CULLEN RESOURCES LIMITED — Annual Report 2003

Sep 28, 2003

REGISTERED ORACE SUBBADIONICS Tel: 1512 94374588
Level 4, 114 Christie Street, St Leonards, NSW 2065
Website: www.cullenresources.com.au Encli info@cullemesources.com.cu

PERTH OFFICE
4/7 Hardy Street, South Perth, WA 6151
Tel: + 61, 8 94745511 Fax: + 61, 8 94745588

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Directors

Denis E. Clarke (Chairman) John Horsburgh Grahame Hamilton Wayne John Kernaahan Chris Ringrose

Secretary Wayne John Kernaghan

Registered Office and Head Office

Level 4, 118 Christle Street St Leonards NSW 2065 Telephone (02) 9437 4588 Facsimile (02) 9437 4599

Perth Office

U4/7 Hardy Street South Perth WA 6151 Telephone (08) 9437 5511 Facsimile (08) 9437 5588

Securities Quoted Australian Stock Exchange Limited Home Exchange - Sydney ASX Code: CUL

Share Registry

Computershare Investor Services Level 3, 60 Carrington Street Sydney NSW 2000 Telephone (02) 8234 5000 www.computershare.com

Auditors

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Ernst & Young 321 Kent Street Sydney NSW 2000

Solicitors

Deacons 1 Alfred Street Sydney NSW 2000

Bankers

Australia and New Zealand Banking Group Limited St Leonards NSW 2065

Company Website www.cullenresources.com.au

Email info@cullenresources.com.au

Contents

Chairman's Report
Exploration Review	З
Directors' Report	13
Corporate Governance Statement	17
Independent Audit Report	18
Directors' Declaration	18
Statement of Financial Position	19
Statement of Financial Performance	20
Statement of Cashflows	21
Notes to the Financial Statements	22
Shareholder Information	32.

Chairman's Report

Dear Shareholder

The year under review was the most active exploration year in Cullen's history with several projects returning promising results. We have made significant steps towards the rewarding goal of making a major mineral discovery.

The Company undertook substantial exploration in its own right, but also attracted major explorers to commit to substantial exploration expenditure on Cullen's tenements. In all, approximately \$3 million was expended on exploration by Cullen and its JV partners in the past year. Nevertheless, the Company finished the year in a strong financial position with cash of \$1.5 million. This position was subsequently strengthened in August 2003 by the raising of \$1.5 million from a Shareholder Share Purchase Plan.

Funds continued to be generated from the sale of the Company's interest in a Russian gold mine through Peter Hambro Mining plc. For the second successive year Cullen reported an accounting profit - a rarity in Cullen's peer group of small mineral explorers.

Highlights of the year included:

• Discovery of significant gold mineralization at the Gunbarrel Project.
• Advancement of nickel exploration by joint venturers WMC Resources Limited at the large Gunbarrel Project and by Sipa Resources International Limited at the Killaloe Project.
• . Introduction of Barrick Gold Australia Limited into a major joint venture on most of the Ashburton tenements.
• Realization of further funds from sale of the Pokrovskiy Gold Project interest.

Cullen's discovery of the Southern and Eureka NW prospects at Gunbarrel was followed by encouraging results from initial follow-up drilling which indicated more widespread gold mineralization. Although recent drilling has not yet resulted in definition of an economic gold deposit, considerable potential remains and the Company is currently continuing with extensive drilling of targets in proximity to Southern.

Details of operations during the year and plans for future exploration are set out in the Exploration Review section of this Annual Report.

In my last two reports I have argued that the value of exploration assets was apparently not fully appreciated by most

Grahame Hamilton, Denis Clarke, Brent Green (Senior Geologist) and John Horsburgh on site - Gunbarrel Project

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investors. In contrast, Cullen's shareholders have been committed and supportive and, while conscious of the risks, have recognized the true value of exploration. As I write, the gold price is again high at about A\$580 per ounce and the price of nickel is strenathenina. Investor attitudes are rapidly becoming more positive towards mineral explorers. There now seems to be better appreciation of the value of exploration assets generally, which is reflected in a rise in share prices of most mineral explorers. The demand for quality exploration properties is now the highest for many years. Arguably, we are at the beginning of a "boom" period in exploration. Cullen's shareholders are well positioned to benefit from the very extensive portfolio of quality gold and nickel exploration assets assembled carefully by Cullen over the last five years. The excellent nickel potential of our Gunbarrel and Killaloe projects complement the broad range of attractive gold exploration projects.

In early 2003 Culten was particularly fortunate to attract the services of Dr Chris Ringrose as Exploration Manager and Director. Chris is a very highly regarded, experienced explorer and his expertise complements that of our joint Managing Directors John Horsburgh and Grahame Hamilton who have a track record of exploration success and mine development. The Cullen team is dedicated to pursuing the goal of exploration success within the framework of prudent corporate management.

Finally, I should like to thank all members of the Board, our staff and contractors for their particularly strong support during the year.

Annual Report 2008/7

Denis E. Clarke CHAIRMAN

THE COMPANY

Cullen is a well funded, ambitious exploration company led by a team of highly experienced, successful and motivated geologists. The depth of technical, managerial and corporate skills possessed by the Company's Directors covers all aspects of project generation, exploration management and corporate governance.

STRATEGY

The Company's objective is to discover economic gold and/or nickel mineralization by generating innovative and opportunistic, project scale exploration plays in Western Australia and New South Wales. The Company will conduct and manage exploration on selected target areas or seek appropriate joint venture partners.

PROJECTS

The Company has four project areas located in three world-class exploration regions of Western Australia :

• the Ashburton Gold Province:
• the Northeastern Goldfields; and,
• the Norseman Gold and Nickel Province.

The Company is actively exploring for gold and nickel with JV partners and for gold in its own right.

The Company has also acquired large tenement areas in New South Wales which it has identified as prospective for Intrusion Related Gold of the type exemplified by deposits in the Tintina Gold Belt of Alaska.

Exploration Review

HIGHLIGHTS OF 2002/2003

• Signing of a major Joint Venture with Barrick Gold Australia Ltd over most of Cullen's Ashburton tenements to explore for Carlin-style (sediment-hosted) gold deposits.
• High level of drilling activity for gold at the Southern Prospect (Gunbarrel Project) yields RC intercepts of 7m @ 9.05 g/t Au and 9m @ 6.2 g/t Au.
• Interpretation of aeromagnetics data identified a number of priority gold targets outside of the Southern Prospect within the Gunbarrel project area.
• Realization of \$0.95 million from the sale of Peter Hambro Mining plc shares during the year.
• The Company launched a scheme to sell shareholdings of less than \$175 in order to achieve significant cost savinas. The number of Cullen shareholders was reduced by 2,509 as a result of the scheme.
• The Company initiated a Shareholder Share Purchase Plan on 25 July 2003 and raised \$1,566,867.

PROJECT STATUS

Gunbarrel Gold continues to be the focus for Cullen managed exploration programmes.

Exploration is in progress in the Ashburton Region under the management of JV partner, Barrick. This is the first field season under the Wyloo Joint Venture.

WMC Resources Ltd (WMC), manager of nickel exploration in the Gunbarrel Project area in the Northeastern Goldfields, has recently completed two diamond drillholes.

Sipa Resources Ltd (Sipa), manager of the Killaloe Joint Venture for nickel, in the Norseman area, has completed a substantial programme of target testing during 2002-2003, and is currently reviewing the project data.

