EV RESOURCES LTD — Interim / Quarterly Report 2014

Mar 13, 2014

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Financial Report For The Half Year Ended 31 December 2013

For South East Asia Resources Limited

and Controlled Entities

ABN 66 009 144 503

This Half-Year Report should be read in conjunction with the Company’s Annual Report for the year ended 30 June 2013

Contents

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Contents

Page

Directors' Report ........................................................................................................................................................................ 3 Directors' Declaration ................................................................................................................................................................ 8 Auditor‟s Independence Declaration ........................................................................................................................................ 9 Statement of Profit or Loss and Other Comprehensive Income – For the Half Year Ended 31 December 2013 ............ 10 Statement of Financial Position – As at 31 December 2013 ............................................................................................... 11 Statement of Changes in Equity – For the Half Year Ended 31 December 2013 ............................................................... 12 Statement of Cash Flows – For the Half Year Ended 31 December 2013 .......................................................................... 13 Notes to and forming part of the Interim Financial Report ................................................................................................... 14 Independent Auditor‟s Review Report .................................................................................................................................... 24

Directors‟ Report

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The Directors‟ present their report together with the financial report of South East Asia Resources Limited (ASX: SXI ) and its controlled entities (“the Company”, “SEA” or “consolidated entity”) for the half year ended 31 December 2013.

The Directors of the Company who held office during or since the end of the half year and until the date of this report were:

Mr. Gary Williams Executive Director (appointed 29/11/2013) Mr. Jackob Tsaban Non –Executive Director (appointed 18/10/2013) Mr. Wayne Knight Non- Executive Director Mr Steven Pynt Non- Executive Director (resigned 29/11/2013) Mr Michael Scivolo Non- Executive Director (resigned 29/11/2013)

Operating Results

During the period the Company made a profit of $1,596,634 (loss of $782,292 in 2012).

Review of Operations

The Consolidated entity‟s activities are contained in releases to the ASX on a quarterly basis and can be obtained from our website www.southeastasiaresources.com.au .

Throughout the half year, the Company has continued to execute its vision of finding, proving and extracting value from world class resource projects in South East Asia and while the Company continues to focus on its cornerstone asset the Malala Molybdenum Project in Sulawesi, Indonesia, the Company, expanding its focus in coal projects in East Kalimantan, Indonesia.

Key Highlights

Notable events during the six month period include:

• As announced by the Company on 31 July 2013 and on 16 September 2013, the Company had agreed, through its wholly-owned subsidiary, South East Asia Energy Resources (Australia) Pty Ltd (SEA), to extend the expiry date of the option period granted to acquire Tiger Coal Pty Ltd and Energy Investments Pty Ltd (“Target Companies”), the holders of three coal exploration licences in Tasmania, Australia, until 30 November 2013. Subsequently the option was not extended with the parties agreeing to work towards restructuring the agreements upon the license renewal by the Tasmanian Mines Department. SEA, at the same time, has been working with an Offshore Investor Group to not only fully fund the project with SEA but additionally all coal off-take. It is expected that this process will be concluded by the end of June 2014.

• During September 2013, the Company executed a Bond Subscription Agreement with PA Broad Opportunity IV Limited (Subscriber) for the provision of up to A$10 million by way of unsecured bonds, convertible into shares.

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Directors‟ Report (continued)

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The key terms of the bonds are set our below:

The conversion price for the bonds is the lower of:

• (a) 125 % of the average of the closing price per share for the 25 trading days immediately prior to the date on which the bond is issued; or

• (b) 90% of the average of the closing price per share in any 5 consecutive trading days during the 25 trading days immediately preceding the relevant conversion date of the bonds.

The conversion price, at all times, cannot be lower than A$0.015 and if the conversion price determined from either (a) or (b) above is below A$0.015, then the conversion price would be equal to A$0.015 for that particular conversion.

The Bonds are unsecured and have a maturity date of 5 years.

On 18 September, the Company issued the Initial Tranche Bonds of A$500,000. The Company also issued 15 million shares in satisfaction of the A$300,000 fee for agreeing the Bond Subscription Agreement. On 1 November, 2013, based on a conversion notice received forA$190,000 of the Initial Tranche Bonds, the Company issued 11,728,395 fully paid shares.

• During December 2013, the company agreed with related parties about debt forgiveness of its liabilities to them. This debt forgiveness contributed $3,465,900 to its revenues. Please refer to note 15 in the financial statements for additional information.

