ASTRON LIMITED — Annual Report 2009

Aug 18, 2009

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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 periodyear ended				Previous corresponding period
30 June 2009				30 June 2008
Contents					Item
Results for announcement to the market					1.
Commentary on results					2.
Condensed Consolidated Income Statement					3.
- Revenue from continuing operations				3.1
- Other income				3.2
- Expenses included in loss before tax				3.3
- Amortisation and impairment expenses				3.4
- Comparison of Half-Year Profits				3.5
Condensed Consolidated Balance Sheet					4.
- Consolidated Retained Earnings				4.1
Condensed Consolidated Cash Flow Statement					5.
- Reconciliation of Cash				5.1
Condensed Consolidated Statement of Changes in Equity					6.
Net tangible assets per ordinary share					7.
Details of subsidiaries					8.
Details of associates and joint venture entities					9.
					10.
Dividends

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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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	down	35.5 %	to $ 10,657,159
(Loss) after income tax from continuing operations			to $ (7,557,871) to $ 5,059,069
	up	193.5 %
Profit after income tax from discontinuing operations Net (loss) for the period attributable to members
	down	95.6 %
			to $ (2,498,802)
	up	102.2 %
	Amount per share	Franked amount per share at n/a…% tax
Dividendsper Share
Final	Nil cents	Nil Cents
Proposed payment date for the dividend		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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2. COMMENTARY ON RESULTS

OVERVIEW OF THE GROUP

Astron Limited (Astron) is the group holding company. Astron has three wholly owned operating subsidiaries, namely: Donald Mineral Sands Pty Limited (Donald), Yingkou Mineral Resources Company Limited (Resources) and Astron Titanium (Yingkou) Company Limited (Titanium). Donald holds the Donald Mineral Sands mining project. Resources and Titanium are Astron’s Chinese operating companies.

Based in China over the last 22 years, the group was built up to become the largest zirconium chemical producer in the world with sales branches across China and globally. In 2008 Astron sold its China Zirconium business and infrastructure to Imerys. Subsequent to this disposal Astron has proceeded to consolidate its remaining business, rebuild its infrastructure and review its strategic direction. These have been its main objectives in the 2009 financial year.

OPERATIONAL UPDATE

During the year under review Astron received Commonwealth Government Environmental approval to mine and process fine grade mineral sands for the Donald Mineral Sands project.

As a result of the global financial crisis and structural changes in the market, Astron is revising and completing the feasibility studies of its current projects, including the Donald Mineral Sands project and the Zirconium oxychloride and Zirpqaque processes. After the completion of updated feasibility studies, the next stage in the development will be the completion of the definitive engineering compilation and the setting up of a trial mining site as part of the Donald project. This will generate feedstock to be utilised in trials.

During the year, through Astron’s research and development capability, work continued on the development of zircon, ilmenite, rutile and related products. These processes could provide significant potential for new business opportunities. Astron has continued its feasibility work on its processes for the cost effective production of titanium metal. Currently, drawings for the furnace designs and the new technology flowcharts are being completed. In China we are in the process of completing environmental approval applications for a plant for the manufacture of titanium dioxide (Ti02). The TiO2 pigment project will be first in China to use overseas technologies. We are also planning to construct a mineral separation plant to separate heavy minerals concentrate into its titanium, zircon and other materials.

Given that most of the group’s infrastructure was sold to Imerys, Astron’s internal systems, controls and reporting systems in both Australia and China needed to be re-established. In addition to replacing the previous systems, enhancements have been made including improving internal control processes, weekly treasury reporting and other reporting and to governance procedures.

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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FINANCIAL COMMENTARY

Balance Sheet

As at 30 June 2009, the group has $169 million of cash on the balance sheet. During the year under review, cash was utilised to, inter alia, pay a dividend of 10 cents per share to shareholders, final settlement of the liability in respect of the sale to Imerys, re-purchase Astron shares and the planned construction of the mineral separation plant. Receivables have decreased during the year due to strong collections and improved debtor management.

Titanium continues to hold the leasehold rights to the property in Yingkou which will be used to develop Astron’s titanium metal and TiO2 projects. The Donald Mineral Sands project is accounted for in terms of AASB 6 - Exploration for and Evaluation of Mineral Resources. This asset is accordingly shown as cost with expenditure incurred capitalised.

