FIRST AU LIMITED — Annual Report 2010

Feb 23, 2011

Public Holdings (Australia) Limited A.B.N. 65 000 332 918 And Controlled Entities

Appendix 4E Preliminary Final Report for the year ended 31 December 2010

Public Holdings (Australia) Limited and Controlled Entities A.B.N 65 000 332 918

Appendix 4E

For the Year Ended 31 December 2010

1. Reporting period: twelve months ended 31 December 2010 Previous corresponding period: twelve months ended 31 December 2009

2. Results for announcement to the market:

2.	Results for announcement to the market:
				$'000
2.1	Revenue from ordinary activities up 15% to:			298
2.2	Loss from ordinary activities after tax attributable to members reduce by 58% from
	$675,675 in 2009 to a loss of:			(284)
2.3	Net loss for the year attributable to members reduce by 47% from a net loss
	of $839,484 in 2009 to a net loss of:			(447)
2.4	It is proposed not to pay dividends for the year ended 31 December 2010
3 - 8	Attached as part of this preliminary report.
9.	Net tangible assets per security:
		2010 Cents	2009 Cents
	Net tangible assets per share:	13.23	18.34

10. On 24 December 2010 Public Holdings (Australia) Limited disposed of its 100% interest in PHAShanghai Classic Wine and Food Co., Ltd. The total loss resulting from the disposal of PHAShanghai Classic Wine and Food Co., Ltd included in the consolidated statement of comprehensive income amounted to $171,088.

11. Public Holdings (Australia) Limited does not have an interest in associates or joint ventures.

12. No additional significant information is considered necessary for an investor to make an informed assessment of the entity's financial performance and financial position other than as provided in this report.

13. Public Holdings (Australia) Limited is not a foreign entity.

14. The Company continues to invest in interest-bearing deposits and listed securities. Concerns about rising government deficits, downgrades for European sovereign debts, and pace of economic recovery are some of the major factors that have caused the stock market to be very volatile in 2010. The Company has taken a conservative approach in securities investment. The realised profit from securities investment was $178,865 and $219,242 for the years 2009 and 2010 respectively.

Despite efforts made for the scale-down of the wine distribution operation and for rebuilding of its sales force, the business results of PHA-Shanghai Classic Wine & Food Co. Ltd. (PHA SC) remained unsatisfactory. As a result, the Board decided to sell PHA SC in December 2010 in order to avoid incurring any further loss on this business. A loss on disposal of PHA SC amounted $171,088 was accounted for in the 2010 consolidated financial statements of the Group.

The Directors of the Company will continue to seek other opportunities that will enhance the value of its assets.

15. This report is based on consolidated financial statements that are in the process of being audited.

Compliance Statement

==> picture [141 x 18] intentionally omitted <==

David W McBain – Company Secretary

Dated: 23 February 2011

1

Public Holdings (Australia) Limited and Controlled Entities

A.B.N 65 000 332 918

Consolidated Statement of Comprehensive Income For the Year Ended 31 December 2010

Note Continuing operations Revenue 3 Administration expenses Impairment of available-for-sale financial assets Net foreign currency exchange loss Other expenses Loss before income tax 4 Income tax expense 5 Loss from continuing operations after income tax Loss from discontinued operations after tax 6 Net loss for the year Other comprehensive (loss)/income Other comprehensive (loss)/income for the year Total comprehensive loss for the year Loss per share 23 From continuing and discontinued operations: Basic loss per share (cents) Diluted loss per share (cents) From continuing operations: Basic loss per share (cents) Diluted loss per share (cents) Basic loss per share (cents) Diluted loss per share (cents) Exchange differences arising on translation of foreign operations Net (loss)/gain on revaluation of available-for-sale financial assets Impairment of available-for-sale financial assets transferred from reserve Exchange reserves realised from disposal of subsidiary From discontinued operations:	31 Dec 31 Dec 2010 2009 $ $ 298,229 259,674 (369,084) (375,708) - (526,796) (908) (4,130) (210,947) (27,504) (282,710) (674,464) (1,108) (1,211) (283,818) (675,675) (163,247) (163,809) (447,065) (839,484) (12,973) (140,609) (37,898) - (266,283) 296,850 - 526,796 (317,154) 683,037 (764,219) (156,447) (2.98) (5.60) (2.98) (5.60) (1.89) (4.51) (1.89) (4.51) (1.09) (1.09) (1.09) (1.09) Consolidated Group	31 Dec 31 Dec 2010 2009 $ $ 298,229 259,674 (369,084) (375,708) - (526,796) (908) (4,130) (210,947) (27,504) (282,710) (674,464) (1,108) (1,211) (283,818) (675,675) (163,247) (163,809) (447,065) (839,484) (12,973) (140,609) (37,898) - (266,283) 296,850 - 526,796 (317,154) 683,037 (764,219) (156,447) (2.98) (5.60) (2.98) (5.60) (1.89) (4.51) (1.89) (4.51) (1.09) (1.09) (1.09) (1.09) Consolidated Group
	(282,710) (1,108)	(674,464) (1,211)
	(283,818) (163,247)	(675,675) (163,809)
	(447,065)	(839,484)
	(12,973) (37,898) (266,283) -	(140,609) - 296,850 526,796
	(317,154)	683,037
	(764,219)	(156,447)
	(2.98) (2.98) (1.89) (1.89) (1.09) (1.09)	(5.60) (5.60) (4.51) (4.51) (1.09) (1.09)

