software (115,125) (200,885)
Deferred exploration, evaluation expenditure and development costs (7,431,047) (3,450,724)
Acquisition of water rights – (17,958,613)
Net cash outflow from investing activities (11,007,865) (27,775,797)
Cash flows from financing activities:
Payment for share buy back – (3,095,662)
Borrowings 301,909 –
Expenditure on re-domiciliation (170,824) (1,086,032)
Net cash inflow/(outflow) from financing activities 131,085 (4,181,694)
Net decrease in cash held (14,193,736) (28,776,313)
Cash and cash equivalents at beginning of the year 58,787,135 87,110,656
Net foreign exchange differences 1,197,219 452,792
Cash and cash equivalents at end of the year 29b 45,790,618 58,787,135
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The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

32 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

Notes to the Financial Statements

For The Year Ended 30 June 2013

1. CORPORATE INFORMATION

The consolidated financial statements of Astron Corporation Limited for the year ended 30 June 2013 were authorised for issue in accordance with a resolution of the Directors on 27 September 2013 and relate to the consolidated entity consisting of Astron Corporation Limited and its subsidiaries. Separate financial statements for Astron Corporation Limited as an individual entity are no longer presented however, limited financial information for Astron Corporation Limited as an individual entity is included in Note 32.

The financial statements are presented in Australian dollars.

Astron Corporation Limited is a company limited by shares incorporated in Hong Kong whose shares are publicly traded through CHESS Depository Interests on the Australian Securities 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 International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and other authoritative pronouncements of the IASB.

Prior to the re-domiciliation of the Group from Australia to Hong Kong, the consolidated financial statements of Astron Limited for the year ended 30 June 2011 were prepared in accordance with Australian Accounting Standards (AAS) and other authoritative pronouncements of the Australian Accounting Standards Board (AASB). By complying with AAS in the comparative period, the consolidated financial statements also complied with IFRS.

There are no differences between the Astron Corporation Limited’s and Astron Limited’s accounting policies under AAS and IFRS. All accounting policies have been consistently applied from the prior period.

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 IFRS, and available-for-sale financial assets that have been measured at fair value. 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 Corporation Limited and its subsidiaries at 30 June 2013 (“the Group”). Subsidiaries acquired in a business combination involving entities under common control were included in the consolidated financial statements as if the acquisition had occurred from the earliest period reported.

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 profit or loss and other comprehensive income and consolidated statement of financial position respectively. A list of subsidiary entities is contained in Note 15 to the financial statements. Investments in subsidiaries are carried in parent entity at costs less impairment.

(c) Foreign Currency Translation

The functional and presentation currency of Astron Corporation 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.

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 33

Notes to the Financial Statements continued

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 Corporation 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.

(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 grants

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, the wholly owned subsidiary of Astron Corporation Limited, and the Australian subsidiaries wholly owned by Astron Limited 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.

34 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

(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.

(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

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.

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 35

Notes to the Financial Statements continued

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 are accounted for in the consolidated financial statements as described in note 2(b).

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:

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Class of Asset
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Leasehold Buildings	50 years
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.

36 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

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

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.

(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.

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 37

Notes to the Financial Statements continued

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.

(w) Issued Capital

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 may provide 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”). Such equity settled transactions are at the discretion of the Remuneration Committee. To date, no such equity settled transactions have been undertaken.

The fair value of options or rights granted is recognised as an employee benefit expense with a corresponding increase in equity (share-based payment reserve). The fair value is measured at grant date and recognised over the period during which the employees become unconditionally entitled to the options. Fair value is determined using a Black-Scholes option pricing model. In determining fair value, no account is taken of any performance conditions other than those related to the share price of Astron Corporation Limited (“market conditions”). The cumulative expense recognised between grant date and vesting date is adjusted to reflect the Directors’ best estimate of the number of options or rights that will ultimately vest because of internal conditions of the options or rights, such as the employees having to remain with the Group until vesting date, or such that employees are required to meet internal KPI. No expense is recognised for options or rights that do not ultimately vest because internal conditions were not met. An expense is still recognised for options or rights that do not ultimately vest because a market condition was not met.

Where the terms of options or rights are modified, the expense continues to be recognised from grant date to vesting date as if the terms had never been changed. In addition, at the date of the modification, a further expense is recognised for any increase in fair value of the transaction as a result of the change.

38 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

Where options are cancelled, they are treated as if vesting occurred on cancellation and any unrecognised expenses are taken immediately to profit or loss. However, if new options are substituted for the cancelled options or rights and designated as a replacement on grant date, the combined impact of the cancellation and replacement are treated as if they were a modification.

When shareholders’ approval is required for the issuance of options or rights, the expenses are recognised based on the grant-date fair value according to the management estimation. This estimate is re-assessed upon obtaining formal approval from shareholders.

(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 Corporation 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.

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 39

Notes to the Financial Statements continued

(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 2013. They have not been adopted in preparing the financial statements for the year ended 30 June 2013 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.

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Title and effected
IFRS/IAS reference standards Nature of Change Application date Impact on Initial Application
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IFRS/IAS reference	Title and effected standards	Nature of Change	Application date	Impact on Initial Application
IFRS 9	Financial Instruments	Amends the requirements for classifcation and measurement of fnancial assets. IFRS 9 requires that gains or losses on fnancial liabilities measured at fair value are recognised in proft or loss, except that the changes in the liability’s credit risk are recognised in other comprehensive income. IFRS 9 is being issued in phases. To date, the chapters dealing with recognition, classifcation, measurement and derecognition of fnancial assets and liabilities have been issued. These chapters are effective for annual period beginning 1 January 2015. Further chapters dealing with impairment methodology and hedge accounting are still being developed.	Effective from 1 January 2015	Unless the entity makes an irrecovable 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 IRFS 9 will be recognised in proft or loss, instead of other comprehensive income. When this standard is frst applied, any remaining balance on the Financial assets available-for-sale will be transferred to retained earnings. The entity foes 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 IFRS 9 are frst adopted.
IFRS 10	Consolidated Financial Statements	IFRS 10 establishes a revised control model which broadens the situations when an entity is considered to be controlled by another entity. The effect of this change may lead to more entities being consolidated into a Group.	Effective from 1 January 2013	The Company does not expect that this change will have any impact on the fnancial statements due to there currently not being any entities within the group that are not currently consolidated.

40 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

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Title and effected
IFRS/IAS reference standards Nature of Change Application date Impact on Initial Application
IFRS 11 Joint Arrangements IFRS 11 uses the principle of Effective from When this standard is first
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IFRS/IAS reference IFRS 11	Title and effected standards Joint Arrangements	Nature of Change IFRS 11 uses the principle of	Application date Effective from	Impact on Initial Application When this standard is frst
		control in IFRS 10 to defne joint control, and therefore the determination of whether joint control exists may change. In addition, AASB 11 removes the option to account for jointly- controlled entities (JCEs) using proportionate consolidation. Instead, accounting for a joint arrangement is dependent on the nature of the rights and obligations arising from the arrangement. Joint operations that give the venturers a right to the underlying assets and obligations for liabilities are accounted for by recognising the share of those assets and liabilities. Joint ventures that give the venturers a right to the net assets are accounted for using the equity method.	1 January 2013	adopted for the year ended 30 June 2014, there will be no impact on transactions and balances recognised in the fnancial statements because the entity has not entered into any joint arrangements.
IFRS 12	Disclosure of Interests in Other Entities	IFRS 12 includes all disclosures relating to an entity’s interests in subsidiaries, joint arrangements, associates and structured entities. New disclosures introduced by IFRS 12 include disclosures about the judgements made by management to determine whether control exists, and to require summarised information about joint arrangements, associates and structured entities and subsidiaries with non-controlling interests.	Effective from 1 January 2013	As this is a disclosure standard only, there will be no impact on amounts recognised in the fnancial statements. However, additional disclosures will be required for interests in associates and joint arrangements, as well as for unconsolidated structured entities.
IFRS 13	Fair Value Measurement	IFRS 13 establishes a single source of guidance for determining the fair value of assets and liabilities. IFRS 13 does not change when an entity is required to use fair value, but rather, provides guidance on how to determine fair value when fair value is required or permitted by other Standards. The standard also expands the disclosure requirements for all assets and liabilities carried at fair value including information about the assumptions made and the qualitative impact of those assumptions on the fair value determined (e.g. land and buildings, investment properties etc).	Effective from 1 January 2013	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.