Income Statement

Sales revenue comprises sales of zircon, rutile and titanium products. Interest received increased due to holding cash for a longer period than last year. Astron is retaining a prudent approach to investing its cash resources.

In addition to administration expenses, expenses include the impairment of and expenditure on Astron’s investments in its Senegal and Gambian operations and its impairment of available for sale share investments. Astron is claiming damages from the Gambian government for the expropriation of its mining rights. Included in the pre-tax loss from continuing operations of $4,675,171 are expenses relating to Gambia and impairments amounting to $4,749,575.

The gain on discontinued operations predominantly represents the finalisation of the indemnification provision booked in the June 2008 accounts in respect of the disposal to Imerys as Astron has been able to more accurately quantify the current position as at 30 June 2009.

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	CONDENSED CONSOLIDATED INCOME STATEMENT
			Current Period A$	Previous corresponding period A$
	Revenue from continuing operations -refer 3.1 below		10,657,159	16,524,424
	Other income -refer 3.2 below		76,102	10,093,358
	Expenses -refer 3.3 and 3.4 below		(15,355,772)	(28,158,160)
	Share of net losses of associates and joint venture entities		(52,660)	(305,807)
	Loss before income tax		(4,675,171)	(1,846,185)
	Income tax expense		(2,882,700)	(729,330)
	Loss for the period from continuing operations		(7,557,871)	(2,575,515)
	Profitfromdiscontinued operations		5,059,069	114,462,802
	(Loss)/profit for the year attributable to members		(2,498,802)	111,887,287
	Basic (Loss)/Earnings Per Share (cents)		(3.9)	181.5
	Diluted (Loss)/Earnings Per Share (cents)		(3.9)	181.5
	Dividends Paid Per Share (cents)		10.0	20.0

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

	NOTES TO THE CONDENSED CONSOLIDATED INCOME STATEMENT	NOTES TO THE CONDENSED CONSOLIDATED INCOME STATEMENT	NOTES TO THE CONDENSED CONSOLIDATED INCOME STATEMENT	NOTES TO THE CONDENSED CONSOLIDATED INCOME STATEMENT
3.1	Revenue from continuing operations
			Current Period A$	Previous corresponding period A$
	Revenue from sales		3,777,286	10,627,126
	Interest revenue		6,840,857	5,895,798
	Rental revenue		39,034	1,500
			10,657,159	16,524,424
3.2	Other income
	Gain on foreign exchange		30,325	92,332
	Net gain on disposal of available-for-sale financial assets		-	2,534,292
	Hedge gain		-	7,159,906
	Other Income		45,779	306,828
			**76,102 **	10,093,358
3.3	Expenses included in loss before tax
	Cost of sales		3,412,730	10,008,930
	Interest paid			990,636
	Foreign currency translation losses(gains)		1,318,974	(92,332)
	Bad & doubtful debts – trade receivable		-	11,139
	Premises – contractual amounts		227,222	230,965
	Research & development costs		15,373	250,477
	Depreciation		282,301	2,882,070
	Superannuation		114,081	131,729
	Employee benefits		1,176,407	3,562,331
	Share based payments		-	260,994
	Costs associated to Gambia investment		1,851,719	-
3.4	Amortisation and Impairment Expenses
			Current Period A$	Previous corresponding period A$
	Impairment of stock		962,036	501,270
	Impairment of capitalised expenditure		583,683	6,848,818
	Impairment of available for sale assets		812,350	-
	Impairment of Gambia equity investment		-	6,041,978
	Impairment of Senegal development expenditure		539,787	-
			2,897,856	13,392,066

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	Comparison of Half-Year Profits
	Consolidated profit after tax attributable to members reportedforthefirsthalfyearlyreport		5,830,233	915,239
	Consolidated (Loss)/Profit after tax attributable to membersforthe secondhalfyear		(8,329,035)	110,972,048
			(2,498,802)	111,887,287

