PRL GLOBAL LTD — Annual Report 2010

Aug 31, 2010

Appendix 4E Preliminary Final Report 30 June 2010

CI Resources Limited ACN 006 788 754

APPENDIX 4E: PRELIMINARY FINAL REPORT

2010

RESULTS FOR ANNOUNCEMENT TO THE MARKET

This Preliminary Final Report is provided to the Australian Securities Exchange (ASX) under Listing Rule 4.3A

Current reporting period: 30 June 2010

Previous corresponding period: 30 June 2009

For and on behalf of the directors

Mr David Somerville Chairman

Dated: 31 August 2010

RESULTS FOR ANNOUNCEMENT TO THE MARKET

Revenue and net profit		AUD
		$’000’s
Revenue from ordinary activities	up 11,330% to	20,067
Profit from ordinary activities after tax
attributable to members	down 90.67% to		1,644
Net profit for the period attributable
to members	up 90.67% to	1,644

Dividends

The directors of the Company have resolved to pay a final dividend to eligible shareholders of 2 cents per share. Relevant dates are as shown below:

Record date	9 September 2010
Payment date	23 September 2010
Despatch date	23 September 2010
There is no dividend	reinvestment plan.

1

COMMENTARY ON RESULTS AND OTHER SIGNIFICANT INFORMATION

Commentary

The Preliminary Final Report includes the results of CI Resources Limited (“Company” or “CI Resources”) and the Consolidated Entity (“Group”) which includes the Company’s subsidiaries Xi Feng International Pte Ltd (“Xi Feng”) and Phosphate Resources Limited (“PRL”).

The Company previously equity accounted the results of PRL, but a further acquisition of 3% of the shares in PRL on 1 April 2010 has lead to a controlling interest and thus the subsidiary is now consolidated into the Group results.

The Consolidated Entity, which combines 9 months of equity accounted results and 3 months of consolidated results is reporting a profit of $2,083,377 for the year ended 30 June 2010.

Review of operations

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, having increased its holding to 44.74%.

The Company is represented on the Board of PRL by Mr Tee Lip Sin, Mr Phuar Kong Seng and Mr Phua Siak Yeong.

PRL reported a post-tax profit of $3.18 million for the year ended 30 June 2010 and has paid two dividends during this time. The Company received a total dividend of $2,577,790.

Xi Feng International Pte Ltd

CI Resources holds a 100% interest in Xi Feng, which currently has impaired all its holdings to nil. The Directors are hopeful of recovering some of these investments.

Subsequent Events

As previously disclosed PRL has continued over a protracted period to seek approval from the Commonwealth to obtain more land for exploration and mining on Christmas Island which would have extended the mine life for PRL.

As advised to the ASX by announcement on the 19[th] July, 2010, on the 16[th] July, 2010 the Commonwealth Minister for Environment, Heritage and the Arts advised that he has refused PRL’s application extensions to its mining tenements. PRL’s current mining lease tenure until 4 February 2019 over 2054 heactares is unaffected by the decision.

Significant changes in the state of affairs

1. On 19 October 2009 the Company announced that it would be receiving a dividend from PRL of $1.00 per share.

2. On 8 January 2010 the Company announced the resignation of a director, Mr Willy Teo.

3. On 2 April 2010 the Company announced that it had used the creep provisions of the Corporations Act 2001 to increase its holding in PRL by 102,300 shares. The Company now holds 44.73% of the issued capital of PRL and is considered to hold a controlling interest in the PRL Group.

2

1. On 29 June 2010 the Company announced it had received an interim dividend from PRL of $0.75 per share.

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

Net tangible asset backing

	30 June 2010 $ 30 June 2009 $
Net assets _Less_intangible assets Net tangible assets of the company Fully paid ordinary shares on issue at balance date Net tangible asset backing per issued ordinary share as at balance date Earnings per share Basic earnings/(loss) per share (cents)	73,911,277 31,708,172 - -
	73,911,277 31,708,172 72,874,102 72,874,102 $1.01 $0.43 2.86 24.19

Audit details

The financial statements of CI Resources are currently in the process of being audited. It is expected that the audit report will include a qualification in relation to the uncertainty of the value of the company’s investment in Xifeng International Pte Ltd as this company does not get audited in accordance with International Audit and Accounting Standards.

