PRL GLOBAL LTD - AGM Information 2011

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CI RESOURCES LIMITED

NOTICE OF ANNUAL GENERAL MEETING

DATE AND TIME OF MEETING

Monday, 28 November 2011 9.00am (MYT)

PLACE OF MEETING

Millennium VIII Level 3, Grand Millennium Kuala Lumpur 160 Jalan Bukit Bintang Kuala Lumpur, Selangor Malaysia

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their accountant, solicitor or other professional adviser prior to voting. The Company’s 2011 Annual Report can be accessed on the Company’s website at www.ciresources.com.au or alternatively by requesting a hard copy from the Company Secretary. Should you wish to discuss any matter please do not hesitate to contact the Company Secretary by telephone on +61 8 6310 5040.

CONTENTS PAGE

Business of the Meeting (setting out the proposed resolutions)	4
Explanatory Statement (explaining the proposed resolutions)	7
Glossary	16
Appendix A – Independent Expert’s Report
Proxy Form

TIME AND PLACE OF MEETING AND HOW TO VOTE

VENUE

Notice is given that the Annual General Meeting of the Shareholders to which this Notice of Meeting relates will be held at 9.00am (MYT) on 28 November 2011 at:

Millennium VIII Level 3 Grand Millennium Kuala Lumpur 160 Jalan Bukit Bintang 55100 Kuala Lumpur Malaysia

VOTING ELIGIBILITY

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Annual General Meeting are those who are registered Shareholders of the Company at 7.00pm (Sydney time) on 25 November 2011.

VOTING IN PERSON

To vote in person, attend the General Meeting on the date and at the place set out above.

VOTING BY PROXY

To vote by proxy, please complete and sign the enclosed Proxy Form and return by the time and in accordance with the instructions set out on the Proxy Form.

New sections 250BB and 250BC of the Corporations Act came into effect on 1 August 2011 and apply to voting by proxy on or after that date. Shareholders and their proxies should be aware of these changes to the Corporations Act, as they will apply to this Annual General Meeting. Broadly, the changes mean that:

if proxy holders vote, they must cast all directed proxies as directed; and
any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed.

Further details on these changes are set out below.

CI Resources Limited – Notice of Meeting 2011

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Proxy vote if appointment specifies way to vote

Section 250BB(1) of the Corporations Act provides that an appointment of a proxy may specify the way the proxy is to vote on a particular resolution and, if it does :

the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way (i.e. as directed); and
if the proxy has 2 or more appointments that specify different ways to vote on the resolution – the proxy must not vote on a show of hands; and
if the proxy is the chair of the meeting at which the resolution is voted on – the proxy must vote on a poll, and must vote that way (i.e. as directed); and
if the proxy is not the chair – the proxy need not vote on the poll, but if the proxy does so, the proxy must vote that way (i.e. as directed).

Transfer of non-chair proxy to chair in certain circumstances

Section 250BC of the Corporations Act provides that, if:

an appointment of a proxy specifies the way the proxy is to vote on a particular resolution at a meeting of the Company's members; and
the appointed proxy is not the chair of the meeting; and
at the meeting, a poll is duly demanded on the resolution; and
either of the following applies:
the proxy is not recorded as attending the meeting;
the proxy does not vote on the resolution,

the chair of the meeting is taken, before voting on the resolution closes, to have been appointed as the proxy for the purposes of voting on the resolution at the meeting.

CORPORATE SHAREHOLDERS

Corporate shareholders who wish to appoint a representative to attend the meeting on their behalf must provide that person with a properly executed letter or other document confirming that they are authorised to act as the corporate shareholder’s representative. The authorisation may be effective either for this meeting only or for all meetings of CI Resources Limited. Shareholders can request for the “Appointment of Corporate Representation” form from the Company Secretary.

CI Resources Limited – Notice of Meeting 2011

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BUSINESS OF THE MEETING

AGENDA

ORDINARY BUSINESS

Financial Reports

To receive the annual Financial Report, Directors’ Report and Auditor’s Report for the Company and its controlled entities for the financial year ended 30 June 2011.

Note: There is no requirement for Shareholders to approve these reports.

1. Resolution 1– Adoption of Remuneration Report

To consider and, if thought fit, to pass, with or without amendment, the following resolution as a non-binding resolution :

“That, for the purpose of Section 250R(2) of the Corporations Act and for all other purposes, approval is given for the adoption of the Remuneration Report as contained in the Company’s annual financial report for the financial year ended 30 June 2011.”

Note: the vote on this Resolution is advisory only and does not bind the Directors or the Company.

Voting Prohibition Statement:

A vote on this Resolution must not be cast (in any capacity) by or on behalf of any of the following persons:

(a) a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report; or
(b) a Closely Related Party of such a member.

However, a person described above may vote on this Resolution if:

(c) the person does so as a proxy appointed by writing that specifies how the proxy is to vote on the Resolution; and
(d) the vote is not cast on behalf of a person described in sub-paragraphs (a) or (b) above.

2. Resolution 2 – Re-election of Director – Mr Tee Lip Sin

To consider, and if thought fit, pass as an ordinary resolution the following:

"That Mr Tee Lip Sin who retires in accordance with the Constitution and, being eligible, offers himself for re-election, be re-elected as a Director of the Company.”

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3. Resolution 3 – Re-election of Director – Mr Phuar Kong Seng

To consider, and if thought fit, pass as an ordinary resolution the following:

"That Mr Phuar Kong Seng who retires in accordance with the Constitution and, being eligible, offers himself for re-election, be re-elected as a Director of the Company.”

4. Resolution 4 – Election of a Director – Mr Adrian Gurgone

To consider, and if thought fit, pass as an ordinary resolution the following:

"That Mr Adrian Gurgone, having been appointed a Director of the Company since the last general meeting in accordance with the Company's Constitution, retires, and being eligible, be elected as a Director of the Company."

5. Resolution 5 – Election of a Director – Mr Tee Lip Jen

To consider, and if thought fit, pass as an ordinary resolution the following:

"That Mr Tee Lip Jen, having been appointed a Director of the Company since the last general meeting in accordance with the Company's Constitution, retires, and being eligible, be elected as a Director of the Company."

6. Resolution 6 – Disposal of a substantial asset - Phosphate Supply & Distribution Agreement

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

“That for the purpose of ASX Listing Rule 10.1 and for all other purposes, approval is given for the Company’s subsidiary, Phosphate Resources Limited, to supply Phosphate Product to CCM Agri-Max Sdn. Bhd. pursuant to the terms and conditions of the Renegotiated Agreement ( Transaction ), on the terms and conditions set out in the Explanatory Statement accompanying this Notice.”

Short Explanation: Shareholder approval is required under ASX Listing Rule 10.1 in order for Phosphate Resources Limited (being a “child entity” of the Company as determined by the ASX Listing Rules) to dispose of a substantial asset to an entity associated with a substantial Shareholder of the Company. Please refer to the Explanatory Statement for further details of the Transaction.

Voting Exclusion: The Company will disregard any votes cast on this Resolution by any party to the Transaction and any associate of that party (or those parties). However, the Company need not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, if it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

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Independent Expert’s Report: Shareholders should carefully consider the Independent Expert’s Report prepared by RSM Bird Cameron Corporate Pty Ltd (ACN 050 508 024) for the purposes of the Shareholder approval required by ASX Listing Rule 10.1 which comments on the fairness and reasonableness of the Transaction to the non-associated Shareholders in the Company. The Independent Expert has determined that the Transaction is FAIR AND REASONABLE to the nonassociated Shareholders of the Company.

7. Resolution 7 – Replacement of Constitution

To consider, and if thought fit, to pass as a special resolution the following:

“That, for the purpose of Section 136(2) of the Corporations Act and for all other purposes, approval is given for the Company to repeal its existing Constitution and adopt a new constitution in its place in the form as signed by the chairman of the Meeting for identification purposes.”

By Order of the Board

Elizabeth Lee Company Secretary 25 October 2011

CI Resources Limited – Notice of Meeting 2011

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ACN 006 788 754

CI RESOURCES LIMITED

EXPLANATORY STATEMENT

Introduction

The purpose of this Explanatory Statement is to provide information, which the Board believes is material to Shareholders in relation to the Resolutions. The Explanatory Statement explains the Resolutions and identifies the Board’s reasons for putting them to Shareholders.

Terms and abbreviations used in this Notice of Meeting are defined in the Glossary.

Financial Reports

The Financial Statements, Directors’ Report and Auditor’s Report for CI Resources Limited for the year ended 30 June 2011 will be laid before the meeting. There is no requirement for Shareholders to approve these reports. However, the Chairman of the meeting will allow a reasonable opportunity for Shareholders to ask questions about, or make comments on, the management of CI Resources Limited. Shareholders will be given a reasonable opportunity to ask the auditor questions about the conduct of the audit and the content of the Auditor’s Report.