PT PAR COKING COAL PROJECT (INDONESIA)

PT PAR coking coal mine is located near Balikpapan in East Kalimantan, Indonesia and has been under development by SEAER . The coal is provided from a multi seam truck and excavator operations providing both semi soft coking coal and additional high-grade thermal coal. The coal is to be trucked by internal haul road some 32 klms to the barge loading port of Telen where it is processed and loaded onto 6,000 tonne barges for 30 km trans-shipment to anchorage of Adang Bay.

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Directors‟ Report (continued)

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The initial PAR area is divided into 2 pits, which have been developed by SEAER using the companies Indonesian subsidiary PT UMES and Mining Contractor Debbia Mining with the coking coal qualities and CSN variable across the two in it mine blending is undertaken ;

Adjoining the PAR coal resource is BBA, which has continuity of coal resources and indicatively higher quality. BBA has had initial geological exploration undertaken with SEAER Geologists but requires a drilling exploration program to complete a JORC resource. This would be undertaken in conjunction with the current PAR coal mining stages.

Production commenced during December 2013 with delays through the later part of December and January due to the wet season and Contractor equipment delays. Arising from these delays South East Asia Resources Limited through its wholly owned subsidiary Singapore based South East Asia Energy Resources Pte Ltd (SEAER ) is taking full control of the operations, mining and coal sales of semi soft coking coal mines of PT Pola Andhika Realtor (PAR) mine site in East Kalimantan Indonesia .

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The initial production to date had been undertaken by mining contractor, Debbia Mining, under the mine and project management of PT UMES with Indonesian and Australian site management. SEAER has reached agreement to take over the mining contractor, mining equipment and workforce and undertake all mining direct. This will provide much more efficient, but also a lower cost of production.

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Legal agreements are being finalised through the companies Lawyers NMLP in Jakarta and PT Debbia the current mining contractor and holder of the coal rights. It is proposed that these agreements will be finalised and executed by the end of March 2014.

It is proposed that all mining and engineering will be undertaken by SEAER Indonesian subsidiary PT UMES under the direct management of SEAER and will recommence under this structure by the end of March.

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Directors‟ Report (continued)

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All coal off-take initially be domestic supply to large Indonesian Steel Works and will be through SEAER Indonesian subsidiary PT United Mining Engineering Services has been able to negotiate an off-take agreement PT Pacific Bliss. Pacbliss is a well-established trading company experienced in Coal and Minerals. Pacbliss have long term supply agreements with the likes of Glencore, Krakatau Posco and Noble Energy.

The local Indonesian company which is wholly controlled by SEAER will have all the necessary licenses in place to enable tender pre qualification to take place for ongoing Domestic supply.

Upon commencement and production for the adjoin BBA this coal will be dedicated under SEAER current relationship to Vietnam for coke works supply as previously reported

As part of this take-over, SEAER will also expand the coking coal resource area and provide for an additional adjoining coal concession for continued production on the expiry of PAR through to BBA and beyond.

MALALA MOLYBDENUM PROJECT, SULAWESI, INDONESIA

The Company has maintained the Malala Molybdenum Project and continued discussions with provincial Government and other officials concerning all licenses and administrative matters. The Company holds 95% beneficial percentage interests in the project.

The Malala Project is located in the ToliToli Regency of Central Sulawesi Province, Indonesia, approximately 150km to the north of Palu. The project comprises five IUP concessions: PT IntiCemerlang, PT Promistis, PT Era Moreco, PT Sembilan Sumber Mas & PT Indo Surya. The total area forming the Malala Project is in excess of 240km2 spread across the five concessions all of which are located within 15km of the coast.

Since acquisition, SXI has worked diligently at compiling and reviewing the historical data and re-initiating the exploration process. The majority of work has targeted Anomaly B, the key area of Rio Tinto/Santos exploration efforts in the 1970‟s and 1980‟s. The Company has significantly advanced its understanding of the Anomaly B prospect area, with detailed trenching and geophysical surveying making large contributions to this improved understanding.

The Company has entered into negotiations with Indonesian parties with interests in the same area to join together to develop this project. The support of these incoming parties is expected to substantially enhance the projects ability to fulfil all of the requirements to get this project to production. This will effectively relaunch the Molybdenum project and provide a timetable to take the project to production with a suitable off take/technical partner. These arrangements are to be concluded in the next quarter with a view to commencing the financing or joint venture of the project in that quarter.

While the Company has high expectations in relation to the Malala Molybdenum Project, it was decided to take a conservative approach and impair the related capital expenditure of this project at 30 June 2013.

TASMANIA ,AUSTRALIA

With the expiry if the option to acquire the Midland Coal exploration licenses of Jericho and Woodbury SEAER has continued through the period to review and assess other coal opportunities within Tasmania during the period.