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 41

Notes to the Financial Statements continued

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 17(b)), capital works in progress (note 16), the impairment of available-for-sale investments (note 14) and prepayments (note 11) in terms of the relevant accounting standards.

(b) Capitalisation of Exploration and Evaluation Assets

The Group has continued to capitalise expenditure, in terms of IFRS 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 17 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.

(e) Critical judgment of accounting for Group’s restructure

Management has made the following judgment when applying the Group’s restructure accounting policy:

The entities comprising the Group had been controlled by the same group of shareholders both before and after the Group restructure (note 2(b)). The shareholders collectively determined these entities’ financial and operating policies throughout the periods reported. Therefore it is determined that these entities are under common control and the combination of those entities is accounted for on a continuous basis accordance with the accounting policy in note 2(b).

4. SEGMENT INFORMATION

(a) Description of Segments

The Group has adopted IFRS 8 Operating Segments from 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/President (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/President 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
Senegal: Development of the Niafarang mine
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

42 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

idated	2012 $	Revenue from external Customers	Sales – – – – – – 7,083,073 11,629,254 834,805 1,962,320 7,917,878 13,591,574 7,917,878 13,591,574	Interest revenue 4,740,724 7,223,792 – – 1,915 13,940 3,140 14,880 10,540 8,579 4,756,319 7,261,191 4,756,319 7,261,191	Rent/Other Income (6,318) – – – 162,190 140,238 125,032 – 14,510 – 295,414 140,238 295,414 140,238	Total revenue 4,734,406 7,223,792 – – 164,105 154,178 7,211,245 11,644,134 859,855 1,970,899 12,969,611 20,993,003 12,969,611 20,993,003	Segment result	Segment (loss) /proft (814,506) (931,457) – – 164,105 154,178 (3,855,818) 1,235,394 (944,410) (322,555) (5,450,629) 71,019 (5,450,629) 71,019	Assets	Segment assets 109,909,761 120,835,629 1,830,170 982,126 59,530,852 51,086,312 14,657,321 15,700,425 18,004,928 17,782,660 203,933,032 206,387,152 203,933,032 206,387,152	Total segment assets 109,909,761 120,835,629 1,830,170 982,126 59,530,852 51,106,322 14,657,321 15,700,425 18,004,928 17,782,660 203,933,032 206,387,153 203,933,032 206,387,152	Liabilities	Segment liabilities 1,231,167 1,539,446 29,848 35,738 5,285,670 5,272,213 647,166 467,257 86,167 131,489 7,280,018 7,446,143 7,280,018 7,446,143	Total segment liabilities 1,231,167 1,539,446 29,848 35,738 5,285,670 3,340,836 647,166 467,257 86,167 131,489 7,280,018 7,446,143 7,280,108 7,446,143	Impairment losses 299,112 169,803 – – – – – 396,398 – 23,582 299,112 589,783 299,112 589,783	Acquisition of PPE, Intangible assets and other non-current segment assets 118,695 212,490 852,306 972,080 8,565,145 21,210,367 489,792 783,420 1,154,530 2,414,974 11,180,468 25,593,331 11,180,468 25,593,331	Depreciation and amortisation 9,992 4,844 11,937 3,034 94,689 26,823 286,268 205,472 230,511 222,780 633,397 462,953 633,397 462,953
Consol	2013 $
ontinuing tions	2012 $
Total of C Opera	2013 $
ium	2012 $
Titan	2013 $
esources	2012 $
Mineral R	2013 $
eral Sands	2012 $
Donald Min	2013 $
gal	2012 $
Sene	2013 $
orporate	2012 $
Astron C	2013 $
30 June

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 43

Notes to the Financial Statements continued

(c) Geographical Information

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

Hong Kong

The home country of the parent entity.

Australia

The home country of Astron Limited and one of the operating subsidiaries which performs evaluation and exploration activities. Rental income all comes from Australian sources.

China

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


	Sales revenues		Interest revenue		Non-current assets
	2013 $	2012 $	2013 $	2012 $	2013 $	2012 $
Australia	– – 4,742,415 7,237,730 61,192,833 51,187,237
China	7,917,878 13,591,574 13,680 23,459 25,876,205 21,906,044
Other countries	– – 224 2 282,640 883,589
	7,917,878 13,591,574 4,756,319 7,261,191 87,351,678 73,976,870

(d) Major customers

Revenues of $2,726,110 (2012: $3,337,983), $1,188,673 (2012: $2,289,444), $1,008,137 (2012: $2,289,444) and $1,310,366 (2012: $nil) were derived from sales to Luoyang Shuangrui Wanji Titanium Industry, Hyundai Welding Co. Ltd (former known as SuPaiTe Metal (Kunshan) Company Limited, Tien Tai Electrode (Kunshan)Co.,Ltd and Zunbao Titanium Industry Limited respectively. These revenues amount to more than 10% of the group’s sales revenues from external customers.

5. REVENUE AND OTHER INCOME

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CONSOLIDATED
2013 2012
$ $
CONTINUING OPERATIONS
Revenue
• sale of goods 7,917,878 13,591,574
• interest income 4,756,319 7,261,191
Total revenue: continuing 12,674,197 20,852,765
OTHER INCOME: CONTINUING OPERATIONS
• gains on foreign exchange 45,782 –
• rental income 162,190 75,697
• other income 87,442 64,541
Total other income: continuing 295,414 140,238
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44 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

6. PROFIT (LOSS) BEFORE INCOME TAX

(a) Profit (loss) before income tax includes the following specific expenses

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CONSOLIDATED
2013 2012
$ $
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Interest Paid	96,669	30,964
Foreign currencytranslation losses	(45,782)	232,85
Premises-contractual amounts	203,934	180,946
Research and development costs	1,391,544	1,094,374
Depreciation and amortization	526,771	462,953
Superannuation	169,170	212,236
Employee benefts	2,026,014	1,208,442
Impairment of available-for sale investments(note 14)	299,112	169,803
Costs associated with Gambia and Senegal Investments(note 14)	328,491	3,323,866
Costs associated withproject development expenditure		–
Impairment of capital works inprogress(note 16)	–	88,475
Write down of inventory (note 12)	537,920	331,504
Impairment ofprepayments		–
Costs relatingto re-domiciliation	10,586	1,376,388

7. INCOME TAX EXPENSE

(a) The components of tax expense comprise:

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CONSOLIDATED
2013 2012
$ $
Current tax expense in respect of current year – 535,102
Adjustments recognised in the current year in relation to the prior year (43,368) 135,294
Recognition of deferred tax liability 58,382 403,791
Total 15,014 1,074,187
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ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 45

Notes to the Financial Statements continued

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

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CONSOLIDATED
2013 2012
$ $
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Prima facie taxpayable onproft 30%(2012: 30%)
•continuingoperations	(1,635,189)	21,306
	(1,635,189)	21,306
Add/(Less) Tax effect of:
•non-deductible Gambia	97,197	997,160
•other non-deductible items	420,642	(223,850)
•deferred tax asset not recognized for China and Hong Kong losses
and temporarydifferences	1,388,933	98,635
•underprovision for income tax inprioryear	(43,368)	135,294
•Impact of overseas tax differential	(213,111)	45,642
Income tax attributable to entity	15,014	1,074,187
The applicable weighted average effective tax rates are as follows:	(0.3)%	1513%

The decrease in the weighted average effective consolidated tax rate for 2013 is mainly the result of operating losses.

