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A1 Investments & Resources Ltd

Annual Report - 30 June 2013

ABN 44 109 330 949

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A1 Investments & Resources LtdContents30 June 2013

Contents

Financial reportStatement of profit or loss and other comprehensive incomeStatement of financial position

Corporate directoryProject activitiesDirectors' reportAuditor's independence declarationCorporate Governance Statement

Statement of cash flows

Shareholder information

Statement of changes in equity

Notes to the financial statementsDirectors' declaration

Independent auditor's report to the members of A1 Investments & Resources Ltd

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30 June 2013Corporate directory

Peter Kao

The annual general meeting of A1 Investments & Resources Ltd:

will be held at Suite 606, 37 Bligh StreetSydney

Suite 606 / 37 Bligh Street

10:00 AMFriday 15 November 2013

Charlie NakamuraPeter KaoPeter AshcroftDan Kao

Sydney NSW 2000

Suite 606 / 37 Bligh Street

datetime

NSW, 2000

Principal place of business

Registered office

Share register

Tel: +61 2 9114 6888Fax: +61 2 9232 8883

Abbotsford VIC 3067

ESV Chartered AccountantsAuditorLevel 18, City Centre

Australia

Tel: 1300 787 272

452 Johnston StreetYarra FallsComputershare Investor Services Pty Limited

Sydney NSW 2000

Company secretary

Notice of annual general meeting

www.a1investments.com.au

A1 Investments & Resources Ltd shares are listed on the Australian Securities Exchange (ASX code: AYI)

Website

Stock exchange listing

Directors

Sydney NSW 2000Australia

Fax: +61 3 9473 2500

55 Market Street

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A1 Investments & Resources Ltd Project activities 30 June 2013 A summary of the A1 Investments & Resources Ltd activities are as follows: Hastings Rare Metals Ltd Hastings Rare Metals Ltd (‘Hastings’) is a leading Australian rare earths company. Rare earths are critical in the manufacture of a wide variety of new consumer and industrial technologies. These range from flat-screen TVs and energy efficient light bulbs to hybrid cars, wind turbines and military hardware. Highlights Highest ever assay results from the Hastings project include: TREO of 4,281 ppm and 5,237 ppm. Two new zones of near surface, high-grade mineralization discovered (Figure 1.) Levon All 19 rock ship samples collected from the eastern side of Levon, centred approximately 1.3km to the southeast of the Main Resource, exceeded 1,000ppm TREO, with six exceeding 2,100 TREO and two high assays of 4,281ppm and 5,237ppm TREO exceeding any previous samples from the Hastings Project area. Haig All 13 rock chip samples collected from Haig centred approximately 4.5km to the southeast of the Main Resource, exceeded 1,000ppm TREO with all but two exceeding 2,100 TREO which is the average of the current resource. The rock chip assay results and surface dimensions of the mineralised zone indicate that Haig also has potential for an attractive mining operation.

Evaluation of Production Options Hastings is currently working with consultants who have been engaged to review a potential low capital expenditure production opportunity. These options have become viable following the evaluation of higher grade components of the JORC resource, which provide scope for starter pits with attractive low cost economics.

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A1 Investments & Resources Ltd Project activities 30 June 2013 Strategic Partner Discussions Hastings continued discussions during the quarter with a number of parties who are interested in assisting in funding the development of the Hastings Rare Earths Project. The Hasting Project is at an advanced stage of development, with a completed scoping study delivering sound economics, a JORC compliant resource giving in excess of +20 years of mine life and is fast tracking towards production, subject to satisfactory funding. The company is investigating a number of options including a strategic alliance, off-take agreement and joint venture proposals. Corporate Mr Malcolm Mason (B.Sc. (Hons) FAus-IMM) has joined the Board of Hastings. Mr Mason has over 45 years’ experience in Australian and international exploration and mining. Mr Mason’s experience covers rare earths, uranium, gold and base metals and extends from acquiring projects and prospects through application or negotiation to conducting exploration and evaluation programs and completing feasibility studies. As of June 2013, Hastings has a cash balance of $2.8 million. As of 30 June 2013, A1 Investments & Resources holds 8,000,000 shares and [ ] listed options in Hastings Rare Metals Limited. For more details please visit www.hastingsraremetals.com Competent Person’s Statement The information that relates to Mineral Resources is based on information compiled by Simon Coxhell. Mr Coxhell is employed as a consultant to the Company and is a member of the Australasian Institute of Mining and Metallurgy. Mr Coxhell has sufficient experience relevant to the styles of mineralisation and types of deposits which are covered in this presentation and to the activity which they are undertaking to qualify as a Competent Person as defined in the 2004 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (“JORC Code”). Mr Coxhell consents to the inclusion in this presentation of the matters based on his information in the form and context in which it appears. PAFtec Pty Ltd PAFtec Pty Ltd (‘PAFtec’) is a 100% Australian innovation company and has tracked well in Australia and New Zealand. Following a successful launch on its first generation CleanSpace, the next generation, CleanSpace® 2 was launched in February of this year.

Sales Over the past 12 months, PAFtec have been granted the CE mark, allowing PAFtec to now sell into Europe as well as Australia and New Zealand. Throughout the period of April to July, PAFtec’s sales have been tracking consistently higher than its projection, exceeding its sales expectations. It is projected that by April to May 2014, PAFtec will reach breakeven. JIS Compliance (Japan) PAFtec has also passed JIS compliance testing for its HI-CAP version of the CleanSpace2, and with the assistance of A1 Investments & Resources Ltd, trials with several large Japanese corporations has already taken place since July.

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A1 Investments & Resources Ltd Project activities 30 June 2013 Award PAFtec’s new generation CleanSpace® 2 has been awarded the Australian International Design Award winner, and it is on display at the Power House Museum, as well as being the overall winner in the British Safety Institute Federation (‘BSIF’), one of the highest safety recognition awards in the UK.

Rights Issue Also in July, PAFtec underwent a restructure, and as a result, there was an urgent cash requirement of approximately $700,000. Due to the urgency of the funding, a rights issue was offered to all the existing shareholders at $0.12 per share. Majority of the existing shareholders of PAFtec participated, and the funds were committed within 2 weeks. Post the restructure, PAFtec has reduced its overheads by more than 50% with a strategy to focus on sales. As of 30 June 2013, A1 Investments & Resources currently holds 11.5% of PAFtec. For more details please visit www.paftec.com.au Hazelwood Resources Ltd Hazelwood Resources Ltd (‘Hazelwood’) is an emerging ferroalloy producer, with a majority interest in the largest, most advanced ferrotungsten plant outside of China. The plant’s construction is now complete and ready for production. Ferrotungsten is used in steels and alloys where heat resistance and hardness is required. Chinese restrictions on strategic metals have provided an opportunity for Hazelwood to become a leading and reliable supplier of the material.

Ferrotungsten metal lifting during July

Highlights Successful hot commissioning and maiden production campaign during April 2013 achieved production at the design rating and saleable product containing approximately 45,000kg tungsten metal was packaged and sold. Modification to plant and equipment during the June quarter proved to be effective, improving materials handling and reducing physical labour associated with the challenging production process.

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A1 Investments & Resources Ltd Project activities 30 June 2013 Ferrotungsten Sales receipt of $US1.74m were received by the ATC subsidiary during the quarter for the product from the first campaign. Subsequent to the end of the quarter, final settlement on those sales amounted to a further $US0.33m. Proceeds from sales were repatriated to Hazelwood from ATC. Product was distributed to end-users in Japan, Europe and Ukraine. A number of end-users visited the ATC site to discuss future supply and product specifications. Minjar Gold Pty Ltd, who own the gold rights to Mt Mulgine, and are in production at the Minjar Gold Project located to the north of Mt Mulgine, have proposed the development of a number of open pit mines within the Mt Mulgine Mining Leases. Discussions are in progress concerning the proposal, taking into consideration Hazelwood’s and Minjar’s respective mineral rights. Extensive field mapping near Copper Gorge in the East Pilbara of Western Australia identified new targets for base metals. As of 30 June 2013, A1 Investments & Resources holds 4,000,000 shares in Hazelwood Resources Limited. For more details please visit www.hazelwood.com.au KBL Mining Limited KBL Mining Limited (‘KBL Mining’) is an Australian copper and precious metals producer at the refurbished and upgraded Mineral Hill Mine in Central Western NSW. Production Record month and quarterly production performance June 2013 was the best production month for KBL since the commencement of operations. 606t of Copper metal in concentrate was produced, exceeding the previous record (505t in mid-2012) by 101t. Best quarter for mill and mine performance-primary ore sourced from Red Terror Cu-Au lodes

• Copper (Cu) production up 12% on previous quarter: Record 1,252 tonnes (t) of Cu in concentrate produced, including a recording monthly production of 606t of Copper for June.

• Gold production up 41% on previous quarter: Record 923 ounces (oz.) of Au in concentrate produced

• Site costs continue to decrease: C1 Copper production cost of 2.07$/lb., which is 0.63$/lb. (23%) less than the March quarter

• Sales: Five shipments of 4,908 dry metric tonnes (DMT) of Cu concentrate

Exploration

• Global Cu-Au Resource base expands with Red Terror Resources upgrade: Combine underground Cu-Au Resource of 1.32Mt ore, averaging 1.5% Cu, 3.1 g/t & 11g/t Ag Dewatering and rehabilitation now provides access to the southern portion of mine (ESOZ and SOZ deposits)

• Metallurgical drill hole confirms high grade Cu-Au mineralisation at ESOZ: 26m @ 0.9% Cu & 3.6 g/t Au, and 10m @ 2.2% Cu & 60.6 g/t Au

Corporate

• $5.3 million cash in bank at 30 June 2013 • R&D money received on the 15 July totalling $14.9 million • Share Purchase Plan (SPP) was announced on 2 July raised some $2.4 million • Implementation of corporate and site cost reductions continue to improve productivity

Sorby Hill silver lead Project KBL holds 75% (with Henan Yuguang Gold & Lead Co. Ltd of China holding 25% ) of the Sorby Hills silver lead projects located near Kununurra, WA one of the world’s largest near surface undeveloped silver-lead deposits, close to port infrastructure and a short distance from Asian markets. Environmental approvals for this Project are anticipated during the current quarter

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A1 Investments & Resources Ltd Project activities 30 June 2013 As of 30 June 2013, A1 Investments & Resources holds 740,000 shares in KBL Mining Limited For more details, please visit www.kblmining.com.au Competent Persons Statement The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Anthony Johnston, MSc (Hons), who is a Member of the Australasian Institute of Mining and Metallurgy and is a full-time employee of KBL Mining Limited. Anthony Johnston has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Johnston consents to the inclusion in the announcement of the matters based on his information in the form and context that the information appears. Asahi Eito Co Ltd Asahi Eito Co Ltd (‘Asahi’) (5341:JP) is a Japan–based listed company mainly engaged in the manufacture, sale and purchase of sanitation equipment and washing equipment, supplying sanitation and washing equipment for many of the Tsunami affected area, which are in the process of restructuring and rebuilding. As of 30 June 2013, A1 Investments & Resources Ltd holds 1.4 million shares in Asahi Eito Co Ltd Litigation Lending Services Partnership No.7 Litigation Lending Services Partnership No.7 (‘Litigation Lending Services’) is an Australian organisation providing individually tailored litigation funding solutions to an increasingly wide range of litigation requirements throughout Australia and New Zealand. There is currently only the case against Bell Potter Securities Ltd still running in this partnership, with an estimated completion date of May 2014. The partners are regularly reviewing the likelihood of this case, and will meet in necessary to decide what the next step will be. The initial investment made by A1 Investments & Resources Ltd was $500,000. To date, the company has received a total cash return of capital of $250,000. As of 30 June 2013, A1 Investments & Resources Ltd is a 25% partner of Litigation Lending Services Partnership No. 7. Enegain A1 Investments & Resources Ltd is continuing to look for parties and entities that would take the initial trial of the product, the Directors believe that more experimentation is needed to collect sufficient local technical data on the characteristics and possible uses of chemically treated coals. It is also needed a greater technical credibility before proceeding with high level presentations. As of 30 June 2013, A1 Investments & Resources Ltd holds 100% of Enegain Pty Ltd.

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In February 2013, the consolidated entity has struck a deal with Eastern Antimony Pty Ltd where the consolidatedentity would provide seed capital to fund the exploration of mining tenements held. An initial drilling of 5 short holes inthe Queensland tenements has been conducted, enabling the consolidated entity to identify drilling targets for a futureand more detailed drilling program in the near future. The assays of the drilling have been undertaken, and the resultswill be released once they are available.

The consolidated entity continues to hold and monitor its investments in the Australian Mining and Resources sector,and has redirected its investment focus to the healthcare sector in Australia, with the possibility of assisting itsexpansion into Japan.

There were no significant changes in the nature of the consolidated entity’s principal activities during the financialyear.

