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R O C K L A N D S R I C H F I E L D L I M I T E D

A N N U A L R E P O R T 2 0 1 1

ABN 82 057 121 749

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CORPORATE DIRECTORY

Directors

Wu Pun Yan (Benny Wu) Executive Chairman

Kit Foo Chye Non-Executive Director

Li Nai San Non-Executive Director

Liu Tai Pei (Darby Liu) Non-Executive Director

Li Naiming (James Li) Non-Executive Director

Rajesh Bhatia Non-Executive Director

Company Secretary

Nancy Liang

Registered Office

C/-Duncan McPhail & Co. Pty. Ltd.

15 Layall Street,

South Perth, WA 6151

AUSTRALIA

Telephone: + (61) 8 9367 7511

China Office

15th Floor, Kingdom Power

Commercial Building,

No. 32-36 Des Voeux Road West,

HONG KONG

Telephone: + (852) 3107 9219

Auditors

Crowe Horwath Melbourne

Level 17, 181 William Street,

Melbourne, VIC 3000

AUSTRALIA

Lawyers – Australia

Minter Ellison

Rialto Towers,

Level 23, 525 Collins Street,

Melbourne, VIC 3000

AUSTRALIA

Share Registry

Gould Ralph Pty Ltd

Share Registry Division

Level 42, Suncorp Place

259 George Street

Sydney, NSW 2000

AUSTRALIA

Telephone: + (61) 2 9032 3000

Home Stock Exchange

Australian Stock Exchange Limited

Level 45, South Tower Rialto

525 Collins Street

Melbourne, VIC 3000

AUSTRALIA

Website:

www.rocklandsrichfield.com.au

ASX Code: RCI

ABN: 82 057 121 749

CONTENTS

Operations Review 2

Directors’ Report 10

Auditor’s Independence Declaration 18

Corporate Governance Statement 19

Consolidated Income Statement 27

Consolidated Statement of Comprehensive Income 28

Consolidated Statement of Financial Position 29

Consolidated Statement of Changes in Equity 30

Consolidated Statement of Cash Flows 31

Notes to the Consolidated Financial Statments 32

Directors’ Declaration 64

Independent Audit Report 65

ASX Additional Information 67

ROCKLANDS RICHFIELD LIMITED

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OPERATIONS REVIEW

ROCKLANDS RICHFIELD

FINANCIAL RESULT

Rocklands Richfield Limited (RCI) returned

a net loss after tax of $19.7 million on

consolidated revenues of $60 million for the

year ending 30 June 2011.

Rocklands Richfield’s Australian Operations

returned a loss of $55 million which includes

a $51 million impairment of the investment

in CCS and $2.2 million in a fair value

adjustment of the convertible bonds.

China Coke and Chemicals Limited (CCS), a

wholly-owned subsidiary of RCI, returned a

consolidated loss after tax of $15.7 million for

the year. The result includes other losses of

$5 million which came from impairment of

goodwill in the Huaibei coking plant.

COAL PROJECTS – AUSTRALIA

RCI owns three separate coal assets in

Queensland’s Bowen Basin, Australia. The

Bowen Basin is one of the world’s largest

coal producing areas and is the source of the

majority of Australia’s exported coking coal.

A number of world-class mining companies

are represented in the Bowen Basin, with a

number of the largest mines near or adjacent

to RCI’s coal projects there. The Bowen

Basin is well serviced with the necessary

infrastructure to support coal mining through

road and rail networks and port facilities.

2010 Queensland Flood

The state of Queensland where the three coal

tenements of RCI is situated was seriously

hit by floods in December 2010 and three-

quarters of the state became a disaster zone.

The Queensland flood has led to temporary

closure of mines, continuing beyond 2010.

As a result of the widespread flood and bad

weather condition, RCI’s coal exploration

activities in the three coal tenements have

been much affected. Field inspection

and exploration works were delayed and

discussion and negotiations with landowners

were postponed because of inaccessible

site condition.

Rocklands – EPC 890

HLM Coal Australia Pty Ltd (HLM), which

is 60% owned by RCI, has held Exploration

Permit Coal (EPC) 890 since it was granted

on 19 October 2004. EPC 890 coal project

is located in the Bowen Basin of central

Queensland, about 50 kilometres south of

the town of Blackwater and 180 kilometres

southwest of Rockhampton.

The tenement originally comprised 51 sub-

blocks and in late 2008, it was reduced to 40

sub-blocks and has a total area of 126 square

kilometres. In September 2009, HLM applied

for variations of the conditions of the EPC by

way of retention of the area in full and that was

granted. The current EPC will expire on 18

October 2013.

During October 2009, HLM submitted an

application for a Mineral Development

Licence over the entire tenement and the

application is currently under consideration

by the Department of Employment, Economic

Development and Innovation.

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ROCKLANDS RICHFIELD LIMITED PROJECTS LOCATION

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During the 2009-2010 year, Geos Mining

Mineral Consultants updated the resources

estimate for the EPC 890 tenement. The work

included the appraisal of seismic traverse

data, coal seam geology and coal seam

quality and resulted in a re-estimation of

Inferred Resources at 700 million tonnes

of bituminous coal in the tenement. The

resources are based on a reassessment of

previous exploration within the tenement, and

are classified in accordance with the 2004

Australasian Code for Reporting of Exploration

Results, Mineral Resources and Ore Reserves

(the JORC Code). Most of the coal resources

in EPC 890 have metallurgical potential.

In addition to the Inferred Resources, an

Exploration Target of around 200 to 300

million tonnes of bituminous coal has also

been estimated. It is yet uncertain whether

further exploration will result in the conversion

of any of this coal to resources.

An announcement on coal resources update of

EPC 890 project was given on 7 July 2010.

There is planned exploration drilling

programme in the tenement’s south-western

and north-western portions, aiming at :-

(i) upgrading portions of the currently

identified Inferred Resources to Indicated

Resources status (classified in accordance

with the 2004 JORC Code);

(ii) advancing the level of confidence in

the deposit sufficient to generate mine

plans; and

(iii) determining the likely washplant yield and

quality of product coal.

The drilling programme will also provide core

samples for coal quality and washbility tests,

geotechnical and coal seam gas testing.

With regret, the exploration drilling

programme has been much delayed during the

year as a result of the pro-longed discussion

and negotiations with two landowners on

land access and compensation and the

Queensland flood in late 2010. We hope that

the exploration drilling programme can move

forward in the forthcoming year.

Richfield – EPC 930

Exploration Permit Coal (EPC) 930 is held by

a joint venture of 60% RCI and 40% Bowen

Coal Pty Limited. Richfield EPC 930 is

around 25 kilometres northeast of the town

of Middlemount in central Queensland and

approximately 200 kilometres southwest

of Mackay. The tenement has an area of

approximately 760 square kilometres.

EPC 930 originally comprised 300 sub-

blocks when granted on 7 April 2005 and was

reduced to 240 sub-blocks in 2007. The EPC

licence expired on 6 April 2011 and renewal

application was lodged on 4 January 2011.

The application is still current and under

section 147C (20 of the Mineral Resources

Act 1989,

“If the application is a properly made

application, the permit continues in force

subject to the rights, entitlements and

obligations in effect immediately before the

end of the expiry day until the application is

withdrawn, refused or granted.”

This is quite a normal process as we are

given to understand that the Department of

Mines has a long list of outstanding renewals

to process.

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Work during the year includes EPC reporting,

administration, desktop data review and

planning for drilling activities planned to be

undertaken in 2010-2011. A cultural heritage

inspection was also undertaken during the

year. Due to the abnormally wet and early

wet season and serious flooding, scheduled

drilling activities were postponed and needed

to wait until ground conditions improved and

returned to normal.

We also have a planned staged exploration

programme and budget for 2011-2014 for

EPC 930. The initial stage of the program will

aim at determining whether any resources

potential exists in the tenement’s northern

portion, following by another stage of work to

identify whether any underground or open cut

resources exist

Hillalong – MDL 324

Mineral Development Licence (MDL) 324 is

owned 100% by Queensland Coal Exploration

Pty Ltd, a wholly owned subsidiary of RCI. It is

approximately 15 kilometres east of the coal

OPERATIONS REVIEW

town of Glendon and 100 kilometres west of

Mackay in central eastern Queensland. The

tenement comprises 10 sub-blocks covering

a total area of about 32 square kilometers and

is in close proximity to several large operating

coal mines of the Bowen Basin.

The MDL licence has expired on 30 June

2011 and renewal application was lodged on

24 December 2010 and is still current. By

virtue of the provisions of section 147C(2) of

the Mineral Resources Act 1989 as mentioned

above, the licence continues in force subject

to the rights, entitlements and obligations in

effect immediately before the end of the expiry

day until the application is withdrawn, refused

or granted.

In 2006, underground Resources (below 100m

depth) resources were estimated in MDL324

Hillalong, comprising 23.2 Mt Indicated and

21.1 Mt Inferred, totalling 44.3 Mt. In 2007,

open cut (to 100m cover depth) Resources

were estimated in MDL324 comprising 5.71

Mt Measured and 11.49 Mt Indicated, totalling

17.2 Mt. This resulted in open cut and

underground Resources totalling of

61.5 Mt of coal in MDL324. These Resources

predominantly comprise a soft to semi-soft

coking coal product.

Resources in MDL324 are being re-evaluated

by Geos Mining Mineral Consultants who are

the current geological consultant engaged

by RCI. Results will be presented when

completed.

Work during the year includes a project

appraisal with an indicative project valuation

(Border & Bradbury, 2010) of the tenement.

We have a planned staged exploration

programme and budget for 2011-2014, which

includes exploratory drilling of around 150

drillholes and a budget for 2011-2012 of

around $1 million, inclusive of contingency

and optional seismic geophysics.

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06

METALLURGICAL COKE PROJECT –

CHINA

RCI’s primary source of income is from the

manufacture and sale of grade 2 metallurgical

coke from locally sourced coals and the

production of coke by-products (tar, crude

benzene, ammonium sulphate and clean coal

gas). The coke plant is located in the Huaibei

region of Anhui Province in eastern China

and is operated by Chang Yuan (Huaibei)

Chemicals & Coking Co. Ltd (“CYCC”) which

is a wholly owned subsidiary of RCI’s 100%

owned subsidiary, China Coke & Chemicals

Limited (“CCS”).

Financial Performance

Production and sales of CYCC for the year is

shown in tables 2 and 3.

CYCC has incurred a total net operating loss

of RMB 103 million (AUD15m) for the year.

Coking Oven Conversion Projects

CYCC was granted government approval to

carry out a coking oven conversion project –

the “268 Project” in late 2010. This is a RMB

500 million (AUD 73 million) investment

project and is for the building of 2 new side-

loading coke ovens with 63 coking 4.3 meters

high cabins each and with total design annual

capacity of 800,000 DMT coke product. On its

completion, production capacity of the new

ovens, together with the existing converted

side-loading ovens, should reach 1.2 million

tonnes of dry coke every year.

The Foundation Stone Laying Ceremony

was held on 18 December 2010 but the

construction works have been delayed

pending funding arrangements because of the

continuous deterioration in the sales revenue

of CYCC.

2010 July Aug Sept Oct Nov Dec

Production (tonnes) 14,584 30,839 26,765 25,483 13,125 17,199

Sales (RMB) 17,434 30,837 29,411 29,562 16,110 18,915

2011 Jan Feb March April May June

Production (tonnes) 17,577 15,960 14,656 9,716 12,643 15,535

Sales (RMB) 20,079 15,890 14,656 10,248 9,633 18,036

Table 1

Table 2

Coke market in China for the year

The coke market in China for the year was

generally weak due to two main reasons. First,

the demand for coke and the price were both

unusually volatile, and secondly, coking coal

was in short supply and expensive.

Table 3. For year ended (2008/2009).



Coke price has been falling since September

2008. Price pressure from steel manufacturers

continued throughout the year and the coke

market suffered significantly, with many

coking plants in China being asked to reduce

their coke price. Most independent coking

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Significant Events after the Financial Year

Since the onset of the Global Financial Crisis

in August 2008, CYCC has incurred operating

losses in each financial year. CYCC’s loss

for 2008/2009 was approximately RMB67.73

million (AUD9.62 million), its loss for

2009/2010 was approximately RMB69.84

million (AUD9.92 million) and its loss for

2010/2011 was approximately RMB99.92

million (AUD 14.59 million). CYCC’s loss for

the month of July 2011 was approximately

RMB 9 million (AUD 1.31million) and its

accumulated losses from July 2008 up to

July 2011 was around RMB 246 million

(AUD 35.41 million).

In light of these accumulated losses, the RCI

Board has carefully considered the future

prospects and viability of the coke business of

RCI. While the continuing rise of the Chinese

economy and the launch of coke futures

in May 2011 have had a positive impact

on the coke industry, further substantial

funding input would be required by RCI to

make CYCC a sustainable and competitive

participant in the China coke sector. The

Board has considered, on the one hand, the

demand on RCI’s management resources

and the future capital investment required to

make the China coking plant a successful

participant in the China coke market and, on

the other hand, the possible benefit to RCI in

focusing exclusively on developing its coal

tenements in Queensland’s Bowen Basin.

After due consideration, the Board considered

that it would be in the best interests of RCI

shareholders for RCI to either dispose of its

coking plant operations or to dissolve those

operations. A conditional Sale Agreement

for the disposal of CCS was entered into on

19 September 2011 with Mr. Yang Jiayin

(representing 9 creditors of CYCC). The

Sale Agreement provides that RCI will sell all

of its shares in CCS, inclusive of all assets

and liabilities of the China coke plant, at the

consideration of HK$12 million (AUD 1.5m).

The transaction under the Sale Agreement is

conditional upon RCI shareholders approval.

ON-MARKET TAKEOVER BID BY

JINDAL

On 20 April 2011, a Bidder’s Statement

relating to an on-market, unconditional cash

offer to acquire all the shares in RCI together

with all rights attaching thereto (“Offer”) was

given by Jindal Steel & Power (Australia) Pty

Ltd (“Jindal”).

Jindal Offer

The Offer was for a consideration of $0.25

for each RCI share and the Offer period

commenced on 5 May 2011, with the earliest

date for close of Offer on 6 June 2011. The

Offer did not extend to RCI options exercisable

on shares or convertible unsecured notes.

Trading price of RCI shares was above the

Offer price following the Offer.

RCI Responses

The Directors of RCI considered that the Offer

was not a commercially recommendable offer

and gave a Response announced on

21 April 2011.

Later on 4 May 2011, a Target’s Statement

was later released by RCI by which the

independent Directors of RCI unanimously

recommended the shareholders to reject the

Offer for the following reasons :-

• the Offer was opportunistic, unsolicited and

undervalued RCI shares and the price of the

Offer did not appear to incorporate a control

premium;

• an increase in Jindal’s shareholding in

RCI was not considered likely to provide

any commercial assistance to RCI as

Jindal as already a shareholder of RCI and

co-operated with on business development

activities.

• the Offer did not offer a strategic vision for

RCI shareholders.

On 12 May 2011, a Supplementary Target’s

Statement and an Independent Expert’s Report

prepared by BDO Securities (NSW-VIC) Pty

Ltd (“BDO Report”) were announced and

dispatched to shareholders. According to the

BDO Report, RCI shares were valued, on a

diluted basis assuming that all the then nine

RCI convertible notes on issue would be

converted to RCI shares, at between $0.36 and

$0.62 each and it was therefore concluded

that the Offer was not fair and not reasonable.

Variation of Jindal Offer

Two weeks after the announcement of the BDO

Report, Jindal varied the Offer and increased

the Offer price from $0.25 per share to $0.30

per share and extended the Offer period to

4:00 p.m. (Brisbane time) on 20 June 2011.

On 6 June 2011, Jindal further extended the

Offer period to 4:00 p.m. (Brisbane time) on

5 July 2011.

enterprises, including CYCC, reduced their

production to the minimum safe level and

maintained an average production level of

40% to 60% only.

The situation became even more serious in

this financial year. Tables 4,5 and 6, show

the coke price and coal costs for the years

2008/2009, 2009/2010 and 2010/2011.

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Lapse of Jindal Offer

The Offer lapsed on 5 July 2011. As at that

day, Jindal has acquired and held a total of

98,289,9442 RCI shares.

Following the Jindal Offer, the Directors

considered that the intended co-operation

between RCI and Jindal under the

Memorandum of Understanding signed on 27

April 2010 has come to an end.

MOU with Kailuan Energy

Chemicals Co., Ltd.

RCI entered into a Memorandum of

Understanding dated 15 March 2011

with Kailuan Energy Chemicals Co., Ltd.

(SSE:600997) (Kailuan) on an intended co-

operation with Kailuan for the development of

RCI’s three Queensland coal projects.

Discussion and negotiation with Kailuan is still

continuing.

Litigation with Minority Shareholders of a

Subsidiary Company

Legal proceedings have commenced between

RCI and some minority shareholders of one

of RCI’s subsidiary companies in respect

of breach of provisions of the related

Shareholders Agreement. RCI has been taking

an active and strong stance in the proceedings

and has engaged Minter Ellison Lawyers

to handle the matter and to enforce and

protect RCI’s rights under the Shareholders

Agreement and at law.

At the date of this Report, the parties to the

proceedings are still dealing with discovery

and quantum of loss and damages has not

yet been quantified by the parties to the

proceedings.

CONVERSION OF CONVERTIBLE NOTES

Two convertible notes were converted during

the year which resulted in issue of 8m shares

as follows :-

(i) on 13 May 2011, one convertible note was

converted into 4,000,000 ordinary shares

valued at HK$5,000,000; and

(ii) on 17 May 2011, one convertible note was

converted into 4,000,000 ordinary shares

valued at HK$5,000,000.

