PRL GLOBAL LTD - Annual Report 2011

CI Resources Limited

Financial Report For the financial year ended 30 June 2011

Annual Report – 30 June 2011

CI Resources Limited ACN 006 788 754

Contents	Page
Chairman’s letter	3
Corporate directory	5
Directors' report	6
Auditor’s independence declaration	21
Corporate Governance Disclosures	22
Financial report	23
Directors' declaration	71
Independent audit report to the members	72
ASX additional information	74

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Chairman’s Letter

Dear Shareholder,

I am pleased to provide the Annual Report for CI Resources Limited (“CII” or “the Company”) for the year ended 30 June 2011 for the operations of the company and its principal subsidiary Phosphate Resources Limited (PRL).

The reported Statement of Consolidated Income (Profit and Loss) reflects a Net Profit attributable to members of the company of AUD $ 4.534 M. This equates to an Earnings Per Share of 6.2 cents.

As reported in our Annual Report last year, the company is now is focussed on the activities of its subsidiary and alternative opportunities for the companies, both through diversification of existing activities and extension of value into current industry sectors.

The company has made further acquisitions of shares in PRL during the year, under the creep provisions of the Corporations Act, 2001 bringing its holding in PRL to 49.93% as at 30 June 2011. On the 4th July, 2011, the Company made a further share acquisitions in PRL taking its holding to 50.47%.

During the year the company’s 100% subsidiary, Xi Feng,International Pte Ltd, divested its interest in the Hua Li mining operations in China. The company hold’s no other investments.

Phosphate Resources Limited

As reported by the Chairman of PRL;

Phosphate Resources Limited has ended the 30 June 2011 financial year with a credible performance after facing the challenges with our phosphate mining operations of unseasonal weather, regulatory malaise and an unfavourable currency exchange. .

PRL has continued to record a reasonable profit level in the face of continuing economic difficulties particularly the high exchange rate which is being sustained by an overall weak global economy.

With one exception, our outlook for future years looks sound as we bed down our diversified businesses in Malaysia and Christmas Island.

The primary area of uncertainty concerns the medium future of our mining operations on Christmas Island beyond the next five years.

And as confirmed by the Managing Director of PRL; regrettably, little progress has been made in finalising our access to resources within our lease area.

We remain hopeful that the bureaucratic resistance to our continued operations on Christmas Island will eventually be overcome and we will be able to sustain the operation until 2019 being the life of the current lease.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Chairman’s Letter

Acquisition of Cheekah-Kemayan Plantations Sdn Bhd

During the year, PRL completed an acquisition of the Cheekah-Kemayan palm oil mill and plantation. After approval by CII Shareholders at the EGM of the company, the acquisition proceeded and has seen the return of an after tax profit of $888,000 in its first two months of operations.

Both the Boards of PRL and CII are pleased that the company is performing above its budget and are confident that the outlook for palm oil remains robust.

The Board of CII is supportive of the activities of PRL, in considering new business opportunities, with the clear intent to increase value to shareholders through profits and capital growth for both the short term and long term of the Company.

As Chairman of CII, I would like to thank the Board of CII for their efforts over the year, and to recognise and thank the Board and management of PRL for their dedication and performance over the year.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Corporate directory

Directors

Mr David Somerville – Chairman

Stock exchange listings

CI Resources Limited shares are listed on the Australian Securities Exchange

Mr Tee Lip Sin

Ordinary fully paid shares (ASX code CII)

Mr Tee Lip Jen (Appointed 18/03/2011)

Principal registered office in Australia

Mr Phuar Kong Seng

884, Canning Highway Applecross WA 6153

Mr Phua Siak Yeong (Resigned 15/03/2011)

Prof. Anthony Brennan

Mr Adrian Gurgone (Appointed 18/03/2011)

Telephone +61 8 6310 5040 Email [email protected] Website www.ciresources.com.au

Secretaries

Ms Elizabeth Lee (Appointed 08/02/2011) Mr Desmond Kelly (Resigned 03/03/2011) Ms Janelle Burns (Resigned 03/03/2011)

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

Auditor

Ernst & Young 11 Mounts Bay Road Perth WA 6000

Solicitors

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

Bankers

National Australia Bank 1238 Hay Street West Perth WA 6005

Annual Report – 30 June 2011

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 financial year ended 30 June 2011.

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:

Mr David Somerville

Mr Tee Lip Sin Mr Phuar Kong Seng

Prof. Anthony Brennan

Mr Tee Lip Jen (Appointed 18/03/2011) Adrian Gurgone (Appointed 18/03/2011) Mr Phua Siak Yeong (Resigned 15/03/2011)

Principal activities

During the year, the principal activities of entities within the consolidated entity were:

mining, processing and sale of phosphate rock, phosphate dust and chalk; and
providing earthmoving, fuel pilotage, maintenance and stevedoring services to other Christmas Island organizations.
running a palm oil estate, processing and sale of palm oil products.

Dividends

On 1 June 2011 an interim fully franked dividend of 1 cent per share was paid to all shareholders holding shares on the record date of 18 May 2011.

No final dividend has been declared or paid.

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:
	Results 2011 **$’000s **
Revenue from continuing operations Profit before income tax expense Income tax expense Profit attributable to members of CI Resources Limited	106,754
	13,663
	(6,433)
	4,534

Annual Report – 30 June 2011

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 $30.5M (2010: $28.5M) and net assets of $76.8M (2010: $73.9M).

Total liabilities amounted to $76.9M (2010: $34.8M), being trade and other creditors, borrowings and taxation liabilities.

Phosphate Resources Limited

During the financial year CI Resources continued to acquire shares in Phosphate Resources Limited (PRL). In Nov 2010, CI Resources acquired a further 102,150 shares under the Creep provisions of the Corporations Act 2001, and a further 75,950 shares in June 2011 such that as at 30 June 2011 the company’s PRL holding was 49.93% of total voting issued capital.

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

PRL reported a post-tax profit of $ 10.1 M for the year ended 30 June 2011, and has paid two dividends during this period. The Company received a total dividend of $0.8 M from PRL during the year.

Xi Feng International Pte Ltd

CI Resources holds a 100% interest in Xi Feng, during the year Xi Feng sold its interest in the Hua Li mining operations in China. The company hold’s no other investments. See Note 37.

Earnings per share Basic earnings per share	2011 Cents 2010 Cents
	6.2 7.9

Significant changes in the state of affairs

On 1 May 2011 PRL acquired Cheekah-Kemayan Plantations Sdn Bhd and operating palm oil estate and crude palm oil milling facility.

In March 2011 the Company disposed of all its interest in the Hua Li mining operation in China.

There was no other significant change in the state of affairs of the company or its controlled entities during the financial year other than that referred to in the financial statements or notes thereto.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Directors’ report

Matters subsequent to the end of the financial year

On the 4 July the company completed the purchase of additional shares in PRL to bring its total holding in PRL to 50.49%.

Apart from the matters set out above, no other matter or circumstance has arisen since 30 June 2011 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

The Directors note that current strategies suggest that the 2011 financial year will see the Consolidated Entity remain profitable and in line with the performance of the current year.

Further information on likely developments in the operations of the consolidated entity and the expected results of those operations have not been included in this report because the Directors believe that it would be likely to result in unreasonable prejudice to the Company.

Environmental regulation

The Consolidated Entity’s operations are subject to environmental regulations in relation to its mining and exploration activities on Christmas Island. Licenses issue by the Commonwealth Government of Australia include general environmental conditions, air pollution control conditions and water control conditions. These conditions regulate the management of mining waste and restoration, dust, liquid chemical storage and water monitoring.

There have been no significant known breaches of the Consolidated Entity’s licences.

Rounding

The amounts contained in this report and in the financial report have been rounded to the nearest $1,000 (where rounding is applicable) under the option available to the Company under the ASIC Class Order 98/0100 . The Company is an entity to which the Class Order applies.

Information on directors

MR DAVID SOMERVILLE Chairman – Non-executive

Experience and expertise

David Somerville holds a Bachelor of Business degree from Curtin University and a Master of Business Administration from Deakin University, he is an Associate member of CPA Australia and a Fellow of the Australian Institute of Management. Mr Somerville has an accounting background having been a senior partner in a large Western Australian accounting practice, before establishing a financial services company which listed on the Australian Securities Exchange in 2007. He has over 20 years experience in a corporate capacity across a number of companies and a number of industry sectors including financial, resources and property development.

Other directorships

Mr Somerville is also a director of Questus Limited, an ASX listed company. He held no other directorships of ASX listed companies during the last three years.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Directors’ report

Information on directors (continued)

MR TEE LIP SIN 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.

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

MR TEE LIP JEN Director – Non-executive

Experience and expertise

Mr Tee holds a Bachelor of Mechanical Engineering from the Royal Melbourne Institute of Technology (RMIT). Since graduating from Australia, Lip Jen started his career as a Process Engineer in the manufacturing industry for 2 years before expanding his experinece as a Project Engineer in a refinery plant specialising in producing downstream palm oil products.

He is currently the Assistant Chief Engineer in charge of overseeing engineering and production activities in seven palm oil mills with an estimated production output of 350,000 metric tonnes of crude palm oil per year. Apart from managing the daily activities in palm oil mills, he is also in charge of overseeing three palm oil plantation estates located in Negeri Sembilan, Malaysia with an estimated acreage of 3,400 acres.

Other directorships

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

MR PHUAR KONG SENG Director – Non-executive

Experience and expertise

Mr Phuar Kong Seng is an entrepreneur and businessman with many years of experience in running successful businesses. He has worked in the fertiliser and chemical industries since 1979 covering a spectrum of responsibilities ranging from accounts, sale, marketing and management.

Other directorships

Mr Phuar Kong Seng held no other directorships of ASX listed companies during the last three years.

MR PHUA SIAK YEONG Director – Non-executive (resigned 15 March 2011) Experience and expertise

Mr Phua Siak Yeong graduated from the University Malaya with a first class honours degree in Chemical Engineering. He obtained his MBA from the same university in 1990. He worked at Esso Singapore after graduation and then as a Marketing Executive for Bulk Chemicals Sdn Bhd from 1979 to 1983. He joined the Hong Leong Group Malaysia in 1983, involved in motorcycle manufacturing. From 1994 to 1996 Mr Phua was posted to China to manage a motorcycle manufacturing joint venture. He returned to Malaysia in 1997 to head the motorcycle research and development company in Hong Leong Group. In 2002 he was transferred to MZ Motorrad Sdn Bhd to develop the MZ brand in Malaysia. Mr Phua retired in 2008 from Hong Leong Group and was employed by Chin Yang Hydro Power Co. in China, before becoming an Executive Director of Phosphate Resources Limited in 2010.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Directors’ report

Other directorships

Mr Phua held no other directorships of ASX listed companies during the last three years. Information on directors (continued)

PROF. ANTHONY BRENNAN Director – Non-executive

Experience and expertise

Prof. Brennan holds a Bachelor of Laws degree from the University of Queensland, a Graduate Diploma in Legal Practice and has practised 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. He 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.

Other directorships

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

MR ADRIAN GURGONE Director – Non-executive Experience and expertise

Mr Gurgone is an experienced Chartered Accountant and MBA with significant experience in reporting to boards. In senior roles with Deloitte Consulting and other top-tier consulting firms, he has advised multinational and midcap organisations across a variety of industries globally. His experience encompasses financial and business analysis, risk management and corporate governance in a variety of industries including Mining and Resources, Education, Telcommunications, Services and Materials. Adrian has also asissted several boards in Australia and overseas in improving organisational performance and in capital allocation.

Other directorships

Mr Adrian Gurgone held no other directorships of ASX listed companies during the last three years.

Company secretaries

ELIZABETH LEE , – B Bus, FCIS, Grad.Dip. Corp. Gov. ASX Listed Entities Company Secretary (Appointed 8 February 2011)

Elizabeth has over 14 years experience in the areas of corporate governance and company secretarial functions. Prior to joining Questus, Elizabeth held company secretarial positions for Phosphate Resources Limited, Macmahon Holdings Limited, Corporate Compliance Partners and Lend Lease Primelife Limited. Elizabeth also performed contract company secretarial roles with Macquarie Bank Limited and Austock Group Limited. Elizabeth holds a Bachelor of Business majoring in Finance and Business Law from Edith Cowan University, a Graduate Diploma in Corporate Governance from Chartered Secretaries Australia, a Graduate Diploma in Corporate governance for ASX Listed Entities from Kaplan Financial Institute and is a Fellow member of the Chartered Secretaries in Australia.

DESMOND KELLY BComm, CPA, MAICD Company Secretary (resigned 3 March 2011)

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.

