ADD Annual Financial report 30 June 2013 v5.xlsx (Read-Only) · ANNUAL FINANCIAL REPORT FOR THE YEAR ... is currently evaluating and undertaking a due diligence program on the ESE

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ADAVALE RESOURCES LIMITED

ACN 008 719 015

ANNUAL FINANCIAL REPORTFOR THE YEAR ENDED

30 June 2013

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CORPORATE DIRECTORY 4REVIEW OF OPERATIONS 5CORPORATE GOVERNANCE STATEMENT 10DIRECTORS’ REPORT 20AUDITOR’S INDEPENDENCE DECLARATION 31CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 32CONSOLIDATED STATEMENT OF FINANCIAL POSITION 33CONSOLIDATED STATEMENT OF CASH FLOWS 34CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 35NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 36DIRECTORS’ DECLARATION 72INDEPENDENT AUDIT REPORT FOR THE YEAR ENDED 30 JUNE 2013 73ADDITIONAL INFORMATION 76

ADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES

CONTENTSFOR THE YEAR ENDED 30 JUNE 2013

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Directors

Saharto Sahardjo (appointed 20 December 2012 Albert Cheok (appointed 20 December 2012)

Richard Poole (resigned 20 December 2012) Roger Steinepreis (resigned 20 December 2012) Philip Suriano (resigned 20 December 2012)

Secretary Leanne Ralph (appointed 20 December 2012) Sylvie Dimarco (resigned 20 December 2012)

Registered Office Level 5 151 Castlereagh Street SYDNEY NSW 2000 Telephone +(612) 82630515 Facsimile +(612) 82630500

Share Registry Computershare Investor Services Pty Limited Level 3, 60 Carrington Street Sydney NSW 2000

Auditor Grant Thornton Audit Pty Ltd Level 1 10 Kings Park Rd West Perth WA 6005

Stock Exchange Australian Securities Exchange 20 Bridge Street SYDNEY NSW 2000

ASX CodeADD (fully paid ordinary shares)


CORPORATE DIRECTORY

Haryono Eddyarto (Chairman)

John Risinger (resigned 6 September 2013) Mark Stevenson (resigned 25 September 2013)

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ADAVALE HARNER RESOURCES (AHR) 40% ARL and 60% Mr Haryono Eddyarto

Previously, Adavale Resources Limited had recognized the importance of establishing sound business relationships with prominent Indonesian partners and had entered into joint venture negotiations with Mr Haryono Eddyarto, a well known businessman with over 34 years experience in the mining and coal industries.


REVIEW OF OPERATIONS

PROJECTS REVIEW - INDONESIA

The Indonesian head office was established in Jakarta, to accellerate the Company's development of coal projects in Indonesia, and has full time technical and legal staff, together with an established network of contacts and professionals.

AHR took over the extensive project data base established by Adavale Resources Limited and has continued to maintain and upgrade a core group of projects as part of its exploration portfolio. The ongoing process of project review is essential to maintaining a structured and valid portfolio in Indonesia where understanding complex ownership, forestry and legal issues is essential to success.

During the year AHR continued to research and identify quality coal projects across Indonesia and exploration programs designed to qualify whether the projects stood up to legal and technical due diligence were carried out on a number of projects. With the current coal price assumptions for 2013-2015, AHR has narrowed the focus on projects under review. Logistics and coal quality are key drivers. Projects need to be located in areas where transport and infrastructure are known parameters and coal quality needs to be greater than GCV 5800 to ensure margins are sufficient to maintain production and profitability.

AHR also signed a co-operation agreement with the regional government of Kutai Timur regency to assist in increasing production and mining performance in the regency area.

The directors are of the opinion that further investment opportunities will present themselves over the next year in the Indonesian market as falling coal prices places financial pressure on inefficient mines and other mining operators/owners seek joint venture partners for their mining operations and that asking prices for concessions reduce to more realistic levels.

Adavale Resources Limited continued with its focus on exploration and development of coal projects in Indonesia and retaining its interest in the Lake Surprise Uranium Project in South Australia.

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TAPAN – SUMATRA - PT PRIMA PERKASA ABADI

PPA is the holder of the Tapan concession and is owned 90% by Adavale Resources Limited and 10% by Adavale Indonesia Pty Ltd.

The Tapan project lies 120 km south of the capital of Padang. PPA had previously completed a JORC exploration program on the Tapan Project. ADA Strategic, a Jakarta based consulting group, carried out the program and prepared a thorough report consistent with JORC code requirements.

PPA holds an IUP production permit on 198Ha and an IUP exploration permit on 2000Ha. Approval has been granted to upgrade the IUP exploration to IUP production subject to an AMDAL (environmental) report. This approval provides a substantial increase in area and the potential to increase the size of the existing resource.

INDONESIAN PROJECTS


REVIEW OF OPERATIONS CONT)

Indonesian Coal

Bengkulu

Tanah Grogot

Sangatta

Berau

Tapan

SUMATRA KALIMANTAN

Tanah Bumbu

Samarinda

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The company has been approached by a number of parties interested in either mining Tapan or undertaking mining on a Joint Operation basis with PPA based on either a profit share or royalty payment.the concession on a Joint Operation basis or outright purchase. At this stage no agreement has been finalised, however the Company is now hopeful an agreement can be finalised before December 2013 to either commence mining or sell the concession outright. John Risinger resigned as President Director of Adavale Harner Resources (40% owned by ADD) and Prima Perkasa Abadi (PPA) in February 2013. As required by Indonesia Law the shareholders of both Companies were required to accept the resignations before they become effective. The Shareholders accepted Mr Risinger’s resignation in March 2013. PT PPA the IUP holder of Tapan which was purchased in December 2011 for USD230,000 and John Ernest Risinger a then Director of ARL (since resigned) and previously sole Director of PPA have been cited as respondents in a civil claim lodged via the District Court in South Jakarta. The claim was lodged by two previous shareholders of PPA who challenged the passing of ownership in the 2011 transaction and completion. A similar action by the same two shareholders via the Pengadilan Tata Usaha Negara (PTUN) ( Administration Court) which ruled in favour of PPA, and confirmed that ARL completed the transaction in accordance with Indonesia Law. The Directors view is that the claim has no merit and is supported by a legal opinion the Company has received.


REVIEW OF OPERATIONS (CONT)

Over the last year the company undertook a number exploration activities in both Sumatra and Kalimantan and undertook extensive due diligence on a number of properties.

Sijunjung - Project The concession sits on 148 hectares and based on a preliminary outcrop survey and by a re investigation of several previous drill holes, three coal seams with thickness of 0.5-1.3 m have been identified. Initial reconnaissance and regional geology maps show the coal bearing formation within the concession is Ombilin, which is a high quality thermal coal. Representative coal samples have been taken from the outcrop which on testing provides a calorific value of 7557 (GAR), TM of 3.13% and total sulphur of less than 1%. A program was established to conduct detailed geological mapping and exploration drilling, with stratigraphy holes to identify coal seam distribution within the prospect area.Adjacently to the north western boundary of this project, two operating mines are currently in production, producing approximately 20 thousand tons per month. The majority of the coal is sold to the Sijantang power plant which is approximately 11 km hauling distance from the mines.Following extensive due diligence (financial, legal and technical) it was decide not to continue with this opportunity.

Limapuluh Koto - Project

The project consists of two IUP production permits of 257 Ha and 483Ha, in the Limapuluh Koto district, West Sumatra. The coal bearing formation is Sihapas, which contained good quality thermal coal of GCV 6400. Mining has previously taken place in one concession, with Infrastructure established to enable a 20-30 thousand ton per month production. Following technical due diligence this opportunity was not progressed.

Sangatta- Project

The total area of the IUP Exploitation concession was 4923 Ha, within a total IUP exploration area of 8113 Ha. Mining has previously taken place at three small pits, which covers an area of less than 100 Ha of the prospect area producing GCV 5800 coal. The mine is currently producing less than 20 thousand tons per month. The coal bearing formation consists of the Balikpapan formation which hosts good quality thermal coal, and the Kampung baru formation which is found in small quantities in the eastern part of the concession. Previous exploration drilling and mapping has identified approximately 6 coal seams with an average thickness of 0.8-5 meters, based on over 30 drillholes and 14 outcrops within the 100 Ha prospect area. . The project lies in a prolific mining area in the Sangatta-Bengalon district, adjacent to KPC’s CCOW concession. The project has a very good strategic position to the open sea, with infrastructure that once upgraded, will enable loading directly to mother vessels.

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Bara Naga ProjectAssociate Company AHR (40% owned) signed a Heads of Agreement to enable final due diligence to be undertaken on the BARA NAGA Project in Samarinda East Kalimantan. BARA NAGA consists of 3 concessions totaling approximately 300ha, which produces an average 4700-4500 GAR coal. The Heads of Agreement signed enables AHR to purchase the Joint Operation Contract on completion of due diligence, and reaching satisfactory terms. Following extensive due diligence the company has withdrawn from the project due to various ownership issues.

Makmus Bersama (MB)

The project consists of an IUP production permit of 192 Ha. The coal bearing formation is Tanjung which hosts good quality thermal coal. Mining has previously taken place within the southern part of the concession where only the upper coal seam was mined to a relatively shallow depth.Potential remains for deeper seams consistent with the deposition of Tanjung formation in the area already mined, and for continuation of the seams in the northern part of the concession. Mine Infrastructure and logistics have been established to maintain the previous mine production.After site visit’s, a technical review of previous mining, observation of existing pits and plotting of outcrops, AHR was satisfied as to the potential of the project. However after legal due diligence identified various issues AHR withdrew from the project.

ESEAHR (40% owned) is currently evaluating and undertaking a due diligence program on the ESE concession located in the Penajam area in East Kalimantan.The concession is located approximately 30minutes by boat from Balikpapan and is approximately 2400 ha in area. The concession is strategically placed to enable a logistics port to be established with indications of GAR 5000 coal. The Company expects to complete its due diligence by November 2013, at which time a decision will be made whether the Company proceeds to acquire the project.

SRE Discussions also have been commenced with SRE on a potential joint operation with AHR to mine several blocks of the SRE concession. The coal quality is GAR 4400-4600. Due diligence is currently being undertaken on the proposal which includes use of all infrastructure assets owned by SRE. The Company expects to decide by December whether to proceed with the joint operation.



An activity plan was finalised to conduct a semi detailed exploration drilling program. This involved spacing systematical drillholes particularly along the extension of the prospect area to the northern block, with several stratigraphy holes to identify coal seam distribution within the prospect area, in order to assess the potential upside of the resources.Associate Company AHR signed a Non-Disclosure Agreement and submitted a Letter of Intent to the current owners, to enable due diligence to be undertaken. An option agreement was to be signed to acquire the project on reaching satisfactory terms. How satisfactory terms could not be reached on this project and the project was not progressed.

Kutai Kartenegara and Banjar ProjectsDuring the quarter, and following initial desk top studies, site visits and a review of the projects, AHR/ADD withdrew from any further obligations on the Bukit Menjangan Lestari and Makmur Bersama projects. These projects would not achieve the company’s stated aim of achieving the key drivers referred to above.An activity plan was finalised to conduct a semi detailed exploration drilling program. This involved spacing systematical drillholes particularly along the extension of the prospect area to the northern block, with several stratigraphy holes to identify coal seam distribution within the prospect area, in order to assess the potential upside of the resources.Associate Company AHR signed a Non-Disclosure Agreement and submitted a Letter of Intent to the current owners, to enable due diligence to be undertaken. An option agreement was to be signed to acquire the project on reaching satisfactory terms. However satisfactory terms could not be reached on this project and the project was not progressed.

Kutai Kartenegara and Banjar ProjectsDuring the quarter, and following initial desk top studies, site visits and a review of the projects, AHR/ADD withdrew from any further obligations on the Bukit Menjangan Lestari and Makmur Bersama projects. These projects would not achieve the company’s stated aim of achieving the key drivers referred to above.

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AUSTRALIA

LAKE SURPRISE - SOUTH AUSTRALIA - 100% ARL

Adavale Resources Limited had completed the first five year term of its sedimentary uranium project at Lake Surprise in South Australia. The project comprised EL 3622 and EL 3620 over an area of 1,836km2. Two prospect areas – Clayton Basin and Mumpie - have been the focus of exploration to date.


In the previous year, two year extensions were granted and licence numbers EL 4949 and EL 4950 were issued which expired on 28 August 2013. The company has since renewed the extentions for a further two years to August 2015. It is the company’s opinion that the area holds significant potential and only a very small percentage of that potential has been explored to date. The company intends to seek joint venture partners to continue the exploration program. The extention approval included a reduction of 25% of the area, which does not impact on the potential mineralised areas.

Competent Person Statement: The information in this report that relates to Exploration Results, Mineral Resources or Ore Resources is based on information compiled by Eka Antasari Nugraho, who is a Member or Fellow of The Australasian Institute of Mining and Metallurgy. Eka Antasari Nugraha is a full time employee of Adavale Harner Resources. He has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of The “Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Eka Antasari Nugraha consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The Company has budgeted approximately AUD$380k to further explore EL 4949 and AUD$400k to explore EL4950 over the next two years following approval of the licence extensions. It is the Director's intention to actively explore the Lake Surprise tenements over the next two years.


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1.1.2 Appointing and working with the Managing Director (MD) / Executive Directors (ED)• The Board is responsible for the appointment of the Company’s Managing Director / Executive Directors and ensuring a strong on-going relationship between the Managing Director and Executive Directors for the benefit of the Company. This is undertaken by : * Ensuring a strong working relationship between the Chairman on behalf of the Board and the MD /ED’s * Ensuring clear appointment terms, position description and delegated authorities are in place for the MD/ED’s * Agreeing annual Key Performance Indicators (KPI’s) are in place * Conducting annual performance reviews which includes achieving KPI’s * Regular reporting to the Board * Working with the MD re succession planning * Involvement with the MD in executive selection.

1. CORPORATE GOVERNANCE STATEMENTThis statement outlines the main corporate governance practices currently in place for Adavale Resources Limited and its controlled entities (Adavale, Company or Group) and also addresses the ASX Corporate Governance Council Corporate Governance Principles and Recommendations (ASX Recommendations). The Board believes the Group accords with the majority of the principles and recommendations of the ASX Corporate Governance Council with the exception of one recommendation, which is outlined in the report. The corporate governance policies and practices described below are those that have been in place for the 2012-13 financial year, or as at the date of this report where indicated. The Board continues to review the governance framework and practices of the Group to ensure they meet the interests of shareholders.1.1 Role of the BoardThe Board of Adavale is responsible for overseeing the effective management and operation of the Group. The Board operates under a formal charter, which can be found on the Group’s website (www.adavaleresources.com.au). In addition to the functions prescribed by law, the Board has the following responsibilities:1.1.1 Providing accountability to shareholders/stakeholders

1.1.2 Appointing and working with the Managing Director /Executive Directors

1.1.3 Approval of Company Strategy

1.1.4 Development of Key Company policy

1.1.5 Monitoring management and operations

1.1.1 Accountability to ShareholdersThe Board is primarily responsible and accountable to the Company’s Shareholders to oversee the management and conduct of the Company’s business. The Board undertakes this accountability through : * Responsible reporting to the ASX (for continuous disclosure) * Written reporting prior to the Company’s AGM (Annual Report) * Verbal reporting and discussion at the AGM * Through annual, half yearly, quarterly and other reporting processes * Through informal communication channels eg on the Company’s website.