A number of gold and nickel targets have been generated over the Wonganoo Project area from compilation of regional geological and previous exploration data.

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Gunbarrel

Annuel Report 2003 $\,$ 3 $\,$

NORTHEASTERN GOLDFIELDS

GUNBARREL GOLD PROJECT

The Gunbarrel Project is part of Cullen's tenement interests in the Northeastern Goldfields of Western Australia.

The project is located $\sim$ 90km east of the Yandal Belt and covers $\sim$ 650km² of Archaean granite/ greenstone terrane. Exploration activity for gold (100% Cullen), has been at a high level throughout the year, following the discovery of significant mineralization at the Southern Prospect.

During the year Cullen completed RAB and aircore drilling (~12,500m); RC drilling (~4,000m); lag/soil sampling $(-2,400$ samples) and acquisition and interpretation of aeromagnetic data $(2,142$ line km).

RESULTS

Most of the exploration drilling programmes completed by Cullen were directed at the Southern Prospect and its immediate area where two zones of mineralization stretching over $\sim$ 1200m in strike were delineated. One of these, the "Galway" zone proved to be somewhat inconsistent in grade and width along strike, however a zone of greater potential was delineated at the "Central" zone.

Exploration Review

The latter zone comprises a series of (up to 3) shallowly dipping quartz lodes in mafic schist localized at the contact with underlying ultramatic rock. The zone of lodes and mineralization remains open along strike and at depth, and deeper RC drilling to target the down plunge component was commenced in August 2003. The results from two completed holes indicate that the lodes, as quartz veining, silicification and pyritization, continue down dip in these holes, however, the gold values are low grade.

The results of interpretation of the aeromagnetics data combined with compilation of other datasets including surface mapping and previous exploration, led to the identification of five additional priority gold targets. A programme of RAB and aircore drilling to assess these targets commenced in August 2003.

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Annual Report 2008 5

GUNBARREL NICKEL PROJECT

WMC has been exploring part of the Gunbarrel project area for nickel in joint venture with Cullen, and can earn a 75% eauity by expenditure of \$1M.

Work by WMC to date has included: lag sampling, aircore drilling, TEM geophysical surveying and geological mapping. This work has identified targets which show favourable cumulate ultramafic rocks with enriched NI and Cu values in the regolith and coincident TEM anomalies indicative of sulphide (possibly nickel bearing) mineralization.

WMC completed two diamond drill holes in a programme to test selected, anomalous positions for nickel sulphides in August 2003.

WONGANOO GOLD & NICKEL PROJECT

During the year, the Company continued to build a project area interest over greenstone which is centred on the Wonganoo Homestead located about 80km south of the Gunbarrel Project.

Compilation of previous exploration data and ground reconnaissance follow up led to the identification of broad target areas for further exploration to include RAB and /or aircore drilling. The areas selected by Cullen for further work have only been lightly explored previously. The presence of thick alluvial cover has precluded the use of conventional surface geochemical surveys and drilling in the areas.

Exploration Review

KILLALOE NICKEL PROJECT

Sipa Resources International NL can earn 70% of the Nickel Rights in the project. Killaloe is situated about 25 kilometres northeast of Norseman in the Kambalda-Widgiemooltha nickel province of the Southeastern Goldfields of Western Australia. Sipa has conducted extensive programmes of geological mapping, airborne magnetics data interpretation, ground EM surveying and RAB, RC and diamond drilling in the search for nickel sulphide deposits within the Eastern and Western ultramafic sequences. The focus of Sipa's work during 2003 has been the testing of EM conductors within the Western ultramafic sequence. Ten conductors situated close to the interpreted basal, ultramatic contact were intersected and explained by the presence of either sulphidic black shales or barren massive to semi-massive sulphides (pyrite and pyrrhotite). No significant nickel mineralization was detected. Subsequently, Sipa has embarked upon a project review in order to identify untested targets for nickel suphide within the area.

$\bullet$ $\circledcirc$ Nickel Deposits and prospects Faults/shear zones

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Annual Report 2003 7

KILLALOE NICKEL PROJECT

Exploration Review

ASHBURTON GOLD PROJECT

Cullen holds a strategic position in the NW sector of the Ashburton Gold Province including a number of project areas closely related to the Paraburdoo Hinge Zone. This zone hosts numerous gold prospects, a producing gold mine at Waugh (Sipa) and major gold resources at Mt Olympus (Sipa) and Paulsens (St Barbara Mines Ltd). The prospectivity of the reajon has attracted companies such as Newcrest, Barrick and Cogerna who are actively exploring for world-class, Carlin-style, sediment-hosted gold deposits. The Newcrest-Sipa Joint Venture has reported Carlin-style, sediment hosted gold mineralization at Cheela Plains southeast of, and structurally on-trend from Cullen's project areas. Cullen's projects also surround the Paulsens deposit $(-2.5$ Mt @ 7.7 g/t Au).

Cullen's properties have: major structures, prospective host rocks, evidence of alteration and significant soil/rock chip gold anomalies and consequently Cullen's interests have attracted a major joint venture partner.

During the year, a Joint Venture with Barrick Gold of Australia was finalized, all relevant tenements were granted, and Barrick began their fieldwork programmes in June 2003.

KILLALOE GOLD PROJECT

Cullen has 100% of the gold exploration rights over the Killaloe project area and during the year has completed further auger soil sampling programmes. These new data together with information from Sipa's geological mapping have identified a number of target areas for further RAB and/or RC drilling Including the Duke, Peninsula, Peninsula South, Baseline and Killaloe Gold workings. The latter comprised an untested area with old diggings stretching over $-2.5$ km in strike length with quartz vein lodes in basalts. Cullen will test for the presence of stockwork zones in doleritic portions of these sequences where cut by a splay structure off a major regional fault.

SCHEDULE OF TENEMENTS

PROJECTS

TENEMENTS REPLACEMENT TENEMENTS CULLEN INTEREST

Western Australia

E47/874	MLA08/277,278,279.	100%
E47/875		100%
F47/903	MLA08/553,554,555	100%
E47/1004		100%
E08/1145	MLA08/309, 310	100%
E08/1166 Wyloo JV		100%	Barrick may earn 70%
E08/1189		100%
E06/1327		100%
	PLA08/494, 495	100%
E08/1330 E08/1292		100% 100%
ELA08/1375		100%
E47/1154		100%
E08/1022	MLA08/281,282,283,284	51%	Udu Resources Ltd 49%
Yanks Bore JV ELA08/1384
Red Hill West E08/1135		100%	2.5% NSR Royalty to Goldfields Exploration Pty Ltd.
Cardo Bore E08/1341		100%
ELA08/1393 Anthiby NW		100%
Showy ELA52/1667 Mountain		100%
M08/79		100%	(i) Hudson Resources Ltd retains a 10% NRI
Slate Bore			(ii) Hudson entitled to an amount equivalent to a 2.5%
E08/1021		100%	NPL of Culten's equity in E08/1021. Telezon Ltd retains a 10% NPI
E53/535	M53/868,869	$100\%$ *	2.5% NPI Royalty to Pegasus on Cullen's interest
	M53/952,953,954
Gunbarrel E53/568	M53/870	100%*	2.5% NPI Royalty to Pegasus on Cullen's interest
E53618		$100\%*$	1.5% NSR Royalty to Aurora
E53/837		$100\% *$	1.5% NSR Royalty to Aurora.
			*WMC JV may earn 75% of Nickel rights
E53/403	M53/494,495,	90%
ELA53925	M53/713,878	90%	10% Revesco Group Ltd.
invin Bore ELA53/981		90%
ELA53/1040		100%
PLA53/1154		100%
ELA53/1096		100%
E53 1046		100%
ELA53/1069 Wonganco		100%
ELA53/1083		100%
ELA53/988		Earning 80%	Cullen can earn 80% from Qantum Resources Ltd.
E63/722		$100% +$	7.5% NPI Royalty to Xplore Pty Ltd.
E63/765 P63/1131-33		$100% +$ $100% +$	7.5% NPI Royalty to Xplore Pty Ltd.
Kilialoe	P63/1172-1174	$100% +$
			+Sipa may earn 70% of Nickel rights
ELA63/815		100%