3

CI RESOURCES LIMITED

Statement of Financial Performance For the financial year ended 30 June 2010

Notes	Consolidated 2010 $ 2009 $
Revenue from continuing operations 2 Other income Share of net profits in associates Cost of sales 3 Other expenses 3 Finance costs Profit before income tax Income tax expense Profit after income tax Loss/(Profit) attributable to minority equity interests Profit attributable to members of CI Resources Limited Basic and diluted earnings/(loss) per share 4	20,067,250 175,573 2,199,108 - 996,125 19,976,347 (14,223,250) - (6,057,606) (3,671,699) (150,750) -
	2,830,877 16,480,222 (747,500) -
	2,083,377 16,480,222 (439,673) 1,151,103
	1,643,704 17,631,324
	Cents 2.86 Cents 24.19

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

4

CI RESOURCES LIMITED

Statement of Financial Position As at 30 June 2010

Notes	Consolidated 30 June 2010 $ 30 June 2009 $ 28,521,823 6,738,207 20,916,458 10,166,000 17,154 - 59,604,281 6,755,361 22,842,000 6,515,000 - - 10,860,000 5,347,000 - - - 25,076,421 45,564,000 25,076,421 108,808,281 31,831,782 7,931,705 1,711,000 130,000 123,610 - - 9,772,705 123,610 14,465,299 1,954,000 4,705,000 - - - 21,124,299 -
Current assets Cash and cash equivalents 5 Trade and other receivables Inventories 6 7 Total current assets Non-current assets Term deposits Deferred tax assets 8 9 Plant & equipment Intangible assets – mine properties Investments accounted for using the Equity method 11 Total non-current assets Total assets Current liabilities Trade and other payables Borrowings Tax liability 13 14 15 Total current liabilities Non-current liabilities Payables Borrowings Tax liability 16 17 18 Total non-current liabilities Total liabilities Net assets Equity Contributed equity 19 Reserves 20 Accumulated profits/(losses) Dividends paid – current year 21 Non-controlling interest Total equity
	30,897,005 123,610 73,911,277 31,708,172 17,970,336 17,970,336 332,248 363,967 15,017,573 (6,299,872) 13,373,869 - 27,020,285 31,708,172 46,890,992 - 73,911,277 31,708,172

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

5

CI RESOURCES LIMITED

Statements of recognised income and expense

For the financial year ended 30 June 2010

	Consolidated 2010 $ 2009 $
Total equity at the beginning of the financial year Translation of foreign entities and associates Dividends paid Total income and expense recognised in equity Profit/(loss) for the year Movement on non-controlling interest Total recognised income and expense for the year Total equity at the end of the financial year	31,708,172 14,698,164 (31,719) (6,299,872) 529,787 -
	(6,331,591) 529,787
	1,643,704 46,890,992 17,631,324 (1,151,103)
	73,911,277 17,010,008
	73,911,277 31,708,172

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

6

CI RESOURCES LIMITED

Cash flow Statements For the financial year ended 30 June 2010

Notes	Consolidated 2010 $ 2009 $
Cash flows from operating activities Receipts from customers Payments to suppliers and employees (inclusive of goods and services tax) Dividends received Dividends paid Interest received Net cash inflow from operating activities Cash flows from investing activities Payments for investments Net cash (outflow) from investing activities Cash flows from financing activities Borrowings Repayment of borrowings Net cash (outflow) from financing activities Net decrease in cash and cash equivalents held Cash and cash equivalents at the beginning of the financial year Cash acquired on acquisition of Phosphate Resources Limited Foreign exchange Cash and cash equivalents at the end of the financial year 5	8,132,203 (9,823,643) (716,925) 1,429,180 3,986,463 (7,448,482) - 408,903 147,617
	(7,301,839) 3,417,155
	(1,432,200) (1,766,500) - -
	(23,677,324) (1,766,500)
	1,954,000 (2,715,281) - -
	(761,281) -
	(9,495,320) 1,650,655 6,738,207 5,059,596 31,278,936 - - 27,956
	28,521,823 6,738,207