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CORPORATE GOVERNANCE STATEMENT (CONT)

1.1.5 Monitoring Management and Operations• The Board is responsible for the development of appropriate internal controls to monitor and supervise the implementation of strategies and policies and the financial performance of the company, against agreed strategies, budgets and delegated authorities.This is achieved through: * Receiving regular management reporting at Board meetings * Working with the Company’s Auditors to ensure integrity in financial reporting * Ensure risk management systems are documented and are regularly reviewed and monitored. * Appropriate use of committees where the Board requires detailed attention and monitoring (a) Audit Committee(b) Investment and Capital Markets Committee * Board professional development activities for improved knowledge and skills including regular evaluations and effectiveness of each of the following: (a) The Board including individual directors(b) Committees of the Board(c) The MD and ED’s Generally, the MD is responsible for all matters not specifically identified as the responsibility of the Board.

1.1.3 Approval of Company Strategy• The Board is responsible for ensuring that the Company is pursuing appropriate strategies for the future security and growth of the Company. It does this by delegating certain responsibilities to the Managing or Executive Directors for the development of strategy, but retains the following responsibilities: * Agreeing with the MD or ED’s the annual cycle and process for review of strategic plans, including which stakeholders are to be involved and how. * Ensuring the full board is directly involved the strategic planning and review process. * Ensuring the strategy development includes appropriate risk management by the Board * Ensuring approved strategic plans include measurable financial and business objectives * Business plans and budgets are prepared to support agreed strategic plans * Monitoring and reviewing the Company’s performance against agreed strategic plans and business goals1.1.4 Development of Key Company Policy• The Board develops key governance polices including: Reference Number Policy Policy 12/01 Audit Committee CharterPolicy 12/02 MD/ED Performance Evaluation Policy 12/03 Continuous Disclosure

• In addition the Board is responsible for polices dealing with: * Selection, nomination succession and remuneration of Directors * Delegated authorities to MD and ED’s responsibility for development of operational policy and any operational limitations.

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(c) Independent adviceThe Board has a policy of enabling directors to seek independent professional advice for Group related matters at the Group’s expense, subject to the prior notification of the Chairman and where the estimated costs are considered to be reasonable.(d) Directors’ independenceThe Board considers specific principles in relation to directors' independence. The Board considers an independent director to be a non-executive director who is not a member of Adavale’s management and who is free of any business or other relationship that could materially interfere with, or could reasonably be perceived to interfere with, the independent exercise of their judgement. The Board will consider the materiality of any given relationship on a case-by-case basis, having regard to both quantitative and qualitative principles.The independence of directors is considered on an ongoing basis at Board Meetings via a Directors Standing Notice Register. In addition, the determination of independent directors is formally considered on an annual basis.At the date of this report, the Board comprises two non-executive directors, and one executive director. The current members of the Board are:- Mr Haryono Eddyarto (Executive Chairman);- Mr Saharto Sahardjo (Non Executive Director);- Mr Albert Cheok (Non-Executive Director);

Mr Albert Cheok is considered by the Board to be independent. The Group recognises that having a majority of independent non-executive directors provides assurance that the Board is structured properly to fulfil its role in holding management accountable for the Group’s performance. To this end, the Board expects to appoint an additional non-executive director with coal experience, in the coming weeks.The Board considers that with this new director appointment the existing Board structure is appropriate for the Group’s current operations and stage of development. Whilst the Chairman of the Company is an executive, he has extensive industry experience relevant to be appointed to the position of Chair.Directors’ details are listed on pages 20 - 23, including details of their other listed company directorships and experience.

1.2 Board size and compositionThe Constitution of Adavale provides that there will be a minimum of three directors and not more than nine directors.Directors are appointed with the aim of ensuring the Board has:• an appropriate range of skills, experience and expertise;• a proper understanding of, and competence to deal with, current and emerging issues in the industry in which it engages;• the ability to effectively review and challenge the performance of Management and exercise independent judgement; and• a majority of independent directors.(a) Terms of appointmentNon-executive directors are appointed pursuant to formal letters of appointment which, among other things, sets out the key terms and conditions of the appointment; the Board’s expectations in relation to the performance of the director, procedures for dealing with a director’s potential conflict of interest and the disclosure obligations of the director, together with the details of the director’s remuneration. (b) Directors’ interestsDirectors are required to keep the Board advised of any interest that may be in conflict with those of Adavale, and restrictions are applied to directors’ rights to participate in discussion and to vote, as circumstances dictate when a conflict has been identified. In particular, where a potential conflict of interest may exist, directors concerned may be required to leave the Board meeting while the matter is considered in their absence.The Group has also entered into a deed of disclosure with each director, which is designed to facilitate the Group’s compliance with its obligations under the ASX Listing Rules relating to disclosure of changes in directors’ security holdings. Directors and their nominated related party shareholdings, are also monitored to identify changes that may require urgent disclosure.



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(e) ChairmanThe role of Chairman and CEO is occupied by the same individual. As stated above, the Board has agreed that it should continue to have a majority of independent non-executive directors, but Mr Eddyarto is the most appropriate director to occupy the position of Chair of the Board at this point in time.

(f) Board diversityIn appointing members to the Board, consideration is given to the skills, business experience and educational backgrounds of candidates. The advantage of having a mix of relevant business, executive and professional experience on the Board; the importance of cultural and ethical values; and the benefits of diversity, including gender diversity is also recognised. These factors will also be considered in any future appointments to the Board including any identified skills ‘gaps’.A formal Diversity Policy has not been adopted by the Board as the Company does not deem it necessary at the point of the Groups size and level of business operations.As a result of not having a Diversity Policy, the group does not have specific gender targets. The proportion of female employees at the various levels of the Group are outlined below:• The proportion of female employees in the whole organisation: 16%• The proportion of female employees in key management personnel positions: 0%• The proportion of female employees on the Board: 0%

The Board typically schedules 4-6 meetings per year, with additional meetings convened as Board meetingsrequired. Agendas for each meeting are prepared by the Company Secretary together with the Chairman, and are distributed prior to the meeting together with supporting papers.Standing items include the Operations Report and the Financial Report, as well as reports addressing matters of strategy, governance and compliance where required. Board papers include minutes of Board committees and subsidiaries as well as papers on material issues requiring consideration.

(h) Board and director performanceThe Board is committed to enhancing its effectiveness through performance management and review, however a review had not been deemed necessary to date as the majority of the Directors have only been appointed within the last twelve months.

1.3 Board committeesThe ultimate responsibility for the oversight of the operations of the Group rests with the Board of Directors. However, the Board may discharge any of its responsibilities through Committees of the Board in accordance with the Constitutions and the Corporations Act 2001.The Board has established the following committees. It is the intention that a review of the composition and effectiveness of these Committees will be carried out on an annual basis:• Audit Committee• Investment & Capital Markets CommitteeThe Audit Committee operates in accordance with a Committee Charter approved by the Board. A copy of this charter can be viewed on the Group website (www.adavaleresources.com.au). The Investment & Capital Markets Committee does not yet have a Charter as it has not yet had a purpose to convene any meetings.

(g) Board meetings



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Internal Control• Consider the effectiveness of the company's internal control system.• Review disclosures made by CEO and CFO about significant deficiencies in the design or operation of internal controls or any fraud that involves management or other employees who have a significant role in the company's internal controls.• Review the scope of internal and external auditors' review of internal control over financial reporting, and obtain reports on significant findings and recommendations, together with management's responses.Internal Audit (if applicable)• Review with management and the chief audit executive the charter, plans, activities, staffing, and organizational structure of the internal audit function, ensuring that there are no unjustified restrictions or limitations on the operations of the internal audit function.• Review the effectiveness of the internal audit function.• On a regular basis, meet separately with the chief audit executive to discuss any relevant matters.External Audit• Establish and maintain procedures for the appointment and rotation of the Group’s external audit firm and lead audit partner as required..• Review the external auditors' proposed audit scope and approach, and the reasonableness of audit fees.• Review the performance of the external auditors, and exercise final approval on the appointment or discharge of the auditors.• Ensure receipt of an Audit Report outlining findings for the year end audit and half year review, presenting these conclusions to the Board.• Set clear hiring policies for employees or former employees of the independent auditors • Meet separately with the external auditors where appropriate.

(a) Audit CommitteeThe Board has established an Audit Committee, which assists the Board in fulfilling its governance and disclosure responsibilities. The Audit Committee has a written charter outlining the role and responsibility of the committee.The role of the Audit Committee is to assist the board of directors in fulfilling its oversight responsibilities for:(i) The integrity of the company's financial statements;(ii) The company's compliance with legal and regulatory requirements;(iii) The independent auditor's qualifications and independence; and(iv) The performance of the company's internal audit function (if applicable).The Audit Committee operates under the delegated authority of the Board and has authority to conduct or authorize investigations into any matters within its scope of responsibility. It is empowered to:• Appoint, compensate, and oversee the work of the public accounting firm employed by the organization to conduct the annual audit and half-year review and any non-audit services. This firm will report directly to the audit committee.• Resolve any issues between management and the auditor regarding financial reporting.• Retain independent counsel, accountants, or others to advise the committee or assist in the conduct of an investigation.• Seek any information it requires from employees--all of whom are directed to cooperate with the committee's requests--or external parties.• Meet with company officers, external auditors, or outside counsel, as necessary.The Committee has the authority under its Charter to carry out the following responsibilities:Review of the Group Financial Reports• Review the Group’s financial reports and commentary prepared by Management.• Review any reports on the financial reports prepared by the Group’s external auditor.• Assess the appropriateness of the accounting policies adopted in preparing the Group’s financial reports.• Assess whether the financial reports are adequate for security holder needs.• Review the compliance with disclosure requirements.• Assess the adequacy of representations and analysis prepared by Management as they relate to the financial reports.• Recommend approval of the financial reports by the Board.• Review significant accounting and reporting issues and understand their impact on the financial statements. • Review with management and the external auditors the results of the audit.



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Compliance• Review the effectiveness of the system for monitoring compliance with applicable laws and regulations. • Review management’s procedures for the receipt, retention, and treatment of complaints received by the Company.• Review the findings of any examinations by regulatory agencies, and any auditor observations.• Review the process for communicating internal compliance policies to company personnel, and for monitoring compliance therewith. • Obtain regular updates from management and company legal counsel regarding compliance matters where appropriate.Other Responsibilities• Review the company's major policies with respect to risk assessment and risk management• Institute and oversee special investigations as needed.• Review and assess the adequacy of the Audit Committee charter annually, recommending any changes be adopted by the Board.• Confirm annually that all responsibilities outlined in this charter have been carried out.• Evaluate the committee's and individual members' performance at least annually.The Audit Committee consists of three members, two directors, each of whom is considered independent, and an independent consultant. The Chair of the Committee is a non executive director and is not the Chair of the Board. The current members of the Audit Committee are:- Mr Saharto Sahardjo (Chair);- Mr Albert Cheok; and - Mr Jeff McKenzie. Details of these directors’ qualifications and attendance at Audit Committee meetings are set out in the Directors’ Report.The external auditor attends the annual general meeting and is available to answer shareholder questions about the conduct of the audit and the preparation and content of the audit report, accounting policies adopted by the Group, and the independence of the auditor in relation to the conduct of the audit.

1.5 Other external review(a) Executive confirmationsIn accordance with the Group’s legal obligations, Mr Haryono Eddyarto and Geoff Brayshaw have made the following certifications to the Board: • The Group’s financial records have been properly maintained in accordance with Section 286 of the Corporations Act 2001;• The Group’s financial statements, and notes thereto; present a true and fair view, in all material respects, of the consolidated group’s financial condition and operational results and are prepared in accordance with relevant Australian Accounting Standards, Corporations Regulations 2001 and other mandatory professional reporting requirements;• the statements made with respect to the integrity of Adavale’s financial reports are founded on a sound system of risk management and internal compliance and control systems which, in all material respects, implement the policies adopted by the Board; and• the risk management and internal compliance and control systems, to the extent they relate to the financial reporting, were operating efficiently and effectively in all material respects throughout the period.Since 30 June 2013, nothing has come to the attention of Mr Eddyarto or Mr Brayshaw that would indicate any material change to any of the statements made above.

(b) Remuneration and/or Nomination CommitteeThe Board has not established a Remuneration and/or Nomination Committee as it considers the size of the Board adequate to deal with the matters ordinarily delegated to such committees.(c) Investment & Capital Markets CommitteeThe Board has established an Investment & Capital Markets Committee, but to date is has not met or defined its Charter.1.4 Risk managementThe Board is responsible for ensuring that sound risk management strategy and polices are in place. The Board has established an Audit Committee that has the delegated responsibility for identifying and overseeing major risks and ensuring that systems are in place to manage them.In addition, the Committee:• identifies and assesses the Group’s material business risks;• regularly reviews and updates the Group’s risk profile; and• oversees the risk management policies and systems.

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1.7 Employee and director trading in Adavale sharesThe Group has a Securities Trading Policy governs the ability of directors, executives and employees to trade in the Group’s securities. Subject to necessary prior written consents being obtained, the Group’s directors, executives and employees may trade in the Group’s securities at any time outside closed periods which are as follows: • From 1 January to the release of half yearly results; • From 1 July to the release of annual results; and• at any other time determined by the Board. Directors and senior executives may, in exceptional circumstances as defined in the policy, trade during a closed period but, only with the prior written consent of the Disclosure Officer. Notwithstanding the closed periods and approval requirements, a person is prohibited from trading at any time if they possess material, price-sensitive information about the Group that is not generally available to the public.The Company’s Securities Trading Policy may be viewed on the Company’s website (www.adavaleresources.com.au).

1.8 Shareholder ConfirmationThe Board aims to ensure that its shareholders are kept well-informed of all major developments and business events that are likely to materially affect Adavale operations and financial standing, and the market price of its securities. Information is communicated to shareholders through:• annual and half year financial reports lodged with the ASX and made available to all shareholders;• announcement of market-sensitive and other information, including Annual and Half Year results announcements released to the ASX;• the Chair’s addresses to, and the results of, the annual general meeting; and• copies of announcements, presentations, past and current reports to shareholders made available on the Company website (www.adavaleresources.com.au).Adavale has a Continuous Disclosure Policy that includes a formal procedure for dealing with potentially price-sensitive information. The policy sets out how the Group meets its disclosure obligations under ASX Listing Rule 3.1. The Group’s policy is to lodge with the ASX and place on its website all market-sensitive information, including annual and half year result announcements and analyst presentations, as soon as practically possible.

