16 September 2014
INTRA ENERGY CORPORATION LIMITED
30 JUNE 2014 ANNUAL REPORT
The Board of Directors of Intra Energy Corporation Limited (ASX: IEC) are pleased to release the Company’s Annual
Report with audited financial statements for the year ended 30 June 2014.
The Company will shortly announce details of a Share Placement Plan to Shareholders.
For further information please contact:
Shareholder Enquiries
Jonathan Warrand
Executive Director & CFO
Intra Energy Corporation Limited
Tel: (02) 9199 5511
www.intraenergycorp.com.au
Intra Energy Corporation Limited
(ABN 65 124 408 751)
Annual Financial Report
For the year ended 30 June 2014
Contents
Corporate Directory
Chairman’s Report
Review of Operations
Directors’ Report
Remuneration Report
Meetings of Directors
Corporate Governance
Auditor’s Independence Declaration
Directors’ Declaration
Independent Auditor’s Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Notes to the Financial Statements
ASX Additional Information
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Corporate Directory
DIRECTORS
Graeme Robertson (Chairman)
David Mason
Jonathan Warrand
William Paterson
Gideon Nasari (Resigned 31 July 2014)
Simon Harvey (Alternate Director for Jonathan Warrand appointed 10 December 2013)
COMPANY SECRETARY
Rozanna Lee
CHIEF OPERATING OFFICER
Tarn Brereton (Appointed 1 July 2013)
REGISTERED OFFICE - AUSTRALIA
Suite 2001, Level 20 Australia Square
264 George Street
Sydney NSW 2000
Telephone: (02) 9199 5511
Facsimile: (02) 9247 8966
Email: info@intraenergycorp.com.au
REGISTERED OFFICE - TANZANIA
10th Floor, IT Plaza
Plot No 778/39
Ohio Street / Garden Ave
PO Box 23066
Dar es Salaam, Tanzania
REGISTERED OFFICE - MALAWI
1st Floor, Part of East Wing
Kang’ombe House
City Centre
Lilongwe, Malawi
Share Registry
Link Market Service Limited
Level 12 680 George Street
Sydney NSW 2000
Telephone: (02) 8280 7111
Facsimile: (02) 9287 0309
AUDITORS
KPMG
10 Shelley Street,
Sydney NSW 2000
Telephone: (02) 9335 7921
Facsimile: (02) 9335 7001
INTERNET ADDRESS
www.intraenergycorp.com.au
ABN 65 124 408 751
ASX CODE (IEC)
Page 3
Chairman’s Report
On behalf of the Board of Intra Energy Corporation Limited ("IEC" or "the Company"), it is my pleasure to
present the Annual Financial Report for 2014.
Intra Energy is the major producer of coal in the Eastern Africa region and is developing quality regional
thermal coal supply to industries as well as developing coal-fired power station projects to increase its coal
supply. The Eastern Africa region is one of the most rapidly growing areas in the world today and is undergoing
an industrial transformation which is being constrained by lack of reliable electricity. There is little competition
to IEC's coal supply and the reliability of production and supply has been instrumental in increasing its market
share. Production costs are in the lowest quartile with the coal not requiring beneficiation and low overburden
to coal ratios. IEC is therefore not directly affected by world coal prices nor negative international trading
parameters. Despite a declining share price reflective of coal stocks internationally, IEC is not comparable to
Australian circumstances as it operates only in dynamic Eastern Africa, with increasing efficiency and expanding
market share.
Over the last year, the mining operations increased sales by 57%, from 121,026 tonnes in 2013 to 189,597
tonnes in 2014. The current order book continues to strengthen and diversify, geographically supplying 30% of
coal outside of Tanzania (25% to Kenya) and broadening further the customer base to cement, textiles, paper,
ceramic, lime and steel industries. Sales to international and regional cement producers alone account for 62%
of current sales.
IEC’s mining operations, Tancoal in Tanzania and Malcoal in Malawi are in remote locations, hence every effort
has been made to improve efficiencies and reduce costs. Emphasis has been placed on procurement of spare
parts by the mining company, increasing operating efficiencies and control of maintenance functions to
enhance performance.
While the prospects for IEC are improving, the 2014 financial year showed a very disappointing loss of $20.8
million, deteriorating the financial position of the Group. A significant contributor to this loss was the Board
taking the prudent decision to impair the Special Mining Licence of IEC’s subsidiary, Tanzacoal East Africa
Mining Limited (“Tanzacoal”) by $13.4 million due to the revocation of its Mining Licence 235/2005 via
cancellation by the Minister of Energy and Minerals in April 2014. Tanzacoal had developed a trial mining
operation and produced samples of the coal for testing and had determined that the coal was only suitable for
power generation. IEC has commenced legal proceedings and will explore all options to protect its interests and
reach a suitable settlement to this issue.
The trading loss of $7.4 million for FY14 was influenced by transport workers strikes and a wet season
impacting transport of coal in Tanzania. The Presidential Election in May in Malawi disrupted sales in that
country, with minimal sales during and shortly after the election period. The Malawi election proceeded
peacefully and is a credit to the democratisation of the nation.
The Company continued to expand its resource base, announcing a maiden JORC compliant resource of 62
million tonnes in Malawi, which adds to the 423 million tonne resource at the Tancoal Mining area in Tanzania.
Both resources comprise good quality thermal coal, which is sufficiently low in ash content to not require
beneficiation.
IEC continues to sponsor the development of the 120MW "Pamodzi" coal-fired power station in Malawi and
entered into a Memorandum of Understanding in April 2014 to progress a joint venture agreement with
Endeavor Energy Power Holdings Limited, a USA based independent power project development company
focused on Pan African energy generation projects and who are supported by leading global energy private
equity firm, Denham Capital.
Whilst IEC experienced a delay caused by the Malawi election, the new Government continues to strongly
support the project as it seeks to diversify its energy sources and also satisfy its growing demand for energy.
The Company is working in partnership with Endeavor to progress Project Pamodzi to financial close and to
complete the negotiations with the Electricity Supply Corporation of Malawi (ESCOM) to conclude terms for a
Power Purchase Agreement.
The 200MW mine mouth coal-fired power station originally proposed to the Tanzania Electric Supply Company
Limited (“TANESCO”) and the Government of Tanzania is currently on hold as IEC and the Government review
options to reduce the gap in the proposed tariff.
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Chairman’s Report
With assistance from the Australian Government's Direct Grants and funding from Tancoal, the Company in
Tanzania continued the development of the local Women's Group aiming to establish various activities for
women to manage their own businesses in a sustainable manner. Additional assistance was provided for
refurbishing a primary school and transport provisions to regional security forces and police are ongoing
projects. In Malawi, Malcoal is training employees from the local community and employing a large proportion
of females as operators - unique in the African mining industry. Despite a difficult year, IEC has made significant
progress in developing its market and has substantially increased both contracted sales and production over
the past year. The target next year is to increase production and sales while improving mining efficiency and
operating profitability to support mine expansion and the power generation initiatives.
Sincerely
Graeme Robertson
Executive Chairman – Intra Energy Corporation Limited
Page 5
Review of Operations
MINING OPERATIONS
TANCOAL (TANZANIA)
IEC’s 100% owned subsidiary, Intra Energy Tanzania Limited (“IETL”), owns a 70% interest in Tancoal Energy
Limited (“Tancoal”), a joint venture with the National Development Corporation of Tanzania (“NDC”), which
holds the remaining 30% interest. Tancoal was granted a Mining Licence (“ML”) by the Tanzanian Government
on 18 August 2011 and commenced mining and supply of coal to domestic and regional industrial customers in
Tanzania, Kenya, Uganda, Zambia and Malawi. Sales increased across the Eastern African region, including trials
to Zambia and new customers in Kenya. Marketing is underway to secure new markets in Rwanda.
IEC’s flagship project, the Tancoal Mine, is a project of national significance, and remains the major operating
coal mine in Tanzania.
SALES
FY14
FY13
Coal Sold (tonnes)
189,597
121,026
PRODUCTION
FY14
FY13
Overburden Stripped (BCM)
461,043
260,161
Coal mined (tonnes)
203,264
105,484
Mining operations continue to focus on efficiency, reducing wastage, improving machinery performance,
labour productivity and matching production to contracted sales.
Current production capacity is circa 450,000 tonnes per annum. Upgrades in equipment and processes target
720,000 tonnes per annum to support the anticipated increase in sales volumes in FY15. As at 30 June 2014,
approximately 34,000 tonnes was held in stockpiles.
A mining and operations efficiency study was undertaken during the year resulting in a wide range of
recommendations in the areas of mine planning, scheduling and processing, which continue to be
implemented, lowering costs of production.
Coal quality has consistently met with client specifications, and resulted in Tancoal being the preferred supplier
over coal imported from South Africa.
A two phase logistics plan is being developed at the Tancoal operations. Product coal is distributed from a
stockpile at Kitai, some 50 kilometres from the mine pit. It is trucked to this location.
The first part of the plan is an expansion of the Kitai stockyard, which commenced in the last quarter of FY14,
and will be completed early in FY15. It will increase the storage and loading capacity of the yard, loading
efficiencies and improve safety and environmental standards.
The second phase of the plan is to assess the benefits of a new haul road, which will connect the Tancoal Mine
to the major roads in the region and allow the direct loading of customer trucks nearer to the Tancoal Mine,
resulting in transport cost savings.
MALCOAL (MALAWI)
Malcoal Mining Limited (“Malcoal”) is a joint venture between IEC and its local partner, Consolidated Mining
Industries Limited (“CMI”). Malcoal is an important part of IEC’s Eastern African strategy to be the dominant
coal supplier in the region.
SALES SUMMARY
Coal Sold (tonnes)
FY14
10,780
Malcoal moved from a contract mining arrangement to using equipment under its own control during the year.
Operations utilising this equipment commenced in the second quarter of FY14 though was delayed by the
delivery of all equipment. The equipment includes a dozer, excavator, wheel loader, trucks, crushing and
screening plant and a weighbridge.
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Review of Operations
PRODUCTION SUMMARY
Overburden Stripped (BCM)
Coal mined (tonnes)
FY14
67,529
27,539
Significant coal quality assurance work has been conducted at the mine, improving acceptance of the product
in the Malawian market.
Some infrastructure was upgraded during the year, allowing for year round access. Additional works will be
undertaken in FY15 to improve hauling efficiencies.
OCCUPATIONAL HEALTH, SAFETY AND ENVIRONMENT (“OHSE”)
OHSE is an important priority for IEC, and is planned at a policy level in Dar es Salaam and managed and
implemented at the mine sites.
Unfortunately a fatality occurred at the Tancoal mine site during the financial year, involving a vehicle
accident. Two lost time injuries also occurred. Thorough investigations were undertaken and recommended
actions put in place. IEC is ensuring that on-going improvements to safety are being made, and during the year
employee alcohol testing and medical examinations were two of the initiatives implemented.
Each mine operation is subject to an Environmental Impact Assessment Plan and the operations are regularly
audited by the relevant regulatory authorities. No major issues were identified for the financial year. As well,
the Tancoal operation was subjected to an independent third party audit as per legal requirements.
Initiatives
undertaken included improvement of storm water management infrastructure and acid neutralization,
establishment of a tree nursery project as part of progressive rehabilitation, and improvements in solid waste
management and hydrocarbons control. The Kiwira Port stockpile was also rehabilitated.
