CADOUX LIMITED - Annual Report 2012

FYI RESOURCES LTD

ABN 85 061 289 218

ANNUAL FINANCIAL REPORT 2012

Corporate Information

Directors : Adrian Jessup Dr David Sparling David Sargeant

Chief Executive Officer : Roland Hill Company Secretary : Phillip MacLeod Registered Office : Registered Office and Principal Place of Business 53 Canning Highway Victoria Park WA 6100 Telephone: (08) 9361 3100 Facsimile: (08) 9361 3184 Website: www.fyiresources.com.au Auditor : HLB Mann Judd Level 4 130 Stirling Street Perth WA 6000 Share Registry : Security Transfer Registrars Pty Ltd 770 Canning Highway Applecross WA 6153 Telephone: (08) 9315 2333 Facsimile: (08) 9315 2233 Australian Securities Exchange : Home Branch: Perth Code: FYI ABN : 85 061 289 218

HIGHLIGHTS OF 2011-2012:

FYI Board supports continued uranium sector involvement despite little improvement in the uranium market over the year.
Attractive longer term forecast demand / supply fundamentals underpin continued corporate activity and counter cyclical investment in the minerals sector.
Seeking short term benefit for shareholders, FYI has formulated a pro-active approach to growth by reviewing a number of corporate opportunities in other commodities and domiciles including Australia and other regions.
A number of potential corporate acquisitions are being reviewed in Australia, Africa, Asia and South America.

Chairman's Report

Dear Shareholders

On behalf of your Directors, I am pleased to present the Company’s 2012 Annual Report and Financial Statements. I commend the report to you.

Throughout the year the Company has continued to explore its core asset “Yarlarweelor” our 100% owned uranium project located 125km north of Meekatharra in Western Australia. The Company is targeting significant uranium mineralization (uraninite) present within the Archaean Despair Granite where it is associated biotite schists in shear zones.

Despite the ongoing challenges associated with the 2011 Fukushima Daiichi Nuclear Power Plant disaster, the slow U.S. recovery, the sovereign debt crisis in Europe and the state of the global markets in general - it is the FYI Board’s firm view that the longer term outlook for uranium is still very positive.

To address the Company’s needs for short to medium term growth and diversification, throughout the year the Company has identified and reviewed numerous opportunities with a view to securing one or more additional projects complimentary to our uranium assets. Any new asset must meet the Company’s high expectations in regard to risk, technical rigour, quality and growth potential. Projects reviewed by FYI during the year, include copper, gold, graphite, molybdenum and mineral sands projects, both in Australia and overseas.

Your board and management will continue to dedicate ourselves to advancing the Company’s core assets and to the search for new opportunities. This will ensure we place the Company in the best position possible to create value for shareholders.

On behalf of the board of directors of FYI Resources I would like to sincerely thank you for your continued support.

Yours faithfully

Dr David Sparling Chairman

CORPORATE OBJECTIVES

FYI Resources Ltd is a mineral exploration company with a current focus on the discovery and development of uranium deposits, principally through its core asset holding, the Yarlarweelor project.

Whilst the FYI board is intent on further exploration and possible development at Yarlarweelor, under a strategic growth plan, the Company is actively seeking additional project opportunities. FYI will not only target uranium projects but will also investigate broader opportunities in other commodities and geographic regions to provide diversification to the Company's overall business model.

REVIEW OF OPERATIONS

CORPORATE

Following a corporate restructuring in April 2010 and subsequent change of business direction by moving into the resources sector, FYI’s immediate focus was on its primary asset, the Yarlarweelor uranium project in Western Australia.

However, with the general downturn in the uranium market due to negative sentiment resulting from the accident at Fukushima in March 2011 and the broader impact of the Global Financial Crisis, the FYI board has taken a prudent approach to the Company’s growth strategy by contemplating diversification.

The Board believes that whilst the long term outlook for the uranium market remains resilient, FYI needs to expand the near term business model. Consequently, the Company has been actively identifying a number of additional corporate opportunities in other commodities, particularly gold and copper, on which to establish a desirable and sustainable business model in parallel to uranium.

During 2012, the board and management adopted a proactive approach to achieving its objectives by reviewing and assessing numerous projects whilst adhering to a strict guideline of corporate and investment principles. The internal criteria used to evaluate these assets are based on the Company's long term growth objectives, quality of the asset in respect to exhibiting superior technical qualities, and its various risk profiles (i.e. geographical, political, simplicity of management etc).

Projects reviewed by FYI during the year, include uranium, copper, gold, graphite, molybdenum and mineral sands projects, both in Australia and overseas with the view to securing one or more new projects in order to address FYI's diversification and growth strategy.

PROJECTS

YARLARWEELOR: Uranium Project – WA (100% interest)

The Yarlarweelor uranium project is located 125km north of Meekatharra in Western Australia. It comprises two adjacent exploration licences, E52/2095 and E52/2478, covering an area of 656 km[2] .

Primary uranium mineralization in the form of uraninite was discovered at Yarlaweelor in the early 1980’s at five locations within the project area. Four of these occurrences are from locations within the Archaean Despair Granite where limited drilling showed the uraninite mineralization to be hosted in multiple parallel shear zones and the surrounding granites.

The uranium mineralization present in the Despair Granite shows many similarities to the large, granite hosted Rossing uranium mine in Namibia.

Since the acquisition of the Yarlarweelor project in late 2010, FYI Resources has applied a systematic and staged approach to exploration on the tenement. To date, four diamond holes at the Kangaroo Ridge and Doris prospects have been completed. These holes intersected wide zones of uranium mineralization associated with biotite rich shear zones in granite, confirming the presence of significant uranium mineralization at Yarlarweelor. Results from the drilling at Kangaroo Ridge included:

Hole	Description
KRD10-01	7.8m @ 588ppm U3O8including 1m@ 1,873ppm U3O8
KRD10-02	35m@ 503ppm U3O8including 5m @ 1,069ppm U3O8
KRD10-03	14m@ 221ppm U3O8including 1m@ 844ppm U3O8

True widths are up to 9 metres with the uranium mineralization currently outlined for 200 metres along strike and to 200 metres depth. It remains open both along strike and at depth.

A single diamond core hole drilled at the Doris prospect intersected seven zones of biotite schist ranging in true widths from 1.3m to 4.0m. Better assays from these biotite schist zones and adjacent granites are:

Hole	Description
DD10-01	2.94m@ 184ppm U3O8
DD10-01	5.37m@ 185ppm U3O8
DD10-01	7.23m @ 153 ppm U3O8

Preliminary metallurgical testwork on a composite core sample from hole KRD10-01 at Kangaroo Ridge, gave an 89% extraction of uranium to liquor in 12 hours and 91% extraction in 24 hours under mild sulphuric acid leaching conditions. This testwork confirms the potential for a significant proportion of the Yarlarweelor uranium mineralization to be amenable to recovery by simple acid leaching.

Results from an airborne radiometric survey and geological mapping indicate shear zones with a combined strike length in excess of 25km exist within FYI’s tenements and may be prospective for uranium mineralization. A program of field checking and sampling of aerial radiometric anomalies has confirmed significant uranium anomalies exist to the north and west of Kangaroo Ridge, none of which have been drill tested to date.

The coming year will see exploration efforts concentrate again on the Doris – Kangaroo Ridge trend and on uranium anomalies to the immediate north and west of Kangaroo Ridge.

The information in this report that relates to Exploration Results has been compiled by Mr. David Ross B.Sc(Hons), M.Sc. who is an employee of Empire Resources Limited. He is a member of the Australasian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists. He has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity to 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”. David Ross consents to the inclusion in the public release of the matters based on his information in the form and context in which it appears.

Directors' Report

Your Directors submit their report for the year ended 30 June 2012.

DIRECTORS

The names and details of the Directors of the Company in office during the financial year and until the date of this report are listed below. Directors were in office for this entire period unless otherwise stated.

Dr David Sparling (Non-Executive Chairman)

Dr Sparling holds degrees in both Veterinary Science and Law. Dr Sparling is also a qualified Company Secretary with a graduate diploma in corporate governance. Dr Sparling joined the Company in July 2005 as Business Development Manager and later as General Manager and most recently as Chief Operating Officer prior to becoming a director of the Company. Prior to commencing employment with the Company, Dr Sparling was Commercial Counsel for Agenix Limited, an ASX listed biotechnology Company based in Queensland. In addition to his position at FYI, Dr Sparling holds an executive role at Genetic Technologies Limited (ASX: GTG) as Vice President Legal and Corporate Development. Dr Sparling has not acted as a director of any other listed company within the past three years.

David Sargeant (Non-Executive)

Mr Sargeant holds a Bachelor of Science degree in economic geology from the University of Sydney and has more than 40 years experience as a geologist, consultant and Company director. As such, he has been involved in numerous mineral exploration, ore deposit evaluation and mining development projects and is a member of AusIMM and the Geological Society of Australia.

