EV RESOURCES LTD — Interim / Quarterly Report 2016

Aug 27, 2017

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Financial Report For The Half Year Ended 31 December 2015

For

South East Asia Resources Limited (Subject to Deed of Company Arrangement)

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 period ending 30 June 2015.

Contents

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Contents

Page

Directors' Report ........................................................................................................................................................................ 3 Directors' Declaration ................................................................................................................................................................ 9 Auditor’s Independence Declaration ...................................................................................................................................... 10 Statement of Profit or Loss and Other Comprehensive Income – For the Half Year Ended 31 December 2015 ............. 11 Statement of Financial Position – As at 31 December 2015 ............................................................................................... 12 Statement of Changes in Equity – For the Half Year Ended 31 December 2015 ............................................................... 13 Statement of Cash Flows – For the Half Year Ended 31 December 2015 .......................................................................... 14 Notes to and forming part of the Interim Financial Report ................................................................................................... 15 Independent Auditor’s Review Report .................................................................................................................................... 25

Directors’ Report

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The Directors present their report together with the financial report of South East Asia Resources Limited (Subject to Deed of Company Arrangement) (ASX: SXI ) and its controlled entities (“the Company”, “SEA” or “consolidated entity”) for the half year ended 31 December 2015.

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

Mr. Jackob Tsaban Non –Executive Director Mr. Wayne Knight Non- Executive Director

Operating Results

During the period the Company made a loss of $28,768 (loss of $964,865 in 2014).

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.

Key Highlights

No notable events during the six month period.

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Directors’ Report (continued)

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Matters subsequent to reporting date

Deed of Company arrangement Execution

At the meeting of creditors held on 20 March 2015 pursuant to Section 439A of the Corporations Act 2001, creditors resolved for the Company to execute a Deed of Company Arrangement (DOCA). The DOCA was executed on 16 April 2015 and accordingly Messers Richard Albarran, David Ingram and Cameron Shaw of Hallchadwick were appointed as the Deed Administrators.

The terms of the DOCA were:

1. Richard Albarran, David Ingram and Cameron Shaw to administer the DOCA/Creditors’ Trust.

2. A DOCA/Creditors’ Trust fund of $600,000 will be made available to all creditors of the Company. Olivest Pty Ltd (“Oilvest") shall make the following payments to the DOCA/Creditors Trust Fund:

3. a) One (1) upfront payment of $250,000 upon execution of the DOCA; and

4. b) $350,000 to be paid no later than twelve (12) months after the execution of the DOCA; and

5. The agreement of the holders of all excluded creditors to convert their debt into shares into the Company at the price of five (5) cents per share with the total number of shares being issued 149,740,902. This conversion price is conditional on Olivest being satisfied that it can obtain title to the Moly project. In the event that this cannot be obtained prior to the shareholders meeting to approve this then the conversion price will revert to thirty (30) cents per share; and

6. 50% of the proceeds of the collection of outstanding amount from the Alluvia Mining loan.

7. The establishment of a Creditors’ Trust as part of the recapitalization process.

8. Olivest to undertake a capital raising of $2,000,000 at a maximum price of $0.005 per share (“Public Raising").

9. Olivest to convert $600,000 to equity via a share placement at a minimum $0.001 per share.

10. A meeting of the Company’s shareholders, the Company’s Convertible Note, Bond and Loan holders may vote to accept their claims are converted into shares of the Company.

11. Interest will be charged on any overdue amounts at the rate of 12% pa.

12. Control and management of the Company will revert to the Directors of the Company upon effectuation of the DOCA/commencement of the Creditors’ Trust.

13. The related creditors including the Directors of the Company and any entity associated with the Directors or their relatives (including in-laws) will subrogate their claims against the Company in their entirety, and will not participate in any distribution under the DOCA subject to shareholder approval to convert their debts into equity on the same terms and conditions as the excluded creditors.

14. The Company’s own subsidiaries will retain all assets as agreed in the DOCA, specifically:

15. a) Any rights to the Moly Project will be retained by the Company as an asset, with the title to this asset still subject to legal confirmations; and

16. b) Any right to the loan to Alluvia Mining loan on the basis that the Company will continue to try and collect this debt and in the event that any collection is made then 50% of that amount will be paid to the Administration under the DOCA.

17. Subject to point 11, all claims against the Company arising prior to the appointment of the Administrators will be admissible under the DOCA.

18. 4 -

Directors’ Report (continued)

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1. There shall be a moratorium on enforcement of pre-Administration creditor claims under the DOCA.

2. Any distribution paid to creditors/beneficiaries is to be in full and final satisfaction of their claims against the Company.

3. Upon wholly effectuation of the DOCA, the Company shall be release from all pre- Administration debts owed to creditors participating in the DOCA.