PROJECTS
POWER STATION DEVELOPMENT
IEC continues to sponsor two major coal-fired energy projects, Project Pamodzi and Project Ngaka. Its role is to
be the originator of the projects, providing the initial equity. IEC will be the exclusive coal supplier to the
proposed power stations.
During FY14, IEC has been identifying potential joint venture partners for both projects who can add expertise
and resources to the projects during development, construction and operations.
For the Pamodzi Project in Malawi, IEC has identified a US Independent Power Producer (“IPP”) investor,
Endeavor Energy Power Holdings Limited (“Endeavor Energy”), which is an investee of US private equity
infrastructure fund Denham Capital. IEC has signed an exclusive Memorandum of Understanding (“MOU”) with
Endeavor Energy to assess the viability of joint collaboration and is in the process of negotiating a Joint
Development Agreement.
IEC has commissioned Parsons Brinckerhoff consulting engineers to assist with pre-feasibility studies and
bankable feasibility studies for both projects.
PROJECT NGAKA (TANZANIA) – 200 MW (NET)
The MOU with TANESCO regarding the proposed mine mouth coal-fired power station at the Tancoal Mine in
the Ngaka coalfields in the Ruvuma Region of Tanzania lapsed in March 2014 and has not been extended.
PROJECT PAMODZI (MALAWI) – 120MW (NET)
Under the MOU with the Government of Malawi (signed in March 2013) IEC has continued the development of
the 120MW coal-fired power station. Through its wholly owned subsidiary in Malawi, Pamodzi Power Limited,
IEC is advancing the proposal for the power generation facility at Chipoka, approximately 130km from Salima
and the capital city, Lilongwe (“Project Pamodzi”). The electricity generated from Project Pamodzi will be sold
to the Electricity Supply Corporation of Malawi (“ESCOM”) under a 20-year Power Purchasing Agreement (PPA).
Project Pamodzi will be operating as the first independent power producer in Malawi.
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Review of Operations
Subsequent to the signing of the MOU, the Government of Malawi established an Advisory Committee to
engage with IEC on commercial issues. The Government and the Advisory Committee have committed to
engage with multilateral agencies, including the World Bank and African Development Bank to secure
commercial guarantees, risk insurance and USD payments required for the project. Technical pre-feasibility
studies showed that the project is technically feasible.
Good progress has been made in developing Project Pamodzi during the year. PPA term sheet negotiations
with ESCOM have been finalised awaiting confirmation on final capacity offtake from ESCOM. When final
capacity is confirmed IEC expects the PPA term sheet to be approved by ESCOM’s Board and Malawi
Government as ESCOM’s sole shareholder and subsequently signed. Discussions with African Development
Bank (“AfDB”) for a Partial Risk Guarantee have progressed well and IEC expects the formal application to be
lodged by the Malawi Government soon. The environmental project brief was approved by the Environmental
Affairs Department of the Malawi Government (“EAD”). Environmental Impact Assessment is needed and IEC
will commence the work when the PPA term sheet has been executed. IEC continues its negotiations for
investment and tax incentives for the project with the Ministry of Finance. Negotiations on the planned
Implementation Agreement and its negotiations for investment and tax incentives have also progressed.
In June 2014 Malawi had a change of Government appointing a new President, Cabinet and Ministers.
Consequently, some of the milestones for Project Pamodzi, in particular the completion of the PPA Term Sheet
and the negotiation of the Implementation Agreement have been delayed by a few months. The newly elected
Government of Malawi however has affirmed the importance of Project Pamodzi.
DRILLING
IEC has recently completed the transaction of the joint venture with General Petroleum Oils and Tools Pty
Limited (“GPOT”), a leading Queensland based provider of drilling supplies and consulting services to the oil
and gas industry. GPOT has acquired a 50% interest in AAA Drilling Limited (“AAA Mauritius”), a wholly owned
Mauritian subsidiary of IEC.
The Mauritian subsidiary has itself a subsidiary, AAA Drilling Limited (“AAA Tanzania”), an operating drilling
company in Tanzania that was established to undertake drilling and logging for IEC entities and third party
customers in Eastern Africa. GPOT is seeking to expand AAA Tanzania’s operations in Eastern Africa and will
apply its capabilities to offer the equipment of AAA to new contracts in the region after satisfying the
exploration and development program of IEC.
As part of the joint venture, GPOT is lending A$700,000 to AAA Tanzania to be paid in three cash instalments,
A$400,000 on completion, A$150,000 on or before 30 November 2014 and A$150,000 on or before 31 March
2015 for working capital.
IEC and GPOT will each provide an additional A$125,000 working capital and provide significant technical and
operational capabilities to AAA Tanzania. Both joint venture partners will have equal representation on the
board and appoint a Joint Operating Officer to the company.
EXPLORATION
TANCOAL (TANZANIA)
IEC has carried out exploration and evaluation of the coal resources throughout its suite of leases in the
southwest region of Tanzania, and in particular at Ngaka and Mhukuru. Substantial drilling had been completed
in the previous year, and in the current period, work focused on follow up geological mapping and resource
evaluation and mine planning.
TANZACOAL (TANZANIA)
Following trial mining and the excavation of a 5,650 tonne bulk sample within SML235 Kabulo, which was
completed in early in 2013, a Kabulo Mine Development Plan Report was completed in December 2013 to
support the mining operations.
This report presents the Development Plan for the Tanzacoal Kabulo Mine Project and describes the
exploration, geology, coal resources, mine design and planning, infrastructure design and mine development,
industrial and power station markets. Mine design and planning has been undertaken as a part of this
Page 8
Review of Operations
Development Plan and includes a study of pit design optimization, mining reserves formulation, equipment
selection and scheduling.
On 4 April 2014 Intra Energy’s subsidiary company, Tanzacoal East Africa Mining Limited received notice from
the Tanzanian Minister for Energy that Special Mining Licence SML235/2005 had been cancelled without
consultation. Tanzacoal has commenced legal action against the cancellation notice seeking the licence to be
restored or pursuing a claim for damages.
MALCOAL (MALAWI)
IEC has carried out substantial exploration within its suite of tenements in Malawi during the period,
culminating in the reporting of JORC Resources for Kopakopa and Nkhachira (refer ASX announcement 11
November 2013 and 24 February 2014).
Exploration and resource definition drilling has been carried out in EPL376 (North Rukuru) and ML143 and
EPL174 (Nkhachira), and geological mapping was undertaken in EPL377 and EPL392 (Ngana) and EPL209
(Mlimbo).
Kopakopa
Drilling has defined the Kopakopa Deposit within the central part of the North Rukuru lease (EPL376).
Seventeen holes were drilled for a total of 720.6m core within the North Rukuru lease and thirteen of these at
Kopakopa for a total of 614.5m core. Drilling was carried out by AAA Drilling. 195 core samples were collected
from these holes and analyzed. All holes at Kopakopa were downhole geophysically logged using a combined
gamma, density (short and long spaced) and caliper tool. Topographic surveying was carried out over the
Kopakopa deposit area and DTM topographic maps were subsequently produced.
The Kopakopa Deposit is comprised of sediments belonging to the Karoo Super Group, which is the largest
sedimentary stratigraphic unit in southern Africa. The coal bearing sediments occur in the K2-K3 Formation and
unconformably overlie Precambrian basement rocks within a half-graben.
Strata dip in an easterly direction at between 15 and 20 degrees. Five coal horizons have been identified at
Kopakopa and named, in top down stratigraphic order, K500, K400, K300, K200 and K100.
Coal resources have been determined in a manner consistent with the “Australian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves ~ The JORC Code ~ 2012 Edition” (the Code) and the
associated 2003 edition of “Australian Guidelines for Estimating and Reporting of Inventory Coal, Coal
Resources and Coal Reserves” (the Guidelines).
Total coal resources are now reported at 23.8 million tonnes comprising 3.4 million tonnes Measured, 5.0
million tonnes Indicated and 15.4 million tonnes Inferred category coal as per Table 1.
Table 1 – Intra Energy JORC resources
Measured (Mt)
Indicated (Mt)
Inferred (Mt)
Total (Mt)
16.4
38.9
55.3
3.4
10.1
13.5
68.8
49.1
63.0
112.1
5.0
13.8
18.8
130.9
142.0
114.0
256.0
15.4
14.4
29.8
285.8
207.5
215.9
423.4
23.8
38.3
62.1
485.5
Project
Tanzania
Tancoal – North
Tancoal – South
Tanzania Total
Malawi
Kopakopa
Nkhachira
Malawi Total
Total Reserves in JORC
Page 9
Review of Operations
Nkhachira
IEC drilled sixty four (64) fully cored holes for a total of 2,437.2m core within the Nkhachira leases (EPL174 and
ML143). Drilling was carried out by AAA Drilling. 523 core samples consisting of coal and non-coal material
were collected from these holes and analysed. A detailed topographic survey was carried out over the
Nkhachira Deposit and a DTM compiled. Topographic maps were subsequently produced from this DTM.
The Nkhachira Deposit is comprised of sediments belonging to the Karoo Super Group. Three coal horizons
have been identified and named, in top down stratigraphic order, K300, K200 and K100. The Company operates
the Malcoal Mine within ML143.
Coal resources have been determined in a manner consistent with the “Australian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves ~ The JORC Code ~ 2012 Edition” (The JORC Code) and
the associated 2003 edition of “Australian Guidelines for Estimating and Reporting of Inventory Coal, Coal
Resources and Coal Reserves” (the Guidelines).
Total coal resources are now reported at 38.3 million tonnes comprising 10.1 million tonnes Measured, 13.8
million tonnes Indicated and 14.4 million tonnes Inferred category coal as per Table 1.
UAROO (AUSTRALIA)
IEC has two exploration licences (E08/1494 and E08/1495) at Uaroo in Western Australia. IEC entered into a
relationship with Cauldron Energy Limited (ASX:CXU) for the exploration of Uranium within the leases.
Cauldron is currently managing the exploration and is administering the tenements.
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Review of Operations
COMPETENT PERSON STATEMENT
MBALAWALA
The information in this report relates to Exploration Results, Mineral Resources or Ore Reserves based on the
Mbalawala Mine Bankable Feasibility Study with related infrastructure feasibility options as at 31 August 2010,
the Mbalawala Coal Mine Bankable Feasibility Study as at 13 August 2010 and the Resource Model Assessment
and Review, Ngaka Project Area as at 20 July 2010, the Memorandum Summary provided by JB Mining Services
Pty Ltd dated 18 October 2012 and have been reviewed by Mr David Mason MBA, BSc (Hons). Mr Mason is a
Fellow of the Australasian Institute of Mining and Metallurgy, has Chartered Professional (Management) status,
and as such qualifies as a Competent Person as defined by the “Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves (The JORC Code) 2012 Edition”. Mr Mason is an Executive
Director of Intra Energy Corporation Limited and has sufficient experience to qualify as a Competent Person as
defined in the 2004 edition of the “Australian Code for Reporting of Mineral Resources and Ore reserves”. Mr
Mason consents to the inclusion of the matters based on his information in the form and context in which it
appears.
