PRL GLOBAL LTD - Annual Report 2007

CI Resources Limited

Financial Report 31 December 2007

Financial Statements – 31 December 2007

CI Resources Limited ACN 006 788 754

Contents	Page
Corporate directory	3
Directors' report	4
Auditor’s independence declaration	14
Corporate Governance Disclosures	15
Financial report	16
Directors' declaration	50
Independent audit report to the members	51

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Corporate directory

Directors

Mr Clive Brown Chairman

Mr Anthony Brennan

Dato Dr Mohamad Hashim Bin Ahmad Tajudin

Mr Lip Sin Tee

Stock exchange listings

CI Resources Limited shares are listed on the Australian Securities Exchange

Ordinary fully paid shares (ASX code CII)

Principal registered office in Australia

C/- BDO Kendalls 128 Hay Street Subiaco WA 6009

Secretaries

Mr Desmond Kelly Ms Janelle Burns

Share register

Computershare Investor Services Pty Ltd Level 2 Reserve Bank Building 45 St Georges Terrace Perth WA 6000 Telephone +61 8 9323 2000 Facsimile +61 8 9323 2033

Telephone +61 8 9485 7222 Email [email protected] Website www.ciresources.com.au

Auditor

BDO Kendalls Audit & Assurance (WA) Pty Ltd 128 Hay Street Subiaco WA 6008

Solicitors

Steinepreis Paganin Lawyers Level 4 Next Building 16 Milligan Street Perth WA 6000

Bankers

Bankwest 54 Adelaide Street Fremantle WA 6160

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Directors’ report

Your directors present their report on the consolidated entity (“Group”) consisting of CI Resources Limited (“CII” or “Company”) and the entities it controlled at the end of, or during, the period ended 31 December 2007.

Directors

The following persons were directors of CI Resources Limited for the whole of the financial year and up to the date of this report, unless otherwise stated:

Dato Dr Mohamad Hashim Bin Ahmad Tajudin

Mr Clive Morris Brown was appointed a director on 30 May 2007 and continues as at the date of this report.

Mr Anthony Brennan was appointed as a director on 30 May 2007 and continues as at the date of this report.

Mr Lip Sin Tee was appointed as a director on 25 June 2007 and continues as at the date of this report.

Mr Mark Victor Caruso was a director from the beginning of the financial year until his resignation on 30 May 2007.

Mr Kim Sun Oh was a director from the beginning of the financial year until his resignation on 30 May 2007.

Dato Lim Say Chong was a director from the beginning of the financial year until his resignation on 30 May 2007.

Mr Peter Patrick Torre was a director from the beginning of the financial year until his resignation on 30 May 2007.

Principal activities

During the period the principal activities of the Consolidated Entity consisted of investment in the phosphate and fertiliser industries.

Dividends

No dividends were paid to members during the financial period and the directors do not recommend the payment of a dividend.

Review of operations

A summary of consolidated revenues and results is set out below:

Review of operations A summary of consolidated revenues and results is set out below:
	Revenues 2007 $	Results 2007 $
Revenue from continuing operations Profit before income tax expense Income tax expense Profit attributable to members of CI Resources Limited	715,457	-
		1,380,022 -
		1,380,022

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Directors’ report

Review of operations (continued)

Financial Position

At the end of the financial period the consolidated entity had net cash balances of $5,005,399 and net assets of $13,702,606.

Total liabilities amounted to $201,184 being, trade and other creditors.

Phosphate Resources Limited

The Board of CI Resources has worked towards maximising the value of its investment and is still the largest shareholder in PRL, holding 38.77%.

The Company is represented on the Board of PRL by Mr Clive Brown and Mr Anthony Brennan.

PRL reported a pre-tax profits of $5.3 million for the year ended 30 June 2007 and $4.84 million for the half-year ended 31 December 2007 and has paid two dividends during the calendar year to 31 December 2007.

PRL is continuing its attempts to obtain more land to mine on Christmas Island which will extend the mine life and its ability to provide returns to its shareholders particularly in the current market where the demand for Phosphate is strong.

Xi Feng International Pte Ltd

CI Resources holds a 51% interest in Xi Feng which in turn holds a 32% interest in GTFC. GTFC is a fertiliser manufacturer and also holds a 30% interest in the Teng Long Phosphate Mine. Xi Feng has reported a profit of SGD 217,684 (AUD 172,662) for the year ended 31 December 2007.

Earnings per share Basic earnings per share	2007 Cents
	1.89

Significant changes in the state of affairs

The Company’s auditors now consider that CI Resources now has significant influence on Phosphate Resources Limited (“PRL”). Therefore the investment in PRL is now being equity accounted for the first time.
On 30 January 2008 the Company released the following statement to the market:

CI Resources Limited, owns a 51% interest in the Singaporean company, Xifeng International Pte Ltd, which in turn holds a 32% interest in Guizhou Tiangfeng Chem-Phos Co Ltd in the Peoples’ Republic of China.

Guizhou Tiangfeng Chem-Phos Co Ltd owns the Pingba fertiliser plant in Guizhou, which is capable of producing sulphuric acid, monammonium phosphate (MAP) and NPK (nitrogen/phosphorous/ potassium) fertilisers.

CI Resources Limited has been informed that the Qingzhen City Environmental Protection Court has identified pollutants being discharged from the gypsum waste dump at the Pingba plant, and has ordered the major shareholder to prevent this pollutant run-off.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Directors’ report

Significant changes in the state of affairs (continued)

The order requires the MAP plant to cease operations by 31 March 2008 if action is not taken to prevent the discharge.

The waste dump was established at least ten years before Xifeng International Pte Ltd invested in the plant, and certain environmental obligations rest with the former owner of the plant.

CI Resources Limited, through its investment in Xifeng International, is currently seeking to clarify the legal issues surrounding the court order.

The Board of CI Resources Limited confirms that the company is committed to upholding the highest standards of environmental responsibility.

Other than those matters shown above, no significant changes in the state of affairs of the Consolidated Entity occurred during the financial period.

Matters subsequent to the end of the financial year

No matter or circumstance has arisen since 31 December 2007 that has 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.

Likely developments and expected results of operations

Other than likely developments contained in the “Review of operations” and “Significant changes in the state of affairs”, further information on likely developments in the operations of the consolidated entity and the expected results of operations have not been included in this report because the directors believe it would be likely to result in unreasonable prejudice to the consolidated entity.

Environmental regulation

The Company’s operations is subject to environmental regulations in the People’s Republic of China in regard to its investment in the Guizhou Tiangfeng Chem-Phos Co Ltd .

Information on directors

MR CLIVE BROWN Chairman – Non-executive

Experience and expertise

Clive Brown was the Western Australian Minister for State Development from 2001-2005. He was responsible for the most significant changes to the Mining Act in the previous twenty five years. He provides strategic advice on business and government relations to a number of mining companies and Chairs a national steering committee of Australian government and mining industry organizations on developing a national framework for occupation health and safety in the mining industry.

Other directorships

Mr Brown is a director of Terrain Minerals Limited, an ASX listed company. Mr Brown has held no other directorships of ASX listed companies in the last three years.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Directors’ report

Information on directors (continued)

MR ANTHONY BRENNAN LLB GDipLegPrac MAICD Director – Non-executive

Experience and expertise

Tony holds a Bachelor of Laws degree from the University of Queensland, a Graduate Diploma in Legal Practice and has practiced with one of Australia's largest private law firms as a solicitor in the area of corporate advisory, mergers and acquisitions and banking and finance. Having worked for local and state government bodies, Australian blue chip companies and national and international banks, Tony has experience in corporate banking and finance transactions including development finance and refinance transactions, infrastructure and project finance, loan facility and security documentation, general corporate banking matters and significant commercial property transactions. The projects he has been involved with range from tunnels, gas pipelines, international cruise ship terminals, agricultural projects and energy and resource projects.

Tony is a member of the Mining Law committee and Oil & Gas committee of the International Bar Association and is also one of the few Australia lawyers to have studied Capital Market Development and Regulation; Arbitration & Dispute Resolution and Debt Rescheduling with the Paris Club through the United Nations Institute of Training and Research.

Tony now works at Murdoch University where he teaches Business Law in the MBA and MPA programs at Murdoch Business School; Company Law in Singapore at the SMa School of Management; Corporate Finance and Trade Practices Law at Murdoch Law School. In addition to this, Tony is a facilitator for the Australian Institute of Company Directors where he teaches the Directors Duties and Responsibilities module on the Company Directors Course.

Other directorships

Mr Brennan held no other directorships of ASX listed companies during the last three years

DATO DR MOHAMAD HASHIM BIN AHMAD TAJUDIN DPMP, PJK, PhD, MSc, BSc Director – Nonexecutive

Experience and expertise

Dr Mohamad Hashim Bin Ahmad Tajudin holds a PhD in Soil Fertility and Management from the Universiti Putra Malaysia and has also attended the Advanced Management Programme at INSEAD, France and the Harvard Premier Business Management Programme.

Dr Mohd Hashim is currently the group Managing Director of Chemical Company of Malaysia Berhad (CCM). Prior to joining CCM he was a senior director in the oils and fats division of Golden Hope Plantations Berhad. He held several other positions during his 26 year career stint in Golden Hope. He was a director in the research and development division from 1998 to 2003 and executive director of Golden Hope Research Sdn Bhd and Golden Hope Agrotech Consultancy Sdn Bhd.

Dr Mohd Hashim is a member of several professional bodies and societies and is also involved in the professional and technical bodies of several Malaysian organizations and government committees.

Other directorships

Dr Mohd Hashim held no other directorships of ASX listed companies during the last three years.