(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 (including Hong Kong)

Astron Corporation Limited is subject to Hong Kong tax law.

The Group’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 costs associated with the Gambian litigation.

(e) Tax on other comprehensive items

No deferred tax liabilities have been recognized in relation to available for sale financial assets reserve due to the existence of significant capital losses. Accordingly, no movement in income tax is recorded in current or prior financial years. No tax is applicable to other comprehensive item: foreign currency translation differences and share based payments reserve.

46 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

8. EARNINGS PER SHARE

(a) Reconciliation of earnings used in the calculation of earnings per share to loss/(profit):

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CONSOLIDATED
2013 2012
$ $
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(Loss)/proft attributable to owners	(5,465,643)	(1,003,168)
(Loss)/earnings used to calculate basic EPS	(5,465,643)	(1,003,168)
(Loss)/earnings used in calculation of dilutive EPS	(5,465,643)	(1,003,168)
(Loss)/proft from continuingoperations	(5,465,643)	(1,003,168)
(Loss)/proft used to calculate basic EPS from continuingoperations	(5,465,643)	(1,003,168)
(Loss)/proft used in the calculation of dilutive EPS from continuingoperations	(5,465,643)	(1,003,168)

(b) Weighted average number of ordinary shares (diluted):

	CONSOLIDATED	CONSOLIDATED
	2013 $	2012 $
Weighted average number of ordinary shares outstanding during theyear
•used in calculatingbasic EPS	122,479,784	123,379,593
•used in calculatingdilutive EPS	122,479,784	123,379,593

The comparative weighted average number of ordinary shares has been adjusted to taken into account the share swap as if it had occurred at the date of the first share issuance.

(c) Dilutive shares

There were no shares issued under escrow at or post year end. There were no rights or options for shares outstanding at year-end.

9. AUDITORS’ REMUNERATION

	CONSOLIDATED	CONSOLIDATED
	2013 $	2012 $
Audit and review of fnancial statements
Grant Thornton	153,762	83,000
Other auditors	–	61,131
	153,762	144,131
Other services – other auditors
•taxation services	12,100	8,550
•due diligence assistance	–	20,209
•other services	7,933	5,135
•corporate fnance services	–	107,504

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 47

Notes to the Financial Statements continued

10. CASH AND CASH EQUIVALENTS

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CONSOLIDATED
2013 2012
$ $
Cash on hand 7,004 77,200
Current & call account balances 11,590,592 4,179,203
Short term deposits 34,193,022 54,530,732
Total 45,790,618 58,787,135
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Cash on hand is non-interest bearing. Bank balances and short term deposits at call bear floating interest rates between 0.0% and 4.07% (2012: 0.0% and 5.1%). Deposits have an average maturity of 90 days (2012: 90 days). Bank balances included letter of credit deposits of $0 as at 30 June 2013 (2012: $56,052).

(a) Geographic concentration of risk

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CONSOLIDATED
2013 2012
$ $
Australia 38,104,226 54,964,921
China 7,659,434 3,743,890
United Kingdom 12,188 4,181
Senegal 14,770 74,143
Total 45,790,618 58,787,135
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b) Concentration of risk by bank

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CONSOLIDATED
2013 2012
$ $
Australia
Commonwealth Bank-S&P rating of AA- (2012:AA-) 28,542,760 49,759,700
Goldman Sachs JB Were-A- (2012:A-) 78,702 5,076,255
Westpac Bank-S&P rating of AA- 7,248,004 –
Bank of China-S&P rating of A (2012:A) 2,164,467 –
Other Australian banks 70,056 128,529
38,103,989 54,964,484
China
Bank of China-S&P rating of A (2012:A) 361,458 1,408,848
Construction Bank-S&P rating of A (2012:A) 106,551 301,135
China Merchant Bank-S&P rating of BBB+ 7,160,278 –
Shanghai Pudong Development Bank – unrated 3,731 1,953,629
Other Chinese banks 20,649 77,658
7,652,667 3,741,270
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48 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

Other countries
Other banks	26,958	–
	26,958	–
Term deposits greater than 90 days
	CONSOLIDATED
	2013 $	2012 $
Term deposits with maturity over 90 days	62,333,117	62,370,546

As at 30 June 2013, term deposits with maturity over 90 days of $62,333,117 (2012: 62,370,546) bear fixed interest rates of 3.85% to 4.07% (2012: 3.3% to 5.4%) and have a maturity of 3-6 months.

c) Geographic concentration of risk

	CONSOLIDATED	CONSOLIDATED
	2013 $	2012 $
Australia	62,333,117	62,370,546

d) Concentration of risk by bank

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CONSOLIDATED
2013 2012
$ $
Australia
Commonwealth Bank-S&P rating of AA- (2012:AA-) 12,880,093 48,846,618
Westpac Bank-S&P rating of AA- 20,504,110 –
Bank of China-S&P rating of A (2012 A) 28,948,914 13,523,928
62,333,117 62,370,546
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11. TRADE AND OTHER RECEIVABLES

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CONSOLIDATED
2013 2012
Note $ $
CURRENT
Trade debtors 12(b)(c) 3,027,627 1,072,772
Drafts and other receivables 12(a) 893,985 2,300,192
Prepayments 12(d) 1,403,917 1,085,388
Impairments 12(d) (318,060) (280,260)
Net prepayments 1,085,857 805,128
Total 5,007,469 4,178,092
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ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 49

Notes to the Financial Statements continued

(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.

(b) Ageing analysis

The ageing analysis of trade receivables is as follows:

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CONSOLIDATED
2013 2012
$ $
0-30 days (not past due) 65,733 1,072,772
31-60 days (past due not impaired) 227,530 –
61-90 days (past due not impaired) 915,352 –
91+ days (past due not impaired) 1,819,012 –
91+ days (past due impaired) – –
Total 3,027,627 1,072,772
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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 practice 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) Prepayments

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

Included in prepayments is an amount of $318,060 (2012: $280,260) which is the prepayment for construction. This amount has been impaired due to low possibility of collection.

12. INVENTORIES

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CONSOLIDATED
2013 2012
$ $
Raw materials 1,314,915 2,141,051
Finished goods – at cost 8,687 1,747,796
Finished goods – at net realisable value 860,845 1,201,886
Total finished goods 869,532 2,949,682
Goods in transit – –
Total 2,184,447 5,090,733
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There has been a write down of inventory of $537,920 to net realisable value in the current financial year (2012: $331,504).

50 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

13. INVESTMENTS IN GAMBIA AND SENEGAL

Carnegie Minerals (Gambia) Limited is a 100% subsidiary of Astron Limited. It was incorporated to commence mining activities in 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.

Development on the Niafarang project in Senegal in current financial year (and in 2012) has been capitalized to development cost.

Furthermore, expenditure of $328,491 (2012: $3,323,866) relating to Gambia litigation claim in 2013 has been expensed directly to profit and loss.

