ASTRON LIMITED — Annual Report 2008

Aug 31, 2008

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PRELIMINARY FINAL REPORT GIVEN TO THE ASX UNDER LISTING RULE 4.3A

Name of entity
ASTRON LIMITED
ABN 97 000 285 272
Reporting period
30 June 2008			30 June 2007
Contents			Item 1. 2. 3. 3.1 3.2 3.3 3.4 3.5 3.6 3.7 4. 4.1 5. 5.1 5.2 6. 7. 8. 9.
Results for announcement to the market
Commentary on Results
Condensed Consolidated Income Statement
- Revenue
- Other income
- Expenses
- Individually Significant Items
- Amortisation and Impairment Expenses
- Capitalisation of Borrowing Costs
- Comparison of Half-Year Profits
Condensed Consolidated Balance Sheet
- Consolidated Retained Earnings
Condensed Consolidated Cash Flow Statement
- Reconciliation of Cash
- Non-Cash Financing and Investing Activities
Condensed Consolidated Statement of Changes in Equity
Net tangible assets per ordinary share Details of subsidiaries
Details of associates and joint venture entities

Registered Office: Level 19, 2 Market Street, Sydney NSW 2000, Australia Tel: 61 2 9984 1379 Fax: 61 2 9984 0279 www.astronchem.com

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Dividends	10.
Accounting Standards	11.
Other Information Regarding the Accounts	12.
Other Significant Information	13.
Significant Accounting Policies	14.

Registered Office: Level 19, 2 Market Street, Sydney NSW 2000, Australia Tel: 61 2 9984 1379 Fax: 61 2 9984 0279 www.astronchem.com

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1. RESULTS FOR ANNOUNCEMENT TO THE MARKET

		Revenue from continuing operations		up	n/a	%	to $ to $ to $ to $		10,627,126
		Profit(Loss) after income tax from continuing operations		down	45.2	%			(2,575,514)
		Profit(Loss) after income tax from discontinuing operations		up	783.8	%			116,701,480
		Net profit (loss) for the period attributable to members		up	898.3	%			114,125,966
		Dividendsper Share	Amount per share		Franked amount per share at …% tax
		Final	10 cents		Nil Cents
		Proposed payment date for the dividend			12 December 2008

Registered Office: Level 19, 2 Market Street, Sydney NSW 2000, Australia Tel: 61 2 9984 1379 Fax: 61 2 9984 0279 www.astronchem.com

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2. COMMENTARY ON RESULTS

The Directors were pleased that the settlement of the sale of the China zircon group being the four Chinese subsidiary companies to Imerys was completed on 4 February 2008 providing a tremendous platform for the group to develop its ongoing projects and build shareholder returns.

The net assets have been effected by:

• Profit from the sale of the China zircon Group and related hedge gain

• Impairment adjustments on Titanium Development expenses in accordance with the provisions of AASB 138 which is awaiting China government development approvals and Astron Board’s decision to proceed

• Gambian mining assets which were seized by the Gambian government and any recoverability is uncertain

• Dividends paid

• One off gain on the sale of the Bemax shares

Aside from the sale of the Zircon Group the results of the Zircon Sands business for the first half prior to the Imerys sale, was affected by ongoing cost increase of Government export tax rebate cancellation, freight and power increases and price increases for raw materials.

Registered Office: Level 19, 2 Market Street, Sydney NSW 2000, Australia Tel: 61 2 9984 1379 Fax: 61 2 9984 0279 www.astronchem.com

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3. CONDENSED CONSOLIDATED INCOME STATEMENT

3.		CONDENSED CONSOLIDATED INCOME STATEMENT
		Revenue from continuing operations -refer 3.1 below Other income -refer 3.2 below Expenses -refer 3.3 below Finance costs -refer 3.6 below Share of net profits(losses) of associates and joint venture entities	Current Period A$ Previous corresponding period A$
			10,627,126 -
			15,990,656 870,536
			(28,158,159) (2,320,908)
			- -
			(305,807) 27,851
		Profit(Loss) before income tax Income tax (expense) gain	(1,846,184) (1,422,521)
			(729,330) (350,759)
		Profit(Loss) for the period from continuing operations Profit(Loss) from discontinued operations	(2,575,514) (1,773 280)
			116,701,478 13,205,101
		Profit(Loss) for the year Profit(loss) attributable to minority interests	114,125,964 11,431,821
			- -
		Profit(loss)for theperiod attributable to members	114,125,964 11,431,821
		Basic Earnings Per Share Diluted Earnings Per Share Dividends Paid Per Share
			1.815 dollars 0.236 dollars
			1.815 dollars 0.236 dollars
			20 cents 10 cents