They were all converted in accordance with

the terms of the Convertible Unsecured Note

Agreement.

CHANGE IN CHIEF EXECUTIVE OFFICER

Ms Phyllis Lam was appointed Chief Executive

Officer and Executive Director of RCI on

4 January 2011. She replaced the previous

Chief Executive Officer and Executive Director,

Mr. John Girdlestone, who left RCI on

1 December 2010. Ms Phyllis Lam has since

resigned on her own accord, effective on

1 September 2011.

ACKNOWLEDGMENT

The Chairman would like to thank all

employees of the RCI Group for their

contribution to the Group and their untiring

works despite the very difficult operating

conditions during the year. The Chairman

would also like to thank the shareholders for

their confidence in RCI in face of the

Jindal Bid.

Benny Wu

Chairman

Competent Persons Statements:

The information in this report that relates to Coal

Resources for the Rocklands EPC 890 project,

and Exploration Results for the Richfield EPC

930 project and Hillalong MDL 324 project, is

based on information compiled and reviewed by

Mr Tom Bradbury (BSc Hons, MAusIMM) and

is a Senior Geologist employed by Geos Mining

Minerals Consultants. Mr Tom Bradbury has more

than 15 years experience in the estimation of

coal resources for coal projects in Australia and is

qualified as a Competent Person for the purpose of

Resource Reporting as defined in the 2004 edition

of the Australasian Code for Reporting of Mineral

Resources and Ore Reserves (JORC Code).

The Coal Resource estimates for the Rocklands

EPC 890 coal project presented in this report

have been carried out in accordance with

the JORC Code (2004).

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FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2011

CONTENTS

Directors’ Report 10

Auditor’s Independence Declaration 18

Corporate Governance Statement 19

Consolidated Income Statement 27

Consolidated Statement of Comprehensive Income 28

Consolidated Statement of Financial Position 29

Consolidated Statement of Changes in Equity 30

Consolidated Statement of Cash Flows 31

Notes to the Consolidated Financial Statments 32

Directors’ Declaration 64

Independent Audit Report 65

ASX Additional Information 67For

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The Directors of Rocklands Richfield Limited submit their report for the year ended 30 June 2011.

DirectorsThe names and details of the Company’s Directors in office during the year and until the date of this report are as follows (Directors were in office for this entire period unless otherwise stated):

Wu Pun Yan (Benny Wu) B.Met.EngExecutive ChairmanAppointed 1 October 2007

Dr Wu has over 35 years experience in the steel industry and owns various investment and trading companies located in China, Hong Kong and Australia.

Dr Wu is an engineering graduate majored in metallurgy machinery from Jiangxi Province Xin Yu University and studied Physics and Advanced Mathematics at Jiangxi University of Science and Technology. He has been honoured with Doctor of Engineering from Lincoln University. In early 1990’s, he was the deputy General Manager of Shenzhen Jiang Zhou Metal Materials & Hardware Co. Ltd. overseeing daily operations of the steel cutting factory with annual production of over 30,000 tonnes of steel. Between 1993 to 1995, he was the Chief Executive Officer of Noble Resources Group Company, a subsidiary of Singapore listed Noble Group Limited, and was the Vice-President of China Division of Noble Group Limited. Since 1997, Dr Wu has been the chairman of Chang Yuang Group Co., Ltd, an investment company and is responsible for the main operation and business development of the companies within the Chang Yuang group. In this role he is engaged in trading of metal ore, scrap steel, casting works and the export and import of foodstuffs.

Kit Foo chye B.Com. CPANon-Executive DirectorAppointed 13 September 2004

Mr Chye is an accountant by profession with more than 23 years experience in the management and administration of publicly listed companies in Malaysia and Australia. Mr Chye is the Managing Director of Zheng He Global Capital Limited and Director in the following ASX listed companies Voltage IP Limited, Allmine Group Limited and Hudson Resources Limited.

Mr Chye specializes in advising both public and private companies on acquisitions, mergers, capital raisings and balance sheet restructurings. He has managed a significant number of initial public offerings and secondary market capital raisings for public and private companies. His expertise lies in the restructuring and financing of entities, including preparation of prospectuses and other requirements for listings on the Bursa Malaysia (formerly called the Kuala Lumpur Stock Exchange) as well as on ASX.

Li Nai san Mech.Eng.Non-Executive DirectorAppointed 1 October 2008

Mr Li began his career as a mechanical engineer and has over 40 years experience in the iron and steel industry.

Mr Li held senior management responsibilities with the Anshan Iron and Steel Group Corporation (Ansteel Group) in China for many years. He has filled a number of overseas postings with Ansteel’s International Trade Corporation Division, including eight years in Australia from 1995 as Managing Director of Angang Australia Pty Ltd. which was a subsidiary wholly owned by Ansteel. At that time he was also a Director of Koolyanobbing Iron Pty Ltd, a joint venture between Portman Mining Limited and Ansteel for the mining and export of iron ore from the Koolyanobbing and Cockatoo Island mines in Western Australia.

Li Nai Ming (James Li) B.Sc.; Post-Grad DiplomaNon-Executive DirectorAppointed 20 October 2009

Mr. Li graduated as a B. Sc. from Fudan University, Shanghai, China. He gained his Post-graduate Diploma in Industrial Chemistry in Melbourne, Australia.

Mr. Li has worked in the Australian Stockbroking industry for more than 15 years. He is the Investment Advisor of a leading full service stockbroking and financial services firm in Australia.

In the past years, Mr. Li has established strong relationships in China with the government, state owned enterprises and private companies. He has a particularly strong relationship with the China Mining Association. He also has an extensive relationship with Australian mining and resources industries as well. He has been involved in a number of major corporate deals in Australia including facilitating the first uranium deal between Australia and China in 2006 as well as initiating and facilitating the Western Australian Abra Mining Limited project in 2007. In the past years, he has also been involved in a number of the ASX listings of the Chinese companies and the local Australian resource companies.

He is also a Non-executive director of the Public Listing company Ishine International Resources Ltd and the Non-executive directors of the public unlisted companies, Fleurieu Mines NL and OzBlue Resources Ltd.

Liu ta Pei (Darby Liu) Non-Executive DirectorAppointed 1 February 2010

For many years Dr Liu has been a Director of Global Securities Finance Corporation, Chung Hsing Bills Finance Company, Central Investment Holding Corporation and Jen Hwa Investment Holding Company. In November 2004, Dr Liu joined Core Pacific – Yamaichi in Hong Kong and led the company to important new milestones.

Dr Liu graduated from National Chung-Hising University in Taiwan. After graduation, he furthered his studies at National Cheng-Chi University where he received a Master of Science degree. Later, at the University of Southern California, USA, he received his MBA degree. He completed his PhD at the University of La Verne, USA.

In 2008, Dr Liu was nominated as one of China’s Top Ten Intelligent Financial Personnel in Greater China, and was honoured with the Best Integrity Award. Since 2000, he has been a member of the Central Committee of the Chinese National Party (Kuo Min Tang), the ruling party of Taiwan, and he was also elected as the Standing Committee member of KMT in September 2010.

Directors’ rePort

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rajesh Bhatia,Non-Executive DirectorAppointed 31 May 2010

Mr. Bhatia is a qualified Chartered Accountant from the Institute of Chartered Accountants of India. He is a Director on Board of Jindal Steel & Power (Mauritius) Ltd. and is also the Executive Vice President (Finance) of Jindal Steel & Power Ltd. He has extensive experience of working with eminent Indian industrial houses before joining Jindal group in April 2008.

Mr. Bhatia has work experience of over two decades in the field of financial management, accounts, corporate affairs and commerce. His proficiency spans across project finance, financial structuring, dealing with national and international financial institutions, managing IPOs/FPOs, overseas acquisitions, strategic planning and commercial negotiations.

Mr. Bhatia has played an important role in Jindal’s overseas acquisitions in Indonesia, South Africa, Mozambique, Madagascar, Mongolia & Oman, apart from arranging financing for greenfield expansion in Orissa and Jharkhand in India.

Before joining JSPL, Mr. Bhatia worked with companies like DCM Shriram Industries Ltd. (DCM Group), Jindal Power Limited, Reliance Industries Ltd., Dalmia Cement (Bhatia) Ltd. and Oswal Chemicals & Fertilizers Ltd.

Director who resigned during the financial year is as follows :

John Girdlestone Ceased 1 December 2010 as Executive Director and Chief Executive Officer

Director who resigned since end of the the financial year to the date of this report is as follows :

Phyllis Lam Appointed 4 January 2011, Ceased 1 September 2011 as Executive Director and Chief Executive Officer

coMPaNY secretarYName and details of the Company Secretary in office at the date of this report is as follows:

Nancy LiangCPAAppointed 11 September 2009

Ms Liang is a certified practicing accountant with more than 15 years experience in the accounting profession in both public and private sectors. She has worked for a number of large international companies in telecommunication, education and mining industries. She has held the position of Financial Controller and Company Secretary for an ASX listed telecommunication company and senior management roles for a number of mining companies and has also advised a number of large Chinese companies which have significant investments in the mining industry in Australia.

chieF FiNaNciaL oFFicer Name and details of the Chief Financial Officer in office at the date of this report is as follows:

Lam chi tatCPAAppointed 1 October 2010

Mr Lam is a certified practicing accountant. He has previously served as financial controller and company secretary for both public and private companies in Hong Kong. He is also experienced in handling financial and accounting tasks involving cross-border transactions.

corPorate iNForMatioNRocklands Richfield Limited (“RCI” or “the Company”) is a company limited by shares which is incorporated and domiciled in Australia. RCI was listed on the Australian Securities Exchange on 1 November 2000.

iNterests iN shares aND oPtioNs oF the coMPaNYThe relevant interest of each Director in the shares and options over such instruments issued by the Company and other related body corporates, as notified by the Directors to the Australian Securities Exchange in accordance with S205G(1) of the Corporations Act 2001, at the date of this report is as follows:

Name of Director

interests (as at the date of this report)

ordinary shares held both direct &

indirect

ordinary shares

(restricted) held both direct & indirect

options held over ordinary

shares

options (restricted) held over ordinary shares

Benny Wu 186,360,626 - 206,933,334 (1) -

Kit Foo Chye 2,571,000 - - -

Li Nai San 100,000 - - -

Li Nai Ming - - - -

Darby Liu 230,000 - - -

Rajesh Bhatia - - - -

totaL 189,261,626 - 206,933,334 -

(1) Options are exercisable at 50 cents before 18 September 2012.

PriNciPaL activitiesDuring the financial year, the principal activities of the Company consisted of coal exploration on the Company’s coal tenements in the Queensland Bowen Basin and the manufacture and sale of metallurgical coke and coke by-products from its operation plant in Huaibei of Anhui Province in China.

revieW aND resuLts oF oPeratioNs A Review of Operations for the financial year and up to the date of this report is included in this document and should be read as part of the Director’s Report.

The consolidated net loss for the year ended 30 June 2011 after income tax was $19.7m.

The consolidated net asset position has decreased in 30 June 2011 primarily due to the net loss position and the following factors:

- Fair value adjustment to decrease convertible bonds by $2.2m.

- Impairment of the carrying value of goodwill in CCS resulting from a reduction of intangibles by approximately $5.04m.

- Net decrease in property, plant and equipment balances of approximately $6.9m mainly due to foreign exchange variation

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DiviDeNDsNo dividend of the parent entity or any entity within RCI group has been paid or declared or recommended since the end of the previous financial year. The Directors do not recommend the payment of any dividend for the year ended 30 June 2011.

corPorateFollowing the resignation of Mr. John Girdlestone effective on 1 December 2010, Ms Phyllis Lam was appointed Executive Director and Chief Executive Officer of the Company on 4 January 2011

Ms Phyllis Lam resigned as the Executive Director and Chief Executive Officer effective on 1 September 2011.

suBsiDiariesThe Company incorporated a wholly-owned subsidiary, Rocklands Richfield (Hong Kong) Limited (“RCI-HK”), in Hong Kong on 12 April 2010. Amongst others, RCI-HK serves as the Company’s network centre with potential investors and partners in the Asia region, particularly those in Greater China.

During the year, another new wholly-owned subsidiary of RCI, A.F. (PNG) Resources Ltd., was incorporated in the British Virgin Islands.

In September 2010, the Company applied for striking off its wholly-owned subsidiary in Singapore, Rocklands International Pte Ltd, which has been inactive

coNvertiBLe NotesIn November 2007, ten unsecured convertible notes with a total value of HK$50,000,000 were issued at the exchange rate of HK$6.25 / AUD1.00 which is in accordance with the formula in the Convertible Unsecured Note Agreement that was approved by shareholders on 26 September 2007.

Three convertible notes have since been converted. One was converted on 14 August 2008. The other two convertible notes converted during the year are as follows :-

(i) on 13 May 2011, one convertible note was converted into 4,000,000 ordinary shares valued at HK$5,000,000; and

(ii) on 17 May 2011, one convertible note was converted into 4,000,000 ordinary shares valued at HK$5,000,000.

They were all converted in accordance with the terms of the Convertible Unsecured Note Agreement.

The recorded book value of the remaining convertible notes is $8,509,584 and there is ongoing exposure to the fair value movement of this liability which is included in the group consolidated accounts.

siGNiFicaNt chaNGes iN the state oF aFFairsOther than disclosed above, there have been no significant changes in the state of affairs of the Company during the financial year.

share oPtioNsNo options were issued to directors, officers or employees during the year as part of any remuneration package.

siGNiFicaNt eveNts aFter BaLaNce DateLapse of Jindal OfferOn 20 April 2011 Jindal Steel & Power (Australia) Pty Ltd. announced its offer to acquire all shares in RCI for a consideration of $0.25 for each RCI share. The offer commenced on 5 May 2011 and was later extended to 20 June 2011 and further extended to 5 July 2011 with an increase of offer price to $0.30 for each RCI share.

The Jindal offer lapsed on 5 July 2011.

Sale of RCI’s coke plant operation in ChinaThe Directors have considered the future prospect of coke business. The coke plant operation in China has consumed significant management resources and incurred substantial losses in the past three years and would require a substantial amount of capital injection from the Company to maintain the operation for at least a few more years in order to make it the surviving winner in the China coke market. The Directors therefore consider that shareholders’ best interests will be served by divesting the coke business in China and focusing on development of the Company’s coal tenements in the Bowen Basin. A conditional Sale Agreement was entered into between RCI and Mr. Yang Jiayin (representing nine creditors of the Company’s China coke plant) on 19 September 2011 under which, subject to RCI shareholders’ approval, RCI would sell all the shares in China Coke & Chemicals Ltd, the wholly-owned subsidiary of RCI which in turn holds the coke plants in China) at the consideration of HKD12 million (AUD1.50m).

As a result of the above sale subsequent to the year end, the carrying value of the investment of RCI in CCS of $52.735m is impaired on 30 June 2011 and impairment loss of approx $51.235m is accounted for in the books of RCI. This impairment loss is eliminated on consolidation. The full impact of this sale on the net asset position of the consolidated accounts for the RCI group in the following years is disclosed in note 26.

Save as aforesaid, there has been no item, transaction and event of a material or unusual nature that have arisen in the interval between the end of the financial year and the date of this report, which has significantly affected the results of the operations of the Company.

Future DeveLoPMeNts, ProsPects aND BusiNess strateGiesThe Company and its controlled entities will continue to pursue the exploration and development of the Company’s existing coal tenements to increase their future profitability and value.

eNviroNMeNtaL issuesThe Company’s Australian coal exploration projects operate under granted Environmental Authorities issued under the Environmental Protection Act 1994. The consolidated entity maintains its tenements in good standing and is not aware of any non-compliance issue.

The Company’s China coke production facilities operate under the related environment laws and regulations in China. The China plant has achieved the national standard in respect of solid waste, gas emission and sewage and the Company is not aware of any non-compliance issue.

ProceeDiNGs oN BehaLF oF coMPaNYNo person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year.

iNDeMNiFYiNG oFFicersDuring the year, the Company has paid insurance premiums in respect of directors’ and officers’ liability insurance policy. The Directors have not included details of the nature of the liabilities covered or the amount of the premium paid in respect of the directors’ and officers’ liability insurance policy, as such disclosure is prohibited under the terms of the policy.

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Directors’ MeetiNGsThe number of meetings of Directors (including meetings of Committees of Directors) held during the year and the number of meetings attended by each Director was as follows:

Name of Director Directors’ Board Meetings

audit & risk committee

Number of Meetings held: 8 2

Number of Meetings attended:

Benny Wu 8 1

John Girdlestone (ceased 1 December 2010) 2 1

Phyllis Lam (appointed 4 January 2011) 4 -

Kit Foo Chye 6 2

Li Nai San 8 -

James Li 8 -

Darby Liu 5 -

Rajesh Bhatia 3 -

Meetings of the Directors (including meetings of Committees of Directors) have been held in person, through telephone conferences or by circular resolutions.

coMMittee MeMBershiPThe Board has established an Audit and Risk Management Committee. The Committee has the responsibility to ensure that an effective internal control framework exists within the entity and operates under the Audit & Risk Management Committee Charter.

corPorate GoverNaNceIn recognising the need for acceptable standards of corporate behaviour and accountability, the Board supports and has for the most part acted in accordance with to the principles and recommendations of corporate governance. The Company’s corporate governance statement is contained in the following section of this Annual Report.

