LYCOPODIUM LIMITED — Annual Report 2011

Aug 23, 2011

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Lycopodium Limited

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ABN 83 098 556 159

Level 5, 1 Adelaide Terrace East Perth, Western Australia 6004 Australia

PO Box 6832 East Perth, Western Australia 6892 Australia T: +61 (0) 8 6210 5222 www.lycopodium.com.au

ASX RELEASE

LYCOPODIUM LIMITED 2010/11 RESULTS

24 August 2011

Revenue : $169.8 million, up 41% from 2010 result Profit Before Tax : $24.9 million, up 33% from 2010 result Profit After Tax : $17.1 million, up 6.6% from 2010 result Earnings Per Share : 44.3 cents per share, up 6.5% from 2010 Total Dividend : 30 cents per share, up 11.1% from 2010

The Directors of Lycopodium are pleased to be able to report a strong performance for the 2010/11 financial year. We are particularly proud of the achievements of our staff over the year and appreciative of the continued support from our valued clients, both of which underpin the current results.

During the financial year ended 30 June 2011, Lycopodium realised revenues of $170 million, a 41% increase on the $120 million in the previous financial year. Net profit after tax was $17 million, as compared to $16 million in the previous financial year, a 6.5% increase. As compared to the 2009/10 profit figures, there were no extraordinary items in the profit figures for 2010/11.

In addition to the segment reporting format in the Appendix 4E report, we are also including our prior segment reporting format.

Basic earnings per share increased from 41.6 cents for the previous financial year to 44.3 cents and in accordance with the company’s dividend policy the Directors have resolved to pay a final dividend of 20 cents fully franked. The total dividend for the year is 30 cents fully franked as compared to 27 cents in the prior year.

The 2010/11 financial year saw the organisation transition from a period of high study activity into a more balanced operating environment comprising a combination of major projects supported by smaller projects and feasibility studies. The organisation is currently operating at normal manhour utilisation rates. Potential growth is constrained on a macro scale by the economic uncertainty in Europe and the USA, and on a company level by our continued objective of executing projects and studies to a consistently high standard and our ability within the current competitive marketplace to recruit and train additional staff.

The Company has forecast revenues of $188 million and profit after tax of $18.5 million for 2011/12, underpinned by several projects that have been committed during the 2010/11 financial year and which are continuing through 2011/12.

Dividend Entitlements

The final dividend of 20.0 cents per share fully franked will be paid to shareholders on 14 October 2010, with a record date of 3 October 2010.

For further information: Rod Leonard Managing Director T: +61 8 6210 5222

Lycopodium Ltd Segment reporting FYE 30 June 2011

EPCM Design & construct (lump sum) Study services Project services Unallocated revenue Unallocated revenue less unallocated expenses Profit before income tax expense Income tax expense Profit for the half-year Less: profit attributable to minority interest Profit attributable to members of Lycopodium Ltd	Jun-11 Jun-10 102,064,644 34,109,503 1,731,098 4,390,655 34,202,725 31,959,598 29,137,275 48,630,280 167,135,742 119,090,036 2,707,174 1,244,479 169,842,916 120,334,514 Segment revenues	Jun-11 Jun-10 18,980,687 9,498,627 751,237 1,113,718 4,422,573 5,019,694 6,357,569 9,965,890 Segment results
		30,512,067 25,597,929 0 0
		30,512,067 25,597,929 (5,604,177) (6,886,151)
		24,907,889 18,711,778 (7,795,136) (2,653,312)
		17,112,753 16,058,466 0 0
		17,112,753 16,058,466

Lycopodium Limited and Controlled Entities ABN 83 098 556 159

Appendix 4E - Preliminary final report for the year ended 30 June 2011

83 098 556 159 Lycopodium Limited and Controlled Entities Appendix 4E - Preliminary final report - 30 June 2011

	Page
Results for Announcement to the Market	1
Preliminary statement of comprehensive income	2
Preliminary balance sheet	3
Preliminary statement of changes in equity	4
Preliminary cash flow statement	5
Notes to the consolidated financial statements	6
Supplementary Appendix 4E information	19

Lycopodium Limited and Controlled Entities Appendix 4E - Preliminary Final Report For the year ended 30 June 2011