Matters subsequent to reporting date

Subsequent to the half year end, the Company and Dempsey Resources have extended the repayment date of the convertible notes to 30 June 2015.

Apart from the above mentioned, there have been no key events.

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Directors‟ Report (continued)

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Dividends Paid or Recommended

No dividends were paid or proposed during the half-year ended 31 December 2013.

Auditor‟s Independence Declaration

The lead auditor's independence declaration under section 307C of the Corporations Act 2001 is set out on page 9 for the half-year ended 31 December 2013.

This report is signed in accordance with a resolution of the Board of Directors made pursuant to s.306 (3) of the Corporations Act 2001.

_____ Jackob Tsaban Director

Dated this 14[th ] day of March 2014

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Directors‟ Declaration

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In accordance with a resolution of the directors of South East Asia Resources Limited, I state that:

In the opinion of the directors:

1. The financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001, including:

2. (a) complying with Accounting Standard AASB 134 “Interim Financial Reporting” and the Corporations Regulations 2001; and

3. (b) give a true and fair view of the economic entity‟s financial position as at 31 December 2013 and the performance for the half-year ended on that date.

4. there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

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______
Jackob Tsaban
Director
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Dated this 14[th] day of March 2014

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Level 1 10 Kings Park Road West Perth WA 6005

Correspondence to: PO Box 570 West Perth WA 6872

T +61 8 9480 2000 F +61 8 9322 7787 E info.wa@au.gt.com W www.grantthornton.com.au

Auditor’s Independence Declaration

To The Directors of South East Asia Resources Limited and its controlled entities

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the review of South East Asia Resources Limited and its controlled entities for the half-year ended 31 December 2013, I declare that, to the best of my knowledge and belief, there have been:

• a No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

• b No contraventions of any applicable code of professional conduct in relation to the review.

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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

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M J Hillgrove Partner - Audit & Assurance

Perth, 14 March 2014

Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.

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Statement of Profit or Loss and Other Comprehensive Income For the Half-Year Ended 31 December 2013

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Note	Consolidated	Consolidated
Other revenue 3 Depreciation and amortization expense Project evaluation costs not capitalised Personnel, suppliers and consulting expenses Listing expenses Finance Costs 4 Insurance Legal Fees Professional Fees Travel costs and accommodation Net foreign exchange losses Changes in fair value of financial assets Other expenses from ordinary activities Profit/(loss) before income tax Income tax expense Profit/(loss) after tax Other comprehensive income Items that may be reclassified subsequently to profit or loss: Exchange difference on translation of foreign operations Income tax relating to components of other comprehensive income Other comprehensive(loss)/ income for the period, net of tax Total comprehensive profit/(loss) for the period Loss attributable to: Members of the parent entity Non-controlling interest Total Comprehensive loss for the period attributable to: Members of the parent entity Non-controlling interest Earnings/(Loss) per Share Basic earning/(loss) per share (cents) Diluted earning/(loss) per share (cents)	31 December 2013 3,466,022 (900) (573,333) (342,200) (55,133) (727,079) (16,539) (42,364) (73,457) (23,597) (10,930) - (3,856) 1,596,634 -	31 December 2012 18,288 (918) (32,324) (407,997) (50,858) (189,381) (7,178) (29,763) (42,746) (138) (30) 5,594 (44,841)
		(782,292) -
	1,596,634 (75,462) - (75,462) 1,521,172 1,596,634 - 1,596,634 1,521,172 - 1,521,172 0.69 0.28	(782,292)
		(128,784) -
		(128,784)
		(911,076)
		(782,292) -
		(782,292)
		(911,076) -
		(911,076)
		(0.43) (0.43)

The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the notes to and forming part of the consolidated interim financial report.

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Statement of Financial Position

As at 31 December 2013

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Note	Consolidated	Consolidated
Current Assets Cash and cash equivalents Trade and other receivables Prepayments Total Current Assets Non-Current Assets Receivables Property, plant and equipment Exploration and evaluation expenditure 6 Other financial assets Total Non-Current Assets Total Assets Current Liabilities Trade & other payables 8 Borrowings 9 Other current liabilities 10 Total Current Liabilities Non-current Liabilities Borrowings 9 Total Liabilities Net Assets Equity Issued capital 11 Reserves Accumulated losses Parent interest Non-controlling interest Total Equity	31 December 2013 222,532 38,678 860 262,070 8,393 1,285 11,993,936 5,595 12,009,209 12,271,279 3,605,777 4,258,600 365,406 8,229,783 1,310,000 9,539,783 2,731,496 28,449,309 (2,756,539) (22,597,710)	30 June 2013 4,817 31,412 11,159
		47,388
		8,247 2,185 11,165,299 5,595
		11,181,326
		11,228,714
		6,237,514 2,941,400 354,476
		9,533,390
		1,300,000
		10,833,390
		395,324
		27,634,309 (2,681,077) (24,194,344)
	3,095,060 (363,564) 2,731,496	758,888 (363,564)
		395,324

The consolidated statement of financial position is to be read in conjunction with the notes to and forming part of the consolidated interim financial report.