JANELLE BURNS Bbus (Acc/Law) Company Secretary(resigned 3 March 2011)

Ms Burns has 20 years experience in the resources sector. She was previously the Chief Group Accountant for Gallery Gold Limited

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Directors’ report

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 David Somerville	-	-	-	-
Mr Tee Lip Sin	-	13,779,876	-	-
Mr Tee Lip Jen	-	-	-	-
Mr Phuar Kong Seng	3,022,000	7,287,410	-	-
Mr Phua Siak Yeong	-	-	-	-
Prof. Anthony Brennan	-	-	-	-
Mr Adrian Gurgone	-	-	-	-

Meetings of directors

The number of meetings of the company’s board of directors held during the year ended 30 June 2011 and the number of meetings attended by each director were:

	Full meetings of Directors	Full meetings of Directors
	Held	Attended
Mr David Somerville	7	7
Mr Tee Lip Sin	7	7
Mr Tee Lip Jen	2	1
Mr Phuar Kong Seng	7	7
Mr Phua Siak Yeong	5	4
Prof. Anthony Brennan	7	7
Mr Adrian Gurgone	2	2

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

Retirement, election and continuation in office of directors

In accordance with the Constitution Mr Tee Lip Sin and Mr Phuar Kong Seng will retire, in rotation, as directors at the Annual General Meeting to be held in November 2011 and, being eligible, will offer themselves for re-election. Mr Tee Lip Jen and Mr Adrian Gurgone’s appointments will be put forward for ratification.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Directors’ report

Remuneration report (Audited)

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

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

The information in this section has been audited as required by section 308(3c) of the Corporations Act 2001.

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

Aside from the discretionary bonus disclosed in the remuneration report, no other 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 as determined by comparison with companies of a similar size. The Chairman’s fees are determined independently to the fees of nonexecutive 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 $400,000.

Remuneration packages may contain the following key elements:

Director’s fees
Consultancy fees
Post employment benefits – superannuation
Performance bonuses
Other non-cash benefits

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.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Directors’ report

Remuneration report (Audited) (continued)

Executive remuneration

The objective of the Consolidated Entity’s executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns executive reward with achievement of strategic objectives and the creation of value for shareholders, and conforms with market best practice for delivery of reward. The Board ensures that executive reward satisfies the following key criteria for good reward governance practices:

competitiveness and reasonableness
acceptability to shareholders
performance linkage / alignment of executive compensation
transparency
capital management.

The Consolidated Entity has structured an executive remuneration framework that is market competitive and complimentary to the reward strategy of the organisation.

Alignment to shareholders’ interests:

focuses on exploration success as the creation of shareholder value and returns
attracts and retains high calibre executives.

Alignment to program participants’ interests:

rewards capability and experience
reflects competitive reward for contribution to growth in shareholder wealth
provides a clear structure for earning rewards
provides recognition for contribution.

The executive pay and reward framework has the following components:

Fixed remuneration (base salary, superannuation & other non-monetary benefits)
Variable Remuneration (incentives through participation in bonus arrangements)

The combination of these components comprises the executive’s total remuneration.

Fixed Remuneration

Base salary

Structured as a total employment cost package which may be delivered as a combination of cash and prescribed non-financial benefits at the executives’ discretion.

Executives are offered a competitive base pay that comprises the fixed component of pay and rewards. Base pay for senior executives is reviewed annually to ensure the executive’s pay is competitive with the market.

There Managing Director has a guaranteed base pay increase of 10% per annum.

Non-monetary benefits

Executives may receive benefits including memberships, car allowances and reasonable entertainment.

Retirement benefits
Directors and employees are permitted to nominate a superannuation fund of their choice to receive superannuation contributions.

Retirement allowances for directors

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

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Directors’ report

Remuneration report (Audited) (continued)

B Details of remuneration

During the financial year to 30 June 2011 the directors and key management personnel of the company were:

Directors of CI Resources Limited

Mr David Somerville – Non-executive Chairman

Mr Tee Lip Sin – Non-executive director Mr Tee Lip Jen – Non-executive director (appointed 18 March 2011) Mr Phuar Kong Seng – Non-executive director Mr Phua Siak Yeong – Non-executive director (resigned 15 March 2011) Prof. Anthony Brennan – Non-executive director

Mr Adrian Gurgone – Non-executive director (appointed 18 March 2011)

Directors of Phosphate Resources Limited

Mr Clive Brown – Non-executive Chairman

Mr Lai Ah Hong – Managing Director

Mr Chan Khye Meng – Non-executive director

Mr Cheng Hang – Non-executive director

Mr Phuar Kong Seng – Non-executive director Mr Tee Lip Sin – Non-executive director

Mr Phua Siak Yeong – Non-executive director

Other key management personnel of CI Resources Limited Ms Elizabeth Lee – Company Secretary (appointed 8 February 2011) Mr D J Kelly – Joint Company Secretary (resigned 3 March 2011) Ms J P Burns – Joint Company Secretary(resigned 3 March 2011)

Other key management personnel of Phosphate Resources Limited Mr Kevin Edwards – Company Secretary/Chief Operating Officer Mr Alfred Chong – Resident Manager/Subsidiary Director Mr Allan Robartson – Financial Controller

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Directors’ report

Remuneration report (Audited) (continued)

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

2011	Short-term benefits	Short-term benefits	Short-term benefits	Post- employment benefits
Name	Cash fees and consulting $	Bonus $	Non- monetary benefits $	Superannu- ation $	Total $	Performance related
Directors of CI Resources Limited Mr David Somerville 58,875 Mr Tee Lip Sin 22,500 Mr Tee Lip Jen - Mr Phuar Kong Seng 22,500 Mr Phua Siak Yeong 28,333 Prof. Anthony Brennan 65,769 Mr Adrian Gurgone 12,833 Directors of Phosphate Resources Limited Clive Brown 150,000 - Lai Ah Hong 409,510 73,750 Chan Khye Meng 75,000 - Cheng Hang 75,000 - Phuar Kong Seng 75,000 - Tee Lip Sin 75,000 - Phua Siak Yeong 149,402 9,640 Other key management personnel – CI Resources Limited Questus Administration Services Pty Ltd (Acctg and Secretarial) * 64,840 - Elizabeth Lee - - Mosman Management Pty Ltd 72,892 - (D Kelly & J Burns) Other key management personnel – Phosphate Resources Limited Kevin Edwards 224,060 55,470 Alfred Chong 217,009 54,920 Allan Robartson 158,855 41,190			4,411 4,411 1,470 4,411 3,308 4,411 1,470 - 38,992 - 7,070 - - - - - 11,293 18,079 16,447	6,331 16,500 53,159 8,250 8,250 - - 9,542 - - - - 29,912 22,005	63,286 26,911 1,470 26,911 31,641 76,511 14,303 166,500 575,411 83,250 90,320 75,000 75,000 168,584 64,840 - 72,892 290,823 319,920 238,497	- - - - - - - - 12.8% - - - - 5.7% - - - 19.1% 17.2% 17.3%
Total	1,957,378	234,970	115,773	153,949	2,462,070

David Somerville is a director of Questus Administration Services Pty Ltd

The non-monetary benefits include the provision of motor vehicles and Directors and Officers insurance.

The cash bonus is based on the results for the financial year ending 30 June 2010 and in accordance with a determination at the discretion of the Board of Directors. 100% of the total bonus was paid in the current financial year ending 30 June 2011.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Directors’ report

2010	Short-term benefits	Short-term benefits	Short-term benefits	Post- employment benefits
Name Cash fees and consulting $ Bonus $ Directors of CI Resources Limited David Somerville 49,811 - Mr Tee Lip Sin 30,000 - Mr Phuar Kong Seng 30,000 - Phua Siak Yeong 37,500 - Anthony Brennan 34,615 - Clive Brown 32,083 - Will Teo See Khiang 15,000 - Directors of Phosphate Resources Limited Clive Brown 37,500 - Lai Ah Hong 80,705 91,924 Willy Teo See Khiang - - Chan Khye Meng 18,750 - Cheng Hang 18,750 - Anthony Brennan - - Phuar Kong Seng 18,750 - Tee Lip Sin 18,750 - Phua Siak Yeong 8,541 - Other key management personnel – CI Resources Limited Mosman Management Pty Ltd 90,945 - (D Kelly & J Burns) Other key management personnel – Phosphate Resources Limited Kevin Edwards 53,755 77,615 Alfred Chong 53,631 76,838 Allan Robartson 38,078 57,628			Non- monetary benefits $ 3,293 3,293 3,293 3,293 1,372 1,921 1,647 - 7,692 - 585 4,129 - - - - 6,586 1,686 4,662 2,041	Superannu- ation $ - - - - 3,115 2,887 - 4,125 18,989 - 2,062 2,062 - - - 512 - - 14,351 10,528	Total $ 53,104 33,293 33,293 40,793 39,102 36,891 16,647 41,625 199,310 - 21,397 24,941 - 18,750 18,750 9,053 97,531 133,056 149,482 108,275	Performance related - - - - - - - - 46.1% - - - - - - - - 58.3% 51.4% 53.2%
Total	667,164	304,005	45,493	58,631	1,075,293

Remuneration amounts for directors and executives of Phosphate Resources represent the three months postacquisition, being 1 April to 30 June 2010.

The non-monetary benefits include the provision of motor vehicles and Directors and Officers insurance.

The Bonus is calculated based on 5% of the net profit after tax of PRL’s profit and before taking effect of movement in FX forward contracts and impairment of inter-company loans. The individual bonuses are then allocated to employees from the 5% pool at the discretion of the Directors.

There were no grants of options to any director or other key management personnel during financial year 2010 and 2011.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Directors’ report

Remuneration report (Audited) (continued)

Company’s Performance

Company’s share price performance

The Company’s share price performance shown in the below graph is a reflection of the Company’s performance during the year.

The graph below shows the Company’s share price performance during the financial year ended 30 June 2011.

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Profit/ (Loss) per share

Below is information on the Consolidated Entity’s profit/ (loss) per share for the previous four financial years and for the current year ended 30 June 2011.

	2011	2010	2009	2008	2007
Basic profit/(loss) per share (cents)	6.2	7.9	24.19	1.56	1.89

Awards

Aggregate cash bonuses of $234,970 were payable in relation to the 2010 financial year, 100% of which were vested and 0% forfeited. Of this, the total amount was paid during the 2011 financial year.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Directors’ report

Remuneration report (Audited) (continued)

C Service Agreements

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

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

Remuneration and other terms of employment for executive directors and other key management personnel are formalised in service agreements. These agreements have a fixed term of three years.

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

– Lai Ah Hong Managing Director (PRL)

Term of agreement – For a period of 3 years, expiring 31 March 2014. Payment of remainder of contract or 12 months, whichever is greater, for early termination.
Components encompass cash salary ($384,562) with provision for a 10% increase annually, superannuation and provision of a motor vehicle.
Leave provisions encompass 5 weeks annual leave, 2 weeks sick leave and 13 weeks long service leave after 10 years service.
Bonus payments as set by Board decision.

– Phua Siak Yeong Executive Director (PRL)

Term of agreement – For a period of 3 years, expiring 31 March 2013. Payment of 12 months salary for early termination.
Components encompass cash salary ($150,000) and superannuation.
Leave provisions encompass 5 weeks annual leave and 2 weeks sick leave.
Bonus payments as set by Board decision.

Kevin Edwards – Company Secretary/COO (PRL)

Term of agreement – For a period of 3 years, expiring 31 March 2014. Payment of remainder of contract or 12 months, whichever is greater, for early termination.
Components encompass cash salary ($235,300) with provision for a 5% increase annually and provision of a motor vehicle.
Leave provisions encompass 5 weeks annual leave, 2 weeks sick leave and 13 weeks long service leave after 10 years service.
Bonus payments as set by Board decision.

– Alfred Chong Resident Manager/Subsidiary Director (PRL)

Term of agreement – For a period of 3 years, expiring 31 March 2014. Payment of remainder of contract or 12 months, whichever is greater, for early termination.
Components encompass cash salary ($235,000) with provision for a 5% increase annually, superannuation and provision of a motor vehicle.
Leave provisions encompass 5 weeks annual leave, 2 weeks sick leave and 13 weeks long service leave after 10 years service.
Bonus payments as set by Board decision.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Directors’ report

Remuneration report (Audited) (continued)

Allan Robartson – Financial Controller (PRL)

Term of agreement – For a period of 3 years, expiring 31 March 2014. Payment of remainder of contract or 12 months, whichever is greater, for early termination.
Components encompass cash salary ($185,000) with provision for a 5% increase annually, superannuation and provision of a motor vehicle.
Leave provisions encompass 5 weeks annual leave, 2 weeks sick leave and 13 weeks long service leave after 10 years service.
Bonus payments as set by Board decision.
Questus Administration Services Pty Ltd Company Secretary and Accounting
Term of agreement – For a period of 3 years, expiring 8 June 2014.
Base fee of $6,600 per month for the provision of company secretarial services and an hourly rate of $180 per hour for additional work outside the scope of this contract.

D Share-based compensation

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

E Additional information

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.

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.

- End of Audited Remuneration Report –

Shares issued on the exercise of options

There were no options over ordinary shares and no ordinary shares of CI Resources Limited issued during the period ended 30 June 2011 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 .

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Directors’ report

Non-audit services

The following non-audit services were provided by the entity's auditor, Ernst & Young. The directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The nature and scope of each type of non-audit service provided means that auditor independence was not compromised.

Ernst & Young received or are due to receive the following amounts for the provision of non-audit services:

Ernst & Young received or are due to receive the following amounts for the provision of non-audit services: General Accounting Advice - CI Resources - Other members of the Group	2011 2010 - - 15,000 -

No non-audit services were provided by the Auditors during the year ended 30 June 2010.

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 21.