MR LIP SIN TEE Director – Non-executive Experience and expertise

Tee Lip Sin holds an Associate Diploma in Commerce from Curtin University Australia and also a post-graduate Executive Diploma in Plantation Management from the University Malaya.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Directors’ report

Information on directors (continued)

He has been involved in palm oil milling and management of palm oil plantations since 1995. Currently, he sits on the board of a number of private companies, and is also the Executive Director for the Prosper Group Of Companies which holds six palm oil mills and 50,000 acres of palm oil plantations. He also has experience in operating 35,000 acres of plantation in Indonesia.

Other directorships

Mr Lip Sin Tee held no other directorships of ASX listed companies during the last three years.

Company secretaries

DESMOND KELLY BComm, CPA, MAICD Company Secretary

Des Kelly has over 30 years financial and corporate management experience focused mainly in the resources sector. He was Dominion Mining’s Group Chief Accountant in that company’s key growth phase in the mid-eighties and, between 1994 and 1998 held the roles of Finance Director and Managing Director of Horizon Mining NL before establishing his own corporate management consulting business. Mr Kelly now contributes corporate and administration management expertise to several listed groups including Universal Resources Limited, CI Resources Limited, Nylex Limited and Avalon Minerals Limited.

JANELLE BURNS Bbus (Acc/Law) Company Secretary

Ms Burns has 15 years experience in the resources sector. She was previously the Chief Group Accountant for Gallery Gold Limited and currently provides corporate and management services to several ASX listed companies, including Terrain Minerals Ltd, Avalon Resources Limited and IAMGOLD Corporation.

Directors’ interests in shares and options

As at the date of this report the interests of the Directors in the shares and options of the company were:

		Ordinary Shares	Options over Ordinary Shares	Options over Ordinary Shares
	Direct	Indirect	Direct	Indirect
Mr Clive Brown	-	-	-	-
Mr Anthony Brennan	-	-	-	-
Dr Mohd Hashim *	-	12,000,000	-	-
Mr Lip Sin Tee **	-	12,333,000	-	-

12,000,000 ordinary shares are held by CCM International Sdn Bhd, a company of which Dato Dr Mohd Hashim is a director.

** 12,333,000 ordinary shares are held by Prosper Trading Sdn Bhd, a company of which Mr Lip Sin Tee is a director.

Meetings of directors

The number of meetings of the company’s board of directors held during the period ended 31 December 2007 and the number of meetings attended by each director were:

	Full meetings of Directors	Full meetings of Directors
	Held	Attended
Mr Clive Brown	9	9
Mr Anthony Brennan	9	9
Dr Mohd Hashim	10	9
Mr Lip Sin Tee	9	6
Kim Sun Oh	1	1
Mr Mark Caruso	1	1
Mr Peter Torre	1	1
Mr Kim Say Chong	1	1

Held – denoted the number of meetings held during the time the director held office.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Directors’ report

Retirement, election and continuation in office of directors

Dato Dr Mohamad Hashim Bin Ahmad Tajudin was appointed as a director on 6 November 2006. In accordance with the Constitution Dr Mohd Hashim will retire, in rotation, as a director at the Annual General Meeting to be held in May 2008 and, being eligible, will offer himself for re-election.

Remuneration report

The remuneration report is set out under the following main headings:

A Principles used to determine the nature and amount of remuneration (audited)
B Details of remuneration (audited)
C Service agreements (audited)
D Share-based compensation (audited)
E Additional information (unaudited)

The information provided under headings A to D includes remuneration disclosures that are required under Accounting Standard AASB 124 Related Party Disclosures. These disclosures have been transferred from the financial report and have been audited. The disclosures in section E are additional disclosures required by the Corporations Act 2001 which have not been audited.

A Principles used to determine the nature and amount of remuneration (audited) In order to maintain and attract directors to facilitate the efficient and effective management of the Company’s operations, the board reviews the remuneration of directors on an annual basis and makes recommendations. The Company does not have a remuneration committee.

No link exists, at this stage in the Company’s development, between financial performance, shareholder wealth and the remuneration of Directors and Key Management Personnel.

Non-executive directors

Fees and payments to non-executive directors reflect the demands which are made on, and the responsibilities of, the directors. Non-executive directors’ fees and payments are reviewed annually by the Board. The Board also ensures non-executive directors’ fees and payments are appropriate and in line with the market. The Chairman’s fees are determined independently to the fees of non-executive directors based on comparative roles in the external market. The Chairman is not present at any discussions relating to determination of his own remuneration.

Directors’ fees

The current base remuneration was last reviewed with effect from 3 July 2007. Directors’ remuneration is inclusive of committee fees.

Non-executive directors’ fees are determined within an aggregate directors’ fee pool limit, which is periodically recommended for approval by shareholders. The total maximum currently stands at $200,000.

Remuneration packages may contain the following key elements:

Director’s fees
Consultancy fees
• Post employment benefits – superannuation

The directors are also remunerated for any additional services they render the Company and such services are carried out under normal commercial terms and conditions. Engagement and payment for such services are approved by the other directors with no interest in the engagement of such services.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Directors’ report

Remuneration report (continued)

Retirement allowances for directors

There is no provision for retirement allowances for non-executive directors.

B Details of remuneration (audited)

Details of the remuneration of the directors and the key management personnel of CI Resources Limited are set out in the following tables.

2007	Short-term benefits	Short-term benefits	Post-employment benefits
Name	Cash fees and consulting $	Non-monetary benefits $	Superannuation $	Total $
Directors of CI Resources Limited Mr Clive Brown 31,983 1,560 Mr Anthony Brennan 34,000 1,560 Dr Mohd Hashim 38,150 4,602 Mr Lip Sin Tee 16,350 1,560 Kim Sun Oh - 3,042 Mr Mark Caruso 27,848 3,042 Mr Peter Torre 10,000 3,042 Mr Lim Say Chong 17,993 3,042 Other key management personnel Mosman Management Pty Ltd 47,280 3,120 (D Kelly & J Burns)			2,887 2,025 - - 27,250 - - - -	36,430 37,585 42,752 17,910 21,035 30,890 13,042 21,035 50,400
Total	223,604	24,750	32,162	280,516

2006	Short-term benefits	Short-term benefits	Post-employment benefits
Name	Cash fees and consulting $	Non-monetary benefits $	Superannuation $	Total $
Directors of CI Resources Limited Kim Sun Oh 60,000 - Mr Mark Caruso 32,250 - Mr Peter Torre 30,000 - Mr Lim Say Chong 30,000 - Dr Mohd Hashim 4,500 -			5,400 450 2,700 2,700 405	65,400 32,700 32,700 32,700 4,905
Total	156,750	-	11,655	168,405

There were no cash bonuses and no grants of options to any director or other key management personnel.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Directors’ report

Remuneration report (continued)

The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:

2007

2007
Name	Fixed remuneration	At risk- STI	At risk- LTI
Directors of CI Resources Limited Mr Clive Brown 100% - - Mr Anthony Brennan 100% - - Dr Mohd Hashim 100% - - Mr Lip Sin Tee 100% - - Kim Sun Oh 100% - - Mr Mark Caruso 100% - - Mr Peter Torre 100% - - Mr Lim Say Chong 100% - - Other key management personnel Mosman Management Pty Ltd 100% - - (D Kelly & J Burns)

2006

2006
Name	Fixed remuneration	At risk- STI	At risk– LTI
Directors of CI Resources Limited Kim Sun Oh 100% - - Mr Mark Caruso 100% - - Mr Peter Torre 100% - - Mr Lim Say Chong 100% - - Dr Mohd Hashim 100% - -

C Service Agreements (audited)

Remuneration and other terms of employment for the directors are not formalised in service agreements.

The agreement for the Company Secretaries provides for the provision of consulting fees.

Other major provisions of the agreements relating to remuneration are set out below.

Mosman Management Pty Ltd, Company Secretaries

Term of agreement – For a period of 12 months with a notice period of two months.
Base fee of $4,000 per month for the provision of company secretarial services and an hourly rate of $160 per hour for the provision of financial and administration services.

D Share-based compensation (audited)

There were no share based payments to directors or other key management personnel during this or the previous financial year and provision for such.

E Additional information (unaudited)

Given CI Resources Limited is involved in investment activities, the remuneration of the persons referred to above is not dependent on the satisfaction of a performance condition.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Directors’ report

Remuneration report (continued)

Loans to directors and executives

There are no loans to directors or executives.

Shares under option

There are no unissued ordinary shares of CI Resources Limited under option at the date of this report.

Shares issued on the exercise of options

There were no ordinary shares of CI Resources Limited issued during the period ended 31 December 2007 on the exercise of options.

Insurance of officers

During the period the Company paid a premium to insure the directors and officers of the Company. Under the terms of the policy the Company cannot publish amounts paid for premiums or the extent of the liabilities insured.

Proceedings on behalf of the company

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the company is a party, for the purpose of taking responsibility on behalf of the company for all or part of those proceedings.

No proceedings have been brought or intervened in on behalf of the company with leave of the Court under section 237 of the Corporations Act 2001 .

Non-audit services

The consolidated entity may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the consolidated entity are important.

Details of the amounts paid or payable to the auditor for audit and non-audit services provided during the period are set out below.

The board of directors has considered the position and is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 . The directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

all non-audit services have been reviewed by the board to ensure they do not impact the impartiality and objectivity of the auditor
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, including reviewing or auditing the auditor’s own work, acting in a management or a decision-making capacity for the consolidated entity, acting as advocate for the consolidated entity or jointly sharing economic risk and rewards.

2007 $

During the year the following fees were paid or payable for services provided by the auditor of the Company, its related practices and non-related audit firms.

Assurance services

Audit services

BDO Kendalls Audit & Assurance (WA) Pty Ltd:

Audit and review of financial report and other audit work under the Corporations Act 2001 43,370

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Directors’ report

Auditors’ Independence Declaration

A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 14.

Auditor

BDO Kendalls Audit & Assurance (WA) Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001 .

This report is made in accordance with a resolution of the directors.