The accompanying notes form part of these financial statements.

2

Public Holdings (Australia) Limited and Controlled Entities

A.B.N 65 000 332 918

Consolidated Statement of Financial Position As at 31 December 2010

Note ASSETS CURRENT ASSETS Cash and cash equivalents 7 Trade and other receivables 8 Inventories 9 TOTAL CURRENT ASSETS NON-CURRENT ASSETS Trade and other receivables 10 Financial assets 11 Plant and equipment 12 TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables 13 Current tax liabilities 14 TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Non-interest bearing liabilities 15 TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 16 Reserves (Accumulated losses)/Retained earnings TOTAL EQUITY	31 Dec 31 Dec 2010 2009 $ $ 880,887 1,036,534 2,548 94,544 - 263,560 883,435 1,394,638 - 2,903 1,252,906 1,613,863 341 21,994 1,253,247 1,638,760 2,136,682 3,033,398 42,793 114,282 1,312 1,354 44,105 115,636 110,352 171,318 110,352 171,318 154,457 286,954 1,982,225 2,746,444 1,872,375 1,872,375 318,247 635,401 (208,397) 238,668 1,982,225 2,746,444 Consolidated Group	31 Dec 31 Dec 2010 2009 $ $ 880,887 1,036,534 2,548 94,544 - 263,560 883,435 1,394,638 - 2,903 1,252,906 1,613,863 341 21,994 1,253,247 1,638,760 2,136,682 3,033,398 42,793 114,282 1,312 1,354 44,105 115,636 110,352 171,318 110,352 171,318 154,457 286,954 1,982,225 2,746,444 1,872,375 1,872,375 318,247 635,401 (208,397) 238,668 1,982,225 2,746,444 Consolidated Group
	883,435	1,394,638
	- 1,252,906 341	2,903 1,613,863 21,994
	1,253,247	1,638,760
	2,136,682	3,033,398
	42,793 1,312	114,282 1,354
	44,105	115,636
	110,352	171,318
	110,352	171,318
	154,457	286,954
	1,982,225	2,746,444
	1,872,375 318,247 (208,397)	1,872,375 635,401 238,668
	1,982,225	2,746,444

The accompanying notes form part of these financial statements.