During his career, Mr Sargeant has held a range of senior positions, including that of senior geologist with Newmont Pty Ltd and senior supervisory geologist with Esso Australia Ltd at the time of the Harbour Lights Gold Mine discovery and development. Further, Mr Sargeant was the first chief geologist at Telfer Gold Mine during exploration, development and production at that project. In addition, he was exploration manager for the Adelaide Petroleum NL group of companies, manager of resources development for Sabminco NL and a technical director of Western Reefs Limited during the period in which that Company became a successful producer at the Dalgaranga Gold Project.

Mr Sargeant successfully managed an exploration and geological consulting business for 18 years, which included the formation and management of platinum and copper-gold companies in Botswana until they were taken over during the 2005 to 2007 period by United Kingdom listed public companies. He was the principal promoter in forming Empire Resources Limited and remains Managing Director.

Mr Sargeant has been a director of the following listed Company during the past three years.

Company	Position	Appointed
Empire Resources Ltd	Executive Director	13/04/2000

Adrian Jessup (Non-Executive)

Mr Jessup also holds a Bachelor of Science degree (with honours) in economic geology from the University of Sydney and has more than 40 years continuous experience as a geologist, Company director and consultant involved in mineral exploration, ore deposit evaluation and mining. He is a member of AusIMM, the Geological Society of Australia and the Australian Institute of Geoscientists.

For the last 15 years, Mr Jessup has operated a geological consulting Company. During that time, he was a founding director of publicly listed companies Empire Resources Limited and Sylvania Resources Limited. He remains an executive director of Empire Resources Ltd. He was also a director of two mineral exploration companies based in southern Africa that were subsequently acquired by United Kingdom listed public companies. Prior to commencing consulting, Mr Jessup was managing director of Giralia Resources NL for eight years, from the Company's inception in 1987. Previously, he had worked for AMAX Exploration Inc., as a senior geologist and as regional manager in charge of that Company's mineral exploration in Western Australia.

Mr Jessup has been a director of the following listed Company during the past three years.

Company	Position	Appointed
Empire Resources Ltd	Executive Director	15/08/2003

Directors' Report

INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY

As at the date of this report the interests of the directors in the shares and options of the Company were:-

Director	Direct Interest Indirect Interest Ordinary Shares	Direct Interest Indirect Interest Ordinary Shares	Direct Interest Indirect Interest Options	Direct Interest Indirect Interest Options
Dr David Sparling	1,048	-	500,000	-
David Sargeant	350,000	12,829,807	500,000	6,414,904
Adrian Jessup	350,000	12,829,807	500,000	6,414,904

CHIEF EXECUTIVE OFFICER

Mr Roland Hill was appointed to the position of chief executive officer on 4 February 2012. Mr Hill has extensive resource industry and investment, finance and funds management experience. He has been directly associated with the mining and exploration sector for over 16 years.

COMPANY SECRETARY

Mr Phillip MacLeod was appointed to the position of Company Secretary on 19 May 2008. Mr MacLeod has over 21 years commercial experience and has held the position of Company Secretary with listed public companies since 1995.

CORPORATE INFORMATION

FYI Resources Limited is a Company limited by shares incorporated and domiciled in Australia.

PRINCIPAL ACTIVITY

The principal activity of the Company during the year was mineral exploration and evaluation of properties in Australia.

RESULTS OF OPERATIONS

The loss after income tax for the financial year was $570,706 (2011: $867,439).

DIVIDENDS

No dividend was paid during the financial year and the Directors do not recommend payment of a dividend.

REVIEW OF OPERATIONS

Detailed comments on operations are included separately in this annual report under the Chairman’s Report and Review of Operations.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

There were no significant changes in the state of affairs of the Company that occurred during the financial year.

SIGNIFICANT EVENTS AFTER THE BALANCE DATE

No matter or circumstance has arisen, since the end of the financial year, which significantly affected, or may significantly affect, the operations of the Company, the results of those operations, or the state of affairs of the Company in subsequent financial years.

DIRECTORS’ MEETINGS

The number of meetings of directors (including meetings of committees of directors) held during the year and the numbers of meetings attended by each director were as follows:

Director	A B Directors’ Meetings	A B Directors’ Meetings
David Sparling	3	3
David Sargeant	3	3
Adrian Jessup	3	3

A - Meetings eligible to attend

B - Meetings attended

Directors' Report

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

Indemnification:

The Company has agreed to indemnify all the directors and the Company Secretary who have held office in the Company during this financial year, against all liabilities to another person (other than the Company or its related body corporate) that may arise from their position as a director or officer of the Company, except where the liability arises out of conduct involving a lack of good faith. The agreement stipulates that the Company will meet the full amount of any such liabilities, including costs and expenses.

Insurance Premiums:

During the financial year the Company has paid insurance premiums of $11,038 (2011: $11,465) in respect of directors and officers liability and legal expenses insurance contracts, for current and former directors and officers, including executive officers of the Company. The insurance premiums relate to:

Costs and expenses incurred by the relevant officers in defending proceedings, whether civil or criminal and whatever their outcome; and
Other liabilities that may arise from their position, with the exception of conduct involving the wilful breach of duty or improper use of information or position to gain a personal advantage.

REMUNERATION REPORT (Audited)

This Remuneration Report consists of the following sections:

A. Principles of Remuneration
B. Details of Remuneration
C. Share Options

A. Principles of Remuneration

This Remuneration Report outlines the director and executive remuneration arrangements of the Company in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purposes of this report Key Management Personnel (KMP) of the Company are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company, directly or indirectly, including any director (whether executive or otherwise) of the Company and includes the executives in the Company receiving the highest remunerations.

For the purposes of this report, the term “executive” encompasses the Chief Executive Officer, Executive Directors, Chief Operating Officer and the Company Secretary of the company.

Details of Key Management Personnel

Directors

Name Position Dr D Sparling Director (Non-Executive) D Sargeant Director (Non-Executive) A Jessup Director (Non-Executive )

Executives

Name Position R Hill Chief Executive Officer P MacLeod Company Secretary

Remuneration Philosophy

This section details the remuneration arrangements in place for the executives and directors of FYI Resources Limited.

The broad remuneration philosophy is to ensure that remuneration properly reflects the relevant person's duties and responsibilities, and that the remuneration is competitive in attracting, retaining and motivating people of the highest quality. The Board believes that the best way to achieve this objective is to provide any executive directors and executives with a remuneration package consisting of components that reflect the person’s responsibilities, duties, personal and corporate performance. At this time no part of an executive’s remuneration package is directly dependent on Company performance. This may be reviewed as the activities of the Company increase with the existing product or the acquisition of a new business.

To this end FYI Resources follows the following principles;

Provide competitive rewards.
That a part of the senior executive’s remuneration may be “at risk” and is linked to pre-determined achievements.
That any variable part of executive remuneration has appropriate and demanding performance hurdles attached.

Directors' Report

REMUNERATION REPORT (Cont.)

Remuneration Committee

FYI Resources does not have a remuneration committee. The remuneration of non-executive directors is determined by the Board as a whole having regard to industry standards of similar sized entities.

Each director receives a fee for being a director of the Company, with additional fees considered in recognition of specific duties carried out by each director. Fees paid to Non-Executive Directors are reviewed annually.

Non-Executive Director Remuneration

The board seeks to set aggregate remuneration at a level that provides the Company with an ability to attract and retain directors of the highest calibre, whilst incurring a cost that is acceptable to the shareholders.

The constitution and the ASX listing rules specify that the aggregate remuneration of Non-Executive directors shall be determined from time to time by general meeting of shareholders.

The aggregate amount payable to the Company’s non-executive directors must not exceed the maximum annual amount approved by the Company’s shareholders. An aggregate amount of $300,000 was approved by shareholders at the Annual General Meeting held in November 2008.

The remuneration of non-executive directors for the period ending 30 June 2012 and 30 June 2011 is detailed in Section B. Details of Remuneration.

Senior Manager and Executive Director Remuneration

The Company aims to reward executives with a level and mix of remuneration commensurate with their position and responsibilities within the Company and so as to:

reward executives for Company, business unit and individual performance against targets set by reference to appropriate benchmarks;
align the interests of executives with those of shareholders;
link rewards with the strategic goals and performance of the Company; and
ensure total remuneration is competitive by market standards.

Remuneration packaging contains the following key elements;

Fixed remuneration - fixed components of salaries, fee and non-monetary benefits.
Variable remuneration - share options.
Post employment benefits – superannuation.

The Chairman, subject to Board approval, generally sets remuneration of any executive directors and the Chief Executive Officer.

Fixed Remuneration

The level of fixed remuneration for executives is set so as to provide a base level of remuneration which is both appropriate to the position and competitive in the market. Fixed remuneration is reviewed annually.

Variable Remuneration

Short term incentives (STI) may be linked to achievement of the Company’s operational targets if the relevant executives achieve the target. STI is not linked to the Company’s prevailing share price or results as the Company is not at a profitable stage of operations.

The Directors, subject to shareholder approval, and executives are eligible to participate in the Company’s share option plan whereby options may be granted at an exercise price above the prevailing share price. This premium in conversion price, coupled with an appropriate vesting period, provides a long term incentive (LTI) whereby directors and executives will benefit only if there is a substantial improvement in the Company’s share price. The number of options granted to each director and executive is determined by the Board based on the Company’s and the eligible participant’s performance. The grant of options is not linked to the Company’s financial results, as the Company is not at a profitable stage of operations.