4. Pursuant to the Act, a Deed Administrator generally has the powers under the prescribed provisions provided under Schedule 8A of the Corporations Regulations, save for 3(c), 10 and 11.

Pursuant to the proposed Creditors’ Trust, the Trustees’ powers would be the powers and rights of a duly appointed Trustee under statute and law. In addition to those powers, the Trustee would have additional powers to enable the proper administration of the trust fund for the purpose of distributing the funds to creditors/beneficiaries. The important powers will be those related to the distribution of the funds, which will be included in the Creditors’ Trust Deed.

1. The DOCA will commence upon its execution by Olivest and the Deed Administrators.

2. If Olivest or the Company are unable to comply with any fundamental provisions of the DOCA including payment of monies due pursuant to the DOCA, and/or the Administrators form the view that the Company is unlikely to be able to comply with the terms of the DOCA, then the Administrators are entitled to convene a meeting of the Company’s creditors at which creditors may resolve to:

3. a) Vary the DOCA; or

4. b) Terminate the DOCA; or

5. c) Enforce the terms of the DOCA.

6. The DOCA/Creditors’ Trust Fund will be distributed as follows;-

7. a) Administrators fees, expenses and trading liabilities;

8. b) Deed Administrators fees and expenses;

9. c) Creditors’ Trustee fees and expenses;

10. d) Priority creditors/beneficiaries;

11. e) Unsecured creditors/beneficiaries.

Pursuant to the terms of the DOCA, the Company was to convene and hold a meeting of the Company’s shareholders to obtain shareholders’ approval of the following:

• a) The DOCA;

• b) The Recapitalization Proposal;

• c) Approval of the Share Issue to Trade Creditors and Related Party Creditors;

• d) Approval of the Share Issue to Convertible Note, Bond and Loan Holders and Related Party Loan Holders; and

• e) Approval of the Share Placement.

A general meeting of the Company’s shareholders was convened and held on 1 December 2016 and the Company’s shareholders approved all of the agenda items as outlined above at points (a) to (e).

Deed of Company arrangement Variation

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Directors’ Report (continued)

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From the date of execution of DOCA, the Deed Administrators received $370,000 as contribution for the DOCA. On April 2017, the Deed Administrators advised that the Company is in default under the terms of the DOCA and the guarantor, Olivest Pty Ltd (“Olivest”) had indicated that it is not in a position to remedy the default.

A DOCA variation has been submitted by Nelac Nominees Pty Ltd (”Nelac”) for the recapitalization of the Company. As part of the proposal, Nelac will replace Olivest in relation to providing the security required with respect to guaranteeing the terms and conditions of the amended DOCA, including executing a new general security agreement.

The major terms of the variation are outlined below:

1. Richard Albarran, David Ingram and Cameron Shaw to administer the DOCA/Creditors’ Trust.

2. The original established Deed Fund of $600,000 (of which $230,000 remains unpaid) be increased to $760,000 (“the Deed Fund") and dealt with in accordance with the DOCA/ Creditors’ Trust. Nelac shall make the following payments to the DOCA/Creditors Trust Fund:

3. a. $20,000 to be paid before the meeting of creditors convened pursuant to section 445F of the Act;

4. b. A lump sum of $370,000 to be paid before 15 September 2017.

5. c. 50% of the shares held by the Company in Amarant Mining AB as consideration for 50% of Alluvia Mining loan.

6. 50% of any right to the shares of Amarant Mining AB to be transferred and /or paid to the Administration under the DOCA.

7. The Company will do everything necessary to comply with Chapters 1 and 2 of the ASX Listing Rules to ensure the Company is in a position to be re-listed including attending to the following by 30 September 2017:

8. a) Complete its audited accounts for 2015, 2016 and 2017 financial years and half- years;

9. b) Convene a meeting of the Company’s shareholders to seek shareholder approval for the acquisition of five (2) exploration licenses covering an area of 340.31km2 in Serbia.

11. The establishment of a Creditors’ Trust as part of the recapitalization process.

12. The Company’s remaining shareholders, Convertible Note, Bond and or Loan holders who did not convert their claims into shares at the General Meeting held on 8 December 2016, may convert their claims into shares of the Company and or participate in any distribution under the DOCA as unsecured creditors.

14. Interest will be charged on any overdue amounts at the rate of 12% per annum.

15. Control and management of the Company will remain with the Directors until and upon effectuation of the amended DOCA and commencement of the Creditors’ Trust.

16. The related creditors including the Directors, Mr Gary Williams, Mr Jackob Tsaban and Mr Wayne Knight and any entity associated with the Directors or their relatives (including in- laws) will subrogate their claims against the Company in their entirety, and will not participate in any distribution under the DOCA and will subject to shareholder approval, convert their debts into equity on the same terms and conditions as approved at the General Meeting held on 8 December 2016.