Auditor

Ernst & Young 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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D Somerville Chairman Perth, Western Australia

30 September 2011

Annual Report – 30 June 2011

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Auditor’s Independence Declaration to the Directors of CI Resources Limited

In relation to our audit of the financial report of CI Resources Limited for the year ended 30 June 2011, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.

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Ernst & Young

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R J Curtin Partner Perth 30 September 2011

Liability limited by a scheme approved under Professional Standards Legislation

RC:VP:CIRESOURCES:023

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	Three of the six board members are considered to be independent including the chairman 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 directingand managingthe 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 anysubstance to thisprocess.
8	8.1	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 will be sought where necessary.

Annual Report – 30 June 2011

CI Resources Limited

Financial report – For the financial year ended 30 June 2011

Contents Page
Financial report
Consolidated Statement of Comprehensive Income 24
Consolidated Statement of Financial Position 25
Consolidated Statement of Changes in Equity 26
Consolidated Statement of Cash Flows 27
Notes to the financial statements 28
Directors’ declaration 71
Independent audit report to the members 72

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

884 Canning Highway Applecross WA 6153

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 30 September 2011. 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 9364 5177 or e-mail [email protected]

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Consolidated of Statement Comprehensive Income For the financial year ended 30 June 2011

Notes Revenue from continuing operations 3a Cost of sales 3b Gross Profit Other income 3c Share of net profits in associates Net Gain on acquisition of Subsidiary Other expenses 3d Finance costs 3e Profit from continuing operations before income tax Income tax expense 4 Profit from continuing operations after income tax Discontinued operations Profit / (loss) from discontinued operations after income tax 37b Profit for the period after income tax Other comprehensive income Net currency translation differences Other comprehensive income for the year Total comprehensive income for the year Profit is attributable to: Non-controlling interest Members of CI Resources Limited Total comprehensive income for the year is attributable to: Non-controlling interest Members of CI Resources Limited Earnings per share for profit from continuing operations attributable to the ordinary equity holders of the parent Basic earnings per share Diluted earnings per share Earnings per share for profit attributable to the ordinary equity holders of the parent: Basic earnings per share Diluted earnings per share	Consolidated 2011 *$’000s* 2010 *$’000s* 106,754 20,401 (77,439) (13,921)
	29,315 6,480 1,857 1,024 - 1,749 - 1,649 (16,883) (2,652) (626) (151)
	13,663 8,099 (6,433) (1,432)
	7,230 6,667 1,555 (690)
	8,785 5,977 (278) -
	(278) -
	8,507 5,977 4,251 231 4,534 5,746
	8,785 5,977
	4,251 231 4,256 5,746
	8,507 5,977
	4.1 cents 7.9 cents 4.1 cents 7.9 cents 6.2 cents 8.8 cents 6.2 cents 8.8 cents

The above Consolidated Statement Comprehensive Income should be read in conjunction with the accompanying notes

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Consolidated Statement of Financial Position

As at 30 June 2011

Current assets Cash and cash equivalents 6 Trade and other receivables 7 Derivative financial assets 8 Inventories 9 Total current assets Non-current assets Other Financial Asset 10 Plant & equipment 11 Mine properties 12 Goodwill 13 Biological assets 14,36 Deferred tax assets 4 Total non-current assets Total assets Current liabilities Trade and other payables 17 Borrowings 18 Tax liability 4,19 Provisions 20 Total current liabilities Non-current liabilities Payables 21 Borrowings 22 Deferred tax liabilities 4 Provisions 23 Total non-current liabilities Total liabilities Net assets Equity Contributed equity 24 Reserves 25 Accumulated profits 26 Non-controlling interest Total equity	Consolidated 2011 *$’000s* 2010 *$’000s* 30,523 28,522 24,320 19,304 5,308 5,556 11,912 10,166
	72,063 63,548
	10,188 22,482 45,593 10,860 - 5,347 7,635 - 12,332 - 5,855 6,515
	81,603 45,204
	153,666 108,752
	12,247 5,558 6,536 1,711 2,836 4,074 2,765 2,374
	24,384 13,717
	- 48 23,996 1,954 12,034 4,705 16,468 14,417
	52,498 21,124
	76,882 34,841
	76,784 73,911
	17,970 17,970 1,673 364 13,996 12,820
	33,639 31,154 43,145 42,757
	76,784 73,911

The above Statement of Financial Position should be read in conjunction with the accompanying notes.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Consolidated Statements of changes in Equity For the year ended 30 June 2011

Consolidated 1 July 2010 Profit for the year Other comprehensive income for the year Total comprehensive income for the year Transactions with owners in their capacity as owners Acquisition of Minority Interest Dividends paid Non-controlling interest arising on acquisition of Phosphate Resources Limited 30 June 2011 1 July 2009 Profit for the year Other comprehensive income for the year Total comprehensive income for the year Transactions with owners in their capacity as owners Dividends paid Non-controlling interest arising on acquisition of Phosphate Resources Limited 30 June 2010	Contributed Equity *$’000s* Foreign currency translation Reserve *$’000s* Acquis- ition Reserve Retained earnings *$’000s* Owners of the Parent *$’000s* Non- controllin g Interest *$’000s* Total *$’000s* 17,970 364 - 12,820 31,154 42,757 73,911 - - - 4,534 4,534 4,251 8,785 - (278) - - (278) - (278)
	- (278) - 4,534 4,256 4,251 8,507
	- - 1,587 - 1,587 (3,863) (2,276) - - - (3,358) (3,358) - (3,358) - - - - - - -
	17,970 86 1,587 13,996 33,639 43,145 76,784
	17,970 364 - 13,374 31,708 - 31,708 - - - 5,746 5,746 231 5,977 - - - - - - -
	- - - 5,746 5,746 231 5,977
	- - - (6,300) (6,300) - (6,300) - - - - - 42,526 42,526
	17,970 364 - 12,820 31,154 42,757 73,911

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

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Consolidated Statement of Cash Flows For the financial year ended 30 June 2011

			Consolidated
	Notes
		2011	2010
		*$’000s*	*$’000s*
Cash flows from operating activities
Receipts from customers		101,568	17,770
Payments to suppliers and employees (inclusive of goods and services tax)		(86,168)	(8,334)
Interest received		1,928	409
Borrowing Costs		(26)	-
Income taxes paid		(8,058)	-
Net cash flows from/(used in) operating activities	33	9,244	9,845
Cash flows from investing activities
Movement in term deposits		12,294	(11,981)
Proceeds from Sale of Subsidiary	37d	3,080	-
Purchase of property, plant and equipment		(1,468)	-
Acquisition of Subsidiary net of Cash Acquired		(44,298)	-
Acquisition of Shares in Phosphate Resources Limited		(1,386)	-
Cash acquired on acquisition of Phosphate Resources Limited		-	26,714
Dividends received		1,154	1,429
Net cash flows from/(used in) investing activities		(30,624)	16,162
Cash flows from financing activities
Borrowings Net Movement		26,738	2,077
Dividends paid		(3,357)	(6,300)
Net cash flows from financing activities		23,381	(4,223)
Net decrease in cash and cash equivalents held		2,001	21,784
Cash and cash equivalents at the beginning of the financial year		28,522	6,738
Cash and cash equivalents at the end of the financial year	6	30,523	28,522

The above Statement of Cash Flows should be read in conjunction with the accompanying notes.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

1. Corporate Information

This financial report of CI Resources Limited (‘company’) for the year ended 30 June 2011 comprises the Company and its subsidiaries (‘Group’). The financial report of CI Resources Limited for the year ended 30 June 2011 was authorised for issue in accordance with a resolution of the directors on 30 September 2011.

The separate financial statements of the parent entity, CI Resources Limited, have not been presented within this financial report as permitted by the Corporations Act 2001.

CI Resources Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange

2. 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 2011, unless otherwise stated.

Basis of preparation

The financial report is a general-purpose financial report which has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritive pronouncements of the Australian Accounting Standards Board. The financial report has also been prepared on a historical cost basis except for derivatives which have been measured at fair value.

The financial report is presented in Australian dollars and all values are rounded to the nearest thousand dollars (“$’000”), unless otherwise stated.

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 equity accounted investment on acquisition of the associate and the derivatives which have been measured at fair value.

(a) Compliance with IFRS

The financial report complies with Australian Accounting Standards and International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board.

(b) New accounting standards and interpretations

(i) Changes in accounting policy and disclosures.

The accounting policies adopted are consistent with those of the previous financial year except as follows:

The group has adopted the following new and amended Australian Accounting Standards and AASB interpretations as of 1 July 2010.

AASB 2009-5 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project effective 1 July 2010

AASB 2010-3 Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 3, AASB 7, AASB 121, AASB 128, AASB 131, AASB 132 & AASB 139] effective 1 July 2010

The adoption of the above Standards or Interpretations does not have an impact on the financial statements or performance of the group.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

2. Summary of Significant Accounting Policies (continue)

(b) New accounting standards and interpretations (continue)

(i) Changes in accounting policy and disclosures (continue)

AASB 2009-5 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project effective 1 July 2010

Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project – The subject of amendments to the standards are set out below:

AASB 5 – Disclosures in relation to non-current assets (or disposal groups) classified as held for sale or discontinued operations

AASB 8 – Disclosure of information about segment assets

AASB 101 – Current/non-current classification of convertible instruments

AASB 107 – Classification of expenditures that does not give rise to an asset

AASB 117 – Classification of leases of land

AASB 118 – Determining whether an entity is acting as a principle or an agent

AASB 136 – Clarifying the unit of account for goodwill impairment test is not larger than an operating segment before aggregation

AASB 139 – Treating loan prepayment penalties as closely related embedded derivatives, and revising the scope exemption for forward contracts to enter into a business combination contract

AASB 2010-3 Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 3, AASB 7, AASB 121, AASB 128, AASB 131, AASB 132 & AASB 139]

Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 3, AASB 7, AASB 121, AASB 128, AASB 131, AASB 132 & AASB 139]

Limits the scope of the measurement choices of non-controlling interest to instruments that are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation. Other components of NCI are measured at fair value.

Requires an entity (in a business combination) to account for the replacement of the acquiree’s share-based payment transactions (whether obliged or voluntarily), in a consistent manner i.e., allocate between consideration and post combination expenses.

Clarifies that contingent consideration from a business combination that occurred before the effective date of AASB 3 Revised is not restated.

Clarifies that the revised accounting for loss of significant influence or joint control (from the issue of IFRS 3 Revised) is only applicable prospectively.

(ii) Accounting Standards and Interpretations issued but not yet effective.

Australian Accounting Standards and interpretations that have recently been issued or amended but are not yet effective have not been adopted for the annual reporting period ended 30 June 2011. These are outlined in the table below:

AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 121, 127, 128, 131, 132, 136, 139, 1023 & 1038 and Interpretations 10 & 12] AASB 124 (Revised) Related Party Disclosures (December 2009) AASB 2009-12 Amendments to Australian Accounting Standards [AASBs 5, 8, 108, 110, 112, 119, 133, 137, 139, 1023 & 1031 and Interpretations 2, 4, 16, 1039 & 1052] AASB 2010-4 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 1, AASB 7, AASB 101, AASB 134 and Interpretation 13] AASB 2010-5 Amendments to Australian Accounting Standards [AASB 1, 3, 4, 5, 101, 107, 112, 118, 119, 121, 132, 133, 134, 137, 139, 140, 1023 & 1038 and Interpretations 112, 115, 127, 132 & 1042] AASB 2010-6 Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial Assets [AASB 1 & AASB 7]

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

2. Summary of Significant Accounting Policies (continue)

(b) New accounting standards and interpretations (continue)

(ii) Accounting Standards and Interpretations issued but not yet effective. (continue)

AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137, 139, 1023, & 1038 and interpretations 2, 5, 10, 12, 19 & 127] AASB 2010-8 Amendments to Australian Accounting Standards – Deferred Tax: Recovery of Underlying Assets [AASB 112] AASB 10 - Consolidated Financial Statements AASB 11 - Joint Arrangements AASB 12 - Disclosure of Interests in Other Entities AASB 13 – Fair value Measurements

(b) New accounting standards and interpretations (continued)

The Group has not elected to early adopt any new standards or amendments that are issued but not yet effective.

(c) Basis of consolidation

The consolidated financial statements comprise the financial statements of CI Resources Limited (“company” or “parent entity”) as at 30 June 2011 and the results of its subsidiaries for the financial year then ended. Interests in associates are equity accounted and are not part of the consolidated Group.

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

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

Subsidiaries are all those entities over which the Group has the power to govern the financial and operating policies so as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether a group controls another entity.

The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. In preparing the consolidated financial statements, all intercompany balances, transactions, unrealised gains and losses resulting from intra-group transactions and dividends have been eliminated in full.

All controlled entities have a June financial year-end with the exception of the companies domiciled in China which have a December year-end.

Subsidiaries are fully consolidated from the date on which control is obtained by the Group and cease to be consolidated from the date on which control is transferred out of the Group.

