CI Resources : Annual Report to shareholders (1.21 Mb)

CI Resources Limited ACN 006 788 754

Chairman's letter 2

Managing Director's report 4

Corporate directory 6

Directors' report 7

Auditor's independence declaration 21

Corporate governance disclosures 22

Financial report 26

Directors' declaration 73

Independent audit report to the members 74

ASX additional information 76

CI RESOURCES LIMITED

I am pleased to be able to report a very positive result for CI Resources Limited (Company). The Company has recorded a substantial profit for the year of $34 million after tax.

The Board has approved a continuation of our dividend policy by confirming a final fully franked dividend of 5 cents, and in view of the very strong results the Board has approved a "special dividend" of a further fully franked 3 cents per share. The record date for the total fully franked dividend payment of 8 cents per share is the 26th September 2016 with payment to be made on 24th October 2016.

Our shares have recorded a 111% growth in the market sales price to the 30th June 2016 and the total of 9 cents in fully franked dividends paid in the financial year amounts to an effective dividend yield of 3.86% on the closing market price at the end of the financial year.

Overall the global economy remains subdued and this, coupled with abnormal climatic conditions, is likely to have an impact on our future returns.

Demand is weaker and the downward trend of prices has increased. Falling shipping costs have enabled low cost phosphate producers from outside our region to enter our market region increasing the price competition in it.

Abnormally high rainfall over the past few months on Christmas Island has also impacted on our production targets. The Managing Director has initiated a program of productivity and efficiency improvements which aims to mitigate some of these negative trends.

Unfortunately abnormally dry weather in peninsular Malaysia has impacted palm oil production in that region and this together with lower global prices has resulted in lower profitability for producers including our Cheekah Kemayan plantation.

The Board remains confident that we will weather any temporary difficulties that may arise and on a positive note, the Board anticipates that the current gloomy outlook will generate opportunities for further strategic investments and growth at realistic entry prices.

The Board has determined to continue pursuing investments in accord with its current "diversified industrial" strategy - in the sectors of phosphate, mining, infrastructure and land development, and agriculture.

Despite the delays referred to by the Managing Director we will also continue with our push to extend our access to additional mining areas on vacant Crown Land outside the National Park on Christmas Island. As we noted last year, we consider an ongoing viable mining operation as essential to provide the underpinning for programmes designed to preserve the unique island ecology particularly given the stringent budget parameters facing the Commonwealth Government.

The Board has approved the continuation of the research programme with Murdoch University to establish whether any boutique alternative agricultural industry, including medicinal cannabis, would be commercially viable on Christmas Island.

CI RESOURCES LIMITED

The Board of the Company is satisfied that the Company has a very sound financial underpinning as reflected in the published balance sheet and will continue to perform positively.

The sound financial base coupled with a competent and flexible management team ensures that we will be able to consider and implement growth strategies and undertake complementary growth investments as opportunities arise.

I finally take this opportunity on behalf of the Board to thank our employees, managers and executives for their contributions to a successful outcome for the year.

David Somerville Chairman

30 August 2016