EV RESOURCES LTD — Annual Report 2006

Sep 26, 2006

ABN 66 009 144 503

FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2006

RICHFIELD GROUP LIMITED ABN 66 009 144 503

INDEX

CORPORATE DIRECTORY
CORPORATE GOVERNANCE STATEMENT
DIRECTORS' REPORT
DIRECTORS' REPORT (CONT)
DIRECTORS' REPORT (CONT)
AUDITOR'S INDEPENDENCE DECLARATION
INDEPENDENT AUDIT REPORT
DIRECTORS' DECLARATION
INCOME STATEMENT
STATEMENT OF CHANGES IN EQUITY
CASH FLOW STATEMENT
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES

RICHFIELD GROUP LIMITED

ABN 66 009 144 503 (Incorporated in Western Australia)

REGISTERED OFFICE

$1^st$ Floor 9 Bowman Street South Perth Western Australia 6151

DIRECTORS

Mr Steven Pynt Mr Jack Bai Mr Christopher Bai

AUDITORS

Bentleys MRI Perth Partnership Level 1 10 Kings Park Road West Perth Western Australia 6005

SHARE REGISTRY

Computershare Level 2, Reserve Bank Building 45 St George's Terrace Perth Western Australia 6000

STOCK EXCHANGE LISTING

The Australian Stock Exchange Limited ASX Code - RCH

RICHFIELD GROUP LIMITED AND CONTROLLED ENTITIES CORPORATE GOVERNANCE STATEMENT

CORPORATE GOVERNANCE

In recognising the need for the highest standards of corporate behavior and accountability, the Directors of Richfield Group Limited support the principles of corporate governance.

The Board of Directors of Richfield Group Limited is responsible for the corporate governance of the entity and endorses the need for high standards of corporate governance. The Board guides and monitors the business and affairs of Richfield Group Limited on behalf of the shareholders by whom they are elected and to whom they are accountable.

The Principles of Good Corporate Governance, as recommended by the Australian Stock Exchange Corporate Governance Council, are as follows:

• Lav solid foundations for management and oversight Principle 1.
• Principle 2. Structure of the Executive Committee to add value
• Principle 3. Promote ethical and responsible Conduct of the Directors and Executive Officers
• Principle 4. Encourage enhanced performance
• Principle 5. Respect the rights of business conduct
• Principle 6. Safequard integrity in Company share dealings
• Principle 7. Promote communication strategies
• Principle 8. Make timely and balanced disclosure
• Principle 9. Recognise and manage risk

Because of the size of the Board and the level of activity of the Company, the Board is yet to adopt a structure of corporate governance as defined above. Consideration is being given to each of the principles and recommendations above and the Board will ensure the necessary policies are adopted as required by the Company.

AUDIT COMMITTEE

The Company does not have an audit committee. It is considered that the costs of having an audit committee for a public company the size of Richfield Group Limited outweigh any perceived benefits to members.

All matters that might be dealt with by such a committee are subject to discussion and screening at full Board Meetings.

REMUNERATION COMMITTEE

Similarly as above, the Company does not have a remuneration committee as no emoluments were paid by the Company to the Directors during the financial year.

All matters that might be dealt with by such a committee are subject to discussion and screening at full Board Meetings.

ROLE OF BOARD

The management and control of the business of Richfield Group Limited is vested in the board. The board's primary responsibility is to oversee Richfield's business activities and management for the benefit of its shareholders. The board also recognises its responsibilities to Richfield's employees, the environments and communities in which the Company operates and where appropriate, other stakeholders. The board strives to create shareholder value and ensure that shareholders' funds are prudently safeguarded.

The Board's main task during the financial year was to identify business potential, assess areas of business risk, review procedures to develop policies regarding business expansion, and co-ordinate financial resources for business expansion. In regard to considering opportunities for business expansion, the Board:

RICHFIELD GROUP LIMITED AND CONTROLLED ENTITIES CORPORATE GOVERNANCE STATEMENT

• reviews the strategic fit to the group;
• undertakes systematic research: $\blacksquare$
• reviews profitability; and ×
• ensures it is within the control of the group.

The Boards responsibilities include:

• The establishment of continuous disclosure controls throughout the consolidated entity;
• The review of legislative and regulatory obligations, and identification of all business risks; $\blacksquare$
• The periodical review of the nomination of external auditors and the adequacy of the existing external audit arrangements;
• The determination and review of employment contracts for all key personnel; and $\blacksquare$
• The maintenance of ethical standards and the satisfying of community expectations in respect of its corporate conduct.

STRUCTURE OF THE BOARD

The skills, experience and expertise relevant to the position of Director held by each Director in office at the date of the annual report is included in the Directors' Report. Directors of Richfield Group Limited are considered to be independent when they are independent of management and free from any business or other relationship that could materially interfere with - or could reasonably be perceived to materially interfere with – the exercise of their unfettered and independent judgement.

In the context of Director independence, "materiality" is considered from both the Company and individual Director perspective. The determination of materiality requires consideration of both quantitative and qualitative elements. An item is presumed to be quantitatively immaterial if it is equal or less than 5% of the appropriate base amount. It is presumed to be material (unless there is qualitative evidence to the contrary) if it is equal to or greater than 10% of the appropriate base amount. Qualitative factors considered include whether a relationship is strategically important, the competitive landscape, the nature of the relationship and the contractual or other arrangements governing it and other factors which point to the actual ability of the Director in question to shape the direction of the Company's lovalty.

In accordance with the definition of independence above, the materiality thresholds set, the following Directors of Richfield Group Limited are considered to be independent:

Name	Position
Mr J Bai	Non-Executive Director
Mr C Bail	Non-Executive Director

The term in office held by each Director in office at the date of this report is as follows:

Name	Term in office
Mr S Pynt	11 years 7 months
Mr J Bai	7 years 9 months
Mr C Bai	3 years 8 months

PERFORMANCE

The performance of the Board and key executives is reviewed and assessed regularly against both specific and measurable qualitative and quantitative performance criteria. The performance criteria against which Directors and executives are assessed is aligned with the financial and non-financial objectives of Richfield Group Limited. Directors whose performance is consistently unsatisfactory may be asked to retire.

There are procedures in place, agreed to by the Board, to enable Directors, in furtherance of their duties, to seek independent professional advice at the Company's expense.