17. The Company’s own subsidiaries will retain all assets as agreed in the DOCA, specifically:

18. a) Any rights to the Moly Project will be retained by the Company as an asset, with the title to this asset still subject to legal confirmations; and

19. b) 50% of the shares held by the Company in Amarant Mining AB as consideration for 50% of Alluvia Mining loan.

20. 6 -

Directors’ Report (continued)

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1. Subject to point 9, all claims against the Company arising prior to the appointment of the Administrators will be admissible under the DOCA.

2. There shall be a moratorium on enforcement of pre-Administration creditor claims under the DOCA.

3. Any distribution paid to creditors/beneficiaries is to be in full and final satisfaction of their claims against the Company.

4. Upon wholly effectuation of the DOCA, the Company shall be released from all pre- Administration debts owed to creditors participating in the DOCA.

5. Pursuant to the Act, a Deed Administrator generally has the powers under the prescribed provisions provided under Schedule 8A of the Corporations Regulations, save for 3(c), 10 and Pursuant to the proposed Creditors’ Trust, the Trustees’ powers would be the powers and rights of a duly appointed Trustee under statute and law. In addition to those powers, the Trustee would have additional powers to enable the proper administration of the trust fund for the purpose of distributing the funds to creditors/beneficiaries. The important powers will be those related to the distribution of the funds, which will be included in the Trust Deed.

6. If Nelac or the Company are unable to comply with any fundamental provisions of the DOCA including payment of monies due pursuant to the DOCA, and/or the Deed Administrators form the view that the Company is unlikely to be able to comply with the terms of the DOCA, then the Deed Administrators are entitled to terminate the DOCA and or convene a meeting of the Company’s creditors at which creditors may resolve to:

7. a) Vary the DOCA; or

8. b) Terminate the DOCA; or

9. c) Enforce the terms of the DOCA.

10. The DOCA/Creditors’ Trust Fund will be distributed as follows; -

11. Firstly, in payment of the remuneration, costs, disbursements and expenses of the Administrators for acting in their capacity as the Deed Administrators of the Company including that of their partners and staff.

12. Secondly, in payment of the remuneration, costs, disbursements and expenses of the Trustees for acting in their capacity as the Trustees of the Company including that of their partners and staff.

13. Finally, in the order of priority as set out in Section 556 of the Act for payment of the claims of the creditors/beneficiaries, other than excluded creditors/beneficiaries, which are admitted to prove under the terms of the DOCA/Creditors’ Trust by the Deed Administrators, with any reference to the winding up of the company to be read as the company being subject to the DOCA/Creditors’ Trust and the relevant date being the date of appointment of the Administrator.

In payment of the claims of the creditors/beneficiaries, other than excluded creditors/beneficiaries, and to the extent that the funds available are insufficient to pay in full all such claims they will be paid proportionately.

At the meeting of creditors held on 8 June 2017 pursuant to Section 445F of the Corporations Act 2001, creditors resolved that the DOCA executed on 16 April 2015 be varied in accordance with the above terms and conditions.

The DOCA variation was executed on 15 August 2017.

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Directors’ Report (continued)

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Issue of Equity

On 9 December 2016 the shareholders approved conversion of liabilities and loans of the Consolidated Entity totaling $8,854,253 for 177,085,060 fully paid ordinary shares. All of the shares were issued between 26 December 2016 and 15 August 2017

On 7 March 2017, 305,000,000 shares were issued at $0.001 per share for a placement of $305,000 for to raise working capital.

On 26 June 2017, 50,000,000 shares were issued at $0.001 per share for a placement of $50,000 for to raise working capital.

On 15 August 2017, 100,000,000 shares were issued at $0.001 per share for a placement of $100,000 for to raise working capital.

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

Dividends Paid or Recommended

No dividends were paid or proposed during the half-year ended 31 December 2015.

Auditor’s Independence Declaration

The lead auditor's independence declaration under section 307C of the Corporations Act 2001 is set out on page 11 for the half-year ended 31 December 2015.

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.

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---

Jackob Tsaban Director

Dated this 25[th ] day of August 2017

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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 2015 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

Dated this 25[th] day of August 2017

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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

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 for the half-year ended 31 December 2015, 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, 25 August 2017

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.