The principal activities of the consolidated entity during the financial year were those of an investment companyfocusing on projects in both Australia and Japan.

Peter Kao

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

30 June 2013

Details of project activities can be found in the 'Project activities' report preceding this Directors' report.

The consolidated entity continues to hold and monitor its investments in the Australian Mining and Resources sector,and has redirected its investment focus to the healthcare sector in Australia, with the possibility of assisting itsexpansion into Japan.

Charlie Nakamura

The directors present their report, together with the financial statements, on the consolidated entity (referred tohereafter as the 'consolidated entity') consisting of A1 Investments & Resources Ltd (referred to hereafter as the'company' or 'parent entity') and the entities it controlled for the year ended 30 June 2013.

Directors


Principal activities

Peter AshcroftDan Kao

The following persons were directors of A1 Investments & Resources Ltd during the whole of the financial year and upto the date of this report, unless otherwise stated:

Directors' report

Review of operationsThe loss for the consolidated entity after providing for income tax amounted to $2,992,094 (30 June 2012:$4,347,992).

Significant changes in the state of affairs

Dividends

Antimony is widely used in alloying to increase hardness and mechanical strength. Antimony is used in thesemiconductor industry for infrared detectors, Hall-effect devices, and diodes. The metal and its compounds alsoused in batteries, bullets, cable sheathing, flame-proofing compounds, glass, ceramics, paints, and pottery. Tartaremetic has been used in medicine. Charlie Nakamura was appointed a director of Eastern Antimony Pty Ltd.

There were no dividends paid, recommended or declared during the current or previous financial year.

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A1 Investments & Resources LtdDirectors' report

Matters subsequent to the end of the financial year

The consolidated entity is not subject to any significant environmental regulation under Australian Commonwealth orState law.

Charlie NakamuraName:

Environmental regulation

PAFtec Pty Limited will continue to sell into Europe as well as in Australia and New Zealand. PAFtec’s sales havebeen tracking consistently higher than its projection, exceeding its sales expectations. It is projected that by April toMay 2014, PAFtec will reach breakeven.

Information on directors

Likely developments and expected results of operations

No other matter or circumstance has arisen since 30 June 2013 that has significantly affected, or may significantlyaffect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs infuture financial years.

In July 2013, A1 Investments & Resources Ltd ('A1') has set up 100% owned subsidiary companies in Singapore andJapan. The purpose of these newly formed entities is to distribute the CleanSpace2 into Japan as well as otherindustrial markets in Asia. A1 has been granted the distribution right of the PAFtec CleanSpace2 in Japan and theAsia region and product trials has already taken place in several large Japanese corporations. A1 believes that themarket for such a device in Japan is significant, and therefore believes that by building up the distribution business inJapan, it would generate healthy cash profits for the consolidated entity.

Qualifications:Experience and expertise:

None

None19,608,862 ordinary sharesInterests in shares:

Interests in options:

B.IE (U.Nihon, Japan), MBA (U.Dubuque, USA)Charlie Nakamura worked for the Tokai Bank (a major Japanese bank that hasmerged and become the current Bank of Tokyo-Mitsubishi UFJ) from 1991 to 2002.During his time in Tokai Bank, Charlie's major activities included corporate finance,project finance, structure finance and international trading. In 1998, Charlietransferred to Tokai Australia Finance Corporation, Tokai Bank's Australiansubsidiary. Charlie was a head of the corporate finance department for the Japanesecorporations, which includes Toyota, Mitsubishi Corporation, Mitsui Corporation andmany other major Japanese companies in Australia. In 2000, Tokai joined the projectfinance ('PF') deal with BHP and Mitsubishi Corporation. Charlie was Tokai'srepresentative for this PF, which was well known as the “Blackwater” coking coal-mining project. After a successful completion of the Blackwater project, Charlie wasinvolved in various resource projects and made extensive networks in Australia. In2002, Charlie finished working for Tokai Australia Finance Corporation andestablished a mortgage finance company in Sydney. In 2007, Charlie started JinjiResources Pty Ltd as managing director which was acquired by the consolidatedentity in 2011.None

Special responsibilities:

Litigation Lending Services Partnership No 7 is projected to finalise the ongoing case against Bell Potter Securities Ltdby May 2014.

None

Title:

Other current directorships:Former directorships (in the last 3 years):

Executive Director and Chief Executive Officer

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Non-Executive DirectorQualifications:



Bachelor of Mechanical Engineering and Master of Biomedical Engineering fromUniversity of New South Wales

NoneMember of Corporate Governance Committee

Peter Kao served as the Company Secretary and Executive Director of ChinaCentury Capital Ltd from February 2009 to November 2011. Peter has been aBusiness and Operations Manager for IT and Technology companies in Australia andTaiwan. He was appointed Chief Operating Officer and Company Secretary of A1Investments & Resources Ltd in November 2011, and looks after the day to dayoperation of the company.

Member of Corporate Governance Committee

Interests in shares:

NoneFormer directorships (in the last 3 years):

Experience and expertise:

Title:

NoneInterests in shares:Interests in options:

Name:

Name:

'Other current directorships' quoted above are current directorships for listed entities only and excludes directorshipsin all other types of entities, unless otherwise stated.


None3,196,500 ordinary shares


Dan Kao

None

Peter Kao

Interests in shares:

Title:

None

Name:

Peter Ashcroft


LLB (University of Sydney), Solicitor of the Supreme Court of NSW and High Court ofAustraliaPeter Ashcroft is a commercial law specialist with over 35 years’ experience. He hasassisted various resource companies in recent years to list, finance their operationswith both debt and equity as well as manage their legal risks. Peter is familiar withmining and resource developments throughout Australia and has advised on jointventures in Indonesia, New Zealand, The Philippines, India, USA, Sweden, Ghana,Canada and Madagascar. Peter has for many years lectured on natural resource law,trade practices, company law and corporate governance and compliance.

Qualifications:


Special responsibilities: None


Executive Director, Chief Operating Officer and Company SecretaryTitle:

230,000 ordinary shares

Non-Executive DirectorQualifications:

Chairman of Torian Resources NL

None

Bachelor of Telecommunications and Master of Biomedical Engineering fromUniversity of New South Wales

None


Other current directorships:

Dan Kao served as the Chief Executive Officer and Managing Director of ChinaCentury Capital Ltd from February 2009 to November 2011. Dan has been a seniordesign engineer and Team leader for over 8 years in the healthcare industry in Chinaand Taiwan. He has been Non-Executive Director of A1 Investments & ResourcesLtd since November 2011.None

'Former directorships (in the last 3 years)' quoted above are directorships held in the last 3 years for listed entities onlyand excludes directorships in all other types of entities, unless otherwise stated.

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Attended Held12 12 12 12 12 12 9 12

ABCD

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performance linkage / alignment of executive compensationtransparency

acceptability to shareholders

attracts and retains high calibre executives

competitiveness and reasonableness

Peter Ashcroft

Peter Kao is an Executive Director and the Company Secretary of the company. Peter's details are included in the'Information on directors' section above.

Share-based compensation

Details of remuneration

The remuneration report is set out under the following main headings:Principles used to determine the nature and amount of remuneration

focuses on sustained growth in shareholder wealth, consisting of dividends and growth in share price, anddelivering constant or increasing return on assets as well as focusing the executive on key non-financialdrivers of value

A Principles used to determine the nature and amount of remuneration

The remuneration report, which has been audited, outlines the director and executive remuneration arrangements forthe consolidated entity and the company, in accordance with the requirements of the Corporations Act 2001 and itsRegulations.

Remuneration report (audited)

Charlie NakamuraPeter Kao

Full Board

Corporate Governance Committee matters were dealt with by the Full Board.

Held: represents the number of meetings held during the time the director held office.

Meetings of directors

Company secretary

The number of meetings of the company's Board of Directors ('the Board') held during the year ended 30 June 2013,and the number of meetings attended by each director were:

The objective of the consolidated entity's and company's executive reward framework is to ensure reward forperformance is competitive and appropriate for the results delivered. The framework aligns executive reward with theachievement of strategic objectives and the creation of value for shareholders, and conforms with the market bestpractice for delivery of reward. The Board of Directors ('the Board') ensures that executive reward satisfies thefollowing key criteria for good reward governance practices:

The Board has structured an executive remuneration framework that is market competitive and complementary to thereward strategy of the consolidated entity and company.

The Board is responsible for determining and reviewing remuneration arrangements for its directors and executives.The performance of the consolidated entity and company depends on the quality of its directors and executives. Theremuneration philosophy is to attract, motivate and retain high performance and high quality personnel.

Dan Kao

Alignment to shareholders' interests:has economic profit as a core component of plan design

Service agreements

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In accordance with best practice corporate governance, the structure of non-executive directors and executiveremunerations are separate.

provides a clear structure for earning rewardsreflects competitive reward for contribution to growth in shareholder wealthrewards capability and experience

Consolidated entity performance and link to remuneration

Executives can receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehiclebenefits) where it does not create any additional costs to the consolidated entity and adds additional value to theexecutive.

The executive remuneration and reward framework has four components:

other remuneration such as superannuation and long service leave

short-term performance incentives

Executive remuneration

Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually bythe Board, based on individual and business unit performance, the overall performance of the consolidated entity andcomparable market remunerations.

Remuneration levels are not directly dependent upon the consolidated entity or company's performance or any otherperformance conditions.

The consolidated entity and company aims to reward executives with a level and mix of remuneration based on theirposition and responsibility, which is both fixed and variable.

The combination of these comprises the executive's total remuneration.

base pay and non-monetary benefits

share-based payments

Long-term incentives ('LTI') include long service leave and share-based payments. Shares are awarded to executivesover a period of three years based on long-term incentive measures. These include increases in shareholder valuerelative to the entire market and the increase compared to the consolidated entity's direct competitors.

The short-term incentives ('STI') program is designed to align the targets of the business units with the targets ofthose executives in charge of meeting those targets. STI payments are granted to executives based on specificannual targets and key performance indicators ('KPI') being achieved. KPI’s include profit contribution, customersatisfaction, leadership contribution and product management.

Fees and payments to non-executive directors reflect the demands which are made on, and the responsibilities of, thedirectors. Non-executive directors' fees and payments are reviewed annually by the Board. The Board may seek theadvice of independent remuneration consultants to ensure non-executive directors' fees and payments areappropriate and in line with the market, see 'use of remuneration consultants' section below. The chairman's fees aredetermined independently to the fees of other non-executive directors based on comparative roles in the externalmarket. The chairman is not present at any discussions relating to determination of his own remuneration. Non-executive directors do not receive share options or other incentives.

Alignment to program participants' interests:

Non-executive directors remuneration

ASX listing rules require that the aggregate non-executive directors remuneration shall be determined periodically by ageneral meeting. The most recent determination was at the Annual General Meeting held on 25 November 2011,where the shareholders approved an aggregate remuneration of $90,867.

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Post-employment Long-term Share-based

benefits benefits payments

Cash salary Non- Super- Long service Equity-and fees Bonus monetary annuation leave settled Total

$ $ $ $ $ $ $

45,000 - - - - - 45,000 28,500 - - 2,565 - - 31,065 73,500 - - 2,565 - - 76,065

120,000 - 15,597 10,800 - - 146,397 95,000 - - 11,769 - - 106,769

215,000 - 15,597 22,569 - - 253,166

288,500 - 15,597 25,134 - - 329,231

Name

Peter Kao

Non-Executive Directors:

Short-term benefits

B Details of remuneration

2013

Executive Directors:Charlie Nakamura

Amounts of remunerationDetails of the remuneration of the key management personnel of consolidated entity are set out in the following tables.

Peter AshcroftDan Kao

Voting and comments made at the company's 2012 Annual General Meeting ('AGM')At the last AGM 99.88% of the shareholders voted to adopt the remuneration report for the year ended 30 June 2012.The company did not receive any specific feedback at the AGM regarding its remuneration practices.

Use of remuneration consultantsDuring the financial year ended 30 June 2013, the company did not engage remuneration consultants to review itsexisting remuneration policies and provide recommendations on how to improve both the short-term incentives ('STI')and long-term incentives ('LTI') programs.

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Post-employment Long-term Share-based

benefits benefits payments

Cash salary Super- Long service Equity-and fees Bonus Termination annuation leave settled Total

$ $ $ $ $ $ $

40,000 - - - - - 40,000 46,667 - - 4,200 - - 50,867 86,667 - - 4,200 - - 90,867

80,000 - - 7,200 - - 87,200 86,667 - - 7,800 - - 94,467

166,667 - - 15,000 - - 181,667

253,334 - - 19,200 - - 272,534

Non-Executive Directors:

Name

Dan Kao

Executive Directors:

Term of agreement:Details:

Name:

Peter Ashcroft

Details:

P Ashcroft

Agreement commenced:

Term of agreement:

Title:

Key management personnel have no entitlement to termination payments in the event of removal for misconduct.

2 months' notice required to terminate. Entitled to 6 months gross salary.

