TESORO GOLD LTD - Annual Report 2013

CONTINUATION INVESTMENTS LIMITED

30 August 2013

Manager of Company Announcements ASX Limited Level 6, 20 Bridge Street SYDNEY NSW 2000

By E‐Lodgement

Continuation Investments APPENDIX 4E – PRELIMINARY FINAL REPORT

Results for Announcement to the Market

The operating results for the year to 30 June 2013 are shown with comparisons to the previous corresponding period, being the year ended 30 June 2012.

	Year ended 30 June 2013 $	Year ended 30 June 2012 $	Percentage increase / (decrease) over previous corresponding period
Revenue from ordinary activities	73,249	97,477	(24.8)%
Earnings before interest, taxation, depreciation and amortisation (EBITDA)	(261,972)	(527,643)	49.6%
Profit/(loss) from ordinary activities after tax attributable to members	(261,972)	(527,643)	49.6%
Net profit/(loss) for the period attributable to members	(261,972)	(527,643)	49.6%

Dividends

No dividends were paid during the financial year. The Board advises that it does not intend to declare a final dividend for the financial year, and it will consider reinstating the dividend policy in the future, subject to performance.

Continuation Investments Limited ABN 91 106 854 175

945 Wellington Street WEST PERTH WA 6005 phone: (08) 9322 7600 fax: (08) 9322 7602 email: [email protected]

Net Tangible Assets / Earnings Per Share

	30 June 2013	30 June 2012
Net tangible assets per ordinary share	8.67 cents	21.57 cents
Basic earnings per ordinary share	(1.4 cents)	(15.8) cents

Independent Audit Report

The information outlined above is presented in accordance with ASX Listing Rule 4.3A and the Corporations Act 2001 ( Corporations Act ). The Appendix 4E is based on the audited Annual Financial Report for the year ended 30 June 2013. The Independent Audit Report is included in the Annual Financial Report attached.

Accounting Policies, Estimation Methods and Measurements

The accounting policies, estimation methods and measurement bases used in the Appendix 4E is the same as those used in the previous annual report and half‐year report.

Yours faithfully

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Jeremy King Chairman

Continuation Investments Limited ABN 91 106 854 175

Annual Report

For the year ended 30 June 2013

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Corporate Information ................................................................................................................................................. 1 Directors Report ........................................................................................................................................................... 2 Auditor’s Independence Declaration .......................................................................................................................... 15 Independent Auditor’s Report .................................................................................................................................... 16 Statement of Comprehensive Income ........................................................................................................................ 18 Statement of Financial Position .................................................................................................................................. 19 Statement of Cash Flows ............................................................................................................................................ 20 Statement of Changes in Equity ................................................................................................................................. 21 Notes to the Financial Statements ............................................................................................................................. 22 Corporate Governance Statement ............................................................................................................................. 37 ASX Additional Information ........................................................................................................................................ 42 Members Information ................................................................................................................................................ 43

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Corporate Information

Directors

Jeremy King – Non‐executive Chairman Andrew Worland – Non‐executive Director David Church – Non‐executive Director

Auditors

RSM Bird Cameron Partners 8 St Georges Terrace Perth WA 6000 Telephone: (08) 9261 9100

Company Secretary

Bankers

Sarah Smith Tel: 08 9322 7600

Registered Office

945 Wellington Street West Perth WA 6005

Postal Address

PO Box 1263 West Perth WA 6872

Share Registry

Boardroom Pty Limited Level 7, 207 Kent Street Sydney NSW 2000 Tel: 02 9290 9600

Westpac Banking Corporation Level 9, 109 St Georges Terrace Perth WA 6000

Solicitors

Steinepreis Paganin Level 4, Next Building 16 Milligan Street Perth WA 6000

Stock Exchange

Australian Securities Exchange Limited Exchange Plaza 2 The Esplanade Perth WA 6000

ASX Code COT

Country of Incorporation

Australia

Page 1

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Directors Report

Your Directors present their report on Continuation Investments Limited (COT) for the financial year ended 30 June 2013.

Directors

The names of the Directors in office during the financial year and until the date of this report are as follows. All Directors were in office for the entire period unless otherwise stated:

Mr Jeremy King – (Non‐executive Chairman) Mr Andrew Worland – (Non‐executive Director) Mr David Church – (Non‐executive Director)[1 ] Mr Richard Ochojski – (Non‐executive Director)[2]

1 Appointed 2 April 2013

2 Resigned 2 April 2013

Principal Activities

COT is a ‘listed investment company’ under the listing rules of the Australian Stock Exchange. The Company’s principal activities during the year involved the review of new investment opportunities and consideration of its investment strategies. All investments during the financial year were held in cash or term deposits as the most stable form of liquid investment during a volatile year for listed companies.

Over the past 12 months, the Board has assessed a significant number of natural resource investment opportunities in the USA, Canada, Brazil, West Africa, South Africa, Asia and Australia in energy minerals, precious and base metals and bulk commodities. Each of these opportunities has been identified on the basis of scale, prospectivity and ability to deliver sustained share price appreciation for COT. In addition, the Company has also reviewed the potential to provide financing for development stage mining properties. The Company continues to actively assess this opportunity which would be consistent with its status as a listed investment company.

The Board of COT has taken a cautious approach to new investments given continued heightened market volatility both domestically and abroad, a strategy which in the Board’s view has been justified as values across most asset classes have generally deteriorated.

Dividends

No dividend has been paid or recommended by the Directors since the commencement of the financial year.

Review of Operations

The Statement of Comprehensive Income shows a net loss attributable to members of $261,972 (2012: $527,643) for the year ended 30 June 2013. Basic and diluted earnings per share was a loss of 1.4 cents, compared with earnings per share of a loss of 15.8 cents for the previous financial year.

The net assets of the Company have increased by $460,575 since 30 June 2012 to $1,720,609 as at 30 June 2013. The net tangible asset backing of the Company as at 30 June 2013 was 8.67 cents per share (2012: 21.57 cents per share). Accounting for the Entitlement Issue of 2.4 new Shares for every 1 Share held that was completed in August 2012, the pro‐forma net tangible asset backing at 30 June 2012 was 9.87 cents per share.

Page 2

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Directors Report (continued)

Significant Changes in State Of Affairs

On 1 August 2012, an Entitlement Issue was completed on the basis of 2.4 new Shares for every 1 share held to raise approximately $701,000 before costs.

Other than the above, no significant changes in the Company's state of affairs occurred during the financial year.

Events Subsequent to Balance Date

On 12 August 2013, the Company received an unsolicited and conditional proportional takeover offer from DMX Corporation Limited (DMX) to acquire 2 out of every 3 shares held by each Continuation shareholder (Takeover Offer). The offer price is either 7.00 cents per share or 5.83 DMX shares per share. On 19 August 2012 the Directors of COT advised that they intended to reject the Takeover Offer. In accordance with the Corporations Act, the Company will release a Target Statement which responds to the Takeover Offer within 15 days of the Company receiving notice from DMX that the Takeover Offer has been sent to Continuation shareholders.

Other than the above, no matter or circumstance has arisen since the end of the financial year which has significantly affected or may significantly affect the Company's operations or results in future years, or the company's state of affairs in future years.

Environmental Issues

The Company's operations are not subject to any significant environmental regulations under the law of the Commonwealth and State.

To the extent that any environmental regulations may have an incidental impact on the Company's operations, the Directors of the Company are not aware of any breach by the Company of those regulations.

Likely Developments and Expected Results of Operations

The Company will continue to pursue its investment objectives for the long term benefit of the members. This will require continual review of the investment strategies that are currently in place and may require changes to these strategies to maximise returns.

