110930 RAD 2011 Annual Report Final - ASXwork has continued throughout the period with the objective...

ACN 146 556 576

ANNUAL REPORT

for the period ended 30 June 2011

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RADAR IRON LTD ACN: 146 556 576

CONTENTS

CORPORATE INFORMATION ..................................................................................... 1

LETTER FROM THE CHAIRMAN .................................................................................. 2

DIRECTORS’ REPORT .............................................................................................. 3

CORPORATE GOVERNANCE STATEMENT .................................................................... 20

AUDITOR’S INDEPENDENCE DECLARATION ............................................................... 25

STATEMENT OF COMPREHENSIVE INCOME ................................................................ 26

STATEMENT OF FINANCIAL POSITION ...................................................................... 27

STATEMENT OF CHANGES IN EQUITY ....................................................................... 28

STATEMENT OF CASH FLOWS .................................................................................. 29

NOTES TO THE FINANCIAL STATEMENTS .................................................................. 30

DIRECTORS’ DECLARATION .................................................................................... 54

INDEPENDENT AUDIT REPORT ................................................................................. 55

ASX ADDITIONAL INFORMATION ............................................................................. 57

SCHEDULE OF MINING TENEMENTS ........................................................................ 60

This Annual Report covers Radar Iron Ltd (“Radar” or the “Company”) as a Group consisting of Radar Iron Ltd and its subsidiary, collectively referred to as the “Group”. The financial report is presented in Australian currency. Radar is a company limited by shares, incorporated and domiciled in Australia. It’s registered office and principal place of business is: Radar Iron Ltd Suite 2 12 Parliament Place West Perth WA 6005

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CORPORATE INFORMATION

Directors: Registered & Principal Office: Alan Tough Suite 2, 12 Parliament Place Non-Executive Chairman WEST PERTH WA 6005 Telephone: + 618 9482 0580 Jonathan Lea Facsimile: + 618 9482 0505 Managing Director Postal Address: Ananda Kathiravelu P.O. Box 902 Non-Executive Director WEST PERTH WA 6872 Home Stock Exchange: Company Secretary: Australian Securities Exchange Limited Phillip Wingate Exchange Plaza Morgan Barron 2 The Esplanade PERTH WA 6000 Auditors: MGI Perth Audit Services Pty Ltd ASX Code: Level 7, The Quadrant RAD 1 William Street RADO PERTH WA 6000 Share Registry: Bankers: Security Transfers Registrars Pty Ltd Westpac Banking Corporation 770 Canning Highway 108 Stirling Highway APPLECROSS WA 6153 NEDLANDS WA 6009 Website: www.radariron.com.au

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LETTER FROM THE CHAIRMAN Dear Shareholder On behalf of the Directors of Radar Iron Ltd (“Radar” or the “Company”), I am pleased to present the Annual Report of Radar Iron Ltd for the period ended 30 June 2011. In December 2010 the Company completed its initial public offering (IPO) which raised $6.8 million. The company immediately commenced exploration of its extensive tenement holdings in the Yilgarn Region of Western Australia. Since listing, the Company has completed 3 drill programmes. These programs were aimed at testing several hematite targets and the preliminary assessment of the metallurgical properties of the larger potential magnetite mineralisation. The resulting drill data provides information confirming that further drilling at hematite targets is warranted and for an initial resource estimate at the Die Hardy project. The extent of the large magnetite exploration target combined with encouraging metallurgical properties caused Radar to focus its efforts on the Die Hardy Range. Drilling work has continued throughout the period with the objective of establishing an initial resource estimate by the end of the calendar year. The company remains committed to identifying and defining hematite and magnetite resources within the 120,000 Ha of tenements most of which are close to existing hematite operations in the Yilgarn. This is an area that is rapidly being developed as the next major iron ore province in Western Australia. Following the resource statement at Die Hardy, Radar intends to complete project development studies at the Die Hardy Project, as well as continue exploration at Johnston Range and commence preliminary work on the Southern Cross Goldfields ground with which Radar holds the Iron Rights aimed specifically at defining hematite mineralisation. My fellow board members and I thank you for your support in the IPO of Radar and during the Company’s first year of life. Your Directors are committed to creating a successful company that rewards shareholders and are committed to progressing to being an iron ore producer in the future. We look forward to the continued support of shareholders in achieving these outcomes. Yours faithfully, Alan Tough Chairman F

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DIRECTORS’ REPORT Your Directors have pleasure in submitting their report on the Company and its subsidiaries, for the period from 21 September 2010 (date of incorporation) to 30 June 2011. DIRECTORS The names and details of Directors in office at any time during the period are: Alan Tough - Non Executive Chairman (appointed 25 October 2010) EXPERIENCE AND EXPERTISE Alan Tough has a distinguished career in business spanning over 40 years including more than 25 years managing publically listed companies. Alan has worked both domestically and internationally in the manufacturing, mining, finance, management and government sectors. Alan holds a mechanical engineering honours degree and an MBA from the University of WA. Recently held positions include his role as Manager of Project Development for Giralia Resources NL, responsible for DSO iron ore projects in the Pilbara and the Yerecoin magnetite project and Executive Director Operations of Polaris Metals NL prior to the Mineral Resources takeover earlier in 2010. Alan’s other current Board roles include Chairman of Scanalyse Pty Ltd, non-executive Director of Mrs Macs Pty Ltd and President of Westcare Incorporated. Alan has significant experience and understanding of strategic business planning, an extensive knowledge of international operations, an effective combination of engineering, banking, government service and broad management skills and a thorough knowledge of the governance requirements of listed companies at both management and Board levels. OTHER CURRENT DIRECTORSHIPS OF LISTED COMPANIES Nil OTHER DIRECTORSHIPS HELD IN LISTED COMPANIES IN THE LAST THREE YEARS Polaris Metals NL – Executive Projects Director (resigned 7 January 2010) Jonathan Lea - Managing Director (appointed 21 September 2010) EXPERIENCE AND EXPERTISE Jon has qualifications in geology, finance and mineral economics with 25 years’ experience in the resource industry. He recently held the roles as Technical Director and Managing Director of Polaris Metals Ltd until the takeover by Mineral Resources Ltd. During Jon's tenure, Polaris made significant iron ore discoveries in the central Yilgarn region commencing the development process towards mining and also advancing the Mayfield magnetite project. Prior to that Jon has had extensive experience in exploration, mining and project development. A qualified geologist from the University of Tasmania and a Member of the AusIMM, Jon also has post graduate qualifications in Mineral Economics and Applied Finance and Investment. He has worked with a number of commodities including iron ore, gold, tin, chromite and base metals throughout Australia and in Africa. OTHER CURRENT DIRECTORSHIPS OF LISTED COMPANIES Nil OTHER DIRECTORSHIPS HELD IN LISTED COMPANIES IN THE LAST THREE YEARS Polaris Metals NL – Executive Technical Director (resigned 7 January 2010)

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DIRECTORS’ REPORT (CONTINUED)

