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Contents

1 Chairman’s Report

2 Operations Report

12 Directors’ Report

23 Auditor’s Independence Declaration

24 Corporate Governance Statement

32 Consolidated Statement of Comprehensive Income

33 Consolidated Statement of Financial Position

34 Consolidated Statement of Changes in Equity

35 Consolidated Statement of Cash Flows

36 Notes to the Financial Statements

64 Directors’ Declaration

65 Independent Auditor’s Report

67 Additional ASX Information

Directors

GD Loftus-HillsLG ReedRE KirtlanPJ Britz Appointed 24 November 2011

Company Secretary

SS Weber Appointed 16 December 2011 BP Boyle Resigned 16 December 2011

Registered Office and Business Address

Unit 1, 245 Churchill Avenue, Subiaco Western Australia 6008

Telephone +61 8 9363 7100 Facsimile +61 8 9388 2355 Email info@avivacorp.com.au Website www.avivacorp.com.au

Auditor

Ernst & Young 11 Mounts Bay Road, Perth Western Australia 6000

Solicitor

Corrs Chambers Westgarth 240 St Georges Terrace, Perth Western Australia 6000

Banker

National Australia Bank Limited Level 1, 88 High Street, Fremantle Western Australia 6160

Share Registry

Computershare Investor Services Pty Limited Level 2, Reserve Bank Building 45 St Georges Terrace, Perth Western Australia 6000

Corpserve Botswana Transfer Services 1st Floor Kwena House Plot 117, GIFP Gaborone Botswana

Stock Exchanges

Australia – ASX code: AVA Botswana – BSE code: AVIVA

Corporate Directory

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Report

Subsequent to the end of the reporting period, Aviva announced on 23 July 2012 that it has entered into a binding sale and purchase agreement (SPA) with ABG to sell Aviva Mining Kenya Limited which holds all of our Kenyan gold and base metal assets, for $20 million. There is a further payment of $10 million due to Aviva if a National Instrument 43-101 (“NI 43-101”) compliant indicated resource of 3 million ounces or more is declared over the project areas.

We have undertaken a considerable amount of exploration on licences that comprise these Kenyan assets since entering joint venture agreements with Lonmin Plc. in July 2010 and Advance Gold Limited in April 2011 respectively. Our work included achieving the milestone of earning a 51% interest on the licences held in conjunction with Lonmin, as well as completing a maiden resource for the Bumbo Base Metal Deposit. This initial estimate for Bumbo of an Inferred mineral resource of 1.68 million tonnes grading 4% Copper Equivalent (with 1.8% copper, 0.7 grams per tonne gold, 36.8g/t silver and 5.4% zinc) was since upgraded with 1.32Mt grading 4.37% Copper Equivalent moving to the Indicated category, showing improved confidence in the resource. Our exploration at Kakamega and Lake District prospects, also part of the West Kenyan licences, demonstrated potential for large gold deposits as well as other base metal mineralisation.

Aviva has spent approximately $8 million on exploration in Kenya, meaning the sale to ABG for $20 million is at a significant premium in current market conditions. It would generate a substantial return on our investment in less than two years and ensure Aviva has a strong balance sheet for the future. The deal gives the Company the flexibility to pursue other opportunities to provide growth to shareholders rather than face possible dilution to fund further gold and base metal exploration. We are now currently reviewing our growth options in relation to coal-based projects in Botswana and are considering other strategic options as well.

Our current Botswana coal project, Mmamantswe, has progressed well over the past year. Consultant Earthtec completed an Environmental and Archaeological Impact Assessment on behalf of Aviva, which did not identify any major impediments to the project’s development. This report has been lodged with the Botswana Department of Environmental Affairs and is subject to a one-month public inspection. Communities potentially affected by the project’s development have been consulted and Aviva has also undertaken discussions with government stakeholders.

Further to this, outcomes of the Botswana government’s Coal Road Map Review, detailed in the Operations Report of this document, provide many positives for the development of Mmamantswe. In May 2012, Aviva’s licences at Mmamantswe were also renewed for a further two years.

During the year, we appointed Pieter Britz as a Non-Executive Director to our board as a representative of The Sentient Group. Sentient became a cornerstone investor in Aviva, taking a 10.5% holding through a share placement undertaken in the 3rd quarter of 2011. In addition 7.5 million convertible notes were issued to the Sentient Group in June 2012. Marford Group, a Perth-based investment company, also became a substantial holder in Aviva during the year and currently has a 6.2% holding. We welcome the support from these entities, as well as that shown by all our shareholders over the past 12 months.

In closing, I thank our management team and staff for their work over the period, and I hold great expectations for what the coming year may bring for our Company.

Geoffrey Loftus-Hills Chairman

Dear Shareholders,

It gives me great pleasure to present Aviva Corporation’s annual report for the year ended 30 June 2012. The past 12 months have seen some exciting developments for Aviva on our projects, and we are looking forward to finalise the sale of Aviva Mining Kenya to African Barrick Gold (“ABG”) and utilise the proceeds to create value for shareholders.

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Kenya

Ethiopa

Tanzania

WEST KENYA LICENCES AREA

Narobi

Mombasa

Kisumu

OvERvIEW

Aviva acquired an interest in the West Kenya Gold and Base Metals Project through a joint venture (“Jv”) with AfriOre International, a subsidiary of large South African-based platinum producer Lonmin Plc, in July 2010.

PROJECTS WEST KENYA GOLD AND BASE METALS PROJECT

Operations Report

The project occupies 2,800km2 of the highly-prospective Ndori Greenstone belt in Kenya, which forms part of the Archaean Tanzanian Craton. Previous exploration identified significant potential for gold, as well as copper, lead and zinc.

Three project areas have been identified within the Jv area:

• the Bumbo base metal precinct, where Aviva delivered a maiden resource in September 2011,which was since upgraded to the Indicated category;

• the Kakamega Gold Camp, where the potential for higher-grade gold deposits has been demonstrated in an area known to have supported Kenya’s largest historical gold mine – Rosterman; and

• the Lake District, where structural and geological mapping suggest a setting similar to the Abitibi gold belt in Canada with the potential for known gold occurrences to point to large-tonnage gold systems. The project offers key infrastructure advantages, being well serviced by air, rail, road, electricity and telecommunication networks across the entire licence area.

The tenement is in a world-class gold address. The licence area covers the northerly extension of the Lake victoria Goldfields in neighbouring Tanzania, where Anglo Ashanti Gold and African Barrick Gold operate multi-million-ounce gold deposits. The West Kenya project has more than 250 recorded artisanal gold prospects, with historical production of more than 250,000 ounces of gold. The gold potential has been confirmed by limited open-hole percussion drilling and diamond drilling (DD) by past explorers at several of these prospects. Previous studies have identified target mineralisation styles comparable with Western Australian Greenstone belts, such as granite-hosted, shear-hosted and strata-hosted mineralisation. The licence area presents an under-explored gold opportunity.

Under the terms of special licences 123 and 213, the Kenyan Commissioner of Mines and Geology’s consent is required for another party to take a Jv interest in the special licences. The Commissioner consented to the agreement in September 2010 and confirmed the special licences are free of encumbrances or reservations.

Under the terms of the joint venture agreement (“JvA”), Aviva can earn up to 75% of the project, initially by spending US$3 million over three years and completing a pre-feasibility study (PFS) on a project within the special licences demonstrating a pre-tax net present value (NPv) of at least US$50 million.

The first milestone to earn 51% of the project was achieved in October 2011, and Aviva received confirmation that the Acting Commissioner of Mines and Geology in Kenya had registered its 51% interest in May 2012.

In addition to the West Kenya agreement with Lonmin/AfriOre, Aviva announced in April 2011 that it had entered an Option and JvA with Advance Gold Corporation and its subsidiary Gold Rim Exploration Kenya Limited. Under the agreement Aviva has the right to earn at least 75% equity in three highly-prospective special licences in Western Kenya: SL265 Bukura, SL266 Sigalagala and SL267 Rosterman. Subsequent to year – end Aviva announced that it has exercised the Preliminary Option on the Advance Gold Jv.

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These special licences were previously excluded from SPL213 Siaya, which is part of the Jv with AfriOre. They cover 64km2 and the addition of these licences completes the area referred to as the Kakamega Gold Camp.

The large land holding enabled the first comprehensive compilation of regional base line studies over the Ndori greenstone belt, including geological mapping, drilling data, geochemical data, remote sensed and geophysical data. A high-resolution airborne magnetic and radiometric survey comprising 26,000 line kilometres at 100m spacing was completed as was a vTEM survey covering an area of approximately 100 square kilometres.

The base line studies enabled Aviva to quickly identify high-priority prospects, commence drilling within three months of receiving approval for the Jv and announce a maiden resource at Bumbo within 12 months of approval.

BUMBO BASE METALS PROSPECTBumbo is an advanced base metals prospect within the West Kenya Project. Copper, zinc, gold and silver are the primary metals. Previous exploration has identified a strata-bound massive sulphide target, prospective for base and precious metals.

Exploration

Aviva announced a maiden resource for the Bumbo Base Metal Deposit on 1 September, 2011. It was estimated that Bumbo contained an Inferred mineral resource of 1.68 million tonnes grading 4% Copper Equivalent, with 1.8% copper, 0.7 grams per tonne (g/t) gold, 36.8g/t silver and 5.4% zinc. This initial resource exceeded the Company’s expectations in terms of tonnes and grade, and was completed within eight months of drilling commencing.

Peripheral gold mineralisation was modelled and noted as an exploration target, with grades ranging from 1.0g/t to 1.5g/t gold for tonnages ranging from 450,000 to 700,000 tonnes. It is possible that the gold mineralisation may contain other economic metals of interest, particularly silver.

After the estimate was complete, Aviva undertook further drilling at Bumbo to test extensions to the deposit and metallurgical characteristics. This included five RC holes at wider Bumbo to evaluate the up-dip and along strike continuity of mineralisation, and four diamond holes to evaluate down-hole electromagnetic conductors and to obtain samples for metallurgical testwork. Aviva also drilled nine holes in six high priority versatile time-domain electromagnetic (vTEM) targets.

Results from this drilling were again above expectations with intercepts including 5.0m at 7.26g/t gold, 103.44g/t silver and 0.47% copper from 9.0m, and 20.0m at 1.06g/t gold, 55.63g/t silver, 3.91% copper and 5.43% zinc from 32m. These results gave Aviva confidence that significant gold ounces could be added to the maiden Bumbo resource.

A resource upgrade on the Bumbo deposit was completed during the June 2012 quarter. The upgrade improved confidence in the resource with 1.32Mt grading 4.37% copper equivalent moving from the Inferred to Indicated category. Modelling of peripheral gold mineralisation at Bumbo identified 290,000 tonnes grading 2.25g/t gold and 64.96g/t silver. A further 500,000 to 700,000 tonnes of peripheral gold mineralisation was also identified with a possible grade between 1.5 and 1.9g/t gold, which has been classified as an exploration target. Metallurgical test work is underway.

GW EDWARDS AND P HUTCHINSON – WEST KENYA

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CONTINUED

ReportOperations

PROJECTS WEST KENYA GOLD AND BASE METALS PROJECT

Table 1. The Bumbo Mineral Resource statement *

Category Volume Tonnes Cu equivalent Cu Au Ag Zn(Mm3) (Mt) (%) (%) (ppm) (ppm) (%)

Indicated Mineral Resources 0.41 1.32 4.37 2.29 0.59 36.60 5.02

Inferred Mineral Resources 0.09 0.27 2.03 1.05 0.42 19.89 1.93

Total (Inferred + Indicated) 0.50 1.58 3.98 2.08 0.56 33.77 4.50

* 0.7% copper equivalent cut-off grade for the massive and disseminated sulphides.

Table 2. Gold lode data for Inferred Mineral Resource using 1ppm gold cut-off grade

Category Volume SG Mt Cu equivalent% Cu% Au ppm Ag ppm Zn% Pb% Inferred Gold 105,958 2.77 0.29 2.25 0.12 2.31 64.96 0.07 0.25

KAKAMEGA GOLD CAMP Overview

The Kakamega Gold Camp draws its name from a gold rush by the same name which occurred in the 1930s and 1940s. During that time the largest recorded production came from the Rosterman mine which produced 250,000 ounces of gold at an average grade of 13g/t Au. In the 70 years since production ceased at Rosterman, there had been limited exploration in the highly-prospective area and these returned large ore grade intercepts.

Aviva believes the Kakamega Gold Camp has the potential for higher-grade deposits containing several hundred thousand ounces.

Exploration

Significant gold intercepts from the Kakamega Gold Camp were released periodically throughout the year and continued to demonstrate the potential for higher-grade gold deposits at Kakamega.

Intercepts at Bushiangala suggested at least a 350m strike length of high grade intercepts in a sub-vertical north-north-west trending corridor. The system appears open along strike and at depth.

Initial indications suggested there may be a shoot control to the high-grade mineralisation at Kimingini, where mineralisation is associated with a well-developed and strike extensive shear zone.

Aviva also completed drilling at Isulu, Bukura, Shitole/Ibwale, Sigalagala and Makuchi prospects during the year.

Results from drilling at Bushiangala announced in April 2012 included 10.82m at 3.96g/t gold from 48.60m, 2.93m at 7.77g/t gold from 96.97m and 9.04m at 13.05g/t gold from 5.96m. At Kimingini, drilling to test high-grade mineralisation intersected in hole ASRC025 (9.0m at 12.71g/t gold from 139.0m) returned further encouraging mineralisation including 3.40m at 5.31g/t gold from 227.64m and 3.27m at 10.23g/t gold from 156.13m.

Results from all the Kakamega prospects drilled to date are considered to be positive and highlight the prospectivity of the 20km Limbiri trend.

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LAKE GOLD DISTRICTOverview

The Lake Gold District is the name given to the western half of the West Kenya Jv licences. Aviva has distinguished the Lake Gold District from the Kakamega Gold Camp based on its distinctive geological and structural setting.

The Lake Gold District is characterized by mafic, intermediate and felsic volcanic of the Nyanzian system intruded by numerous late syntectonic granites. The area is also known to host a number of kimberlite plugs.

Aviva believes the Lake Gold District has the potential to host very large gold systems and limited drilling to date has confirmed that potential.

The first reconnaissance holes in the Lake Gold District at Masumbi confirmed potential for large gold systems similar to those hosting multi-million-ounce deposits elsewhere in the Tanzania Craton.

Exploration

Four diamond holes drilled at Masumbi early in the year tested down-dip continuity and aimed to help define higher-grade mineralisation. The holes returned broad, low-grade intercepts with higher-grade zones of mineralisation that appears to be associated with intense silicification and sulphides. Further drilling included five RC holes at Masumbi to test down-dip continuity of mineralisation and one reconnaissance diamond hole at the Barding Prospect.

Drilling was undertaken at the Lake Zone during the December quarter at Masumbi and Wagusu.

Figure 1. West Kenya

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ReportOperations

CONTINUED

PROJECTS WEST KENYA GOLD AND BASE METALS PROJECT

SALE OF AvIvA MINING KENYASince the end of the reporting period, in July 2012, Aviva entered a binding sale and purchase agreement (“SPA”) with African Barrick Gold plc. (“ABG”) to sell all of its Kenyan gold and base metal assets for an initial cash payment of $20 million. ABG is majority owned by Barrick Gold Corporation, the world’s largest gold producer, and is one of the five largest gold producers in Africa. Its purchase of Aviva’s assets is its first move into Kenya

Among key terms of the SPA are:

• ABG will acquire all the shares in Aviva Mining Kenya Limited (“Aviva Kenya”), the owner of Aviva’s Kenyan assets, for $20 million;• Aviva will receive a further $10 million if a National Instrument 43-101 – compliant Indicated resource of 3 million ounces or more is declared

over the project areas;• ABG will fund all costs that Aviva incurs on the Kenyan assets, based on an agreed work program retrospectively from 1 June 2012, until

the completion of the agreement. • ABG will provide $0.1 million for Aviva Kenya to exercise its preliminary option in its Jv with Advanced Gold. Following this payment, Advance

Gold will grant Aviva Kenya the right to acquire a 51% ownership interest in the mineral rights owned by Advance Gold which are subject to the Jv agreement in consideration for Aviva Kenya incurring further exploration expenditure of US$0.5m in relation to those rights in a 24-month period;

The only condition precedent outstanding on the SPA at the date of this annual report was the approval of the Kenyan Competition Authority. This approval is expected to be received in October 2012. Aviva shareholders approved the sale of Aviva Kenya on 11 September 2012. Aviva’s Jv partners, Lonmin and Advanced Gold, also agreed to release Aviva as a guarantor under the JvA and replace it with ABG.

The sale of Aviva Kenya’s assets to ABG will provide Aviva with cashflow to pursue options in relation to its coal-based projects in Botswana and other strategic options.

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PROJECTS MMAMANTSWE COAL PROJECT (BOTSWANA)Overview

In 2007, Aviva and Mawana Minerals Pty Ltd of Botswana entered a joint venture (“Jv”) over the Mmamantswe Coal Project in Botswana, whereby Aviva could earn a 90% interest in the project. It is located 70km north of the capital, Gaborone, and 15km from the South African border.

Rail, power and highway links to Gaborone and South Africa pass within 30km of the coal deposit, and it is located only 150km from the planned Eskom power stations across the border and 70km from the railway servicing those locations. Mmamantswe’s location puts it in a prime position to capitalise on the region’s growing demand for electricity.

An estimate completed by SRK Consulting in 2010 identified a large coal resource of 1.3 billion tonnes, including a probable reserve of 895 million tonnes. Studies have demonstrated the project could yield 200 million tons of export-grade thermal coal and an additional 100-150 million tons of domestic power station coal. The SRK report showed that the reserve can support 2000MW of power generation for 40 years at a low stripping ratio of 1:1 (bcm/t) and sulphur content of 0.38%, which are significant advantages.

Aviva has completed a significant water drilling program to support development of the mine and proposed power plant. Requirements for

Botswana

Zambia

Zimbabwe

South Africa

Nam

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MMAMANTSWE LICENCE AREA

Africa

generation of 1000MW of power are about 3 gigalitres (GL) per annum. Pump testing has demonstrated a high probability of long-term supply of 8GL per annum.

Developments

During the reporting period, Aviva appointed Botswana consultant Earthtec to complete an Environmental and Archaeological Impact Assessment for the Mmamantswe Coal Project. The environmental team comprised 12 specialists in various fields necessary for the study. Extensive public consultations were held in all communities that would potentially be affected by the development. Aviva also undertook discussions with government stakeholders regarding the Company’s Environmental Impact Assessment for the project.

This report was submitted to the Botswana Department of Environmental Affairs subsequent to year end and did not identify any major environmental impediments to development of the project. The Environmental Impact Statement is expected to be issued in the 3rd quarter of 2012.