1 November 20113 years

Term of agreement: 3 years2 months' notice required to terminate. Entitled to 6 months gross salary.

P KaoTitle:Agreement commenced:

Details: 2 months' notice required to terminate. Entitled to 6 months gross salary.

Remuneration and other terms of employment for key management personnel are formalised in service agreements.Details of these agreements are as follows:

3 years

Name:

Agreement commenced:

C NakamuraExecutive Director and Chief Executive Officer

Name:Title:

Executive Director and Company Secretary

2012 Short-term benefits


C Service agreements

2 months' notice required to terminate. Entitled to 6 months gross salary.

1 November 2011Non-Executive DirectorD Kao

Non-Executive Director1 November 2011

1 November 2011

Details:

Term of agreement:

3 yearsAgreement commenced:Title:Name:

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Shares issued on the exercise of options

There were no unissued ordinary shares of A1 Investments & Resources Ltd under option outstanding at the date ofthis report.

D Share-based compensation

Proceedings on behalf of the company

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

This concludes the remuneration report, which has been audited.

There were no shares of A1 Investments & Resources Ltd issued on the exercise of options during the year ended 30June 2013 and up to the date of this report.

Options

Indemnity and insurance of officers

There were no options over ordinary shares issued to directors and other key management personnel as part ofcompensation that were outstanding as at 30 June 2013.

Indemnity and insurance of auditorThe company has not, during or since the financial year, indemnified or agreed to indemnify the auditor of thecompany or any related entity against a liability incurred by the auditor.

During the financial year, the company paid a premium in respect of a contract to insure the directors and executivesof the company against a liability to the extent permitted by the Corporations Act 2001. The contract of insuranceprohibits disclosure of the nature of liability and the amount of the premium.

The consolidated entity has received a legal notice that proceedings from the Tokyo District Court have been takenout by Succeed Co., Ltd against the company's 100% owned subsidiary Jinji Resources Pty Ltd in relation to a breachof duty of care. The directors are seeking legal advice and will be defending the claim which is for the amount of$816,000. No provision has been recognised in the financial statements in relation to this.

Shares under option

The company has indemnified the directors and executives of the company for costs incurred, in their capacity as adirector or executive, for which they may be held personally liable, except where there is a lack of good faith.

There were no options over ordinary shares granted to or vested by directors and other key management personnelas part of compensation during the year ended 30 June 2013.

Issue of sharesThere were no shares issued to directors and other key management personnel as part of compensation during theyear ended 30 June 2013.

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ESV Chartered Accountants continues in office in accordance with section 327 of the Corporations Act 2001.Auditor

This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act2001.

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

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

all non-audit services have been reviewed and approved to ensure that they do not impact the integrity andobjectivity of the auditor, andnone of the services undermine the general principles relating to auditor independence as set out in APES110 Code of Ethics for Professional Accountants issued by the Accounting Professional and EthicalStandards Board, including reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the company, acting as advocate for the company or jointly sharing economic risks andrewards.

Sydney

26 September 2013

Director

________________________________Charlie Nakamura

On behalf of the directors

Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by theauditor are outlined in note 26 to the financial statements.

Non-audit services

The directors are of the opinion that the services as disclosed in note 26 to the financial statements do notcompromise the external auditor’s independence requirements of the Corporations Act 2001 for the following reasons:

Auditor's independence declaration

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Robin

Stamp

16

Auditor’s Independence Declaration Under Section 307C of the Corporations Act 2001 to the Directors

of A1 Investments & Resources Limited

I declare that to the best of my knowledge and belief, during the year ended 30 June 2013, there have been:

(i) no contraventions of the auditor’s independence requirements as set out in the Corporations Act 2001 in relation to the audit; and

(ii) no contraventions of any applicable code of professional conduct in relation to the audit.

Dated at Sydney the 23rd day of September 2013.

ESV Chartered Accountants

Tim Valtwies

Partner

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A1 Investments & Resources Ltd Corporate Governance Statement 30 June 2013 Board of directors Charter This Charter sets out the role and specific responsibilities of the Board of directors (the ‘Board’) of A1 Investments & Resources Ltd (‘company’), the delegation of authority to Board Committees and the Board’s approach to corporate governance. Roles and Responsibilities of the Board The Board is ultimately responsible for the conduct and overall management of the company as well as for formulating and establishing its strategic goals with the aim of delivering shareholder value through performance maximisation of its businesses and employees. The primary role of the Board is to:

• Appoint the Chief Executive Officer (‘CEO’), and monitor performance of the CEO and senior executives; • Monitor and optimise business performance, including against approved plans and policies; • Formulate and establish the strategic direction of the company and monitor its execution; • Protect the interests of shareholders; • Approve external financial reporting by the company; and • Attend to specific Board matters including director appointments, approval of dividends, calling of

shareholders meetings, issue of securities, etc. The Board shall meet regularly as it deems appropriate. In carrying out its duties, the Board will evaluate, review and if satisfied, approve recommendations received from Board committees or the company’s management. It is responsible for the:

• development of strategic business planning and its final approval; • review and approval of business and marketing plans and budgets, including the setting of performance

objectives; • monitoring of executive management's performance and their implementation of strategy and policy; • constitutional structure, governance issues and significant policy issues; • review and approval of proposals for major capital expenditure, acquisitions and divestitures and monitor

their effectiveness; • establishment of the Corporate Governance, Nomination and Remuneration and Audit Committees as well

as ratifying their Charter and managing their effectiveness; • managing the relationship and performance of the auditor; • approval of company financial policies and financial statements; • review and monitoring management processes in place aimed at ensuring integrity of financial and other

reporting; • review, guidance and ratifying systems and procedures for identifying and managing risk management,

internal control, continuous disclosure and legal compliance; • monitoring director and senior executive compliance with its legal, operational, financial and administrative

policies; • approval and monitoring compliance with the company’s Delegation of Authority that prescribes the

authority limits of management; • selection, appointment and performance evaluation of the CEO as well as providing support and mentoring

where required, and removal if deemed necessary; • ratifying the appointment and the removal of senior executives; and • review and provision of input to succession plans for executive and management roles.

Responsibilities of Chairman The Chairman is responsible for leadership of the Board, for ensuring that the Board functions effectively, and for communicating the views of the Board (including through the CEO) to shareholders and the public. In performing this role the Chairman's responsibilities include:

• setting the agenda of matters to be considered by the Board; • managing the conduct, frequency and length of Board meetings to ensure that the Board maintains an in-

depth understanding of performance, the opportunities and challenges facing the company; • facilitating open and constructive communications between Board members and encouraging their

contribution to Board deliberations; • acting as a mentor and independent sounding board to the CEO, advising the CEO on likely Board

reactions to issues and proposals, keeping directors informally advised as necessary of such matters, convening special Board meetings as required and optimising the working relationship between the Chairman, directors and CEO; and

• reviewing the performance of the Board as a whole and all individual directors.

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A1 Investments & Resources Ltd Corporate Governance Statement 30 June 2013 Board Composition & Structure To provide for efficient understanding of and proper conduct with respect to the company’s business:

• The Board shall comprise directors with a range of backgrounds and experience; • The Board shall regularly review its composition and performance; • The Chairman has no executive authority; • The directors are encouraged to visit key site operations; • The directors are required to disclose all conflicts of interest or potential conflicts; and • Non-executive directors are required to be independent and are required to disclose all business

relationships or dealings with the company in accordance with director independence policy. The Board of directors may obtain independent professional advice at the company’s expense and may review in advance the estimated cost of the advice for reasonableness. Directors must seek approval of the Chairman and such approval will be granted where the advice sought is reasonably justified. Director Independence The objective of the Director Independence Policy is to ensure the company and the subsidiaries it controls (‘consolidated entity’) fulfils its duties and maintains good governance, to increase the incidence of independent directors and to specify the materiality thresholds and other tests that will generally be applied in determining the independence of each director. The document also prescribes the disclosure guidelines. This policy takes into account the Corporate Governance requirements established by the Australian Securities Exchange Corporate Governance Council that recommends the majority of the members of the Board of directors and the Audit Committee to be independent of the consolidated entity. It is the responsibility of the Board to determine the independence of directors in accordance with the procedures contained in its policy. In reaching their decision regarding individual director independence, the Board reserves the right to consider a director to be independent even though they may not meet one or more of the specific thresholds or tests, having regard to the underlying policy of the independence requirement and the qualitative nature of that director's circumstances. Corporate Governance Committee The directors aspire to high standards of corporate governance. To ensure the effective management and execution of its duties, the Board has established the Corporate Governance Committee (‘Committee’) which is responsible for:

• Corporate governance matters; • Nominations, appointments and remuneration of officers and senior executives; and • Audit matters.

The Committee makes recommendations to the Board recognising their responsibility is not delegated except as specifically authorised by the Board. The Committee shall comprise a non-executive director majority and with a minimum of two non-executive directors. The Committee shall be chaired by the Chairman of the company. The committee structure and membership is reviewed annually. Minutes of these meeting are kept and tabled at the Board meeting. Corporate Governance Committee Charter The Corporate Governance Committee’s Charter sets out the specific tripartite responsibilities delegated by the Board for the following areas:

• Corporate governance; • Nominations & remunerations; and • Audit.

Corporate Governance The objective is to assist the Board with fulfilling its responsibilities for the proper governance of the Board and the company.

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A1 Investments & Resources Ltd Corporate Governance Statement 30 June 2013 The primary role of the Committee in respect of corporate governance is to:

• establish a Charter for the Board; • assess the policies, practices and conduct ensuring compliance; and • monitor the performance of the Board and executives relative to standards expected.

To achieve the above objectives, the Committee shall ensure:

• the Board approves and directs the strategic business and marketing plans; • performance objectives are set; • executive management's performance and their implementation of strategy and policy is monitored; • directors are given appropriate advice to assist on constitutional structure, governance issues and

significant policy issues; • proposals for major capital expenditure, acquisitions and divestitures are appropriately assessed and

approved; • potential conflicts of interest by directors are reported to the Board and if necessary interested directors

excluded from discussion of the relevant matter and will not vote on that matter; • directors will provide the company with details of their shareholdings in the company and any changes; • directors will comply with the company’s policies for Continuous Disclosure and Share Trading and its

Code of Conduct which is reviewed annually; • directors have, at the cost of the company, access to independent, external and professional advice; • directors have access where necessary and at the cost of the company, to its senior executives for direct

information on the company’s affairs; • the Board as a whole is responsible for the appointment and removal of the Company Secretary; • directors will have the benefit of directors and Officers Insurance; • directors will have the benefit of an indemnity from the company to the extent permitted by the

Corporations Act as well as access to the company’s Board papers on terms agreed between the company and the Board; and

• The Committee makes recommendations to the Board recognising non delegated responsibilities. Nominations and Remuneration Committee The objective is to assist the Board with fulfilling its responsibilities for Board composition, structure, membership and remuneration as well as the executive selection, remuneration and succession planning. The primary role of the Committee in respect of nominations and remuneration is to:

• identify the necessary and desirable competencies of Board members; • assess the extent to which the competencies are represented on the Board; and • adhere to the selection and appointment process for directors and senior executives.

To achieve the above objectives, the Committee shall:

• engage appropriate qualified external consultants to provide advice and recommendations; • assess the requisite competencies of Board member; • review Board succession plans and skills goals; • evaluate Board performance; • make recommendations with regard to appointment, removal and remuneration of directors and the

Company Secretary; • incur at company expense every three years an independent professional assessment of remuneration

levels for Board members and the senior executives; • assess non-company time commitments of directors; • have direct access to the Company Secretary; • review and approve all executive positions reporting to the CEO; • review overall remuneration structure and strategies; and • review and assist with the senior executive succession planning

Due to the current size of the company, the role of the Nomination and Remuneration Committee is undertaken by the Full Board. Audit Committee The objective is to ensure the Board is fully informed on the adequacy of company’s financial reporting structure and financial control system as well as the proper carriage of the company’s audit process. The Committee has full and direct access to individual employees and the company’s external auditors who report directly to them and to the Board.

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A1 Investments & Resources Ltd Corporate Governance Statement 30 June 2013 The primary role of the Committee in respect of the Audit is to:

• assist the Board to fulfil its obligations for the company’s accounts and external reporting; • ensure appropriate internal financial control processes are in place and compliance with accounting

policies; • agree the scope and monitor the progress of the internal business reviews; and • review issues which the Board or the CEO request.

The Committee shall enjoy all the powers it deems reasonably necessary for it to discharge its responsibilities efficiently and independently. To achieve the above objectives, the Committee shall:

• be satisfied that the financial statements and external reports are the result of proper processes and are signed off by the CEO and Chief Operating Officer (‘COO’) via the auditor’s representation letter;

• inquire of the company's CEO and COO as to the existence of any significant deficiencies and material weaknesses in the design or operation of the internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarise and report financial information, and any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting;

• discuss any other major issues regarding accounting principles and financial statement presentations, internal controls, financial reporting issues, accounting standards treatment, off-balance sheet exposures and other material accounting and financial reporting issues.