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C Brown Chairman Perth, Western Australia

27[th] March 2008

Financial Statements – 31 December 2007

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BDO Kendalls Audit & Assurance (WA) Pty Ltd 128 Hay Street SUBIACO WA 6008 PO Box 700 WEST PERTH WA 6872 Phone 61 8 9380 8400 Fax 61 8 9380 8499 [email protected] www.bdo.com.au

ABN 79 112 284 787

27[th] March 2008

The Directors CI Resources Limited PO Box 449 BELMONT WA 6984

Dear Sirs

DECLARATION OF INDEPENDENCE BY BRAD MCVEIGH TO THE DIRECTORS OF CI RESOURCES LIMITED

As lead auditor of CI Resources Limited for the year ended 31 December 2007, I declare that, to the best of my knowledge and belief, there have been no contraventions of:

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

This declaration is in respect of CI Resources Limited and the entities it controlled during the period.

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BG McVeigh Director

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BDO Kendalls Audit & Assurance (WA) Pty Ltd Perth, Western Australia

BDO Kendalls is a national association of separate partnerships and entities

CI RESOURCES LIMITED

Corporate Governance disclosures

During the Consolidated Entity’s financial period the Group has complied with the ASX Principles and Recommendations other than in relation to the matters specified below:

Principle Ref.	Recommendation Ref.	Notification of Departure	Explanation for Departure
2	2.1	A majority of board members are not independent directors	Two of the four board members are considered to be independent in accordance with the ASX definition. In view of the size of the Company and the nature of its activities the board considers that the current board is a cost effective and practical method of directing and managing the Company.
2	2.4	The board has not established a nomination committee	The board has no formal nomination committee. Acting in its ordinary capacity from time to time as required, the board carries out the process of determining the need for, screening and appointment of new directors. In view of the size of the Company and resources available, it is not considered that a separate nomination committee would add any substance to this process.
4	4.3	The board has established an audit committee, however, the structure of audit committees should be such that it consists of: • Only non-executive directors • A majority of independent directors • An independent Chairman, who is not the Chairman of the board, and • Atleast threemembers.	The CII Audit Committee consists of Messrs Brown and Brennan, both independent directors. The committee is chaired by Mr Brennan. CII’s directors do not consider that the Company’s affairs are of such a size and complexity to merit the establishment of larger audit committee.

9	9.2	The board has not established a remuneration committee	The full board is responsible for setting remuneration levels and individual performance targets. Due to the size of the Company it is considered to be efficient and cost effective. Advice from professional independent advisors willbe sought wherenecessary.

Financial Statements – 31 December 2007

CI Resources Limited Financial report – 31 December 2007

Contents Page

Financial report Income Statements 17 Balance Sheets 18 Statements of Changes in Equity 19 Cash Flow Statements 20 Notes to the financial statements 21 Directors’ declaration 50 Independent audit report to the members 51

CI Resources Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office is:

C/- BDO Kendalls 128 Hay Street Subiaco WA 6008

and principal place of business is:

Unit 1, 103 Campbell Street Belmont WA 6104

A description of the nature of the consolidated entity’s operations and its principal activities is included in the directors’ report, which is not part of this financial report.

The financial report was authorised for issue by the directors on 27th March 2008. The consolidated entity has the power to amend and reissue the financial report.

Through the use of the internet, we have ensured that our corporate reporting is timely, complete and available globally at minimum cost to the consolidated entity. All press releases, financial reports and other information are available on our website: www.ciresources.com.au

For queries in relation to our reporting please call +61 8 9485 7222 or e-mail [email protected]

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Income Statements

For the year ended 31 December 2007

Consolidated Parent entity Notes 2007 $ 2006 $ 2007 $ 2006 $	Consolidated Parent entity Notes 2007 $ 2006 $ 2007 $ 2006 $
Revenue from continuing operations 2 Share of net profits in associates Purchase of finished goods Depreciation expense Foreign exchange loss Directors remuneration and employee expenses Accounting, audit, legal and other professional services Administration, corporate and travel expenses 3 Impairment of investment Share of net losses of associates Profit/(Loss) before income tax Income tax expense 4 Profit/(Loss) after income tax (Profit)/Loss attributable to minority equity interests Profit/(Loss) attributable to members of CI Resources Limited Basic earnings/(loss) per share 5	715,457 545,166 715,457 136,085 1,411,240 - - - - (390,650) - - (765) - - - (12,228) - (10,291) - (168,208) (226,557) (168,208) (168,861) (351,441) (140,187) (276,427) (119,662) (129,428) (109,355) (120,424) (173,622) - - - (468,000) - (439,840) - -
	1,464,627 (775,580) 140,107 (716,100) - - - -
	1,464,627 (775,580) 140,107 (716,100) (84,605) 258,374 - -
	1,380,022 (517,206) 140,107 (716,100)
	Cents 1.89 Cents (0.82)

The above Income Statements should be read in conjunction with the accompanying notes.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Balance Sheets As at 31 December 2007

Notes	Consolidated Parent entity 2007 $ 2006 $ 2007 $ 2006 $
Current assets Cash and cash equivalents 6 Trade and other receivables 7 Total current assets Non-current assets Plant & equipment 8 Investments accounted for using the Equity method 9 Other financial assets 10 Total non-current assets Total assets Current liabilities Trade and other payables 13 Total current liabilities Total liabilities Net assets Equity Contributed equity 14 Reserves 15 Accumulated losses 16 Minority equity interest Total equity	5,005,399 4,921,536 4,974,823 4,883,479 35,011 24,282 33,422 118,454
	5,040,410 4,945,818 5,008,245 5,001,933
	842 1,607 - - 8,862,538 2,511,859 - - - 5,034,393 6,451,253 6,222,870
	8,863,380 7,547,859 6,451,253 6,222,870
	13,903,790 12,493,677 11,459,498 11,224,803
	201,184 169,383 135,229 40,642
	201,184 169,383 135,229 40,642
	201,184 169,383 135,229 40,642
	13,702,606 12,324,294 11,324,269 11,184,161
	17,970,336 17,970,336 17,970,336 17,970,336 (98,789) (12,475) - - (5,394,663) (6,774,685) (6,646,067) (6,786,175)
	12,476,884 11,183,176 11,324,269 11,184,161 1,225,722 1,141,118 - -
	13,702,606 12,324,294 11,324,269 11,184,161

The above Balance Sheets should be read in conjunction with the accompanying notes.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Statements of changes in equity For the year ended 31 December 2007

Notes	Consolidated Parent entity 2007 $ 2006 $ 2007 $ 2006 $
Total equity at the beginning of the financial year Translation of foreign entities and associates Total income and expense recognised in equity Profit/(loss) for the year Total recognised income and expense for the year Transactions with equity holders in their capacity as equity holders: Contributions of equity net of transaction costs Total equity at the end of the financial year	12,324,294 10,362,262 11,184,161 9,140,261 (86,315) (22,388) - -
	(86,315) (22,388) - -
	1,464,627 (775,580) 140,107 (716,100)
	1,378,312 (797,968) 140,107 (716,100)
	- 2,760,000 - 2,760,000
	13,702,606 12,324,294 11,324,269 11,184,161

The above Statements of Changes in Equity should be read in conjunction with the accompanying notes.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Cash flow Statements For the year ended 31 December 2007

Notes	Consolidated Parent entity 2007 $ 2006 $ 2007 $ 2006 $
Cash flows from operating activities Receipts from customers Payments to suppliers and employees (inclusive of goods and services tax) Dividends received Interest received Net cash inflow/(outflow) from operating activities 24 Cash flows from investing activities Refund of investment costs Net cash inflow from investing activities Cash flows from financing activities Loans to subsidiary Loans to related parties Proceeds from borrowings Repayment of borrowings Proceeds from share issue Net cash (outflow)/inflow from financing activities Net increase (decrease) in cash and cash equivalents held Cash and cash equivalents at the beginning of the financial year Foreign exchange Cash and cash equivalents at the end of the financial year 6	- 409,082 - - (619,366) (838,320) (484,211) (375,496) 464,513 - 464,513 - 250,944 136,085 250,945 136,085
	96,091 (293,153) 231,245 (239,411)
	- 13,887 - -
	- 13,887 - -
	- - (129,611) (98,772) - (2,957) - - - 57,826 - - - (84,862) - - - 2,760,000 - 2,760,000
	- 2,730,007 (129,611) 2,661,228
	96,091 2,450,640 101,635 2,421,817 4,921,536 2,471,014 4,883,479 2,461,662 (12,228) (118) (10,291) -
	5,005,399 4,921,536 4,974,823 4,883,479

The above Cash Flow Statements should be read in conjunction with the accompanying notes.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Note 1. Summary of Significant Accounting Policies

The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been consistently applied to the year ended 31 December 2007, unless otherwise stated.

(a) Basis of preparation

This general purpose financial report has been prepared in accordance with Australian Equivalents to International Financial Accounting Standards (AIFRS), other authoritative pronouncements of the Australian Accounting Standards Board, Australian Accounting Interpretations and the Corporations Act 2001.

The financial report covers the Consolidated Entity of CI Resources Limited and its controlled entity, and CI Resources Limited as an individual parent entity. The financial report has also been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, and financial assets and financial liabilities for which the fair value basis of accounting has been applied.

Compliance with IFRSs

Australian Accounting Standards include AIFRSs. Compliance with AIFRSs ensures that the financial statements and notes of CI Resources Limited comply with International Financial Reporting Standards (IFRSs).

Critical accounting estimates

The preparation of financial statements in conformity with AIFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the consolidated entity’s accounting policies.

(b) Principles of consolidation

Subsidiaries

The consolidated financial statements incorporate the assets and liabilities of the subsidiary of CI Resources Limited (“company” or “parent entity”) as at 31 December 2007 and the results of the subsidiary for the financial period then ended.

