PACIFIC RESOURCES LIMITED — Annual Report 2020

Sep 28, 2020

ABN 20 075 877 075

ANNUAL REPORT FOR YEAR ENDED 30 JUNE 2020

	Page
Corporate Directory	1
Chairman's Report	2
CEO's Report and Operational Review	3
Directors' Report	12
Remuneration Report	15
Auditor's Independence Declaration	22
Directors' Declaration	23
Financial Report
Consolidated Statement of Profit or Loss and Other ComprehensiveIncome	24
Consolidated Balance Sheet	25
Consolidated Statement of Changes in Equity	26
Consolidated Statement of Cash Flows	27
Notes to the Financial Statements	28
Shareholder information	49
Independent Auditor's Report to the Members	50

CORPORATE DIRECTORY

Directors	Daniel Chan (Chairman)George Lam (Deputy Chairman)William KoAndrew Macintosh
Executives	Andrew Fogg (Chief Executive Officer)Bruce Patrick (Chief Operating Officer)
Company Secretary	Leni Stanley
Registered office	Level 16, 344 Queen StreetBrisbane QLD 4000(07) 3229 6606
Share register	Link Market Services LimitedLevel 19, 324 Queen StreetBrisbane QLD 4000(02) 8280 7454
Auditor	RSM Australia PartnersLevel 6, 340 Adelaide StreetBrisbane QLD 4000(07) 3225 7800
Bankers	Westpac Banking Corporation388 Queen Eagle StreetBrisbane QLD 4000
Stock exchange listing	AustChina Holdings Limited shares are listed on the AustralianSecurities Exchange – using the stock code 'AUH'.
Website address	www.austchinaholdings.com

Competent Person's Statement

Rowan Johnson confirms that he is the Competent Person for the Competent Person Report from which the information to be publicly released has been obtained and also confirms that:

• He has read and understood the requirements of the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code, 2012 Edition), the 2014 Edition of the Australian Guidelines for the Estimation and Classification of Coal Resources and the relevant sections of Chapter 5 and Guidance Note 31 from the ASX Listing Rules.
• He is a Competent Person as defined by the JORC Code 2012 Edition, having 35 years of experience that is relevant to the coal types, quality and potential mining method(s) of the deposit(s) described in the Report. In addition, he has 25 years of experience in the estimation, assessment and evaluation of Coal Resources, the activity for which he is accepting responsibility.
• He is a Member of The Australasian Institute of Mining and Metallurgy.
• He has reviewed the Report or Excerpt from the Report to which this Consent Statement applies.

He is a consultant working for McElroy Bryan Geological Services and has been engaged by AustChina Holdings Limited to prepare the documentation for the Blackall Coal Project – Inverness Deposit on which the Report is based.

In addition:

• He has disclosed to AustChina Holdings Limited the full nature of the relationship between himself and the company, including any issues that could be perceived by investors as a conflict of interest.
• He verifies that the Report is based on and fairly and accurately reflects in the form and context in which it appears, the information in his supporting documentation relating to Coal Resources.

He consents to the release of the Report and this Consent Statement by the directors of AustChina Holdings Limited.

The Chairman's Report

On behalf of the AustChina Board I am pleased to introduce the Company's 2020 Annual Report.

The 2019–2020 year has proven to be challenging given the onset of the worldwide COVID-19 pandemic in the second half of the year.

The drilling programme at Blackall during the year provided increased knowledge of the coal resource contained in the Blackall Coal Project. Following the update of the Competent Person Report on the Coal Resources of its Blackall Project, AustChina was pleased to report the inclusion for the first time of Indicated category resources. Indicated resources are a pre-requisite for any future application for higher tenure such as a Mineral Development License.

The Blackall Coal Project remains a medium-term opportunity dependent in part on the increasing demand for thermal coal into South East Asia, identification of on-site use for the coal and/or on improvement in infrastructure economics that may arise from the progression of Galilee Basin projects.

There is increasing recognition of the potential for biogas industries to participate in a cleaner worldwide economy. AustChina remains confident that Utilitas is well positioned in the biogas (bioenergy and bioproducts) field in Australia. In June 2020 Utilitas settled on the acquisition of the 3.5ha Bundaberg (QLD) bioHub site, with works now under way preparing the master planned biomanufacturing precinct for new tenants.

Mr. Andrew Macintosh was welcomed to the Board in July 2019.

On behalf of the Board, I thank existing shareholders for your continued support and welcome new shareholders to the Company.

I also take this opportunity to thank the Board of Directors and Management for their contributions to the company during the year.

Daniel Chan Chairman

CEO'S REPORT AND OPERATIONAL REVIEW

Tenement Update

A schedule of the Exploration Permits held as at 30 June 2020 by AustChina is provided in Table 1.

TENEMENT	PROJECT NAME	OWNERSHIP %	DATE GRANTED	EXPIRY DATE
EPC 1719	BARCOO RIVER‐BLACKALL RAIL	100	28/07/2010	27/07/2025
EPC 1993	BLACKALL SOUTH CORNER	100	17/03/2010	16/03/2021

Table 1: AustChina Holdings Limited Tenement Portfolio

The two current exploration permits for coal (EPCs) are located near Blackall in Central Queensland. EPC1625 expired on 28 April 2020. EPCs 1719 and 1993 remain within a single project-based administration area approved by the Department of Natural Resources, Mines and Energy.

AustChina's Coal Project

AustChina's coal exploration footprint is shown in Figure 1, with its focus on the Blackall Coal Project to the south of the township of Blackall contained within EPCs 1719 and 1993.

Figure 1: AustChina Coal Exploration Portfolio in Queensland at 30th June 2020.

Update of Mineral Resources and Reserves 2020

The Company was pleased to announce on 16 June 2020 that it had upgraded the Resource Statement for its Blackall Coal Project to 31 May 2020. The resources now for the first time include Indicated Resources of 30 million tonnes in EPC1993.

The company's maiden coal resource statement was announced on 20 June 2012 (ASX: "Maiden Resource Statement Confirms 1.3 Billion Tonnes JORC Resource at Blackall Coal Project"). A total Inferred Resource of 1.3Bt of thermal coal for the Inverness Deposit was confirmed, located immediately south of Blackall in Queensland.

In December 2019, a cored drilling programme targeted to increase the stratigraphic, structural and coal quality knowledge of a section within the overall resource area was successfully completed in EPC 1993, with sample analysis continuing into 2020. Drill hole spacings were reduced allowing a section of the deposit to be elevated to Indicated Resource status under the Australasian Code for Reporting of Mineral Resources and Ore Reserves (The JORC Code). Figure 2 show the rig at site BCP3 at Blackall.

Figure 2: Drill rig at site BCP2

McElroy Bryan Geological Services Pty Limited (MBGS) was commissioned by AustChina to provide an objective assessment of coal resources for its Blackall Coal Project compliant with the JORC Code.

The Inverness Deposit is situated within a broad synclinal structure trending north-northwest throughout the 25 kilometre length of the deposit. The coal seams are relatively flat-lying and the upper seams sub-crop locally, controlled by the gentle structure.

Figure 3 shows the drill hole locations for the Blackall Coal Project.

Figure 3: Drill Hole Location Plan – Blackall Coal Project

Tables 2 and 3 provide the updated Summary Coal Resources by Seam, Category and Depth for EPCs 1719 and 1993, respectively.

TABLE 2:

SeamName	BlockArea(km2)	CoalArea(km2)	CoalThickness	In SituDensity(g/cc) (1)	Raw Ash(%) (2)	SpecificEnergy(kcal/kg)(a.d.) (3)	SpecificEnergy(kcal/kg)(2)	TotalSulphur(%) (2)	Subcrop50m	Inferred Resources (Mt)50-100m	100-150m	Total
F	7.70	6.37	()1.2	1.56	35	3090	2640	0.53	10	1	-	11
E	12.23	5.50	2.1	1.42	18	4480	3940	0.37	15	16	-	31
D	15.33	7.70	2.2	1.39	14	4800	4250	0.48	16	27	-	43
C	12.73	5.75	0.6	1.39	15	4880	4180	0.42	1	5	-	6
B	22.48	8.04	0.7	1.43	20	4500	3810	1.21	4	11	2	17
Notes: 1 In Situ Density generated from Ash regression at 25% moisture basis			Inferred subtotal for EPC1719			46	60	2	108

Notes: 1 In Situ Density generated from Ash regression at 25% moisture basis 2 Raw coal quality parameters reported at In Situ Moisture basis (25%) 3.Specific Energy reported at air dried basis

1. Default In Situ Density generated from available laboratory data

2. Default Raw Ash generated from default In Situ Density and ash/density regres

Inferred Total for EPC1719	108
Inferred Total for EPC1719 (Rounded)	100

TABLE 3:

						Specific	Specific	Total			Indicated Resources (Mt)
SeamName	BlockArea(km2	CoalArea(km2)	CoalThickness(m)	In SituDensity (g/cc) (1)	Raw Ash(%)(2)	Energy(kcal/kg) (a.d.)(3)	Energy(kcal/kg)(2)	Sulphur(%)(2)	Subcrop-50m	50-100m	100-150m	Total
F	)1.91	1.89	1.4	1.52	31	3343	2971	0.67	5.1	-	-	5.1
E	2.83	2.13	0.7	1.44	22	4062	3666	0.34	17.9	2.9	-	20.8
D	2.29	1.27	0.5	1.39	15	4566	4150	0.34	3.4	2.2	-	5.6
C	0.47	0.43	0.3	1.35	10	4994	4551	0.39	0.02	0.4	-	0.4
							Indicated Subtotal for EPC1993		26.4	5.5	-	31.9
								Indicated Total for EPC1993				32
							Indicated Total for EPC1993 (Rounded)					30
F	21.20	18.09	0.6	1.48	26	3837	3352	0.57	47	1	-	48
E	43.20	30.60	0.4	1.41	18	4416	3964	0.36	244	25	-	269
D	149.46	70.95	0.4	1.42	19	4334	3898	0.61	300	105	-	405
C	159.49	58.71	0.4	1.41	18	4415	3964	0.41	125	98	<1	224
B	173.57	75.11	1.1	1.43	20	4280	3810	1.31	36	114	9	159
A	56.07	17.67	1.0	1.38 (4)	14 (5)	4790	4290	-	10	17	30	57
Notes: 1. In Situ Density generated from Ash regression at 25% moisture basis				39Inferred Subtotal for EPC1993761.86 361.2				1162
	2. Raw coal quality parameters reported at In Situ Moisture basis (25%)3. Specific Energy reported at air dried basis					Inferred Total for EPC1993				1162
	4. Default In Situ Density generated from available laboratory data5. Default Raw Ash generated from default In Situ Density and Ash/Density				Inferred Total for EPC1993 (Rounded)					1200

There are no Mineral Reserves pertaining to the company's tenements.