RICHFIELD GROUP LIMITED AND CONTROLLED ENTITIES CORPORATE GOVERNANCE STATEMENT

REMUNERATION

It is the Company's objective to provide maximum stakeholder benefit from the retention of a high quality Board and executive team by remunerating Directors and key executives fairly and appropriate with reference to relevant employment market conditions. When considered appropriate the Board will link the nature and amount of executive Directors' and officers' emoluments to the Company's financial and operational performance. The expected outcomes of any future remuneration structure will be the:

• Retention and motivation of key executives: $\blacksquare$
• Attraction of quality management to the Company; and $\blacksquare$
• Performance incentives, which allow executives to share the rewards of the success of $\blacksquare$ Richfield.

In relation to the payment of bonuses, options and other incentive payments, discretion is exercised by the Board, having regard to the overall performance of Richfield Group Limited and the performance of the individual during the period.

There is no scheme to provide retirement benefits, other than statutory superannuation, to Directors.

The Board is responsible for determining and reviewing compensation arrangements for the Directors.

RICHFIELD GROUP LIMITED AND CONTROLLED ENTITIES DIRECTORS' REPORT

The Directors present their report together with the financial report of Richfield Group Limited and its controlled entities ("the Company") for the year ended 30 June 2006 and the independent audit report thereon.

DIRECTORS

The Directors of the Company at any time during or since the end of financial year are:

Mr Steven Pynt BJuris, LLB, MBA, B.Bus, MTax

Chairman and Non-Executive Director

Appointed 2 February 1995

After completing his law degree in 1980, Mr Pynt worked with a law firm for two and a half years before joining a major accounting firm where he worked as a tax consultant. Subsequently, he established his own legal firm that later merged with a medium size Perth firm. Mr Pynt is a Director with McDonald Pynt solicitors, practicing primarily in commercial law.

Currently Mr Pynt is a director of Gondwana Resources Ltd. Working Systems Solutions Ltd and Richfield International Limited. All these companies are listed on the ASX.

Mr Jack Guo Jin Bai

Non-Executive Director

Appointed 8 December 1999

Mr Jack Bai is a resident of Singapore and has extensive business interests in the region. Currently Mr Bai is a director of the Australian based Company Calibre Solutions Pty Ltd.

Mr Christopher Bai

Non-Executive Director

Appointed 10 January 2003

Mr Christopher Bai is a Singapore based businessman. He is responsible for the day to day management of a corrugated paper box manufacturing factory in Singapore.

Mr Simon Headon B.Bus, CPA

Company Secretary

Appointed 1 July 2005

Mr Headon holds a Bachelor of Business (Accounting) from Edith Cowan University. He is a member of CPA Australia and the National Tax and Accountants Association. Mr Headon has been with Nissen Kestel Harford since July 1988 and was appointed a director in July 2000. He attends to the financial reporting and taxation compliance work for a number of public companies as well as providing business and statutory compliance advice to a wide range of clients.

PRINCIPAL ACTIVITIES

The Company did not carry on a business during the financial year. A number of investment opportunities in various industries were reviewed.

OPERATING RESULTS AND FINANCIAL REVIEW

The consolidated (loss) of the entity after providing for income tax and eliminating outside equity interests amounted to (\$127,763) (2005: (\$358,924)).

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

Significant changes to the Company's state of affairs during the financial year was a return of capital by way of an in specie distribution of 4,646,760 fully paid ordinary shares in Richfield International Limited in November 2005 as part of the Australian Stock Exchange (ASM) listing requirements of Richfield International Limited.

DIVIDENDS

No dividends were paid or proposed during the year ended 30 June 2006.

EVENTS SUBSEQUENT TO BALANCE DATE

Other than the matters disclosed in the Events Subsequent to Balance Date in the Notes to the financial statements, there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material or unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the operations of the consolidated entity in future financial years.

LIKELY DEVELOPMENTS

The Company continues to look for opportunities for expansion in various industries.

DIRECTORS' INTERESTS

The relevant interest of each director in the shares, interests in registered schemes and rights or options over such instruments issued by the companies within the consolidated entity and other related bodies corporate, as notified by the directors to the Australian Stock Exchange in accordance with S205G (1) of the Corporations Act 2001, at the date of this report is as follows:

Directors	Ordinary Shares
Mr S Pynt	8.000
Mr J Bai	10.166,734
Mr C Bai	10,066,694

MEETINGS OF DIRECTORS'

The number of Directors' meetings and the number of meetings attended by each of the Directors of the Company during the financial year are:

Director	Number of meetings eligible to attend	Number of meetings attended during the year
Mr S Pynt
Mr J Bai
Mr C Bai		MC

In addition there were twelve (12) Circular Resolutions signed by the Directors who were eligible to vote.

SHARE OPTIONS

During or since the end of the financial year, the Company has not granted any options over the unissued ordinary shares to the Directors of the Company.

INDEMNIFICATION AND INSURANCE OF OFFICERS

Indemnification has not been given or paid during the financial year for any person who is or has been a director of the Company.

Since the end of the previous financial vear, the Company has not paid any insurance premiums for any person who is or has been an auditor of the Company.

PROCEEDINGS ON BEHALF OF COMPANY

During the financial year, Reymer Pty Ltd applied to bring proceedings on behalf of the Company through the issue of a General Procedure Claim for the sum of \$9,310.70. \$9,000.00 represented half the cost of debt refinancing arrangements as a result of Richfield Group Limited being removed as Guarantors to a debt and \$310.70 representing interest and other costs.

On advice from Mr Pynt, in his capacity as a commercial Lawyer, Richfield Group Limited decided against defending the claim and instigating legal proceedings and the General Procedure Claim was settled by the Company on the 16 August 2006.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The Company's operations are not regulated by any significant environmental regulation under the Law of the Commonwealth or of a State or Territory.

NON-AUDIT SERVICES

During the year. Bentleys MRI Perth Partnership, the Company's auditor, has performed certain other services in addition to their statutory duties.

The board has considered the non-audit services provided during the year by the auditor and is satisfied that the provision of those non-audit services during the year by the auditor is compatible with. and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons:

• all non-audit services were subject to the corporate governance procedures adopted by the Company to ensure they do not impact the integrity and objectivity of the auditor; and
• the non-audit services provided do not undermine the general principles relating to auditor independence as set out in Professional Statement FI Professional Independence, as they did not involve reviewing or auditing the auditor's own work, acting in a management or decision making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards.