Page 3

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Directors Report (continued)

Information on Directors

Information on Directors
Director Name & Title	‐	Jeremy King
		Non‐executive Director
Qualifications	‐	LLB
Experience	‐	Mr King is a director of Grange Consulting Group Pty Ltd where he
		specialises in corporate advisory, strategic advice and managing legal
		issues associated with Grange’s clients. Mr King is a corporate lawyer
		with over 12 years experience in domestic and international legal,
		financial and corporate matters.
		He spent several years in London where he worked with Allen and
		Overy LLP and Debevoise & Plimpton LLP and has extensive corporate
		experience, particularly in relation to cross border private equity,
		leveraged buy‐out acquisitions and acting for banks, financial
		institutions and corporate issuers in respect of various debt and equity
		capital raisings.
Direct Interest in Shares and	‐	15,700 Ordinary Shares
Options		1,250,000 Unlisted Options ($0.20; 31 December 2015)
Indirect Interest in Shares and	‐	1,414,171 Ordinary Shares
Options
Current Directorships	‐	Smart Parking Limited (ASX:SPZ), Orca Energy Limited (ASX:OGY)
Former Directorships held in	‐	Glory Resources Limited (ASX:GLY)
past three years

Page 4

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Directors Report (continued)

Information on Directors (cont’d)

Director Name & Title	‐	Andrew Worland
		Non‐executive Director
Qualifications	‐	B.Com
Experience	‐	Mr Worland holds a B.Com (UWA) and has nearly 20 years experience
		in the resources industry working in corporate, finance, project
		development and operations roles in exploration, development stage
		and producing ASX and TSX listed mining companies across base and
		precious metals, bulk commodities and strategic minerals. Mr Worland
		was GM Corporate and Marketing and Company Secretary for ASX
		listed Moly Mines from 2004‐2012 and is currently GM Project Finance
		and Strategy with ASX listed Toro Energy Limited.
Direct Interest in Shares and	‐	757,888 Ordinary Shares
Options		1,000,000 Unlisted Options ($0.20; 31 December 2015)
Indirect Interest in Shares and	‐	556,962 Ordinary Shares
Options
Current Directorships	‐	None
Former Directorships held in	‐	None
past three years

Director Name & Title	‐	David Church
		Non‐executive Director_(Appointed 2 April 2013)_
Qualifications	‐	LLB
Experience	‐	Mr Church has over 10 years experience in Australia with Clayton Utz,
		and in the UK and Hong Kong, with Linklaters, advising corporates and
		investment banks alike on cross border mining and financial services
		transactions across Europe and Asia. Mr Church is currently head of
		Mergers and Acquisitions and General Counsel for Regent Pacific
		Group Limited, a Hong Kong listed mining investment house. He has
		led and advised on a variety of international mining and mining related
		acquisitions and divestments since joining Regent Pacific in 2008.
Direct Interest in Shares and	‐	694,872 Ordinary Shares
Options
Indirect Interest in Shares and	‐	Nil
Options
Current Directorships	‐	None
Former Directorships held in	‐	None
past three years

Page 5

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Directors Report (continued)

Director Name & Title ‐ Richard Ochojski Non‐executive Director (Resigned 2 April 2013) Qualifications ‐ n/a Experience ‐ Mr Ochojski is a finance executive with over 30 years experience within the banking and finance industry. He spent 20 years with Macquarie Bank and was a director within the Banking and Property Group. He is currently employed as a consultant in a variety of corporate advisory roles. In addition, Mr Ochojski has held a number of public company Directorships and is currently on the Board of Reel Time Media Limited.

Direct Interest in Shares and ‐ Nil Options Indirect Interest in Shares and ‐ Nil Options Current Directorships ‐ Reeltime Media Limited (ASX:RMA), Q Limited (ASX:QXQ) Former Directorships held in ‐ Vesture Limited (ASX:VES) past three years

Director Meetings

The number of Directors’ meetings and number of meetings attended by each of the Directors of the Company during the period are:

	Number of Meetings	Number of Meetings
	Eligible to Attend	Directors’ attended
Number of Meetings Held	2	2
Number of Meetings Attended
Director
Mr Jeremy King	2	2
Mr Andrew Worland	2	2
Mr David Church_(Appointed 2 April 2013)_	0	0
Mr Richard Ochojski_(Resigned 2 April 2013)_	2	2

Retirement, election and continuation in office of directors

In accordance with the Constitution, Mr Church and Mr King retire as Directors at the annual general ‑ meeting and, being eligible, offer themselves for re election.

Company Secretary

Ms Sarah Smith is an employee of Grange Consulting Group Pty Ltd which provides a unique range of corporate services to listed and unlisted companies.

Page 6

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Directors Report (continued)

Shares under Option

Unissued ordinary shares of COT under option at the date of this report are as follows:

Date Options Granted	Expiry Date	Issue Price of Shares	Number Under Option
30 November 2012	31 December 2015	$0.20	2,250,000
Total			2,250,000

Shares Issued on the Exercise of Options

There were no options exercised during the financial year.

Insurance of Officers

During the financial year, the Company paid a premium of $12,500 to insure the Directors and officers of the Company.

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 entities in the Company, and any other payments arising from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for them or someone else or to cause detriment to the Company. It is not possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to other liabilities.

Proceedings on Behalf of the Group

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.

No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001.

Page 7

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Directors Report (continued)

Non Audit Services

The Board has considered the non audit services provided during the year by the auditor (as disclosed in note 8 of the financial statements) and is satisfied that the provision of those non audit services during the year is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons:

all non audit services were subject to the corporate governance procedures adopted by the Company and have been reviewed by the Board to ensure they do not impact the integrity and objectivity of the auditor; and
the non audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards.

Auditor's independence declaration

The auditor's independence declaration for the year ended 30 June 2013 has been received and is included within this financial report.

This report is made in accordance with a resolution of the Directors of the Company.

Page 8

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Directors Report (continued)

Remuneration Report (Audited)

The remuneration report is set out under the following main headings:

A Principles used to determine the nature and amount of remuneration.
B Details of remuneration.
C Service agreements.
D Share‐based compensation.
E Additional information.

A Principles used to determine the nature and amount of remuneration

The Board has elected not to establish a remuneration committee based on the size of the organisation and has instead agreed to meet as deemed necessary and allocate the appropriate time at its Board meetings.

The following items are considered and discussed as deemed necessary at the Board meetings:

make specific recommendations to the Board on remuneration of Directors and senior officers;
recommend the terms and conditions of employment for the Executive Director;
undertake a review of the Executive Director’s performance, at least annually, including setting with the Executive Director goals for the coming year and reviewing progress in achieving those goals;
consider and report to the Board on the recommendations of the Executive Director on the remuneration of all direct reports; and
develop and facilitate a process for Board and Director evaluation.

Non‐executive Directors

Non‑executive Directors’ fees and payments are reviewed regularly by the Board in light of demands of the Directors from time to time and the financial condition of the Company.

Directors’ Fees

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 $250,000 per annum.

The following fees have applied:

Base fees for period 1 July 2012 – 30 November 2012

Non‐executive Directors $20,000 ‐$25,000

Page 9

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Directors Report (continued)

Remuneration report (cont’d)

A Principles used to determine the nature and amount of remuneration (cont’d)

Base fees for period 1 December 2012 – 30 June 2013

Non‐executive Directors $nil

Additional fees

A Director may also be paid fees or other amounts as the Directors determines if a Director performs special duties or otherwise performs services outside the scope of the ordinary duties of a Director. No additional fees were paid during the financial period.

A Director may also be reimbursed for out of pocket expenses incurred as a result of their Directorship or any special duties.

Executive pay

The Company does not currently employ any Executives. As a policy, in determining executive remuneration, the Board aims to ensure that remuneration practices are:

competitive and reasonable, enabling the Company to attract and retain key talent;
aligned to the Company’s strategic and business objectives and the creation of shareholder value;
transparent; and
acceptable to shareholders.