Following the update of the Competent Person Report on the Coal Resources of its Blackall Project, AustChina notes the inclusion for the first time of Indicated category resources. Indicated resources are a pre-requisite for any future application for higher tenure such as a Mineral Development License.

Over 800Mt of the resources were estimated at less than 50 metres depth.

Investment in Sector Projects Pty Ltd (AUH 5%)

Through the sale of its subsidiary Surat Gas Pty Ltd completed on 28 September 2018, AustChina acquired 5% of the issued capital of Sector Projects Pty Ltd (Sector);

Background

Sector is 100% owner and operator of Exploration Permits for Minerals (EPMs) 18628, 18644, 18645, and 18647 together with EPMs 26419 and 26463 situated 220km north of Mt Isa in Queensland (Figure 4). Covering an area of 665 square kilometres, the tenements have been the subject of a systematic program of exploration activity over the years in the search for world scale base minerals deposits, primarily copper. The region is known to host a number of large-scale mineral deposits (Mt Isa, Century, George Fischer, Ernest Henry to name a few). The geology of the Sector tenements is known to contain the same host rocks; however, these tenements are overlain by cover material ranging from 40 to 200 metres deep. This cover material makes a more challenging environment for orebody identification when compared to areas closer to Mt Isa where many of the identified economic orebodies have outcropped at surface.

Figure 4: Sector Projects Exploration Area Location

Exploration Program

Commencing in H2 FYE 2019 and continuing into July 2019, a 4 hole 2,700m diamond drilling program was undertaken in EPM18628 (Figure 5). Encouraging signs of mineralisation, predominantly chalcopyrite, were seen in 3 of the 4 holes.

Figure 5: EPM18628 Location

Sector undertook an electromagnetic survey during the second half of calendar 2019 following the completion of the drilling programme, however this was inconclusive. Further geophysical exploration (IP) focusing on the area surrounding one drill hole which encountered obvious and visible chalcopyrite over a 500m continuous length of core was undertaken. This work provided improved areal data in the region of the earlier electromagnetic survey. Additional lines of IP proximate to the 2019 drill hole, have resulted in the definition of a zone of high conductivity approximately 400 metres south-west of the earlier drill hole. An obvious high priority drill target has resulted and will form a part of the next phase of drilling.

Investment in Biogas Renewable Energy Sector

AustChina holds 25.14% of the Utilitas Group Pty Ltd (Utilitas), a Brisbane based privately owned company established in 2010 by Ms Fiona Waterhouse. The company is focused on the emerging biogas and biorefining industries in Australasia and represents a unique opportunity for AustChina to provide an additional investment in the energy and resources sector to diversify its existing portfolio. Ms Waterhouse remains a major shareholder in Utilitas and continues as its Chief Executive Officer.

Biogas, mostly methane, is produced via a natural process called anaerobic digestion (AD) of organic material in the absence of oxygen. The world's most flexible fuel, biogas can directly displace fossil sources of dispatchable electricity, gas and transport fuel and is generated from feedstock that reduces trade waste costs and risks for producers.

The biogas industry is supported by a global supply chain of mature equipment suppliers. Germany is the world leader with 12,500 biogas plants (av. 300kWe) connected to its national electricity network and 179 plants supplying biomethane (upgraded biogas) into its national gas grid.

Previously low electricity and gas prices in Australia has meant the local biogas industry has been slow to emerge, but this is changing with local issues around grid stability, high costs of electricity and gas, and gas shortages. In 2017 the World Biogas Association claimed the Australian biogas industry, from waste-based production (livestock manure, biosolids, food, and water) has the potential to generate $4.3 billion per year. With a livestock population of 29 million cattle, over 2 million pigs, and 101 million poultry in addition to about 24 million people generating biosolids and 290 kg of food waste per year, the biogas potential is estimated to be 7.5 million m3.

Figure 6: The biogas cycle*.*

A regional bioHub aggregates organic waste and wastewater to produce energy, water, and other bio-products. It is centred around anaerobic digestion of wet organic waste streams. A Utilitas bioHub includes upstream and downstream processing and creates a platform for co-location of other biomanufacturing industry. It provides infrastructure as a service to local industry and Councils.

During FY2020 Utilitas continued its focus on bringing the first bioHub projects in its portfolio through the final steps to achieve financial close, negotiating co-development arrangements for the Company's first two bioHubs sites. In the March quarter, Utilitas secured investment (via a convertible note) to enable settlement on its 3.5ha Bundaberg (QLD) bioHub site. It also completed planning approvals for its master planned biomanufacturing precinct.

In June 2020 Utilitas settled on the acquisition of the 3.5ha Bundaberg (QLD) bioHub site (Figure 7), with works now under way preparing the master planned biomanufacturing precinct for new tenants.

Figure 7: Bundaberg bioHub site

The Company has been engaged by "anchor tenants" in two other bioHubs (VIC & NSW) to carry out Concept Validation.

A Memorandum of Understanding was announced on 10th June 2020 between Utilitas, as a leading Australian bioenergy developer, with ReCarbon, Inc., the developer of the patented Plasma Carbon Conversion Unit (PCCU), a revolutionary greenhouse gas utilization technology, towards building biogas-to-hydrogen plants across Australia.

Operations Outlook

The Blackall Coal Project remains a medium-term opportunity dependent in part on the increasing demand for thermal coal into South East Asia, identification of on-site use for the coal and/or on any improvement in infrastructure economics that may arise from the progression of Galilee Basin projects. There was continued industry momentum towards commencement of mining operations in the Galilee Basin during the year, together with construction of associated new rail infrastructure. The acquisition of additional stratigraphic, structural and coal quality knowledge through the drilling programme carried out in late 2019 provides the company with tenure options into the future and consideration will be given to the timing of such applications.

In FY2020 Sector carried out a professional on-ground programme on its exploration holdings in NW Queensland and this is expected to continue in the coming year. AustChina keeps in regular contact with Sector in relation to these exploration activities.

Global trends in the biogas industry include the investment by petroleum majors into the biogas industry. BP acquired the biogas assets of Clean Energy Fuels in USA in 2019 and at 30th June 20 Shell announced a significant strategic investment in Renewable Natural Gas. AustChina remains confident that Utilitas is well positioned in the biogas (bioenergy and bioproducts) field in Australia.

The current COVID-19 pandemic adds a component of uncertainty to near-term planning.

Andrew Fogg Chief Executive Officer

DIRECTORS' REPORT

Your directors present their report on the consolidated entity (referred to hereafter as the Group) consisting of AustChina Holdings Limited ("the company") and the entities it controlled at the end of, or during, the year ended 30 June 2020. Throughout this report the consolidated entity is referred to as the group.

Directors

The following persons were Directors of AustChina Holdings during the whole of the year and up to the date of this report (unless otherwise stated):

D Chan G Lam W Ko A Macintosh (from 4 July 2019)

Principal Activities

During the year the principal continuing activity of the Group consisted of exploration and investment in energy and resources.

Review of Operations

The operating loss after income tax of the Group for the year was $413,867 (2019: profit $2,587,315). The current year loss includes a gain on from equity accounted investment of $83,311 (2019: loss $50,425) and non-cash expense items including exploration assets written off of $546,104 (2019: $38,365), gain on fair value of non-current investments of $173,700, gain on recovery of prior year provision for non-recovery of convertible note of $553,000 (2019: loss $553,000). The prior year profit also included a gain on sale of assets held for resale of $3,901,128

Information on the operations of AustChina Holdings Limited and its business strategies and prospects is set out in the CEO's Report and Review of Operations on pages 3 to 11 of this annual report.

Dividend

The directors do not recommend the payment of a dividend. No dividend was paid during the year.

Significant Changes in the State of Affairs

During the current financial year the Company issued 277,105,109 shares at 0.30 cents each in a placement and a further 241,633,664 shares at 0.31 cents each upon the part conversion of a convertible note.

There were no other significant changes in the state of affairs of the Group during the financial year.

Matters Subsequent to the End of the Financial Year

No matter or circumstance has arisen since 30 June 2020 that has significantly affected the group's operations, results or state of affairs, or may do so in future years.

Likely Developments and Expected Results from Operations

Comments on expected results of certain operations of the group are included in this annual report under the CEO's report and review of operations on pages 3 to 11.

Environmental Regulation

The Group is subject to significant environmental regulation in respect of its exploration activities in Australia and is committed to undertaking all its operations in an environmentally responsible manner.

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

Information on Directors

D Chan CFA, MRICS. Non-executive director
Experience andexpertise	Mr Chan has extensive experience in the financial and investment arena and holds aMasters Degree in Finance from the Imperial College London and Chartered FinancialAnalyst (CFA) and is a member of the Royal Institute of Chartered Surveyors (MRICS). Mr
	Chan has over 13 years' experience in China real estate investment.
Other currentdirectorships	Nil
Former directorships inlast 3 years	Nil
Special responsibilities	Chairman, Member of the Audit and Risk Management Committee and Member of theRemuneration Committee. Mr Chan is also AustChina's representative Director on UtilitasGroup Pty Ltd.
Interests in shares and
options	Indirect interest in 906,873,358 Ordinary Shares

Independent non-executive director	G Lam BSc, MSc, MBA, DPA, MPA, LLB (Hons), LLM, PCLL, PhD, FHKIoD, FHKIArb, FCMA, FCPA(Aust.)
Experience andexpertise	Mr Lam has over 30 years of international experience in general management, strategyconsulting, corporate governance, direct investment, investment banking and fundmanagement across the telecommunications/media/technology (TMT), consumer/healthcare,infrastructure/real estates, energy/resources and financial services sectors.
Other currentdirectorships	Nil
Former directorships inlast 3 years	Nil
Special responsibilities	Chairman of the Audit and Risk Management Committee and Chairman of the RemunerationCommittee
Interests in shares andoptions	Nil

W Ko. Independent non-executive director
Experience andexpertise	Mr Ko holds a Bachelor of Laws degree from the University of London as well as aPostgraduate Certificate in Laws from the University of Hong Kong and a Diploma in ChineseLaws from the University of Macau and has been admitted in Australia, Hong Kong, NewZealand and England. Mr Ko has over 30 years' experience in China trade and cross bordertransactions and has been involved in mining and resources projects including coal, iron ore,gold, copper and petroleum in Australia and overseas.
Other currentdirectorships	Nil
Former directorships inlast 3 years	Nil
Special responsibilities	Nil
Interests in shares andoptions	Nil

	A Macintosh Independent non-executive director (from 4 July 2019)
Experience and	Mr Macintosh hold an MBA (Finance, Economics) and a Bachelor of Science (Computer
expertise	Science, Mathematics).
	Mr Macintosh is non-executive Chairman of Acorus Investment Management, a China-Africaprivate equity fund and has extensive experience in investment banking and finance, both inAustralia and overseas.
Other current	Nil
directorships
Former directorships in	Nil
last 3 years
Special responsibilities	Nil
Interests in shares and	Nil
options

Company Secretary

The company secretary is Ms Leni Stanley CA, B.Com. Ms Stanley was appointed to the position of company secretary in 2002. Ms Stanley is the principal in a Chartered Accounting firm and holds the office of company secretary with other ASX listed companies.