Queensland

TICK HILL EPMA 12395 n Wales	n an an an an an an an an an an an an an
EPMA 11990	n de provincia de la calca de la calca de la calca de la calca de la calca de la calca de la calca de la calca Se para la calca de la calca de la calca de la calca de la calca de la calca de la calca de la calca de la ca . . a kithean the anthers it eas

Central Lachlan ELA2150-53.2156

$100\%$ and $100\%$

Your Directors submit their report for the year ended 30 June 2003.

Directors

The names and details of the company's directors in office during the financial year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated.

& Dr Denis Clarke BSc, BA, PhD, FAIMM (Non-Executive Chairman)

Denis Clarke has more than 30 years experience in exploration and mining operations. Over 15 years with Plutonic Resources ("Plutonic"), he contributed significantly at the General Manager level to its success as it developed from a small explorer in 1983 to one of Australia's largest gold miners prior to its take-over in 1998 in a transaction which valued Plutonic at \$1 billion. Dr. Clarke at various times managed the exploration, finance, administration and corporate divisions. He brings to the Board broad technical, financial, administrative and corporate experience and a wide range of industry contacts. Currently Dr. Clarke is Non-Executive Chairman or Non-Executive Director of three other listed companies.

& Grahame Hamilton BSc, MSc, MAIG (Executive Director)

Grahame Hamilton, a graduate of the University of NSW, has extensive experience over 30 years in exploration, corporate and project management. He has wide ranging expertise in project evaluation. Between 1994 and 1996he managed the Brocks Creek exploration, environmental impact statement, feasibility study, mine development and construction for Solomon Pacific Resources NL. Before Solomon, Grahame worked with Getty Oil Development Co.- minerals division as Queensland Manager.

& John Horsburgh BSc, MSc, FAIMM (Executive Director)

John Horsburgh, a graduate of the Royal School of Mines, has over 32 years industry experience including 11 years with Solomon Pacific Resources NL. Prior to this he gained extensive experience in Australia and overseas with Getty Oil Development Co., Billiton and RTZ Group.

& Wayne John Kernaghan (Non-Executive Director)

Wayne Kernaghan is a member of the Institute of Chartered Accountants in Australia with a number of years experience in various areas of the mining industry. He is also a Fellow of the Australian Institute of Company Directors. Mr Kernaghan is also a director of AIM Resources Limited.

& Dr Chris Ringrose BSc, Phd, MBA, MAIMM (Exploration Director)

Chris Ringrose was appointed a director on 19 June 2003. He has been an exploration geologist based mainly in Western Australia since he completed his geology degrees in Scotland in 1982. His career has included experience with EZ, Chevron and Aztec, and prior to joining Cullen, Chris was Exploration Manager with Troy Resources NL for nine years. Chris has also completed an MBA at Deakin University and brings to the Company significance management, exploration and project evaluation experience gained both in Australia and overseas.

Principal Activities

The principal activities for the consolidated entity during the course of the financial year was mineral exploration. There was no significant change in the nature of the consolidated entity's activities during the year.

Results

The consolidated profit of the consolidated entity for the financial year was \$187,220 [2002: \$141,937]. No income tax was attributable to this result.

Dividends

The directors do not recommend the payment of a dividend for this financial year. No dividend has been declared or paid by the company since the end of the previous financial year.

Significant Changes in the State of Affairs. 99 MAY

la the signification to the directors there were no significant changes in the state of affairs of the consolidated entity that occurred during the financial year under review not otherwise disclosed in this report or the consolidated financials statements.

DIRE DRS REIGRA

Review of Operations

During the year under review, the Company continued its mineral exploration activities which were focussed in three main centres of Western Australia:

• A Ashburton Province (Yanks Bore, Red Hill West, De Courcy, Slate Bore, Hardey Junction, Mt Stuart, Cardo Bore and Catho Well Gold Projects).
• Northeastern Goldfields (Gunbarrel Gold and Nickel Projects, Irwin Bore and White Well/Wonganoo Projects).
• La Eastern Goldfields (Killaloe Gold and Nickel Projects).

A total of \$1,645,212 was spent on exploration during the year.

Cullen's objective in these areas is to discover gold and/or nickel deposits by generating drill targets for testing either by Cullen in its own right or with a joint venture partner.

Exploration activities during the year to 30 June have included RAB/aircore/auger drilling of 16,706m at Gunbarrel and Killaloe, RC and core drilling of 6,732m at Gunbarrel, Irwin Bore and Killaloe; airborne magnetic surveying at Gunbarrel; electromagnetic (EM) surveying at Killaloe and Gunbarrel; general geological and geochemical prospecting at De Courcy, Hardey Junction, Yanks Bore, Gunbarrel, Irwin Bore and Killaloe.

Cullen's drilling at Gunbarrel has been encouraging with the discovery of the Central Zone at the Southern Prospect with intercepts of 7m @ 9.0g/t Au and 6m @ 6.2g/t Au. The Central Zone comprises at least three shallowly dipping lodes extending for at least 300m that potentially remain open to the east and down dip. RC drilling in the September Quarter 2003 will further test this prospective area. Interpretation of detailed aeromagnetic surveys has identified numerous new targets for gold exploration and with first pass RAB/aircore drilling of five priority targets in the September Quarter 2003.

WMC Resources Ltd has been exploring for nickel and related base metal and platinum group elements on the Gunbarrel tenements since May 2001. Exploration to date has identified two coincident EM and geochemical (copper and nicket) targets for core drilling in the September Quarter 2003.

A promising new project has been generated at Wonganoo, approximately 80 km south west of Gunbarret. Cullenhas secured a significant tenement package that is prospective for gold and nickel deposits. Prior exploration has provided Cullen with high quality aeromagnetics data from which two broad gold target areas have been identified, one of which has a previous drill intercept of 24m @ 1.3g/f Au.

At Killaloe, Cullen has completed widespread auger drilling for gold and has identified several targets for RAB and/ or RC follow-up. The Killaloe workings and NE Volcanic Zone are located on a major regional structure and represent primary drill targets. Sipa Resources International NL (Sipa) may earn a 70% interest in the nickel, base metal and related PGEs in the tenements, for a total expenditure of \$3.95 million over four years. Sipa's exploration has consisted of geological mapping, EM surveying, RC and diamond core drilling. Ten EM targets have been drilled to date, however, only barren iron sulphides have been intersected. Sipa are currently reviewing all data.

Barrick Gold Australia Ltd (Barrick) has advanced the Wyloo Joint Venture tenements substantially to a stage where all tenements have been granted. Barrick can earn 70% by spending \$5 million over 5 years, with \$350,000 in the first year. Field work commenced in the June Quarter 2003 with geochemical and geological surveys, predominantly in the Hardey Junction area. Aircore drilling is planned for the September Quarter 2003. At Yanks Bore new targets have been generated. A joint venture partner is being sought for the Yanks Bore, Red Hill, Cardo Bore and Slate Bore tenements.