Resolution 1 - Adoption of Remuneration Report

General

The Corporations Act requires that at a listed company’s annual general meeting, a resolution that the remuneration report be adopted must be put to the shareholders. However, such a resolution is advisory only and does not bind the Directors or the Company.

Under recent changes to the Corporations Act which came into effect on 1 July 2011, if at least 25% of the votes cast on Resolution 1 are voted against adoption of the Remuneration Report at this Annual General Meeting, and then again at the Company's next annual general meeting, the Company will be required to put to Shareholders a resolution proposing the calling of an extraordinary general meeting to consider the appointment of directors of the Company ( Spill Resolution ).

If more than 50% of Shareholders vote in favour of the Spill Resolution, the Company must convene the extraordinary general meeting ( Spill Meeting ) within 90 days of the Company's next annual general meeting. All of the Directors who were in office when the Company's 2012 Directors' report was approved, other than the managing director of the Company, will cease to hold office immediately before the end of the Spill Meeting but may stand for re-election at the Spill Meeting. Following the Spill Meeting those persons whose election or re-election as Directors is approved will be the Directors of the Company.

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The remuneration report sets out the Company’s remuneration arrangements for the Directors and senior management of the Company. The remuneration report is part of the Directors’ report contained in the annual financial report of the Company for the financial year ending 30 June 2011.

A reasonable opportunity will be provided for discussion of the remuneration report at the Annual General Meeting.

Proxy Restrictions

Pursuant to the Corporations Act, if you elect to appoint the Chair, or another member of Key Management Personnel whose remuneration details are included in the Remuneration Report or any Closely Related Party of that member as your proxy to vote on this Resolution 1, you must direct the proxy how they are to vote. Where you do not direct the Chair, or another member of Key Management Personnel whose remuneration details are included in the Remuneration Report or Closely Related Party of that member on how to vote on this Resolution 1, the proxy is prevented by the Corporations Act from exercising your vote and your vote will not be counted in relation to this Resolution 1.

Definitions

Key Management Personnel has the same meaning as in the accounting standards and broadly includes those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any director (whether executive or otherwise) of the Company.

Closely Related Party of a member of the Key Management Personnel means:

(a) a spouse or child of the member;
(b) a child of the member’s spouse;
(c) a dependent of the member or the member’s spouse;
(d) anyone else who is one of the member’s family and may be expected to influence the member, or be influenced by the member, in the member’s dealing with the entity;
(e) a company the member controls; or
(f) a person prescribed by the Corporations Regulations 2001 (Cth).

Resolution 2 - Re-election of Director – Mr Tee Lip Sin

Clause 21.3(2) of the Constitution requires that at each annual general meeting, one third (or if that is not a whole number, the next lowest whole number) of the Directors who are not to retire under clause 21.3(1) (i.e. Directors appointed during the year to fill a casual vacancy), the managing director of the Company or an alternate director of the Company, automatically retire and are eligible for re-appointment.

CI Resources Limited – Notice of Meeting 2011

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The Directors who are required to retire by reason of clause 21.3(2) of the Constitution are those of the Directors the subject of that clause who have been in office the longest and, as between Directors who have been in office for an identical period, those to retire are (unless they otherwise agree among themselves) to be selected by lot.

Pursuant to the Constitution Mr Tee Lip Sin will retire by rotation.

Mr Tee seeks re-election. A brief biography of Mr Tee is in the Annual Report.

The Board supports the re-election of Mr Tee Lip Sin.

Resolution 3 - Re-election of Director – Mr Phuar Kong Seng

The Constitution requires that if and for so long as there are three or more Relevant Directors, one third of those Directors must retire at each AGM. If the number of Directors is not a multiple of three, then the next nearest whole number of relevant Directors must retire from office. The Constitution excludes the Managing Director.

The Constitution provides that a Director who retires is eligible for re-election.

Pursuant to the Constitution Mr Phuar Kong Seng will retire by rotation.

Mr Phuar seeks re-election. A brief biography of Mr Phuar is in the Annual Report.

The Board supports the re-election of Mr Phuar Kong Seng.

Resolutions 4 & 5 - Election of a Director – Mr Adrian Gurgone & Mr Tee Lip Jen

Pursuant to clause 21.6 of the Constitution, the Board may at any time (except the period from the opening to the closing of a Shareholders meeting) appoint any person as a Director (other than an alternate director of the Company) to fill a casual vacancy or as an addition to the Board but so that the number of those Directors does not at any time exceed the maximum number set under clause 21.1 (currently 10).

Any Director so appointed may hold office only until the next following Shareholders meeting and is eligible for re-election. If such a director is not re-appointed their retirement takes effect at the conclusion of the meeting.

On 18 March 2011, the Directors appointed both Mr Adrian Gurgone and Mr Tee Lip Jen as Non-executive Directors of the Company.

A brief biography of both Mr Adrian Gurgone and Mr Tee Lip Jen are in the Company’s 2011 Annual Report.

The Board supports the confirmation of the re-appointments of Mr Adrian Gurgone and Mr Tee Lip Ken as Directors of the Company.

CI Resources Limited – Notice of Meeting 2011

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Resolution 6 – Disposal of a substantial asset – Phosphate Supply & Distribution Agreement

Background

As at the date of this Notice, the Company owns 50.49% of Phosphate Resources Limited (ACN 009 396 543) ( PRL ).

On 25 June 2010, Shareholder approval was obtained for PRL to enter into an agreement with CCM Agri-Max Sdn. Bhd. (Malaysian Company No. 268746-W) (a company incorporated in Malaysia) ( CCMA ), pursuant to which PRL would supply Phosphate Product to CCMA ( Phosphate Supply and Distribution Agreement ).

PRL wishes to renegotiate the terms of the Phosphate Supply and Distribution Agreement ( Renegotiated Agreement ).

The material terms of the Renegotiated Agreement will be as follows:

(a) ( Supply ): PRL undertakes to supply up to 150,000 metric tonnes of Phosphate Product annually to CCMA and its associated companies in the Territory;
(b) ( Term ): 1 January 2012 to 31 December 2016 unless terminated earlier;
(c) ( Territory ): Malaysia and Indonesia;
(d) ( Promotion ): CCMA must on a best endeavours basis actively promote the use of the Phosphate Product as raw materials in the production of NPK compound fertiliser in its or its associated companies plants that are involved in NPK compound fertiliser manufacture;
(e) ( Export restriction ): other than to deliver to its or its associated companies operations for use as raw material in NPK compound fertiliser manufacture, CCMA must not re-export the Phosphate Product from the Territory except with the written consent of PRL;
(f) ( Price ): the price payable for the Phosphate Product shall be agreed between PRL and CCMA every 6 months having consideration for world phosphate market prices and the fertiliser market condition in the Territory. Either party may request a price review in the event a significant change in the market price of phosphate occurs with the parties to use their respective best endeavours;
(g) ( Discount ): CCMA is entitled to a cash discount per tonne of Phosphate Product purchased from PRL to be paid every 6 months and to not exceed US$200,000 per calendar year and to be agreed at the same time as the Price is negotiated;
(h) ( Adjustments ): the Price shall be adjusted by a pre-determined formula in the event the Phosphate Product falls outside the specifications agreed by the parties;
(i) ( Costs ): CCMA must bear the cost at each port of discharge;
(j) ( Payment ): CCMA must pay PRL within 30 days of the Phosphate Product being loaded;

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(k) ( Termination ): six months written notice:
(i) by PRL in the event PRL decides to permanently cease its phosphate mining operations; or
(ii) by CCMA in the event CCMA or any of its associated companies ceases to carry on NPK compound fertiliser manufacture for any reason; and
(l) ( Arbitration ): Any dispute arising in relation to the provisions of the agreement may be referred to arbitration in Perth, Western Australia with any award made final and binding upon each party.

Further details in respect of PRL and CCMA are set out in the Independent Expert’s Report. Shareholders are encouraged to read the Independent Expert’s Report in its entirety.

ASX Listing Rule 10.1

ASX Listing Rule 10.1 provides that an entity must ensure that neither it, nor any of its child entities, acquires a substantial asset from, or disposes of a substantial asset to, amongst other persons, a substantial holder or one of its associates, without the prior approval of holders of the entity’s ordinary shareholders.

Child entity

For the purpose of the ASX Listing Rules, the term “child entity” means:

(a) an entity which is controlled by a body corporate within the meaning of section 50AA of the Corporations Act; and
(b) an entity which is a subsidiary of the body corporate.

For the purpose of Section 46 of the Corporations Act, an entity is a subsidiary of a body corporate if, and only if:

(g) the body corporate:
(i) controls the composition of the entity’s board; or
(ii) is in a position to cast, or control the casting of, more than one-half of the maximum number of votes that might be cast at a general meeting of the entity; or
(iii) holds more than one-half of the issued share capital of the entity (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital); or
(h) the entity is a subsidiary of a subsidiary of the body corporate.