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
		Previous corresponding period A$
	Current Period A$
Current Assets
Cash and cash equivalents	168,816,405	185,656,025
Trade and other receivables	2,463,961	8,423,480
Inventories	2,884,393	3,357,587
Available-for-sale financial assets	1,099,736	-
Total Current Assets	175,264,495	197,437,092
Non-Current Assets
Property, plant and equipment	8,998,671	6,639,252
Intangible assets	20,471,305	19,898,255
Land use rights	10,770,472	9,009,128
Total Non-Current Assets	40,240,448	35,546,635
TOTAL ASSETS	215,504,943	232,983,727
Current Liabilities
Trade and other payables	1,664,573	6,868,781
Current tax liabilities	920,986	14,154,348
Provisions	100,000
Total Current Liabilities	2,685,559	21,023,129
Non Current Liabilities
Deferred tax	1,613,295	-
Provisions	40,000	40,000
Total Non Current Liabilities	1,653,295	40,000
TOTAL LIABILITIES	4,338,854	21,063,129
NET ASSETS	211,166,089	211,920,598

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

	EQUITY
	Contributed Equity		39,376,051	39,203,511
	Reserves		6,931,567	86,436
	Retained Earnings		164,858,471	172,630,651
				-
	Parent entity interest		211,166,089	211,920,598
	Minority interests		-	-
	TOTAL EQUITY		211,166,089	211,920,598
	NOTES TO THE CONDENSED CONSOLIDATED BALANCE SHEET
4.1	Consolidated Retained Earnings
				Previous corresponding period A$
			Current Period A$
Retained Earnings at the beginning			172,630,651	72,830,286
of the financial period
Net (Loss)/ Profit attributable to members			(2,498,802)	111,887,287
Net transfers from reserves			1,216,859	-
Dividends and other equity distributions paid or payable
			(6,490,237)	(12,086,922)
Retained Earnings at the end of the financial period			164,858,471	172,630,651

		Previous
	Current Period	corresponding
	A$	period A$
Retained Earnings at the beginning	172,630,651	72,830,286
of the financial period
Net (Loss)/ Profit attributable to members	(2,498,802)	111,887,287
Net transfers from reserves	1,216,859	-
Dividends and other equity distributions paid or
payable	(6,490,237)	(12,086,922)
Retained Earnings at the end of the financial period	164,858,471	172,630,651

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

5. CONDENSED CONSOLIDATED CASH FLOW STATEMENT
		Previous
	Current Period	corresponding
	A$	period A$
Cash flows from operating activities
Receipts from customers	10,765,773	92,754,254
Payments to suppliers and employees	(16,001,348)	(77,632,471)
Interest received	6,840,857	5,917,372
Interest paid Income taxes paid
	-	(825,647)
	(348,235)	(97,664)
Proceeds from hedge gain	-	7,159,906
Other income	62,476	-
Cash flowsprovided by operating activities	1,319,523	27,275,750
Cash flows from investing activities
Payments for purchases of property, plant and equipment	(411,901)	(14,966,943)
Deferred exploration and evaluation expenditure	(1,470,831)	(2,127,031)
Construction work in progress	(1,703,996)
Loans to Joint Venture entities	-	(46,027)
Payment for purchase of equity securities	(1,912,086)
Proceeds from disposal of other financial assets	-	6,302,498
Investment in subsidiary	(50,000)
Proceeds/(payments)arisingfrom disposal of subsidiaries	(8,385,308)	168,414,186
Net cash(used in)/ provided by investing activities	(13,934,122)	157,576,683
Cash flows from financing activities
Payment for share buy-back and costs	(544,040)	(498,696)
Repayment of borrowings	-	(6,092,512)
Dividendspaid	(5,700,107)	(2,265,351)
Net cash used in financing activities	(6,244,147)	(8,856,559)
Net (decrease)/ increase in cash held	(18,858,746)	175,995,874
Cash at beginning of period -refer 5.1 below	185,656,025	9,784,235
Effects of exchange rates on the balance of cash held	2,019,126	(124,084)
Cash at end of period -refer 5.1 below	168,816,405	185,656,025

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

5.1 Reconciliation of Cash
			Previous
		Current Period	corresponding
		A$	period A$
Cash on hand and at bank		168,816,405	185,656,025
Total cash at end of period		168,816,405	185,656,025