• discuss and review the type and presentation of information to be included in earnings press releases; • review the performance and compensation of the external auditors and be responsible for the appointment,

retention, compensation, evaluation, re-appointment or termination of the external auditors; • meet regularly with management and with the internal auditors and ensure that the company's financial

processes and related internal controls are adequate; • review the assessment of business risk across the consolidated entity; • establish procedures to pre-approve all audit and non-audit related work which can be undertaken by the

external auditors and review such activity on an annual basis; • review significant transactions if requested to do so by the Board or by the CEO; • ensure that the independent auditors prepare and deliver annually an Auditor's Statement and discuss any

matters that may affect the independence of the company's independent auditors; • obtain from the independent auditors in connection with any audit a timely report relating to the company's

annual audited financial statements regarding: − alternative treatments of financial information within generally accepted accounting principles

discussed with management − ramifications of the use of such alternative disclosures and treatments, − the treatment preferred by the independent auditors − material written communications between the independent auditors and management, − schedule of unadjusted differences; − management or internal control issues.

• discuss any significant matters arising from any audit; and • discuss any difficulties the independent auditors encountered in the course of the audit, including any

restrictions on their activities or access to requested information and any significant disagreements with management.

Due to the current size of the company, the role of the Audit Committee is undertaken by the Full Board. Diversity The company does not have a formal diversity policy and is therefore not disclosing any measurable objectives for achieving gender diversity. The participation of women in the company and consolidated entity at 30 June 2013 was as follows:

• Women employees in the consolidated entity 33% • Women in senior management positions 0% • Women on the board 0%

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A1 Investments & Resources Ltd Corporate Governance Statement 30 June 2013 CEO and CFO certification The chief executive officer and chief financial officer have given a written declaration to the Board required by section 295A of the Corporations Act 2001 that in their view:

• the company's financial report is founded on a sound system of risk management and internal compliance and control which implements the financial policies adopted by the Board;

• the company's risk management and internal compliance and control system is operating effectively in all material respects;

• the company’s financial statements and notes thereto comply with the accounting standards; and • the company’s financial statements and notes thereto give a true and fair view of the consolidated entity's

financial position as at 30 June 2013 and of its performance for the financial year ended on that date.

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Note 2013 2012$ $

5 99,599 51,828

6 - 417,785

7 (175,496) (207,182)7 (19,250) (15,154)

(237,641) (39,229)(19,484) (4,202)

- (74,697)(33,114) (63,146)(38,966) (171,477)

7 - (950,888)(230,000) -

(6,176) - (1,561,813) (2,431,678)

(429,453) (498,648)7 (340,300) (361,304)

(2,992,094) (4,347,992)

8 - -

22 (2,992,094) (4,347,992)

(850,553) (56,000)

(850,553) (56,000)

(3,842,647) (4,403,992)

Cents Cents

35 (0.657) (1.196)35 (0.657) (1.196)

Other comprehensive income for the year, net of tax

Total comprehensive income for the year attributable to the owners of A1 Investments & Resources Ltd

Loss before income tax expense

Diluted earnings per shareBasic earnings per share

Employee benefits expense

Share of net losses of associated entity

Net loss on financial assets through profit or loss

Consultancy and professional fees

Expenses


For the year ended 30 June 2013Statement of profit or loss and other comprehensive income

Consolidated

Net loss on disposal of investments

Finance costsOther expenses

Other comprehensive income

Investment and other income

Revenue

Depreciation expense

Impairment of investments and loans

Share registry and listing expenses

Guarantee settlement

Foreign exchange lossesProduct samples

Loss after income tax expense for the year attributable to the owners of A1 Investments & Resources Ltd

Income tax expense

Items that may be reclassified subsequently to profit or lossLoss on the revaluation of available-for-sale financial assets, net of tax

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

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Note 2013 2012$ $

9 71,320 661,405 10 48,024 1,442,562 11 1,299,445 3,506,442 12 156,835 6,835

1,575,624 5,617,244

13 750,000 22,700 14 429,766 468,732 15 567,050 1,417,603 16 50,525 68,712

1,797,341 1,977,747

3,372,965 7,594,991

17 310,248 791,809 18 111,378 2,811,123

421,626 3,602,932

19 2,722,655 33,528 2,722,655 33,528

3,144,281 3,636,460

228,684 3,958,531

20 24,471,771 24,358,971 21 1,103,220 1,953,773 22 (25,346,307) (22,354,213)

228,684 3,958,531

A1 Investments & Resources LtdStatement of financial positionAs at 30 June 2013

Consolidated

Trade and other payablesBorrowings

Total assets

Issued capitalEquity

Non-current liabilities

Total non-current liabilities

Net assets

Borrowings

Total equity

Accumulated losses

Trade and other receivablesFinancial assets at fair value through profit or loss

Total current liabilities

Current liabilities

Non-current assets

Total current assets

Trade and other receivablesInvestments accounted for using the equity methodAvailable-for-sale financial assets

Current assets

Assets

Cash and cash equivalents

Other

Reserves

Property, plant and equipment

Total liabilities

Liabilities

Total non-current assets

The above statement of financial position should be read in conjunction with the accompanying notes

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Totalequity

$ $ $ $

19,079,687 2,009,773 (18,006,221) 3,083,239

- - (4,347,992) (4,347,992)

- - - (56,000) - (56,000)

- - - (56,000) (4,347,992) (4,403,992)

5,279,284 - - 5,279,284

- - 24,358,971 1,953,773 (22,354,213) 3,958,531

Totalequity

$ $ $ $

24,358,971 1,953,773 (22,354,213) 3,958,531

- - (2,992,094) (2,992,094)

- - - (850,553) - (850,553)

- - - (850,553) (2,992,094) (3,842,647)

112,800 - - 112,800

- - 24,471,771 1,103,220 (25,346,307) 228,684

Reserves lossesAccumulated

Issuedcapital capital

IssuedReserves

Accumulatedlosses

ConsolidatedBalance at 1 July 2011

Loss after income tax expense for the year

Total comprehensive income for the year

Contributions of equity, net of transaction costs (note 20)

Balance at 30 June 2012

Consolidated

Transactions with owners in their capacity as owners:


For the year ended 30 June 2013Statement of changes in equity


Issuedcapital



Total comprehensive income for the year

Balance at 1 July 2012

Contributions of equity, net of transaction costs (note 20)


Transactions with owners in their capacity as owners:

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

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Note 2013 2012$ $

61,707 57,011 (1,631,867) (475,316)

(1,570,160) (418,305)1,570 3,346

(340,300) (361,304)

34 (1,908,890) (776,263)

(158,640) - - 28,537

(1,063) (12,533)(11,702) (50,000)

1,490,210 1,199,034

1,318,805 1,165,038

- 230,283

- 230,283

(590,085) 619,058 661,405 42,347

9 71,320 661,405

Net increase/(decrease) in cash and cash equivalents

Cash flows from financing activities

Net cash from investing activities

Cash acquired through business combinationPayments for investments

Proceeds from sale of investments


For the year ended 30 June 2013Statement of cash flows

Cash and cash equivalents at the beginning of the financial year

Cash and cash equivalents at the end of the financial year

Cash flows from investing activities

Payment of other loans

Net cash from financing activities

Consolidated

Cash flows from operating activitiesReceipts from customers (inclusive of GST)

Interest received

Payments for property, plant and equipment

Payments to suppliers and employees (inclusive of GST)

Interest and other finance costs paid

Net cash used in operating activities

Proceeds from borrowings

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

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The financial report was authorised for issue, in accordance with a resolution of directors, on 27 September 2013.The directors have the power to amend and reissue the financial report.

The consolidated entity has applied AASB 2011-9 amendments from 1 July 2012. The amendments requiresgrouping together of items within other comprehensive income on the basis of whether they will eventually be'recycled' to the profit or loss (reclassification adjustments). The change provides clarity about the nature of itemspresented as other comprehensive income and the related tax presentation. The amendments also introduced theterm 'Statement of profit or loss and other comprehensive income' clarifying that there are two discrete sections, theprofit or loss section (or separate statement of profit or loss) and other comprehensive income section.

Notes to the financial statements

Note 1. General information

The financial report covers A1 Investments & Resources Ltd as a consolidated entity consisting of A1 Investments &Resources Ltd and the entities it controlled. The financial report is presented in Australian dollars, which is A1Investments & Resources Ltd's functional and presentation currency.

The principal accounting policies adopted in the preparation of the financial statements are set out below. Thesepolicies have been consistently applied to all the years presented, unless otherwise stated.

A1 Investments & Resources Ltd is a listed public company limited by shares, incorporated and domiciled in Australia.Its registered office and principal place of business is:

Note 2. Significant accounting policies


30 June 2013

New, revised or amending Accounting Standards and Interpretations adopted

The financial report consists of the financial statements, notes to the financial statements and the directors'declaration.

Suite 606 / 37 Bligh StreetSydney NSW 2000Australia

A description of the nature of the consolidated entity's operations and its principal activities are included in thedirectors' report, which is not part of the financial report.

AASB 2011-9 Amendments to Australian Accounting Standards - Presentation of Items of Other ComprehensiveIncome

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

Any significant impact on the accounting policies of the consolidated entity from the adoption of these AccountingStandards and Interpretations are disclosed below. The adoption of these Accounting Standards and Interpretationsdid not have any significant impact on the financial performance or position of the consolidated entity.

The following Accounting Standard is most relevant to the consolidated entity:

The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretationsissued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.

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Notes to the financial statementsA1 Investments & Resources Ltd

30 June 2013

In accordance with the Corporations Act 2001, these financial statements present the results of the consolidatedentity only. Supplementary information about the parent entity is disclosed in note 30.

Parent entity information

Historical cost conventionThe financial statements have been prepared under the historical cost convention, except for financial assets at fairvalue through profit or loss and available-for-sale financial assets.

Basis of preparation

The preparation of the financial statements requires the use of certain critical accounting estimates. It also requiresmanagement to exercise its judgement in the process of applying the consolidated entity's accounting policies. Theareas involving a higher degree of judgement or complexity, or areas where assumptions and estimates aresignificant to the financial statements, are disclosed in note 3.

Critical accounting estimates

If the initiatives referred to above do not eventuate and the company is unable to continue as a going concern it maybe required to realise its assets and discharge its liabilities other than in the normal course of business and atamounts different to those stated in the financial statements. The financial statements do not include adjustmentsrelating to the recoverability and classification of recorded asset amounts nor to the amounts and classification ofliabilities that might be necessary should the company not continue as a going concern.

Going concernThe following conditions give rise to material uncertainty which may cast doubt over the company’s ability to continueas a going concern:• Total comprehensive income for the year ended 30 June 2013 was a loss of $3,842,647 (2012: $4,403,992) whichincludes net loss on fair value adjustments to financial assets of $1,561,813 (2012: $2,431,678) and loss onrevaluation of available for sale financial assets of $850,553 (2012: $56,000);• Net cash outflow for the year was $590,085 (2012: net cash inflow $619,058);• The convertible notes maturing 30 September 2014 and likelihood of repayment, conversion or roll over; and• Volatility in fair value of financial assets created by the current economic environment.

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

Note 2. Significant accounting policies (continued)

The directors believe the company is a going concern for the following reasons:• Significantly reduced the fixed costs required to maintain the operation of the company, particularly the salaries andfees payable to the directors;• Seeking new projects and investment opportunities which will allow the company to raise further capital to continueits operations;• Re-directing its investment focus on the distribution of the PAFtec product into Japan, this, if successful, willgenerate healthy cash profits for the company;• Initiate discussion with convertible note holders about an extension and or conversion of their notes; and• Continuously monitor the company’s on-going working capital requirements.

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30 June 2013

Foreign operationsThe assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at thereporting date. The revenues and expenses of foreign operations are translated into Australian dollars using theaverage exchange rates, which approximate the rate at the date of the transaction, for the period. All resulting foreignexchange differences are recognised in other comprehensive income.

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of A1 Investments &Resources Ltd ('company' or 'parent entity') as at 30 June 2013 and the results of all subsidiaries for the year thenended. A1 Investments & Resources Ltd and its subsidiaries together are referred to in these financial statements asthe 'consolidated entity'.

Operating segmentsOperating segments are presented using the 'management approach', where the information presented is on thesame basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM isresponsible for the allocation of resources to operating segments and assessing their performance.

Revenue recognition

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

Subsidiaries are all those entities over which the consolidated entity has the power to govern the financial andoperating policies, generally accompanying a shareholding of more than one-half of the voting rights. The effects ofpotential exercisable voting rights are considered when assessing whether control exists. Subsidiaries are fullyconsolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated fromthe date that control ceases.


Revenue is recognised when it is probable that the economic benefit will flow to the consolidated entity and therevenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable.