Registered Office: Level 19, 2 Market Street, Sydney NSW 2000, Australia Tel: 61 2 9984 1379 Fax: 61 2 9984 0279 www.astronchem.com

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NOTES TO THE CONDENSED CONSOLIDATED INCOME STATEMENT

3.1		Revenue from continuingoperations	Revenue from continuingoperations
		Revenue from Sales Revenue from Services Interest Revenue	Current Period A$ Previous corresponding period A$
			10,627,126 - - - 5,895,798 69,377
			16,522,924 69,377
3.2		Other income Net gain on disposal of property, plant and equipment Net gain on disposal of available-for-sale financial assets Hedge gain Other Income
			- -
			2,534,292 775,580
			7,159,906 -
			400,660 94,956
			10,094,858 870,536
		Expenses Cost of sales Distribution expenses Marketing expenses Occupancy expenses Administrative expenses Finance expenses Impairment of Capitalised expenditure Impairment of Gambian equity investment Other expenses
3.3
			10,008,930 - 367,988 - 36,988 28,566 4,426 - 4,562,237 2,292,042 - -
			6,848,818 -
			6,041,978 -
			286,794 300
			28,158,159 2,320,908

Note: Included in the above expenses disclosed by function are depreciation and amortization expenses amounting to $2,888,611 for 2008 and $2,064,268 for 2007.

Registered Office: Level 19, 2 Market Street, Sydney NSW 2000, Australia Tel: 61 2 9984 1379 Fax: 61 2 9984 0279

www.astronchem.com

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3.5 Amortisation and Impairment Expenses

Impairment of Capitalised expenditure Impairment of Gambian equity investment

	Current Period A$ Previous corresponding period A$ (6,848,818) - (6,041,978) -
	(12,890,796) -

3.6 Capitalisation of Borrowing Costs

N/A

3.7 Comparison of Half-Year Profits

3.7		Comparison of Half-Year Profits
		Consolidated profit(loss) after tax attributable to members reported for the 1st half yearly report Consolidated profit(loss) after tax attributable to members for the 2nd halfyear	915,239	7,378,636
			113,210,725	6,674,389

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Registered Office: Level 19, 2 Market Street, Sydney NSW 2000, Australia Tel: 61 2 9984 1379 Fax: 61 2 9984 0279 www.astronchem.com

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4. CONDENSED CONSOLIDATED BALANCE SHEET

4.		CONDENSED CONSOLIDATED BALANCE SHEET
					Current Period **A$' **	Previous corresponding period A$
		Current Assets
		Cash and cash equivalents			185,656,026	9,784,235
		Trade and other receivables			8,546,897	29,678,635
		Inventories			3,357,587	49,941,129
		Available-for-sale financial assets			-	6,199,305
		Total Current Assets			197,560,510	95,603,304
		Non-Current Assets
		Property, plant and equipment			15,648,380	21,732,918
		Deferred Tax			-	729,330
		Intangible assets			19,898,255	24,620,042
		Investments accounted for using the equity method			-	2,171,730
		Other			-	-
		Total Non-Current Assets			35,546,635	49,254,020
		TOTAL ASSETS			233,107,145	144,857,324
		Current Liabilities
		Trade and other payables			4,787,514	31,887,485
		Short-term borrowings			-	13,605,354
		Current tax liabilities			14,153,718	300,463
		Total Current Liabilities			18,941,232	45,793,302
		Non Current Liabilities
		Provisions			40,000	40,000
		Deferred Tax			-	1,076,649
		Total Non Current Liabilities			40,000	1,116,649
		TOTAL LIABILITIES			18,981,232	46,909,951
		NET ASSETS			214,125,913	97,947,373

Registered Office: Level 19, 2 Market Street, Sydney NSW 2000, Australia Tel: 61 2 9984 1379 Fax: 61 2 9984 0279

www.astronchem.com

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CONDENSED CONSOLIDATED BALANCE SHEET	CONDENSED CONSOLIDATED BALANCE SHEET
Equity
Contributed Equity	39,203,511	29,619,643
Reserves	53,074	(6,204,326)
Retained Earnings	174,869,328	72,830,286
Amounts recognised directly in equity in relation to assets classified as held for sale	-	1,701,770
Parent entity interest	214,125,913	97,947,373
Minority interests	-	-
Total Equity	214,125,913	97,947,373
NOTES TO THE CONDENSED CONSOLIDATED BALANCE SHEET
4.1 Consolidated Retained Earnings
	Current Period A$	Previous corresponding period A$
Retained Earnings at the beginning	72,830,286	67,230,677
of the financial period
Net profit (loss) attributable to members	114,125,964	11,431,821
Net transfers from (to) reserves	-	-
Net effect of changes in accounting policies	-	-
Dividends and other equity distributions paid or payable	(12,086,922)	(5,832,212)
Retained Earnings at the end of the financial period	174,869,328	72,830,286