Investments in subsidiaries held by Phosphate Resources Limited are accounted for at cost in the separate financial statements of the parent entity less any impairment charges. Dividends received from subsidiaries are recorded as a component of other revenues in the separate income statement of the parent entity, and do not impact the recorded cost of the investment. Upon receipt of dividend payments from subsidiaries, the parent will assess whether any indicators of impairment of the carrying value of the investment in the subsidiary exist. Where such indicators exist, to the extent that the carrying value of the investment exceeds its recoverable amount, an impairment loss is recognised.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

2. Summary of Significant Accounting Policies (continue)

(c) Basis of consolidation (continue)

The acquisition of subsidiaries is accounted for using the acquisition method of accounting. The acquisition method of accounting involves recognising at acquisition date, separately from goodwill, the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree. The identifiable assets acquired and the liabilities assumed are measured at their acquisition date fair values.

The difference between the above items and the fair value of the consideration (including the fair value of any pre-existing investment in the acquiree) is goodwill or a discount on acquisition.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquire are assigned to those units.

Where goodwill forms part of a cash-generating unit and part of the operation within that unit disposal of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.

Non-controlling interests are allocated their share of net profit after tax in the statement of comprehensive income and are presented within equity in the consolidated statement of financial position, separately from the equity of the owners of the parent.

Losses are attributed to the non-controlling interest even if that results in a deficit balance. A change in the ownership interest of a subsidiary that does not result in a loss of control, is accounted for as an equity transaction.

(d) Income tax

The charge for current income tax expense is based on the profit for the year adjusted for any nonassessable or disallowed items. It is calculated using tax rates that have been enacted or are substantively enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised. Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the economic entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

2. Summary of Significant Accounting Policies (continue)

(e) Inventories

Inventories are measured at the lower of cost and net realisable value. The cost of mining stocks includes direct materials, direct labour, transportation costs and variable and fixed overhead costs relating to mining activities. Overheads are applied on the basis of normal operating capacity. Costs are assigned on the basis of weighted average costs.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

(f) Property, plant and equipment

Each class of property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses.

Property

Freehold land and buildings are measured at cost less accumulated depreciation on buildings.

Plant and equipment

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

The carrying amount of plant and equipment is reviewed annually by the directors to ensure it is not in excess of the recoverable amount from these assets (refer to note 2(l) for accounting policy on recoverable amount).

The cost of fixed assets constructed within the economic entity includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads.

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 group 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.

Depreciation

The depreciable amount of all fixed assets including building and capitalised lease assets, but excluding freehold land are depreciated on a straight line or diminishing balance basis over their useful lives to the economic entity commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. The depreciation rates used for each class of depreciation assets are:

Class of Fixed Asset	Depreciation Rate
Leasehold and strata title properties	Shorter of the lease
	and 2%
Plant and equipment under lease:
- the shorter of the lease term and life span	20 – 30%
Plant and equipment	13 – 40%
Mine properties	Life of mine

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

2. Summary of Significant Accounting Policies (continue)

(f) Property, plant and equipment (Continued)

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

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

(g)

Mining tenements and exploration expenditure

Costs incurred during exploration and evaluation activities related to an area of interest are accumulated at cost.

Such costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area of interest, or alternatively its sale, or where activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active operations are continuing.

Accumulated costs in relation to abandoned areas of interest are written off in full in the year in which the decision to abandon the area is made.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

(h) Mine properties

Costs incurred prior to the start up of operations or mining assets acquired are accumulated at cost. Such costs are only carried forward to the extent that they are expected to be recouped through the successful exploitation of the known reserves.

Impairment

The carrying amount of mine properties is reviewed annually by the directors to ensure it is not in excess of the recoverable amount of these assets (refer to note 2(l) for accounting policy on recoverable amount).

(i) Restoration

Estimated rehabilitation expenditure is recognised as a provision when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, the amounts are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

The amortisation or ‘unwinding’ of the discount applied in establishing the net present value of provision is charged to the income statement in each accounting period, and is disclosed as a financing cost.

Other changes in the measurement of an existing restoration obligation that result from changes in the estimated timing or amount of future costs, or a change in the discount rate, are recognised as an adjustment to production costs included in cost of goods sold.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

2. Summary of Significant Accounting Policies (continue)

(j) Leases

Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that are transferred to entities in the economic entity are classified as finance leases.

Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

Leased assets are depreciated on a straight-line basis over their estimated useful lives where it is likely that the economic entity will obtain ownership of the asset or over the term of the lease.

Lease payments of operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred.

Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term.

(k) Derivative financial instruments

Derivative financial instruments are used by the Group to provide an economic hedge of exposures to exchange rates. The consolidated entity does not apply hedge accounting and accordingly all fair value movements on derivative financial instruments are recognised in the statement of comprehensive income.

Derivative financial instruments are stated at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. Derivatives are carried as assets when their fair value is positive and as liabilities when their fair value is negative. The resulting gain or loss is recognised in profit or loss immediately.

The fair values of forward currency contracts are calculated by reference to current forward exchange rates for contracts with similar maturity profiles.

(l) Impairment of non-financial assets other than goodwill

At each reporting date, the company assesses whether there is any indication that an asset may be impaired.

Where an indicator of impairment exists, the Company makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.

Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the asset’s value in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

2. Summary of Significant Accounting Policies (continue)

(m) Intangibles

Goodwill

Goodwill is 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 the identifiable net assets at the date of acquisition.

Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.

Goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Impairment losses recognised for goodwill are not subsequently reversed.

Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Research and Development

Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised only when technical feasibility studies indicate that the project will deliver future economic benefits and these benefits can be measured reliably.

(n) Foreign currency transactions and balances

Functional and presentation currency

The functional currency of each of the group’s entities is determined by reference to the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity’s functional and presentation currency.

Transactions and balances

Foreign currency transactions are translated into the 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 exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items are recognised in the income statement.

Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the 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 at that reporting date.
Income and expenses are translated at average exchange rates for the period.

Exchange differences arising on translation of foreign operations are transferred directly to the group’s foreign currency translation reserve in the balance sheet. These differences are recognised in the income statement in the period

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

2. Summary of Significant Accounting Policies (continue)

(o) Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the balance sheet.

(p)

Trade and other receivables

Trade receivables, which generally have 30 to 90 day terms, are carried at nominal amounts due less an allowance for any uncollectible amounts. An allowance for doubtful debts is made when there is objective evidence that the Group will not be able to collect the debts. Bad debts are written-off when identified.

Receivables from related parties are recognised and carried at the nominal amount due. An estimate for doubtful debts is determined based on the net assets of the related party.

(q)

Trade and other payables

Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services.

(r) Segment reporting

An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity), whose operating results are regularly reviewed by the entity's chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available. This includes start up operations which are yet to earn revenues. Management will also consider other factors in determining operating segments such as the existence of a line manager and the level of segment information presented to the board of directors.

Operating segments have been identified based on the information provided to the chief operating decision makers — being the executive management team.

The group aggregates two or more operating segments when they have similar economic characteristics, and the segments are similar in each of the following respects:

Nature of the products and services
Nature of the production processes
Type or class of customer for the products and services
Methods used to distribute the products or provide the services, and if applicable
Nature of the regulatory environment

Operating segments that meet the quantitative criteria as prescribed by AASB 8 are reported separately.

However, an operating segment that does not meet the quantitative criteria is still reported separately where information about the segment would be useful to users of the financial statements.

Information about other business activities and operating segments that are below the quantitative criteria are combined and disclosed in a separate category for “all other segments”.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

2. Summary of Significant Accounting Policies (continue)

(s) Business Combination

Business combinations are accounted for using the acquisition method. The consideration transferred in a business combination shall be measured at fair value, which shall be calculated as the sum of the acquisition date fair values of the assets transferred by the acquirer, the liabilities incurred by the acquirer to former owners of the acquiree and the equity issued by the acquirer, and the amount of any non-controlling interest in the acquiree. For each business combination, the acquirer measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree's identifiable net assets.

Acquisition-related costs are expensed as incurred, and included in administrative expenses.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic conditions, the Group’s operating or accounting policies and other pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer's previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability will be recognised in accordance with AASB 139 either in profit or loss or as a change to other comprehensive income. If the contingent consideration is classified as equity, it should not be remeasured until it is finally settled within equity.

(t) Revenue

Sale of goods

Revenue is recognised when there has been a passing of the significant risks and rewards of ownership, which means the following:

The product is in a form suitable for delivery and no further processing is required by or on behalf of the consolidated entity;
The quantity and quality of the product can be determined with reasonable accuracy;
The product has been despatched to the customer and is no longer under the physical control of the consolidated entity;
The selling price can be measured reliably;
It is probable that the economic benefits associated with the transaction will flow to the consolidated entity; and
The costs incurred, or expected to be incurred, in respect of the transaction can be measured reliably.

Interest

Revenue is recognised as the Interest accrues using the effective interest rate method (which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument to the net carrying amount of the financial asset).

Rendering of services

Revenue from a contract to provide services is recognised by reference to the stage of completion of the contract.

Dividends

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

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

2. Summary of Significant Accounting Policies (continue)

(u) Government grants

Government grants are recognised when there is reasonable assurance that the grant will be received and all attaching conditions will be complied with.

When the grant relates to an expense item, it is recognised as income over the periods necessary to match the grant on a systematic basis to the costs that it is intended to compensate.

When the grant relates to an asset, the fair value is credited to a deferred income account and is released to the income statement over the expected useful life of the relevant asset by equal annual instalments.

(v) Employee benefits

Provision is made for the company’s liability for employee benefits arising from services rendered by employees up until balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.

(w) Provisions

Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

(x) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognised in income during the period in which they are incurred.

(y) Plantation development costs

Costs incurred on land clearing are capitalised as plantation development costs and is amoritsed over the economic useful life of the asset (25 years). Costs on the concession lease with a term of 60 years are capitalised and amortised over the remaining term of lease.

(z) Biological assets

Biological assets which include mature and immature oil palm plantations are stated at fair value less estimated point of sale costs except when the fair value cannot be measured reliably. In this instance, the biological assets are measured at cost less any accumulated depreciation and any accumulated impairment losses until such time as its fair value can be reliably measured.

Fresh fruit bunches (which are subsequently milled to become palm oil) is the harvested product of a biological asset and is measured at its fair value less estimated point of sale costs at the point of harvest. Net movement in fair value less estimated point of sale costs of biological assets are included in the statement of comprehensive income in the year they arise.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

2. Summary of Significant Accounting Policies (continue)

(aa) 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.

(bb) Financial instruments

Recognition

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

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 statement of financial position date which are classified as non-current assets and carried at amortised cost. Loans and receivables are included in receivables in the financial position.

Financial liabilities

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

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.

(cc) Investments in associates

Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting, after initially being recognised at cost. The Group’s investment in associates includes goodwill (net of any accumulated impairment loss) identified on acquisition.

The Group’s share of its associates’ post-acquisition profits or losses is recognised in the Statement of Comprehensive Income, and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Dividends receivable from associates are recognised in the parent entity’s income statement, while in consolidated financial statements they reduce the carrying amount of the investment.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

2. Summary of Significant Accounting Policies (continue)

(cc) Investments in associates (continue)

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.

(dd) 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.

(ee) Comparative figures

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

(ff) 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.

(gg) 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).

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

2. Summary of Significant Accounting Policies (continue)

(hh) Significant accounting judgments

In the process of applying the Group’s accounting policies, management has made the following judgments, apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements.

Assessment of mine life on Christmas Island

The Financial statements have been prepared on the basis that the resource supports continued operations for at least 5 years on the current market parameters and expectations.

Determination of mineral resources and ore reserves

The Group’s policy for estimating its mineral resources and ore reserves requires that the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves 2004 (the ‘JORC code’) be used as a minimum standard. The information on mineral resources and ore reserves were prepared by or under the supervision of Competent Persons as defined in the JORC code. The amounts presented are based on the mineral resources and ore reserves determined under the JORC code.

There are numerous uncertainties inherent in estimating mineral resources and ore reserves and assumptions that are valid at the time of estimation may change significantly when new information becomes available.

Changes in the forecast prices of commodities, exchange rates or production costs may change the economic status of resources and may, ultimately, result in the resources being restated. Such changes in resources could impact on depreciation and amortisation rates, asset carrying values and provisions for decommissioning and restoration.

The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:

Impairment of property, plant and equipment

Property, plant and equipment is reviewed for impairment if there is any indication that the carrying amount may not be recoverable. Where a review for impairment is conducted, the recoverable amount is assessed by reference to the higher of ‘value in use’ (being the net present value of expected future cash flows of the relevant cash generating unit) and ‘fair value less costs to sell’.

In determining value in use, future cash flows are based on:

Estimates of the quantities of ore reserves and mineral resources;
Future production levels;
Future commodity prices and foreign exchange rates; and
Future cash costs of production and capital expenditure.

Variations to the expected future cash flows, and the timing thereof, could result in significant changes to any impairment losses recognised, if any, which could in turn impact future financial results.

Provisions for decommissioning and restoration costs

Decommissioning and restoration costs are a normal consequence of mining and the majority of this expenditure is incurred at the end of a mine’s life. In determining an appropriate level of provision consideration is given to the expected future costs to be incurred, the timing of these expected future costs (largely dependent on the life of the mine), the appropriateness of the discount rate and the estimated future level of inflation.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

2. Summary of Significant Accounting Policies (continue)

(ii) Significant accounting estimates and assumptions

The ultimate cost of decommissioning and restoration is uncertain and costs can vary in response to many factors including changes to the relevant legal requirements or the emergence of new restoration techniques. The expected timing of expenditure can also change, for example in response to changes in reserves or to production rates.