3

Public Holdings (Australia) Limited and Controlled Entities

A.B.N 65 000 332 918

Consolidated Statement of Changes in Equity For the Year Ended 31 December 2010

Consolidated Group Balance at 1 January 2009 Net loss attributable to the members of parent entity Revaluation of available-for- sale financial assets Asset revaluation reserve realised Impairment of available-for- sale financial assets transferred to profit or loss Adjustment from translation of foreign controlled entities Balance at 1 January 2010 Net loss attributable to the members of parent entity Revaluation of available-for- sale financial assets Asset revaluation reserves realised Adjustment from translation of foreign controlled entities Exchange reserves realised from disposal of subsidiary Balance at 31 December 2010 Total comprehensive loss for the year Total comprehensive loss for the year Balance at 31 December 2009	Share Capital Asset Revaluation Reserve Translation Reserve Retained Earnings $ $ $ $ 1,872,375 (239,116) 191,480 1,078,152 - - - (839,484) - 388,543 - - - (91,693) - - - 526,796 - - - - (140,609) -	Total $ 2,902,891 (839,484) 388,543 (91,693) 526,796 (140,609)
	- 823,646 (140,609) (839,484)	(156,447)
	1,872,375 584,530 50,871 238,668	2,746,444
	1,872,375 584,530 50,871 238,668 - - - (447,065) - (67,115) - - - (199,168) - - - - (12,973) - - - (37,898) -	2,746,444 (447,065) (67,115) (199,168) (12,973) (37,898)
	- (266,283) (50,871) (447,065)	(764,219)
	1,872,375 318,247 - (208,397)	1,982,225

The accompanying notes form part of these financial statements.

4

Public Holdings (Australia) Limited and Controlled Entities

A.B.N 65 000 332 918

Consolidated Statement of Cash Flows For the Year Ended 31 December 2010

Note CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees Receipts from customers Dividends received Other (paid) receipts Interest received Income tax refunded Net cash used in operating activities 21a CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial instruments Sale of financial instruments Purchase of property, plant and equipment Sale of property, plant and equipment Net cash outflow from disposal of subsidiary 21b Net cash provided by investing activities CASH FLOWS FROM FINANCING ACTIVITIES Repayment of borrowings to related parties Net cash used in financing activities Net decrease in cash held Cash and cash equivalents at 1 January Effect of exchange rates on cash holdings in foreign currencies Cash and cash equivalents at 31 December 7	31 Dec 31 Dec 2010 2009 $ $ (528,360) (880,650) 131,252 249,281 47,418 53,310 (88,947) 17,734 31,067 25,531 15,174 16,075 (392,396) (518,719) (196,857) (269,366) 510,512 701,849 (10,905) - 7,199 - (8,102) - 301,847 432,483 (60,966) - (60,966) - (151,515) (86,236) 1,036,534 1,163,972 (4,132) (41,202) 880,887 1,036,534 Consolidated Group	31 Dec 31 Dec 2010 2009 $ $ (528,360) (880,650) 131,252 249,281 47,418 53,310 (88,947) 17,734 31,067 25,531 15,174 16,075 (392,396) (518,719) (196,857) (269,366) 510,512 701,849 (10,905) - 7,199 - (8,102) - 301,847 432,483 (60,966) - (60,966) - (151,515) (86,236) 1,036,534 1,163,972 (4,132) (41,202) 880,887 1,036,534 Consolidated Group
	(392,396)	(518,719)
	(196,857) 510,512 (10,905) 7,199 (8,102)	(269,366) 701,849 - - -
	301,847	432,483
	(60,966)	-
	(60,966)	-
	(151,515) 1,036,534 (4,132)	(86,236) 1,163,972 (41,202)
	880,887	1,036,534

The accompanying notes form part of these financial statements.

5

Public Holdings (Australia) Limited and Controlled Entities A.B.N 65 000 332 918

Notes to the Financial Statements For the Year Ended 31 December 2010

This financial report includes the consolidated financial statements and notes of Public Holdings (Australia) Limited and controlled entities ('Consolidated Group').

1. Summary of Significant Accounting Policies

Basis of Preparation

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards including Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and the Corporations Act 2001.

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below and have been consistently applied unless otherwise stated.

The financial report has been prepared on an accruals basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. The financial report is presented in Australian dollars.

a) Principles of Consolidation

The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by Public Holdings (Australia) Limited at the end of the reporting period. A controlled entity is any entity over which Public Holdings (Australia) Limited has the power to govern the financial and operating policies so as to obtain benefits from the entity's activities. Control will generally exist when the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are also considered.

Where controlled entities have entered or left the Consolidated Group during the year, the financial performance of those entities are included only for the period of the year that they were controlled. A list of controlled entities is contained in Note 17 to the financial statements.

In preparing the consolidated financial statements, all inter-company balances and transactions between entities in the Consolidated Group, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those policies applied by the Parent Entity.

b) Income Tax

The income tax expenses for the year comprises current income tax expense and deferred tax expense.

Current income tax expense charged to profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax liabilities are therefore measured at the amounts expected to be paid to the relevant taxation authority.