CI Resources Limited and its subsidiaries together are referred to in this financial report as the Group or Consolidated Entity.

Subsidiaries are all those entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies, generally accompanying shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group.

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Minority interests in the results and equity of subsidiaries are shown separately in the consolidated income statement and balance sheet respectively.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Note 1. Summary of Significant Accounting Policies (continued)

(c) Income tax

The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.

(d)

Goods and services tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the Australian Taxation Office. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the Australian Taxation Office is included with other receivables or payables in the balance sheet.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the Australian Taxation Office, are presented as operating cash flow.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the Australia Taxation Office.

(e) Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.

(f) Financial instruments

Recognition

Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Note 1. Summary of Significant Accounting Policies (continued)

Loans and receivables

Loans and receivables are non derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the consolidated entity provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets, except for those with maturities greater than 12 months after the balance sheet date which are classified as non-current assets. Loans and receivables are included in receivables in the balance sheet.

Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the consolidated entity’s management has the positive intention and ability to hold to maturity.

Available-for-sale financial assets

Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives that are either designated in this category or not classified in any of the other categories. They are reflected at fair value except investments in unlisted companies, which are held at cost. Unrealised gains and losses arising from the changes in fair value are taken directly to equity.

Financial liabilities

Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal repayments and amortization.

Derivative instruments

Derivative instruments are measured at fair value. Gains and losses arising from changes in fair value are taken to the Income Statement unless they are designated as hedges.

Fair value

The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the consolidated entity establishes fair value by using valuation techniques. These include reference to the fair values of recent arm’s length transactions, involving the same instruments or other instruments that are substantially the same, discounted cash flow analysis, and option pricing models refined to reflect the issuer’s specific circumstances.

Impairment

The Consolidated Entity assesses at each balance date whether there is objective evidence that a financial asset or group of financial assets is impaired. In the case of equity securities classified as available for sale, a significant or prolonged decline in the fair value of a security below its cost is considered in determining whether the security is impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit and loss - is removed from equity and recognised in the income statement. Impairment losses recognised in the income statement on equity instruments are not reversed through the income statement.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Note 1. Summary of Significant Accounting Policies (continued)

(g) Intangibles – Goodwill

Goodwill and goodwill on consolidation are initially recorded at the amount by which the purchase price for a business or for an ownership interest in a controlled entity exceeds the fair value attributed to its net assets at the date of acquisition. Goodwill on the acquisition of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

(h)

Investments in associates

Investments in associate companies are recognised in the financial statements by applying the equity method of accounting. The equity method of accounting recognises the group’s share of post acquisition reserves of associates.

(i) Plant and equipment

Plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains/losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.

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

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are included in the income statement.

Increases in the carrying amount arising on the revaluation of land and buildings are credited to a revaluation reserve in equity. Decreases that offset previous increases of the same asset are charged against fair value reserves directly in equity. All other decreases are charged to the income statement. Each year the difference between depreciation based on the revalued carrying amount of the asset charged to the income statement and depreciation based on the assets original cost is transferred from the revaluation reserve to retained earnings.

Depreciation

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

The depreciation rates used for plant and equipment range from 5% to 33%. The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

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

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the income statement. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Note 1. Summary of Significant Accounting Policies (continued)

(j) Foreign currency transactions and balances

Functional and presentation currency

The functional currency of the group’s entities is measured using the currency of the primary economic environment in which the entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity’s functional and presentation currency.

Transactions and balances

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

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

Group companies

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

Assets and liabilities are translated at year end exchange rates prevailing on that reporting date;
Income and expenses are translated at average exchange rates for the period; and
Retained profits are translated at the exchange rates prevailing at the date of the transaction.

Exchange differences arising on translation of foreign operations are transferred directly the group’s foreign currency translation reserve in the Balance Sheet. These differences are recognised in the Income Statement in the period in which the operation is disposed.

(k) Contributed equity

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(l) Comparative figures

Where required by Accounting Standards, comparative figures have been adjusted to conform with changes in presentation for the current financial year.

(m) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances and duties and taxes paid.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Note 1. Summary of Significant Accounting Policies (continued)

(n) Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the consolidated entity, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the year, adjusted for bonus elements in ordinary shares issued during the year.

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

(o) Impairment of assets

Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).

(p) Critical accounting estimates and judgments

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the consolidated entity and that are believed to be reasonable under the circumstances.

Critical accounting estimates and assumptions

The consolidated entity makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. There were no estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(q)

Segment reporting

A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different to those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment and is subject to risks and returns that are different from those of segments operating in other economic environments.

(r)

Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Note 1. Summary of Significant Accounting Policies (continued)

(s) Acquisition of assets

The purchase method of accounting is used to account for all acquisitions of assets (including business combinations) regardless of whether equity instruments or other assets are acquired. Cost is measured as the fair value of the assets given, shares issued or liabilities incurred or assumed at the date of exchange plus costs directly attributable to the acquisition. Where equity instruments are issued in an acquisition, the value of the instruments is their published market price as at the date of exchange unless, in rare circumstances, it can be demonstrated that the published price at the date of exchange is an unreliable indicator of fair value and that other evidence and valuation methods provide a more reliable measure of fair value. Transaction costs arising on the issue of equity instruments are recognised directly in equity.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the consolidated entity’s identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement, but only after a reassessment of the identification and measurement of the net assets acquired.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

(t) Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for doubtful debts. Trade receivables are due for settlement no more than 120 days from the date of recognition.

Collectibility of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for doubtful receivables is established when there is objective evidence that the consolidated entity will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognised in the income statement.

(u)

Trade and other payables

These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

(v) Provisions

Provisions for legal claims are recognised when: the consolidated entity has a present legal or constructive obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Note 1. Summary of Significant Accounting Policies (continued)

(w) Employee benefits

Wages and salaries, annual leave and sick leave

Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees' services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.

Retirement benefit obligations

The consolidated entity contributes to various defined contribution funds for its employees.

Contributions to the defined contribution funds are recognised as an expense as they become payable. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

Share-based payments

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

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

Upon the exercise of options, the balance of the share-based payments reserve relating to those options is transferred to share capital.

The market value of shares issued to employees for no cash consideration under the employee share scheme is recognised as an employee benefits expense with a corresponding increase in equity when the employees become entitled to the shares.

(x) Business combinations

The purchase method of accounting is used to account for all business combinations, including business combinations involving entities or businesses under common control, regardless of whether equity instruments or other assets are acquired. Cost is measured as the fair value of the assets given plus costs directly attributable to the acquisition.

Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair value at the acquisition date, irrespective of the extent of any minority interest.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Note 1. Summary of Significant Accounting Policies (continued)

(y) Borrowings

Borrowings are recorded initially at fair value, net of transaction costs. Subsequent to initial recognition, borrowings are measured at amortised cost with any difference between the initial recognised amount and the redemption value being recognised in the income statement over the period of the borrowing using the effective interest rate method.

Borrowings are classified as current liabilities, unless the entity has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

Borrowing costs

Borrowing costs include interest, amortisation of discounts or premiums relating to borrowings and amortisation of ancillary costs incurred in connection with arrangement of borrowings. Borrowing costs are expensed as incurred except when it related to a qualifying asset in which case it would be capitalised.

(z) New accounting standards and interpretations

The following new/amended accounting standards and interpretations have been issued, but are not mandatory for financial years ended 31 December 2007. They have not been adopted in preparing the financial report for the year ended 31 December 2007 and are expected to impact the entity in the period of initial application. In all cases the entity intends to apply these standards from application date as indicated in the table below.

STANDARDS LIKELY TO HAVE A FINANCIAL IMPACT

AASB reference	Title and Affected Standard(s):	Nature of Change	Application date:	Impact on Initial Application
AASB 2007-4 (issued April 2007)	Amendments to Australian Accounting Standards arising from ED 151 and Other Amendments [AASB 1, 2, 3, 4, 5, 6, 7, 102, 107, 108, 110, 112, 114, 116, 117, 118, 119, 120, 121, 127, 128, 129, 130, 131, 132, 133, 134, 136, 137, 138, 139, 141, 1023 & 1038]	Inserts accounting treatment options that currently exist under IFRSs back into AIFRSs and removes Australian- specific disclosures that were originally added into AIFRSs on first- time adoption from 1 January 2005.	Periods commencing on or after 1 July 2007	Most changes relate to certain Australian-specific disclosures not being required. The entity does not intend to adopt any reinstated options for accounting treatment when the standard is adopted. As such, there will be no future financial impacts on the financial statements.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Note 1. Summary of Significant Accounting Policies (continued)

AASB reference	Title and Affected Standard(s):	Nature of Change	Application date:	Impact on Initial Application

AASB 123 (revised June 2007)	Borrowing Costs	To the extent that borrowing costs are directly attributable to the acquisition, construction or production of a qualifying asset, the option of recognising borrowing costs immediately as an expense has been removed. Consequently all borrowing costs for qualifying assets will have to be capitalised.	Periods commencing on or after 1 January 2009	The transitional provisions of this standard only require capitalisation of borrowing costs on qualifying assets where commencement date for capitalisation is on or after 1 January 2009. As such, there will be no impact on prior period financial statements when this standard is adopted.
IFRS 3 (revised 2008) .	Business Combinations	Released as part of long term international convergence project between IASB and FASB. The revised standard introduces more detailed guidance on accounting for step acquisitions, adjustments to contingent consideration, assets acquired that the purchaser does not intend to use, reacquired rights and share-based payments as part of purchase consideration. Also, all acquisition costs will have to be expensed instead of being recognised as part of goodwill.	Business combinations where the acquisition date is on or after the beginning of the first reporting period that commences 1 July 2009 or later	As there is no requirement to retrospectively restate comparative amounts for business combinations undertaken before this date, there is unlikely to be any impact on the financial statements when this revised standard is first adopted. However, due to the nature of some of the changes in the revised standard, business combinations that the entity undertakes after this date may in future impact negatively on the results of the entity. For example, acquisition costs will have to be expensed instead of being recognised as part of goodwill. Specific changes in respect of step acquisitions and sell downs may introduce situations whereby adopting the revised standard may improve profitability.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Note 1. Summary of Significant Accounting Policies (continued)

AASB reference	Title and Affected Standard(s):	Nature of Change	Application date:	Impact on Initial Application
IAS 27 (revised 2008)	Consolidated and Separate Financial Statements	The revised standard clarifies that changes in ownership interest which result in control being retained are accounted for within equity as transactions with owners. Losses will be attributed to the non-controlling interest even if this results in a debit balance for the non-controlling interest. Investments retained where there has been a loss of control will be recognised at fair value at date of sale.	Periods commencing on or after 1 July 2009	As there is no requirement to retrospectively restate the effect of these revisions, there is unlikely to be any impact on the financial statements when this revised standard is first adopted. However, Xi Feng International Pte Ltd may incur losses. To the extent that Xi Feng incurs losses for the financial year ending 31 December 2010, such losses will be attributed to the non- controlling interest. No adjustment will be made to comparatives for losses not previously attributed to the non- controllinginterest.