Statement of Profit or Loss and Other Comprehensive Income For the Half-Year Ended 31 December 2015

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Note	Consolidated	Consolidated
Project evaluation costs not capitalised Personnel, suppliers and consulting expenses Listing expenses Finance Costs 3 Legal Fees Travel costs and accommodation 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 earnings/(loss) per share (cents) Diluted earnings/(loss) per share (cents)	31 December 2015 - - (28,768) - - - - (28,768)	31 December 2014 (556,414) (67,441) (36,947) (193,659) (18,273) (3,464) (5,625)
		(881,823) -
	(28,768) - - - (28,768) (28,768) - (28,768) (28,768) - (28,768) (0.01) (0.01)	(881,823)
		(83,042) -
		(83,042)
		(964,865)
		(881,823) -
		(881,823)
		(964,865) -
		(964,865)
		(0.29) (0.29)

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 2015

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Current Assets Cash and cash equivalents Trade and other receivables Total Current Assets Non-Current Assets Total Non-Current Assets Total Assets Current Liabilities Trade & other payables 5 Borrowings 6 Amounts to be converted 7 Total Current Liabilities Total Liabilities Net Assets Equity Issued capital 8 Reserves Accumulated losses Parent interest Non-controlling interest Total Equity	31 December 2015 - 2,877 2,877 - 2,877 354,752 777,500 8,154,254 9,286,506 9,286,506 (9,283,629) 23,833,825 , (33,117,454)	30 June 2015 - -
		-
		-
		-
		350,607 750,000 8,154,254
		9,254,861
		9,254,861
		(9,254,861)
		23,833,825 - (33,088,686)
	(9,283,629) - (9,283,629)	(9,254,861) -
		(9,254,861)

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 2015

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		Consolidated
Balance at 1.7.2014 Loss attributable to members of parent entity Other comprehensive income Sub-total Contributions to equity Conversion of convertible notes Balance at 31.12.2014 Balance at 1.7.2015 Loss attributable to members of parent entity Other comprehensive income Sub-total Contributions to equity Transaction costs Conversion of convertible notes Balance at 31.12.2015	Note	Issued capital Accumulated Losses Option Reserve Foreign currency translation Acquisition Reserve Non- controlling Interest Total $ $ $ $ $ $ $
		29,169,803 (36,201,610) 315,900 179,359 (3,350,000) (363,564) (10,250,112) - (881,823) - - - - (881,823) - - - (83,042) - - (83,042)
		29,169,803 (37,083,433) 315,900 96,317 (3,350,000) (363,564) (11,214,977) 14,022 - - - - - 14,022 200,000 - - - - - 200,000
		29,383,825 (37,083,433) 315,900 96,317 (3,350,000) (363,564) (11,000,955)
		23,833,825 (33,088,686) - - - - (9,254,861) - (28,768) - - - - (28,768) - -
		23,833,825 (33,117.454) - - - - (9,283,629) - - - - - - - - - - - - - - - - - - - - -
		23,833,825 (33,117,454) - - - - (9,283,629)

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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Statement of Cash Flows For the Half-Year Ended 31 December 2015

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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 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 2015 (27,500) - (27,500) - - - 27,500 - 27,500 - - -	31 December 2014 (857,108) -
		(857,108)
		(828,637)
		(828,637)
		14,022 823,660 (10,000)
		827,682
		(29,426) 30,616
		1,190

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 2015

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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 2015 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 2015 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 2015

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(e) Going Concern

The financial report has been prepared on a going concern basis, which contemplates the continuity of the normal business activities and the realization of assets and settlement of liabilities in the normal course of business.

For the half year ended 31 December 2015, the Group incurred an operating loss of $28,768 (2013: $881,824 loss) and an operating cash outflow of $27,500 (2014: $857,108). As at 31 December 2015, the Group had a net current and overall net asset deficiency of $9,283,629.

At the meeting of creditors held on 20 March 2015 pursuant to Section 439A of the Corporations Act 2001, creditors resolved for the Company to execute a Deed of Company Arrangement (DOCA). The DOCA was executed on 16 April 2015. For further details please refer to Note 12 - Post reporting date events .

The Directors have reviewed the circumstances of the Company and believe that there are reasonable grounds to believe that the Consolidated Entity will be able to continue as going concern, after consideration of the following factors:

• On 8 December 2016 the shareholders approved conversion of liabilities and loans of the Consolidated Entity totaling $8,854,253 for 177,085,060 fully paid ordinary shares. Of the approved conversion 16,116,121 shares were issued on 12 December 2016 and 122,119,938 shares were issued on 7 March 2017.

• The remaining balance of the interest bearing liabilities of $500,000 and amounts to be converted of $1,132,450 is expected to be converted after the next shareholders meeting on 31 July 2017. In case any the above amounts will not be converted its debt to equity it will be allocated to the Creditors’ Trust Fund. The amount will be written off in the Company’s account, with partial payment to occur from the Creditors’ Trust.

• As at 31 July 2017, the Company liabilities is of $305,000 (including $210,000 DOCA liability), compare to $10,330,979 as at 30 June 2014.

• As described in Note 9 ‘Events Subsequent to Reporting Date’:

• The Company have made payments of $390,000 under the DOCA and the creditors approved variation of the DOCA on 31 May 2017. The Company is expecting to raise $1,000,000 through a rights issuance to existing shareholders to pay the balance of the DOCA commitment and the remaining borrowing amount of $277,500;

• Subject the above, the Company will effectuate its DOCA and the Company will cease to be in administration.