14. AVAILABLE-FOR-SALE FINANCIAL ASSETS

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CONSOLIDATED
2013 2012
$ $
Listed Securities
Current listed investments, at fair value
shares in listed corporations 983,198 1,983,776
Total available for sale financial assets 983,198 1,983,776
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Available-for-sale financial assets comprise investments in the ordinary issued capital of four public companies listed on the Australian Securities Exchange (ASX). The cost of these investments was $2,435,302. There are no fixed returns or fixed maturity date attached to these investments. In the current financial year the combined market value of these investments has decreased by $1,000,578 from 30 June 2012. $701,466 of the decrease in market value of these investments has been netted off against the Financial Assets Available for Sale Reserve, under IAS 139, in the consolidated statement of financial position and an amount of $299,112 (2012: $169,803) was recorded as profit or loss as an impairment.

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.

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 51

Notes to the Financial Statements continued

15. SUBSIDIARIES

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Percentage
Owned Ordinary
Country of Shares
Financial Year 2013 incorporation 2013
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Parent entity
Astron Corporation Limited	HongKong
Subsidiaries ofparent entity
Astron Limited	Australia	100
Astron Advanced Materials Limited	UK	100
Astron Mineral Sands PtyLimited	Australia	100
Astron Titanium(Yingkou)Co Ltd	China	100
Carnegie Minerals(Gambia)Limited	The Gambia	100
Coast Resources Limited	Isle of Man	100
Dickson & Johnson PtyLimited	Australia	100
Donald Mineral Sands PtyLtd	Australia	100
Sovereign Gold NL	Australia	100
WIM 150 PtyLimited	Australia	100
Yingkou Astron Mineral Resources Co Ltd	China	100
Astron Senegal HoldingPtyLtd	HongKong	100
Senegal Mineral Sands Ltd	HongKong	100
Zirtanium PtyLimited	Australia	100

52 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

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Percentage
Owned Ordinary
Country of Shares
Financial Year 2012 (effective 21 May 2012) incorporation 2012
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Parent entity
Astron Corporation Limited	HongKong
Subsidiaries ofparent entity
Astron Limited	Australia	100
Astron Advanced Materials Limited	UK	100
Astron Mineral Sands PtyLimited	Australia	100
Astron Titanium(Yingkou)Co Ltd	China	100
Carnegie Minerals(Gambia)Limited	The Gambia	100
Coast Resources Limited	Isle of Man	100
Dickson & Johnson PtyLimited	Australia	100
Donald Mineral Sands PtyLtd	Australia	100
Sovereign Gold NL	Australia	100
WIM 150 PtyLimited	Australia	100
Yingkou Astron Mineral Resources Co Ltd	China	100
Astron Senegal HoldingPtyLtd	HongKong	100
Senegal Mineral Sands Ltd	HongKong	100
Zirtanium PtyLimited	Australia	100

All the above entities became the subsidiaries of the parent company following the completion of the Group restructure as set out in Note 2(b).

(a) Equity

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

(b) Disposal of subsidiaries

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

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 53

Notes to the Financial Statements continued

16. PROPERTY, PLANT AND EQUIPMENT

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CONSOLIDATED
2013 2012
$ $
LAND AND BUILDINGS
Land
At cost 5,248,417 3,555,982
Total land 5,248,417 3,555,982
Leasehold buildings
At cost 2,369,046 2,139,372
Less accumulated depreciation (337,538) (261,542)
Less accumulated impairment losses – (51,877)
Total leasehold buildings 2,031,508 1,825,953
Total land and buildings 7,279,925 5,381,935
PLANT AND EQUIPMENT AND WORKS IN PROGRESS
Capital works in progress
At cost 14,676,709 12,232,206
Less accumulated impairment losses (1,812,116) (1,812,116)
Total capital works in progress 12,864,593 10,420,090
Plant and equipment
At cost 2,258,414 1,180,487
Less accumulated depreciation (1,311,050) (277,122)
Total plant and equipment 947,364 903,365
Total plant and equipment and works in progress 13,811,957 11,323,455
Total property, plant and equipment 21,091,882 16,705,390
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(a) Assets pledged as security

As at 30 June 2013 and 30 June 2012 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.

(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.

54 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

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CONSOLIDATED
Capital works Plant and
in progress Land Buildings equipment Total
$ $ $ $ $
YEAR ENDED 30 JUNE 2013
Balance at the beginning of year 10,420,090 3,555,982 1,825,953 903,365 16,705,390
Additions 1,234,738 1,692,435 – 232,413 3,159,586
Depreciation expense – – (35,766) (398,934) (434,700)
Transfers (155,277) – – 155,277 –
Expense to R & D (40,364) – – – (40,364)
Disposal – – – (5,797) (5,797)
Foreign exchange movements 1,405,406 – 241,321 61,040 1,707,767
Carrying amount at the end of year 12,864,593 5,248,417 2,031,508 947,364 21,091,882
YEAR ENDED 30 JUNE 2012
Balance at the beginning of year 7,162,375 2,897,330 1,745,844 580,488 12,386,037
Additions 2,829,213 658,652 – 495,244 3,983,109
Depreciation expense – – (35,097) (236,914) (272,011)
Transfers (19,628) – – 19,628 –
Impairment (88,475) – – – (88,475)
Disposals – – – – –
Foreign exchange movements 536,605 – 115,206 44,919 696,730
Carrying amount at the end of year 10,420,090 3,555,982 1,825,953 903,365 16,705,390
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(d) Impairment of capital works in progress

No impairment loss has been recognised in profit or loss during the year (2012: $88,475 – separately presented in profit or loss as “impairment of capital works in progress”).

(e) Land acquisition

Included in the land cost was $1,692,435 (2012: $658,652) being the acquisition cost for 3 pieces of new land in Victoria for the Donald Project.

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 55

Notes to the Financial Statements continued

17. INTANGIBLE ASSETS

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CONSOLIDATED
2013 2012
Note $ $
Development costs
Cost 18(b) 9,360,224 8,489,299
Accumulated impairment loss 18(b) (7,329,855) (7,329,855)
Net carrying value 18(d) 2,030,369 1,159,444
Exploration expenditure capitalised
Exploration and evaluation phases 18(a)(c) 35,942,139 29,240,470
Net carrying value 35,942,139 29,240,470
Water rights 18(a)(d)
Net carrying value 17,958,613 17,958,613
Computer software 18(a)(e)
Net carrying value 316,011 200,886
Total Intangibles 18(f) 56,247,132 48,559,413
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(a) Intangible assets

Movements during the year ended 30 June 2013 in intangible assets represent additions only. No amortisation has been brought to account. For capital expenditure commitments refer note 28(b).

(b) Development costs and impairment losses

The development costs of $9,360,244 (2012: $8,489,299) and the accumulated impairment of $7,329,855 (2012: $7,329,855) as at 30 June 2013 relates to the following:

1 TiO2 project cost of $7,801,584 (2012: $6,874,401) was fully impaired in 2009. The current year movement represents the movement in foreign exchange.
2 The Senegal project of $2,207,181 (2012: $1,367,335) represents development costs incurred in Senegal. This was netted off by an impairment of $438,328 which was carried forward from prior years and shifted due to the movement in foreign exchange. That costs incurred in the prior years were fully impaired due to doubt as to whether the project will continue at that time. The current year additions represented the resumption of activities following the grant of the exploration licence in June 2011.
3 The remaining balance of $261,516 (2012: $230,436) relates to capitalised testing and design fees for the MSP $19,347 (2012: $17,127) accumulated impairment which was carried forward from prior years and shifted due to the movement in foreign exchange.