The Group produces two sets of financial information each financial year: the half year financial report for the six months ended 31 December and the annual financial report for the year ended 30 June. Both are made available to shareholders and other interested parties.

Shareholders who cannot attend the annual general meeting may lodge a proxy in accordance with the Corporations Act 2001. Proxy forms may be lodged by facsimile or electronically.

Shareholders have the right to attend the Company’s annual general meeting, usually held towards the end of November each year, and are provided with an explanatory memorandum on the resolutions proposed through the notice of meeting. A copy of the notice of meeting is also posted on the Company website and lodged with the ASX.Shareholders are encouraged to vote on all resolutions. Unless specifically stated otherwise in the notice of meeting, all shareholders are eligible to vote on all resolutions. Shareholders who cannot attend the annual general meeting may lodge a proxy in accordance with the Corporations Act 2001. Proxy forms may be lodged by facsimile or electronically.Transcripts of the Chair’s reports to shareholders are also released to the ASX upon the commencement of the annual general meeting. This transcript, together with the results of the annual general meeting are also posted on the Company website (www.adavaleresources.com.au).Shareholders have the right to attend the Company’s annual general meeting, usually held towards the end of November each year, and are provided with an explanatory memorandum on the resolutions proposed through the notice of meeting. A copy of the notice of meeting is also posted on the Company website and lodged with the ASX.Shareholders are encouraged to vote on all resolutions. Unless specifically stated otherwise in the notice of meeting, all shareholders are eligible to vote on all resolutions.

Transcripts of the Chair’s reports to shareholders are also released to the ASX upon the commencement of the annual general meeting. This transcript, together with the results of the annual general meeting are also posted on the Company website (www.adavaleresources.com.au).



1.6 Code of conduct and ethical behaviourThe Board acknowledges the need for high standards of corporate governance practice and ethical conduct by all directors and employees of the Group.The Board has endorsed a code of conduct which outlines ‘acceptable behaviour’ and attitudes expected from all staff to promote and maintain the confidence and trust of all those dealing with the Group.Various measures have been established to ensure that a high standard of ethical business behaviour is observed by all staff members. In addition to their obligations under the Corporations Act 2001 in relation to inside information, all directors, employees and consultants have a duty of confidentiality to the Group in relation to confidential information they possess.

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1.9 Continuous disclosure

Female representation within the Group is as follows:

No. % No. %Board representation 0 0% 0 0%Key management personal representation 0 0% 0 0%Group Representation 1 16% 1 16%

Compliance

1.1P

1.2 P1.3 P

2.1 P

2.2 ×2.3 ×2.4 ×2.5 ×2.6 P


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

A majority of the board should be independent directors.The chair should be an independent director.The roles of the chair and chief executive officer should not be exercised by the same individual.The board should establish a nomination committee.

Checklist of Corporate Governance Principles and Recommendations

Principles and Recommendations Compliance

2013 2012

Establish the functions reserved to the board and those delegated to senior executives and disclose those functions.

Disclose the process for evaluating the performance of senior executives.

Principle 1 – Lay solid foundations for management and oversight



Adavale is committed to continuous disclosure of material information as a means of promoting transparency and investor confidence.

The Company’s Continuous Disclosure Policy incorporates the continuous disclosure framework as set out in the ASX Listing Rules Chapter 3, as well as the revised ASXListing Rules Guidance Note 8.


The Group has written policies and procedures that focus on continuous disclosure of any information concerning the Group that a reasonable person would expect to have amaterial effect on the price of the Group’s securities.

Principle 2 – Structure the Board to add value

Disclose the process for evaluating the performance of the board, its committees, and individual directors.Provide the information indicated in Guide to reporting on Principle 2.

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3.1P

P

P

practices.

3.2

×3.3

×3.4

P

3.5 P

4.1 P

4.2P

P

P

P

4.3 P

4.4 P

5.1

P5.2 P

6.1

P

6.2 P

Principle 5 – Make timely and balanced disclosure

Principle 6 – Respect the rights of shareholders

Principle 4 – Safeguard integrity in financial reporting

Companies should establish a policy concerning diversity and disclose the policy or a summary of that policy. The policy should include requirements for the board to establish measureable objectives for achieving gender diversity for the board to assess annually both the objectives and the progress in achieving themCompanies should disclose in each annual report the measurable objectives for achieving gender diversity set by the board in accordance with the diversity policy and progressCompanies should disclose in each annual report the proportion of women employees in the whole organisation, women in senior executive positions and women on the board.

Establish written policies and procedures 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 these policies.

Design a communications policy for promoting effective communication with shareholders and encouraging their participation at general meeting and disclose the policy or a summary of the policy or a summary of the policy




Principle 3 – Promote ethical and responsible decision-making

- the responsibility and accountability of individuals for reporting and investigating reports of unethical


The board should establish an audit committee.Structure the audit committee so that it:- consists only of non-executive directors- consists of a majority of independent directors- is chaired by an independent chair, who is not the chair of the board; and- has at least three members

shareholders; and



Establish a code of conduct and disclose the code or a summary of the code as to:- the practices necessary to maintain confidence in company’s integrity

The audit committee should have a formal charter.

- the practice necessary to take into account their legal obligations and the reasonable expectations of

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7.1P

7.2

P7.3

P7.4 P

8.1 ×8.2

×××

8.3 ×

Principle 8 – Remunerate fairly and responsibly

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

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 risks.

The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial office (or equivalent) 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 operation effectively in all material respects in relation to financial reporting risks.


The board should establish a remuneration committee.The remuneration committee should be structured so that it: - consists of a majority of independent directors - is chaired by an independent chair - has at least three membersProvide the information indicated in Guide to reporting on Principle 8.

Principle 7 – Recognise and manage risk



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Interests in Shares and

Haryono Eddyarto 84,775,541 fully paid Mr Eddyarto is an Indonesian Resident and has over Executive Chairman ordinary shares 35 years experience in International trade. He has extensiveAppointed 28 September 2011 32,004,435 options business activities ranging from Commodity Trading, Mining,

60,000,000 options subject Chemical, Television and Property. Mr Eddyarto is a to shareholder approval strong promoter of the Asian region having represented

Indonesian Chamber of Commerce and Industry in the G-15,G-77 and the Indian Ocean Rim ARG-Business Forum.

Current directorships include: Pt House of Indonesia, Pt Inter Mineral Resources, Pt Nikelindo, SpaceBee Broadcasting Servides AG, Switzerland and Pt TerasNirwana Bali.

Mark Stevenson 21,254,314 fully paid Mr Stevenson is President and CEO of Holloman HoldingsNon-Executive Director ordinary shares Corporation and has had over 30 years experience inAppointed 15 May 2007 management, engineering and operations in the upstream Oil

Resigned 25th September 2013 and Gas Industry. He holds a B.S. in ConstructionalEngineering from Texas Tech University, Lubbock Texas. Former directorship, RMG Limited.

Saharto Sahardjo Nil shares Mr Saharto is an Indonesian Professional Business Law AdvisorNon-Executive Director with over 25 years' experience in the management of companies. Appointed 20 December 2012 He has a Law Degree Major in Private International Law and is a

Notarial Specialist. He also has a Master of Business Administration. Mr Saharto worked for PT Tanbang Timah, Tin Mining in Indonesia as Legal Staff (1982-5), and PT Latinusa (1985-98) as Manager, and thereafter as Company Secretaryand Commercial Director. He is the Commissioner and Chairmanof the Audit Committee of PT Polytama Propindo, the secondlargest polypropylene producer in Indonesia.

Options

Held at date of resignation


DIRECTORS’ REPORT

The directors present their report on the Company and its controlled entities for the financial year ended 30 June 2013.

DirectorsThe directors of the Company at any time during or since the end of the financial year are:

Name and Qualifications Experience and Special Responsibilities

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Albert Cheok 6,000,000 fully paid Mr Cheok is a Fellow of the Australian Institute of Certified Non-Executive Director ordinary shares. Public Accountants and is a banker with over 30 years experienceAppointed 20 December 2012 Held from date of in banking in the Asia Pacific region. Mr Cheok is currently the

appointment Chairman of Bowsprit Capital Corporation Limited, the Manager of First Real Estate Investment Trust, a healthcare REIT, and the Chairman of LMIRT Management Ltd, the Manager of Lippo Malls Indonesia Retail Trust, a retail mall REIT. Both ofthe REIT's are listed in Singapore. Mr Cheok is the Deputy Chairman of Metal Reclaimatiopn, a leading lead refinery in Malaysia.Mr Cheok is a Senior Adviser to a number of businesses andIndustrial groups in SE Asia. He is the Vice Governor on the Board of Governors of the Malaysian Institute of Corporate Governance; a private/public sector initiative established to good corporate governance practices in Malaysia.

John Risinger 9,626,293 fully paid Mr Risinger has over 35 years experience in the drilling Executive Director industry and in managing drilling and operations in mineralAppointed 15 May 2007 exploration. He has had many years experience at board

20,000,000 options level in a number of listed and unlisted public companies.

Richard Poole,

Non-Executive Director,

LLB, B Juris, B Comm Held at date of resignation

ASIA 17,004,435 optionsAppointed 20 February 2006 Held at date of resignationResigned 20 December 2012

Roger SteinepreisNon- Executive DirectorLLB, B Juris Held at date of resignationAppointed 26 May 2006 2,500,000 optionsResigned 20 December 2012 Held ast date of resignation


DIRECTORS’ REPORT (CONT)

Australian Power and Gas Limited and Resources & Energy Group Limited.

Former directorship Imugene Limited.

17,486,838 fully paid Mr Steinepreis graduated from the University of Western ordinary shares Australia where he completed his law degree. He was

admitted as a barrister and solicitor of the Supreme Court ofWestern Australia in 1987 and has been practicing as a

ordinary shares and acquisitions. He is a principal of Arthur Phillip Pty

Limited and has been involved in a range of fund raising and

advisory projects for public and private clients. At date of resignation, current public company directorships included

50,796,085 fully paid

ordinary shares

Held at date of resignation.Resigned 6 September 2013

Held at date of resignation.

Mr Poole is a qualified lawyer who specialises in mergers

Firestrike Resources Limited, Apollo Consolidated Ltd andLtd, Integrated Resources Group Ltd, PWH Consolidated Ltd,

DGI Holdings Limited.

lawyer in excess of 24 years.

Current Directorships at resignation include, AVZ Minerals

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Philip SurianoNon-Executive Director

Held at date of resignationAppointed 26 May 2006 20,000,000 optionsResigned 20 December 2012 Held at date of resignation

Current directorships at date of resignation include Laserbond

Ltd, BBX Minerals Ltd and Resources & Energy Group Limited.

Company SecretaryLeanne Ralph

Leanne is a member of Chartered Secretaries Australia and theAustralian Institute of Company Directors.Leanne is the principal of Boardworx Australia Pty Ltd, whichsupplies bespoke outsourced Company Secretary services to a number of listed and unlisted companies.

Directors’ Meetings

Director

Eligible AttendedH Eddyarto 21 20A Cheok 9 9J Risinger 21 20M Stevenson 21 18S Sahardjo 9 9R Poole 15 15R Steinepreis 13 15P Suriano 14 15

committee circular resolution held during the year.

Messrs Poole, Suriano and Steinepreis resigned on 20 December 2012. Messrs Cheok and Sahardjo were appointed on this date.Messrs Risinger, Eddyarto and Stevenson each missed one meeting due to conflicts of interest.

ordinary shares State Bank of Victoria (Commonwealth Bank). Mr Suriano

experience to give him a strong background in operations,

Board Meetings

The number of directors’ meetings (including meetings of committees of directors and approvals by circular resolution) and

number of meetings attended by each of the directors of the Company during the financial year were:

This table includes 15 director circular resolutions during the year and 1 audit committee meeting and one audit

sales and marketing in such roles as National Sales Director,MCN (the subscription TV joint venture between Austarand Foxtel) and Group Sales Manager at Network Ten.

B Bus, Bkg & Fin, Monash spent 16 years in senior positions within the AustralianMedia Industry. Mr Suriano has gained wide knowledge and

2,666,667 fully paid Mr Suriano began his career in corporate banking with the

For the past 10 years Mr Suriano has worked in corporate

finance and is currently working with Lempriere Capital Partners.

Ms Leanne Ralph was appointed to the position of Company Secretary in December 2012. Leanne has over 22 years experience in Chief Financial Officer and Company Secretarial roles for various publicly listed and unlisted entities.



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Adavale Resources Limited has established itself in the coal industry in Indonesia and will continue to research and identify quality

coal projects across Indonesia, including through the Company's 40% joint venture interest in Adavale Harner Resources .

2013 2012$ $

50,970 65,058 (4,235,038) (1,484,550)(4,184,068) (1,419,492)

(200,568) (415,197)(4,384,636) (1,834,689)

The consolidated loss of the company was $4,384,636 which compared with a net loss for the prior year of $1,834,689.

The changes in the ownership and management were agreed at the Company's general meeting on 20 December 2012. Since that date there has been a significant change to the management structure, while at the same time the Company has continued to identify and review coal projects in Indonesia.

As discussed above under Project Review, the Company has continued to place emphasis on the TAPAN project, and has recently renewed the South Australian Lake Surprise Tenements.

The Company has significantly curtailed the administrative costs associated with the company head office, with the Adavale Harner Resources (AHR) Joint Venture bearing the majority of Indoneasian expenditure in the last twelve months.

The major expenditure item in the current year was the impairment of the carrying costs of both the TAPAN and Lake Surprise projects in line with the independent values used for the Company General Meeting in December 2012. This write down, which was reported in the December 2012 Half Yearly report, amounted to $3,677,750 in the current financial year. In addition, the investment funds previously advanced to AHR have been written down to zero as AHR has incurred the operational and overhead costs of the Indonesian operation. No advances to AHR were made in the current financial year, nor are there any advances budgeted for in the near future.

As at year end the Company had cash resources of $150,505 and a funding facility of $825,000 from Mr Haryono Eddyarto, since reduced to $750,000 at the date of this report.

The Company has, through access to these funds, in the form of a convertible loan facility, provided by the Company Chairman, funds of a further $750,000 to progress both the TAPAN and Lake Surprise projects, and research other coal projects referred to above. Should any project require major funding beyond the funds immediately available to the Company, the Company would consider either introducing joint venture parties to the project, or carry out a capital raising to enable a full ownership retention of the project. Such decisions would be made on a case by case basis.



Loss from continuing operations

Share of loss from equity accounted investmentProfit/(loss) from ordinary activities

Expenses from continuing operations

The loss from ordinary activities before income tax expense includes the following revenue and expense disclosures which are relevant in explaining the financial performance of the entity:

Revenue from continuing operations

Principal Activities

The principal activities of the consolidated entity are mining explorations and development in Australia and Indonesia.