MMAMANTSWE COAL PROJECT

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CONTINUED

Operations ReportPROJECTS MMAMANTSWE COAL PROJECT (BOTSWANA)

The Botswana Government Coal Road Map Review is a critical study examining the infrastructure required to develop export and domestic coal markets required for the establishment of a sustainable coal sector in Botswana. The review was presented at a “Pitso” (general assembly of people for the purpose of making an important decision) in Gaborone, Botswana on 31 January 2012. Objectives of the Pitso were to provide a clear and transparent view of government intentions for the development of Botswana’s coal resources and enable investors to engage with government constructively on the road map’s development.

Figure 2. Mmamantswe Licence Area

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The key outcomes of the review are favourable to development of the Mmamantswe project. These included:

• Immediate lifting of the moratorium on new coal licences;• Overhauling the coal licensing regime to ensure licences are issued to entities with adequate resources and capacity to develop a mine and

associated infrastructure;• Establishment of a dedicated unit to facilitate the coal development process including minerals, energy, water and infrastructure;• Production targets of 90 million tonnes per annum of export coal and 30Mtpa of domestic coal;• Commitment to completing government-sponsored Preliminary Feasibility Studies (PFS) of rail routes (the Trans-Kalahari and the Ponto

Technobane) to identify a preferred route by the end of 2012;• Commitment to two 300MW power generation facilities;• The announcement of a 400kv transmission line through the Mmamantswe licences to a new substation within 30km of the project.

Mmamantswe’s advantages are that it is the only coal development project in Botswana with a JORC reserve estimate, it has a low strip ratio, a defined water resource, close proximity to transmission for both domestic and export electricity markets and the best proximity to a proposed spur line from a Trans-Kalahari railway.

Aviva may consider options to add to its coal portfolio in Botswana.

The first licences put to tender by the Botswana government following the release of the road map were the Mmamabula Central and South licences, which are located adjacent to Mmamantswe’s water well field at Artesia. These licences were previously held by CIC Energy Ltd. Jindal Steel and Power of India acquired CIC Energy Ltd. for US$116 miillion in September 2012.

Since the release of the road map, the Botswana Government continued to progress studies of the east and west rail routes, commenced construction of high voltage electricity transmission networks and is planning to seek proposals for two new power stations.

During the March 2012 quarter, Aviva in conjunction with Botswana’s power coordinating unit responded to a Request for Information from the South African Department of Energy seeking information on power development options in the region.

During the June 2012 quarter, the Company’s licences at Mmamantswe were renewed for a further two years. The area for renewal was reduced by 50% while the two licences, PL070 and PL069, were consolidated into a single licence covering 453.7km2. The new licence encompasses more than 12 times the area of Aviva’s Mmamantswe deposit and also retains access to Botswana’s main infrastructure corridor 40km west.

PROJECTS COOLIMBA COAL AND POWER PROJECT (AUSTRALIA)Overview

Aviva developed the Coolimba Coal and Power Project in the Mid-West region of Western Australia, gaining approval to host a 450MW base load and 360MW gas-fired power generation facility. The project, near Eneabba between Perth and Geraldton, is in a prime position to support the energy needs of the growing Mid-West and South West regions of WA.

Aviva has managed the Coolimba project from its outset. The Group has overseen all stages of development from target definition to exploration, feasibility studies and environmental approvals.

The Coolimba Power Project was going to source coal from the Central West Coal project. However, Aviva no longer has an option over this project after writing off its investment in 2009.

Developments

Aviva retains the approvals for a coal-fired power station and a gas-fired power station at Coolimba.

Aviva continues to explore avenues of realising value from its Coolimba Power development approvals and intellectual property.

COOLIMBA PROJECT

Perth

Geraldton

South West

Western Australia

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Operations Report

CORPORATE SOCIAL RESPONSIBILITY PROGRAMSOverview

Aviva endeavours to involve itself in community and social programs in the locations in which it operates. We believe that youth development is an area that promotes positive long-term outcomes in all communities. This year the Company has again targeted youth, health and education issues in Kenya.

Aviva targets programs that encourage engagement from the wider community as we believe this enhances community benefit. We target programs and institutions that are already in place in the community and provide human and/or financial resources to achieve specific outcomes.

The programs we have been pleased to support this year are outlined below.

Ikolomani Area

Aviva were involved in projects with the Australian High Commission that identified 5 primary schools, a youth centre and a church that could benefit from Aviva’s Corporate Social Responsibility program. Schools were identified on the basis where they missed out on Government supported programs. At the Bushiangala Primary, Bushiangala Church of God and Mukoyani Primary school Aviva donated 9 tables, 2 teacher’s desks and 5 office chairs at each institution. At Ibuka Primary school and ECD 23 desks, 12 tables, 10 chairs and a bookshelf were donated by Aviva. Ibuka is a relatively new primary school in the area.

Munyanza Primary school received 62 chairs and 11 tables from Aviva, whilst books and book cabinets were provided to Maziense Primary School. Munyanza Primary school is located in a remote part of the district with very poor access. This school has been under equipped with the lower classes using a few benches and clay bricks for chairs.

The St Jerome Youth Polytechnic is a new establishment which still requires essential furniture and equipment. Aviva responded by providing 70 chairs, 11 tables, 5 sewing machines, a cabinet and a desk.

Kakamega South

At 6 primary schools and ECD’s in this area the need was for chairs and Aviva provided 291 chairs. These schools serve a considerable area which falls within Aviva’s area of work. Bushiangala Church of God received 50 chairs and the Shikokho health centre 30 chairs. The Shikokho health centre is run by a local women group and benefits a broad area especially in Mother Child Health Services. At the Bushiangala Health Centre Aviva donated a 5,000 litres plastic water tank.

Ramula

Ramula falls within Special License 123 in which Aviva has a 51% interest in its joint venture with Lonmin. The Corporate Social Responsibility projects were identified by the community through a committee of stakeholders. At the Sinyolo and Naya ECD Aviva provided 20 chairs each. The Ramula police post received a 1,500 litre water tank and the Ramula health clinic received visual aids, Tv and a DvD player.

Local Suppliers

In an effort to support local entrepreneurship in Kenya, local suppliers were encouraged to tender for bids to supply materials to all of the projects stated above.

Operations ReportCONTINUED

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CORPORATEBoard and Staff Appointments

Aviva appointed Pieter Britz as a Non-Executive Director of the company on 24 November 2011. Mr Britz joined the Board as a representative of The Sentient Group, which is a cornerstone investor in Aviva.

Stef Weber joined Aviva on 1 December 2011 as the Company’s Chief Financial Officer. On 16 December, Mr Weber was also appointed Aviva’s Company Secretary, following the resignation of Brad Boyle.

Share Placements

Aviva Corporation announced on 21 July 2011 that it would raise $6 million through the issuing of 30 million ordinary shares at a price of 20 cents per share. This capital raising received shareholder approval and the placement was finalised in August. The shares were issued to sophisticated and professional investors in Australia and internationally.

The Sentient Group acquired 17.5 million shares in the Company to the value of $3.5 million through the placement, giving the group a holding of approximately 10.5% of the issued capital in Aviva post-placement. Sentient also took a seat on the Aviva board as part of the acquisition through the appointment of Mr Britz.

Following this, on 22 June 2012, Aviva announced that it has agreed to issue 7.5 million convertible notes at a face value of $0.10 per note to Sentient Executive GP Iv Limited to raise $750,000 to progress its projects in Africa and provide general working capital.

Also during the June quarter, Aviva issued 1 million unlisted ordinary options, comprising two tranches of 500,000 options each, as part of the Company’s Executive and Employee Option Plan.

New Substantial Holders, Share Options and Director Share Transactions

In addition to the Sentient group(refer previous section on share placements), the Marford Group Pty Ltd became a substantial holder in Aviva Corporation on 16 January 2012, taking a 5.11% share of the company with 8,489,604 ordinary shares. Marford Group’s interest increased further to 6.17% and 10,259,369 ordinary shares on 29 February 2012. Marford Group is a Perth-based company involved in investment portfolio management.

Aviva issued the following share options during the year under review:

• On 30 August 2011, 500 000 unlisted ordinary options, comprising two tranches of 250, 000 options each, as part of the Company’s Executive and Employee option plan;

• On 30 January 2012, Aviva Corporation issued 2,000,000 unlisted ordinary options with an exercise price of $0.12 and expiry date of 18 March 2014;

• On 9 May 2012, 1 million unlisted ordinary options, comprising two tranches of 500,000 options each, as part of the Company’s Executive and Employee Option Plan.

On 15, 16, 17 and 24 February 2012, Lindsay George Reed, a Director of the Company, purchased ordinary shares in Aviva Corporation Limited through Jadekey Nominees Pty Ltd, of which Mr Reed is the sole director and shareholder. Mr Reed purchased 100,000 ordinary shares on market at $0.115 per share on 15 February, 250,000 ordinary shares at $0.115 per share on 16 February and 150,000 ordinary shares at $0.115 per share on 17 February. On 24 February 2012, Mr Reed purchased 100,000 ordinary shares at $0.115 per share on market. After these changes, Mr Reed held 6,200,000 ordinary shares in Aviva Corporation and 1,500,000 options expiring on 31 December 2013.

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The Board of Directors presents their report on Aviva Corporation Limited (“the Company”) and controlled entities (“the Group” or “the Consolidated Entity”) for the year ended 30 June 2012.

1. BOARD OF DIRECTORS

i. Names, qualifications, experience and special responsibilitiesThe names and details of the Company’s directors in office at any time during the financial year until the date of this report are as follows. Directors were in office for this entire period, unless otherwise stated.

Dr Geoffrey Dean Loftus-Hills, B.Sc. (Melb), B.Sc. (Hons), Ph.D. (Tas), FAusIMM Non-Executive and Independent Chairman – 71 years

Dr Loftus-Hills has 40 years mining industry experience, including 28 years with Western Mining Corporation and Normandy Mining Ltd (held the position of General Manager – Services). He previously spent 5 years teaching at the University of Tasmania, during which time he completed a Ph.D. in sulphide geochemistry.

With Western Mining Corporation he held positions in regional exploration management and as Chief Geologist Kambalda Nickel Operations, Chief Scientist, General Manager Mineral Exploration (Australasia), and General Manager Corporate Services.

Dr Loftus-Hills is a Fellow of The Australasian Institute of Mining and Metallurgy.

Presently Dr Loftus-Hills is the Chairman of the Audit as well as the Nomination and Remuneration Committees of the Group.

During the past three years Dr Loftus-Hills has also served as a director of NGM Resources Limited and resigned in December 2010.

Lindsay George Reed, BE (Mining), MBA, MAusIMM, MAICDChief Executive Officer – 50 years

Mr Reed has more than 20 years’ experience in the resource sector as a mining engineer, resources analyst and business development executive. He worked for RGC Ltd for eight years in a range of operational and management roles, before joining Perth stock broker Porter Western Ltd for four years as a resources analyst.

Mr Reed joined Murchison United Ltd as a corporate development manager and was instrumental in the acquisition of the Renison Bell tin mine from RGC Limited.

During the past three years Mr Reed has not served as a director of any other listed company.

Robert Edward Kirtlan Non-Executive Director – 53 years

Mr Kirtlan joined the Company on 21 November 2003, has over 15 years company management experience and spent 7 years in the global mining investment banking sector in Perth, Sydney and New York, working for major global investment banks with a specialist role in the mining and natural resources sector.

He has a background in finance and management with small companies. He was a founding shareholder and director of Cooper Energy Ltd, an emerging exploration and production oil and gas company.

Presently Mr Kirtlan serves on the Audit and Nomination and Remuneration Committees of the Group.

Mr Kirtlan is currently a director of the following listed companies:

• RMG Ltd – Appointed 29 April 2011;• Credo Resources Ltd – Appointed 30 November 2011.

During the past three years Mr Kirtlan has also served as a director of NGM Resources Ltd for 7 years and resigned in December 2010.

Directors’ Report

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Pieter Jacobus Britz, BENG( Industrial) Pr Eng, MBA Non-Executive Director – 45 years (Appointed 24 November 2011)

Mr Britz is a registered professional engineer with a wealth of experience in the resources industry since the early 1990’s. He began his career in the mining industry in South Africa where he worked as an engineer at the Sishen iron ore mine from 1992-1997. He also had various executive roles in corporate strategy and business consulting and managed various corporate level strategic initiatives. His experience also includes coal, base metals, heavy minerals and industrial minerals. In early 2004 he moved to Australia and set up Royal Bank of Canada’s investment banking division in Sydney. He joined The Sentient Group in early 2007 as investment professional. Mr Britz is a Member of AusIMM.

Mr Britz serves on the Audit as well as the Nomination and Remuneration Committees of the Group.

Mr Britz is currently also a director of the following listed company:

• East African Copper Ltd – Appointed 4 October 2011

During the past three years Mr Britz has served as a director of Geodynamics Ltd (resigned 24 February 2011) and Ivernia Inc. (resigned 15 June 2011).

Sarel Stefanus Weber, B.Comm, B. Comm Honours, CA(SA)Company Secretary – 42 years (Appointed 16 December 2011)

Mr Weber is a Chartered Accountant with 16 years’ experience in the Mining Industry. Before he joined Aviva, Mr Weber worked for Exxaro Resources Ltd for 16 years. Mr Weber held various senior financial positions in Exxaro’s mineral sands and coal division in South Africa and Australia. Most recently he was the Financial Manager and Company Secretary for Exxaro’s operations in Australia. Mr Weber has extensive experience in corporate finance, debt funding, joint ventures and tax planning/management.

ii. Interests in the shares and options of the CompanyAt the date of this report, the interests of the directors in the shares and options of Aviva Corporation Ltd were:

Shares OptionsGD Loftus-Hills (i) 100,000 500,000

LG Reed(ii) 6,200,000 1,500,000

RE Kirtlan 3,481,600 -

PJ Britz(iii) 17,500,000 -

27,281,600 2,000,000

(i) Options expiring 1 July 2014

(ii) Options expiring 31 December 2013

(iii) Mr Britz was appointed on 24 November 2011 and is an executive of Sentient who holds 17.5 million shares in Aviva Corporation Ltd

2. PRINCIPAL ACTIvITIESThe principal activities during the year of the entities within the Consolidated Entity are mineral exploration and project development.

3. OPERATING RESULTS FOR THE YEARThe net consolidated loss for the year after income tax amounted to $2,323,281 (2011: $2,437,017).

The Group has not reached a stage in its development where it is generating an operating profit. All of the Group’s efforts go into project exploration and development.

At the end of the financial year the Group had cash on hand including term deposits of $1,070,406 (2011: $2,041,910). The Group raised funds of $6,000,000 less costs of $372,750 from the issue of equity in August 2011 (2011: $2,951 955). In June 2012 convertible notes were issued to Aviva’s largest shareholder Sentient Executive GP Iv Ltd to raise cash proceeds of $750,000. During the year the Group paid for $5,359,379 (2011: $2,913,904) of exploration expenditure. More information on the operating results, financial position and cash flow movements are included in the Financial Statements included in this Annual Report.

During the year the Group has continued its principal activities in Australia, Kenya and Botswana. A full review of operations is set out in the Operations Report section of the 2012 Annual Report.

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ReportDirectors’

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4. DIvIDENDSNo dividend has been declared or paid by the Consolidated Entity since the end of the previous financial year and the directors do not at present recommend a dividend.

5. LIKELY DEvELOPMENTS, ExPECTED RESULTS AND FUTURE BUSINESS STRATEGIES The sale of Aviva Mining Kenya to African Barrick Gold will be completed once the Kenyan Competition Authority approval for the transaction has been obtained. On completion of this sales transaction the group will cease to hold any interests in the West Kenyan gold and base metal assets. The Group will continue the evaluation of its mineral projects which includes the coal based energy assets in Botswana and Western Australia and undertake generative work to identify and acquire new resource projects. Other than as referred to in this report, due to the nature of the business, future information as to likely developments in the operations of the Consolidated Entity and likely results of those operations in future financial years would, in the opinion of the directors, be speculative.

6. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRSAviva achieved the 51% earn – in milestone on its West Kenya Joint venture with Afriore International (Barbados) Limited (a full subsidiary of Lonmin Plc.) in October 2011.

During the year under review Aviva also completed a maiden resource on the Bumbo Base Metal deposit, this resource was upgraded to an indicated category in the June 2012 quarter.

In June 2012 Aviva announced that it had received an approach regarding a potential material corporate transaction. The investigation of this transaction has resulted in Aviva not being in a position to raise funds by way of an equity capital raising, as the status of the transaction remained incomplete at that point in time.

Accordingly, Aviva agreed to issue convertible notes to the company’s major shareholder, Sentient Executive GP Iv Limited to raise $750,000.

Since the end of the reporting period, in July 2012, Aviva entered a binding sale and purchase agreement with African Barrick Gold plc. to sell all of its Kenyan gold and base metal assets for an initial cash payment of $20 million. The only outstanding condition to complete this transaction is the approval of the Kenyan Competition Authority. On completion of this sales transaction the group will cease to hold any interests in the West Kenyan gold and base metal assets.

The Directors again reviewed the Coolimba Power and Central West Coal projects. As a result of environmental approval not being granted for the Central West Coal project and the fact that the Group has been unable to secure a contract to supply future power production to a third party at this time, the Directors continued to form the view that the exploration expenditure on these projects should be impaired. At 30 June 2012 impairment losses of $9,779 were recognised in the Statement of Comprehensive Income.

During June 2011 the Botswana Government initiated a Coal Road Map review to study the development of the country’s coal resources. The outcome of these studies was presented to key stakeholders on 31 January 2012.

Notwithstanding the positive developments on the Botswana Government Coal Road Map Review the Company still considers it is appropriate to continue to hold this project at nil value. At 30 June 2012 impairment losses of $238,633 were recorded in the Statement of Comprehensive Income. There have been no other significant changes in the state of affairs of the Consolidated Entity during the current year.F

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7. SIGNIFICANT EvENTS AFTER BALANCE DATEOn 23 July 2012 Aviva announced it has entered into a binding sale and purchase agreement with African Barrick Gold plc. (“ABG” LSE: ABG) to sell Aviva Mining Kenya Limited(“AMK”) for an initial cash payment of $20 million. AMK held all of Aviva’s Kenyan gold and base metals assets when the transaction was announced. There is a further payment of $10 million due to Aviva if a National Instrument 43-101 (“NI 43-101”) compliant indicated resource of 3 million ounces or more is declared over the project areas.

The transaction is subject to several conditions precedent. At date of this report all the conditions precedent were satisfied, except for the approval of the Kenyan Competition Authority. This approval which will lead to completion of the sales transaction is expected to be obtained in October 2012.

Since the end of the financial year no other matters or circumstances have occurred that have or may significantly affect the operations or the state of affairs of the Consolidated Entity in subsequent financial years.

8. REMUNERATION REPORT (AUDITED)This report details the nature and amount of remuneration for each director of Aviva Corporation Limited and controlled entities, and for the executives in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purposes of this report, key management personnel (KMP) of the Company and the Group are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Consolidated Entity, directly or indirectly. This information has been audited as required by Section 308(3C) of the act.