(c) Exploration and evaluation expenditure

This expenditure relates to the Group’s investment in the Donald Mineral Sands Project. As at 30 June 2013 the Group has complied with the conditions of the granting of EL4432, EL4433, EL5255, EL5263, EL5186, EL5261, EL5262, EL5353, EL5354, EL5472 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.

56 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

(d) Purchase of software

In the current year the Group continued with the implementation of a new enterprise resource planning system. The computer software balance represents the software and installation cost of the first phase of this system.

(e) Movement in net carrying value

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CONSOLIDATED
Exploration and Development
Evaluation Phase costs Water Rights Software Total
$ $ $ $ $
YEAR ENDED 30 JUNE 2013
Opening balance 29,240,470 1,159,444 17,958,613 200,886 48,559,413
Additions 6,701,669 852,306 – 115,125 7,669,100
Impairment – – – – –
Foreign exchange movements – 18,619 – – 18,619
Balance at 30 June 2013 35,942,139 2,030,369 17,958,613 316,011 56,247,132
YEAR ENDED 30 JUNE 2012
Opening balance 26,718,754 232,140 – – 26,950,894
Additions 2,521,716 929,008 17,958,613 200,886 21,610,223
Impairment – (16,753) – – (16,753)
Foreign exchange movements – 15,049 – – 15,049
Balance at 30 June 2012 29,240,470 1,159,444 17,958,613 200,886 48,559,413
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(f) 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.

18. LAND USE RIGHTS

	CONSOLIDATED	CONSOLIDATED
	2013 $	2012 $
Land use rights	10,012,664	8,712,067

(a) Reconciliation

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CONSOLIDATED
2013 2012
$ $
Opening balance 8,712,067 8,352,354
Addition 308,979 –
Amortisation (198,697) (190,941)
Foreign exchange movements 1,190,315 550,654
Closing balance 10,012,664 8,712,067
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ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 57

Notes to the Financial Statements continued

19. TRADE AND OTHER PAYABLES

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CONSOLIDATED
2013 2012
$ $
Unsecured liabilities
Trade payables 1,241,957 1,088,456
Other payables 641,023 1,099,919
Total 1,882,980 2,188,375
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20. BORROWINGS

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CONSOLIDATED
2013 2012
Note $ $
Current
Short term borrowings 301,909 –
301,909 –
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The borrowings relate to a 90 day advance by Bank of China for issuing a letter of credit. The interest rate was fixed at 4.7731% and the amount was repaid in full on 20 August 2013.

21. PROVISIONS

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CONSOLIDATED
2013 2012
Note $ $
Current
Provision for indemnification on discontinued operations 18,546 18,546
18,546 18,546
Non-current
Environmental rehabilitation 21(a) 40,000 40,000
40,000 40,000
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a) Provision for environmental rehabilitation

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

58 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

22. TAXATION

(a) Liabilities

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CONSOLIDATED
2013 2012
$ $
Current tax liability – 221,023
Deferred tax liability arises from the following:
Capitalised expenditure 5,287,278 4,979,580
Interest accrued 205,575 368,609
Provisions (44,131) (39,656)
Blackhole expenditure (412,139) (330,334)
5,036,583 4,978,199
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(b) Deferred tax assets not brought to account

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

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CONSOLIDATED
2013 2012
$ $
----- End of picture text -----

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||||
|---|---|---|
|Temporary differences unrecognized|1,376,669|1,376,669|
|Tax losses:|
|Revenue losses (China)|1,790,492|1,920,203|
|Capital losses|17,928,340|17,931,771|

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(c) Current Tax Asset

This represent payment of 2013 tax year’s provisional tax which is recoverable as there is no tax liability in view of tax losses.

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||||
|---|---|---|
|CONSOLIDATED|
|2013|2012|
|$|$|
|Current tax asset|282,505|–|

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ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 59

Notes to the Financial Statements continued

23. ISSUED CAPITAL

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CONSOLIDATED
2013 2012
$ $
122,479,784 (2012: 122,479,784) Fully Paid Ordinary Shares at HK$0.1 1,605,048 1,605,048
Share Premium 28,456,871 28,456,871
Total 30,061,919 30,061,919
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The number of shares on issue in above table and the tables below are based on assumption that the 2 for 1 share swap, in terms of the re-domiciliation, took place on 1 July 2010. The shares in Astron Corporation Limited are par value shares with a par value of HK$0.1.

(a) Reconciliation of ordinary shares (number)

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CONSOLIDATED
2013 2012
$ $
At the beginning of year 122,479,784 62,294,366
Shares bought back during the year – (1,054,474)
Shares issued during group restructure – 61,239,892
At reporting date 122,479,784 122,479,784
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On 21 May 2012, Astron Corporation Limited acquired the equity interests in Astron Limited through a share swap, and became the holding company of the companies now comprising the Group. As at the date of acquisition 122,477,078 CDIs and 2,706 ordinary shares were allotted and issued to shareholders of Astron Limited for the purpose of acquiring the subsidiaries.

(b) Reconciliation of ordinary shares (value)

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CONSOLIDATED
2013 2012
$ $
At the beginning of the year 30,061,919 33,157,582
Shares issued during the year
• Shares bought back during the year – (3,095,663)
Total 30,061,919 30,061,919
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(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.

60 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

(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.

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CONSOLIDATED
2013 2012
$ $
Net debt – –
Total equity 196,653,014 198,941,009
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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

As at 30 June 2013 there were no key executives that had any rights to acquire shares in terms of a share-based payment scheme for employee remuneration. The creation and grant is subject to shareholder approval.

24. RESERVES

(a) Foreign currency translation reserve

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

(b) Share based payment reserve

The share-based payment reserve records the amount of expense raised in terms of equity-settled share-based payment transactions. The reserve recognized in the current financial year is nil (2012: $125,250).

(c) Financial assets available for sale reserve

The financial assets available for sale reserve represents the cumulative gains and losses arising on the revaluation of available for sale financial assets that have been recognised in other comprehensive income, net of amounts reclassified to profit or loss when those assets have been disposed of or are determined to be impaired.

25. DIVIDENDS

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

	CONSOLIDATED	CONSOLIDATED
Franking account balance	2013 $	2012 $
Franking credits available for the subsequent fnancial years based on a tax rate
of 30%(2012:30%)	3,003,852	2,509,965

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

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 61

Notes to the Financial Statements continued

26. KEY MANAGEMENT PERSONNEL DISCLOSURES

(a) Key management personnel compensation

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CONSOLIDATED
2013 2012
$ $
Short-term employee benefits/management fees 2,844,106 1,874,156
Post-employment benefits 142,593 185,258
Share-based payments – 125,250
Total 2,986,699 2,184,664
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Further information regarding the identity of key management personnel and their compensation can be found in the Remuneration Report contained in the Directors’ Report.

(b) Shareholdings

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

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Balance Shares (sold) Balance
30 June 2013 1/07/2012 /purchased 30/06/2013
Key Management Personnel
Mr. Gerard King 49,038 49,038
Mr. Alexander Brown 88,111,988 6,053,984 94,165,972
Mr. Robert Flew 341,148 341,148
Mr. Ronald McCullough 8,000 8,000
Mdm Kang Rong 4,000,000 4,000,000
Mr. Hayden Stockdale 80,000 (80,000) –
Mr. Mark Nielsen 23,500 (23,500) –
Mr. Allen Cauvin – –
Mr. Mark Coetzee – –
Mr. Joshua Theunissen – –
Total 92,613,674 5,950,484 98,564,158
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No shares were issued as remuneration.

No shares were issued as dividend entitlements.