Executive remuneration is comprised of base pay and benefits, including superannuation.

Base pay

Executives are offered a competitive base pay that comprises the fixed component of pay and rewards. Base pay for Executives is reviewed regularly to ensure the Executive’s pay is competitive with the market.

There are no guaranteed base pay increases included in any Executives’ contracts.

Benefits

No benefits other than noted above are paid to Directors or management except as incurred in normal operations of the business.

Page 10

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Directors Report (continued)

Remuneration report (cont’d)

A Principles used to determine the nature and amount of remuneration (cont’d)

Long term incentives

Options are issued at the Board’s discretion. Other than options disclosed in section D of the remuneration report, no options have been issued in the current financial year and to the date of this financial report to Directors, employees or consultants.

No remuneration consultants were used by the Company during the period, however the Company has structured the executive remuneration framework that is market competitive and complimentary to the reward strategy of the organisation.

B Details of remuneration

Amounts of remuneration

Details of the remuneration of the Directors and the key management personnel of the Company are found below:

Mr Jeremy King

Mr Andrew Worland

Mr David Church (Appointed 2 April 2013)

Mr Richard Ochojski (Resigned 2 April 2013)

Key Management personnel and other Executives of the Company and the Group

30 June 2013 Non Executive Directors Jeremy King1 Andrew Worland1 David Church3 Richard Ochojski4 Sub‐Total Non Executive Directors Executive Directors Andrew Worland2 Total Key Management Personnel Compensation (group)	Short‐Term Employee Benefits Post‐ Employment Benefits Share‐Based Payments Total Total Remuneration Represented By Cash Salary & Fees Superannuation Pensions Options Options $ $ $ $ % 6,667 ‐ 26,065 32,732 79.63 8,333 ‐ 20,852 29,185 71.45 ‐ ‐ ‐ 18,745 ‐ ‐ 18,745 0.00
	33,745 ‐ 46,917 80,662
	40,000 3,600 ‐ 43,600 ‐
	73,745 3,600 46,917 124,262

1 Mr King and Mr Worland voluntarily ceased their Non‐executive Directors fees on 1 November 2012.

2 Mr Worland held a full time executive position with COT between 1 January 2013 and 30 April 2013 in an effort to fast track the Company’s investment efforts. Mr Worland voluntarily terminated his own services agreement effective 30 April 2013. He has since not received any Directors fees.

3 Mr Church was appointed on 2 April 2013. He has not received any Directors fees for the period.

4 Mr Ochojski resigned on 2 April 2013.

Page 11

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Directors Report (continued)

Remuneration report (cont’d)

30 June 2012 Directors Non‐executive Directors Jeremy King Andrew Worland Richard Ochojski Steve Roberts Andrew Brown Stuart Nisbett John Vatovec Sub‐total Non‐executive Directors	Short Term Employee Benefits Total Total Remuneration Represented By Cash Salary & Fees Options $ $ % 6,237 6,237 0.00 7,796 7,796 0.00 16,662 16,662 0.00 5,000 5,000 0.00 5,000 5,000 0.00 16,666 16,666 0.00 8,161 8,161 0.00
	65,522 65,522 0.00

The relative proportions of remuneration including base fees and options issued that are linked to performance and those that are fixed are as follows:

Name	Fixed Remuneration	Performance Based
		Remuneration
	2013	2013
Non‐Executive Director
Jeremy King	100%	0%
Andrew Worland	100%	0%
David Church	n/a	n/a
Richard Ochojski	100%	0%

Page 12

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Directors Report (continued)

Remuneration report (cont’d)

C Service agreements

Executive Directors

Executive Directors
Name	Term of	Base Salary	Termination Benefit
	Agreement	excluding
		Superannuation
Executive
Andrew Worland1	Open	$120,000	Relevant notice periods apply, being 1
			months’ notice with reason or 3
			months without reason.

1 Mr Worland held a full time executive position with COT between 1 January 2013 and 30 April 2013. Mr Worland voluntarily terminated his own services agreement effective 30 April 2013. He has not since received any Directors fees.

C Service agreements (cont’d)

Non‐executive Directors

On appointment to the Board, all Non‐executive Directors enter into a service agreement with the Company in the form of a letter of appointment. The letter summarises the Board policies and terms, including compensation, relevant to the Director.

D Share‐based compensation

Options

Options over shares in the Company are granted at the Directors’ discretion.

Details of options over ordinary shares in the Company provided as remuneration to each Director of the Company, and each of the key management personnel of the Company at the date of this financial report are set out below. The issue of these options were approved by COT shareholders at the November 2012 annual general meeting.

Director	No of Options	Exercise	Expiry Date
		Price
JeremyKing	1,250,000	$0.20	31 December 2015
Andrew Worland	1,000,000	$0.20	31 December 2015
David Church	‐	‐	‐
Richard Ochojski	‐	‐	‐

When exercisable, each option is convertible into one ordinary share of COT.

Options granted carry no dividend or voting rights.

Page 13

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Directors Report (continued)

Remuneration report (cont’d)

D Share‐based compensation (cont’d)

Options (cont’d)

The assessed fair value at grant date of options granted to the individuals is allocated equally over the period from grant date to vesting date, and the amount is included in the remuneration tables above. Fair values at grant date are independently determined using a Black‐Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk‐free interest rate for the term of the option.

The assumptions used in the Black‐Scholes option pricing model for the options issued were:

Risk‐free rate: 5.39% Volatility: 90%

The value of an option calculated by the Black‐Scholes option pricing model was 2.1 cents.

E Additional information

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

In accordance with Listing Rule 3.12.2, it is confirmed that the following resolutions put to the AGM of Continuation Investments Limited shareholders, held on 20 November 2012, were unanimously passed on a show of hands:

Resolution 1: Adoption of Remuneration Report Resolution 2: Re‐election of Director – Jeremy King Resolution 3: Re‐election of Director – Andrew Worland Resolution 4: Re‐election of Director – Richard Ochojski Resolution 5: Change of Auditor Resolution 6: Issue of options to Mr Jeremy King Resolution 7: Issue of options to Mr Andrew Worland Resolution 8: Approval of 10% Placement Capacity

This report of Directors, incorporating the Remuneration Report, is signed in accordance with a resolution of Directors.

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Jeremy King Non‐executive Chairman

Dated: 30 August 2013 Perth

Page 14

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RSM Bird Cameron Partners 8 St George’s Terrace Perth WA 6000 GPO Box R1253 Perth WA 6844 T +61 8 9261 9100 F +61 8 9261 9101 www.rsmi.com.au

AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the financial report of Continuation Investments Limited for the year ended 30 June 2013, 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.

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RSM BIRD CAMERON PARTNERS

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Perth, WA Dated: 30 August 2013

TUTU PHONG Partner

Liability limited by a Major Offices in: RSM Bird Cameron Partners is a member of the RSM network. Each member scheme approved Perth, Sydney, Melbourne, of the RSM network is an independent accounting and advisory firm which under Professional Adelaide and Canberra practises in its own right. The RSM network is not itself a separate legal entity Standards Legislation ABN 36 965 185 036 in any jurisdiction.

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RSM Bird Cameron Partners

8 St George’s Terrace Perth WA 6000 GPO Box R1253 Perth WA 6844 T +61 8 9261 9100 F +61 8 9261 9101 www.rsmi.com.au

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CONTINUATION INVESTMENTS LIMITED

Report on the Financial Report

We have audited the accompanying financial report of Continuation Investments Limited, which comprises the statement of financial position as at 30 June 2013, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration.

Directors’ Responsibility 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 is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements , that the financial statements comply with International Financial Reporting Standards .