Meetings of Directors

The numbers of meetings of the company's board of directors and of each board committee held during the year ended 30 June 2020, and the numbers of meetings attended by each director were:

	Full Meetingsof Directors	Meetings ofAudit Committee
	A	B	A	B
D Chan	6	6	2	2
G Lam	6	6	2	2
W Ko	5	6	1	2
A Macintosh	5	5	2	2

A = Number of meetings attended

B = Number of meetings held during the time the director held office or was a member of the committee during the year.

There were no meetings of the Remuneration Committee during the year.

Remuneration Report (AUDITED)

The directors are pleased to present AustChina Holdings Limited's 2020 remuneration report which sets out remuneration information for AustChina Holdings Limited's non-executive directors, executive directors, and other key management personnel.

The report contains the following sections:

• (a) Key management personnel disclosed in this report
• (b) Remuneration governance
• (c) Use of remuneration consultants
• (d) Executive remuneration policy and framework
• (e) Relationship between remuneration and AustChina Holdings Limited's performance
• (f) Non-executive director remuneration policy
• (g) Voting and comments made at the company's 2016 Annual General Meeting
• (h) Details of remuneration
• (i) Service agreements
• (j) Details of share-based compensation and bonuses
• (k) Equity instruments held by key management personnel
• (l) Loans to key management personnel
• (m) Other transactions with key management personnel

(a) Key management personnel disclosed in this report

Non-executive and executive directors (see page 13 for details about each director)
Name	Position
Present:
D Chan	Non-executive Chairman – appointed 22 November 2013
G Lam	Independent non-executive director – appointed 22 November 2013
W Ko	Independent non-executive director – appointed 5 December 2018
A Macintosh	Independent non-executive director – appointed 4 July 2019
Past:
A Chan	Non-executive Chairman – appointed 22 November 2013 and ceased on
	7 June 2019
N Bolkus	Independent non-executive director – appointed 22 November 2013 and
	ceased on 7 June 2019
R Marks	Independent non-executive director – appointed 22 November 2013 and
	ceased on 21 November 2018

Other key management personnel
Name	Position
Andrew Fogg	Chief Executive Officer – appointed 2 December 2013
Bruce Patrick	Chief Operating Officer – appointed 1 December 2013. Previously
	served as Chief Executive Officer.

There have been no changes in key management personnel since the end of the financial year.

(b) Remuneration governance

The board is responsible for:

• the over-arching executive remuneration framework
• operation of the incentive plans which apply to the executive team, including key performance indicators and performance hurdles
• remuneration levels of executive directors and other key management personnel, and
• non-executive directors' fees.

The objective is to ensure that remuneration policies and structures are fair and competitive and aligned with the longterm interests of the Group.

(c) Use of remuneration consultants

The Group has not engaged the services of any remuneration consultants during the current or prior financial years.

(d) Executive remuneration policy and framework

The combination of base pay and superannuation make up the executives' fixed remuneration. Base pay for the executives is reviewed annually to ensure the executive's pay is competitive with the market. Executive pay is linked to the performance of the company through the issue of performance rights and share options. The board ensures that executive reward satisfies the following key criteria for good reward governance practices:

• competitiveness and reasonableness
• acceptability to shareholders
• transparency
• capital management.

Long-term incentives

Refer to section (j) of the Remuneration Report below for details regarding the Group's long-term incentives.

(e) Relationship between remuneration and AustChina Holdings Limited's performance

During the year, the Company has generated losses from its principal activity of exploration for coal. As the Company is still in the exploration and development stage, the link between remuneration, company performance and shareholder wealth is tenuous. Share prices are subject to the influence of coal prices and market sentiment towards the sector, and as such increases or decreases may occur quite independent of Executive performance or remuneration.

During the current and previous financial years the group has generated losses from its exploration and evaluation activities. Given the nature of the group's activities and the consequential operating results, no dividends have been paid. There have been no returns of capital in the current or previous financial periods.

Additional information

The earnings of the consolidated entity for the five years to 30 June 2020 are summarised below:

	2020$	2019$	2018$	2017$	2016$
EBITEBITDA	(490,776)(490,776)	2,553,1452,553,145	(805,891)(805,245)	(963,613)(958,803)	(2,473,094)(2,466,403)
Profit (loss) after income tax	(413,867)	2,587,315	(951,981)	(1,001,165)	(2,471,950)
	2020	2019	2018	2017	2016
Share price at financial yearend (cents per share)Total dividends declared	0.30	0.30	0.60	0.30	0.10
(cents per share)	0.00	0.00	0.00	0.00	0.00
Basic earnings per share(cents per share)	(0.03)	0.23	(0.09)	(0.09)	(0.25)

(f) Non-executive director remuneration policy

Fees and payments to non-executive directors reflect the demands which are made on, and the responsibilities of, the directors. Non-executive directors' fees and payments are reviewed annually by the Board. Non-executive directors do not receive performance-based pay.

Share options are issued to non-executive directors at the discretion of the board and following shareholder approval.

The current base fees were last reviewed with effect from 1 April 2019 when they were reduced.

Non-executive directors' fees are determined within an aggregate directors' fee pool limit, which is periodically recommended for approval by shareholders. The maximum currently stands at $400,000 in aggregate and was approved by shareholders at the annual general meeting on 9 November 2009.

The following fees have applied:
Base fees	$
Chair - prior to 1 April 2019	30,000
Chair – after 1 April 2019	24,000
Other non-executive directors – prior to 1 April 2019	20,000
Other non-executive directors– after 1 April 2019	16,000

(g) Voting and comments made at the company's 2019 Annual General Meeting

At the company's 2019 Annual General Meeting the shareholders voted 99.87% in favour of the advisory remuneration report resolution on a poll.

(h) Details of remuneration

Amounts of remuneration

Details of the remuneration of the directors and the key management personnel (as defined in AASB 124 Related Party Disclosures) of AustChina Holdings Limited are set out in the following tables. Key management personnel of AustChina Holdings Limited

2020	Short-termbenefits	Postemploymentbenefits	Sharebasedpayments
Name	Cashsalary andfees$	Superannuation$	Options$	Total$	A%	B%
Non-executive directors
D Chan, Chairman from 7 June 2019	24,000	-	-	24,000	100%	-
Independent non-executive directors
G Lam	16,000	-	-	16,000	100%	-
W Ko	16,000	1,520	-	17,520	100%	-
A Macintosh (from 4 July 2019)	16,000	1,520	-	17,520	100%	-
Sub-total non-executive directors	72,000	3,040	-	75,040	100%	-
Other key management personnel
A Fogg – Chief Executive Officer	108,193	-	-	108,193	100%	-
B Patrick– Chief Operating Officer	131,236	-	-	131,236	100%	-
Total key management personnelcompensation	311,429	3,040	-	314,469	100%	-

A Proportion of remuneration that is fixed remuneration

B Percentage of remuneration that is share-based payment

2019	Short-termbenefits	Postemploymentbenefits	Sharebasedpayments
Name	Cashsalary andfees$	Superannuation$	Options$	Total$	A%	B%
Non-executive directors
D Chan, Chairman from 7 June 2019A Chan, (to 7 June 2019)	20,25226,983	--	--	20,25226,983	100%100%	--
Independent non-executive directors
G LamW Ko (from 5 December 2018)N Bolkus (to 7 June 2019)R Marks (21 November 2018)	19,00010,48017,9897,849	-9961,709746	---	19,00011,47619,6988,595	100%100%100%100%	---
Sub-total non-executive directors	102,553	3,451	-	106,004	100%	-
Other key management personnelA Fogg – Chief Executive OfficerB Patrick– Chief Operating Officer	117,708125,000	--	--	117,708125,000	100%100%	--
Total key management personnelcompensation	345,261	3,451	-	348,712	100%	-

A Proportion of remuneration that is fixed remuneration

B Percentage of remuneration that is share-based payment

(i) Service agreements

The Company has a service agreement with NABJA Consulting Services Pty Ltd for the services of Mr Andrew Fogg, Chief Executive Officer. The service agreement was for an initial period of 5 years and commenced on 1 December 2013. The base fees were $15,833 per month. The contract includes a change of control clause which is triggered if Treasure Wheel Global Limited ceases to hold 25% or more of AustChina Holdings Limited. Under the change of control clause a compensation amount equal to one year remuneration is payable. In addition, under the contract the contractor or his nominee is entitled to receive five million performance rights in the Company, once the share price equals or exceeds two cents for five consecutive trading days. The initial contract term expired on 1 December 2019 and in accordance with the provisions of the contract it was extended for a further period of 1 year.

The Company has a service agreement with Geomine Project Management Pty Ltd for the services of Mr Bruce Patrick, Chief Operating Officer. The service agreement is ongoing and commenced on 1 December 2013. The base fees are $13,333 per month. There are no termination benefits under the agreement. In addition, under the contract the contractor or his nominee is entitled to receive three million performance rights in the Company, once the share price equals or exceeds two cents for five consecutive trading days.

(j) Details of share-based compensation and bonuses

There have been no share-based payment benefits, vested or exercised, or granted as compensation during the year (2019: Nil).

Options

There were no options over ordinary shares in the company provided as remuneration during the financial year (2019: nil).

Shares provided on exercise of remuneration options

There were no ordinary shares in the company issued on the exercise of remuneration options during the financial year (2019: nil).

Performance rights

There were no performance rights over ordinary shares in the company provided as remuneration during the financial year (2019: nil).

Shares provided on exercise of performance rights

There were no ordinary shares in the company issued to key management personnel during the financial year from the exercise of performance rights.