62 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

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Balance Shares (sold) Balance
30 June 2012 1/07/2011 /purchased Share swap/ re-domicilation 30/06/2012
Key Management Personnel
Mr. Gerard King 24,519 – (24,519) 49,038 49,038
Mr. Alexander Brown 44,055,994 – (44,055,994) 88,111,988 88,111,988
Mr. Robert Flew 170,574 – (170,574) 341,148 341,148
Mr. Ronald McCullough 4,000 – (4,000) 8,000 8,000
Mdm Kang Rong 2,000,000 – (2,000,000) 4,000,000 4,000,000
Mr. Hayden Stockdale – 40,000 (40,000) 80,000 80,000
Mr. Mark Nielsen 11,750 – (11,750) 23,500 23,500
Mr. Allen Cauvin – – – – –
Mr. Mark Coetzee – – – – –
Total 46,266,837 40,000 (46,306,837) 92,613,674 92,613,674
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Shares issues under the share swap/re-domiciliation column relate to the 2:1 share swap

(c) Loans to/from key management personnel

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

27. RELATED PARTY TRANSACTIONS

(a) Parent entity

Astron Corporation Limited is the parent entity of the Group.

(b) Subsidiaries

Interests in subsidiaries are disclosed in note 16.

(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.

(e) Rental of offices

From 1 July 2011, the Group entered into a lease agreement with Kang Rong, who is an executive Director of the Astron Corporation Limited, whereby the Yingkou Astron Mineral Resources Co Ltd will lease the offices at level 18, Building B, Fortune Plaza, 53 Beizhan Road, Shenhe District, Shenyang China. The salient terms of the lease are:

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Period 1 January 2013 to 30 June 2014
Rental amount RMB 400,000 per annum paid in 2 equal installments, renegotiated at the commencement of each financial year
Cancellation Either party can cancel the lease by giving the other party 6 months’ notice
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The rental amount is below market price for similar properties.

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 63

Notes to the Financial Statements continued

28. CAPITAL AND LEASING COMMITMENTS

(a) Operating lease commitments

There are no non-cancellable operating leases contracted for but not capitalised in the financial statements (2012: nil)

(b) Capital expenditure commitments

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CONSOLIDATED
2013 2012
$ $
Capital expenditure commitments contracted for:
Chinese capital projects 34,222 756,148
Chinese subsidiary capitalization 3,109,000 3,084,000
Donald Mineral Sands 50,000 50,000
3,193,222 3,890,148
Payable:
not later than 12 months 3,193,222 3,890,148
Total 3,193,222 3,890,148
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(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 to the Group in relation to the land use rights. As at the 30 June 2013 the net book value of this land is $8,378,532 (2012: $7,552,501).

The intention for the block of land held by Yingkou Astron Mineral Resources Co Ltd is currently being evaluated. As at 30 June 2013 the net book value of the land is $1,634,132 (2012: $1,159,566)

Minimum expenditure on exploration and mining licenses

To maintain the Exploration and Mining Licences at Donald the Group is required to spend $1,821,300 on exploration and development expenditure over the next year (2012: $2,188,600). The minimum expenditure amount per annum will normally increase over the life of an exploration licence. The minimum expenditure on the mining licence 5532 is $556,800 per annum. The amount of this expenditure could be reduced should the Group decide to relinquish land.

Astron entered into a contract with third party consultants, Geostec Ltd to facilitate the process of obtaining a mining licence. Such services include, but are not limited to, assistance in the extension of the exploration licence which is due to expire in November 2013. The total fee to be paid by Astron amounts to USD$1.5m. The first payment of USD$650,000 was made on 17 July 2013.

(d) Water rights

In terms of the contract with GWMW the Group is required to pay a usage fee in 2013 of $191,987 (2012: $183,306) per quarter for the life of the water rights.

(e) Contingencies

Astron has received a claim from its former CEO regarding the termination of his employment, which it is defending. Astron is currently engaged in confidential and without prejudice discussions around the settlement of a termination package with the former CEO. At this stage, the directors do not expect a resolution of this matter to have any significant impact on the Company’s stated financial position.

64 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

29. CASH FLOW INFORMATION

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

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CONSOLIDATED
2013 2012
$ $
Net (loss)/profit for the year (5,465,643) (1,003,168)
Non-cash flows in profit (loss) from ordinary activities
Depreciation and amortisation 526,771 462,953
Impairment of capital works in progress – 88,476
Impairment to development costs – 16,752
Asset expended to R & D 40,364 –
Expenditure on re-domiciliation 10,586 1,086,032
Impairment of available-for-sale assets 299,112 169,803
Decrease/(increase) in trade and other receivables (1,047,488) 2,078,053
Decrease/(increase) in inventories 3,334,465 (1,134,889)
Increase/(decrease) in trade payables and accruals (444,729) 871,841
(Decrease)/increase income taxes payable (503,528) (496)
Increase in deferred tax liabilities 58,384 403,791
Effects on foreign exchange rate movement – 16,780
(Decrease)/increase in share-based payments reserve (125,250) 125,250
(3,316,956) 3,181,178
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(b) Reconciliation of cash

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CONSOLIDATED
2013 2012
Note $ $
Cash at the end of the financial year as shown in the cash flow statement is
reconciled to items in the consolidated statement of financial position as follows:
Cash on hand 10 7,004 77,200
Current & call account balances 10 11,590,592 4,179,203
Short term deposits 10 34,193,022 54,530,732
45,790,618 58,787,135
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(c) Loan facilities

As at 30 June 2013 and 30 June 2012 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.

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 65

Notes to the Financial Statements continued

(e) Acquisition of entities

During the year or during the previous year Astron Corporation Limited did not invest any funds into Chinese subsidiaries. During the current year Astron did not acquire any news entities.

(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 (2012: $60,000) of cash backed Bank Guarantees for the operations of the Donald Mineral Sands project and WIM 150 Pty Limited.

Bank balances did not include any letter of credit deposits at 30 June 2013 (2012: $56,052).

30. EMPLOYEE BENEFIT OBLIGATIONS

As at 30 June 2013 and 30 June 2012, 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.

31. SUBSEQUENT EVENTS

The financial statements were authorised for issue on 27 September 2013 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.

32. PARENT COMPANY DISCLOSURE

The following information relates to the parent entity, Astron Corporation Limited (2012: Astron Limited). Financial information for Astron Corporation Limited as an individual entity is shown in this note. The information presented has been prepared using accounting policies that are consistent with those presented in Note 1.

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Astron Corporation Astron Corporation
Limited Limited
2013 2012
$ $
Current assets –
Non–current assets 168,409,703 168,409,703
Total assets 168,409,703 168,409,703
Current liabilities 33,552 5,212
Non-current liabilities –
Total liabilities 33,552 5,212
Share capital 1,605,048 1,605,048
Share premium 166,804,655 166,804,655
Contributed equity –
Reserves (3,617) 125,250
(Accumulated loss)/ retained earnings (29,935) (130,462)
Total equity 168,376,151 168,404,491
Profit/(loss) for the year 99,665 (130,462)
Other comprehensive income for the year 862 –
Total comprehensive loss/ (income) 100,527 (130,462)
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66 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

(a) Guarantees between 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) Capital Commitments

Astron Limited is committed to adequately capitalise its Chinese subsidiaries to the amount of $3,109,000 (2012: $3,084,000).