AASB 2008-1 (issued February 2008)	Amendments to AASB 2 – Share-based Payments – Vesting Conditions and Cancellations	The definition of _vesting conditions_has changed and the accounting treatment clarified for cancellations to share- based payment arrangements by the counterparty. This is to ensure that conditions other than performance conditions do not result in a ‘true up’ of the share-based payment expense and are treated in a manner similar to market conditions.	Periods commencing on or after 1 January 2009	To date the entity has not issued any options to employees that include non-vesting conditions and as such there will be no impact on the financial statements when this revised standard is adopted for the first time.

AASB Interpretation 11 (issued Feb 2007)	AASB 2 – Group and Treasury Share Transactions	Clarifies the accounting treatment under AASB 2:Share-Based _Payments_where the parent entity grants rights to its equity instruments to employees of its subsidiaries, or where a subsidiary grants to its employees rights to equity instruments of its parent.	Periods commencing on or after 1 March 2007	*[in the accounts of Xi Feng Pte* *Ltd]* There will be no impact because at the reporting date neither the entity nor its parent entity has granted any rights to equity instruments for employee services. *[in the accounts of CI* *Resources Ltd]* There will be no impact because at the reporting date the entity has not issued any equity instruments to employees of subsidiaries.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Note 1. Summary of Significant Accounting Policies (continued)

AASB reference	Title and Affected Standard(s):	Nature of Change	Application date:	Impact on Initial Application
AASB Interpretation 12 (issued Feb 2007)	Service Concession Arrangements (recognition and measurement)	Guidance for accounting by operators for public-to-private service concession arrangements.	Periods commencing on or after 1 January 2008	There will be no impact as the entity does not have any service concession arrangements
AASB Interpretation 13 (issued Aug 2007)	Customer Loyalty Programmes	The fair value of revenue is to be allocated between sales and reward credits, resulting in a portion of revenue being deferred until reward credits are redeemed.	Periods commencing on or after 1 July 2008	There will be no impact as the entity does not have a customer loyalty programme

AASB 8 (Issued Feb 2007)1	Operating Segments	Replaces the disclosure requirements of AASB 114:Segment Reporting.	Periods commencing on or after 1 January 2009	As this is a disclosure standard only, there will be no impact on amounts recognised in the financial statements. However, disclosures required for the operating segments will be significantly different to what is currently reported (business and geographical segment).
AASB 101 (Revised Sep 2007)	Presentation of Financial Statements	Amendments to presentation and naming of the financial statements.	Annual reporting periods commencing on or after 1 January 2009	As this is a disclosure standard only, there will be no impact on amounts recognised in the financial statements. However, there will be various changes to the way financial statements are presented and various changes to names of individual financial statements.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

	Consolidated Parent entity 2007 $ 2006 $ 2007 $ 2006 $
Note 2. Revenue Revenue from continuing operations Sales revenue Dividends received Interest received - 464,513 250,944 409,081 - 136,085 - 464,513 250,944 - - 136,085 715,457 545,166 715,457 136,085 Note 3. Expenses Profit/(Loss) before income tax includes the following expenses: Cost of sales - 390,650 - - Administration, corporate and travel expenses includes the following Travel and accommodation 48,678 34,348 48,678 26,430 ASIC and ASX fees 27,448 25,433 27,448 25,433 Rental expense 3,375 823 2,400 - Note 4. Income tax (a) Income tax expense Tax at the Australian tax rate of 30% 439,388 (232,674) 42,032 (214,830) Add/(Less) tax effect of: Franking credits on gross income Other non-deductible items Other deductible items 59,723 26,262 (3,931) 7,227 (35,795) 59,723 25,680 (3,931) 7,227 (35,795) Share of associates net profits (345,557) (131,952) - - Impairment of investment - - - 140,400 175,885 (393,194) 123,504 (102,998) Franking credits Utilisation of prior period tax losses (123,504) (52,381) - 393,194 (123,504) - - 102,998 Income tax expense attributable to parent entity - - - -	- 464,513 250,944 409,081 - 136,085 - 464,513 250,944 - - 136,085
	715,457 545,166 715,457 136,085
	439,388 (232,674) 42,032 (214,830) 59,723 26,262 (3,931) 7,227 (35,795) 59,723 25,680 (3,931) 7,227 (35,795) (345,557) (131,952) - - - - - 140,400
	175,885 (393,194) 123,504 (102,998) (123,504) (52,381) - 393,194 (123,504) - - 102,998
	- - - -

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

	Consolidated Parent entity 2007 $ 2006 $ 2007 $ 2006 $
Note 4. Income tax (continued) (b) The components of tax expense comprise: Current tax Utilisation of prior period tax losses (c) The estimated potential deferred tax benefits not brought to account at 30% Revenue losses Capital losses	(52,381) (393,194) - (102,998) 52,381 393,194 - 102,998
	- - - -
	1,530,054 528,218 1,557,000 528,218 1,240,384 528,218 1,240,384 528,218
	2,058,272 2,085,218 1,768,602 1,768,602

The potential future income tax benefit will only be obtained if:

(i) the Company derives future assessable income of a nature and of an amount sufficient to enable the benefit to be realised;

(ii) the Company continues to comply with the conditions for deductibility imposed by law; and

(iii) no changes in tax legislation adversely affect the Company in realising the benefit.

Note 5. Earnings per share

Note 5. Earnings per share
	2007 Cents
Basic earnings per share	1.89 2007 Number
Weighted average number of shares used as the denominator Weighted average number of ordinary shares used as the denominator in calculating basic and diluted earnings per share.	72,874,102
	2007 $
Profit used in calculating basic and diluted losses per share Net profit	1,380,022

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Note 5. Earnings per share (continued)

		2006 Cents
Basic earnings per share		(0.82) 2006 Number
Weighted average number of shares used as the denominator Weighted average number of ordinary shares used as the denominator in calculating basic and diluted earnings per share.		62,879,582
		2006 $
Loss used in calculating basic losses per share Net loss (517,206) Consolidated Parent entity Notes 2007 $ 2006 $ 2007 $ 2006 $		(517,206)
Note 6. Current assets – Cash and cash equivalents Cash at bank and on hand 3,124,693 3,160,418 3,094,117 3,122,361 Deposits at call 1,880,706 1,761,118 1,880,706 1,761,118 5,005,399 4,921,536 4,974,823 4,883,479
	5,005,399 4,921,536 4,974,823 4,883,479

Note 7. Current assets – Trade and other receivables

Other	debtors	35,011	24,282	33,422	118,454
Note	8. Non-current assets – Plant and equipment
Plant	& equipment
Plant	& equipment – at cost	3,258	3,160	-	-
Less:	accumulated depreciation	(2,416)	(1,553)	-	-
		842	1,607	-	-

Reconciliation

Reconciliation of the carrying amounts of plant and equipment at the beginning and end of the current financial period is set out below.

Plant & equipment At the beginning of the year Depreciation expense Other Closing net book amount	1,607 2,696 - - (765) (665) - - - (424) - -
	842 1,607 - -

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Consolidated	Consolidated	Parent	entity
2007	2006	2007	2006
$	$	$	$

Note 9. Non-current assets – Investments accounted for using the equity method

The Consolidated Entity has a 32% interest in the ordinary shares of Guizhou Tianfeng Chem-Phos Company Ltd, a fertilizer manufacturing company incorporated in China, and also a 38.77% interest in the ordinary shares of Phosphate Resources Limited which operates a phosphate mine on Christmas Island.

(a) Associated companies Guizhou Tianfeng Chem-Phos Company Phosphate Resources Limited (b) Reconciliation At the beginning of the year Investments equity accounted for the first time Share of associated company’s profit/(loss) Guizhou Tianfeng Chem-Phos Company _Less:_Minority interest Phosphate Resources Limited Foreign currency adjustments	2,676,288 6,186,250 2,511,859 - - - - -
	8,862,538 2,511,859 - -
	2,511,859 2,986,487 - - 5,034,393 - - - 259,383 (439,840) - - - - (84,605) - - - 1,151,857 - - - (10,349) (34,788) - -
	8,862,538 2,511,859 - -

(c) These investments are not recorded at fair value because their fair values cannot be reliably measured. Fair values cannot be readily determined as there is no publicly available information to support the fair values. The directors have determined that at 31 December 2006 and 2007, there is no readily available and ascertainable information and therefore cannot disclose the requirements of paragraph 30 (c) of AASB 7. It is also the intention of the Board to maintain the equity holdings in the above and have no intention of disposing the investments in the foreseeable future.