Changes to any of the estimates could result in significant changes to the level of provisioning required, which would in turn impact future financial results.

Fair value of biological assets

The fair value of the oil palm plantations is estimated by reference to independent professional valuations using the discounted cash flows of the underlying biological assets. The expected cash flows from the whole life cycle of the oil palm plantations is determined using the market price and the estimated yield of the agricultural produce, being FFB, net of maintenance and harvesting costs and any costs required to bring the oil palm plantations to maturity. The estimated yield of the oil palm plantations is dependent on the age of the oil palm trees, location of the plantations, soil type and infrastructure. The market price of FFB is largely dependent on the prevailing market prices of crude palm oil and palm kernel.

Revenue a) Revenue from continuing operations Sales of phosphate and oil Rendering of services Interest income b) Cost of sales Production costs Shipping & marketing Depreciation c) Other income Commonwealth grants Net gain/(loss) on disposal of assets Net foreign exchange gains	Consolidated 2011 2010 *$’000s* *$’000s* 94,803 17,737 10,024 2,256 1,927 408
	106,754 20,401
	55,290 8,835 19,472 4,469 2,677 617
	77,439 13,921
	1 5 29 - 1,827 1,019
	1,857 1,024

3. Revenue

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

3. Expenses

d) Other expenses Government grant expenditure Redundancy expense Depreciation Administration Loss on disposal of a subsidiary 37d Bad debt expense/(recovery) Foreign exchange loss Allowance for inventory obsolescence Others e) Finance costs Interest expense Accretion on demolition provision . Income tax The major components of income tax are: Statement of Comprehensive Income Current income tax Current income tax charge Adjustments in respect of current income tax of previous years Deferred income tax Relating to origination and reversal of temporary differences Adjustments in respect of deferred tax of previous years Income tax expense reported in theStatement of Comprehensive Income	Consolidated 2011 2010 *$’000s* *$’000s* - 1 1,192 153 33 15 11,661 2,236 985 - 650 74 2,274 186 - (13) 88 -
	16,883 2,652
	26 1 600 150
	626 151
	6,473 1,190 (546) - (1,129) 242 1,635 -
	6,433 1,432

4. Income tax

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

4. Income tax (continue)

A reconciliation between tax expense and the product of accounting profit before income tax multiplied by the Group’s applicable income tax rate is as follows: Accounting profit before income tax At the Group’s statutory income tax rate of 30% (2010: 30%) Income/expenditure not allowable for income tax purposes: Add: - Adjustments in respect of current income tax of previous years - Prior year adjustment in respect of temporary difference - Dividend income received - Expenditure not allowable for income tax purposes - Franked dividends received - Deferred tax asset not bought to account - Share of associate’s net profit Aggregate income tax expense	Consolidated 2011 2010 *$’000s* *$’000s* 13,663 8,099
	4,098 2,429 (546) - 1,635 - - 773 478 245 (240) (773) 1,008 - - (1,242)
	6,433 1,432

A reconciliation between tax expense and the product of accounting profit before
income tax multiplied by the Group’s applicable income tax rate is as follows:
Accounting profit before income tax
At the Group’s statutory income tax rate of 30% (2010: 30%)
Income/expenditure not allowable for income tax purposes:
Add:
- Adjustments in respect of current income tax of previous years
- Prior year adjustment in respect of temporary difference
- Dividend income received
- Expenditure not allowable for income tax purposes
- Franked dividends received
- Deferred tax asset not bought to account
- Share of associate’s net profit
Aggregate income tax expense

Consolidated
2011
2010
$’000s
$’000s
13,663
8,099

4,098
2,429
(546)
-
1,635
-
-
773
478
245
(240)
(773)
1,008
-
-
(1,242)

6,433
1,432

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

4. Income tax (continued)

	*Statement of Financial* *Position* 2011 $’000s 2010 $’000s	*Statement of Comprehensive* *Income* 2011 $’000s 2010 $’000s
Deferred income tax Deferred income tax at 30 June relates to the following: CONSOLIDATED Deferred tax liabilities Consumables(i) Other Mine properties(i) Unrealised gains(i) Gross deferred income tax liabilities Deferred tax assets Provisions and accruals(i) Depreciation – fixed assets(i) Unrealised forex loss Allowance for doubtful debt(i) Gross deferred income tax assets Deferred tax income/(expense)	(1,352) (938) (9,090) (4) - (1,604) (1,592) (2,159)	410 60 3 (4) - - (567) 302 (586) 27 (168) (126) (206) - 1,620 (21)
	(12,034) (4,705)
	4,434 3,848 1,215 1,047 206 - - 1,620
	5,855 6,515

		506 (238)

(i) Deferred tax balances acquired as part of business combination

This deferred tax asset will only be obtained if:

(a) future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised;

(b) the conditions for deductibility imposed by tax legislation continue to be complied with; and (c) no changes in tax legislation adversely affect the consolidation entity in realising the benefit.

The parent entity has made non-current provisions for demolition of $7,504,000 (2010: $6,904,000) and for employee redundancies of $6,009,000 (2010: $5,349,000). The future income tax benefit relating to the provision on restoration and demolition is not probable of recovery, as it is believed that when the provisions are required the parent entity may not have future taxable income to utilise the tax benefit. It is opined that 65% of the provision for employee redundancy is probable of recovery on the premise that this proportion of total employee severance will be incurred prior to mine closure.

CI Resources Limited and its wholly owned controlled entities have not entered into a tax consolidation agreement.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

5. Earnings per share

	2011 Cents 2010 Cents
Basic earnings per share	6.2 7.9 2011 Number 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 72,874,102 2011 *$’000s* 2010 *$’000s*
Profit used in calculating basic and diluted losses per share Net profit	4,534 5,746

There are no instruments (e.g., share options) excluded from the calculation of diluted earnings per share that could potentially dilute basic earnings per share in the future because they are antidilutive for either of the periods presented.

There have been no transactions involving ordinary shares or potential ordinary shares that would significantly change the number of ordinary shares or potential ordinary shares outstanding between the reporting date and the date of completion of these financial statements.

6. Current assets – Cash and cash equivalents Cash at bank and on hand Deposits at call 7. Current assets – Trade and other receivables Debtors Prepayments	Consolidated 2011 2010 *$’000s* *$’000s* 28,890 26,424 1,633 2,098
	30,523 28,522
	23,554 18,506 766 798
	24,320 19,304

Trade receivables at 30 June 2011 is in accordance with the terms of the contract and no impairment loss is expected. There are no receivables which are past due and/or impaired.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

8. Derivative financial asset

Forward currency contracts – held for trading(a)	Consolidated 2011 2010 *$’000s* *$’000s* 5,308 5,556
	5,308 5,556

(a) Forward currency contracts – held for trading

The Group has entered into forward exchange contracts which are economic hedges but do not satisfy the requirements for hedge accounting.

	Notional amounts	Notional amounts	Average	exchange rate
		$AUD
	2011	2010	2011	2010
	*$’000s*	*$’000s*
Sell US$/buy Australian $
Consolidated
Sell US$ maturity 0 to 12 months	25,602	35,970	0.8281	0.7173
Sell US$ maturity 12 to 24 months	-	17,646	-	0.7820
Parent
Sell US$ maturity 0 to 12 months	25,602	35,970	0.8281	0.7173
Sell US$ maturity 12 to 24 months	-	17,646	-	0.7820

These contracts are fair valued by comparing the contracted rate to the market rates for contracts with the same length of maturity. All movements in fair value are recognised in profit or loss in the period they occur. The net fair value gains on foreign currency derivatives during the year were $1.822 million for the Group (2010: gain of $4.019 million) and $1.822 million (2010: gain of $4.019 million) for the Company.

The group uses various methods in estimating the fair value of a financial instrument. The methods comprise:

Level 1: the fair value is calculated using quoted price in active markets;

Level 2: the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for the assets or liability, either directly (as price) or indirectly (derived from prices); and Level 3 : the fair value is estimated using inputs for the assets or liability that are not based on observable market data.

Forward currency contracts – held for trading	Level 1 ‘000 Level 2 ‘000 Level 3 ‘000 Total ‘000 - 5,308 - 5,308
	- 5,308 - 5,308

Transfer between categories:

There were no transfer between level 1 and level 2 during the year.

9. Inventories (current) Consumable materials and stores Finished goods	Consolidated 2011 2010 *$’000s* *$’000s* 3,854 2,565 8,058 7,601
	11,912 10,166

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

10. Other Financial Asset

Trust fund term deposit Demolition and restoration bonds Other term deposits	Consolidated 2011 2010 *$’000s* *$’000s* 4,446 3,735 2,059 1,957 3,683 16,790
	10,188 22,482

Under the terms of the current Workplace Agreement between the Union of Christmas Island Workers and Phosphate Resources Limited a trust fund term deposit to meet employee entitlements is maintained. This trust fund may only be used to meet employee entitlements but may be drawn down as they arise. It is supplemented by a minimum amount of $500,000 annually. The trust fund term deposit currently stands at $4,446,448 (2010: $3,735,308). The interest earned on the term deposit of $211,140 (2010: $183,751) has been added to the term deposit.

Other term deposits have varying maturities all greater than 12 months and earn interest at commercial rates..

11. Property, Plant & equipment

Leasehold Land At cost Accumulated depreciation Leasehold buildings At cost Accumulated depreciation Land and buildings At cost Accumulated depreciation Strata title properties At cost Accumulated depreciation Plant and equipment At cost Accumulated depreciation and impairment Plant and equipment under lease At cost Accumulated depreciation Construction in progress Total property, plant and equipment At cost Accumulated depreciation and impairment Net carrying amount	26,839 - (72) -
	26,767 -
	4,788 928 (1,923) (783)
	2,865 145
	383 1,237 (146) (809)
	237 428
	1,191 1,255 (211) (163)
	980 1,092
	54,054 46,473 (42,924) (40,364)
	11,130 6,109
	4,371 3,768 (1,958) (818)
	2,413 2,950
	1,201 136
	92,827 53,797 (47,234) (42,937)
	45,593 10,860

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

11. Property, Plant & equipment (continued)

(a) Assets pledged as security:

Included in all balances above are assets of Phosphate Resources Limited, Phosphate Resources Properties Pty Ltd and strata title properties of Phosphate Resources (Singapore) Pte Ltd over which first and second mortgages have been granted as security. The terms of the mortgages preclude the assets being sold or being used as security for further mortgages without the permission of the first mortgage holder. The shares in Cheekah-Kemayan Plantation Sdn Bhd are pledge as a security on a USD bank loan and the assets of Cheekah-Kemayan Plantation Sdn Bhd are pledged as a security over a bank overdraft facility. The net book values of the assets pledged are:

Consolidated	Consolidated
2011	2010
$’000s	$’000s
59,320	10,166

(b) Reconciliations

Reconciliations of the carrying amounts of property, plant and equipment at the beginning and end of the current financial year.

Leasehold Land Carrying amount at beginning Transfer from construction in progress On acquisition of subsidiary Disposals Depreciation expense Leasehold buildings Carrying amount at beginning Foreign exchange difference Transfer from construction in progress Additions Disposals Depreciation expense Land and buildings Carrying amount at beginning Transfer from construction in progress Additions Disposal of subsidiary Depreciation expense Strata title properties Carrying amount at beginning Impact of foreign exchange Additions Disposals Depreciation expense	- - - - 26,839 - - - (72) -
	26,767 -
	145 59 (3) 180 - 2,675 127 - - (132) (41)
	2,865 145
	428 543 - - - - (191) - - (115)
	237 428
	1,092 1,122 (112) (18) - - - - - (12)
	980 1,092

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

11. Property, Plant & equipment (continued)

1. Property, Plant & equipment (continued)
(b) Reconciliations (continued) Plant and equipment Carrying amount at beginning Transfer from construction in progress Impact of foreign exchange Additions Transfer from/(to) equipment under lease Disposals Impairment Depreciation expense Plant and equipment under lease Carrying amount at beginning Gain / (loss) on translation of foreign exchange Additions Disposals Transfer (to)/from plant and equipment Depreciation expense Construction in progress Carrying amount at beginning Additions Disposals Written off Transferred to plant and equipment	Consolidated 2011 2010 *$’000s* *$’000s* 6,109 6,850 2,074 - (316) (633) 6,390 1520 39 6 (1,136) - - 556 (2,030) (2,190)
	11,130 6,109
	2,950 264 - (4) 201 - - (84) (39) 3,606 (699) (832)
	2,413 2,950
	136 3,748 3,255 - - - - - (2,190) (3,612)
	1,201 136

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

12. Mine properties

Mine development (at cost) Carrying amount at start of year Disposed of subsidiary (i) Additions Impact of foreign exchange Impairment (ii)	Consolidated 2011 2010 *$’000s* *$’000s* - 5,347
	5,347 13,262 (5,347) - - - - (242) - (7,673)
	- 5,347

(i)

Effective 1 May 2009 a subsidiary of Phosphate Resources Limited, PRL China Pty Ltd, acquired 59.275% interest in Phosphate Resources (Hua Li) Ltd which owned a Phosphate mining project comprising three mines in China. The carrying value of these mine properties was $5,347,000 as at 30 June 2010.