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

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

Liability limited by a Major Offices in: scheme approved Perth, Sydney, Melbourne, under Professional Adelaide and Canberra Standards Legislation ABN 36 965 185 036

RSM Bird Cameron Partners is a member of the RSM network. Each member of the RSM network is an independent accounting and advisory firm which practises in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.

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Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of Continuation Investments Limited, would be in the same terms if given to the directors as at the time of this auditor's report .

Opinion

In our opinion:

(a) the financial report of Continuation Investments Limited is in accordance with the Corporations Act 2001 including:
(i) giving a true and fair view of the company’s financial position as at 30 June 2013 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001 ; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.

Report on the Remuneration Report

We have audited the Remuneration Report contained within the directors’ report for the year ended 30 June 2013. 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.

Opinion

In our opinion the Remuneration Report of Continuation Investments Limited for the year ended 30 June 2013 complies with section 300A of the Corporations Act 2001 .

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RSM BIRD CAMERON PARTNERS

Perth, WA Dated: 30 August 2013

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TUTU PHONG Partner

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Statement of Comprehensive Income

For the year ended 30 June 2013

Statement of Comprehensive Income For the year ended 30 June 2013
Note	2013 $ 2012 $
Revenue Dividends Interest Realised loss on sale of trading portfolio Total profit/(loss) from trading portfolio Expenses Share based payment expense Brokerage Directors' fees Legal fees Other operating expenses Total Expenses Loss before income tax Income tax expense 9 Loss for the year Other comprehensive income for the year, net of tax Total comprehensive loss for the year Earnings Per Share Basic and diluted earnings per share (cents) 10	‐ 33,211 73,249 64,266 ‐ (335,004)
	73,249 (237,527)
	(46,917) ‐ ‐ 42,833 (73,745) (56,576) (250) (31,296) (214,309) (245,077)
	(335,221) (290,116)
	(261,972) (527,643) ‐ ‐
	(261,972) (527,643)
	‐ ‐
	(261,972) (527,643)
	(1.4) (15.8)

The above statement of comprehensive income is to be read in conjunction with the accompanying notes.

Page 18

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Statement of Financial Position As at 30 June 2013

Statement of Financial Position As at 30 June 2013
Note	2013 $ 2012 $
ASSETS Cash and cash equivalents 2 Trade and other receivables 3 Other assets 4 TOTAL ASSETS LIABILITIES Trade and other payables 5 TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 7 Accumulated losses TOTAL EQUITY	1,957,308 1,530,411 30,869 2,629 ‐ 11,562
	1,988,177 1,544,602
	267,568 284,568
	267,568 284,568
	1,720,609 1,260,034
	23,148,894 22,426,347 (21,428,285) (21,166,313)
	1,720,609 1,260,034

The above statement of financial position is to be read in conjunction with the accompanying notes.

Page 19

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Statement of Cash Flows

For the year ended 30 June 2013

Statement of Cash Flows For the year ended 30 June 2013
Note	2013 $ 2012 $
CASH FLOWS FROM OPERATING ACTIVITIES Proceeds from sale of trading portfolio Payments for purchase of trading portfolio Dividends received Interest received Management fees paid Other expenses paid Net cash (used in) / provided by operating activities 11 CASH FLOWS FROM FINANCING ACTIVITIES Capital return payment Entitlement issue Costs of entitlement issue Net cash provided by / (used in) financing activities Net increase in cash and cash equivalents held Cash and cash equivalents at beginning of financial year Cash and cash equivalents at end of financial year 2	‐ 3,494,761 ‐ ‐ ‐ 42,913 42,380 64,266 ‐ (59,926) (285,186) (317,459)
	(242,806) 3,224,555
	(5,927) (2,001,693) 701,130 ‐ (25,500) ‐
	669,703 (2,001,693)
	426,897 1,222,862 1,530,411 307,549
	1,957,308 1,530,411

The above statement of cash flows is to be read in conjunction with the accompanying notes.

Page 20

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Statement of Changes in Equity

For the year ended 30 June 2013

	Issued Capital $	Accumulated Losses $ Total $
2013 Balance at 1 July 2012 Profit or loss attributable to members Dividends provided for or paid Option Reserve Shares issued during the year Costs of issued capital Balance at 30 June 2013 2012 Balance at 1 July 2011 Profit or loss attributable to members Dividends provided for or paid Shares bought back during the year Costs of issued capital Balance at 30 June 2012	22,426,347 ‐ ‐ 46,917 701,130 (25,500)	(21,166,313) 1,260,034 (261,972) (261,972) ‐ ‐ ‐ 46,917 ‐ 701,130 ‐ (25,500)
	23,148,894	(21,428,285) 1,720,609
	24,661,423 ‐ ‐ (2,235,076) ‐	(20,638,670) 4,022,753 (527,643) (527,643) ‐ ‐ ‐ (2,235,076) ‐ ‐
	22,426,347	(21,166,313) 1,260,034

The statement of changes in equity is to be read in conjunction with the accompanying notes.

Page 21

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Notes to the Financial Statements

Continuation Investments Limited is a company domiciled in Australia. The Company's registered office is 945 Wellington Street, West Perth, WA 6005. The Company’s financial statements are for the year ended 30 June 2013.

The financial report was authorised for issue on 30 August 2013 by the Directors of the Company.

1. Statement of Significant Accounting Policies

Basis of preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions to which they apply. Compliance with Australian Accounting Standards means that the financial statements and notes also comply with International Financial Reporting Standards.

The financial statements cover Continuation Investments Limited which is a listed public company, incorporated and domiciled in Australia. The financial statements have been prepared on an accruals basis and are based on historical costs with the exception of the revaluation of financial assets and financial liabilities for which the fair value basis of accounting has applied.

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

The Statement of Financial Position is presented on a liquidity basis. Assets and liabilities are presented in decreasing order of liquidity and are not distinguished between current and non‐ current, additional information regarding this is included in the relevant notes.

Financial Instruments

Recognition and initial 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 company 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 fair value, amortised cost using the effective interest method, or cost.

Page 22

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Notes to the Financial Statements (continued)

1. Statement of Significant Accounting Policies (cont’d)

Financial Instruments (cont’d)

Amortised cost is calculated as the amount at which the financial asset or financial liability is measured at initial recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative amortisation of the difference between that initial amount and the maturity amount calculated using the effective interest method.

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

The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) over 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 financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying amount with a consequential recognition of an income or expense item in profit or loss.

(i) Financial assets at fair value through profit or loss Financial assets are classified at “fair value through profit or loss” when they are held for trading for the purpose of short‐term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a Group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying amount being included in profit or loss.
(ii) 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. Gains or losses are recognised in profit or loss through the amortisation process and when the financial asset is derecognised.
(iii) Held‐to‐maturity investments
Held‐to‐maturity investments are non‐derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Group’s intention to hold these investments to maturity. They are subsequently measured at amortised cost. Gains or losses are recognised in profit or loss through the amortisation process and when the financial asset is derecognised.
(iv) Available‐for‐sale investments
Available‐for‐sale investments are non‐derivative financial assets that are either not capable of being classified into other categories of financial assets due to their nature or they are designated as such by management. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments.

Page 23

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Notes to the Financial Statements (continued)

1. Statement of Significant Accounting Policies (cont’d)

Financial Instruments (cont’d

(iv) Available‐for‐sale investments (cont’d)

They are subsequently measured at fair value with any remeasurements other than impairment losses and foreign exchange gains and losses recognised in other comprehensive income. When the financial asset is derecognised, the cumulative gain or loss pertaining to that asset previously recognised in other comprehensive income is reclassified into profit or loss.

Available‐for‐sale financial assets are classified as non‐current assets when they are expected to be sold after 12 months from the end of the reporting period. All other available‐for‐sale financial assets are classified as current assets.