Details of key management personnel of the Consolidated Entity

i. DirectorsGD Loftus-Hills Chairman, Non-Executive and Independent Director LG Reed Chief Executive OfficerRE Kirtlan Non-Executive DirectorPJ Britz Non-Executive Director – Appointed 24 November 2011

ii. ExecutivesSC Jones Chief Financial Officer – Resigned 29 July 2011GW Edwards Exploration Manager BP Boyle Company Secretary – Resigned 16 December 2011SS Weber Chief Financial Officer – Appointed 1 December 2011 and Company Secretary – Appointed 16 December 2011

Mr Boyle was the Company Secretary until 16 December 2011 and is not considered part of the key management personnel as he did not have the authority and responsibility for planning, directing and controlling the major activities of the Company and its controlled entities. However, under the Corporations Act 2001 Mr Boyle met the definition of a company executive.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee of the Board of Directors is responsible for determining and reviewing remuneration arrangements for the Directors and Executives. The Nomination and Remuneration Committee consist of the three Non-Executive Directors.

The Nomination and Remuneration Committee assesses the appropriateness of the nature and amount of remuneration of executives on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality, high performing director and executive team.

The Board approve the remuneration arrangements of the CEO and other executives, following recommendations from the Nomination and Remuneration Committee. The CEO attends the nomination and remuneration committee meetings by invitation, but is not present during any discussion related to his own remuneration arrangements.

Remuneration policy

The remuneration policy of Aviva Corporation Limited has been designed to align director and executive objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific long-term incentives. (e.g. options). The Board of Aviva Corporation Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best executives and directors to run and manage the Group, as well as create goal congruence between directors, executives and shareholders. A discussion of the Company’s performance is included in item 3 above. F

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8. REMUNERATION REPORT (AUDITED) CONTINUED

Fixed remuneration is reviewed annually by the Nomination and Remuneration Committee. The process consists of a review of company, business unit and individual performance, relevant comparative remuneration externally and internally and, where appropriate, external advice on policies and practices. The Nomination and Remuneration Committee accesses external advice independent of management where required.

Executives are given the opportunity to receive their fixed (primary) remuneration in a variety of forms including cash and superannuation contribution. It is intended that the manner of payment chosen will be optimal for the recipient without creating undue cost for the Group. The fixed remuneration component of executives and the discretionary bonus paid to executives is detailed in Figure 3 below.

The CEO, Chairman and other key management personnel have been granted options to acquire ordinary shares of the Company. The Board believes that options are an effective remuneration tool which preserves cash reserves of the Group whilst providing valuable remuneration. Under the Employees and Executives’ Options Plan, options may not be exercised for an agreed period from grant and may be cancelled at any time during the option term should the Company terminate employment for reasons of serious misconduct.

The Nomination and Remuneration Committee considers that equity participation by way of the grant of options is appropriate to attract the high quality executives that are required to assist with the development of the Group, in addition to contributing to the preservation of the Consolidated Entity’s cash reserves. The options granted have no direct performance requirements but are in substance, a performance incentive which allows executives to share the rewards of the success of the Company. The Company’s performance for the last five years can be seen in Figure 4 (page 17).

As part of the terms and conditions of employment, the Company prohibits executives and directors from entering into arrangements to protect the value of unvested options and share awards. This includes entering into contracts to hedge their exposure to options or shares granted as part of their remuneration package. Adherence to this policy is monitored on an annual basis.

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Non-Executive Director’s remuneration

The Board policy is to remunerate Non-Executive Directors at market rates for time, commitment and responsibilities. The Board determines payments to Non-Executive Directors and reviews their remuneration regularly. The maximum aggregate amount of directors’ fees that can be paid to Non-Executive Directors is subject to approval by shareholders at the Annual General Meeting. The latest determination was prior to June 2002 when shareholders approved an aggregate remuneration of $200,000 per year and an increase will not be seeked at the Annual General Meeting scheduled for 21 November 2012. Non-Executive Directors also do not receive any retirement benefits.

Executive and key management personnel remuneration

The remuneration structure for key management personnel is based on a number of factors, including length of service, particular experience of the individual concerned and their role within the organisation. The contracts of service between the Group and key management personnel are on a continuing basis, the terms of which are not expected to change in the near future.

Employment contracts

Chief Executive OfficerLG Reed is employed under a rolling contract. The current employment contract commenced on 12 March 2002 and is amended regularly. Under the terms of the present contract Mr Reed receives a fixed remuneration of $250,000 per annum (2011: $250,000). Mr Reed’s employment is based on normal industry standard employment terms and conditions.

Other executivesAll executives have rolling contracts.

All contractsThe Company may terminate employment agreements by providing three months written notice or providing payment in lieu of the notice period plus leave entitlements.

The Company may terminate the contract at any time without notice if serious misconduct has occurred. Where termination with cause occurs the executive is only entitled to that portion of remuneration that is fixed, and only up to the date of termination. There is no termination payments provided in any employment contracts.

Where contracts are terminated the Board has the discretion to allow the executive to retain any issued options that are not yet exercised.

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ReportDirectors’

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8. REMUNERATION REPORT (AUDITED) CONTINUED

Remuneration of key management personnel and the five highest paid executives of the Consolidated Entity

Table 3. Remuneration for the year ended 30 June 2012

Key management personnel and position

Short-term benefits Share based payment

Post employment benefit

Long-Term Benefits

Total Option related remuneration as % of total (f)

Salary and fees

Cash bonus

Non-monetary benefits (e) Options Superannuation

Long-Service Leave

$ $ $ $ $ $ $GD Loftus-HillsChairman 41,250 - 5,779 52,749 (i) - - 99,778 53LG ReedCEO 234,225 20,000 5,779 25,097 (ii) 15,775 3,838 304,714 8RE KirtlanNon-Executive Director 46,000 - 5,779 - - - 51,779 -PJ Britz Non-Executive Director (a) 18,123 - 5,779 - - - 23,902 -SC JonesCFO (b) 17,116 - 67 - 1,307 - 18,490 -GW EdwardsExploration Manager 202,064 25,000 801 8,320 (iii) 18,186 - 254,371 3BP BoyleCompany Secretary (c) 40,033 - 2,489 - - - 42,522 -SS WeberCFO and Company Secretary (d) 145,833 30,000 3,223 1,017 (iv) 9,202 - 189,275 1

744,644 75,000 29,696 87,183 44,470 3,838 984,831

(a) Appointed 24 November 2011

(b) Resigned 29 July 2011

(c) Resigned 16 December 2011

(d) Appointed as CFO 1 December 2011, Appointed as Company Secretary 16 December 2011.

(e) Non-monetary benefits are Directors and Officers insurance and Workers Compensation insurance premiums paid.

(f) Options granted are based on service conditions and have no performance related conditions attached. The nature of the options granted to key management personnel serves to align the interest of key management personnel with the interest of the shareholders. There were no alterations to the terms and conditions of options awarded as remuneration since their award date.

(i) After attaining shareholder approval on 30 August 2011 at a General Meeting of Shareholders, Dr Loftus-Hills received 500,000 Options, split into two tranches of 250,000 options with exercise prices of $0.25 and $0.35 respectively and an expiry date of 1 July 2014, for no consideration. 250,000 options vested immediately and 250,000 have a vesting date of 1 July 2012.

(ii) After attaining shareholder approval on 17 November 2010 at the Company’s Annual General Meeting of Shareholders, Mr Reed received 1,500,000 Options, split into two tranches of 750,000 options with exercise prices of $0.20 and $0.30 respectively and an expiry date of 31 December 2013, for no consideration. The fair value of the options granted to Mr Reed is $119,745 which is being amortised over the applicable vesting period.

(iii) Under the Executive and Employee Option Plan on 5 October 2010, Mr Edwards received 1,000,000 Options, split into 2 tranches of 500,000 with exercise prices of $0.20 and $0.30 respectively and an expiry date of 31 December 2013, for no consideration. The fair value of the options granted to Mr Edwards is $44,497 which is being amortised over the applicable vesting period.

(iv) Under the Executive and Employee Option Plan on 9 May 2012, Mr Weber received 1,000,000 Options, split into 2 tranches of 500,000 with exercise prices of $0.20 and $0.30 respectively and an expiry date of 30 June 2015, for no consideration. 500,000 have a vesting date of 1 January 2013 and the remaining 500,000 vest on 1 July 2013. The fair value of the options granted to Mr Weber is $5,500.

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Table 4. Remuneration for the year ended 30 June 2011

Key management personnel and position

Short-term benefits Share based payment

Post employment benefit

Long-Term Benefits

Total Option related remuneration

as % of total (m)

Salary and fees

Cash bonus

Non-monetary benefits (l) Options Superannuation

Long-Service Leave

$ $ $ $ $ $ $AM IannelloChairman (g) 15,220 - 4,795 - - - 20,015 -GD Loftus-HillsChairman (h) 22,400 - 4,795 - (v) - - 27,195 -LG ReedCEO 234,801 - 4,795 94,649 (vi) 15,199 3,922 353,366 27RE KirtlanNon-Executive Director 60,000 - 4,795 - - - 64,795 -SC JonesCFO 129,080 - 4,795 - 12,605 - 146,480 -GW EdwardsExploration Manager (i) 197,248 - 730 36,176 (vii) 17,752 - 251,906 14BP BoyleCompany Secretary (j) 93,525 - 4,795 - - - 98,320 -GI SmithCompany Secretary (k) 5,027 - - - - - 5,027 -

757,301 - 29,500 130,825 45,556 3,922 967,104

(g) Resigned 17 November 2010

(h) Appointed 17 November 2010

(i) Appointed 14 June 2010

(j) Appointed 1 August 2010

(k) Resigned 1 August 2010

(l) Non-monetary benefits are Directors and Officers insurance and Workers Compensation insurance premiums paid.

(m) Options granted had no performance related conditions attached. The nature of the options granted to key management personnel serves to align the interest of key management personnel with the interest of the shareholders. There were no alterations to the terms and conditions of options awarded as remuneration since their award date.

(v) After attaining shareholder approval on 30 August 2011 at a General Meeting of Shareholders, Dr Loftus-Hills received 500,000 Options, split into two tranches of 250,000 options with exercise prices of $0.25 and $0.35 respectively and an expiry date of 1 July 2014, for no consideration.

(vi) After attaining shareholder approval on 17 November 2010 at the Company’s Annual General Meeting of Shareholders), Mr Reed received 1,500,000 Options, split into two tranches of 750,000 options with exercise prices of $0.20 and $0.30 respectively and an expiry date of 31 December 2013, for no consideration. The fair value of the options granted to Mr Reed is $119,745.

(vii) Under the Executive and Employee Option Plan on 5 October 2010, Mr Edwards received 1,000,000 Options, split into 2 tranches of 500,000 with exercise prices of $0.20 and $0.30 respectively and an expiry date of 31 December 2013, for no consideration. The fair value of the options granted to Mr Edwards is $44,497.

Table 5. value of options awarded, exercised and lapsed during the year ended 30 June 2012

Value of options granted during the year

Value of options exercised during the year

Value of options lapsed during the year

Remuneration consisting of share options for the year

$ $ $ %GD Loftus-Hills 53,069 - - 53SS Weber 5,500 - - 1

For details of valuation of options including models and assumptions used, please refer to Note 25.

Table 6. value of options awarded, exercised and lapsed during the year ended 30 June 2011

Value of options granted during the year

Value of options exercised during the year

Value of options lapsed during the year

Remuneration consisting of share options for the year

$ $ $ %L.G Reed 119,745 - - 27GW Edwards 44,497 - - 14

For details of valuation of options including models and assumptions used, please refer to Note 25.

END OF AUDITED REMUNERATION REPORT

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Auditor Independence and Non-Audit ServicesThe Board of Directors is satisfied that the provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the services disclosed below did not compromise the external auditors’ independence for the following reasons:

• all material non-audit services are reviewed and approved by the Board of Directors prior to commencement to ensure that they do not adversely affect the integrity and objectivity of the auditor; and

• the nature of the services provided does not compromise the general principles relating to auditor independence as set out in APES110 Code of Ethics for Professional Accountants.

The following fees for non-audit services were paid to the external auditors during the year ended 30 June 2012:

• Tax Compliance Services $42,702 (2011: $40,202).

9. AUDITORS’ INDEPENDENCE DECLARATIONThe Auditors’ Independence Declaration for the year ended 30 June 2012 is included at page 23 and forms part of this Directors’ Report.

10. CORPORATE GOvERNANCEIn recognising the need for the highest standard of corporate behaviour and accountability, the Directors support and have adhered to the principles of corporate governance. The Consolidated Entity’s corporate governance statement is included in the annual report immediately after the Auditors’ Independence Declaration.

11. SHARE OPTIONS At the date of this report 7,000,000 options to acquire ordinary shares in Aviva Corporation Limited were on issue as follows:

Number Expiry Date Exercise Price Transferable/Non-Transferable500,000 31 December 2013 $0.20 Non Transferable (i)

500,000 31 December 2013 $0.30 Non Transferable (i)

750,000 31 December 2013 $0.20 Non Transferable (i)

750,000 31 December 2013 $0.30 Non Transferable (i)

1,000,000 18 March 2014 $0.12 Non Transferable (i)

2,000,000 18 March 2014 $0.12 Non Transferable (i)

250,000 01 July 2014 $0.25 Non Transferable (i)

250,000 01 July 2014 $0.35 Non Transferable (i)

500,000 30 June 2015 $0.20 Non Transferable (i)

500,000 30 June 2015 $0.30 Non Transferable (i)

(i) The options are non-transferable unless the Board, in its absolute discretion, permits options to be transferred

Option holders do not have any right, by virtue of the option, to participate in any share issue of the company or any related body corporate.

No options were exercised during the year or in the period up to the date of this report.For

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12. DIRECTORS’ MEETINGSThe number of meetings of Directors (including meetings of committees of Directors) held during the year and the number of meetings attended by each director is as follows:

Director Directors’ Meetings Eligible

to Attend

Directors’ Meetings Attended

Nomination and Remuneration

Committee Meetings Eligible

to Attend

Nomination and Remuneration

Committee Meetings Attended

Audit Committee Meetings Eligible

to Attend

Audit Committee Meetings Attended

GD Loftus-Hills 5 5 1 1 2 2LG Reed 5 5 1 1 2 2RE Kirtlan 5 4 1 1 2 2PJ Britz 3 3 - - 1 1

Mr Reed is not a member of the Nomination and Remuneration Committee or the Audit Committee but attend by invitation. Mr Britz was appointed as a Board member on 24 November 2011 and therefore was only eligible to attend 3 Board meeting and 1 Audit Committee meeting. Mr Britz was also appointed as a Nomination and Remuneration Committee member on 6 July 2012.

In addition to formal Board meetings, Directors held a number of informal single purpose meetings culminating in the passing of circular resolutions relating to the business discussed. During the year there were 5 such occasions.

13. INSURANCE AND INDEMNITY OF DIRECTORS AND OFFICERSUnder Aviva’s constitution, unless arising out of conduct involving a lack of good faith, Aviva must indemnify, to the extent permitted by law, each director, secretary, executive officer and employee of Aviva against:

i. any liability incurred by each such person in their capacity as director, secretary, executive officer or employee, as the case may be:ii. any liability incurred:

• in defending civil or criminal proceedings in which judgement is given in their favour or in which they are acquitted;• in connection with any application relating to such proceedings in which relief is granted to them under the Corporations Act or the

corresponding law of another jurisdiction; or• in connection with any investigation of any kind relating to the affairs or conduct of Aviva in which they are examined or required to give

evidence or produce documents.

Each of the Directors named in this report has the benefit of this indemnity, which extends to all Directors, secretaries, executive officers and employees of Aviva.

No amount was paid under these indemnities during the financial year ended 30 June 2012 or since that date.

The Constitution permits Aviva to pay or agree to pay premiums in respect of any contract of insurance which insures any person who is or has been a director, secretary, executive officer or employee of Aviva against any liability incurred by that person in any such capacity and being a liability:

• for costs and expenses in defending proceedings (whether civil or criminal), whatever their outcome; and• not arising out of conduct involving a wilful breach of duty or which contravenes Section 182 and 183 of the Corporations Act.

Aviva has insurance cover in respect of amounts that Aviva may have to pay under any of the indemnities set out above at an annual cost for 2012 of $24,891 (2011: $24,395).

14. RISK MANAGEMENTThe Group takes a proactive approach to risk management including monitoring actual performance against budgets and forecasts. The Board is responsible for ensuring that risks, and also opportunities, are identified on a timely basis and that the Consolidated Entity’s objectives and activities are aligned with the risks and opportunities identified by the Board.

Risk Management forms part of all strategic, business planning and day to day operational activities. Business Risks are determined on a project by project basis and continuously evaluated with a view to establish an acceptable level of risk in each area. The Board reviews the consolidated risk appetite for residual risks and ensures it is aligned with the Aviva group strategy. Aviva senior management reviews all the risks registers per project on a quarterly basis and compiles a consolidated risk register and presents it to the Board. Strategies are developed for all the material risks on the consolidated risk register. On an annual basis the board reviews the company’s policies on risk management to satisfy itself that management has developed and implemented a sound system of risk management and internal control.

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CONTINUED

15. ENvIRONMENTAL REGULATIONS AND PERFORMANCEThe Group is required to carry out the exploration and evaluation of its mining tenements in accordance with various country and state government Acts and Regulations.

In regard to environmental considerations, the Group is required to obtain approval from various country and state regulatory authorities before any exploration requiring ground disturbance is carried out. It is normally a condition of such regulatory approval that any area of ground disturbed during the Group’s activities is rehabilitated in accordance with various guidelines.

There have been no significant known breaches of the consolidated entity’s license conditions or any environmental regulations to which it is subject.

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

GD Loftus-Hills Chairman

Perth 27 September 2012

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TO THE DIRECTORS’ OF AvIvA CORPORATION LIMITED

Independence DeclarationAuditor’s

In relation to our audit of the financial report of Aviva Corporation Ltd for the financial year ended 30 June 2012, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.

Auditor's Independence Declaration to the Directors of Aviva Corporation Ltd

Ernst & Young

G A BuckinghamPartnerPerth27 September 2012

Ernest & Young Building11 Mounts Bay RoadPerth WA 6000 AustraliaGPO Box M939 Perth WA 6843

Tel: +61 8 9429 2222Fax: +61 8 9429 2436www.ey.com/au

GB;HG;AVIVA;014 Liability limited by a scheme approvedunder Professional Standards Legislation

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Aviva Corporation Limited’s (“Aviva Group”) Corporate Governance Statement is structured with reference to the “Corporate Governance Principles Recommendations” as promulgated by the ASx Corporate Governance Council (the Council) with 2010 Amendments:

Principle 1 Lay solid foundation for management and oversightPrinciple 2 Structure the Board to add valuePrinciple 3 Promote ethical and responsible decision makingPrinciple 4 Safeguard integrity in financial reportingPrinciple 5 Make timely and balanced disclosurePrinciple 6 Respect rights of shareholdersPrinciple 7 Recognise and manage risksPrinciple 8 Remunerate fairly and responsibly

The Aviva Group’s compliance with the ASx Corporate Governance Recommendations is detailed below. Where a recommendation is not followed there is an accompanying explanation of why it is not followed.