Note 10. Non-current assets – Other financial assets

Shares in unlisted companies – at cost Shares in controlled entities – at cost Provision for impairment Amounts receivable from controlled entities	- 5,034,393 5,034,393 5,034,393 - - 1,656,477 1,656,477 - - (468,000) (468,000) - - 228,383 -
	- 5,034,393 6,451,253 6,222,870

The fair value shares in unlisted companies and shares in controlled entities cannot be reliably measured as variability in the range of reasonable fair value estimates is significant. As a result, all unlisted investments are reflected at cost. Management has determined that the estimate of total consolidated fair values for unlisted investments would range in values exceeding the cost of the total investment. Unlisted investments exist within markets which would permit the assets to be disposed of if required.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Note 11. Investments in associates

(a) Carrying amounts

Information relating to associates is set out below:

			Consolidated	Consolidated	Parent	entity
			2007	2006	2007	2006
			$	$	$	$
Name of company	Principal activity	Ownership interest
Unlisted
Phosphate Resources
Limited	Mining	38.77%	6,186,250	5,034,393	5,034,393	5,034,393
Guizhou Tianfeng Chem-Phos Company	Mining	N/A	2,676,288	2,511,859	-	-

The above associate is incorporated in Australia

(b) Movements in carrying amounts

Phosphate Resources Limited	Consolidated 2007 $ 2006 $
Carrying amount at the beginning of the financial year Share of profits/(losses) after income tax Carrying amount at the end of the financial year Guizhou Tianfeng Chem-Phos Company	5,034,393 5,034,393 1,151,817 -
	6,186,250 5,034,393

Carrying amount at the beginning of the financial year Share of profits/(losses) after income tax Carrying amount at the end of the financial year (c) Share of associates profits or losses Phosphate Resources Limited Profit/(loss) before income tax Income tax expense Profit after income tax Guizhou Tianfeng Chem-Phos Company Profit/(loss) before income tax Income tax expense Profit after income tax	2,511,859 2,986,487 164,429 (474,628)
	2,676,288 2,511,859
	1,863,557 - (711,740) -
	1,151,817 -
	164,429 (474,628) - -
	164,429 (474,628)

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Note 11. Investments in associates (continued)

(d) Summarised financial information of associates

		Group’s	share of:
	Assets	Liabilities	Revenues	Profit
	$	$	$	$
2007
	AUD	AUD	AUD	AUD
Phosphate Resources Limited	17,534,340	8,708,460	14,308,140	1,863,557
	RMB	RMB	RMB	RMB
Guizhou Tianfeng Chem-Phos Company	45,579,192	30,496,727	69,814,786	1,648,763
2006
	AUD	AUD	AUD	UAD
Phosphate Resources Limited	16,101,540	7,966,140	12,683,580	1,131,780
	RMB	RMB	RMB	RMB
Guizhou Tianfeng Chem-Phos Company	50,258,480	34,824,779	67,518,981	(2,666,605)

(e) Share of associates expenditure commitments, other than for the supply of inventories

Phosphate Resources Limited	Consolidated 2007 $ 2006 $
Capital commitments Lease commitments Guizhou Tianfeng Chem-Phos Company	308,180 - - -
	308,180 -

Capital commitments Lease commitments (f) Contingent liabilities of associates Phosphate Resources Limited Share of contingent liabilities incurred jointly with other investors Guizhou Tianfeng Chem-Phos Company Share of contingent liabilities incurred jointly with other investors	- - - -
	- -
	- -
	- -

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Note 12. Controlled entities

CI Resources Limited owns 51% of Xi Feng International Pte Ltd which is incorporated in Singapore. The voting power in respect to Xi Feng International Pte Ltd is in proportion to ownership.

	Consolidated	Consolidated	Parent	entity
	2007	2006	2007	2006
	$	$	$	$
Note 13. Current liabilities – Trade and other payables
Trade payables	141,830	13,392	75,875	13,392
Other payables	59,354	127,791	59,354	27,250
Amounts payable to other related parties	-	28,200	-	-
	201,184	169,383	135,229	40,642

Note 14. Contributed equity

Note 14. Contributed equity
(a) Share capital		Number of shares $
Ordinary shares – fully paid (b) Movements in ordinary share capital Date Details	72,874,102 17,970,336 Number of shares Issue price $ $	72,874,102 17,970,336
1 January 2006 Opening balance 31 October 2006 Placement of shares 31 December 2006 Closing balance 31 December 2007 Closing balance	60,874,102 15,210,336 12,000,000 0.23 2,760,000 72,874,102 17,970,336 72,874,102 17,970,336
			17,970,336
			17,970,336

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Note 14. Contributed equity (continued)

(c) Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the company in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

		Consolidated	Consolidated	Parent entity	Parent entity
	Notes	2007	2006	2007	2006
		$	$	$	$
Note 15. Reserves
Foreign exchange translation reserve		(98,789)	(12,475)		-	-

Foreign currency translation reserve

Exchange differences arising on translation of the foreign controlled entity are taken to the foreign currency translation reserve, as described in note 1(j). The reserve is recognised in profit and loss when the net investment is disposed of.

Movements in reserves

Foreign exchange translation reserve Balance at the beginning of the year FX on translation of financial report Balance at the end of the year Note 16. Accumulated losses Accumulated losses at the beginning of the year Net profit/(loss) attributable to members of CI Resources Limited Accumulated losses at the end of the financial year	(12,475) (1,055) - - (86,314) (11,420) - -
	(98,789) (12,475) - -
	(6,774,685) (6,257,479) (6,786,175) (6,070,075) 1,380,022 (517,206) 140,107 (716,100)
	(5,394,663) (6,774,685) (6,646,067) (6,786,175)

Note 16. Accumulated losses

Note 17. Key management personnel disclosures

(a) Directors

The following persons were directors of CI Resources Limited during the whole of the financial year, unless otherwise stated:

Chairman - non-executive

Mr Clive Morris Brown (appointed 30 May 2007)

Non-executive directors

Mr Anthony Brennan (appointed 30 May 2007) Dato Dr Mohamad Hashim Bin Ahmad Tajudin Mr Lip Sin Tee (appointed 25 June 2007) Mr Mark Victor Caruso (resigned 30 May 2007) Mr Kim Sun Oh (resigned 30 May 2007) Dato Lim Say Chong (resigned 30 May 2007) Mr Peter Patrick Torre (resigned 30 May 2007)

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Note 17. Key management personnel disclosures (continued)

(b) Other key management personnel

The following persons also had authority and responsibility for planning, directing and controlling the activities of the consolidated entity, directly or indirectly, during the financial period:

Name Position Desmond John Kelly Joint Company Secretary Janelle Burns Joint Company Secretary

Notes	Consolidated Parent entity 2007 $ 2006 $ 2007 $ 2006 $
(c) Key management personnel compensation Short term employee benefits Post employment benefits	248,354 156,750 248,354 156,750 32,162 11,655 32,162 11,655
	280,516 168,405 280,516 168,405

The consolidated entity has taken advantage of the relief provided by Corporations Regulations 2M.6.04 and has transferred the detailed remuneration disclosures to the Directors’ Report. The relevant information can be found in sections A to D of the remuneration report.

(d) Equity instrument disclosures relating to key management personnel

Options provided as remuneration and shares issued on exercise of such options

There were no options issued to key management personnel for the financial years ended 31 December 2007 or 31 December 2006.

Option holdings

The numbers of options over ordinary shares in the company held during the financial year by each director of CI Resources Limited and other key management personnel of the company, including their personally-related parties, are set out below.

2007 Name	Balance at the start of the period	Granted during the period as remuneration	Exercised during the period	Other changes during the period	Balance at the end of the period	Vested and exercisable at the end of the period
*Directors of CI Resources Limited*
Mr Clive Morris Brown Mr Anthony Brennan Dato Dr Mohamad Hashim Bin Ahmad Tajudin Mr Lip Sin Tee	- - - -	- - - -	- - - -	- - - -	- - - -	- - - -
*Other key management personnel*
Mr Desmond John Kelly Ms JanelleBurns	- -	- -	- -	- -	- -	- -

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Note 17. Key management personnel disclosures (continued)

2006 Name	Balance at the start of the period	Granted during the period as remuneration	Exercised during the period	Other changes during the period	Balance at the end of the period	Vested and exercisable at the end of the period
*Directors of CI Resources Limited*
Dato Dr Mohamad Hashim Bin Ahmad Tajudin Mr Mark Victor Caruso Mr Kim Sun Oh Dato Lim Say Chong Mr Peter Patrick Torre	- - - - -	- - - - -	- - - - -	- - - - -	- - - - -	- - - - -

No options were vested and unexercisable at the end of the financial year.

Share holdings

The numbers of shares in the company held during the financial year by each director and the key management personnel of the consolidated entity, including their personally related parties, are set out below. There were no shares granted during the reporting period as compensation.

2007 Name	Balance at the start of the period	Received during the period on the exercise of options	Other changes during the period	Balance at the end of the period
*Directors of CI Resources Limited*
Mr Clive Morris Brown Mr Anthony Brennan Dato Dr Mohamad Hashim Bin Ahmad Tajudin Mr Lip Sin Tee*	- - 12,000,000 -	- - - -	- - - 11,616,000	- - 12,000,000 11,616,000
*Other key management personnel*
Mr Desmond John Kelly Ms JanelleBurns	- -	- -	- -	- -

12,000,000 ordinary shares are held by CCM International Sdn Bhd, a company of which Dato Dr Mohd Hashim is a director.

** 11,616,000 ordinary shares are held by Prosper Trading Sdn Bhd, a company of which Mr Lip Sin Tee is a director.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Note 17. Key management personnel disclosures (continued)

2006 Name	Balance at the start of the period	Received during the period on the exercise of options	Other changes during the period	Balance at the end of the period
*Directors of CI Resources Limited*
Dato Dr Mohamad Hashim Bin Ahmad Tajudin * Mr Mark Victor Caruso Mr Kim Sun Oh Dato Lim Say Chong Mr Peter Patrick Torre	- 50,000 11,616,000 - -	- - - - -	12,000,000 - - - -	12,000,000 50,000 11,616,000 - -

12,000,000 ordinary shares are held by CCM International Sdn Bhd, a company of which Dato Dr Mohd Hashim is a director.