The company is also continuing exploration on its uranium project at Lake Surprise in South Australia as well as evaluatingother uranium and coal exploration opportunities.

Review and Results of Operations

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On 31 July 2012, Mr Haryono Eddyarto, a director of Adavale Resources Limited, agreed to assume the Company's USD300,000financial obligation to Adavale Harner Resources (AHR), subject to BKPM (Indonesia Investment Coordinating Board) approval, which has subsequently been received.The Company agreed to immediately transfer to Mr Eddyarto 300 shares in Adavale Harner Resources (AHR) on receipt of BKPM's approval and payment by Mr Eddyarto of USD300,000 direct to Adavale Harner Resources to complete the Company'sobligation. Following receipt of the funds, the AHR joint venture is 40% Adavale Resources Limited and 60% Mr Eddyarto.

The Company has not received either during the year or since year end any capital call by AHR, which has continued its recent Indonesian activities utilising funds advanced by Mr Haryono Eddyarto, Chairman of Adavale Resources Limited.

The Company also announced in July 2012 it had entered into a Convertible Loan Agreement with Mr Eddyarto to the value of $1 million (Loan), subject to Shareholder approval (subsequently received). As a consequence of entering into the Convertible Loan Agreement with Mr Eddyarto, the Company and Arthur Phillip Pty Ltd agreed to terminate the Convertible Loan Agreement announced on 15 October 2010. The 10,000,000 options issued to Arthur Phillip Pty Ltd for providing the loan were transferredto Mr Eddyarto. The Company has drawn down $175,000 against this facility. The loan facility has a duration of 24 months.

On 1 August 2012, the Company announced that Mr Eddyarto (a director of the company) entered into an agreement toacquire 24,000,000 shares in the Company, taking Mr Eddyarto's interest in the Company to 19.8%. Mr Eddyarto also advisedthat he entered into Conditional Share Sale Agreements with other parties, including interests associated with Mr Richard Poole andMr Roger Steinepries (then directors of the Company) (the vendors) that subject to obtaining shareholder approvals, Mr Eddyarto could acquire up to an additional 99,522,838 shares. This could take Mr Eddyarto's total combined interest in the Company to 51.2% (excluding option exercises). Shareholder approval was obtained on 20 December 2012.In addition a total of 32,004,435 options to acquire shares would also be transferred to Mr Eddyarto by the Vendors on the settlement date of the Conditional Share Sales Agreements.Pursuant to this agreement a total of 21,381,956 shares and 22,004,435 unlisted options were acquired by Mr Eddyarto on 31 December 2012. By notice to the ASX on 31 July 2013, it is noted the remaining share acquisitions by Mr Eddyarto have yet to be acquired, and negotiations are continuing between the parties.

The Company agreed that following shareholder approval, the Company would allot and issue 60,000,000 options to Mr Eddyarto in consideraton for him becoming Chairman and on satisfaction by the Company of certain milestones. The 60,000,000

options were subsequently issued by the Board however not within the one month timeframe allowed by the ASX Listing Rules.

Approval is therefore to be re-obtained at the next AGM. If this approval is not given the options are to be cancelled.

Future DevelopmentsThe Group expects to continue its explanation and evaluation activities in Indonesia and Australia into the foreseeable future and

will examine options for maximising the value of its mineral interests.



changes to the state of affairs of the Group during the year.

Dividends

No dividends were paid during the financial year and the directors recommend that no dividend be paid in respect of the year ended 30 June 2013.

Significant Changes in the State of Affairs

Except for the matters discussed above or disclosed elsewhere in the attached financial statements, there were no significant Events Subsequent to Balance Date

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The directors of Adavale Resources Limited present the Remuneration Report for non-executive directors, executive directors andkey management personnel, prepared in accordance with the Corporations Act 2001 and Corporations Regulations 2001.The remuneration report is set out under the following main headings:

a. Principles used to determine the nature and amount of remunerationb. Details of remunerationc. Share based remunerationd. Service agreements

The compensation structure takes into account: - the capability and experience of the key management personnel - the key management personnel's ability to control the relevant segment performance - the group's performance including:

·∙ the group's earning

·∙ the growth of the share price and delivering constant reutrn to shareholders



Remuneration levels are competitively set to attract and retain qualified and experienced directors, executives and staff, and

appropriateness of remuneration packages, given trends in comparative companies and industry surveys.

incentives. Short and long term performance - based incentivesares designed to reward key management personal for meeting or exceeding their financial and personal objectives.

Compensation packages include a mix of fixed and variable compensation and short and long term performance - based

Currently the company does not have a Reumuneration committee, but the Board establishes and monitors rumuneration packages and policies.

(a) Remuneration Policies

When appointed, the Board establishes and monitors the remuneration of the Managing Director. Currently no Chief Executive Officer has been appointed.

having regard for the overall performance of the Company. Where necessary the Board obtains independent advice on the

Key management personnel have authority and responsibility for planning, directing and controlling the activites of the Group, including directors of the Company and other executives. Key management personnel comprise of directors of the company and senior executives of the Group.

Remuneration Report (audited)

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(b) Company Directors’ remuneration

The remuneration paid during the year to each director of the Company are as follows:Salary Share-Based& Fees Super- Payment Total

annuation Shares & Options$ $ $ $

2013DIRECTORS

Haryono Eddyarto v 69,444 - - 69,444Albert Cheok - - - -Saharto Sahardjo vi 19,526 - - 19,526John Risinger iv 232,038 - - 232,038Mark Stevenson 2,000 -‐ - 2,000Richard Poole i 4,000 - - 4,000Roger Steinepreis ii 4,000 - - 4,000Philip Suriano iii 24,000 - - 24,000

355,008 - - 355,008

vii 18,842 - - 18,842

2012DIRECTORS

Richard Poole i 24,000 - - 24,000Roger Steinepreis ii 24,000 - - 24,000Philip Suriano iii 144,000 - - 144,000John Risinger iv 363,379 8,250 - 371,629Mark Stevenson 24,000 - - 24,000Haryono Eddyarto v 53,251 - - 53,251

632,630 8,250 0 640,880



OTHER KEY MANAGEMENT PERSONNEL

Leanne Ralph

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i Fees payable to Mr Poole were paid to Arthur Phillip Pty Limited, a company controlled by him.ii Fees payable to Mr Steinepreis were paid to Steinepreis Paganin, a firm of which he is a partner.iii Fees payable to Mr Suriano were paid to Entertainment Marketing Enterprise Pty Ltd, a company controlled by him.iv Director's fees of $6,000 payable to Mr Risinger were paid directly or paid to Larca Pty Limited, a company controlled by him. Mr Risinger's salary of $151,038 was paid from Adavale Harner Resources, the Joint Venture of Adavale Resources Limited.

v Fees payable to Mr Eddyarto were paid from Adavale Harner Resources, a Joint Venture in which Adavale Resources Limited owns a share.,

The relative proportions of remuneration that are linked to performance and those that are fixed as follows:

Name At risk - STI At risk - options

Executive DirectorJohn Risinger - 75%

Non-Executive DirectorsRichard Poole - - Roger Steinepreis - - Philip Suriano - 75%Mark Stevenson - - Haryono Eddyarto - - Saharto Sahardjo - -

Salary Share-Based& Fees Super- Payment Total

annuation Shares & Options$ $ $ $

2012Marshall Cooper 114,069 - - 114,069



vii Fees paid to L Ralphe for the period since appointment as company secretary, paid to Boardworx.

Fixed Remuneration

100%

In the 2013 financial year no salaries were paid to Key Personnel except directors referred to above.

Other Key Management Personnel

On 11 July 2011, Mr Marshall Cooper was appointed as Chief Executive Office of Adavale's Indonesian Coal Operations. Mr Cooper resigned on 29 November 2011.

100%100%100%100%100%

100%

vi The salary paid to Mr Sahardjo is for the period since appointment as a director, and was paid by Adavale Harner Resources.

In addition an amount of $75,000 has been paid by Adavale Resources Limited to Mr Risinger since year end in relation to salary and holiday pay entitlements to 30 June 2013.

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Exercise Type Number Price

John Risinger Class A 5,000,000 $0.04Class B 5,000,000 $0.04Class C 5,000,000 $0.045Class D 5,000,000 $0.05

Phillip Suriano Class A 5,000,000 $0.04Class B 5,000,000 $0.04Class C 5,000,000 $0.045Class D 5,000,000 $0.05

NameTerm of

Agreement Notice Period

Philip Suriano unspecified unspecified i

John Risinger unspecified unspecified ii

Saharto Sahardjo unspecified unspecified vHaryono Eddyarto unspecified unspecified iii

unspecified unspecified iv

ii) John Risinger's salary (net salary of USD180,000) was paid from Adavale Harner Resources (Joint Venture of Adavale

iii) Haryono Eddyarto's salary (net salary of USD60,000) is paid from Adavale Harner Resources (Joint Venture of Adavale Resources Limited).iv) Leini Eddyarto's salary (net of tax) is paid by Adavale Harner Resources (Joint Venture of Adavale Resources Ltd.v) Saharto Sahardjo's salary is paid by Adavale Harner Resources (Joint Venture of Adavale Resources Ltd)End of Remuneration report

Directors

There were no new options issued in the year, nor any options exercised.



US$ 36,000 (net)

USD60,000 (net)

8 December 2010 31 July 20148 December 2010 31 July 20158 December 2010

31 July 201531 July 2016

8 December 2010 31 July 2014

(d) Service Agreements

Reumuneration and other terms of employment for the Executive Director and other key management personnel are formalised in a service agreement. The major provisions of the agreements relating to remuneration are set out below:

Leini Eddyarto

31 July 2016

former directors and company secretary, against all liabilities to another person (other than the Company or a related body corporate) that may arise from their position as directors or company secretary of the Company and its controlled entities, except where the liability arises out of conduct involving a lack of good faith. The agreement stipulates that the Company will

The Company indemnifies, to the extent permitted by law, all directors and the company secretary of the Company and all

meet the full amount of any such liabilities, including costs and expenses.

Aust$24,000 directors fees & USD180,000 (net)

Non- executive directors are paid $24,000 per year. Since August 2012 this payment has been waived by directors.

i) Mr Suriano's payments were waived from September 2012, and terminated on his resignation in December 2012.

Resources Limited). Payments ceased in January 2013. Mr Risinger has been paid an amount of Aust$75,000 since 30 June

2013 in relation to salary and on-costs owing to that date. Mr Risinger resigned in September 2013.

US$144,000 (net of tax)

$144,000

Base

Indemnification of Officers and Auditors

8 December 2010

(c) Share Options Issued as Remuneration

8 December 2010

Date of Expiry8 December 20108 December 2010 31 July 2014

31 July 2014Date of Grant

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The Company does not indemnify its auditors.

Options

Exercise Number Price

65,697,863 $0.04

10,000,000 $0.04

10,000,000 $0.04

10,000,000 $0.045

10,000,000 $0.05

10,000,000 $0.04

In addition, the Company agreed that following shareholder approval, the Company would allot and issue 60,000,000 options to Mr Eddyarto in consideraton for him becoming Chairman and on satisfaction by the Company of certain milestones. The 60,000,000options were subsequently issued by the Board however not within the one month timeframe allowed by the ASX Listing Rules.

Approval is therefore to be re-obtained at the next AGM. If this approval is not given the options are to be cancelled.

Environmental IssuesThe Company's operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of a



The auditor’s independence declaration for the year ended 30 June 2013 has been received and can be found on Page 31.

Type

The Board of directors is satisfied that the provision of non-audit services during the year is compatible with the general

8 December 2010

8 December 2010

The Company also indemnifies the current directors and company secretary of its controlled entities for all liabilities to another person (other than the Company or a related body corporate) that may arise from their position, except where the liability arises out of conduct involving a lack of good faith. The agreement stipulates that the Company will meet the full amount of any such liabilities, including costs and expenses.

Date of Grant8 December 2010

8 December 2010

8 December 2010

Unlisted

Class A (U02)

Class B (U03) 31 July 2014

State or Territory.

Non-Audit Services

standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the nature of the services disclosed below did not compromise the external auditor’s independence.

Grant Thornton did not provide any non-audit services during the year ended 30 June 2013.

Auditor’s Independence Declaration

Class C (U04)

Class D (U05)

(U09)

The Company also indemnifies executive officers of the Company and its controlled entities for all liabilities to another person (other than the Company or a related body corporate) that may arise from their position in the Company and its controlled entities, except where the liability arises out of conduct involving a lack of good faith.

At the date of this report the unissued ordinary shares of Adavale Resources Limited under option are as follows:-

Date of Expiry

31 July 2015

31 July 2016

31 July 2014

31 July 2014

31 July 20148 December 2010

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10 Kings Park Road

West Perth WA 6005

PO Box 570

West Perth WA 6872

T +61 8 9480 2000

F +61 8 9322 7787

E [email protected]

W www.grantthornton.com.au

Grant Thornton Audit Pty Ltd ACN 130 913 594

a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the

context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm

is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and

are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its

Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.

Auditor’s Independence Declaration

To the Directors of Adavale Resources Limited

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead

auditor for the audit of Adavale Resources Limited for the year ended 30 June 2013, I

declare that, to the best of my knowledge and belief, there have been:

a no contraventions of the auditor independence requirements of the Corporations Act

2001 in relation to the audit; and

b no contraventions of any applicable code of professional conduct in relation to the

audit.