During the year ended 30 June 2011 PRL China Pty Ltd sold its entire interest (59.275%) in Phosphate Resources (Hua Li) Ltd.

(ii)

Since the determination of the acquisition price of the phosphate mines in China, recoverable phosphate prices had declined in the People’s Republic of China and the demand had dropped considerably.

The mining operations remained break even for 2009/10, however extensive floods in China had limited the demand for fertiliser products and the operation remained marginal.

The value of the mine properties had been calculated on the basis of the sale of shares of a minority shareholder in Phosphate Resources (Hua Li) Ltd, the company holding the mine properties. The impairment charge had been allocated in the prior year to mine development only.

13. Goodwill

Goodwill arising from business combination (Note 36)	7,635 -
	7,635 -

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

14. Biological Assets

4. Biological Assets
Carrying amount on acquisition of subsidiary Carrying amount at end	Consolidated 2011 2010 *$’000s* *$’000s* 12,332 -
	12,332 -

Biological assets consist of mature oil palm trees.

The Group grows oil palm trees to produce palm oil. The plantation is located in Malaysia.

A valuation was conducted by Jones Lang Wootton, an independent professional valuer, on a subsidiary's oil palm estate development comprising land, ancillary facilities and biological assets, for the purposes of acquisition of the subsidiary by Phosphate Resources Limited on 30 April 2011.

The valuer has confirmed that there have been no significant changes in the value of biological assets between 30 April 2011 and 30 June 2011.

The Group is exposed to risks in respect of agricultural activity. The agricultural activity of the Group consists of the plantation development and cultivation of palm products.

The primary risk associated with this activity occurs due to the length of time between expending cash on the purchase of planting and maintenance of oil palm plantation and in harvesting, and ultimately receiving cash from sale of palm oil to third parties. The Group's strategy to manage this risk is to get adequate insurance coverage.

15. 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 2010 the Company increased its holding to 44.73% in PRL. Out of 6 Directors on PRL 3 Directors represent CI Resources giving CI Resources at least 50% control over PRL. The Board of Directors also have publicly announced that they have concluded that CI Resources now controls PRL. Based on above factors the Company is now considered to have a controlling interest in PRL.

(a) Associated companies (Note 16) 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	Consolidated 2011 2010 *$’000s* *$’000s* - -
	- 25,076 - - - - - 1,748 - (1,429) - - - - - (25,395)
	- -

(a) Associated companies (Note 16)
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

Consolidated
2011
2010
$’000s
$’000s
-
-

-
25,076
-
-
-
-
-
1,748
-
(1,429)
-
-
-
-
-
(25,395)

-
-

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

16. Investments in controlled entities

CI Resources Limited owns 100% of Xi Feng International Pte Ltd which is incorporated in Singapore and 49.93% of Phosphate Resources Limited which is incorporated in Australia (50.47 as a 4th July 2011). The voting power in respect to Phosphate Resources is in proportion to ownership.

(a) Carrying amounts

Information relating to controlled entities is set out below:

Name of company	Principal activity	Ownership interest
		2011	2010
Unlisted
Phosphate Resources Limited and its controlled entities	Mining	49.93%	44.73%
Xifeng International Pte Ltd	Investment	100.00%	100.00%

17. Current liabilities – Trade and other payables

Notes Trade payables Other payables 18. Current liabilities – Interest bearing loans and borrowings Insurance premium funding loan Bank loan 18 (a),(b), (c),(d) Lease liability 30(a)	Consolidated 2011 2010 *$’000s* *$’000s* 11,357 5,558 890 -
	12,247 5,558
	518 526 4,656 - 1,362 1,185
	6,536 1,711

18. Current liabilities – Interest bearing loans and borrowings

(a) Interest rate risk and liquidity risk

Details regarding interest rate risk and liquidity risk are disclosed in Note 34.

(b) Fair value

The carrying amount of the borrowings approximates their fair value as the borrowings are at floating interest rates which move in accordance with market rates.

(c) Defaults and breaches

During the current there were no defaults or breaches on any of the loans.

(d) Financing facilities available

At reporting date, the following financing facilities had been negotiated and were available :

Total facilities	28,454	1,026
Facilities utilised at reporting date	(27,954)	(526)
Facility unused at reporting date	500	500

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

19. Current liabilities – Tax liability

Notes Tax payable 20. Current liabilities – Provisions Employee entitlements 21. Non-current liabilities – Payables Other payables 22. Non-current liabilities – Borrowings Bank loan 18 (a),(b), (c),(d) Lease liabilities 30(a) Loans from Associates 23. Non-current liabilities – Provisions Redundancy (a) Employee entitlements Decommissioning and restoration (b)	Consolidated 2011 2010 *$’000s* *$’000s* 2,836 4,074
	2,765 2,374
	- 48
	23,280 - 676 1,954 40 -
	23,996 1,954
	6,499 5,349 2,465 2,164
	8,964 7,513 7,504 6,904
	16,468 14,417

20. Current liabilities – Provisions

21. Non-current liabilities – Payables

22. Non-current liabilities – Borrowings

23. Non-current liabilities – Provisions

The amounts employees are entitled to receive if made redundant in accordance with their employment agreements are fully provided. The redundancy provision was increased by a net amount of $1,150,000 during the year ended 30 June 2011 (2010: $464,000).

(b) Provision for decommissioning and restoration

Based on the Mining Lease Agreement between the Commonwealth Government and Phosphate Resources Limited a provision for decommissioning and restoration has been recognised for costs associated with:

Demolition of all improvements specified for the removal of all debris resulting from demolition, removal of plant and equipment and leaving the leased land in a safe, clean and tidy condition at the expiry of the lease.

Estimates of the decommissioning and restoration obligations are based on anticipated technology and legal requirements and future costs, which have been discounted to their present value. In determining the decommissioning and restoration provision, the entity has assumed no significant changes will occur in the relevant Federal and State legislation in relation to demolition or restoration of such mines in the future.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

23. Non-current liabilities – Provisions (continue)

			Consolidated	Consolidated
			2011	2010
		Notes	*$’000s*	*$’000s*
(c)	*Movement in provisions*
	Provision for decommissioning and restoration :
	Carrying amount at the beginning of the financial year		6,904	6,304
	Additional provision
	Change in net present value of provision:
	- Credited to profit or loss		600	600
	Carrying amount at the end of the financial year		7,504	6,904

24. Contributed equity

24. Contributed equity
(a) Share capital	Number of shares *$’000s*
Ordinary shares – fully paid (b) Movements in ordinary share capital Date Details	72,874,102 17,970
	Number of shares *$’000s*
1 July 2009 Opening balance 30 June 2010 Closing balance 30 June 2011 Closing balance	72,874,102 17,970
	72,874,102 17,970
	72,874,102 17,970

(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.

Notes 25. Reserves Foreign exchange translation reserve Acquisition reserve	Consolidated 2011 2010 *$’000s* *$’000s* 86 364 1,587 -
	1,673 364

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.

Acquisition reserve

Any gain or loss arising on acquisition of non controlling interest of subsidiaries is recognized in this reserve.

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	364 364 (278) -
	86 364

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

26. Retained earnings

Accumulated losses at the beginning of the year Net profit attributable to members of CI Resources Limited Dividends paid Accumulated profits/(losses) at the end of the financial year	12,820 13,374 4,534 5,746 (3,358) (6,300)
	13,996 12,820

27. Key management personnel disclosures

(a) Key management personnel compensation Short term employee benefits Post employment benefits	Consolidated 2011 2010 *$’000s* *$’000s* 2,308 3,792 153 228
	2,461 4,020

(b) 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 30 June 2011 and 30 June 2010.

Option holdings

No key management personnel held options over ordinary shares in the Group during the current year ended 30 June 2011 (2010: Nil)

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.

2011 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 theperiod
*Directors of CI Resources Limited*
Mr David Somerville Mr Tee Lip Jen (i) Mr Tee Lip Sin Mr Phuar Kong Seng Mr Phua Siak Yeong (ii) Prof. Anthony Brennan Mr Adrian Gurgone(i)	- - 13,779,876 10,309,410 - - -	- - - - - - -	- - - - - - -	- - 13,779,876 10,309,410 - - -
*Other key management personnel*
Ms Elizabeth Lee Mr Desmond John Kelly (iii) Ms Janelle Burns(iii)	- - -	- - -	- - -	- - -

(i) Mr Tee Lip Jen & Mr Adrian Gurgone were appointed on the 18 March 2011

(ii) Mr Phau Siak Yeong resigned on the 15 March 2011

(iii) Mr Desmond John Kelly & Ms Janelle Burns resigned on the 3 March 2011

Other changes does not denote sale of securities, rather that the director has resigned.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

27. Key management personnel disclosures (continued)

2010 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 theperiod
*Directors of CI Resources Limited*
Mr David Somerville Mr Clive Morris Brown Mr Lip Sin Tee Mr Phuar Kong Seng Mr Phua Siak Yeong Prof. Anthony Brennan Mr WillyTeo(i)	- - 13,779,876 10,309,410 - - 2,487,762	- - - - - - -	- - - - - - (2,487,762)	- - 13,779,876 10,309,410 - - -
*Other key management personnel*
Mr Desmond John Kelly Ms Janelle Burns	- -	- -	- -	- -

(i) Mr Will Teo resigned on 8 January 2010.

(ii) Other changes does not denote sale of securities, rather that the director has resigned.

(c) Loans to key management personnel

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

(d) Other transactions with key management personnel

There were no other transactions with key management personnel.

Notes 28. Remuneration of auditors Amounts received or due and receivable by Ernst & Young (Australia) for: - audit of the financial report of the parent entity and the consolidated entity - review of the half year financial report of the consolidated entity - other services Amounts received or due and receivable by related practices of Ernst & Young (Australia) for the audit of the financial statements Amounts received or due and receivable by auditors other than Ernst & Young for: - an audit or review of the financial report of a controlled entity	Consolidated 2011 2010 *$’000s* *$’000s* 206,221 130,000 61,540 41,000 15,000 -
	282,761 171,000 12,688 53,000
	12,688 53,000 - 40,750
	40,750
	295,449 264,750

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

29. Contingent liabilities

As part of the conditions of sale of the stevedoring and mooring services in January 2007 the Consolidated Entity has agreed that, in the event of premature closure of the Christmas Island mine (and hence cessation of shipping of phosphate) within five years of the date of sale of the business, the purchaser will be reimbursed an amount not exceeding $200,000 for each year remaining of the five year period as at the date shipping of phosphate ceases.

There are no other contingent assets or liabilities as at the date of this report.

30. Commitments for expenditure

Notes (a) Lease expenditure commitments Operating leases - not later than one year - later than one year and not later than five years - total minimum payments	Consolidated 2011 2010 *$’000s* *$’000s* 274 144 217 169
	491 313

Operating leases are entered into as a means of providing residential accommodation and office premises for Phosphate Resources Limited; residential accommodation for Indian Ocean Stevedores Pty Ltd and office equipment for Phosphate Resources (Singapore) Pte Ltd.

Finance leases CONSOLIDATED Within one year After one year but not more than five years Total minimum lease payments Less amounts representing future finance charges Present value of minimum lease payments	*2011* *2010* *Minimum Lease* *Payments* *Present Value* *of Lease* *Payments* *Minimum* *Lease* *Payments* *Present Value* *of Lease* *Payments* *$’000s* *$’000s* *$’000s* *$’000s* 1,477 1,362 1,383 1,185 691 676 2,074 1,954
	2,168 2,038 3,457 3,139 (130) - (318) -
	2,038 2,038 3,139 3,139

Finance leases are entered into as a means of financing the acquisition of plant and equipment. Finance leases are secured against the plant & equipment being purchased.

(b) The Company provides a guarantee and indemnity to the Commonwealth Government of Australia (Commonwealth) to ensure the performance of Indian Ocean Oil Company Pty Ltd’s obligations under the terms of a 20 year fuel lease arrangement.
(c) The Company has committed to undertake various environmental management targets and objectives as detailed in the Christmas Island Phosphates Environmental Management Plan.
(d) The Company has provided a bank guarantee of $1 million to the Commonwealth Government under the terms of the Mining Lease Agreement.
(e) The Company has capital commitments of $0.36 million (2010: $ Nil) for items of plant on order but not yet delivered.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

31. Related party transactions

Directors and other key management personnel

Disclosures relating to directors and other key management personnel are set out in note 27.

Questus Administration Services Pty Ltd a company which David Somerville is a director of was paid $64,840 in fees for the provision of Company Secretary and Accounting services.

Controlling entities

The ultimate parent entity in the 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 16

32. Events occurring after reporting date

On the 4 July the company completed the purchase of additional shares in PRL to bring its total holding in PRL to 50.47%.

Apart from the matters set out above, no other matter or circumstance has arisen since 30 June 2011 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.