6

Public Holdings (Australia) Limited and Controlled Entities

A.B.N 65 000 332 918

Notes to the Financial Statements For the Year Ended 31 December 2010

1. Summary of Significant Accounting Policies (Continued)

b) Income Tax (Continued)

Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses.

Current and deferred income tax expense is charged or credited outside profit or loss when the tax relates to items that are recognised outside profit or loss.

Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination where there is no effect on accounting or taxable profit or loss.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rate enacted or substantively enacted at the end of the reporting period. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.

Where temporary differences exist in relation to investments in subsidiaries, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.

Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective assets and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

c) Inventories

Inventories are measured at the lower of cost and net realisable value.

d) Trade and Other Receivables

Trade receivables, which generally have 30-90 days terms, are recognised and carried at original invoice amount less an allowance for any uncollectible amounts.

An allowance for doubtful debts is made when there is objective evidence that the Consolidated Group will not be able to collect the debts. Bad debts are written off when identified.

7

Public Holdings (Australia) Limited and Controlled Entities

A.B.N 65 000 332 918

Notes to the Financial Statements For the Year Ended 31 December 2010

1. Summary of Significant Accounting Policies (Continued)

e) Plant and Equipment

Plant and equipment are measured on the cost basis less accumulated depreciation and any accumulated impairment losses.

The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item can be measured reliably. All other repairs and maintenance are charged to the consolidated statement of comprehensive income during the financial period in which they are incurred.

Depreciation

The depreciable amount of all fixed assets is depreciated on a diminishing value basis over their useful lives to the Consolidated Group commencing from the time the asset is held ready for use.

The depreciation rates used for each class of depreciable assets are:

Class of Fixed Asset	Depreciation Rate
Office Equipment	15-40%

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the consolidated statement of comprehensive income.

f) Financial Instruments

Recognition and initial measurement

Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the Consolidated Group commits itself to either the purchase or sale of the asset.

Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified 'at fair value through profit or loss', in which case transaction costs are expensed to profit or loss immediately.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost.

Loans and receivables are included in current assets, except for those which are not expected to mature within 12 months after the end of the reporting period.

8

Public Holdings (Australia) Limited and Controlled Entities A.B.N 65 000 332 918

Notes to the Financial Statements For the Year Ended 31 December 2010

1. Summary of Significant Accounting Policies (Continued)

f) Financial Instruments (Continued)

Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be classified into other categories of financial assets due to their nature, or they are designated as such by management. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments.

Available-for-sale financial assets are included in non-current assets, except for those which are expected to mature within 12 months after the end of the reporting period.

Financial liabilities

Non-derivative financial liabilities are subsequently measured at amortised cost.

Fair value

Fair value is determined based on current bid prices for all quoted investments.

Impairment

At the end of each reporting period, the Consolidated Group assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in the consolidated statement of comprehensive income.

g) Impairment of Assets

At each reporting date, the Consolidated Group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the consolidated statement of comprehensive income.

Where it is not possible to estimate the recoverable amount of an individual asset, the Consolidated Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

h) Foreign Currency Transactions and Balances

Functional and presentation currency

The functional currency of each of the Consolidated Group’s entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the Parent Entity’s functional and presentation currency.

9

Public Holdings (Australia) Limited and Controlled Entities

A.B.N 65 000 332 918

Notes to the Financial Statements For the Year Ended 31 December 2010

1. Summary of Significant Accounting Policies (Continued)

h) Foreign Currency Transactions and Balances (Continued)

Transaction and balances

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Nonmonetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items are recognised in the consolidated statement of comprehensive income, except where deferred in equity as a qualifying cash flow or net investment hedge.

Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the consolidated statement of comprehensive income.

Group companies

The financial results and position of foreign operations whose functional currency is different from the Consolidated Group’s presentation currency are translated as follows:

• assets and liabilities are translated at year-end exchange rates prevailing at that reporting date; - income and expenses are translated at average exchange rates for the period; and

• retained profits are translated at the exchange rates prevailing at the date of the transaction.