(e) Loans to key management personnel

There are no loans made to directors or other key management personnel of CI Resources Limited.

(f) Other transactions with key management personnel

The Company has entered into a project specific contract with Mr Anthony Brennan whereby he will provide consulting services for a specific project at a fee of $7,500 +GST per month. The contract dates from 1 December 2007 and will terminate on completion of the project.

Notes	Consolidated Parent entity 2007 $ 2006 $ 2007 $ 2006 $
Note 18. Remuneration of auditors During the year the following fees were paid or payable for services provided by the auditor of the Company, its related practices and non-related audit firms. Assurance services Audit services BDO Kendalls Audit & Assurance (WA) Pty Ltd: Audit and review of financial reports and other audit work under the_Corporations Act 2001_ Audit services Other auditors of subsidiaries: Audit and review of financial reports of subsidiaries	43,370 17,189 43,370 17,189 50,231 4,998 - -
	93,601 22,187 43,370 17,189

Notes

Consolidated
Parent entity
2007
$
2006
$ 2007
$
2006
$

Note 18. Remuneration of auditors
During the year the following fees were paid or
payable for services provided by the auditor of the
Company, its related practices and non-related audit
firms.
Assurance services
Audit services
BDO Kendalls Audit & Assurance (WA) Pty Ltd:
Audit and review of financial reports and other audit
work under the_Corporations Act 2001_
Audit services
Other auditors of subsidiaries:
Audit and review of financial reports of subsidiaries

43,370
17,189
43,370
17,189
50,231
4,998
-
-

93,601
22,187
43,370
17,189

Note 19. Contingent liabilities

As at 31 December 2007 the Consolidated Entity had no contingent liabilities.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Note 20. Commitments for expenditure

As at 31 December 2007 the Consolidated Entity has no commitments for expenditure.

Note 21. Related party transactions

Directors and other key management personnel

Disclosures relating to directors and other key management personnel are set out in note 17.

Other related party transactions

During the financial year the Company paid fees for office management services, accounting and company secretarial to Prospero Corporate, an entity of which Mr Peter Torre is the principal. This arrangement ceased on 30 May 2007.

Controlling entities

The ultimate parent entity in the wholly-owned group is CI Resources Limited.

Ownership interests in related parties

Interests held in the following classes of related parties are set out in the following Notes: Controlled entities – Note 23

Note 22. Events occurring after reporting date

On 30 January 2008 the Company released the following statement to the market:

The order requires the MAP plant to cease operations by 31 March 2008 if action is not taken to prevent the discharge.

The waste dump was established at least ten years before Xifeng International Pte Ltd invested in the plant, and certain environmental obligations rest with the former owner of the plant.

CI Resources Limited, through its investment in Xifeng International, is currently seeking to clarify the legal issues surrounding the court order.

The Board of CI Resources Limited confirms that the company is committed to upholding the highest standards of environmental responsibility.

Other than that shown above, there are no matters or circumstances that have arisen since 31 December 2007 that has significantly affected, or may significantly affect:

(d) the consolidated entity’s operations in future financial years, or
(e) the results of those operations in future financial years, or
(f) the consolidated entity’s state of affairs in future financial years.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Note 23. Subsidiaries

Note 23. Subsidiaries
	Country of		Class of shares	Equity holding
Name of entity	incorporation			2007
Xi Feng International Pte Ltd	Singapore		Ordinary	51%
		Consolidated		Parent entity
	Notes	2007	2006	2007	2006
		$	$	$	$
Note 24. Reconciliation of profit(loss) from ordinary activities after income tax to net cash outflow from
operating activities
Operating profit (loss) after income tax		1,380,022	(775,580)	140,107	(341,008)
Share of associates net (profits)/losses		(1,411,240)	439,840	-	-
Minority interest		84,605	-	-	-
Depreciation		765	665	-	-
Other		20,867	2,355	-	-
Impairment of investment		-	-	-	468,000
Change in operating assets and liabilities
(Increase)/decrease in receivables		(10,729)	5,808	(3,449)	5,808
(Increase)/decrease in other operating	assets	-	(1,197)	-	(1,197)
Increase/(decrease) in payables		31,801	34,956	94,587	4,078
Net cash inflow/(outflow) from operating	activities	96,091	(293,153)	231,245	(239,411)

Note 25. Financial instruments and financial risk management

CI Resources is exposed to risks from movements in interest rates and foreign exchange risks that affect its assets and liabilities. Financial risk management aims to limit these market risks through focusing on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Company and the Group.

(i) Interest rate risk

CI Resources, both parent and group, is exposed to interest rate risks in Australia. To minimise the effects of the potential adversities, the management attempt to limit these effects through constant reviewing of the financial markets.

Interest rate risk is presented by way of sensitivity analysis in accordance with AASB 7. These show the effect on interest income and shareholders equity. The interest rate sensitivity is based on the following assumptions.

Interest rate analysis is based on those in effect at 31 December 2007 and based on the 1 year variable bond yield.

If market rates had been 36 basis points higher then the profit and loss, and bank and cash, would have been $17,345 higher (31 December 2006: $11,561 higher – using 30 basis points). If market rates had been 36 basis points lower then the profit and loss, and bank and cash, would have been $18,693 lower (31 December 2006: $17,968 lower – using 30 basis points).

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Note 25. Financial instruments and financial risk management (continued)

Summaryof sensitivityanalysis	Consolidated Parent entity 2007 $ 2006 $ 2007 $ 2006 $
Cash at bank 3,124,693 3,160,418 3,094,117 3,122,361 Deposits at call 1,880,706 1,761,118 1,880,706 1,761,118 5,005,399 4,921,536 4,974,823 4,883,179 Interest income 250,944 136,085 250,944 136,085 Effective interest rate (%) 5.00 2.70 5.00 2.70 Increase by 36 basis points at 31 December 2007 5.36 (↑17,345) - 5.36 (↑17,345) - Increase by 30 basis points at 31 December 2006 - 3.06 (↑11,561) - 3.06 (↑11,561) Decrease by 36 basis points at 31 December 2007 4.64 (↓18,693) - 4.64 (↓18,693) - Decrease by 30 basis points at 31 December 2006 - 2.34 (↓17,698) - 2.34 (↓17,698) The following table sets out the carrying amount, by maturity, of the financial instruments exposed to interest rate risk.

Summaryof sensitivityanalysis

Consolidated
Parent entity
2007
$
2006
$ 2007
$
2006
$

Cash at bank
3,124,693
3,160,418
3,094,117
3,122,361
Deposits at call
1,880,706
1,761,118
1,880,706
1,761,118
5,005,399
4,921,536
4,974,823
4,883,179
Interest income
250,944
136,085
250,944
136,085
Effective interest rate (%)
5.00
2.70
5.00
2.70
Increase by 36 basis points at 31 December 2007
5.36 (↑17,345)
-
5.36 (↑17,345)
-
Increase by 30 basis points at 31 December 2006
-
3.06 (↑11,561)
-
3.06 (↑11,561)
Decrease by 36 basis points at 31 December 2007
4.64 (↓18,693)
-
4.64 (↓18,693)
-
Decrease by 30 basis points at 31 December 2006
-
2.34 (↓17,698)
-
2.34 (↓17,698)
The following table sets out the carrying amount, by maturity, of the financial instruments exposed to interest rate risk.

2007 Financial Instruments Floating interest rate Fixed interest rate maturing in: 1 year or less Consolidated Entity and Parent $ $ (i) Financial assets Cash assets Trade and other receivables Investments – equity accounted 3,124,693 - - 1,880,706 - - Total financial assets 3,124,693 1,880,706 (ii) Financial liabilities Trade and other payables - - Total financial liabilities - -	Non-interest bearing $ - 35,011 8,862,538 8,897,549 201,184 201,184	Total Weighted average effective interest rate $ % 5,005,399 35,011 8,862,538 6.5 - - 13,902,948 201,184 - 201,184

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Note 25. Financial instruments and financial risk management (continued)

2006
Financial Instruments
Floating interest
rate
Fixed interest rate
maturing in: 1
year or less
Non-interest
bearing
Consolidated Entity and Parent
$
$
$
(i) Financial assets
Cash assets
Trade and other receivables
Investments – equity
accounted
Other financial assets
3,160,418
-
-
-
1,761,118
-
-
-
-
24,282
2,511,859
5,034,393
Total financial assets
3,160,418
1,761,118
7,570,534
(ii) Financial liabilities
Trade and other payables
-
-
169,383
Total financial liabilities
-
-
169,383

Total
Weighted
average
effective
interest rate
$
%
4,921,536
24,282
2,511,859
5,034,393
6.2
-
-
-
12,402,070
169,383
-
169,383

(ii) Foreign currency risk

The Group and parent are exposed to fluctuations in the Australian dollar against the Singaporean dollar. The risk is managed by reference to potential adverse effects in the market. For the Group and parent, directors believe the potential exchange rate effects would not have a material effect to the income statement or equity.

(iii) Liquidity Risk

The Group has no significant exposure to liquidity risk as there is effectively no debt, however should there be a risk of a nonmaterial nature then the group manages liquidity risk by monitoring forecast cash flows.

The Group nor the parent is not subject to any other risks other than those described above.

Capital risk management

The Group and the parent entity’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide shareholders and stakeholders in the future and to maintain an optimal capital structure to reduce the cost of capital.