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Statement of Changes in Equity For the Half-Year Ended 31 December 2013

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		Consolidated
Balance at 1.7.2012 Loss attributable to members of parent entity Other comprehensive income Sub-total Contributions to equity Transaction costs Performance shares and options issued for the acquisition of SEAE Conversion of convertible notes Balance at 31.12.2012 Balance at 1.7.2013 Loss attributable to members of parent entity Other comprehensive income Sub-total Contributions to equity Conversion of convertible notes Balance at 31.12.2013	Note	Issued capital Accumulated Losses Option Reserve Foreign currency translation Acquisition Reserve Non- controlling Interest Total $ $ $ $ $ $ $
	7	21,502,323 (12,555,549) 23,850 (1,404,337) (3,350,000) (32,557) 4,183,730 - (782,292) - - - - (782,292) - - - (128,784) - - (128,784)
		21,502,323 (13,337,841) 23,850 (1,533,121) (3,350,000) (32,557) 3,272,654 750,000 - - - - - 750,000 (28,000) - - - - - (28,000) 4,950,000 - 292,050 - - - 5,242,050 104,986 - - - - - 104,986
		27,279,309 (13,337,841) 315,900 (1,533,121) (3,350,000) (32,557) 9,341,690
		27,634,309 (24,194,344) 315,900 353,023 (3,350,000) (363,564) 395,324 - 1,596,634 - - - - 1,596,634 - - (75,462) - - (75,462)
		27,634,309 (22,597,710) 315,900 277,561 (3,350,000) (363,564) 1,916,496 625,000 - - - - - 625,000 190,000 - - - - - 190,000
		28,449,309 (22,597,710) 315,900 277,561 (3,350,000) (363,564) 2,731,496

The consolidated statement of changes in equity is to be read in conjunction with the notes to and forming part of the consolidated interim financial report.

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For the Half-Year Ended 31 December 2013

Statement of Cash Flows

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Note	Consolidated	Consolidated
Cash Flow from Operating Activities Payments to suppliers and employees Interest received Net cash flows (used in) operating activities Cash Flow from Investing Activities Payment for exploration and evaluation expenditure Purchase of subsidiary under business combination - net of cash acquired (SEAE) 7 Loans to other entities Loans from other entities Loans repaid by other entities Net cash flows (used in) investing activities Cash Flow from Financing Activities Proceeds from issue of shares and options Proceeds from borrowings Repayment of borrowings Net cash flows provided/ (used in) by financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period	31 December 2013 (987,407) 123 (987,284) (828,637) - - - - (828,637) 440,000 1,646,000 (52,364) 2,033,636 (217,715) 4,817 222,532	31 December 2012 (255,006) -
		(255,006)
		- 1,890 (685,000) - -
		(683,110)
		722,000 502,120 (725,094)
		499,026
		(439,090) 481,060
		41,970

The consolidated statement of cash flows is to be read in conjunction with the notes to and forming part of the consolidated interim financial report.

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Notes to and Forming Part of the Accounts For the Half-Year Ended 31 December 2013

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Notes to the consolidated interim financial report

(a) Reporting Entity

South East Asia Resources Limited (the Company) is a company domiciled in Australia. The consolidated interim financial statement of the Company as at and for the six months ended 31 December 2013 comprises the Company and its controlled entities (together referred to as the consolidated entity).

(b) Statement of Compliance

The half-year consolidated financial statements are general purpose financial statements prepared in accordance with the requirements of the Corporations Act 2001, applicable accounting standards including AASB 134: Interim Financial Reporting, Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board („AASB‟). Compliance with AASB 134 ensures compliance with IAS 34 „Interim Financial Reporting‟.

These half-year financial statements do not include full disclosures of the type normally included in an annual financial report. Therefore, they cannot be expected to provide as full an understanding of the financial performance, financial position and cash flows of the Company as in the full financial report.

It is recommended that these financial statements be read in conjunction with the annual financial report for the year ended 30 June 2013 and any public announcements made by South East Asia Resources Limited during the half-year in accordance with continuous disclosure requirements arising under the Corporations Act 2001 and the ASX Listing Rules.

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim period, except as contained within the following notes.