(v) Financial liabilities

Non‐derivative financial liabilities other than financial guarantees are subsequently measured at amortised cost. Gains or losses are recognised in profit or loss through the amortisation process and when the financial liability is derecognised.

Taxation

The income tax expense/(income) for the year comprises current income tax expense/(income) and deferred tax expense/(income).

Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax liabilities/(assets) are measured at the amounts expected to be paid to/(recovered from) the relevant taxation authority.

Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses. Current and deferred income tax expense/(income) is charged or credited outside profit or loss when the tax relates to items that are recognised outside profit or loss.

Except for business combinations, no deferred income tax is recognised from the initial recognition of an asset or liability, where there is no effect on accounting or taxable profit or loss.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled and their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability. With respect to non‐depreciable items of property, plant and equipment measured at fair value and items of investment property measured at fair value, the related deferred tax liability or deferred tax asset is measured on the basis that the carrying amount of the asset will be recovered entirely through sale.

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.

Page 24

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Notes to the Financial Statements (continued)

1. Statement of Significant Accounting Policies (cont’d)

Taxation (cont’d)

Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.

Current tax assets and liabilities are offset where a legally enforceable right of set‐off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where: (a) a legally enforceable right of set‐off exists; and (b) the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

Revenue and other income

Interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset. Dividend revenue is recognised when the right to receive a dividend has been established.

The realised gains or losses on the sale of the trading portfolio represent the difference between the net proceeds and the net fair value of the investments at the prior year end or cost if acquired during the year.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less, and bank overdrafts.

Trade and Other Receivables

Trade and other receivables include amounts due from customers for goods sold and services performed in the ordinary course of business. Receivables expected to be collected within 12 months of the end of the reporting period are classified as current assets. All other receivables are classified as non‐current assets.

Trade and Other Payables

Trade and other payables represent the liabilities for goods and services received by the entity that remain unpaid at the end of the reporting period. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability.

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).

Page 25

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Notes to the Financial Statements (continued)

1. Statement of Significant Accounting Policies (cont’d)

Goods and Services Tax (GST) (cont’d)

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 with other receivables or payables in the statement of financial position.

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 ATO are presented as operating cash flows included in receipts from customers or payments to suppliers.

Share Capital

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.

Functional and Presentation Currency

The functional and presentation currency of the Company is Australian Dollars.

Operating Segments

The Company operated in Australia only and the principal activity is investment.

Critical Accounting Estimates and Judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectation of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances. In the opinion of the Directors, there are no critical accounting estimates and judgements in this financial report.

New, revised or amending Accounting Standards and Interpretations adopted

The company has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the company.

Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

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 company for the annual reporting period ended 30 June 2013. The company's assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the company, are set out below.

Page 26

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Notes to the Financial Statements (continued)

1. Statement of Significant Accounting Policies (cont’d)

New Accounting Standards and Interpretations not yet mandatory or early adopted (cont’d)

AASB 9 Financial Instruments, 2009‐11 Amendments to Australian Accounting Standards arising from AASB 9, 2010‐7 Amendments to Australian Accounting Standards arising from AASB 9 and 2012‐6 Amendments to Australian Accounting Standards arising from AASB 9

This standard and its consequential amendments are applicable to annual reporting periods beginning on or after 1 January 2015 and completes phase I of the IASB's project to replace IAS 39 (being the international equivalent to AASB 139 'Financial Instruments: Recognition and Measurement'). This standard introduces new classification and measurement models for financial assets, using a single approach to determine whether a financial asset is measured at amortised cost or fair value. The accounting for financial liabilities continues to be classified and measured in accordance with AASB 139, with one exception, being that the portion of a change of fair value relating to the entity’s own credit risk is to be presented in other comprehensive income unless it would create an accounting mismatch. The company will

adopt this standard from 1 July 2015 but the impact of its adoption is yet to be assessed by the company.

AASB 2011‐4 Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirement

These amendments are applicable to annual reporting periods beginning on or after 1 July 2013, with early adoption not permitted. They amend AASB 124 'Related Party Disclosures' by removing the disclosure requirements for individual key management personnel ('KMP'). The adoption of these amendments from 1 July 2014 will remove the duplication of information relating to individual KMP in the notes to the financial statements and the Directors report. As the aggregate disclosures are still required by AASB 124 and during the transitional period the requirements may be included in the Corporations Act or other legislation, it is expected that the amendments will not have a material impact on the company.

2. Cash and Cash Equivalents

Cash at the end of the financial year as shown in the statement of cash flows is reconciled to items in the statement of financial position as follows:

Cash and cash equivalents Balance as per Statement of Cash flows	2013 $ 2012 $ 1,957,308 1,530,411
	1,957,308 1,530,411

The credit risk of the company in relation to cash is the carrying amount and any unpaid interest.

3. Trade and Other Receivables

Trade and Other Receivables GST receivable Accrued income	2013 $ 2012 $ ‐ 2,629 30,869 ‐
	30,869 2,629

Page 27

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Notes to the Financial Statements (continued)

3. Trade and Other Receivables (cont’d)

Receivables are non interest bearing and unsecured. Outstanding settlements are on the terms operating in the securities industry, which usually require settlement within three days of the date of a transaction.

The credit risk of the Company in relation to receivables is the carrying amount.

4. Other Assets

Prepayments 5. Trade and Other Payables Unpresented cheques from past distributions ** GST Payable Trade Creditors and other payables	2013 $ 2012 $
	‐ 11,562
	‐ 11,562
	$ $ 227,458 233,384 3,575 ‐ 36,535 51,184
	267,568 284,568

5. Trade and Other Payables

** The Company holds cash which it is not entitled, being unpresented cheques from past distributions upon which it earns interest until they are claimed or pass to the relevant authorities, after an appropriate period, as unclaimed monies.

6. Tax

Unrecognised carried forward tax losses

Tax losses (Taxation Benefit)	2013 2012 $ $
	7,011,708 6,932,190

Carried forward tax losses have not been recognised because it is presently not considered probable that future taxable profit will be available against which the company can utilise the benefits therein.

7. Issued Capital

Opening balance – 30 June 2012 Options Issue1 Entitlement Issue Less: issued capital costs Closing balance – 30 June 2013	2013 No. 2013 $ 5,842,758 22,426,347 ‐ 46,917 14,022,619 701,130 ‐ (25,500)
	19,865,377 23,148,894

12,250,000 options issued exercisable at $0.20 on or before 31 December 2015

Page 28

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Notes to the Financial Statements (continued)

7. Issued Capital (cont’d)

Ordinary shares

The holders of ordinary shares are entitled to participate in dividends and the proceeds on winding up of the Company. Shareholders are entitled to one vote per share when a poll is called at shareholder meetings. Otherwise each Shareholder has one vote on a show of hands.

Capital Management

The Company’s objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can continue to provide returns to Shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The Company’s capital includes ordinary share capital and financial liabilities supported by financial assets.

The net working capital position of the Company as at 30 June 2013 was $1,720,609.

Capital Management (Cont’d)

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to Shareholders, return capital to Shareholders, issue new shares or sell assets to reduce debt. As at 30 June 2013, the Company has $1,957,308 of cash and cash equivalents and no debt. The Board believes this is sufficient working capital to allow it to identify and pursue investment opportunities as they arise.