SONGWE-KIWIRA (SONGWE KABULO)
The Resource Statement in relation to Songwe-Kiwira and the Memorandum Summary relating to the Ngaka
coal leases were compiled by Phillip Sides, a qualified senior geologist employed by JB Mining Services Pty Ltd
(JBMS), who has over 25 years’ experience in the exploration and evaluation of coal resources. Mr Sides is a
member of the Australian Institute of Geoscientists and as such, qualifies as a Competent Person as defined by
the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC
Code) 2012 Edition”. The report has been prepared using the guidelines for the estimation of black coal
resources and reserves as contained in The JORC Code.
Neither Mr Sides nor JBMS has any material interest or entitlement, direct or indirect, in the securities of Intra
Energy Corporation Limited. JBMS has been providing geological services to Intra Energy Corporation on the
Kabulo Project since early 2011.
Mr David Mason, Executive Director – Exploration and Business Development of Intra Energy Corporation
Limited, originally requested this resource evaluation. All fees for the preparation of this report are charged on
a time and materials basis.
Initial evaluation, computer modelling of seam structure and coal quality and initial coal tonnage estimates
were undertaken by Greg Jones, Senior Consultant/Director of JBMS prior to handing over responsibility of the
resource evaluation to Phillip Sides.
NKHACHIRA AND KOPAKOPA
The information in this report that relates to the Nkhachira and Kopakopa coal resources is based on a report
compiled by Mr David Mason. The reporting is in compliance with the 2012 JORC Code. Mr Mason is a qualified
coal geologist, a Fellow of the Australasian Institute of Mining and Metallurgy (No 100405) and an Executive
Director employed by Intra Energy Corporation Limited. He has sufficient experience relevant to the style of
mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as
a Competent Person as defined in the Australasian Code for Reporting of Mineral Resources and Ore Reserves
published by the Joint Ore Reserves Committee (The JORC Code – 2012 Edition). Mr Mason has given his
consent for the inclusion of this information in the report and has reviewed all statements pertaining to the
information in the form and context in which it appears.
Page 11
Review of Operations
CORPORATE SOCIAL RESPONSIBILITY (“CSR”)
Community
At IEC our approach to corporate social responsibility (“CSR”) is about partnership with local communities to
develop initiatives to provide social and economic development as well as environmental protection and
conservation in the areas IEC operate.
By developing partnerships with the communities, IEC is helping to foster sustainable development, share the
socio-economic benefits from its operations and alleviate poverty.
IEC’s focus is helping communities by developing infrastructure, education and health opportunities by
employment of local personnel. It relies on the local community for operational support rather than external
contractors in order to boost the local economy where it operates. IEC makes direct contributions to the
community through building infrastructure and donations of equipment and supplies, and transfers capabilities
and skills to enhance work abilities.
IEC is a member of the Australian African Mining Industry Group (“AAMIG”) – an industry body that promotes
best practice in corporate social responsibility among Australian mining companies active in Africa.
Some of the key challenges associated with investing in Africa relate to governance, capacity building, human
rights, environment and social issues. The mining industry in both Tanzania and Malawi represents a large
potential source of income for the long-term development of these economies. IEC is therefore committed to
continue to work in conjunction with the government and local communities to put in place programs and
develop projects that have a tangible outcome, and priority is given to projects that alleviate poverty,
contribute to building skills and support women’s and youth economic empowerment, especially through
education and business ownership.
IEC currently has many projects in the early stage of development, however it remains committed to working
with the local community by supporting the following projects:
TANZANIA
Mbalawala Women’s Group (“The Women’s Group”)
The Women’s Group was established in late 2011 after consultation with local women and in partnership with
community leaders. The Women’s Group provides local goods and camp services to the mine employees and is
funded by Tancoal with assistance from a successful grant application from the Australian Government’s Direct
Aid Programme.
The Women’s Group aims to establish a number of activities for the local women to learn new skills and have
the opportunity to run each activity as a business. It also enables IEC to work with local women to improve
their education, health, independence and social equality.
Education
Education for the local communities is very important. Tancoal has refurbished three local schools, constructed
toilets for students, donated equipment for the students’ canteen, donated sports material and is working with
the schools to identify local students who are selected to attend training in environmental, medical and
mechanical skills. Tancoal also employs workers from the local community and has implemented training
schemes to develop technical skills for employment.
Community and Health
Tancoal has facilitated the supply of clean water to the nearest schools, health centre and residential points,
which has reduced travelling time for villagers to secure clean water for domestic consumption. Plans are
underway to improve the nearest health facility to be able to offer outpatient services to the village near the
campsite, including donating medicines and equipment for the clinic.
MALAWI
Intra Energy is in the process of establishing a group of local women to start providing catering services for
Malcoal mine workers in conjunction with the setup of an agricultural program.
Page 12
Directors’ Report
The Directors submit their report for Intra Energy Corporation Limited (“IEC” or “the Company”) and its
controlled entities for the year ended 30 June 2014 (together referred to as “the Group” or “the Consolidated
Entity”).
DIRECTORS
The names and details of the Company’s Directors in office during the financial year and until the date of this
report are as follows. The Directors were in office for the entire period unless otherwise stated.
Name
Position
Description
Graeme
Robertson
BA, FAICD, MAIE
Executive Chairman
David Mason
BSc (Hons), MBA
Executive Director –
Geology and Business
Development
Non-Executive Director
from 31 July 2014
Executive Director and
Chief Financial Officer
Jonathan
Warrand
MBA (Exec), CA,
FINSIA, IPAA,
BCom
(Accounting)
Page 13
Graeme joined the Board in November 2010 as Non-Executive
Chairman and was appointed Executive Chairman in January 2011.
He has over thirty years’ experience in the coal, infrastructure and
power development industries.
From 1983 to 2005 Graeme was CEO and Managing Director of
New Hope Corporation Limited (ASX:NHC). During this period he
pioneered the development of major international companies
including as President Director of Adaro Indonesia, the largest
single open cut coal mine in the Southern Hemisphere, President
Director of Indonesia Bulk Terminal, a 12 mtpa capacity bulk coal
port and as an advisor to the development of the 1,230MW Paiton
Power station, the first IPP in Indonesia.
His career has spanned both public and private energy related
developments including directorships with the Port of Brisbane
Authority and Washington H. Soul Pattinson & Co Ltd, one of
Australia’s oldest listed companies.
Graeme was the recipient of the Asia 500 Award in 2000 and the
Coaltrans Lifetime Achievement Award in 2010 for his
contribution to the coal industry. He is a Fellow of the Australian
Institute of Company Directors and a Member of the Australian
Institute of Energy.
Graeme currently holds the position of Non-Executive Chairman of
both NuEnergy Gas Limited (formerly NuEnergy Capital Limited)
(ASX:NGY) and Indopac Holdings Limited (ASX:IDP).
David joined the Board in January 2011. He has over thirty years’
exploration, drilling and mining experience throughout
Australasia.
David was formerly a Director of Overseas & General Limited
(ASX:OGL), a coal producer in Indonesia. Prior to this, David was
Operations Director of Haddington Resources (now Altura Mining,
ASX:AJM) a diversified resource company which acquired the
resource investment and mining service companies of Minvest
International, a group he managed.
In his prior role as General Manager of Minvest, David assisted in
the development of the Adaro Indonesia coal mine, the MHU coal
mine, a suite of exploration assets and mining service companies.
Jonathan joined the Board in January 2011. Jonathan has over
twenty five years’ of corporate advisory experience across various
sectors including resources, financial services and real estate and
has experience in equity and debt capital markets, strategic
planning, capital management and corporate advisory.
Jonathan holds a Masters of Business Administration (AGSM,
Directors’ Report
William Paterson
BE (Civil) Hons
(Non-Executive Director)
Gideon Nasari
MSc, MBA
(Non-Executive Director)
Resigned 31 July 2014
Simon Harvey
CA BCom
(Non-Executive Alternate
Director for Jonathan
Warrand)
Appointed 10 December
2013
COMPANY SECRETARY
Rozanna Lee
B. Com (Hons),
LLB
Company Secretary
Page 14
University of Sydney and University of New South Wales), is a
Chartered Accountant, Fellow of Finsia, Associate of the
Insolvency Practitioners’ Association of Australia and holds a
Bachelor of Commerce (Accounting) from the University of
Wollongong.
Jonathan currently holds the position of Non-Executive Director of
NuEnergy Gas Limited (formerly NuEnergy Capital Limited)
(ASX:NGY) and Indopac Holdings Limited (ASX:IDP).
Bill was appointed as a non-Executive Director of IEC in March
2012 and is the Chairman of the Remuneration Committee. Bill
graduated in 1964 from Auckland University with an honours
degree in civil engineering. From 1973, for 27 years, he made
major contributions as a director to the growth and success of one
of Australia’s premier engineering consultancies. In 2002, that
business became a listed engineering services provider, now
known as Worley Parsons Ltd.
Bill has extensive experience and continuing involvement in the
planning, design and implementation of a wide range of civil,
infrastructure and building projects in the commercial, industrial
and energy related sectors.
Gideon was Managing Director and Chief Executive Officer of the
National Development Corporation (NDC) from 2007 to 2014. NDC
is a statutory organisation wholly owned by the Government of
the United Republic of Tanzania with the mandate to implement
strategic industrial development projects in partnership with the
private sector.
Gideon has more than 30 years’ experience
in mining,
manufacturing and leadership. He has served as Manager, Deputy
General Manager of Tanzania Portland Cement Co. Ltd and later
as Executive Director, Corporate Affairs in 1998, having risen
through the ranks from a Mining Geologist in 1978.
Simon is currently the CFO of an ASX listed company, NuEnergy
Gas Limited. (ASX: NGY) He previously worked for many years in
Europe, and prior to his return to Australia was a director at
Pinnacle Real Estate Innovation, a real estate development and
asset management company in Prague, Czech Republic. Simon
also has extensive experience with development and asset
management and was country manager of Pinnacle’s Bulgarian
operations in 2009.
Rozanna was appointed Company Secretary in October 2011.
Rozanna has experience
including
international trust company services in the Netherlands and has
degrees in Law and Commerce from the University of Queensland.
in a range of
industries
Directors’ Report
CORPORATE STRUCTURE
IEC is a public company domiciled in Australia and listed on the Australian Stock Exchange (ASX:IEC). The
Company has prepared a consolidated financial report incorporating the entities that it controlled during the
financial year, which are outlined in Note 19 of the financial statements.
INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY AND RELATED BODIES CORPORATE
As at the date of this report, the interests of the Directors in the shares of the Company were:
Special Responsibilities
G Robertson
Executive Chairman
D Mason
Executive Director
Ordinary
Shares
70,345,741
6,421,923
J Warrand
Executive Director, Chief Financial Officer
2,835,930
W Paterson
Non-Executive Director, Chair of Remuneration
Committee
29,000,000
G Nasari
S Harvey
Non-Executive Director
(Resigned 31 July 2014)
Alternate Director to J Warrand
(Appointed 10 December 2013)
59,000
Options Over
Ordinary
Shares
Performance
rights
2,832,240
2,004,922
1,889,784
Subsequent to 30 June 2014 a private placement was announced issuing 51,851,852 ordinary shares in IEC at
$0.027 per share raising $1.4m before transaction costs. Each shareholder participating in the placement will
receive two unlisted options for nil consideration for every five ordinary shares. The options will be exercisable
at any time prior to 31 August 2015 at an exercise price of $0.05. Directors who participated in the placement
will require shareholder approval at the next meeting of IEC shareholders. The 24,074,074 shares and
9,629,628 options to be issued to Directors under this placement are not included in the above table.