A copy of the auditors' independence declaration as required under Section 307C of the Corporations Act is included.

Details of the amounts paid to the auditor of the Company, Bentleys MRI Perth Partnership for audit and non-audit services provided during the year are set out below:

	Consolidated
	2006 \$	2005 \$
Statutory audit Audit and review of financial reports	10,800	10.950
Other services Taxation compliance services	1.900	1.475
	12,700	12.425

Signed in accordance with a resolution of the Board of Directors

Comments $\zeta$

Mr Jack Bai
Director

Dated at SINGAPORE this 26th day of September 2006

CHARTERED ACCOUNTANTS ADVISORS

A MEMBER OF
MOORES ROWLAND
INTERNATIONAL

Bentleys MRI Perth Partnership ABN 17-735-344-518

City Office Level 40, BankWest Tower 308 St George's Terrace Perth WA 6000 Anstralia

GPO Box W2106 Perth WA 6846

T 61 8 9320 2888 F 61 8 9320 2999

admin@bmrip.com.au www.bentleys.com

RICHFIELD GROUP LIMITED AND CONTROLLED ENTITIES AUDITOR'S INDEPENDENCE DECLARATION

RICHFIELD GROUP LIMITED AND CONTROLLED ENTITIES ABN 66 009 144 503

AUDITOR'S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001

I declare that, to the best of my knowledge and belief during the year ended 30 June 2006 there has been:

• İ no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
• ii. no contraventions of any applicable code of professional conduct in relation to the audit.

BENTLEYS MRI PERTH PARTNERSHIP

K lul

MAURICE L ANGHIE PARTNER

26^th day of September 2006

Level 1, 10 Kings Park Road WEST PERTH WA 6005

A MEMBER OF
MOORES ROWLAND INTERNATIONAL

Bentleys MRI Perth Partnership ARN 17 735 344 518

Ony Office Level 40. Bank West Tower 108 St George's Terrace Perth WA 6000 Aostrafía

(190 Box W2106 Perth WA 6846)

T AT RIGETA DRRR F 61 8 9320 2999

admin@bmrip.com.au www.bentlevs.com

RICHFIELD GROUP LIMITED AND CONTROLLED ENTITIES ABN 66 009 144 5039

Independent Audit Report TO THE MEMBERS OF RICHFIELD GROUP LIMITED

SCOPE

The financial report and directors' responsibility.

The financial report comprises the income statement, balance sheet, statement of changes in equity, cash flow statement, accompanying notes to the financial statements, and the directors' declaration for Richfield Group Limited (the company) and the consolidated entity, for the year ended 30 June 2006. The consolidated entity comprises both the company and the entities it controlled during that year.

The directors of the company are responsible for the preparation and true and fair presentation of the financial report in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report.

AUDIT APPROACH

We conducted an independent audit in order to express an opinion to the members of the company. Our audit was conducted in accordance with Australian Auditing Standards, in order to provide reasonable assurance as to whether the financial report is free of material misstatement. The nature of an audit is influenced by factors such as the use of professional judgment, selective testing, the inherent limitations of internal control, and the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected.

We performed procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations Act 2001, including compliance with Accounting Standards and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the company's and the consolidated entity's financial position, and of their performance as represented by the results of their operations and cash flows.

We formed our audit opinion on the basis of these procedures, which included:

• examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the financial report, and
• assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors.

While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our audit was not designed to provide assurance on internal controls.

INDEPENDENCE

In conducting our audit, we followed applicable independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.

In accordance with ASIC Class Order 05/83, we declare to the best of our knowledge and belief that the auditor's independence declaration set out on page 8 of the financial report has not changed as at the date of providing our audit opinion.

QUALIFICATIONS

Going Concern

The financial statements have been prepared assuming that the economic entity will continue as a going concern. The economic entity has a deficiency of working capital and total equity, and has made trading losses since inception. The economic entity's ability to continue as a going concern is therefore dependent on the operations becoming profitable or additional funds being provided by financiers or shareholders of the entity.

QUALIFIED AUDIT OPINION

In our opinion, except for the effect of the matters mentioned in the qualifications paragraph the financial report of Richfield Group Limited is in accordance with:

• the Corporations Act 2001, including: $(a)$
• $(i)$ giving a true and fair view of the company's and consolidated entity's financial position as at 30 June 2006 and of their performance for the year ended on that date; and
• $(ii)$ complying with Accounting Standards in Australia and the Corporations Regulations $2001$ : and
• other mandatory professional reporting requirements in Australia. $(b)$

BENTLEYS MRI PERTH PARTNERSHIP

Mul

MAURICE L ANGHIE PARTNER

Dated at Perth this 26^th day of September 2006.

In accordance with a resolution of the directors of Richfield Group Limited, I declare that:

• $\mathbf{1}$ . In the opinion of the Directors:
• the financial statements and notes of the Company are in accordance with the a. Corporations Act 2001, including:
  • ì. giving a true and fair view of the Company's and consolidated entity's financial position as at 30 June 2006 and of their performance for the year ended on that date: and
  • ii. complying with Accounting Standards and Corporation Regulations 2001; and
• $_b$ . there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
• $\overline{2}$ . This declaration has been made after receiving the declarations required to be made to the Directors in accordance with Section 295A of the Corporations Act 2001 for the financial period ending 30 June 2006.

On behalf of the Board

Mr Jack Bai Director

Dated at SINGAPORE this 26th day of September 2006

RICHFIELD GROUP LIMITED AND CONTROLLED ENTITIES INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2006

	NOTE	ECONOMIC ENTITY 2006 \$	2005 S	PARENT ENTITY 2006 \$	2005 \$
Revenue	3	21,738	181,217	2,897	3,631
Changes in inventories of finished goods and work in progress		(8,611)	(108, 094)
Employee benefits expense		(66, 648)	(132,099)	(6,000)
Depreciation and amortisation expense		(1, 349)	(614)	(304)	(303)
Other expenses from ordinary activities	4	(72, 893)	(299, 334)	(193, 451)	(279, 181)
Finance costs	4
Profit/(Loss) before income tax expense Income tax (expense)/benefit	5	(127, 763)	(358, 924)	(196, 858)	(275, 853)
Profit/(Loss) for the year		(127,763)	(358, 924)	(196, 858)	(275, 853)
Profit/(Loss) attributable to members of the parent entity		(127, 763)	(358, 924)	(196, 858)	(275, 853)
Basic earnings per share (cents per share)	8	(0.0003)	(0.0007)