The Company does not have a policy for Directors to hedge their equity positions.

Employment contracts

In February 2011, the Company entered into a management services agreement with Capstone Capital Pty Ltd (a Company associated with Mr Roland Hill) (“Capstone”) for the term of 36 months, for the provision of services by Mr Hill, acting in the

Directors' Report

REMUNERATION REPORT (Cont.)

capacity of FYI’s Chief Executive Officer, overseeing the day to day administration and management of the business. The monthly fee payable to Capstone is $15,000 plus GST in arrears. The termination payment is 50% of the number of months remaining under the term of the Agreement multiplied by the monthly fee payable.

B. Details of remuneration

The remuneration for each director and each of the executive officers of the Company receiving remuneration during the year was as follows:

Directors’ remuneration:

2012 Specified Directors	Consulting Salary Fees $ $ $ Short Term Directors Fees	Post Employment Super $	Share Based Payment Options $	Total $	% performance based
D Sparling (Non-Executive) D Sargeant (Non-Executive) A Jessup (Non-Executive)	- - 24,500 2,205 - 26,705 0% - - 24,500 - - 24,500 0% - - 24,500 - - 24,500 0%
	- - 73,500 2,205 - 75,705 0%


2011 Specified Directors	Consulting Salary Fees $ $ $ Short Term Directors Fees	Post Employment Super $	Share Based Payment Options $	Total $	% performance based
R Barnett (Non Executive Chairman Resigned 14/3/10) D Sparling (Non-Executive) D Sargeant (Non-Executive) A Jessup (Non-Executive)	- - 22,500 2,025 - 24,525 0% - - 24,500 2,206 22,409 49,115 0% - - 24,792 - 22,410 47,202 0% - - 64,292 - 22,410 86,702 0%
	- - 136,084 4,231 67,229 207,544 0%

Remuneration of key management personnel:

2012 Name	Consulting Salary Fees $ $ Short Term	Post Employment Super $	Share Based Payment Options $	Total $	Total Remuneration % performance based	Total Remuneration % consisting of options
R Hill (CEO Appointed 4/2/11) P MacLeod (Company Secretary)	180,000 - - 39,785 219,785 - 18% 30,000 - - - 30,000 - 0%
	210,000 - - 39,785 249,785 - 16%

2011 Name	Consulting Salary Fees $ $ Short Term	Post Employment Super $	Share Based Payment Options $	Total $	Total Remuneration % performance based	Total Remuneration % consisting of options
R Hill (CEO Appointed 4/2/11) P MacLeod (Company Secretary)	90,000 - - 50,230 140,230 - 36% 30,000 - - 22,409 52,409 - 43%
	120,000 - - 72,639 192,639 - 38%

REMUNERATION REPORT (Cont.)

Directors' Report

C. Share Options

Directors & Key Management Personnel

Options granted, exercised or lapsed during the year by directors and executives:

Name	Number of options lapsed	Value of options granted at the grant date	Value of options exercised at the exercise date	Value of options lapsed at the date of lapse	No. of options held at 30 June 2012
Dr DSparling	524	-	-	21	500,000
DSargeant	75,000	-	-	3,000	500,000
AJessup	75,000	-	-	3,000	500,000
R Hill	-	-	-	-	2,000,000
P MacLeod	-	-	-	-	500,000

No options granted as part of remuneration were exercised during the year ended 30 June 2012 or in the period to date.

There is no performance criteria linked to KMP options. The option holders must remain employed with the Company until vesting date to be entitled to the options.

The option holders do not have any right, by virtue of the option to participate in any share issue of the Company or any related body corporate.

AUDITORS INDEPENDENCE AND NON-AUDIT SERVICES

Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the directors of the Company with an Independence Declaration in relation to the audit of the annual report. This Independence Declaration is set out on page 12 and forms part of this directors’ report for the year ended 30 June 2012.

CORPORATE GOVERNANCE

In recognising the need for the highest standards of corporate behaviour and accountability, the directors of FYI Resources Ltd support the principles of corporate governance. The Company's corporate governance statement is contained in the additional corporate governance section of the Annual Report.

Signed at Perth this 12[th] day of September 2012

Adrian Jessup Director

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AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the financial report of FYI Resources Limited for the year ended 30 June 2012, I declare that to the best of my knowledge and belief, there have been no contraventions of:

a) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b) any applicable code of professional conduct in relation to the audit.

This declaration is in respect of FYI Resources Limited.

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Perth, Western Australia N G NEILL 12 September 2012 Partner, HLB Mann Judd

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HLB Mann Judd (WA Partnership) ABN 22 193 232 714 Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: [email protected]. Website: http://www.hlb.com.au Liability limited by a scheme approved under Professional Standards Legislation

HLB Mann Judd (WA Partnership) is a member of

International, a worldwide organisation of accounting firms and business advisers.

Directors' Declaration

In the opinion of the directors of FYI Resources Limited (“the Company”):
a) the financial statements and notes and the remuneration disclosures that are contained in sections A to C of the remuneration report in the Directors’ report, are in accordance with the Corporations Act 2001 , including:
- (i) giving a true and fair view of the financial position of the Company as at 30 June 2012 and of its performance, as represented by the results of its operations and its cash flows, for the year ended on that date; and
- (ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001;
b) the financial report also complies with International Financial Reporting Standards as disclosed in note 2(a);
c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
The directors have been given the declarations pursuant to Section 295A of the Corporation Act 2001 for the financial year ended 30 June 2012.

Dated this 12[th] day of September 2012.

Signed in accordance with a resolution of the directors:

Adrian Jessup Director

Statement of Comprehensive Income For The Year Ended 30 June 2012

	Note	Company	Company
		2012 $	2011 $
Continuing Operations Other income Exploration expense Depreciation expense ASX fees Share based payments Accounting and audit fees Other administration expenses Salaries and wages Share registry expenses Rent Legal expenses Consulting fees Loss before income tax expense	3(a) 3(b)	25,191 50,709 (119,203) (313,172) (494) (466) (12,680) (22,745) (39,785) (139,868) (58,980) (76,718) (63,994) (120,549) (255,705) (228,804) (18,247) (28,598) (23,859) (21,439) (2,950) (6,710) - (16,543)
		(570,706) (924,903)
Income tax benefit / (expense)	4	- 57,464
Net loss for the year Other comprehensive income / (loss)
		(570,706) (867,439)

Revaluation of land and improvements taken to reserves Reclassification to profit and loss on disposal of available-for-sale financial assets Income tax on items recognised in equity	4	- (730,000) - 9,335 - 219,000
Other comprehensive loss Total comprehensive loss attributable to members of the Company Basic loss per share (cents per share)	22	- (501,665)
		(570,706) (1,369,104)
		(1.24) (2.10)

The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

Statement of Financial Position

As At 30 June 2012

	Note	Company	Company
		2012 $	2011 $
CURRENT ASSETS Cash and cash equivalents Trade and other receivables Total Current Assets NON-CURRENT ASSETS Property, plant and equipment Investment property Exploration and evaluation expenditure Total Non-Current Assets TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Current tax liabilities Total Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY	20(a) 5 6 7 8 9 11 12	349,830 957,740 182,390 150,438
		532,220 1,108,178
		1,175 1,669 1,070,000 1,070,000 1,509,804 1,509,804
		2,580,979 2,581,473
		3,113,199 3,689,651
		117,368 161,971 - 7,618
		117,368 169,589
		117,368 169,589
		2,995,831 3,520,062
		27,452,608 27,445,918 1,737,333 1,697,548 (26,194,110) (25,623,404)
		2,995,831 3,520,062

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

Statement of Changes in Equity

For the year Ended 30 June 2012

	Company	Company	Company	Company	Company	Company
	Issued Capital	Accumulated Losses	Share Based Payments Reserve	Option Premium Reserve	Asset Revaluation Reserve	Total
	$	$	$	$	$	$
Balance at 1 July 2010 Revaluation of land and buildings to fair value Change in the fair value of available for sale financial assets Income tax on items recognised in equity Total income/(expense) for the year recognised directly in equity Loss for the year Total comprehensive loss for the year Equity transactions: Shares issued net of transactions costs Key management personnel options Balance at 30 June 2011	26,895,879 (24,755,965) 301,774 834,677 922,894 4,199,259 - - - - (730,000) (730,000) - - - - 9,335 9,335 - - - - 219,000 219,000
	- - - - (501,665) (501,665) - (867,439) - - - (867,439)
	- (867,439) - - (501,665) (1,369,104) 550,039 - - - - 550,039 - - 139,868 - - 139,868
	27,445,918 (25,623,404) 441,642 834,677 421,229 3,520,062

Balance at 1 July 2011 Loss for the year Total comprehensive loss for the year Equity transactions: Shares issued net of transactions costs Key management personnel options Balance at 30 June 2012	27,445,918 (25,623,404) 441,642 834,677 421,229 3,520,062 - (570,706) - - - (570,706)
	- (570,706) - - - (570,706) 6,690 - - - - 6,690 - - 39,785 - - 39,785
	27,452,608 (26,194,110) 481,427 834,677 421,229 2,995,831

The above statement of changes in equity should be read in conjunction with the accompanying notes.