(k) Equity instruments held by key management personnel

The tables below show the number of:

• (i) options over ordinary shares in the company
• (ii) performance rights granted, and
• (iii) shares in the company

that were held during the financial year by key management personnel of the group, including their close family members and entities related to them.

There were no shares or options granted during the reporting period as compensation. There are no options or performance rights on issue at balance date.

(i) Shareholdings

2020Name	Balance at thestart of the year	Received during theyear on theconversion ofconvertible notes	Other changesduring the year	Balance at theend of the year
Ordinary shares
Directors
D Chan #	665,239,694	241,633,664	-	906,873,358
G Lam	-	-	-	-
W Ko	-	-	-	-
A Macintosh	-	-	-	-
Other key managementpersonnelA FoggB Patrick	17,500,0002,023,388	--	--	17,500,0002,023,388

A Chan is a director and shareholder of Loyal Strategic Investment Ltd, the holding company of Treasure Wheel Global Limited, which is the registered holder of the 906,873,358 shares.

(l) Loans to key management personnel

There were no loans to key management personnel during the financial period.

(m) Other transactions with key management personnel

There were no other transactions with key management personnel during the financial period.

This is the end of the remuneration report (audited).

Shares under Option

There are no unissued ordinary shares of AustChina Holdings Limited under option or performance rights at the date of this report.

Shares Issued on the Exercise of Options

There were no ordinary shares of AustChina Holdings Limited issued during or since the end of the year ended 30 June 2020 on the exercise of options.

Insurance of Officers

During the financial year AustChina Holdings Limited paid a premium to insure the directors and officers of the company. The policy prohibits disclosure of details of the cover and the amount of premium paid.

The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of the entity, and any other payments arising from liabilities incurred by the officers in connection with such proceedings, other than where such liabilities arise out of conduct involving a willful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the company.

Agreement to Indemnify Officers

AustChina Holdings Limited is party to an agreement to indemnify the directors and officers of the company.

The indemnity relates to any liability:

• (a) incurred in connection with or as a consequence of the directors and officers acting in the capacity including, without limiting the foregoing, representing the company on any body corporate, and
• (b) for legal costs incurred in defending an action in connection with or as a consequence of the director or officer acting in the capacity.

No liability has arisen under these indemnities as at the date of this report.

Indemnity of auditors

AustChina Holdings Limited has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the company or any related entity against a liability incurred by the auditor.

During the financial year, AustChina Holdings Limited has not paid a premium in respect of a contract to insure the auditor of the company or any related entity.

Proceedings on Behalf of Company

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

Non-audit services

Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor are outlined in Note 23 to the financial statements.

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

The directors are of the opinion that the services as disclosed in Note 23 to the financial statements do not compromise the external auditor's independence requirements of the Corporations Act 2001 for the following reasons:

• all non-audit services have been reviewed by the Audit and Risk Management Committee to ensure they do not impact the impartiality and objectivity of the auditor; and
• none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the company, acting as advocate for the company or jointly sharing economic risks and rewards.

Officers of the company who are former partners of RSM Australia Partners

There are no officers of the Company who are former partners of RSM Australia Partners.

Rounding of amounts

The company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument to the nearest dollar.

Auditor's independence declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 22.

Auditor

RSM Australia Partners continues in office in accordance with section 327 of the Corporations Act 2001.

This report is made in accordance with a resolution of the directors, pursuant to section 298(2)(a) of the Corporations Act 2001.

D Chan Chairman Brisbane, 29 September 2020

RSM Australia Partners

Level 6, 340 Adelaide Street Brisbane QLD 4000 GPO Box 1108 Brisbane QLD 4001

T +61 (0) 7 3225 7800 F +61 (0) 7 3225 7880

www.rsm.com.au

AUDITOR'S INDEPENDENCE DECLARATION

As lead auditor for the audit of the financial report of AustChina Holdings Limited for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been no contraventions of:

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

RSM AUSTRALIA PARTNERS

Brisbane, Queensland Albert Loots Dated: 29 September 2020 Partner

THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING

RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036

Liability limited by a scheme approved under Professional Standards Legislation

DECLARATION BY DIRECTORS

In the directors' opinion:

• (a) the attached financial statements and notes are in accordance with the Corporations Act 2001, including:
  • (i) complying with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and
  • (ii) giving a true and fair view of the consolidated entity's financial position as at 30 June 2020 and of its performance for the financial year ended on that date;
• (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, for the reasons provided in Note 3(iii);
• (c) Note 1(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board; and
• (d) the remuneration disclosures contained in the Remuneration Report comply with s300A of the Corporations Act 2001.

The directors have been given the declarations by the chief executive officer and the chief financial officer required by s295A of the Corporations Act 2001.

This declaration is made in accordance with a resolution of the directors made pursuant to section 295(5)(a) of the Corporations Act 2001.

D Chan Chairman

Brisbane, 29 September 2020

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2020

		Consolidated
		2020	2019
	Notes	$	$
Continuing Operations
Interest income		76,909	63,537
Gain on fair value of convertible note borrowings		91,260	-
Gain on fair value of investments		173,700	-
Exploration assets written off/expensed		(546,104)	(38,365)
Professional services expenses		(397,459)	(383,409)
Corporate overhead expenses		(206,822)	(216,779)
Depreciation expenses		-	-
Directors' remuneration		(75,040)	(106,005)
Finance costs		-	(29,367)
Recovery of (Provision for) non-recovery of convertible note		553,000	(553,000)
Share of loss from equity accounted investment		(83,311)	(50,425)
Loss before income tax	5	(413,867)	(1,313,813)
Income tax expense	6	-	-
Loss from continuing operations		(413,867)	(1,313,813)
Discontinued operations
Gain on sale of assets held for resale	20	-	3,901,128
Gain from discontinued operations		-	3,901,128
Net (loss) profit for the year		(413,867)	2,587,315
Other comprehensive income
Items that will not be reclassified to profit or loss
Share of revaluation of land and buildings of associates		319,276	-
Total comprehensive (loss) profit for the year		(94,591)	2,587,315
		Cents	Cents
Loss per share for loss from continued operations
attributable to the ordinary equity holders of the company:
Basic loss per share	29	(0.03)	(0.12)
Diluted loss per share	29	(0.03)	(0.08)
Profit per share for profit from discontinued operations
attributable to the ordinary equity holders of the company:
Basic profit per share	29	-	0.35
Diluted profit per share	29	-	0.24
(Loss) profit per share for (loss) profit attributable to the
ordinary equity holders of the company:
Basic profit (loss) per share	29	(0.03)	0.23
Diluted profit (loss) per share	29	(0.03)	0.16
Total comprehensive (loss) income for the year attributable to
owners arises from:
Continuing operations		(94,591)	(1,313,813)
Discontinued operations		-	3,901,128
		(94,591)	2,587,315

The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2020

		Consolidated
		2020	2019
	Notes	$	$
ASSETS
Current assets
Cash and cash equivalents	7	635,035	65,881
Trade and other receivables	8	27,851	18,916
Convertible notes	9	489,918	508,685
Total current assets		1,152,804	593,482
Non-current assets
Investments at fair value through profit or loss	11	250,000	76,300
Investments accounted for using equity method	12	1,012,478	776,513
Exploration and evaluation assets	13	15,542,886	15,755,652
Other assets	14	8,200	10,200
Total non-current assets		16,813,564	16,618,665
Total assets		17,966,368	17,212,147
LIABILITIES
Current liabilities
Trade and other payables	15	174,622	65,868
Borrowings	16	648,751	1,268,269
Total current liabilities		823,373	1,334,137
Non-current liabilities
Other financial liabilities	17	1,500,000	1,500,000
Total non-current liabilities		1,500,000	1,500,000
Total liabilities		2,323,373	2,834,137
Net assets		15,642,995	14,378,010
EQUITY
Issued capital	18	66,749,129	65,389,553
Reserves	19	3,847,319	3,528,043
Accumulated losses	19	(54,953,453)	(54,539,586)
Total equity		15,642,995	14,378,010

The above consolidated balance sheet should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2020

	Notes	IssuedCapital$	Share-basedpaymentreserve$	RevaluationReserve$	AccumulatedLosses$	Total$
Balance at 30 June 2018		65,507,816	3,528,043	-	(57,126,901)	11,908,958
Profit for the yearOther comprehensive income		--	--	--	2,587,315-	2,587,315-
Total comprehensive income		-	-	-	2,587,315	2,587,315
Transactions with owners intheir capacity as owners:Equity component of convertiblenote	18	(118,263)	-	-	-	(118,263)
Balance at 30 June 2019		65,389,553	3,528,043	-	(54,539,586)	14,378,010
Loss for the yearOther comprehensive incomeTotal comprehensive loss		---	---	-319,276319,276	(413,867)-(413,637)	(413,867)319,276(94,591)
Transactions with owners intheir capacity as owners:
Contributions of equity, net oftransaction costs	18	831,317	-	-	-	831,317
Conversion of convertible noteEquity component of convertiblenote	1818	750,000(221,741)	--	--	--	750,000(221,741)
Balance at 30 June 2020		66,749,129	3,528,043	319,276	(54,953,453)	15,642,995

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2020

		Consolidated
		2020	2019
	Notes	$	$
Cash flows from operating activities
Receipts in the course of operations (inclusive of goods and servicestax)		63,238	66,384
Payments to suppliers (inclusive of goods and services tax)Interest received		(718,377)148,676	(1,181,560)1,852
Net cash outflows from operating activities	26	(506,463)	(1,113,324)
Cash flows from investing activities
Payments for exploration and evaluation assets		(267,707)	(174,870)
Proceeds on sale of Assets classified as held for sale		-	3,100,000
Proceeds from part repayment of convertible note		500,000	-
Payments for security deposits		-	(500)
Refunds for security deposits		12,006	-
Net cash inflows from investing activities		244,299	2,924,630
Cash flows from financing activities
Repayment of current borrowings		-	(1,461,000)
Repayment of convertible note		-	(400,000)
Proceeds from share issue		831,318	-
Net cash inflows (outflows) from financing activities		831,318	(1,861,000)
Net increase (decrease) in cash and cash equivalents		569,154	(49,694)
Cash and cash equivalents at the beginning of the financial year		65,881	115,575
Cash and cash equivalents at the end of the financial year	7	635,035	65,881

The above Consolidated statement of cash flows should be read in conjunction with the accompanying notes.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020

Note 1 Summary of significant accounting policies

This financial report covers the Consolidated Entity of AustChina Holdings Limited (the "Company") and its controlled entities (together referred to as the "Consolidated Entity" or "Group"). AustChina Holdings Limited is a listed public company, incorporated and domiciled in Australia. The Consolidated Entity is a for-profit entity for the purpose of preparing the financial statements.