8. Auditors’ Remuneration

Remuneration of the auditor of the company for: RSM Bird Cameron Partners ‐ auditing and reviewing the financial report -tax compliance MNSA Pty Ltd ‐ auditing and reviewing the financial report	2013 $ 2012 $ 19,500 ‐ 4,119 ‐ ‐ 32,994
	23,619 32,994

Page 29

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Notes to the Financial Statements (continued)

9. Income Tax Expense

The prima facie tax on profit loss before income tax is reconciled to the income tax expense as follows:

Prima facie tax payable on profit from ordinary activities before income tax at 30% (2012: 30%) Add: Tax effect of: ‐ imputation gross‐up on dividends received ‐ temporary differences ‐ non‐deductible expenses Less: Tax effect of: ‐ rebateable fully franked dividends ‐ temporary differences Recoupment of prior year tax losses not brought to account Income tax expense	2013 $ 2012 $ (78,591) (158,293)
	‐ 3,815 1,908 131,695 6,425 35,500
	(70,258) 12,717 ‐ 12,717 9,261 ‐ (79,519) ‐
	‐ ‐

The applicable weighted average effective tax rates are as follows: 0% 0%

10. Earnings per Share

a) Weighted average number of ordinary shares outstanding during the year used in calculating basic earnings per share.

	2013	2012
	No.	No.
Weighted average number of ordinary shares outstanding
during the year used in calculating basic earnings per share	18,195,397	3,348,810

b) Diluted earnings per share is equivalent to basic earnings per share. The Company has no securities outstanding which have the potential to convert to ordinary shares and dilute the basic earnings per share.

Page 30

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Notes to the Financial Statements (continued)

11. Cash Flow Information

Reconciliation of result for the year to cash flows from operating activities:

(Loss)/Profit for the year Non‐cash flows in profit: ‐ Share‐based payment Changes in assets and liabilities: ‐ trade and other receivables ‐ prepayments ‐ trading portfolio ‐ trade and other payables Cash flow from operations	2013 $ 2012 $ (261,972) (527,643) 46,917 ‐ (28,240) 32,599 11,562 11,355 ‐ 3,839,718 (11,073) (131,474)
	(242,806) 3,224,555

12. Related Party Information

a) Key management personnel

The names of the persons who were key management personnel of the Company during the financial year were:

Jeremy King (appointed 8 March 2012) Andrew Worland (appointed 8 March 2012) David Church (appointed 2 April 2013) Richard Ochojski (resigned 2 April 2013)

b) Key management personnel remuneration

Key management personnel remuneration
Base salary and fees Superannuation Share based payments	2013 $ 2012 $ 73,745 65,522 3,600 ‐ 46,917 ‐
	124,262 65,522

The Directors' remuneration excludes insurance premiums paid and payable by the company in respect of Directors' liability insurance.

The Board of Directors of COT is responsible for determining and reviewing compensation arrangements for the Directors. The Board assesses the appropriateness of the nature and amount of emoluments of each Director on a periodic basis by reference to workload and market conditions. The overall objective is to ensure maximum stakeholder benefit from the retention of a high quality Board whilst constraining costs.

Page 31

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Notes to the Financial Statements (continued)

12. Related Party Information (cont’d)

b) Key management personnel remuneration (cont’d)

In connection with ongoing company secretarial assistance and administrative assistance which included assistance in preparing and lodging ASX and ASIC documents, financial management services, corporate advisory services in relation to the entitlement issue, Board minutes, notice of meetings, organising shareholder meetings, other shareholder communications and other administrative assistance, Grange Consulting Group Pty Ltd was paid fees totalling $113,175, excluding GST. Jeremy King is a Director of Grange Consulting. These transactions have been entered into on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

The Company entered into an executive services agreement with Mr Andrew Worland on 1 January 2013. Mr Worland was paid fees totalling $43,600 (including superannuation) over a four month period in accordance with the agreement. The agreement was voluntarily terminated on 30 April 2013.

c) Option Holdings of Key Management Personnel

The number of options over ordinary shares in the Company held during the period by each director of COT and other key management personnel, including their personally related parties, are set out below.

2013

2013
Name	Balance at start of theperiod Received during theperiod	Other changes Balance at the end of theperiod
Directors Jeremy King Andrew Worland David Church Richard Ochojski Total	‐ 1,250,000 ‐ 1,000,000 ‐ ‐ ‐ ‐	‐ 1,250,000 ‐ 1,000,000 ‐ ‐ ‐ ‐
	‐ 2,250,000	‐ 2,250,000

Details of the options provided as remuneration, together with terms and conditions of the options can be found in section D of the remuneration report.

The share‐based payment expense recognised in the statement of comprehensive income for the 2,250,000 options issued during the year ended 30 June 2013 was $46,917 (2012: Nil).

d) Shareholdings of Key Management Personnel

Directors’ transactions concerning dividends and ordinary shares are on the same terms and conditions applicable to ordinary members.

Page 32

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Notes to the Financial Statements (continued)

12. Related Party Information (cont’d)

d) Shareholdings of Key Management Personnel (cont’d)

2013 Equity Instruments and Directors Holdings – Ordinary Shares

Name	Balance as at	Acquired	Other	Sold		Shares No		Balance as at
	1 July 2012	Holdings				Longer		30 June 2013
						Deemed
						Director
						Related
Jeremy King	251,115	1,178,756	‐		‐		‐	1,429,871
Andrew Worland	236,838	1,078,012	‐		‐		‐	1,314,850
David Church	131,580	563,292	‐		‐		‐	694,872
Richard Ochojski	‐	‐	‐		‐		‐	‐
2012
Equity Instruments	and Directors
Holdings – Ordinary Shares
Name	Balance as at	Acquired	Other (3 for	Sold		Shares No		Balance as at
	1 July 2011	Holdings	1 Share Split)			Longer		30 June 2012
						Deemed
						Director
						Related
Jeremy King	‐	83,705	167,410		‐		‐	251,115
Andrew Worland	‐	78,946	157,892		‐		‐	236,838
David Church	‐	43,860	87,720		‐		‐	131,580
Richard Ochojski	‐	‐	‐		‐		‐	‐

13. Segment Information

The Company has only one reportable segment. The Company operates predominantly in Australia and in one industry being the securities investment industry, deriving revenue from dividend income, interest income and from the sale of its portfolio.

14. Financial Risk Management

The Company's financial instruments comprise mainly of deposits with banks, trading portfolio, accounts receivable and payable.

The Company's activities expose it to a variety of financial risks: market risk (including price risk), credit risk and liquidity risk.

The Investment Manager reviews and agrees policies for managing each of these risks and they are summarised below. The Investment Manager also monitors the market price risk arising from all financial instruments.

Page 33

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Notes to the Financial Statements (continued)

14. Financial Risk Management (cont’d)

a) Credit risk

The standard defines this as the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation.

The maximum exposure to credit risk excluding the value of any collateral or other security, at balance date to recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the financial statement.

There are no other material amounts of collateral held as security at 30 June 2013.

Credit risk is managed as provided in Note 3 with respect to receivables and Note 2 with respect to cash assets. None of these assets are overdue or considered to be impaired.

b)

Liquidity risk

The standard defines this as the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities.

The Board continuously monitor the cash flow requirements daily in relation to the trading account taking into account upcoming dividends, tax payments and trading activity.

The Company's inward cash flows depend upon the level of dividend and distribution revenue received. Should these decrease by a material amount, the Company would amend its outward cash flows accordingly. As the Company's major cash outflows are the purchase of securities and dividends paid to Shareholders, the level of both of these is managed by the Board.

Furthermore, at reporting date, the Company holds predominately cash assets which can be used to settle any financial liabilities that fall due.

The table below analyses the Company's non derivative financial liabilities in relevant maturity groupings based on the remaining period to the earliest possible contractual maturity date at the yearend date. The amounts in the table are contractual undiscounted cash flows.

Financial liabilities due for payment Trade and other payables Total contractual outflows	Less than 1 Month More than 1 Month Total 2013 $ 2012 $ 2013 $ 2012 $ 2013 $ 2012 $ 267,568 51,184 ‐ 233,384 267,567 284,568
	267,568 51,184 ‐ 233,384 267,568 284,568

Page 34

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Notes to the Financial Statements (continued)

14. Financial Risk Management (cont’d)

c) Market risk

The standard defines this as the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices.