• In addition, given the Consolidated Entity’s history of successful raising of capital, the Directors are confident of the Company’s ability to raise additional funds as and when they are required but will not require these funds to continue as a going concern. This is because the Company’s expenditures can be curtailed and are discretionary based on whether these additional capital raises are successful.

Notwithstanding this, there is significant uncertainty whether the Company and the Group will be able to continue as going concerns.

The ability for the Group to continue as a going concern is dependent upon, the group meeting the terms and requirements of the Deed of Company Administration (as amended), the significant requirements are as follows:

• Complete and lodge audited accounts for 30 June 2017 by 30 September 2017;

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Notes to and Forming Part of the Accounts (continued) For the Half-Year Ended 31 December 2015

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• Convene a meeting of shareholders to seek shareholder approval for the acquisition of exploration licenses in Serbia

• The remaining claims by shareholders, convertible note holders and or loan holders convert their claims to shares in the company, once the above general meeting approval is obtained to issue the additional shares in accordance with ASX listing requirements

• Raise, by 15 September 2017, $1,000,000 in additional equity. From these proceeds, an amount of $390,000 will be paid to the Creditors Trust on or before the 15 September 2017. The remaining funds from the equity raising will be used to fund the working capital requirements of the group.

Should the Company and the Group be unable to continue as going concerns, they may be required to realise their assets and extinguish liabilities other than in the normal course of business and at amounts different from those 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 and the Group be unable to continue as a going concern.

2. Segment Information

The reportable segments have been re-designated during the prior year and it was identified that the Consolidated Entity has no material operating segment. The Consolidated Entity’s operations during the period included corporate and administrative tasks to resolve debts and act under the Deed of Company Arrangement as mentioned throughout this financial report.

3. Finance costs

In the finance cost for 31 December 2014 included interest for loans provided for the PAR mining in Indonesia.

4. Contingent Assets and Liabilities

The Group’s subsidiary, South East Asia Energy Resources Pte Limited, had amounts owing to creditors of $685,764 as at 30 June 2014. These amounts were subsequently written off by the Group in the 30 June 2015 period. The Group has had no correspondence from creditors since 30 September 2014 and the subsidiary’s operations have ceased and were closed as last communicated by the company secretary of the subsidiary on 23 February 2015. The Singapore subsidiary has previously been funded solely by the Parent, with its ability to operate reliant on the Parent’s support. When the Parent went into administration and considering the Deed of Company Arrangement referred to within this financial report, it was concluded that the Singapore subsidiary could no longer viably operate. The creditors of the Singapore subsidiary have not made any communication with the Parent with a claim on amounts owed by the Singapore subsidiary and it has been concluded that these creditors are no longer active.

The Directors have determined that the amount of $685,764 is considered a contingent liability given that there is no known present obligation to settle these amounts, however, there is a possibility these amounts may arise in future periods at which point a present and measurable obligations would deemed to have occurred and would be recorded as a provision accordingly.

• 17 -

Notes to and Forming Part of the Accounts (continued) For the Half-Year Ended 31 December 2015

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Apart from the above mentioned items, as at 31 December 2015, the Group has no other contingent liabilities nor does it have any contingent assets.

5. Current Trade and Other Payables

	Consolidated
Unsecured liabilities Note Trade payables Other payables	31 December 2015 $ 30 June 2015 $ 354,752 350,607
	354,752 350,607

Payables are unsecured.

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

6. Borrowings

	Consolidated
Current borrowings Note Convertible loans – unsecured (a) Short-term borrowings (b) Current borrowings	31 December 2015 $ 30 June 2015 $ 500,000 500,000 277,500 250,000
	777,500 750,000

• (a) The convertible loans represent the remaining not converted balance raised during 2013 financial year. It does not have a maturity date and expected to be converted into ordinary shares. In case the above loan will not be converted its debt to equity it will be allocated to the Creditors’ Trust Fund. The amount will be written off in the Company’s account, with partial payment to occur from the Creditors’ Trust.

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

• 18 -

Notes to and Forming Part of the Accounts (continued) For the Half-Year Ended 31 December 2015

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7. Amounts to be converted

Following the execution of the Deed of Company arrangement on 16 April 2015, it was agreed that the following amount of liabilities and loans owed by the company and or its controlled subsidiaries, will be converted to regular shares. This was approved during shareholders meeting held on 8 December 2016.