Results for Announcement to the Market 30 June 2011

					$
Revenuefrom continuing operations (Appendix 4E item 2.1)	up	% 41.1	to		169,842,916
Profit / (loss)from continuing operations after tax attributable to members (Appendix 4E item 2.2)	up	% 6.6	to		17,112,753
Profit / (loss)for the period attributable to members (Appendix 4E item 2.3)	up	% 6.6	to		17,112,753
Dividends / distributions (Appendix 4E item 2.4)	Amount per security		Franked amount per security
Final dividend (cents)	20.0			20.0
Key Ratios	2011			2010
	June			June
Basic earnings per share (cents)	44.3			41.6
Net tangible assets per share (cents)	112.6			100.1
Record datefor determining entitlements to the final dividend
				3 October 2011

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Lycopodium Limited Appendix 4E - Preliminary Final Report Preliminary Statement of Comprehensive Income For the year ended 30 June 2011

Notes Revenue from operations 3 Other income 4 Employee benefits expense Depreciation and amortisation expense 5 Project expenses Equipment and materials used Contractors Administration and management costs Loss on disposal of asset Finance costs 5 Share of net profit of associate accounted for using the equity method Profit before income tax Income tax expense 6 Profit for the year Other comprehensive income / (expense) Changes in fair value of available-for-sale financial assets 7 Exchange differences on translation of foreign operations 7 Income tax relating to components of other comprehensive income 6 Other comprehensive income for the year, net of tax Total comprehensive income for the year Profit for the year is attributable to: Owners of Lycopodium Limited Non-controlling interests Total comprehensive income for the year is attributable to: Owners of Lycopodium Limited Non-controlling interests Earnings per share attributable to the ordinary equity holders of the parent entity: Basic earnings per share 14 Diluted earnings per share 14

Consolidated 2011 2010 $ $ 169,842,916 120,334,515 - 466,947 (83,588,572) (62,205,326) (1,286,219) (1,608,491) (4,181,481) (446,985) (216,994) (417,512) (41,516,936) (26,832,329) (13,866,490) (9,889,071) (25,503) (868) (252,832) (715,142) - 26,042 24,907,889 18,711,780 (7,795,136) (2,653,312) 17,112,753 16,058,468 (1,000) (17,000) 79,326 6,813 300 5,100 78,626 (5,087) 17,191,379 16,053,381 17,162,237 16,058,468 (49,484) - 17,112,753 16,058,468 17,240,863 16,053,381 (49,484) - 17,191,379 16,053,381 Cents Cents 44.3 41.6 44.0 41.4

The above preliminary statement of comprehensive income should be read in conjunction with the accompanying notes.

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Lycopodium Limited and Controlled Entities Appendix 4E - Preliminary Final Report Preliminary Balance Sheet As at 30 June 2011

Notes ASSETS Current assets Cash and cash equivalents Trade and other receivables Current tax receivables Other current assets Total current assets Non-current assets Available-for-sale financial assets Property, plant and equipment Intangible assets Other receivables Deferred tax assets Total non-current assets Total assets LIABILITIES Current liabilities Trade and other payables Borrowings Current tax liabilities Provisions Total current liabilities Non-current liabilities Borrowings Provisions Total non-current liabilities Total liabilities Net assets EQUITY Contributed equity Reserves 7(a) Retained profits 7(b) Parent entity interest Non-controlling interest 8 Total equity

Consolidated 2011 2010 $ $ 26,199,742 23,395,487 39,835,367 27,665,269 - 1,374,991 1,639,824 1,415,739 67,674,933 53,851,486 32,000 33,000 4,120,986 3,147,532 6,148,994 6,018,211 1,629,874 1,858,515 4,273,369 2,152,651 16,205,223 13,209,909 83,880,156 67,061,395 24,080,949 18,994,066 909,755 782,003 6,242,748 - 316,431 475,000 31,549,883 20,251,069 1,781,208 1,473,918 861,971 616,973 2,643,179 2,090,891 34,193,062 22,341,960 49,687,094 44,719,435 18,730,297 18,730,297 89,318 (134,501) 30,916,243 26,123,639 49,735,858 44,719,435 (48,764) - 49,687,094 44,719,435

The above preliminary balance sheet should be read in conjunction with the accompanying notes.