PRL is a subsidiary of the Company as the Company holds more than one-half (50.49%) of the issued share capital of PRL.

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Substantial asset

For the purposes of ASX Listing Rule 10.1, an asset is substantial if its value, or the value of the consideration for it is, or in ASX’s opinion is, 5% or more of the equity interests of the entity as set out in the latest accounts given to ASX under the ASX Listing Rules.

Based on PRL supplying the maximum annual amount of Phosphate Product for the duration of the Renegotiated Agreement and the price of the Phosphate Product remaining constant, the potential consideration to be received by PRL is 5% or more of the equity interests of the Company as set out in the latest accounts given to ASX under the ASX Listing Rules (i.e. 5% or more of $76.784mn for the financial year ending 30 June 2011).

Therefore, the Transaction potentially involves a substantial asset.

Substantial shareholder (or associate)

For the purposes of ASX Listing Rule 10.1, a substantial shareholder is a person who has a relevant interest (either directly or through its associates), or had at any time in the 6 months before the transaction, in at least 10% of the total votes attaching to the voting securities.

For the purposes of ASX Listing Rule 10.1, an associate includes a related body corporate.

CCM International Sdn. Bhd. (a company incorporated in Malaysia) ( CCMI ) is a substantial holder of the Company by virtue of its relevant interest in 12,000,000 Shares or 16.47% of the voting Shares. CCMA is a related body corporate of, and therefore an associate of, CCMI by virtue of each being a subsidiary of Chemical Company of Malaysia Berhad (a company incorporated in Malaysia).

Therefore, the Transaction is with an associate of a substantial shareholder of the Company.

Requirement for shareholder approval

On the basis that:

(a) PRL is a child entity;
(b) the Transaction is for the disposal of a substantial asset (i.e. supply of Phosphate Product); and
(c) CCMA is an associate of a substantial shareholder of the Company,

the Company is required to seek Shareholder approval under ASX Listing Rule 10.1 in respect of the Transaction.

Independent Expert’s Report

ASX Listing Rule 10.10.2 requires a notice of meeting containing a resolution under ASX Listing Rule 10.1 to include a report on the transaction from an independent expert.

The Independent Expert's Report set out in Appendix A sets out a detailed independent examination of the proposed Transaction to enable non-associated Shareholders to assess the merits and decide whether to approve the Transaction.

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To the extent that it is appropriate, the Independent Expert’s Report sets out further information with respect to the Transaction and concludes that it is FAIR AND REASONABLE to the non-associated Shareholders.

Shareholders are urged to carefully read the Independent Expert’s Report to understand its scope, the methodology of the valuation and the sources of information and assumptions made.

Directors Recommendations

The Directors do not have any material personal interest in the outcome of the Resolutions other than as a result of their interest arising solely in the capacity of Shareholders of the Company.

Each of the Directors intends to vote their Shares in favour of the Resolution. Based on the information available, all of the Directors consider that the proposed Transaction is in the best interests of the Company and recommend that the Shareholders vote in favour of the Resolutions. If Resolution 6 is not approved by Shareholders the existing Phosphate Supply and Distribution Agreement will continue on its existing terms and expire on 30 June 2012 unless otherwise terminated earlier, following which there will be a significant financial impact on PRL and in turn the Company (owning 50.49% of PRL) through the loss of revenue unless alternative buyers can be sourced to acquire an equivalent amount of the product on the same or similar terms as proposed under the Renegotiated Agreement.

The Directors have approved the proposal to put the Resolutions to Shareholders.

Resolution 7 – Replacement of Constitution

General

A company may modify or repeal its constitution or a provision of its constitution by special resolution of Shareholders.

Resolution 7 is a special resolution which will enable the Company to repeal its existing Constitution and adopt a new constitution ( Proposed Constitution ) which is of the type required for a listed public company limited by shares updated to ensure it reflects the current provisions of the Corporations Act and ASX Listing Rules.

This will incorporate amendments to the Corporations Act and ASX Listing Rules since the current Constitution was adopted on 30 April 2001.

The Directors believe that it is preferable in the circumstances to replace the existing Constitution with the Proposed Constitution rather than to amend a multitude of specific provisions.

The Proposed Constitution is broadly consistent with the provisions of the existing Constitution. Many of the proposed changes are administrative or minor in nature including but not limited to:

updating the name of the Company;
updating references to bodies or legislation which have been renamed (e.g. references to the Australian Settlement and Transfer Corporation Pty Ltd, ASTC Settlement Rules and ASTC Transfer); and

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expressly providing for statutory rights by mirroring these rights in provisions of the Proposed Constitution.

The Directors believe these amendments are not material nor will they have any significant impact on Shareholders. It is not practicable to list all of the changes to the Constitution in detail in this Explanatory Statement, however, a summary of the proposed material changes is set out below.

A copy of the Proposed Constitution is available for review by Shareholders at the Company’s website http://www.ciresources.com.au and at the office of the Company. A copy of the Proposed Constitution can also be sent to Shareholders upon request to the Company Secretary (+61 8 6310 5040)). Shareholders are invited to contact the Company if they have any queries or concerns.

Summary of material proposed changes

Minimum Shareholding (new clause 3)

Clause 3 of the Proposed Constitution outlines how the Company can manage shareholdings which represent an “unmarketable parcel” of shares, being a shareholding that is less than $500 based on the closing price of the Company’s Shares on ASX as at the relevant time.

The Proposed Constitution is in line with the requirements for dealing with “unmarketable parcels” outlined in the Corporations Act and ASX Listing Rules such that where the Company elects to undertake a sale of unmarketable parcels, the Company is only required to give one notice to holders of an unmarketable parcel to elect to retain their shareholding before the unmarketable parcel can be dealt with by the Company, saving time and administrative costs incurred by otherwise having to send out additional notices.

Clause 3 of the Proposed Constitution continues to outline in detail the process that the Company must follow for dealing with unmarketable parcels.

Fee for registration of off market transfers (new clause 8.4(c))

On 24 January 2011, ASX amended ASX Listing Rule 8.14 with the effect that the Company may now charge a “reasonable fee” for registering paper-based transfers, sometimes referred to “off-market transfers”.

Clause 8.4 of the Proposed Constitution enables the Company to charge a reasonable fee when it is required to register off-market transfers from Shareholders. The fee is intended to represent the cost incurred by the Company in upgrading its fraud detection practices specific to off-market transfers.

Before charging any fee, the Company is required to notify ASX of the fee to be charged and provide sufficient information to enable ASX to assess the reasonableness of the proposed amount.

Dividends (new clause 21)

Section 254T of the Corporations Act was amended effective 28 June 2010.

There is now a three-tiered test that a company will need to satisfy before paying a dividend replacing the previous test that dividends may only be paid out of profits.

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The amended requirements provide that a company must not a pay a dividend unless:

(a) the company’s assets exceed its liabilities immediately before the dividend is declared and the excess is sufficient for the payment of the dividend;
(b) the payment of the dividend is fair and reasonable to the company’s shareholders as a whole; and
(c) the payment of the dividend does not materially prejudice the company’s ability to pay its creditors.

The existing Constitution reflects the former profits test and restricts the dividends to be paid only out of the profits of the Company. The Proposed Constitution is updated to reflect the new requirements of the Corporations Act. The Directors consider it appropriate to update the Constitution for this amendment to allow more flexibility in the payment of dividends in the future should the Company be in a position to pay dividends.

Partial (proportional) takeover provisions (new clause 35)

A proportional takeover bid is a takeover bid where the offer made to each shareholder is only for a proportion of that shareholder’s shares.

Pursuant to Section 648G of the Corporations Act, the Company has included in the Proposed Constitution a provision whereby a proportional takeover bid for Shares may only proceed after the bid has been approved by a meeting of Shareholders held in accordance with the terms set out in the Corporations Act.

This clause of the Proposed Constitution will cease to have effect on the third anniversary of the date of the adoption of last renewal of the clause.

Information required by Section 648G of the Corporations Act

Effect of proposed proportional takeover provisions

Where offers have been made under a proportional off-market bid in respect of a class of securities in a company, the registration of a transfer giving effect to a contract resulting from the acceptance of an offer made under such a proportional off-market bid is prohibited unless and until a resolution to approve the proportional off-market bid is passed.

Reasons for proportional takeover provisions

A proportional takeover bid may result in control of the Company changing without Shareholders having the opportunity to dispose of all their Shares. By making a partial bid, a bidder can obtain practical control of the Company by acquiring less than a majority interest. Shareholders are exposed to the risk of being left as a minority in the Company and the risk of the bidder being able to acquire control of the Company without payment of an adequate control premium. These amended provisions allow Shareholders to decide whether a proportional takeover bid is acceptable in principle, and assist in ensuring that any partial bid is appropriately priced.