NoN-auDit servicesThe Auditors have not undertaken any non-audit services in addition to the provision of audit and assurance services to the Company and its controlled entities.

auDitor’s iNDePeNDeNceThe Auditor’s Independence Declaration for the year ended 30 June 2011 has been received and is attached to, and formed part of, this Directors’ Report.

reMuNeratioN rePort (auDiteD)This remuneration report outlines the Director and Executive remuneration arrangements of the Company and the Group in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purposes of this report, key management personnel of the Group are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, directly or indirectly, including any Director (whether Executive or otherwise) of the Parent, and includes the five Executives in the Parent and the Group receiving the highest remuneration.

For the purposes of this report, the term ‘executive’ encompasses the chief executive, senior executives, general managers and secretaries of the Parent and the Group.

Details of key management personnel (including the five highest paid executives of the Company and the Group) during the financial year ended 30 June 2011, are:

Directors:Benny Wu Executive Chairman John Girdlestone Executive Director and Chief Executive Officer (ceased 1 December 2010)Phyllis Lam Executive Director and Chief Executive Officer (appointed 4 January 2011 and ceased 1 September 2011)Kit Foo Chye Non-Executive DirectorLi Nai San Non-Executive Director, Chairman - Chang Yuan (Huaibei) Chemicals & Coking Co. Ltd. James Li Non-Executive DirectorDarby Liu Non-Executive DirectorRajesh Bhatia Non-Executive Director

other Key Management Personnel:He Jian Project Manager – Queensland coal projectsNancy Liang Company SecretaryLam Chi Tat Chief Financial Officer (appointed 1 October 2010)Ye Wen Shi General Manager – Chang Yuan (Huaibei) Chemicals & Coking Co. Ltd (ceased 29 October 2010)Sun Lian Jie General Manager - Chang Yuan (Huaibei) Chemicals & Coking Co. Ltd (appointed 20 April 2011 and ceased 6 August 2011)Zhu Hu Lin Assistant General Manager– Chang Yuan (Huaibei) Chemicals & Coking Co. Ltd.(appointed 29 October 2010 and ceased 20 April 2011)

remuneration reviewThe Board has not established a Remuneration Committee. Therefore the Board of Directors is responsible for determining and reviewing remuneration arrangements for the Directors and the executive officers. The Board assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of an experienced and high quality Board and executive team. As at the date of this report, the Board has not established any formal link between the Company’s performance and the Directors’ emoluments, other than by reference to relevant market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of an experienced and high quality Board and executive team.

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remuneration Philosophy The performance of RCI depends upon the quality of its Directors and Executive Officers. To prosper, RCI must attract, motivate and retain highly skilled personnel.

To this end, the Board:

• Works to attract the appropriate staff by providing a competitive remuneration structure and a productive working environment;

• reviews and determines the levels of remuneration for;

• Directors of the Group of companies;

• the Chief Executive Officer;

• executive and senior management; and

• ensures that all compliance, governance, accounting, legal approvals and disclosure requirements associated with RCI employment practices are satisfied.

It is the Board’s policy that employment letters are issued to Directors and executives. These letters contain their responsibilities and remuneration paid.

remuneration structureIn accordance with corporate governance principles and recommendations, the Company substantially complies with the guidelines for executive remuneration packages and Non-Executive Director remuneration.

Non-Executive Directors remunerationThe Constitution and the ASX Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall be determined from time-to-time by a general meeting. The latest determination was at the Annual General Meeting held 21 December 2005 when shareholders approved an aggregate remuneration of $350,000 per annum to be apportioned amongst Non-Executive Directors.

The amount of aggregate remuneration sought to be approved by shareholders and the fee structure is reviewed annually. The Board considers advice from external consultants as well as the fees paid to Non-Executive Directors of comparable companies when undertaking the annual review process.

On appointment, Non-Executive Directors were advised of their Directors duties and responsibilities and the remuneration fee to be paid to that Director in carrying out his duties. This fee covers both the Board and any committee position where the Non-Executive Director is a member.

The Non-Executive Directors do not receive retirement benefits, nor do they participate in any incentive programmes. There is no share-based payment.

The remuneration of Non-Executive Directors for the period ending 30 June 2011 and 30 June 2010 is detailed in the tables that follow.

Executive remunerationThe Company aims to reward its executives with a level of remuneration commensurate with their position and responsibilities within the Company, so as to reward executives for meeting or exceeding targets set by reference to appropriate benchmarks; align the interests of executives with those of shareholders; and ensure remuneration is competitive by market standards.

It is the Company’s policy that relevant engagement contracts must be entered into with the Chief Executive Officer and senior executives. Remuneration consists of fixed remuneration, superannuation and non-monetary benefits only and does not include a variable remuneration component such as the issue of shares and/or options. There is no share-based payment.

Fixed remunerationObjectiveFixed remuneration is reviewed at the end of each contract term by the Board. The process consists of a review of Company and individual performance, relevant comparative remuneration externally and internally and, where appropriate, external advice on policies and practices.

StructureExecutives receive their fixed remuneration in the form of cash payments to their nominated accounts with approriate PAYG tax deducted (where applicable), and superannuation funds (where applicable).

variable remuneration – short-term incentiveObjectiveThe objective of a short-term incentive programme is to link the achievement of the Group’s operational targets with the remuneration received by the executives charged with meeting those targets.

At the date of this report, there is no short-term incentive programme for Executive Directors. Any adoption of executive share option scheme and the issue of such securities under the scheme to Executive Directors will be determined by the Board.

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Director and executive emolumentsDetails regarding Director and specified executive emoluments for the financial year ended 30 June 2011 and 30 June 2010 are found below.

Remuneration of Directors and Specified Executives

Name of Directors & executives

short term employee benefits

Post employment benefits

Year ended 30 June 2011 consulting, salary / Director

Fees $

Bonus $

Non-Monetary Benefits

$

other $

superannuation $

other long term benefits

$

total $

Non-Executive Directors

Kit Foo Chye 40,000 - - - 40,000Li Nai San 60,560 25,924 - - - - 86,484James Li 40,000 - - - 40,000Darby Liu 41,144 - - - - - 41,144Rajesh Bhatia 43,333 - - - - - 43,333Executive DirectorsBenny Wu 123,435 - - - - - 123,435John Girdlestone (1) 45,833 - - - 34,054 - 79,887Phyllis Lam (2) 73,013 - - - 73,013

Other Key Management PersonnelHe Jian 81,146 - - - 7,303 - 88,449Nancy Liang 48,000 - - - 4,320 - 52,320Lam Chi Tat (3) 32,105 1,171 33,276Ye Wen Shi (4) 34,369 - - - - - 34,369Zhu Hu Ling (5) 16,189 - - - - - 16,189Sun Lian Jie (6) 3,823 3,823

Total Remuneration 682,950 25,924 - - 46,848 - 755,722

1. John Girdlestone ceased to be n Executive Director on 1 December 20102. Phyllis Lam was appointed as an Executive Director on 4 January 2011.3. Lam Chi Tat was appointed as the Chief Financial Officer on 1 October 20104. Ye Wen Shi ceased to be the General Manager of Chang Yuan (Huaibei) Chemicals & Coking Co.,Ltd on 29 October 20105. Zhu Hu Lin was appointed to be the Chief Marketing Officer of Chang Yuan (Huaibei) Chemicals & Coking Co. Ltd on 29 October 2010 and ceased on 20 April 2011.6. Sun Lian Jie was appointed the General Manager of Chang Yuan (Huaibei) Chemicals & Coking Co.,Ltd on 20 April 2011 and ceased on 6 August 2011

Name of Directors & executives

short term employee benefits

Post employment benefits

Year ended 30 June 2010 consulting, salary and Director

Fees $

Bonus $

Non-monetary benefits

$

other $

superannuation $

other long term benefits

$

total $

Non-Executive DirectorsHung Kwang Hou (1) 14,736 - - - - - 14,736Kit Foo Chye 60,000 - - - - - 60,000Li Nai San 64,871 - - - - - 64,871James Li (2) 36,576 - - - - - 36,576Darby Liu (3) 16,667 - - - - - 16,667Rajesh Bhatia (4) 3,333 - - - - - 3,333Executive DirectorsBenny Wu 224,677 - - - - - 224,677John Girdlestone (5) 110,000 - - 39,753 9,900 - 159,653

Other Key Management PersonnelHe Jian 75,600 - - - 6,804 - 82,404Ye Wen Shi 54,871 - - - - - 54,871Nancy Liang 42,500 - - - 2,160 - 44,660Zhang Hai Feng 24,871 - - - - - 24,871Zhu Hu Lin 14,922 - - - - - 14,922

Total Remuneration 743,624 - - 39,753 18,864 - 802,241

1. Hung Kwang Hou ceased as a Director on 14 October 2009.2. James Li was appointed as a Director on 21 October 2009.3. Darby Liu was appointed as a Director on 1 February 2010.4. Rajesh Bhatia was appointed as a Director on 31 May 2010. 5. Other post employment benefits include value of motor vehicle.

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Number of Options Held by Directors and Key Management Personnel

Year ended 30 June 2011

Balance as at 1 July 2010

Granted as compensation

Net change other*

Balance as at 30 June 2011

total vested 30 June 2011

total vested & exercisable

30 June 2011

total vested & unexercisable 30 June 2011

Benny Wu 206,933,334 (1) - - 206,933,334 206,933,334 206,933,334 -John Girdlestone - - - - - - -Phyllis Lam - - - - - - -Kit Foo Chye - - - - - - -Li Nai San - - - - - - -James Li - - - - - - -Darby Liu - - - - - - -Rajesh Bhatia - - - - - - -He Jian - - - - - - -Nancy Liang - - - - - - -Shi Chuan - - - - - - -Ye Wen Shi - - - - - - -Zhu Hu Ling - - - - - - -

206,933,334 - - 206,933,334 206,933,334 206,933,334 -




Net change other*

Balance 30 June 2010

total vested 30 June 2010

total vested & exercisable

30 June 2010

total vested & unexercisable 30 June 2010

Benny Wu 206,933,334 (1) - - 206,933,334 206,933,334 206,933,334 -Hung Kwang Hou 7,000,000 (2) - (7,000,000) - - - -Kit Foo Chye 404,750 (2) - (404,750) - - - -John Girdlestone - - - - - - -Li Nai San - - - - - - -James Li - - - - - - -Darby Liu - - - - - - -Rajesh Bhatia - - - - - - -He Jian - - - - - - -Nancy Liang - - - - - - -Ye Wen Shi - - - - - - -Zhang Hai Feng - - - - - - -Zhu Hu Lin - - - - - - -

214,338,084 - (7,404,750) 206,933,334 206,933,334 206,933,334 -

1. Options exercisable at 50 cents before 18 September 2012.2. Options exercisable at 30 cents before 30 November 2009.

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Number of Shares held by Directors and Key Management Personnel




options exercised

Net change other*


Benny Wu 185,801,431 (1) - - 559,195 186,360,626

John Girdlestone 250,000 - - - 250,000

Phyllis Lam - - - - -

Kit Foo Chye 2,571,000 - 2,571,000

Li Nai San 100,000 - - - 100,000

James Li - - - - -

Darby Liu 230,000 - - - 230,000

Rajesh Bhatia - - - - -

He Jian - - - - -

Nancy Liang - - - - -

Shi Chuan - - - - -

Ye Wen Shi - - - - -

Zhu Hu Ling - - - - -

188,952,431 - - 559,195 189,511,626




options exercised

Net change other*


Benny Wu 207,483,334 (1) - - (21,681,903) 185,801,431

Hung Kwang Hou 7,000,000 - - (7,000,000) -

Kit Foo Chye 2,471,000 - - 100,000 2,571,000

John Girdlestone 250,000 - - - 250,000

Li Nai San 100,000 - - - 100,000

James Li - - - - -

Darby Liu - - - 230,000 230,000

Rajesh Bhatia - - - - -

He Jian - - - - -

Ye Wen Shi - - - - -

Nancy Liang - - - - -

Zhang Hai Feng - - - - -

Zhu Hu Lin - - - - -

217,304,334 - - (28,351,903) 188,952,431

1.Includes 106,666,667 performance shares that were released from escrow on 9 October 2008

Signed in accordance with a resolution of the Board of Directors.

Benny Wu

Executive Chairman

30 September 2011

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auDitor’s iNDePeNDeNce DecLaratioN

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The Board of Directors of Rocklands Richfield Limited (“RCI” or “the Company”) is responsible for the corporate governance of the Group. The Board guides and monitors the business and affairs of Rocklands on behalf of the shareholders by whom they are elected and to whom they are accountable.

The table below summarises the Company’s compliance with the ASX Corporate Governance Council’s Revised Principles and Recommendations.

Principles and recommendations compliance comply

Principle 1 – Lay solid foundations for management and oversight

1.1 Establish the functions reserved to the Board of Directors of Rocklands and those delegated to manage and disclose those functions

The Board is responsible for the overall corporate governance of the Company.

The Board has adopted a Board Charter that formalises its roles and responsibilities and defines the matters that are reserved for the Board and specific matters that are delegated to management.

Complies.

1.2 Disclose the process for evaluating the performance of senior executives

Senior executives prepare strategic objectives that are signed off by the Board. These objectives must then be met by senior executives as part of their performance targets. The CEO then reviews the performance of the senior executives against those objectives. The Board reviews the CEO’s compliance against his/her and the company’s objectives. These reviews occur annually.

Complies.

1.3 Provide the information indicated in Guide to reporting on Principle 1

A Board Charter has been disclosed on the Company’s website and is summarised in this Corporate Governance Statement.

A performance evaluation process is included in the Board Charter, which has been disclosed on the Company’s website and is summarised in this Corporate Governance Statement.

The Board evaluates the performance of senior executives on an ongoing basis with a formal periodical evaluation process currently being implemented.

Complies

Does not comply.

Development and implementation of a formal performance evaluation system was suspended during the year because of the on-market Takeover Bid by Jindal Steel & Power Limited in April 2011 which lapsed in July 2011.

Principle 2 – structure the Board to add value

2.1 A majority of the Board should be Independent Directors

The majority of the Board’s Directors are not independent as a majority of the Board are either a substantial shareholder of the Company, a nominee of a substantial shareholder, an Executive Director of the Company, or an Executive Director of a controlled entity.

Kit Foo Chye, James Li and Darby Liu are Independent Non-Executive Directors.

Li Nai San and Rajesh Bhatia are Non-Executive Directors.

Benny Wu, John Girdlestone (ceased 1 December 2010) and Phyllis Lam (ceased 1 September 2011) are/were Executive Directors.

Does not comply. However the skills and experience of both the Independent and Non-Independent Directors allows the Board to act in the best interests of shareholders.

2.2 The chair should be an independent director

Benny Wu is not an Independent, Non-Executive director of the Board. Does not comply due to Dr Wu’s controlling interest in the Company.

2.3 The roles of Chair and Chief Executive Officer should not be exercised by the same individual

Benny Wu is the Chairman and the Chief Executive Officer. Does not comply

Company has not yet appointed a new CEO, following resignation of immediately past CEO Phyllis Lam

2.4 The Board should establish a Nomination Committee

Given the size of the Board, it was determined that the Board will execute the functions of a Nomination Committee and that a separate Nomination Committee is unnecessary.

Does not comply for reasons given under 2.6 Compliance.

2.5 Disclose the process for evaluating the performance of the Board, its committees and individual Directors.

The Company conducts the processes for evaluating the performance of the Board, its committees and individual Directors as outlined in the Board Charter which is available on the Company’s website.

Complies.

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2.6 Provide the information indicated in the Guide to reporting on Principle 2

This information has been disclosed (where applicable) in the Directors’ Report attached to this Corporate Governance Statement.

Kit Chye, James Li and Darby Liu are Independent Directors of the Company. A Director is considered independent when he substantially satisfies the test for independence as set out in the ASX Corporate Goverenance Recommendations.

Members of the Board are able to take independent professional advice at the expense of the Company.

Benny Wu, Executive Chairman, was appointed to the Board on 1 October 2007.

John Girdlestone, Executive Director and Chief Executive Officer, was appointed to the Board on 1 October 2007 (ceased 1 December 2010).

Phyllis Lam, Executive Director and Chief Executive Officer, was appointed to the Board on 4 January 2011 (ceased 1 September 2011).

Kit Foo Chye, Independent Non-Executive Director, was appointed to the Board on 13 September 2004.

Li Nai San, Non-Executive Director, was appointed to the Board on 1 October 2008.

James Li, Independent Non-Executive Director, was appointed to the Board on 20 October 2009.

Darby Liu, Independent Non-Executive Director, was appointed to the Board on I February 2010.

Rajesh Bhatia, Non-Executive Director, was appointed to the Board on 31 May 2010.

The Board carries out the functions of a Nomination Committee.

In accordance with the information suggested in Guide to Reporting on Principle 2, the Company has disclosed full details of its Directors in the Director’s Report attached to this Corporate Governance Statement. Other disclosure material as suggested in Guide to Reporting on Principle 2.has been made available on the Company’s website.

The Board has not established a Nomination Committee and does not have a majority of Independent Directors.

Given the size of the Board, the Board has determined that it will execute the functions of a Nomination Committee and that a separate Nomination Committee is unnecessary.

Principle 3 – Promote ethical and respnsible decision making

3.1 Establish a Code of Conduct and disclose the code or a summary of the code

The Board has adopted a Code of Conduct which is available on the Company’s website.

Complies.

3.2 Establish a policy concerning trading in company securities by Directors, senior Executives and employees and disclose the policy or a summary of that policy

The Company has adopted a Securities Trading Policy that applies to trading in shares in the Company by any Director or employee of the Company.

Complies.


The Code of Conduct and Securities Trading Policy are available on the Company’s website. The Securities Trading Policy is summarised in this Corporate Governance Statement.

Complies.