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

J W Vibert

Partner - Audit & Assurance

Perth, 27 September 2013

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Notes 2013 2012$ $

4 50,970 65,058

50,970 65,058

(36,066) (262,415)Audit Fees 5 (59,739) (50,047)

(5,678) (2,833)(1,000) (34,915)

(110,652) (497,116)(99,975) (19,933)(21,326) (21,501)(53,080) (54,636)(41,654) (15,000)(10,000) (120,000)

Travel (76,752) (305,135)11 (3,677,750) -

Exchange rate losses (824) (46,213)

(40,542) (54,806)25 (200,568) (415,197)

(4,384,636) (1,834,689) - -

(4,384,636) (1,834,689)

(12,434) 12,437 (4,397,070) (1,822,252)

7 (1.38) (0.58)7 (1.38) (0.58)

7 (1.38) (0.58)7 (1.38) (0.58)

Employee benefit expenses

FOR THE YEAR ENDED 30 JUNE 2013


Consolidated

Other expenses from ordinary activities

Profit / (Loss) from ordinary activities before income tax expense

Earnings per Share from continuing operations:Basic (loss)/earnings per share – cents

Premises expenses

Total revenue

(Net Loss) from ordinary activities after income tax expense

Insurance

Revenue from ordinary activitiesOther Revenue

Share of loss from equity accounted investment

Depreciation

Contractor and consultants expensesLegal expenses

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Share registry feesManagement and administrationDirectors' fees

Impairment of exploration and evaluation expenditure

Diluted (loss)/earnings per share – cents

Basic (loss)/earnings per share – cents

Other comprehensive income/loss

Total comprehensive income/(loss)

Income tax expense relating to ordinary activities

Earnings per Share attributable to the ordinary shareholder of the Company

Items which may subsequently be transferred to profit or lossForeign currency translation movements

Diluted (loss)/earnings per share – cents

These financial statements should be read with the accompanying notes

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Notes 2013 2012$ $

CURRENT ASSETS Cash assets 8 150,505 589,014Receivables 9 62,326 22,345Other 4,385 8,904

TOTAL CURRENT ASSETS 217,216 620,263

NON-CURRENT ASSETS Receivables 9 - 15,000Investment accounted for using the equity method 25 - 200,568Property, plant and equipment 10 2,471 8,149Exploration and evaluation assets 11 1,180,000 4,765,489

TOTAL NON-CURRENT ASSETS 1,182,471 4,989,206

TOTAL ASSETS 1,399,687 5,609,469

CURRENT LIABILITIES Payables 12 225,219 169,438Provisions 13 - 43,494

TOTAL CURRENT LIABILITIES 225,219 212,932

NON-CURRENT LIABILITIESBorrowings 14 175,000 -

TOTAL LIABILITIES 400,219 212,932

NET ASSETS 999,468 5,396,537

EQUITY Contributed equity 15 37,326,274 37,326,273Reserves 43,437 55,871Accumulated losses (36,370,243) (31,985,607)

TOTAL EQUITY 999,468 5,396,537


CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAS AT 30 JUNE 2013


Consolidated

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Notes 2013 2012$ $

Cash flows from operating activitiesCash payments in the course of operations (591,182) (1,365,762)Interest received 6,933 62,184

Net cash (used in) operating activities 22(b) (584,249) (1,303,578)

Cash flows from investing activities

Purchase of property, plant and equipment - (3,723)

(44,261) (397,291)

- (615,765)

Net cash (used in) investing activities (44,261) (1,016,779)

Cash flows from financing activitiesIssue of shares 1 -

Loan funds received 175,000 -

Repayment of loan 15,000 1,360

Net cash provided by financing activities 190,001 1,360

Net (decrease) in cash held (438,509) (2,318,997)

Cash at beginning of financial year 589,014 2,908,011

Cash at end of financial year 22(a) 150,505 589,014



CONSOLIDATED STATEMENT OF CASH FLOWS

Consolidated

Payment for joint venture


Development,exploration & evaluation expenses capitalised

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Share Accumulated Option FXCapital Losses Reserve Translation Total

Reserve$ $ $ $ $

Balance at 1 July 2011 37,326,273 (30,150,918) 43,434 - 7,218,789

Issue of shares - - - - - Costs of shares - - - - - Share based payment - - - - - Transactions with owners - - - - -

Loss for the year - (1,834,689) - -‐ (1,834,689)Other comprehensive income - - - 12,437 12,437 Total Comprehensive Loss - (1,834,689) - 12,437 (1,822,252)Balance at 30 June 2012 37,326,273 (31,985,607) 43,434 12,437 5,396,537

Balance at 1 July 2012 37,326,273 (31,985,607) 43,434 12,437 5,396,537

Issue of shares 1 - - -‐ 1 Transactions with owners 1 - - - 1

Loss for the year - (4,384,636) - -‐ (4,384,636)Other comprehensive income - - - (12,434) (12,434)Total Comprehensive Loss - (4,384,636) - (12,434) (4,397,070)Balance at 30 June 2013 37,326,274 (36,370,243) 43,434 3 999,468



STATEMENT OF CHANGES IN EQUITYADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES

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1. REPORTING ENTITY

2.

(a)

The financial statements were authorised for issue on 27 September 2013 by the Directors of the Company.

(b)

The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best

Adavale Resources LimitedLevel 5, 151 Castlereagh StreetSYDNEY NSW 2000

Use of Estimates and Judgements

disclosed in the following notes to the financial statements.

application of accounting polices and the reported amounts of assets, liabilities, income and expenses.

Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis.

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the

Accounting Standards Board (IASB).

The principal place of business is:

Statement of Compliance

The registered office of the Company is:

the “Group”) and the Group’s interest in associates and jointly controlled entities. The Group is primarily involved in mining exploration.

The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards including Accounting Standards interpretations, adopted by the Australian Accounting Standards Board (AASB) andthe Corporations Act 2001. The consolidated financial report of the Group and the financial report of the Company comply with Australian equivalents to International Financial Reporting Standards (IFRSs) and interpretations adopted by the International


Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods

BASIS OF PREPARATION

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.

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2013

Adavale Resources Limited (the “Company”) is a for profit company incorporated and domiciled in Australia. The consolidated financial

affected. All significant areas of estimation uncertainty and critical judgements in applying accounting policies have been

statements of the Company as at and for the year ended 30 June 2013 comprise the Company and its subsidiaries (together referred to as

Indonesia

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(c) Going Concern Basis of Accounting

3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

Material accounting policies adopted in the preparation of this financial report are presented below. The financial report has been

prepared on an accruals basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. The accounting policies set out below have been applied consistently to all periods presented in these consolidated financialstatements, and have been applied consistently by all entities in the Group unless otherwise stated.

(a) Principles of Consolidation

The consolidated financial statements incorporate the assets and liabilities of all entities controlled by Adavale Resources Limited (the parent entity) as at 30 June 2013 and the results of all controlled entities for the year then ended. Adavale Resources Limited and its controlled entities together are referred to in this financial report as the group or consolidated entity.

Controlled EntitiesA controlled entity is any entity controlled by Adavale Resources Limited. Control exists where Adavale Resources Limited has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that are currently exercisable are taken into account.

In the Company’s financial statements, investments in controlled entities are carried at cost. A list of controlled entities is contained in Note 21 of the accounts.

Where controlled entities have entered or left the economic entity during the year, their financial statements have been included from the date control was obtained or until the date control ceased.

Currently the Group has a Loan Agreement of $1million with Haryono Eddyarto, the Company Chairman. At 30 June 2013 this had been drawn to $175,000. The facility expires in July 2014. Mr Haryono Eddyarto has agreed with the Board to extend this facility to January 2015, subject to shareholder approval should the Company continue to require a funding facility.

The Group may require further successful raising of funding through debt or equity in order to allow for the successful exploration and subsequent exploitation of the Company's tenements.


The Directors have prepared the financial statements on a going concern basis, as the Directors believe that sufficient funding will be generated from future capital raisings and utilising existing undrawn loan funding facilities.

Notwithstanding the significant uncertainties of future events inherent in the above strategy, the Directors consider it is appropriate to prepare the financial statements on a going concern basis and hence no adjustments have been made in relation to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary if the entity does not continue as a going concern.


The Group is at the exploration and evaluation phase on each of its mining tenements. The Group has incurred a loss for the year of $4,384,636 (2012: $1,834,689) and cash outflows from operations of $584,249 (2012: $1,303,578). The Group also acknowledges its decreased cash balance of $150,505 as at 30 June 2013 (2012: $589,014). The Company is committed to payments to maintain rights to perform its evaluation activity. As a result the Group has and expects further cash outflows from operating and investing activities. Funding of ongoing activities is required from future capital raisings. Therefore significant uncertainty exists to the Group’s ability to continue as a going concern.

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3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT).

Jointly Controlled Entities (equity-accounted investees)Jointly Controlled Entities are those entities over whose activities the Group has joint control, established by contractual agreementand requiring unanimous consent for strategic financial and operating decisions.

Jointly controlled entities are accounted for using the equity method (equity-accounted investees) and are initially recognised at cost.The cost of the investment includes transaction costs.

The consolidated financial statements include the Group's share of the profit or loss and other comprehensive income of equity-

joint control ceases.

When The Group's share of losses exceeds its interest in an equity-accounted investee, the carrying amount of that interest, includingany long-term investments that form part thereof, is reduced to zero, and that recognition of further losses is discontinued exceptto the extent that the Group has an obligliation or has made payments on behalf of the investee.

Transactions Eliminated on Consolidation

Unrealised gains and losses and inter-entity balances resulting from transactions with or between controlled entities are eliminated onconsolidation.

(b) Revenue Recognition

(c) Goods and Services Tax

accounted investees, from the date that significant influence or joint control commences until the date the significant influence or

Interest Revenue

The gross proceeds of non-current asset sales are included as revenue at the date control of the asset passes to the buyer, usually when an unconditional contract of sale is signed.

Revenues are recognised at fair value of the consideration received net of the amount of goods and services tax (GST). Exchanges


of goods or services of the same nature and value without any cash consideration are not recognised as revenues.

The gain or loss on disposal is calculated as the difference between the carrying amount of the asset at the time of disposal and the net proceeds on disposal.


Sale of Non-Current Assets

Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST

incurred is not recoverable from the Australian Tax Office (ATO). 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.

Interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset.

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(d) Foreign Currency Transactions and Balances

exchange rate for reporting purposes. The non-monetary items are translated into AUD, using the historical exhange rate forreporting purposes.

• 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.

The transactions are translated to Australian Dollars which is the Company's functional and presentation currency.

functional and presentation currency.

other comprehensive income.

which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity’s

Exchange differences arising on the translation of non-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 statement of profit or loss and

equity as a qualifying cash flow or net investment hedge.

The Company subsidiary, PT Adavale Nusantara transacts in USD. The monetary items are translated into AUD, using the average


Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to,

currency are translated as follows:

Functional and Presentation Currency

The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment in

Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities, which are recoverable from, or payable to, the ATO are classified as operating cash flows.

the taxation authority is included with other receivables or payables in the balance sheet.


Transaction and Balances

Foreign 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

continued to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at their 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 profit and loss, except where deferred in

Foreign Operations

The financial results and position of foreign operations whose functional currency is different from the Group’s presentation

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

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(e) Taxation

Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred

tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled

and it is not probable that the reversal will occur in the foreseeable future.

Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement

or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are

offset where: (a) a legally enforceable right of set-off exists; and (b) the deferred tax assets and liabilities relate to income

income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where

it is intended that in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

(f) Financial Instruments

designated by management and within the requirements of AASB 139: Recognition and Measurement of Financial Instruments.

Financial Assets at Fair Value Through Profit or Loss

or the liability is settled and their measurement also reflects the manner in which management expects to recover or settle the

carrying amount of the related asset or liability.

The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income).Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.

Deferred tax assets relating to temporary differences and usused tax losses are recongised only to the extent that it is probable that

future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.

A financial instrument is classified in this category if acquired principally for the purpose of selling in the short term, or if so


Recognition


Deferred tax assets and liabilities are calculted at the tax rates that are expected to apply to the period when the asset is realised

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

Realised and unrealised gains and losses arising from changes in the fair value of these assets are included in the statement

contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.

Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well unused tax losses.

Financial instruments are initially measured at cost on trade date basis, which includes transaction costs, when the related

of profit or loss and other comprehensive income in the period in which they arise.

NOTES TO THE FINANCIAL STATEMENTS

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Fair Value

(g) Impairment of Non-Current Assets

(h) Receivables

(i) Investments

Available-for-sale financial instruments include any financial assets not included in the above categories.

higher of the 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 assets carrying value over its recoverable amount is expensed to the comprehensive income statement.


The collectability of debts is assessed at balance date and specific provision is made for any doubtful accounts.

Controlled Entities

market and are stated at cost using the effective interest rate method.

held-to-maturity investments held by the company are stated at amortised cost using the effective interest rate method.

These investments have fixed maturities and it is the company’s intention to hold these investments to maturity. Any


Loans and Receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active

the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine

Available-for-Sale Financial Instruments

Held-to-Maturity Investments

Financial Liabilities

value of all unlisted securities, including recent arms length transactions, reference to similar instruments and option pricing models.

Impairment

Investments in controlled entities are carried in the Company’s financial statements at the lower of cost and recoverable amount.

amortisation.

Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the

whether an impairment has arisen. Impairment losses are recognised in the comprehensive income statement.

Non-derivative financial instruments are recognised at amortised cost, comprising original debt less principal payments and

At each reporting date, the company assesses whether there is objective evidence that a financial instrument has been impaired. In

At each reporting date the group reviews the carrying values of its non-current 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

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(j) Depreciation and amortisation

Useful Lives

2013 2012Office Equipment 3-5 years 3-5 yearsField Equipment 3-5 years 3-5 years

(k) Payables

(l) Employee Benefits

(m) Provisions

(n) Cash

(o) Earnings per Share

(i) Basic earnings per share: Basic earnings per share is determined by dividing net profit or loss after income tax attributable to members of the Company by the weighted average number of ordinary shares outstanding during the financial year.


All assets, including intangibles, have limited useful lives and are depreciated/amortised using the diminishing value method, with

for which the realization is considered to be no longer probable are written off.


of economic benefits will be required to settle the obligation.

For the purposes of the statement of cash flows, cash includes deposits at call with financial institutions and other highly liquid

Provision is made for the Company’s liability for employee benefits arising from services rendered by employees to balance date.

the exception of finance lease assets which are amortised over the term of the relevant lease, or where it is likely the consolidated

entity will obtain ownership of the asset, the life of the asset.

Liabilities are recognised for amounts to be paid in the future for goods or services received.

A provision is recognised when a legal or constructive obligation exists as a result of a past event and it is probable that an outflow

Depreciation and amortisation rates and methods are reviewed annually for appropriateness. When changes are made, adjustments

are reflected prospectively in current and future periods only. Depreciation and amortisation are expensed.

The depreciation/amortisation rates used for each class of asset during the current and prior year are as follows:

Assets are depreciated or amortised from the date of acquisition or, in respect of internally constructed assets, from the time an

asset is completed and held ready for use. Goodwill balances are reviewed annually and any balance representing future benefits

investments with short periods to maturity which are readily convertible to cash on hand and are subject to an insignificant risk of


changes in value, net of outstanding bank overdrafts.

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3. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT). (ii) Diluted earnings per share:

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after tax effect of interest and other financing costs associated with dilutive potential ordinary

shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

(p) Exploration and Evaluation Expenditure

(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 exploitation of the area of interest, or alternatively, by its sale; or

(b) exploration and evaluation activities in the area 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 relating to, the area of interest are continuing.

for the asset in previous years.

(q) Intangible assets


The intangible assets of the Company are exploration licences acquired during the year ended 30 June 2007. The licenses are

carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised

an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and


drilling, trenching and sampling and associated activities and an allocation of depreciation and amortisation of assets used inexploration and evaluation activities. General and administrative costs are only included in the measurement of exploration and

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

measured at cost less accumulated impairment losses. A review of the exploration licences occur each year .

Where a decision has been 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.


Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an exploration and evaluation asset in the year in which they are incurred where the following conditions are satisfied:

evaluation costs where they are related directly to operational activities in a particular area of interest.

Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of

evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the relevant area of interest) is

Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory

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(r) Segment Reporting

An operating segment is a component of the Group that engages in business activities from which it may earn revenue and incur expenses, including revenues and expenses that relate to transaction with any of the Company’s other components.

Unallocated items comprising mainly of head office assets, expenses and liabilities.

(s) Share Based Payments

It is measured by fair value of the equity at the grant date. Fair value is meansured by the use of a Black Scholes model.

The purpose of performance securities are to provide cost effective consideration to directors for their ongoing commitment andcontribution to the Company in their respective roles as Directors.

(t) Critical Accounting Estimates and Judgements

Impairment Testing

The directors evaluate estimates and judgements incorporated into the financial report based on historial 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. Critical estimates and judgements relating to the impairment testing of

assets of the Group are as follows:

Exploration and Evaluation Expenditure

The Group capitalises expenditure relating to exploration and evaluation where it is considered likely to be recoverable or where

the activities have not reached a stage that permits a reasonable assessment of the existence of reserves.

The Group assess impairment at the end of each reporting period by evaluating conditions and events specific to the Group. As a

result of their testing, they have valued exploration and evaluation assets at $1,180,000 (2012: $4,765,489).

The valuation on TAPAN is based on offers the group has received for this asset over the last financial year which also incorporates

The company presents operating segments based on information reported internally.


a royalty payment. The Company considers that the offers support the valuation of TAPAN by the Directors.

The valuation of Lake Surprise was reviewed in 2012 and the Directors consider it a fair value at present based on the proposed

expenditure to be committed to exploration over the next two years.

NOTES TO THE FINANCIAL STATEMENTSADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES

The performance securities issued to the Directors is recognised as a share-based expense, with a corresponding increase in equity.

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(u) Parent Entity Financial Information

The financial information for the parent entity, Adavale Resources Lmited, disclosed in note 27 has been parepared on the same

basis as the basis of the consolidated financial statements of the Group.

(v) New Accounting Standards and Interpretations

Standards, amendments and interpretations to existing standards that are yet effective and have not been adopted earlyby the Group

At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing

standards have been published but are not yet effective, and have not been adopted early by the Group.

Management anticipates that all of the relevant pronouncements will be adopted in the Group's accounting policies for the first

period beginning after the effective date of the pronouncement. Information on new standards, amendments and interpretations that

are expected to be relevant to the Group's financial statements is provided below.

Certain other new standards and interpretations have been issued but are not expected to have a material impact on the Group's

financial statements.

New Accounting Standards for Application in Future Periods

The AASB has issued a number of new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting period, some of which are relevant to the Group. The Group has decided not to early adopt any of the new and amended pronouncements. The Group’s assessment of the new and amended pronouncements that are relevant to the Company / Group but applicable in future reporting periods is set out below:

• AASB 9: Financial Instruments (December 2010) and AASB 2010-7: Amendments to Australian Accounting Standards arising from AASB 9 (December 2010).

This standard is mandatorily applicable for annual reporting periods commencing on or after 1 January 2013. However, AASB 2012-6 defers the application date of AASB 9 from 1 January 2013 to 1 January 2015. AASB 9 introduces new requirements for the classification and measurement of financial assets and liabilities.

Although the Directors anticipate that the adoption of AASB 9 and AASB 2010-7 may have an impact on the Group’s financial statements, it is impracticable at this stage to provide a reasonable estimate of such impact.

• AASB 10: Consolidated Financial Statements, AASB 11: Joint Arrangements, AASB 12: Disclosure of Interests in Other Entities, AASB 127: Separate Financial Statements (August 2011) and AASB 128: Investments in Associates and Joint Ventures (August 2011) (as amended by AASB 2012-10: Amendments to Australian Accounting Standards – Transition Guidance and Other Amendments), and AASB 2011-7: Amendments to Australian Accounting Standards.

FOR THE YEAR ENDED 30 JUNE 2013NOTES TO THE FINANCIAL STATEMENTSADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES

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• AASB 13: Fair Value Measurement and AASB 2011-8: Amendments to Australian Accounting Standards arising from AASB 2013 (applicable for annual reporting periods commencing on or after 1 January 2013).

AASB 13 establishes a single source of guidance for determining the fair value of assets and liabilities. AASB 13 does not change when an entity is required to use fair value, but rather, provides guidance on how to determine fair value when fair value is required or permitted by other Standards.

These Standards are expected to result in more detailed fair value disclosures, but are not expected to significant impact the amounts recognised in these financial statements.

• AASB 2011-4: Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements (applicable for annual reporting periods beginning on or after 1 January 2013).

This Standard makes amendments to AASB 124 Related Party Disclosures to remove the individual key management personnel (KMP) disclosure requirements by Australia specific paragraphs.

When adopted, these amendments are unlikely to have any significant impact on the financial statements. • AASB 119: Employee Benefits (September 2011) and AASB 2011-10: Amendments to Australian Accounting Standards arising from AASB 119 (September 2011) (applicable for annual reporting periods beginning on or after 1 January 2013).

AASB 10 provides a revised definition of “control” and additional application guidance so that a single control model will apply to all investees. When adopted, this Standard is not expected to significantly impact the Group’s financial statements.

AASB 11 requires joint arrangements to be classified as either “joint operations” (where the parties that have joint control of the arrangement have rights to the assets and obligations for the liabilities) or “joint ventures” (where the parties that have joint control of the arrangement have rights to the net assets of the arrangement). When adopted, this Standard is not expected to significantly impact the Group’s financial statements.

AASB 12 contains the disclosure requirements applicable to entities that hold an interest in a subsidiary, joint venture, joint operation or associate. AASB 12 also introduces the concept of a “structured entity”, replacing the “special purpose entity: concept currently used in Interpretation 112, and requires specific disclosures in respect of any investments in unconsolidated structured entities. When adopted, this Standard will affect disclosures only and therefore is not expected to significantly impact the Group’s financial statements.

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• AASB Interpretation 20: Stripping Costs in the Production Phase of Surface Mining (applicable for annual reporting periods beginning on or after 1 January 2013).

This interpretation clarifies that costs of removing mine waste materials (overburden) to gain access to mineral ore deposits during the production stage of a mine must be capitalized as inventories under AASB 102: Inventories if the benefits from stripping activity is realised in the form of inventory produced.

The entity does not operate a surface mine. Therefore, there will be no impact on the financial statements when this interpretation is first adopted.

• AASB 2012-2: Amendments to Australian Accounting Standards – Disclosures – Offsetting Financial Assets and Financial Liabilities (application for annual reporting periods commencing on or after 1 January 2014).

This Standard amends the required disclosures in AASB 7 to include information that will enable users of an entity’s financial statements to evaluate the effect or potential effect of netting arrangements, including rights of set-off associated with the entity’s recognised financial assets and recognised financial liabilities, on the entity’s statement of financial position.

When adopted, there will be no impact on the entity as the entity does not have any netting arrangements in place.

• AASB 2012-5: Amendments to Australian Accounting Standards arising from Annual Improvements 2009-2011 (applicable for annual reporting periods beginning on or after 1 January 2013).

These amendments are a consequence of the annual improvement process, which provides a vehicle for making non-urgent but necessary amendments to Standards.

When these amendments are first adopted, this Standard is not expected to significantly impact the Group’s financial statements.


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4. REVENUE FROM ORDINARY ACTIVITIES

2013 2012$ $

Revenue from outside the operating activities

Interest 6,933 62,184Other Revenue 44,037 2,874

50,970 65,058

5. AUDITORS’ REMUNERATION

2013 2012$ $

Audit and review of financial statements

- auditors of Adavale Resources Limited - Grant Thornton 59,739 50,047 Remuneration for audit and review of financial statements 59,739 50,047

Other services - -Total other service remuneration 0 0Total auditor's remuneration 59,739 50,047


Consolidated

Consolidated


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6. TAXATION

2013 2012$ $

The prima facie tax on loss from ordinary activities before income tax is reconciled to income tax as follows:a. Prima facie tax receivable on loss from ordinary activities at (1,319,121) (546,676)30% (2012: 30%)

Tax effect of deferred tax assets not brought to account 1,319,121 546,676Income tax expense attributable to entity - -

The directors have not recognised any tax assets in respect of losses, as they do not believe that the conditions for recognition set out in Note 3(e) have been met. The directors estimate the carry-forward income tax losses carried forward was approximately$8,881,431 (2012: $6,584,978) available to offset again future taxable income.

7. EARNINGS PER SHARE

2013 2012$ $

Continuing Operations Earnings per share

- Basic – cents (1.38) (0.58)- Diluted – cents (1.38) (0.58)

Earnings/(loss) used in the calculation of basic and diluted EPS (4,384,636) (1,834,689)

Weighted average number of ordinary shares used in the calculation of basic and diluted EPS

- in the calculation of basic EPS 316,990,035 316,990,019- in the calculation of diluted EPS 316,990,035 316,990,019

Number of options not considered dilutive 115,697,863 115,697,879

As the company reported a loss for the year ended 30 June 2013, options on issue were not included in the calculation of diluted earnings per share.



Consolidated

Consolidated

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8. CASH ASSETS

2013 2012$ $

Cash at bank 150,505 589,014

9. RECEIVABLES

2013 2012$ $

CurrentOther receivables 62,326 22,345

62,326 22,345

Non-currentOther receivables 0 15,000

0 15,000

10. PROPERTY, PLANT AND EQUIPMENT

2013 2012$ $

Field equipmentAt cost 8,322 8,322Accumulated depreciation (8,322) (6,508)

0 1,814Office equipmentAt cost 13,917 13,917Accumulated depreciation (11,446) (7,582)

2,471 6,335Total property, plant and equipment – Net book value 2,471 8,149

Movement in Carrying Values Field Office TotalEquipment Equipment

$ $ $Carrying value as at 1 July 2012 1,814 6,335 8,149Additions 0 0 0Disposals 0 0 0Depreciation (1,814) (3,864) (5,678)

Carrying value as at 30 June 2013 0 2,471 2,471

Consolidated

Consolidated



Consolidated

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11. EXPLORATION AND EVALUATION ASSETS

2013 2012$ $

Exploration Licences 1,050,160 1,050,160Exploration expenditure capitalised- Exploration and evaluation phase 3,807,590 3,715,429Less: Provision for impairment (3,677,750) 0

1,180,000 4,765,589

Exploration Licences are carried at cost of acquisition less impairment losses.

Recoverability of the carrying amount of exploration and evaluation assets is dependent on the successful production and sale of uranium ore and coal and or the sale of the areas of interest.Capitalised costs amounting to $44,261 (2012:$397,291) have been included in cash flows from investing activities in the cash flow statement.

12. PAYABLES

2013 2012$ $

Trade creditors 46,871 32,958Trade creditors to related parties 86,194 78,982Other creditors and accruals 92,154 57,498

225,219 169,438

Further information relating to trade creditors to related parties is set out in note 24.

The terms and conditions of the transactions with directors and related parties are no more favourable than those available, orwhich might reasonably be expected to be available, on similar transactions to non-Director related entities on an arm'slength basis.

Consolidated


Consolidated



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13. PROVISIONS2013 2012

Current $ $Employee benefits 0 43,494

0 43,494

(a) Movement in provisions Employeebenefits

$Consolidated Opening balance as at 1 July 2012 43,494Additional provision 0Amount utilised in year (43,494)Balance as at 30 June 2013 0

14. BORROWINGS

2013 2012$ $

Loan from related party 175,000 -

On 1 August 2012, the Company announced it has entered into a Convertible Loan Agreement with Mr Eddyarto to the value of

the Convertible Loan Agreement announced on 15 October 2010. The 10,000,000 options issued to Arthur Phillip Pty Ltd for providing the loan were transferred to Mr Eddyarto.

The terms of the loan with Mr Eddyarto are as follows

(a) Loan has a Face Value of $1,000,000;(b) The Company may make multiple draw downs under the Loan;(c ) Interest shall accrue on the Loan at 8%;(d) If the Loan has not been repaid or converted, the Company will repay any or all of the Loan 24 months after the execution date:(e ) Where an event of default occurs, Mr Eddyarto may require the Company to repay any or all of the Loan plus any interest.(f) The Loan is convertible into Shares at a conversion price of 5 cents per Share;(g) The Loan is an unsecured debt instrument ranking alongside general secured creditors.

Since inception, $175,000 has been drawn by the Company against the loan. The undrawn balance is $825,000.


$1million (Loan), subject to Shareholder approval. Shareholder approval was provided on 20 December 2012. As a consequence of entering into the Convertible Loan Agreement with Mr Eddyarto, the Company and Arthur Phillip Pty Ltd agreed to terminate

Consolidated



Consolidated

Mr Eddyarto has agreed to extend the terms of the loan for a further one year, subject to shareholder approval.

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15. CONTRIBUTED EQUITY

2013 2013 2012 2012No $ No $

Issued and Paid-up Share Capital

(a) Ordinary shares, fully paid 316,990,035 37,326,274 316,990,019 37,326,273316,990,035 37,326,274 316,990,019 37,326,273

Number No $ No $

Ordinary SharesBalance as at 1 July 316,990,019 37,326,273 316,990,019 37,326,273Issues during the year on conversion of options (i) 16 1 - -Closing balance at 30 June 316,990,035 37,326,274 316,990,019 37,326,273

Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share whena poll is called or else one vote each on a show of hands.In the event of a winding up of the Company, ordinary shareholders rank after all creditors and are fully entitled to any proceeds ofliquidation.

(i) 16 options were exercised by shareholders during 2013, resulting in 16 ordinary shares issued at 4 cents.

Consolidated Consolidated



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15. CONTRIBUTED EQUITY (continued)(b) Options

2013 2012No No

Options - exercisable at 0.04, expiring date 31 Jul 2014Opening balance 65,697,879 65,697,879 Issued - - Options exercised (16) - Closing balance 65,697,863 65,697,879

Class A Options - exercisable at 0.04, expiring date 31 Jul 2014Opening balance 10,000,000 10,000,000 Issued - - Closing balance 10,000,000 10,000,000

Class B Options - exercisable at 0.04, expiring date 31 Jul 2014Opening balance 10,000,000 10,000,000 Issued - - Closing balance 10,000,000 10,000,000

Class C Options - exercisable at 0.045, expiring date 31 Jul 2015Opening balance 10,000,000 10,000,000 Issued - - Closing balance 10,000,000 10,000,000

Class D Options - exercisable at 0.05, expiring date 31 Jul 2016Opening balance 10,000,000 10,000,000 Issued - - Closing balance 10,000,000 10,000,000

Options - exercisable at 0.04, expiring date 31 Jul 2014Opening balance 10,000,000 10,000,000 Issued - - Closing balance 10,000,000 10,000,000

In addition, the Company agreed that following shareholder approval, the Company would allot and issue 60,000,000 options to Mr Eddyarto in consideraton for him becoming Chairman and on satisfaction by the Company of certain milestones. The 60,000,000options were subsequently issued by the Board however not within the one month timeframe allowed by the ASX Listing Rules. Approval is therefore to be re-obtained at the next AGM. If this approval is not given the options are to be cancelled.