Knowledge of any acquisition proposals

As at the date of this Notice of Meeting, no Director is aware of any proposal by any person to acquire, or to increase the extent of, a substantial interest in the Company.

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Potential advantages and disadvantages of proportional takeover provisions

The Directors consider that the proportional takeover provisions have no potential advantages or disadvantages for them and that they remain free to make a recommendation on whether an offer under a proportional takeover bid should be accepted.

The potential advantages of the proportional takeover provisions for Shareholders include:

(a) the right to decide by majority vote whether an offer under a proportional takeover bid should proceed;
(b) assisting in preventing Shareholders from being locked in as a minority;
(c) increasing the bargaining power of Shareholders which may assist in ensuring that any proportional takeover bid is adequately priced; and
(d) each individual Shareholder may better assess the likely outcome of the proportional takeover bid by knowing the view of the majority of Shareholders which may assist in deciding whether to accept or reject an offer under the takeover bid.

The potential disadvantages of the proportional takeover provisions for Shareholders include:

(a) proportional takeover bids may be discouraged;
(b) lost opportunity to sell a portion of their Shares at a premium; and
(c) the likelihood of a proportional takeover bid succeeding may be reduced.

Recommendation of the Board

The Directors do not believe the potential disadvantages outweigh the potential advantages of adopting the proportional takeover provisions and as a result consider that the proportional takeover provision in the Proposed Constitution is in the interest of Shareholders and unanimously recommend that Shareholders vote in favour of Resolution 7.

Glossary

$ means Australian dollars.

Annual General Meeting or Meeting means the meeting convened by the Notice of Meeting.

ASX means ASX Limited or the financial market operated by it as the context requires.

ASX Listing Rules means the Listing Rules of ASX.

Board means the current board of directors of the Company.

CCMA means CCM Agri-Max Sdn. Bhd. (Malaysian Company No. 268746-W) (a company incorporated in Malaysia).

CCMI means CCM International Sdn. Bhd. (Malaysian Company No. 45218-A) (a company incorporated in Malaysia).

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Company means CI Resources Limited (ACN 006 788 754).

Constitution means the Company’s constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Directors means the current directors of the Company.

Explanatory Statement means the explanatory statement accompanying the Notice of Meeting.

MYT means Malaysian Time as observed in Kuala Lumpur, Malaysia.

Notice or Notice of Meeting or Notice of Annual General Meeting means this notice of annual general meeting including the Explanatory Statement and the Proxy Form.

Phosphate Product means bulk rock phosphate raw material and phosphate dust mined by PRL on Christmas Island, but excluding any chemically processed phosphate material.

Phosphate Supply & Distribution Agreement means the agreement entered into between PRL and CCMA on 1 July 2010 following Shareholder approval on 25 June 2010.

PRL means Phosphate Resources Limited (ACN 009 396 543).

Proposed Constitution means the constitution proposed to be adopted by the Company the subject of Resolution 7.

Proxy Form means the proxy form accompanying the Notice.

Remuneration Report means the remuneration report which forms part of the Directors’ Report of CI Resources Limited for the financial year ended 30 June 2011 and which is set out in the 2011 Annual Report.

Renegotiated Agreement means the agreement to be entered into between PRL and CCMA for the supply of Phosphate Product the subject of Resolution 6.

Resolutions means the resolutions set out in the Notice of Meeting, or any one of them, as the context requires.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a holder of a Share.

Transaction means the supply of Phosphate Product pursuant to the Renegotiated Agreement.

US$ means US dollars.

CI Resources Limited – Notice of Meeting 2011

Page 17

CI Resources Limited

Financial Services Guide and Independent Expert’s Report

18 October 2011

RSM Bird Cameron Corporate Pty Ltd 8 St Georges Terrace Perth WA 6000 GPO Box R1253 Perth WA 6844 T +61 8 9261 9100 F +61 8 9261 9102 www.rsmi.com.au

Financial Services Guide

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As the holder of an Australian Financial Services Licence, we are required to have a system for handling complaints from persons to whom we provide financial product advice. All complaints must be in writing, addressed to The Complaints Officer, RSM Bird Cameron Corporate Pty Ltd, P O Box R1253, Perth, WA, 6844.

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Contact Details

You may contact us using the details set out at the top of our letterhead on page 1 of this report.

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Independent Expert’s Report

TABLE	OF CONTENTS Page
1.	Introduction ................................................................................................................ 1
2.	Summary and Conclusion .......................................................................................... 2
3.	Summary of Proposed Transaction ............................................................................ 3
4.	Purpose of this Report ................................................................................................ 4
5.	Industry Profile ........................................................................................................... 6
6.	Profile of CI Resources .............................................................................................. 7
7.	Profile of CCMA ....................................................................................................... 13
8.	Evaluation ................................................................................................................ 14

Appendix 1 - Declarations and Disclaimers

Appendix 2 - Sources of Information

RSM Bird Cameron Corporate Pty Ltd 8 St Georges Terrace Perth WA 6000 GPO Box R1253 Perth WA 6844 T +61 8 9261 9100 F +61 8 9261 9102 www.rsmi.com.au

Direct Line: (08) 9261 9447 Email: [email protected] AJG/AB

18 October 2011

The Directors CI Resources Limited 13 Mount Eden Lane OAKFORD WA 6121

Dear Sirs

Independent Expert’s Report

1. Introduction

1.1. This report has been prepared to accompany the Notice of Meeting and Explanatory Statement for Shareholders for the Meeting of CI Resources Limited (“CIRL” or “the Company”) to be held on 28 November 2011 at which Shareholder approval will be sought for Resolution 6 for the following transaction (“Proposed Transaction”):-

Resolution 6 – Disposal of a Substantial Asset – Phosphate Supply & Distribution Agreement

“To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

That for the purpose of ASX Listing Rule 10.1 and for all other purposes, approval is given for the Company’s subsidiary, Phosphate Resources Limited, to supply Phosphate Product to CCM Agri-Max Sdn. Bhd. pursuant to the terms and conditions of the Renegotiated Agreement, on the terms and conditions set out in the Explanatory Statement accompanying this Notice.”

1.2. The Directors have requested that RSM Bird Cameron Corporate Pty Ltd, being independent and qualified for the purpose, express an opinion as to whether the Proposed Transaction is fair and reasonable to Shareholders not associated with the Proposed Transaction (“the Non-Associated Shareholders”).
1.3. The Non-Associated Shareholders comprise all holders of ordinary shares in the Company other than CCM International Sdn Bhd (“CCMI”), being a significant shareholder in CIRL, and any of its associates including CCM Agri-Max Sdn Bhd (“CCMA”).

RSM Bird Cameron Major Offices in: RSM Bird Cameron Corporate Pty Ltd is beneficially owned by the Directors Corporate Pty Ltd Perth, Sydney, of RSM Bird Cameron. RSM Bird Cameron is an independent member firm ABN 82 050 508 024 Melbourne, of RSM International, an affiliation of independent accounting and consulting AFS Licence No 255847Adelaide and firms. RSM International is the name given to a network of independent Canberra accounting and consulting firms each of which practices in its own right. RSM International does not exist in any jurisdiction as a separate legal entity.

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2. Summary and Conclusion

2.1. In our opinion and for reasons set out in Section 8 of this Report, the Proposed Transaction is Fair and Reasonable for the Non-Associated Shareholders of CIRL.

Fairness

2.2. For the purpose of assessing whether the Proposed Transaction is fair to the Non-Associated Shareholders of CIRL, we have considered whether the transaction is being conducted on commercial terms.
2.3. The terms of the Proposed Transaction do not appear to be more favourable than those offered to other customers, therefore we consider the Proposed Transaction to be fair to the Non-Associated Shareholders.

Reasonableness

2.4. In accordance with regulatory guidance provided by the Australian Securities and Investments Commission (“ASIC”), an offer is reasonable if it is fair. On this basis, in our opinion the Proposed Transaction is reasonable.
2.5. In assessing the reasonableness of the Proposed Transaction to the Non-Associated Shareholders of CIRL, we have also considered the likely advantages and disadvantages associated with the Proposed Transaction and the future prospects of the Company if the Proposed Transaction does not proceed.
2.6. The likely advantages include:-
The contracted supply volume constitutes a significant share of CIRL’s subsidiary, Phosphate Resources Limited’s (“PRL”) business;
Securing of a major Malaysian fertiliser manufacturer as an important strategic customer; and
Continuation of a long-term trading partnership – PRL has traded with CCMA since 1991.
2.7. We have not identified any material disadvantages associated with the Proposed Transaction.
2.8. The agreement provides for an annual supply of up to 150,000 metric tonnes of bulk rock phosphate raw material and phosphate dust mined by PRL, excluding any chemically processed phosphate material (“the Phosphate Product”) which represents a significant proportion of PRL’s total production output. If the Proposed Transaction does not proceed and comparable terms cannot be sourced from alternative buyers, the financial performance of PRL may be adversely affected.
2.9. PRL is the primary asset and profit generator of CIRL, therefore the return on investment to the NonAssociated Shareholders may be diminished if PRL’s financial performance suffers as a result of the Proposed Transaction not proceeding.
2.10. It is therefore our view that the advantages of the Proposed Transaction outweigh the disadvantages, and consequently, that shareholders will be better off if the Proposed Transaction proceeds.
2.11. These opinions should be considered in conjunction with, and not independently of, the information set out in the remainder of this report.

