In addition to the Directors' Report for the year ended 31 December 2011, dated 30 March 2012, the following information is provided for shareholders.

Also, the attention of shareholders and investors is drawn to the releases made by the Company to the ASX which provide information on the Company's activities. Such releases are accessible on the ASX website (under announcements for SXX) at www.asx.com.au and some releases may also be viewed on the company's website: www.sxxgroup.com (including this Annual Report, the Notice of Meeting and Proxy Form).

As implemented last year, a hard copy of the Company's Annual Report is only being mailed out to those shareholders who have requested to receive a copy. All shareholders are being mailed the Notice of Meeting for the Annual General Meeting and the Proxy Form.

SXX has a sound Balance Sheet and low gearing. Shareholders’ Funds have risen to $15,907,383 at balance date (see the Simplified Balance sheet - inside front cover), although, as can be seen in the accounts, losses are still being incurred. However, this is not unusual, especially for exploration companies, until either exploration is successful and production is achieved and/or a project is joint-ventured or realised.

As at 31 December 2011, the net tangible asset backing was 8.8 cents per share.

The Company's assets cover three main areas of interest: Uranium projects (one of which - the Bigrlyi Uranium Joint Venture - is at an advanced stage), Gold exploration projects in the Philippines and a Mortgage and Share Investment in a Fijian property company.

Such assets are not necessarily easily converted into cash; at the same time they could realise prices well above book values. Equally, on a "must sell now" or forced sale basis, it is likely that lower values could be realisable.

For patient investors, who take the old-fashioned medium-term view of the market and invest accordingly, a period of even three years could be considered reasonable. Today, however many investors (traders, really, by another name) look only at 3 days, 3 weeks or 3 months between short term and long-term.

The Issued Capital increased by 61,000,000 shares as a result of share placements made at 4 cents and 5 cents, as detailed in the accounts. At balance date, there were 180,000,000 ordinary fully paid shares on issue.

The Company's interest in the Bigrlyi Uranium Joint Venture, which is an advanced JORC-compliant mineral project, is classified in the accounts as "Investment in Joint Venture". The Bigrlyi project is located in the Ngalia Basin, northwest of Alice Springs, in the Northern Territory. It has relatively high uranium grades (with vanadium credits) and good metallurgical recoveries.

The Bigrlyi Uranium Joint Venture is an important investment which Southern Cross acquired as far back as 1981 in a purchase from the Commonwealth Atomic Energy Commission, which became a joint venture with a number of uranium pioneers of that era, like Central Pacific Minerals, Urangesellschaft, AGIP Nucleare and Offshore Oil N L et al. The project was subject to significant exploration activity in the period 1974 to 1983, when it was placed on care and maintenance where for many years, due to the anti-uranium policies under the "Three Mines Policy" of the Federal Government of the time. After positive changes in Government policy to uranium mining, Energy Metals Ltd (EME) obtained a majority interest in the project in November 2005 and became Operator.

In 2009 EME became a 60% subsidiary of one of the two largest Chinese nuclear power companies, China Guandong Nuclear Power Holding Co Ltd, holding a 53.3% interest - which has 6 operating nuclear power plants, with a further 15 under construction. Paladin Energy Ltd (PDN) (through a subsidiary) holds 41.7% and Southern Cross holds a 5% interest.

The following information is compiled from recent Reports of the Operator, Energy Metals Ltd (EME):

Several drilling programmes have been completed at Bigrlyi since 2005, with most holes intersecting significant uranium mineralisation. Uranium and vanadium resource models were successively calculated incorporating results from these drilling programmes. An up-dated Resource Estimate was released by the Operator in June 2011, which showed a total Indicated and Inferred Mineral Resource - at 250ppm U3O8
cut off - of 27 million pounds of uranium (U3O8) and 30.8 million pounds of vanadium (V2O5).

The resources were estimated by consultants Hellman & Schofield Pty Ltd (H&S) using the Multiple Indicator Kriging (MIK) method to estimate uranium resources and Ordinary Kriging (OK) to estimate vanadium resources.

Exploration and development activities carried out on the Bigrlyi Project during the year were designed to increase the resource base by targeting extensions of the mineralisation, along with obtaining core for further Metallurgical testing and Geotechnical evaluation. A pre-feasibility study was also completed during 2011.
The Operator has advised that a further update of the Resource Estimate is planned to be completed shortly.

Further information on the Bigrlyi Uranium Joint Venture Project, including metallurgical testwork, resource estimates and economic studies, may be obtained from the website of the Operator, Energy Metals - www.energymetals.net.

Southern Cross has for many years invested surplus funds in property, shares and other investment projects.