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Ananda Kathiravelu – Non-Executive Director (appointed 21 September 2010) EXPERIENCE AND EXPERTISE Ananda Kathiravelu has been in the financial services funds management and stock broking industries for over 20 years. He holds a Bachelor of Business and a Graduate Diploma of Applied Finance and Investment. Mr Kathiravelu is the Managing Director of Armada Capital Ltd, a corporate advisory company that has been involved in providing strategic corporate advice and services to listed and unlisted public companies including, Pryme Oil and Gas Ltd, CuDeco Ltd (formally known as Australian Mining Investments Ltd), Meridian Minerals Ltd (formally Bellevue Resources Ltd), Promesa Ltd, Mineq Ltd, Coronado Ltd and Intium Energy Ltd. His areas of expertise include corporate advice, capital raising, mergers and acquisitions. His focus is on the small cap resources and emerging business sectors. OTHER CURRENT DIRECTORSHIPS OF LISTED COMPANIES Transit Holdings Limited – Non-Executive Chairman Promesa Limited - Executive Director OTHER DIRECTORSHIPS HELD IN LISTED COMPANIES IN THE LAST THREE YEARS Pryme Oil and Gas Ltd Richard Monti – Non-Executive Director (appointed 21 September 2010, resigned 26 October 2010) COMPANY SECRETARY Phillip Wingate – appointed 15 October 2010 Phillip holds a Bachelor of Commerce Degree from Curtin University Australia, and is an Associate of the Institute of Chartered Accountants in Australia. After graduating from University, he started his career in commercial and management accounting with a large private construction group. Since 2008 Phillip has been involved in a number of company secretarial positions and ASX junior transactions. Phillip has been closely involved with the mining sector in Western Australia and has a strong financial and management reporting background. Morgan Barron - appointed 21 September 2010 Morgan Barron is a qualified Chartered Accountant who has worked in various corporate roles both in Australia and Europe. Mr Barron is a director of Corporate Advisory firm Ventnor Capital Pty Ltd and Ventnor Securities Pty Ltd which specialise in the provision of corporate and financial advice to junior resource companies. Whilst at Ventnor Capital Pty Ltd he has been involved in a number of director and company secretarial functions and ASX junior transactions. Mr Barron holds a Bachelor of Commerce Degree, is an Associate of the Securities Institute of Australia, and an Associate of the Institute of Chartered Accountants in Australia. After graduating from UWA he started his career at Horwath and then KPMG. Once qualified, he made the move to London where he gained experience in Banking and European acquisitions for a US listed Investment bank, providing him with a strong commercial, financial and management background.

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PRINCIPAL ACTIVITIES Radar Iron Ltd’s (“Radar” or the “Company”) principal activities are the exploration of iron ore in the central Yilgarn Iron Ore Province of Western Australia. RESULTS The net loss attributable to members of the Company for the period from 21 September 2010 (date of incorporation) to 30 June 2011 amounted to $581,730. The net loss relates to share based payments and administration costs relating to an ASX listed entity. DIVIDENDS There were no dividends paid or declared during the period. OPERATING AND FINANCIAL REVIEW Overview Radar is focused on identifying and defining hematite and magnetite resources in the central Yilgarn region of Western Australia. The Group has an extensive package of tenements situated nearby operating hematite mines in an area rapidly being developed as the next major iron ore province in Western Australia. Radar was listed on the ASX in December 2010. Following the Company’s successful float, Radar commenced exploration on its highly prospective tenement holding. Radar’s overall exploration objectives are:

• To define initial iron ore resources in 2011

• To continue exploration on the tenement holding to identify all potential targets and ensure continuity in drill testing opportunity

• To acquire as available new tenements prospective for iron ore that have potential to increase shareholder value

Since listing 3 drill programmes have been undertaken aimed at initial testing of some obvious hematite targets, to enable preliminary assessment of the metallurgical properties of the large potential magnetite mineralisation and at providing data for an initial resource estimate at the Die Hardy project. Results have provided encouragement for the presence of hematite mineralisation in the Johnston Range area and over 20 targets remain to be drill tested. Drilling has validated the magnetite mineralisation potential at both Johnston Range and the Die Hardy Range prospects. The Die Hardy project provided the greatest initial encouragement for a very large body with superior metallurgical properties and hence detailed drilling has been completed and resource estimation is planned for completion by November 2011. Other key areas of activities and developments since listing include:

• a helicopter supported magnetic survey over newly acquired tenements along with regional mapping aimed at new target identification

• A scoping study on the Die Hardy mineralisation producing encouragement to continue with a resource development programme

• A geophysical review of the Johnston Range magnetite potential indicating an exploration potential of billions of tonnes

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• Metallurgical studies for magnetite mineralisation for the Die Hardy and Johnston Range projects

• Flora studies to facilitate drill approvals

• Acquisition of Southern Cross Goldfields Ltd’s (SXG’s) iron mineralisation rights covering 913 km2

Target generation and drill testing is planned to continue along with feasibility studies aimed at discovering further mineralisation and bringing both hematite and magnetite resources into production as rapidly as possible.

Figure 1: Project Area

Exploration to June 2011 Johnston Range Three RC drilling campaigns were completed at Johnson Range:

1. Campaign 1 – in late 2010 with 9 holes completed for 1102m targeting magnetite.

2. Campaign 2 – drilled in February 2011 and comprised 20 holes for 1978m. The aim of the drilling was to provide geological and stratigraphic information, to test previously defined hematite targets and to obtain metallurgical samples from the magnetite targets.

3. Campaign 3 – drilled in April 2011 and comprised 11 holes for 1884m aimed at obtaining further samples for metallurgical analysis.

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Figure 2: Prospect Location Plan Hematite Targets Five hematite targets were tested in drilling campaign two, with the Rowling prospect returning the best results – 16m at 55.7% Fe. The Rowling results indicate that the banded iron formation (BIF) has been enriched in places to economic grades and that the potential to define economic hematite mineralisation in the Johnston Range project area remains high. Mapping between January and June at Johnston Range utilising a consultant mapping specialist confirmed the presence of enriched banded iron formations that form a number of hematite targets. Zones of surface hematite enrichment up to approximately 800m in length were identified. Assessment and prioritisation of these targets using both mapping and geophysical data has continued prior to drill testing. All approvals are now in place and drill testing of the targets is scheduled in the coming months. Approximately 3,000m of drilling will be sufficient to test 20 targets defined in the project area with follow up drilling envisaged to better define any mineralisation intercepted. The target size, as previously indicated, remains current with the potential for a number of 2-5Mt bodies of hematite being the most likely exploration outcome. The current expectation for hematite mineralisation in the Johnston Range area is for a number of relatively small bodies that will accumulate to provide a critical tonnage sufficient to justify mining.