Statement of Cash Flows

For The Year Ended 30 June 2012

	Note	Company	Company
		2012 $	2011 $
Cash Flows from Operating Activities Payments to suppliers and employees Payments for exploration and evaluation Interest received Refund of rent Net cash used in operating activities Cash Flows from Investing Activities Payments for plant and equipment Proceeds from sale of investments Net cash provided by investing activities Cash Flows from Financing Activities Proceeds from issue of shares Share issue costs Net cash (used in) / provided by financing activities Net increase in cash held Cash at the beginning of the financial year Cash at the end of the financial year	20(b) 20(a)	(376,577) (534,356) (261,499) (444,151) 25,191 34,358 8,770 -
		(604,115) (944,149)
		- (1,335) - 52,499
		- 51,164
		- 600,340 (3,795) (46,506)
		(3,795) 553,834
		(607,910) (339,151) 957,740 1,296,891
		349,830 957,740

The above statement of cash flows should be read in conjunction with the accompanying notes.

Notes to the Financial Statements For the Year ended 30 June 2012

CORPORATE INFORMATION

The financial report of FYI Resources Limited (“the Company”) for the year ended 30 June 2012 was authorised for issue in accordance with a resolution of the directors on 12 September 2012. FYI Resources Limited is a Company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange. The nature of the operations and principal activities of the Company during the financial year are mineral exploration and evaluation of properties in Australia.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Basis of Preparation

This financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standards (including Australian Interpretations). The financial report of FYI Resources Limited complies with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board. The financial report has also been prepared on a historical cost basis, except for land and improvements and available for sale financial assets, which have been measured at fair value. The financial report is presented in Australian dollars, which is the Company’s functional and presentation currency.

b) Adoption of New and Revised Accounting Standards

In the year ended 30 June 2012, the Company has reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for the current annual reporting period.

It has been determined by the Company that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change is necessary to Company accounting policies.

The Company has also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the year ended 30 June 2012. As a result of this review the Directors have determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change necessary to Company accounting policies.

c) Statement of compliance

The financial report complies with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS).

d) Going Concern

As disclosed in the Statement of Comprehensive Income, the Company recorded operating losses of $570,706 (2011: $867,439) and as disclosed in the Statement of Cash Flows, the Company recorded cash outflows from operating activities of $604,115 (2011: $944,149), financing activities of $3,795 (2011: inflow $553,834) and a cash inflow from investing activities of $Nil (2011: $51,164). After consideration of these financial conditions, the Directors have assessed the following matters in relation to the adoption of the going concern basis of accounting by the Company:

The Company has the ability to complete capital raisings on a timely basis, pursuant to the Corporations Act 2001, as is budgeted to occur in the twelve month period from the date of this financial report;
The Company has net current assets of $414,852 (2011: $938,589) at balance date and expenditure commitments for the next 12 months of $350,787 (2011:$264,693), as disclosed in Note 15 (i), and retains the ability to scale down its operations to conserve cash, in the event that the proposed capital raisings are delayed or partial;
The Company has the ability, if required, to undertake mergers, acquisitions or restructuring activity or to wholly or in part, dispose of interests in mineral exploration and development assets; and
The Company has the ability, if required, to dispose of its interests in non-core assets or draw down on unused facilities.

Due to the above matters, the Directors believe that it is reasonably foreseeable that the company will continue as a going concern and that it is appropriate that this basis of accounting be adopted in the preparation of the financial statements.

e) Significant Accounting Judgements, Estimates and Assumptions

The application of accounting policies requires the use of judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

Notes to the Financial Statements For the Year ended 30 June 2012

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED

e) Significant Accounting Judgements, Estimates and Assumptions (Continued)

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are recognised in the period in which the estimate is revised if it affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Share-based payment transactions

The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by an external valuer using a Black and Scholes model, using the assumptions detailed in Note 17.

The Company measures the cost of cash-settled share-based payments at fair value at the grant date using the Black and Scholes formula taking into account the terms and conditions upon which the instruments were granted, as discussed in Note 17.

Exploration and evaluation costs carried forward

The Company has capitalised exploration and evaluation acquisition costs on the basis either that this is expected to be recouped through future successful development (or alternatively sale) of the area of interest concerned or on the basis that it is not yet possible to assess whether it will be recouped.

Valuation of Land and Improvements

The Company’s land and improvements are measured at fair value. The fair value of land and improvements is determined by reference to market based evidence which is the amount for which the assets could be exchanged between a knowledgeable and willing buyer and a knowledgeable and willing seller in an arm’s length transaction. The valuation is prepared by an independent licensed land valuer on a biennial basis.

f) Income Tax

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities based on the current period’s taxable income. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance date.

Deferred income tax is provided on all temporary differences at the balance date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences except:

when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
when the taxable temporary difference is associated with investments in subsidiaries, associates or interest in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:

when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint
ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised.

The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Notes to the Financial Statements For the Year ended 30 June 2012

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED

f) Income Tax (Continued)

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance date.

Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.

g) Goods and Services Tax (GST)

Revenue, expenses and assets are recognised net of the amount of GST except:

where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
receivables and payables are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

Cash flows are included in the statement of cash flows 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.

h) Revenue

Revenue is recognised to the extent that it is probable that the economic benefit will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Interest income is recognised as it accrues in profit or loss, using the effective interest method.

i) Property, Plant and Equipment

Plant and equipment is stated at cost less accumulated depreciation and any impairment in value.

Land is measured at fair value based on periodic valuations by external independent valuers.

Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows:

	Estimated useful life
Plant and equipment	4 – 5 years
Land	Not Depreciated

Impairment

The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.

For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cashgenerating unit to which the asset belongs.

If any such indication exists and where the carrying values exceed the estimated recoverable amounts, the assets or cashgenerating units are written down to their recoverable amount.

The recoverable amount of plant and equipment is the greater of fair value less costs to sell and value in use. 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.

Notes to the Financial Statements For the Year ended 30 June 2012

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED

i) Property, Plant and Equipment (continued)

Revaluations

Following initial recognition at cost, land and improvements are carried at a revalued amount which is the fair value at the date of the revaluation less any accumulated impairment losses.

Fair value is determined by reference to market-based evidence, which is the amount for which the assets could be exchanged between a knowledgeable willing buyer and a knowledgeable willing seller in an arm’s length transaction as at the valuation date.

Any revaluation surplus is credited to the asset revaluation reserve included in the equity section of the statement of financial position unless it reverses a revaluation decrease of the same asset previously recognised in the statement of comprehensive income.

Any revaluation deficit is recognised in the statement of comprehensive income unless it directly offsets a previous surplus of the same asset in the asset revaluation reserve.

In addition, any accumulated depreciation as at revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.

Upon disposal, any revaluation reserve relating to the particular asset being sold is transferred to retained earnings.

Independent valuations are performed with sufficient regularity to ensure that the carrying amount does not differ materially from the asset’s fair value at the balance date.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset.

Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the statement of comprehensive income in the period the item is derecognised.

j) Investment Property

Investment Property is measured at fair value based on periodic valuations by external independent valuers.

Revaluations

Following initial recognition at cost, land and improvements are carried at a revalued amount which is the fair value at the date of the revaluation less any accumulated impairment losses.

A gain or loss arising from a change in the fair value of investment property shall be recognised in profit or loss for the period in which it arises.

k) Exploration and Evaluation Expenditure

Exploration and evaluation costs, excluding the costs of acquiring licences, are expensed as incurred. Acquisition costs will be assessed on a case by case basis and, if appropriate, they will be capitalised. These acquisition costs are only carried forward only if the rights to tenure of the area of interest are current and either:

They are expected to be recouped through successful development and exploitation of the area of interest or;
The activities in the area of interest at the reporting date have not reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing

Accumulated acquisition costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made.

The carrying values of acquisition costs are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.

l) Trade and other receivables

Trade receivables, which generally have 30-90 day terms, are carried at amortised cost using the effective interest method less impairment losses.

Notes to the Financial Statements For the Year ended 30 June 2012

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED

m) Share-based Payments

Share-based compensation benefits are provided to directors and executives.

The fair value of options granted to directors and executives is recognised as an employee benefit expense with a corresponding increase in equity over the vesting period. The fair value is measured at grant date and recognised over the period during which the directors and/or executives becomes unconditionally entitled to the options.

The fair value at grant date is independently determined using an option pricing model that takes into account the exercise price, the term of the option, the vesting and performance criteria, the impact of dilution, the non-tradeable nature of the option, the share price at grant date and expected price volatility of the underlying share, the expected divided yield and the risk-free interest rate for the term of the option.

n) Cash and Cash Equivalents

Cash and cash equivalents in the statement of financial position includes cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities 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.

o) Earnings per Share

Basic earnings per share is calculated as net result attributable to the Company, adjusted to exclude costs of servicing equity (other than dividends), divided by the weighted average number of ordinary shares, adjusted for any bonus element.