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

(a) Basis of preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board ('IASB').

Operations and principal activities

The principal activity of the Consolidated Entity is coal exploration.

Currency

The financial report is presented in Australian dollars which is the functional and presentational currency of the Consolidated Entity.

Authorisation of financial report

The financial report was authorised for issue on 29 September 2020.

Critical accounting estimates

The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Consolidated Entity's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed below.

Historical cost convention

The financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

(b) Principles of consolidation

Subsidiaries

Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases.

The acquisition method of accounting is used to account for business combinations by the group.

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated income statement and statement of comprehensive income, statement of changes in equity and balance sheet respectively.

(c) Income taxes

The income tax expense or revenue for the period is the tax payable on the current period's taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the reporting date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

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

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the assets and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

(d) Exploration and evaluation assets

Exploration and evaluation assets incurred by or on behalf of the Group is accumulated separately for each area of interest until such time as the area of interest moves into development phase or is abandoned or sold. The realisation of the value of expenditure carried forward depends upon any commercial results that may be obtained through successful development and exploitation of the area of interest or alternatively by its sale. If an area of interest is abandoned or is considered to be of no further commercial interest the accumulated exploration costs relating to the area are written off against income in the year of abandonment.

(e) Acquisitions of assets

The purchase method of accounting is used for all acquisitions of assets. Cost is measured as the fair value of the assets given up, shares issued or liabilities undertaken at the date of acquisition plus incidental costs directly attributable to the acquisition.

(f) Impairment of non-financial assets

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

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

(g) Property, plant and equipment

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

Depreciation is calculated on a straight-line basis to write off the net cost or revalued amount of each item of property, plant and equipment over its expected useful life to the entity. Estimates of remaining useful lives are made on a regular basis for all assets, with annual reassessments for major items. The expected useful lives are as follows:

Plant and equipment 3 – 5 years

(h) Trade and other payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and which are unpaid. These amounts are unsecured and usually have 30 day payment terms.

(i) Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(j) Issued capital and share-based payments

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(k) Revenue

Interest Income Interest income is recognised on a time proportion basis using the effective interest method.

(l) 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 Taxation Office (ATO).

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included in other receivables or payables in the Consolidated Balance Sheet.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.

(m) Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.

(ii) Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

(n) Financial instruments

Initial recognition and measurement

Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the group commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted).

Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified 'at fair value through profit or loss', in which case transaction costs are expensed to profit or loss immediately.

Classification and subsequent measurement

Financial instruments are subsequently measured at either of fair value or amortised cost using the effective interest rate method. Fair value represents the amount for which an asset could be exchanged or a liability settled between knowledgeable, willing parties. Where available, quoted prices in an active market are used to determine fair value. In other circumstances valuation techniques are adopted.

Amortised cost is calculated as:

• a. the amount at which the financial asset or financial liability is measured at initial recognition;
• b. less principal repayments;
• c. plus or minus the cumulative amortization of the difference, if any, between the amount initially
• recognised and the maturity amount calculated using the effective interest rate method; and
• d. less any reduction for impairment.

The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profit or loss.

(i) 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 subsequently measured at amortised cost.

Loans and receivables are included in current assets, except for those which are not expected to mature within 12 months after the end of the reporting period. All other loans and receivables are classified as non-current assets.

The group considers the probability of default upon initial recognition of an asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the group compares the risk of a default occurring on the asset as at the reporting date with the risk of default at the date of initial recognition. It considers available reasonable and supportive forward-looking information. Especially the following indicators are incorporated:

• internal credit rating;
• external credit rating (as far as available);
• actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to the borrower's ability to meet its obligations;
• actual or expected significant changes in the operating results of the borrower;
• significant increases in credit risk on other financial instruments of the same borrower;
• significant changes in the value of the collateral supporting the obligation or in the quality of third-party guarantees or credit enhancements;
• significant changes in the expected performance and behavior of the borrower, including changes in the payment status of borrowers in the group and changes in the operating results of the borrower.

Regardless of the analysis above, a significant increase in credit risk is presumed if a debtor is more than 30 days past due in making a contractual payment.

A default on a financial asset is when the counterparty fails to make contractual payments within 60 days of when they fall due.

(ii) Financial liabilities

Financial liabilities, after initial recognition, are measured at either amortised cost using the effective interest rate method, or at fair value. Where an instrument contains an embedded derivative that component is, where appropriate, separately identified and measured at fair value. If the embedded derivative is not capable of being measured separately at acquisition or at the end of a reporting period, the entire instrument is measured at fair value.

Derivative financial instruments

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date.

(o) Business combinations

The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:

• fair values of the assets transferred,
• liabilities incurred,
• equity interests issued by the group,
• fair value of any asset or liability resulting from a contingent consideration arrangement, and
• fair value of any pre-existing equity interest in the subsidiary

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The group recognises any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest's proportionate share of the acquired entity's net identifiable assets.

Acquisition-related costs are expensed as incurred.

The excess of the:

• consideration transferred,
• amount of any non-controlling interest in the acquired entity, and
• acquisition-date fair value of any previous equity interest in the acquired entity

over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired, the difference is recognised directly in profit or loss as a bargain purchase.

(p) Parent entity financial information

The financial information for the parent entity, AustChina Holdings Limited, disclosed in note 21 has been prepared on the same basis as the consolidated financial statements except in respect of tax consolidation legislation.

AustChina Holdings Limited and its wholly owned Australian controlled entities have implemented the tax consolidation legislation.

The head entity, AustChina Holdings Limited, and the controlled entities in the tax consolidated group account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a standalone taxpayer in its own right.

In addition to its own current and deferred tax amounts, AustChina Holdings Limited also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax consolidated group.

The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate AustChina Holdings Limited for any current tax payable assumed and are compensated by AustChina Holdings Limited for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to AustChina Holdings Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the wholly owned entities' financial statements.

The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments.

Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as current amounts receivable from or payable to other entities in the group.

Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement are recognised as a contribution to (or distribution from) wholly owned tax consolidated entities.

(q) Fair value measurement

When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principle market; or in the absence of a principal market, in the most advantageous market.

Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interest. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. Classifications are reviewed each reporting date and transfers between levels are determined based on a reassessment of the lowest level input that is significant to the fair value measurement.

For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data.

Derivative financial instruments have been valued using the fair value at the time of the receipt of the funds. The Group's exploration and evaluation activities have not progressed to a stage to allow more reliable measurement of any future royalty payment obligations.

(r) New accounting standards and interpretations not yet mandatory or early adopted

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2020. These new or amended Accounting Standards and Interpretations, most relevant to the consolidated entity, are not expected to have any impact on the consolidated entity.

Note 2 Financial instruments

The Group's activities expose it to a variety of financial risks; credit risk, liquidity risk and cash flow interest rate risk.

The Group holds the following financial instruments:

	Consolidated
	2020	2019
	$	$
Financial assets
Cash and cash equivalents	635,035	65,881
Convertible notes	489,918	508,685
Security deposits	8,200	10,200
	1,133,153	584,766
Financial liabilities
Trade and other payables	174,622	65,868
Other financial liabilities (including borrowings and derivatives)	2,148,751	2,768,269
	2,323,373	2,834,137

The Board has overall responsibility for the determination of the Group's risk management objectives and policies. The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group's competitiveness and flexibility.

There have been no substantive changes to the Group's exposure to financial instruments, its objectives, policies and processes for managing risks from previous periods.

Credit risk

Credit risk is managed on a Group basis. Credit risk arises primarily from cash and cash equivalents and deposits with banks and financial institutions. For bank and financial institutions, only independently rated parties with a minimum rating of 'A' are accepted.

The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available).

	Consolidated
	2020$	2019$
Cash at bank and short-term bank deposits
AA-	634,932	65,778
A	103	103
	635,035	65,881

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities to meet obligations when due.

The Group manages liquidity risk by continuously monitoring forecast and actual cash flows. No finance facilities were available to the Group at the end of the reporting period.

Maturities of financial liabilities

The table below analyses the Group's financial liabilities into relevant maturity groupings.

30 June 2020	Less than 6months	6 – 12months	Between1 and 2years	Between2 and 5years	Over 5years	Totalcontractualcash flows
Non-derivatives	$	$	$	$	$	$
Trade and other payables	174,622	-	-	-	-	174,622
Borrowings	-	-	-	-	1,500,000	1,500,000
	174,622	-	-	-	1,500,000	1,674,622
DerivativesConvertible notes	648,751	-	-	-	-	648,751

Note 2 Financial risk management (continued)

30 June 2019	Less than 6months	6 – 12months	Between1 and 2years	Between2 and 5years	Over 5years	Totalcontractualcash flows
Non-derivatives	$	$	$	$	$	$
Trade and other payables	65,868	-	-	-	-	65,868
Borrowings	-	-	-	-	1,500,000	1,500,000
	65,868	-	-	-	1,500,000	1,565,868
DerivativesConvertible notes	1,268,269	-	-	-	-	1,268,269

Other financial liabilities of $1,500,000 (2019: $1,500,000) relate to a royalty agreement as outlined in Note 17. At this stage there is no known cash outflow arising from this liability.

Cash flow and fair value interest rate risk

As the Group has interest-bearing cash assets, the company's income and operating cash flows are exposed to changes in market interest rates. The company manages its exposure to changes in interest rates by using fixed term deposits.

At 30 June 2020 if interest rates had changed by -/+ 100 basis points from the year-end rates with all other variables held constant, post-tax loss for the year would have been $9,547 lower/higher (2019 – change of 100 bps: $15,884 higher/lower), as a result of higher/lower interest income from cash and cash equivalents.

Fair Value

The carrying value of all other assets and liabilities approximate their fair value.

Note 3. Critical accounting estimates and judgements

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Consolidated Entity's accounting policies.

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

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision effects only that period or in the period and future periods if the revision affects both current and future periods. There were no key adjustments during the year which required estimates and/or judgements.

Key judgements and estimates

(i) Carrying value of exploration and evaluation assets

The Group has capitalised exploration expenditure of $15,542,886 (2019: $15,755,652). This amount includes costs directly associated with exploration. These costs are capitalised until assessment and/or drilling of the permit is complete and the results have been evaluated. These costs include employee remuneration, materials, rig costs, delay rentals and payments to contractors. The expenditure is carried forward until such a time as the area of interest moves into the development phase, is abandoned, sold or sub-blocks relinquished.