BALANCE SHEET AS AT 30 JUNE 2006

	NOTE	ECONOMIC ENTITY 2006 \$	2005 \$	PARENT ENTITY 2006 \$	2005 \$
CURRENT ASSETS Cash & Cash Equivalents Trade & Other Receivables Inventories	9 10 11	101,719 27,021	251,598 78,121 9,764	98,221	199,869 115,984
TOTAL CURRENT ASSETS		128,740	339,483	98,221	315,853
NON CURRENT ASSETS Financial Assets Property, Plant & Equipment Intangible Assets	12 14 15	37,296 7,574	269,628 9,563	37,296 7,574	292,743 7,878
TOTAL NON CURRENT ASSETS		44,870	279,191	44,870	300,621
TOTAL ASSETS		173,610	618,674	143,091	616,474
CURRENT LIABILITIES Trade & Other Payables	16	186,663	312,544	160,257	204,450
TOTAL CURRENT LIABILITIES		186,663	312,544	160,257	204,450
TOTAL LIABILITIES		186,663	312,544	160,257	204,450
NET ASSETS		(13,053)	306,130	(17, 166)	412,024
EQUITY Issued Capital Reserves Accumulated Losses	17 18 19	8,730,799 16,409 (8,760,261)	8,963,131 (24, 503) (8,632,498)	8,730,799 (8,747,965)	8,963,131 (8,551,107)
Parent Interest		(13,053)	306,130	(17, 166)	412,024
TOTAL EQUITY		(13,053)	306,130	(17, 166)	412,024

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2006

ECONOMIC ENTITY	ISSUED CAPITAL	RESERVES	ACCUMULATED LOSSES	TOTAL
Balance at 1 July 2004 Profit attributable to members of parent entity	8,963,131	(16,680)	(8,273,574) (358, 924)	672,877 (358, 924)
Adjustments from translation of foreign controlled entities		(7, 823)		(7, 823)
Balance at 30 June 2005	8,963,131	(24, 503)	(8,632,498)	306,130
'In Specie' Distribution Profit attributable to members of parent	(232, 332)			(232, 332)
entity			(127,763)	(127, 763)
Adjustments from disposal of foreign controlled entities		40,912		40,912
Balance at 30 June 2006	8,730,799	16,409	(8,760,261)	(13,053)
PARENT ENTITY
Balance at 1 July 2004	8,963,131		(8,275,254)	687,877
Profit attributable to members of parent entity Adjustments from translation of foreign			(275, 853)	(275, 853)
controlled entities
Balance at 30 June 2005	8,963,131		(8,551,107)	412,024
'In Specie' Distribution	(232, 332)			(232, 332)
Profit attributable to members of parent entity Adjustments from disposal of foreign controlled entities			(196, 858)	(196, 858)
Balance at 30 June 2006	8,730,799		(8,747,965)	(17, 166)

CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2006

	NOTE	ECONOMIC ENTITY 2006 \$	2005 \$	PARENT ENTITY 2006 \$	2005 \$
CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and employees Interest received Finance costs Income tax paid		77,487 (248, 431) 2,897	142,266 (512, 982) 3,631	7,546 (72,063) 2,897	(286, 684) 3,631
Net cash provided by/(used in) operating activities	23(a)	(168, 047)	(367,085)	(61, 620)	(283,053)
CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of property, plant & equipment Purchase of property, plant & equipment Investments/Advances to controlled entities		640	(1,996) (333, 193)	(40,028)	(199, 405)
Net cash flows provided by/ (used in) investing activities		640	(335, 189)	(40,028)	(199, 405)
CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares Repayment of borrowings
Net cash flows provided by/ (used in) financing activities
Net increase/(decrease) in cash held		(167, 407)	(702, 274)	(101, 648)	(482, 458)
Cash relating to subsidiary no longer part of economic entity			73,074		89,973
Cash at beginning of the financial year		251,598	880,798	199,869	592,354
Effect of exchange rates on cash holdings in foreign currencies		17,528
Cash at end of financial year	9	101,719	251,598	98,221	199,869

RICHFIELD GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO AND FORMING PART OF THE ACCOUNTS

FOR THE YEAR ENDED 30 JUNE 2006

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Urgent Issues Group Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

The financial report covers the economic entity of Richfield Group Limited and controlled entities, and Richfield Group Limited as an individual parent entity. Richfield Group Limited is a listed public company, incorporated in Australia and domiciled in Singapore,

The financial report of Richfield Group Limited and controlled entities, and Richfield Group Limited as an individual parent entity comply with all Australian equivalents to International Financial Reporting Standards (AIFRS) in their entirety.

The following is a summary of the material accounting policies adopted by the economic entity in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

BASIS OF PREPARATION

First-time Adoption of Australian Equivalents to International Financial Reporting Standards Richfield Group Limited and controlled entities, and Richfield Group Limited as an individual parent entity have prepared financial statements in accordance with the Australian equivalents to International Financial Reporting Standards (AIFRS) from 1 July 2005.

In accordance with the requirements of AASB 1: First-time Adoption of Australian Equivalents to International Financial Reporting Standards, adjustments to the parent entity and consolidated entity accounts resulting from the introduction of AIFRS have been applied retrospectively to 2005 comparative figures excluding cases where optional exemptions available under AASB 1 have been applied. These consolidated accounts are the first financial statements of Richfield Group Limited to be prepared in accordance with Australian equivalents to IFRS.

The accounting policies set out below have been consistently applied to all years presented. The parent and consolidated entities have however elected to adopt the exemptions available under AASB 1 relating to AASB 132: Financial Instruments: Disclosure and Presentation, and AASB 139: Financial Instruments: Recognition and Measurement. Refer to Note 26 for further details on changes in accounting policy.

Reconciliations of the transition from previous Australian GAAP to AIFRS have been included in Note 2 to this report.

Reporting Basis and Conventions

The financial report has been prepared on an accrual basis and is based on historical cost and does not take into account changing money values, or except where stated current valuations of non-current assets. Cost is based on the fair values of the consideration given in exchange for assets.

The financial report has been prepared on a going concern basis, which contemplates continuity of normal business activities and the realisation of assets and liabilities in the ordinary course of business and on the assumption of sufficient funds becoming available for the operations of the consolidated entity.