By its nature as a Listed Investment Company that invests, the Company can never be free of market risk as it invests its capital in securities which are not risk free the market price of these securities can fluctuate.

As at 30 June 2013 there are no securities held by the Company therefore this risk is seen to be minimal.

The Company is not directly exposed to currency risk as all its investments are quoted in Australian Dollars.

d) Interest rate risk

The Company's interest bearing financial assets expose it to risks associated with the effects of fluctuations in the prevailing levels of market interest rates on its financial position and cash flows.

Sensitivity analysis interest rate risk .

An increase of 75 basis points in interest rates as at the reporting date (assuming a flat tax rate of 30 per cent) would have increased the company's equity and revenue from bank interest by $14,544 (2012: $8,035). A decrease of 75 basis points would have an equal but opposite effect.

15. Events Occurring after Balance Date

Other than the above, there has not been in the interval between the end of the financial period and the date of this report any other item, transaction or event of a material and unusual nature likely, in the opinion of the Company, to significantly affect the operations of the entity, the results of those operations, or the state of affairs of the entity, in future financial years.

16. Contingent Liabilities and Commitments

The Directors are not aware of any potential liabilities or claims against the Company as at the date of the Directors' Report.

The Company do not have any commitments as at 30 June 2013.

Page 35

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Directors’ Declaration

The Directors of the Company declare that:

The financial statements and notes are in accordance with the Corporations Act 2001 and:
- a) comply with Accounting Standards, which, as stated in accounting policy note 1 to the financial statements, constitutes explicit and unreserved compliance with International Financial Reporting Standards; and
- b) give a true and fair view of the Company’s financial position as at 30 June 2013 and of its performance for the year ended on that date;
In the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and
The Directors have been given the declarations required by s 295A of the Corporations Act 2001 from the Chairman and Chief Financial Officer.
As at the date of this declaration, in the Directors' opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors.

==> picture [82 x 42] intentionally omitted <==

Jeremy King Chairman, Director

Perth, Western Australia, 30 August 2013

Page 36

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Corporate Governance Statement For the year ended 30 June 2013

This statement outlines the main corporate governance practices adopted by the Company, which comply with the ASX Corporate Governance Council Principles and Recommendations (2nd Edition, August 2007) unless otherwise stated.

The following Board policies and charters have been adopted by the Company:

Board Charter
Appointment and Selection of Directors Policy
Code of Conduct and Ethics
Audit and Risk Management Charter
Remuneration Committee Charter
Disclosure Policy
Communication Policy
Performance Evaluation Policy
Trading Policy

Structure of the Board

The skills, experience and expertise relevant to the position of director held by each Director in office at the date of the annual report is included in the Directors' Report. Directors of the Company are considered to be independent when they are Non‐executive Directors who are not a member of management and free from any business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the independent exercise of judgement.

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

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

Directors of COT are considered to be independent:
Name	Position
David Church	Non‐executive Director

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

Recommendation 2.1 requires that "A majority of the Board should be independent Directors". The Board is not currently comprised of a majority of independent Directors. However, the Board considers that its current structure is appropriate given the size, nature and scope of the Company’s activities. The Board intends to reconsider its composition as the Company’s operations evolve, and may appoint additional Directors as it deems appropriate and the Company’s circumstances warrant.

Page 37

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Corporate Governance Statement (continued)

For the year ended 30 June 2013

Recommendation 2.3 requires that "the role of the Chair and Chief Executive Officer of the company should not be exercised by the same individual". The Company has not appointed a Chief Executive Officer due to the limited size of the Company’s current operations. The Board may appoint a Chief Executive Officer, separate from the role of the Chair in the future if required.

Role of the Board

The Board's primary role is the protection and enhancement of long term shareholder value. To fulfill this role the Board seeks to address:

The prudential control of the company's operations;
The resourcing, review and monitoring of executive management;
The timeliness and accuracy of reporting to shareholders; and
The determination of the company's broad objectives.

Board Processes

The Board holds strategic meetings as and when necessitated by the Company's operations. The agenda for meetings is prepared through the input of the Chairman and the Company Secretary. Standing items include matters of compliance and reporting, financials, shareholder communications and investments strategy and outcomes. Submissions are circulated in advance.

Nomination and Remuneration Committee

The Company does not have a separate constituted nomination and remuneration committee. The Board, as a whole, serves as a nomination and remuneration committee and acts in accordance with the Nomination and Remuneration Committee Charter.

Pursuant to the charter, the nomination and remuneration responsibilities of the Board include:

Conducting an annual review of the Board membership with regard to the present and future requirements of the Company and make recommendations as to composition and appointments;
Review of Board succession plans, including succession of the Chairman, to maintain an appropriate balance of skills, experience and expertise;
Conducting an annual review of the time required from Non‐executive Directors, and whether the Directors are meeting this;
Reviewing and recommending the overall strategies in relation to executive remuneration policies;
Reviewing and making recommendations in respect of the compensation arrangements for all Directors and executive management;
Conducting an annual review of the independence of Directors; and
Recommendations to the Board on necessary and desirable competencies of Directors.

Recommendation 3.2 states that companies should establish a policy concerning diversity and disclose the policy or a summary of that policy. The policy should include requirements for the Board to establish measurable objectives for achieving gender diversity and for the Board to assess annually both the objectives and progress in achieving them.

Page 38

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Corporate Governance Statement (continued)

For the year ended 30 June 2013

The Company recognises that a talented and diverse workforce is a key competitive advantage and that an important contributor to the Company’s success is the quality, diversity and skills of its people.

Due to the small scale of the Company’s operations and the limited number of employees, the Company has not established a Diversity Policy. However, as the Company develops, the Board will consider adopting such a policy.

Director Dealing in Company Shares

The Company encourages Directors to have a significant personal financial interest in Continuation Investments Limited, by acquiring and holding shares on a long term basis.

The Board has adopted the following policies concerning dealing in the Company’s shares by Directors and officers.

Insider trading laws prohibit Directors and their associates from dealing in the company's shares whilst in possession of price sensitive information that is not generally available.
Directors and their associates are prohibited from trading in the company's shares during the period of seven days prior to the announcement of financial results, including the company's half year and full year results.

Independent Professional Advice and Access to Company Information

Each director has the right of access to all relevant company information and to the Company's service providers and subject to prior consultation with the Chairman, may seek independent professional advice at the company's expense. A copy of advice received by the director is made available to all other members of the Board.

Audit Committee

The Company does not have a separate constituted audit committee. The Board as a whole serves as an audit committee and acts in accordance with the Audit and Risk Management Charter.

Pursuant to the charter, the audit and risk management responsibilities of the Board include:

Relevant, reliable and timely information is available to the Board to monitor the performance of the Company;
Overseeing, co‐ordinating and appraising the quality of the audits conducted by both the Company’s external and internal auditors (if and when appointed);
Management process support external reporting in a format which facilitates ease of understanding by shareholders and institutions;
The external audit arrangements are adequate to ensure the maintenance of an effective and efficient external audit. This involves:
Reviewing the terms of engagement, scope and auditor's independence;
Recommendations as to the appointment, removal and remuneration of an auditor; and
Reviewing the provision of non audit services provided by the external auditor ensuring they do not adversely impact on audit independence.
Review the Company's risk profile and assess the operation of the Company's internal control system.

Page 39

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Corporate Governance Statement (continued)

For the year ended 30 June 2013

Risk Management Policy

The Board acknowledges that it is responsible for the overall system of internal control but recognises that no cost effective internal control system will preclude all errors and irregularities. The Board’s collective experience will enable accurate identification of the principal risks that may affect the Company’s business. Key operational risks and their management will be recurring items for deliberation at Board meetings.