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Lycopodium Limited and Controlled Entities Appendix 4E - Preliminary Final Report Preliminary Statement of Changes in Equity For the year ended 30 June 2011

Consolidated Notes Balance at 1 July 2009 Total comprehensive income for the year Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs Non-controlling interest on acquisition of subsidiary Dividends provided for or paid Director performance rights - value of rights Director performance rights - transfer on exercise Balance at 30 June 2010 Total comprehensive income for the year Transactions with owners in their capacity as owners: Non-controlling interest on acquisition of subsidiary Foreign currency transactions with non- controlling interest Dividends provided for or paid Director performance rights - value of rights Balance at 30 June 2011	Contributed equity $ 17,656,497 - 1,073,800 - - - - 18,730,297 - - - - - 18,730,297	Retained earnings $ 21,622,524 16,058,468 - (1,893,578) (9,663,775) - - 26,123,639 17,162,237 - - (12,369,633) - 30,916,243	Foreign currency translation reserve Available for sale investments revaluation reserve Director performance share reserve Non controlling interest Total equity $ $ $ $ $ (353,825) (49,000) 244,682 606,422 39,727,300 6,813 (11,900) - - 16,053,381 - - - - 1,073,800 - - - (606,422) (2,500,000) - - - - (9,663,775) - - 102,529 - 102,529 - - (73,800) - (73,800) (347,012) (60,900) 273,411 - 44,719,435 79,326 (700) - (49,484) 17,191,380 - - - 1 1 - - - 719 719 - - - - (12,369,633) - - 145,193 - 145,193 (267,686) (61,600) 418,604 (48,764) 49,687,094

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

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Lycopodium Limited and Controlled Entities Appendix 4E - Preliminary Final Report Preliminary Cash Flow Statement For the year ended 30 June 2011

Notes Cash flows from operating activities Receipts from customers (inclusive of goods and services tax) Payments to suppliers and employees (inclusive of goods and services tax) Interest received Interest paid Income taxes paid Net cash inflow from operating activities 13 Cash flows from investing activities Payment for purchase of business, net of cash acquired 10 Payment for acquisition of minority interest 10 Payments for property, plant and equipment Payments for intangible assets Proceeds from sale of property, plant and equipment Net cash outflow from investing activities Cash flows from financing activities Repayment of hire purchase and lease liabilities Repayment of borrowings Dividends paid to company’s shareholders 9 Loans provided under the senior manager share acquisition plan Repayment of loans provided under the Senior Manager Share Acquisition Plan Net cash outflow from financing activities Net increase / (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at end of year

Consolidated 2011 2010 $ $ 157,441,484 123,545,413 (138,010,980) (105,358,861) 19,430,504 18,186,552 1,224,656 632,640 (252,832) (470,593) (2,298,113) (5,172,935) 18,104,215 13,175,664 (400,000) (870,132) - (1,500,000) (538,485) (378,469) (389,988) (54,717) 89,596 51,144 (1,238,877) (2,752,174) (1,116,544) (1,045,577) (882,872) (829,223) (12,369,633) (9,663,775) - (1,858,515) 228,641 - (14,140,408) (13,397,090) 2,724,930 (2,973,600) 23,395,487 26,362,861 79,325 6,226 26,199,742 23,395,487

The above preliminary cash flow statement should be read in conjunction with the accompanying notes.

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Lycopodium Limited and Controlled Entities Appendix 4E - Preliminary Final Report Notes to the financial statements 30 June 2011

1 Summary of significant accounting policies

(a) Basis of preparation

This preliminary financial report has been prepared in accordance with Australian Securities Exchange Listing Rules as they relate to Appendix 4E and in accordance with the recognition and measurement requirements of the Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001.

As such, this preliminary financial report does not include all the notes of the type included in an annual financial report and accordingly, should be read in conjunction with the annual report for the year ended 30 June 2010 and with any public announcements made by Lycopodium Limited during the period in accordance with the disclosure requirements of the Corporations Act 2001.

The principal accounting policies adopted in the preparation of the financial report are consistent with those of the previous financial year.

2 Segment information

(a) Description of segments

Management has determined the operating segments based on the reports reviewed by the Board of Directors that are used to make strategic decisions.

The Board considers the business from both a product and geographic perspective and has identified nine operating segments of which two are reportable in accordance with the requirements of AASB 8.

The Corporate Services segment consists of managerial and legal services provided to the group in addition to strategic investment holdings.

The Minerals segment consists of engineering and related services provided to the extractive mining industry. The clients, including junior exploration companies and major multinational producers, are developing projects for a wide range of commodities. These projects range in scope from large greenfield projects involving process plant and equipment, civil and building works, control systems, services and infrastructure to small skid mounted pilot plants.

All other operating segments are not reportable operating segments, as they fall under the quantitative thresholds of AASB 8. The results of these operations are included in the 'Other' column.