The acquisition of subsidiaries is accounted for using the acquisition method of accounting. Refer to the 'businesscombinations' accounting policy for further details. A change in ownership interest, without the loss of control, isaccounted for as an equity transaction, where the difference between the consideration transferred and the bookvalue of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.

Principles of consolidation

Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilitiesand non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity.The consolidated entity recognises the fair value of the consideration received and the fair value of any investmentretained together with any gain or loss in profit or loss.

Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entityare eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment ofthe asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistencywith the policies adopted by the consolidated entity.

Foreign currency translationThe financial report is presented in Australian dollars, which is A1 Investments & Resources Ltd's functional andpresentation currency.

Foreign currency transactionsForeign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates ofthe translations. Foreign exchange gains and losses resulting from the settlement of such transactions and from thetranslation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currenciesare recognised in profit or loss.

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30 June 2013

●

●

The carrying amount of recognised and unrecognised deferred tax assets are reviewed each reporting date. Deferredtax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be availablefor the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extentthat it is probable that there are future taxable profits available to recover the asset.


Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assetsagainst current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the sametaxable authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply whenthe assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted,except for:

The income tax expense or benefit for the period is the tax payable on that period's taxable income based on theapplicable income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and liabilities attributableto temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.


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

RentRent revenue is recognised on a straight-line basis over the lease term. Lease incentives granted are recognised aspart of the rental revenue. Contingent rentals are recognised as income in the period when earned.

When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset orliability in a transaction that is not a business combination and that, at the time of the transaction, affectsneither the accounting nor taxable profits; or

InterestInterest revenue is recognised as interest accrues using the effective interest method. This is a method of calculatingthe amortised cost of a financial asset and allocating the interest income over the relevant period using the effectiveinterest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of thefinancial asset to the net carrying amount of the financial asset.

Other revenueOther revenue is recognised when it is received or when the right to receive payment is established.

Income tax

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

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

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Financial assets at fair value through profit or loss are either: i) held for trading, where they are acquired for thepurpose of selling in the short-term with an intention of making a profit; or ii) designated as such upon initialrecognition, where they are managed on a fair value basis or to eliminate or significantly reduce an accounting mis-match. Except for effective hedging instruments, derivatives are also categorised as fair value through profit or loss.Fair value movements are recognised in profit or loss.

Financial assets at fair value through profit or loss

Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted inan active market. They are carried at amortised cost using the effective interest rate method. Gains and losses arerecognised in profit or loss when the asset is derecognised or impaired.

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired orhave been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership.

Other receivables are recognised at amortised cost, less any provision for impairment.

Associates

Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using theeffective interest method, less any provision for impairment. Trade receivables are generally due for settlement within14 to 28 days.

Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable arewritten off by reducing the carrying amount directly. A provision for impairment of trade receivables is raised whenthere is objective evidence that the consolidated entity will not be able to collect all amounts due according to theoriginal terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enterbankruptcy or financial reorganisation and default or delinquency in payments (more than 60 days overdue) areconsidered indicators that the trade receivables may be impaired. The amount of the impairment allowance is thedifference between the asset’s carrying amount and the present value of estimated future cash flows, discounted atthe original effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect ofdiscounting is immaterial.

Trade and other receivables

Investments and other financial assets are initially measured at fair value. Transaction costs are included as part ofthe initial measurement, except for financial assets at fair value through profit or loss. They are subsequentlymeasured at either amortised cost or fair value depending on their classification. Classification is determined basedon the purpose of the acquisition and subsequent reclassification to other categories is restricted. The fair values ofquoted investments are based on current bid prices. For unlisted investments, the consolidated entity establishes fairvalue by using valuation techniques. These include the use of recent arm's length transactions, reference to otherinstruments that are substantially the same, discounted cash flow analysis, and option pricing models.


Investments and other financial assets

When the consolidated entity’s share of losses in an associate equals or exceeds its interest in the associate,including any unsecured long-term receivables, the consolidated entity does not recognise further losses, unless ithas incurred obligations or made payments on behalf of the associate.

Associates are entities over which the consolidated entity has significant influence but not control or joint control.Investments in associates are accounted for using the equity method. Under the equity method, the share of theprofits or losses of the associate is recognised in profit or loss and the share of the movements in equity is recognisedin other comprehensive income. Investments in associates are carried in the statement of financial position at costplus post-acquisition changes in the consolidated entity's share of net assets of the associates. Dividends received orreceivable from associates reduce the carrying amount of the investment.

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Available-for-sale financial assets

Property, plant and equipment

The amount of the impairment allowance for financial assets carried at cost is the difference between the asset’scarrying amount and the present value of estimated future cash flows, discounted at the current market rate of returnfor similar financial assets.

Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant andequipment over their expected useful lives as follows:

Motor vehicles and plant and equipment under lease are depreciated over the unexpired period of the lease or theestimated useful life of the assets, whichever is shorter.

The consolidated entity assesses at the end of each reporting period whether there is any objective evidence that afinancial asset or group of financial assets is impaired. Objective evidence includes significant financial difficulty of theissuer or obligor; a breach of contract such as default or delinquency in payments; the lender granting to a borrowerconcessions due to economic or legal reasons that the lender would not otherwise do; it becomes probable that theborrower will enter bankruptcy or other financial reorganisation; the disappearance of an active market for thefinancial asset; or observable data indicating that there is a measurable decrease in estimated future cash flows.

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

Plant and equipment

Impairment of financial assets

8-20 years

The amount of the impairment allowance for loans and receivables carried at amortised cost is the differencebetween the asset’s carrying amount and the present value of estimated future cash flows, discounted at the originaleffective interest rate. If there is a reversal of impairment, the reversal cannot exceed the amortised cost that wouldhave been recognised had the impairment not been made and is reversed to profit or loss.


Available-for-sale financial assets are non-derivative financial assets, principally equity securities, that are eitherdesignated as available-for-sale or not classified as any other category. After initial recognition, fair value movementsare recognised directly in the available-for-sale reserve in equity. Cumulative gain or loss previously reported in theavailable-for-sale reserve is recognised in profit or loss when the asset is derecognised or impaired.

An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefitto the consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken toprofit or loss.

The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at eachreporting date.

Motor vehicles 5 years

Available-for-sale financial assets are considered impaired when there has been a significant or prolonged decline invalue below initial cost. Subsequent increments in value are recognised directly in the available-for-sale reserve.

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Finance leases are capitalised. A lease asset and liability are established at the fair value of the leased assets, or iflower, the present value of minimum lease payments. Lease payments are allocated between the principalcomponent of the lease liability and the finance costs, so as to achieve a constant rate of interest on the remainingbalance of the liability.

Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs.They are subsequently measured at amortised cost using the effective interest method.

Leased assets acquired under a finance lease are depreciated over the asset's useful life or over the shorter of theasset’s useful life and the lease term if there is no reasonable certainty that the consolidated entity will obtainownership at the end of the lease term.

Operating lease payments, net of any incentives received from the lessor, are charged to profit or loss on a straight-line basis over the term of the lease.


Borrowings

Trade and other payables

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

A distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially allthe risks and benefits incidental to ownership of leased assets, and operating leases, under which the lessoreffectively retains substantially all such risks and benefits.

Impairment of non-financial assets

Where there is an unconditional right to defer settlement of the liability for at least 12 months after the reporting date,the loans or borrowings are classified as non-current.

On the issue of the convertible notes the fair value of the liability component is determined using a market rate for anequivalent non-convertible bond and this amount is carried as a non-current liability on the amortised cost basis untilextinguished on conversion or redemption. The increase in the liability due to the passage of time is recognised as afinance cost. The remainder of the proceeds are allocated to the conversion option that is recognised and included inshareholders equity as a convertible note reserve, net of transaction costs. The carrying amount of the conversionoption is not remeasured in the subsequent years. The corresponding interest on convertible notes is expensed toprofit or loss.

The component of the convertible notes that exhibits characteristics of a liability is recognised as a liability in thestatement of financial position, net of transaction costs.

Leases

These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of thefinancial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are notdiscounted. The amounts are unsecured and are usually paid within 30 days of recognition.

Recoverable amount is the higher of an asset’s fair value less costs to sell and value-in-use. The value-in-use is thepresent value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to theasset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows aregrouped together to form a cash-generating unit.

Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that thecarrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset'scarrying amount exceeds its recoverable amount.

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The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controllinginterest in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existinginvestment in the acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value isless than the fair value of the identifiable net assets acquired, being a bargain purchase to the acquirer, the differenceis recognised as a gain directly in profit or loss by the acquirer on the acquisition-date, but only after a reassessmentof the identification and measurement of the net assets acquired, the non-controlling interest in the acquiree, if any,the consideration transferred and the acquirer's previously held equity interest in the acquirer.

Employee benefits

Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.

On the acquisition of a business, the consolidated entity assesses the financial assets acquired and liabilitiesassumed for appropriate classification and designation in accordance with the contractual terms, economicconditions, the consolidated entity's operating or accounting policies and other pertinent conditions in existence at theacquisition-date.

Defined contribution superannuation expense

Where the business combination is achieved in stages, the consolidated entity remeasures its previously held equityinterest in the acquiree at the acquisition-date fair value and the difference between the fair value and the previouscarrying amount is recognised in profit or loss.

The acquisition method of accounting is used to account for business combinations regardless of whether equityinstruments or other assets are acquired.

Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequentchanges in the fair value of contingent consideration classified as an asset or liability is recognised in profit or loss.Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for withinequity.

Issued capitalOrdinary shares are classified as equity.

- interest on short-term and long-term borrowings

Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs areexpensed in the period in which they are incurred, including:

Business combinations

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


Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts theprovisional amounts recognised and also recognises additional assets or liabilities during the measurement period,based on new information obtained about the facts and circumstances that existed at the acquisition-date. Themeasurement period ends on either the earlier of (i) 12 months from the date of the acquisition or (ii) when theacquirer receives all the information possible to determine fair value.

Finance costs

The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equityinstruments issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest in the acquiree. For each business combination, the non-controlling interest in the acquiree ismeasured at either fair value or at the proportionate share of the acquiree's identifiable net assets. All acquisitioncosts are expensed as incurred to profit or loss.

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

Diluted earnings per share

Goods and Services Tax ('GST') and other similar taxes

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

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yetmandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June2013. The consolidated entity's assessment of the impact of these new or amended Accounting Standards andInterpretations, most relevant to the consolidated entity, are set out below.


Earnings per share

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxauthority.

Basic earnings per shareBasic earnings per share is calculated by dividing the profit attributable to the owners of A1 Investments & ResourcesLtd, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinaryshares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during thefinancial year.

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

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GSTrecoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement offinancial position.

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is notrecoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or aspart of the expense.

New Accounting Standards and Interpretations not yet mandatory or early adopted

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

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This standard and its consequential amendments are applicable to annual reporting periods beginning on or after 1January 2013. The standard provides a single robust measurement framework, with clear measurement objectives,for measuring fair value using the 'exit price' and it provides guidance on measuring fair value when a marketbecomes less active. The 'highest and best use' approach would be used to measure assets whereas liabilities wouldbe based on transfer value. As the standard does not introduce any new requirements for the use of fair value, itsimpact on adoption by the consolidated entity from 1 July 2013 should be minimal, although there will be increaseddisclosures where fair value is used.

This standard is applicable to annual reporting periods beginning on or after 1 January 2013. The standard has a newdefinition of 'control'. Control exists when the reporting entity is exposed, or has the rights, to variable returns (e.g.dividends, remuneration, returns that are not available to other interest holders including losses) from its involvementwith another entity and has the ability to affect those returns through its 'power' over that other entity. A reporting entityhas power when it has rights (e.g. voting rights, potential voting rights, rights to appoint key management, decisionmaking rights, kick out rights) that give it the current ability to direct the activities that significantly affect the investee’sreturns (e.g. operating policies, capital decisions, appointment of key management). The consolidated entity will notonly have to consider its holdings and rights but also the holdings and rights of other shareholders in order todetermine whether it has the necessary power for consolidation purposes. The adoption of this standard from 1 July2013 may have an impact where the consolidated entity has a holding of less than 50% in an entity, has de factocontrol, and is not currently consolidating that entity.

AASB 11 Joint Arrangements

AASB 12 Disclosure of Interests in Other Entities

AASB 13 Fair Value Measurement and AASB 2011-8 Amendments to Australian Accounting Standards arising fromAASB 13

AASB 127 Separate Financial Statements (Revised)AASB 128 Investments in Associates and Joint Ventures (Reissued)

AASB 10 Consolidated Financial Statements

This standard is applicable to annual reporting periods beginning on or after 1 January 2013. The standard defineswhich entities qualify as joint ventures and removes the option to account for joint ventures using proportionalconsolidation. Joint ventures, where the parties to the agreement have the rights to the net assets will use equityaccounting. Joint operations, where the parties to the agreements have the rights to the assets and obligations for theliabilities will account for the assets, liabilities, revenues and expenses separately, in accordance with the standardsapplicable to the particular assets, liabilities, revenues and expenses. The adoption of this standard from 1 July 2013will not have a material impact on the consolidated entity.