Given exploration activities have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of recoverable resources and the difficulty in forecasting cash flows to assess the fair value of exploration expenditure there is uncertainty as to the carrying value of exploration expenditure. The ultimate recovery of the carrying value of exploration expenditure is dependent upon the successful development and commercial exploitation or, alternatively, sale of the interests in the tenements. There are no factors or circumstances which suggest that the carrying amount of remaining exploration and evaluation assets may exceed recoverable amount.

(ii) Fair value of the financial liabilities

The Group has agreements with Oliver Lennox-King (Lennox-King), whereby Lennox-King has paid a net $1.5 million to the Group and in return the Group has agreed to pay Lennox-King a royalty equal to 1% of the gross value of coal sold from the tenements currently held by the Group, in the areas of the Moreton Energy Coal Project in the Clarence-Moreton Basin. The liability was initially recognised at fair value. Post initial recognition, the financial liability is accounted for in accordance with the Group policy for financial instruments set out in Note 1(n).

Note 3. Critical accounting estimates and judgements (continued)

The royalty is only payable in the event of future production of coal.

The Group's exploration and evaluation activities have not progressed to a stage to allow more reliable measurement of any future royalty payment obligations. As such, the Board is of the view that the fair value at the time of the receipt of the funds remains the appropriate measure of fair value at reporting date.

(iii) Going concern

The financial statements have been prepared on the going concern basis which contemplates continuity of normal business activities and the realisation of assets and discharge of liabilities in the ordinary course of business.

For the year ended 30 June 2020 the Group generated a consolidated loss from continuing operations of $413,867 and incurred operating cash outflows of $506,463 for the year ended 30 June 2020 and was in a net current asset position of $329,431 at this date.

The Group's ability to continue to adopt the going concern assumption will depend upon the Group being able to manage its liquidity requirement and by taking some or all of the following actions:

• 1. raising additional capital; and
• 1. disposing of non-core projects.

The directors have concluded as a result of the requirement to raise funds in the future there exists a material uncertainty that may cast significant doubt regarding the Group's ability to continue as a going concern and therefore, the Group may be unable to realise their assets and discharge their liabilities in the normal course of business. Nevertheless, after taking into account the current financial position of the Group, and the Group's ability to raise further capital, the directors have a reasonable expectation that the Group will have adequate resources to fund its future operational requirements and for these reasons they continue to adopt the going concern basis in preparing the financial report.

Should the Group be unable to continue as a going concern, it may be required to realise its assets and extinguish its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts or classification of liabilities and appropriate disclosures that may be necessary should the Group be unable to continue as a going concern.

(iv) Recovery of deferred tax assets

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

Note 4 Segment information

Identification of reportable segments

The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors in assessing performance and determining the allocation of resources. The Board of Directors carries out the role and is therefore the Chief Operating Decision Maker. Financial information provided to the board is currently at the consolidated level.

Management currently identifies the consolidated entity as having only one reportable segment, being exploration of coal, oil and gas. All significant operating decisions are based upon analysis of the Group as one segment. The financial results from this segment are equivalent to the financial statements of the consolidated entity as a whole.

The Group operates solely within Australia.

The Group does not have any products or services that it derives revenue from.

	Consolidated
	2020$	2019$
Note 5Expenses
Loss before income tax from continuing operations includes the following specificexpenses:
Defined contribution superannuation expense	5,643	3,450
Exploration expenditure written off/expensed	556,110	38,365
Share of loss from equity accounted investment	-	50,425
Provision for non-recovery of convertible noteReversal of provision for non-recovery of convertible note	-(553,000)	553,000-
Finance costs
Interest paidFinance costs expensed	--	29,36729,367

	Consolidated2020	2019
	$	$
Note 6Income tax expense
(a) Income tax expense
Current tax expenseDeferred tax expense	--	--
Aggregate income tax expense	-	-
(b) Numerical reconciliation of income tax expense to prima facietax payable
(Loss) Profit from operations before income tax expense	(413,867)	2,587,315
Tax at the Australian tax rate of 27.5% (2019: 27.5%)Tax effect of amounts which are not deductible (taxable) in calculatingtaxable income:	(113,813)	711,512
Prior year adjustmentsOther	(184,668)(24,968)	-8,076
Amounts recognised in other comprehensive incomeIncrease (decrease) in unrecognised deferred tax assets	(323,450)87,801235,649	719,588-(719,588)
Income tax expense	-	-
(c) Deferred Tax Liabilities
The balance comprises temporary differences attributable to:Exploration expenditure	4,273,647	4,332,804
Total deferred tax liabilitiesSet-off of deferred tax assets pursuant to set-off provisions	4,273,647(4,273,647)	4,332,804(4,332,804)
Net deferred tax liabilities	-	-
(d) Deferred Tax Assets
The balance comprises temporary differences attributable to:Tax lossesAccrualsBusiness capital costsFixed assetsInvestmentsOther financial liabilities	17,968,4557,9831,558576213,528412,500	17,547,1536,875-3,050458,531412,500
Total deferred tax assetsSet-off of deferred tax liabilities pursuant to set-off provisionsNet adjustment to deferred tax assets not recognised	18,604,601(4,273,647)(14,330,953)	18,428,109(4,332,804)(14,095,305)
Net deferred tax assets	-	-
(e) Unrecognised net deferred tax assets
Unused tax losses for which no deferred tax asset has been recognised	49,799,299	48,052,177
Potential tax effect at 27.5% (2019: 27.5%)	13,694,807	13,214,349

Following the proportional takeover by Treasure Wheel Global Limited, the Group failed the Continuity of Ownership Test (COT). Unused tax losses are therefore carried forward under the Same Business Test (SBT). Management and the Directors are satisfied that the Group passes SBT on the basis that coal exploration has always been, and continues to be, the core focus of the business.

Note 6 Income tax expense (continued)

Unused losses which have not been recognised as an asset, will only be obtained if:

• (i) the group derives future assessable income of a nature and of an amount sufficient to enable the losses to be realised;
• (ii) the group continues to comply with the conditions for deductibility imposed by the law; and
• (iii) no changes in tax legislation adversely affect the group in realising the losses.

(f) Tax consolidation legislation

AustChina Holdings Limited and its wholly owned Australian subsidiaries have implemented the income tax consolidation legislation from 1 August 2010. AustChina Holdings Limited is the head entity of the tax consolidated group for the year ended 30 June 2020. The Australian Taxation Office has been notified of the formation of the AustChina Holdings Limited tax consolidated group.

		Consolidated
		2020	2019
		$	$
Note 7	Current assets – Cash and cash equivalents
	Cash at bank and on hand	278,213	10,587
Deposits at call		356,822	55,294
		635,035	65,881

(a) Risk exposure

The Group's exposure to interest rate risk is discussed in Note 2. The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of cash and cash equivalents mentioned above.

(b) Deposits at call

All deposits are at call bearing an interest rate of between 0% and 0.7% (2019 – 0% to 0.7%).

Note 8 Current assets – Trade and other receivables

		Consolidated
	2020$	2019$
Prepayments	15,908	13,728
Other debtors	11,943	5,188
	27,851	18,916

Note 9 Current assets – Convertible Notes

		Consolidated
	2020	2019
	$	$
Convertible note at face value	500,000	1,000,000
Capitalised interest	-	61,684
Prepaid interest	(10,082)	-
Less provision for non-recovery	-	(553,000)
	489,918	508,685

During the prior financial year as part consideration for the sale of Surat Gas Pty Ltd (refer Note 20) the company received a Convertible Note with a Face Value of $1,000,000 in Sector Projects Pty Ltd, the purchaser of Surat Gas Pty Ltd.

During the financial year, Sector Projects Pty Ltd repaid $500,000 on the Convertible Note. The term of the remaining $500,000 outstanding as at 30 June 2020 has been extended and now requires repayment of $250,000 on 30 September 2020 and the final $250,000 is due for repayment on 21 December 2020. The note accrues interest of 8% calculated daily and capitalised at the end of each calendar month and in accordance with the agreement reached when the current repayment extension was granted, is payable in advance with each quarterly payment. The interest accruing to 30 September 2020 has been prepaid by Sector prior to the end of the financial year.

AustChina Holdings Limited has the option to elect to convert to shares in Sector Projects Pty Ltd. The Note is secured by a mortgage over two tenements controlled by Sector Projects Pty Ltd. A provision for non-recovery of this asset of $553,000 recognised in the prior year has been reversed in the current year.

Note 10Non-current assets – Plant and equipment
Consolidated	Plant &equipment$	Total$
Year ended 30 June 2019Opening net book amountAdditionsDisposalsDepreciation charge	----	----
Closing net book amount	-	-
At 30 June 2019At CostAccumulated depreciationNet book amount	6,495(6,495)-	6,495(6,495)-
Year ended 30 June 2020Opening net book amountAdditionsDisposalsDepreciation charge	----	----
Closing net book amount	-	-
At 30 June 2020At CostAccumulated depreciationNet book amount	6,495(6,495)-	6,495(6,495)-

	Consolidated
	2020	2019
	$	$
Note 11Non-current assets – Investments
Unlisted equity securities – at written down value	250,000	76,300
Unlisted securities are traded in inactive markets.
Balance at the beginning of the year	76,300	-
Additions during the year	-	1,000,000
Decrement on revaluation	-	(923,700)
Increment on revaluation	173,700	-
Balance at the end of the year	250,000	76,300

During the prior financial year as part consideration for the sale of Surat Gas Pty Ltd (refer Note 20) the company received shares with a Face Value of $1,000,000 in Sector Projects Pty Ltd, the purchaser of Surat Gas Pty Ltd. The company has received an offer to purchase the shares for $250,000 and accordingly have revalued the shares by applying an increment of $173,700 (2019: decrement $923,700).

		Consolidated
		2020$	2019$
Note 12usin	Non-current Asset – Investments accounted forg equity method
Investment in Associate		1,012,478	776,513

Refer to Note 30 for further information on investment in associate.

Note 13	Non-current assets – Exploration and evaluation assets	Consolidated
		2020$	2019$
	Exploration phase costs – at cost	15,542,886	15,755,652
follows:	The capitalised exploration assets carried forward above have been determined as
	Balance at the beginning of the yearExpenditure incurred during the year - additionsExploration expenditure written off	15,755,652343,344(556,110)	15,580,782174,870-
	Balance at the end of the year	15,542,886	15,755,652

The ultimate recoupment of costs carried forward for exploration assets is dependent upon the successful development and commercial exploitation or alternatively sale of the interests in the tenements.