33. 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 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 practice 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:

(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:

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CONSOLIDATED
2013 2012
$ $
Cash & cash equivalents 45,790,618 58,787,135
Term deposits with maturity over 90 days 62,333,117 62,370,546
Receivables 3,921,612 3,372,964
Total 112,045,347 124,530,645
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ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 67

Notes to the Financial Statements continued

(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. As at the year end the Group had cash of $45,790,618 (2012: $58,787,135)

Maturity analysis

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CONSOLIDATED
Contractual Cash
Carrying Amount flows < 6 months
Note $ $ $
YEAR ENDED 30 JUNE 2013
Non-derivatives
Trade payables 19 1,241,957 1,241,957 1,241,957
Other payables and accruals 19 641,023 641,023 641,023
Borrowings 20 301,909 301,909 301,909
Total Non-interest bearing liabilities 2,184,889 2,184,889 2,184,889
Total liabilities 2,184,889 2,184,889 2,184,889
YEAR ENDED 30 JUNE 2012
Non-derivatives
Trade payables 19 1,088,456 1,088,456 1,088,456
Other payables and accruals 19 822,679 822,679 822,679
Total Non-interest bearing liabilities 1,911,135 1,911,135 1,911,135
Total liabilities 1,911,135 1,911,135 1,911,135
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(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.

At 30 June 2013 and 30 June 2012, 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 IFRS7.

68 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

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CONSOLIDATED
2013 2012
$ $
Available-for-sale financial assets
ASX Listed equity shares Level 1 983,198 1,983,776
983,198 1,983,776
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(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:

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Weighted
Average
Effective Fixed Interest Rate
Interest Rate Floating Interest Rate Maturing within 1 Year Non-interest Bearing Total
2013 2012 2013 2012 2013 2012 2013 2012 2013 2012
% % $ $ $ $ $ $ $ $
Financial Assets:
Cash and cash
equivalents 1.42% 4.42% 11,590,592 4,179,203 34,193,022 54,530,732 7,004 77,200 45,790,618 58,787,135
Term deposits greater
than 90 days 4.59% 5.26% – – 62,333,117 62,370,546 – – 62,333,117 62,370,546
Receivables – – – – – – 3,921,612 3,367,744 3,921,612 3,367,744
Available-for-sale
investments – – – – – – 983,198 1,983,776 983,198 1,983,776
Total Financial
Assets 11,590,592 4,179,203 96,526,139 116,901,278 4,911,814 5,428,720 113,028,545 126,509,201
Financial Liabilities:
Trade and sundry
payables – – – – – – 1,882,980 2,188,375 1,882,980 2,188,375
Borrowings 4.77% – – – 301,909 – – – 301,909 –
Total Financial
Liabilities – – – 301,909 – 1,882,980 2,188,375 2,184,889 2,188,375
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ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 69

Notes to the Financial Statements continued

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.

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CONSOLIDATED
+1% (100 basis points) -1% (100 basis points)
2013 2012 2013 2012
$ $ $ $
Cash at bank 522,889 507,307 (522,889) (507,307)
Term deposits greater than 90 days 623,518 492,186 (623,518) (492,186)
Borrowings (3,019) – 3,019 –
1,143,388 999,493 (1,143,388) (999,493)
Tax charge of 30% (343,016) (299,848) 343,016 299,848
Total 800,372 699,645 (800,372) (699,645)
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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. 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 2013, the maximum exposure of price risk to the Group was the available-for-sale investments for $983,198 (2012: $1,983,776). 100% of the Group’s holding is in the mining or energy sector.

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

		CONSOLIDATED
		2013 $ 2012 $
Carryingamount of listed equityshares on ASX		983,198 1,983,776
		983,198 1,983,776
Sensitivity analysis
		CONSOLIDATED
	2013 $	2012 $
	Increase/(decrease) in shareprice	Increase/(decrease) in shareprice
	+10% -10%	+10% -10%
Listed equity shares on ASX
Proft before tax – decrease	– (98,320)	– (198,377)
Other comprehensive income – increase	98,320 –	198,377 –

The above analysis assumes all other variables remain constant.

70 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

Declaration by Directors For The Year Ended 30 June 2013

ASTRON CORPORATION LIMITED

Declaration by Directors

For The Year Ended 30 June 2013

The Directors of the company declare that:

The financial statements, comprising the consolidated statement of profit or loss and other comprehensive income, consolidated statement of financial position, consolidated statement of cash flows, consolidated statement of changes in equity, accompanying notes, are in accordance with International Financial Reporting Standards and give a true and fair view of the consolidated entity’s financial position as at 30 June 2013 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.

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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R Flew, Director R McCullough, Director

Dated this 27 September 2013

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 71

Independent Audit Report

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72 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

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ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 73

Investor Information

2013/2014 FINANCIAL CALENDAR (ON OR BEFORE)

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Release of quarterly report 31 October 2013
2013 Annual general meeting 22 November 2013
Release of quarterly report 31 January 2014
Release of half year report 28 February 2014
Release of quarterly report 30 April 2014
Release of Appendix 4E 29 August 2014
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Additional information required by the Australian Securities Exchange Ltd and not shown elsewhere in this report is as follows. The information is current as at 17 September 2013.

SHAREHOLDERS’ INTERESTS

(a) Distribution of equity securities

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

Range of Units Snapshot

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% of
Total holders Units Issued Capital
1–1,000 131 64,584 0.05
1,001–5,000 150 437,830 0.36
5,001–10,000 67 527,945 0.43
10,001–100,000 157 5,129,521 4.19
100,001–9,999,999,999 41 116,316,898 94.97
Rounding 0.00
Total 583 122,476,778 100.00
NON CDI HOLDERS
1–1,000 4 306
1,001–5,000 1 2,700
Total 2 3,006
Unremarkable Parcels
Minimum
parcel size Holders Units
Minimum $500.00 parcel at $0.71 per unit 705 82 20,723
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74 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

(b) Twenty largest CDI holders

The twenty largest CDI holders are as follows:

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% of Total
Rank Name Units CDIs
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1.	FIRBACK FINANCE LIMITED	61,804,028	50.46
2.	P T ARAFUA MINING LIMITED	32,361,944	26.42
3.	FSC INVESTMENT HOLDINGS LTD	7,437,092	6.07
4.	JUHUA INTERNATIONAL LIMITED	4,000,000	3.27
5.	GCC ASSET HOLDINGS PTY LTD	1,797,866	1.47
	MR DARRELL VAUGHAN MANTON + MRS VERONICA JOSEPHINE MANTON <THE
6.	MANTON FAMILY NO 2 A/C>	933,364	0.76
7.	MR DONALD ALEXANDER BLACK	647,628	0.53
8.	BT PORTFOLIO SERVICES LIMITED	600,000	0.49
9.	MR ADRIAN ROBERT NIJMAN + MRS JENNY ANN NIJMAN	484,021	0.40
10.	DFC MANAGEMENT PTY LTD	400,000	0.33
11.	COGNITION AUSTRALIA PTY LTD	381,468	0.31
12.	NAVIGATOR AUSTRALIA LTD	376,120	0.31
13.	3RD PULITANO INCORPORATION PTY LTD	328,744	0.27
14.	BRESRIM NOMINEES PTY LTD	328,342	0.27
15.	UBS NOMINEES PTY LTD	321,000	0.26
16.	MAX SHORT PTY LTD	289,260	0.24
17.	ELLROCK PTY LTD	260,000	0.21
	MR DAVID DIPPIE + MRS JOANNE DIPPIE + BRAMWELL GROSSMAN TRUSTEES LTD
18.		247,613	0.20
19.	MR MALCOLM CAMPBELL	204,400	0.17
20.	GOLDEN ARCH(QLD)PTY LTD	202,460	0.17
Totals: Top 20 holders of CDI		113,405,350	92.54
Total RemainingHolders Balance		9,131,728	7.46
Total CDIs		122,476,778	100.00
Total non-CDI holders		3,006
Total shares on issue		122,479,784