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Figure 3: Johnston Range – Drill hole location

Magnetite Targets Three drilling campaigns have been completed at the Johnston Range project aimed at testing magnetite mineralisation. Given the extensive strike length (approximately 35km), geophysical targeting along with surface mapping has been used to identify the better zones to test initially. A substantial part of the area is yet to be drill tested. The aim has been to identify the widest and most continuous zones of magnetite mineralisation with the best metallurgical properties. A number of areas (eg the Shipley, Rowling and Muldoon prospects) have returned encouraging results with the best result being 160m at 33.3% Fe from Shipley. The results were highly encouraging with a number of zones identified with estimated thicknesses of 80-150m with grades consistently above 30% Fe. The potential length of each mineralised zone (Shipley, Lange, Muldoon and Rowling) is 4-5 km containing 3-4 BIF units oriented approximately parallel to each other within each zone. Testing has only been completed on one or two of the units at each location. A geophysical review of the aero-magnetic data covering its Johnston Range project was completed by independent geophysical consultants, Resource Potentials of Perth and was aimed at identifying areas in the 35km Johnston Range BIF with greater potential to host significant mineralisation and to better define exploration targets.

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The results were:

1. Primary Magnetite BIF: 4.0Bt - 6.7Bt at 20-45% Fe

2. Potential Enriched Material: 370Mt - 617Mt at 40-65% Fe

3. Total Exploration Potential: 4.4Bt - 7.3Bt at 20-65% Fe Radar Iron advises that the potential quantity and grade of iron deposits reported as exploration target potential is conceptual in nature and there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource. The huge potential resource size and results to date clearly justify further work. Metallurgical assessment is ongoing through Davis Tube Recovery (DTR) testing with consultancy firm Calibre Global being retained to review results and provide guidance for ongoing test work. This work, while continuing, has been slowed as the focus remains on the Die Hardy magnetite mineralisation. Further drilling is planned for 2012. Die Hardy Project The potential for a major body of magnetite mineralisation at the Die Hardy Range was indentified in 2010 through reconnaissance mapping. The prospect, approximately 3.4km long, was given the initial name of ‘Lara’. Two RC drill holes were completed in late 2010 to provide initial samples of the mineralisation for metallurgical testing. Both assay results and the preliminary metallurgical test work were highly encouraging. Further drilling was planned and a number of botanical surveys completed earlier in 2011 to facilitate drill approvals. Based on encouraging surface geology, drill hole data and metallurgical assessments, the Die Hardy Range magnetite was selected for the first resource drill out for Radar. Five drill sections, spaced nominally at 400m with holes 80m apart, are being drilled between May and September – 25 holes in total. This density of drilling should be sufficient to enable at least an Inferred Mineral Resource to be estimated and this work is scheduled for October/November this year. The RC drilling programme commenced in May 2011 with 21 holes drilled for 6,172m to the end of August 2011. Two kilometres of the 3.4km strike length is targeted in the initial drill campaign. The best result to date is 194m at 34.2% Fe. The drilling indicates a continuous body ranging in width from 100 to 300m and continuing to at least 300-400m below surface. Consultant group, Calibre Global, was engaged to coordinate metallurgical test work using material from the initial two drill holes. A grind size test was completed that produced recommendations for the optimum DTR process. The key recommendation was for a grind size of 80% passing 50 micron, a relatively coarse grind size. This procedure has been implemented for all recent DTR test work. DTR test work has been completed for 166, 4m long composite samples from the first four holes with highly encouraging results – mass recovery of 40%, concentrate grade of 69% Fe and silica averaging 4.1%. The exploration potential for the Die Hardy Range mineralisation has been estimated using surface geology, aeromagnetic data and the size and grade is indicated by the drilling as being:

0.7-1.2Bt at 29-33% Fe

Radar Iron advises that the potential quantity and grade of iron deposits reported as exploration target potential is conceptual in nature and there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource.

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The potential size of the Die Hardy Range magnetite mineralisation and highly encouraging metallurgical properties indicate that it has excellent potential to produce a saleable concentrate. RC drilling of approximately 2km of strike length will continue before resource estimation is undertaken. Radar intends to produce a maiden JORC compliant resource statement in October/November this year. A scoping study to identify key project drivers and infrastructure solutions for the Die Hardy Range project was completed in August 2011. The potential of the project was supported by the results of the study, which also identified credible production and transport solutions to meet the future transport, power and water requirements. Positive financial results for a range of production options of concentrate were identified. A key recommendation was to proceed with further drilling and development studies. Investors are advised that the Company does not represent that the results of the Scoping Study present an economically viable project as the assumptions used were based upon the Company’s previously announced exploration target and may not be considered sufficiently reliable. Further drilling and project development studies will be planned after the initial resource statement later in 2011.

Figure 4: Die Hardy Range – Prospect

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Figure 5: Die Hardy Range – Drill Hole Location over Magnetic Image

Figure 6: Die Hardy Range – Cross Section through Mineralisation

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Regional Exploration Regional geological reconnaissance was continued on existing Radar tenements and those recently acquired from Southern Cross Goldfields Ltd (SXG). A number of areas have been identified as containing outcropping hematite mineralisation and magnetite potential is widespread. Being a large holding with significant potential in a number of areas, Radar is using geophysical techniques along with field validation to define drill targets. While the ground has potential for both hematite and magnetite mineralisation, Radar intends to focus on identifying hematite targets in the first instance for drill testing later in 2011 and 2012. A helicopter borne aero-magnetic survey was flown in August 2011 over significant parts of the acquired tenure. This data will be used in conjunction with ground mapping and possible focussed gravity surveys to define hematite targets for future drill testing. One zone of potential hematite mineralisation has already been identified in the Evanston Project area adjacent to Johnson Range through ground reconnaissance. The zone is approximately 2 km long and lies along strike and on the same BIF unit that hosts the 20Mt+ Deception hematite deposit of Cliff’s Natural Resources and Mineral Resources Ltd to the south. 10 rock chip samples have returned assay grades averaging 60% Fe. Drill approvals are pending with the intent to drill test the zone when the hematite drill testing of the nearby Johnston Range hematite targets commences in coming months. Iron Rights Acquisition Radar has completed the agreement to acquire a significant package of iron ore rights from SXG in the central Yilgarn iron district of WA which was initially agreed in February 2011. The iron rights, covered by tenement holdings of 913 km2, more than triple Radar’s current land position (previously around 300 km2). SXG will continue to hold the tenement titles with Radar having the right to access, explore and exploit all iron and associated minerals. Over 80 linear kilometres of Banded Iron Formation (BIF) has been identified on the tenements. The ground has had limited exploration for iron mineralisation in the past and is considered highly prospective for direct shipping hematite ores and magnetite mineralisation. The acquisition was completed on July 4 with the signing of a joint mineral rights agreement to ensure compatible exploration and mining activity between Radar and SXG and to maximise potential synergies between the companies. Corporate Activities Radar was admitted to the Official List of ASX Limited on Friday 17 December 2010. Quotation of the securities commenced at 1:00pm AEDT (10:00 am WST), Tuesday 21 December 2010. The IPO closed with Radar Iron’s 495 new shareholders investing $6.8M, above the $6 million target. As discussed in the review of operations, since admission Radar has used its cash and assets of a form readily convertible to cash that it had at the time of admission in a way that is consistent with the objectives of the Company. Radar completed a non-renounceable rights issue of options on 2 May 2011. The Company issued 16,614,773 Options exercisable at 45 cents each expiring on 30 April 2012. A total of $332,295 was raised from the offer. Trading of the options commenced on the ASX on 3 May 2011. The shortfall from the offer which amounted to 4,011,931 was placed on 20 July 2011 with specific investors identified by the board. Radar’s cash position at the end of the period was $4.24 million.