PRINCIPLE 1: LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OvERSIGHTRecommendation 1.1

The role of the Board is to oversee and guide the management of the Aviva Group with the aim of protecting and enhancing the interests of its shareholders, taking into account the interests of other stakeholders, including employees, (future) customers, suppliers and the wider community.

The Board has an approved delegation of authority framework that clearly establishes the respective responsibilities of the Board and senior executives.

In addition The Board has a Charter which describes the relationship between the Board and management and their respective functions and responsibilities.

The responsibilities of the Board include:

• Approving the Company’s strategic and operating objectives and monitoring the implementation by management;• Reviewing and ratifying the Company’s financial position, systems of risk management and internal compliance and control, codes of

conduct and legal compliance;• Approving and monitoring the progress of major capital expenditure, capital management and acquisitions and divestments;• Approving the appointment and remuneration of directors and reviewing their performance;• Recommending the appointment of the external auditors and monitoring their performance;• Evaluating the performance of the CEO and setting the basis for determining corporate remuneration bases;• Ensuring that policies and procedures in place are consistent with the Company’s objectives; and • Monitoring that the Company and its officers act legally, ethically and responsibly in all matters.

A copy of the Board charter is available on the Company’s website.

Recommendation 1.2

The Nomination and Remuneration Committee considers the Chairman’s performance evaluation of the CEO on an annual basis against measurable and qualitative criteria and makes recommendations to the Board. The CEO does an annual performance evaluation of the senior executives of the Aviva Group which is reviewed and evaluated by the Board. These evaluations are done on the basis of the performance criteria agreed in the contracts of the senior executives.

The Chief Executive Officer is responsible to the Board for the day-to-day management of the Aviva Group, including the review of remuneration and performance of senior executives.

In accordance with ASx Principles 1.2 and 2.5 the Nomination and Remuneration Committee evaluates performance at least annually and it is based on a number of criteria.

The roles and responsibilities of the Company’s Board and management are consistent with those set out in ASx Principle 1.

Governance StatementCorporate

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PRINCIPLE 2: STRUCTURE THE BOARD TO ADD vALUERecommendation 2.1

The Board is currently comprised of 4 directors with:

• three Non-Executive Directors, including the Chairman; and • one Executive Director.

Directors are expected to bring independent views and judgment to the Board’s deliberations.

In considering whether a director is independent, the Board considers the independence criteria in ASx Principle 2 and other facts, information and circumstances deemed by the Board to be relevant. The Board assesses the independence of new directors upon appointment and reviews their independence, and the independence of the other directors, at other times as appropriate.

The test of whether a relationship is material is based on the nature of the relationship and the circumstances of the director. Materiality is considered from the perspective of the Group, the director, and the person or entity with which the director has a relationship.

The Board considers Dr Loftus-Hills (Chairman) to be an independent Director in accordance with the criteria set out in ASx Principle 2.

Mr Reed is actively involved in the activities of the Group as the Chief Executive Officer and hold interests in the Company. Mr Kirtlan was employed in an executive capacity less than 3 years ago. Mr Britz is an employee of the Sentient Group the largest shareholder in Aviva. Messrs Reed, Kirtlan and Britz are therefore not regarded as independent directors.

The Directors in office at the date of this report, their skills and expertise, the year of each director’s appointment and each Director’s status as an independent, non-executive or executive director are set out in the Directors’ Report forming part of the Annual Report.

Departure from the RecommendationsAlthough the Company does not currently comply with Recommendation 2.1, the Company considers that at this stage of the Company’s development, the Company’s shareholders’ best interests are being served by the current Directors, who hold a vested interest in its performance. The Company will at an appropriate time move towards seeking further independent Director/s to comply with Recommendation 2.1.

Recommendation 2.2

Dr Geoffrey Loftus-Hills the Chairman of the Aviva group is an independent director and does not currently hold any other directorships of listed companies.

Recommendation 2.3

The role of the Chief Executive Officer and the Chairperson is not exercised by the same individual as Mr Lindsay Reed is the Chief Executive Officer and Dr Geoffrey Loftus-Hills is the Chairman of the Aviva Group.

Recommendation 2.4

The Board has established a Nomination and Remuneration Committee. Aviva Group has combined the composition, operation and responsibilities of a standard Remuneration Committee and Nomination Committee into a joint committee. This committee consist of 3 members:

• Dr Geoffrey Loftus-Hills (Chairman of the Nomination and Remuneration Committee)• Mr Robert Kirtlan• Mr Pieter Britz (Appointed 6 July 2012)

Details of meeting attendance for committee members are set out in the Directors’ Report that forms part of the Annual Report.

A copy of the charter for the Nomination and Remuneration Committee is available on the Company’s website.

Knowledge, skills and experienceAll Directors are expected to maintain the skills required to discharge their obligations to the Company. Directors are provided with papers and briefings on Aviva Group activities.

Directors are also encouraged to undertake continuing education and training relevant to the discharge of their obligations as Directors of the Company. To assist them to maintain an appropriate level of knowledge of company activities, directors may undertake site visits.

The skills, experience, expertise and period of office held by each director are included in the Directors Report section of the Annual report.

Conflicts of interestDirectors are required to advise the Company of any relevant interests that may result in a conflict of interest. Directors are required to avoid conflicts of interest and immediately inform their fellow Directors should a conflict of interest arise.

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Governance StatementCorporate

CONTINUED

PRINCIPLE 2: STRUCTURE THE BOARD TO ADD vALUE CONTINUED

Recommendation 2.4 CONTINUED

Where a matter in which a Director has a material personal interest is being considered by the Board, unless all of the other Directors have passed a resolution to enable that Director to do so, that Director must not be present when the matter is being considered. Regardless, the Director shall not vote on that matter.

Recommendation 2.5

Review of Board performanceThe Chairman, at least once each year, facilitates a self-evaluation performance review covering the Board and all of its standing committees. The results are considered by the Board as part of its annual planning session. The evaluation criteria include:

• relevance of the Board’s role and responsibilities;• Board composition appointments, professional knowledge and competence;• Board leadership, teamwork and relationship with Management;• conduct of meetings, strategic awareness and the effectiveness thereof;• self-evaluation and evaluation of the CEO’s and Company Secretary’s performance;• general conduct, including ethics, stakeholder relations and endowments.

Board access to information and independent adviceAll Directors have unrestricted access to employees of the Aviva Group and, subject to the law, access to all of the Group’s records and information held by Aviva Group employees and external advisers. The Board receives regular detailed financial and activity reports from senior management to enable it to carry out its duties.

Consistent with ASx Principle 2, each Director may, with the prior approval of the Chairman, obtain independent professional advice to assist the Director in the proper exercise of powers and discharge of duties as a director or as a member of a Board committee. The Company will reimburse the director for the reasonable expenses of obtaining such advice.

PRINCIPLE 3: PROMOTE ETHICAL AND RESPONSIBLE DECISION-MAKINGRecommendation 3.1

The Board has adopted a Code of Conduct to guide the Directors and Employees and promote high ethical and professional standards and responsible decision-making.

Employees and Directors are expected to respect the law, properly use group assets, maintain confidentiality, avoid conflicts of interest, contribute to the company’s reputation as a good corporate citizen and act in the best interests of shareholders.

The Board’s Code of Conduct is consistent with ASx Principle 3. The Code of Conduct is available on the Company’s website.

Recommendation 3.2

The Board of Aviva has an approved Diversity Policy. A copy of the diversity policy is included on the Company’s website. The Company encourages diversity in employment, and in the composition of its Board, as a means of ensuring that the Company has access to an appropriate mix of skills and talents to enable it to conduct its business and achieve the Company’s goals in an effective manner.

The Company will promote diversity and foster an environment within the Company that respects diversity in the work place and promotes equal opportunities for employment and a work environment that is free from harassment.

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Recommendation 3.3

The Board proactively monitor Company performance in meeting the standards and policies outlined in the Diversity Policy. This includes an annual review of the diversity objectives set by the Board, and its progress in achieving them. The next review of the diversity objectives are set for November 2012.

Recommendation 3.4

The company currently has 4 women employees, of which 2 is based in the corporate office and one each on the Botswana and Kenyan projects. This represents approximately 25% of the permanent workforce of the Aviva Group as at 30 June 2012.

PRINCIPLE 4: SAFEGUARD INTEGRITY IN FINANCIAL REPORTINGRecommendation 4.1

Audit CommitteeThe Board has established an Audit Committee which monitors internal control policies and procedures designed to safeguard company assets and to maintain the integrity of both internal and external financial reporting, consistent with ASx Principle 4.

Structure of Audit CommitteeBecause the Company is not one of the S&P All Ordinary Top 300 Companies, it is exempt under Listing Rule 12.7 from maintaining an Audit Committee. However the Company continues to have an Audit Committee as a principle of best practice and in compliance with Recommendation 4.1.

The Chief Executive Officer, Chief Financial Officer and Company Secretary, the external auditor (Ernst & Young), and any other persons considered appropriate, attend meetings of the Audit Committee by invitation.

The Audit Committee also meets from time to time with the external auditor in the absence of management.

The Audit Committee has the following specific responsibilities (as set out in its Charter):

• reviewing with management, the appointment, performance, remuneration and terms of engagement of the external auditor and of their non-audit services;

• reviewing all general purpose financial reports of the Company, together with the external auditors and management, prior to submission to the Board;

• reviewing any changes in accounting policies or practices and subsequent effects on the general purpose financial reports; • monitoring and assessing the systems for internal compliance and control, continuous disclosure compliance and risk management;• reviewing the effectiveness of management information systems;• reviewing policies on sensitive issues or practices such as environmental issues;• reviewing significant transactions that are not a normal part of the Company’s business;• reviewing policies to avoid conflict of interest and reviewing past or proposed transactions between the Company and members of management;• reviewing reports on certain aspects of the Company’s superannuation plan and compliance with relevant laws and regulations; and• reviewing reports on adequacy of insurance coverage.

The composition, operations and responsibilities of the Audit Committee are consistent with ASx Principle 4. Details of meeting attendance for committee members are set out in the Directors’ Report to the Annual Financial Report.

Recommendation 4.2

The members of the Audit Committee are:

• Dr Geoffrey Loftus-Hills – Chairman and Independent Non-Executive Director; • Mr Robert Kirtlan – Non-Executive Director;• Mr Pieter Britz – Non-Executive Director.

Departure from the RecommendationsThe Company complies with Corporate Governance Council Recommendation 4.2 requirement to the extent that there should be 3 members and they are all non-executive directors. However, only one of the members is an Independent Director. This independent director Dr Geoffrey Loftus-Hills also acts as the chairperson of the Audit Committee and is also the chairperson of the Board. The Company considers at this stage of the Company’s development, that the Company’s shareholders’ best interests are being served by the current Directors and members of the Audit Committee who hold a vested interest in its performance. The Company will at an appropriate time move towards seeking further independent.

Directors who will then also serve on the Audit Committee. This will then also provide the opportunity to have separate chairpersons for the Board and Audit Committee.

The current membership of the Audit Committee includes non-independent Director, Mr Robert Kirtlan, who has past experience in financial management and financial reporting.

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Governance StatementCorporate

CONTINUED

PRINCIPLE 4: SAFEGUARD INTEGRITY IN FINANCIAL REPORTING CONTINUED

Recommendation 4.3

The Audit Committee Charter has a formal charter where it is called the Audit and Governance Commitee that is available on the Company’s website. The Audit Committee Charter sets out the audit committee’s responsibilities, composition, membership requirements and the procedures for inviting non-committee members to attend meetings.

PRINCIPLE 5: MAKE TIMELY AND BALANCED DISCLOSURERecommendation 5.1

Continuous disclosureThe Board has adopted a Continuous Disclosure Policy. The Continuous Disclosure Policy is available on the Company’s website.

The Company understands and respects that timely disclosure of price sensitive information is central to the operation of an efficient securities market and ensures:

• timely announcements are made to the ASx and Botswana Stock Exchange (BSE);• prevention of selective or inadvertent disclosure;• conduct of investor and analysts briefings; and• media communications.

The Company Secretary is the designated disclosure officer and has responsibility for overseeing and coordinating the disclosure of information by the company to the ASx and BSE and for referring matters relating to disclosure to the Board.

The Company’s Continuous Disclosure monitoring is consistent with ASx Principle 5.

PRINCIPLE 6: RESPECT THE RIGHTS OF SHAREHOLDERSRecommendation 6.1

Communications with shareholdersThe Company places considerable importance on effective communications with shareholders. A shareholder communication policy has been implemented and a copy of this policy is available on the Company’s website.

The Company’s communications strategy promotes the communication of information to shareholders through the annual report, half-year report, quarterly activities and cash-flow reports, announcements through the ASx/BSE and the media, regarding changes in its business, and the Chairman’s address at the Annual General Meeting. In addition, the Company publishes on its website a copy of Company presentations to investors and conferences, as well as a copy of research notes prepared periodically by stockbrokers, investment banks or other analysts.

The Company also provides shareholders with the opportunity to receive email alerts of significant announcements and advises of the availability of reports on the Company’s website. The Company regularly reviews its communication strategy and underlying policies and processes to ensure effective communication with shareholders are maintained.F

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PRINCIPLE 7: RECOGNISE AND MANAGE RISKRecommendation 7.1

Consistent with ASx Principle 7, the Company is committed to the identification; monitoring and management of risks associated with its business activities and has embedded, in its management and reporting systems, a number of risk management controls. Risk Management forms part of all strategic, business planning and day to day operational activities.

The Company has implemented an Enterprise Risk Management Framework. This Risk Management Framework is aligned with Principle 7 of the ASx Corporate Governance code and the AUS/NZ standard for risk management. The Company’s Risk Management Framework, risk management policy and risk management process is reviewed by the Board once a year. The risk matrix and the strategies to address the major risks are reviewed by the Board on a regular basis. Business Risks are determined on a project by project basis and continuously evaluated with a view to establish an acceptable level of risk in each area. Strategies to address and mitigate the material risks are developed and implemented. The Risk Charter for Aviva is available on the Company’s website.

Recommendation 7.2

On an annual basis the Board reviews the company’s policies on risk management to satisfy itself that management has developed and implemented a sound system of risk management and internal control.

Management is ultimately responsible to the Board for the group’s system of internal control and risk management. The Audit Committee assists the Board in relation to risk management and receives reports on risks associated with financial, legal, strategic and operational risks. The Company maintains a Risk Register, which sets out all the enterprise risks that have been identified and includes an assessment of the risk and treatment plans to mitigate the risks.

Recommendation 7.3

The Chief Executive Officer and Chief Financial Officer provide the Board with a written statement confirming that:

• the financial statements (as required under Section 295 A of the Corporation Act) was founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board; and

• the Company’s risk management and internal compliance and control system was operating efficiently and effectively in all material respects.

PRINCIPLE 8: REMUNERATE FAIRLY AND RESPONSIBLYRecommendation 8.1

The Board has established a Nomination and Remuneration Committee. Aviva Group has combined the composition, operation and responsibilities of a standard Remuneration Committee and Nomination Committee into a joint committee.

The Nomination and Remuneration Committee’s responsibilities include:

• reviewing remuneration of Directors and Committee members;• reviewing fixed and variable remuneration of the Chief Executive Officer (including the level of participation in the long term incentive plan);• reviewing recommendations from the Chief Executive Officer on fixed and variable remuneration for senior executives (including the level

and nature of participation in the long-term incentive plan); • reviewing and making recommendations on any equity based plans and other incentive schemes; • Consider the Chairman’s performance evaluation of the Board as a whole, Chief Executive Officer and Board Committees on an annual basis• arranging annual performance evaluations of senior executives of the company;• oversee the implementation of training plans arising from the evaluation process to ensure that the Board has the appropriate range of skills

and expertise;• reviewing and recommend human resources policies and practices for senior executives;• review Aviva’s recruitment, retention and termination policies;• review of Board and committee size and composition to ensure it is conducive and effective in making decisions;• develop and implement processes to identify suitable candidates for nomination or appointment to the Board;• develop and implement an induction program to allow new Directors to participate fully and actively in Board decision making as soon

as possible;• Monitor progress towards achieving objectives set out in the diversity policy;• Review and if appropriate recommend amendments to superannuation arrangements.

A copy of the charter for the Nomination and Remuneration Committee is available on the Company’s website.

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Governance StatementCorporate

CONTINUED

PRINCIPLE 8: REMUNERATE FAIRLY AND RESPONSIBLY CONTINUED

Recommendation 8.2

The Nomination and Remuneration Committee consist of 3 members:

• Dr Geoffrey Loftus-Hills – Chairman of the Nomination and Remuneration Committee and Independent Director;• Mr Robert Kirtlan – Non-Executive Director;• Mr Pieter Britz (Appointed 6 July 2012) – Non-Executive Director.

Details of meeting attendance for Committee members are set out in the Directors’ Report to the Annual Report.

Departure from the RecommendationsThe Company complies with Corporate Governance Council Recommendation 8.2 requirement to the extent that there should be 3 members and they are all Non-Executive Directors. However only one of the members is an Independent Director. This Independent Director Dr Geoffrey Loftus-Hills also acts as the chairperson of the Nomination and Remuneration Committee and is also the chairperson of the Board. The Company considers at this stage of the Company’s development, that the Company’s shareholders’ best interests are being served by the current Directors and members of the Nomination and Remuneration Committee. The Company will at an appropriate time move towards seeking further independent Directors who will then also serve on the Nomination and Remuneration Committee. This will also provide the opportunity to have separate chairpersons for the Board and Nomination and Remuneration Committee.

Recommendation 8.3

Board remuneration

Remuneration poolThe current annual remuneration pool for non-executive directors is $200,000.

Details of Director and senior executive remuneration are set out in the Remuneration Report, which forms part of the Directors’ Report to the Annual Financial Report.

The Remuneration Report also sets out details of remuneration practices and policies of the Aviva Group.

The Chairman has been granted a relatively small parcel of stock options, in addition to Director’s fees.

Please refer to the Company’s website: www.avivacorp.com.au for the Corporate Governance Statement under the Corporate Governance Section.