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Lycopodium Limited and Controlled Entities Appendix 4E - Preliminary Final Report Notes to the financial statements 30 June 2011

(continued)

2 Segment information (continued)

(b) Segment information provided to the Board of Directors

The segment information provided to the Board of Directors for the reportable segments for the year ended 30 June 2011 and 2010 are as follows:

		Corporate
2011		Services		Minerals		Other	Total
Total segment revenue Inter-segment revenue Revenue from external customers Segment net profit before tax Depreciation and amortisation Income tax expense Total segment assets Total assets includes: Additions to non-current assets (other than financial assets and deferred tax) Total segment liabilities		$ 16,658,193 (16,325,746) 332,447 (933,655) (367,075) 175,238 11,677,751 566,419 (1,763,516)		$ 148,721,029 (8,333,247) 140,387,782 22,390,717 (541,141) (6,953,135) 51,974,557 1,031,155 (26,075,807)		$ 36,174,002 (7,051,315) 29,122,687 3,520,559 (378,003) (1,017,239) 17,419,745 956,150 (8,973,336)	$ 201,553,224 (31,710,308) 169,842,916 24,977,621 (1,286,219) (7,795,136) 81,072,053 2,553,724 (36,812,659)

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Lycopodium Limited and Controlled Entities Appendix 4E - Preliminary Final Report Notes to the financial statements 30 June 2011

(continued)

2 Segment information (continued)

(b) Segment information provided to the Board of Directors (continued)

		Corporate
2010		Services		Minerals		Other	Total
Total segment revenue Inter-segment revenue Revenue from external customers Segment net profit before tax Depreciation and amortisation Income tax expense Share of profit of associate Total segment assets Total assets includes: Additions to non-current assets (other than financial assets and deferred tax) Total segment liabilities		$ 8,563,387 (8,251,717) 311,670 (530,956) (631,943) (10,750) 26,042 11,429,478 - (2,282,391)		$ 111,868,242 (8,670,996) 103,197,246 16,409,671 (619,259) (2,036,351) - 38,130,396 462,855 (14,419,380)		$ 22,286,590 (5,460,991) 16,825,599 2,821,301 (357,288) (606,211) - 14,360,016 241,595 (7,917,089)	$ 142,718,219 (22,383,704) 120,334,515 18,700,016 (1,608,490) (2,653,312) 26,042 63,919,890 704,450 (24,618,860)

(c) Other segment information

(i) Segment revenue Sales between segments are carried out at arm's length and are eliminated on consolidation. The revenue from external parties reported to the Board of Directors is measured in a manner consistent with that in the statement of comprehensive income.

Segment revenue reconciles to total revenue from operations as per the preliminary statement of comprehensive income as follows:

Total segment revenue Intersegment eliminations Total revenue as per the preliminary statement of comprehensive income	Consolidated 2011 2010 $ $ 201,553,224 142,718,219 (31,710,308) (22,383,704) 169,842,916 120,334,515

The entity is domiciled in Australia. The amount of its revenue from external customers in Australia is $102,159,000 (2010 - $67,050,000), and the total revenue from external customers in other countries is $67,684,000 (2010 - $53,285,000). Segment revenues are allocated based on the country in which the customer is located.

Revenues of approximately $69,858,000 (2010 - $47,503,000) are derived from the group's top 3 customers. These revenues are attributable to the Minerals segment.

(ii) Segment profit before tax

The Board of Directors assesses the performance of the operating segments based on a measure of profit before tax.

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Lycopodium Limited and Controlled Entities Appendix 4E - Preliminary Final Report Notes to the financial statements 30 June 2011

(continued)

2 Segment information (continued)

(c) Other segment information (continued)

A reconciliation of reportable segment profit before tax to the profit before tax in the preliminary statement of comprehensive income is provided as follows:

Segment profit before tax Amortisation of customer relationships Share of net profit of associate accounted for using the equity method Other Profit before income tax as per the preliminary statement of comprehensive income	Consolidated 2011 2010 $ $ 24,977,621 18,700,016 (45,000) (45,000) - 26,042 (24,732) 30,722 24,907,889 18,711,780

(iii) Segment assets

The amounts provided to the Board of Directors with respect to total assets are measured in a manner consistent with that of the financial statements. These assets are allocated based on the operations of the segment and the physical location of the asset.

Reportable segments' assets are reconciled to total assets in the preliminary balance sheet as follows:

Segment assets Intersegment eliminations Intangibles arising on consolidation Deferred tax arising on consolidation Total assets as per the preliminary balance sheet	Consolidated 2011 2010 $ $ 81,072,053 63,919,890 (2,866,979) (2,565,075) 5,742,582 5,787,580 (67,500) (81,000) 83,880,156 67,061,395

The total of non-current assets located in Australia is $9,994,000 (2010 - $8,799,000), and the total of these non-current assets located in other countries is $276,000 (2010 - $367,000). Segment assets are allocated to countries based on where the assets are located.