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Financial Position The financial report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business. The Group has incurred a comprehensive loss after tax for the period ended 30 June 2011 of $581,730 had a net working capital surplus of $2,200,454 and experienced net cash outflows from operating activities of $348,355. Accordingly, the Directors believe that there are sufficient funds to meet the Group’s working capital requirements. However, in order to continue the Company’s planned exploration program or if one of the projects proceeds to the development phase, the Company will require further funding within the next 15 months. Should the Company be unable to raise sufficient funds, the planned exploration program may have to be amended and the development of the project may have to be deferred. The Board is confident in securing sufficient additional funding to provide working capital for at least the next 18 months. The Directors consider the going concern basis of preparation to be appropriate based on forecast cash flows and confidence in raising additional funds. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS There have been no significant changes in the state of affairs of the Group that occurred during the financial period not otherwise disclosed in this report or the financial statements. SIGNIFICANT EVENTS AFTER THE BALANCE DATE On 20 July 2011 the Company issued 4,011,931 listed options in relation to the shortfall from the entitlements issue completed in April 2011. The Company raised $80,238.62 from the issue. On 16 September 2011 the Company issued 300,000 options to employees of Radar in accordance with the Radar Iron Incentive Option Scheme. Other than as noted above and elsewhere in this report, no matters or circumstances have arisen since the end of the period which significantly affected or may significantly affect the operations of the Company or Group, the results of those operations or the state of affairs of the Company and Group in subsequent financial years. ENVIRONMENTAL REGULATION The Directors believe that the Group has, in all material respects, complied with all particular and significant environmental regulations relevant to its operations. The Group’s operations are subject to various environmental regulations under the Federal and State Laws of Australia. The majority of the Group’s activities involve low level disturbance associated with exploration drilling programs. Approvals, licences and hearings and other regulatory requirements are performed as required by the management of Radar for each permit or lease in which the Group has an interest.

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INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS During the financial period, the Company has paid a premium of $15,900 excluding GST to insure the Directors and secretary of the Company. The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of the Company, and any other payments arising from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the Company. DIRECTORS’ INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY As at the date of this report, the interests of the Directors in ordinary shares, listed and unlisted options of the Company were: Shares Options Director Held Directly Held Indirectly Held Directly Held Indirectly A. Tough 50,000 50,000 16,667 1,016,667 J. Lea - 350,000 - 2,116,668 A. Kathiravelu - - 1,000,000 - TOTAL 50,000 400,000 1,016,667 3,133,335 MEETINGS OF DIRECTORS During the financial period, 6 meetings of Directors were held with the following attendances:

Directors Meetings Attended

Meetings Eligible to

Attend A. Tough 6 6

J. Lea 6 6

A. Kathiravelu 6 6 REMUNERATION REPORT (AUDITED) This report outlines the remuneration arrangements in place for Directors and key management personnel of the Company for the period from 21 September 2010 (date of incorporation) to 30 June 2011. The information contained in this report has been audited as required by section 308(3C) of the Corporations Act 2001. The information provided includes remuneration disclosures that are required under Accounting Standard AASB 124 “Related Party Disclosures”. These disclosures have been transferred from the financial report. This remuneration report details the remuneration arrangements for key management personnel (“KMP”) who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, directly or indirectly, including any director (whether executive or otherwise) of the parent company, and includes those executives in the Parent and the Group receiving the highest remuneration.

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REMUNERATION REPORT (AUDITED) (CONTINUED) Key Management Personnel

(i) Directors: Mr Alan Tough (Chairman) Mr Jonathan Lea (Managing Director) Mr Ananda Kathiravelu (Non-Executive) Mr Richard Monti (Non-Executive) (resigned 26 October 2010)

Remuneration Policy The Company’s performance relies heavily on the quality of its Key Management Personnel. The Company has therefore designed a remuneration policy to align director and executive reward with business objectives and shareholder value. Executive reward is linked to shareholder value by providing a fixed remuneration component and offering specific long-term incentives based on key performance areas affecting the Group’s financial results. The Board believes the remuneration policy to be appropriate and effective in its ability to attract and retain high calibre management personnel and directors to run and manage the Group. Remuneration Structure In accordance with best practice corporate governance, the structure of non-executive director and executive remuneration is separate and distinct. Non-Executive Director Remuneration The Board policy is to remunerate non-executive Directors at market rates for comparable companies for time, commitment and responsibilities. The Board determines payments to the non-executive Directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to non-executive Directors is subject to approval by shareholders at the Annual General Meeting (currently $300,000). Fees for non-executive Directors are not linked to the performance of the Group. However, to align Directors’ interests with shareholder interests, the Directors are encouraged to hold shares in the Company and are able to participate in employee incentive option plans that may exist from time to time. Executive Remuneration Executive Remuneration consists of fixed remuneration and variable remuneration (comprising short-term and long-term incentive schemes). Fixed Remuneration All KMP’s are remunerated on a consultancy basis based on services provided by each person. The Board reviews KMP packages annually by reference to the Group’s performance, executive performance and comparable information from industry sectors and other listed companies in similar industries. The fixed remuneration of the Company’s KMP is detailed in the table below. Variable Remuneration The remuneration policy has been tailored to increase goal congruence between shareholders and directors and key management personnel. Currently, this is facilitated through the issue of options to key management personnel to encourage the alignment of personal and shareholder interests. The Company believes this policy will be effective in increasing shareholder wealth.

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REMUNERATION REPORT (AUDITED) (CONTINUED) Principles used to determine the nature and amount of variable remuneration: relationship between remuneration and company performance The overall level of executive reward takes into account the performance of the Group over a number of years, with greater emphasis given to the current and prior year. The main performance criteria used in determining the executive reward remuneration is increasing shareholder value through aligning the Company with high quality exploration assets. Due to the nature of the Group’s principal activities the Directors assess the performance of the Group with regard to the price of the Company’s ordinary shares listed on the ASX, and the market capitalisation of the Group. Directors and executives are issued options to encourage the alignment of personal and shareholder interests. Options issued to Directors may be subject to market based price hurdles and vesting conditions, and the exercise price of options is set at a level that encourages the Directors to focus on share price appreciation. The Company believes this policy will be effective in increasing shareholder wealth. Key Management Personnel are also entitled to participate in the employee share and option arrangements. On the resignation of Directors any vested options issued as remuneration are retained by the relevant party. For details of Directors and key management personnel interests in options at period end, refer Note 17(f) of the financial report. The Board may exercise discretion in relation to approving incentives such as options. The policy is designed to reward key management personnel for performance that results in long-term growth in shareholder value. The Company does not currently have a policy pertaining to Directors hedging their exposure to risks associated to the Company’s securities they receive as compensation. During the period the Board has not completed a performance evaluation for senior executives. This is expected to take place in 2012 financial year. Service Contracts Upon appointment to the Board, all non-executive Directors enter into a service agreement with the Company in the form of a letter of appointment. The letter summarises the policies and terms, including compensation, relevant to the office of Director. Remuneration and other terms of employment for the Managing Director are formalised in a service agreement. The agreement provides for the participation, when eligible in the Radar Iron Incentive Option Plan. Other major provisions of the agreement relating to remuneration are set out below. J Lea, Managing Director • Term of agreement – ongoing subject to annual review • Executive Salary of $250,000 per annum plus statutory superannuation, to be

reviewed annually by the Board. • Grant of Options in the Company on the following terms and conditions:

a. 1,000,000 Options at an exercise price of $0.25 on or before 30 November 2013; and

b. 1,000,000 Options at an exercise price of $0.30 on or before 31 May 2014. • Either party may terminate the contract by giving 3 months’ written notice. • On termination of the Employment Contract, the Executive is entitled to payment in

lieu of annual leave to which he has become entitled during employment but which has not been taken.