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Consolidated Statement of Comprehensive Income

Consolidated Entity

Notes 2012 $

2011 $

Interest revenue 6a 176,902 162,097

Other income 6b 80,058 187,557

Directors and employee benefits expense 7a (1,031,428) (945,258)

Share based payments 25 (171,183) (160,439)

Depreciation and amortisation expense 7b (50,660) (57,023)

Business development expense (6,539) (51,493)

Impairment of exploration expenditure 14 (248,412) (147,876)

Occupancy expenses 7c (153,901) (435,588)

Professional services expense (478,064) (388,215)

Public and investor relations expense (453,507) (384,538)

Foreign exchange gain/(loss) 4,026 (27,725)

Other expenses (31,955) (200,693)

Loss before income tax (2,364,663) (2,449,194)Income tax benefit 8a 41,382 12,177

Loss for the year (2,323,281) (2,437,017)Other comprehensive income - –

Total comprehensive loss for the year, net of tax (2,323,281) (2,437,017)

Basic loss per share (cents per share) 9 (1.44) (1.91)

Diluted loss per share (cents per share) 9 (1.44) (1.91)

The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

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Consolidated Statement of Financial PositionAS AT 30 JUNE 2012

Consolidated Entity

Notes 2012 $

2011 $

ASSETSCURRENT ASSETSCash and cash equivalents 10 670,406 2,041,910

Term deposits at banks 10 400,000 -

Trade and other receivables 11 389,987 193,108

Prepayments 12 60,854 76,051

1,521,247 2,311,069

Exploration Assets held for Sale 15 7,975,186 -

TOTAL CURRENT ASSETS 9,496,433 2,311,069

NON-CURRENT ASSETS

Plant and equipment 13 99,555 106,723

Deferred exploration and evaluation costs 14 - 2,766,028

TOTAL NON-CURRENT ASSETS 99,555 2,872,751TOTAL ASSETS 9,595,988 5,183,820

LIABILITIES

CURRENT LIABILITIES

Trade and other payables 16 438,314 329,403

Provisions 17 129,335 132,109

567,649 461,512

Liabilities associated with assets held for sale 15 77,041 -

TOTAL CURRENT LIABILITIES 644,690 461,512

NON-CURRENT LIABILITIES

Provisions 18 39,459 35,621

TOTAL NON-CURRENT LIABILITIES 39,459 35,621TOTAL LIABILITIES 684,149 497,133NET ASSETS 8,911,839 4,686,687

EQUITY

Equity attributable to equity holders of the parent Contributed equity 19 46,177,862 39,800,612

Reserves 20 1,386,456 1,215,273

Accumulated losses 21 (38,652,479) (36,329,198)

TOTAL EQUITY 8,911,839 4,686,687

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

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Consolidated Contributed Equity

Share Based Payment Reserves

Accumulated Losses

Total Equity

$ $ $ $As at 1 July 2010 36,848,657 1,054,834 (33,892,181) 4,011,310Other Comprehensive Income - - - -

Loss for the period - - (2,437,017) (2,437,017)

Total Comprehensive Loss for the year - - (2,437,017) (2,437,017)

Equity transactions:

Issue of ordinary shares 3,150,000 - - 3,150,000

Cost of share based payments

- Issue of options - 160,439 - 160,439

Cost of share issue (198,045) - - (198,045)

As at 30 June 2011 39,800,612 1,215,273 (36,329,198) 4,686,687

At 1 July 2011 39,800,612 1,215,273 (36,329,198) 4,686,687Other Comprehensive Income - - - -

Loss for the period - - (2,323,281) (2,323,281)

Total Comprehensive Loss for the year - - (2,323,281) (2,323,281)

Equity Transactions:

Issue of ordinary shares 6,000,000 - - 6,000,000

Cost of share based payments

- Issue of options - 171,183 - 171,183

Costs of Share issue (372,750) - - (372,750)

Convertible Notes issued 750,000 - - 750,000

As at 30 June 2012 46,177,862 1,386,456 (38,652,479) 8,911,839

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

Consolidated Statement of Changes in Equity

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FOR THE YEAR ENDED 30 JUNE 2012

Cash FlowsConsolidated Statement of

Consolidated Entity

Notes 2012 $

2011 $

Cash flows from operating activitiesPayments to suppliers and employees (2,297,158) (2,126,424)

Other receipts 114,127 179,419

Receipt of research and development tax rebate 12,177 236,952

Proceeds from disposal of assets - 8,138

Interest received 181,403 175,067

Net cash flows used in operating activities 22 (1,989,451) (1,526,848)

Cash flows from investing activities

Placements on term deposits (400,000) -

Receipts/(payments) from refund of security deposits 58,703 (156,895)

Payments for equipment (62,653) (72,915)

Payments for exploration assets now classified held for sale (5,110,967) -

Payments for exploration and evaluation (248,412) (2,913,904)

Net cash flows used in investing activities (5,763,329) (3,143,714)

Cash flows from financing activities

Receipts from share issues 6,000,000 3,150,000

Receipts from convertible note issue 750,000 -

Payments for share issue costs (372,750) (198,045)

Net cash flows from financing activities 6,377,250 2,951,955

Net decrease in cash and cash equivalents (1,375,530) (1,718,607)Cash at the beginning of the year 2,041,910 3,788,242

Net foreign exchange differences 4,026 (27,725)

Cash at the end of the year 10 670,406 2,041,910

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

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Notes to the Financial Statements

1. CORPORATE INFORMATION

The Financial Report of Aviva Corporation Limited (“the Company”) and controlled entities (“the Consolidated Entity” or “the Group”) for the year ended 30 June 2012 was authorised for issue in accordance with a resolution of the Directors on 27 September 2012.

Aviva Corporation Limited is a company limited by shares, incorporated and domiciled in Australia, and whose shares are publicly traded on the Australian Stock Exchange.

The nature of the operations and principal activities of the Consolidated Entity are mineral exploration and project development which is further described in the Directors’ Report.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board. The financial report has also been prepared on a historical cost basis.

The Financial Report is presented in Australian dollars.

(b) Going Concern

The financial report has been prepared on a going concern basis. In arriving at this position the Directors have had regard to the fact that the Consolidated Entity will have access to sufficient working capital to fund administrative and other committed expenditure for a period of not less than 12 months from the date of this report.

The consolidated entity recorded a loss of $2,323,281 for the year ended 30 June 2012 and had a net cash outflow of $7,752,780 in connection with its operating and investing activities during the year. The consolidated entity had cash and cash equivalents, including term deposits at 30 June 2012 of $1,070,406.

The Group’s forecast cashflow requirements for the 15 months ending 30 September 2013 reflects cash outflows from operating and investing activities in excess of its available cash resources at 30 June 2012. These requirements reflect a combination of committed and uncommitted but current planned expenditure. As referred to in note 29, Aviva announced on 23 July 2012 that it has entered into a binding sale and purchase agreement with African Barrick Gold plc. (“ABG” LSE: ABG) to sell Aviva Mining Kenya Limited (“AMK”) for an initial cash payment of $20 million. At the date of this report the only outstanding condition precedent to complete this transaction and for Aviva to receive $20 million is the approval of the Kenyan Competition Commission (“KCC”). Management is confident that the KCC will grant this approval shortly and the $20 million will be received. Should the approval be significantly delayed or not obtained, management are satisfied they will be able to source additional working capital to enable the group to meet their ongoing working capital commitments as and when required.

In the unlikely event that the KCC approval is not obtained and the group is unable to raise additional funds to meet the group’s ongoing working capital requirements when required there is a significant uncertainty as to whether the group will be able to meet its debts as and when they fall due and thus continue as a going concern.

The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, nor to the amounts or classification of liabilities that might be necessary should the group not be able to continue as a going concern.

(c) Compliance Statement

The financial report complies with Australian Accounting Standards as issued by the Australian Accounting Standards Board and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.

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(d) New Accounting Standards and Interpretation

From 1 July 2011 the Group has adopted all the Standards and Interpretations mandatory for annual periods beginning on or after 1 July 2011, including the following pronouncements:

• AASB 124: Related Party Disclosures (amendment) effective 1 January 2011;• AASB 2009-12: Amendments to Australian Accounting Standards; • AASB 2010-4: Amendments to Australian Accounting Standards arising from the Annual Improvements Project;• AASB 2010-5: Amendments to Australian Accounting Standards;• AASB 1054: Australian Additional Disclosures;• AASB 2010-6: Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial Assets [AASB 1 & AASB 7];• Improvements to AASBs (May 2010).

Adoption of these Standards and Interpretations did not have any effect on the financial position or performance of the Group.

A number of Australian Accounting Standards and Interpretations have been issued or amended but are not yet effective. The relevant pronouncements which have not been adopted by the Group are as follows:

AASB 1048: Interpretation of Standards. AASB 1048 identifies the Australian Interpretations and classifies them into two groups: those that correspond to an IASB Interpretation and those that do not. Entities are required to apply each relevant Australian Interpretation in preparing financial statements that are within the scope of the Standard. The revised version of AASB 1048 updates the lists of Interpretations for new and amended Interpretations issued since the June 2010 version of AASB 1048.

AASB 2010-8: Amendments to Australian Accounting Standards – Deferred Tax. Recovery of Underlying Assets. These amendments address the determination of deferred tax on investment property measured at fair value and introduce a rebuttable presumption that deferred tax on investment property measured at fair value should be determined on the basis that the carrying amount will be recoverable through sale. The amendments also incorporate SIC-21 Income Taxes – Recovery of Re-valued Non-Depreciable Assets into AASB 112.

AASB 2011-9: Amendments to Australian Accounting Standards – Presentation of Other Comprehensive Income. This Standard requires entities to group items presented in other comprehensive income on the basis of whether they might be reclassified subsequently to profit or loss and those that will not.

AASB 10: Consolidated Financial Statements. AASB 10 establishes a new control model that applies to all entities. It replaces parts of AASB 127 Consolidated and Separate Financial Statements dealing with the accounting for consolidated financial statements and UIG-112 Consolidation – Special Purpose Entities. The new control model broadens the situations when an entity is considered to be controlled by another entity and includes new guidance for applying the model to specific situations, including when acting as a manager may give control, the impact of potential voting rights and when holding less than a majority voting rights may give control.

Consequential amendments were also made to other standards via AASB 2011-7.

AASB 11: Joint Arrangements. AASB 11 replaces AASB 131 Interests in Joint ventures and UIG-113 Jointly – controlled Entities – Non-monetary Contributions by ventures. AASB 11 uses the principle of control in AASB 10 to define joint control, and therefore the determination of whether joint control exists may change. In addition it removes the option to account for jointly controlled entities (JCEs) using proportionate consolidation. Instead, accounting for a joint arrangement is dependent on the nature of the rights and obligations arising from the arrangement. Joint operations that give the venturers a right to the underlying assets and obligations themselves is accounted for by recognising the share of those assets and obligations. Joint ventures that give the venturers a right to the net assets is accounted for using the equity method.

Consequential amendments were also made to other standards via AASB 2011-7 and amendments to AASB 128.

AASB 12: Disclosure of Interests in Other Entities. AASB 12 includes all disclosures relating to an entity’s interests in subsidiaries, joint arrangements, associates and structures entities. New disclosures have been introduced about the judgments made by management to determine whether control exists, and to require summarised information about joint arrangements, associates and structured entities and subsidiaries with non-controlling interests.

AASB 13: Fair value Measurement. AASB 13 establishes a single source of guidance for determining the fair value of assets and liabilities. AASB 13 does not change when an entity is required to use fair value, but rather, provides guidance on how to determine fair value when fair value is required or permitted. Application of this definition may result in different fair values being determined for the relevant assets. AASB 13 also expands the disclosure requirements for all assets or liabilities carried at fair value. This includes information about the assumptions made and the qualitative impact of those assumptions on the fair value determined.

Consequential amendments were also made to other standards via AASB 2011-8.

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Financial StatementsNotes to the

CONTINUED

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED

AASB 119: Employee Benefits. The main change introduced by this standard is to revise the accounting for defined benefit plans. The amendment removes the options for accounting for the liability, and requires that the liabilities arising from such plans is recognized in full with actuarial gains and losses being recognized in other comprehensive income. It also revised the method of calculating the return on plan assets. The revised standard changes the definition of short-term employee benefits. The distinction between short-term and other long-term employee benefits is now based on whether the benefits are expected to be settled wholly within 12 months after the reporting date.

Consequential amendments were also made to other standards via AASB 2011-10.

AASB 2011-4: Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements. This Amendment deletes from AASB 124 individual key management personnel disclosure requirements for disclosing entities that are not companies.

AASB 2012-2: AASB 2012-2 principally amends AASB 7 Financial Instruments: Disclosures to require disclosure of information that will enable users of an entity’s financial statements to evaluate the effect or potential effect of netting arrangements, including rights of set-off associated with the entity’s recognised financial assets and recognised financial liabilities, on the entity’s financial position.

AASB 2012-4: Amendments to Australian Accounting Standards Government Loans. AASB 2012-4 adds an exception to the retrospective application of Australian Accounting Standards under AASB 1 First-time Adoption of Australian Accounting Standards to require that first-time adopters apply the requirements in AASB 139 Financial Instruments: Recognition and Measurement (or AASB 9 Financial Instruments) and AASB 120 Accounting for Government Grants and Disclosure of Government Assistance prospectively to government loans (including those at a below-market rate of interest) existing at the date of transition to Australian Accounting Standards.

AASB 2012-5: Amendments to Australian Accounting Standards arising from Annual Improvements 2009-2011 Cycle– AASB 2012-5 makes amendments resulting from the 2009-2011 Annual Improvements Cycle. The Standard addresses a range of improvements, including the following:

• repeat application of AASB 1 is permitted (AASB 1); and• clarification of the comparative information requirements when an entity provides a third balance sheet (AASB 101 Presentation of

Financial Statements).

AASB 2012-3: Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities: AASB 2012-3 adds application guidance to AASB 132 Financial Instruments: Presentation to address inconsistencies identified in applying some of the offsetting criteria of AASB 132, including clarifying the meaning of “currently has a legally enforceable right of set-off” and that some gross settlement systems may be considered equivalent to net settlement.

AASB 9: Financial Instruments: AASB 9 includes requirements for the classification and measurement of financial assets. It was further amended by AASB 2010-7 to reflect amendments to the accounting for financial liabilities.

These requirements improve and simplify the approach for classification and measurement of financial assets compared with the requirements of AASB 139. The main changes are described below.

(a) Financial assets that are debt instruments will be classified based on (1) the objective of the entity’s business model for managing the financial assets; (2) the characteristics of the contractual cash flows;

(b) Allows an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument;

(c) Financial assets can be designated and measured at fair value through profit or loss at initial recognition if doing so eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities, or recognising the gains and losses on them, on different bases.

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(d) Where the fair value option is used for financial liabilities the change in fair value is to be accounted for as follows:

• The change attributable to changes in credit risk are presented in other comprehensive income (OCI);• The remaining change is presented in profit or loss.

If this approach creates or enlarges an accounting mismatch in the profit or loss, the effect of the changes in credit risk are also presented in profit or loss.

Consequential amendments were also made to other standards as a result of AASB 9, introduced by AASB 2009-11 and superseded by AASB 2010-7 and 2010-10. A full assessment has not yet been completed of the impact of all the new or amended Accounting Standards and interpretations issued but not effective.

(e) Basis of consolidation

The consolidated financial statements comprise the financial statements of Aviva Corporation Limited and its subsidiaries (the Group) as at 30 June each year or for any time during the year. The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies.

In preparing the consolidated financial statements, all inter-company balances and transactions, income and expenses and profit and losses resulting from intra-group transactions, have been eliminated in full.

Subsidiaries are fully consolidated for the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group.

(f) Segment reporting

The Consolidated Entity has identified its operating segments based on the internal reports that are reviewed and used by the executive management team (the chief operating decision makers) in assessing performance and in determining the allocation of resources.

The Consolidated Entity operates in a single operating segment, in three geographical locations. The operations of the Consolidated Entity consist of mineral exploration, within Australia, Botswana and Kenya.

(g) Foreign currency translation

(i) Functional and presentation currencyThe consolidated financial statements are presented in Australian dollars (AUD), which is Aviva Corporation Limited’s functional and presentation currency.

(ii) Transactions and balancesTransactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the reporting date.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

(h) Cash and cash equivalents

Cash and cash equivalents in the statement of financial position comprise cash at bank and short-term deposits with an original maturity 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 values.

For the purposes of the Statement of Cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

(i) Trade and other receivables

Trade receivables are generally paid on 30 day settlement terms and are recognised and carried at original invoice amount less an allowance for impairment. Trade receivables are non-interest bearing. Collectability of trade receivables is reviewed on an ongoing basis. Individual debts that are known to be uncollectible are written off when identified.

An impairment provision is recognized when there is objective evidence that the Group will not be able to collect the receivable. Financial difficulties of the debtor, default payments or debts more than 120 days overdue are considered objective evidence of impairment. The amount of the impairment loss is the receivable carrying amount compared to the present value of estimated future cash flows, discounted at the original effective interest rate.

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Financial StatementsNotes to the

CONTINUED

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED

(j) Investments and other financial assets

Investments and financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are categorised as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available for sale financial assets. The classification depends on the purpose for which the investments were acquired. Designation is re-evaluated at each financial year end, but there are restrictions on reclassifying to other categories.

(i) Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payment that are not quoted in an active market. Such assets are carried at amortized cost using the effective interest method. Gains and losses are recognized in the statement of comprehensive income when the loans and receivables are derecognized or impaired.

(k) Interest in jointly controlled assets

A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control. A jointly controlled asset involves use of assets and other resources of the ventures rather than establishment of a separate entity. The Group recognises its interest in the jointly controlled asset by recognising its share of the asset. The Group also recognises its share of the liabilities, expenses and income from the use and output of the jointly controlled asset.

(l) Plant and equipment

Plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of these items.

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

Depreciation is calculated using a straight line method to allocate their cost over their estimated useful lives. The expected useful lives are detailed in Note 13.

The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end.

(i) ImpairmentProperty, plant and equipment are reviewed for impairment if there is any indication that the carrying amount may not be recoverable. Where a review for impairment is conducted, the recoverable amount is assessed by reference to the higher of ‘value in use’ (being the net present value of expected future cash flows of the relevant cash generating unit) and ‘fair value less costs to sell’.

(ii) Derecognition and disposalAn item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use.

Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of comprehensive income in the year the asset is derecognised.F

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(m) Leases

The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.

(i) Consolidated entity as a lesseeOperating lease payments and incentives are recognised as an expense in the income statement on a straight-line basis over the lease term.

(n) Trade and other payables

Trade payables and other payables are carried at transaction price minus principal repayments. They represent liabilities for goods and services provided to the Consolidated Entity prior to the end of the financial year that are unpaid and arise when the Consolidated Entity becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition.

(o) Provisions and employee benefits

ProvisionsProvisions are recognised when the Consolidated Entity has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

When the Consolidated Entity expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of comprehensive income net of any reimbursement.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the reporting date using a discounted cash flow methodology. The risks to the provision are factored into the cash flows and as such a risk-free government bond rate relative to the expected life of the provision is used as a discount rate. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the time value of money and the risks specific to the liability. The increase in the provision resulting from the passage of time is recognised in finance costs.

Employee benefits

(i) Wages, salaries and annual leaveLiabilities for wages and salaries, including non-monetary benefits and annual leave due to be settled within 12 months of the reporting date are recognised in respect of employees’ services up to the reporting date. They are measured at the amounts due to be paid when the liabilities are settled.

(ii) Long service leaveThe liability for long service leave is recognised and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date.

(iii) Equity settled transactionsThe Consolidated Entity provides benefits to its directors and employees in the form of share-based payments, whereby directors and employees render services in exchange for shares or rights over shares (equity-settled transactions).

The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a Binomial Option Pricing Model, taking into account the terms and conditions upon which the options were granted.

The cost of equity-settled transactions is recognised as an expense, together with a corresponding increase in equity, on a straight-line basis, over the period in which the vesting and/or service conditions are fulfilled (the vesting period), ending on the date on which the relevant directors and employees become fully entitled to the options (the vesting date).