(iv) Segment liabilities

The amounts provided to the Board of Directors with respect to total liabilities are measured in a manner consistent with that of the financial statements. These liabilities are allocated based on the operations of the segment.

Reportable segments' liabilities are reconciled to total liabilities as per the preliminary balance sheet as follows:

Segment liabilities Intersegment eliminations Total liabilities as per the preliminary balance sheet	Consolidated 2011 2010 $ $ 36,812,659 24,618,860 (2,619,597) (2,276,900) 34,193,062 22,341,960

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Lycopodium Limited and Controlled Entities Appendix 4E - Preliminary Final Report Notes to the financial statements 30 June 2011

(continued)

3 Revenue

From operations Sales revenue Contract revenue Other revenue Rents and sub-lease rentals Bank interest Other revenue Total revenue from operations 4 Other income Gain on step-up of investment in associate (note 10) 5 Expenses Profit before income tax includes the following specific expenses: Depreciation Plant and equipment Motor Vehicles Total depreciation Amortisation Leasehold improvements Leased plant and equipment Computer software Customer contracts and relationships Total amortisation Total depreciation and amortisation Finance costs Interest and finance charges paid/payable Net loss on disposal of property, plant and equipment Rental expense relating to operating leases Minimum lease payments Earn out right paid to vendors of Sherwood Utilities Pty Ltd (note 10)

Consolidated 2011 2010 $ $ 168,507,990 119,570,470 28,283 36,080 1,225,791 646,893 80,852 81,072 1,334,926 764,045 169,842,916 120,334,515 Consolidated 2011 2010 $ $ - 466,947 Consolidated 2011 2010 $ $ 258,868 301,588 22,854 18,561 281,722 320,149 79,408 83,964 746,794 694,252 133,295 465,126 45,000 45,000 1,004,497 1,288,342 1,286,219 1,608,491 252,832 715,142 25,503 868 5,094,450 4,329,130 400,000 -

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Lycopodium Limited and Controlled Entities Appendix 4E - Preliminary Final Report Notes to the financial statements 30 June 2011

(continued)

6 Income tax expense

(a) Income tax expense Current tax Deferred tax Adjustments for current tax of prior periods - overprovision of prior year income tax Adjustments for current tax of prior periods - research and development concessions Adjustments for current tax of prior periods - Non-assessable, non-exempt income and related non-deductible expenses Deferred income tax (revenue) included in income tax expense comprises: Decrease / (Increase) in deferred tax assets Increase / (Decrease) in deferred tax liabilities

Consolidated 2011 2010 $ $ 9,998,653 6,127,823 (2,120,718) 749,844 20,301 (158,247) (103,100) (180,239) - (3,885,869) 7,795,136 2,653,312 (1,914,112) 598,465 (206,606) 151,379 (2,120,718) 749,844

(b) Numerical reconciliation of income tax expense to prima facie tax payable Profit before income tax expense Tax at the Australian tax rate of 30% (2010 - 30%) Tax effect of amounts which are not deductible (taxable) in calculating taxable income: Non deductible depreciation and amortisation Share based payment (note 7) Sundry items Subsidiary acquisition costs (note 10) Non-assessable, non-exempt income and related non-deductible expenses relating to foreign jurisdiction Adjustments for current tax of prior periods - research and development concessions Adjustments for current tax of prior periods - overprovision of prior year income tax Adjustments for current tax of prior periods - Non-assessable, non-exempt income and related non-deductible expenses Difference in overseas tax rates Previously unrecognised tax losses now recouped to reduce current tax expense Deferred tax asset not recognised Movement in exchange rates Total income tax expense

24,907,889 18,711,780 7,472,366 5,613,534 - 2,992 43,558 30,759 195,292 117,223 120,000 - (118,142) 804,196 7,713,074 6,568,704 (103,100) (180,239) 20,301 (158,247) - (3,885,869) 45,917 431,682 (92,661) (122,128) 211,605 - - (590) 7,795,136 2,653,313

(c) Amounts recognised directly in equity

Aggregate current and deferred tax arising in the reporting period and not recognised in net profit or loss but directly debited or credited to equity

Net deferred tax - (credited) directly to equity

Consolidated	Consolidated
2011	2010
$	$
(300)	(5,100)