(c) Reporting Basis and Conventions

The half-year report has been prepared on a historical cost basis. Cost is based on the fair value of the consideration given in exchange for assets. The Company is domiciled in Australia and all amounts are presented in Australian dollars, unless otherwise noted.

For the purpose of preparing the half-year financial statements, the half-year has been treated as a discrete reporting period.

(d) Adoption of new and revised Accounting Standards

The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to their operations and effective for the current half year.

The adoption of all the new and revised Standards and Interpretations has not resulted in any changes to the Group‟s accounting policies and has no effect on the amounts reported for the current or prior half-years.

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Notes to and Forming Part of the Accounts (continued) For the Half-Year Ended 31 December 2013

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(e) Going Concern

The financial statements for the half-year have been prepared on the basis of going concern, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business. Whilst acknowledging the inherent uncertainties of progressing to productive mining operations, the Directors consider the going concern basis to be appropriate.

During the half year the consolidated entity incurred a profit after tax of $1,596,634, net cash flows used in operating activities were $987,284, net cash outflows during the period were $217,715 and at 31 December 2013 had net current liabilities of $7,967,713. The Company is in negotiations with the note holders and is confident that the amounts will be repaid subject to successful capital management initiatives or via the conversion to equity.

On 18 September 2013, the Company announced that it has executed a Bond Subscription Agreement (BSA) with PA Broad Opportunity IV Limited (Subscriber) for the provision of up to A$10 million by way of unsecured bonds, convertible into shares. The BSA was approved by shareholders on 29 November 2013.

Subsequent to balance date, a significant majority of convertible debt holders have agreed to extend the expiry date for these loans to 30 June 2015 (refer note 9). The Directors are confident that the convertible amounts will be repaid at maturity subject to successful capital management initiatives and/or ultimately settled via conversion to equity. In addition, the creditors associated with key management personnel have agreed in writing to defer settlement of their debts until such time as the consolidated entity is in a position to meet these debts and/or ultimately convert the debts to equity.

The Directors are developing a capital management program that will provide funding to the company‟s future projects and provide a strong base for increasing shareholder value. Whilst continued growth is dependent on the Company successfully obtaining new funding and refinancing of existing facilities in what are challenging capital markets the Directors are confident that the consolidated entity will be able to continue its operations into the foreseeable future.

Based on the financial forecasts and achieving the future financing, the directors consider the basis of going concern to be appropriate. In particular, given the Company‟s history of successful raising of capital to date, the Directors are confident of the Company‟s ability to raise additional funds as and when they are required.

The ability of the consolidated entity to continue as a going concern is also dependent upon the successful exploitation of its mineral tenements and progression of its exploration activities into a successful production stage.

Should the Company be unable to raise the funding referred to above, there is a material uncertainty whether the Company will be able to continue as a going concern, and therefore, whether it will be required to realize its assets and extinguish its liabilities other than in the normal course of business and at amounts different from these stated in the financial report. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that may be necessary should the Company be unable to continue as a going concern.

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Notes to and Forming Part of the Accounts (continued) For the Half-Year Ended 31 December 2013

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2. Segment Information

The following table presents revenue and profit information and certain asset and liability information regarding the relevant segments for the period ended 31 December 2013 for the consolidated entity.

The chief operating decision-maker has been identified as the Board of South East Asia Resources Limited.

The reportable segments have been identified around geographical areas and regulatory environments. Operating segments have been aggregated where segments are considered to have similar economic characteristics. Specifically PT Sulawesi Molybdenum Management is the Indonesian reporting segment and South East Asia Energy Resources Pte Limited Management is the Singaporean reporting segment (was acquired on 24 December 2012).

The Australian reporting segment derives its revenues from its investments in the entities making up the Indonesian reporting segment and from interest on its cash deposit. It is intended that the Indonesian reporting segment will derive revenue from the commercial exploitation of the exploration assets it currently holds.

Transactions between reportable segments are accounted for in the same manner as transactions with external parties.