At each subsequent reporting date until vesting, the cumulative charge to the statement of comprehensive income reflects:

(i) the grant date fair value of the options;(ii) the current best estimate of the number of options that will ultimately vest, taking into account such factors as the likelihood

of employee turnover during the vesting period and the likelihood of vesting conditions being met, based on best available information at the reporting date; and

(iii) the extent to which the vesting period has expired.

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Financial StatementsNotes to the

CONTINUED

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED

(o) Provisions and employee benefits

Employee benefits

(iii) Equity settled transactionsThe charge to the statement of comprehensive income for the period is the cumulative amount as calculated above less the amounts already charged in previous periods. There is a corresponding entry to equity.

Until an award has vested, any amounts recorded are contingent and will be adjusted if more or fewer awards vest than were originally anticipated to do so. Any award subject to a market condition is considered to vest irrespective of whether or not that market condition is fulfilled, provided that all other conditions are satisfied.

If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.

If an equity-settled award is cancelled, other than forfeiture, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph.

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share.

(p) Contributed equity

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.

(q) Revenue recognition

Revenue is recognised and measured at the fair value of the consideration received or receivable to the extent it is probable that the economic benefits will flow to the Consolidated Entity and the revenue can be reliably measured. The following specific criteria must also be met before revenue is recognised:

(i) Rendering of servicesWhere the work performed in relation to a joint venture or other contract outcome can be reliably measured the right to receive compensation for the services provided and the stage of completion can be reliably measured. Stage of completion is measured by reference to the labour hours performed to date as a percentage of total estimated labour hours in relation to a joint venture or for each contract.

(ii) Interest revenueRevenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest revenue over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

(r) Income tax and other taxes

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

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Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences except:

• when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or

• when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:

• when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or

• when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised.

The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.

Tax consolidation legislationAviva Corporation Limited and its wholly-owned Australian controlled entities formed a tax consolidated group on 30 June 2006. The Consolidated Entity has applied the stand alone taxpayer approach in determining the appropriate amount of current taxes and deferred taxes to allocate to members of the tax consolidated group. The current and deferred tax amounts are measured in a systematic manner that is consistent with the broad principles in AASB 112 Income Taxes.

In addition to its own current and deferred tax amounts, Aviva Corporation 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.

Members of the tax consolidated group have not entered into a tax funding agreement and as no current tax assets or liabilities or deferred tax assets are recognised in relation to tax losses or unused tax credits, no contributions or distributions are required to be made under UIG 1052 Tax Consolidation Accounting.

Other taxesRevenues, expenses and assets are recognised net of the amount of GST except:

• when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

• receivables and payables, which are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position. Cash flows are included in the Statement of Cash flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority is classified as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

(s) Earnings per share

Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element.

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Financial StatementsNotes to the

CONTINUED

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED

(s) Earnings per share

Diluted earnings per share are calculated as net profit attributable to members of the parent, adjusted for:

• costs of servicing equity (other than dividends) and preference share dividends;• the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and• other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares;

divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

(t) Exploration and evaluation expenditure

Expenditure on exploration and evaluation is accounted for in accordance with the ‘area of interest’ method. Exploration and evaluation expenditure is capitalized provided the right to tenure of the area of interest is current and either:

• the exploration and evaluation activities are expected to be recouped through successful development and exploitation of the area of interest or, alternatively, by its sale; or

• exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest is continuing.

(i) ImpairmentThe carrying value of capitalized exploration and evaluation expenditure is assessed annually for impairment at the cash generating unit level whenever facts and circumstances suggest that the carrying amount of the asset may exceed its recoverable amount.

An impairment exists when the carrying amount of an asset or cash generating unit exceeds its estimated recoverable amount. The asset or cash generating unit is then written down to the recoverable amount. Any impairment losses are recognized in the statement of comprehensive income.

(u) Provision for restoration, rehabilitation and environmental expenditure

The amount recognised as a provision is the best estimate of the expenditure required to settle the present obligation at the reporting date. Where the effect of the time value of money is material, the amount of a provision is the present value of the expenditures expected to be required to settle the obligation. Furthermore, gains from the expected disposal of assets are not taken into account in measuring a provision.

Any adjustments to the provision as a result of the unwinding of the discount are recognised as an interest expense and not as a movement in the restoration provision expense.

Changes to the estimated liability, including changes as a result of changes to discount rates are added to or subtracted from the cost of the asset in the current period. The carrying value of the asset may not, however, be reduced below zero, hence any excess is taken immediately to the statement of comprehensive income.

(v) Current assets held for sale

Non-current assets and disposal groups are measured at the lower of their carrying amount and fair value less costs to sell. Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than continuing use. This condition is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

Property, plant and equipment once classified as held for sale are not depreciated or amortized.

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3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgments and estimates in relation to assets, liabilities and contingent liabilities, revenue and expenses. Management bases its judgments and estimates on historical experience and on other various factors it believes to be reasonable under the circumstances, the result of which form the basis of the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions.

Management has identified the following critical accounting policies for which significant judgments, estimates and assumptions are made. Actual results may differ from these estimates under different assumptions and conditions and may materially affect financial results or the financial position reported in future periods.

(i) Impairment of capitalised exploration and evaluation expenditureThe future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including whether the Consolidated Entity decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration and evaluation asset through sale.

To the extent that capitalised exploration and evaluation expenditure is determined not to be made recoverable in the future, profits and net assets will be reduced in the period in which this determination is made.

In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest have not yet reached a stage that permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. To the extent it is determined in the future that this capitalised expenditure should be written off, profits and net assets will be reduced in the period in which this determination is made.

(ii) Provisions for decommissioning and restoration costsDecommissioning and restoration costs are a normal consequence of mining, and the majority of this expenditure is incurred at the end of a mine’s life. In determining an appropriate level of provision consideration is given to the expected future costs to be incurred, the timing of these expected future costs (largely dependent on the life of the mine), and the estimated future level of inflation.

The ultimate cost of decommissioning and restoration is uncertain and costs can vary in response to many factors including changes to the relevant legal requirements, the emergence of new restoration techniques or experience at other mine sites. The expected timing of expenditure can also change, for example in response to changes in reserves or to production rates.

Changes to any of the estimates could result in significant changes to the level of provisioning required, which would in turn impact future financial results. There have been no significant changes to estimates this year.

(iii) Share based payment transactionsThe Consolidated Entity measures the cost of equity settled transactions with directors and employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using a Binomial Option Pricing Model, with the assumptions detailed in Note 25. The accounting estimates and assumptions relating to equity settled share based payments would have no impact on the carrying amounts of the assets and liabilities within the next annual reporting period but may impact income and expenses.

4. SEGMENT INFORMATION

The Consolidated Entity has identified its operating segments based on the internal reports that are reviewed and used by the executive management team (the chief operating decision makers) in assessing performance and in determining the allocation of resources.

The Consolidated Entity operates throughout the world and prepares reports internally by geographical locations. The following are the current geographical locations;

Australia – Administration and business development of potential power and mineral resources;Botswana – Exploration and evaluation for coal;Kenya – Exploration and evaluation for gold and base metals.

Other prospective opportunities outside of these geographical locations are also considered from time to time, and if they are secured, will then be attributed to the geographical location where they are located.

The following items and associated assets and liabilities are not allocated to operating segments as they are not considered part of the core operations of any segment:

• Cash on hand and interest revenue• Corporate expenses• Share based payments• Accounts receivable

• Prepaid expenses• Accrued corporate expenses• Assets held for sale• Liabilities associated with assets held for sale.

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Financial StatementsNotes to the

CONTINUED

4. SEGMENT INFORMATION CONTINUED

The following table presents revenue, expenditure and certain information regarding the geographical locations for the year ended 30 June 2012 and 30 June 2011.

Consolidated

Australia Botswana Kenya Unallocated Total$ $ $ $ $

Year ended 30 June 2012Segment revenue 74,240 21 5,797 176,902 256,960Segment expenses (1,885,387) (141,348) *31,891 (378,367) (2,373,211)Segment loss (1,811,147) (141,327) 37,688 (201,465) (2,116,251)Impairment of exploration expenditure (9,779) (238,633) - - (248,412)Segment result before income tax (1,820,926) (379,960) 37,688 (201,465) (2,364,663)Income tax benefit 41,382 - - - 41,382Segment result net of tax (1,779,544) (379,960) 37,688 (201,465) (2,323,281)

Assets and liabilitiesSegment assets 1,574,017 5,606 6,495,118 1,521,247 9,595,988Segment liabilities 490,475 633 167,041 26,000 684,149Non-current assets 93,950 5,605 - - 99,555

Other segment informationCapital expenditure 55,569 7,084 5,110,967 - 5,173,620Depreciation 37,961 2,209 10,490 - 50,660Share based payments - - - 171,183 171,183

Year ended 30 June 2011

Segment revenue 158,147 - 29,410 162,097 349,654Segment expenses (2,140,660) (104,914) (57,706) (347,692) (2,650,972)Segment loss before income tax (1,982,513) (104,914) (28,296) (185,595) (2,301,318)Impairment of exploration expenditure (89,437) (58,439) - - (147,876)Segment result before income tax (2,071,950) (163,353) (28,296) (185,595) (2,449,194)Income tax benefit 12,177 - - - 12,177Segment result net of tax (2,059,773) (163,353) (28,296) (185,595) (2,437,017)

Assets and liabilitiesSegment assets 76,342 730 2,795,680 2,311,068 5,183,820Segment liabilities 443,752 3,320 23,061 27,000 497,133Non-current assets 76,342 730 2,795,679 - 2,872,751

Other segment informationCapital expenditure 48,478 - 2,796,653 - 2,845,131Depreciation 37,618 18,433 972 - 57,023

Share based payments - - - 160,439 160,439

* Kenya segment expense is positive due to foreign currency gains.

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5. PARENT ENTITY INFORMATIONThe following detailed information related to the parent entity, Aviva Corporation Limited, at 30 June 2012. The information presented here has been prepared using consistent accounting policies as presented in Note 2.

Parent

2012 $

2011 $

ASSETSTotal current assets 3,025,437 2,162,505

Total non-current assets 6,362,171 3,018,076

Total assets 9,387,608 5,180,581

LiabilitiesTotal current liabilities 481,313 358,262

Non-current liabilities 39,459 135,621

Total liabilities 520,772 493,883

Equity attributable to equity holders of the parentContributed equity 46,177,862 39,800,612

Reserves 1,386,455 1,215,273

Accumulated losses (38,697,481) (36,329,187)

Total equity 8,866,836 4,686,698

Loss for the year (2,386,284) (2,537,017)

Other comprehensive loss for the year - -

Total comprehensive loss for the year (2,368,284) (2,537,017)

6. REvENUE AND INCOME

(a) Interest revenue

Interest Revenue 176,902 162,097 (b) Other revenue

Total other income 80,058 187,557

7. ExPENSES

(a) Directors and employee benefits expense

Payments to Directors and Employees:

Directors fees, wages and salaries 944,432 863,820

Workers' compensation costs 6,404 6,565

Directors' and officers' insurance costs 24,891 24,395

Post employment benefit expense 55,701 50,478

1,031,428 945,258 (b) Depreciation expense

Motor vehicles 6,457 18,728

Plant and equipment 44,203 38,295

50,660 57,023

(c) Lease payment included in income statement

Minimum lease payments 146,426 165,538

Other occupancy expenses 7,475 270,050

153,901 435,588

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Financial StatementsNotes to the

CONTINUED

8. INCOME TAx

Consolidated2012

$2011

$(a) Numerical reconciliation of accounting loss to tax expense

A reconciliation between tax expense and the product of the accounting loss before income tax multiplied by the Group’s applicable income tax rate is as follows:

Accounting loss before tax (2,364,663) (2,449,194)

At the Group's statutory income tax rate of 30% (2011: 30%) (709,398) (734,758)

Non-deductible expenditure 194,876 65,528

Adjustment for different foreign tax rates 11,289 -

Temporary differences not brought to account 503,233 669,230

Research and development tax concession 41,382 12,177

Aggregate income tax benefit 41,382 12,177

Consolidated 2012

Opening balance

Credited/(Charged) to income

Credited/(Charged) to equity

Closing balance

$ $ $ $

(b) Recognised deferred tax assets and liabilities

Deferred tax balancesTaxable and deductible temporary differences arise from the following:Deferred tax assets:Provisions 50,319 319 - 50,638Losses available for offset against future taxable income (Australian) 4,327,988 213,658 - 4,541,646Losses available for offset against future taxable income (Foreign) - 1,617,042 - 1,617,042

Capital raising expenses 86,264 (86,264) - -

Other 7,500 1,800 - 9,300

4,472,071 1,746,555 - 6,218,626Deferred tax liabilities:

Exploration and evaluation expenditure (829,809) 829,809 - -

Other - (1,804) - (1,804)

(829,809) 828,005 - (1,804)

Net deferred tax assets 3,642,262 2,574,560 - 6,216,822

Less unrecognised deferred tax assets (3,642,262) (2,574,560) - (6,216,822)

Net recognised deferred tax assets - - - -

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Consolidated 2011

Opening balance

Credited/(Charged) to income

Credited/(Charged) to equity

Closing balance

$ $ $ $(b) Recognised deferred tax assets and liabilities (continued)

Deferred tax balancesTaxable and deductible temporary differences arise from the following:Deferred tax assets:Provisions 24,910 25,409 - 50,319Losses available for offset against future taxable income 5,763,799 (1,435,811) - 4,327,988Capital raising expenses 77,814 - 8,450 86,264

Other 8,325 - (825) 7,500

5,874,848 (1,410,402) 7,625 4,472,071Deferred tax liabilities:

Exploration and evaluation expenditure - (829,809) - (829,809)

Other (7,045) 7,045 - -

(7,045) (822,764) - (829,809)

Net deferred tax assets 5,867,803 2,233,166 7,625 3,642,262

Less unrecognised deferred tax assets (5,867,803) (2,233,166) (7,625) (3,642,262)

Net recognised deferred tax assets - - - -

Consolidated2012

$2011

$(c) Unrecognised deferred tax balances

The following deferred tax assets have not been brought to account as follows:

Tax losses – revenue (Australian) 4,541,646 3,642,262

Tax losses – revenue (Foreign) 1,617,041 -

Other 58,135 -

6,216,822 3,642,262

(d) Tax consolidation

Aviva Corporation Limited and its wholly-owned Australian controlled entities formed a tax consolidated group on 30 June 2006. The Consolidated Entity has applied the stand alone taxpayer approach in determining the appropriate amount of current taxes and deferred taxes to allocate to members of the tax consolidated group. The current and deferred tax amounts are measured in a systematic manner that is consistent with the broad principles in AASB 112 Income Taxes. In addition to its own current and deferred tax amounts, Aviva Corporation 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. Members of the tax consolidated group have not entered into a tax funding agreement and as no current tax assets or liabilities or deferred tax assets are recognised in relation to tax losses or unused tax credits, no contributions or distributions are required to be made under UIG 1052 Tax Consolidation Accounting.

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Financial StatementsNotes to the

CONTINUED

9. EARNINGS PER SHAREThe following reflects the income used in the basic and diluted earnings per share computations.

Consolidated2012

$2011

$(a) Earnings used in calculating earnings per share

For basic and diluted loss per share:

Net loss for the year attributable to ordinary shareholders of the parent 2,323,281 2,437,017

2012 Number

2011 Number

(b) Weighted average number of shares Number NumberFor basic and diluted loss per share:

Weighted average number of ordinary shares 161,432,849 127,367,852

Effect of dilution of share options - -

Weighted average number of ordinary shares adjusted for the effect of dilution 161,432,849 127,367,852

At 30 June 2012 the company had 7,000,000 Employees and Executives Options (2011: 3,500,000) on issue with the last exercisable on or before 30 June 2015. These options are not considered to be dilutive as the conversion of the options to ordinary shares will result in a decrease in the net loss position.

At 1 September 2011 the company issued 30,000,000 ordinary shares, of this 17,500,000 shares were issued to Sentient Executive GP Iv Limited who became a substantial holder at that date.

There have been no other transactions involving ordinary shares or potential ordinary shares that would significantly change the number of ordinary shares or potential ordinary shares outstanding between the reporting date and the date of completion of these financial statements.

10. CURRENT ASSETS – CASH AND CASH EQUIvALENTS AND TERM DEPOSITS

Cash at bank and on hand 670,406 541,910

Short-term deposits - 1,500,000

670,406 2,041,910Term deposit at banks 400,000 -

11. CURRENT ASSETS – TRADE AND OTHER RECEIvABLES

Other receivables 362,687 36,213Security deposits (a) 27,300 156,895

389,987 193,108

Allowance for impairment lossOther receivables which are primarily from African Barrick Gold, the National Australia Bank and the ATO are non-interest bearing and are generally paid on 30 day settlement terms. Other receivables are neither past due nor impaired at 30 June 2012. The African Barrick Gold debtor relates to their agreement to fund exploration expenditure retrospectively from 1 June 2012 in terms of the Sales and Purchase Agreement between Aviva and African Barrick Gold. This amount has subsequently been received.

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Fair value and credit riskDue to the short term nature of the other receivables, their carrying value is assumed to approximate their fair value.

(a) Security deposits

Cash term deposits held as security over lease of commercial premises and bonds or guarantees over the stamp duty assessable in the event of a failure to export geological equipment out of Kenya at the conclusion of the drilling program.

12. CURRENT ASSETS – PREPAYMENTS

Consolidated2012

$2011

$Prepayments 60,854 76,051

13. NON-CURRENT ASSETS – PLANT AND EQUIPMENT

Motor vehicles at cost 82,962 100,718

Accumulated depreciation (82,962) (82,776)

Net carrying amount - 17,942

Plant and equipment at cost 212,288 198,362

Accumulated depreciation (112,733) (109,581)

Net carrying amount 99,555 88,781

Total cost 295,250 299,080

Accumulated deprecation (195,695) (192,357)

Net carrying amount 99,555 106,723

Motor vehicles

At 1 July, net of accumulated depreciation 17,943 18,914

Additions 22,327 17,757

Reclassified to assets held for sale (33,813) -

Depreciation charge for the year (6,457) (18,728)

- 17,943Plant and equipment

At 1 July, net of accumulated depreciation 88,780 79,955

Additions 66,623 61,338

Disposals - (14,218)

Reclassified to assets held for sale (11,645) -

Depreciation charge for the year (44,203) (38,295)

99,555 88,780

At 1 July, net of accumulated depreciation 106,723 98,869

Additions 88,950 79,095

Disposals/Assets written off - (14,218)

Reclassified to assets held for sale (45,458) -

Depreciation charge for the year (50,660) (57,023)

Net carrying amount 99,555 106,723

(a) No provision has been made for the impairment of plant and equipment as the Directors consider the net carrying amount of these assets to be recoverable.