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Lycopodium Limited and Controlled Entities Appendix 4E - Preliminary Final Report Notes to the financial statements 30 June 2011

(continued)

6 Income tax expense (continued)

(d) Tax losses Unused tax losses for which no deferred tax asset has been recognised Potential tax benefit @ 30% All unused tax losses were incurred by Australian entities. 7 Reserves and retained profits (a) Reserves Director performance share reserve Foreign currency translation reserve Available-for-sale investments revaluation reserve Movements: Director performance rights reserve Balance 1 July Director performance share plan expense Transfer to share capital (rights exercised) Balance 30 June Movements: Foreign currency translation reserve Balance 1 July Currency translation differences arising during the year Balance 30 June

Consolidated 2011 2010 $ $ 2,134,860 1,969,435 640,458 590,831 Consolidated 2011 2010 $ $ 418,604 273,411 (267,686) (347,012) (61,600) (60,900) 89,318 (134,501) Consolidated 2011 2010 $ $ 273,411 244,682 145,193 102,529 - (73,800) 418,604 273,411 Consolidated 2011 2010 $ $ (347,012) (353,825) 79,326 6,813 (267,686) (347,012)

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Lycopodium Limited and Controlled Entities Appendix 4E - Preliminary Final Report Notes to the financial statements 30 June 2011

(continued)

7 Reserves and retained profits (continued)

(a)

Movements: Available-for-sale investments revaluation reserve Balance 1 July Revaluation - gross Deferred tax Balance 30 June	Consolidated 2011 2010 $ $ (60,900) (49,000) (1,000) (17,000) 300 5,100 (61,600) (60,900)

(b) Retained profits

Movements in retained profits were as follows:

Balance 1 July Net profit for the year Dividends Transfer from minority interest Acquisition of minority interest Balance 30 June	Consolidated 2011 2010 $ $ 26,123,639 21,622,524 17,162,237 16,058,468 (12,369,633) (9,663,775) - 606,422 - (2,500,000) 30,916,243 26,123,639

8 Non-controlling interests

Interest in: Share capital Reserves Retained profits Transfer to retained earnings	Consolidated 2011 2010 $ $ 1 35 719 - (49,484) 606,387 - (606,422) (48,764) -

The transfer to retained profits in June 2010 relates to the acquisition of the remaining 25% issued capital in Lycopodium Minerals QLD Pty Ltd as noted in Note 10.

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Lycopodium Limited and Controlled Entities Appendix 4E - Preliminary Final Report Notes to the financial statements 30 June 2011

(continued)

9 Dividends

(a) Ordinary shares Final dividend for the year ended 30 June 2010 of 22.0 cents (2009 - 20.0 cents) per fully paid share paid on 15 October 2010 (2009 - 16 October 2009) Fully franked based on tax paid @ 30% (2009 - 30%) Interim dividend for the year ended 30 June 2011 of 10.0 cents (2010 - 5.0 cents) per fully paid share paid 15 April 2011 (2010 - 15 April 2010) Fully franked based on tax paid @ 30% (2010 - 30%) Total dividends provided for or paid Dividends paid in cash during the year were as follows: (b) Dividends not recognised at year end In addition to the above dividends, since year end the directors have recommended the payment of a final dividend of 20.0 cents per fully paid ordinary share (2010 - 22.0 cents), fully franked based on tax paid at 30% (2010 - 30%). The aggregate amount of the proposed dividend expected to be paid on 14 October 2011 out of Group retained profits at 30 June 2011, but not recognised as a liability at year end, is

Parent entity 2011 2010 $ $ 8,504,123 7,731,021 3,865,510 1,932,754 12,369,633 9,663,775 12,369,633 9,663,775 Parent entity 2011 2010 $ $ 7,731,021 8,504,123

10 Business combination

Acquisition of remaining 60% interest in Sherwood Utilities Pty Ltd

(a) Summary of acquisition

On 31 August 2009 Lycopodium Ltd acquired the remaining 60% of the issued share capital of its associate Sherwood Utilities Pty Ltd not held by it.

The acquired business contributed revenues of $5,750,000 and net profit of $510,000 to the Group for the period from 31 August 2009 to 30 June 2010. If the acquisition had occurred on 1 July 2009, consolidated revenue and consolidated profit for the year ended 30 June 2010 would have been $121,406,000 and $16,127,000 respectively. These amounts have been calculated using the Group's accounting policies and by adjusting the results of the subsidiary to reflect the additional amortisation that would have been charged assuming the fair value adjustments to intangible assets (customer contracts and relationships) had applied from 1 July 2009, together with the consequential tax effects.