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3. Summary of Proposed Transaction

3.1. The Company’s 50.49% owned subsidiary, PRL is proposing to enter into an agreement with CCMA, pursuant to which PRL will supply the Phosphate Product to CCMA (“Phosphate Supply and Distribution Agreement”).
3.2. The material terms of the Phosphate Supply and Distribution Agreement are as follows:
The Existing Phosphate Supply and Distribution Agreement will be terminated with effect from 31 December 2011;
The term of the new Phosphate Supply and Distribution Agreement will be five years, effective from 1 January 2012 to 31 December 2016 (“the Term”);
PRL agrees to supply up to 150,000 metric tonnes of Phosphate Product annually to CCMA and its associate companies in Malaysia and Indonesia (“the Territory”);
The pricing of the Phosphate Product will be mutually agreed between the parties every 6 months and will be based on world phosphate market prices and fertiliser market conditions in the Territory. Either party may request a price review in the event a significant change in the market price of phosphate occurs with parties to use their respective best endeavours;
CCMA is entitled to a cash discount at the end of each six month period for every tonne of Phosphate Product purchased to a maximum of US$200,000 per calendar year;
Other than to deliver to its or its associated companies operations for use as raw material in NPK compound fertiliser manufacture, CCMA must not re-export the Phosphate Product from the Territory without the consent of PRL;
CCMA must, on a best endeavours basis, actively promote the Phosphate Product for use as raw materials in the production of NPK compound fertiliser in all of CCMA’s (or its associated companies) plants that are involved in NPK compound fertiliser manufacture;
The price shall be adjusted by a pre-determined formula in the event the Phosphate Product falls outside the specifications agreed by the parties;
CCMA must bear the cost at each port of discharge and must pay PRL within 30 days of the Phosphate Product being loaded;
Six months termination notice is required from PRL, in the event PRL decides to permanently cease its phosphate mining operations; six months termination notice is required from CCMA in the event CCMA or any of its associated companies ceases to carry on NPK compound fertiliser manufacture for any reason; and
The Phosphate Supply and Distribution Agreement shall be governed by, and construed in accordance with, the laws of Western Australia.
3.3. CCMA is an associated entity of CCMI which is a significant shareholder of CIRL.

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4. Purpose of this Report

ASX Listing Rules

4.1. Australian Securities Exchange (“ASX”) Listing Rule 10.1 provides that an entity must ensure that neither it, nor any of its child entities, acquire a substantial asset from, or dispose of a substantial asset to a substantial shareholder or any of its associates without the prior approval of the entity’s shareholders.
4.2. PRL is a subsidiary of the Company as the Company holds 50.49% of the issued share capital of PRL. On the basis of this interest, CIRL controls PRL. Therefore, PRL is deemed to be a “child entity” of the Company for the purposes of the ASX Listing Rules.
4.3. CCMI holds 16.47% of the issued share capital of CIRL and, for the purposes of the ASX Listing Rules, is a “substantial holder” of the Company; CCMA is an associated entity of CCMI by virtue of both CCMI and CCMA being subsidiaries of Chemical Company of Malaysia Berhad (“CCM Berhad”).
4.4. For the purposes of ASX Listing Rule 10.1, a “substantial asset” is an asset valued at greater than 5% of the equity interests of a company. The value of the consideration to be received by PRL for the supply of Phosphate Product to CCMA over the term of the Phosphate Supply and Distribution Agreement is estimated to be greater than 5% of the Company’s equity interests as set out in the latest accounts given to ASX.
4.5. For the reasons set out above, the Proposed Transaction is considered to be a disposal of a substantial asset by a child entity of the Company to a substantial shareholder or any of its associates.
4.6. Accordingly, the Company is seeking shareholder approval for the purpose of ASX Listing Rule 10.1 to enter into the Proposed Transaction on the terms and conditions set out in Section 3 of this report.
4.7. Where ASX Listing Rule 10.1 approval is sought, shareholders must be presented with a report on the proposed transaction from an independent expert. The report must state whether the proposed transaction is “fair and reasonable” to non-associated shareholders.

Basis of Evaluation

4.8. In determining whether the Proposed Transaction is “fair and reasonable” we have given regard to the views expressed by the Australian Securities and Investment Commission (“ASIC”) in Regulatory Guide 111 Contents of Expert’s Reports (“RG 111”).
4.9. RG 111 provides ASIC’s views on how an expert can help security holders make informed decisions about transactions. Specifically it gives guidance to experts on how to evaluate whether or not a proposed transaction is fair and reasonable.
4.10. RG 111 states that the expert report should focus on:
the issues facing the security holders for whom the report is being prepared; and
the substance of the transaction rather than the legal mechanism used to achieve it.
4.11. Furthermore RG 111 states that in relation to related party transactions the expert’s assessment of fair and reasonable should not be applied on a composite test – that is there should be a separate assessment of whether the transaction is “fair and reasonable” as in a control transaction.

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4.12. Consistent with the guidelines in RG 111, in assessing whether the Proposed Transaction and as such Resolution 6 is fair and reasonable to the Non-Associated Shareholders, the analysis undertaken is as follows:
Whether the Proposed Transaction is being conducted on normal commercial terms - fairness; and
A review of other significant factors which Non-Associated Shareholders might consider prior to approving the Proposed Transaction - reasonableness.
4.13. The other significant factors to be considered include:
The future prospects of the Company if the Proposed Transaction does not proceed; and
Any other commercial advantages and disadvantages to the Non-Associated Shareholders as a consequence of the Proposed Transaction proceeding.
4.14. Our assessment of the Proposed Transaction is based on economic, market and other conditions prevailing at the date of this report.

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5. Industry Profile

Phosphate Industry

5.1. Phosphate rock is a source of phosphorus, an essential nutrient for plants and therefore one of the key ingredients in the production of agricultural fertilisers. Approximately 90% of the phosphate rock mined around the world is processed into fertilisers.
5.2. Phosphate rock is a non-renewable resource produced in over forty countries, with China, the United States and Morocco being the largest producing nations.
5.3. According to producers of industry reports IBIS World (“IBIS”), Australia’s production of phosphate rock was approximately 2.1 million tonnes in 2010-11, falling within the typical annual range of production of between 1.9 million and 2.2 million tonnes.
5.4. Phosphate prices slumped in 2008-2009 following the onset of the global financial crisis and continued to remain weak through 2009-2010. In 2010-2011 phosphate prices began to gradually increase due to renewed demand from farmers for fertiliser, having reached almost US$198 per tonne as at August 2011, compared to a low of around US$90 in the period between July and December 2009.
5.5. The Australian industry performance is impacted by the volume of product sales, US dollar price movements and shifts in the value of the Australian dollar. Indications are that industry revenue will increase over the next 5 year period, as IBIS estimates fertiliser manufacturing to increase by around 2% per year through to 2017.
5.6. There is relatively low competition in Australia for phosphate production, with the Queensland mine owned by Incitec Pivot accounting for a significant proportion of production; barriers to entry are high.

Fertiliser Industry

5.7. Global demand for food, feed, fibre and bio-energy has a major impact on fertiliser consumption. After a 7.6% contraction in global fertiliser demand in 2008-2009, the market began to recover in 2009-2010 by 5.4% on the previous year and a further 5% in 2010-2011.
5.8. The International Fertilizer Industry Association issued an industry outlook paper in June 2011 stating that world fertiliser demand is expected to continue this recovery over the medium term, with an average annual growth rate of around 2.6% projected through 2015-16. Demand for phosphate based fertilisers is expected to grow by an average of 3.1% per year through 2015-2016.
5.9. At the regional level, the bulk of the increase in demand over the next five years is expected to come from Asia, accounting for around 60% of the forecast total growth.
5.10. In recent years the global fertiliser industry has been characterised by vertical integration and consolidation through acquisitions or joint ventures. Most projects for finished fertilisers occur in phosphate-rich countries. Incitec Pivot in Australia is an example of a vertically integrated phosphate mine and fertiliser producer.