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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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6.	CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
		Issued capital	Retained earnings	Other Reserves	Total
	As at 1 July 2007	29,619,643	72,830,286	(4,502,556)	97,947,373
	Exchange differences on translation of foreign operations	-	-	619,933	619,933
	Exchange differences recycled on sale of China business	-	-	5,670,829	5,670,829
	Gains on disposal of available-for-sale financial assets credited to Income Statement	-	-	(1,701,770)	(1,701,770)
	Profit for the year	-	111,887,287		111,887,287
	Shares issued during the year	10,082,565	-	-	10,082,565
	Transaction costs	(19,456)			(19,456)
	Shares bought back during the year	(479,241)			(479,241)
	Dividends paid or provided for	-	(12,086,922)	-	(12,086,922)
	Equity as at 30 June 2008	39,203,511	172,630,651	86,436	211,920,598
	As at 1 July 2008	39,203,511	172,630,651	86,436	211,920,598
	Exchange differences on translation of foreign operations	-	-	8,061,990	8,061,990
	Gains on disposal of available-for-sale financial assets credited to Income Statement	-	-
	Share of contributions by other Joint Venture party in investments accounted for using the equity method	-	1,216,859	(1,216,859)	-
	Loss for the year	-	(2,498,802)	-	(2,498,802)
	Shares issued during the year	793,765	-	-	793,765
	Transaction costs	(3,635)	-	-	(3,635)
	Shares bought back during the year	(617,590)			(617,590)
	Dividends paid or provided for	-	(6,490,237)	-	(6,490,237)
	Equity as at 30 June 2009	39,376,051	164,858,471	6,931,567	211,166,089

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
		Current	Previous
		Period	correspondin
			g period
7.	NET TANGIBLE ASSETS PER ORDINARY
	SHARE (NTA backing)	2.94	3.00
8.	DETAILS OF SUBSIDIARIES
8.1	Loss of Control of Entities During the Period
	Date of loss of control, i.e. date until which	N/A	4 February
	profit has been calculated		2008
	Profit of the subsidiary (or group of	N/A	$4,499,782
	entities) during the current period to the
	dateon which control was lost
	Profit of the subsidiary (or group of	N/A	$13,583,938
	entities) for thewhole of the previous
	corresponding period
8.2	Control Gained Over Entities During the
	Period
	Coast Resources Limited (previously a joint
	venture with Carnegie) became 100% owned
	on 22 December 2008
9.	DETAILS OF ASSOCIATES AND JOINT	VENTURE
	ENTITIES
9.1	Equity Accounted Associates and	%Ownership Interest		Contribution to Net
	Joint Venture Entities				Profit
		Current	Previous	Current	Previous
		Period %	Corresponding	Period	Corresponding
			Period	A$	Period A$
			%
	Carnegie Astron Joint Venture	-	50%	(52,660)	(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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9.2 Aggregate Share of Associates and Joint Venture Entities Group's Share of Associates and Joint Venture Entities Current Period A$ Previous Corresponding Period A$ Loss before income tax (52,660) (305,807) Income tax expense - Share of net loss of associates and joint venture entities (52,660) (305,807)	9.2 Aggregate Share of Associates and Joint Venture Entities Group's Share of Associates and Joint Venture Entities Current Period A$ Previous Corresponding Period A$ Loss before income tax (52,660) (305,807) Income tax expense - Share of net loss of associates and joint venture entities (52,660) (305,807)	9.2 Aggregate Share of Associates and Joint Venture Entities Group's Share of Associates and Joint Venture Entities Current Period A$ Previous Corresponding Period A$ Loss before income tax (52,660) (305,807) Income tax expense - Share of net loss of associates and joint venture entities (52,660) (305,807)
10. DIVIDENDS
			Amount per
	Amount per	Franked amount	share of
	share	per share	foreign source
			dividend
10.1 Dividends Paidper Share
Final
- current period - paid	10 cents	Nil cents	Nil cents
- previous corresponding period - paid	20 cents	Nil cents	Nil cents

		Previous
		Corresponding
	Current Period	Period
10.2 Total Proposed Dividends	A$	A$
Dividend Proposed	-	6,466,754

10.3 Dividend Reinvestment Plans

Currently there is no DRP in operation

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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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

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