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Principle 4 – safeguard integrity in financial reporting

4.1 The Board should establish an Audit Committee

The Board has established an Audit and Risk Management Committee and adopted an Audit and Risk Management Committee Charter to focus on issues relevant to the integrity of the Company’s financial reporting.

Complies

4.2 The Audit Committee should be structured so that it consists of only Non-Executive Directors, a majority of Independent Directors, is chaired by an Independent Chair, who is not a Chair of the Board and have at least 3 members

Members of the Audit and Risk Management Committee are Kit Foo Chye (chair), John Girdlestone (ceased 1 December 2010) and Lam Chi Tat. Benny Wu replaced John Girdlestone on 1 December 2010. Kit Foo Chye is an Independent Non-Executive Director and is not Chair of the Board.

The Audit and Risk Management Committee does not comply with Recommendation 4.2 in that the committee does not consist of only Non-Executive Directors.

Does not comply. However the Board considers that Mr. Kit Chye, Mr John Girdlestone (replaced by Dr Benny Wu on 1 December 2010), Mr James Li replaced Dr Benny Wu on 29 Aug 2011 and Mr Lam Chi Tat are the most appropriate members to constitute the Audit and Risk Management Committee given their techncical, financial and accounting expertise and knowledge of the industry in which the Company operates within.

4.3 The audit committee should have a formal charter

The Board has adopted an Audit and Risk Management Committee Charter.

This charter is available on the Company’s website.

Complies.


In accordance with the information suggested in Guide to Reporting on Principle 2, this has been disclosed in the company’s Prospectus, in the Directors’ Report attached to this Corporate Governance Statement and is summarised in this Corporate Governance Statement.

The Audit and Risk Management Committee has held two (2) meetings and is scheduled to meet every six months.

The Audit and Risk Management Committee Charter, and information on procedures (which will be determined by the audit committee) for the selection and appointment of the external auditor, and for the rotation of external audit engagement partners, is available on the Company’s website.

Complies.

Principle 5 – Make timely and balanced disclosure

5.1 Establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies

The Company has adopted a Continuous Disclosure Policy, to ensure that it complies with the continuous disclosure regime under the ASX Listing Rules and the Corporations Act 2001.

This policy is available on the Company’s website.

Complies.


The Company’s Continuous Disclosure Policy is available on the Company’s website. Complies.

Principle 6 – respect the rights of shareholders

6.1 Design a Communications Policy for promoting effective communication with shareholders and encouraging their participation at general meetings and disclose that policy or a summary of that policy

The Company has adopted a Shareholder Communications Policy. The Company uses its website, annual report and periodic ASX announcements to communicate with its shareholders, as well as encourage particpation at general meetings.

This policy is available on the Company’s website.

Complies.


The Company has adopted a Shareholder Communications Policy. This policy is available on the Company’s website.

Complies.


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Principle 7 – recognise and manage risk

7.1 Establish policies for the oversight and management of material business risks and disclose a summary of these policies

The Company has adopted a Risk Management Statement within the Audit and Risk Management Committee Charter. The Audit and Risk Management Committee is responsible for managing risk, however ultimate responsibility for risk oversight and risk management rests with the Board.

This charter is available on the Company’s website and is summarised in this Corporate Governance Statement.

Complies

7.2 The Board should require management to design and implement the risk management and internal control system to manage the company’s material business risks and report to it on whether those risks are being managed effectively. The Board should disclose that management has reported to it as to the effectiveness of the company’s management of its material business risks.

The Company has identified key risks within the business. In the ordinary course of business, management monitor and mange these risk on a regular basis.

A documented risk management framework and risk register that will report the likelihood and consequence of risks within the business will be incorporated within the Company’s risk management process by the end of the 2010 calender year.

Complies

Does not comply.

Development and implementation of a formal performance evaluation system was suspended during the year because of the on-market Takeover Bid by Jindal Steel & Power Limited in April 2011 which lapsed in July 2011.

7.3 The Board should disclose whether it has received assurance from the Chief Executive Officer and Chief Financial Officer that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating efficiently and effectively in all material respects in relation to the financial reporting risks.

The Board has received a statement from the Chief Executive Officer and Chief Financial Officer that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating efficiently and effectively in all material respects in relation to the financial reporting risks.

Complies


The Board has adopted an Audit and Risk Management Committee Charter which includes a risk management statement of the company’s policies.

This Charter is available on the Company’s website and is summarised in this Corporate Governance Statement.

The Company has identified key risks within the business and has received a statement of assurance from the Chief Executive Officer and Chief Financial Officer.

Complies


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Principle 8 – remunerate fairly and responsibly

8.1 The Board should establish a Remuneration Committee

The Board has not established a Remuneration Committee. Does not comply. Given the structure of the Board, the Board has determined that it will execute the functions of a Remuneration Committee and that a separate Remuneration Committee is unnecessary.

8.2 Clearly distinguish the structure of Non-Executive Directors’ remuneration from that of Executive Directors and Senior Executives.

The Company complies with the guidelines for executive remuneration packages and Non-Executive Director remuneration.

Complies.


Although the Board has not established a separate Remuneration Committee, the Board has adopted a Remuneration Charter.

This Charter is available on the Company’s website and is summarised in this Corporate Governance Statement.

In accordance with the information suggested in Guide to Reporting on Principle 8, this has been disclosed in the Remuneration Report within the Directors’ Report attached to this Corporate Governance Statement and is summarised in this Corporate Governance Statement.

The Company does not have any schemes for retirement benefits.

Complies

RCI’s corporate governance practices were in place for the year ended 30 June 2011 and to the date of signing the Directors’ Report.

Various corporate governance practices are discussed within this statement. For further information on corporate governance policies adopted by RCI, refer to our website:

http://www.rocklandsrichfield.com.au/


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BoarD FuNctioNsThe role of the Board of Rocklands Richfield Limited is as follows:

• Representing and serving the interests of shareholders by overseeing and appraising the strategies, policies and performance of the Company. This includes overviewing the financial and human resources the Company has in place to meet its objectives and the review of management performance.

• Protecting and optimising Company performance and building sustainable value for shareholders in accordance with any duties and obligations imposed on the Board by law and the Company’s Constitution and within a framework of prudent and effective controls that enable risk to be assessed and managed.

• Responsible for the overall Corporate Governance of Rocklands and its controlled entities, including monitoring the strategic direction of the Company and those entities, formulating goals for management and monitoring the achievement of those goals.

• Setting, reviewing and ensuring compliance with the Company’s values (including the establishment and observance of high ethical standards).

• Ensuring shareholders are kept informed of the Company’s performance and major developments affecting its state of affairs.

Responsibilities/functions of the Board include:

• selecting, appointing and evaluating from time to time the performance of, determining the remuneration of, and planning for the successor of, the Chief Executive Officer;

• reviewing procedures in place for appointment of senior management and monitoring of its performance, and for succession planning. This includes ratifying the appointment and the removal of the Chief Financial Officer and the Company Secretary;

• input into and final approval of management development of corporate strategy, including setting performance objectives and approving operating budgets;

• reviewing and guiding systems of risk management and internal control and ethical and legal compliance. This includes reviewing procedures in place to identify the main risks associated with the Company’s businesses and the implementation of appropriate systems to manage these risks;

• monitoring corporate performance and implementation of strategy and policy;

• approving major capital expenditure, acquisitions and divestitures, and monitoring capital management;

• monitoring and reviewing management processes in place aimed at ensuring the integrity of financial and other reporting;

• monitoring and reviewing policies and processes in place relating to occupational health and safety, compliance with laws, and the maintenance of high ethical standards; and

• performing such other functions as are prescribed by law or are assigned to the Board.

• in carrying out its responsibilities and functions, the Board may delegate any of its powers to a Board committee, a Director, employee or other person subject to ultimate responsibility of the Directors under the Corporations Act.

Matters which are specifically reserved for the Board or its committees, include the following:

• appointment of a Chair;

• appointment and removal of the Chief Executive Officer;

• appointment and removal of the Chief Financial Officer;

• appointment of Directors to fill a vacancy or as additional Director;

• establishment of Board committees, their membership and delegated authorities;

• approval of dividends;

• development and review of corporate governance principles and policies;

• approval of major capital expenditure, acquisitions and divestitures in excess of authority levels delegated to management;

• calling of meetings of shareholders; and

• any other specific matters nominated by the Board from time to time.


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structure of the BoardThe Company’s constitution governs the regulation of meetings and proceedings of the Board.

The Board determines the size and composition of the Board, subject to the terms of the constitution. The Board does not believe that it should establish a limit on tenure. While tenure limits can help to ensure that there are fresh ideas and viewpoints available to the Board, they hold the disadvantage of losing the contribution of Directors who have been able to develop, over a period of time, increasing insight in the Company and its operation and, therefore, an increasing contribution to the Board as a whole. It is intended that the Board should comprise a majority of Independent Non-Executive Directors and comprise Directors with a broad range of skills, expertise and experience from a diverse range of backgrounds. It is also intended that the chair should be an Independent Non-Executive Director, however this is not currently the case. The Board regularly reviews the independence of each Director in light of the interests disclosed to the Board.

The Board only considers Directors to be independent where they are independent of management and free of any business or other relationship that could materially interfere with - or could reasonably be perceived to interfere with - the exercise of their unfettered and independent judgement. The Board has adopted a definition of independence based on that set out in the ASX Corporate Governance Council Recommendation 2.1. The Board will review the independence of each Director in light of interests disclosed to the Board from time to time.

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

Name PositionKit Foo Chye Non-Executive DirectorLi Nai Ming (James Li) Non-Executive DirectorLiu Ta Pei (Darby Liu) Non-Executive Director

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

The term in office held by each Director in office at the date of this report is as follows:

Name Position term in officeWu Pun Yan (Benny Wu) Chairman, Executive Director Appointed 1 October 2007Kit Foo Chye Non-Executive Director Appointed 13 September 2004Li Nai San Non-Executive Director Appointed 1 October 2008Li Nai Ming (James Li) Non-Executive Director Appointed 20 October 2009Liu Ta Pei (Darby Liu) Non-Executive Director Appointed 1 February 2010Rajesh Bhatia Non-Executive Director Appointed 31 May 2010

Further details on each director can be found in the Directors’ Report.

securities traDiNG PoLicYUnder the Company’s Share Trading Policy which sets out guidelines for dealing in securities, a Director or Company employee must not trade in any securities of the Company at any time when they are in possession of unpublished price sensitive or ‘inside’ information in relation to those securities.

Generally, Directors or Company employees may not buy or sell the Company’s securities on the ASX in the period of 30 days preceding:

• the announcement of the half yearly financial results;

• the announcement of annual financial results;

• the holding of a shareholder’s meeting,

and ending two days after the end of the day of the announcement of the Company’s financial results or the holding of the shareholder’s meeting to allow the market to absorb the contents of the announcement (Non-Trading Period).

Directors and employees may receive clearance to deal in the Company’s securities on a prescribed financial market during a Non-Trading Period as follows:

• A Director of the Company (including the Chief Executive Officer) must inform and receive approval from the Chairman before undertaking a transaction during a Non-Trading Period;

• the Chairman must obtain approval from the Board before undertaking a transaction during a Non-Trading Period;

• all other employees, including Executives and senior management must inform and receive approval from the Company Secretary before undertaking a transaction during a Non-Trading Period.

As required by the ASX Listing Rules, the Company notifies the ASX of any transaction conducted by Directors in the securities of the Company within five days of the transaction taking place.


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auDit aND risK MaNaGeMeNt coMMitteeThe Board has established an Audit and Risk Management Committee which operates under a Charter approved by the Board. It is the Board’s responsibility to ensure that an effective internal control framework exists within the entity. This includes internal controls to deal with both the effectiveness and efficiency of significant business processes, the safeguarding of assets, the maintenance of proper accounting records, and the reliability of financial information as well as non-financial considerations such as the benchmarking of operational key performance indicators. The Board has delegated responsibility for establishing and maintaining a framework of internal control and ethical standards to the Audit and Risk Management Committee.

The Committee also provides the Board with additional assurance regarding the reliability of financial information for inclusion in the financial reports.

The members of the Audit and Risk Management Committee during the year were:

Kit Foo Chye – Independent Non-Executive Director

John Girdlestone – Executive Director and Chief Executive Officer (ceased 1 December 2010)

Benny Wu – Executive Chairman (replacing John Girdlestone in the Committee as from 1 December 2010, ceased 29 August 2011

Li Naiming - Independent Non-Executive Director from 29 August 2011

Lam Chi Tat – Chief Financial Officer

Details of the number of meetings of the Audit and Risk Management Committee that were held during the year are in the Directors’ Report.

risKThe responsibility of overseeing risk falls within the charter of the Audit and Risk Management Committee. The Company has adopted a risk management statement and has identified key business risks within the Company.

The Company continuously undertakes a risk assessment of the Company’s operations, procedures and processes. The risk assessment is aimed at identifying the following:

• a culture of risk control and the minimisation of risk throughout the Company, which is being done through natural or instinctive process by employees of the Company;

• a culture of risk control that can easily identify risks as they arise an amend practices;

• the installation of practices and procedures in all areas of the business that are designed to minimise an event or incident that could have a financial or other effect on the business and its day-to-day management; and

• adoption of these practices and procedures to minimise many of the standard commercial risks, i.e. taking out the appropriate insurance polices, or ensuring compliance reporting is up to date.

executive chairMaN aND cFo certiFicatioNThe Executive Chairman and Chief Financial Officer have provided a written statement to the Board 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; and

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

PerForMaNceThe performance of the Board and key executives is reviewed regularly using both measurable and qualitative indicators.

reMuNeratioNIt is the Company’s objective to provide maximum stakeholder benefit from the retention of a high quality Board and executive team by remunerating Directors and key executives fairly and appropriately. To assist in achieving this objective, the Board links the nature and amount of Executive Directors’ and officers’ remuneration to the Company’s financial and operational performance. The expected outcomes of the remuneration structure are:

• retention and motivation of key executives;

• attraction of high quality management to the Company; and

• performance incentives that allow executives to share in the success of Rocklands.

For a more comprehensive explanation of the Company’s remuneration framework and the remuneration received by Directors and key executives in the current period, please refer to the Remuneration Report, which is contained within the Directors’ Report.

There is no scheme to provide retirement benefits to either Executive or Non-Executive Directors.

The Board is responsible for determining and reviewing compensation arrangements for the Directors themselves and the Chief Executive Officer and the executive team.


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FOR THE YEAR ENDED 30 JUNE 2011


coNsoLiDateD iNcoMe stateMeNt

Note 2011 2010 $ $

continuing operations Revenue 3 60,376,765 79,305,098

Other Income 3 1,241,297 1,021,606

Cost of goods sold (59,579,351) (75,376,913)

Administration and corporate expense (6,311,418) (4,418,678)

Depreciation and amortisation 4 (2,277,364) (2,570,319)

Impairment of intangibles 4 (5,040,906) (5,466,024)

Employment costs 4 (4,227,092) (4,245,933)

Finance costs 4 (3,805,339) (1,591,421)

(81,241,470) (93,669,288)

Gain/(loss) before income tax expense (19,623,408) (13,342,584)

Income tax benefit (expense) 5 (76,885) (3,859)

Gain/(loss) after income tax expense (19,700,293) (13,346,443)

Minority interest 91,872 (15,745)

Gain/(loss) attributable to members of rocklands richfield Limited (19,608,421) (13,362,188)

earnings/(loss) per share cents Cents

Basic earnings per share 8 ($0.05) ($0.04)

Diluted earnings per share 8 ($0.05) ($0.04)

Weighted average number of shares used as the denominatorWeighted average number of ordinary shares on issue during the financial year used in the calculation of basic earnings/(loss) per share 353,212,136 328,955,200

Weighted average number of ordinary shares on issue during the financial year used in the calculation of diluted earnings/(loss) per share 381,212,136 364,955,200

The accompanying notes form part of these financial statements.