Diluted earnings per share is calculated as net result attributable to members, adjusted for:

costs of servicing equity (other than dividends);
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares;

Divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

p) Trade and Other Payables

Trade payables and other payables are carried at amortised cost. They represent liabilities for goods and services provided to the Company prior to the end of the financial year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months.

q) Impairment of Assets

At each balance date, the Company assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the Company makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.

Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the asset’s value in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are largely independent of those from other assets or group of assets, in which case, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

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. Impairment losses relating to continuing operations are recognised in the statement of comprehensive income.

An assessment is also made at each balance date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss.

Notes to the Financial Statements For the Year ended 30 June 2012

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED

r) Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses.

When the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of comprehensive income net of any reimbursement.

Provisions are measured at the present value or management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability.

When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

s) Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors of FYI Resources Ltd.

t) Issued Capital

Ordinary shares are classified as equity. Incremental costs directory attributably to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

u) Financial Assets

Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale investments, as appropriate. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The Company determines the classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates this designation at each financial yearend. All regular way purchases and sales of financial assets are recognised on the trade date i.e. the date that the Company commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets under contracts that require delivery of the assets within the period established generally by regulation or convention in the marketplace.

(i) Financial assets at fair value through profit or loss

Financial assets classified as held for trading are included in the category ‘financial assets at fair value through profit or loss’. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term. Derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on investments held for trading are recognised in profit or loss.

(ii) Held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Company has the positive intention and ability to hold to maturity. Investments intended to be held for an undefined period are not included in this classification. Investments that are intended to be held-to-maturity, such as bonds, are subsequently measured at amortised cost. This cost is computed as the amount initially recognised minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initially recognised amount and the maturity amount. This calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums and discounts. For investments carried at amortised cost, gains and losses are recognised in profit or loss when the investments are derecognised or impaired, as well as through the amortisation process.

If the Company were to sell other than an insignificant amount of held-to-maturity financial assets, the whole category would be tainted and reclassified as available-for-sale.

(iii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

Notes to the Financial Statements For the Year ended 30 June 2012

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED

u) Financial Assets (Continued)

(iv) Available-for-sale investments

Available-for-sale investments are those non-derivative financial assets that are designated as available-for-sale or are not classified as any of the three preceding categories. After initial recognition available-for sale investments are measured at fair value with gains or losses being recognised as a separate component of equity until the investment is derecognised or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is recognised in profit or loss.

The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business on the balance date. For investments with no active market, fair value is determined using valuation techniques. Such techniques include using recent arm’s length market transactions, reference to the current market value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models.

v) Impairment of financial assets

The Company assesses at each balance date whether a financial asset or group of financial assets is impaired.

(i) Financial assets carried at amortised cost

If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced either directly or through use of an allowance account. The amount of the loss is recognised in profit or loss.

The Company first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively for financial assets that are not individually significant. If it is determined that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, the asset is included in a group of financial assets with similar credit risk characteristics and that group of financial assets is collectively assessed for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognised are not included in a collective assessment of impairment.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent reversal of an impairment loss is recognised in profit or loss, to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date.

(ii) Financial assets carried at cost

If there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument that is not carried at fair value (because its fair value cannot be reliably measured), or on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the current market rate of return for a similar financial asset.

(iii) Available-for-sale investments

If there is objective evidence that an available-for-sale investment is impaired, an amount comprising the difference between its cost (net of any principal repayment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss, is transferred from equity to the statement of comprehensive income. Reversals of impairment losses for equity instruments classified as available-for-sale are not recognised in profit. Reversals of impairment losses for debt instruments are reversed through profit or loss if the increase in an instrument's fair value can be objectively related to an event occurring after the impairment loss was recognised in profit or loss.

w) Derecognition of financial assets and liabilities

(i) Financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:

the rights to receive cash flows from the asset have expired;
the Company retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a ‘pass-through’ arrangement; or
the Company has transferred its rights to receive cash flows from the asset and either:
(a) has transferred substantially all the risks and rewards of the asset, or
(b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset and has neither transferred nor retained

Notes to the Financial Statements For the Year ended 30 June 2012

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED

w) Derecognition of financial assets and liabilities (Continued)

substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Company’s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration received that the Company could be required to repay.

When continuing involvement takes the form of a written and/or purchased option (including a cash-settled option or similar provision) on the transferred asset, the extent of the Company’s continuing involvement is the amount of the transferred asset that the Company may repurchase, except that in the case of a written put option (including a cash-settled option or similar provision) on an asset measured at fair value, the extent of the Company’s continuing involvement is limited to the lower of the fair value of the transferred asset and the option exercise price.

(ii ) Financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

NOTE 3 – REVENUE & EXPENSES

	Company	Company
	2012 $	2011 $
3 (a) Revenue Interest received Profit on sale of shares Other income	25,191 34,358 - 7,581 - 8,770
	25,191 50,709

3 (b) Other Administration Expenses Corporate Administration costs Annual & quarterly reports Insurance Other administration expenses	1,408 7,000 9,435 19,700 53,151 93,849
	63,994 120,549
NOTE 4 – INCOME TAXES
Income tax recognised directly in equity Deferred income tax expenses arising from revaluation of land and improvements	- 219,000

Notes to the Financial Statements For the Year ended 30 June 2012

NOTE 4 – INCOME TAXES (CONTINUED)

The prima facie income tax benefit on pre-tax accounting loss from operations reconciles to the income tax expense in the financial statements as follows:

	Company	Company
	2012 $	2011 $
Accounting loss before tax Income tax benefit at 30% (2011: 30%) Tax effect of: Non-deductible expenses Share based payment Deductible temporary differences Deferred tax asset not recognised R&D tax offset from prior year Income tax benefit / (expense) attributable to loss from ordinary activities before tax	(570,706) (924,903)
	171,212 277,471 (1,008) (14) (11,936) (41,960) 11,593 22,071 (169,861) (326,146) - 126,042
	- 57,464


Unrecognised deferred tax balances	Company
	2012 $	2011 $
Tax losses carried forward Potential Income tax benefit at 30% (2011: 30%)	2,925,250 2,359,047
	877,575 707,714

These deferred tax assets will only be obtained if:

(i) Future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised; (ii) The conditions for deductibility imposed by tax legislation continue to be complied with; and (iii) No changes in tax legislation adversely affect the Company in realising the benefit.

NOTE 5 – TRADE AND OTHER RECEIVABLES

	Company	Company
	2012 $	2011 $
Current Prepaid expenses Trade receivables Allowance for impairment Other receivables	39,464 - 48,616 48,616 (48,616) (48,616) 142,926 150,438
	182,390 150,438

Trade and sundry receivables are non interest bearing and are generally received on 30-60 day terms.

Notes to the Financial Statements For the Year ended 30 June 2012

NOTE 6 – PROPERTY, PLANT AND EQUIPMENT

	Plant & Equipment Land $ $ Company	Plant & Equipment Land $ $ Company	Plant & Equipment Land $ $ Company	Total $
Year ended 30 June 2011
At 1 July 2010, net of accumulated depreciation Additions Revaluation Transfer to Investment Property Depreciation charge for the year At 30 June 2011, net of accumulated depreciation	800 1,800,000 1,335 - - (730,000) - (1,070,000) (466) - 1,669 -			1,800,800 1,335 (730,000) (1,070,000) (466)
				1,669

Year ended 30 June 2012
At 1 July 2011, net of accumulated depreciation Depreciation charge for the year At 30 June 2012, net of accumulated depreciation	1,669 - (494) - 1,175 -			1,669 (494)
				1,175


	Company
	Plant & Equipment $		Land $	Total $
At 30 June 2011	2,135 - (466) - 1,669 - 2,135 - (960) - 1,175 - 2012 2011 $ $ 1,070,000 - - 1,070,000 1,070,000 1,070,000 Company
Cost / Fair value Accumulated depreciation				2,135 (466)
Net carrying amount At 30 June 2012				1,669

Cost / Fair value Accumulated depreciation				2,135 (960)
Net carrying amount				1,175

NOTE 7 – INVESTMENT PROPERTY
	Company
	2012 $	2011 $
Land At start of period Transfer from Property, Plant and Equipment Balance at 30 June 2012

The land is held for a currently undetermined future use. The transfer to investment property was made when there was a change in use to not develop or occupy the property.

During 2011 the Company engaged Valuations WA Pty Ltd, an accredited independent valuer, to determine the fair value of its land and buildings at 30 June 2011. The fair value given was $1,070,000. Fair value is determined directly by reference to market-based evidence, which are the amounts for which the assets could be exchanged between a knowledgeable willing buyer and a knowledgeable willing seller in an arm’s length transaction as at the valuation date.

If land was measured using the cost model the carrying amounts would be as follows:

Notes to the Financial Statements For the Year ended 30 June 2012

NOTE 7 – INVESTMENT PROPERTY (CONTINUED)

	Company	Company
	2012 $	2011 $
Land
Net carrying amount on cost basis	262,893 262,893
	262,893 262,893

Non-current assets pledged as security

Refer to note 20c for information on non-current assets pledged as security by the Company.