MIM Exploration Pty Ltd (MIM) advised Cullen that it has no further interest in the Duchess tenement EPM 11990. This advice terminates Cullen's remaining obligations under the Tick Hill Joint Venture agreement. Cullen will pursue joint venture partners for its tenements in the Duchess region.

In a new initiative, five EL applications were lodged in August in the Central Lachlan Fold Belt to cover areas prospective for Intrusive-Related Gold Deposits.

Cullen will continue to identify and evaluate advanced gold and nickel opportunities as the Australian gold industry @ontinues to rationalise. Gullen's portfolio of projects is under cantinual evaluation to focus on projects likely to result in an economic mineral deposit.

Corporate

The company realised approximately \$0.95million from the sale of part of its shareholding in Peter Hambro Mining plc, the AIM listed company that controls the Pokrovskiy Gold Project in Russia. The company still holds 40,000 shares in Peter Hambro Mining Plc at 30 June 2003. Available cash at year end totalled approximately \$1.5 million.

Significant Events after Year End

There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the parent entity, to affect the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity in subsequent financial years other than the Company had a shareholder share purchase plan in operation which closed on 27 August 2003. Under the shareholder share purchase plan the company will issue 52,228,906 ordinary shares at 3 cents raising \$1,566,867.

Likely Developments and Future Results

Other than as referred to in this report, further information as to likely developments in the operations of the consolidated entity and the expected results of those operations would, in the opinion of the directors, be speculative and not in the best interests of the consolidated entity.

Environmental Regulation

The exploration activities of the consolidated entity in Australia are subject to environmental regulation under the laws of the Commonwealth and the States in which those exploration activities are conducted. The environmental laws and regulations generally address the potential impact of the consolidated entity's activities in the areas of water and air quality, noise, surface disturbance and the impact upon flora and fauna. The directors are not aware of any environmental matter which would have a materially adverse impact on the overall business of the consolidated entity.

Options

During the year the company has granted 5,500,000 options to take up fully paid shares in the company.

As at 30 June 2003 the company has 15,500,000 (2002; 10,000,000) options which were outstanding. Refer to note 10 of the financial statements for further detail of the options outstanding.

During the year, Nil (2002: Nil) fully paid ordinary shares were issued by virtue of the exercise of options. Since the end of the financial year no shares have been issued by virtue of the exercise of options.

Directors' and Executives Remuneration

Details of remuneration provided to directors who include the most highly remunerated executives for the year ended 30 June 2003 are as follows:

	Salah Hite t		Superantuation and Autorised Coa
De Clarke	-25.000			251
A Hammor	140,004	2,6UU
Altresored	140.004
W.J. Kernagnan	130.575	.350
w Rengonski			24.200	.00,502

These options were issued and vested on 13 November 2001 as a result no amount has been included as emoluments for the year ended 30 June 2003.

From 1 July 2002, options granted as a part of director and executive emoluments have been valued using a Black and Scholes pricing model, which takes account of factors including the option exercise price, the share price at time of grant, volatility of the underlying share price, the risk-free interest rate and the expected life of the option. The policies adopted by the company is relation to except twes remuneration is disclosed in the Corpor

Covernance Statement

TIRK GRAFIN SIDE

Directors' Interest

At the date of this report, the interest of the directors in the shares and options of the company were:

		Direct		Indirect
	Fully Part	Ontions	Fully Paid	Optans
	Sharesi		Shares
D. L. Carl Ro		2,000,000	-4,269,383
G Hamilton		2,000,000	10,878,004
Leforsburgh		2,000,000	[12, 193, 002]
W.J. Kemaghan		~2,000,000 .	197.UU.
C. Mingrese		5,000,000

Directors' Meetings

During the year the company held 5 meetings of directors. The attendance of the directors at meetings of the Board were:

	Board of Directors Maximum possible
	Aftended eligible to attend
- - - - - - - - - - - - - - - - - - -
Mamilton
W. Kemaghan

Corporate Governance

In recognising the need for the highest standard of corporate behaviour and accountability, the directors of Cullen-Resources Limited support and have adhered to the principles of good corporate governance. The company's corporate governance statement is on page 17.

Directors' Interests and Benefits

Since the end of the previous financial year no director of the company has received or become entitled to receive a benefit (other than a benefit included in the aggregate amount of remuneration received or due and receivable by directors shown in the consolidated financial statements), by reason of a contract made by the company, its controlled entities or a related body corporate with a director or with a firm of which a director is a member, or with a company in which the director has a substantial financial interest except for the payment for provision of office facilities and staff in the ordinary course of business to a company in which a director is also a director and shareholder.

Signed in accordance with a resolution of the directors

			J. Horsburgf
	Director

Sydney, 4. September 2003

Corporate Governance Statement

The board of directors of Cullen Resources Limited is responsible for the corporate governance of the consolidated entity. The board guides and monitors the business of Cullen Resources Limited on behalf of the shareholders by whom they are elected and to whom they are accountable.

The board of directors consider that Cullen Resources Limited's structure and the scope of its activities does not justify the establishment of committees such as an audit committee, preferring to manage the consolidated entity through the full board of directors. The board of directors comprise directors with an appropriate range of qualifications and expertise who meet regularly to assess the business and affairs of the company. The directors feel that appropriate measures are in place which enable effective control and direction of the company to identify areas of significant business risk and to ensure arrangements are in place to adequately manage those risks.

The Board is responsible for establishing remuneration packages applicable to the Board members and senior. executives of the Company. The policy adopted by the board is to ensure the remuneration properly reflects an individual's duties and responsibilities and that remuneration is competitive in attracting, retaining and motivating people of the highest calibre.

Directors' and executive remuneration packages are also assessed in the light of the condition of markets within which the Company operates, the Company's financial condition and the individual's contribution to the achievement of corporate objectives. In reviewing remuneration packages generally and in considering the granting of options or payment of bonuses, past performance is given the greatest weighting of the aforementioned factors.

At any time any director can obtain independent professional advice at the company's expense. No director has sought independent professional advice during this financial year.

The board of directors aims to ensure that the shareholders, on behalf of whom they act, are informed in a timely manner of all information necessary to assess the performance of the directors.

Information is communicated to the shareholders through:

• the annual report which is distributed to all shareholders;
• the annual general meeting and other meetings called to obtain approval for board action as appropriate; and 么
• quarterly reports released to the market through the Australian Stock Exchange; and
• the company website www.cullenresources.com.au

ANDERSADENT AUDIT REZORTE

TO THE MEMBERS OF CULLEN RESOURCES LIMITED

Scope

The financial report and directors' responsibility

The financial report comprises the statement of financial position, statement of financial performance, statement of cash flows, accompanying notes to the financial statements, and the directors' declaration for Cullen Resources Limited (the company) and the consolidated entity, for the year ended 30 June 2003. The consolidated entity comprises both the company and the entities it controlled during that year.

The directors of the company are responsible for preparing a financial report that gives a true and fair view of the financiat position and performance of the company and the consolidated entity, and that complies with Accounting Standards in Australia, in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report.

Audit approach

We conducted an independent audit of the financial report in order to express an opinion on it to the members of the company. Our audit was conducted in accordance with Australian Auditing Standards in order to provide reasonable assurance as to whether the financial report is free of material misstatement. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal control, and the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material misstatements have been delected.