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coNsoLiDateD stateMeNt oF coMPreheNsive iNcoMe

Note 2011 2010 $ $

Profit/(Loss) for the year (19,608,421) (13,362,188)

other comprehensive income after income tax :

Exchange differences on translatingforeign controlled entities (3,056,409) (2,414,807)

Other comprehensive income for the year, net of tax (3,056,409) (2,414,807)

total comprehensive income for the year, net of tax (22,664,830) (15,776,995)

total comprehensive income attributable to:Members of the parent entity (22,572,958) (15,792,740)

Minority equity interests (91,872) 15,745

(22,664,830) (15,776,995)


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coNsoLiDateD stateMeNt oF FiNaNciaL PositioN

Note 2011 2010 $ $

curreNt assetsCash and Cash Equivalents 9 22,273,121 25,814,518

Trade Receivables and other receivables 10 18,148,423 18,187,361

Other Financial Assets 11 1,110,010 1,049,862

Inventories 12 4,080,441 5,153,918

totaL curreNt assets 45,611,995 50,205,659

NoN-curreNt assetsProperty, Plant and Equipment 13 27,163,145 33,966,326

Prepaid Land Use Rights 15 6,548,610 7,824,849

Exploration and Evaluation Assets 16 5,591,955 5,396,064

Intangible Assets 14 17,648,822 23,300,839

Other Financial Assets 11 - -

totaL NoN-curreNt assets 56,952,532 70,488,078

totaL assets 102,564,527 120,693,737

curreNt LiaBiLitiesTrade and Other Payables 17 39,403,785 41,881,602

Financial Liabilities 18 15,128,922 11,401,238

totaL curreNt LiaBiLities 54,532,707 53,282,840

NoN-curreNt LiaBiLitesTrade and Other Payables 17 40,306 77,323

Financial Liabilities 18 9,050,341 8,033,400

Deferred Tax 5(d) 1,040,832 1,221,939

totaL NoN-cureNt LiaBiLites 10,131,479 9,332,662

totaL LiaBiLities 64,664,186 62,615,502

Net assets 37,900,341 58,078,235

eQuitYIssued Capital 20 43,287,493 40,856,183

Reserves 21 5,257,582 8,313,990

Retained Earnings/(Accumulated losses) (11,567,386) 8,251,855

Non-controlling Interests 922,652 656,207

totaL eQuitY 37,900,341 58,078,235


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coNsoLiDateD stateMeNt oF chaNGes iN eQuitY

ordinary retained Foreign option Non-controlling total shares earnings exchange reserve interest reserve $ $ $ $ $ $

Balance at 1 July 2009 23,644,120 21,614,042 10,524,263 204,535 579,256 56,566,216

Profit/(Loss) attributable to members - (13,362,188) - - 15,745 (13,346,443)

Additional contribution from members - - - - 61,206 61,206

Other comprehensive income - - (2,414,807) - - (2,414,807)

Issue of Shares Exercise of options 17,212,063 - - - - 17,212,063

Balance at 30 June 2010 40,856,183 8,251,855 8,109,456 204,535 656,207 58,078,235

Profit/(Loss) attributable to members - (19,608,421) - - (91,872) (19,700,293)

Other comprehensive income - - (3,056,409) - - (3,056,409)

Revaluation of inter-group account - - - - - -

Additional contribution from members - - - - 147,497 147,497

Recognising minority interest in opening retained earnings - (210,820) - - 210,820 -

Issue of Shares Exercise of convertible notes 2,431,310 - - - - 2,431,310

Balance at 30 June 2011 43,287,493 (11,567,386) 5,053,047 204,535 922,652 37,900,341


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coNsoLiDateD stateMeNt oF cash FLoWs

Note 2011 2010 $ $

cash FLoW FroM oPeratiNG activitiesReceipts from customers 59,132,471 79,468,992

Interest received 862,541 252,825

Payment to supplier & employees (64,372,008) (71,927,825)

Finance costs (798,648) (757,896)

Tax paid (76,914) (3,814)

Net cash provided by (used in) operating activities 25 (5,252,558) 7,032,282

cash FLoWs FroM iNvestiNG activitiesPurchase of property, plant & equipment (800,636) (3,519,881)

Exploration expenditure (195,891) (298,972)

Deposit for investments - (762,470)

Net cash (used in) investing activities (996,527) (4,581,323)

cash FLoWs FroM FiNaNciiNG activitiesIssues of shares - 17,212,064

Finance under loans (2,172,849) (7,233,257)

Drawdown of borrowings 13,547,356 8,538,973

Repayment of borrowings (7,901,618) (6,547,652)

Loans from related parties 566,225 -

Repayment of loan by joint venture partners 87,348 -

Net cash provided by (used in) Financing activities 4,126,462 11,970,128

Net increase/(decrease) in cash held (2,122,623) 14,421,087

Effect of exchange translation (1,418,774) (606,066)

Cash at beginning of financial year 25,814,518 11,999,497

cash at end of financial year 9 22,273,121 25,814,518


Non-cash movements include:Covertible notes exercised during the year resulted in a non-cash increase to equity of $2,431,310.

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Notes to the coNsoLiDateD FiNaNciaL stateMeNts

Note 1 Statement of Significant Accounting PoliciesThese consolidated financial statements and notes represent those of Rocklands Richfield Limited and Controlled Entities (the “consolidated group” or “group”).

The separate financial statements of the parent entity, Rocklands Richfield Limited, have not been presented within this financial report as permitted by the Corporations Act 2001.

The financial statements were authorised for issue on 30 September 2011 by the directors of the company.

Basis oF PreParatioNThe financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, including Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards as issued by the IASB. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless otherwise stated.

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

accouNtiNG PoLicies(a) Principles of Consolidation

The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by Rocklands Richfield Limited at the end of the reporting period. A controlled entity is any entity which Rocklands Richfield Limited has the power to control the financial and operating policies so as to obtain benefits from its activities.

A list of controlled entities is contained in Note 23 to the financial statements. All controlled entities have a June financial year-end.

All inter-company balances and transactions between entities in the consolidated group, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies by the parent entity.

Where controlled entities have been entered or left the consolidated group during the year, their operating results have been included/excluded from the date control was obtained or until the date control ceased.

Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are reported separately within the equity section of the consolidated statement of financial position and statement of comprehensive income. The non-controlling interests in the net assets comprise their interests at the date of the original business combination and their share of changes in equity since that date.

Rocklands Richfield Limited acquired 100% of China based company China Coke & Chemicals Limited on September 30, 2007. The acquisition was implemented by way of issuing shares of Rocklands Richfield Limited to shareholders of China Coke & Chemicals Limited. The issue of shares resulted in China Coke & Chemicals Limited shareholders holding a majority shareholding in Rocklands Richfield Limited. Thus, this transaction has been accounted for as a reverse acquisition in accordance with AASB 3 – Business Combinations and the consolidated accounts represent a continuation of China Coke & Chemicals Limited rather than that of Rocklands Richfield Limited. For other purposes, including entitlement to dividends, Rocklands Richfield Limited remains the parent company of the combined Group.

Reverse acquisition accounting applies only to the consolidated financial statements. The parent entity financial statements are those of Rocklands Richfield Limited.

Reverse acquisition accounting applies only to the business combination transactions at the acquisition date and does not apply to transactions after the reverse acquisition date.

(b) Business CombinationsAcquisition of subsidiaries and businesses are accounted for using the purchase method. The cost of the business combination is measured as the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under AASB 3 ‘Business Combinations’ are recognised at their fair values at the acquisition date, except for non-current asset (or disposal group) that are classified as held for sale in accordance with AASB 5 ‘Non-current Assets Held for Sale and Discontinued Operations’, which are recognised and measured at fair value less costs to sell.

Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in profit or loss.

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Note 1 Statement of Significant Accounting Policies (Continued)(b) Business Combinations (continued)

The interest of non-controlling shareholders in the acquiree is initially measured at the non-controlling proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

The fair value adjustments from acquisition and its cost, retained earnings and equity structure at June 30, 2008 and the results for the year then ended resulting from the reverse accounting treatment to the consolidation financial statements have been fully described in the previous year report; relevant figures applicable to those items were carried forward to the current year.

(c) Going Concern The financial report of the Group has been prepared on the going concern basis. The company considers the going concern basis appropriate notwithstanding the following facts:

During the year ending June 30, 2011, the Group incurred a loss of $19,608,421, has a deficit in working capital of $8,920,712 and a negative cash flow from operations of $5,252,558. The poor operating performance was mainly due to the poor performance of the company’s Coke Manufacturing unit in China due to the impact of the global financial crisis, the rising price of coal and lack of demand for coking coal by steel manufacturers. The decline in performance has resulted in the recognition of impairments to the carrying value of CCS goodwill by $5,040,946. Furthermore, the Group has incurred a loss of $ 2,261,647 on its fair value adjustment of the convertible bonds liability.

Management of the Group have been evaluating various strategies to improve the financial performance and position of the Group so as to enable it to continue to operate as a going concern. Management is pursuing the following strategies to address the above going concern uncertainties:

• The Directors have considered the future prospect of coke business. The coke plant operation in China has consumed significant management resources and incurred substantial losses in the past three years and would require a substantial amount of capital injection from the Company to maintain the operation for at least a few more years in order to make it the surviving winner in the China coke market. The Directors therefore consider that shareholders’ best interests will be served by divesting the coke business in China and focusing on development of the Company’s coal tenements in the Bowen Basin. The disinvestment will result in substantial cost savings for the company which will become debt free.Further details and information on the progress of the sale of CCS together with its impact on the future consolidated accounts for the RCI group is detailed in note 26.

• The deficit in working capital is partly due to the planned expiry of certain loans which are due for renewal in September 2011. Till the time the above disinvestment occurs, management expects that these loans will be refinanced as and when needed. Subsequent to the end of the reporting period, loans totalling approximately AUD 2.5m (RMB17m) which were due in July, August and September 2011 were refinanced and extended for another 12 months. Management are presently negotiating an extension of the balance of loans totalling approximately Aud 10.8m (RMB 70m) which were due in the same period.

The Group considers the going concern basis appropriate as it has developed financial forecasts which incorporate the effects of the above prospective events and transactions. The results of these projections, although not resulting in an operating profit, reflect a positive working capital position in the future.

The ability of the Group to continue as a going concern and to its pay debts as and when they fall due is dependent upon the Group succeeding in disposing of the operation of CCS which is subject to shareholders approval, and in rolling over the loans in future periods. If these strategies are accomplished, the directors are satisfied the Group will be able to pay its debts when they fall due and therefore the use of the going concern basis of accounting is appropriate.

Should the Group not achieve the above events, they may be required to realise their assets and extinguish their liabilities other than in the normal course of business and at amounts different from those stated in the financial report.

The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that may be necessary should the Group be unable to continue as a going concern.

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Note 1 Statement of Significant Accounting Policies (Continued)(d) Income Tax

current taxCurrent tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that is unpaid or (refundable).

Deferred taxDeferred tax is accounted for using the balance sheet liability method. Temporary differences are differences between the tax base of an asset or liability and its carrying amount in the statement of financial position. The tax base of an asset or liability is the amount attributable to that asset or liability for tax purposes.

In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be available against which deductible temporary differences or unused tax losses and tax offsets can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from the initial recognition of goodwill.

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries, branches and associates, and interests in joint venture except where the Group is able to control the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with these investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of is assets and liabilities.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

current and deferred tax for the periodCurrent and deferred tax is recognised as an expense or income in the income statement, except when it relates to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from the initial accounting for a business combination, in which case it is taken into account in the determination of goodwill or excess.

Tax ConsolidationRocklands Richfield Limited and its wholly owned Australian subsidiaries have not formed an income tax consolidated group under tax consolidation legislation.

(e) InventoriesInventories are measured at the lower of cost and net realisable value. The cost of production of coke and other by-products includes direct materials, direct labour and an appropriate portion of variable and fixed overheads. The cost of raw materials are determined on the first-in-first-out basis and comprises the original cost of purchase plus cost of bringing inventories to their present location and condition.

(f) Plant and EquipmentEach class of plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses.

Plant and equipmentPlant and equipment are measured on the cost basis. The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

Construction work in progress is valued at cost, which includes both variable and fixed costs relating to specific contracts and those costs that are attributable to the contract activity in general and that can be allocated on a reasonable basis.

The cost of fixed assets constructed within the consolidated group includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads. Subsequent costs are included in the asset’s carrying amount or recognised as separate assets, as appropriate, only when it is probable that the future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Increases in the carrying amount arising on revaluation of land and building are credited to a revaluation reserve in equity. Decreases that offset previous increases of the same asset are charged against fair value reserves directly in equity; all other decreases are charged to the income statement. Each year the difference between depreciation based on the revalued carrying amount of the asset charged to the income statement and depreciation based on the assets original cost is transferred from the revaluation reserve to retained earnings.

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Note 1 Statement of Significant Accounting Policies (Continued)(f) Plant and Equipment (continued)

DepreciationThe depreciable amount of all plant and equipment is depreciated on a straight-line basis over their useful lives to the consolidated group commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

The annual depreciation rates used for each class of depreciable assets are :

Class of Plant and Equipment Depreciation RatePlant and equipment 10%Buildings 5%Motor Vehicle 20%Electrical equipment 20%

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the income statement. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings

(g) Exploration and EvaluationExploration and evaluation expenditures in relation to each separate area of interest are recognised as exploration and evaluation assets in the year in which they are incurred where the following conditions are satisfied :

(i) The rights to tenure of the area of interest are current; and

(ii) at least one of the following conditions is also met :

a. the exploration and evaluation expenditures are expected to be recouped through successful development and exploration of the area of interest, or alternatively, by its sale; or

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

Exploration and valuation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortisation of assets used in exploration and evaluation activities. General and administrative costs are only included in the measurement or exploration and evaluation costs where they are related directly to operation activities in a particular area of interest.

Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that their carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset (or the cash-generating unit(s) to which it has been allocated, being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years.

Where a decision is made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to development.

(h) Provision for Restoration and RehabilitationA provision for restoration and rehabilitation is recognised when there is a present obligation as a result of exploration and development activities undertaken, it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount of the provision can be measured reliably. The estimated future obligations include the costs of removing facilities, abandoning sites and restoring the affected areas.

The provision for future restoration costs is the best estimate of the present value of the expenditure required to settle the restoration obligation at the reporting date. Future restoration costs are reviewed annually and any changes in the estimate are reflected in the present value of the restoration provision at each reporting date.

The initial estimate of the restoration and rehabilitation provision relating to exploration development is capitalised into the cost of the related asset and amortised on the same basis as the related asset, unless the present obligation arises from the production of inventory in the period, in which case the amount is included in the cost of production for the period.

Changes in the estimate of the provision for restoration and rehabilitation are treated in the same manner, except that the unwinding of the effect of discounting on the provision is recognised as a finance cost rather than being capitalised into the cost of related assets.

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Note 1 Statement of Significant Accounting Policies (Continued)(i) Financial Instruments

recognition and initial MeasurementFinancial instruments, incorporating financial assets and financial liabilities, are recognised when the entity becomes a party to the contractual provisions of the instrument. Trade date accounting is adopted for financial assets that are delivered within timeframes established by marketplace convention.

Financial instruments are initially measured at fair value plus transactions costs where the instruments are not classified as at fair value through profit or loss. Transaction costs related to instruments classified as at fair value through profit or loss are expensed to profit or loss immediately. Financial instruments are classified and measured as set out below. Subsequent to initial recognition, investments in subsidiaries are measured at cost in the company financial statements.

classification and subsequent Measurement

(i) Financial assets at fair value through profit or loss Financial assets are classified at “fair value through profit or loss” when they are held for trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a Group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss.

(ii) Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost using the effective interest rate method.

Loans and receivables are included in current assets, where they are expected to mature within 12 months after the end of the reporting period.

(iii) Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the group’s intention to hold these investments to maturity. They are subsequently measured at amortised cost using the effective rate of interest.

Held-to-maturity investments are included in non-current assets where they are expected to mature within 12 months after the end of the reporting period. All other investments are classified as current assets.

(iv) Available –for-sale financial assetsAvailable-for-sale financial assets are non-derivative financial assets that are either designated as such or that are not classified in any of the other categories. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments.

They are subsequently measured at fair value with changes in such fair value (ie gains or losses) recognised in other comprehensive income (except for impairment losses and foreign exchange gains and losses). When the financial asset is derecognised, the cumulative gain or loss pertaining to that asset previously recognised in other comprehensive income is reclassified into profit or loss.

Available-for-sale financial assets are included in non-current assets where they are expected to be sold within 12 months after the end of the reporting period. All other financial assets are classified as current assets.

(v) Financial LiabilitiesNon-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the effective interest rate method.

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

impairmentAt each reporting date, the group assess whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether impairment has arisen. Impairment losses are recognised in the income statement.F

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Note 1 Statement of Significant Accounting Policies (Continued)(i) Financial Instruments (continued)

Financial GuaranteesWhere material, financial guarantees issued, which require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due, are recognised as a financial liability at fair value on initial recognition.

The guarantee is subsequently measured at the higher of the best estimate of the obligation and the amount initially recognised less, when appropriate, cumulative amortisation in accordance with AASB 118: Revenue. Where the entity gives guarantees in exchange for a fee, revenue is recognised under AASB 118.

The fair value of financial guarantee contracts has been assessed using a probability weighted discounted cash flow approach. The probabilities have been based on:

- The likelihood of the guaranteed party defaulting in a year period;- The proportion of the exposure that is not expected to be recovered due to the guaranteed party defaulting; and- The maximum loss exposed if the guaranteed party were to default.

DerecognitionFinancial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the entity is no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expire. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.

(j) LeasesLeases of fixed assets where substantially all the risks and benefits incidental to ownership of the asset but not the legal ownership that is transferred to entities in the consolidated group, are classified as finance leases.

Lease payments for operating leases where substantially all the risks and benefits remain with lessors, are charged as expenses in the periods in which they are incurred.

(k) Interests in Joint VentureThe consolidated group’s share of assets, liabilities, revenue and expense of joint venture operations are included in the appropriate items of the consolidated financial statements.

The consolidated group’s interests in joint venture entities are brought to account using the equity method accounting in the consolidated financial statements. The parent entity’s interests in joint venture entities are brought to account using the cost method.

(l) IntangibleAcquired both separately and from business combinationIntangible assets acquired separately are capitalised at cost and from a business combination are capitalised at fair value as at the date of acquisition. Following initial recognition, the cost model is applied to the class of intangible assets.

The useful lives of these intangible assets are assessed to be either finite or indefinite. Where amortisation is charged on assets with finite lives, this expense is taken to an expense category in the income statement which is consistent with the nature of the intangible asset.

Intangible assets are tested for impairment where an indicator of impairment exists. Useful lives are also examined on an annual basis and adjustments, where applicable, are made on a prospective basis.

Mining Agreements are considered to have an indefinite useful life.

Development costs have a finite life and are amortised on a systematic basis matched to the future economic benefits over the useful life of the project.

Goodwill arising on acquisition or on consolidation is initially recorded at the amount by which the purchase price for a business combination exceeds the fair value attributed to the interest in the net fair value of identifiable assets, liabilities and contingent liabilities at date of acquisition. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses.

(m) Impairment of AssetsAt each reporting date, the group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the assets carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed in the profit or loss, unless the asset is carried at a revalued amount in accordance with another Standard. Any impairment loss of a revalued asset is treated as a revaluation decrease in accordance with that other Standard.

Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the assets belongs.

Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.

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Note 1 Statement of Significant Accounting Policies (Continued)(n) Foreign Currency Transactions and Balances

Functional and Presentation currencyThe functional currency of each of the group’s entities is determined using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the legal parent entity’s functional and presentation currency.

transactions and BalancesForeign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items are recognised in the income statement, except where deferred in equity as a qualifying cash flow or net investment hedge.

Exchange differences arising on the translation of monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the income statement.

Foreign operationsThe financial results and position of foreign operations whose functional currency is different from the group’s presentation currency are translated as follows:

• Assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;

• Income and expenses are translated at average exchange rates for the period ; and

Retained earnings are translated at the exchange rates prevailing at the date of the transaction. Exchange differences arising on translation of foreign operations with functional currencies other than Australian dollars are recognised in other comprehensive income and included in the foreign currency translation reserve in the statement of financial position. These differences are recognised in profit or loss in the period in which the operation is disposed.

(o) Employee Benefits A liability is recognised for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs.

Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.

Defined contributions PlanContributions to defined contribution superannuation plans are expensed when incurred.

equity-settled compensationThe group operates a share-based option scheme. The fair value of the equity to which employees become entitled is measured at grant date and recognised as an expense over the vesting period, with corresponding increase to an equity account. The fair value of options is ascertained using a Black-Scholes pricing models which incorporates all market vesting conditions. (refer to Note 20), and excludes options issued on business combinations. The Group’s share-based option scheme is limited to the 206,933,334 performance options exercisable at 50 cents before 18 September 2012.

(p) ProvisionsProvisions are recognised when the group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

(q) Convertible NotesConvertible notes are reviewed for fair value by comparing the exercise price of the note to the closing share trading price of the company as at the end of the reporting period.

(r) Cash and Cash EquivalentsCash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of financial position.

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Note 1 Statement of Significant Accounting Policies (Continued)(s) Revenue

Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of significant risk and rewards ownership of the goods and the cessation of all involvement in the goods. Interest revenue is recognised on a proportional basis taking into account the effective interest rates applicable to the financial assets.

Revenue from the rendering of service is recognised upon the delivery of the service to the customers. All revenue is stated net of the amount of goods and services tax (GST).

(t) Borrowing CostsBorrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowing costs are recognised in the income statement in the period in which they are incurred.

(u) Goods and Services Tax (GST)Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.

Receivables and payables in the statement of financial position are shown inclusive of GST.

Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

(v) Comparative FiguresWhen required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

(w) New and Revised Accounting Requirements Applicable to the Current Half-Year Reporting PeriodFor the year end reporting period to 30 June 2011, a number of new and revised accounting standard requirements became mandatory for the first time. Application of these amendments was considered and it was concluded that they did not have a material impact on the financial statements of the Group.

(x) New accounting standards for application in future periods The AASB has issued new and amended accounting standards and interpretations that have mandatory application dates for future periods. The company has decided against early adoption of these standards. A discussion of those future requirements and their impact on the company follows:

• AASB 9: Financial Instruments and AASB 2010 -11: Amendments to Australian Accounting Standards arising from AASB 9 [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 121, 127, 128, 131, 132, 136, 139, 1023 and 1038 and Interpretations 10 and 12] (applicable for annual reporting periods commencing on or after 1 January 2013).

These standards are applicable retrospectively and amend the classification and measurement of financial assets. The company has not yet determined any potential impact on the financial statements.

The changes made to accounting requirements include:

- simplifying the classification of financial assets into those carried at amortised cost and those carried at fair value;

- simplifying the requirements of embedded derivatives;

- removing the tainting rules associated with held-to-maturity assets;

- removing the requirements to separate and fair value embedded derivatives for financial assets carried at amortised costs;

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

- requiring financial assets to be reclassified where there is a change in an entity’s business model as they initially classified based on a) the objective of the entity’s business model for managing the financial assets; and b) the characteristics of the contractual cash flows.

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Note 1 Statement of Significant Accounting Policies (Continued)(y) Critical accounting estimates and judgments

The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the group. Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash generating unit to which the asset belongs.

Key Estimates – ImpairmentThe group assesses impairment at the end of each reporting period by evaluating conditions specific to the group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined on a cash-generating unit basis (CGU). Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.

For coal exploration the company considers the projected coal production from its Queensland leases and for coke manufacturing projected cash flows from sale of coke produced from the coke production facility in China are considered for value-in-use calculations. Impairment testing is performed annually for goodwill and intangible assets with indefinite lives. The directors have performed an impairment review based on the potential for future economic benefits that may arise in respect of the investment value in the Huaibei chemical and coking plant and the capitalised mining lease balances, and have determined to impair the remaining value of purchased goodwill of the Huaibei chemical and coking plant of A$5.04 million (RMB32.97 million).

Key Estimates – Deferred Exploration Costs At each reporting date, the group reviews the carrying values of its intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the assets, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the income statement. No impairment has been recognised in respect of deferred exploration costs for the year ended 30 June 2011. If any or part of the company’s exploration leases are abandoned or dropped, the capitalised exploration cost of that lease will be impaired up to the value of that lease area.

Notes 2011 2010 $ $

Note 2 Parent Informationstatement of Financial Position

assetsCurrent assets 20,646,648 21,546,136

Non-current assets 9,398,885 60,558,658

Total assets 30,045,533 82,104,794

LiabilitiesCurrent liabilities 148,243 88,985

Non-current liabilities 11,253,096 10,726,724

Total liabilities 11,401,339 10,815,709

Net assets 18,644,194 71,289,085

equityIssued Capital 74,915,805 72,484,494

Reserves 20 10,515,533 10,515,533

Retained Earnings/(Accumulated losses) (66,904,973) (11,710,942)

Minority Interest 117,829 -

total equity 18,644,194 71,289,085

statement of comprehensive income

Total losses (55,194,031) (1,517,425)

Total comprehensive income (55,194,031) (1,517,425)

A conditional Sale Agreement (subject to RCI shareholders’ approval) was entered into by RCI on 19 September 2011 under which RCI would sell all the shares in China Coke & Chemicals Ltd, the wholly-owned subsidiary of RCI at the consideration of HKD 12 million (AUD 1.50m). As a result of the above sale, the carrying value of the investment of RCI in CCS of $52.735m is impaired and an impairment loss of approx $51.235m has been accounted for in the books of RCI. The full impact of this sale on the net asset position of the consolidated accounts for the RCI group in following years is disclosed in note 26.

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2011 2010 $ $

Note 3 Revenuea. revenue from continuing operations

Revenue from the sale of goods 60,289,546 78,699,754

Other operating revenue 87,219 605,344

total 60,376,765 79,305,098

other incomeInterest revenue 862,474 501,068

Other income 378,823 520,538

total 1,241,297 1,021,606

total revenue 61,618,062 80,326,704

Note 4 Expenses a. Profit before income tax includes the following specific expenses:

Interest on term loans 810,866 677,991

Interest on bills payable 86,979 80,030

Unwinding of interest expense 645,847 581,503

Fair value adjustment of convertible notes 2,261,647 251,897

Total Finance Costs 3,805,339 1,591,421

Salary & Wages 4,227,092 4,245,933

Depreciation 2,216,412 2,322,757

Amortisation 60,952 247,562

Impairment of goodwill 5,040,906 5,466,024

Total Depreciation/Amortisation & Impairment 7,318,270 8,036,343

b. significant expense:The following significant expenses are items relevant in explaining the financial performance:

Unwinding of interest expense 645,847 581,503

Fair value adjustment of convertible bonds 2,261,647 251,897

Impairment of goodwill 5,040,906 5,466,024

7,948,400 6,299,424

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2011 2010 $ $

Note 5 Income Tax Expense (a) the components of tax expense comprise :

Current Tax paid (refund) 76,885 3,859

Deferred tax asset 4,171,901 420,109

Deferred tax asset not recognised (4,171,901) (420,109)

76,885 3,859

(b) the Prima Facie tax on (Loss)/Profit from operations before income tax is reconciled to the income tax :(Loss)/Profit from Operation (19,623,408) (13,342,584)

Prima Facie Tax Payable on Profit/(Loss) from Operationsbefore Income Tax at 30% (2010 : 30%) (5,887,023) (4,002,775)

Less adjustment for foreign subsidiaries with different tax rates 783,186 590,255

Less adjustment on account of foreign subsidiaries tax exempt status - -

Add/(less) tax effect of permanent differencesNon-deductible items 931,936 41,138

Tax losses not recognised as deferred tax assets 4,171,901 3,375,241

Prior period tax adjustment 76,885 -

5,963,908 4,006,634

Income tax expenses/(refund) attributable to Profit/(loss) after income tax 76,885 3,859

The Coke manufacturing operation in China has been granted preferential tax treatment by the relevant authorities under which the 100% owned subsidiary company, Chang Yuan (Huaibei) Chemicals & Coking Co. Ltd, is entitled to the following tax concessions :

(i) Profit for the first two financial years (June 2004 and June 2005) beginning with the first profit-making year was exempt from income tax in China;

(ii) Profit for each of the subsequent three financial years, which expired on 31 December 2008, was taxed at 50% of the prevailing rate of tax set by the tax authorities.

Current applicable tax rate is 25% on the taxable income.China Coke and Chemicals Limited is a company incorporated in Bermuda and enjoys tax exempt status.

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2011 2010 $ $

Note 5 Income Tax Expense (continued)(c) Deferred asset not brought into account

ReconciliationOpening balance 7,154,423 4,164,369

Add/(Less): Exchange variations (428,154) (238,048)

Tax effect of current period losses 4,171,901 3,228,102

closing balance at 30 June 2011 10,898,170 7,154,423

Deferred tax assets mainly comprises income tax losses brought forward. The taxation benefits of tax losses and timing differences not brought to account will only be obtained if :

(i) Assessable income is derived of a nature and of an amount sufficient to enable the benefit from the deductions to be released

(ii) Conditions of deductibility imposed by the law are complied with and

(iii) No change in tax legislation adversely affects the realisation of the benefit

(d) Deferred tax liability 1,040,832 1,221,939

reconciliationOpening balance 1,221,939 1,285,431

Add/(less): exchange variations (181,107) (63,492)

closing balance at 30 June 2011 1,040,832 1,221,939

This comprises tax effect on fair value adjustments to the net asset acquired on acquisition of Chang Yuan (Huaibei) Chemicals & Coking Co. Ltd.

Note 6 Key Management Personnel CompensationInformation relating to emoluments and share options issued to key management personnel during the financial year are disclosed in the Directors Report.

Short term employee benefits and consulting fees 682,950 743,624

Post-employment benefits 46,848 18,864

Other 25,924 39,753

Note 7 Auditors RemunerationRemuneration of the auditor for auditing or reviewing the financial report:

Crowe Horwath MelbourneAudit and Review of financial reports 87,578 77,123

Crowe Horwath MalaysiaAudit and Review of financial reports 90,023 58,105

177,601 135,228

The Auditor of Rocklands Richfield Limited is Crowe Horwath, Melbourne.

The Auditor of China Coke & Chemicals Ltd. is Crowe Horwath Malaysia, Kuala Lumpur.For

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2011 2010 $ $

Note 8 Earnings per Share(a) reconciliation of earnings to profit or loss

Profit/(Loss) used to calculate basic EPS (19,608,421) (13,362,188)

Earnings used to calculate basic EPS (19,608,421) (13,362,188)

(b) Weighted average number ordinary shares outstanding No. No.during the year used in calculating ePs 353,212,316 328,955,200

Movement between calculation of basic EPS and diluted EPS is as follows : No. No.

Weighted average number of ordinary shares at beginning 352,203,917 294,830,503

Weighted average number of ordinary shares from issue of options – Actually converted into shares - 34,124,697

Weighted average number of ordinary shares from issue of convertible notes – Actually converted into shares 1,008,219 -

(c) Weighted average number of ordinary shares outstanding during the year used in calculating basic ePs 353,212,316 328,955,200

Weight average number of ordinary shares arising from possibleconversion into shares from convertible notes 28,000,000 36,000,000

(d) Weighted average number of ordinary shares outstanding during the year used in calculating diluted ePs 381,212,316 364,955,200

The options issued by the company have a strike price higher than the company’s share price as at the end of the reporting period and therefore have not been included in the diluted EPS weighted average calculation.

In 2009 the company issued 3,636,363 shares on August 14, 2008 for one convertible note exercised to covert into shares. Convertible notes are considered to have a dilutive effect, as the market price of the Company’s shares as at 30 June 2011 is exceeding the conversion price at the end of the reporting period. Therefore it is likely the convertible notes would be converted into equity and therefore considered to have a dilutive effect on earnings.

Note 9 Cash and Cash Equivalents cash & cash equivalentsCash at Bank and in Hand 7,270,777 7,950,628

Short term bank deposits 15,002,344 17,863,890

22,273,121 25,814,518

In the previous financial year, the cash and bank balances included short-term fixed deposits of RMB 5,800,000 for Chinese operations which was subject to interest rate of 1.98% per annum and had a maturity period of 6 months.

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

Cash and Cash Equivalents 22,273,121 25,814,519 For

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2011 2010 $ $

Note 10 Trade and Other ReceivablescurreNt Trade Receivables 6,089,965 6,328,550

Bills Receivable 4,280,916 3,895,555

Advance to suppliers * - 1,495,019

Other (including prepayments) * 8,937,364 6,468,237

Less: Allowance for impairment loss (1,159,822) -

18,148,423 18,187,361

* Included in other receivables and advance to suppliers at the end of the reporting period are amounts owing by the following related parties:

Integrated Utilization 1,046,236 1,046,236

Less: Allowance for impairment loss (1,046,236) -

- 1,046,236

The amount owing was unsecured, interest-free and repayable on demand.

Note 11 Financial AssetscurreNtLoan to joint venture partners 347,540 287,392

Deposits 762,470 762,470

1,110,010 1,049,862

Note 12 Inventories, at costRaw material 726,442 3,272,584

Consumables and spare parts 715,000 773,957

Finished Goods 2,638,999 1,107,377

Total Inventories 4,080,441 5,153,918

Inventories are represented by the following :(a) raw materials – comprising mainly coking coal.

(b) consumables and spare parts – comprising other materials to convert coal to coke.

(c) finished goods – comprising coke and other by-products available for sale.

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Note 13 Property, Plant & Equipment Buildings Plant & construction electrical Motor total equipment in progress equipment vehicles

$ $ $ $ $ $

Gross carrying amountBalance at 1 July 2009 35,769,088 11,405,859 234,083 1,494,653 797,859 49,701,542

Additions / (Disposals) 182,702 198,357 3,221,774 36,892 (51,567) 3,588,158

Transfer (189,221) (28,128) - - - (217,349)

Exchange variations (1,766,776) (529,255) (36,918) (78,768) 12,576 (2,399,141)

Balance at 30 June 2010 33,995,793 11,046,833 3,418,939 1,452,777 758,868 50,673,210

re-classification 1,394,130 1,661,366 (3,055,496) - - -

additions 43,144 302,111 418,131 1,330 - 764,716

adjustment - (18,011) (167,942) - - (185,953)

exchange variations (5,038,603) (1,636,634) (506,730) (215,320) (100,383) (7,497,670)

Balance at 30 June 2011 30,394,464 11,355,665 106,902 1,238,787 658,485 43,754,303

accumulated depreciation/impairment loss Balance at 1 July 2009 (8,508,852) (5,493,869) - (675,910) (314,381) (14,993,012)

Depreciation expenses (1,511,911) (586,824) - (253,801) (58,965) (2,411,501)

Exchange variations 407,379 299,989 - 32,352 (42,091) 697,629

Balance at 30 June 2010 (9,613,384) (5,780,704) - (897,359) (415,437) (16,706,884)

Depreciation expenses (1,316,533) (765,924) - (167,021) (98,232) (2,347,710)

exchange variations 1,424,824 856,130 - 133,000 49,482 2,463,436

Balance at 30 June 2011 (9,505,093) (5,690,498) - (931,380) (464,187) (16,591,158)

Net Book value As at 30 June 2010 24,382,409 5,266,129 3,418,939 555,418 343,431 33,966,326

as at 30 June 2011 20,889,372 5,665,165 106,902 307,407 194,298 27,163,145

At the end of the reporting period property, plant and equipment with a net valuation amount of $6,849,407 (2010: $20,053,149) were pledged as securities for banking facilities as disclosed in note 18(a) to the financial statements.

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2011 2010 $ $

Note 14 Intangible AssetsGoodwillAt cost 27,929,163 28,766,863

Accumulated Amortisation & Impairment (10,280,341) (5,466,024)

total intangibles 17,648,822 23,300,839

Movements in intangible assets between the beginning and the end of current financial year : Goodwill Goodwill total in cYcc ($) in rci ($) $

Balance at 1 July 2009 11,891,396 17,648,822 29,540,218

Impairment (5,466,024) - (5,466,024)

Exchange variations (773,355) - (773,355)

closing carrying value at 30 June 2010 5,652,017 17,648,822 23,300,839

impairment (5,040,906) - (4,814,317)

exchange variations (611,111) - (837,700)

closing carrying value at 30 June 2011 - 17,648,822 17,648,822

Goodwill in Chang Yuan (Huaibie) Chemicals & Coking Co. Ltd. (“CYCC”) represents the value of goodwill on acquisition of the company’s coke manufacturing facilities from the Huaibei Municipal Government in China.