This standard is applicable to annual reporting periods beginning on or after 1 January 2013. It contains the entiredisclosure requirement associated with other entities, being subsidiaries, associates and joint ventures. Thedisclosure requirements have been significantly enhanced when compared to the disclosures previously located inAASB 127 'Consolidated and Separate Financial Statements', AASB 128 'Investments in Associates', AASB 131'Interests in Joint Ventures' and Interpretation 112 'Consolidation - Special Purpose Entities'. The adoption of thisstandard from 1 July 2013 will significantly increase the amount of disclosures required to be given by theconsolidated entity such as significant judgements and assumptions made in determining whether it has a controllingor non-controlling interest in another entity and the type of non-controlling interest and the nature and risks involved.


These standards are applicable to annual reporting periods beginning on or after 1 January 2013. They have beenmodified to remove specific guidance that is now contained in AASB 10, AASB 11 and AASB 12. The adoption ofthese revised standards from 1 July 2013 will not have a material impact on the consolidated entity.

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The amendments are applicable to annual reporting periods beginning on or after 1 January 2014. The amendmentsadd application guidance to address inconsistencies in the application of the offsetting criteria in AASB 132 'FinancialInstruments: Presentation', by clarifying the meaning of "currently has a legally enforceable right of set-off"; andclarifies that some gross settlement systems may be considered to be equivalent to net settlement. The adoption ofthe amendments from 1 July 2014 will not have a material impact on the consolidated entity.

AASB 2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and JointArrangements StandardsThe amendments are applicable to annual reporting periods beginning on or after 1 January 2013. The amendmentsmake numerous consequential changes to a range of Australian Accounting Standards and Interpretations, followingthe issuance of AASB 10, AASB 11, AASB 12 and revised AASB 127 and AASB 128. The adoption of theseamendments from 1 July 2013 will not have a material impact on the consolidated entity.

AASB 2012-2 Amendments to Australian Accounting Standards - Disclosures - Offsetting Financial Assets andFinancial LiabilitiesThe amendments are applicable to annual reporting periods beginning on or after 1 January 2013. The disclosurerequirements of AASB 7 'Financial Instruments: Disclosures' (and consequential amendments to AASB 132 'FinancialInstruments: Presentation') have been enhanced to provide users of financial statements with information aboutnetting arrangements, including rights of set-off related to an entity's financial instruments and the effects of suchrights on its statement of financial position. The adoption of the amendments from 1 July 2013 will increase thedisclosures by the consolidated entity.

The amendments are applicable to annual reporting periods beginning on or after 1 January 2013. The amendmentsaffect five Australian Accounting Standards as follows: Confirmation that repeat application of AASB 1 (IFRS 1) 'First-time Adoption of Australian Accounting Standards' is permitted; Clarification of borrowing cost exemption in AASB 1;Clarification of the comparative information requirements when an entity provides an optional third column or isrequired to present a third statement of financial position in accordance with AASB 101 'Presentation of FinancialStatements'; Clarification that servicing of equipment is covered by AASB 116 'Property, Plant and Equipment', if suchequipment is used for more than one period; clarification that the tax effect of distributions to holders of equityinstruments and equity transaction costs in AASB 132 'Financial Instruments: Presentation' should be accounted forin accordance with AASB 112 ‘Income Taxes’; and clarification of the financial reporting requirements in AASB 134'Interim Financial Reporting' and the disclosure requirements of segment assets and liabilities. The adoption of theamendments from 1 July 2013 will not have a material impact on the consolidated entity.

These amendments are applicable to annual reporting periods beginning on or after 1 July 2013, with early adoptionnot permitted. They amend AASB 124 'Related Party Disclosures' by removing the disclosure requirements forindividual key management personnel ('KMP'). The adoption of these amendments from 1 July 2013 will remove theduplication of information relating to individual KMP in the notes to the financial statements and the directors report.Corporations and Related Legislation Amendment Regulations 2013 and Corporations and Australian Securities andInvestments Commission Amendment Regulation 2013 (No. 1) now specify the KMP disclosure requirements to beincluded within the directors report for annual reporting periods beginning 1 July 2013.


AASB 2012-5 Amendments to Australian Accounting Standards arising from Annual Improvements 2009-2011 Cycle

AASB 119 Employee Benefits (September 2011) and AASB 2011-10 Amendments to Australian AccountingStandards arising from AASB 119 (September 2011)

AASB 2012-3 Amendments to Australian Accounting Standards - Offsetting Financial Assets and Financial Liabilities

This revised standard and its consequential amendments are applicable to annual reporting periods beginning on orafter 1 January 2013. The amendments make changes to the accounting for defined benefit plans and the definitionof short-term employee benefits, from 'due to' to 'expected to' be settled within 12 months. The later will requireannual leave that is not expected to be wholly settled within 12 months to be discounted allowing for expected salarylevels in the future period when the leave is expected to be taken. The adoption of the revised standard from 1 July2013 is not expected to have a significant impact on the consolidated entity.

AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management PersonnelDisclosure Requirement

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The preparation of the financial statements requires management to make judgements, estimates and assumptionsthat affect the reported amounts in the financial statements. Management continually evaluates its judgements andestimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases itsjudgements, estimates and assumptions on historical experience and on other various factors, including expectationsof future events, management believes to be reasonable under the circumstances. The resulting accountingjudgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptionsthat have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer tothe respective notes) within the next financial year are discussed below.

The consolidated entity is required to classify financial instruments, measured at fair value, using a three levelhierarchy, being: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices)or indirectly (derived from prices); and Level 3: Inputs for the asset or liability that are not based on observable marketdata (unobservable inputs). An instrument is required to be classified in its entirety on the basis of the lowest level ofvaluation inputs that is significant to fair value. Considerable judgement is required to determine what is significant tofair value and therefore which category the financial instrument is placed in can be subjective.

This amendment is applicable to annual reporting periods beginning on or after 1 January 2013. The amendmentremoves reference in AASB 1048 following the withdrawal of Interpretation 1039. The adoption of this amendment willnot have a material impact on the consolidated entity.

The consolidated entity assesses impairment of non-financial assets other than goodwill and other indefinite lifeintangible assets at each reporting date by evaluating conditions specific to the consolidated entity and to theparticular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset isdetermined. This involves fair value less costs to sell or value-in-use calculations, which incorporate a number of keyestimates and assumptions.

Impairment of non-financial assets other than goodwill and other indefinite life intangible assets

AASB 2012-9 Amendment to AASB 1048 arising from the Withdrawal of Australian Interpretation 1039

Note 3. Critical accounting judgements, estimates and assumptions

The fair value of financial instruments classified as level 3 is determined by the use of valuation models. Theseinclude discounted cash flow analysis or the use of observable inputs that require significant adjustments based onunobservable inputs.

AASB 2012-10 Amendments to Australian Accounting Standards – Transition Guidance and Other Amendments


These amendments are applicable to annual reporting periods beginning on or after 1 January 2013. They amendAASB 10 and related standards for the transition guidance relevant to the initial application of those standards. Theamendments clarify the circumstances in which adjustments to an entity’s previous accounting for its involvement withother entities are required and the timing of such adjustments. The adoption of these amendments will not have amaterial impact on the consolidated entity.

AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial AssetsThe amendments are applicable to annual reporting periods beginning on or after 1 January 2014. The disclosurerequirements of AASB 136 ‘Impairment of Assets' have been enhanced to require additional information about the fairvalue measurement when the recoverable amount of impaired assets is based on fair value less costs of disposals.Additionally, if measured using a present value technique, the discount rate is required to be disclosed. The adoptionof the amendments from 1 July 2014 may increase the disclosures by the consolidated entity.

Fair value and hierarchy of financial instruments

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2013 2012$ $

- 43,877 66,000 -

100 150 1,570 3,346 5,455 4,455

26,474 -

- - 99,599 51,828

2013 2012$ $

- 417,785

2013 2012$ $

11,035 4,932 8,215 10,222

- - 19,250 15,154

- 186,526 - 764,362

- - - 950,888

The consolidated entity operates in one segment, being an investment company focusing on projects in the rapidlygrowing economy in the Australian mining and resources sector. This is based on the internal reports that arereviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers ('CODM')) inassessing performance and in determining the allocation of resources. There is no aggregation of operatingsegments.

Impairment

Motor vehiclesPlant and equipment

Research fees

Loss before income tax includes the following specific expenses:

Total impairment

Depreciation

Net gain on disposal of investments

Dividends

Other revenue

Consolidated

Note 6. Investment and other income

Rent

Consolidated

Interest

As a result of this, the operating segment information is as disclosed in the statements and notes to the financialstatements throughout the report.

Identification of reportable operating segments

Note 4. Operating segments

Revenue

Consulting fees

Note 5. Revenue

- Cominco Pty Ltd - Convertible Notes

Note 7. Expenses

Total depreciation

- Sinotel Limited - Shares

Consolidated

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30 June 2013

2013 2012$ $

340,300 361,304

55,000 41,632

135 22,622 175,361 184,560

- - 175,496 207,182

2013 2012$ $

(2,992,094) (4,347,992)

(897,628) (1,304,398)

118,227 285,266

- - (779,401) (1,019,132)779,401 1,019,132

- - - -

11,815,333 9,566,022

3,544,600 2,869,807

2013 2012$ $

71,320 661,405

Loss before income tax expense

Consolidated

Note 9. Current assets - cash and cash equivalents

The above potential tax benefit for tax losses has not been recognised in the statement of financial position. Thesetax losses can only be utilised in the future if the continuity of ownership test is passed, or failing that, the samebusiness test is passed.

Current year tax losses not recognised

Write-downs to recoverable amounts

Minimum lease payments

Consolidated

Note 8. Income tax expense

Unused tax losses for which no deferred tax asset has been recognised

Rental expense relating to operating leases

Note 7. Expenses (continued)

Defined contribution superannuation expense

Tax at the statutory tax rate of 30%


Total employee benefits expense

Interest and finance charges paid/payable

Consolidated

Income tax expense

Finance costs

Tax effect amounts which are not deductible/(taxable) in calculating taxable income:


Potential tax benefit @ 30%

Tax losses not recognised


Numerical reconciliation of income tax expense and tax at the statutory rate

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2013 2012$ $

36,300 750,000 22 -

11,702 692,562

- - 48,024 1,442,562

2013 2012$ $

1,299,445 3,506,442

2013 2012$ $

6,385 6,385 450 450

150,000 -

- - 156,835 6,835

Refer to note 24 for further information on financial instruments.

Impairment of receivables

Note 10. Current assets - trade and other receivables

Other receivables

1,110,647 (2012: 1,438,811) shares in the Japanese vitreous plumbing fixtures company Asahi Eito CompanyLimited, listed on the Tokyo Stock exchange (TSE: 53410).

Share subscription deposit

Prepayments

Note 12. Current assets - other

Consolidated

Security deposits

Trade receivables

Shares in listed entities - designated at fair value through profit or loss

Related party receivable

Past due but not impairedThere are no past due but not impaired receivables.

The consolidated entity has recognised a loss of $nil (2012: $84,657) in profit or loss in respect of impairment ofreceivables for the year ended 30 June 2013.

Related party receivable represented an interest-free loan to KOR Holdings Pty Ltd who is a substantial shareholderas well as a director related entity with Charlie Nakamura a common director. The loan was repaid by 31 December2012 in a non-cash transaction via transfer of securities in a listed company.

Consolidated

Shares in listed entities8,000,000 (2012: 8,000,000) shares in the Australian rare earths company Hastings Rare Metals Limited (ASX: HAS).

4,390,000 (2012: 15,000,000) shares in the Australian rare metal company Hazelwood Resources Limited (ASX:HAZ).

Consolidated

Note 11. Current assets - financial assets at fair value through profit or loss

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2013 2012$ $

750,000 - - 22,700

- - 750,000 22,700

2013 2012$ $

429,766 468,732

2013 2012$ $

567,050 1,417,603

2013 2012$ $

61,024 59,961 (43,906) (32,871)

- - 17,118 27,090

54,766 54,766 (21,359) (13,144)

- - 33,407 41,622

- - 50,525 68,712

Note 14. Non-current assets - investments accounted for using the equity method

ReceivableRelated party receivable

Consolidated

Investment in Litigation Lending Services Partnership No.7

Motor vehicles - at cost

Consolidated

Shares in unlisted entities relate to its holding in PAFtec Pty Ltd.

Shares in unlisted entities

Consolidated

Refer to note 32 for further information on investments in associates.