Registered Office: Level 19, 2 Market Street, Sydney NSW 2000, Australia Tel: 61 2 9984 1379 Fax: 61 2 9984 0279 www.astronchem.com

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5. CONDENSED CONSOLIDATED CASH FLOW STATEMENT

				Previous
			Current Period	corresponding
			A$	period A$
	Cash flows related to operating activities
	Receipts from customers		92,754,254	180,324,436
	Payments to suppliers and employees		(76,314,318)	(184,203,172)
	Interest received		5,917,372	132,573
	Interest paid
			(825,647)	(1,221,842)
	Income taxes paid
			(97,664)	(1,503,550)
	Proceeds from hedgegain		7,159,906	-
	Net operating cash flows		28,593,903	(6,471,555)
	Cash flows related to investing activities
			(18,253,159)	(4,581,786)
			(1,615,319)	(3,016,708)
	Development costs		(746,897)	(4,897,988)
	Investment in joint venture entities		-	(976,242)
	Loans to Joint Venture entities		(46,027)	(925,251)
	Proceeds from sale of other financial assets		6,302,498	-
	Proceeds from sale of investments		170,011,278	(1,657,375)
	Net investing cash flows		155,652,374	(12,740,600)
	Cash flows related to financing activities
	Payment for sharebuy-back and cost of share issues		(498,696)	(13,031)
	Proceeds/(Repayment) from/of borrowings		(5,486,387)	11,018,266
	Dividendspaid		(2,265,351)	(1,107,491)
	Net financing cash flows		(8,250,434)	9,897,744
	Net increase (decrease) in cash held		175,995,843	(9,314,411)
	Cash at beginning of period -refer 5.1 below		9,784,235	20,783,975
	Exchange rate adjustments to cash at beginning		(124,052)	(1,685,325)
	ofperiod
	Cash at end of period -refer 5.1 below		185,656,026	9,784,235

Registered Office: Level 19, 2 Market Street, Sydney NSW 2000, Australia Tel: 61 2 9984 1379 Fax: 61 2 9984 0279

www.astronchem.com

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NOTES TO THE CONDENSED CONSOLIDATED CASH FLOW STATEMENT

5.1Reconciliation of Cash

				Previous
			Current Period	corresponding
			A$	period A$
	Cash on hand and at bank		185,656,026	9,784,235
	Total cash at end of period		185,656,026	9,784,235

5.2Non-Cash Financing and Investing Activities

On 4 February 2008 Astron settled the disposal of the four Chinese subsidiary companies to Imerys (Refer note 8.1).

Registered Office: Level 19, 2 Market Street, Sydney NSW 2000, Australia Tel: 61 2 9984 1379 Fax: 61 2 9984 0279 www.astronchem.com

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6.

6.
							Issued capital	Retained **earnings **	Other Reserves	Total
							24,279,368	67,230,674	3,192,745	94,702,787
		As at 1 July 2006
		Exchange differences on translation of foreign					-	-	(8,093,930)	(8,093,930)
		operations
							-	-	(42,650)	(42,650)
		Loss of available-for-sale financial assets
		Gains on disposal of available-for-sale financial assets credited to Income Statement					-	-	(775,580)	(775,580)
		Share of contributions by other Joint Venture party in investments accounted for usingthe equitymethod					-	-	1,216,859	1,216,859
		Total income and expense for the year recognised directly in equity					-	-	(7,695,301)	(7,695,301)
		Profit for theyear					-	11,431,821	-	11,431,821
		Total income and expense for theyear					-	11,431,821		11,431,821
		Shares issued duringtheyear					5,353,307	-	-	5,353,307
		Transaction costs					(13,031)	-	-	(13,031)
		Dividendspaid orprovided for					-	(5,832,212)	-	(5,832,212)
		Equity as at 30 June 2007					29,619,643	72,830,286	(7,695,301)	97,947,373
		As at 1 July 2007					29,619,643	72,830,286	(7,695,301)	97,947,373
		Exchange differences on translation of foreign operations					-	-	9,450,145	9,450,145
		Gains on disposal of available-for-sale financial assets credited to Income Statement					-	-	(1,701,770)	(1,701,770)
		Share of contributions by other Joint Venture party in investments accounted for usingthe equitymethod					-	-	-	-
		Total income and expense for the year recognised directlyin equity					-	-	7,748,375	7,748,375
		Profit for theyear					-	114,125,964	-	114,125,964
		Total income and expense for theyear					-	114,125,964		114,125,964
		Shares issued duringtheyear					10,082,565	-	-	10,082,565
		Transaction costs					(19,456)	-	-	(19,456)
		Shares bought back duringtheyear					(479,241)			(479,241)
		Dividendspaid orprovided for					-	(12,086,922)	-	(12,086,922)
		Equity as at 30 June 2008					39,203,511	174,869,328	53,074	214,125,913