Loss Per Share
Basic loss per share (cents)
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
2014
(6.68)
2013
(2.96)
The principal activities of the entities within the Consolidated Entity during the year were coal exploration,
production and power generation in Eastern Africa.
OPERATING REVIEW
The Consolidated Entity’s operations are discussed in detail in the Review of Operations which can be found on
pages 6 to 12 of this Annual Financial Report.
REVIEW OF FINANCIAL CONDITION
The Consolidated Entity recorded an operating loss after income tax and non-controlling interests of
$20,777,000 (2013 Loss: $8,611,000), including an impairment charge of $13,413,000 relating to the cancelled
Tanzacoal Mining Licence. Income tax benefit for the year is $107,000 (2013: $117,000).
Page 15
Directors’ Report
CAPITAL STRUCTURE
As at the date of signing this report, the Company had 318,102,703 fully paid ordinary shares and 11,111,107
options over ordinary shares on issue (excluding 24,074,074 shares and 9,629,628 options to be issued to
Directors and approved by shareholders at the AGM).
DIVIDENDS
No dividend was paid or declared during the year ended 30 June 2014.
CASH FROM OPERATIONS
The net cash outflow from operations of $3.39m was lower than the cash outflow in the previous year of
$5.22m due to improved operating activities arising from an increase in coal tonnes sold.
The net cash outflow from operations was funded by carried forward cash reserves of $4.44m, a US$0.5m
working capital facility combined with proceeds from a Share Purchase Plan concluded in January 2014 raising
$1.53m. The Company had a net overdraft of $0.43m at year end with $0.09m cash at bank and a bank
overdraft facility of $0.52m.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
On 4 April 2014 the Company received notice from the Tanzanian Minister of Energy and Minerals that licence
SML 235/2005, held by IEC subsidiary company Tanzacoal East Africa Mining Limited, had been cancelled. An
impairment charge of $13,413,000 was recorded in the period. The Company has sought legal recourse to have
the licence re-instated.
There are no further significant changes to the state of affairs of the Company.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
On 31 July 2014, Mr Gideon Nasari resigned as a Non-Executive Director of the Company. On the same date
David Mason transitioned to a Non-Executive Director.
On 14 August 2014 the Company announced completion of a private placement to sophisticated investors of
51,852,851 shares in IEC at a share price of $0.027 per share, raising $1.4 million before transaction costs. Each
shareholder participating in the private placement will receive two unlisted options for nil consideration for
every five ordinary shares. The options will be exercisable at any time prior to 31 August 2015 at an exercise
price of $0.05. 27,777,778 ordinary shares and 11,111,107 options were issued on 15 August 2014 with the
remainder being 24,074,074 shares and 9,629,628 options to be issued to IEC Directors, subject to shareholder
approval at the Company’s AGM.
AAA Drilling has recently completed the transaction to enter into a joint venture agreement with General
Petroleum Oils and Tools Pty Limited (“GPOT”), a Queensland based provider of drilling supplies and consulting
services to the oil and gas industry. GPOT has acquired a 50% interest in AAA Drilling Limited (“AAA Mauritius”),
a wholly owned Mauritian subsidiary of IEC.
The Mauritian subsidiary has itself a subsidiary, AAA Drilling Limited (“AAA Tanzania”), an operating drilling
company in Tanzania. GPOT is seeking to expand AAA Tanzania’s operations in Eastern Africa and will apply its
capabilities to offer the equipment of AAA to new contracts in the region after satisfying the exploration and
development program of IEC.
As part of the joint venture, GPOT is lending A$700,000 to AAA Tanzania to be paid in three cash instalments,
A$400,000 on completion, A$150,000 on or before 30 November 2014 and A$150,000 on or before 31 March
2015 for working capital.
IEC and GPOT will each provide an additional A$125,000 working capital and provide significant technical and
operational capabilities to AAA Tanzania. Both joint venture partners will have equal representation on the
board and appoint a Joint Operating Officer to the company.
Subsequent to balance date, the Group received from the National Bank of Commerce in Tanzania (“NBC”),
formal acknowledgment of the pre-notification of the expected covenant breaches in Tancoal and AAA Drilling.
The NBC has provided a waiver against immediately recalling the loans based on the expected breaches subject
to the companies meeting their on-going compliance obligations under the original payment schedule as
Page 16
Directors’ Report
specified in the facility agreements. The NBC has reserved its right to perform its annual review following
receipt of the audited accounts of the companies, in which the bank will perform a holistic assessment of the
financial health of the companies and, despite the current waiver, reserves its right to further action. The loan
amount is secured against the Company’s mining assets and drilling rigs.
Other than those events outlined above, there has not arisen in the interval between the end of the financial
year and the date of this report any item, transaction or event of a material and unusual nature likely, in the
opinion of the Directors of the Company, to affect significantly the operations of the Company, the results of
those operations, or the state of affairs of the Company, in future financial years.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Company is subject to environmental regulations and is compliant with all aspects of environmental
regulation in its exploration and mining activities, including provision for environmental rehabilitation costs.
The Directors are not aware of any environmental law that is not being complied with.
Page 17
Remuneration Report
REMUNERATION REPORT (AUDITED)
This report outlines the remuneration arrangements in place for key management personnel of the Company,
in connection with the management of the affairs of the entity and its subsidiaries, during the year to 30 June
2014.
Key management personnel have authority and responsibility for planning, directing and controlling the
activities of the Company and the Consolidated Entity, including Directors of the Company and other
executives. Key management personnel comprise the Directors of the Company and executives of the Company
and the Consolidated Entity.
A. REMUNERATION POLICY
Remuneration Committee
During the year ended 30 June 2014, the Remuneration Committee (“the Committee”) comprised of three
members, two Non-Executive Directors and the Executive Chairman, the Committee is chaired by a Non-
Executive Director.
The function of the Committee is to assist the Board in fulfilling its corporate governance responsibilities with
respect to remuneration by reviewing and making appropriate recommendations on:
(a) Remuneration packages of Executive Directors, Non-Executive Directors and Senior Management;
(b) Employee incentive and equity-based plans including the appropriateness of performance hurdles
and total payments proposed.
Remuneration Policy
The Committee adopts the following policies on executive compensation and will bear these policies in mind
during remuneration reviews:
All key executives should be paid fair market Total Fixed Remuneration (“TFR”) for their employment, taking
into account their responsibilities and performance expectations.
All remuneration paid to Directors and Executives is valued at the cost to the Company and expensed. Prior to
the 2014 year the Company had a practice of granting shares and/or options to the Executives (being Executive
Directors and Senior Management). The shares granted were valued at the difference between the market
price of those shares and the amount paid by the Executives. Options were valued using the Black-Scholes
methodology.
In 2012 the Remuneration Committee initially adopted Performance Rights as the incentive scheme for the
Executive Directors and Senior Management.
The Committee’s policy is to remunerate Non-Executive Directors at market rates for comparable
companies for time, commitment and responsibilities. The Committee determines payments to the Non-
Executive Directors and reviews their remuneration annually, based on market practice, duties and
accountability. Independent external advice is sought when needed. Fees for Non-Executive Directors are
not linked to the performance of the Consolidated Entity. The Directors are not required to hold any shares
in the Company under the Company’s Constitution. However, to align Directors’ interests with shareholder
interests, the Directors are encouraged to hold shares in the Company.
Executive Directors’ Remuneration
In considering the Company’s Remuneration Policy and levels of remuneration for Executives, the Committee
makes recommendations that seek to:
Motivate Executive Directors and Senior Management to pursue long term growth and success of the
Company within an appropriate control framework;
Demonstrate a clear correlation between Executives’ performance and remuneration; and
Align the interests of Executives with the long-term interests of the Company’s shareholders.
To the extent that the Company adopts a different remuneration structure for its Executive Directors, the
Committee shall document its reasons for the purpose of disclosure to stakeholders.
Page 18
Remuneration Report
On August 2013 the Board of Intra Energy Corporation resolved that the employee incentive scheme would be
suspended for the financial year ended 30 June 2014.
On 22 January 2014 Shareholders approved the issue of performance rights to the Executive Directors and
Senior Management of IEC in exchange for a voluntarily reduction in their cash remuneration for the six month
period from 1 January to 30 June 2014. Executive Directors voluntarily elected a 20% reduction in base
remuneration (excluding superannuation) and the Senior Management elected a 10% reduction in exchange
for performance rights as a short term cash saving measure. The Executive Directors and Senior Management
were granted a fixed number of IEC performance rights based on their remuneration deferral. The performance
rights will only vest after 12 months providing the employee remains in service with the Company. On 22
January 2014, 1,381,025 performance rights were issued as a result. An expense of $29,217 was recorded
relating to Executive Directors.
Non-Executive Director Remuneration
In considering the Company’s Remuneration Policy and levels of remuneration for Non-Executive Directors, the
Committee is to ensure that:
Fees paid to Non-Executive Directors are within the aggregate amount approved by shareholders and
recommendations are made to the Board with respect to the need for increases to this aggregate amount
at the Company’s Annual General Meeting;
Non-Executive Directors are remunerated by way of fees (in the form of cash);
Non-Executive Directors are not provided with retirement benefits; and
Non-Executive Directors are not entitled to participate in equity-based remuneration schemes designed for
Executives without due consideration and appropriate disclosure to the Company’s shareholders.
To the extent that the Company adopts a different remuneration structure for its Non-Executive Directors, the
Committee shall document its reasons for the purpose of disclosure to stakeholders.
Incentive Scheme
To qualify for the Scheme a person must be an employee and have worked with the Company for a minimum
of 6 months (the only exception is to attract Senior Management or a Head of Business and is subject to the
approval of the Remuneration Committee).
The incentive scheme has two components, namely, the Short Term Incentive (“STI”) and Long Term Incentive
(“LTI”) respectively. This is to ensure that the key Executives have short and long term interests of the Company
in mind in their decision making.
Executive Management
For the Executive Directors the performance conditions are 50% external, 50% internal.
Payout of LTI incentive is dependent on the combined score of both the external and internal measures.
STI: 40% of TFR, payable in lump sum annually when an Executive has satisfactorily achieved his or her
performance targets set by the Company.
LTI: 60% of TFR, This is in a form of an equity incentive using Performance Rights as an instrument. Payout will
be based on the performance of the entire management team in achieving exceptional performance for the
Company and its shareholders.
Management
The Management team performance conditions are 1/3 satisfaction of individual performance (agreed Key
Performance Indicators), 1/3 external measure and 1/3 internal measure. The annual individual performance
targets are agreed at the June board meeting.
During the period, certain members of the IEC Senior Management team were issued performance rights in
exchange for a 10% voluntarily reduction in their cash remuneration for the six month period from 1 January to
30 June 2014 as a short term cash saving measure. Senior Management who participated were granted a fixed
number of IEC performance rights based on their remuneration deferral. The performance rights were issued in
two tranches. Tranche 1 will only vest after 12 months providing the employee remains in service with the
Company. Tranche 2 will vest if one of the following occurs:
Page 19
Remuneration Report
An increase of at least 50% between the closing IEC share price on the date of the 2013 AGM Notice of
Meeting and the 30 day VWAP calculated on the date of the release of the audited Financial Statements for
the year ended 30 June 2014; or
The audited Financial Statements for the year ending 30 June 2014 show the Company has made a profit.