Details of the fair value of the assets and liabilities acquired and goodwill are as follows:

Purchase consideration Cash paid Total purchase consideration Fair value of net identifiable assets acquired (60% of $1,238,284) (refer to (c) below) Goodwill in respect of 60% of interest acquired	1,400,000
	1,400,000 742,971
	657,029

The goodwill arises on the acquisition of the remaining 60% interest in Sherwood Utilities Pty Ltd.

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Lycopodium Limited and Controlled Entities Appendix 4E - Preliminary Final Report Notes to the financial statements 30 June 2011

(continued)

10 Business combination (continued)

The goodwill is attributable to Sherwood Utilities Pty Ltd's profitability and synergies expected to arise after the company's acquisition of the new subsidiary.

Based on the above purchase consideration, the value of the previously equity accounted investment was revalued. A gain of $466,947 is included in the other income for the 2010 year.

(b) Purchase consideration

Outflow of cash to acquire business, net of cash acquired Cash consideration Less: Balances acquired Cash Outflow of cash	2010 $ 1,400,000 529,868
	870,132

(c) Assets and liabilities acquired

The assets and liabilities recognised as a result of the acquisition are as follows:

Cash and cash equivalents Trade and other receivables Property, plant and equipment Intangibles Trade and other payables Employee benefit liabilities, including superannuation Borrowings Net deferred tax asset (liability) Net assets Net identifiable assets acquired	Acquiree's carrying amount $ 529,868 841,858 121,356 390 (251,705) (231,591) (61,869) 69,477 1,017,784	Fair value $ 529,868 841,858 121,356 315,390 (251,705) (231,591) (61,869) (25,023)
		1,238,284
		1,238,284

Earn out right

The earn out right by the vendors of Sherwood Utilities Pty Ltd as disclosed in the annual report for the year ended 30 June 2010 has now been settled. A payment of $400,000 was made which has been expensed in the income statement of the consolidated entity for the year ended 30 June 2011.

Acquired receivables

The fair value of acquired trade and other receivables is $841,858 and includes trade receivable with a fair value of $811,768. The gross contractual amount for trade receivables due is $811,768, of which the full amount is expected to be collectible.

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Lycopodium Limited and Controlled Entities Appendix 4E - Preliminary Final Report Notes to the financial statements 30 June 2011

(continued)

10 Business combination (continued)

Acquisition of remaining 25% minority interest in Lycopodium Minerals QLD Pty Ltd

(a) Summary of acquisition

On 13 July 2009 Lycopodium Limited completed the acquisition of all the minority interests' shares in its subsidiary Lycopodium Minerals QLD Pty Ltd pursuant to the exercise of an existing option, for a total consideration of $2,500,000.

In addition, a maximum of five equal instalments of $200,000 per annum is payable on successive anniversary dates of completion of the business combination. These payments are considered to be post acquisition employment benefits and will be recognised as part of employee benefits expense in the period to which the service relates.

The Group recognised a decrease in minority interest of $606,422 in 2010 as noted in Note 8.

11 Subsidiaries

(a) Significant investments in subsidiaries

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 1.

accordance with the accounting policy described in	note 1.
	Country of
Name of entity	incorporation	Class of shares	Equity	holding
			2011	2010
Lycopodium Minerals Pty Ltd	Australia	Ordinary	100	100
Orway Mineral Consultants (WA) Pty Ltd	Australia	Ordinary	100	100
Lycopodium Process Industries Pty Ltd	Australia	Ordinary	100	100
Lycopodium (Ghana) Pty Ltd	Australia	Ordinary	100	100
Lycopodium (Ghana) Limited	Ghana	Ordinary	100	100
Lycopodium Tanzania Limited	Tanzania	Ordinary	100	100
Lycopodium (Philippines) Pty Ltd	Australia	Ordinary	100	100
Lycopodium Minerals QLD Pty Ltd	Australia	Ordinary	100	100
Lycopodium Infrastructure Pty Ltd	Australia	Ordinary	100	100
Sherwood Utilities Pty Ltd	Australia	Ordinary	100	100
Process Design & Fabrication Pty Ltd	Australia	Ordinary	100	100
Lycopodium Share Plan Pty Ltd	Australia	Ordinary	100	100
Lycopodium Mauritius (i)	Mauritius	Ordinary	100	-
Lycopodium Mauritania SARL (ii)	Mauritania	Ordinary	100	-
Lycopodium Americas Pty Ltd (iii)	Australia	Ordinary	85	-
Lycopodium Minerals U.S.A. Inc. (iv)	America	Ordinary	100	-
Lycopodium Minerals Canada Ltd (v)	Canada	Ordinary	100	-
Orway Minerals Consultants Americas Pty Ltd (vi)	Australia	Ordinary	85	-
Orway Minerals Consultants Canada Ltd (vii)	Canada	Ordinary	100	-
Lycopodium PNG Ltd (viii)	Papua New Guinea	Ordinary	100	-

(i) Lycopodium Mauritius was incorporated on 7 October 2010.