Amounts owed to suppliers Amounts owed to related parties Convertible notes secured Convertible notes unsecured Convertible bonds unsecured Short term loans Balance at the end of reporting period	31 December 2015 $ 86,282 1,335,541 2,865,474 1,110,000 110,000 2,646,957
	8154254

8. Share Capital

	Consolidated
Note 312,520,518 (30 June 2015: 312,520,518 ) fully paid ordinary shares (a) 120,000,000 (30 June 2015: 120,000,000) performance shares (b) Movements in: a) Ordinary Shares At 1 July 2015 Issue of shares – placement (i) Issue of shares – conversion of bonds (ii) At 31 December 2015 b) Performance Shares Note At 1 July 2015 Shares issuable At 31 December 2015	31 December 2015 $ 30 June 2015 $ 23,833,825 23,833,825 - -
	23,833,825 23,833,825 No. of Shares $ 312,520,518 23,833,825 - - - -
	312,520,518 23,833,825
	No. of Shares $ 120,000,000 - - -
	120,000,000 -

• 19 -

Notes to and Forming Part of the Accounts (continued) For the Half-Year Ended 31 December 2015

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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.

9. Events Subsequent to Balance Date

Deed of Company arrangement Execution

At the meeting of creditors held on 20 March 2015 pursuant to Section 439A of the Corporations Act 2001, creditors resolved for the Company to execute a Deed of Company Arrangement (DOCA). The DOCA was executed on 16 April 2015 and accordingly Messers Richard Albarran, David Ingram and Cameron Shaw of Hallchadwick were appointed as the Deed Administrators. The terms of the DOCA were:

1. Richard Albarran, David Ingram and Cameron Shaw to administer the DOCA/Creditors’ Trust.

2. A DOCA/Creditors’ Trust fund of $600,000 will be made available to all creditors of the Company. Olivest Pty Ltd (“Oilvest") shall make the following payments to the DOCA/Creditors Trust Fund:

3. a) One (1) upfront payment of $250,000 upon execution of the DOCA; and

4. b) $350,000 to be paid no later than twelve (12) months after the execution of the DOCA; and

5. The agreement of the holders of all excluded creditors to convert their debt into shares into the Company at the price of five (5) cents per share with the total number of shares being issued 149,740,902. This conversion price is conditional on Olivest being satisfied that it can obtain title to the Moly project. In the event that this cannot be obtained prior to the shareholders meeting to approve this then the conversion price will revert to thirty (30) cents per share; and

6. 50% of the proceeds of the collection of outstanding amount from the Alluvia Mining loan.

8. The establishment of a Creditors’ Trust as part of the recapitalization process.

9. Olivest to undertake a capital raising of $2,000,000 at a maximum price of $0.005 per share (“Public Raising").

10. Olivest to convert $600,000 to equity via a share placement at a minimum $0.001 per share.

11. A meeting of the Company’s shareholders, the Company’s Convertible Note, Bond and Loan holders may vote to accept their claims are converted into shares of the Company.

12. Interest will be charged on any overdue amounts at the rate of 12% pa.

13. Control and management of the Company will revert to the Directors of the Company upon effectuation of the DOCA/commencement of the Creditors’ Trust.

14. The related creditors including the Directors of the Company and any entity associated with the Directors or their relatives (including in-laws) will subrogate their claims against the Company in their entirety, and will not participate in any distribution under the DOCA subject to shareholder approval to convert their debts into equity on the same terms and conditions as the excluded creditors.

15. The Company’s own subsidiaries will retain all assets as agreed in the DOCA, specifically:

16. 20 -

Notes to and Forming Part of the Accounts (continued) For the Half-Year Ended 31 December 2015

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• a) Any rights to the Moly Project will be retained by the Company as an asset, with the title to this asset still subject to legal confirmations; and

• b) Any right to the loan to Alluvia Mining loan on the basis that the Company will continue to try and collect this debt and in the event that any collection is made then 50% of that amount will be paid to the Administration under the DOCA.

• Subject to point 11, all claims against the Company arising prior to the appointment of the Administrators will be admissible under the DOCA.

• There shall be a moratorium on enforcement of pre-Administration creditor claims under the DOCA.

• Any distribution paid to creditors/beneficiaries is to be in full and final satisfaction of their claims against the Company.

• Upon wholly effectuation of the DOCA, the Company shall be release from all pre- Administration debts owed to creditors participating in the DOCA.

• Pursuant to the Act, a Deed Administrator generally has the powers under the prescribed provisions provided under Schedule 8A of the Corporations Regulations, save for 3(c), 10 and 11.

Pursuant to the proposed Creditors’ Trust, the Trustees’ powers would be the powers and rights of a duly appointed Trustee under statute and law. In addition to those powers, the Trustee would have additional powers to enable the proper administration of the trust fund for the purpose of distributing the funds to creditors/beneficiaries. The important powers will be those related to the distribution of the funds, which will be included in the Creditors’ Trust Deed.