		Consolidated
		2020$	2019$
Note 14	Non-current assets – Other assets
Security deposit		8,200	10,200

Security deposits represent amounts lodged with the Queensland Department of Natural Resources and Mines as security for tenements.

Note 15 Current liabilities – Trade and other payables

		Consolidated
	2020$	2019$
UnsecuredTrade payables	174,622	65,868
Note 16Current liabilities – Borrowings
	Consolidated2020$	2019$
Convertible note	648,751	1,268,269
	Consolidated
	2020	2019

	2020	2019
Borrowings – Convertible note	$	$
Face value of notes issued	750,000	1,500,000
Other equity securities – value of conversion rights	(101,249)	(231,731)
Current liability	648,751	1,268,269

Derivative financial instruments – Convertible note

On 30 November 2016, the Company issued a Convertible Note for $1,900,000 to Treasure Wheel Global Limited in place of $1,900,000 unsecured loan. As at 30 June 2020 this Convertible Note is classified as a current liability. During the current financial year the convertible note of $1,5000,000 matured. During the year the note holder elected to convert $750,000 of the convertible note to shares and granted an extension of the remaining balance of $750,000 such that the current maturity date is 11 November 2020. There is no interest payable on the convertible note.

The note is interest free and is convertible into ordinary shares in the parent entity at a price per share equal to 10 day VWAP x 0.915 for the 10 days immediately before the conversion date.

The initial fair value of the liability portion of the note was determined using a market interest rate for an equivalent non-convertible note at the issue date. The liability is subsequently recognised on an amortised cost basis until extinguished on conversion or maturity of the notes. The remainder of the proceeds is allocated to the conversion option and recognised in shareholders' equity, net of income tax, and not subsequently re-measured.

		Consolidated
		2020	2019
Note 17	Non-current liabilities – Other financial liabilities	$	$
Other financial liabilities		1,500,000	1,500,000

The Group has agreements with Oliver Lennox-King (Lennox-King), whereby Lennox-King has paid a net $1.5 million to the Group and in return the Group has agreed to pay Lennox-King a royalty equal to 1% of the gross value of coal sold from certain tenements currently held by the Group in the areas of the Moreton Energy Coal Project in the Clarence-Moreton Basis. The liability was initially recognised at fair value. Post initial recognition, the financial liability is accounted for in accordance with the Group policy for financial instruments set out in Note 1(n).

The royalty is only payable in the event of future production of coal.

There has been no movement in the balance of the liability. The Group has assessed that the fair value at the time of the initial transaction, which was at arm's length, remains a reasonable assessment of the fair value at 30 June 2020 as no changes in the underlying circumstances have occurred since. The fair value would be Level 3 in the fair value hierarchy.

The Group's exploration and evaluation activities have not progressed to a stage to allow more reliable measurement of any future royalty payment obligations.

Note 18 Issued capital

		Consolidated		Consolidated
		2020Shares	2019Shares	2020$	2019$
(a)	Share capital
	(i)Ordinary sharesFully paid(ii)Other equity securities	1,634,124,361	1,115,385,048	66,970,870	65,389,553
	Value of conversion rights– convertible notes	-1,634,124,361	-1,115,385,048	(221,741)66,749,129	(118,263)65,389,553

(b) Movements in ordinary share capital:

Date	Details	Number ofShares	IssuePrice(cents)	$
1 July 2018	BalanceValue of conversion rights of convertible	1,115,385,048		65,507,816
	notes repaid during the year	-	-	(118,263)
30 June 2019	Balance	1,115,385,048		65,389,553
	Placement	277,105,109	0.30	831,317
	Part conversions of convertible note(note 16)Value of conversion rights of convertible	241,633,664	0.31	750,000
	notes converted during the year	-		(221,741)
30 June 2020		1,634,124,361		66,749,129

(c) Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the company in proportion to the number of and amounts paid on the 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.

Ordinary shares have no par value and the company does not have a limited amount of authorised capital.

Note 18 Issued capital (continued)

(d) Options

At balance date there were no options over ordinary shares of AustChina Holdings Limited on issue.

(e) Other equity securities

The amount of $221,741 (2019: $118,263) shown for other equity securities is the value of the conversion rights relating to the convertible notes that were converted/repaid, details of which are shown in Note 16.

(f) Capital risk management

The Group's objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders, benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

The capital structure of the Group includes equity attributable to equity holders, comprising of issued capital, reserves and accumulated losses. In order to maintain or adjust the capital structure, the company may issue new shares, sell assets to reduce debt or adjust the level of activities undertaken by the company.

The Group monitors capital on the basis of cash flow requirements for operational, and exploration and evaluation expenditure. The Group will continue to use capital market issues and joint venture participant funding contributions to satisfy anticipated funding requirements.

The Group has no externally imposed capital requirements. The Group's strategy for capital risk management is unchanged from prior years.

(g) Subsequent events

Since 30 June 2020 there have been no issued capital transactions.

	Consolidated2020	2019
Note 19Reserves and accumulated losses	$	$
(a) Reserves
Share-based payments reserve	3,528,043	3,528,043
Movements:Balance 1 JulyShare-based payments	3,528,043-	3,528,043-
Balance 30 June	3,528,043	3,528,043
Asset revaluation reserve	319,276	-
Movements:Balance 1 JulyShare of revaluation of land and buildings of associates	-319,276	--
Balance 30 June	319,276	-
(b) Accumulated losses
Balance 1 July	(54,539,586)	(57,126,901)
(Loss) profit for the year	(465,282)	2,587,315
Balance 30 June	(55,004,868)	(54,539,586)

Nature and purpose of reserves

Share-based payments reserve

The share-based payments reserve is used to recognise:

(i) the grant date fair value of options issued to directors / contractors and vendors of assets

(ii) the grant date fair value of performance rights issued to directors / contractors

Note 20 Discontinued operations

Gain on sale of Assets classified as held for resale

During the prior financial year the Company recognised a gain on sale of assets classified as held for resale of $3,901,128. This gain arose from the sale of Surat Gas Pty Ltd, which was a 100% owned subsidiary of the Company. The sale was completed on 28 September 2018 for a total price of $5.1 million, comprising $3.1 million cash, shares in Sector Projects Pty Ltd, being the purchaser of Surat Gas Pty Ltd, representing 5% of the issued capital with a nominal value of $1.0 million and a Convertible Note in Sector Projects Pty Ltd for $1.0 million (refer note 9). The shares in Sector Projects Pty Ltd were independently valued at 30 June 2019 to a fair value of $76,300 and a decrement on revaluation of $923,700 was recognised against the gain on sale.

The gain on sale represents:	$
Sale price	5,100,000
LessCosts incurred in respect of the saleCarrying value of the asset at 30 June 2018Revaluation decrement on the shares inSector Projects Pty Ltd upon Independent	(5,960)(269,212)
Valuation	(923,700)-----------------
Net Gain on sale	$3,901,128
Note 21Parent entity information	==========

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

	2020$	2019$
Current assets	1,152,701	593,482
Non-current assets	9,683,355	8,942,249
Total assets	10,836,056	9,535,731
Current liabilities	823,373	1,334,137
Non-current liabilities	1,500,000	1,500,000
Total liabilities	2,323,373	2,834,137
Issued capitalAccumulated lossesShare based payment reserveAsset revaluation reserve	66,749,129(62,083,765)3,528,043319,276	65,389,552(62,216,001)3,528,043-
Total equity	8,512,683	6,701,594
Profit (loss) for the year	(132,237)	2,856,526
Total comprehensive income	319,276	2,856,526

Guarantees

AustChina Holdings Limited has not guaranteed any debts of its subsidiaries.

Contingent liabilities

The parent entity has no contingent liabilities as at 30 June 2020 and 30 June 2019.

Capital commitments – Property, plant and equipment

The parent entity had no capital commitments for property, plant and equipment as at 30 June 2020 and 30 June 2019.

Note 22 Director and key management personnel disclosures

Key management personnel compensation

		Consolidated
	2020$	2019$
Short-term employee benefits	311,429	345,262
Post-employment benefits	3,040	3,450
	314,469	348,712

Note 23 Remuneration of auditors

	Consolidated
	2020$	2019$
During the year the following fees were paid, payable or accrued for servicesprovided by the auditor or, its related practices and non-related audit firms:
RSM Australia PartnersAudit services
Audit and review of financial reports	39,470	38,450
Total remuneration for audit and other assurance services	39,470	38,450
Other servicesTaxation services	27,650	5,650
Total remuneration for other services	27,650	5,650
Total auditor remuneration	67,120	44,100

Note 24 Related parties

(a) Parent entities

The parent entity and ultimate Australian parent entity within the group is AustChina Holdings Limited. The ultimate parent entity is Treasure Wheel Global Limited which at 30 June 2020 owned 55.5% (2019: 59.64%).

(b) Subsidiaries

Interests in subsidiaries are set out in Note 28.

(c) Key management personnel

Disclosures relating to key management personnel are set out in Note 22.

(d) Amounts payable to related parties

During the current financial year a convertible note of $1,500,000 matured. The noteholder, Treasure Wheel Global Limited, elected to convert $750,000 into shares and granted an extension of the remaining $750,000. No interest is payable on the convertible note which has a maturity date of 11 November 2020.

As at 30 June 2020 there is on issue 1 convertible note with a face value of $750,000 (2019: $1,500,000). The note is convertible into ordinary shares of the parent entity, at any time at the option of the holder, at a price equal to 10 day VWAP x 0.915 for the 10 days immediately before the conversion date.

At 30 June 2020 Included in trade payables was an amount of $18,760 (2019: $Nil) which represented amounts payable to directors for unpaid directors' fees for the quarter ended 30 June 2020.

Note 25 Events occurring after reporting date

No matter or circumstance has arisen since 30 June 2020 that has significantly affected the group's operations, results or state of affairs, or may do so in future years.

Note 26 Reconciliation of (loss) profit after income tax to net cash outflow from operating activities

	Consolidated
	2020$	2019$
(Loss) profit after income tax	(413,867)	2,587,315
Exploration written off	556,110	-
Profit on sale of assets held for resale	-	(3,901,128)
Accrued interest	-	(61,684)
Prepaid interest	71,767	-
Share of loss from equity accounted investment	83,311	50,425
(Reversal of) Provision for non-recovery of convertible note	(553,000)	553,000
Finance costs: Interest	-	29,367
Gain on fair value of convertible note borrowings	(91,260)	-
Gain on fair value of non-current investment	(173,700)	-
Change in operating assets and liabilities:
(Increase)/decrease in trade and other receivables	(8,836)	4,946
Increase/(decrease) in trade and other payables	23,012	(375,565)
Net cash outflow from operating activities	(506,463)	(1,113,324)

Note 27 Commitments for expenditure

	Consolidated
	2020	2019
	$	$
Exploration commitments
Commitments for payments under exploration permits for coal and petroleum inexistence at the reporting date but not recognised as liabilities payable is asfollows:
-payable within one year	60,000	146,667
-payable between one year and five years	155,417	42,500
	215,417	189,167

So as to maintain current rights to tenure of various exploration tenements, the Group will be required to outlay amounts in respect of tenement exploration expenditure commitments. These outlays, which arise in relation to granted tenements are noted above. The outlays may be varied from time to time, subject to approval of the relevant government departments, and may be relieved if a tenement is relinquished.