Note 13. Non-current assets - trade and other receivables

Less: Accumulated depreciation

Note 16. Non-current assets - property, plant and equipment

Less: Accumulated depreciationPlant and equipment - at cost

Note 15. Non-current assets - available-for-sale financial assets


The receivable is a loan to Minatek Pty Ltd which arose from the disposal of shares in Heng Sheng MiningCorporation during the 30 June 2012 financial year. This loan is payable on demand, unsecured and interest-free. Asthe Board is examining the opportunity to convert the loan into equity in a new project introduced by Minatek Pty Ltdthe loan has been classified as non current.

Consolidated

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Total$ $ $ $ $ $

- - - 5,690 - 5,690 - - - 6,427 1,245 7,672

- - - 19,905 50,599 70,504 - - - (4,932) (10,222) (15,154)

- - - 27,090 41,622 68,712 - - - 1,063 - 1,063 - - - (11,035) (8,215) (19,250)

- - - 17,118 33,407 50,525

2013 2012$ $

310,248 791,809

2013 2012$ $

33,528 10,618 77,850 77,850

- 2,722,655

- - 111,378 2,811,123

Trade payables and accruals

Consolidated

Note 17. Current liabilities - trade and other payables

Consolidated

Other loans - unsecured

Refer to note 19 for details on convertible notes


Other loans - secured



ReconciliationsReconciliations of the written down values at the beginning and end of the current and previous financial year are setout below:

Plant and

Note 16. Non-current assets - property, plant and equipment (continued)

Motor

Additions


Consolidated

equipment


Additions


vehicles

Additions through business combinations

Note 18. Current liabilities - borrowings

Convertible notes payable

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2013 2012$ $

- 33,528 2,722,655 -

- - 2,722,655 33,528

2013 2012$ $

33,528 44,146

2013 2012 2013 2012Shares Shares $ $

478,029,040 449,762,373 24,471,771 24,358,971

No of shares Issue price $

216,534,191 19,079,687 4,646,203 $0.031 145,000

216,534,191 $0.023 5,001,940 12,047,788 $0.011 132,344

449,762,373 24,358,971 18,666,667 $0.005 84,000

9,600,000 $0.003 28,800

478,029,040 24,471,771

10 October 2011

26 June 2013

5 April 2012

Conversion of note

Assets pledged as security

Movements in ordinary share capital

Ordinary shares - fully paid

Consolidated

Balance 30 June 2013

Conversion of fees payable30 June 2012

Issue of shares

Conversion of fees payable

Consolidated

Other loans include a lease payable, which is secured by the motor vehicle subject to lease.

Total secured liabilitiesThe total secured liabilities (current and non-current) are as follows:

Consolidated

Convertible notesAt a noteholder meeting held on 21 August 2012, the company received approval from noteholders to extend thematurity date of the convertible notes by two years to 30 September 2014. The holder has the right to convert at 30September or 31 March each year. Conversion ratio is 1 / (90% x Volume-weighted average share price ('VWAP')).Convertible notes carry interest of 12% per annum, payable half yearly. No voting rights are attached to theconvertible notes. As a result of this convertible notes are now classified as non-current.

Consolidated




Note 19. Non-current liabilities - borrowings


Balance

Details

Balance 1 July 2011

14 March 2013

Note 20. Equity - issued capital

Date

Conversion of note6 November 2011

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30 June 2013

2013 2012$ $

283,518 1,134,071 819,702 819,702

- - 1,103,220 1,953,773

Total$ $ $

1,190,071 819,702 2,009,773

(56,000) - (56,000)

- - - 1,134,071 819,702 1,953,773 (850,553) - (850,553)

- - - 283,518 819,702 1,103,220

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


Revaluation - gross

Asset revaluation reserve

Consolidated


payments revaluationAvailable-for-Revaluation

Available-for-sale reserve

The reserve is used to recognise increments and decrements in the fair value of non-current assets.

The reserve is used to recognise increments and decrements in the fair value of available-for-sale financial assets.

Consolidated

Share-based

Note 20. Equity - issued capital (continued)

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

The consolidated entity would look to raise capital when an opportunity to invest in a business, company or generalequities was seen as value adding relative to the current parent entity's share price at the time of the investment. Theconsolidated entity actively pursue additional investments to grow its investment portfolio.

Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company inproportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par valueand the company does not have a limited amount of authorised capital.

Loss on the revaluation of available-for-sale financial assets, net of tax

sale

Capital risk management

Asset



Ordinary shares

The capital risk management policy remains unchanged from the 30 June 2012 Annual Report.

In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid toshareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

surplus


Note 21. Equity - reserves

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2013 2012$ $

- - (22,354,213) (18,006,221)(2,992,094) (4,347,992)

- - (25,346,307) (22,354,213)

2013 2012 2013 2012$ $ $ $

27,374 679,984 - 247,249 775,659 1,102,810 - -

803,033 1,782,794 - 247,249

Financial risk management objectives

Accumulated losses at the beginning of the financial year

Foreign exchange risk arises from future commercial transactions and recognised financial assets and financialliabilities denominated in a currency that is not the entity’s functional currency. The risk is measured using sensitivityanalysis and cash flow forecasting.

There were no dividends paid, recommended or declared during the current or previous financial year.

Market risk

Note 24. Financial instruments

The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial liabilitiesat the reporting date was as follows:

Japanese yen

Foreign currency risk

Liabilities

The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign currency risk,price risk and interest rate risk), credit risk and liquidity risk. The consolidated entity's overall risk managementprogram focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on thefinancial performance of the consolidated entity. The consolidated entity uses different methods to measure differenttypes of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreignexchange and other price risks, ageing analysis for credit risk and beta analysis in respect of investment portfolios todetermine market risk.

The consolidated entity does not have a hedging policy.

Accumulated losses at the end of the financial year

The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to foreigncurrency risk through foreign exchange rate fluctuations.

Note 23. Equity - dividends

Note 22. Equity - accumulated losses


Consolidated

Risk management is carried out by the Board of Directors ('Board') under policies approved by the Board. Thesepolicies include identification and analysis of the risk exposure of the consolidated entity and appropriate procedures,controls and risk limits.

Consolidated

Shares in Asahi Eito Co Ltd

Assets

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% change

Effect on profit

before taxEffect on

equity % change

Effect on profit

before taxEffect on

equity

5% 1,369 (1,369) 5% (1,369) 1,369 5% 38,783 (38,783) 5% (38,783) 38,783

40,152 (40,152) (40,152) 40,152

% change

Effect on profit

before taxEffect on

equity % change

Effect on profit

before taxEffect on

equity

5% 21,637 (21,637) 5% (21,637) 21,637 5% 55,141 (55,141) 5% (55,141) 55,141

76,778 (76,778) (76,778) 76,778

% change

Effect on profit

before taxEffect on

equity % change

Effect on profit

before taxEffect on

equity

10% 129,945 (129,945) 10% (129,945) 129,945

% change

Effect on profit

before taxEffect on

equity % change

Effect on profit

before taxEffect on

equity

10% 350,644 (350,644) 10% (350,644) 350,644

Average price decrease

Consolidated - 2012

Shares in listed entities

The consolidated entity's main interest rate risk arises from long-term borrowings. Borrowings issued at variable ratesexpose the consolidated entity to interest rate risk. Borrowings issued at fixed rates expose the consolidated entity tofair value interest rate risk.

Average price increase

Consolidated - 2013

Interest rate risk


The sensitivity analysis for price risk of its shares held in listed investments is as follows:

The consolidated entity is exposed to significant price risk on its shares held in listed entities.Price risk

AUD weakened

Average price increase


Average price decrease

Japanese yen

AUD strengthened

Note 24. Financial instruments (continued)

AUD strengthened

AUD weakened


The percentage change is the expected overall volatility of the significant currencies, which is based onmanagement’s assessment of reasonable possible fluctuations. The actual foreign exchange loss for the year ended30 June 2013 was $19,484 (2012: $4,202).

Japanese yen

The sensitivity analysis for credit risk of the above financial assets and financial liabilities is as follows:

Consolidated - 2012

Consolidated - 2013

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Weighted average

interest rate Balance

Weighted average

interest rate Balance% $ % $

10.00 111,378 10.00 121,996 12.00 2,722,655 12.00 2,722,655

2,834,033 2,844,651

Convertible notes

An analysis by remaining contractual maturities in shown in 'remaining contractual maturities' below.

Credit riskCredit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss tothe consolidated entity. The consolidated entity obtains guarantees where appropriate to mitigate credit risk. Themaximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount, net ofany provisions for impairment of those assets, as disclosed in the statement of financial position and notes to thefinancial statements. The consolidated entity does not hold any collateral.

Net exposure to cash flow interest rate risk

The consolidated entity has significant credit risk exposure to Australia given the substantial investments in thisregion.

2012

Credit risk related to balances with banks and other financial institutions is managed by the Board in accordance withapproved Board policy. Such policy required that surplus funds are only invested with counterparties with a Standard& Poor's rating of at least AA-. As at 30 June 2013, the consolidated entity does not have any surplus funds forinvestment (2012: nil). The cash and cash equivalents are held with the consolidated entity's main financialinstitutions.

Other loansConsolidated

2013

As at the reporting date, the consolidated entity had the following fixed rate borrowings outstanding:

The consolidated entity manages liquidity risk by maintaining adequate cash reserves and continuously monitoringactual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.


Vigilant liquidity risk management requires the consolidated entity to maintain sufficient liquid assets (mainly cash andcash equivalents) and available borrowing facilities to be able to pay debts as and when they become due andpayable.

Liquidity risk

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Weighted average

interest rate1 year or

lessBetween 1 and 2 years

Between 2 and 5 years Over 5 years

Remaining contractual maturities

% $ $ $ $ $

- 310,248 - - - 310,248

10.00 122,516 - - - 122,516 12.00 326,719 3,049,374 - - 3,376,093

759,483 3,049,374 - - 3,808,857

Weighted average

interest rate1 year or

lessBetween 1 and 2 years

Between 2 and 5 years Over 5 years


% $ $ $ $ $

- 791,809 - - - 791,809

10.00 97,315 36,881 - - 134,196 12.00 3,049,374 - - - 3,049,374

3,938,498 36,881 - - 3,975,379

Level 1 Level 2 Level 3 Total$ $ $ $

1,299,445 - - 1,299,445 - - 567,050 567,050

1,299,445 - 567,050 1,866,495

Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, eitherdirectly (as prices) or indirectly (derived from prices)

Non-interest bearing

Interest-bearing - fixed rate

Total assets

The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractuallydisclosed above.

Fair value of financial instruments

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities


Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs)

Total non-derivatives

Consolidated - 2013

Other loans

Trade payables

Non-derivatives


Non-derivativesNon-interest bearing


Trade payables

Consolidated - 2013

The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities.The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest dateon which the financial liabilities are required to be paid. The tables include both interest and principal cash flowsdisclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in thestatement of financial position.

Total non-derivatives

Other loans

Consolidated - 2012



Interest-bearing - fixed rate


Assets

The following tables detail the consolidated entity's fair values of financial instruments categorised by the followinglevels:

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30 June 2013

Level 1 Level 2 Level 3 Total$ $ $ $

3,506,442 - - 3,506,442 - 1,417,603 - 1,417,603

3,506,442 1,417,603 - 4,924,045

Total$ $ $ $ $

- -

- - - - - 1,417,603 1,417,603

(850,553) (850,553)

- - - 567,050 567,050

Changing one or more inputs would not significantly change the fair value of level 3 financial instruments.

Total assets

Transfers into level 3

for-sale



Assets


Movements in level 3 financial instrumentsMovements in level 3 financial instruments during the current and previous financial year are set out below:

Consolidated

Losses recognised in other comprehensive income

There were no transfers between levels during the financial year.

Available-

Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. The carrying amounts oftrade receivables and trade payables are assumed to approximate their fair values due to their short-term nature. Thefair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current marketinterest rate that is available for similar financial instruments.



Executive Director, Chief Operating Officer and Company Secretary

Directors

Dan Kao Non-Executive DirectorNon-Executive Director

Executive Director and Chief Executive Officer

The following persons were directors of A1 Investments & Resources Ltd during the financial year:

Note 25. Key management personnel disclosures

Charlie Nakamura

Peter Ashcroft

Peter Kao


Consolidated - 2012

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2013 2012$ $

304,097 253,334 25,134 19,200

- - 329,231 272,534

Balance at Received Balance atthe start of as part of Disposals/ the end of

the year remuneration Additions other the year

19,608,862 - - - 19,608,862 230,000 - - - 230,000

3,196,500 - - - 3,196,500 23,035,362 - - - 23,035,362

Balance at Received Balance atthe start of as part of Disposals/ the end of

the year remuneration Additions other the year

- - 19,608,862 - 19,608,862 230,000 - - - 230,000

3,196,500 - - - 3,196,500 10,032,900 - - (10,032,900) - 7,500,000 - - (7,500,000) -

20,959,400 - 19,608,862 (17,532,900) 23,035,362

*

Ordinary shares

Ching-Lang Kuan *

Disposals/other represents no longer key management personnel not necessarily a disposal of holding.