Registered Office: Level 19, 2 Market Street, Sydney NSW 2000, Australia Tel: 61 2 9984 1379 Fax: 61 2 9984 0279

www.astronchem.com

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OTHER NOTES TO THE CONDENSED FINANCIAL STATEMENTS

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Previous
Current
corresponding
Period
period
NET TANGIBLE ASSETS PER ORDINARY
7. SHARE (NTA backing) 3.00 1.21
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8. DETAILS OF SUBSIDIARIES

Loss of Control of Entities During the 8.1 Period

On 4 February 2008 the group disposed of the Zircon group being 4 Chinese subsidiaries being:

• Astron Chemical Co Limited

• Tai Cang Astron Mining Products Co Ltd

• Yingkou Astron Mineral Resources Co Ltd

• Zibo Astron Advanced Materials Co Limited

				4 February
	profit(loss) has been calculated			2008
	Profit (loss) of the subsidiary (or group of entities) during the current period to the
	dateon which control was lost		$ 4,499,782
	Profit (loss) of the subsidiary (or group of entities) for thewhole of the previous
	corresponding period		$ 13,583,938

Control Gained Over Entities During the 8.2 Period

N/A

Registered Office: Level 19, 2 Market Street, Sydney NSW 2000, Australia Tel: 61 2 9984 1379 Fax: 61 2 9984 0279 www.astronchem.com

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9. DETAILS OF ASSOCIATES AND JOINT VENTURE ENTITIES

					Contribution to Net Profit
	Equity Accounted Associates and Joint
9.1	Venture Entities		%Ownership Interest
				Previous Corresponding Period %	Current Period A$
						Previous
						Correspon
			Current			ding
			Period %			Period A$
				50%
					(305,807)
	Carnegie Astron Joint Venture		50%			434,435

9.2 Aggregate Share of Profits(Losses) of Associates and Joint Venture Entities

				Previous Corresponding Period A$
			Current
	Group's Share of Associates and Joint		Period
	Venture Entities:		A$
				434,435 -
	Profit(Loss) before income tax		(305,807)
	Income tax expense		-
				434,435 -
	Net profit(loss)		(305,807)
	Adjustments		-
				434,435
	Share of net profit(loss) of associates and
	joint venture entities		(305,807)

Registered Office: Level 19, 2 Market Street, Sydney NSW 2000, Australia Tel: 61 2 9984 1379 Fax: 61 2 9984 0279 www.astronchem.com

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10. DIVIDENDS

					Franked		Amount per
					amount per		share of
			Amount per share
					share at …% f		oreign source
					tax		dividend
10.1	Dividends Paidper Share
						cents cents
	Final
	- current period		10	cents	Nil		10	cents
	- previous corresponding period		20	cents	Nil		20	cents

					Franked		Amount per
					amount per		share of
			Amount per share
					share at …% f		oreign source
					tax		dividend
10.1	Dividends Paidper Share
						cents cents
	Final
	- current period		10	cents	Nil		10	cents
	- previous corresponding period		20	cents	Nil		20	cents

				Previous
			Current	Correspon
			Period	ding
10.2	Total Proposed Dividends		A$	Period A$
	Final dividend payable on 12 December
	2008		6,466,754	12,086,922

				Previous
			Current	Correspon
			Period	ding
10.2	Total Proposed Dividends		A$	Period A$
	Final dividend payable on 12 December
	2008		6,466,754	12,086,922

All dividends reflected as distributions

above were paid during the period.

10.3 Dividend Reinvestment Plans

The Company runs a DRP the details are available from the Company Share Registry

11. ACCOUNTING STANDARDS

All applicable accounting standards have been applied in preparing this Appendix 4E

OTHER INFORMATION REGARDING THE 12, ACCOUNTS

The information contained in this Appendix 4E 12.1 is based on accounts which:

• have been audited

• are in the process of being audited X

• have not yet been audited

Registered Office: Level 19, 2 Market Street, Sydney NSW 2000, Australia Tel: 61 2 9984 1379 Fax: 61 2 9984 0279 www.astronchem.com

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12.2 Audit Disputes or Qualifications N/A

13. OTHER SIGNIFICANT INFORMATION N/A

14 Significant Accounting Policies

Accounting policies, estimation methods and measurement bases used in this Appendix 4E are the same as those used in the last annual report and the last half-year report.

Registered Office: Level 19, 2 Market Street, Sydney NSW 2000, Australia Tel: 61 2 9984 1379 Fax: 61 2 9984 0279 www.astronchem.com