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

7

CI RESOURCES LIMITED

Notes to the financial statements For the financial year ended 30 June 2010

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 financial year ended 30 June 2010, 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 entities. 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).

	Consolidated 2010 $ 2009 $
Note 2. Revenue Revenue from continuing operations Sales Provision of services Interest received Net Foreign exchange gains Other income	17,609,750 2,255,750 201,750 - - - - 147,617 27,956 -
	20,067,250 175,573

Note 3. Expenses

Profit/(Loss) before income tax includes the following expenses:

Cost of sales
Production costs	8,970,500	-
Shipping & marketing	4,469,250	-
Depreciation	783,500	-
Other expenses
Provision for impairment	1,852,000	3,013,059

8

CI RESOURCES LIMITED

Notes to the financial statements For the financial year ended 30 June 2010

Note 4. Earnings per share

		2010 Cents
Basic earnings per share		2.68 2010 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
		2010 $
Profit used in calculating basic and diluted losses per share Net profit		2,083,377
		2009 Cents
Basic earnings per share		24.19 2009 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
		2009 $
Profit used in calculating basic and diluted losses per share Net profit	30 June $	17,631,324
		Consolidated 2010 30 June 2009 $
Note 5. Current assets – Cash and cash equivalents Cash at bank and on hand Deposits at call	26,423,754 4,721,285 2,098,069 2,016,922
	28,521,823 6,738,207

9

CI RESOURCES LIMITED

Notes to the financial statements For the financial year ended 30 June 2010

	Consolidated 30 June 2010 $ 30 June 2009 $
Note 6. Current assets – Trade and other receivables Debtors Income tax Forward exchange contracts Prepayments Note 7. Current assets – Inventories Consumables Finished goods Note 8. Non-current assets – Receivables Term deposits Note 9. Non-current assets – Deferred tax assets Deferred tax assets	18,506,523 (3,944,000) 5,556,000 797,935 17,154 - - -
	20,916,458 17,154
	2,565,000 7,601,000 - -
	10,166,000 -
	22,482,000 -
	6,515,000 -

Note 10. Non-current assets – Investments accounted for using the equity method

Prior to 1 April 2010 the Company had a 41.74% interest in the ordinary shares of Phosphate Resources Limited which operates a phosphate mine on Christmas Island. Post 1 April the Company increased its holding to 44.73% and is now considered to have a controlling interest.

(a) Associated companies (Note 13) Phosphate Resources Limited (b) Reconciliation At the beginning of the year Share of associated company’s profit/(loss) Guizhou Tianfeng Chem-Phos Company _Less:_Minority interest Phosphate Resources Limited Equity accounted dividends Increase in shareholding – Phosphate Resources Impaired investment Foreign currency adjustments Re-measurement of equity interest on acquisition of controlling interest in PRL	- 25,076,421
	25,076,421 9,808,906 - - - - 996,125 19,976,347 (1,429,180) (3,986,463) 1,432,200 1,766,500 - (2,488,869) (26,075,366) -
	- 25,076,421

10

CI RESOURCES LIMITED

Notes to the financial statements For the financial year ended 30 June 2010

					Consolidated	Consolidated
				30 June	2010	30 June 2009
				$		$
Note 11. Investments in associates
(a) Carrying amounts
Information relating to associates is set out below:
Name of company	Principal activity	Ownership interest
Unlisted
Phosphate Resources
Limited1	Mining	44.74%	(2009: 41.74%)		-	25,076,421