We performed procedures to assess whether in all material respects the financial report presents (airly, in accordance with the Corporations Act 2001, including compliance with Accounting Standards in Australia, and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the company's and the consolidated entity's financial position, and of their performance as represented by the results of their operations and cash flows.

Salar

We formed our audit opinion on the basis of these procedures, which included:

• examining, on a lest basis, information to provide evidence supporting the amounts and disclosures in the financial h. report, and
• assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors.

While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our audit was not designed to provide assurance on internal controls.

We performed procedures to assess whether the substance of business transactions was accurately reflected in the financial report. These and our other procedures did not include consideration or judgement of the appropriateness or reasonableness of the business plans or strategies adopted by the directors and management of the company.

Indenendence

We are independent of the company, and have met the independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.

Audit opinion

In our opinion, the financial report of Cullen Resources Limited is in accordance with:

• (a) the Corporations Act 2001, including:
• giving a true and fair view of the financial position of the company and the consolidated entity at 30 June. 份 2003 and of their performance for the year ended on that date; and
• complying with Accounting Standards in Australia and the Corporations Regulations 2001; and (韵

(b) other mandatory financial reporting requirements in Australia.

Ernst & Young

Peter A. Markey Partner Swiney 4 September 2003

Directors' Declaration

In accordance with a resolution of the directors of Cullen Resources Limited, I state that:

In the opinion of the directors:

• (a) the financial statements and notes of the company and of the consolidated entity are in accordance with the Corporations Act 2001, including:
• $\langle \rangle$ giving a true and fair view of the company's and consolidated entity's financial position as at 30 June 2003 and of their performance for the year ended on that date; and
• complying with Accounting Standards and Corporations Regulations 2001; and 伍

(b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become indue and payable. w Qas ann

On behalf of the Board

J. Horsburgh ^...

Director $_{\sim}$

Sydney, 4 September 2003.

and a sing

SATISTIKO I INANGALIZISTIKA

Statement of Financial Position at 30 June 2003

			Consolidated		The Company
	Note	2003 ٩,	2002	2003.	2002
Current Assets
Cash assets	18()	1.513.155	2.705.319	1.479.102	2.689.053
Total Current Assets		1.513.155	2,705,319	1,479,102	2,689,053
Non Current Assets
Receivables				5,326,708	3,355,308
Other financial assets		12,800	107,000	12,800	107,000
Plant & Equipment		60,333	24,108	13,815	:20,545.
Other		3.935.422	2.517.200
Total Non Current Assets		4.008.555	2,648,308	5.353.323	3.482.853
Total Assets		5,521.710	5.353,627	6.832.425	6.171.906
Current Liabilities
Payables		47,920	84,025	26,657	10,998
Provisions		30.358	13.390
Total Current Liabilities		78,278	97.415	26.657	10,998
Total Liabilities		78,278	97,415	26,657	10,998
Net Assets		5,443,432	5,256,212	6,805,768	6,160,908
Equity
Contributed Equity	10	16,957,639	16,957,639	16,957,639	16,957,639
Accumulated Losses		(11,514.207)	(11,701,427)	(10,151,871)	(10,796,731)
Total Equity		5,443,432	5,256,212	6,805,768	$-6,160,908$

				STATEMENT OF FINANCIAL PERFORMANCE
				[1] 2010년 11월 11월 11월 11월 11월 11월 11월 11월 11월 11

Statement of Financial Performance for the year ended 30 June 2003
	Note	2003	Consolidated 2002	The Company 2003	2002
Revenues from ordinary activities		1,033,145	2,088,535	1,030,403	2,083,597
Exploration expenditure written off		(226,990)	1,085,433)
Cost of investments sold		(94,200)	(199, 150)	(94,200)	(199, 150)
Rent		(73, 162)	(58, 882)	(56,360)	(58, 882)
Salaries and consultants		(224, 887)	(366, 289)	(70, 238)	(274, 203)
Compliance		(78, 731)	(50,383)	(78, 731)	(50,183)
Other expenses from ordinary activities		(147.955)	186,461	(86.014)	(122.221)
Profit from ordinary activities		187,220	141,937	644,860	1,378,958
Income tax relating to ordinary activities
Net Profit		187.220		644.860
Basic earnings per share (cents per share)		0.07
Diluted earnings per share (cents per share)		0.07

String in Sirk Self of Sirk 150 USA

Statement of Cash Flows for the year ended 30 June 2003

	Note	2003.	Consolidated 2002	2003	The Company 2002
Cash flows from operating activities			Inflows/LOutflows)
Cash receipts in the course of operations
Cash payments in the course of operations		(692, 343)	(747,910)	(302, 138)	(564, 922)
GST refunded		161,909	89,510	33,184	43,024
Interest received		83.035	34,247	80.293	33.930
Net operating cash flows	18 (ii) -	(447.399)	(624, 153)	(188.661)	(487.968)
Cash flows from investing activities
Loan to controlled entity				(1,971,400)	(964,067)
Receipts from safe of investments.		950,110	2,049,667	950,110	2,049,667
Payment for property, plant & equipment		(49, 663)	$^{5}(9,573)$		(6,873)
Payments for exploration		(1,645.212)	(811, 633)
Net investing cash flows		(744, 765)	1,228,461	(1,021,290)	1,078,727
Cash flows from financing activities
Proceeds from issue of shares			949,000		949,000.
Payment of share issue costs.			(25,900)		(25,900)
Net financing cash flows			923,100		923,100
Net (decrease)/increase in
cash held		(1, 192, 164)	1,527,408	(1,209,951)	1,513,859
Cash at the beginning of the financial year		2,705,319	1,177,911	2,689,053	1,175,194
Cash at the end of the financial year	18(i)	1,513,155	2,705,319	1,479,102	2,689,053

for the year ended 30 June 2003.

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, including applicable Accounting Standards. Other mandatory professional reporting requirements (Urgent Issues Group Consensus Views) have also been complied with. The financial statements have also been prepared in accordance with the historical cost convention using the accounting policies described below and do not take account of changes in either the general purchasing power of the dollar or in prices of specific assets.

Principles of consolidation

The consolidated financial statements include the financial statements of Cullen Resources Limited and the results of all of its controlled entities which are referred to collectively throughout these financial statements as the "Consolidated Entity". The results of controlled entities are prepared for the same reporting period as the parent, using consistent accounting policies. All inter-entity balances and transactions, and unrealised profits arising from intra-economic entity transactions, have been eliminated in full.

Taxes

Income Tax

The consolidated entity applies the principles of tax-effect accounting. The income tax expense in the Statement of Financial Performance represents the tax on the pre-tax accounting profit adjusted for income and expenses never to be assessed or allowed for taxation purposes. The provision for deferred income tax liability and the future income tax benefit includes the tax effect (at current tax rates) of differences between income and expense items recognised in different accounting periods for book and tax purposes. The benefit arising from estimated carryforward tax tosses has also been recorded as a future income tax benefit only where realisation of such benefit is considered to be virtually certain.

Goods and Services Tax (GST)

Revenues, 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.

Recoverable Amounts of Non-Current Assets

All non-current assets excluding mining tenements and development costs are reviewed each reporting date to determine whether their carrying amounts require write down to recoverable amount. Recoverable amount is determined using net cash flows discounted to present values.