1. The DOCA will commence upon its execution by Olivest and the Deed Administrators.

2. If Olivest or the Company are unable to comply with any fundamental provisions of the DOCA including payment of monies due pursuant to the DOCA, and/or the Administrators form the view that the Company is unlikely to be able to comply with the terms of the DOCA, then the Administrators are entitled to convene a meeting of the Company’s creditors at which creditors may resolve to:

3. a) Vary the DOCA; or

4. b) Terminate the DOCA; or

5. c) Enforce the terms of the DOCA.

6. The DOCA/Creditors’ Trust Fund will be distributed as follows;-

7. a) Administrators fees, expenses and trading liabilities;

8. b) Deed Administrators fees and expenses;

9. c) Creditors’ Trustee fees and expenses;

10. d) Priority creditors/beneficiaries;

11. e) Unsecured creditors/beneficiaries.

Pursuant to the terms of the DOCA, the Company was to convene and hold a meeting of the Company’s shareholders to obtain shareholders’ approval of the following:

• a) The DOCA;

• 21 -

Notes to and Forming Part of the Accounts (continued) For the Half-Year Ended 31 December 2015

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• b) The Recapitalization Proposal;

• c) Approval of the Share Issue to Trade Creditors and Related Party Creditors;

• d) Approval of the Share Issue to Convertible Note, Bond and Loan Holders and Related Party Loan Holders; and

• e) Approval of the Share Placement.

A general meeting of the Company’s shareholders was convened and held on 1 December 2016 and the Company’s shareholders approved all of the agenda items as outlined above at points (a) to (e).

Deed of Company arrangement Variation

From the date of execution of DoCA, the Deed Administrators received $370,000 as contribution for the DoCA. On April 2017, the Deed Administrators advised that the Company is in default under the terms of the DoCA and the guarantor, Olivest Pty Ltd (“Olivest”) had indicated that it is not in a position to remedy the default.

A DoCA variation has been submitted by Nelac Nominees Pty Ltd (”Nelac”) for the recapitalization of the Company. As part of the proposal, Nelac will replace Olivest in relation to providing the security required with respect to guaranteeing the terms and conditions of the amended DoCA, including executing a new general security agreement.

The major terms of the variation are outlined below:

1. Richard Albarran, David Ingram and Cameron Shaw to administer the DoCA/Creditors’ Trust.

2. The original established Deed Fund of $600,000 (of which $230,000 remains unpaid) be increased to $760,000 (“the Deed Fund") and dealt with in accordance with the DOCA/ Creditors’ Trust. Nelac shall make the following payments to the DOCA/Creditors Trust Fund:

3. a. $20,000 to be paid before the meeting of creditors convened pursuant to section 445F of the Act;

4. b. A lump sum of $370,000 to be paid before 15 August 2017.

5. c. 50% of the shares held by the Company in Amarant Mining AB as consideration for 50% of Alluvia Mining loan.

6. 50% of any right to the shares of Amarant Mining AB to be transferred and /or paid to the Administration under the DoCA.

7. The Company will do everything necessary to comply with Chapters 1 and 2 of the ASX Listing Rules to ensure the Company is in a position to be re-listed including attending to the following by 30 September 2017:

8. a) Complete its audited accounts for 2015, 2016 and 2017 financial years and half- years;

9. b) Convene a meeting of the Company’s shareholders to seek shareholder approval for the acquisition of five (2) exploration licenses covering an area of 340.31km2 in Serbia.

10. The establishment of a Creditors’ Trust as part of the recapitalization process.

11. The Company’s remaining shareholders, Convertible Note, Bond and or Loan holders who did not convert their claims into shares at the General Meeting held on 8 December 2016, may convert their claims into shares of the Company and or participate in any distribution under the DOCA as unsecured creditors.

12. Interest will be charged on any overdue amounts at the rate of 12% per annum.

13. 22 -

Notes to and Forming Part of the Accounts (continued) For the Half-Year Ended 31 December 2015

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1. Control and management of the Company will remain with the Directors until and upon effectuation of the amended DOCA and commencement of the Creditors’ Trust.

2. The related creditors including the Directors, Mr Gary Williams, Mr Jackob Tsaban and Mr Wayne Knight and any entity associated with the Directors or their relatives (including in- laws) will subrogate their claims against the Company in their entirety, and will not participate in any distribution under the DOCA and will subject to shareholder approval, convert their debts into equity on the same terms and conditions as approved at the General Meeting held on 8 December 2016.

3. The Company’s own subsidiaries will retain all assets as agreed in the DOCA, specifically:

4. a) Any rights to the Moly Project will be retained by the Company as an asset, with the title to this asset still subject to legal confirmations; and

5. b) 50% of the shares held by the Company in Amarant Mining AB as consideration for 50% of Alluvia Mining loan.

6. Subject to point 9, all claims against the Company arising prior to the appointment of the Administrators will be admissible under the DOCA.