The Company's Mortgage Investment (SXX is a 50% joint mortgagee) is secured over freehold property in Fiji owned by Nadi Bay Beach Corporation Limited (NBBC). The mortgage comes up for review at various times and due to commercial and political considerations, it has been renewed by the Board as and when appropriate. However, as detailed in the Notice of Meeting, in view of a conflict perceived to exist by one shareholder and due to the recent change in the Board's composition, the Company is seeking shareholders' approval for the further extension of this mortgage.

The Company also has a 20% shareholding in the Fijian company which is the registered proprietor of the properties. The beachfront freehold land is zoned for Special Uses, related to tourism activities. It is suitable for the development of about 700 holiday apartments, hotels and a shopping centre. NBBC has recently appointed a Consultant in Fiji to progress development of these valuable beachfront properties.

The Company holds strategic investments in two listed entities - Longreach Oil Ltd (LGO) and Chapmans Ltd (CHP). LGO is concentrating on Oil and Gas, Coal and other Energy exploration. CHP has been operating in small scale investment projects, provision of venture capital and general investment. CHP also has two subsidiaries - Gladstone Development Pty Ltd (100%) and Hallmark Minerals N L (72%) - in which Southern Cross also has a 20% shareholding.

Southern Cross has given notice under the acquisition agreement that it would increase its interest in uranium exploration licences in Tanzania from 7% to 25% by the issue of 3 million shares. That transaction has not been settled and is awaiting finalisation of documentation.

The uranium tenements are situated in the highly prospective Mkuju River region of south-western Tanzania. They are underlain by Karoo Group sedimentary rocks in which uranium deposits of the sandstone-hosted tabular and roll front type have been discovered in South Africa, Malawi and Tanzania.

The tenements are located north of Mantra Resources’ Mkuju River Uranium Project. with Mineral Resources reported by Mantra of 101.4 million pounds of @ 422 ppm of U308. Last year, ARMZ, a wholly owned subsidiary of the Russian State Atomic Energy Corp., acquired all of the issued shares in Mantra for A$7.00 cash, when it reduced its original offer of $8 following the Japanese tsunami. This transaction imputed a value of A$9.00 per pound for U308 for the Mkuju River uranium resources.

Southern Cross believes the Mkuju River tenements are prospective for the discovery of economic uranium deposits and proposes to invite other entities to participate in the exploration and development of these areas.

The Company is still awaiting the issue of permits to explore on the two gold projects in the Philippines. Delays have unfortunately been encountered in obtaining the grant of the licences. These matters are being addressed by the local joint venture interests.

- BATANGAS PROJECT (10%)

In June 2011, Southern Cross exercised an option to acquire an initial 5% in the Batangas Gold Project, located in the Province of Batangas, some 110 km south of Manila, Island of Luzon, in the Philippines. On 1 September 2011, Southern Cross acquired a further 5% of the project upon the issue of
6 million shares. The Company’s wholly-owned subsidiary Northern Star Investments (Qld) Pty Ltd is the holding company for the group’s interest in the Batangas Gold Project.

The Batangas Gold Project consists of an MPSA and an EP Application covering an area of approximately 3,300 ha. Final documentation is awaited for the approval of EPA 115, and the evaluation of the MPSA Application is continuing.

Nearby projects to the Batangas Gold Project include the Taysan porphyry copper-gold deposit (just 6 km northeast of the Batangas tenements) acquired in 2010 by Crazy Horse Resources Inc, a Vancouver-based company, which has reported a favourable scoping study and increased mineral resources. Also, Mindoro Resources Ltd (listed on TSX-V) controls an area of some 29,000 ha which is located between 10 and 20 km to southeast of Batangas and which has similar geology, where a high grade mineral resource (66,920 oz of gold grading ~6 g/t Au) has been defined.

The geology of the Batangas property is considered a highly prospective, major gold exploration opportunity. Subject to confirmatory mapping and sampling, it is likely that the Ulanin breccia stock-work and the American Vein area could provide early drilling targets with potential for developing open pit mining resources.

- GOLD CROSS PROJECT (20%)

Southern Cross continues to hold a 20% interest in the Gold Cross Gold Project in the Philippines. This project is located in the Province of Bulacan about 100 kms north-east of Manila, on the main island of Luzon. Southern Cross can acquire an additional interest in the Gold Cross Gold Project by exercising its rights to purchase the balance of 80% in several tranches.

Royal Standard Group of Gold Mines, Woods Point, Victoria

Application by a joint venture in which Southern Cross had a 50% interest for the grant and/or the renewal of these tenements, near Woods Point, was refused some years ago, after long delays due to unresolved Native Title claims. The matter remains under review by the joint venture parties.