NOTE 8 – EXPLORATION AND EVALUATION EXPENDITURE

	Company	Company
	2012 $	2011 $
Current Costs carried forward in respect of Exploration and Evaluation Phase – At Cost Balance at beginning of year	1,509,804 1,509,804
	1,509,804 1,509,804

In March 2010, the Company issued 12,829,807 shares to Empire Resources Ltd as consideration for the acquisition of the Yarlarweelor uranium tenement. The recoupment of costs carried forward in relation to areas of interest in the exploration and evaluation phases is dependent on the successful development and commercial exploitation or sale of the respective areas.

NOTE 9 – TRADE AND OTHER PAYABLES

	Company	Company
	2012 $	2011 $
Current Trade and other payables Accruals	116,384 159,764 984 2,207
	117,368 161,971

Trade payables are non-interest bearing and most suppliers have 30 day terms.

Notes to the Financial Statements For the Year ended 30 June 2012

NOTE 10 – DEFERRED TAX LIABILITIES

	Company	Company
	2012 $	2011 $
Recognised deferred tax assets and liabilities Deferred tax assets and liabilities are attributable to the following: Deductions Accruals Tax losses Deferred tax assets not recognised Exploration costs Revaluation of land and buildings Net tax asset (liabilities)	38,721 8,367 5,115 6,687 877,575 707,714 (245,238) (3,427)
	676,173 719,341 (452,941) (452,941) (223,232) (266,400)
	(676,173) (719,341)
	- -

NOTE 11 – ISSUED CAPITAL
	Company
	2012 $	2011 $
46,122,229 (2011: 46,077,633 ) fully paid ordinary shares	27,452,608 27,445,918


(i) Ordinary shares - number	Company
	2012 No.	2011 No.
At start of period Exercise of options 17 August 2010 Exercise of options 18 August 2010 Exercise of options 23 August 2010 Exercise of options 1 September 2010 Exercise of options 29 September 2010 Exercise of options 5 October 2010 Exercise of options 11 January 2011 4,900,000 shares issued to Sophisticated Investors 31 March 2011 Exercise of options 31 May 2011 1,100,000 shares at 10 cents per share issued to Directors 22 June 2011 Exercise of options 30 June 2012 Balance at 30 June 2012	46,077,633 40,075,362 - 500 - 1 - 880 - 15 - 2 - 300 - 540 - 4,900,000 - 33 - 1,100,000 44,596 -
	46,122,229 46,077,633

Notes to the Financial Statements For the Year ended 30 June 2012

NOTE 11 – ISSUED CAPITAL (CONTINUED)

(ii) Ordinary shares – value	Company	Company
	2012 $	2011 $
At start of period Exercise of options 17 August 2010 Exercise of options 18 August 2010 Exercise of options 23 August 2010 Exercise of options 1 September 2010 Exercise of options 29 September 2010 Exercise of options 5 October 2010 Exercise of options 11 January 2011 4,900,000 shares issued to Sophisticated Investors 31 March 2011 Exercise of options 31 May 2011 1,100,000 shares at 10 cents per share issued to Directors 22 June 2011 Costs of shares issued Exercise of options 30 June 2012 Balance at 30 June 2012	27,445,918 26,895,879 - 75 - - - 132 - 2 - - - 45 - 81 - 490,000 - 5 - 110,000 - (50,301) 6,690 -
	27,452,608 27,445,918

Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.

Options - number	Company	Company
	2012 No.	2011 No.
At start of period Issue of options 10 August 2010 Expired 1 August 2010 Exercise of options 17 August 2010 to 31 May 2011 Issue of options 22 June 2011 Exercise of options 30 June 2012 Expired 30 June 2012 Balance at 30 June 2012	23,932,922 218,336 - 19,935,193 - (218,336) - (2,271) - 4,000,000 (44,596) - (19,888,326) -
	4,000,000 23,932,922

Option details at 30 June 2011 - 19,932,922 exercisable at $0.15 on 30 June 2012 4,000,000 exercisable at $0.152 on 1 January 2014

Option details at 30 June 2012 - 4,000,000 exercisable at $0.152 on 1 January 2014

Option holders do not have any rights, by virtue of their option holding, to vote at a meeting of the Company.

Share Options

For details of the share based payment option scheme under which options to subscribe for the Company shares are granted to directors and executives, refer to note 17.

Notes to the Financial Statements For the Year ended 30 June 2012

NOTE 12 – RESERVES

	Company	Company
	2012 $	2011 $
Share based premium reserve Option premium reserve Asset revaluation reserve Reserves	481,427 441,642 834,677 834,677 421,229 421,229
	1,737,333 1,697,548

	Company
	2012 $	2011 $
Reserves comprise the following: Share Based Premium Reserve At start of period	441,642 301,774
Share based payment - Employees	39,785 139,868
Balance at 30 June 2012 Option Premium Reserve At start of period Balance at 30 June 2012 Asset Revaluation Reserve At start of period Revaluation of available for sale asset to Revaluation of property during the year (net of Balance at 30 June 2012
	481,427 441,642
	834,677 834,677
	834,677 834,677
	421,229 922,894 - 9,335 - (511,000)
	421,229 421,229

Nature and purpose of reserves

Share based payment reserve

The share based payments reserve is used to record the value of share based payments. The reserve includes grant of options to directors and employees, including key management personnel, as part of their remuneration.

Option premium reserve

The option premium reserve is used to record premiums received when options are issued to shareholders at a premium.

Asset revaluation reserves

The asset revaluation reserve is used to record increases in the fair value of assets and decreases to the extent that such decreases relate to an increase on the same assets previously recognised in equity.

Notes to the Financial Statements For the Year ended 30 June 2012

13. DIVIDENDS

No dividends were paid or provided for during the year (2011: nil).

14. SEGMENT INFORMATION

Operating segments are reported in a manner that is consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the Board of FYI Resources Ltd.

Consistent with prior year, the Company operates only in one business and geographical segment being mineral exploration and evaluation of properties in Australia. The Company considers its business operations in mineral exploration to be its primary reporting function.

15. EXPENDITURE COMMITMENTS

	Company	Company
	2012 $	2011 $
(i) Capital Expenditure Commitments Exploration Tenements In order to maintain current rights of tenure to exploration tenements, the Company is required to outlay rentals and to meet the minimum expenditure requirements. These obligations are not provided for in the financial statements and are payable: - not later than 12 months - between 12 months and 5 years	350,787 264,693 1,403,147 1,058,772
	1,753,934 1,323,465


	Company
	2012 $	2011 $

(ii) Remuneration Commitments Commitments for the payment of salaries and other remuneration under long-term employment contracts in existence at the reporting date but not recognised as liabilities, payable: - not later than 12 months - between 12 months and 5 years	207,900 189,000 108,900 316,800
	316,800 505,800

Notes to the Financial Statements For the Year ended 30 June 2012

16. REMUNERATION OF AUDITOR

	Company	Company
	2012 $	2011 $
Amounts received or due and receivable by HLB Mann Judd for: Audit or review of the financial reports of the Company 23,800 24,500

	23,800 24,500

17. SHARE BASED PAYMENTS

Executive and Director Share Based Payment Plan

An Executive and Director Equity-settled Share Based Payment Plan (“the Plan”) has been established where the Company, at the discretion of the Directors, may grant options over the ordinary shares of the Company to executives and directors of the Company. The Company has adopted this plan to enable executives and directors to acquire an ownership interest in the Company. The options issued under the Plan are not quoted on the ASX.

The expense recognised in the statement of comprehensive income in relation to share-based payments is $39,785 (2011: $139,868).

The consolidation of capital, 1 for 30 shares, occurred on 2[nd] March 2010. The following share-based payment arrangements were in place during the current and prior periods:

	Number Pre Consolidation	Number Post Consolidation	Grant date	Expiry date	Exercise Price Pre Consolidation $	Exercise Price Post Consolidation $	Fair value at grant date $
Key Executive Options	5,000,000	166,667	01-Aug-07	01-Aug-10	$0.05	$1.50	$0.02
Employee Options	1,550,000	51,669	01-Jul-07	01-Aug-10	$0.05	$1.50	$0.02
Key Executive Options	-	1,000,000	20-Jun-11	01-Jan-14	-	$0.15	$0.03
Key Executive Options	-	3,000,000	20-Jun-11	01-Jan-14	-	$0.15	$0.04

The following table illustrates the number and weighted average exercise prices of and movements in share options issued during the year:

	2012 Number	2012 Weighted average exercise price	2011 Number	2011 Weighted average exercise price
Outstanding at the beginning of the year Granted during the year Granted during the year Forfeited during the year Exercised during the year Expired during the year Outstanding at the end of the year Exercisable at the end of the year	23,932,922 $0.15 218,336 $1.50 - - 19,935,193 $0.15 - - 4,000,000 $0.15 - - - - (44,596) - (2,271) $0.15 (19,888,326) - (218,336) $1.50 4,000,000 $0.15 23,932,922 $0.15 4,000,000 23,932,922

Notes to the Financial Statements For the Year ended 30 June 2012

17. SHARE BASED PAYMENTS (CONTINUED)

The weighted average remaining contractual life for the share options outstanding as of the 30/06/12 is 1.5 years (2011: 1.25 years).