7. There shall be a moratorium on enforcement of pre-Administration creditor claims under the DOCA.

8. Any distribution paid to creditors/beneficiaries is to be in full and final satisfaction of their claims against the Company.

9. Upon wholly effectuation of the DOCA, the Company shall be released from all pre- Administration debts owed to creditors participating in the DOCA.

10. Pursuant to the Act, a Deed Administrator generally has the powers under the prescribed provisions provided under Schedule 8A of the Corporations Regulations, save for 3(c), 10 and Pursuant to the proposed Creditors’ Trust, the Trustees’ powers would be the powers and rights of a duly appointed Trustee under statute and law. In addition to those powers, the Trustee would have additional powers to enable the proper administration of the trust fund for the purpose of distributing the funds to creditors/beneficiaries. The important powers will be those related to the distribution of the funds, which will be included in the Trust Deed.

11. If Nelac or the Company are unable to comply with any fundamental provisions of the DOCA including payment of monies due pursuant to the DOCA, and/or the Deed Administrators form the view that the Company is unlikely to be able to comply with the terms of the DOCA, then the Deed Administrators are entitled to terminate the DOCA and or convene a meeting of the Company’s creditors at which creditors may resolve to:

12. a) Vary the DOCA; or

13. b) Terminate the DOCA; or

14. c) Enforce the terms of the DOCA.

15. The DOCA/Creditors’ Trust Fund will be distributed as follows; -

16. Firstly, in payment of the remuneration, costs, disbursements and expenses of the Administrators for acting in their capacity as the Deed Administrators of the Company including that of their partners and staff.

17. Secondly, in payment of the remuneration, costs, disbursements and expenses of the Trustees for acting in their capacity as the Trustees of the Company including that of their partners and staff.

18. 23 -

Notes to and Forming Part of the Accounts (continued) For the Half-Year Ended 31 December 2015

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• Finally, in the order of priority as set out in Section 556 of the Act for payment of the claims of the creditors/beneficiaries, other than excluded creditors/beneficiaries, which are admitted to prove under the terms of the DOCA/Creditors’ Trust by the Deed Administrators, with any reference to the winding up of the company to be read as the company being subject to the DOCA/Creditors’ Trust and the relevant date being the date of appointment of the Administrator.

In payment of the claims of the creditors/beneficiaries, other than excluded creditors/beneficiaries, and to the extent that the funds available are insufficient to pay in full all such claims they will be paid proportionately.

At the meeting of creditors held on 8 June 2017 pursuant to Section 445F of the Corporations Act 2001, creditors resolved that the DOCA executed on 16 April 2015 be varied in accordance with the above terms and conditions.

The DOCA variation was executed on 15 August 2017.

Issue of Equity

On 9 December 2016 the shareholders approved conversion of liabilities and loans of the Consolidated Entity totaling $8,854,253 for 177,085,060 fully paid ordinary shares. Most of the shares were issued between 26 December 2016 and 23 May 2017

On 7 March 2017, 305,000,000 shares were issued at $0.001 per share for a placement of $305,000 for to raise working capital.

On 26 June 2017, 50,000,000 shares were issued at $0.001 per share for a placement of $50,000 for to raise working capital.

On 15 August 2017, 100,000,000 shares were issued at $0.001 per share for a placement of $100,000 for to raise working capital.

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

10. Related Party Transactions

During six months ended 31 December 2015 there were no related party transactions.

• 24 -

Correspondence to: PO Box 570 West Perth WA 6872

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Level 1 10 Kings Park Road West Perth WA 6005

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

INDEPENDENT AUDITOR’S REVIEW REPORT W TO THE MEMBERS OF SOUTH EAST ASIA RESOURCES LIMITED

We have reviewed the accompanying half-year financial report of South East Asia Resources Limited (the Company), which comprises the consolidated financial statements being the statement of financial position as at 31 December 2015, 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 halfyear’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 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 2015 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, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

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.

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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 .

Basis for Disclaimed Conclusion

As noted in Note 1(e) to the financial statements, the directors state that the consolidated entity’s financial statements have been prepared on a going concern basis. In assessing the going concern basis of preparation, the consolidated entity has made a number of assumptions including the assumption that the consolidated entity is able to raise capital of $1,000,000 by the 15[th] of September 2017 to settle its obligations under the Deed of Company Arrangement. As at the date of this signed report, we have been unable to obtain sufficient audit evidence that the consolidated entity will raise capital of $1,000,000 by the 15[th] of September in order for us to form an opinion on the financial report.

Disclaimed Conclusion

Based on our review, which is not an audit, because of the matters described in the Basis for Disclaimed Conclusion paragraph, we have not been able to obtain sufficient appropriate evidence to provide a basis for our conclusion. Accordingly, we do not express a conclusion on the financial report.

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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

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M J Hillgrove Partner - Audit & Assurance

Perth, 25 August 2017