An expense of $45,595 was recorded relating to Senior Management.
External Measure
The vesting of Performance Rights is subject to the Company’s Total Shareholder Return (“TSR”) outperforming
the S&P/ASX300 Energy Index (ASX: XEK) over the vesting period.
Percentile Ranking
50th
> 51st but < 60th
> 60th but < 68th
> 68th but < 76th
> 76th
Percentage of Tranche 1 (T1) Performance Rights to
Vest (50% component)
Nil
30%
60%
90%
100%
IEC’s TSR over the vesting period is ranked against the constituent companies of the S&P/ASX300 Energy Index.
T1 Performance Rights will vest based on the IEC TSR Percentile Ranking achieved in this table. The Peer Group
is established on the Grant Date as all companies within the S&P/ASX300 Energy Index.
Any companies within the Peer Group which are delisted as at the vesting date are removed from the final
analysis.
The Company reserves the right to amend the Peer Group at any time prior to the vesting date.
Internal Measure
The internal measure uses earnings per share (“EPS”) as the indicator.
The annual EPS target is set by the Board and agreed by the Committee after approval of the following year’s
Group budget. The vesting of these Rights is subject to achieving the budgeted earnings per share (“Budget
EPS”) as determined by the Board over the vesting period. That is, the sum of three years’ EPS ending 30 June.
The Budget EPS is determined by the Board and takes into account market expectations, economic and
industry conditions, meeting financial objectives and the past performance of the Company. EPS is as defined
under AIFRS for the relevant period.
Performance against budget EPS
Percentage of Tranche 2 (T2) Performance Rights to
Vest (50% component)
Nil
25%
50%
75%
100%
< 100%
> 100% but < 107%
> 107% but < 114%
> 114% but < 120%
> 120%
Page 20
Remuneration Report
B. KEY MANAGEMENT PERSONNEL
During the year ended 30 June 2014 the Key Management Personnel (“KMP”) of IEC were:
Name
Position Held
Mr Graeme Robertson
Executive Chairman
Mr Jonathan Warrand
Mr David Masonᶺ
Mr William Paterson
Mr Gideon Nasari
Mr Tarn Brereton
Mr Simon Harvey*
Executive Director and Chief Financial Officer
Executive Director – Exploration and Business Development
Non-Executive Director and Chair of Remuneration Committee
Non-Executive Director (Resigned 31 July 2014)
Chief Operating Officer (Appointed 1 July 2013)
Alternate Director to J Warrand (Appointed 10 December 2013)
* Mr Simon Harvey was appointed as an Alternate Director for Mr Jonathan Warrand on 10 December 2013. Mr Harvey
does not receive any remuneration for acting in his capacity as Alternate Director.
ᶺ Mr David Mason resigned as an Executive Director on 31 July 2014. Mr Mason continues as a Non-Executive Director.
C. CONSEQUENCES OF PERFORMANCE ON SHAREHOLDER WEALTH
In considering the Group’s performance and benefits for shareholder wealth, the Committee has regard to the
following indices in respect of the current financial year and the previous three financial years.
2014
2013
2012
2011
Loss attributable to shareholders
(18,845,000)
(7,296,000)
(6,954,000)
(6,357,000)
Dividends paid
Net operating result
Change in share price
Return on capital employed
–
–
–
–
(20,777,000)
(8,611,000)
(7,751,000)
(7,860,000)
(69%)
(144%)
(62%)
(26%)
(23%)
(24%)
88%
(28%)
Profit is one of the financial performance targets considered in setting the STI. Profit amounts have been
calculated in accordance with Australian Accounting Standards (AASBs). Net operating result is Net Loss for the
period reported in the Statement of Comprehensive Income.
The overall level of compensation takes into account the performance of the Group over a number of years.
Over the past four years the Group’s loss from ordinary activity after income tax has increased. During the
same period the average total senior executive compensation has decreased from A$2,392,433 in 2011 to
A$1,284,628 in 2014, an average decrease over the period of 15% per annum.
Page 21
Remuneration Report
D. DETAILS OF REMUNERATION
2014
Salary and fees
$
Cash bonus
$
Non-monetary benefits
$
Superannuation
$
Retirement Benefits
$
Long service leave
$
Shares
$
Options
$
Incentive plans¹
$
Short-term
Post-Employment
Long-term
Share-based Payment
NON-EXECUTIVE DIRECTORS
Mr G Nasari
Mr W Paterson
EXECUTIVE DIRECTORS
Mr G Robertson
Mr D Mason
Mr J Warrand
Mr S Harvey
45,680
50,000
186,500
226,555
226,555
–
KEY MANAGEMENT PERSONNEL
Mr T Brereton
Total
258,316
993,606
–
–
–
–
–
–
–
–
4,621
4,621
4,621
4,621
4,621
–
–
–
–
–
23,284
23,284
–
–
23,105
46,568
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
84,913
62,697
59,133
–
14,606
221,349
¹ Incentive plan amounts relate to FY12 and FY13 LTI/STI schemes and FY14 incentives granted in lieu of pay reductions.
Short-term
Post-Employment
Long-term
Share-based Payment
2013
Salary and fees
$
Cash bonus
$
Non-monetary benefits
$
Superannuation
$
Retirement Benefits
$
Long service leave
$
Shares
$
Options
$
Incentive plans
$
NON-EXECUTIVE DIRECTORS
49,167
70,604
9,167
12,500
200,000
284,098
252,293
877,829
Mr W Paterson
Mr G Nasari
Mr C Hartz
Mr F Lung
EXECUTIVE DIRECTORS
Mr G Robertson
Mr D Mason
Mr J Warrand
Total
Page 22
–
–
–
–
–
–
–
–
3,886
3,258
542
926
3,886
3,886
3,886
20,270
–
–
–
–
–
24,235
22,706
46,941
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
61,883
40,224
38,345
TOTAL
$
50,301
54,621
276,034
317,157
313,593
–
272,922
1,284,628
TOTAL
$
53,053
73,862
9,709
13,426
265,769
352,443
317,230
% of Remuneration
granted as options
%
–
–
–
–
–
–
–
–
% of Remuneration
granted as options
%
–
–
–
–
–
–
–
–
140,452
1,085,492
Remuneration Report
E. CASH BONUSES
There were no cash bonuses paid during the year.
F.
SHARE BASED PAYMENT BONUSES
There were no share-based payment bonuses paid during the year.
G. OPTIONS ISSUED AS PART OF REMUNERATION
No options were issued as remuneration during the 2014 year. In 2012 the Committee adopted Performance
Rights as the incentive scheme for the Executive Directors and Senior Management.
H. EMPLOYMENT CONTRACTS OF DIRECTORS AND EXECUTIVES
Mr Graeme Robertson is employed by the Company as Executive Chairman for an indefinite period until
terminated by either party by giving not less than three months’ notice. His rate of remuneration is $135,000
per annum which is reviewed annually. In the event of termination by either party the Company may choose to
make a payment in lieu of notice, or any unexpired period of notice, at a sum equivalent to the current rate of
remuneration. Mr Robertson also receives Chairman’s fees of $65,000 per annum.
Mr Robertson voluntarily accepted a 20% reduction in base salary for the period 1 January 2014 to 30 June
2014 in exchange for performance rights.
Mr Jonathan Warrand is employed by the Company as Executive Director and Chief Financial Officer for an
indefinite period until terminated by either party by giving not less than three months’ notice. Mr Warrand
receives a salary of $275,000 including superannuation from the Company.
Mr Warrand voluntarily accepted a 20% reduction in base salary for the period 1 January 2014 to 30 June 2014
in exchange for performance rights.
Intrasia Capital Pty Ltd, a related entity of Mr Warrand and Mr Robertson, receives management services fees
(representing administration, investor relations, accounting and general office support) of $40,000 per month
from IEC. The fees are reviewed annually and approved by Directors of IEC not related to Mr Warrand and Mr
Robertson.
Mr David Mason is employed as Executive Director – Exploration and Business Development for an indefinite
period until terminated by either party by giving not less than three months’ notice. During the year, Mr Mason
was paid $275,000 as an employee including superannuation.
Mr Mason voluntarily accepted a 20% reduction in base salary for the period 1 January 2014 to 30 June 2014 in
exchange for performance rights.
Mr Tarn Brereton is employed as Chief Operating Officer for an indefinite period until terminated by either
party by giving not less than three months’ notice. During the year, Mr Brereton was paid US$250,000 as an
employee including local superannuation.
Mr Brereton voluntarily accepted a 10% reduction in base salary for the period 1 January 2014 to 30 June 2014
in exchange for performance rights as a short term cash saving measure. The performance rights were issued in
two tranches. Tranche 1 will only vest after 12 months providing Mr Brereton remains in service with the
Company. Tranche 2 will vest if one of the following occurs:
An increase of at least 50% between the closing IEC share price on the date of the 2013 AGM Notice of Meeting
and the 30 day VWAP calculated on the date of the release of the audited Financial Statements for the year
ended 30 June 2014; or
The audited Financial Statements for the year ending 30 June 2014 show the Company has made a profit.
Each employment contract of Directors and Executives includes:
Three months’ notice to be given by the Director;
Termination payments equivalent to six months’ salary package;
Base total fixed remuneration (including superannuation) to be reviewed annually;
Provision of annual leave, accrued balance payable upon termination;
Provision made for the awarding of bonuses at the recommendation of the Committee (“STI”); and
Page 23
Remuneration Report
Provision made
shareholder approval.
for
the
award of performance
share
rights
(“LTI”),
subject
to
No payments were made under an LTI or STI scheme for the year ended 30 June 2014.
I.
KEY MANAGEMENT PERSONNEL COMPENSATION - OPTIONS
2014
Mr G Robertson
Mr J Warrand
Mr D Mason
Mr G Nasari
Mr W Paterson
Mr T Brereton
Mr S Harvey
Total
2013
Mr G Robertson
Mr J Warrand
Mr D Mason
Mr G Nasari
Mr W Paterson
Mr C Hartz
Mr F Lung
Total
Balance at
beginning of
year
Granted during
the year as
compensation
Exercised
during the year
Lapsed /
cancelled
during the year
Balance at the
end of the year
Vested and
exercisable
3,000,000
1,000,000
1,500,000
800,000
–
–
–
6,300,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Balance at
beginning of
year
Granted during
the year as
compensation
Exercised
during the year
3,000,000
1,000,000
1,500,000
800,000
–
–
–
6,300,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(3,000,000)
(1,000,000)
(1,500,000)
(800,000)
–
–
–
(6,300,000)
Lapsed /
cancelled
during the year
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Balance at the
end of the year
Vested and
exercisable
3,000,000
3,000,000
1,000,000
1,000,000
1,500,000
1,500,000
800,000
800,000
–
–
–
–
–
–
6,300,000
6,300,000
KEY MANAGEMENT PERSONNEL COMPENSATION – FULLY PAID SHARES
J.