The exercise price for options outstanding at the end of the year was $0.15 (2011: $0.15).

The fair value of the equity-settled share options is estimated as at the date of grant using the Black and Scholes model taking into account the terms and conditions upon which the options were granted.

18. DIRECTOR AND EXECUTIVE DISCLOSURES

Details of Key Management Personnel

Directors

Name Dr D Sparling D Sargeant A Jessup

Position

Director (Non-Executive) Director (Non-Executive) Director (Non-Executive)

Executives

Name

P MacLeod R Hill

Position

Company Secretary Chief Executive Officer (Appointed 4/2/11)

Compensation of Key Management Personnel by category

Company 2012 2011 $ $ Short-term 283,500 256,084 Post-employment 2,205 4,231 Share-based payment 39,785 139,868 325,490 400,183

Notes to the Financial Statements For the Year ended 30 June 2012

18. DIRECTOR AND EXECUTIVE DISCLOSURES (CONTINUED)

Option Holdings of Directors and Key Management Personnel

2012	Balance at beginning of period 1 Jul 2011	Granted as Remuneration	Options Exercised	Net Change Other#	Consolidation of Capital	Balance at end of period 30 Jun 2012	Total Exercisable Not Exercisable Vested at 30 June 2012
Non-Executive Directors	575,000 - - (75,000) - 500,000 500,524 - - (524) - 500,000 575,000 - - (75,000) - 500,000						500,000 500,000 - 500,000 500,000 - 500,000 500,000 -
A Jessup
D Sparling
D Sargeant
Executives	2,000,000 - - - - 2,000,000 500,000 - - - - 500,000						2,000,000 2,000,000 - 500,000 500,000 -
R Hill2
P MacLeod
Total	4,150,524 - - (150,524) - 4,000,000						4,000,000 4,000,000 -

2011	Balance at beginning of period 1 Jul 2010	Granted as Remuneration	Options Exercised	Net Change Other	Consolidation of Capital	Balance at end of period 30 Jun 2011*	Total Exercisable Not Exercisable Vested at 30 June 2011
Non-Executive Directors	- 500,000 - 75,000 - 575,000 - - - 203,667 - 203,667 166,667 500,000 - (166,143) - 500,524 - 500,000 - 75,000 - 575,000						575,000 575,000 - - - - 500,524 500,524 - 575,000 575,000 -
A Jessup
R Barnett1
D Sparling
D Sargeant
Executives	- 2,000,000 - - - 2,000,000 - 500,000 - - - 500,000						1,000,000 1,000,000 1,000,000 500,000 500,000 -
R Hill2
P MacLeod
Total	166,667 4,000,000 - 187,524 - 4,354,191						3,150,524 3,150,524 1,000,000

1 resigned 14 March 2011.

2 appointed 4 February 2011.
includes interests of directors at date of resignation
options expired on 30 June 2012

Notes to the Financial Statements For the Year ended 30 June 2012

18. DIRECTOR AND EXECUTIVE DISCLOSURES (CONTINUED)

Share Holdings of Directors and Key Management Personnel

30-Jun-12	Balance at beginning of period 1 July 2011	Issued as Remuneration	Issued on Exercise of Options	Net Change Other	Consolidation of Capital	Balance at end of period 30 Jun 2012
Non-Executive Directors	350,000 - - - - 350,000 1,048 - - - - 1,048 350,000 - - - - 350,000
A Jessup
D Sparling
D Sargeant
Executives	977,827 - - 955,479 - 1,933,306 96,201 - - - - 96,201
R Hill2
P MacLeod
Total	1,775,076 - - 955,479 - 2,730,555

30-Jun-11	Balance at beginning of period 1 July 2010	Issued as Remuneration	Issued on Exercise of Options	Net Change Other	Consolidation of Capital	Balance at end of period 30 Jun 2011*
Non-Executive Directors	150,000 - - 200,000 - 350,000 407,334 - - - - 407,334 1,048 - - - - 1,048 150,000 - - 200,000 - 350,000
A Jessup
R Barnett1
D Sparling
D Sargeant
Executives	- - - 977,827 - 977,827 96,201 - - - - 96,201
R Hill2
P MacLeod
Total	804,583 - - 1,377,827 - 2,182,410

1 resigned 14 March 2011.

2 appointed 4 February 2011.

includes interests of directors at date of resignation

Notes to the Financial Statements For the Year ended 30 June 2012

19. RELATED PARTY TRANSACTIONS

Directors and specified executives

Disclosures relating to the remuneration and shareholding of directors and specified executives are set out in the Directors’ Report and Note 18 respectively.

Empire Resources Ltd has a 28% interest in FYI Resources Ltd (2011: 28%). The Company reimburses Empire Resources Ltd the office costs and exploration costs incurred by them on behalf of FYI Resources Ltd. These transactions are made at made normal market prices and on normal commercial terms.

The following table provides the total amount of transactions that were entered into with related parties for the relevant financial year:

Related party		Purchase of tenement from Related Parties $	Reimbursement of Expenditure to Related Parties $	Amounts owed by Related Parties $	Amounts Owed to Related parties $

Empire Resources Ltd	2012 2011	- 42,880 - 15,927 - 103,604 - 26,360

The following table provides the amounts outstanding at the reporting date in relation to transactions with related parties:

	Company	Company
	2012 $	2011 $
Amounts payable to Directors for Directors Fees:
Kirkdale Holdings Pty Ltd Murilla Exploration Pty Ltd	2,246 2,246 2,246 2,246
Amounts payable to CEO for Management Fees:
Capstone Capital Pty Ltd	16,500 16,500
	20,992 20,992

	Company
	2012 $	2011 $
Amounts paid to Directors for Directors Fees:
Kirkdale Holdings Pty Ltd Murilla Exploration Pty Ltd D Sparling	24,500 24,792 24,500 64,292 24,500 24,500
Amounts paid to CEO for Management Fees:
Capstone Capital Pty Ltd	180,000 90,000
	253,500 203,584

Notes to the Financial Statements For the Year ended 30 June 2012

20. NOTES TO THE STATEMENT OF CASH FLOWS

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Company
2012 2011
$ $
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(a) Reconcilation to Statement of Cash Flows

For the purposes of the statement of cash flows, cash and cash equivalents comprise cash on hand and at bank.

Cash and cash equivalents as shown in the statement of cash flows are reconciled to the related items in the statement of financial position as follows:

Cash and cash equivalents (b) Reconciliation of loss after income tax to net cash flows from operating activities:	349,830 957,740	349,830 957,740

	Company
	2012 $	2011 $
Loss after income tax Profit on disposal of plant and equipment Share based payments Depreciation Tax expense Movements in Assets and Liabilities Trade and other receivables Trade and other payables Net cash outflow from operating activities	(570,706) (867,439) - (7,581) 39,785 139,868 494 466 - (57,464) (38,656) 3,260 (35,032) (155,259)
	(604,115) (944,149)

	Company
	2012 $	2011 $
(c) Financing Facilities At balance date, the following financing facilities had been negotiated and were available: Total Facilities Bank overdraft Used at reporting date Unused at reporting date	400,000 400,000 Nil Nil 400,000 400,000

Details of Financing Facilities

The overdraft is secured on the freehold property owned by the Company and is reviewed annually. The overdraft is secured by a registered mortgage over the Baldivis land in favour of National Australia Bank.

Notes to the Financial Statements For the Year ended 30 June 2012

21. FINANCIAL RISK MANAGEMENT

Overview

The Company has exposure to the following risks from their use of financial instruments:

Credit risk
Liquidity risk
Market risk

This note presents information about the Company’s exposure to each of the above risks, their objectives, policies and processes for measuring and managing risk, and the management of capital.

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. Management monitors and manages the financial risks relating to the operations of the Company through regular reviews of the risks.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investment securities.

Investments

The Company limits its exposure to credit risk by only investing with counterparties that have an acceptable credit rating. Cash and cash equivalents are held with National Australia Bank which is an Australian bank with an AA credit rating (Standard & Poor’s). Cash and cash equivalents are held with BankWest which is an Australian bank with an AA- credit rating (Standard & Poor’s).

Trade and other receivables

During the last three financial years the Company has sold some equipment and has a small exposure to trade receivables at 30 June 2012.

The Company has established an allowance for impairment that represents their estimate of incurred losses in respect of other receivables and investments. The components of this allowance may include a specific loss component that relates to individually significant exposures.

Exposure to credit risk

The carrying amount of the Company’s financial assets represents the maximum credit exposure. The Company’s maximum exposure to credit risk at the reporting date was:

	Company	Company
	2012 $	2011 $
Cash & cash equivalents Trade and other receivables	349,830 957,740 182,390 150,438

Impairment losses

There are none of the Company’s other receivables past due (2011: $Nil).

An impairment loss of $Nil (2011: $Nil) has been recognised in respect of trade receivables.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company manages liquidity risk by maintaining adequate reserves by continuously monitoring forecast and actual cash flows.

Typically the Company ensures it has sufficient cash on demand to meet expected operational expenses for a period of 90 days.