Provision for Employee Benefits

Provision has been made in the financial statements for benefits accruing to employees in relation to annual leaveand fong service leave, 'Annual leave and long service leave provisions expected to be settled within twelve months, are measured at their nominal amounts. All other employee entitlement liabilities are measured at the present value of the estimated future cash outflow to be made in respect of services provided by employees up to the reporting date ...

Investments in Controlled Entities

Hilvestments in controlled entities are carried in the company's financial statements at the lower of cost and recoverable amount. Dividends and distributions are brought to account when they are proposed by the controlled entities.

W or

NOTES TO HE ENTIRODES MEMENTS

for the year ended 30 June 2003.

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Investments in Other Companies

Investments in other companies are carried at the lower of cost, or recoverable amount, being a directors' valuation based on market values at the time of the valuation. Dividends are brought to account as they are received.

Mining Tenements and Development Costs

Exploration, evaluation and development costs are accumulated in respect of each separate area of interest. These costs are carried forward where they are expected to be recouped through sale or successful development and exploitation of the area of interest, or, where activities in the area of interest have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

When an area of interest is abandoned or the directors decide that it is not commercial, any accumulated costs in respect of that area are written off to the extent that they will not be recoverable in the future.

Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase until production commences.

When production commences, carried forward exploration, evaluation and development costs are amortised on a units of production basis over the life of the economically recoverable reserves.

Foreign Currency

Foreign currency transactions are translated to Australian currency at the rate of exchange ruling at the date of the transactions. Amounts receivable and payable in foreign currencies at balance date are translated at the rates of exchange ruling on that date.

Exchange differences relating to amounts payable and receivable in foreign currencies are brought to account in the Statement of Financial Performance in the financial year in which the exchange rates change, as exchange gains or losses.

Plant and Equipment

Plant and equipment are depreciated over their useful economic lives as follows:

	iite	Method
Plant & Equipment	3-8 vears	Straight Line

Operating revenue

Other revenue includes interest income on short term deposit received from other persons. It is brought to account as it accrues.

Joint Venture

An interest in a joint venture operation is brought to account by including in the respective financial statement. categories:

• the consolidated entity's share in each of the individual assets employed in the joint venture;
• a. Habilities incurred by the consolidated entity in relation to the joint venture including the economic entity's share of any liabilities for which the consolidated entity is jointly and/or severally liable; and
• A the consolidated entity's share of expenses of the joint venture.

Financial Instruments

Included in Assets:

North Mars

A Receivables are initially recorded at the amount of contracted sales proceeds.

, paradikang

A Junestments, including equity interests in non-subsidiary, non-associated corporations, are included in investments at the lower of cost or recoverable amount. Dividend income is brought to account when declared.

辨.

$\geq k$

for the year ended 30 June 2003.

Payables

Liabilities for trade creditors and other amounts are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the consolidated entity.

Contributed Equity

Issued and paid up capital is recognised at the fair value of the consideration received by the company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.

Earnings Per Share (EPS)

Basic EPS is calculated as net profit/(loss) attributable to members, adjusted to exclude costs of servicing equity, divided by the weighted average number of ordinary shares, adjusted for any bonus element. Diluted EPS is calculated as net profit/(loss) attributable to members, adjusted for:

• & costs of servicing equity;
• the after tax effect of 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, adjusted for any bonus element.

Change in accounting policies

The accounting policies adopted are consistent with those of the previous year except for the accounting policies with respect to foreign currency translation, employee benefits and Provisions, Contingent Liabilities and Contingent Assets.

Foreign currency translation

The consolidated entity has applied AASB1012 "Foreign Currency Translation" (issued in November 2001) for the first time from 1 July 2002.

There was no impact on the consolidated financial report as at 1 July 2002 or on the profit or loss for the reporting period ended 30 June 2003.

Employee benefits

The consolidated entity has applied the revised AASB 1028 "Employee Benefits" (issued June 2001) for the first time from 1 July 2002.

There was no impact on the consolidated financial report as at 1 July 2002 or on the profit or loss for the reporting period to 30 June 2003.

Provisions, Contingent Liabilities and Contingent Assets

The consolidated entity has applied the revised AASB 1044 "Provisions, Contingent Liabilities and Contingent Assets" (issued in October 2001) for the first time from 1 July 2002.

There was no impact on the consolidated financial report as at 1 July 2002 or on the profit or loss for the reporting period to 30 June 2003.

for the year ended 30 June 2003.

2. PROFIT AND LOSS ITEMS
	Consolidated 2003.	2002	The Company 2003	2002
Profit from ordinary activities after
crediting the following revenues:
Other Revenues
Interest received from other persons	-83,035	34,247	80,293	33,930
Proceeds from sale of investments (a)	950,110	2,049,667	950,110	2,049,667
Other		4.621
	1,033,145	2,088,535	1,030,403	2.083.597
Profit/(loss) from ordinary activities is after charging the following expenses:
Auditors remuneration in respect of the audit of the financial statements - current year	30,000	32,465		32,465
Exploration expenditure written off	226,990	1,085,433
Depreciation	13,438	7,841		6,139
Provision for employee benefits	11,112	2,500
(a) Net gain (loss) on sale of investments	855,910	1,850,517	855,910	1,850,517
3. INCOME TAX
Operating profit before income tax	187,220	141,937	644.860	1.378,958
Prima facie income tax expenses calculated at 30% (2002: 30%)	56,166	42,581	193,458	413,687
Less benefit of tax losses now recognised	(56.166)	(42.581)	(193.458)	(413.687)
Total income tax expense

As at 30 June 2003 future income tax benefits were available to the company and to the consolidated entity in respect of operating losses and prospecting and exploration expenditure incurred. The directors estimate the potential income tax benefit at 30 June 2003 in respect of tax losses not brought to account is \$1,500,000 (2002: \$1,600,000). The benefit of these losses has not been brought to account as realisation is not virtually certain. The benefit will only be obtained if:

• (a) the relevant company derives future assessable income of a nature and of sufficient amount to enable the benefit to be realised.
• (b) the relevant company and/or the consolidated entity continue to comply with the conditions for deductibility imposed by the law: and
• (c) no changes in tax legislation adversely affect the company and/or the consolidated entity in realising the benefit.

Since the substantive enactment of the Tax Consolidation legislation the Cullen consolidated group has decided not to enter the tax consolidation regime for the 2003 taxation year. It is possible that an election to enter the tax consolidation regime will be during the 2004 taxation year.

's x le

MONSKOMILINIVANGIALISKA ENERGIS

for the year ended 30 June 2003

4. RECEIVABLES

		Consolidated	All The Company
	vranssagany p e ssagan musiqii ilgasammed muuluumilli		Allingside and the superior of the superior of the second second second second second second second second second second second second second second second second second second second second second second second second sec
Non current	. er de la tradición de la calcada de la Calcada 1990 - La Calcada de La Calcada de la Calcada 1990 - La Calcada de La Calcada de la Calcada		pintana Pikamang Pikamangan
Loan to controlled entities	--

The loans to controlled entities are non interest bearing and have no fixed term for repayment.

5. OTHER FINANCIAL ASSETS Non ourroof

INGH CUITEIR. Shares quoted on stock exchanges.	107,000		107,000
Shares in controlled entity Cullen Minerals NL		2,643,131	2.643.131
Provision for diminution in value		(2.643.131)	(2,643,131)
	000		.000

The market value of the listed shares at 30 June 2003 was \$270,000 (2002:\$974,800). The listed investment comprises shares in a mining corporation.