The numbers of shares in the Company held during the financial year or at time of resignation by each
Director or KMP of IEC, including their personally related parties, are set out below:
2014
Mr G Robertson
Mr J Warrand
Mr D Mason
Mr W Paterson
Mr G Nasari
Mr T Brereton
Mr S Harveyᶺ
Total
Balance at
beginning of year
Granted during the
year as
compensation
Received during
the year on
exercise of options
Changes during the
year*
Balance at the end
of the year
61,278,109
2,224,179
5,488,074
24,467,248
–
–
59,000
93,516,610
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
9,067,632
70,345,741
611,751
933,849
2,835,930
6,421,923
4,532,752
29,000,000
–
–
–
–
–
59,000
15,145,984
108,662,594
* Changes during the year represent shares acquired or sold by Directors or their associates
ᶺ At time of appointment as Alternate Director
Page 24
Remuneration Report
2013
Mr G Robertson
Mr J Warrand
Mr D Mason
Mr C Hartzˆ
Mr W Paterson
Mr G Nasari
Mr F Lungˆ
Total
Balance at
beginning of year
Granted during the
year as
compensation
Received during
the year on
exercise of options
42,994,417
1,211,539
2,222,835
20,547,418
17,208,739
–
–
84,184,948
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Changes during the
year *
Balance at the end
of the year
18,283,692
61,278,109
1,012,640
3,265,239
2,224,179
5,488,074
–
20,547,418
7,258,509
24,467,248
–
–
–
–
29,820,080
114,005,028
* Changes during the year represent shares acquired or sold by Directors or their associates
ˆ At me of resigna on
K. KEY MANAGEMENT PERSONNEL COMPENSATION – PERFORMANCE RIGHTS
The numbers of performance rights in the Company held during the financial year or at time of resignation
by each Director or KMP of IEC, including their personally related parties, are set out below:
2014
Mr G Robertson
Mr J Warrand
Mr D Mason
Mr W Paterson
Mr G Nasari
Mr T Brereton
Mr S Harvey
Total
Balance at
beginning of year
Granted during the
year as
compensation
Vested during the
year
Lapsed/cancelled
during the year
Balance at the end
of the year
2,697,240
1,638,068
1,753,206
–
–
135,000
251,716
251,716
–
–
392,063*
140,242
–
–
6,480,577
778,674
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,832,240
1,889,784
2,004,922
–
–
532,305
–
7,259,251
* At time of appointment as Chief Operating Officer
Balance at
beginning of year
Granted during the
year as
compensation
Vested during the
year
Lapsed/cancelled
during the year
Balance at the end
of the year
–
–
–
–
–
–
–
–
2,697,240
1,638,068
1,753,206
–
–
–
–
6,088,514
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,697,240
1,638,068
1,753,206
–
–
–
–
6,088,514
2013
Mr G Robertson
Mr J Warrand
Mr D Mason
Mr C Hartzˆ
Mr W Paterson
Mr G Nasari
Mr F Lungˆ
Total
ˆ At me of resigna on
Page 25
Meetings of Directors
Meetings of Directors
Attended
Available to attend
Mr G Robertson
Mr J Warrand
Mr D Mason
Mr W Paterson
Mr G Nasari
Mr S Harvey (Alternate)
11*
11*
11*
12
10
1
11
11
11
12
12
1
* Messrs Robertson, Warrand and Mason were excluded from a board meeting pertaining to a related party transaction.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company has entered into Directors’ Access Indemnity and Insurance Deeds (“D&O Deed”) with each
Director (“Officers”). Under the D&O Deed, the Company indemnifies the Officers to the maximum extent
permitted by law and the Constitution against legal proceedings, damage, loss, liability, cost, charge, expense,
outgoing or payment (including legal expenses on a solicitor/client basis) suffered, paid or incurred by the
officers in connection with the Officers being an officer of the Company, the employment of the officer with
the Company or a breach by the Company of its obligations under the D&O Deed.
Also pursuant to the D&O Deed, the Company must insure the Officers against liability and provide access to all
board papers relevant to defending any claim brought against the Officers in their capacity as officers of the
Company. The Company has paid insurance premiums of $23,105 (2013: $20,270) in respect of liability for any
current and future Directors, Company Secretary, executives and employees of the Company. This amount is
payable in total and is included in the Directors’ remuneration.
SHARES UNDER OPTION
As at 30 June 2014, there were 600,000 unissued ordinary shares under option, none were held by Directors
and Executives. These options expired and were cancelled on 9 August 2014.
Expiry Date
9 August 2014
Exercise Price of Options
Number Under Option
$0.39
600,000
As at the date of this report, there were 11,111,107 unissued ordinary shares under option. This excludes the
9,629,628 options to be issued to IEC Directors, subject to shareholder approval at the Company’s AGM in
October 2014.
Expiry Date
31 August 2015
Exercise Price of Options
Number Under Option
$0.05
11,111,107
The holders of these options do not have any rights under the options to participate in any share issues of the
Company.
LOANS TO DIRECTORS AND EXECUTIVES
No loans were made to any Directors or Executives during the financial year.
Page 26
Corporate Governance
The Board of Directors of IEC is responsible for the corporate governance of the Company. The Board guides
and monitors the business and affairs of IEC on behalf of the shareholders by whom it is elected and to whom it
is accountable. This statement reports on the Company’s key governance principles and practices.
COMPLIANCE WITH BEST PRACTICE RECOMMENDATIONS
The Company, as a listed entity, must comply with the Corporations Act 2001 and the Australian Securities
Exchange Limited (“ASX”) Listing Rules. The ASX Listing Rules require the Company to report on the extent to
which it has followed the Corporate Governance Recommendations published by the ASX Corporate
Governance Council (ASX:CGC). Where a recommendation has not been followed, that fact is disclosed
together with the reasons for the departure.
The information below summarises the Company’s compliance with the Corporate Governance Council’s
Recommendations.
STATEMENT ON CORPORATE GOVERNANCE
This statement reports on the key governance framework, principles and practices for IEC. These principles and
practices are reviewed regularly and revised as appropriate to reflect changes in law and best practice in
corporate governance.
IEC’s Corporate Governance Statement is structured with reference to the Corporate Governance Council’s
principles and recommendations, which are as follows:
Principle 1
Principle 2
Principle 3
Principle 4
Principle 5
Principle 6
Principle 7
Principle 8
Lay solid foundations for management and oversight
Structure the board to add value
Promote ethical and responsible decision making
Safeguard integrity in financial reporting
Make timely and balanced disclosure
Respect the rights of shareholders
Recognise and manage risk
Remunerate fairly and responsibly
Given the size and structure of the Company, the nature of its business activities, the stage of its development
and the cost of strict and detailed compliance with all of the recommendations, it has continued to adopt a
range of modified systems, procedures and practices which it considers will enable it to meet the principles of
good corporate governance.
The Company’s practices are mainly consistent with those of the guidelines and where they do not correlate
with the recommendations in the guidelines the Company considers that its adopted practices are appropriate
to it. At the end of this statement a table is included detailing the recommendations with which the Company
does not strictly comply.
The following section addresses the Company’s practices in complying with the principles.
PRINCIPLE 1: LAYING SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
Role and responsibilities of the Board
The Board of Directors of IEC is responsible for the corporate governance of the Consolidated Entity. The Board
guides and monitors the business and affairs of IEC on behalf of the shareholders, by whom the Directors are
elected and to whom they are accountable.
After appropriate consultation with Executive Management, the Board:
defines and sets its business objectives and subsequently monitors performance and achievements of
those objectives;
Page 27
Corporate Governance
oversees the reporting on matters of compliance with corporate policies and laws, takes responsibility
for risk management processes and continually reviews the executive management of the Company;
monitors and approves financial performance and budgets; and
reports to shareholders.
PRINCIPLE 2: STRUCTURING THE BOARD TO ADD VALUE
Composition of the Board
The names of the Directors of the Company and their qualifications are set out in the section headed Directors’
Report in the Annual Report for the year ended 30 June 2014.
The composition of the Board is determined so as to provide the Company with a broad base of industry,
business, technical, administrative, financial and corporate skills and experience considered necessary to
represent shareholders and fulfil the business objectives of the Company.
Nomination of other Board Members
Membership of the Board of Directors is reviewed on an on-going basis by the Chairman of the Board to
determine if additional core strengths are required to be added to the Board in light of the nature of the
Company’s businesses and its objectives.
Independent advice
Each of the Directors is entitled to seek independent advice at the Company’s expense to assist them to carry
out their responsibilities however prior approval of the Chairman is required which is not unreasonably
withheld.
PRINCIPLE 3: PROMOTION OF ETHICAL AND RESPONSIBLE DECISION-MAKING
Directors, officers, employees and consultants to the Company are required to observe high standards of
behaviour and business ethics in conducting business on behalf of the Company and they are required to
maintain a reputation of integrity on the part of both the Company and themselves. The Company does not
contract with or otherwise engage any person or party where it considers integrity may be compromised.
Directors are required to disclose to the Board actual or potential conflicts of interest that may or might
reasonably be thought to exist between the interests of the Director or the interests of any other party in so far
as it affects the activities of the Company and to act in accordance with the Corporations Act if conflict cannot
be removed or if it persists. That involves taking no part in the decision making process or discussions where
that conflict does arise.
Directors are required to make disclosure of any share trading in the Company’s shares. The Company’s policy
in relation to share trading is that officers are prohibited to trade whilst in possession of unpublished price
sensitive information concerning the Company. That is information which a reasonable person would expect to
have a material effect on the price or value of the Company’s shares. It is recommended that an officer discuss
the proposal to acquire or sell shares with the Directors or the Company Secretary prior to doing so to ensure
that there is no price sensitive information of which that officer might not be aware. The undertaking of any
trading in shares must be notified to the ASX.
PRINCIPLE 4: SAFEGUARDING INTEGRITY IN FINANCIAL REPORTING
Each Board member has access to the external auditors and the auditor has access to each Board member.
A Director does make a statement to the shareholders that the Company’s financial reports present a true and
fair view in all material respects of the Company’s financial condition and operational results and are in
accordance with relevant accounting standards.
Page 28
Corporate Governance
PRINCIPLE 5: MAKING TIMELY AND BALANCED DISCLOSURE
All Directors, Executives and employees are required to abide by all legal requirements, the Listing Rules of the
ASX and the highest standards of ethical conduct. This includes compliance with the continuous disclosure
requirements of the Listing Rules.
The Company Secretary is responsible for overseeing and co-ordinating disclosure of information to the ASX as
well as communicating with the ASX.
PRINCIPLE 6: RESPECTING THE RIGHTS OF SHAREHOLDERS
The Board’s fundamental responsibility to shareholders is to work towards meeting the Company’s objectives
so as to add value for them.
The Board seeks to inform shareholders of all major developments affecting the Company by:
preparing half yearly and yearly financial reports;
preparing quarterly cash flow reports and reports as to activities;
making announcements in accordance with the listing rules and the continuous disclosure obligations;
hosting all of the above on the Company’s website;
annually, and more regularly if required, holding a general meeting of shareholders and forwarding to
them the annual report together with notice of meeting and proxy form; and
voluntarily releasing other information which it believes is in the interest of shareholders.
The Annual General Meeting enables shareholders to receive the reports and participate in the meeting by
attendance or by written communication. The Board seeks to notify all shareholders so they can be fully
informed annually for the voting on the appointment of directors and so as to enable them to have discussion
at the Annual General Meeting with the directors and/or the auditor of the Company who is invited to attend
the Annual General Meeting.