1 The above associate is incorporated in Australia

(b) Movements in carrying amounts

Phosphate Resources Limited	Consolidated 30 June 2010 $ 30 June 2009 $
Carrying amount at the beginning of the financial year Increase in shareholding Share of profits/(losses) after income tax Equity accounted dividends Re-measurement of equity interest on acquisition of controlling interest in PRL Carrying amount at the end of the financial year (c) Share of associates profits or losses Phosphate Resources Limited Profit after income tax	25,076,421 7,320,037 1,432,200 1,766,500 996,125 19,976,347 (1,429,180) (26,075,366) (3,986,463) -
	- 25,076,421
	996,125 19,976,347

Note 12. Controlled entities

CI Resources Limited owns 100% of Xi Feng International Pte Ltd which is incorporated in Singapore and 44.73% of Phosphate Resources Limited which is incorporated in Australia. The voting power in respect to Phosphate Resources is in proportion to ownership.

Note 13. Current liabilities – Trade and other payables

Trade payables Other payables Note 14. Current liabilities – Borrowings Other loans Lease liabilities	5,557,705 63,554 2,374,000 60,056
	7,931,705 123,610
	526,000 - 1,185,000 -
	1,711,000 -

Note 14. Current liabilities – Borrowings

11

CI RESOURCES LIMITED

Notes to the financial statements For the financial year ended 30 June 2010

		Consolidated	Consolidated
30	June	2010	30 June 2009
	$		$

Note 15. Current liabilities – Tax liability

Tax payable Note 16. Non-current liabilities – Payables Provision for redundancy Provision for employee entitlements Provision for restoration Loans from associates	130,000 -
	5,349,000 2,164,000 6,904,000 - 48,299 -
	14,465,299 -

Note 16. Non-current liabilities – Payables

Note 17. Non-current liabilities – Borrowings

Lease liability

Lease liability Note 18. Non-current liabilities – Tax liability Deferred tax liability Note 19. Contributed equity (a) Share capital	1,954,000 -
	4,705,000 -
	Number of shares $
Ordinary shares – fully paid	72,874,102 17,970,336

(b) Movements in ordinary share capital

(b) Movements in ordinary share capital
Date Details	Number of shares Issue price $	$
1 July 2008 Opening balance 30 June 2009 Closing balance 30 June 2010 Closing balance	72,874,102 72,874,102 **72,874,102 **	17,970,336
		17,970,336
		17,970,336

(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.

12

CI RESOURCES LIMITED

Notes to the financial statements For the financial year ended 30 June 2010

		Consolidated	Consolidated
	30 June	2010	30 June 2009
	$		$
Note 20. Reserves
Foreign exchange translation reserve	332,248		363,967

Foreign currency translation reserve

Exchange differences arising on translation of the foreign controlled entity are taken to the foreign currency translation reserve. 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 period	363,967 (165,820) (31,719) 529,787
	332,248 363,967

Note 21. Accumulated losses

Accumulated losses at the beginning of the year Net profit attributable to members of CI Resources Limited Accumulated profits/(losses) at the end of the financial year	13,373,869 (4,257,455) 1,643,704 17,631,324
	15,017,573 13,373,869

Note 22. Events occurring after reporting date

As previously disclosed PRL has continued over a protracted period to seek approval from the Commonwealth to obtain more land for exploration and mining on Christmas Island which would have extended the mine life for PRL.

As advised to the ASX by announcement on the 19[th] July, 2010, on the 16[th] July, 2010 the Commonwealth Minister for Environment, Heritage and the Arts advised that he has refused PRL’s application extensions to its mining tenements. PRL’s current mining lease tenure until 4 February 2019 over 2054 heactares is unaffected by the decision.

Other than that shown above, there are no matters or circumstances that have arisen since 30 June 2010 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.

13