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Notes to the Financial Statements For the Year ended 30 June 2012

21. FINANCIAL RISK MANAGEMENT (CONTINUED)

Currency risk

The Company is not exposed to any currency risk. All investments and purchases are denominated in Australia dollars.

Interest rate risk

The Company is exposed to interest rate risk due to variable interest being earned on its assets held in cash and cash equivalents.

The Company has currently has no borrowings.

Profile

At the reporting date the interest rate profile of the Company’s interest bearing financial instruments was:

	Company	Company
	2012 $	2011 $
Fixed rate instruments Financial assets Variable rate instruments Financial assets
	- -

	349,830 957,740

Interest Rate Risk

Where possible the Company enters into fixed interest rate deposits to reduce its exposure to interest rate fluctuations. The Company’s exposure to interest rate risk, which is the risk that a financial instrument's value will fluctuate as a result of changes in market interest rates, and the effective weighted average interest rates on these financial instruments, are as follows:

Notes to the Financial Statements For the Year ended 30 June 2012

21. FINANCIAL RISK MANAGEMENT (CONTINUED)

Company 30 June 2012	Weighted Average Effective Interest Rate	Floating Interest Rate $	Non-interest bearing $	Total $

Financial Assets: Cash & cash equivalents 4.1% 349,830 - 349,830 Trade and other receivables - - 182,390 182,390 Total Financial Assets 349,830 182,390 532,220 Financial Liabilities: Trade and other payables - - 117,368 117,368 Total financial liabilities - 117,368 117,368 Net Financial Assets (liabilities) 349,830 65,022 414,852
		349,830 182,390 532,220
		- 117,368 117,368
		- 117,368 117,368

		349,830 65,022 414,852

Company 30 June 2011	Weighted Average Effective Interest Rate	Floating Interest Rate $	Non-interest bearing $	Total $

Financial Assets: Cash & cash equivalents 3.7% 957,740 - 957,740 Trade and other receivables - - 150,438 150,438 Total Financial Assets 957,740 150,438 1,108,178 Financial Liabilities: Trade and other payables - - 161,971 161,971 Total financial liabilities - 161,971 161,971 Net Financial Assets (liabilities) 957,740 (11,533) 946,207
		957,740 150,438 1,108,178
		- 161,971 161,971
		- 161,971 161,971

		957,740 (11,533) 946,207

Fair value sensitivity analysis for fixed rate instruments

The Company does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Company does not designate derivatives (interest rate swaps) as hedging instruments under a fair value hedge accounting model. Therefore a change in interest rates at the reporting date would not affect profit or loss.

A change of 100 basis points in interest rates would have increased or decreased the Company’s equity by $6,189 (2011: $9,236)

Cash flow sensitivity analysis for variable rate instruments

A change of 100 basis points would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, remain constant. The analysis is performed on the same basis for 2011.

	100bp 100bp increase decrease Profit or Loss	100bp 100bp increase decrease Equity
30 June 2012 Variable rate instruments 6,189 (6,189) 6,189 (6,189) 30 June 2011 Variable rate instruments 9,236 (9,236) 9,236 (9,236)

Notes to the Financial Statements For the Year ended 30 June 2012

21. FINANCIAL RISK MANAGEMENT (CONTINUED)

Fair values versus carrying amounts

The fair values of financial assets and liabilities are as per the carrying amounts shown in the statement of financial position.

Other market price risk

Other Equity price risk is the risk that the value of the instrument will fluctuate as a result of changes in market prices (other than those arising from interest rate risk or currency risk), whether caused by factors specific to an individual investment, its issuer or all factors affecting all instruments traded in the market.

Capital management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business.

The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. The Company defines return on capital as net operating income divided by total shareholders equity.

There were no changes in the Company’s approach to capital management during the year. The Company is not subject to externally imposed capital requirements.

22. EARNINGS PER SHARE

Basic earnings per share amounts are calculated by dividing the net result for the year attributable to ordinary equity holders of the Company (after deducting interest on the convertible redeemable preference shares) by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net result attributable to ordinary equity holders of the Company (after deducting interest on the convertible redeemable preference shares) by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.

The following reflects the income and share data used in the basic and diluted earnings per share computations:

	Company	Company
	2012 Cents	2011 Cents
Basic loss per share Loss used in the calculation of basic EPS Weighted average number of shares outstanding during the year used in calculations of basic loss per share	(1.24) (2.10)
	(570,706) (867,439)
	46,077,633 41,322,789

There are 4,000,000 (2011: 23,932,922) options on issue that are not dilutive.

23. SUBSEQUENT EVENTS

24. CONTINGENCIES

In the opinion of the directors there were no contingent liabilities at the date of this report.

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INDEPENDENT AUDITOR’S REPORT

To the members of FYI Resources Limited

Report on the Financial Report

We have audited the accompanying financial report of FYI Resources Limited (“the company”), which comprises the consolidated statement of financial position as at 30 June 2012, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration for the consolidated entity. The consolidated entity comprises the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ responsibility for the financial report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error.

In Note 1(c), the directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements , that the consolidated financial report complies with International Financial Reporting Standards.

Auditor’s responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

Our audit did not involve an analysis of the prudence of business decisions made by directors or

management.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 .

HLB Mann Judd (WA Partnership) ABN 22 193 232 714 Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: [email protected]. Website: http://www.hlb.com.au Liability limited by a scheme approved under Professional Standards Legislation

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HLB Mann Judd (WA Partnership) is a member of

International, a worldwide organisation of accounting firms and business advisers.

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Matters relating to the electronic presentation of the audited financial report and remuneration report

This auditor’s report relates to the financial report and remuneration report of FYI Resources Limited for the financial year ended 30 June 2012 published in the annual report and included on the company’s website. The company’s directors are responsible for the integrity of the company’s website. We have not been engaged to report on the integrity of this website. The auditor’s report refers only to the financial report and remuneration report. It does not provide an opinion on any other information which may have been hyperlinked to/from the financial report and remuneration report. If users of the financial report and remuneration report are concerned with the inherent risks arising from publication on a website, they are advised to refer to the hard copy of the audited financial report and remuneration report to confirm the information contained in this website version of the financial report and remuneration report.

Auditor’s opinion

In our opinion:

(a) the financial report of FYI Resources Limited is in accordance with the Corporations Act 2001 , including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2012 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001 ; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1(c).

Report on the Remuneration Report

We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2012. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s opinion

In our opinion the Remuneration Report of FYI Resources Limited for the year ended 30 June 2012 complies with section 300A of the Corporations Act 2001 .

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HLB MANN JUDD Chartered Accountants

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N G NEILL Partner

Perth, Western Australia 12 September 2012

AI assistant

CADOUX LIMITED — Annual Report 2012

64620_rns_2012-09-12_183537ee-c81a-463b-b44e-9f021421c830.pdf

FYI RESOURCES LTD

Corporate Information

Chairman's Report

Dear Shareholders

CORPORATE OBJECTIVES

REVIEW OF OPERATIONS

CORPORATE

PROJECTS

YARLARWEELOR: Uranium Project – WA (100% interest)

Directors' Report

DIRECTORS

Dr David Sparling (Non-Executive Chairman)

David Sargeant (Non-Executive)

Adrian Jessup (Non-Executive)

Directors' Report

INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY

CHIEF EXECUTIVE OFFICER

COMPANY SECRETARY

CORPORATE INFORMATION

PRINCIPAL ACTIVITY

RESULTS OF OPERATIONS

DIVIDENDS

REVIEW OF OPERATIONS

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

SIGNIFICANT EVENTS AFTER THE BALANCE DATE

DIRECTORS’ MEETINGS

Directors' Report

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

Indemnification:

Insurance Premiums:

REMUNERATION REPORT (Audited)

A. Principles of Remuneration

Details of Key Management Personnel

Directors

Executives

Remuneration Philosophy

Directors' Report

REMUNERATION REPORT (Cont.)

Remuneration Committee

Non-Executive Director Remuneration

Senior Manager and Executive Director Remuneration

Fixed Remuneration

Variable Remuneration

Employment contracts

Directors' Report

REMUNERATION REPORT (Cont.)

B. Details of remuneration

Directors’ remuneration:

Directors' Report

C. Share Options

AUDITORS INDEPENDENCE AND NON-AUDIT SERVICES

CORPORATE GOVERNANCE

AUDITOR’S INDEPENDENCE DECLARATION

Directors' Declaration

Adrian Jessup Director

Statement of Comprehensive Income For The Year Ended 30 June 2012

Statement of Financial Position

As At 30 June 2012

Statement of Changes in Equity

Statement of Cash Flows

Notes to the Financial Statements For the Year ended 30 June 2012

CORPORATE INFORMATION

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Basis of Preparation

b) Adoption of New and Revised Accounting Standards

c) Statement of compliance

d) Going Concern

e) Significant Accounting Judgements, Estimates and Assumptions

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED

e) Significant Accounting Judgements, Estimates and Assumptions (Continued)

Share-based payment transactions

Exploration and evaluation costs carried forward

Valuation of Land and Improvements

f) Income Tax

Notes to the Financial Statements For the Year ended 30 June 2012

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED

f) Income Tax (Continued)

CADOUX LIMITED Annual Report 2012