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6. Profile of CIRL

Overview

6.1. CIRL is a Western Australian based public company listed on the Australian Securities Exchange (ASX code CII). CIRL was admitted to the official list on 24 July 1987.
6.2. CIRL has a portfolio of interests in Australia and China; its key assets are:
50.49% interest (1,728,580 shares out of 3,423,507 as at the date of this report) in Phosphate Resources Limited, a public unlisted Australian company whose principal activities include the mining, processing and sale of phosphate rock and phosphate dust from its 100%-owned phosphate mine on Christmas Island as well as palm oil production through its 100%-owned entity, Cheekah-Kemayan Plantation Sdn Bhd (“CKP”); and
100% interest in XiFeng International Pte Ltd (“XiFeng”), a Singaporean company. As at the date of this report, XiFeng holds no active or passive investments, having divested direct holdings in Chinese investments during the 2011 financial year.

Phosphate Resources Limited

6.3. PRL has mined and exported phosphate from Christmas Island since 1990 and is a leading producer of phosphate rock in the South East Asia region. It supplies Malaysia, Indonesia, Australia, New Zealand and Thailand with up to 700,000 tonnes per year.
6.4. PRL produces and markets its phosphate under the brand name Christmas Island Rock Phosphate (“CIRP”) both in the form of bulk and bagged dust. The phosphate is primarily sold as raw materials for fertiliser production or as a direct application product to Palm Oil plantations.
6.5. Phosphate mining commenced on Christmas Island over 100 years ago; PRL was founded in 1990 by the workforce of the previous mining company and commenced operations the following year after re-opening the mine.
6.6. Current resources held by PRL on Christmas Island indicate approximately five years of mine production can be maintained. The company previously sought to expand its operations through an additional 256 hectares of land for mining on Christmas Island which would extend phosphate export operations to between 10 and 12 years, however the application was rejected by the Commonwealth Minister for Environment, Heritage and the Arts in July 2010. This outcome does not affect the Company’s current mining lease tenure on Christmas Island over 2,054 hectares which expires on 4 February 2019.
6.7. In addition to the phosphate business, PRL has wholly owned subsidiaries involved in fuel and earthmoving operations on Christmas Island and the running of a palm oil estate and crude palm oil milling facility in Malaysia, which were acquired through PRL’s acquisition of CKP on 1 May 2011 for a total consideration of $48.293 million.
6.8. PRL’s financial results for the year ended 30 June 2011 show revenue of $106.6 million (2010: $77.7 million) and a net profit of $10.7 million (2010: $3.1 million). This reflects the impact of increasing global phosphate prices following the decline in the year ended 30 June 2010.
6.9. PRL had net assets of $74.6 million as at 30 June 2011, an improvement of $6.3 million from the previous financial year-end.

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Financial Position

6.10. The table below sets out the audited statement of financial position for CIRL and its subsidiary companies (“CIRL Group”) as at 30 June 2010 and 30 June 2011.

	Paragraph	As at	As at
	Ref.	30-Jun-11	30-Jun-10
		*Audited*	*Audited*
		$'000	$'000
Current Assets Cash and cash equivalents Trade and other receivables Derivative financial assets 6.11 Inventories Non-Current Assets Other financial assets 6.12 Deferred tax assets Property, plant & equipment 6.13 Mine properties 6.14 Goodwill 6.15 Biological assets 6.16 Total Assets Current Liabilities Trade and other payables Borrowings 6.17 Tax liability Provisions 6.18 Non-Current Liabilities Payables Borrowings 6.17 Deferred tax liability Provisions 6.18 Total Liabilities NET ASSETS Equity Contributed equity Reserves Accumulated profits Dividends paid - current year 6.19 Non-controlling interest TOTAL EQUITY		30,523 24,320 5,308 11,912 72,063 10,188 5,855 45,593 - 7,635 12,332 81,603 153,666 12,247 6,536 2,836 2,765 24,384 - 23,996 12,034 16,468 52,498 76,882 76,784 17,970 1,673 17,354 (3,358) 43,145 76,784	28,522 19,304 5,556 10,166 63,548 22,482 6,515 10,860 5,347 - - 45,204 108,752 5,558 1,711 4,074 2,374 13,717 48 1,954 4,705 14,417 21,124 34,841 73,911 17,970 364 19,120 (6,300) 42,757 73,911

Table 1: CIRL Group Financial Position as at 30 June 2010 and 2011

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6.11. Derivative financial assets are forward currency contracts used to hedge against movements in the USD/AUD exchange rate, however, the contracts do not satisfy the requirements for hedge accounting.
6.12. Other financial assets comprise trust fund term deposits used to meet employee entitlements, demolition and restoration bonds and other term deposits of varying maturities, all of which are greater than 12 months and earn interest at commercial rates.
6.13. Property, plant and equipment includes land and buildings, leasehold land and buildings, plant and equipment and strata title properties. The significant increase in plant and equipment held of almost $35,000,000 since the year ended 30 June 2010 is primarily due to the 100% acquisition of the shares in CKP by PRL in May 2011 and the leasehold land, mill plant and machinery held by CKP. The remainder is attributable to additions made to leasehold buildings and plant and equipment during the year to 30 June 2011.
6.14. Mine properties of $5,347,000 held by PRL China Pty Ltd, a subsidiary of PRL, were disposed of in the year ended 30 June 2011.
6.15. Goodwill of $7,635,000 relates to the 100% acquisition of CKP in May 2011 by PRL, the consideration for which was in excess of $48 million.
6.16. Biological assets includes the palm oil producing palm trees held by PRL’s subsidiary CKP on plantations located in Malaysia.
6.17. Borrowings are mainly comprised of drawn down bank financing facilities of around $28 million. Other borrowing amounts include an insurance premium funding loan and lease liabilities.
6.18. Provisions are for employee entitlements, redundancies and decommissioning and restoration costs.
6.19. On 9 May 2011, the Company declared a fully franked dividend of 1 cent per share with a payment date of 1 June 2011.

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Financial Performance

6.20. The audited income statement for the CIRL Group is set out in the table below providing the results for the years ended 30 June 2010 and 30 June 2011.

	Paragraph	Year ended	Year ended
	Ref.	30-Jun-11	30-Jun-10
		*Audited*	*Audited*
		$'000	$'000
Continuing Operations Revenue from continuing operations 6.21 Cost of sales 6.22 Gross profit Other income Other income 6.23 Share of net profits in associates Net gain on acquisition of subsidiary Expenses Other expenses 6.24 Finance costs Profit/(loss) before tax Income tax Net Profit		106,754 (77,439) 29,315 1,857 - - 1,857 (16,883) (626) (17,509) 13,663 (6,433) 7,230	20,401 (13,921) 6,480 1,024 1,749 1,649 4,422 (2,652) (151) (2,803) 8,099 (1,432) 6,667

Table 2: CIRL Group Financial Performance for the two years ended 30 June 2011

6.21. Revenues increased significantly between the years ended 30 June 2010 and 2011 due to higher product sales volumes brought about by an increase in global demand and the US dollar price of phosphate, coupled with a strong Australian dollar over the year to 30 June 2011 as well as the sales of palm oil through the acquired CKP subsidiary. The provision of services on Christmas Island also contributed to the increased revenues.
6.22. Cost of sales increased in proportion to the increased revenues with the largest portion of the increase attributable to production costs.
6.23. Other income is primarily made up of net foreign exchange gains but also includes net gains from the disposal of assets and Commonwealth grants.
6.24. Other expenses increased by over $14 million in the year ended 30 June 2011, with around 65% of this increase arising from administration costs attributable to the increased level of activity following the acquisition of the Malaysian palm oil assets. Other significant movements were from net foreign exchange losses, redundancy expenses, increases in bad debts expense and losses on the disposal of interests in Phosphate Resources (HuaLi) Limited which was owned through CIRL’s XiFeng and PRL subsidiaries.

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Capital Structure

6.25. The capital structure of CIRL as at 22 September 2011 is set out below:


			Number
		Total ordinary shares on issue Top 20 shareholders Top 20 shareholders as % of shares on issue	72,874,102 68,808,435 94.42%

Table 3: Capital Structure as at 22 September 2011

6.26. The five largest shareholders held 84% of the shares on issue as at 30 September 2011 as set out in the Table below.

	Name	No. of Shares Percentage of Issued Shares (%)

Phillip Securities Pte Ltd CCM International Sdn Bhd Prosper Trading Sdn Bhd Mr Willy See Khiang Teo Citicorp Nominees Pty Ltd Total Top 5 Others Total Ordinary Shares on Issue

Table 4: Largest Shareholders as at 22 September 2011

6.27. The distribution of shareholders in CIRL as at 22 September 2011 is as follows:

		No. Of Ordinary
	Range	Shareholders
1 – 1000 1001 – 5,000 5001 – 10,000 10,001 – 100,000 100,001 +		60 50 108 74 35 327

Table 5: Distribution of Shareholders as at 22 September 2011

6.28. CIRL does not have any unlisted securities or share options on issue.

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Share Price and Performance

6.29. The chart below depicts CIRL’s daily closing share price between 1 July 2010 and 12 October 2011 and the volumes of shares traded.