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REMUNERATION REPORT (AUDITED) (CONTINUED) Remuneration of Directors and Executives Details of the remuneration of the Directors and the key management personnel (as defined in AASB 124 Related Party Disclosures) of Radar Iron Ltd are set out in the following table. Key management personnel of Radar Iron Ltd

2011 Short Term Benefits Post

Employment Benefits

Share Based

Payments

Key Management Personnel

Salary and Fees

$

Non Monetary

$

Super-annuation

$ Options

$ Total

$

% of remuneration consisting of

options

Non-Executive Directors A. Tough 48,317 - - 45,300 93,617 48% A. Kathiravelu 24,693 - 2,222 45,300 72,215 63% R. Monti - - - - - - Executive Directors J. Lea 205,769 - 18,519 90,600 314,888 29% Total 278,779 - 20,741 181,200 480,720 37% Share-based compensation Details of the share based remuneration of the Directors and the key management personnel (as defined in AASB 124 Related Party Disclosures) of the Company are set out in the following table. Key management personnel of Radar Iron Limited – Share-based compensation

**********END OF REMUNERATION REPORT********** LIKELY DEVELOPMENTS Other than as disclosed elsewhere in this report, there are no likely developments in the operations of the Group that were not finalised at the date of this report. Further information as to likely developments in the operations of the Group and Company and likely results of those operations would in the opinion of the Directors, be likely to result in unreasonable prejudice to the Group. AUDITORS INDEPENDENCE DECLARATION The auditor’s independence declaration as required under section 307C of the Corporations Act 2001 for the period ended 30 June 2011 has been received and can be found on page 25.

2011 Granted Terms & Conditions for each Grant Vested

Directors No Granted Grant Date Fair Value at Grant Date

Exercise Price per Option Expiry Date Yes/No %

A. Tough 500,000 03/12/2010 $0.0443 $0.25 30/11/2013 Yes 100% 500,000 03/12/2010 $0.0463 $0.30 31/05/2014 Yes 100% J. Lea 1,000,000 03/12/2010 $0.0443 $0.25 30/11/2013 Yes 100% 1,000,000 03/12/2010 $0.0463 $0.30 31/05/2014 Yes 100% R. Monti - - - - - - - A. Kathiravelu 500,000 03/12/2010 $0.0443 $0.25 30/11/2013 Yes 100% 500,000 03/12/2010 $0.0463 $0.30 31/05/2014 Yes 100%

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AUDITOR MGI Perth Audit Services Pty Ltd was appointed as auditor on incorporation of the Company and continues in office in accordance with section 327 of the Corporation Act 2001. PROCEEDINGS ON BEHALF OF THE COMPANY No person has applied to the Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the period. SHARE OPTIONS Shares under Option At the date of this report there are 43,376,704 unissued shares under option outstanding.

Date Granted Expiry Date Exercise Price Number shares under option

*3 December 2010 30 November 2013 $0.25 20,375,000 *3 December 2010 31 May 2014 $0.30 2,375,000

29 April 2011 30 April 2012 $0.45 16,614,773 21 July 2011 30 April 2012 $0.45 4,011,931

16 September 2011 31 July 2014 $0.45 300,000 43,676,704

* Unlisted options These options do not entitle the holders to participate in any share issue of the Company or any other body corporate. During the period there were no ordinary shares issued as a result of the exercise of an option. NON-AUDIT SERVICES During the period the following fees were paid or payable for services provided by the auditor. Consolidated

2011 $

Amounts received or due and receivable by MGI Perth Audit Services Pty Ltd: An audit or review of the financial report of the parent and any other entity in the Group 20,000 Other services in relation to the parent and any other entity in the Group

- Assurance related 9,500 29,500 F

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Signed in accordance with a resolution of the Directors made pursuant to Section 298(2) of the Corporations Act 2001.

Jonathan Lea Managing Director Perth 30 September 2011 The information in this report accurately reflects information prepared by competent persons (as defined by the Australasian Code for Reporting of Mineral Resources and Ore Reserves). It is compiled by Mr Jonathan Lea, an employee of the Company who is a Member of The Australasian Institute of Mining and Metallurgy with the requisite experience in the field of activity in which he is reporting. Mr Lea has sufficient experience which is relevant to the style of mineralisation and the type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Lea consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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CORPORATE GOVERNANCE STATEMENT Radar Iron Ltd and the Board are committed to achieving and demonstrating the highest standards or corporate governance. The Board continues to review the framework and practices to ensure they meet the interests of shareholders. The Company has adopted systems of control and accountability as the basis for the administration of corporate governance. The Company and its Controlled Entity together are referred to as the Group in this statement. The Board is committed to administering the policies and procedures with openness and integrity, pursuing the true spirit of corporate governance commensurate with the Company’s needs. The Corporate Governance Statement has been structured with reference to the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations with 2010 Amendments 2nd edition to the extent that they are applicable to the Company. Information about the Company’s corporate governance practices are set out below. All of these practices have been put in place subsequent to the listing of the Company in December 2010. THE BOARD OF DIRECTORS The Company’s Constitution provides that the number of Directors shall not be less than three. There is no requirement for any shareholding qualification. If the Company’s activities increase in size, nature and scope, the size of the Board will be reviewed periodically and the optimum number of Directors required to adequately supervise the Company’s activities will be determined within the limitations imposed by the Constitution and as circumstances demand. The membership of the Board, its activities and composition is subject to periodic review. The criteria for determining the identification and application of a suitable candidate for the Board shall include quality of the individual, background of experience and achievement, compatibility with other Board members, credibility within the Company’s scope of activities, intellectual ability to contribute to Board duties and physical ability to undertake Board duties and responsibilities. Directors are initially appointed by the full Board, subject to election by shareholders at the next Annual General Meeting. Under the Company’s Constitution the tenure of a Director (other than Managing Director, and only one Managing Director where the position is jointly held) is subject to reappointment by shareholders not later than the third anniversary following his or her last appointment. Subject to the requirements of the Corporations Act, the Board does not subscribe to the principle of retirement age and there is no maximum period of service as a Director. A Managing Director may be appointed for the period and on any terms the Directors think fit and, subject to the terms of any agreement entered into, the appointment may be revoked on notice. The Company is not currently of a size, nor are its affairs of such complexity, to justify the formation of other separate or special committees at this time. The Board as a whole is able to address the governance aspects of the full scope of the Company’s activities and to ensure that it adheres to appropriate ethical standards. F