Consolidated

FOR THE YEAR ENDED 30 JUNE 2013NOTES TO THE FINANCIAL STATEMENTSADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES

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There is no externally imposed capital requirements for the Company.

16. RESERVES

The option reserve records items recognised as expenses on valuation of Directors' share options

17. DIVIDENDS

The Directors do not recommend a dividend for the year ended 30 June 2013. No dividend was paid for the year ended 30 June 2013.

18. FINANCIAL INSTRUMENTS

Financial Risk Management



Risk management is carried out by the Board of Directors under policies approved by the Board. The Board identifies and evaluates financial risks and provides principles for overall risk management.

The Company's activities expose it to a variety of financial risks; market risk (including fair value interest rate risk and price risk),

credit risk, liquidity risk and cash flow interest rate risk. The Company's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Company.


(c) Capital Risk Management

The Company’s objective when managing capital is to safeguard its ability to continue as a going concern. In order to maintain or adjust the capital structure, the Company may issue new shares or return capital to shareholders.

The Company’s strategy, which is unchanged from the prior year, was to maintain a sufficient level of cash to meet its obligations,

as and when any debts are due, and to meet any investment commitments.

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(a) Interest Rate Risk

Interest Rate Risk Exposures

Weighted Floating Non-Average Interest 1 year or 1 to 5 years more than 5 Interest Total

Note Interest rate less years Bearingrate

$ $ $ $ $ $2013

Financial assets Cash assets 8 0.00% - - - - 150,505 150,505

Receivables 9 - - - - 62,326 62,326

Other current assets - - - - 4,385 4,385 - - - - 217,216 217,216

Financial liabilitiesLoans and borrowings 14 8.00% - - 175,000 - - 175,000

Payables 12 - - - - 225,219 225,219 - - 175,000 - 225,219 400,219

2012

Financial assets Cash assets 8 2.26% 347,421 241,593 - - - 589,014Receivables 9 - - - - 22,345 22,345Other current assets - - - - 8,904 8,904

347,421 241,593 - - 31,249 620,263

Financial liabilitiesPayables 12 - - - - 169,438 169,438

- - - - 169,438 169,438


The consolidated entity is exposed to interest rate fluctuations.

The consolidated entity’s exposure to interest rate risk and the effective weighted average interest rate for classes of financial assets



Fixed interest maturing in:

and financial liabilities is set out below:

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18. FINANCIAL INSTRUMENTS DISCLOSURE (CONTINUED)

Financial Risk Management (continued)

Interest Rate Sensitivity Analysis

At 30 June 2013, the effect on profit and equity as a result of changes in the interest rate, with all other variables

Economic EconomicEntity Entity

30 June 2013 30 June 2012$ $

Change in profit

- Increase in interest rate by 2% 0 256

- Decrease in interest rate by 2% 0 (256)

Change in equity

- Increase in interest rate by 2% 0 256

- Decrease in interest rate by 2% 0 (256)

(b) Net Fair Values of Financial Assets and Liabilities

Valuation Approach

at the present value of contractual future cash flows on amounts due from customers (reduced for expected credit losses) or due to suppliers. Cash flows are discounted using standard valuation techniques at the applicable market yield having regard to the timing

A sensitivity analysis was performed relating to the exposure to interest rate risk at balance date. This sensitivity analysis demonstrates the effect on the current year results and equity which should result from a change in these risks.

Monetary financial assets and financial liabilities not readily traded in an organised financial market are determined by valuing them

The balances of financial assets and liabilities approximate their net fair value.

of the cash flows. The carrying amounts of bank term deposits, trade debtors, other debtors, accounts payable, bank loans and

The net fair value of investments in unlisted shares in other corporations is determined by reference to the underlying net assets and an assessment of future maintainable earnings and cash flows of the respective corporations.



lease liabilities approximate net fair value.

remaining constant would be as follows:

Net fair values of financial assets and liabilities are determined by the consolidated entity on the following basis:


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(c) Unrecognised Financial Instruments

The Company and controlled entities do not have any unrecognised financial instruments.

(d) Foreign Currency Risk

The Group's exposure to foreign currency risk was as follows based on notional amounts:

AUD USD AUD USDOther Debtors 619 583 0 0Other Creditors 9,620 9,065 0 0

`

The following significant exchange rates applied during the year:

2013 2012 2012 2011AUDUSD 1.0266 1.0321 1.0321 1.0333

Sensitivity analysis

A strengthening of the AUD, as indicated below, against the USD at 30 June 2013 would have an immaterial effect on either the profit or loss or balance sheet.

2013 2012


Average Rate Average Rate


FOR THE YEAR ENDED 30 JUNE 2013NOTES TO THE FINANCIAL STATEMENTS

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(e) Credit Risk Exposures

(f) Liquidity Risk

long-term liquidity needs is secured by a loan facility of $1 milllion, currently drawn to $175,000.

(g) Capital Management Risk

The Company’s objective when managing capital is to safeguard its ability to continue as a going concern, so that it can provide

net debt. As the Company is in a transitionary stage the gearing ratio has been maintained throughout the year at 0%.is calculated as total borrowing less cash and cash equivalents. Total capital is calculated as equity shown in the balance sheet plus



credit risk on a fair value basis. The credit risk on financial assets, excluding investments, of the consolidated entity, which havebeen recognised on the statement of financial position, is the carrying amount, net of any provision for doubtful debts.

The Company has no significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics.

returns for shareholders and benefits to other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

The Company monitors capital on the basis of the gearing ratio. The ratio is calculated as net debt divided by total capital. Net debt

credit facilities or other fund raising initiatives, to meet commitments as and when they fall due.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets.


Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted. The Company measures

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through

Management monitors rolling forecasts of the Group’s liquidity on the basis of expected cash flow. The Economic Entity cash reserves of $150,505 (2012: $589,014) as at 30 June 2013 will meet liquidity requirements in the short term. Funding for

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2013 2012$ $

Exploration lease commitmentsMinimum expenditure commitments on exploration licencesCommitted but not provided for andpayable:Within one year 0 480,000One year or later and no later than for five years 780,000 0

780,000 480,000

2013 2012Operating lease commitment $ $Minimum expenditure commitments on rentalleaseCommitted but not provided for andpayable:Within one year - 33,488One year or later and no later than for five years - -

0 33,488

Estimated amount payable for the share of property lease of office premises in Indonesia.

Consolidated

NOTES TO THE FINANCIAL STATEMENTSADAVALE RESOURCES LIMITED AND ITS CONTROLLED ENTITIES


19. COMMITMENTS

Consolidated

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20. SEGMENT INFORMATION

(b) Primary Reporting – Business Segments Mineral Mineral Other TotalYear ended 30 June 2013 exploration exploration

$ $ $ $Australia Indonesia

RevenueSales - - - -

Interest - - 6,933 6,933

Other - - 44,037 44,037

Total Segment Revenue - - 50,970 50,970

Segment Result

Depreciation -‐ (5,678) -‐ (5,678)

[1] (1,938,784) (1,939,534) (506,318) (4,384,636) - - - -

(1,938,784) (1,939,534) (506,318) (4,384,636)

480,000 700,000 - 1,180,0003,034,971 - - 3,034,971

- Others - 24,622 128,354 152,9763,514,971 724,622 128,354 4,367,947

- Loans - - 175,000 175,000- Others 2,968,260 - 225,219 3,193,479

2,968,260 0 400,219 3,368,479

[1]

- Receivables


- Exploration expenditure

The Company has identified its operating segments based on internal reports that are reviewed by the Board and management. The


Income tax expenseNet Profit/(loss)

Total segment liabilities

Company operated in one business segment during the year, being mineral exploration and in two geographical areas, being Australia and Indonesia.

The segment reporting is detailed below:

Please note that the loss for Australia and Indonesia is limited to the impairment losses incurred in the current year.

Total segment assets


Profit/(loss) from ordinary activities before income tax

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20. SEGMENT INFORMATION (CONT)

(a) Primary Reporting – Business Segments Mineral Mineral Other TotalYear ended 30 June 2012 exploration exploration

$ $ $ $Australia Indonesia

RevenueSales -

Interest - - 62,184 62,184

Other - - 2,874 2,874

Total Segment Revenue - - 65,058 65,058

Segment Result

(122,926) (682,858) (1,008,906) (1,814,690)

- - - -

(122,926) (682,858) (1,008,906) (1,814,690)

2,387,491 2,377,998 - 4,765,489

2,900,186 77,397 41,875 3,019,458- Others 5,011 274,335 518,387 797,733

5,292,688 2,729,730 560,262 8,582,680

- Loans - 42,014 2,895,812 2,937,826- Others 22,678 - 190,255 212,933

22,678 42,014 3,086,067 3,150,759

Consolidated Consolidated30 June 2013 30 June 2012

4,367,947 8,582,680

(2,968,260) (2,973,211)1,399,687 5,609,469

Total segment liabilities

Profit/(loss) from ordinary activities before income tax

Income tax expenseNet Profit/(loss)

Intersegment EliminationsTotal assets as per balance sheet

- Receivables

Segment Assets



All segment assets are located in Australia and Indonesia.

c) Segment assets:Reportable segments’ assets reconciled to total assets as follow:

Total segment assets- Exploration expenditure

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20. SEGMENT INFORMATION (CONT)

Consolidated Consolidated30 June 2013 30 June 2012

3,368,479 3,150,759(2,968,260) (2,937,827)

400,219 212,932

21. CONTROLLED ENTITIES

Particulars in relation to controlled entities

2013 2012% %

Company:Adavale Resources Limited

Controlled entities:

Adavale Minerals Pty Ltd 100 100Adavale Queensland Pty Ltd 100 100Adavale Indonesia Pty Ltd 100 100

The above entities were incorporated in Australia.

PT Adavale Nusantara 100 100PT Prima Perkasa Abadi 100 100

Incorporated in Indonesia


Total liabilities as per balance sheet

Ordinary Shares

Segment LiabilitiesIntersegment Eliminations


Consolidated Entity Interest

d) Segment liabilities:Reportable segments’ liabilities reconciled to total liabilities as follow:

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22. NOTES TO THE STATEMENT OF CASH FLOWS

2013 2012Notes $ $

Cash at bank 8 150,505 589,014

(4,384,636) (1,834,689)

5,678 2,833

200,568 415,197 3,677,750 0

(12,434) 12,439(513,074) (1,404,220)

(35,462) 77,617

7,781 (4,715)

(43,494) 27,740(584,249) (1,303,578)

Shares were granted to key management personnel as share-based payments in prior periods were as follows:Grant Date No.

John Risinger 26-Nov-10 1,000,000Philip Suriano 26-Nov-10 1,000,000

On 26 November 2010, the above performance securities were approved at the AGM for 2 directors of Adavale Resources Ltd.The primary purpose of granting these performance shares to Messrs John Risinger and Philip Suriano was to provide cost effective consideration for their ongoing commitment and contribution to the Company in their roles as Directors and to providean incentive to them to deliver a mining project in Indonesia. Mr Suriano resigned as a director on 20 December 2012and Mr John Risinger since year end, however each retains the potential benefits of these equity instruments.

Consolidated

For the purposes of the statements of cash flows, cash includes cash on hand and at bank and short term deposits at

call, net of outstanding bank overdrafts. Cash as at the end of the financial year as shown in the statements of cash flows

Net cash (used in) operating activities

23. SHARE BASED PAYMENTS


- Depreciation of non-current assets

Profit/(loss) from ordinary activities afterincome tax

tax to the net cash flow from operations

(a) Reconciliation of Cash

- Impairment of exploration and evaluation costs

- Increase/(decrease) in provisions

- Equity Method-Joint Venture

Add/(less) non cash items:

is reconciled to the related items in the statement of financial position as follows:



- (Increase)/decrease in receivables

- Increase/(decrease) in trade creditors and accruals

(b) Reconciliation of the operating loss after

- Other

Changes in assets and liabilities:

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Options granted to key management personnel in prior periods as share-based payments are as follows:Exercise

Type Number PriceJohn Risinger Class A 5,000,000 $0.04

Class B 5,000,000 $0.04Class C 5,000,000 $0.045Class D 5,000,000 $0.05

Philip Suriano Class A 5,000,000 $0.04Class B 5,000,000 $0.04Class C 5,000,000 $0.045Class D 5,000,000 $0.05

estimated using the Black-Scholes option pricing model applying the following inputs:

At the weighted average exercise price: $0.045

Weighted average life of the options: 3.75 years

Expected share price violatility: 15%

Risk-free interest rate: 4.96%

The terms and conditions of these options when issued were as follows:

(a) Class A - give the optionholder the right to subscribe to one share;

(b) Class B - shall only vest and be exercisable upon the Company selling and shipping its first load of coal;

(c ) Class C - shall only vest and be exercisable upon the Company selling and shipping 500,000th tonne of coal; and

(d) Class D - shall only vest and be exercisable upon the Company selling and shipping its 1,000,000th tonne of coal.

No options have been issued during the current financial period.

Directors


The grant date fair value of these share based payments were measured using the Black-Scholes formula. Expected volatility is

No other Key Management Personnel have been issued options in the Company

8 December 2010



23. SHARE BASED PAYMENTS (CONTINUED)

Date of Grant Date of Expiry8 December 2010 31 July 2014

31 July 201631 July 2015


8 December 2010 31 July 20148 December 2010 31 July 2014


8 December 2010

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2013 2012$ $

Short-term employee benefits paid by JV Adavale Harner Resources 246,008 522,505Directors' fees paid by Adavale Resources Limited 10,000 96,000Remuneration paid byAdavale Resources Limited 99,000 0

Total 355,008 618,505

Directors’ transactions with the Company or its controlled entities

2013 2012$ $

14,500 131,919

4,874 -

73,165 50,888

0 20,711

20,000

controlled by Mr John Risinger for the reimbursement 61,268 138,340of travel costs during the year

Mr Phillip Suriano for the reimbursement of travel costs during the year

Fees paid to Arthur Phillip Pty Limited, a company

Consulting fees to E & M



The directors’ remuneration and equity holdings have been disclosed in the directors report attached to the financial statements.

Mr Roger Steinepreis is a partner, for the provision

company secretarial, administration, management

a material contract with the Company or the consolidated entity since the end of the previous financial year and there were no

Expenses paid to Entertainment Marketing

of legal services during the year

Consolidated

Apart from the details disclosed in this note and elsewhere in the financial report, no director or other related party has entered into

material contracts involving directors’ interests existing at year-end.