6.PLANT & EQUIPMENT

Plant & Equipment

Cost Opening Balance		43,250		27,863
Additions	49,663	9.573		6.873
Closing Balance	$\overline{\phantom{a}}$ 102.486	52,823	$\cdots$ 34,736	34,736
Accumulated Depreciation Opening Balance		20.874		8,052
Depreciation for the year	13,438	7,841	6.730	6,139
Closing Balance	42,153	28,715	20.92	14.191
Net book value	60.333	24.108	13.815	20.545

for the year ended 30 June 2003

The Company

7. OTHER

	Consolidated		The Company
	2003.	-2002.	2003.	2902. я.
Exploration rights and development costs
Costs carried forward in respect of areas of interest in the exploration phase.
Opening balance		3,078,150		287,150
Expenditure incurred	645.2	811.633
	4.162,412	3,889,783		287,150
Less expenditure written off	226 991	(1,085,433)
Less transfer to investments (a)		(287.150)		(287.150)
Closing balance		2.517.200

$(a)$ The cost of the company's 2% interest in the Pokrovskiy Gold project in Russia being transferred to investments upon the AIM listing of Peter Hambro Mining plc. Peter Hambro Mining plc is the company that contracts the Pokroviskiy Gold Project.

Mining tenements are carried forward in accordance with the accounting policy set out in Note 1.

The ultimate recoupment of the book value of deferred costs relating to areas of interest in the exploration/evaluation phase is dependent upon the successful development and commercial exploitation or, alternatively, sale of the respective areas of interest and the consolidated entity's ability to continue to meet its financial obligations to maintain the areas of interest.

Consolidated

8. PAYABLES

. . . .

	2003	2002	2003	2002
Current
Trade creditors - unsecured		84.025		10.998
9. PROVISIONS
Current
Employee Benefits		13.390
10. CONTRIBUTED EQUITY
Issued capital
268,752,376 (2002:268,752,376)	16,957,639	16.957.639	16,957,639	16.957.639
Movement in issued shares for the year:
	2003		2002
	Number of Shares	Д.	Number of Strates
Beginning of the financial year	268.752.37	16,957,639	241,102,376	16,034,539
Issued at 2.0 cents each			1,250,000	25,000
Issued at 3.5 cents each			26,400,000	924,000
Less transaction costs				(25,900)
End of the financial year -	268,752,376	16,957,639	268,752,376 Ωģ	$-16.957.639$

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 upon shares held.

Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the company

for the year ended 30 June 2003.

Options

As at 30 June 2003 there are 15,500,000 (2002: 10,000,000) unissued shares in respect of which options were outstanding and the details of these are as follows:

	limmer TARTORA PETOR 30 November 2004. 10.000.000 $\approx 17$ January 2006 $-3,500,000$ 0.05. 17 January 2006 [1996] $2,000,000$
LL. ACCUMULATED LOSSES Accumulated losses at the beginning			$\sim$
of the year	.,701,427)	(11.843,364)		(12.175.689).
Net profit	187.220	141.937	644.860	1.378.958
Accumulated losses at the end of the year	.	701,427) .	151 -------------------------	.796.731). --------------------------

12. PARTICULARS IN RELATION TO CONTROLLED ENTITIES

man

The consolidated financial statements at 30 June 2003 include the following controlled entities. The financial years of all controlled entities are the same as that of the parent entity.

	Parent licomoration and the more than the control of the control of the control of the control of the control of ,,,,,,,,,,,,,,,,,, apagawang mga mga mga mga mga mga mga mga mga mg a se poder de la construcción de la construcción de la construcción de la construcción de la construcción de l En la construcción de la construcción de la construcción de la construcción de la construcción de la construcc ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
Minerals NL	. of the executive products a diference na ala	. 1.11111111111111111111111111111111111
Exploration Pty Ltd	the second complete second second DESENTO LA COLORAD	$\cdots \cdots \cdots \cdots \cdots$

13. DIRECTORS' REMUNERATION

Directors' Income

Cullen Cullen

The number of directors of the company, including executive directors, whose income from the company or related bodies corporate falls within the following bands were:

\$0	$\ddot{\phantom{a}}$	\$9.999
\$20.000	$\ddot{\phantom{a}}$	\$29.999
\$30.000	ä,	\$39,999
\$100,000	à.	\$109.999
\$110.000	à.	\$119.999
\$150.000	$\mathcal{L}$	\$159.999

Total income received or due and receivable by all directors, including executive directors, of the company from the company or related bodies corporate.

Details of remuneration provided to all executive officers is as per the director's income above.

The fair value of each option issued to the directors and executive officers is estimated on the date of grant using a Black and Scholes option pricing model with the following weighted average assumptions used for grants made on 17 January 2003. No grants were made during the year ended 30 June 2002.

	∴Volatility ~… Expected life of option [1].3 years.	-2003- -30%
The fair values for those options issued on 17 January 2003 are as follows:
Mumber of options.		EXPIRATIONS	Tan Value
3.000.000	17/01/2003	17/01/2006	M cents
		7/01/2006	-34 cents
These fair values are not recognised as expenses in the financial statements.

14. JOINT VENTURE

The consolidated entity has interests in the following unincorporated joint ventures:

	Pineroal Actively Office Participant
Ashburton (a)	Barrick Gold Australia Limited Exploration
Gunbarrel (b)	WMC Resources Ltd Exploration
Yanks Bore (c)	ldu Resources Limite
Killaioe (d)	Sipa Exploration NL Exploration
Irwin Bore (e)	Revesco Group Limited
Wanganoo (f)	Quantum Resources Limited Exploration

• (a) Barrick Gold Australia Limited are earning a 70% interest by spending \$5 million over four years.
• (b) WMC Resources Limited are earning a 75% interest in the nickel rights by spending \$1 million over four years. (c) Udu Resources Limited have a 49% interest.
• (d) Sipa Exploration NL are earning a 70% interest in the nickel rights, by spending \$3.95 million over 4 years.
• (e) Cullen Exploration Pty Ltd has earned a 90% interest. Revesco retains a 10% interest.
• (f) Cullen Exploration Pty Ltd may earn an 80% interest by spending \$50,000 in one year.

The joint ventures are not separate legal entities. They are contractual arrangements between the participants for the sharing of costs and any outputs and do not, in themselves, generate revenue and profit. The net contribution of any joint venture activities to the operating profit before income tax is \$Nil (2002:Nil). The consolidated entity's assets employed in the joint ventures, are included in the balance sheet of the consolidated entity as follows:

Exploration expenditure

15. COMMITMENTS

The consolidated entity has certain obligations to perform minimum exploration work and expend minimum amounts of money on mineral exploration tenements. The consolidated entity has committed to expend a minimum of \$656,700 (2002;\$534,700) over the next year to keep its current tenements in good standing.

16. RELATED PARTIES

Directors

The names of each person holding the position of director of Cullen Resources Limited during all of the past two financial years, unless ofherwise stated are Messrs D.E. Clarke, G. Hamilton, J. R.Horsburgh, and W. J. Kernaghan. Mr C Ringrose was appointed a director on 19 June 2003.

Other related parties

Mr W.J. Kernaghan is a director and shareholder of Mining Investors Australia Pty Ltd which provided management services and staff to the consolidated entity during the prior year on commercial terms and conditions. The amount paid during the year to Mining Investors Australia Pty Ltd and other related parties was \$Nil (2002: \$233,861).

Director shareholding

At year end the directors held a total of 27,537,391 (2002: 26,118,008) fully paid ordinary shares in the company. During the year Mr Clarke acquired 1,169,383 shares and Mr Horsburgh acquired 250,000 shares in the company on the Australian Stock Exchange.