Exploration commitments are calculated on the assumption that each of these tenements will be held for its full term. But, in fact, commitments will decrease materially as exploration advances and ground that is shown to be unprospective is progressively surrendered. Expenditure commitments on prospective ground will be met out of existing funds, joint ventures, farm-outs, and new capital raisings.

Note 28 Subsidiaries

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in Note 1(b):

Name of entity	PrincipalCountry ofActivitiesincorporation		Class of shares	Equity holding
				2020%	2019%
TamboCoal&GasPtyLimited	Coalexploration	Australia	Ordinary	100	100
Moreton Energy Pty Ltd	Coalexploration	Australia	Ordinary	100	100
Coalbank Qld Pty Ltd	Coalexploration	Australia	Ordinary	100	100

Note 29 Earnings per share

	2020Cents	2019Cents
(a)Basic earnings per shareFrom continuing operations attributable to ordinary equity holders of the	(0.03)	(0.12)
company
From discontinued operations attributable to ordinary equity holders of thecompany	-	0.35
Total basic earnings per share attributable to the ordinary equity holders ofthe company	(0.03)	0.23
(b)Diluted earnings per share
From continuing operations attributable to ordinary equity holders of thecompany	(0.03)	(0.08)
From discontinued operations attributable to ordinary equity holders of thecompany	-	0.24
Total diluted earnings per share attributable to the ordinary equity holdersof the company	(0.03)	0.16
(c)Reconciliation of earnings used in calculating earnings per	2020$	2019$
shareBasic earnings per share
(Loss) profit attributable to the ordinary equity holders of the company usedin calculating basic earnings per share:
From continuing operations	(413,867)	(1,313,813)
From discontinued operations	-(413,867)	3,901,1282,587,315
Diluted earnings per share
Loss from continuing operations attributable to the ordinary equity holdersof the company:
Used in calculating basic earnings per share	(413,867)	(1,313,813)
Add back (fair value gain)/interest on convertible notesUsed in calculating diluted earnings per share	(91,260)(505,127)	29,367(1,284,446)
Profit from discontinued operations	-	3,901,128
Profit attributable to the ordinary equity holders of the company used in
calculating diluted earnings per share	(505,127)	2,616,682
(d)Weighted average number of shares used as the denominator
	2020Number	2019Number
Weighted average number of ordinary shares used as the denominator incalculating basic earnings per share	1,483,262,763	1,115,385,048
Adjustments for calculation of diluted earnings per share:Convertible note	493,950,767	532,905,105
Weighted average number of ordinary shares and potential ordinaryshares used as the denominator in calculating diluted earnings per share	1,977,213,560	1,648,290,153

(e) Information concerning the classification of securities

Options and rights

There are no options or rights on issue at 30 June 2020.

Note 30 Investment in Associate accounted for using equity method

Set out below is the associate of the group as at 30 June 2020 which, in the opinion of the directors, is material to the group. The associate has share capital consisting solely of ordinary shares, which are held directly by the group.

The company holds 25.14% (2019: 25.15%) of the issued capital of Utilitas Group Pty Ltd, a company that is engaged in the Biogas Renewable Energy Sector. Utilitas Group Pty Ltd is incorporated in Australia and this is also its principal place of business. The proportion of ownership interest is the same as the proportion of voting rights held.

AustChina Holdings Limited does not have any commitments or contingent liabilities in respect of its investment in Utilitas Group Pty Ltd.

	Consolidated
	2020$	2019$
Opening carrying amount	776,513	826,938
Share of loss from continuing operations after income tax	(83,311)	(50,425)
Share of revaluation of land and buildings	319,276	-
Closing carrying amount	1,012,478	776,513

The table below provides summarised financial information for the associate and reflects the amounts presented in the financial statements of the associate and not AustChina Holdings Limited's share of those amounts.

Summarised balance sheet	2020$	2019$
Total Current assets	615,676	677,027
Non-current assets	1,497,168	56,928
Total assets	2,112,843	733,955
Current liabilities	875,975	423,599
Non-current liabilities	68,775	85,998
Total liabilities	944,750	509,597
Net assets	1,168,094	244,358
Loss from continuing operations	(331,375)	(200,514)
Other comprehensive income	1,269,945	-
Total comprehensive income (loss)	738,570	(200,514)

More details on the operations of Utilitas Group is set out under the CEO's report and review of operations on pages 3 to 11.

SHAREHOLDER INFORMATION

The shareholder information set out below was applicable as at 22 September 2020.

A. Distribution of equity securities

Analysis of numbers of equity security holders by size of holding: Class of equity security

	Ordinary Shares
1 – 1,000	66
1,001 – 5,000	30
5,001 – 10,000	130
10,001 – 100,000	253
100,001 and over	236
	715

There were 498 holders of less than a marketable parcel of ordinary shares.

B. Equity security holders

Twenty largest quoted equity security holders

The names of the twenty largest holders of quoted equity securities are listed below:

	Ordinary shares
Name	Number	Percentage (%) of
	Held	issued shares
Citicorp Nominees Pty Limited	908,687,209	55.61
Icon Venture Group Limited	277,105,649	16.96
KAMS Brother Holdings Limited	128,093,700	7.84
Ms Sihol Marito Gultom	41,000,000	2.51
Mr Peter Andrew Proksa	20,000,000	1.22
Group 4 Solutions Pty Ltd	17,500,000	1.07
Comsec Nominees Pty Limited	14,066,956	0.86
Trevor Robert Learey	14,048,975	0.86
TRE Pty Ltd	13,000,000	0.80
Mr Nicholas Playford Forgan	9,264,917	0.57
KOL SMSF Pty Ltd	8,931,846	0.55
Mr Aaron Jermaine Proksa	7,200,000	0.44
Mr Ianaki Semerdziev	6,025,675	0.37
Square Resources Pty Ltd	5,937,500	0.36
Anthony Cowper Lashlie	5,087,701	0.31
John Francis Dooley	5,079,282	0.31
Jomot Pty Ltd	4,930,752	0.30
Robert Kenneth Mueller & Cassy Myra Mueller	4,499,834	0.28
Gayle Patric Doran	4,408,217	0.27
Jeffrey Howard Latimer & Judith Ann Latimer	3,900,000	0.24
	1,498,768,213	91.72

C. Substantial shareholders

Substantial shareholders as shown in substantial shareholder notices received by the company at 25 September 2020 are:

	Numberheld	Percentage
Ordinary shares
Treasure Wheel Global Limited	906,873,358	55.50%
Icon Venture Group Limited	277,105,649	16.96%
Kam's Brother Holdings Limited	128,093,700	7.84%

D. Voting rights

The voting rights attaching to each class of equity securities are set out below:

(a) Ordinary shares

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

(b) Options No voting rights.

RSM Australia Partners

Level 6, 340 Adelaide Street Brisbane QLD 4000 GPO Box 1108 Brisbane QLD 4001

T +61 (0) 7 3225 7800 F +61 (0) 7 3225 7880

www.rsm.com.au

INDEPENDENT AUDITOR'S REPORT

To the Members of AustChina Holdings Limited

Opinion

We have audited the financial report of AustChina Holdings Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated balance sheet as at 30 June 2020, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors' declaration.

In our opinion the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:

• (i) giving a true and fair view of the Group's financial position as at 30 June 2020 and of its financial performance for the year then ended; and
• (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's report.

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

Material Uncertainty Related to Going Concern

We draw attention to Note 3 (iii) in the financial report, which indicates the Group incurred a loss after tax from continuing operations of $94,591 and had net cash outflows from operating activities of $506,463 for the year ended 30 June 2020. As at the date, the Group had net current assets of $329,431. As stated in Note 3 (iii), these events or conditions, along with other matters as set forth in Note 3 (iii), indicate that a material uncertainty exists that may cast significant doubt on the Group's ability to continue as a going concern. Our conclusion is not modified in respect of this matter.

THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING

RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matter	How our audit addressed this matter
Carrying Value of Capitalised Exploration ExpenditureRefer to Note 13 in the financial statements
The Group has capitalised exploration expenditurewith a carrying value of $15,542,886 as at 30 June2020.We determined this to be a key audit matter due to thesignificantmanagementjudgmentinvolvedinassessing the carrying value in accordance withAASB 6 Exploration for and Evaluation of MineralResources, including:Determination of whether expenditure can beassociatedwithfindingspecificmineralresources,andthebasisonwhichthatexpenditure is allocated to an area of interest;Assessing whether any indicators of impairmentare present; andDetermination of whether exploration activitieshave progressed to the stage at which theexistenceofaneconomicallyrecoverablemineral reserve may be determined.	Our audit procedures in relation to the carrying value ofcapitalised exploration costs included:Ensuring that the right to tenure of the areas of interestwas current through confirmation with the relevantgovernment departments;Critically assessing and evaluating management'sassessment that no indicators of impairment existed;Agreeing a sample of the additions to capitalisedexploration expenditure during the year to supportingdocumentation, and ensuring that the amounts werecapitalised correctly; andThrough discussions with the Group's Directors, andreview of the Group's ASX announcements and otherrelevant documentation, assessing management'sdetermination that exploration activities have not yetprogressed to the point where the existence orotherwise of an economically recoverable mineralresource may be determined.

Other Information

The directors are responsible for the other information. The other information comprises the information included in the Group's annual report for the year ended 30 June 2020 but does not include the financial report and the auditor's report thereon.

Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the Audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditorsresponsibilities/ar2.pdf.

This description forms part of our auditor's report.

Report on the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included in pages 15 to 19 of the directors' report for the year ended 30 June 2020.

In our opinion, the Remuneration Report of AustChina Holdings Limited, for the year ended 30 June 2020, complies with section 300A of the Corporations Act 2001.

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

RSM AUSTRALIA PARTNERS

Brisbane, Queensland Albert Loots Dated: 29 September 2020 Partner