Exchange differences arising on translation of foreign operations are transferred directly to the Consolidated Group’s foreign currency translation reserve in the consolidated statement of financial position. These differences are recognised in the consolidated statement of comprehensive income in the period in which the operation is disposed.

i) Trade and Other Payables

Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by the Consolidated Group during the reporting period which remains unpaid. The balance is recognised as a current liability, except for those which are not expected to settle within 12 months after the end of the reporting period.

j) Employee Benefits

Provision for annual leave and long service leave has not been made as the Consolidated Group has no obligation to pay at the end of the reporting period.

k) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the consolidated statement of financial position.

10

Public Holdings (Australia) Limited and Controlled Entities

A.B.N 65 000 332 918

Notes to the Financial Statements For the Year Ended 31 December 2010

1. Summary of Significant Accounting Policies (Continued)

l) Revenue and Other Income

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Consolidated Group and the revenue can be reliably measured.

Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and volume rebated allowed. Any consideration deferred is treated as the provision of finance and is discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference between the amount initially recognised and the amount ultimately received is interest revenue.

Revenue from the sale of goods is recognised upon the delivery of goods to customers.

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

Dividend revenue is recognised when the right to receive a dividend has been established.

All revenue is stated net of the amount of goods and services tax (GST).

m) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the consolidated statement of financial position are shown inclusive of GST.

Cash flows are presented in the consolidated statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

n) Critical Accounting Estimates and Judgments

The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Consolidated Group.

Key estimates

Impairment

The Consolidated Group assesses impairment at each reporting date by evaluation of conditions and events specific to the Consolidated Group that may be indicative of impairment triggers. Recoverable amounts of relevant assets are reassessed using value-in-use calculations, which incorporate various key assumptions.

Key judgments

Impairment of available-for-sale financial assets

The Consolidated Group evaluates, among other factors, the duration and extent to which the fair value of an investment is less than its cost, and the financial health of and near-term business outlook for the investee, including factors such as industry and sector performance, change in technology and operational and financing cash flow. This evaluation requires significant judgment.

11

Public Holdings (Australia) Limited and Controlled Entities

A.B.N 65 000 332 918

Notes to the Financial Statements For the Year Ended 31 December 2010

1. Summary of Significant Accounting Policies (Continued)

n) Critical Accounting Estimates and Judgments (Continued)

Key judgments (Continued)

Impairment of trade receivables

The Consolidated Group makes impairment based on an assessment of the recoverability of trade receivables. Impairment is made when there are events or changes in circumstances which indicate that the balances may not be collectible. The identification of doubtful receivables requires the use of judgments and estimates. Where the expectation on the recoverability of trade receivables is different from the original estimate, such difference will impact the carrying value of trade receivables and impairment expenses in the year in which such estimate has been changed.

Impairment of inventories

The Consolidated Group makes impairment of inventories based on assessment of the net realisable value of existing inventories. Impairment is made if there is an indication that the net realisable value of inventories is lower than the cost. Calculation of net realisable value requires the use of judgments and estimates.

Extinguishment of payables and accruals

The Consolidated Group extinguishes payables and accruals based on the assessment whether the Consolidated Group is still liable for the payables and accruals. Extinguishment is made when there are events or changes in circumstances which indicate that the balances may not be liable. The assessment requires the use of judgments and estimates.

12

Public Holdings (Australia) Limited and Controlled Entities

A.B.N 65 000 332 918

Notes to the Financial Statements For the Year Ended 31 December 2010

		31 Dec	31 Dec
		2010	2009
2	Parent Information (Extracts)	$	$
	Statement of Financial Position
	Assets
	Current assets	765,914	860,915
	Total assets	2,269,132	3,108,120
	Liabilities
	Current liabilities	42,793	49,757
	Total liabilities	2,398,319	3,469,955
	Equity
	Issue capital	1,872,375	1,872,375
	Asset revaluation reserve	316,204	581,702
	Accumulated losses	(2,317,766)	(2,815,912)
	Deficiency of equity	(129,187)	(361,835)
	Statement of comprehensive income
	Profit/(loss) for the year	498,149	(1,021,276)
	Other comprehensive (loss)/income	(265,501)	822,520
	Total comprehensive income/(loss)	232,648	(198,756)

Guarantees

Public Holdings (Australia) Limited has not entered into any guarantees, in the current or previous financial year, in relation to the debts of its subsidiaries.

Contingent liabilities

At 31 December 2010, Public Holdings (Australia) Limited has no contingent liabilities (2009: Nil).