ACCOUNTING POLICIES

(a) Principles of Consolidation

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

A list of controlled entities is contained in Note 19 to the financial statements. All controlled entities have a June financial year-end.

(a) Principles of Consolidation (Cont'd)

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

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

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

(b) Income Tax

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

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

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

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

(c) Inventories

Inventories are measured at the lower of cost and net realisable value. The cost of manufactured products includes direct materials, direct labour and an appropriate portion of variable and fixed overheads. Overheads are applied on the basis of normal operating capacity. Costs are assigned on the basis of weighted average costs. Refer to Note 39 for further details on changes in accounting policy.

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

(d) Property, Plant & Equipment

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

Property

Freehold land and buildings are shown at their fair value (being the amount for which an asset could be exchanged between knowledgeable willing parties in an arm's length transaction), based on periodic, but at least triennial, valuations by external independent valuers, less subsequent depreciation for buildings.

Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.

Plant & Equipment

Plant and equipment are measured on the cost basis.

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

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

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Increases in the carrying amount arising on revaluation of land and buildings are credited to a revaluation reserve in equity. Decreases that offset previous increases of the same asset are charged against fair value reserves directly in equity; all other decreases are charged to the income statement. Each year the difference between depreciation based on the revalued carrying amount of the asset charged to the income statement and depreciation based on the asset's original cost is transferred from the revaluation reserve to retained earnings.

Depreciation

The depreciable amount of all fixed assets including building and capitalised lease assets, but excluding freehold land, is depreciated on a straight-line basis over their useful lives to the economic entity commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

The depreciation rates used for each class of depreciable assets are:

CLASS OF FIXED ASSET	DEPRECIATION RATE
Leasehold Improvements	2%
Plant and Machinery	$10\% - 20\%$
Office Furniture	$6\% - 20\%$
Office Equipment	20%
Mator Vehicles	10% - 30%

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

(d) Property, Plant & Equipment (Cont'd)

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the income statement. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.

(e) Leases

Leases of fixed assets, where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that is transferred to entities in the economic entity, are classified as finance leases.

Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any quaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term.

Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred.

Lease incentives under operating leases are recognised as a liability and amortised on a straightline basis over the life of the lease term.

(f) Financial Instruments

Recognition

Financial instruments are initially measured at cost on trade date, which includes transaction costs. when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.

Financial assets at fair value through profit and loss

A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management and within the requirements of AASB 139: Recognition and Measurement of Financial Instruments. Derivatives are also categorised as held for trading unless they are designated as hedges. Realised and unrealised gains and losses arising from changes in the fair value of these assets are included in the income statement in the period in which they arise.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method.

Held-to-maturity investments

These investments have fixed maturities, and it is the group's intention to hold these investments to maturity. Any held-to-maturity investments held by the group are stated at amortised cost using the effective interest rate method.

Available-for-sale financial assets

Available-for-sale financial assets include any financial assets not included in the above categories. Available-for-sale financial assets are reflected at fair value. Unrealised gains and losses arising from changes in fair value are taken directly to equity.

Financial liabilities

Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation.

RICHFIELD GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO AND FORMING PART OF THE ACCOUNTS (CONT'D) FOR THE YEAR ENDED 30 JUNE 2006

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

(f) Financial Instruments (Cont'd) Derivative instruments

Derivative instruments are measured at fair value. Gains and losses arising from changes in fair value are taken to the income statement unless they are designated as hedges.

Richfield Group Limited and Controlled Entities designates certain derivatives as either:

• hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value $\mathbf{L}$ hedge): or
• ii. hedges of highly probably forecast transactions (cash flow hedges).

At the inception of the transaction the relationship between hedging instruments and hedged items. as well as its risk management objective and strategy for undertaking various hedge transactions is documented.

Assessments, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items, are also documented.

(i) Fair value hedge

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income statement, together with any changes in the fair value of the hedge asset or liability that are attributable to the hedged risk.

(ii) Cash flow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is deferred to a hedge reserve in equity. The gain or loss relating to the ineffective portion is recognised immediately in the income statement.

Amounts accumulated in the hedge reserve in equity are transferred to the income statement in the periods when the hedged item will affect profit or loss.

Fair value

Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm's length transactions, reference to similar instruments and option pricing models.

Impairment

At each reporting date, the group assess whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in the income statement.

(g) Impairment of Assets

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

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

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

(h) Intangibles

Goodwill

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

Research & Development

Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised only when technical feasibility studies identify that the proiect will deliver future economic benefits and these benefits can be measured reliably.

Development costs have a finite life and are amortised on a systematic basis matched to the future economic benefits over the useful life of the project.

(i) Foreign Currency Transactions and Balances Functional and presentation currency

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

Transaction and balances

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the vear-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items are recognised in the income statement, except where deferred in equity as a qualifying cash flow or net investment hedge.

Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the income statement.

Group companies

The financial results and position of foreign operations whose functional currency is different from the group's presentation currency are translated as follows:

• assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;
• income and expenses are translated at average exchange rates for the period; and
• retained earnings are translated at the exchange rates prevailing at the date of the transaction.

Exchange differences arising on translation of foreign operations are transferred directly to the group's foreign currency translation reserve in the balance sheet. These differences are recognised in the income statement in the period in which the operation is disposed.

RICHFIELD GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO AND FORMING PART OF THE ACCOUNTS (CONT'D) FOR THE YEAR ENDED 30 JUNE 2006

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

(i) Employee Entitlements

Provision is made for the company's liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.

(k) Cash

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of one month or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the balance sheet.

(I) Revenue

Revenue from the sale of goods is recognised upon the delivery of goods to customers.

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

Revenue from investment properties is recognised on an accruals basis or straight-line basis in accordance with leases agreements.

Dividend revenue is recognised when the right to receive a dividend has been established. Dividends received from associates and joint venture entities are accounted for in accordance with the equity method of accounting.

Revenue from the rendering of a service is recognised upon the delivery of the service to the customers.

All revenue is stated net of the amount of goods and services tax (GST).

(m) 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 income in the period in which they are incurred.

(n) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST.

Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

(o) Comparative Figures

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

RICHFIELD GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO AND FORMING PART OF THE ACCOUNTS (CONT'D) FOR THE YEAR ENDED 30 JUNE 2006

2. FIRST-TIME ADOPTION OF AUSTRALIAN EQUIVALENTS TO INTERNATIONAL FINANCIAL REPORTING STANDARDS

Impact of Adoption of Australian Equivalents to International Financial Reporting Standards

The impact of adopting AIFRS on the total equity and profit after tax as reported under previous Australian Generally Accepted Accounting Principles (AGAAP) are illustrated below.

(a) Reconciliation of Equity

Reconciliation of Equity as presented under AGAAP to that under AIFRS.

	30 JUNE 2005	1 JULY 2004
Total Equity under AGAAP	306.130	672.877
Total Equity under AIFRS	306,130	672,877

There were no adjustments as at the date of transition to AIFRS.

Reconciliation of Profit and Loss for 2005 as presented under AGAAP to that under AIFRS.

	30 JUNE 2005
Loss for the year under AAAP_	358.924
Profit for the year under AIFRS	358,924

(b) Reconciliation of Profit or Loss

No financial effect.

			ECONOMIC ENTITY		PARENT ENTITY
			2006 \$	2005 \$	2006 \$	2005 S
3.	REVENUE
	Operating Activities:
	- Sale of goods		18,841	177,477
	- Interest received	(a)	2,897	3,631	2,897	3,631
	- Other revenue			109
	- Realised gain on currency translation
	Total Revenue		21,738	181,217	2,897	3,631
	(a) Interest revenue from:
	- wholly-owned controlled entities
	- partly owned subsidiaries
	- associated companies
	- other related parties
	- directors
	- other persons		2,897	3,631	2,897	3,631
			2,897	3,631	2,897	3,631

NOTES TO AND FORMING PART OF THE ACCOUNTS (CONT'D)
FOR THE YEAR ENDED 30 JUNE 2006

		ECONOMIC ENTITY 2006	2005	2006	PARENT ENTITY 2005
4.	PROFIT/(LOSS) FOR THE YEAR (a) Expenses Cost of sales	\$	S	\$	\$
	Foreign currency translation gain/(losses)	7,546	80,897	7,546	89,973
	Bad and doubtful debts - trade receivables - other receivables - director related parties - wholly owned subsidiaries		(62, 720)	(139, 482)	(62, 720)
		7,546	18,177	(131,936)	(27, 253)
	Other Expenses	(55, 239)	(275, 325)	(36,315)	(209, 742)
	(b) Significant Expenses The following significant revenue and expense items are relevant in explaining the financial performance:
	Professional Fees	(25, 200)	(42, 186)	(25, 200)	(42, 186)
	Net effect of significant items	(25, 200)	(42, 186)	(25, 200)	(42, 186)
	Total Other Expenses	72,893	299,334	193,451	279,181
5.	INCOME TAX EXPENSE (a) The components of tax expense comprise: Current tax Deferred tax asset relating to losses Deferred tax asset not recognised Under provision in respect of prior years	(38, 329) 38,329	(107, 677) 107,677	(17,213) 17,213	(82,756) 82,756
	(b) The prima facie tax on profit from ordinary activities before income tax is reconciled to the income tax as follows: Prima facie tax expense/(benefit) on profit/(loss) from ordinary activities before income tax at 30% (2005: 30%)	(38, 329)	(107, 677)	(17,213)	(82,756)
	Add tax effect of: - non-deductible depreciation and amortisation - write-downs to recoverable amounts - under provision for income tax in prior year
	Less tax effect of: Deferred tax on tax losses not recognised	38,329	107,677	17,213	82,756

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RICHFIELD GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO AND FORMING PART OF THE ACCOUNTS (CONT'D)

FOR THE YEAR ENDED 30 JUNE 2006

6. KEY MANAGEMENT PERSONNEL COMPENSATION

(a) Names and positions held of economic and parent entity key management personnel in office at any time during the financial year are:

Key Management Person	Position
Mr Steven Pynt	Chairman, Non-Executive Director
Mr Jack Bai Guo Jin	Independent Non-Executive Director
Mr Christopher Bai	Independent Non-Executive Director
Mr Simon Headon	Company Secretary
Mr Ross Kestel	Company Secretary - Resigned 1 July 2005

(b) Compensation Practices

The terms of remuneration to be paid to Mr Steven Pynt as Chairman is currently the subject of review by the Company.

(c) Shareholdings

	Number of Shares held by Key Management Personnel
	Balance	Received as	Net Change	Balance
	1.7.2005	Compensation	Other*	30.6.2006
Mr S Pynt	8.000	$\overline{\phantom{a}}$		8.000
Mr J Bai	10,228,734	w		10,228,734
Mr C Bai	10,066,694	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	10,066,694
TOTAL	20,303,428			20,303,428

		ECONOMIC ENTITY		PARENT ENTITY
		2006 \$	2005 \$	2006 \$	2005 \$
7.	AUDITORS' REMUNERATION Remuneration of the auditor of the parent entity for: - Auditing or reviewing the financial report - Other services	10,800 1,900	10,950 1,475	10,800 1,900	10,950 1,475
	Remuneration of other auditors of subsidiaries for: - Auditing or reviewing the financial report of subsidiaries
8. (a)	EARNINGS PER SHARE Reconciliation of earnings to profit or loss Profit Redeemable and converting preference share dividends	(127, 763)	(358, 924)	(57, 376)	(275, 853)
	Earnings used to calculate basic EPS	(127, 763)	(358, 924)	(57, 376)	(275, 853)
	number of ordinary (b) Weighted average	No.	No.	No.	No.
	shares outstanding during the year used in calculating basic EPS Weighted average number options οf		464,676,013 464,676,013 464,676,013 464,676,013
	outstanding Weighted average number of converting
	preference shares on issue

RICHFIELD GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO AND FORMING PART OF THE ACCOUNTS (CONT'D)

FOR THE YEAR ENDED 30 JUNE 2006

			ECONOMIC ENTITY		PARENT ENTITY
		2006 \$	2005 \$	2006 \$	2005 \$
9.	CASH AND CASH EQUIVALENTS
	Cash at bank and in hand	101,719	92,396	98,221	40,667
	Short Term Bank Deposits	$\overline{\phantom{a}}$	159,202	$\overline{\phantom{a}}$	159,202
		101.719	251.598	98.221	199,869

The effective interest rate on short-term bank deposits was 5% (2005: 4.5%); these deposits have an average maturity of xx days.