(b) The useful life of the assets was estimated as follows:

Motor vehicles 3 yearsPlant and equipment 3 to 15 years

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Financial StatementsNotes to the

CONTINUED

14. NON-CURRENT ASSETS – ExPLORATION AND EvALUATION COST

Consolidated2012

$2011

$

Exploration and evaluation costs - 2,766,028Exploration and evaluation costs carried forward in respect of areas of interest

Balance at the beginning of the year 2,766,028 -

Expenditure incurred during the year 248,412 2,913,904

Expenditure incurred during the year for assets held for sale 5,017,789 –

Impairment of Exploration Expenditure (248,412) (147,876)

Expenditure classified as assets held for sale (7,783,817) -

Balance at end of year – 2,766,028

The recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of the respective areas of interest.

During the year ended 30 June 2012, the carrying value of each exploration and evaluation asset was reviewed for impairment.

(a) Expenditure incurred relating to the West Kenya ProjectIn July 2010, Aviva acquired an interest in the West Kenya gold and base metals project, through a joint venture with AfriOre International, a wholly owned subsidiary of Lonmin Plc. for 2 special licences.

In September 2010, the Commissioner of Mines and Geology in Kenya formally consented to the West Kenya Earn-in Joint venture Agreement (“JvA”) between AfriOre International (Barbados) Limited and Aviva Corporation Limited. Under the terms of the JvA which was signed in July 2010, Aviva can earn up to 75% of the project, initially by spending US$3 million over three years and completing a Pre-feasibility Study.

In April 2011, the Group entered into an Option and Joint venture Agreement with Advance Gold Corporation (Advance Gold) and its subsidiary Gold Rim Exploration Kenya Limited. Under the terms of the Agreement, during the option period Aviva spent more than US$100,000 on the ground of three licences within the first 12 months, which was followed by Aviva making a cash payment of US$100,000 in July 2012 to Advance Gold to secure an option to earn an interest in the licences. In the First Earn-in period, Aviva can obtain 51% ownership interest by spending a further US$500,000 on the three licences over 12 months. During the Second Earn-in period, Aviva can obtain 75% ownership interest by sole funding activities with an additional US$1,000,000 over a further 24 month period. Once Aviva has reached a 75% interest, Advance Gold may elect to contribute or dilute to 10% after which Aviva may convert Advance Gold’s interest to a 3% net smelter royalty.

On 23 July 2012, Aviva Corporation Limited (“Company”) announced that it had entered into a binding, conditional sale and purchase agreement with African Barrick Gold plc. to sell all of the issued shares in the Company’s indirect wholly-owned subsidiary, Aviva Mining (Kenya) Limited. This transaction will become effective on receipt of the Kenyan Competition Authority approval. Expenditure incurred up to 30 June 2012 in Kenya was therefore reclassified to Assets held for sale. Exploration expenditure up to 30 June 2012 was $7,783,817.

(b) Impairment of Mmamantswe Coal ProjectDuring June 2011 the Botswana Government initiated a Coal Road Map review to study the development of the country’s coal resources. The outcome of these studies was presented to key stakeholders on 31 January 2012.

Notwithstanding the positive developments on the Botswana Government Coal Road Map Review the Company still considers it is appropriate to continue to hold this project at nil value. At 30 June 2012 impairment losses of $238,633 (2011: $58,439) were recorded in the Statement of Comprehensive Income.

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(c) Impairment of Coolimba Power and Central West Coal ProjectsThe Directors again reviewed the Coolimba Power and Central West Coal projects. As a result of environmental approval not being granted for the Central West Coal project and the fact that the Group has been unable to secure a contract to supply future power production to a third party at this time, the Directors continued to form the view that the exploration expenditure on these projects should be impaired. At 30 June 2012 impairment losses of $9,779 (2011: $89,437) were recognised in the Statement of Comprehensive Income.

15. CURRENT ASSETS AND LIABILITIES HELD FOR SALEDuring the period Aviva Corporation Limited entered into a binding, conditional sale and purchase agreement with African Barrick Gold plc to sell all of the issued shares in the Company’s indirect wholly-owned subsidiary, Aviva Mining (Kenya) Limited. Exploration Expenditure incurred to date in Kenya was reclassified to Assets held for sale. Assets held in Aviva Mining (Kenya) Limited were classified as Assets held for sale. Liabilities held in Aviva Mining (Kenya) Limited were classified as Liabilities associated with assets held for sale.

Consolidated2012

$2011

$Exploration and evaluation assets 7,783,817 -Other assets 191,369 -Total assets held for sale 7,975,186 -

Liabilities associated with assets held for sale 77,041 -77,041 -

16. CURRENT LIABILITIES – TRADE AND OTHER PAYABLES

Trade and other payables 382,792 277,608Accrued expenses 55,522 51,795

438,314 329,403

Trade and other payables are non-interest bearing and are normally settled on 30 day terms. Due to the short term nature of these payables, their carrying value is assumed to approximate their fair value.

17. CURRENT LIABILITIES – PROvISIONS

Annual leave 29,335 32,109Rehabilitation (i) 100,000 100,000

129,335 132,109

(i) Environmental obligations associated with rehabilitation of the Central West Coal Project exploration area, recognised when the disturbance occurred and is based on the extent of rehabilitation required. The provision has been measured at the present value of the future expenditure for rehabilitation.

18. NON-CURRENT LIABILITIES – PROvISIONS

Long service leave 39,459 35,62139,459 35,621

19. CONTRIBUTED EQUITY

Ordinary shares 45,427,862 39,800,612Convertible notes 750,000 -Balance at 30 June 46,177,862 39,800,612

Fully paid ordinary shares carry one vote per share and carry the right to dividends. Effective 1 July 1998, the Corporations legislation in place abolished the concepts of authorised capital and par values. Accordingly, the parent entity does not have authorised capital or par value in respect to its issued shares.

On 22 June 2012 Aviva Corporation issued 7.5 million convertible notes with a face value of $0.10 to Sentient Executive GP, leading to proceeds of $750,000. Details of the issue are:

• The notes mature in 12 months;• Interest is 8% payable in arrears;• The notes are redeemable at any time by Aviva, although the note holder has option to convert prior to redemption taking effect;• If the note holder elects to convert the notes will be convertible at $0.10 per share. If Aviva elects to convert they will be convertible at $0.07

per share.

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Financial StatementsNotes to the

CONTINUED

19. CONTRIBUTED EQUITY CONTINUED

Number of shares

$

Movement in ordinary shares on issueAt 1 July 2010 118,641,825 36,848,657

Share issue 17,500,000 2,951,955

At 30 June 2011 136,141,825 39,800,612

Share Issue – 1 September 2011 30,000,000 6,000,000

Less cost relating to share issue (372,750)

At 30 June 2012 166,141,825 45,427,862

20. OTHER RESERvES

Consolidated2012

$2011

$Share based payment reserve 1,386,456 1,215,273

Movement in share based payment reserveBalance at the beginning of the financial year 1,215,273 1,054,834

On 20 July 2010, 1,000,000 options were issued to a consultant with an expiry date of 18 March 2014. They have been valued using a Binomial Option Pricing Model. - 29,614

On 5 October 2010, 1,000,000 options were issued to an employee with an expiry date of 31 December 2013. They have been valued using a Binomial Option Pricing Model. 8,320 36,176

On 17 November 2010, 1,500,000 options were issued to a director with an expiry date of 31 December 2013. They have been valued using a Binomial Option Pricing Model. 25,097 94,649

On 31 August 2011 500,000 options were issued to a director with an expiry date of 1 July 2014. They have been valued using a Binomial Option Pricing Model. 52,749 -

On 31 January 2012 2,000,000 options were issued to a consultant with an expiry date of 18 March 2014. They have been valued using a Binomial Option Pricing Model. 84,000 -

On 9 May 2012 1,000,000 options were issued to an employee with an expiry date of 30 June 2015. They have been valued using a Binomial Option Pricing Model. 1,017 -

Balance at the end of the financial year 1,386,456 1,215,273

Nature and purpose of reserve The share based payments reserve records the value of share options issued to the company’s directors, employees and third parties.F

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21. ACCUMULATED LOSSES

Consolidated2012

$2011

$Accumulated losses (38,652,479) (36,329,198)Movement in accumulated losses

Balance at the beginning of the financial year (36,329,198) (33,892,181)

Net loss attributable to members of Aviva Corporation Limited (2,323,281) (2,437,017)

Balance at the end of the financial year (38,652,479) (36,329,198)

22. CASH FLOW STATEMENT RECONCILIATION

(a) Reconciliation of net loss after tax to net cash flows from operationsLoss from ordinary activities after income tax (2,323,281) (2,437,017)

Adjustments for

Depreciation 50,660 57,023

Written down value of disposed fixed assets - 8,038

Share based payments 171,183 160,439

Non cash foreign exchange losses(gain)/loss (4,026) 27,725

Impairment of exploration and evaluation costs 248,412 147,876

Changes in assets and liabilities

( Increase)/decrease in trade and other receivables (353,775) 312,168

Decrease/(increase) in prepayments 15,197 (14,767)

Increase in trade and other payables 205,115 226,970

Increase/(decrease) in provisions 1,064 (15,303)

Net cash flows used in operating activities (1,989,451) (1,526,848)

23. RELATED PARTY DISCLOSURES

(a) Ultimate parent

The ultimate Australian parent entity and the ultimate parent of the Consolidated Entity is Aviva Corporation Limited.

(b) Subsidiaries

The subsidiaries of Aviva Corporation Limited are listed in the following table:

Name Country of Incorporation Functional Currency Equity interest2012

%2011

%Botswana Energy Solutions Ltd British virgin Islands AUD 100 100

Central West Coal Pty Ltd Australia AUD 100 100

Coolimba Power Pty Ltd Australia AUD 100 100

WFTT Ltd British virgin Islands AUD 100 100

Aviva Mining (Kenya) Ltd (iii) Kenya AUD 100 100

Amaraka Trading 7 Pty Ltd (i) South Africa AUD 100 100

Mmamantswe Coal Pty Ltd (ii) Botswana AUD 100 100

(i) Amaraka Trading 7 Pty Ltd, a wholly owned subsidiary of WFTT Ltd, was deregistered in September 2012 subsequent to year end.

(ii) A wholly owned subsidiary of Botswana Energy Solutions Ltd.

(iii) A wholly owned subsidiary of WFTT Ltd and will be sold subsequent to year end on completion of the sales transaction with African Barrick Gold.

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Financial StatementsNotes to the

CONTINUED

23. RELATED PARTY DISCLOSURES CONTINUED

(c) Key Management Personnel

Aviva Corporation has undertaken two commercial arrangements with RMG Limited where Robert Kirtlan is a director for both companies. A sub-lease of commercial premises to RMG Limited at commercial terms equal to the lease terms received by Aviva Corporation Limited on an arms-length transaction with a third party. This third party is the lessor of the main lease. The amount received in the year was $71,710 (2011: $11,413)

Aviva Corporation has paid $26,085 (2011: Nil) to RMG Limited for Geological Services provided.

Aviva Corporation has undertaken a commercial arrangement with Credo Resources Limited where Robert Kirtlan is a director for both companies. The arrangement is a sub-lease of commercial premises at commercial terms equal to the lease terms received by Aviva Corporation Limited on an arms-length transaction with a third party. This third party is the lessor of the main lease. The amount received in the year was $13,525 (2011: Nil)

Aviva Corporation has paid Sentient Asset Management Australia Pty Ltd $18,123 (2011: Nil) for director fees. Pieter Britz, a director of Aviva Corporation Limited is an employee of Sentient Asset Management Australia Pty Ltd.

There were no other related party transactions with Directors, key management personnel or related parties in the current year.

24. DIRECTORS AND KEY MANAGMENT PERSONNEL

(a) Compensation for key management personnel

Consolidated and Parent2012

$2011

$Short term employee benefits 849,340 786,801Post-employment benefits 44,470 45,556Share based payments 87,183 130,825Long Term Benefits 3,838 3,922

984,831 967,104

(b) Option holdings of key management personnel (Consolidated)

Vested at 30 June 2012Balance at beginning

of periodGranted as

remunerationOptions

exercisedOptions expired

Balance at end of period

Exercisable Not Exercisable

DirectorsGD Loftus Hills (v) - 500,000 - - 500,000 250,000 250,000LG Reed 1,500,000 - - - 1,500,000 1,500,000 -RE Kirtlan - - - - - - -PJ Britz (i) - - - - - - -ExecutivesSC Jones (ii) - - - - - - -SS Weber (iii) & (vi) - 1,000,000 - - 1,000,000 - 1,000,000GW Edwards 1,000,000 - - - 1,000,000 1,000,000 -BP Boyle (iv) - - - - - - -Total 2,500,000 1,500,000 - - 4,000,000 2,750,000 1,250,000

(i) Appointed 24 November 2011(ii) Resigned 29 July 2011(iii) Appointed 1 December 2011(iv) Resigned 16 December 2011(v) Dr Loftus Hills was granted options in accordance with the New Aviva Corporation Limited Executive and employee option plan and ratified by the shareholders at the Annual General Meeting on 30 August 2011(vi) Mr Weber was granted options under conditions similar to the Executive and Employee Option Plan (refer Note 25).

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Number of Options Exercise Price $

Expiry date Vesting Date

DirectorGD Loftus Hills 250,000 0.25 1 July 2014 1 July 2011

250,000 0.35 1 July 2014 1 July 2012ExecutiveSS Weber 500,000 0.20 30 June 2015 1 January 2013

500,000 0.30 30 June 2015 1 July 2013

Vested at 30 June 2011Balance at

beginning of periodGranted as

remuneration (vi)

Options exercised

Options expired

Balance at end of period

Exercisable Not Exercisable

DirectorsAM Iannello (i) 500,000 - - (500,000) - - -GD Loftus Hills (ii) - - - - - - -LG Reed 2,000,000 1,500,000 - (2,000,000) 1,500,000 - 1,500,000RE Kirtlan 2,000,000 - - (2,000,000) - - -ExecutivesSC Jones 1,000,000 - - (1,000,000) - - -GW Edwards (iii) - 1,000,000 - - 1,000,000 - 1,000,000BP Boyle (iv) - - - - - - -GI Smith (v) - - - - - - -Total 5,500,000 2,500,000 - (5,500,000) 2,500,000 - 2,500,000

(i) Resigned 17 November 2010(ii) Appointed 17 November 2010(iii) Appointed 14 June 2010(iv) Appointed 1 August 2010(v) Resigned 1 August 2010(vi) Messrs Reed and Edwards were granted options under conditions similar to the Employees and Executive Option Plan (refer Note 24).

Number of Options Exercise Price $

Expiry date Vesting Date

DirectorLG Reed 750,000 0.20 31 Dec 2013 1 July 2011

750,000 0.30 31 Dec 2013 1 January 2012ExecutiveGW Edwards 500,000 0.20 31 Dec 2013 1 July 2011

500,000 0.30 31 Dec 2013 1 January 2012

(c) Shareholdings of key management personnel (Consolidated)

30 June 2012Balance at beginning

of periodGranted as

remunerationOptions

exercisedNet change

otherBalance at

end of periodDirectorsGD Loftus Hills 100,000 - - - 100,000LG Reed 5,600,000 - - 600,000 6,200,000RE Kirtlan 3,481,600 - - - 3,481,600P Britz (i) - - - 17,500,000 17,500,000ExecutivesSC Jones (ii) 40,000 - - (40,000) -SS Weber (iii) - - - - -GW Edwards - - - - -BP Boyle (iv) - - - - -Total 9,221,600 - - 18,060,000 27,281,600

(i) Appointed 24 November 2011. The shares are held by Sentient Executive GP where PJ Britz is an employee

(ii) Resigned 29 July 2011

(iii) Appointed 1 December 2011

(iv) Resigned 16 December 2011

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Financial StatementsNotes to the

CONTINUED

24. DIRECTORS AND KEY MANAGMENT PERSONNEL CONTINUED

(c) Shareholdings of key management personnel (Consolidated)

30 June 2011Balance at beginning

of periodGranted as

remunerationOptions

exercisedNet change

otherBalance at

end of periodDirectorsAM Iannello (i) - - - - -GD Loftus-Hills (ii) - - - 100,000 100,000LG Reed 5,600,000 - - - 5,600,000RE Kirtlan 5,131,600 - - (1,650,000) 3,481,600ExecutivesSC Jones 40,000 - - - 40,000GW Edwards (iii) - - - - -BP Boyle (iv) - - - - -GI Smith (v) - - - - -Total 10,771,600 - - (1,550,000) 9,221,600

(i) Resigned 17 November 2010

(ii) Appointed 17 November 2010

(iii) Appointed 14 June 2010

(iv) Appointed 1 August 2010

(v) Resigned 1 August 2010

25. SHARE BASED PAYMENTS

(a) Recognized share based payment expenses

Consolidated2012

$2011

$

Expense arising from equity settled share based payment transactions 171,183 160,439

(b) Share based payment plan

Employees and Executives Option PlanAn employees and executives option plan has been established where Aviva Corporation Limited may, at the discretion of management, grant options over the ordinary shares of Aviva Corporation Limited to directors, executives and certain members of staff of the Consolidated Entity. The options, issued for nil consideration, are granted in accordance with guidelines established by the Directors of Aviva Corporation Limited, although the management of Aviva Corporation Limited retains the final discretion on the issue of options. The contractual life of each option granted is variable. The vesting period is pre-determined by the Company without considering the performance conditions. There are no cash settlement alternatives.

The share options are forfeited if the Company initiates the termination of the employee or director due to serious misconduct. The options cannot be transferred and will not be quoted on the ASx.F

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(c) Summary of options granted

The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share options during the year:

2012 WAEP 2011 WAEPOutstanding at the beginning of the year 3,500,000 0.21 9,450,000 0.5Granted during the year 3,500,000 0.18 3,500,000 0.21Exercised during the year - - - -Expired during the year - - (9,450,000) (0.50)Outstanding at the end of the year 7,000,000 0.20 3,500,000 0.21

500,000 options were granted to the Chairman on 31 August 2011. These options have a weighted average exercise price of $0.30 each, and expire on the 1 July 2014. Details of the options issued are shown above (see Note 24(b)). Of these options 250,000 vested on 1 July 2011, and the remaining 250,000 options vest on 1 July 2012.

2,000,000 options were granted to a consultant on 31 January 2012 as consideration for achieving certain milestones on Aviva’s West Kenya Joint venture Agreement. These options have an exercise price of $0.12 and expire on 18 March 2014. These options vested immediately upon grant.

500,000 options were granted to an Executive on 9 May 2012. These options have a weighted average exercise price of $0.25 each, and expire on 30 June 2015. Details of the options issued are shown above (see Note 24(b)). Of these options 500,000 vest on 1 January 2013, and the remaining 500,000 options vest on 1 July 2013.