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CORPORATE GOVERNANCE STATEMENT (CONTINUED)

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INDEPENDENCE Given the Company’s present size and scope, it is currently not company policy to have a majority of independent Directors. Directors have been selected to bring specific skills and industry experience to the Company. The Board has an expansive range of relevant industry experience, financial, legal and other skills and expertise to meet its objectives. The current board composition includes one independent director and two non-independent directors. Mr Alan Tough is the current Non-Executive Chairman and is considered an independent director. When determining the independent status of each Director the board has considered whether the Director: - Is a substantial shareholder of the Company or an officer of, or otherwise associated

directly with, a substantial shareholder of the Company. - Is employed, or has previously been employed in an executive capacity by the

Company or another Group member, and there has not been a period of at least three years between ceasing such an employment and serving on the board.

- Has within the last three years been a principal of a material professional adviser or a material consultant to the Company or another Group member, or an employee materially associated with the services provided.

- Is a material supplier or customer of the Company or other Group member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer.

- Has a material contractual relationship with the Company or another Group member other than as a Director.

APPOINTMENTS TO OTHER BOARDS Directors are required to take into consideration any potential conflicts of interest when accepting appointments to other boards. INDEPENDENT PROFESSIONAL ADVICE The Board has determined that individual Directors have the right in connection with their duties and responsibilities as Directors, to seek independent professional advice at the Company’s expense. With the exception of expenses for legal advice in relation to Director’s rights and duties, the engagement of an outside adviser is subject to prior approval of the Chairman and this will not be withheld unreasonably. GENDER DIVERSITY The Company’s has not adopted an express policy specifically addressing achieving gender diversity. Due to the current limited size of the Board, the Board does not consider it necessary to have a gender diversity policy, but will consider adopting a policy in the future. Furthermore, the Company has not set any objectives for achieving gender diversity. Should a gender diversity policy be considered appropriate for the Company in the future due to increases in size of the organisation, the policy will specifically deal with the objectives for achieving diversity. The Company’s corporate code of conduct, provides a framework for undertaking ethical conduct in employment. Under the corporate code of conduct, the Company will not tolerate any form of discrimination or harassment in the workplace. The company currently has no women board members, senior executives or employees.

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CONTINUOUS REVIEW OF CORPORATE GOVERNANCE Directors consider, on an ongoing basis, how management information is presented to them and whether such information is sufficient to enable them to discharge their duties as Directors of the Company. Such information must be sufficient to enable the Directors to determine appropriate operating and financial strategies from time to time in light of changing circumstances and economic conditions. The Directors recognise that iron ore exploration are businesses with inherent risks and that operational strategies adopted should, notwithstanding, be directed towards improving or maintaining the net worth of the Company. CODE OF CONDUCT The Company has adopted a Code of Conduct for company executives that promotes the highest standards of ethics and integrity in carrying out their duties to the Company. The Code of Conduct can be found on the Company’s website at www.radariron.com.au. RISK MANAGEMENT SYSTEMS The identification and management of risk, including calculated risk-taking activity is viewed by management as an essential component in creating shareholder value. Management, through the Managing Director is responsible for developing, maintaining and improving the Company’s risk management and internal control system. Management provides the board with periodic reports identifying areas of potential risks and the safeguards in place to efficiently manage material business risks. These risk management and internal control systems are in place to protect the financial statements of the entity from potential misstatement, and the Board is responsible for satisfying itself annually, or more frequently as required, that management has developed a sound system of risk management and internal control. Strategic and operational risks are reviewed at least annually as part of the forecasting and budgeting process. The Group has identified and actively monitors risks inherent in the industry in which the Group operates. The Board also receives a written assurance from the Managing Director and Company Secretary that to the best of their knowledge and belief, the declaration provided to the Board in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control, and that the system is operating effectively in relation to financial reporting risks. The Board notes that due to its nature, internal control assurance from the Managing Director and Company Secretary can only be reasonable rather than absolute. This is due to such factors as the need for judgement, the use of testing on a sample basis, the inherent limitations in internal control and because much of the evidence is persuasive rather than conclusive and therefore is not and cannot be designed to detect all weaknesses in internal control procedures.

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ASX PRINCIPLES OF GOOD CORPORATE GOVERNANCE The Board has reviewed its current practices in light of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations with 2010 Amendments 2nd edition with a view to making amendments where applicable after considering the Company's size and the resources it has available. As the Company's activities develop in size, nature and scope, the size of the Board and the implementation of any additional formal corporate governance committees will be given further consideration. The following table sets out the ASX Corporate Governance Guidelines with which the Company does not comply: ASX Principle Reference/comment

Principle 2: Structure the Board to add value

2.1 A majority of the Board should be independent Directors

Given the Company’s present size and scope, it is currently not company policy to have a majority of independent Directors. Directors have been selected to bring specific skills and industry experience to the Company.

2.4 The Board should establish a nomination committee

Given the size of the Board there is no formal nomination committee. Acting in its ordinary capacity from time to time as required, the Board carries out the process of determining the need for, screening and appointing new Directors. In view of the size and resources available to the Company, it is not considered that a separate nomination committee would add any substance to this process.

Principle 3: Promote ethical and responsible decision-making

3.2 – 3.3 Companies should establish a policy concerning diversity

The Company does not have an express policy specifically addressing achieving gender diversity. Due to the current limited size of the Board, the Board does not consider it necessary to have a gender diversity policy, but will consider adopting a policy in the future. The Company’s Corporate Governance Plan includes a corporate code of conduct, which provides a framework for undertaking ethical conduct in employment. Under the corporate code of conduct, the Company will not tolerate any form of discrimination or harassment in the workplace.

Principle 4: Safeguard integrity in financial reporting

4.1 – 4.2 The Board should establish an audit committee

The Company does not have an Audit Committee. The Board believes that, with only 3 Directors on the Board, the Board itself is the appropriate forum to deal with this function.

Principle 8: Remunerate fairly and responsibly

8.1 The Board should establish a remuneration committee

Given the current size of the Board, the Company does not have a remuneration committee. The Board as a whole reviews remuneration levels on an individual basis, the size of the Company making individual assessment more appropriate than formal remuneration policies. In doing so, the Board seeks to retain professional services as it requires, at reasonable market rates, and seeks external advice and market comparisons where necessary.

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ASX Principle Reference/comment

8.3 Companies should clearly distinguish the structure of non-executive Directors’ remuneration from that of executive Directors and senior executives.

The Board acknowledges the grant of options to Non-Executive Directors is contrary to Recommendation 8.3 of the ASX Corporate Governance Principles and Recommendations. However, the Board considers the grant of Director Options to be reasonable in the circumstances, given the necessity to attract and retain the highest calibre of professionals to the Company, whilst maintaining the Company’s cash reserves.