Fees paid to Steinepreis Paganin, a firm of which

Enterprise Pty Ltd, a company controlled by

controlled by Mr Richard Poole for provision of

The directors of Adavale Resources Limited are considered the key management personnel of the consolidated economic entity.

paid to Arthur Phillip Pty Ltd

and advisory services during the year

(a) The key management personnel compensation comprised:Consolidated

Expenses paid to Larca Pty Ltd, a company

24. RELATED PARTIES

Expenses, being reimbursement of travel costs

Directors’ and Key Management Personnel

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Salary and reimbursement of mobile phone paid to MsLeiny Haryono (spouse of Mr Haryono Eddyarto), being 172,531 112,999 the Chief Financial Officer of Adavale Harner Resources(Joint Venture) during the year. *

2013 2012$ $

- 29,716 11,194 27,266 75,000 8,800

- 13,200 86,194 78,982

On 31 July 2012, Mr Haryono Eddyarto, a director of Adavale Resources Limited, agreed to assume the Company's USD300,000financial obligation to Adavale Harner Resources (AHR), subject to BKPM (Indonesia Investment Coordinating Board) approval,which has subsequently been received.The Company agreed to immediately transfer to Mr Eddyarto 300 shares in Adavale Harner Resources (AHR) on receipt ofBKPM's approval and payment by Mr Eddyarto of USD300,000 direct to Adavale Harner Resources to complete the Company'sobligation. Following receipt of the funds, the AHR joint venture is 40% Adavale Resources Limited and 60% Mr Eddyarto.

The Company has not received neither during the year nor since year end any capital call by AHR, which has continued its recent Indonesian activities utilising funds advanced by Mr Haryono Eddyarto, Chairman of Adavale Resources Limited.

The Company also announced in July 2012 it had entered into a Convertible Loan Agreement with Mr Eddyarto to the value of $1 million (Loan), subject to Shareholder approval (subsequently received). As a consequence of entering into the Convertible Loan Agreement with Mr Eddyarto, the Company and Arthur Phillip Pty Ltd agreed to terminate the Convertible Loan Agreement announced on 15 October 2010. The 10,000,000 options issued to Arthur Phillip Pty Ltd for providing the loan were transferred toMr Eddyarto. The Company has drawn down $175,000 against this facility. The loan facility has a duration of 24 months.

Other related parties transactions

The amount owing to Larca relates to outstanding remuneration payable at the time of resignation of Mr Risinger since year end.

The terms and conditions of the transactions with directors and their director-related entities were no more favourable than those


Consolidated


24. RELATED PARTIES (CONTINUED)

In addition Mr Haryono Eddyarto and related persons have advanced US$ 317,051 to Adavale Harner Resources as at 30 June 2013. There is no interest or terms of repayment set for this advance.

Arthur Phillip Pty LimitedPayables (see note 12)

length basis.

* Ms Leiny Haryono salary and reimbursement of mobile phone charges were paid from Adavale Harner Resources (Joint Venture).

Steinepreis PaganinLarca Pty LimitedEntertainment Marketing Enterprise Pty Ltd

available, or which might reasonably be expected to be available, on similar transactions to non-Director-related entities on an arm’s

Directors’ balances with the Company or its controlled entities

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The Company agreed that following shareholder approval, the Company would allot and issue 60,000,000 options to Mr Eddyarto in consideraton for him becoming Chairman and on satisfaction by the Company of certain milestones. The 60,000,000options were subsequently issued by the Board however not within the one month timeframe allowed by the ASX Listing Rules.Approval is therefore to be re-obtained at the next AGM. If this approval is not given the options are to be cancelled.

The Company made neither profits nor losses for the year ended 30 June 2013, hence there is no proportional share of results



24. RELATED PARTIES (CONTINUED)

For the purpose of administering a number of associated companies, an administration company Norfolk Management Pty Ltd was

formed, with Adavale Resources Limited holding one share being 50% of the issued capital. The company operated solely as an

administrative function and recharges as an administrative fee for the share of administrative expenses incurred on behalf of Adavale

Transactions with associated company

Resources Limited. During the year $20,653 (2012 - $152,965) was paid to Norfolk Management Pty Ltd as administrative fees.

brought to account to the Company or Group financial statements. The management arrangement with Norfolk ceased in August

2012 and the share was disposed. Adavale has no continuing relationship with Norfolk.

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2013 2012$ $

Interest in joint venture entities - 200,568

Total Assets - 200,568

Interests in Joint Venture EntitiesOn 31 July 2012, Mr Haryono Eddyarto, a director of Adavale Resources Limited, agreed to assume the Company's USD300,000

financial obligation to Adavale Harner Resources, subject to BKPM (Indonesia Investment Coordinating Board) approval which has

subsequently been received. The Company agreed to immediately transfer to Mr Eddyarto 300 shares in Adavale Harner Resources

on receipt of BKPM's approval and payment by Mr Eddyarto of USD300,000 direct to Adavale Harner Resources to complete the

Company's obligation.

As from 1 July therefore the Group has owned a 40% interest (previously 60%) in PT Adavale Harner and is the only jointly

controlled entity within the Group. The interest in the joint venture is accounted for using the equity method of accounting. The

Group's share of the jointventure entity's results and financial position is as follows:

2013 2012$ $

Non current assets 68,361 436,758

Current assets 69,323 35,421

Total Assets 137,684 472,179

Non current liabilities -

Current Liabilities 1 (137,684) (16,773)

Total Liabilities 0 (16,773)

Income - -

Expenses 2 (200,568) (415,197)

Loss before income tax (200,568) (415,197)

The Group has not incurred any contingent liabilities or other commitments relating to its joint venture.

hence in 2013, only $200,568 was accounted for in Adavale, and the investment reduced to zero. Adavale have no obligation in

relation to further costs incurred. No call has been made by Adavale Harner Resources.

Note. Losses for the JV in the year totalled $960,906, however expenses were taken up only to the extent of the capital input,



25. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD


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No matters or circumstances have arisen since the end of the year which significantly affected or maysignificantly affect the operations of the Company, the results of those operations, or the state of affairs of the

Company in future financial years.

27. PARENT ENTITY FINANCIAL INFORMATION

(a) Summary financial information The individual financial statements for the parent entity show the following aggregate amounts:

2013 2012$ $

Balance SheetCurrent Assets 190,100 516,772Total Assets 1,370,100 8,193,394Current Liabilities 215,600 185,723Non Current Liability 175,000 0Total Liabilities 390,600 185,723

Shareholders' contributed equity 37,326,274 37,326,273Reserves 43,433 43,433Accumulated Losses (36,303,341) (29,362,035)

979,500 8,007,671

2013 2012$ $

Statement of Comprehensive IncomeTotal profit/(loss) (6,941,306) (993,523)Total comprehensive income/(loss) (6,941,306) (993,523)

26. EVENTS SUBSEQUENT TO REPORTING DATE




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(b) Contingent Liabilities of the ParentAdavale Resources Limited (ARL) has been cited, together with Mr J Risinger (as a Director of ARL and previously sole Directorof PT Prima Perkasa Abadi (PPA) as respondents in a civil claim lodged via the District Court of South Jakarta. The claim has been lodged by two previous shareholders of PPA, who have challenged the passing of ownership in the2011 transaction and its completion. The Directors believe there is no substance to the claim and will defend the claim. A legal opinion has been received to confirmthe Directors opinion.

(c ) Commitments The parent entity did not have any contractual commitment as at 30 June 2013.



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ADAVIIS RE8OUrcE8 LMIET)

DINECTCIN$ I'ECI"ARATION

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72

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10 Kings Park Road

West Perth WA 6005

PO Box 570

West Perth WA 6872

T +61 8 9480 2000

F +61 8 9322 7787

E [email protected]

W www.grantthornton.com.au

Grant Thornton Audit Pty Ltd ACN 130 913 594

a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the

context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm

is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and

are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its

Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.

Independent Auditor’s Report

To the Members of Adavale Resources Limited

Report on the financial report

We have audited the accompanying financial report of Adavale Resources Limited (the

“Company”), which comprises the consolidated statement of financial position as at 30 June

2013, the consolidated statement of profit or loss and other comprehensive income,

consolidated statement of changes in equity and consolidated statement of cash flows for

the year then ended, notes comprising a summary of significant accounting policies and

other explanatory information and the directors’ declaration of the consolidated entity

comprising the Company and the entities it controlled at the year’s end or from time to time

during the financial year.

Directors’ responsibility for the financial report

The Directors of the Company are responsible for the preparation of the financial report

that gives a true and fair view in accordance with Australian Accounting Standards and the

Corporations Act 2001. The Directors’ responsibility also includes such internal control as

the Directors determine is necessary to enable the preparation of the financial report that

gives a true and fair view and is free from material misstatement, whether due to fraud or

error. The Directors also state, in the notes to the financial report, in accordance with

Accounting Standard AASB 101 Presentation of Financial Statements, the financial

statements comply with International Financial Reporting Standards.

Auditor’s responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We

conducted our audit in accordance with Australian Auditing Standards. Those standards

require us to comply with relevant ethical requirements relating to audit engagements and

plan and perform the audit to obtain reasonable assurance whether the financial report is

free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial report. The procedures selected depend on the auditor’s

judgement, including the assessment of the risks of material misstatement of the financial

report, whether due to fraud or error. For

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In making those risk assessments, the auditor considers internal control relevant to the

Company’s preparation of the financial report that gives a true and fair view in order to

design audit procedures that are appropriate in the circumstances, but not for the purpose

of expressing an opinion on the effectiveness of the Company’s internal control. An audit

also includes evaluating the appropriateness of accounting policies used and the

reasonableness of accounting estimates made by the Directors, as well as evaluating the

overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide

a basis for our audit opinion.

Independence

In conducting our audit, we have complied with the independence requirements of the

Corporations Act 2001.

Auditor’s opinion

In our opinion:

a the financial report of Adavale Resources Limited is in accordance with the

Corporations Act 2001, including:

i giving a true and fair view of the consolidated entity’s financial position as at 30

June 2013 and of its performance for the year ended on that date; and

ii complying with Australian Accounting Standards and the Corporations

Regulations 2001; and

b the financial report also complies with International Financial Reporting Standards as

disclosed in the notes to the financial statements.

Emphasis of Matter

Without qualifying our opinion, we draw attention to Note 2(c) in the financial report which

indicates that the consolidated entity incurred a net loss of $4,384,636 during the year ended

30 June 2013 and, as of that date, the consolidated entity’s current liabilities exceeded its

current assets by $8,003. These conditions, along with other matters as set forth in Note

2(c), indicate the existence of a material uncertainty which may cast significant doubt about

the consolidated entity’s ability to continue as a going concern and therefore, the

consolidated entity may be unable to realise its assets and discharge its liabilities in the

normal course of business, and at the amounts stated in the financial report.

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Report on the remuneration report

We have audited the remuneration report included in pages 25 to 28 of the directors’ report

for the year ended 30 June 2013. The Directors of the Company are responsible for the

preparation and presentation of the remuneration report in accordance with section 300A of

the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration

report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s opinion on the remuneration report

In our opinion, the remuneration report of Adavale Resources Limited for the year ended

30 June 2013, complies with section 300A of the Corporations Act 2001.

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

J W Vibert

Partner - Audit & Assurance

Perth, 27 September 2013

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Additional information included in accordance with the Listing Rules of ASX Limited.

1. SHAREHOLDER INFORMATION(a) Distribution of holders at 25 September 2013

Number of HoldersDistribution is:

1 - 1,0001,001 - 5,0005,001 - 10,000

10,001 - 100,000100,001 and Over

parcel

(b) Voting rights There are no restrictions on voting rights attached to the ordinary shares. On a show of hands every member present in person shall have one vote and upon a poll, every member present or by proxy shall have one vote every share held.

(c ) Substantial shareholders (as at 25 September 2013) The Company’s register of substantial shareholders shows the following:

Shareholder Number of shares

Fully paid

468


ADDITIONAL INFORMATION

Mark Stevenson 21,254,314

218

Holding less than a marketable 818

%Haryono Eddyarto 84,154,541 26.55%

216 65 43

ordinary shares

6.70%Richard Poole 58,122,023 18.34%

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(d) Shareholders

RANK NAMENUMBER OF

SHARES% OF SHARES

ISSUED

1 84,154,541 26.55

2 58,122,023 18.34

3 19,333,333 6.10

4 7,628,333 2.41

5 6,749,468 2.13

6 6,000,000 1.89

7 5,361,501 1.69

8 4,039,334 1.27

9 3,888,545 1.23

10 3,666,666 1.16

11 3,393,830 1.07

12 3,371,336 1.06

13 3,355,864 1.06

14 2,228,407 0.70

15 2,222,223 0.70

16 2,000,000 0.63

17 1,980,099 0.62

18 1,865,648 0.59

19 1,776,549 0.56

20 1,678,781 0.53

222,816,481 70.29

The twenty largest shareholders hold70.29% of the total issued ordinary shares in the Company as at 25 September 2013.

SING CAPITAL PTY LTD

LARCA PTY LTD <THE RISINGER FAMILY A/C>

MR DAVID ARTHUR PAGANIN <D A PAGANIN FAMILY NO 2 A/C>

BIRKDALE NOMINEES PTY LTD <RISINGER SUPER FUND A/C>

RANCHLAND HOLDINGS PTYLTD

MR DENNIS VOSSOS + MRS ANGELA KOSTARAS-VOSSOS

ZERO NOMINEES PTY LTD

RDA ASSET MANAGEMENT LIMITED

GANRA PTY LTD <THE FLANNERY FAMILY A/C>

MR ANDREW MUIRHEAD SKIDMORE

MRS GERALDINE ANITA DUNN

MR HARYONO EDDYARTO

ARTHUR PHILLIP NOMINEES PTY LTD

HOLLOMAN VALUE HOLDINGS LLC

BYRON DEVESON SUPERANNUATION FUND PTY LTD <THE BYRON DEVESON S/F A/C>

BLUEKNIGHT CORPORATION PTY LTD

MR ALBERT SAYCHUAN CHEOK + MR ERIC VICTOR CHEOK

MR MARK E STEVENSON

PHEAKES PTY LTD <SENATE A/C>

MR WAYNE ANTHONY HAMBLION + MS DIANE LOUISE KENNEY <JOSHUAGEFFORY SUPERFUND A/C>

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(e) Restricted Securities There are no securities subject to escrow restrictions.

(f) Unquoted Equity Securities (as at 26 September 2013)

Options

Expiry 31 July 2014 and exercisable at $0.04






2. QUOTATION Listed securities in Adavale Resources Limited are quoted on the Australian Stock Exchange.


ADDITIONAL INFORMATION

10,000,000 100%

10,000,000 100%

10,000,000 100%

10,000,000 100%

10,000,000 100%

65,697,863 100%

Number on issue % held

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Documents

ADD Annual Financial report 30 June 2013 v5.xlsx (Read-Only) · ANNUAL FINANCIAL REPORT FOR THE YEAR ... is currently evaluating and undertaking a due diligence program on the ESE