(ii) Lycopodium Mauritania SARL was incorporated on 19 July 2010.

(iii) Lycopodium Americas Pty Ltd was incorporated on 6 September 2010.

(iv) Lycopodium Minerals U.S.A. Inc. was incorporated on 20 September 2010.

(v) Lycopodium Minerals Canada Ltd was incorporated on 19 October 2010.

(vi) Orway Minerals Consultants Americas Pty Ltd was incorporated on 5 May 2011.

(vii) Orway Minerals Consultants Canada Ltd was incorporated on 21 April 2011. (viii) Lycopodium PNG Ltd was incorporated on 6 December 2010.

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Lycopodium Limited and Controlled Entities Appendix 4E - Preliminary Final Report Notes to the financial statements 30 June 2011

(continued)

12 Events occurring after the reporting period

With the exception the dividends as noted in note 9(b), no other matter or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect:

(a) the consolidated entity's operations in future financial years, or

(b) the results of those operations in future financial years, or

(c) the consolidated entity's state of affairs in future financial years.

13 Reconciliation of profit after income tax to net cash inflow from operating activities

	Consolidated 2011 2010 $ $
Profit for the year	17,112,753 16,058,468
Depreciation and amortisation	1,286,216 1,608,491
Non-cash employee benefits expense-share-based payments	145,193 102,529
Gain on step-up of investment in associate	- (466,947)
Share of profit of associate not received as dividends or distributions	- (26,042)
Net exchange differences	1,024 4,353
Non cash interest expense	225,320 221,728
Change in operating assets and liabilities
Increase in trade and other receivables	(11,260,821) (2,722,845)
(Increase) / Decrease in deferred tax assets	(2,120,716) 769,179
Decrease in other operating assets	658,786 805,970
Increase in trade creditors and other payables	3,025,999 2,166,426
Increase / (Decrease) in provision for income taxes payable	7,617,739 (4,224,904)
Increase / (Decrease) in other provisions	1,412,722 (1,120,742)
Net cash inflow from operating activities	18,104,215 13,175,664

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Lycopodium Limited and Controlled Entities Appendix 4E - Preliminary Final Report Notes to the financial statements 30 June 2011

(continued)

14 Earnings per share (a) Basic earnings per share Profit attributable to the ordinary equity holders of the company (b) Diluted earnings per share Profit attributable to the ordinary equity holders of the company (c) Reconciliations of earnings used in calculating earnings per share Basic earnings per share Profit from operations Loss from operations attributable to non-controlling interests Diluted earnings per share Profit attributable to the ordinary equity holders of the company used in calculating basic earnings per share Profit attributable to the ordinary equity holders of the company used in calculating diluted earnings per share (d) Weighted average number of shares used as the denominator Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share Adjustments for calculation of diluted earnings per share: Performance rights Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating diluted earnings per share

Consolidated 2011 2010 Cents Cents 44.3 41.6 44.0 41.4 Consolidated 17,162,237 16,058,467 (49,484) - 17,112,753 16,058,467 17,112,753 16,058,467 17,112,753 16,058,467 Consolidated 2011 Number 2010 Number 38,655,103 38,617,878 280,092 164,807 38,935,195 38,782,685

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Lycopodium Limited and Controlled Entities Appendix 4E - Preliminary Final Report Supplementary Appendix 4E information 30 June 2011

Additional dividend/distribution information (Appendix 4E item 6)

Details of dividends/distributions declared or paid during or subsequent to the year ended 30 June 2011 are as follows:

Record date	Payment date	Type	Amount per security	Total dividend	Franked amount per security
1 October 2010	15 October 2010	Final	22.0 cents	$ 8,504,123	22.0 cents
1 April 2011	15 April 2011	Interim	10.0 cents	$ 3,865,510	10.0 cents
3 October 2011	14 October 2011	Final	20.0 cents	$ 7,731,021	20.0 cents

Audit Alert (Appendix 4E items 15 - 17)

This report is based on accounts which are in the process of being audited.

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