(c) Voting rights

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

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 75

Investor Information continued

(d) Schedule of interests in mining tenements

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Location Tenement Percentage held
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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 Group held one shareholder information session 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

76 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

SALIENT FINANCIALS

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2013 2012 2011 2010 2009 2008 2007 2006
Share price ($) 0.71 1.30 1.50 0.90 0.90 1.00 1.30 1.60
EPS (c) (4.46) (0.80) 0.70 0.90 (2.00) 89.00 9.50 20.00
Price earnings Ratio n/a n/a 221.4 105.6 n/a 0.1 13.7 8.9
Interest Cover n/a n/a n/a n/a n/a 115 13 n/a
Nos of Shares on issue (m) 122.5 122.5 124.6 128.4 129.6 129.4 120.8 116.6
Profit and Loss ($m)
Revenue 13.0 21.0 20.5 15.3 10.6 204.2 181.7 151.9
Costs (17.8) (20.4) (17.0) (12.2) (9.9) (87.4) (164.5) (130.5)
EBITDA (4.8) 0.6 3.5 3.1 0.7 116.8 17.2 21.4
Depreciation & Amorisation (0.6) (0.5) (0.4) (0.3) (0.3) (2.9) (2.1) (1.8)
EBITDA (5.4) 0.1 3.1 2.8 0.4 113.9 15.1 19.6
– – – –
Borrowing Costs (0.1) (0.1) (1.0) (1.2)
NPBT (5.5) 0.1 3.1 2.7 0.4 112.9 13.9 19.6
Income tax expenses (0.0) (1.1) (2.2) (1.5) (2.9) (1.0) (2.5) 1.0
NPAT (5.5) (1.0) 0.9 1.2 (2.5) 111.9 11.4 20.6
Balance Sheet ($m)
Cash & Term deposits 108.1 121.2 147.4 166.5 168.8 185.6 15.9 20.8
Receivables 5.0 4.2 7.5 2.6 2.5 8.4 29.7 21.5
Inventories 2.2 5.1 3.7 1.3 2.9 3.4 50.0 28.6
Other financial Assets 1.0 1.9 2.5 0.7 1.1 – 6.1 8.3
Current Tax Assets 0.3 – – – – – – –
Total Current Assets 116.6 132.4 161.1 171.1 175.3 197.4 101.7 79.2
Property, Plant & Equipment 21.1 16.7 12.4 11.4 9.0 6.6 21.7 21.1
Investments – – – – – – 2.2 –
Intangible assets 56.2 48.6 27.0 21.8 20.4 19.9 24.6 18.3
Land use rights 10.0 8.7 8.3 10.0 10.8 9.0 – 0.3
Deferred Tax Assets – – – – – – 0.7 1.1
Total Current Assets 87.3 74.0 47.7 43.2 40.2 35.5 49.2 40.8
TOTAL ASSETS 203.9 206.4 208.8 214.3 215.5 232.9 150.9 120.0
Payables 1.9 2.2 2.2 1.5 1.8 21.0 31.9 20.6
Borrowings 0.3 0.2 – – – – 13.6 3.5
Tax Liabilities – 0.1 0.2 0.2 0.9 – 0.3 0.1
Total Current Liabilities 2.2 2.5 2.4 1.7 2.7 21.0 45.8 24.2
Deferred Tax 5.0 5.0 4.6 2.9 1.6 – 1.1 1.1
Total Non-Current Liabilities 5.0 5.0 4.6 2.9 1.6 – 1.1 1.1
Total liabilities 7.3 7.5 7.0 4.6 4.3 21.0 46.9 25.3
NET ASSETS 196.6 198.9 201.8 209.7 211.2 211.9 104.0 94.7
Cash Flows ($m)
Operating Activities (3.3) 3.2 (1.5) 4.0 0.8 27.3 (6.5) 15.0
Investing Activities (11.0) (27.8) (17.9) (57.8) (13.5) 157.6 (12.7) (7.2)
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After 2:1 share swap

ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 77

Corporate Information

DIRECTORS

Mr Gerard King (Chairman) Mr Alexander Brown (Managing Director)

Mr Robert Flew (Non-executive Director)

AUDITORS

Grant Thorton Australia Limited Level 19, 2 Market Street Sydney NSW 2000, Australia

Mr Ronald McCullough (Non-executive Director)

Mdm Kang Rong (Executive Director)

COMPANY SECRETARY AND REGISTERED OFFICE

Grant Thornton Jingdu Tianhua

20th Floor Sunning Plaza 10 Hysan Avenue Causeway Bay Hong Kong

INTERNET ADDRESS

McCabe Secretarial Service Limited

www.astronlimited.com

29th Floor, Wing-On-Centre, 111 Connaught Road Central, Hong Kong

AUSTRALIAN CORPORATE 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, Australia

SHARE REGISTRAR

Computershare Investor Services Limited

Level 3, 60 Carrington Street Sydney NSW 2001, Australia

Computershare Hong Kong Investor Services Limited

Hopewell Centre, 46th floor 183 Queen’s Road East Wan Chai, Hong Kong

78 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

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ASTRON CORPORATION LIMITED ANNUAL REPORT 2013 79

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80 ASTRON CORPORATION LIMITED ANNUAL REPORT 2013

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www.astronlimited.com
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AI assistant

ASTRON LIMITED — Annual Report 2013

64449_rns_2013-10-29_3537671d-69e3-48de-a474-edcc066f8dd7.pdf

Contents

Cautionary statement

Competent Person’s Statement

About Astron

Key objectives and outlook

Highlights

NAV per share

Chairman’s report

Dear Shareholder,

Managing Director’s report

Definitive feasibility study (DFS) for Donald Project

ACTIVITIES IN VICTORIA AND THE DONALD PROJECT

Zircon wash process

Jackson and regional exploration

Metallurgical test work

Land

Regulatory & Approvals

UPDATE ON ACTIVITIES OF PROJECT DEPARTMENT

SUMMARY OF RUTILE TRADING FOR THE FINANCIAL YEAR

Rutile market summary

Financial performance

THE YEAR AHEAD

OTHER OPPORTUNITIES

Alex Brown

Sustainable development

EMPLOYEES AND OTHER STAKEHOLDERS

LOCAL COMMUNITIES

ENVIRONMENT

Corporate governance

THE BOARD OF DIRECTORS

1. BOARD OF DIRECTORS

1.2 Composition of the Board

CORPORATE GOVERNANCE POLICY

1.4 Board Policies

1.3 Responsibilities of the Board

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

1.11 Attestations by Chairman and Non-Executive Director

2. BOARD COMMITTEES

2.1 Audit and Finance Committee

2.1.1 Role

1.9 Trading in Company Shares

1.10 Performance Review/Evaluation

2.1.2 Responsibilities

2.1.3 Risk Management Policies

2.3 Remuneration Committee

2.3.1 Role

2.3.2 Responsibilities

2.2 Code of Conduct

2.3.3 Remuneration Policy

2.3.3.1 Senior Executive Remuneration Policy

2.3.3.2 Non-Executive Director Remuneration Policy

2.4 Nomination Committee

2.4.1 Role

2.4.2 Responsibilities

2.4.3 Criteria for selection of Directors

2.3.4 Current Director Remuneration

Directors’ Report

DIRECTORS

NAMES

PRINCIPAL ACTIVITIES

SIGNIFICANT CHANGES TO GROUP STRUCTURE

FINANCIAL POSITION

DIVIDENDS

REVIEW OF OPERATIONS

Financials

Consolidated Statement of Profit or Loss and other Comprehensive Income

Consolidated Statement of Financial Position

Operations review

Donald

Regulatory

ASTRON LIMITED Annual Report 2013