The outstanding balance as at 30 June 2012 is represented by:

• 1,000,000 options over ordinary shares with an exercise price of $0.12 each, exercisable and will expire on 18 March 2014• 500,000 options over ordinary shares with an exercise price of $0.20 each, exercisable and will expire on 31 December 2013• 500,000 options over ordinary shares with an exercise price of $0.30 each, exercisable and will expire on 31 December 2013• 750,000 options over ordinary shares with an exercise price of $0.20 each, exercisable and will expire on 31 December 2013• 750,000 options over ordinary shares with an exercise price of $0.30 each, exercisable and will expire on 31 December 2013• 250,000 options over ordinary shares with an exercise price of $0.25 each, exercisable and will expire on 01 July 2014• 250,000 options over ordinary shares with an exercise price of $0.35 each, exercisable and will expire on 01 July 2014• 2,000,000 options over ordinary shares with an exercise price of $0.12 each, exercisable and will expire on 18 March 2014• 500,000 options over ordinary shares with an exercise price of $0.20 each, exercisable and will expire on 30 June 2015• 500,000 options over ordinary shares with an exercise price of $0.30 each, exercisable and will expire on 30 June 2015

(d) Weighted average remaining contractual life

The weighted average remaining contractual life for the share options outstanding at 30 June 2012 is 1.84 years (2011: 2.57 years).

(e) Range of exercise price and weighted share price at the date of exercise

The range of exercise prices for options outstanding at the end of the year was $0.12~$0.35 (2011: $0.12~$0.30). There were no options exercised in the current or prior year.

(f) Weighted average fair value

The weighted average fair value of options granted during the prior year was $0.18 (2011: $0.06). The fair value of the options granted during the year is $141,765 (2011: $193,856).

(g) Option pricing model

Equity settled transactionsThe fair value of the equity settled share options granted under the Employees and Executive Option Plan is estimated as at the date of grant using a Binomial Option Pricing Model.

The following table lists the inputs to the model used for the year ended 30 June 2012.

2012Dividend yield (%) -Expected volatility (%) 63%Risk-free interest rate (%) 3.31Expected life of options (years) 1.9-2.1Options exercise price ($) $0.12-$0.35Weighted average share price at grant date ($) $0.085-$0.20

The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome. No other features of the options granted were incorporated into the measurement of fair value.

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Financial StatementsNotes to the

CONTINUED

26. FINANCIAL RISK MANAGEMENTThe Consolidated Entity’s principal financial instruments comprise cash, short-term deposits, receivables and payables.

The Consolidated Entity has a policy not to participate in debt financing, derivatives or hedging activity. As a result the Consolidated Entity has not formulated any specific management objectives and policies in respect to these types of financial instruments. Should the Consolidated Entity change its position in the future, a considered summary of these policies will be disclosed at that time.

The Consolidated Entity uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring levels of exposure to interest rate and foreign exchange risk and assessment of market forecasts for interest rate and foreign exchange. The credit risk is managed by only dealing with recognized, creditworthy, third parties and liquidity risk is monitored through the development of future rolling cash flow forecasts.

Interest rate riskThe Consolidated Entity’s current exposure to the risk of changes in market interest rates relate primarily to cash assets rates and is managed by the Board of Directors.

During the financial year, the Group has managed its cash assets by entering into a fixed interest bank bill to maximise its cash balance and minimise investment risk.

The following table summarises the impact of reasonably possible changes on interest rates for the Consolidated Entity at 30 June 2012. The sensitivity is based on the assumption that interest rate changes by 80 basis points with all other variables held constant. The 80 basis points sensitivity is based on reasonably possible changes over a financial year, using the observed range of actual historical rates for the preceding three year period. The analysis was performed on the same basis for the comparative period.

The exposure to interest rate risk on pre-tax profit arises from higher or lower interest income from cash and cash equivalents. The Group’s main interest rate risk arises from cash and cash equivalents with variable interest rates.

Consolidated2012

$2011

$Financial assetsCash and cash equivalents 1,070,406 2,041,910

Pre-tax loss Other Comprehensive Income

2012 $

2011 $

2012 $

2011 $

Consolidated Entity

80 basis point increase 8,563 16,335 - -

80 basis point (decrease) (8,563) (16,335) - -

The difference in the impact on pre-tax loss is due to lower interest revenue from cash and cash equivalents. The sensitivity is lower in 2012 than in 2011 because of a reduction in cash balances that has occurred during the year.

Foreign currency riskThe Consolidated Entity transacts predominately in Australian dollars and therefore does not participate in the use of derivative financial instruments. Minor exposure to foreign exchange transactions may occur as a result of the Consolidated Entity’s activities in other jurisdictions arising from variations in the Australian exchange rate on historically low bank balance maintained in those locations. The impact of these foreign exchange differences are not material, therefore the Consolidated Entity considers there is no material foreign exchange risk present.

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Credit riskCredit risk arises in the event that counterparty will not meet its obligations under a financial instrument leading to financial losses. The Consolidated Entity is exposed to credit risk from its operating activities and financing activities, including deposits with banks.

The credit risk control procedure adopted by the Consolidated Entity is to assess the credit quality of the institution with which funds are deposited or invested, taking into account its financial position and past experiences. Any credit concerns are highlighted to senior management.

As the Consolidated Entity has not yet commenced mining operations, it has no significant exposure to customer credit risk. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets in the balance sheet.

S&P Credit ratingAAA

$A1+

$A1

$A2

$Unrated

Credit risk30 June 2012Cash and cash equivalents 500 1,069,906 - - -

Trade and other receivables 0 387,529 - - 2,458

Number of counterparties 1 5 - - 2

Largest counterparty (%) 100% 75% - - 84%

30 June 2011Cash and cash equivalents 700 2,041,210 - - -

Trade and other receivables - 186,579 - - 6,529

Number of counterparties 1 4 - - 6

Largest counterparty (%) 100% 90% - - 20%

Liquidity riskThe responsibility for liquidity risk management rests with the Board of Directors.

The Consolidated Entity manages liquidity risk by maintaining sufficient cash to meet the operating requirements of the business and investing excess funds in highly liquid, high security short term investments. The Consolidated Entity’s liquidity needs can be met through a variety of sources, including cash generated from operations and issue of equity instruments.

The following table details the Consolidated Entity’s non-derivative financial instruments according to their contractual maturities. The amounts disclosed are based on contractual undiscounted cash flows.

Less than 6 months

$

6 months to 12 months

$

1 to 2 years $

Greater than 2 years

$Consolidated entity at 30 June 2012Trade and other payables 438,314 - - -

Consolidated entity at 30 June 2011Trade and other payables 329,403 - - -

Capital risk managementCapital is defined as shareholders’ equity of $46,177,862 (2011: $39,800,612)

When managing capital, management’s objective is to ensure the entity continues as a going concern as well as to maintain optimal returns to shareholders and benefits for other stakeholders. Management also aims to maintain a capital structure that ensures the lowest cost of capital available to the entity.

In order to maintain or adjust the capital structure, the entity may adjust the amount of dividends paid to shareholders, issue new shares, enter into joint ventures or sell assets.

The entity does not have a defined share buy-back plan.

No dividends were paid in 2012 and no dividends are expected to be paid in 2013.

There is no current intention to incur debt funding on behalf of the Consolidated Entity as on-going exploration expenditure will be funded via equity or joint ventures with other companies.

The Consolidated Entity is not subject to any externally imposed capital requirements.

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Financial StatementsNotes to the

CONTINUED

27. COMMITMENTSEstimated commitments for which no provisions were included in the financial statements are as follows:

Consolidated2012

$2011

$(a) Operating lease commitments

Not later than one year 159,832 164,141

Later than one year and not later than five years 131,526 272,749

Total minimum lease payments 291,358 436,890

The lease commitment is for the lease of Aviva’s registered offices in Subiaco.

(b) Remuneration commitmentsNot later than one year 910,654 557,650

Later than one year and not later than five years - -

Later than five years - -

Total remuneration commitments 910,654 557,650

Commitments for the payment of salaries and other remuneration under long term employment contracts in existence at the reporting date but not recognised as liabilities payable.

(c) Exploration expenditure commitmentsNot later than one year - -

Later than one year and not later than five years - -

Later than five years - -

Total exploration expenditure commitments - -

All exploration expenditure commitments are non-binding, in respect of outstanding expenditure commitments, in that the Group has the option to relinquish and lose these licences or its contractual commitments at any stage, at the cost of its cumulative expenditure up to the point of relinquishment.

28. CONTINGENT LIABILITIESIn accordance with normal industry practice the Consolidated Entity has entered into joint venture operations and farm-in agreements with other parties for the purpose of exploring and developing its mineral interests. If a party to a joint venture defaults and does not contribute its share of joint venture obligations, then the other joint venture partner is liable to meet those obligations. In this event the interest in the tenements held by the defaulting party may be redistributed to the remaining joint venture partner.F

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29. EvENTS AFTER BALANCE DATEOn 23 July 2012 Aviva announced it has entered into a binding sale and purchase agreement with African Barrick Gold plc. (“ABG” LSE: ABG) to sell Aviva Mining Kenya Limited (“AMK”) for an initial cash payment of $20 million. AMK held all of Aviva’s Kenyan gold and base metals assets when the transaction was announced. There is a further payment of $10 million due to Aviva if a National Instrument 43-101 (“NI 43-101”) compliant indicated resource of 3 million ounces or more is declared over the project areas.

The transaction is subject to several conditions precedent. At date of this report all the conditions precedent were satisfied, except for the approval of the Kenyan Competition Commission. This approval which will lead to completion of the sales transaction is expected to be obtained in October 2012.

Since the end of the financial year no other matters or circumstances have occurred that have or may significantly affect the operations or the state of affairs of the Consolidated Entity in subsequent financial years.

30. AUDITORS’ REMUNERATION

Consolidated2012

$2011

$The auditor of Aviva Corporation Limited is Ernst & Young.

Amounts received or due and receivable by Ernst & Young (Australia) for:

An audit or review of the financial report of the Company and any other entity in the consolidated group 49,320 39,425

Other services in relation to the entity and any other Company in the consolidated group for tax compliance 42,702 40,202

92,022 79,627

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FOR THE YEAR ENDED 30 JUNE 2012

64

In accordance with a resolution of the directors of Aviva Corporation Limited, I state that:

In the opinion of the directors:

(a) the financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001, including:(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2012 and of its performance for the year ended

on that date; and(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations

Regulations 2001;

(b) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 2(c);

(c) subject to matters described in Note 2(b), going concern, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable;

(d) this declaration has been made after receiving the declarations required to be made to the Directors in accordance with Section 295A of the Corporations Act 2001 for the financial year ending 30 June 2012.

On behalf of the Board

GD Loftus-Hills Chairman

Perth 27 September 2012

Directors’ Declaration

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FOR THE YEAR ENDED 30 JUNE 2012

Independent Auditor’s Report

We have audited the accompanying financial report of Aviva Corporation Ltd, which comprises theconsolidated statement of financial position as at 30 June 2012, the consolidated statement ofcomprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies andother explanatory information, and the directors' declaration of the consolidated entity comprising thecompany and the entities it controlled at the year's end or from time to time during the financial year.

Directors' responsibility for the financial report

The directors of the company are responsible for the preparation of the financial report that gives a trueand fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and forsuch internal controls as the directors determine are necessary to enable the preparation of the financialreport that is free from material misstatement, whether due to fraud or error. In Note 2, the directors alsostate, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that thefinancial 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 ouraudit in accordance with Australian Auditing Standards. Those standards require that we comply withrelevant ethical requirements relating to audit engagements and plan and perform the audit to obtainreasonable 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 thefinancial report. The procedures selected depend on the auditor's judgment, including the assessment ofthe risks of material misstatement of the financial report, whether due to fraud or error. In making thoserisk assessments, the auditor considers internal controls relevant to the entity's preparation and fairpresentation of the financial report in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internalcontrols. An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of accounting estimates made by the directors, as well as evaluating the overallpresentation of the financial report.

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

Independence

In conducting our audit we have complied with the independence requirements of the Corporations Act2001. We have given to the directors of the company a written Auditor’s Independence Declaration, a copyof which is included in the directors’ report.

Independent audit report to the members of Aviva Corporation Ltd

Report on the financial report

Ernest & Young Building11 Mounts Bay RoadPerth WA 6000 AustraliaGPO Box M939 Perth WA 6843

Tel: +61 8 9429 2222Fax: +61 8 9429 2436www.ey.com/au

GB:MM:AVIVA:014 Liability limited by a scheme approvedunder Professional Standards Legislation

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TO THE MEMBERS OF AvIvA CORPORATION LIMITED

Independent Auditor’s Report

Ernest & Young Building11 Mounts Bay RoadPerth WA 6000 AustraliaGPO Box M939 Perth WA 6843

Tel: +61 8 9429 2222Fax: +61 8 9429 2436www.ey.com/au

GB:MM:AVIVA:014 Liability limited by a scheme approvedunder Professional Standards Legislation

Opinion

In our opinion:a. the financial report of Aviva Corporation Ltd is in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the consolidated entity's financial position as at 30 June 2012 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 2.

Material uncertainty regarding continuation as a going concern

Without qualification to the opinion expressed above, attention is drawn to the following. As a result of thematters described in Note 2 “Going Concern” of the financial report, there is material uncertainty whetherthe consolidated entity will be able to continue as a going concern and therefore whether it will be able topay its debts as and when they fall due and realise its assets and extinguish its liabilities in the normalcourse of business at the amounts stated in the financial report. The financial report does not include anyadjustments relating to the recoverability and classification of recorded asset amounts or to the amountsand classification of liabilities that might be necessary should the consolidated entity not be able tocontinue as a going concern.

Report on the remuneration report

We have audited the Remuneration Report included in pages 16 to 22 of the directors' report for the yearended 30 June 2012. The directors of the company are responsible for the preparation and presentation ofthe Remuneration Report in accordance with section 300A of the Corporations Act 2001. Ourresponsibility is to express an opinion on the Remuneration Report, based on our audit conducted inaccordance with Australian Auditing Standards.

Opinion

In our opinion, the Remuneration Report of Aviva Corporation Ltd for the year ended 30 June 2012,complies with section 300A of the Corporations Act 2001.

Ernst & Young

G A BuckinghamPartnerPerth27 September 2012F

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FOR THE YEAR ENDED 30 JUNE 2012

(i) Substantial shareholders

As at 13 September 2012, the name of the substantial shareholders in the Company, the number of equity securities to which the substantial shareholders and substantial holder’s associates have a relevant interest, as disclosed in substantial holding notice given to the company:

Name Number of Ordinary Shares %SENTIENT ExECUTIvE GP Iv LIMTIED <SGRF Iv A/C> 17,500,000 10.53

MARFORD GROUP PTY LTD 10,259,369 6.18

NATIONAL NOMINEES PTY LIMITED 9,774,585 5.88

(ii) Number of holders of each class of equity securities and the voting rights attached

Class of Security Number of Holders Voting rights attachedOrdinary Shares 1,816 Each shareholder is entitled to one vote per share held

Unlisted Options 5 There are no voting rights attached to these options

All ordinary shares carry one vote per share without restriction.

(iii) Distribution schedule of the number of holders in each class of equity security as at 13 September 2012

Holders of Ordinary Shares Number of Ordinary Shares %1 – 1,000 253 141,035 0.08

1,001 – 5,000 581 1,614,502 0.97

5,001 – 10,000 248 2,011,499 1.21

10,001 – 100,000 540 23,236,203 13.99

100,001 and over 194 139,138,586 83.75

1,816 166,141,825 100.00

(iv) Marketable Parcel

The number of shareholders with less than marketable parcel is 849.

Additional ASX Information

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CONTINUED

ASX Additional Information

(v) Twenty largest holders of quoted ordinary shares

The names of the twenty largest holders of each class of quoted equity security, the number of equity security each holds and the percentage of capital each holds (as at 13 September 2012) is as follows:

Name Number of Ordinary Shares %1. SENTIENT ExECUTIvE GP Iv LIMITED <SGRF Iv A/C> 17,500,000 10.532. MARFORD GROUP PTY LTD 10,259,369 6.183. NATIONAL NOMINEES LIMITED 9,774,585 5.884. JADEKEY NOMINEES PTY LTD 6,000,000 3.615. CITICORP NOMINEES PTY LIMITED 5,199,650 3.136. PERSHING AUSTRALIA NOMINEES PTY LTD <ARGONAUT ACCOUNT> 5,025,000 3.027. MEURS HOLDINGS PTY LTD <P & M MEURS SUPER FUND A/C> 4,550,000 2.748. HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 4,407,076 2.659. HOMELAND ENERGY CORP 4,000,000 2.4110. MR ROBERT EDWARD KIRTLAN <MERK UNIT A/C> 2,791,600 1.6811. MR RAM SHANKER KANGATHARAN 2,360,000 1.4212. UBS WEALTH MANAGEMENT AUSTRALIA NOMINEES PTY LTD 1,900,000 1.1413. NORONEKE MASTER FUND LTD 1,861,115 1.1214. JP MORGAN NOMINEES AUSTRALIA LIMITED <CASH INCOME A/C> 1,674,979 1.0115. OUTLAND INvESTMENTS PTY LTD 1,600,000 0.9616. MR JOHN ALLAN ROBERTSON 1,575,000 0.9517. BOTSWANA REGISTER CONTROL 1,508,849 0.9118. RW ASSOCIATES PTY LTD <R W ASSOC SUPER FUND A/C> 1,503,000 0.9019. BREvMAR PTY LTD <GLEN INvST S/F A/C> 1,320,000 0.7920. MR RUPERT JAMES MCCAMMON 1,100,000 0.66

Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (TOTAL) 85,910,223 51.71

(vi) Unquoted equity securities

The company has the below listed unquoted equity securities on issue:

No. of Securities Number of Holders Type of Security1,000,000 1 Options exercisable at 12 cents, expiry dated 18 March 2014

2,000,000 1 Options exercisable at 12 cents, expiry dated 18 March 2014

500,000 1 Options exercisable at 20 cents, expiry date 31 December 2013

500,000 1 Options exercisable at 30 cents, expiry date 31 December 2013

750,000 1 Options exercisable at 20 cents, expiry date 31 December 2013

750,000 1 Options exercisable at 30 cents, expiry date 31 December 2013

250,000 1 Options exercisable at 25 cents, expiry date 01 July 2014

250,000 1 Options exercisable at 35 cents, expiry date 01 July 2014

500,000 1 Options exercisable at 20 cents, expiry date 30 June 2015

500,000 1 Options exercisable at 30 cents, expiry date 30 June 2015

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(i) Mining tenements

The Group is a mining exploration entity, below is a list of its interests in mining tenements, where the tenements are situated and the percentage interest held.

Mining tenements Location of mining tenements InterestM70/492 Eneabba, Western Australia 100%

PL-069/ 2007** Mmamantswe, Botswana, Africa 90%*

SL123 Kenya, Africa 51%***

SL213 Kenya, Africa 51%***

SL265 Kenya, Africa 51%***

SL266 Kenya, Africa 51%***

SL267 Kenya, Africa 51%***

* Interest conditional on satisfying the earn-in requirements under the joint venture agreement.

** As part of the renewal of the Mmamantswe licenses, PL 069/2007 and PL 070/2007 was consolidated into one license PL069/2007

*** Will be disposed of when completion is achieved on the sale of Aviva Mining Kenya to African Barrick Gold plc.

(ii) On market buy-back

There is currently no on-market buy-back.

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