33. Reconciliation of profit(loss) from ordinary activities after income tax to net cash outflow from operating activities

Notes
Operating profit (loss) after income tax
Share of associates net (profits)/losses
Adjustment for non-cash items
Accretion of demolition provision
Bad debts
Loss on disposal of subsidiary
Gain on acquisition of subsidiary
Depreciation
Unrealised foreign exchange (gain) / loss
Other
Change in operating assets and liabilities
(Increase)/decrease in trade and other receivables
Movement in deferred tax balances
(Increase)/decrease in inventories
Decrease in trade creditors and accruals
Increase in provisions
Decrease/(increase) in prepayments
(Decrease)/increase in tax payable
Net cash inflow/(outflow) from operating activities

Consolidated
2011
2010
$’000s
$’000s
8,785
5,746
-
(1,748)
600
-
650
-
985
-
-
(1,649)
2,776
617
(190)
(1,020)
-
-
(7,599)
(4,815)
112
-
(1,538)
-
6,106
12,714
(112)
-
31
-
(1,362)
-

9,244
9,845

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

34. Financial instruments and financial risk management

The Group’s principal financial instruments comprise receivables, payables, finance leases, cash and short-term deposits, long-term deposits and foreign exchange derivatives.

Market, liquidity and credit risk (including foreign exchange, commodity price and interest rate risk) arise in the normal course of the Group’s business.

The Group manages its exposure to key financial risks, including interest rate, currency and commodity risk in accordance with the Group's risk management procedures. The overall objective of these procedures is to:

Ensure that net cash flows are sufficient to meet all financial commitments as and when they fall due.
Support the delivery of the Group's financial targets whilst protecting future financial security.
• Minimise the potential adverse effects resulting from volatility on financial markets.

The Group continually monitors its forecast financial position against these criteria.

It is, and has been throughout the period under review, Group policy that no speculative trading in financial instruments be undertaken

(i) Interest rate risk

The Group’s exposure to market interest rates relates primarily to the Group’s long term debt obligations. Interest rate risk on cash and short term deposits is not considered to be a material risk due to the short term nature of these financial instruments.

The interest rates for term deposits are fixed and there is no material risk for interest bearing assets. There is no other financial asset or liability bearing interest rate risk except for interest bearing loans and borrowings, the sensitivity of which is disclosed below.

The following sensitivity analysis is based on the interest rate risk exposures in existence at the reporting date:

At 30 June 2011, if interest rates had moved, as illustrated in the table below, with all other variables held constant, post tax profit and other comprehensive income would have been affected as follows:

		Consolidated	Consolidated
		Higher/(Lower)
		2011	2010
	Notes	*$’000s*	*$’000s*
Judgments of reasonably possible movements:
Post tax profit
+1.0% (100 basis points)		(305)		(36)
-1.0% (100 basis points)		305		36

Reasonable possible movements in interest rates were determined based on the Group’s mix of debt in Australia and foreign countries, relationship with financial institutions and review of last two years’ historical movements and economic forecaster’s expectations.

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.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

34. Financial instruments and financial risk management (continued)

(ii) Liquidity Risk

The Group’s liquidity position is managed to ensure that sufficient funds are available to meet its financial commitments in a timely and cost effective manner.

Management monitors the Group’s liquidity reserve on the basis of expected cash flow. The table below reflects a balanced view of cash inflows and outflows and shows the implied risk based on those values. Trade payables and other financial liabilities originate from the financing of assets used in the Group’s ongoing operations. These assets are considered in the Group's overall liquidity risk.

Management continually reviews the Group liquidity position including cash flow forecasts to determine the forecast liquidity position and maintain appropriate liquidity levels.

Maturity analysis of financial assets and liabilities based on contractual maturity

Consolidated

*Consolidated*
Year ended 30 June 2011	≤6 months	6-12 months	1-5years	>5years	Total
	$’000	$’000	$’000	$’000	$’000
Financial assets
Cash	30,523	-	-	-	30,523
Trade and other receivables	24,320	-	-	-	24,320
Term deposits	-	10,188	-	-	10,188
Foreign exchange contracts	3,134	2,174	-	-	5,308
	57,977	12,362	-	-	70,339
Financial liabilities
Trade and otherpayables	12,247	-	-	-	12,247
Insurancepremium fundingloan	259	259	-	-	518
Bank Loan	2,358	2,358	24,805	-	29,521
Lease Liabilities	681	681	676	-	2,038
Loans from Associates	-	-	40	-	40
	15,545	3,298	25,521	-	44,364

Year ended 30 June 2010	≤6 months	6-12 months	1-5years	>5years	Total
	$’000	$’000	$’000	$’000	$’000
Financial assets
Cash	28,522	-	-	-	28,522
Trade and other receivables	19,304	-	-	-	19,304
Term deposits	-	22,482	-	-	22,482
Foreign exchange contracts	2,596	2,442	518	-	5,556
	50,422	24,924	518	-	75,864
Financial liabilities
Trade and otherpayables	5,558	-	-	-	5,558
Insurancepremium fundingloan	263	263	-	-	526
Lease Liabilities	593	592	1,954	-	3,139
	6,414	855	1,954	-	9,223

(iii) Credit risk

Credit risk is the risk that a contracting entity will not complete its obligation under a financial instrument that will result in a financial loss to the Group. The carrying amount of financial assets represents the maximum credit exposure.

Financial instruments that potentially subject the consolidated entity to concentrations of credit risk consist principally of cash deposits and receivables. The Group places its cash deposits and derivatives with high credit-quality financial institutions. Receivables balances are monitored on an ongoing basis with the results that the Group’s exposure to bad debts is not significant.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

34. Financial instruments and financial risk management (continued)

(iv) Derivative instruments and foreign currency risk

The Group’s future revenues are exposed to movements in foreign exchange rates, particularly the US dollar/Australian dollar rate. The Group may from time to time enter into foreign exchange derivative instruments to manage this exposure.

The Group has, as outlined in note 8, forward currency contracts designated as held for trading that are subject to fair value movements through profit or loss as foreign exchange rates move.

At 30 June 2011, had the Australian Dollar moved, as illustrated in the table below, with all other variables held constant, post tax profit and equity would have been affected as follows:

Judgments of reasonably possible movements:	Post tax profit	Post tax profit
	Higher/Lower
	2011	2010
	$’000s	$’000s
Consolidated
AUD/USD + 10%	(2,327)	(4,876)
AUD/USD - 10%	2,560	5,360

Management believes the balance date risk exposures are representative of the risk exposure inherent in the financial instruments.

Significant assumptions used in the foreign currency exposure sensitivity analysis include:
Reasonably possible movements in foreign exchange rates were determined based on a review of the last two years historical movements.
The net exposure at balance date is representative of what the Group was and is expecting to be exposed to in the next twelve months from balance date.

(v) Fair values

The Directors have performed a review of the financial assets and liabilities as at 30 June 2011 and have concluded that the fair value of those assets and liabilities are not materially different to book values. The methods and assumptions used to estimate the fair value of financial instruments were:

Cash - The carrying amount is fair value due to the liquid nature of these assets.
Receivables/payables - due to the short term nature of these financial rights and obligations, and/or market interest received/paid, their carrying values are estimated to represent their fair values.
Derivatives - The fair values of forward currency contracts are calculated by reference to current forward exchange rates for contracts with similar maturity profiles.
Finance lease liability – The fair value is the present value of minimum lease payments.
Bank loan – All the bank loans of the Group are interest bearing with floating interest rates which move in accordance with the market interest rates. Therefore the fair value of the bank loans approximates their carrying value.

Capital risk management

The Group’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.

Management are constantly adjusting the capital structure as suitable. As the market is constantly changing, management may change the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.

During 2011, management paid dividends of $3,358,000 (2010: 6,300,000).

Management have no current plans to issue further shares on the market.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

35. Parent entity information

		Consolidated	Consolidated
		2011	2010
	Notes	*$’000s*	*$’000s*
Current assets		3,145	5,889
Total assets		13,215	14,122
Current liabilities		573	230
Total liabilities		573	230
Issued capital		17,970	17,970
Retained earnings		(5,328)	(4,079)
Total shareholders’ equity		12,643	13,891
Profit of the parent entity		937	1,924
Total comprehensive income		937	1,924

There have been no guarantees entered into by the Parent Entity in relation to any debts of its subsidiaries.

The parent has no contingent liabilities as at date of this report.

The Parent Entity has no contractual commitments for the acquisition of property, plant or equipment.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

36. Business combination

Acquisition of Cheekah-Kemayan Plantation SDN. BHD.

Effective 1 May 2011 Phosphate Resources Limited, acquired a 100% interest in Cheekah-Kemayan Plantations SDN. BHD. a company incorporated in Malaysia with principal activities of oil palm cultivation and palm oil processing. The total cost of the acquisition was $ 48.293 million and was settled by way of cash.

The provisional fair value of the identifiable assets acquired as at the date of the acquisition are:

Cash Trade and other receivables Inventory Property, plant and equipment Biological assets Goodwill arising on acquisition Trade payables Hire purchase Tax payable Deferred tax liability Fair value of identifiable net assets Direct cost of acquisition** Fair value of consideration paid: Cash Deferred consideration Total consideration paid The cash outflow on acquisition is as follows: Net cash acquired with the subsidiary Cash paid Net consolidated cash outflow	*CONSOLIDATED* *Recognised on* *acquisition* *Acquiree Carrying* *value* *$’000s* *$’000s* 2,436 2,436 412 412 621 622 35,950 12,855 12,448 2,088 7,635 -
	59,502 18,413
	(1,881) (1,881) (89) (89) (124) (124) (9,115) (1,480)
	(11,209) (3,574)
	48,293 535 46,735 1,557 48,292 2,436 (46,735) 44,299

The fair value of property, plant and equipment and biological assets acquired as part of business combination and related deferred tax liability has been determined provisionally and based upon the best information available as the initial accounting was not complete as at the reporting date.

** Acquisition costs are disclosed under administrative expenses in this financial report.

The consolidated statement of comprehensive income includes sales revenue and net profit for the year ended 30 June 2011 of $9.99m and $0.88m respectively, as a result of the acquisition of Cheekah-Kemayan Plantations Sdn Bhd. Had the acquisition of Cheekah-Kemayan Plantations Sdn Bhd occurred at the beginning of the reporting period, the consolidated statement of comprehensive income would have included revenue and profit of $60.7m and $3.8m respectively.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

36. Business combination (continued)

Acquisition of control of Phosphate Resources Limited

Prior to 1 April 2010 the Company had a 41.74% interest in the share capital of PRL and therefore the Company equity accounted its investment in PRL. On 1 April 2010 the Company acquired a further 3% (102,300 shares) of the issued capital of PRL, pursuant to the Company’s stated intentions to do so, using the creep provisions of the Corporations Act 2001. As a result of acquisition of these additional shares, the Company now holds 44.74% (1,531,480 shares) of PRL, which is also the Company’s voting interest.

Three of the directors of CI Resources were also directors of PRL and therefore it had been concluded by the Company’s and PRL’s management that the Company had control over PRL from 1 April 2010.

The fair value of the identifiable assets acquired as at the date of the acquisition were:

The fair value of the identifiable assets acquired as at the	date of the acquisition were:
	Consolidated
	Recognised on
	acquisition
	$
Cash and cash equivalents	28,146
Trade and other receivable	19,505
Inventories	10,305
Other current assets	13,393
Term Deposits	10,501
Plant property and equipment	11,477
Mine Properties	5,347
Deferred Tax Assets	4,343
	103,017
Trade and other payables	6,597
Interest bearing loans and borrowings	1,588
Income tax payable	159
Deferred tax liabilities	6,395
Provisions	17,276
Total Liabilities	32,015
Provisional fair value of identifiable net assets	71,002
Non-controlling interest	(42,526)
Cash paid for additional interest of 3%	(1,432)
Fair value of investment in subsidiary prior to
acquiring controlling interest	(25,395)
Net gain on acquisition of PRL	1,649
The cash inflow in acquisition is as follows:
Net cash acquired with the subsidiary	28,146
Cash Paid	(1,432)
	26,714

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

36. Business combination (continued)

The consolidated Statement of Comprehensive Income includes sales revenue and net profit for the year ended 30 June 2010 of $20,820,000 and $5,977,000 respectively, as a result of the acquisition of PRL. Had the acquisition of PRL occurred at the beginning of the reporting period, the consolidated Statement of Comprehensive Income would have included revenue and net profit of $80,269,000 and 3,155,000 respectively.

The value of the non-controlling interest was determined based on its interest in the fair value of the identifiable net assets at the date of acquisition.

37. Discontinued Operations

(a) Details of operations disposed

On 21 March Xi Feng International Pte Ltd entered into agreement with Fertiliser Futures Ltd to sell its entire interest of 18.1% in Phosphate Resources (Hua Li) Ltd (“PRL Hua Li”). The disposal was completed on 24 March 2011, on which date control of the business was passed to the acquirer.

On 18 April 2011 Phosphate Resources (China) Ltd entered into agreement with Fertiliser Futures Ltd to sell its entire interest of 59.275% in Phosphate Resources (Hua Li) Ltd (“PRL Hua Li”). The disposal was completed on 31 May 2011, on which date control of the business was passed to the acquirer.

PRL Hua Li held investment in Kaiyang County Tenglong Mineral Resources Enterprise which was engaged in exploration, mining, ore processing and sales of apatite and apatite related product. PRL Hua Li also owned direct interest in mine properties.