In October 2011, Southern Cross announced that it had agreed to acquire a sixty five percent (65%) interest in a Coal Exploration Licence located near Dubbo in central News South Wales. Following that announcement, a private company claimed a prior interest in the Licence, of which SXX was not aware, and commenced Court proceedings. Its claim was recently upheld. The Company is considering its position either to appeal that decision and/or it will seek to obtain at least a 30% interest in the Licence from the original Licence Holders.

The company maintains its 10% interest in two private companies based in Iran. Several exploration tenements with identified outcropping dolomite/magnesite deposits are held. Cheap power is available, which is vital for commercially successful magnesite and magnesium production. This project is being kept under review.

During the year, oil and gas exploration opportunities in Australia and overseas have been examined, with a view to direct participation.

Southern Cross retains an indirect interest in Oil and Gas exploration through its substantial shareholding in Longreach Oil Ltd (LGO), an ASX-listed company. LGO has a direct 50% interest in Petroleum Lease 280 in the Surat Basin, Queensland and also holds an 11% interest in three exploration permits in Western Australia. LGO also holds a 20% shareholding in unlisted Brisbane Petroleum Ltd (BPL) which held two Petroleum Leases - 18 and 40 - in the Surat Basin, with small oil production. In 2011, BPL sold its Oil and Gas interests to a Canadian/U.K. consortium which proposes to carry out development with drilling on the area as soon as practicable.

Southern Cross is participating in the promotion of an Oil and Gas Exploration and Investment company, Offshore Oil Ltd, which intends to acquire equity interests in Australian and overseas oil companies and to acquire direct interests in Oil and Gas and Energy joint ventures.

Shareholders interested in information on the Company's Exploration interests and activities should view the Company's Quarterly Reports when they are issued to the ASX, and the Company's website.

As shown in the Notice of Meeting, shareholders are being asked to vote in favour of a resolution authorising the placement of shares. Resolutions authorising placements of securities have been submitted for shareholders’ approval for some years. Such approvals have been utilised on only a few occasions and capital was raised when the market price appeared fair and reasonable to all parties. There are neither any specific plans to place securities nor are there any specific recipients identified. If any placements should be made, they would be done as advantageously as possible to ensure that existing shareholders are not disadvantaged. New capital raised would be utilised to fund existing and new exploration projects, for suitable investments, repayment of liabilities and for general purposes.

Since the end of the year, Mr Robert Adamson retired as a Director and Mr Eugene Ganke (the Chairman's son) was appointed as a non-executive Director. Eugene Ganke has a background in property management and his experience will be of assistance in dealing with the Company’s mortgage and investment in Fiji. Additional appointments of independent Directors are under consideration.

Due to the requirements of the Corporations Act, 2001, a new Auditor was appointed during the year, as the previous Auditor could not continue to act. The Company appointed CDTL Corporate Accountants (Mr Carl Dumbrell - Partner) as Auditor during the year and this appointment is being submitted for the approval of shareholders at the Annual General Meeting. The nomination of the Auditor from a member of the Company is set out on page 8 of the Annual Report.

In June 2011, an extraordinary General Meeting was requisitioned by a private shareholder group represented by T O Lebbon for the purpose of removing the Company's entire Board of three Directors and appointing three new Directors. A lot of unproductive work and expenditure resulted from calling that meeting, which was held last August 2011. The meeting rejected the requisitionists' proposals by a large majority.

Southern Cross Exploration N L was incorporated in 1970 and listed on the Sydney Stock Exchange in that year. All shares on issue are now fully paid ordinary shares (ASX code SXX). It has about 900 shareholders and is about 98% Australian-owned.

Exploration for oil and gas, gold, uranium and other metals and minerals has been its principal activity during those years. The Company also invested in property, loans, shares and other securities. In recent years, the Company has sought to obtain overseas exploration projects with early development potential.

The share price started moving up to the 5 cent range and looked a bit stronger early last year - and then the Japanese tsunami tragedy occurred. All stocks with uranium interests were badly affected by the consequences and the effects are on-going. Many experts believe that the price of uranium is set to recover as early as this year - and positive comments have been made in that regard, particularly by Mr John Borshoff, the Managing Director of Paladin Energy Ltd (PDN) (see the latest Quarterly Activities Report of PDN - on their website: www.paladinenergy.com.au). However, at present, there is no clear evidence that it is happening yet.

When that does occur, it is hoped that the Company's valuable investment in the Bigrlyi Joint Venture Uranium Project will be given proper recognition by the market and the Company's participation in its other projects will see renewed interest in the Company and its shares.

The Company is always open to examine opportunities for exploration, mining or investment projects in Australia and overseas, which could be joint ventured with other entities.