Contractual commitments

At 31 December 2010, Public Holdings (Australia) Limited has not entered into any contractual commitments for the acquisition of property, plant and equipment (2009: Nil).

Note 3 Revenue (a) Revenue from continuing operations: Net profit on disposal of financial instruments Interest received - other persons and corporations Dividends received - other corporations Total Revenue	31 Dec 31 Dec 2010 2009 $ $ 219,242 178,865 31,569 24,862 47,418 55,947 298,229 259,674 Consolidated Group	31 Dec 31 Dec 2010 2009 $ $ 219,242 178,865 31,569 24,862 47,418 55,947 298,229 259,674 Consolidated Group
	298,229	259,674

13

Public Holdings (Australia) Limited and Controlled Entities

A.B.N 65 000 332 918

Notes to the Financial Statements For the Year Ended 31 December 2010

				Consolidated	Group
				31 Dec	31 Dec
				2010	2009
3	Revenue (Continued)		Note	$	$
(b)	Total revenue and other income	from
	continuing operations
	Attributable to members of the parent	entity		298,229	259,674
(c)	Revenue and other income from discontinued
	operations
	Wine selling business:
	Attributable to members of the parent	entity	6	103,008	205,165
(d)	Revenue and other income from continuing operations and
	discontinued operations
	Attributable to members of the parent	entity		401,237	464,839
4	Loss before income tax
(a)	Revenue and expenses
	The following revenue and expense items are relevant in explaining the financial performance:
	Net profit on disposal of financial instruments			219,242	178,865
	Employee benefits expenses			(94,951)	(94,269)
	Impairment of available-for-sale financial assets			-	(526,796)
(b)	Significant revenue and expenses
	The following significant revenue and	expense items are relevant in explaining the financial		performance:
	Net loss on the disposal of PHA-Shanghai
	Classic Wine and Food Co. Ltd		21b	(171,088)	-
	Net loss from discontinued operations after tax		6	(163,247)	-

14

Public Holdings (Australia) Limited and Controlled Entities

A.B.N 65 000 332 918

Notes to the Financial Statements For the Year Ended 31 December 2010

5 Income Tax Expense Prima facie income tax on loss at 30%: Tax effect of: Non-taxable items Impairment of available-for-sale financial assets not subject to income tax Foreign currency exchange difference not subject to income tax Rebateable dividends Loss from foreign subsidiary not subject to income tax Tax loss not brought to account Income tax attributable to entity The prima facie tax on loss is reconciled to the income tax as below:	31 Dec 31 Dec 2010 2009 $ $ (133,787) (251,482) (2,104) (382) - 158,039 (28,323) (84,647) 5,656 6,204 48,974 49,143 110,692 124,336 1,108 1,211 Consolidated Group	31 Dec 31 Dec 2010 2009 $ $ (133,787) (251,482) (2,104) (382) - 158,039 (28,323) (84,647) 5,656 6,204 48,974 49,143 110,692 124,336 1,108 1,211 Consolidated Group
	1,108	1,211

A deferred tax asset has not been recognised in respect of the carry forward of unused tax losses.

The benefit for tax losses will only be obtained if: - the company derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for the losses to be realised;

• the company continues to comply with the conditions for deductibility imposed by tax legislation; and

• no changes in tax legislation adversely affect the company in realising the benefit from the deductions for the losses.

6 Discontinued Operations

On 24 December 2010, the parent entity disposed of its 100% interest in its wine selling business, thereby financial results of this business segment was reclassified as discontinued operations.

Financial information relating to the discontinued operations to the date of disposal is set out below.

Revenue 103,008 205,165 Expenses (266,255) (368,974) Loss before income tax (163,247) (163,809) Income tax expense - - Loss attributable to members of the parent entity (163,247) (163,809) Net cash used in operating activities (54,653) (132,056) Net cash used in investing activities (3,706) - Net cash outflow from discontinued operations (58,359) (132,056) The net cash flows of the discontinued operations, which have been incorporated into the consolidated statement of cash flows, are as follows:	103,008 (266,255)	205,165 (368,974)
	(163,247) -	(163,809) -
	(163,247)	(163,809)
	(58,359)	(132,056)

Loss on disposal of the operations was included in other expenses in the consolidated statement of comprehensive income.