Six months ended 31 December 2013

Six months ended 31 December 2013
	Australia $ Indonesia $ Singapore $ 1,240,195 - 2,225,827	Total $ 3,466,022
Revenue Total segment revenue Segment net profit/(loss) before tax Reconciliation of segment result to group net loss before tax Unallocated items Net loss before tax from continuing operations
	(270,312) - 1,866,946	1,596,634 -
		1,596,634

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Notes to and Forming Part of the Accounts (continued) For the Half-Year Ended 31 December 2013

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2. Segment Information(Continued)
	Australia Indonesia	Singapore	Total
	$ $	$	$
Segment assets and liabilities Segment assets Unallocated Assets Total assets Segment liabilities Unallocated Liabilities Total Liabilities Other segment information Depreciation and amortisation expense Movement in fair value of financial assets Six months ended 31 December 2012	156,602 96,752	12,017,925	12,271,279 -
	(7,601,523) (84,179)	(1,846,307)
			12,271,279
			(9,532,009) -
	(900) - - -	- -
			(9,532,009)
			(900) -
	Australia $ Indonesia $ 18,288 -	Singapore $	Total $ - 18,288
	18,288 -		- 18,288
			- (798,552) 2,028
			(782,292)

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Notes to and Forming Part of the Accounts (continued) For the Half-Year Ended 31 December 2013

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2. Segment Information (Continued)

	Australia Indonesia Singapore	Total
Segment assets and liabilities as at 30 June 2013	$ $ $	$
Segment assets Unallocated Assets Total assets Segment liabilities Unallocated Liabilities Total Liabilities Other segment information (31 December 2012) Depreciation and amortisation expense Impairment of financial assets	48,289 - 11,180,425	11,228,714 -
	(7,892,504) - (2,940,886)
		11,228,714
		(10,833,390) -
	(918) - - 5,594 - -
		(10,833,390)
		(918) 5,594

3. Other revenue

	Consolidated
Interest income Income from debt forgiveness	31 December 2013 $ 31 December 2012 $ 122 18,288 3,465,900 -
	3,466,022 18,288

4. Finance costs

In the finance cost for 31 December 2013 included $300,000 which were issued in ordinary shares to PA Broad Opportunity IV Limited as a fee for the convertible bonds agreement signed on 18 September 2013.

5. Contingent Assets and Liabilities

At balance date the Company is not aware of any additional contingent assets or liabilities.

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Notes to and Forming Part of the Accounts (continued) For the Half-Year Ended 31 December 2013

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6. Exploration and evaluation expenditure

	Consolidated
Note Opening balance at 1 July Increase for expenditure incurred Increase through acquisition of South East Asia Energy Resources Pte Ltd 7 Impairment of exploration and evaluation expenditure Adjustments for foreign exchange differences on expenditure	31 December 2013 $ 30 June 2013 $ 11,165,299 7,238,387 828,637 1,535,095 - 9,868,499 - (7,129,116) - (347,566)
	11,993,936 11,165,299

7. Acquisition of Controlled Entities

On 24 December 2012, the Company acquired 100% of the issued capital of South East Asia Energy Resources Pte Limited (SEAE), as announced by the Company. The acquisition was a result of the Group‟s strategy of increasing its presence in the energy resources industry. The acquisition resulted in South East Asia Resources Limited obtaining control of South East Asia Energy Resources Pte Limited.

Note Purchase consideration: Cash Performance shares (i) 11(b) Options (ii) Allocated as follows (iii): Cash and cash equivalents Other assets Exploration and evaluation assets 6 Trade and other payables	Fair Value $ 750,000 4,950,000 292,050
	5,992,050 1,890 23,159 9,868,499 (3,901,498)
	5,992,050

• i The consideration paid to acquire SEAE includes 110,000,000 performance shares together with an additional 220,000,000 shares should certain milestones be achieved with 3 years of completion. The fair value of the shares has been determined based on the current market price of the shares at the date of acquisition, taking into consideration certain probability factors.

• ii. The consideration paid to acquire SEAE includes 33,000,000 performance options issued to the vendors of SEAE.

• iii. The Company has allocated the purchase consideration to the fair value of the assets and liabilities acquired on a preliminary basis. Any excess in the purchase consideration above the fair value of the net tangible assets has been accounted for as exploration and evaluation expenditure.

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Notes to and Forming Part of the Accounts (continued) For the Half-Year Ended 31 December 2013

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8. Current Trade and Other Payables

	Consolidated
Unsecured liabilities Note Trade payables Sundry payables and accrued expenses Deferred consideration owing to Victory West Pty Ltd vendors Deferred consideration owing to SEAER Pte Limited vendors 6 Other payables	31 December 2013 $ 30 June 2013 $ 1,606,255 3,678,977 795,551 1,364,739 250,000 250,000 750,000 750,000 203,971 193,798
	3,605,777 6,237,514

Payables are unsecured.

All other unsecured liabilities are interest free and have no fixed term of repayment.