As at 31 December 2006 and 2007 the entity attempted to ensure the parent and the Group was debt free, the gearing ratios for both the parent and Group was:

	Consolidated	Consolidated	Parent	entity
	2007	2006	2007	2006
	$	$	$	$
Total debt	-	-	-	-
Total equity	13,702,606	12,324,294	11,324,269	11,184,161
Gearing ratio	0%	0%	0%	0%

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

	Australia $ Singapore $ Eliminations $ Consolidated $
Note 26. Segment reporting Primary reporting – geographical segments 2007 Revenue Interest Dividends Total revenue from continuing operations Result Segment result Share of net losses of equity accounted associates Profit before income tax Income tax expense Profit after income tax Assets Segment assets Total assets Liabilities Segment liabilities Total liabilities 2006 Revenue Interest Sales Total revenue from continuing operations Result Segment result Share of net losses of equity accounted associates Loss before income tax Income tax expense Loss after income tax Assets Segment assets Total assets Liabilities Segment liabilities Total liabilities	250,944 464,513 - - - - 250,944 464,513
	715,457 - - 715,457
	140,107 (86,720) - 53,387 1,151,857 259,383 (84,605) 1,326,635
	1,291,499 (172,663) (84,605) 1,380,022 - - - -
	1,291,964 (172,663) (84,605) 1,380,022
	11,459,499 2,709,294 261,004 13,903,790
	11,459,499 2,709294 261,004 13,903,790
	135,229 294,338 (228,383) 201,184
	135,229 294,338 (228,383) 201,184
	136,085 - - 409,081 - - 136,085 409,081
	136,085 409,081 - 545,166
	(716,100) (87,640) 468,000 (335,740) - (439,840) - (439,840)
	(716,100) (527,480) 468,000 (775,580) -
	(716,000) (527,480) 468,000 (775,580)
	11,692,804 2,556,122 1,755,249 12,493,677
	11,692,804 2,556,122 1,755,249 12,493,677
	40,642 227,513 (98,772) 169,383
	40,642 227,513 (98,772) 169,383

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Notes to the Financial Statements For the year ended 31 December 2007

Note 26. Segment reporting (continued)

Secondary reporting – business segments

The Consolidated Entity operates predominantly in the investment sector.

Note 27. Differences from preliminary final report

In accordance with Listing Rule 4.5A, set out below are certain differences between information contained in the Appendix 4E lodged with the ASX and this financial report.

At the time of lodging the Preliminary Final Report preliminary financial information had been received from Phosphate Resources Limited, on which the Consolidated Entity relied to equity account for the investment. This information had not yet been subject to audit review. Once final audit reviewed information was received the following differences between the Preliminary Final Report and this Financial Report have arisen. All changes are relevant to the Consolidated Entity only.

The profit after income tax has decreased from $1,849,526 to $1,380,022, this is due to an increase in accrued expenses taken up and an increase in taxation provision within Phosphate Resources Limited.

Earnings per share has decreased from 2.53 cents per share to 1.89 cents per share.

Total assets has decreased from $14,373,294 to $13,903,790, and net assets from $14,172,110 to $13,702,606 as a result of the decreased share of profits from PRL.

Financial Statements – 31 December 2007

CI RESOURCES LIMITED

Directors’ declaration

In the directors’ opinion:

(a) The financial statements and notes set out on pages 17 to 49 are in accordance with the Corporations Act 2001 , including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
(ii) giving a true and fair view of the company and the consolidated entity’s financial position as at 30 June 2007 and of their performance, as represented by the results of their operations, changes in equity and their cash flows, for the financial period ended on that date; and
(b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable; and
(c) the audited remuneration disclosures set out on pages 9 to 12 of the directors’ report comply with Accounting Standards AASB 124 Related Party Disclosures and the Corporations Regulations 2001; and

The directors have been given the declarations by the chief executive officer and the chief financial officer required by section 295A of the Corporations Act 2001 .

This declaration is made in accordance with a resolution of the directors.

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C Brown Chairman

Perth 27[th] March 2008

Financial Statements – 31 December 2007

BDO Kendalls Audit & Assurance (WA) Pty Ltd 128 Hay Street SUBIACO WA 6008 PO Box 700 WEST PERTH WA 6872 Phone 61 8 9380 8400 Fax 61 8 9380 8499 [email protected] www.bdo.com.au

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ABN 79 112 284 787

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CI RESOURCES LIMITED

Directors’ Responsibility for the Financial Report and AASB 124 Remuneration Disclosures Contained in the Directors Report

We have audited the accompanying financial report of CI Resources Limited, which comprises the balance sheet as at 31 December 2007, and the income statement, statement of changes in equity and cash flow statement for the period ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration.

We have also audited the remuneration disclosures contained in the directors’ report. As permitted by the Corporations Regulations 2001, the Company has disclosed information about the remuneration of directors and executives (“remuneration disclosures”), required by Accounting Standard AASB 124 Related Party Disclosures, under the heading “Remuneration Report” in pages 9 – 12 of the directors’ report and not in the financial report.

The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001 . This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards.

Auditor’s Responsibility

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

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

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

BDO Kendalls is a national association of separate partnerships and entities

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Independence

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

Qualification

Limitation of Scope – Xi Feng International Pte Ltd

The group, through its controlled entity Xi Feng International Pte Ltd, maintains an investment of 32% in Guizhou Taingfeng Chem-Phos Co Ltd, an associated entity. The accounts of the associated entity were qualified due to their auditors being unable to satisfy themselves as to the accuracy of the balance of a long term equity investment it maintains, as they were not supplied with financial statements of the investee to support the balance.

As a result, any change in this long term equity investment balance could ultimately result in a change in the equity accounted investment and profit and loss of the controlled entity.

Given this limitation of scope, we are unable to conclude on the financial effect, if any, on the carrying value of the equity associated investment in the consolidated accounts or its commensurate effect on the consolidated profit and loss.

Limitation of Scope – Phosphate Resources Limited

The company maintains an investment of 38% in Phosphate Resources Limited. The group has equity accounted this investment in the consolidated financial statements.

The accounts at 31 December 2007 of Phosphate Resources Limited were unaudited, and as such BDO were unable to satisfy ourselves as to their accuracy via alternative audit procedures.

Given this limitation of scope, we are unable to conclude on the accuracy and financial effect, if any, on the carrying value of the equity accounted investment in the consolidated accounts or its commensurate effect on the consolidated profit and loss.

Inability to Form an Opinion – Impairment of Investment

In January 2008 the company was informed that the Qingzen City Environmental Protection Court had identified pollutants being discharged from the gypsum dump at the Pingba plant in China. An order requiring the plant to cease operations by March 31 2008 if action is not taken to prevent the discharge was issued.

The effect that the Pingba plant closure will have on impairing the carrying value of the investment held in Guizhou Taingfeng Chem-Phos Co Ltd, an associate of a CI Resources Limited subsidiary, Xi Feng International Pt Ltd, is not yet able to be quantified.

As such BDO is not able to conclude on the carrying value of the equity accounted investment in the consolidated accounts or its commensurate effect on the consolidated profit and loss.

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Qualified Auditor’s Opinion

In our opinion except for the matters referred to above in the qualification paragraph:

(a) the financial report of CI Resources Limited is in accordance with the Corporations Act 2001 , including:
(i) giving a true and fair view of the company’s and consolidated entity’s financial position as at 31 December 2007 and of their performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001 ; and
(b) the consolidated financial statements and notes also complies with International Financial Reporting Standards as disclosed in Note 1.

BDO Kendalls Audit & Assurance (WA) Pty Ltd

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BG McVeigh Director

Perth, Western Australia Dated this 27[th] day of March 2008

AI assistant

PRL GLOBAL LTD — Annual Report 2007

65611_rns_2008-03-27_9b3a290a-3a6a-48b1-94e6-5808611974f3.pdf

CI Resources Limited

Financial Report 31 December 2007

CI Resources Limited ACN 006 788 754

CI RESOURCES LIMITED

Corporate directory

Directors

Stock exchange listings

Principal registered office in Australia

Secretaries

Share register

Auditor

Solicitors

Bankers

CI RESOURCES LIMITED

Directors’ report

Directors

Principal activities

Dividends

Review of operations

Directors’ report

Review of operations (continued)

Financial Position

Phosphate Resources Limited

Xi Feng International Pte Ltd

Significant changes in the state of affairs

Directors’ report

Significant changes in the state of affairs (continued)

Matters subsequent to the end of the financial year

Likely developments and expected results of operations

Environmental regulation

Information on directors

MR CLIVE BROWN Chairman – Non-executive

Experience and expertise

Other directorships

CI RESOURCES LIMITED

Directors’ report

Information on directors (continued)

MR ANTHONY BRENNAN LLB GDipLegPrac MAICD Director – Non-executive

Experience and expertise

Other directorships

DATO DR MOHAMAD HASHIM BIN AHMAD TAJUDIN DPMP, PJK, PhD, MSc, BSc Director – Nonexecutive

Experience and expertise

Other directorships

MR LIP SIN TEE Director – Non-executive Experience and expertise

Directors’ report

Information on directors (continued)

Other directorships

Company secretaries

DESMOND KELLY BComm, CPA, MAICD Company Secretary

JANELLE BURNS Bbus (Acc/Law) Company Secretary

Directors’ interests in shares and options

Meetings of directors

CI RESOURCES LIMITED

Directors’ report

Retirement, election and continuation in office of directors

Remuneration report

Non-executive directors

Directors’ fees

CI RESOURCES LIMITED

Directors’ report

Remuneration report (continued)

Retirement allowances for directors

B Details of remuneration (audited)

Directors’ report

Remuneration report (continued)

2007

2006

C Service Agreements (audited)

Mosman Management Pty Ltd, Company Secretaries

D Share-based compensation (audited)

E Additional information (unaudited)

CI RESOURCES LIMITED

Directors’ report

Remuneration report (continued)

Loans to directors and executives

Shares under option

Shares issued on the exercise of options

PRL GLOBAL LTD Annual Report 2007