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Figure 1: CIRL Daily Closing Share Price and Traded Volumes

6.30. The CIRL share price has fluctuated between $0.47 and $0.80 in the last 14 months, with a closing share price at 12 October 2011 of $0.57.
6.31. Daily trading in CIRL is relatively low with a daily average of approximately 5,000 since the beginning of the financial year ended 30 June 2011 to 12 October 2011.
6.32. Trading volume activity was high between 26 July 2010 and 24 August 2010 following the Company’s announcement to the market on 19 July 2010 that the Commonwealth Minister for Environment, Heritage and the Arts had refused the Company’s application for approval to explore and mine for phosphate on an additional 256 hectares of land on Christmas Island.

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7. Profile of CCMA

CCM Group

7.1. CCMA is a subsidiary of CCM Berhad, a public company listed since 1966 on the Malaysian stock exchange operated by Bursa Malaysia Securities Berhad.
7.2. The CCM Group is one of Malaysia’s largest chemicals, fertilisers and healthcare companies, manufacturing products for both the domestic and international markets.
7.3. The latest financial results for CCM Berhad are audited figures for the year to 31 December 2010 which show consolidated revenue of approximately 1.64 billion Malaysian Ringgit (“RM”) (2009: RM 1.57 billion) and a net profit of RM 33 million (2009: RM 5 million). The increase in revenue was due to stronger market conditions brought about by improvements in prices and demand, with the Chemicals division recording an increase of 6% and the Pharmaceuticals division an increase of 3% in revenues against the previous year.
7.4. At 31 December 2010, the audited consolidated total assets of CCM Berhad were RM 2.0 billion and the consolidated net assets were RM 0.88 billion. At the date of this report, the exchange rate for RM to Australian dollars was approximately 3:1.

CCMA

7.5. CCMA is one of four key trading entities in the CCM Fertilizers Division of the CCM Group.
7.6. CCM Fertilizers Division began production in 1967 and has factories in both Malaysia and Indonesia. The division has a large domestic dealer network and also exports its fertilisers to other countries in South East Asia.
7.7. CCMA is a trading company which mainly trades and distributes straight, mixture and other compound fertilisers locally. Its clients consist of plantation companies, dealers and other key fertiliser manufacturers and traders in Malaysia.
7.8. CCM Fertilizers Sdn Bhd, another entity in the division, was a pioneer company in the manufacturing of NPK compound fertilisers in Malaysia.
7.9. PRL has been supplying CCMA with phosphate since 1991 for use in the CCM Group’s fertiliser operations.

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8. Evaluation

8.1. As previously stated, in assessing whether the Proposed Transaction is fair and reasonable to the NonAssociated Shareholders we have considered:
Whether the Proposed Transaction is being conducted on normal commercial terms;
The future prospects of the Company if the Proposed Transaction does not proceed; and
Any other commercial advantages and disadvantages to the Non-Associated Shareholders as a consequence of the Proposed Transaction proceeding.

Rationale for the Proposed Transaction

8.2. PRL has been supplying CCMA with Phosphate since its operations began at Christmas Island in 1991.
8.3. The Phosphate Supply and Distribution Agreement is a renewal of the previous agreement between PRL and CCMA which has been in force since 1 July 2010.

Fairness

8.4. The basis of our evaluation is to consider whether the Proposed Transaction is being conducted on commercial terms.
8.5. Various supply agreements between PRL and other customers were reviewed to compare the terms offered to CCMA with third parties.
8.6. The agreement terms compared included pricing, quantities, exclusivity restrictions, buyer and seller covenants, discharge terms and rates, and payment terms. For reasons of commercial confidentiality, the details of these terms are not disclosed.
8.7. The terms offered to CCMA under the Proposed Transaction do not appear to be any more favourable than those offered to other customers, after allowing for standard commercial negotiation for volume considerations. We have therefore concluded that the Proposed Transaction is being conducted on commercial terms.

Conclusion - Fairness

8.8. Therefore, for the above reasons, in our opinion, the Proposed Transaction is Fair to the Non-Associated Shareholders of CI Resources.

Reasonableness

8.9. In accordance with RG 111 an offer is reasonable if it is fair. Therefore, in our opinion the Proposed Transaction is reasonable.
8.10. However, we have also considered the future prospects of the Company if the Proposed Transaction is not approved, and have taken into account the likely advantages and disadvantages of the Proposed Transaction in this assessment.

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Future Prospects of CI Resources if the Proposed Transaction does not Proceed

8.11. The Phosphate Supply and Distribution Agreement provides for a maximum supply of 150,000 metric tonnes of Phosphate Product per annum for a five year term. This accounts for approximately 20% of PRL’s estimated total annual production and therefore represents a significant contract.
8.12. If the Proposed Transaction does not proceed then PRL would need to source alternative buyers on similar terms if profitability levels were to be maintained. Given the relative size of CCMA in Malaysia, with four NPK fertiliser production plants in operation, the Company considers that there are no immediate alternative buyers for the volumes under the contract.
8.13. PRL is currently the primary asset and profit generator for CIRL, therefore any downturn in PRL’s financial performance would also affect CIRL. If the Proposed Transaction does not proceed and alternative buyers cannot be sourced on similar terms, then the return on investment to Non-Associated Shareholders of CIRL would be diminished.

Advantages and Disadvantages

8.14. In assessing whether the Non-Associated Shareholders are likely to be better off if they approve the Proposed Transaction, we have compared the various advantages and disadvantages that are likely to accrue to the Non-Associated Shareholders.

Advantages

8.15. The Proposed Transaction provides for an annual supply of up to 150,000 metric tonnes of Phosphate Product, which represents a significant contract for PRL.
8.16. CCMA is a long-term term trading partner of PRL; the Proposed Transaction would secure this relationship for up to a further 5 years.
8.17. CCMA is also part of a major Malaysian manufacturing group and therefore an important strategic customer for PRL in Malaysia.

Disadvantages

8.18. We have not identified any material disadvantages of approving the Proposed Transaction.

Conclusion - Reasonableness

8.19. We consider the Proposed Transaction is Reasonable for the Non-Associated Shareholders of CI Resources taking into account our assessment that the Proposed Transaction is fair, that the advantages outweigh the disadvantages and consequently, that the Non-Associated Shareholders will be better off if the Proposed Transaction proceeds.

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Overall Conclusion

8.20. In our opinion, the Proposed Transaction is Fair and Reasonable for the Non-Associated Shareholders of CIRL.

Yours faithfully

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A J GILMOUR Director

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APPENDIX 1 Declarations and Disclosures

RSM Bird Cameron Corporate Pty Ltd holds Australian Financial Services Licence 255847 issued by ASIC pursuant to which they are licensed to prepare reports for the purpose of advising clients in relation to proposed or actual mergers, acquisitions, takeovers, corporate reconstructions or share issues.

Qualifications

RSM Bird Cameron Corporate Pty Ltd is beneficially owned by the partners of RSM Bird Cameron (RSMBC) a large national firm of chartered accountants and business advisors.

Mr. Andrew Gilmour is a director of RSM Bird Cameron Corporate Pty Ltd. He is a Chartered Accountant with extensive experience in the field of corporate valuations and the provision of independent expert’s reports for transactions involving publicly listed and unlisted companies in Australia.

Reliance on this Report

This report has been prepared solely for the purpose of assisting the Non-Associated Shareholders of CI Resources in considering the Proposed Transaction. We do not assume any responsibility or liability to any party as a result of reliance on this report for any other purpose.

Reliance on Information

Statements and opinions contained in this report are given in good faith. In the preparation of this report, we have relied upon information provided by the directors and management of CI Resources and we have no reason to believe that this information was inaccurate, misleading or incomplete. However, we have not endeavoured to seek any independent confirmation in relation to its accuracy, reliability or completeness. RSM Bird Cameron Corporate Pty Ltd does not imply, nor should it be construed that it has carried out any form of audit or verification on the information and records supplied to us.

The opinion of RSM Bird Cameron Corporate Pty Ltd is based on economic, market and other conditions prevailing at the date of this report. Such conditions can change significantly over relatively short periods of time.

In addition, we have considered publicly available information which we believe to be reliable. We have not, however, sought to independently verify any of the publicly available information which we have utilised for the purposes of this report.

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Disclosure of Interest

At the date of this report, none of RSM Bird Cameron Corporate Pty Ltd, RSMBC, Andrew Gilmour, nor any other member, director, partner or employee of RSM Bird Cameron Corporate Pty Ltd and RSMBC has any interest in the outcome of the Proposed Transaction, except that RSM Bird Cameron Corporate Pty Ltd are expected to receive a fee of approximately $13,500 based on time occupied at normal professional rates for the preparation of this report. The fees are payable regardless of whether CI Resources receives Shareholder approval for the Proposed Transaction, or otherwise.