PRINCIPLE 7: RECOGNISING AND MANAGING RISK
The Board is conscious of the need to continually maintain systems of risk management and controls to
manage all of the assets and affairs of the Company. The Company has in place a risk and management policy
which sets out systems for risk oversight, management and internal controls.
This risk management policy was adopted in 29 April 2014. The Board approves risk management systems and
will review them and their implementation annually. The Company's risk profile, assessed and determined on
the basis of the Company's businesses in coal exploration and production, is reviewed annually. The Board
regularly considers risk management at its meetings.
PRINCIPLE 8: REMUNERATE FAIRLY AND RESPONSIBLY
The Company has established a Remuneration Committee.
Each member of the Board has committed to spending sufficient time to enable them to carry out their duties
as a Director of the Company.
A maximum amount of remuneration for Non-Executive Directors is fixed by shareholders in a general meeting
and can be varied in that same manner. In determining the allocation the Board takes account of the time
demands made on the directors together with such factors as fees paid to other corporate directors and to the
responsibilities undertaken by them.
Page 29
Corporate Governance
TABLE OF DEPARTURES AND EXPLANATIONS
(FROM ASX GUIDANCE NOTE 9A – CORPORATE GOVERNANCE PRINCIPLES & RECOMMENDATIONS)
Guidance
9A reference no. Departure
Explanation
2.1
2.2
2.4
During the Reporting
Period, the Company
did not have a majority
of independent
directors
The Chair of the Board
is Mr Graeme
Robertson who is an
Executive (non-
independent) Director)
Given the nature and size of the Company, its business interests
and the stage of development, the Board considers that its
composition is an appropriate blend of skills and expertise
relevant to the Company’s business. The Company deals with the
lack of independent directors by ensuring that conflicts of interest
are adequately disclosed in accordance with the Company’s Code
of Conduct. Directors abstain from voting on matters where they
have, or it is perceived they have, a beneficial interest in the
outcome of the matters.
Having considered Mr Robertson’s experience within the
industry, intimate knowledge of the operations of the Company
and his longstanding commitment to the success of the Company
the Board considers it to be in the best interests of the Company
to maintain Mr Robertson as the Chair of the Company at this
time. The Company has appropriate guidelines and checks in
place to ensure that the Board makes decisions in the best
interests of shareholders.
A separate Nomination
Committee has not
been formed.
At 30 June 2014, the Board comprised five members each of
whom have valuable contributions to make in fulfilling the role of
a nomination committee member. A Director will excuse himself
where there is a personal interest or conflict.
NON-AUDIT SERVICES
The Board of Directors is satisfied that the provision of non-audit services during the year is compatible with
the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are
satisfied that the services disclosed below did not compromise the external auditor’s independence for the
following reasons:
all non-audit services are reviewed and approved by the Board prior to commencement to ensure they
do not adversely affect the integrity and objectivity of the auditor; and
the nature of the services provided do not compromise the general principles relating to auditor
independence as set out in the Institute of Chartered Accountants in Australia and APES110 Code of
Ethics for Professional Accountants.
The following fees for non-audit services were paid to an affiliated entity of the external auditors during the
year ended 30 June 2014:
Taxation and other advisory services: $53,000
Page 30
Corporate Governance
LEAD AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration is set out on page 32 and forms part of the Directors’ Report for
the financial year ended 30 June 2014.
ROUNDING OFF
The Group is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with that
Class Order, amounts in the financial report and Directors’ report have been rounded off to the nearest
thousand dollars, unless otherwise stated.
This Directors’ Report, Remuneration Report and Corporate Governance Statement are made with a resolution
of the Directors.
GRAEME ROBERTSON
Executive Chairman
Dated this 16 September 2014
Page 31
Directors’ Declaration
1.
In the opinion of the Directors:
(a) the accompanying financial statements, notes and additional disclosures are in accordance with the
Corporations Act 2001 including:
(i) giving a true and fair view of the Company and Group’s financial position as at 30 June 2014 and its
performance for the financial year ended on that date; and
(ii) complying with Accounting Standards (includes the Australian Accounting Interpretations), the
Corporations Regulations 2001 and any other mandatory professional reporting requirements.
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
(c) the financial statements and notes thereto are in accordance with International Financial Reporting
Standards issued by the International Accounting Standards Board.
2. This declaration has been made after receiving the declarations required to be made to the Directors in
accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2014.
The declaration is signed in accordance with a resolution of the Board of Directors.
GRAEME ROBERTSON
Executive Chairman
Dated this 16 September 2014
Page 33
Consolidated Statement of Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2014
Sales income
Net cost of production
Gross Profit
Other Income
Foreign exchange gain / (loss)
Compliance and regulatory expenses
Legal and professional expenses
Depreciation and amortisation
Remuneration and employee expenses
Exploration expenditure
Project expenditure
Impairment of fixed assets
Impairment of tenements
Share based payments
Other expenses
Finance income
Finance expenses
Loss Before Income Tax
Income tax benefit
Net Loss For The Period
Other Comprehensive Income
Foreign currency translation (loss)/gainᶺ
Total Comprehensive Loss for the Period
Net Loss for the Period Attributable to:
Shareholders of IEC
Non-controlling interest
Total Comprehensive Loss for the Period Attributable to:
Shareholders of IEC
Non-controlling interest
Loss per share
NOTES
2
3
4
CONSOLIDATED
2014
$’000S
10,867
(8,978)
1,889
50
(56)
(78)
(976)
(1,392)
(2,039)
(785)
(1,295)
(204)
(13,413)
(322)
(1,775)
15
(503)
(20,884)
107
(20,777)
(2,005)
(22,782)
(18,845)
(1,932)
(20,777)
(20,686)
(2,096)
(22,782)
2013
$’000S
8,550
(7,474)
1,076
250
(705)
(68)
(1,118)
(785)
(2,080)
(1,147)
(1,307)
(189)
(2,635)
116
(136)
(8,728)
117
(8,611)
3,237
(5,374)
(7,296)
(1,315)
(8,611)
(4,537)
(837)
(5,374)
Loss per share (cents per share, basic and diluted)
7
(6.68)
(2.96)
ᶺ Item that may be classified subsequently to Statement of Comprehensive Income
The Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes to the
Financial Statements.
Page 36
Consolidated Statement of Financial Position
AS AT 30 JUNE 2014
CONSOLIDATED
2014
$’000S
2013
$’000S
NOTES
Assets
Current Assets
Cash and cash equivalents
Inventories
Trade and other receivables
Assets held for sale
Total Current Assets
Non-Current Assets
Other receivables
Property, plant and equipment
Intangibles
Mine development costs
Exploration expenditure
Total Non-Current Assets
Total Assets
Liabilities
Current Liabilities
Bank overdraft
Trade and other payables
Interest bearing liabilities
Provisions
Liabilities held for sale
Total Current Liabilities
Non-Current Liabilities
Other payables
Interest bearing liabilities
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity attributed to equity holders of the Company
Non-controlling interest
Total Equity
8
9
10
11
12
12
13
14
15a
16
15b
11
16
17
20
88
1,701
2,518
2,458
6,765
160
9,871
188
6,442
375
17,036
23,801
522
5,386
2,147
491
1,056
9,602
193
1,486
1,679
11,281
12,520
67,858
4,147
(54,330)
17,675
(5,155)
12,520
4,437
2,636
3,354
10,427
164
10,513
252
6,299
14,668
31,896
42,323
4,851
3,369
385
8,605
205
205
8,810
33,513
66,391
5,666
(36,806)
35,251
(1,738)
33,513
The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes to the
Financial Statements.
Page 37
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2014
Cash Flows from Operating Activities
Receipts from Customers
Payments to Creditors and Suppliers
Interest Received
Interest paid
Tax (paid)/received
NOTES
CONSOLIDATED
2014
$’000S
13,320
(16,329)
15
(503)
107
2013
$’000S
10,666
(15,770)
116
(136)
(100)
Net cash used in operating activities
24
(3,390)
(5,224)
Cash Flows from Investing Activities
Mine Development and Capitalised Exploration Costs
Purchase of property, plant and equipment
Purchase of Intangibles
Payment for acquisition of other mining interests
Loans to other entities
Net cash used in investing activities
Cash Flows from Financing Activities
Proceeds from issue of shares and options
Share and option issue costs
Proceeds from borrowings
Repayment of borrowings
Net cash provided by financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effects of exchange rate changes on cash
Cash and Cash Equivalents/(Net Overdraft) at end of year
Cash and cash equivalents
8
Bank overdrafts used for cash management purposes
Cash and Cash equivalents/(Net Overdraft) in the Statement of
Cash Flows
(1,178)
(1,312)
(72)
(2,068)
(3,266)
(200)
(978)
(144)
(2,562)
(6,656)
1,531
(64)
1,161
(1,617)
1,011
(4,941)
4,437
70
(434)
88
(522)
(434)
4,530
(199)
3,706
(524)
7,513
(4,367)
8,771
33
4,437
4,437
-
4,437
The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes to the Financial
Statements.
Page 38
ACCUMULATED
PERFORMANCE
RIGHTS
$’000S
OPTION
RESERVE
$’000S
FOREIGN CURRENCY
TRANSLATION RESERVE
$’000S
TOTAL
$’000S
267
2,216
3,183
35,251
NON-CONTROLLING
INTEREST
$’000S
(1,738)
TOTAL EQUITY
$’000S
33,513
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2014
CONSOLIDATED
At 1 July 2013
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
Loss for the year
Other Comprehensive Income
Foreign currency translation differences
Total Other Comprehensive Income
ISSUED
CAPITAL
$’000S
66,391
TRANSACTIONS WITH OWNERS RECORDED DIRECTLY INTO EQUITY
Shares issued during the year
Share raising cost (net of tax)
Performance rights granted
Change in ownership of subsidiary
Balance at 30 June 2014
CONSOLIDATED
At 1 July 2012
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
Loss for the year
Other Comprehensive Income
Foreign currency translation differences
Total Other Comprehensive Income
Shares issued during the year
Share raising cost (net of tax)
Performance rights granted
Balance at 30 June 2013
1,531
(64)
67,858
4,530
(199)
TRANSACTIONS WITH OWNERS RECORDED DIRECTLY INTO EQUITY
LOSSES
$’000S
(36,806)
(18,845)
(18,845)
1,321
(54,330)
(7,296)
(7,296)
322
589
189
267
(18,845)
(1,932)
(20,777)
(1,841)
(1,841)
(1,841)
(20,686)
1,531
(64)
322
1,321
17,675
(164)
(2,096)
(1,321)
(5,155)
(2,005)
(22,782)
1,531
(64)
322
12,520
2,216
1,342
(7,296)
(1,315)
(8,611)
2,759
2,759
2,759
(4,537)
4,530
(199)
189
478
(837)
3,237
(5,374)
4,530
(199)
189
33,513
62,060
(29,510)
78
2,216
424
35,268
(901)
34,367
66,391
(36,806)
2,216
3,183
35,251
(1,738)
The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes to the Financial Statements.