Due to continued difficulties, cost uncertainties and constant regulatory changes the directors of the group decided to sell group’s interest in PRL Hua Li.

(b) Financial performance of operations disposed

The results of the discontinued operations for the year until disposal are presented below:

	Phosphate Resources (Hua Li) Ltd 2011 2010 $’000s $’000s
Sale of goods Other revenue REVENUE COST OF SALES GROSS PROFIT Other expenses Finance costs PROFIT BEFORE INCOME TAX FROM DISCONTINUED OPERATIONS INCOME TAX BENEFIT / (EXPENSE) PROFIT FORM DISCONTINUED OPERATIONS	4,339 626 2 -
	4,341 626 (1,086) (302)
	3,255 324 (1,325) (1,387) - -
	1,930 (1,063) (375) 373
	1,555 690

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

37. Discontinued Operations (continued)

(c) Assets and Liabilities and cash flow information of disposed group

The major class of assets and liabilities of Phosphate Resources (Hua Li) Ltd are as follows:

ASSETS Cash Trade receivables Inventory Property, Plant and Equipment LIABILITIES Trade and other payable Tax liabilities Net assets attributable to discontinued operations The net cash flows from Phosphate Resources (Hua Li) Ltd are as follows: Operating activities Investing activities Financing activities Net cash flow (d) Consideration received or receivable Cash Less: net assets disposed off Loss on disposal before income tax Income tax expenses Loss on disposal after income tax Net cash inflow on disposal: Cash and cash equivalent consideration Less: Cash balance disposed Reflected in the consolidated statement of cash flows	669 1,156 414 5,406 (1,638) (1,273)
	4,734
	(1,306) 1,912 -
	606
	3,749 (4,734)
	(985) -
	(985)
	3,749 (669)
	3,080

38. Segment reporting

Segment Reporting for the year ended 30 June 2011

The Group has identified its operating segments based on the internal reports that are reviewed and used by the executive management team (the chief operation decision makers) in assessing performance and in determining the allocation of resource.

The Group has identified its operating segments to be Mining and Farming based on the different operating businesses within the Group. Discrete financial information about each of these operating segments is reported to the chief operation decision makers on a monthly basis.

Mining operating segment primarily involves mining, processing and sale of phosphate rock, phosphate dust and chalk

Farming operating segment primarily involves oil palm cultivation and palm oil processing

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

38. Segment reporting (continued)

The accounting policy used by the Group in reporting segments internally are the same as those contained in Note 2 to the accounts.

Deferred tax assets and liabilities are not allocated to operating segments as they are not considered part of the core operations of any segment.

Revenue Revenue from external customers Interest income Stevedoring Rendering of services Total segment revenue Result Segment net operating profit after tax (attributable to parent) Depreciation and amortisation Income tax expense Profit/(loss) from discontinued operations after income tax (including share of Non Controlling Interest) Assets and Liabilities Segment assets Segment liabilities	Year ended 30 June 2011
	Phosphate Sale Palm Oil Sale Unalloc. Total $’000 $’000 $’000 $’000
	84,817 9,986 - 94,803 1,029 898 1,927 2,242 2,242 7,782 7,782
	85,846 9,986 10,922 106,754 6,780 888 1,117 8,785
	2,005 279 492 2,776 5,451 370 612 6,433 1,555 1,555 73,027 62,451 18,189 153,667
	52,674 13,470 10,640 76,784

Segment Reporting for the year ended 30 June 2010

The company has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance and in determining the allocation of resources.

The operating segments have been identified by management based on the manner in which the product is sold or service provided.

The company has three operating segments, that being the Sale of Phosphate, Stevedoring Services and Other. The Other segment consists of the Oil, Australia and Singaporean operations.

Accounting policies and inter-segment transactions

The accounting policies used by the Group in reporting segments internally are the same as those contained in Note 2 to the accounts and in the prior period except as follows:

Corporate charges

Corporate charges comprise non-segmental expenses such as head office expenses and interest. Corporate charges are allocated to each business segment on a proportionate basis linked to segment revenue so as to determine segmental results.

Income tax expense

Income tax expense is calculated based on the segment operating net profit using the notional charge of 30% (2010: 30%). No effect is given for taxable or deductible temporary differences.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

38. Segment reporting (continued)

Revenue Sales to external customer Other revenue from external customer Inter-segment sales Total segment revenue Segment net operation profit/(loss) after tax Provisions Segment assets Segment Liabilities	Year ended 30 June 2010
	Phosphate Stevedoring Unallocated Total
	$’000 $’000 $’000 $’000 17,647 2,625 1,695 21,967 195 6 - 201 (782) (566) - (1,348) 17,060 2,065 1,695 20,820 5,293 288 396 5,977 - - 942 942 101,829 5,843 1,080 108,752 43,799 2,616 (11,574) 34,841

Revenue from external customers by geographical locations is detailed below. Revenue is attributed to geographic location based on the location of the customers. The Company does not have external revenues from external customers that are attributable to any foreign country other than as shown:

Australia China Malaysia Other foreign countries	Consolidated 2011 2010 *$’000s* *$’000s*
	95,508 20,690 - 551 9,986 - 1,260 726
	106,754 21,967

Major customers

The Group has number of customers to which it provides the products. There are no customers of the Group who account for more than 10% of total external revenue in 2011 and 2010.

Non-Current Assets by geographical regions:

Australia China Malaysia Other foreign countries	Consolidated 2011 2010 *$’000s* *$’000s*
	24,080 36,287 - 7,097 56,242 - 1,281 1,820
	81,603 45,204

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Notes to the financial statements For the year ended 30 June 2011

39. 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.

On completion of the audit of the Consolidated Entity an adjustment to a Term Deposit was made to account for interest received

In conclusion:

The consolidated profit after income tax has increased by $7,411.

Total assets has increased by $7,411.

Total liabilities has not moved.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

Directors’ declaration For the year ended 30 June 2011

In accordance with a resolution of the Directors of CI Resources Limited, I state that:

In the directors’ opinion:

(a) The financial statements comprising the Statement of Financial Performance, Statement of Financial Position, Statement of Cash Flows, Statement of Changes in Equity and accompanying notes set out on pages 24 to 71 are in accordance with the Corporations Act

2001 , including:

(i) complying with Accounting Standards (including Australian Accounting Interpretations) and Corporations Regulations 2001 ; and
(ii) giving a true and fair view of the company and the consolidated entity’s financial position as at 30 June 2011 and of their performance, for the year ended on that date; and
(a) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in note 1
(c) 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
(d) the audited remuneration disclosures set out on pages 12 to 19 of the directors’ report comply with section 300A of the Corporations Act 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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D Somerville

Chairman

Perth 30 September 2011

Annual Report – 30 June 2011

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Independent audit report to members of CI Resources Limited

Report on the financial report

We have audited the accompanying financial report of CI Resources Limited, which comprises the consolidated statement of financial position as at 30 June 2011, and the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year ended on that date, notes comprising a summary of significant accounting policies, other explanatory notes and the directors’ declaration of the consolidated entity comprising the company and the group it controlled at the year’s end or from time to time during the financial year.

Directors' responsibility for the financial report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal controls as the directors determine are necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply 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. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about 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 judgment, 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 controls 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 controls. 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.

Independence

In conducting our audit we have complied with the independence requirements of the Corporations Act 2001. We have given to the directors of the company a written Auditor’s Independence Declaration a copy of which is included in the directors’ report.

Liability limited by a scheme approved under Professional Standards Legislation

RC:VP:CIRESOURCES:022

Opinion

In our opinion:

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 financial position of the consolidated entity’s financial position as at 30 June 2011 and of its performance for the year ended on that date; and
II. complying with Australian Accounting Standards and the Corporations Regulations 2001 ; and
b. the financial report also complies with International Financial Reporting Standards as disclosed in Note 2.

Report on the remuneration report

We have audited the Remuneration Report which is included in the directors’ report for the year ended 30 June 2011. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Opinion

In our opinion the Remuneration Report of CI Resources Limited for the year ended 30 June 2011, complies with section 300A of the Corporations Act 2001 .

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Ernst & Young

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R J Curtin Partner Perth 30 September 2011

RC:VP:CIRESOURCES:022

CI RESOURCES LIMITED

ASX Additional Information

Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in this report.

SHAREHOLDINGS

Substantial shareholders

The following substantial shareholders have lodged notices with the Company as at 30 September 2011:

Holders	Ordinary shares
Prosper Trading Sdn Bhd	13,779,876
CCM International Sdn Bhd	12,000,000
Destinasi Emas Sdn Bhd	7,287,410
Liow Boon Seng	3,750,000
Poo Ah Lam	3,675,371

Class of shares and voting rights

At 30 September 2011 there were 327 holders of ordinary shares on the Company. The voting rights attaching to the ordinary shares are:

• On a show of hands, every person present who is a shareholder or a proxy, attorney or representative of a shareholder has one vote; and

• On a poll, every person present who is a shareholder or a proxy, attorney or representative of a shareholder shall, in respect of each fully paid share held by him, or in respect of which he is appointed a proxy, attorney or representative, have one vote for the share, but in respect of partly paid shares, shall have a fraction of a vote for each partly paid share. The fraction shall be equivalent to the proportion which the amount paid is of the total amounts paid and payable, excluding amounts credited, provided that the amounts paid in advance of a call are ignored when calculating a true portion.

Distribution of share holders

	Ordinary
Category	shares
1 - 1,000	60
1,001 - 5,000	50
5,001 - 10,000	108
10,001 - 100,000	74
100,001 - and over	35
	327

There were 60 holders of less than a marketable parcel of ordinary shares.

On-market buy back

There is no current on-market buy back.

Restricted securities

The Company does not have any restricted securities.

Annual Report – 30 June 2011

CI RESOURCES LIMITED

ASX Additional Information

Unquoted securities

The Company does not have any unquoted securities

Twenty largest holders of ordinary shares (as at 22 September 2011)

Holder name

Ordinary shares
Number
%

Phillip Securities Pte Ltd
CCM International Sdn Bhd
Prosper Trading Sdn Bhd
Mr Willy See Khiang Teo
Citicorp Nominees Pty Limited
Kluang Pty Ltd
Mee Yuen Yong
HSBC Custody Nominees (Australia) Limited
Rivertree Pty Ltd
Mr Philip Tuck Sang Woo
Hang Phoo Tan
DMG & Partners Securities Pte Ltd
Krishnan Ramanthan
Mr Xu Yi Hao
Fullong Worldwide Limited
Great Pioneer Consultants Ltd
ARP Holdings Pty Ltd
KSL Super Pty Ltd
DBS Vickers Securities (Singapore) Pte Ltd Account>
Masli Sadiran

33,213,519
45.58
12,000,000
16.47
11,616,000
15.94
2,866,476
3.93
1,687,717
2.32
1,280,988
1.76
835,572
1.15
717,000
0.98
711,293
0.98
605,715
0.83
500,000
0.69
437,325
0.60
407,673
0.56
378,657
0.52
311,750
0.43
311,750
0.43
300,000
0.41
210,000
0.29
210,000
0.29
207,000
0.28

68,808,435
94.44

Other information

CI Resources Limited, incorporated and domiciled in Australia, is a publicly listed company limited by shares.

The Company’s shares are quoted on the Australian Securities Exchange.

Annual Report – 30 June 2011

AI assistant

PRL GLOBAL LTD — Annual Report 2011

65611_rns_2011-10-02_a843cb68-a78a-49d4-a24a-d09257955d1f.pdf

CI Resources Limited

Financial Report For the financial year ended 30 June 2011

CI Resources Limited ACN 006 788 754

CI RESOURCES LIMITED

Chairman’s Letter

CI RESOURCES LIMITED

Chairman’s Letter

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

CI RESOURCES LIMITED

Directors’ report

Matters subsequent to the end of the financial year

Likely developments and expected results of operations

Environmental regulation

Rounding

Information on directors

MR DAVID SOMERVILLE Chairman – Non-executive

Experience and expertise

Other directorships

CI RESOURCES LIMITED

Directors’ report

Information on directors (continued)

MR TEE LIP SIN Director – Non-executive

Experience and expertise

Other directorships

MR TEE LIP JEN Director – Non-executive

Experience and expertise

Other directorships

MR PHUAR KONG SENG Director – Non-executive

Experience and expertise

Other directorships

MR PHUA SIAK YEONG Director – Non-executive (resigned 15 March 2011) Experience and expertise

CI RESOURCES LIMITED

Directors’ report

Other directorships

PROF. ANTHONY BRENNAN Director – Non-executive

Experience and expertise

Other directorships

MR ADRIAN GURGONE Director – Non-executive Experience and expertise

Other directorships

Company secretaries

DESMOND KELLY BComm, CPA, MAICD Company Secretary (resigned 3 March 2011)

JANELLE BURNS Bbus (Acc/Law) Company Secretary(resigned 3 March 2011)

Directors’ report

Directors’ interests in shares and options

Meetings of directors

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

Retirement, election and continuation in office of directors

CI RESOURCES LIMITED

Directors’ report

Remuneration report (Audited)

Non-executive directors

Directors’ fees

CI RESOURCES LIMITED

Directors’ report

Remuneration report (Audited) (continued)

Executive remuneration

PRL GLOBAL LTD Annual Report 2011