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Lead auditor’s independent declaration under section 307C of the Corporations Act 2001 To the directors of Radar Iron Limited, I declare that, to the best of my knowledge and belief, in relation to the audit for the financial period ended 30 June 2011 there have been:

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

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

MGI Perth Audit Services Pty Ltd

TJ Spooner CA FCA(UK) ACIS Director Perth, 30 September 2011

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STATEMENT OF COMPREHENSIVE INCOME For the period 21 September 2010 (date of incorporation) to 30 June 2011

Consolidated

Note 2011

$

Finance income 4 160,751

Financial administration, insurance and compliance costs 125,010 Consultants and contractors 235,289 Depreciation 11 10,941 Employee benefits expenses 5 431,729 Write off of exploration expenditure 10 21,673 Other expenses 44,970

Loss before income tax expense (708,861)

Income tax (expense) benefit 7 127,131

Loss for the period (581,730) Other Comprehensive Income - Total Comprehensive Loss for the period (581,730) Loss attributable to: Owners of the parent entity (581,730) Total Comprehensive Loss attributable to: Owners of the parent entity (581,730)

Basic and Diluted Loss per share – cents per share 6 (1.68) The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

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STATEMENT OF FINANCIAL POSITION As at 30 June 2011

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

Note

Consolidated 30 June

2011 $

ASSETS Current assets Cash and cash equivalents 8 4,243,449 Other receivables 9 415,569

Total current assets 4,659,018

Non-current assets Exploration and evaluation expenditure 10 4,689,291 Plant and equipment 11 174,726

Total non-current assets 4,864,017

TOTAL ASSETS 9,523,035

LIABILITIES Current liabilities Trade and other payables 12 2,458,564

Total current liabilities 2,458,564

TOTAL LIABILITIES 2,458,564

NET ASSETS 7,064,471

EQUITY

Issued capital 14 6,355,930 Reserves 14 1,290,271 Accumulated losses (581,730)

TOTAL EQUITY 7,064,471

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STATEMENT OF CHANGES IN EQUITY For the period 21 September 2010 (date of incorporation) to 30 June 2011

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

Consolidated 2011

Note

Issued Capital

$

Option Reserve

$

Accumulated Losses

$

Total Equity

$

Total equity at the beginning of the period

- - - -

Total comprehensive loss for the period - - (581,730) (581,730)

Transactions with equity holders: Shares issued during the period:

Contributions of capital (net of capital raising costs)

14 5,944,121 - - 5,944,121

Issue of shares in relation to the acquisition of assets

18 411,809 - - 411,809

Options issued during the period: Listed options issued in relation to entitlements issue

14 - 332,295 - 332,295

Unlisted Options issued in relation to theacquisition of assets

18 - 37,200 - 37,200

Unlisted options issued in consideration for services

18 - 920,776 - 920,776

Total equity at 30 June 6,355,930 1,290,271 (581,730) 7,064,471

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STATEMENT OF CASH FLOWS For the period 21 September 2010 (date of incorporation) to 30 June 2011

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

Note

Consolidated 2011

$ Cash flows from operating activities Receipts from customers 106,847 Interest received 131,082 Payments to suppliers and employees (586,284) Net cash used in operating activities 15 (348,355)

Cash flows from investing activities Purchase of non-current assets (185,667) Payments for capitalised exploration expenditure (1,552,224) Payments for acquisition of prospects (550,000) Net cash acquired/(paid) on acquisition (102,321) Net cash used in investing activities (2,390,212)

Cash flows from financing activities Proceeds from issues of shares and options 7,655,195 Capital raising costs (673,179) Net cash flows provided by financing activities 6,982,016

Net increase in cash and cash equivalents 4,243,449 Cash and cash equivalents at the beginning of the period - Cash and cash equivalents at the end of the period 8 4,243,449

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NOTES TO THE FINANCIAL STATEMENTS For the period 21 September 2010 (date of incorporation) to 30 June 2011 NOTE 1: REPORTING ENTITY Radar Iron Ltd (the “Company”) is a company domiciled in Australia. The consolidated financial report of the Company as at and for the period to 30 June 2011 comprises the Company and its subsidiary (collectively referred to as the “Group”). A description of the nature of the Group’s operations and its principal activities is included in the review of operations and activities in the Directors’ report on page 5, which does not form part of this financial report. NOTE 2: BASIS OF PREPARATION This General Purpose Financial Report has been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board (including Australian Interpretations) and the Corporations Act 2001. The Consolidated Financial Statements and Notes of the Group comply with International Financial Reporting Standards (IFRS) and interpretations adopted by the International Accounting Standards Board. Radar Iron Ltd was incorporated in Australia on 21 September 2010 and is a company limited by shares. The financial report is presented in the functional currency of the Group, being Australian Dollars. This Consolidated Financial Report was approved by the Board of Directors on 29 September 2011. Financial Position The financial report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business. The Group has incurred a comprehensive loss after tax for the period ended 30 June 2011 of $581,730 had a net working capital surplus of $2,200,454 and experienced net cash outflows from operating activities of $348,355 Accordingly, the Directors believe that there are sufficient funds to meet the Group’s working capital requirements. However, in order to continue the Company’s planned exploration program or if one of the projects proceeds to the development phase, the Company will require further funding within the next 15 months. Should the Company be unable to raise sufficient funds, the planned exploration program may have to be amended and the development of the project may have to be deferred. The Board is confident in securing sufficient additional funding to provide working capital for at least the next 18 months. The Directors consider the going concern basis of preparation to be appropriate based on forecast cash flows and confidence in raising additional funds. Historical cost convention These financial statements have been prepared under the historical cost convention.

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NOTES TO THE FINANCIAL STATEMENTS For the period 21 September 2010 (date of incorporation) to 30 June 2011

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NOTE 3: SIGNIFICANT ACCOUNTING POLICIES The preparation of the financial reports requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates. The significant policies which have been adopted in the preparation of this financial report are: (a) Principles of Consolidation Subsidiaries The consolidated accounts comprise the assets and liabilities of Radar Iron Ltd and its subsidiaries at 30 June 2011 and the results of the subsidiary for the period then ended. A subsidiary is any entity controlled by Radar Iron Ltd. Subsidiaries are all those entities (including special purpose entities) over which the Company has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Company controls another entity. The financial statements of subsidiaries are prepared from the same reporting period as the Parent Company, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist. All inter-company balances and transactions, including unrealised profits arising from intra-entity transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered. Investments in subsidiaries are accounted for at cost in the individual financial statements of Radar Iron Ltd. Subsidiaries are consolidated from the date on which control is obtained by the Group and cease to be consolidated from the date on which control is transferred out of the Group. Where there is a loss of control of a subsidiary, the consolidated financial statements include the results for the part of the reporting period which Radar Iron Ltd has control. The acquisition of subsidiaries is accounted for using the acquisition method of accounting. The acquisition method of accounting involves recognising at acquisition date, separately from goodwill, the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree. The identifiable assets acquired and the liabilities assumed are measured at their acquisition date fair values (see note 1(h)). Common Control transactions are accounted for at the net asset value of the identifiable assets and liabilities of the acquired entity. This method of accounting involves recognising at acquisition date, the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree. The consideration paid is valued at the net asset value of the identifiable assets and liabilities of the acquired entity, in accordance with these principles to ensure no profit or loss is accounted for in either the acquirer or the seller. The identifiable assets acquired and the liabilities assumed are measured at their acquisition date fair values (see note 1(h)). A change in the ownership interest of a subsidiary that does not result in a loss of control is accounted for as an equity transaction.