The Board takes a proactive approach to risk management and have a formal risk management policy to provide further guidance. The identification and proper management of risk within the Company is a priority for the Board and management.

The Board identifies the following business risks as having the potential to significantly or materially impact the company's performance (a) administrative risks including operational, compliance and financial reporting (b) market related risks.

Administrative Risks

The Company Secretary and the Board carefully monitor the Company's financial statements and notes to ensure they present a true and fair view, in all material respects, of the Company's financial position and operational results and that they have been prepared and maintained in accordance with relevant accounting standards and the Corporations Act 2001.

Market Risks

The Board is primarily responsible for recognising and managing market related risks. By its nature as a Listed Investment Company, the Company will always carry investment risk because it must invest its capital in securities which are not risk free.

The Board performs a risk review on an annual basis to ensure that adequate controls are in place to mitigate risk associated with investment manager performance, market risk, fraud, transaction reporting errors, material reporting risks and compliance risk.

Ethical Standards

The Board expects all Directors to act professionally in their conduct and with the utmost integrity and objectivity. All Directors must comply with the company's code of conduct and ethics.

The Board monitors its outsourced service providers compliance with the company's code of conduct and ethics, which is documented in the Corporate Governance policies adopted by the Company.

Shareholder Rights

Shareholders are entitled to vote on significant matters impacting on the business, which include the election and remuneration of Directors, changes to the constitution and are able to receive annual and interim financial statements if requested. Shareholders are strongly encouraged to attend and participate in the Annual General Meetings of Continuation Investments Limited, to lodge questions to be responded by the Board, and are able to appoint proxies.

Page 40

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Corporate Governance Statement (continued)

For the year ended 30 June 2013

Shareholder Communications

The Board and the Company Secretary are responsible for ensuring the Company complies with its continuous disclosure obligations and informs Shareholders of all major developments affecting the company's state of affairs through market announcements to ASX.

As a minimum, net asset backing per share is released to the ASX by the 14th day following each month end. Where possible all continuous disclosure releases to the ASX are approved by a director and where necessary the Board. Where time does not permit approval by all members of the Board, the Chairman must approve the release.

Relevant parties associated with the Company have been made aware of these obligations and are required to report any price sensitive information to the Company Secretary immediately, once they become aware of it. The Company Secretary in consultation with a director will decide whether the information should be disclosed to the ASX.

Page 41

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

ASX Additional Information

Additional information required by the ASX Limited Listing Rules not disclosed elsewhere in this Annual Report is set out below.

1. Substantial Shareholders

The number of substantial shareholders and their associates are set out below:

The number of substantial shareholders and their associates	are set out below:
Shareholders	Number of Shares
Bushwood Nominees Pty Ltd	1,414,171
Mr Andrew Worland	1,314,850
Mr Jason Peterson & Mrs Lisa Peterson
	1,149,001

2. Voting Rights

Ordinary Shares

At a general meeting, on a show of hands, every ordinary member present in person shall have one vote for every share held. Proxies present at the meeting are not entitled to vote on a show of hands, but on a poll have one vote for every share held.

3. Distribution of Equity Security Holders

Holding	Number of Shareholders Number of Shares
1 ‐ 1,000 1,001 ‐ 5,000 5,001 ‐ 10,000 10,001 ‐ 100,000 100,000 and over	43 6,888 149 454,424 62 443,782 63 1,918,432 45 17,041,851
	362 19,865,377

There were 222 holders of less than a marketable parcel of ordinary shares as at 26 August 2013.

Page 42

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Members Information

Top 20 Shareholders as at 26 August 2013

	Name	Number of Shares	%
1	Bushwood Nominees PtyLtd	1,414,171	7.12
2	Mr Jason Peterson & Mrs Lisa Peterson	1,149,001	5.78
3	Mr Andrew John Worland	757,888	3.81
4	Celtic Capital Pty Ltd	712,419	3.59
5	Mr David Samuel Church	694,872	3.50
6	Barclay Wells	671,048	3.38
7	Mr Stephen Bruce Dennis	657,950	3.31
8	Mr Andrew James Partington	657,950	3.31
9	Eightnine Pty Ltd	608,000	3.06
10	Mrs J Chiu‐Yueh Hsu & Mr S Chia‐Kuei Hsu	607,359	3.06
11	Badlands Super Pty Ltd	556,962	2.80
12	Sean TimothyKeenan	525,000	2.64
13	Invia Custodian Pty Limited	524,210	2.63
14	Jetosea PtyLtd	467,429	2.35
15	Pheakes Pty Ltd	447,372	2.25
16	Barclay Wells Ltd	398,000	2.00
17	Cornela Pty Ltd	357,898	1.80
18	ACP Investments Pty Ltd	357,000	1.80
19	Mr Lachlan Taylor Hughes & Mrs Elizabeth Hughes	332,946	1.67
20	Mr Collis James Thorp	328,975	1.66
		12,226,450	61.55

Page 43

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Members Information (continued)

Registry

Share registry functions are maintained by Boardroom Pty Limited and their details are as follows:

Level 7 207 Kent Street Sydney NSW 2000 Shareholder enquiries telephone: (02) 9290 9600

Stock Exchange Listing

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

Corporate Governance

The Company has followed all applicable best practice recommendations set by ASX Corporate Governance Council during the reporting period, unless otherwise stated.

Page 44

Continuation Investments Limited Financial Statements for the Year Ended 30 June 2013

Members Information (continued)

Unlisted Options as at 26 August 2013.

	Name	Number of Options	%
1	Mr JeremyKing	1,250,000	55.56
2	Mr Andrew Worland	1,000,000	44.44
	Total	2,250,000	100.00

Page 45

AI assistant

TESORO GOLD LTD — Annual Report 2013

65957_rns_2013-09-01_0cffa33e-043f-4cd9-b68b-9a519003b8fe.pdf

CONTINUATION INVESTMENTS LIMITED

By E‐Lodgement

Continuation Investments APPENDIX 4E – PRELIMINARY FINAL REPORT

Results for Announcement to the Market

Dividends

Net Tangible Assets / Earnings Per Share

Independent Audit Report

Accounting Policies, Estimation Methods and Measurements

Annual Report

Contents

Corporate Information

Directors

Auditors

Company Secretary

Bankers

Registered Office

Postal Address

Share Registry

Solicitors

Stock Exchange

ASX Code COT

Country of Incorporation

Directors Report

Directors

Principal Activities

Dividends

Review of Operations

Directors Report (continued)

Significant Changes in State Of Affairs

Events Subsequent to Balance Date

Environmental Issues

Likely Developments and Expected Results of Operations

Directors Report (continued)

Information on Directors

Directors Report (continued)

Information on Directors (cont’d)

Directors Report (continued)

Director Meetings

Retirement, election and continuation in office of directors

Company Secretary

Directors Report (continued)

Shares under Option

Shares Issued on the Exercise of Options

Insurance of Officers

Proceedings on Behalf of the Group

Directors Report (continued)

Non Audit Services

Auditor's independence declaration

Directors Report (continued)

Remuneration Report (Audited)

A Principles used to determine the nature and amount of remuneration

Non‐executive Directors

Directors’ Fees

Base fees for period 1 July 2012 – 30 November 2012

Directors Report (continued)

Remuneration report (cont’d)

Additional fees

Executive pay

Base pay

Benefits

Directors Report (continued)

Remuneration report (cont’d)

A Principles used to determine the nature and amount of remuneration (cont’d)

Long term incentives

B Details of remuneration

Amounts of remuneration

Mr Jeremy King

Directors Report (continued)

Remuneration report (cont’d)

Directors Report (continued)

Remuneration report (cont’d)

C Service agreements

Executive Directors

C Service agreements (cont’d)

Non‐executive Directors

D Share‐based compensation

Options

TESORO GOLD LTD Annual Report 2013