15

Public Holdings (Australia) Limited and Controlled Entities

A.B.N 65 000 332 918

Notes to the Financial Statements For the Year Ended 31 December 2010

7 Cash and Cash Equivalents Cash at bank Short-term deposits 8 Trade and sundry debtors 9 Inventories - Current Finished goods at net realisable value 10 Trade and Other Receivables - Non-Current Prepaid/deferred expenses 11 Financial Assets - Non-Current Available-for-sale financial assets Listed investments, at fair value - Shares in listed corporations Trade and Other Receivables - Current Available-for-sale financial assets comprise:	31 Dec 31 Dec 2010 2009 $ $ 770,018 920,651 110,869 115,883 880,887 1,036,534 2,548 94,544 - 263,560 - 2,903 1,252,906 1,613,863 1,252,906 1,613,863 1,252,906 1,613,863 Consolidated Group	31 Dec 31 Dec 2010 2009 $ $ 770,018 920,651 110,869 115,883 880,887 1,036,534 2,548 94,544 - 263,560 - 2,903 1,252,906 1,613,863 1,252,906 1,613,863 1,252,906 1,613,863 Consolidated Group
	880,887	1,036,534
	2,548	94,544
	-	263,560
	-	2,903
	1,252,906	1,613,863
	1,252,906	1,613,863
	1,252,906	1,613,863

Available-for-sale financial assets comprise investments in the ordinary share capital of various entities. There are no fixed returns or fixed maturity date attached to these investments.

12 Plant and Equipment

Office equipment - at cost Accumulated depreciation Total Plant and Equipment Movements in Carrying Amounts: Balance at the beginning of the year Addition Disposal Foreign exchange movement on translation of foreign operations Disposals on sale of subsidiary Depreciation expense Carrying amount at the end of the year	15,464 (15,123)	118,880 (96,886)
	341	21,994
	21,994 10,905 (10,904) (1,353) (13,135) (7,166)	37,573 - - (7,629) - (7,950)
	341	21,994

16

Public Holdings (Australia) Limited and Controlled Entities

A.B.N 65 000 332 918

Notes to the Financial Statements For the Year Ended 31 December 2010

13 Trade and Other Payables - Current Unsecured liabilities Trade and other creditors and accruals 14 Current Tax Liabilities Provision for income tax 15 Non-Interest Bearing Liabilities Unsecured - no fixed term liabilities Amounts payable to: - controlling entities 16 Issued Capital 14,979,000 (2009: 14,979,000) fully paid ordinary shares	31 Dec 31 Dec 2010 2009 $ $ 42,793 114,282 1,312 1,354 110,352 171,318 1,872,375 1,872,375 Consolidated Group	31 Dec 31 Dec 2010 2009 $ $ 42,793 114,282 1,312 1,354 110,352 171,318 1,872,375 1,872,375 Consolidated Group
	1,312	1,354
	110,352	171,318
	1,872,375	1,872,375

There has been no movement in share capital during the year.

(a) Ordinary shares participate in dividends and the proceeds on winding up of the entity in proportion to the number of shares held.

(b) At shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

17 Controlled Entities

• (a) Controlled entities consolidated

PHA Trading Pty Ltd PHA Investments Pty Ltd	Country Class of incor- of poration share	Carrying amount of % investment Owned
	Aust. Ord. Aust. Ord.	$ 150,817 100 103,000 100 253,817

The amount of investment and percentage holding in the controlled entities has remained unchanged during the financial year.

• (b) Disposal of controlled entities

On 24 December 2010, the parent entity disposed of its 100% interest in PHA-Shanghai Classic Wine and Food Co., Ltd. An operating loss of $163,247 after tax was attributable to members of the parent entity prior to the disposal. No remaining interest in the entity was held by any members of the Consolidated Group.

17

Public Holdings (Australia) Limited and Controlled Entities

A.B.N 65 000 332 918

Notes to the Financial Statements For the Year Ended 31 December 2010

18 Dividends

The Directors have recommended no payment of dividends in respect of the year ended 31 December 2010.