Consents

RSM Bird Cameron Corporate Pty Ltd consents to the inclusion of this report in the form and context in which it is included with the Explanatory Memorandum to be issued to Shareholders. Other than this report, none of RSM Bird Cameron Corporate Pty Ltd, RSM Bird Cameron Partners or RSMBC has been involved in the preparation of the Notice of General Meeting and Explanatory Statement. Accordingly, we take no responsibility for the content of the Notice of General Meeting and Explanatory Statement as a whole.

APPENDIX 2 Sources of Information

In preparing this report we have relied upon the following principal sources of information:

Audited consolidated financial statements for CI Resources for the years ended 30 June 2010 and 30 June 2011;
Audited consolidated financial statements for PRL for the years ended 30 June 2010 and 30 June 2011;
Agreements in relation to the Proposed Transaction being:-
Proposed Phosphate Supply and Distribution Agreement (not executed);
Previous Phosphate Supply and Distribution Agreement dated February 2010 (executed);
Various Supply and Distribution agreements between PRL and other customers;
Announcements by CI Resources to the ASX;
Discussions with CI Resources and PRL directors, management and advisors;
CI Resources web site www.ciresources.com.au;
PRL web site www.cirp.com;
CCM web site www.ccm.com.my;
IBISWorld Industry Report – Salt and Other Mineral Mining in Australia – B1429 (May 2011);
The International Fertilizer Industry Association 79th Annual Conference “Fertilizer Outlook 20112015” paper (May 2011); and
Information in the public domain.

CI RESOURCES LIMITED ACN 006 788 754

P R O X Y F O R M

Lodge your vote to:

The Company Secretary CI Resources Limited

By delivery: 884 Canning Highway Applecross WA 6153

By post: By facsimile: PO Box 1346 +618 9364 7333 Canning Bridge WA 6153

*** For your vote to be effective it must be received by 9.00am (MYT) on Saturday, 26 November 2011, being 48 hours before the commencement of the meeting.**

How to Vote on Items of Business

All your securities will be voted in accordance with your directions.

Appointment of Proxy

Voting 100% of your holding: Direct your proxy how to vote by marking one of the boxes opposite each item of business. If you do not mark a box, your proxy may vote as they choose. If you mark more than one box on an item your vote will be invalid on that item.

Voting a portion of your holding: Indicate a portion of your voting rights by inserting the percentage or number of securities you wish to vote in the For, Against or Abstain box or boxes. The sum of the votes cast must not exceed your voting entitlement or 100%.

Appointing a second proxy: You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you appoint two proxies you must specify the percentage of votes or number of securities for each proxy, otherwise each proxy may exercise half of the votes. When appointing a second proxy write both names and the percentage of votes or number of securities for each in Step 1 overleaf.

A proxy need not be a securityholder of the Company.

Signing Instructions

Individual: Where the holding is in one name, the securityholder must sign. Joint Holding: Where the holding is in more than one name, all of the securityholders should sign. Power of Attorney : If you have not already lodged the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: Where the company has a Sole Director, who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone, Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please sign on the appropriate place to indicate the office held. Delete titles as applicable.

Please mark to indicate your directions.

Step 1

Appoint a Proxy to /Vote on Your Behalf

I/We[1] ___________________

of _________________

being a Shareholder/Shareholders of the Company and entitled to ________

votes in the Company, hereby appoint[2 ] __________

or failing such appointment the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held at Millennium VIII, Level 3, Grand Millennium Kuala Lumpur, 160 Jalan Bukit Bintang, Kuala Lumpur, Selangor, Malaysia on Monday, 28 November 2011 at 9.00am (MYT), and at any adjournment thereof in the manner indicated below or, in the absence of indication, as he thinks fit. If 2 proxies are appointed, the proportion or number of votes that this proxy is authorised to cast is * [ ]% of the Shareholder’s votes*/ [ ] of the Shareholder’s votes. (Additional Proxy Forms can be supplied by the Company upon request).

Step 2 Items of Business

Important for Resolution 1 : If the Chair of the Meeting or any member of the Key Management Personnel of the Company whose remuneration detals are included in the Remuneration Report or a Closely Related Party of that member is your proxy and you have not directed the proxy to vote on Resolution 1, the proxy will be prevented from casting your votes on Resolution 1. If the Chair, another member of the Key Management Personnel of the Company whose remuneration details are included in the Remuneration Report or Closely Related Party of that member is your proxy, in order for your votes to be counted on Resolution 1, you must direct your proxy how to vote on Resolution 1.

The Chairman of the Meeting intends to vote undirected proxies in favour of Resolutions 2 to 7, and will not cast undirected proxies in favour of Resolution 1.

The proxy is to vote for or against, or abstain from voting on, the Resolutions referred to in the Notice as follows:

For Against Abstain

Resolution 1 Adoption of Remuneration Report Resolution 2 Re-election of a Director – Mr Tee Lip Sin Resolution 3 Re-election of a Director – Mr Phuar Kong Seng Resolution 4 Election of a Director – Mr Adrian Gurgone Resolution 5 Election of a Director – Mr Tee Lip Jen Resolution 6 Disposal of a substantial asset – Renegotiated Agreement Resolution 7 Replacement of Constitution

If you mark the abstain box for a particular item, you are directing your proxy not to vote on that item on a show of hands or on a poll and that your votes are not to be counted in computing the required majority on a poll.

Authorised signature/s This section must enable your voting instructions to be implemented.

This section must be signed in accordance with the instructions above to

Individual or Shareholder 1 Sole Director and Sole Company Secretary

Shareholder 2 Shareholder 3 Director Director/Company Secretary

____ ____ _____ Contact Name Contact Daytime Telephone Date

1Insert name and address of shareholder 2 Insert name and address of proxy *Omit if not applicable

AI assistant

PRL GLOBAL LTD — AGM Information 2011

65611_rns_2011-10-24_d3596c91-d58a-4f80-8a43-1df1b60b9fa9.pdf

CI RESOURCES LIMITED

NOTICE OF ANNUAL GENERAL MEETING

DATE AND TIME OF MEETING

PLACE OF MEETING

CONTENTS PAGE

TIME AND PLACE OF MEETING AND HOW TO VOTE

VENUE

VOTING ELIGIBILITY

VOTING IN PERSON

VOTING BY PROXY

Proxy vote if appointment specifies way to vote

Transfer of non-chair proxy to chair in certain circumstances

CORPORATE SHAREHOLDERS

BUSINESS OF THE MEETING

AGENDA

ORDINARY BUSINESS

Financial Reports

1. Resolution 1– Adoption of Remuneration Report

Voting Prohibition Statement:

2. Resolution 2 – Re-election of Director – Mr Tee Lip Sin

3. Resolution 3 – Re-election of Director – Mr Phuar Kong Seng

4. Resolution 4 – Election of a Director – Mr Adrian Gurgone

5. Resolution 5 – Election of a Director – Mr Tee Lip Jen

6. Resolution 6 – Disposal of a substantial asset - Phosphate Supply & Distribution Agreement

7. Resolution 7 – Replacement of Constitution

CI RESOURCES LIMITED

EXPLANATORY STATEMENT

Introduction

Financial Reports

Resolution 1 - Adoption of Remuneration Report

General

Proxy Restrictions

Definitions

Resolution 2 - Re-election of Director – Mr Tee Lip Sin

Resolution 3 - Re-election of Director – Mr Phuar Kong Seng

Resolutions 4 & 5 - Election of a Director – Mr Adrian Gurgone & Mr Tee Lip Jen

Resolution 6 – Disposal of a substantial asset – Phosphate Supply & Distribution Agreement

Background

ASX Listing Rule 10.1

Child entity

Substantial asset

Substantial shareholder (or associate)

Requirement for shareholder approval

Independent Expert’s Report

Directors Recommendations

Resolution 7 – Replacement of Constitution

General

Summary of material proposed changes

Minimum Shareholding (new clause 3)

Fee for registration of off market transfers (new clause 8.4(c))

Dividends (new clause 21)

Partial (proportional) takeover provisions (new clause 35)

Information required by Section 648G of the Corporations Act

Effect of proposed proportional takeover provisions

Reasons for proportional takeover provisions

Knowledge of any acquisition proposals

Recommendation of the Board

Glossary

Financial Services Guide

Financial services we are licensed to provide

General Financial Product Advice

Benefits that we may receive

Remuneration or other benefits received by our employees

Referrals

Associations and relationships

Complaints Resolution

Internal complaints resolution process

Referral to External Dispute Resolution Scheme

Contact Details

Independent Expert’s Report

Independent Expert’s Report

1. Introduction

2. Summary and Conclusion

Fairness

Reasonableness

3. Summary of Proposed Transaction

4. Purpose of this Report

PRL GLOBAL LTD AGM Information 2011