Related party transactionsRelated party transactions are set out in note 29.

Post-employment benefits

Edmund Jen Kuang Hu *

2012


2013Ordinary shares

Dan Kao

Peter KaoCharlie Nakamura

Dan Kao

ShareholdingThe number of shares in the parent entity held during the financial year by each director and other members of keymanagement personnel of the consolidated entity, including their personally related parties, is set out below:

CompensationThe aggregate compensation made to directors and other members of key management personnel of theconsolidated entity is set out below:

Short-term employee benefits

Note 25. Key management personnel disclosures (continued)

Consolidated

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30 June 2013

2013 2012$ $

48,000 37,500

7,620 14,000 - 13,000

- - 7,620 27,000

- - 55,620 64,500

Subsidiaries

Associates

During the financial year the following fees were paid or payable for services provided by ESV CharteredAccountants, the auditor of the company:

Accounting advisory services

Note 26. Remuneration of auditors

Disclosures relating to key management personnel are set out in note 25 and the remuneration report in the directors'report.

Parent entity

Note 27. Contingent liabilities

The consolidated entity has received a legal notice that legal proceedings from the Tokyo District Court have beentaken out against the company's 100% owned subsidiary Jinji Resources Pty Ltd in relation to a breach of duty ofcare. The directors are seeking legal advice and will be defending the claim which is for the amount of $816,000. Noprovision has been recognised in the financial statements in relation to this.

Interests in subsidiaries are set out in note 31.

A1 Investments & Resources Ltd is the parent entity.

Interests in associates are set out in note 32.

Note 28. Commitments

Taxation services

Note 29. Related party transactions

Audit or review of the financial statements

Consolidated

Other services - ESV Chartered Accountants

Audit services - ESV Chartered Accountants

Enegain Pty Limited ('Enegain'), a subsidiary of A1 Investments & Resources Ltd, has obtained sole distribution rightsfor the 3Ec Nano Enzyme ('3Ec') in the Australia and New Zealand market. There is a minimum purchasecommitment for Enegain to meet to retain such sole distribution right. In the opinion of directors, the amount of suchcommitment is confidential and not suitable for disclosure. If Enegain failed to meet such commitment, it can still be adistributor but not the sole agent.

Key management personnel

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2013 2012$ $

5,455 4,000

7,379 6,076

2013 2012$ $

150,000 - 10,000 -

- 692,562

- 22,700

2013 2012$ $

(3,665,636) (4,222,675)

(4,516,189) (4,278,675)

Loans to/from related parties

Total comprehensive income

Rent received from NDC Research Australia Pty Limited, a director related entity

Loan to Eastern Antimony Pty Ltd which is a director related entity with Charlie Nakamura a common director

Consolidated

Receivable from and payable to related parties

The following balances are outstanding at the reporting date in relation to loans with related parties:

All transactions were made on normal commercial terms and conditions and at market rates.

Loan to Tournet Oceania, a related entity

Terms and conditions

Interest paid to Yvonne Lu, an associate

Current receivables:

Non-current receivables:

There were no trade receivables from or trade payables to related parties at the current and previous reporting date.

Consolidated

The following transactions occurred with related parties:

Note 29. Related party transactions (continued)

Set out below is the supplementary information about the parent entity.

Note 30. Parent entity information

Statement of profit or loss and other comprehensive incomeParent

Loss after income tax

Loan to KOR Holding Pty Ltd who is a substantial shareholder as well as a director related entity with Charlie Nakamura a common director

Other income:

Loan to China Century Capital (HK) Limited, an entity in which Charlie Nakamura is a director

Payment for other expenses:

Transactions with related parties

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2013 2012$ $

704,253 2,986,275

5,721,748 7,901,598

2,726,166 3,225,280

5,448,821 3,225,280

24,471,771 24,358,971 283,518 1,134,071 819,702 819,702

(25,302,064) (21,636,426)

272,927 4,676,318

●

●

2013 2012% %

100.00 100.00 100.00 100.00

100.00 100.00 100.00 100.00

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries inaccordance with the accounting policy described in note 2:

Equity holding

Huzhou Huagang Mining & Processing Co. Ltd

AustraliaHong Kong

Jinji Resources Pty Limited

Capital commitments - Property, plant and equipment

Accumulated losses

The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2013 and 30 June 2012.

Total equity


The parent entity had no contingent liabilities as at 30 June 2013 and 30 June 2012.


Guarantees entered into by the parent entity in relation to the debts of its subsidiaries

Enegain Pty Ltd

People's Republic of ChinaAustralia

The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 2,except for the following:

Statement of financial position

Note 30. Parent entity information (continued)

Contingent liabilities

Issued capital

Total liabilities

Investments in associates are accounted for at cost, less any impairment, in the parent entity.

Total current liabilities

Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.

The parent entity had no capital commitments for property, plant and equipment at as 30 June 2013 and 30 June2012.

Significant accounting policies

Total assets

Parent

Equity

Total current assets

Country ofName of entity

China Century Capital (HK) Limited

incorporation

Note 31. Subsidiaries

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30 June 2013

2013 2012% %

25.00 25.00

2013 2012$ $

441,510 497,056

- - 441,510 497,056

11,700 28,324

- - 11,700 28,324

- - 429,810 468,732

119,381 130,046 (158,347) (301,523)

- - (38,966) (171,477)

Associate

Total assets

Total liabilities

Expenses

Note 32. Investments in associates

Net assets

Information relating to the associates is set out below.

Note 33. Events after the reporting period

Loss before income tax

Revenue

Consolidated

Share of revenue, expenses and results

In July 2013, A1 Investments & Resources Ltd ('A1') has set up 100% owned subsidiary companies in Singapore andJapan. The purpose of these newly formed entities is to distribute the CleanSpace2 into Japan as well as otherindustrial markets in Asia. A1 has been granted the distribution right of the PAFtec CleanSpace2 in Japan and theAsia region and product trials has already taken place in several large Japanese corporations. A1 believes that themarket for such a device in Japan is significant, and therefore believes that by building up the distribution business inJapan, it would generate healthy cash profits for the consolidated entity.

No other matter or circumstance has arisen since 30 June 2013 that has significantly affected, or may significantlyaffect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairsin future financial years.

Current liabilities

Principal activities

Individually tailored litigation funding solutions in Australia and New Zealand

Litigation Lending Services PartnershipNo.7

Interests in associates are accounted for using the equity method of accounting. Information relating to associates isset out below:

Percentage interest

Consolidated

Share of assets and liabilitiesCurrent assets

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30 June 2013

2013 2012$ $

- - (2,992,094) (4,347,992)

19,250 15,154 - 950,888

38,966 171,477 22,700 (417,785)

1,567,989 2,431,678

(36,322) 93,186 - 74,697

(150,000) - (368,761) 268,909 (10,618) (16,475)

- - (1,908,890) (776,263)

2013 2012$ $

(2,992,094) (4,347,992)

Number Number

455,519,306 363,682,701

455,519,306 363,682,701

Cents Cents

(0.657) (1.196)(0.657) (1.196)

Consolidated

Consolidated

Adjustments for:

Increase/(decrease) in trade and other payables


Unrealised net loss on financial assets through profit or loss

Increase in other operating assets

Note 34. Reconciliation of loss after income tax to net cash used in operating activities

Decrease in inventories

Share of net loss of associated entity

Net cash used in operating activities

Impairment of non-current assetsDepreciation and amortisation

Note 35. Earnings per share

Other non-cash items

Change in operating assets and liabilities:

Weighted average number of ordinary shares used in calculating basic earnings per share

Basic earnings per share

Loss after income tax attributable to the owners of A1 Investments & Resources Ltd

Weighted average number of ordinary shares used in calculating diluted earnings per share

Decrease/(increase) in trade and other receivables

Decrease in other operating liabilities

Diluted earnings per share

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●

●

●

●

________________________________

The directors have been given the declarations required by section 295A of the Corporations Act 2001. Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001. On behalf of the directors

Sydney

26 September 2013

Charlie NakamuraDirector

Directors' declarationA1 Investments & Resources Ltd

there are reasonable grounds to believe that the company will be able to pay its debts as and when theybecome due and payable.

In the directors' opinion:

the attached financial statements and notes thereto comply with the Corporations Act 2001, the AccountingStandards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;

the attached financial statements and notes thereto give a true and fair view of the consolidated entity'sfinancial position as at 30 June 2013 and of its performance for the financial year ended on that date; and

the attached financial statements and notes thereto comply with International Financial Reporting Standardsas issued by the International Accounting Standards Board as described in note 2 to the financialstatements;

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Robin

Stamp

Independent Audit Report to the Members of A1 Investments & Resources Limited Report on the Financial Report We have audited the accompanying financial report of A1 Investments & Resources Limited and its controlled entities (“the Group”), which comprises the statement of financial position as at 30 June 2013, the statement of profit or loss and other comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the Group. Directors’ Responsibility for the Financial Report The directors of the Group are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In the Notes to the financial statements, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards. Auditor’s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements, and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Group’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors, would be in the same terms if given to the directors as at the time of this auditor’s report. 57

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Independent Audit Report to the Members of A1 Investments & Resources Limited Opinion In our opinion: (a) the financial report of A1 Investments & Resources Limited is in accordance with the Corporations Act

2001, including:

(i) giving a true and fair view of the financial position of the Group for the year ended 30 June 2013 and of its performance for the year ended on that date; and

(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.

(b) the financial report also complies with International Financial Reporting Standards as disclosed in the

financial statements.

Emphasis of matter

Without modifying our opinion, we draw attention to Note 2 Going Concern in the financial report, which indicates;

• The Group’s total comprehensive income for the year ended 30 June 2013 was a loss of $3,842,647 (2012: $4,403,992) which includes net loss on fair value adjustments to financial assets of $1,561,813 (2012: $2,431,678) and loss on revaluation of available for sale financial assets of $850,553 (2012: $56,000).

• Net cash outflow for the year was $590,085 (2012: net cash inflow $619,058); • The convertible notes mature 30 September 2014; and • Volatility in fair value of financial assets created by the current economic environment.

These conditions, indicate the existence of a material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern and therefore, the Group may be unable to realise its assets and discharge its liabilities in the normal course of business.

Report on Remuneration Report We have audited the Remuneration Report included in pages 10 to 14 of the directors’ report for the year ended 30 June 2013. The directors of the Group are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Opinion In our opinion, the Remuneration Report of A1 Investments & Resources for the year ended 30 June 2013 complies with section 300A of the Corporations Act 2001. Dated at Sydney the 25th day of September 2013.

ESV Chartered Accountants

Tim Valtwies Partner 58

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Numberof holdersof ordinary

shares

35 51

265 483 171

1,005

886

% of totalshares

Number held issued

57,000,000 11.92 45,357,454 9.49 42,338,318 8.86 25,804,639 5.40 23,156,604 4.84 19,608,862 4.10 18,723,034 3.92 15,094,340 3.16 12,660,380 2.65 11,544,028 2.41 10,588,495 2.22 10,319,456 2.16 10,032,900 2.10

9,289,673 1.94 9,289,673 1.94 7,582,930 1.59 7,500,000 1.57 4,180,000 0.87 4,159,278 0.87 4,131,536 0.86

348,361,600 72.87

Mr Ushio Miyaji

Minatek Pty Ltd

Mr Masazumi Yamaoka

Hiromi NakamuraMr Kohji MatsuoMr Fu-Ju Tien + Ms Tzu-Shih DaiCBS Equity Investments Pty Ltd

Mr Shu-An YangMr Katsutoshi Sugita

Twenty largest quoted equity security holders

Ordinary shares

Equity security holders

100,001 and over 10,001 to 100,000

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

Holding less than a marketable parcel


Distribution of equitable securities

30 June 2013

The shareholder information set out below was applicable as at 3 September 2013.

Shareholder information

Analysis of number of equitable security holders by size of holding:

1 to 1,000

Takanori Yamaoka

Mr Jen Kuang HuMr Wen Gan Chen

Citicorp Nominees Pty LimitedMr Anjia Hong

KOR Holdings Pty Ltd

Mr Tso Shan Wu

Unquoted equity securities

Mr Yoshiyasu AkiMrs Shen-Mei Huang WeiMr Mu Kang Wei

Mr Ching-Lang Kwan

5,001 to 10,000 1,001 to 5,000

There are no unquoted equity securities.

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30 June 2013Shareholder information

% of totalshares

Number held issued

57,000,000 11.92 45,357,454 9.49 42,338,318 8.86 25,804,639 5.40

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

Ordinary shares

Ordinary shares

Minatek Pty LtdKOR Holdings Pty Ltd

Mrs Shen-Mei Huang WeiMr Yoshiyasu Aki

Substantial holdersSubstantial holders in the company are set out below:

There are no other classes of equity securities.

Voting rightsThe voting rights attached to ordinary shares are set out below:

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