Employees

The economic entity has four full-time employees (2002:3).

Wholly owned group transaction

Loans made from Cullen Resources Limited to wholly owned subsidiaries are non interest bearing and have no fixed term for repayment.

Ultimate Parent Entity

The ultimate parent entity is Cullen Resources Limited.

17. SEGMENT INFORMATION

The consolidated entity operated during the year in one geographical segments, being Australia. The consolidated entity operated in one business segment being exploration.

for the year ended 30 June 2003

18. STATEMENT OF CASH FLOWS

(i) Reconciliation of cash

For the purposes of the Statement of Cash Flows, cash includes cash at bank and short term deposits at call. Cash at the end of the financial year as shown in the Statement of Cash Flows is reconciled to the related items in the Statement of Financial Position as follows:

	Consolidated		The Company
	2003	2002	2003	2002
Cash on hand	1,513,155	2,705,319	1,479,102	2,689,053
(ii) Reconciliation of operating profit/(loss) after income tax to net cash used in operating activities Operating profit/(loss) after income tax	187,220	141.937	644,860	1,378,958
Add/(less) non cash items Exploration expenditure written off	.226,990	1,085,433
Depreciation	13,438	7,841	.6.73	6,139
Provisions for employee entitlements	16,968	2,500
(Profit)/loss on sale of investments	(855,910)	(1,850,517)	(855,910)	(1,850,517)
Net cash used in operating activities
before change in assets and liabilities.		(612,806)	(204,320)	(465, 420)
Increase/(Decrease) in creditors	(36,105)	(11, 347)	15,659	(22, 548)
Net operating cashflows	(447.399)	(624.153)	(188,661)	(487,968)

19. EARNINGS PER SHARE

Basic earnings per share (cents per share).

Diluted earning per share (cents per share).

The following reflects the income and share data used in the calculations. of basic and diluted earnings per share. Net profit

Weighted average number of ordinary shares used in the calculation of basic and diluted earnings per share.

Options on issue at year end not dilutive and hence not used in the calculation of diluted EPS

CONSOBJARCO
2003	2002
Ť.	T
0.07	0.06
0.07	0.06
187,220	141.937
-268,752,376	248,639,876
15,500,00	10,000,000

No ordinary shares have been issued since the reporting date and up to completion of this financial report.

for the year ended 30 June 2003.

20. FINANCIAL INSTRUMENTS

(a) Interest Rate Risk

The economic entity's exposure to interest rate risk and the effective weighted average interest rate for each class of financial assets and financial fiabilities is set out below.

Financial instruments	Floatne meres, rate 2003	Fixed interest rate maturing in one vear or less. 2003	Non-interest hearing 2903	Total Carrying amount as per the balance sheet 2003	Weighten average effectore interesti fate 2003
Financial Assets Cash Investments - listed Total Financial Assets	,513,155 1,513,155		12,800 12,800	1,513,155 12,800 1,525,955	3.5 N/A.
Financial Liabilities Trade creditors Total Financial Liabilities			47,920 47,920	47,920 47,920
Financial instruments	Fleating merest rate 2002	Fixed Interest tate matumus in one year or less 2002	Non-raterest bearing. 2002	Total carrying amount as per the collance sheet 2002	Weighted average effective interest rate. 2002 He.
Financial Assets Cash Investments - listed Total Financial Assets	12,705,319 $\frac{1}{2,705,319}$		107,000 107,000	2,705,319 107,000 2,812,319	5.0 N/A
Financial Liabilities Trade creditors Total Financial Liabilities			84,025 84.025	84,025 84.025

(b) Net Fair Values

The aggregate net fair values of financial assets and financial liabilities, both recognised and unrecognised, at the balance date, are as follows:

Financial Assets	Total carring amount as per balance sheet -2003 -	Aggregate net: Tak value (i) -2003: 90	fotal carying amount!!! as per balance sheet! - 2002 : S.	Aggregate net fair value (1) 2002
Cash	.513.155 .	1,513,155	.705,319	2,705,319
Investments -- listed	12.800	270.000	.07 1000	974.800
Total Financial Assets	1,525.955	1,783,155	2,812,319	3.680.119
Financial Liabilities
Trade creditors		-47.920	R4 A25	84.025
Total Financial Liabilities				ብ25

(i) The following methods and assumptions are used to determine the net fair values of financial assets and liabilities ina.
Ny faritr'ora dia G Recognised financial instruments $\zeta_{\rm{max}}$ and Marana and Maria Alegia and a marana d

Cash, cash equivalents and short-term investments. The carrying amount approximates fair value because of their short-term to maturity. The second consumer that the consumer successors respuesto de

Trade debtors and creditors: The carrying amount approximates fair value. $\mathbb{N}\mathbb{N}$

Non-current investments: For financial instruments traded in organised financial markets, fair value is the current quoted market bid price for an asset or offer price for a liability, adjusted for transaction costs necessary to realise the asset of settle the liability.

21. SUBSEQUENT EVENTS

ng masa kemaga

The Company had a shareholder share purchase plan in operation which closed on 27 August 2003. Under the plan, the company will issue 52,228,906 new ordinary shares at 3 cents spen taiming \$1,566,867

SHAREHOLDER INFORMATION

at 22 September 2003

	Felly paint ishanesi	Onlines expliints 30 November 2004	Oratoris explicite 17 January 2006.
Issued Capital	321,181,282	10,000,000	5.500.000
Top 20 Shareholders
Total holding of the twenty largest shareholders % of total shares on issue	58.908,224 21.5%	10,000,000 100%	5.580.800
Distribution of shareholders $1-1000$ shares . 1,001 – 5,000 shares 5,001 - 10,000 shares 10,001 - 100,000 shares	1,358
100,000 and over	661 2,487	5 ı.,
Shareholders holding fess than a marketable parcel

Substantial shareholders

The company has no substantial shareholders as at 22 September 2003.

Twenty largest shareholders

The names of the twenty holders of the fully paid shares are listed below:

Name	No. of Shares	% Heid
Dunsfair Pty Limited	10,693,000	3.33
Kitchsmith Pty Limited	10,415,002	3.24
ANZ Nominees Limited	5,065,428	1.58
Woodhill Holdings Pty Ltd	4,365,000	1.36
Neil Ronald Griffin	4,087,000	1.27
Wythenshawe Pty Ltd	4,000,000	1.25
Lindgiade Enterprises Pty Ltd	3,414,883	1.06
Terranora Securities Pty Ltd	3,165,112	0.99
Farrington Corporate Services Pty Ltd	2,840,000	0.88
Paul Delius Haege	2,800,000	0.87
Chiatta Pty Ltd	2,542,326	0.79
Climax Australia Pty Limited	2,500,000	0.78
Dennis Robert Wyllie	2,243,000	0.70
Cramm Nominees Pty Limited	2,202,000	0.69
lan William Hodgson	1,500,000	0.47
Innerleithen Pty Ltd	1,490,000	0.46
Con Kondonis	1,470,000	0.46
John Gastone Capovilla	1,400,000	0.44
L.J. Thomson Pty Ltd.	1,389,500	0.43
The House of Dare Pty Ltd	1,325,973	0.41
Total --	68,908,224	21.46

VOTING RIGHTS

Every member present in person or by representative shall on a show of hands have one vote, and on a poll every member present in person or by representative, proxy or attorney shall in respect of each fully paid share held by him.

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