Goodwill in Rocklands Richfield Limited (“RCI”) represents value of goodwill following the reverse acquisition of RCI by China Coke & Chemicals Limited.

impairment of GoodwillGoodwill is allocated to the following cash generating units:

• Coke Manufacturing

• Coal Exploration

The directors have performed an impairment review based on the potential for future economic benefits that may arise in respect of the investment value in the Huaibei chemical and coking plant and the capitalised mining lease balances, and have determined to impair the remaining purchased goodwill of the Huaibei chemical and coking plant of A$5.04 million (RMB32.97 million).

The Huaibei chemical and coking plant has been operating at loss for nearly three years and would require a substantial amount of capital injection from the Company to maintain the operation for at least a few more years in order to make it a profitable operation. Considering these facts the directors have determined that the purchased goodwill should be fully impaired.

A Goodwill payment on the reverse acquisition of RCI was made in anticipation of future economic benefits that can be derived from the mining tenements owned by RCI. At the date of this financial report, based on the independent expert report, it is estimated that the future economic benefits expected to be derived from these resources will far exceed the value of the RCI’s net assets including goodwill, and consequently no impairment of goodwill has been considered necessary.

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2011 2010 $ $

Note 15 Prepaid Land-use rightsPrepaid land use right, at cost 9,020,547 9,020,547

Accumulated Amortisation (1,462,610) (1,346,112)

Exchange variations (1,009,327) 150,414

total Prepaid land-use rights 6,548,610 7,824,849

Prepaid land-use rights represents land use rights paid to the Chinese Government land bureau with a lease expiring in 2053, effective from 2003.

Prepaid land-use rights to the value of A$11,670,950 (PY A$2,162,948) have been pledged as security for the bank borrowings.

Movement in prepaid land-use rights during the current financial year is as follows: $

Balance at 1 July, 2009 8,500,719

Amortisation Expense (255,986)

Exchange variations (419,884)

closing carrying value at 30 June 2010 7,824,849

amortisation expense (116,498)

exchange variations (1,159,741)

closing carrying value at 30 June 2011 6,548,610

Note 16 Exploration and Evaluation AssetsCost and Net Carrying Value 5,591,955 5,396,064

Total Exploration & Evaluation Expenditure Capitalised 5,591,955 5,396,064

Total exploration and evaluation expenditure capitalised is solely intangible.

The ultimate recoupment of costs carried forward is dependent upon the successful development and commercial exploitation or sale of the respective areas. Capitalised costs amounting to $195,891 (2010:$298,972) have been included in cash flows from operating activities in the statement of cash flows.

The directors have performed an impairment review and have not impaired the value of the coal leases, based on the potential for future economic benefits that may arise. Recoverability of the carrying amount of exploration assets is dependent on the successful exploration activities carried out at the Hillalong, Rocklands and Richfield coal leases.

Rocklands Richfield Limited holds a 60% participating interest in HLM Coal Australia Pty Ltd and the Richfield Joint Venture whose principal activities is the exploration and evaluation of coal deposits.

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2011 2010 $ $

Note 16 Exploration and Evaluation Assets (continued)The consolidated group’s share of exploration costs capitalised as assets in RCI for the three coal projects are :

Exploration costs capitalised 5,591,955 5,396,064

Accumulated Depreciation - -

TOTAL NON CURRENT ASSETS 5,591,955 5,396,064

Under the terms of the Richfield Joint Venture Agreement, Rocklands Richfield Limited’s initial contribution is $527,050 before it has earned a 60% participating interest in the Richfield lease EPC 930, at which time the parties to the joint venture contribute to the ongoing exploration and evaluation of the lease in accordance with their respective interest.

Recoverability of the carrying amount of exploration and evaluation assets is dependent on the successful development and commercial exploration, or alternatively, sale of the respect areas of interests.

For The Year Ended 30 June 2011, capitalised exploration costs comprise of:

$

- Richfield Joint Venture (EPC 930) 821,623

- HLM Coal Australia Pty Ltd (EPC 890) 1,223,726

- Queensland Coal Exploration Pty Ltd (Hillalong MDL 324) 3,546,193

2011 2010 $ $

Note 17 Trade & Other PayablescurreNtUnsecured LiabilitiesTrade payables 25,331,103 18,900,685

Advances from customers - 5,180,917

Bills payable 6,118,932 9,619,902

Sundry payables & accrued expenses 7,953,750 8,180,098

Total Trade & Other Payables 39,403,785 41,881,602

NoN-curreNtSundry Payables & Accrued expenses 40,306 -

Included in other payable at the end of the reporting period are amounts owing to the following related parties:

Huai Bei An Industrial Gas Supply Co Ltd 1,396,840 1478,620

The amount owing was unsecured, interest-free and repayable on demand.

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2011 2010 $ $

Note 18 Financial LiabilitiescurreNtSecured Liabilities – Short-term loan (a) 15,128,922 11,401,238

Unsecured liabilities - -

15,128,922 11,401,238

NoN-curreNtSecured Liabilities

Convertible Note (c) 8,509,584 8,033,400

Long-term bank loan (a) - 77,323

Unsecured LiabilitiesRelated party loan (b) (Note 27) 540,757 -

9,050,341 8,110,723

a) Interest-bearing short-term loans bore a weighted average effective interest rate at the end of the reporting period of 6.60% (30.6.2010 - 6.32%) per annum and are secured by way of the following:

- Property, plant & equipment to the value of $6,849,407 (PY $20,053,149) and prepaid land use rights to the value of $11,670,950 (PY $2,539,304) have been pledged as security over those bank borrowings.

- 80% debt collection from a receivable; and

- corporate guarantees provided by third parties

(b) Related party loan is payable to Mr. Benny Wu, is unsecured and non-interest bearing.

(c) On 18 September 2007, the Company entered into a bond subscription agreement with an investor in relation to an issue of 10 convertible notes at HKD50,000,000 aggregate principal amount of zero coupon convertible bonds (the “Convertible Bonds”) due on 18 September 2012 with rights attaching to convert into ordinary shares in the capital of the Company at the conversion price of $0.20 per share (the “Conversion Price”). Of these 10 convertible notes, three have been exercised and converted into ordinary shares. Based on the Conversion Price and assuming full conversion of the outstanding Convertible Bonds, up to approximately 28 million shares are expected to be allotted and issued to the holders of the Convertible Bonds. If the Convertible Bonds are not converted, they will be redeemed at fixed price. The fair value adjustment on convertible bonds at 30 June 2011 was A$2,261,647. This value was determined using an option pricing model and the treatment applied is in accordance with AASB 139 “Financial Instruments: Recognition and Measurement”.

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2011 2010 $ $

Note 19 Short-term ProvisionscurreNtEmployee Entitlements- Opening Balance at beginning of year - 9,231

- (Payment)/Additional Provisions raised during the year - (9,231)

- Balance at end of the year - -

Exploration Rehabilitation - -

Provision for employee entitlementsA provision has been recognised for employee entitlements relating to annual leave. The measurement and recognition criterion relating to employee benefits has been included in Note 1 to this report.

Provisions for exploration rehabilitationA provision for exploration rehabilitation has not been made as all required restoration sites has already been completed.

Note 20 Issued Capital360,203,917 (2010 : 352,203,917) Fully Paid Ordinary Shares, at no par value 43,287,493 40,856,183

2011 2010 No. No.

(a) ordinary sharesAt the beginning of reporting period 352,203,917 294,830,503

Shares Issued on : November 2010 – Listed options exercised - 55,873,414

November 2010 – Management options exercised - 1,500,000

May 2011 – Convertible notes exercised 8,000,000 -

360,203,917 352,203,917

The number of shares issued under the consolidated entity represents the number of shares issued in Rocklands Richfield Limited. During the year additional shares were issued as a result of two convertible notes exercised.

Ordinary share participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held.

Each ordinary share of Rocklands Richfield Limited is entitled to one vote when poll is called, otherwise each shareholder has one vote on a show of hands.

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2011 2010 $ $

Note 20 Issued Capital (continued)(b) options(i) As part consideration for the acquisition of China Coke & Chemicals Limited, on 3 October 2007 the Company issued 100,266,667 options,

with a 50 cent strike price expiring 18 September 2012, and 106,666,667 performance options, with a 50 cent striking price expiring 18 September 2012. Those options are valued at $3,911,000 and $6,400,000 respectively.

(iv) Capital ManagementManagement controls the capital of the group in order to maintain a good debt to equity ratio, provide the shareholders with adequate returns and ensure that the group can fund its operations and continue as a going concern. Management effectively manages the group’s capital by assessing the group’s financial risks and adjusting its capital structure in response to changes in these risks and in the market.

2011 2010 $ $

Total borrowings 63,623,354 61,393,563

Less cash and cash equivalents (22,273,121) (25,814,518)

Net Debt 41,350,233 35,579,045

Total equity 37,567,348 58,078,235

Total capital 78,917,581 93,657,280

Gearing ratio 52.40% 37.99%

credit standby arrangement with BanksCredit facility 15,128,922 11,401,238

Amount utilised (15,128,922) (11,401,238)

As at the end of the reporting period, there are no unutilised finance facilities

Note 21 ReservesForeign currency translation reserveThe foreign currency translation reserve records exchange differences arising on translation of foreign controlled subsidiaries.

option reserveThe option reserve records items recognised as expenses on valuation of employee share options issued under a share based payment arrangement.

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2011 2010 $ $

Note 22 Contingent Liabilities & CommitmentsThe Company’s statutory commitments with respect to lease to lease tenements are as follows :

MDL 324 – Hillalong Project 1,190,000 -

EPC 890 – Rocklands Project 1,700,000 1,250,000

EPC 930 – Richfield Project 250,000 350,000

total 3,140,000 1,600,000

Alleged breach of shareholders agreement:Legal proceedings have commenced between the Company and some minority shareholders of one of the Company’s subsidiary companies in respect of breach of provisions of their Shareholders Agreement. At the date of this Report, the quantum of loss and damages has not yet been quantified by the parties to the proceedings. The Board is taking an active and strong stance in the proceedings and has engaged lawyers to handle the matter and to enforce and protect the rights of the Company under the Shareholders Agreement and at law.

Compensation for land access rights:Rocklands Richfield Limited is also currently in negotiation with the landholders of one of the mining tenements in respect to compensation for land access rights. As at balance date it is not practicable to estimate the potential liability.

Financial GuaranteeAs at the balance date, there is an outstanding amount of bank guarantee provided by Bank of China of $2.8m

Note 23 Controlled Entities(a) controlled entities consolidated country of incorporation Percentage owned (%)*

Parent entity : 2011 2010

rocklands richfield Limited Australia

subsidiaries of rocklands richfiled Limited :PCI Coal Pty Ltd Australia 100 100

Queensland Coal Exploration Pty Ltd Australia 100 100

Richfield Coal Limited Australia 100 100

Richfield Energy Pty Ltd Australia 100 100

Rocklands Coal Pty Ltd Australia 100 100

HLM Coal (Australia) Pty Ltd Australia 60 60

Rocklands Richfield (Hong Kong) Limited Hong Kong 100 100

China Coke & Chemicals Limited Bermuda 100 100

A.F. (PNG) Resources Limited British Virgin Islands 100 -

subsidiaries of china coke & chemicals Limted :Chang Yuan (Huaibei) Chemicals & Coking Co Ltd China 100 100

C & R Resources Ltd British Virgin Islands 100 100

Huaibei Changyuan Zhicheng Coal Co Ltd China 51 51

* Percentage of voting power in proportion to ownership

(b) acquisition and Deregistration of controlled entitiesDuring the year ended 30 June 2011, the Company incorporated A F (PNG) Resources Ltd, and Rocklands Richfield (Hong Kong) Limited, and deregistered a wholly owned subsidiary Rocklands International Pte Ltd.

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Note 24 Segment Reportingsegment informationidentification of reportable segmentsThe business segments of the consolidated entity continued to be two business divisions namely:

• Coke Manufacturing

• Coal Exploration

Rocklands Richfield Limited acquired 100% of China Coke & Chemicals Limited and its wholly-owned subsidiary Chang Yuan (Huaibei) Chemicals and Coking Co. Ltd. (CCS), a coke production plant in Huaibei China, from its previous owner Mr. Benny Wu on 3 October 2007. CCS operations classified under “Coke Manufacturing” business segment of the Group.

Operating segments are premised on the internal reports that are reviewed and used by the Board of Directors in assessing performance and determining the allocation of resources.

The Group is managed primarily on the basis of product category and service offerings as the diversification of the Group’s operations inherently have different risk profiles and performance assessment criteria. Operating segments are therefore determined on the same basis.

Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar economic characteristics and are also similar with respect to the following:

• the products sold and/or services provided by the segment;• the manufacturing process;• the distribution method; and• any external regulatory requirements.

The following operating segments have been identified (i) Coke Manufacturing(ii) Coal Exploration(iii) Other

Coke Manufacturing segment, which is based in China, is also responsible for distribution and sales of products locally due to better management of logistics and knowledge of local market.

Coal exploration activities are based in Australia and managed locally for all exploration activities.

Basis of accounting for purposes of reporting by operating segmentsaccounting policies adoptedUnless stated otherwise, all amounts reported to the Board of Directors, are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Group.

inter-segment transactionsInter-segment loans payable and receivable are initially recognised at the consideration received/to be received net of transaction costs. If inter-segment loans receivable and payable are not on commercial terms, these are not adjusted to fair value based on market interest rates.

segment assets Where an asset is used across multiple segments, the asset is allocated to that segment that receives majority economic value from that asset. In the majority of instances, segment assets are clearly identifiable on the basis of their nature and physical location.

segment liabilitiesLiabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the operations of the segment. Segment liabilities include trade and other payables.

unallocated itemsThe following items of revenue, expenses, assets and liabilities are not allocated to operating segments as they are not considered part of the core operations of any segment.

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Note 24 Segment Reporting (continued)Segments Information

2011 coke coal other unallocated total Manufacturing exploration

$ $ $ $ $

reveNue

Revenue from sale of goods & services 60,376,765 - - - 60,376,765

Interest Income 36,020 826,454 - - 862,474

Other Revenue 1,158,823 243,655 - - 1,402,478

total revenue 61,571,608 1,070,109 - - 62,641,717

Inter-segment eliminations (780,000) (243,655) - - (1,023,655)

total group revenue 60,791,608 826,454 - - 61,618,062

Profit/(loss) (15,663,725) (3,959,683) - (51,235,148) (70,858,556)

Consolidation elimination - - - 51,235,148 51,235,148

Profit/(loss) before income tax (15,663,725) (3,959,683) - - (19,623,408)

income tax (expense)/recovered (76,885) - - - (76,885)

Profit/(loss) after income tax (15,740,610) (3,959,683) - - (19,700,293)

amount included in the segment profit/(loss) after income tax:Depreciation & amortisation (2,277,364) - - - (2,277,364)

Impairment of goodwill (5,040,906) - - - (5,040,906)

Impairment of value of investments - - - (51,235,148) (51,235,148)

Finance costs (869,102) (2,936,237) - - (3,805,339)

assets

segment assets 65,470,336 45,750,233 762,470 - 111,983,039

reconciliation of segment assets to Group assetsInter Segment elimination (2,743,512) (6,675,000) - (9,418,512)

total Group assets 62,726,824 39,075,233 762,470 - 102,564,527

included in segment assets:Goodwill - 17,648,822 - - 17,648,822

segment assets decreased during the period:Impairment of goodwill (5,652,017) - - - (5,652,017)

Exchange variation in property, plant & equipment (7,497,670) - - - (7,497,670)For

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Note 24 Segment Reporting (continued)


$ $ $ $ $

LiaBiLities

segment Liabilities (62,667,668) (11,415,030) - - (74,082,698)

reconciliation of segment liabilities to Group liabilities Inter Segment elimination 6,675,000 2,743,512 - - 9,418,512

total Group liabilities (55,992,668) (8,671,518) - - (64,664,186)


$ $ $ $ $

reveNue

Revenue from sale of goods & services 78,699,754 - - - 78,699,754

Interest Income 46,515 454,553 - - 501,068

Other Revenue 1,125,882 - - - 1,125,882

total revenue 79,872,151 454,553 - - 80,326,704

Profit/(loss) before income tax (11,825,159) (1,517,425) - - (13,342,584)

income tax (expense)/recovered (3,859) - - - (3,859)

Profit/(loss) after income tax (11,829,018) (1,517,425) - - (13,346,443)

amount included in the segment profit/(loss) after income tax:

Depreciation & amortisation (2,558,505) (11,814) - - (2,570,319)

Impairment of goodwill (5,466,024) - - - (5,466,024)

Finance costs (758,021) (581,503) - - (1,339,524)

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Note 24 Segment Reporting (continued)


$ $ $ $ $

assets

segment assets 82,834,312 46,529,504 762,470 - 130,126,286

reconciliation of segment assets to Group assetsInter Segment elimination (2,757,549) (6,675,000) - - (9,432,549)

total Group assets 80,076,763 39,854,504 762,470 - 120,693,737

included in segment assets:- Goodwill 5,652,017 17,648,822 - - 23,300,839

segment assets increased during the period:Acquisition of property, plant & equipment 3,588,158 - - - 3,588,158

LiaBiLities

segment Liabilities (61,168,077) (10,879,973) - - (72,048,050)

reconciliation of segment liabilities to Group liabilities Inter Segment elimination 6,675,000 2,757,549 - - 9,432,549

total Group liabilities (54,493,077) (8,122,424) - - (62,615,501)

(b) Revenue by geographical region:The consolidated entity operates in two geographical locations; the resources sector via its coal exploration activities solely in Queensland, Australia, and the manufacturing sector in respect of its coke (from coal) manufacturing operations solely in Anhui Province, China. Therefore, secondary segment reporting is the same as primary segment reporting as the tables above would have headings changed to China.