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NOTE 3: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (a) Principles of Consolidation (continued) Non-controlling interests are allocated their share of net profit after tax in the statement of comprehensive income and are presented within equity in the consolidated statement of financial position, separately from the equity of the owners of the Company. Losses are attributed to the non-controlling interest even if that results in a deficit balance. If the Group loses control over a subsidiary, it:

• Derecognises the assets (including any goodwill) and liabilities of the subsidiary. • Derecognises the carrying amount of any non-controlling interest. • Derecognises the cumulative translation differences, recorded in equity. • Recognises the fair value of the consideration received. • Recognises the fair value of any investment retained. • Recognises any surplus or deficit in profit or loss. • Reclassifies the parent's share of components previously recognised in other

comprehensive income to profit or loss. (b) Segment Reporting An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity), whose operating results are regularly reviewed by the entity's chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available. This includes start up operations which are yet to earn revenues. Management will also consider other factors in determining operating segments such as the existence of a line manager and the level of segment information presented to the board of directors. Operating segments have been identified based on the information provided to the chief operating decision makers – being the board of directors. The group aggregates two or more operating segments when they have similar economic characteristics, and the segments are similar in the nature of the minerals targeted. Operating segments that meet the quantitative criteria as prescribed by AASB 8 are reported separately. However, an operating segment that does not meet the quantitative criteria is still reported separately where information about the segment would be useful to users of the financial statements. Information about other business activities and operating segments that are below the quantitative criteria are combined and disclosed in a separate category for “all other segments”. (c) Income Tax The income tax expense or benefit for the year is the tax payable on the current year’s taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.

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NOTE 3 – STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (c) Income Tax (continued) Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity. (d) Goods and Services Tax Revenues, expenses and assets are recognised net of the amount of goods and services tax (“GST”), except where the GST incurred on a purchase of goods and services is not recoverable from the taxation authorities, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense item as applicable and receivables and payables in the balance sheet are shown inclusive of GST. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet. Cash flows are included the Cash Flow Statement on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority. F

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NOTE 3 – STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (e) Trade and Other Receivables Trade and other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to another party with no intention of selling the receivables. They are included in current assets, except for those with maturities greater than 12 months after the balance date which are classified as non-current assets. Trade and other receivables are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method, less any impairment losses. (f) Exploration, Evaluation and Development Expenditure

Exploration, evaluation and development expenditure incurred is either written off as incurred or accumulated in respect of each identifiable area of interest. Costs are only carried forward to the extent that right of tenure is current and those costs are expected to be recouped through the successful development of the area (or, alternatively by its sale) or where activities in the area have not yet reached a stage which permits reasonable assessment of the existence of economically recoverable reserves and above operations in relation to the area are continuing. Accumulated costs in relation to an abandoned area are written off in full against profit in the period in which the decision to abandon the area is made.

When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. (g) Property, Plant and Equipment Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the items. Repairs and maintenance are charged to the statement of comprehensive income during the reporting period in which they were incurred. Depreciation is calculated using the straight-line method to allocate asset costs over their estimated useful lives, as follows: • Computer equipment 3 years • Software 3 years • Plant & equipment 5 years Each asset’s residual value and useful life is reviewed, and adjusted if appropriate, at each balance sheet date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the income statement.

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NOTE 3 – STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (h) Business Combinations The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. Cost is measured as the fair value of the assets given, securities issued or liabilities incurred or assumed at the date of exchange plus costs directly attributable to the acquisition. Where equity instruments are issued in an acquisition, the fair value of the instruments is their published market price as at the date of exchange unless, in rare circumstances, it can be demonstrated that the published price at the date of exchange is an unreliable indicator of fair value and that other evidence and valuation methods provide a more reliable measure of fair value. Transaction costs arising on the issue of equity instruments are recognised directly in equity. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the Group's share of the fair value of the identifiable net assets of the subsidiary acquired, the difference is recognised directly in the income statement, but only after a reassessment of the identification and measurement of the net assets acquired. (i) Impairment of Non-Financial Assets Where an indicator of impairment exists, the Group makes a formal estimate of the recoverable amount. Where the carrying amount of an asset or cash generating unit exceeds its recoverable amount the asset or cash generating unit is considered impaired and is written down to its recoverable amount. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets or groups of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”). Subject to an operating segment ceiling test, for the purposes of goodwill impairment testing, CGUs to which goodwill has been allocated are aggregated so that the level at which impairment is tested reflects the lowest level at which goodwill is monitored for internal reporting purposes. Goodwill acquired in a business combination is allocated to groups of CGU’s that are expected to benefit from the synergies of combination. (j) Share-Based Payments The Group has provided payment to service providers and related parties in the form of share-based compensation, whereby services are rendered in exchange for shares or rights over shares (‘equity-settled transactions’). The cost of these equity-settled transactions is measured by reference to the fair value at the date at which they are granted. The fair value is determined using an appropriate option valuation model for services provided by employees or where the fair value of the shares received cannot be reliably estimated.

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NOTE 3 –SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (j) Share-Based Payments (continued) For goods and services received where the fair value can be determined reliably the goods and services and the corresponding increase in equity are measured at that fair value. The fair value of the options granted is adjusted to reflect market vesting conditions, but excludes the impact of any non market vesting conditions. Non market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. At each balance sheet date, the entity revises its estimates of the number of options that are expected become exercisable. The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant parties become fully entitled to the award (‘vesting date’). The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the number of awards that, in the opinion of the Directors of the Group, will ultimately vest. This opinion is formed based on the best available information at balance date. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date.

Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the modification, as measured at the date of modification. (k) Cash and Cash Equivalents Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less. For the purposes of the statement of cash flows cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. (l) Finance income and expense Finance income comprises interest income on funds invested, gains on disposal of financial assets and changes in fair value of financial assets held at fair value through profit or loss. Finance expenses comprise changes in the fair value of financial assets held at fair value through profit or loss and impairment losses on financial assets. Interest income is recognised as it accrues in profit or loss, using the effective interest rate method. (m) Issued Capital Ordinary shares are classified as equity. Issued and paid up capital is recognised at the fair value of the consideration received by the Company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.

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NOTE 3 –SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (n) Earnings per Share i) Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year. 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 income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number

110930 RAD 2011 Annual Report Final - ASXwork has continued throughout the period with the objective...

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Transcript of 110930 RAD 2011 Annual Report Final - ASXwork has continued throughout the period with the objective...