9. Borrowings

	Consolidated
Current borrowings Note Convertible note – secured (a) Convertible loans – unsecured (b) Convertible bonds – unsecured (d) Short-term borrowings (e) Current borrowings	31 December 2013 $ 30 June 2013 $ 1,900,000 1,900,000 370,000 400,000 310,000 - 1,678,600 641,400
	4,258,600 2,941,400
	Consolidated
Non-current borrowings Note Convertible loans – unsecured (c) Current borrowings	31 December 2013 $ 30 June 2013 $ 1,310,000 1,300,000
	1,310,000 1,300,000

• (a) The convertible note bears interest at 12% per annum, and has matured. The note is convertible at the higher of 30 cents or the 5-day average market share price. The Company has the option to repay the note within 90 days upon receipt of a conversion notice. The convertible note is secured by a fixed and floating charge over all the assets of the Company and Victory West Pty Ltd. Subsequently to balance date the Company and Dempsey Resources have extended the repayment date to 30 June 2015.

• (b) The convertible loans bear interest at 10% per annum. The maturity date of $100,000 of these convertible loans was extended to 30 June 2014. The company is discussing the extension of the maturity date for the remaining convertible loans holders. The loan is convertible at the lower of 5 cents per share or a price equal to 80% of the five (5) day WVAP immediately prior to the Conversion Date. The convertible loans are unsecured.

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Notes to and Forming Part of the Accounts (continued) For the Half-Year Ended 31 December 2013

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• (c) The convertible loans raised during the period bear interest at 13% per annum, and have a maturity date of 30 March 2015. The loans are convertible at the lower of 4 cents per share. The convertible loans are unsecured.

• (d) The Short-term borrowing includes loans provided by related parties. These loans do not have a maturity date.

Short term borrowings Loan from Domenal enterprises (i) Loan from Karen Williams (i) Loan from Timriki Pty Ltd (ii) Loan from Minimum Risk Pty Ltd (iii) Current borrowings	31 December 2013 $ 30 June 2013 $ 1,076,457 - 338,900 361,721 250,000 - - 279,679
	1,665,357 641,400

• i. Bear interest at 12% per annum. Does not have a maturity date.

• ii. Does not bear interest. Does not have a maturity date.

• iii. The loan was forgiven in December 2013.

10. Other current liabilities

	Consolidated
Current borrowings Note Commitment fee from CGGC Finance fee and interest charge from CGGC	31 December 2013 $ 30 June 2013 $ 140,549 136,345 224,857 218,131
	365,406 354,476

The Company in the prior year had entered into a Memorandum of Understanding (“MOU”) with China Guangshou Group Corp (“CGGC”) that, subject to due diligence, CGGC is to acquire a 65% interest in the Malala Molybdenum Project in consideration for committing to sole fund 100% of all funding required to take the Malala Molybdenum Project into large scale commercial production by 2016.

The outstanding balance at 31 December 2013 is $US324,000. The balance outstanding is not interest bearing.

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Notes to and Forming Part of the Accounts (continued) For the Half-Year Ended 31 December 2013

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11. Share Capital

	Consolidated
Note 265,180,672 (30 June 2013: 222,202,277 ) fully paid ordinary shares (a) 120,000,000 (30 June 2013: 120,000,000) performance shares (b)	31 December 2013 $ 30 June 2013 $ 22,899,309 22,084,309 5,550,000 5,550,000
	28,449,309 27,634,309

Movements in:

a) Ordinary Shares

a) Ordinary Shares
At 1 July 2013 Issue of shares – placement (i) Issue of shares – convertible bonds fee (ii) Issue of shares – option exercise fee (iii) Issue of shares – conversion of bonds (iv) At 31 December 2013 b) Performance Shares Note At 1 July 2013 Shares issuable 8 At 31 December 2013	No. of Shares $ 222,202,277 22,084,309 12,500,000 250,000 15,000,000 300,000 3,750,000 75,000 11,728,395 190,000
	265,180,672 22,899,309
	No. of Shares $ 120,000,000 5,550,000 - -
	120,000,000 5,550,000

• i. On 21 October 2013, the Company issued 12,500,000 ordinary shares at a deemed value of $0.02 per share for placement.

• ii. On 18 September 2013, the Company issued 15,000,000 ordinary shares at a deemed value of $0.02 per share, respectively, in consideration for fee related to the convertible bonds facility.

• iii. On 31 July 2013 and 31 October 2013 respectively, the Company issued 1,250,000 and 2,500,000 ordinary shares at a deemed value of $0.02 per share as payment of the $75,000 option fee regarding the option granted to the Company to acquire Tiger Coal Pty Ltd and Energy Investments Pty Ltd.

• iv. On 1 November 2013, the Company issued 11,728,395 shares at a deemed value of $0.0162 per share for conversion of convertible bonds.