Reconciliation of Cash Cash at the end of the financial year as shown in the cash flow statement is reconciled to items in the balance sheet as follows:

Cash and Cash Equivalents Bank overdrafts	101,719	251,598	98,221	199,869
	101,719	251,598	98,221	199,869
10. TRADE AND OTHER RECEIVABLES
Trade receivables Provision for impairment of receivables	27,021	837,636 (802,316)		802,316 (802,316)
	27,021	35,320
Other receivables Provision for impairment of other receivables Amount receivable from:		42,801		39,645
- Wholly owned subsidiaries Provision for impairment οf amount			116,367	76,339
receivable from wholly owned subsidiaries			(116, 367)
	27,021	78,121		115,984
11. INVENTORIES
At Cost: Raw Materials and Stores
Finished Goods		9,764
		9,764
12. OTHER FINANCIAL ASSETS Investments at cost
- shares in listed entity (MV \$33,566)	37,296	232,338	37,296	232,338
Loans to Other Entities		37,290		37,290
Investment in Subsidiaries Provision for Non-Recoverability			23,115 (23, 115)	23,115
	37,296	269,628	37,296	292,743

During the year an in specie distribution of 4,646,760 shares amounting to \$232,332 in Richfield International Ltd was made to the shareholders of Richfield Group Ltd. The loan to Richfield International Ltd amounting to \$37,290 was converted to shares in Richfield International Ltd.

13. CONTROLLED ENTITIES

(a) Controlled Entities Consolidated	Country of Incorporation	Percentage Owned 2006 %	2005 ℅
Parent Entity Richfield Group Limited	Australia
Subsidiaries of Richfield Group Limited Eastern Prime Corporation Pte Ltd Advanz International Pte Ltd	Singapore Singapore		100 100	100 100
	ECONOMIC ENTITY 2006 \$	2005 \$	PARENT ENTITY 2006 \$	2005 \$
14. PROPERTY, PLANT AND EQUIPMENT Plant & Equipment
At Cost Accumulated Depreciation	98,793 (98, 793)	100,790 99,105	98,793 (98, 793)	98,793 (98, 793)
Total Plant & Equipment		1,685
Leasehold Buildings & Improvements At Cost	15,144	15,144	15,144	15,144
Accumulated Depreciation	(7,570)	(7, 266)	(7,570)	(7, 266)
Total Leasehold Buildings & Improvements	7,574	7,878	7,574	7,878
Total Property, Plant and Equipment	7,574	9,563	7,574	7,878
(a) Movements in Carrying Amounts Economic Entity	Plant & Equipment	Leasehold Improvements		Total
Balance at the beginning of year Additions	1,685		7,878	9,563
Disposals Revaluation increments/ (decrements)	(1,997)			(1,997)
Depreciation expense	312		(304)	8

Carrying amount at the end of year

Parent Entity	Plant & Equipment	Leasehold Improvements	Total
Balance at the beginning of year		7.878	7,878
Additions
Disposals
Revaluation increments/ (decrements)	A
Depreciation expense		(304)	(304)
Carrying amount at the end of year		7.574	7,574

$\omega$

7,574

7,574

NOTES TO AND FORMING PART OF THE ACCOUNTS (CONT'D) FOR THE YEAR ENDED 30 JUNE 2006

ECONOMIC ENTITY 2006 2005 2006 \$ \$ \$	PARENT ENTITY 2005 \$
15. INTANGIBLE ASSETS
Goodwill
On Consolidation 19,224 19,224 Accumulated Impairment Losses (19, 224) (19, 224)
Net Carrying Value
Total Intangibles
16. TRADE AND OTHER PAYABLES
Trade payables and accruals 56,960 98,883	29,440 30,549
Sundry payables 22,671 106,629 Amounts payable to: - Wholly owned subsidiaries	23,785 66,869
- Other related parties 107,032 107,032	107,032 107,032
186,663 312,544	160,257 204,450
17. ISSUED CAPITAL
464,676,013 (2005: 464,676,013) fully paid
ordinary shares 8,730,799 8,963,131	8,730,799 8,963,131
(a) Ordinary Shares
At the beginning of the reporting period 8,963,131 8,963,131 'In specie' return of capital (232, 332)	8,963,131 8,963,131 (232, 332)
At reporting date 8,730,799 8,963,131	8,730,799 8,963,131
No. No. No.	No.
At the beginning of reporting period 464,676,013 464,676,013 464,676,013	464,676,013
464,676,013 464,676,013 464,676,013 At reporting date	464,676,013

At balance date, no share options were outstanding.

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

At 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.

On 30 November 2005, 4,646,730 shares in Richfield International Limited were distributed to shareholders of the company as an 'in specie' return of capital.

NOTES TO AND FORMING PART OF THE ACCOUNTS (CONT'D) FOR THE YEAR ENDED 30 JUNE 2006

	2006	ECONOMIC ENTITY 2005		PARENT ENTITY 2005
	\$	\$	\$	\$
18. RESERVES
Foreign currency translation	16,409	(24, 503)
Foreign Currency Translation Reserve (a) Opening balance Adjustment arising from the translation of	(24, 503)	(16,680)
controlled entities' financial foreign statements	40,912	(7, 823)
Closing balance	16,409	(24, 503)

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

19. ACCUMULATED LOSSES

Accumulated losses at the beginning of the
financial year.	(8,632,498)	(8,273,574)	(8,551,107)	(8,275,254)
Net loss attributable to members of the
Company	(127.763)	(358, 924)	(196, 858)	(275, 853)
Accumulated losses at the end of the
financial year	(8,760,261)	(8,632,498)	(8,747,965)	(8,551,107)

20. STATEMENT OF OPERATING BY SEGMENTS

The Company is currently seeking business opportunities in the IT industry. The Company operates in one geographical segment in South-East Asia.

21. CAPITAL & LEASING COMMITMENTS

At balance date, there are no outstanding capital commitments for the parent entity and economic entity.

22. CONTINGENT LIABILITIES & CONTINGENT ASSETS

At balance date there were no contingent liabilities or assets.