(c) Major customersThe Group has a number of customers to whom it provides products. The Group has supplied a single external customer in the coke manufacturing segment who accounted for 26% (2010: 52%) of external revenue. The next two significant customers accounted for 17% (2010: 14%) and10% (2010: 9%) of external revenue respectively.

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2011 2010 $ $

Note 25 Cash Flow Information(a) reconciliation of cash Flow from operations with Profit/(loss) after income tax

Profit/(loss) after Income Tax (19,700,292) (13,346,443)

Adjustments for- Inventories written off - 144,754

- Allowance for Doubtful Debts 2,159,076 198,246

- Impairment of Goodwill 5,040,906 5,466,024

- Amortisation of land used rights 121,981 247,562

- Depreciation 2,458,206 2,334,085

- Loss/(Gain) on disposal/scrap of PP&E 194,705 39,752

- Interest Unwinding and Fair Value Adjustments 2,907,492 833,400

- Bad Debts Written off (182,834) 391,714

(Increase)/Decrease in inventories 309,602 (2,351,046)

(Increase)/Decrease in Trade and Other Receivable (4,509,103) 4,973,363

Increase/(Decrease) in Trade Payables & Accruals 5,851,557 8,492,536

Increase/(Decrease) in Income Tax Payables - -

Effect of foreign exchange translation 96,146 (391,665)

Cash Flow from Operations (5,252,558) 7,032,282

Note 26 Events after the Reporting PeriodLapse of Jindal OfferOn 20 April 2011 Jindal Steel & Power (Australia) Pty Ltd. announced its offer to acquire all shares in RCI for a consideration of $0.25 for each RCI share. The offer commenced on 5 May 2011 and was later extended to 20 June 2011 and further extended to 5 July 2011 with an increase of offer price to $0.30 for each RCI share.

The Jindal offer lapsed on 5 July 2011.

Sale of RCI’s coke plant operation in ChinaThe Directors have considered the future prospect of coke business. The coke plant operation in China has consumed significant management resources and incurred substantial losses in the past three years and would require a substantial amount of capital injection from the Company to maintain the operation for at least a few more years in order to make it the surviving winner in the China coke market. The Directors therefore consider that shareholders’ best interests will be served by divesting the coke business in China and focusing on development of the Company’s coal tenements in the Bowen Basin. A conditional Sale Agreement was entered into between RCI and Mr. Yang Jiayin (representing nine creditors of the Company’s China coke plant) on 19 September 2011 under which, subject to RCI shareholders’ approval, RCI would sell all the shares in China Coke & Chemicals Ltd, the wholly-owned subsidiary of RCI which in turn holds the coke plants in China) at the consideration of HKD12 million (AUD 1.50m).

As a result of the above sale, the carrying value of the investment of RCI in CCS of $52.735m is impaired and impairment loss of approx $51.235m is accounted in the books of RCI. This impairment loss is eliminated on consolidation.

The above sale, if approved by RCI’s shareholders, will result in deconsolidation of China Coke & Chemicals Limited (CCS) and the financial statement for the 2012 year will no longer be prepared on a reverse acquisition basis (Refer to Note 1(a) – Principles of Consolidation). The consolidated accounts for 2012 onwards will not represent a continuation of the financial statements of China Coke & Chemicals Limited, rather it will represent the financial results of Rocklands Richfield Limited and Controlled Entities. Had the deconsolidation occurred in 2011, the consolidated financial statement would have reported a net asset position as disclosed in Note 2.

Other than above, there has been no item, transaction and event of a material or unusual nature that have arisen in the interval between the end of the financial year and the date of this report, which has significantly affected the results of the operations of the Company.

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2011 2010 $ $

Note 27 Related Party TransactionsTransactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

Transactions with Related Parties:

(a) Key Management Personnel Amount payable to Mr Benny Wu (i) 540,757 -

(b) sales to a related partyNew Chang Yuan (Nanjing) Casting Ltd 11,584,415 16,949,754

Huai Bei An An Industrial Supply Co Ltd 362,855 606,593

11,947,270 17,556,347

(i) All amounts owing to Mr Benny (Pun Yan) Wu are unsecured, interest free and repayable on demand.

Note 28 Financial InstrumentsFinancial risk management objectives and policiesThe Group’s principal financial instruments during the financial year comprised short term and long term debt, convertible notes, cash and short-term deposits. The Group has various other financial assets and liabilities such as accounts receivable and trade payables, which arise from its operations. The risks arising from the Group’s financial instruments are market risk (including interest rate risk and foreign currency risk and commodity prices) credit risk and liquidity risk.

A summary of the Group’s and parent’s financial assets and liabilities is shown below:

2011 2010 $ $

Financial assetsCash and cash equivalents 22,273,121 25,814,518

Current – Trade and other receivables 18,097,210 18,187,361

Other current receivables 347,540 287,392

40,717,871 44,289,271

Financial liabilitiesTrade and other payables 38,040,717 40,602,034

Current loans – Interest bearing 15,128,922 11,401,238

Non current loans – interest bearing 40,306 -

Non current loans – related party 540,757 -

Convertible notes 8,509,584 8,033,400

62,260,286 60,036,672

Net Position (21,542,415) (15,747,401)

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 1.

Risk management is undertaken in accordance with the Group’s financial risks policies. The Group’s overall risk management program focuses on minimising the potential adverse effects of the unpredictability of the financial markets on the financial performance of the company. The Group uses different methods to measure different types of risks to which it is exposed.

Primary responsibility for identification and control of financial assets rests with the Board. The Board reviews and agrees policies with management for managing each of the risk the Group is exposed to, in addition to reviewing cash flow projections to monitor the liquidity profile of the Group.

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Note 28 Financial Instruments (continued)interest rate risk• A portion of the Group’s and Parents’ financial instruments are exposed to interest rate variations. The other instruments either do not attract/bear

interest, or have a fixed rate of interest.

• Interest bearing assets and liabilities comprise cash deposits made in RMB to Chinese financial institutions and short term loans. Examples of the non-interest bearing instruments are the amounts owed to customers (both accounts receivable and bills receivable) and from suppliers (other receivables, which are prepayments made to suppliers and trade payables). The Company’s convertible notes are also non-interest bearing.

• There are also several intercompany loans between the parent and other subsidiary companies. The Group does not charge/receive interest in relation to these intercompany loans on either counterparty.

The instruments which are exposed to interest rate risk are given below:

2011 2010 $ $

Financial assetsCash at bank and on hand 7,270,777 7,950,628

Short term deposits 15,002,344 17,863,890

Cash and cash equivalents 22,273,121 25,814,518

Financial liabilitiesCurrent loans – interest bearing 15,128,922 11,401,238

Non current loans – interest bearing - -

15,128,922 11,401,238

Net position 7,144,199 14,413,280

effective interest rate 2011 2010

Financial assetsCash at bank and on hand 0.17% 0.35%

Short term deposits 5.8% 5%

Financial liabilitiesCurrent loans – interest bearing 6.60% 6.32%

Non current loans – interest bearing 0% 0%

The Group holds a substantial amount of the cash is on deposit in Australia, being a combination of at-call and term deposits. The Group also holds surplus funds in interest earning deposits accounts in HK$, which attract interest at commercial rates.

The Group has short term and long term borrowings which are interest bearing at commercial interest rates. Short-term and long-term funding have been sourced from recognised Chinese financial institutions, and several major suppliers. These major suppliers are:

supplier

amount of loan

2011 2010

Short-term –Teng Zhou Jia Yin Co. Ltd. 730,183 857,236

Shu Zhou Lang Ying Ltd. 1,460,365 1,714,472

2,190,548 2,571,708

Funding from Chinese based financial institutions and major suppliers are in RMB and at commercial interest rates.

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Note 28 Financial Instruments (continued)interest rate risk – sensitivity analysisThe following table shows the effect of interest rate risk exposure at the end of the reporting period:

Post tax Profit equity higher/(Lower) higher/(Lower)

2011 2010 2011 2010 $ $ $ $

consolidated+ 1% (100 basis points) 71,442 144,133 - 144,133

- 1% (100 basis points) (71,442) (144,133) - (144,133)

Foreign currency riskAs a result of significant operations in China and large purchases of inventory in RMB, the Group’s statement of financial position can be affected significantly by movements in the AUD/RMB exchange rate. The Group seeks to mitigate the effect of its foreign currency exposure by borrowing in RMB and HKD. The Group also had minimal transactional currency exposures due to all sales made by the Chinese subsidiary, and all relating expenses being denominated in RMB.

At balance date, the Group had the following financial assets and liabilities exposed to foreign exchange risk.

2011 2010FX Exposure $ $

Financial assetsCash and cash equivalents 6,950,772 25,814,518

Trade and other receivables 17,998,698 18,187,361

Total 24,949,470 44,001,879

Financial liabilitiesTrade and other payables 31,781,463 30,982,132

Bills payable 6,118,932 9,619,902

Current loans – interest bearing 15,128,922 11,401,238

Non current loans – interest bearing 40,306 -

Non current loans – related party 540,757 -

Convertible notes 8,509,584 8,033,400

Total 62,119,964 60,036,672

Net Position (37,170,494) (16,034,793)

The key foreign exchange risks of the Group is the translation effect of assets and liabilities denominated in foreign currency at the end of the reporting period and the convertible notes, which has been issued in HKD. The Group has not taken out derivative instruments to hedge the foreign exchange exposure credited by the notes. Convertible notes are stated at the higher of the conversion value under the Convertible Unsecured Notes Agreement and market value of each ordinary shares. A movement in the exchange rate will effect the carrying value of the convertible note, and hence the liability of the Group.



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Note 28 Financial Instruments (continued)

currency risk – sensitivity analysisThe following table shows the effect of a foreign currency exposure at the end of the reporting period in relation to the convertible notes.

Post tax Profit equity higher/(Lower) higher/(Lower)

2011 2010 2011 2010 $ $ $ $

consolidatedAUD/HKD appreciates 10% 121,513 52,642 121,513 52,642

AUD/HKD depreciation 10% (148,516) (64,340) (148,516) (64,340)

AUD/RMB appreciates 10% 2,866,527 1,944,384 2,866,527 1,944,384

AUD/RMB depreciation 10% (3,503,533) (2,376,470) (3,503,533) (2,376,470)

Price and commodity riskThe Group purchases raw materials at commercial prices. The Group has not taken out derivative instruments to hedge the exposure to movement in coal and coke commodity prices. The Group considers that any movements would be subsequently reflected in revenue, and hence the effect on the Group’s financial position will be minimal. The Board has actively sought to mitigate the effect of price risk by seeking opportunities to diversify the Group into other revenue streams.

credit riskThe Group’s exposure to credit risk arises mainly from receivables. The maximum exposure to credit risk is represented by the total amount of the trade receivables and bills receivable amounts on the statement of financial position. The Group has credit exposure as a significant portion of its revenue is derived from three customers. These are:

customer amount outstanding % of at 30/6/2011 a$ total receivable

Huai Bei Guo An Gong Mao Co. Ltd. 4,260,217 10%

Length Source (Nanjing) Costing Co Ltd 10,841,810 26%

Lianfeng Gangtie (Zhangjiagang) Co.Ltd. 7,041,074 17%

The Group manages its exposure to credit risk by the application of credit approvals, credit limits and monitoring procedures on an ongoing basis.

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Note 28 Financial Instruments (continued)

Liquidity riskThe Group’s exposure to liquidity risk arises from the matching of cash inflows and outflows arising from the business, and having access to suitable external financing arrangements to meet any short term funding requirements.

The Group has sufficient financial arrangements to meet the day to day needs of the business. At a parent level, financing through a convertible note arrangement provides sufficient long term funding.

The group practices prudent liquidity risk management by maintaining sufficient cash balances and the availability of funding through certain committed credit facility to meet the group financing obligations.

Liquidity Profile Balance as at 0-6 months 6-12 months over 1 Year, total 30 June 2011 less than 5 year

consolidated Financial assetsCash and cash equivalents 22,273,121 22,273,121 - - 22,273,121

Trade receivables 6,089,965 6,089,965 - - 6,089,965

Bills receivable 4,280,916 4,280,916 - - 4,280,916

Other trade receivables 7,726,329 7,726,329 - - 7,726,329

Current loan receivable 347,540 - - 347,540 347,540

Total 40,717,871 40,370,331 - 347,540 40,717,871

Financial liabilitiesTrade payables (25,331,103) (25,331,103) - - (25,331,103)

Bills payable (6,118,932) (6,118,932) - - (6,118,932)

Sundry payables (7,171,745) (7,171,745) - - (7,171,745)

Short term bank loans (15,128,922) (15,128,922) - - (15,128,922)

Convertible note (8,509,584) - - (8,509,584) (8,509,584)

(62,260,286) (54,750,702) - (8,509,584) (62,260,286)

total (21,542,415) (13,380,371) - (8,162,044) (21,542,415)

2011 201 $ $

Note 29 Tax LiabilitiescurreNtIncome Tax 76,885 -

Note 30 Company DetailsThe registered office and principal place of business of the Company is:

Rocklands Richfield Limited15, Lyall Street, South PerthWestern Australia 6151



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Directors’ DecLaratioN

The Directors declare that:

1. The financial statements and notes, as set out on pages 27 to 63 are in accordance with the Corporations Act 2001 and:

a. comply with Accounting Standards; and

b. give a true and fair view of the financial position as at 30 June 2011 and of the performance for the year ended on that date of the Company and consolidated group;

2. The Chief Executive Officer and Chief Finance Officer have each declared that:

a. the financial records of the Company for the financial year have been properly maintained in accordance with s 286 of the Corporations Act 2001;

b. the financial statements and notes for the financial year comply with the Accounting Standards; and

c. the financial statements and notes for the financial year give a true and fair view;

3. With regard to the matters raised in note 1 ( c ) of the notes to the consolidated financial statements, in the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of the Board of Directors

Benny WuExecutive Chairman 30 September 2011

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TO THE MEMBERS OF ROCKLANDS RICHFIELD LIMITED

iNDePeNDeNt auDit rePort

65

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TO THE MEMBERS OF ROCKLANDS RICHFIELD LIMITED

iNDePeNDeNt auDit rePort

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asx aDDitioNaL iNForMatioN

Additional information required by the Listing Rules of the Australian Securities Exchange and which is not disclosed elsewhere in the Annual Report, is as follows. The information is made up to 26 September 2011.

sharehoLDer iNForMatioNThe number of Security investors holding less than a marketable parcel of 1,755 securities ($0.285 on 26 September 2011) is 40 holding 28,750 securities.

DistriButioN oF sharehoLDerscategory (number of securities) orDiNarY FuLLY PaiD shares (listed)

Number of holders Number of shares Percentage of total %

1 - 1,000 26 9,485 0.03

1,001 - 5,000 266 864,156 0.23

5,001 - 10,000 152 1,293,250 0.35

10,001 - 100,000 313 10,890,502 3.02

100,001 and over 70 347,146,524 96.37

827 360,203,917 100

List oF toP 20 orDiNarY sharehoLDers

ordinary shareholder Number of shares Percentage of issued capital %

MR WU PUN YAN 177,745,114 49.35

RUBICON NOMINEES PTY LTD 50,915,494 14.14

JINDAL STEEL AND POWER (AUSTRALIA) PTY LTD 47,374,450 13.15

TRANS GLOBAL MINERALS AND METALS CORPORATION LIMITED 17,216,113 4.78

MCNEIL NOMINEES PTY LIMITED 12,331,652 3.42

UBS NOMINEES PTY LTD 6,523,942 1.81

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 5,496,552 1.53

JP MORGAN NOMINEES AUSTRALIA LIMITED <CASH INCOME A/C> 3,723,163 1.03

MR KIT FOO CHYE 2,571,000 0.71

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA 2,500,000 0.69

CITICORP NOMINEES PTY LIMITED 1,949,600 0.54

MR GUILONG LI 1,505,000 0.42

WYNNWOOD PTY LTD <THE PANG FAMILY S/F A/C> 1,437,637 0.4

MR KEVIN XIAO LIN ZHENG 1,319,170 0.37

MR CHEE MIN LAM 1,093,750 0.3

CBD PLAZA (AUST) PTY LTD 1,073,000 0.3

DMG & PARTNERS SECURITIES PTE LTD <CLIENTS A/C> 994,698 0.28

H M COMMERCIAL ADVISOR PTY LIMITED 626,366 0.17

MR PETER ROBERT WEXLER <RAMPION SUPERANNUATION A/C> 532,000 0.15

MR WAYNE JOHN REID <SUPER FUND A/C> 507,300 0.14

rePort totaL 337,436,001 93.68

reMaiNDer 22,767,916 6.32

GraND totaL 360,203,917 100

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asx aDDitioNaL iNForMatioN

suBstaNtiaL sharehoLDers

ordinary shareholder Number of shares Percentage of total %

Dr Wu Pun Yan (Benny Wu) and Nominees 186,360,626 51.74

Jindal Steel & Power (Australia) Pty Ltd and its parent holding company 98,289,944 27.29

total substantial shareholders 276,035,058 79.03

votiNG riGhtsOn a show of hands every shareholder present in person or by proxy holding ordinary shares in the consolidated entity shall have one vote and upon a poll each share shall have one vote.

auDit & risK coMMitteeAs at the date of the Directors’ Report, the Company has established an Audit and Risk Committee of the Board of Directors (refer Directors’ Report and Corporate Governance Statement).

List oF toP 20 oPtioN hoLDers There are no listed options.

Dr Wu Pun Yan (Benny Wu) holds 206,933,334 unlisted options with a strike price of 50 cents and an expiry date of 18 September 2012.

There are no voting rights attached to the Options.

coNversioN oF coNvertiBLe NotesTwo convertible notes were converted into 8,000,000 ordinary shares in May 2011.

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