Ordinary shares have no par value and participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

Performance shares do not entitle the holder to any dividends and shall participate in the proceeds of surplus profits or assets on winding up of the parent entity only to the extent of $0.0001 per performance share. Performance shares do not entitle the holder to vote on any resolutions proposed at a general meeting of shareholders.

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Notes to and Forming Part of the Accounts (continued) For the Half-Year Ended 31 December 2013

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12. Events Subsequent to Balance Date

Subsequent to the half year end, the Company and Dempsey Resources have extended the repayment date of the convertible notes to 30 June 2015.

Apart from the above mentioned, there have been no key events.

13. Related Party Transactions

During December 2013, the company agreed with Coalindo Pte Limited, an entity related to Mr Gary Williams, on debt forgiveness of $180,053 of the outstanding balance owed by the company. There was $100,000 outstanding as at 31 December 2013.

During December 2013 the company agreed with United Asia Energy Pte Ltd an entity which Mr Gary Williams is a director of, on debt forgiveness it‟s outstanding balance of USD$1,100,000 outstanding as at 30 June 2013. There was no outstanding balance as at 31 December 2013.

During six months ended 31 December 2013 transactions of $110,000 were made with United Pastoral Pty Limited, a related entity which Mr Gary Williams is a director, for provision of professional consulting services. These services were provided on normal commercial terms and conditions and at market rates. During December 2013, the company agreed with United Pastoral Pty Limited on debt forgiven of $537,353 of the balance owed by the company. There was $132,000 outstanding as at 31 December 2013.

During six months ended 31 December 2013 transactions of $37,500 were made with Jackori Consulting, a related entity which Mr Jackob Tsaban is a director, for provision of professional consulting services. These services were provided on normal commercial terms and conditions and at market rates. There was $82,500 outstanding as at 31 December 2013.

During December 2013 the company agreed with United Energy and Resources Australia Pty Ltd, a related entity which Mr Gary Williams is a director, on debt forgiveness it‟s outstanding balance of $186,796 as at 30 June 2013. There was no outstanding balance as at 31 December 2013.

During the year payments of $828,637 were made with PT United Mining Energy Services, a related entity which Mr Gary Williams is a commissioner, for financing development and production costs to PAR project and provision of professional consulting services. These services were provided on normal commercial terms and conditions and at market rates.

Indian Ocean Advisory Group Pty Ltd, an entity which Mr. Luke Martino is a director of, provided consulting and administrative services, including rent to the group. During December 2013, the company agreed with Indian Ocean Advisory Group Pty Ltd on debt forgiveness of its outstanding balance for $372,912. There was no outstanding balance as at 31 December 2013.

Payments of $10,340 (2012: $9,091) were made to a related party of Mr Wayne Knight for corporate services provided during the period.

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Level 1 10 Kings Park Road West Perth WA 6005

Correspondence to: PO Box 570 West Perth WA 6872

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Independent Auditor’s Review Report

T +61 8 9480 2000 F +61 8 9322 7787 E info.wa@au.gt.com W www.grantthornton.com.au

To the Members of South East Asia Resources Limited and its controlled entities

We have reviewed the accompanying half-year financial report of South East Asia Resources Limited and its controlled entities (“Company”), which comprises the consolidated financial statements being the statement of financial position as at 31 December 2013, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, notes comprising a statement or description of accounting policies, other explanatory information and the directors’ declaration of the consolidated entity, comprising both the Company and the entities it controlled at the half-year’s end or from time to time during the half-year.

Directors’ responsibility for the half-year financial report

The directors of South East Asia Resources Limited and its controlled entities are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such controls as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express a conclusion on the consolidated half-year financial report based on our review. We conducted our review in accordance with the Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2013 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of South East Asia Resources Limited and its controlled entities, ASRE 2410

Grant Thornton Audit Pty Ltd ACN 130 913 594

a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.

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requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we complied with the independence requirements of the Corporations Act 2001.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of South East Asia Resources Limited and its controlled entities is not in accordance with the Corporations Act 2001, including:

• a giving a true and fair view of the consolidated entity’s financial position as at 31 December 2013 and of its performance for the half-year ended on that date; and

• b complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001.

Material uncertainty regarding continuation as a going concern

Without qualification to the conclusion expressed above, we draw attention to Note 1(e) in the half year financial report which indicates the Company had net operating cash outflows of $987,284 during the half year ended 31 December 2013 and at 31 December 2013 had net current liabilities of $7,967,713. These conditions, along with other matters as set forth in Note 1(e), indicate the existence of a material uncertainty which may cast significant doubt about the Company’s ability to continue as a going concern and whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial statements.

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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

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M J Hillgrove Partner - Audit & Assurance

Perth, 14 March 2014

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