NOTES TO AND FORMING PART OF THE ACCOUNTS (CONT'D) FOR THE YEAR ENDED 30 JUNE 2006

		ECONOMIC ENTITY		PARENT ENTITY
	2006 \$	2005 \$	2006 \$	2005 \$
23. CASH FLOW INFORMATION
(a) Reconciliation of Cash Flow from Operations with Profit after Income Tax
Profit/(Loss) after income tax	(127, 763)	(358, 924)	(196, 858)	(275, 853)
Non-cash flows in profit
Amortisation			139,482
Depreciation	1,349	614	304	303
Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries (Increase)/decrease in trade and term
receivables	51,100	(47, 680)	(383)	(31, 848)
(Increase)/decrease in prepayments		(3, 156)
(Increase)/decrease in inventories Increase/(decrease) in trade payables and	9,764	(9,764)
accruals	(102, 497)	51,825	(4, 165)	24,345
Increase/(decrease) in income taxes payable
Increase/(decrease) in deferred taxes payable
Cash flow from operations	(168, 047)	(367,085)	(61, 620)	(283,053)

24. EVENTS AFTER THE BALANCE SHEET DATE

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

25. RELATED PARTY TRANSACTIONS

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

Transactions with related parties: (a) Other Related Parties

Directors and director-related entities hold directly, indirectly or beneficially as at the reporting date the following equity interests in members of the economic entity: - ordinary shares

257, 154, 061 257, 154, 061 257, 154, 061 257, 154, 061

RICHFIELD GROUP LIMITED AND CONTROLLED ENTITIES NOTES TO AND FORMING PART OF THE ACCOUNTS (CONT'D) FOR THE YEAR ENDED 30 JUNE 2006

26. FINANCIAL INSTRUMENTS

(a) INTEREST RATE RISK

The economic entity's exposure to interest rate risk, which is the risk that a financial instrument's value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rates on classes of financial assets and financial liabilities, is as follows:

FINANCIAL INSTRUMENTS	HATE	FLOATING INTEREST		1 YEAR OR LESS	OVER 1 TO 5 YEARS			NON-INTEREST BEARING	TOTAL CARRYING AMOUNT AS PER THE BALANCE SHEET		WEIGHTED AVERAGE EFFECTIVE INTEREST RATE(C)
	2006 \$	2005	2006	2005 s	2006 \$	2005	2006 æ	2005 ¢.	2006 \$	2005 s	2006 (%)	2005 (%)
Financial Assets ω
Cash Receivables	101,717	92,377	ж.	159,202			2 27,021	19 78.121	101,719 27,021	251,598 78,121	N/A	4.25 N/A
Total financial assets	101,717	92.377	۰.	159,202		۰.	27.023	78.140	128,740	329,719
Financial Liabilities (ii) Bank overdraft
Payables						۰.	186,663	312,544	186,663	312,544	N/A	N/A
Morigage Loans								٠	٠	$\overline{\phantom{a}}$		$\sim$
Bills Payables Hire Purchase
Rability
Total financial liabilities							186,663	312,544	186,663	312,544

COMPANY DETAILS

The registered office of the company is: Richfield Group Limited 1^st Floor 9 Bowman Street South Perth WESTERN AUSTRALIA 6151

The principal place of business is: Richfield Group Limited 194 Pandan Loop # 0608 Pantech Industrial Complex SINGAPORE 128383

RICHFIELD GROUP LIMITED AND CONTROLLED ENTITIES ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES

The following additional information is required by the Australian Stock Exchange Ltd in respect of listed public companies only.

SHAREHOLDER INFORMATION

As at 31 August 2006 the Company had 830 holders of Ordinary Fully Paid Shares.

(a) DISTRIBUTION OF SHARE HOLDERS (AS AT 31 AUGUST 2006)

Category (size of holding)	Ordinary
1 – 1.000	13
$1,001 - 5,000$	293
$5,001 - 10,000$	159
$10,001 - 100,000$	209
$100,001 -$ and over	156

The number of shareholdings held in less than marketable parcels is Nil.

(b) SUBSTANTIAL SHAREHOLDERS

The names of shareholders that are recorded in the Register of Substantial Shareholders (as at 12 September 2006) are as follows:

Twenty Largest Shareholders (as at 12 September 2006)

	Fully Paid Ordinary
	Number	Percentage
Tan Chak Chew	26,850,000	5.78%
Lim Poh Choo	26,850,000	5.78%
Eastern Investment Limited	26,850,000	5.78%
Tan Yen Yen	26,850,000	5.78%
Kevin Ho Keng Leng	22,000,000	4.73%
Soi Koon Tan	18,533,334	3.99%
Zhenyang Bai	16,233,334	3.49%
Pacific Achiever Limited	15,733,334	3.39%
Jian Hui Raymond Bai	15,000,000	3.23%
InfoLink Limited	12,600,000	2.71%
Guat Hua Teo	10,200,000	2.20%
Guojin Bai	10,066,734	2.17%
Guobao Bai	10,066,694	2.17%
Guocai Bai	9,998,194	2.15%
Pek San Lam	9,300,000	2.00%
Bin Ice Bai	9,000,000	1.94%
Meow Lan Low	9,000,000	1.94%
Asian Tech Investments Limited	8,400,000	1.81%
Zheng Cong Bai	8,000,000	1.72%
Chian Hui Teo	8.000.000	1.72%

(c) VOTING RIGHTS

Ordinary shares

Subject to any rights or restrictions for the time being attached to any class or classes (at present there are none) at general meetings of shareholders or classes of shareholders:

• each shareholder entitled to vote, may vote in person or by proxy, attorney or representative;
• on a show of hands, every person present who is a shareholder or a proxy, attorney or representative of a shareholder has one vote: and
• on a poll, every person present who is a shareholder or a proxy, attorney or representative of a shareholder shall, in respect of each Fully Paid Share held, or in respect of which he/she has appointed a proxy, attorney or representative, have one vote for the share, but in respect of partly paid Shares shall have a fraction of a vote equivalent to the proportion which the amount paid up bears to the total issue price for the Share.

(d) SHARE BUY-BACKS

There is no current on-market buy-back scheme.

(e) REGISTERED OFFICE

The address of the registered office in Australia is:

1^st Floor 9 Bowman Street South Perth WA 6151

(f) SECURITIES REGISTER

Registers of Securities are held at the following addresses:

Computershare Investor Services Level 2, 45 St George's Terrace Perth WA 6000

(g) STOCK EXCHANGE LISTING

Quotation has been granted fro all the ordinary shares of the company shares of the company on all Member Exchanges of the Australian Stock Exchange Limited.