Balance of franking account at year end	31 Dec 31 Dec 2010 2009 $ $ 1,182,749 1,161,959 Consolidated Group

19 Related Party Transactions

Parent Entity

Atlas Securities Pty Ltd owns 73.93% of Public Holdings (Australia) Limited. P I Investments Australia Pty. Ltd owns 100% of Atlas Securities Pty Ltd, PHA Investments Pty Ltd and PHA Trading Pty Ltd. Transactions between the parties consist of interest-free unsecured loans to and from the parties. The aggregate amount of these transactions were as follows:

Amounts due to:

• Atlas Securities Pty Ltd for:

Payments for purchases of wine and other services on behalf of Public Holdings (Australia) Limited	110,352	171,318

Ultimate Parent Entity

The ultimate parent entity of Public Holdings (Australia) Limited is First Shanghai Investments Limited, a company incorporated in Hong Kong, China. Management fees paid/payable to First Shanghai Investments Limited’s subsidiary, First Shanghai Management Services Limited, amounted to $100,000 in 2010 (2009: $100,000). Amounts owed to First Shanghai Management Services Limited was nil in 2010 (2009:Nil).

20 Remuneration of Auditors

Amounts received or due and receivable by the auditors: - Auditing the financial statements Remuneration of other auditors of subsidiaries	22,500 1,528 24,028	21,500 4,950
		26,450

18

Public Holdings (Australia) Limited and Controlled Entities

A.B.N 65 000 332 918

Notes to the Financial Statements For the Year Ended 31 December 2010

21 Cash Flow Information (a) Net loss for the year Depreciation & amortisation Provision for bad debt Impairment of available-for-sale financial assets Net loss on disposal of subsidiary Effect of exchange differences Reversal of provision of obsolete inventory Changes in assets and liabilities: Decrease in trade and other receivables Decrease in inventories Net cash used in operating activities Net profit on disposal of financial instruments Decrease in trade and other payables Reconciliation of cash flows from operations with net loss for the year Non-cash flows in loss from ordinary activities:	31 Dec 31 Dec 2010 2009 $ $ (447,065) (839,484) 7,166 9,041 5,085 - - 526,796 171,088 - (219,242) (178,865) (3,522) (91,394) (44,843) - 64,310 44,316 86,824 234,094 (12,197) (223,223) (392,396) (518,719) Consolidated Group	31 Dec 31 Dec 2010 2009 $ $ (447,065) (839,484) 7,166 9,041 5,085 - - 526,796 171,088 - (219,242) (178,865) (3,522) (91,394) (44,843) - 64,310 44,316 86,824 234,094 (12,197) (223,223) (392,396) (518,719) Consolidated Group
		(518,719)

(b) Disposal of entities

During the year the controlled entity PHA-Shanghai Classic Wine and Food Co., Ltd was sold. Aggregate details of this transaction are:

Cash consideration Assets and liabilities held at disposal date: Cash Receivables Inventories Property plant and equipment , Payables Exchange translation reserve Loss on disposal Net cash outflow	2 8,104 25,504 221,579 13 135 , (59,334) 208,988 (37,898) 171,090 171,088 (8,102)	- - - - - -
		- -
		-
		-
		-

22 Contingent Liabilities

The Consolidated Group has no material contingent liabilities.

19

Public Holdings (Australia) Limited and Controlled Entities A.B.N 65 000 332 918

Notes to the Financial Statements For the Year Ended 31 December 2010

		Consolidated Group	Consolidated Group
		31 Dec	31 Dec
**23 **	Loss per Share	2010	2009
(a)	From continuing and discontinued operations:
	Basic loss per share
	(cents per share)	(2.98)	(5.60)
	Diluted loss per share
	(cents per share)	(2.98)	(5.60)
(b)	From continuing operations:
	Basic loss per share
	(cents per share)	(1.89)	(4.51)
	Diluted loss per share
	(cents per share)	(1.89)	(4.51)
(c)	From discontinued operations:
	Basic loss per share
	(cents per share)	(1.09)	(1.09)
	Diluted loss per share
	(cents per share)	(1.09)	(1.09)
(d)	Weighted average number of ordinary shares outstanding
	during the year used in calculation of basic EPS	14,979,000	14,979,000

24 Company Details

The registered office of the Company is:

Level 1 123 Whitehorse Road Balwyn, Victoria, 3103

The principal place of business of the Company is at:

Level 9 552 Lonsdale Street Melbourne Vic 3000

25 Events after balance sheet date

There have been no material matters arising since year end which have not been adequately disclosed in the financial report.

20