Page 39
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Intra Energy Corporation Limited (“the Company”) is a company limited by shares, incorporated and domiciled in
Australia. The shares of Intra Energy Corporation Limited are publically traded on the Australian Stock Exchange. The
consolidated financial statements for the year ended 30 June 2014 comprise the Company and its controlled entities
(together referred to as “the Group” or “Consolidated Entity”) and the Group’s interests in associates and jointly
controlled entities. The Company is a for-profit entity and primarily is involved in the mining and sale of coal.
The consolidated financial statements were approved by the Board and authorized for issue on 16 September 2014.
A. Going Concern
The consolidated financial statements have been prepared on a going concern basis, which assumes that the Group
will be able to continue trading, realise its assets and discharge its liabilities in the ordinary course of business for a
period of at least 12 months from the date that these financial statements are approved.
The Directors note that:
The Group generated a loss after tax for the year of $20,777,000 primarily as a result of non-cash impairment
charges of $13,617,000, exploration and project expenditure of $2,080,000, non-cash depreciation and
amortisation charges of $1,392,000 together with continued operating losses after corporate overheads; and
As at balance date, the Group's current liabilities exceeded its current assets by $2,837,000. The deficit in net
current assets includes a $522,000 overdraft payable to the National Bank of Commerce in Tanzania (“NBC”) and
$2,496,000 payable to the NBC under loan facilities which expire in December 2015. These loans were classified
as current loans at balance date as the loan covenants under the facilities were in breach.
In considering the impact of these factors on the appropriateness of the use of the going concern assumption, the
Directors have noted the following subsequent events:
The Company announced the issue of 51,851,852 ordinary shares at $0.027 per share through a private
placement to sophisticated investors, raising $1,400,000 before transaction costs. Each shareholder participating
in the private placement will receive two unlisted options for nil consideration for every five ordinary shares. The
options will be exercisable at any time prior to 31 August 2015 at an exercise price of $0.05. On 15 August 2014
27,777,778 ordinary shares and 11,111,107 options were issued, with 24,074,074 shares and 9,629,628 options
to be issued to Directors as part of this placement subject to shareholder approval at the IEC Annual General
Meeting to be held in October 2014.
AAA Drilling has recently completed the transaction of the joint venture with General Petroleum Oils and Tools
Pty Limited (“GPOT”), a leading Queensland based provider of drilling supplies and consulting services to the oil
and gas industry. GPOT has acquired a 50% interest in AAA Drilling Limited (‘AAA Mauritius’), a wholly owned
Mauritian subsidiary of IEC. As part of the joint venture, GPOT is lending A$700,000 to AAA Tanzania to be paid in
three cash instalments, A$400,000 on completion, A$150,000 on or before 30 November 2014 and A$150,000 on
or before 31 March 2015 for working capital. IEC and GPOT will each provide an additional A$125,000 working
capital and provide significant technical and operational capabilities to AAA Tanzania.
The Group received from NBC, formal acknowledgment of the pre-notification of the expected covenant
breaches in Tancoal and AAA Drilling. The NBC has provided a waiver against immediately recalling the loans
based on the expected breaches subject to the companies meeting their on-going compliance obligations under
the original payment schedule as specified in the facility agreements. As disclosed in Note 16, the NBC has
reserved its right to perform its annual review following receipt of the audited accounts of the companies, in
which the bank will perform a holistic assessment of the financial health of the companies and, despite the
current waiver, reserves its right to further action. The loan amounts are secured against the Company’s mining
assets and drilling rigs.
In assessing the appropriateness of using the going concern assumption, the Directors have:
Considered the working capital requirements of the business given the current operating and cash flow forecasts
of the Group. Coal sales are expected to increase as the Group responds to growing demand in the East African
cement and industrial markets segment. As Tancoal implements productivity improvements and further
initiatives to expand equipment capacity, the working capital position of the Company is expected to improve.
Page 40
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
1.
A.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Going Concern (cont’d)
Implemented a number of cost saving initiatives to preserve working capital.
Retained their confidence in the strategic value of the Group as it develops its coal and power station projects
across East Africa. IEC is the dominant and growing coal miner and supplier to industrial energy users in the
Eastern African region and is advancing coal-fired power generation projects in Malawi and Tanzania. Eastern
Africa is one of the fastest growing regions in the world with national growth rates between 5 and 8%. In 2014,
IEC supplied 70% of its production to Tanzania and 30% to Kenya and Malawi with trial shipments to Uganda,
Rwanda and Zambia. Approximately 60% was supplied to the cement industry, 13% to textile manufacturers,
15% to paper and ceramics industries and the remainder to processing plants.
Acknowledged the significant interest received in the 120MW “Pamodzi” coal fired power station project in
Malawi and the MOU entered with Endeavour Energy Power Holdings Limited.
Recognised that the interest bearing liabilities relating to the loans from the NBC and hire purchase equipment
providers are secured against the Group’s mining equipment.
Noted JORC compliant resources of 62 million tonnes in Malawi and 423 million tonnes at the Tancoal mine in
Tanzania.
The Directors remain confident in the Group’s ability to access further working capital through debt, equity or asset
sales if required.
After considering the above factors, the Directors have concluded that the use of the going concern assumption is
appropriate. Should the Group not achieve its coal sales, cost saving initiatives and working capital improvement
targets, or the NBC recalls the Company’s loans as part of its annual review, the Group will be required to raise further
debt or equity or divest assets to continue as a going concern.
Whilst the Directors remain confident of the Group’s ability to raise debt or equity, there is a material uncertainty as
to whether the Group could continue as a going concern without such funding.
Had the going concern basis not been used, adjustments would need to be made relating to the recoverability and
classification of certain assets, and the classification and measurement of certain liabilities to reflect the fact that the
Group may be required to realise its assets and settle its liabilities other than in the ordinary course of business, and at
amounts different from those stated in the consolidated financial statements..
B.
Statement of compliance and basis of preparation
The financial report is a general purpose financial report that has been prepared in accordance with Australian
Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian
Accounting Standards Board and the Corporations Act 2001.
The financial report of Intra Energy Corporation Limited and controlled entities (“IEC”, “the Company”, “the Group” or
“Consolidated Entity”), and IEC as an individual parent entity (“IEC Parent” or “Parent Entity”) complies with all
Australian equivalents to International Financial Reporting Standards (AIFRS) and International Financial Reporting
Standards (IFRS).
b.i Reporting Basis and Conventions
The financial report has been prepared on an accruals basis and is based on historical costs other than financial assets
and financial liabilities for which the fair value basis of accounting has been applied.
The following is a summary of the material accounting policies adopted by the Company in the preparation of the
financial report. The accounting policies have been consistently applied, unless otherwise stated.
Separate financial statements for IEC Parent, as an individual entity are no longer presented as a consequence of a
change to the Corporations Act 2001, however, required financial information for IEC Parent as an individual entity is
included in Note 29.
Page 41
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
b.ii New Accounting Standards
New accounting standards adopted for the first time in these financial statements include AASB 10 Consolidated
Financial Statements, AASB 11 Joint Arrangements, AASB 12 Disclosure of Interest in Other Entities, AASB 13 Fair Value
Measurement and AASB 119 Employee Benefits (2011).
There were no significant impacts arising from accounting standards or interpretations adopted for the first time in
these Financial Statements.
b.iii New Accounting Standards and Interpretations that are not yet mandatory
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2014
reporting periods. The Group’s assessment of the impact of these new standards and interpretations is set out below.
The Group does not plan to adopt these standards early.
AASB 9 Financial Instruments (2010), AASB 9 Financial Instruments (2009)
AASB 9 (2009) introduces new requirements for the classification and measurement of financial assets. Under AASB 9
(2009), financial assets are classified and measured based on the business model in which they are held and the
characteristics of their contractual cash flows. AASB 9 (2010) introduces additions relating to financial liabilities. The
IASB currently has an active project that may result in limited amendments to the classification and measurement
requirements of AASB 9 and add new requirements to address the impairment of financial assets and hedge
accounting.
AASB 9 is effective for annual periods beginning on or after 1 January 2018. Early adoption is permitted. The adoption
of these standards is expected to have no impact on the Group’s financial assets and financial liabilities. As the Group
does not have hedging arrangements, this will not have an impact to the Group or its results.
C. Principles of consolidation
c.i Business combinations
The purchase method of accounting is used to account for all business combinations, including business combinations
involving entities or businesses under common control, regardless of whether equity instruments or other assets are
acquired.
Cost is measured as the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at
the date of exchange plus costs directly attributable to the acquisition. Where equity instruments are issued in an
acquisition, the fair value of the instruments is their published market price as at the date of exchange unless, in rare
circumstances, it can be demonstrated that the published price at the date of exchange is an unreliable indicator of
fair value and that other evidence and valuation methods provide a more reliable measure of fair value. Transaction
costs arising on the issue of equity instruments are expensed in the period incurred.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured
initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest. The
excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is
recorded as goodwill. If the cost of acquisition is less than the Group’s share of the fair value of the identifiable net
assets of the subsidiary acquired, the difference is recognised directly in the Consolidated Statement of
Comprehensive Income, but only after a reassessment of the identification and measurement of the net assets
required.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to
their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate,
being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms
and conditions.
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Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
c.ii Subsidiaries
Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control commences until the date that control ceases.
The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by
the Group.
c.iii Transactions eliminated on Consolidation
All balances and transactions, arising from transactions between entities within the group are eliminated in preparing
the consolidated financial statements.
c.iv Non-controlling interests
Non-controlling interests are measured at their proportionate share of the acquiree’s identifiable net assets at the
acquisition date. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted
for as equity transactions.
D.
Income Tax
The charge for current income tax expense is based on the profit for the year adjusted for any non-assessable or
disallowed items. It is calculated using tax rates that have been enacted or are substantively enacted by the
Consolidated Statement of Financial Position.
Deferred tax is accounted for using the Consolidated Statement of Financial Position 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 year when the asset is realised or liability is
settled. Deferred tax is credited in the Consolidated Statement of Comprehensive Income 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.
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.
E. Property, Plant and Equipment
Each class of plant and equipment is carried at cost less any accumulated depreciation and impairment losses.
Plant and equipment are measured on the cost basis. The carrying amount of plant and equipment is reviewed
annually by Directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable
amount is assessed on the basis of the expected net cash flows which will be received from the assets’ employment
and subsequent disposal. The expected net cash flows have been discounted to their present values in determining
recoverable amounts.
e.i Depreciation
The depreciable amount of all fixed assets is depreciated on a straight-line basis over the asset’s useful life to the
consolidated group commencing from the time the asset is held ready for use.
The useful lives used for each class of depreciable asset are:
Page 43
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Class of fixed asset
Property, Plant and Equipment
Motor Vehicles
Office Equipment
Computer Equipment and Software
Leasehold Improvements
Useful life
10 to 15 years
10 years
8 years
3 years
25 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses
are included in the profit or loss.
F.
Exploration, evaluation and acquisition expenditure
Acquisition costs are accumulated in respect of each separate area of interest. Acquisition costs are carried forward
where right of tenure of the area of interest is current and they are expected to be recouped through sale or
successful development and exploitation of the area of interest or, where exploration and evaluation activities in the
area of interest have not yet reached a stage that permits reasonable assessment of the existence of economically
recoverable reserves. Where an area of interest is abandoned or the Directors decide that it is not commercial, any
accumulated acquisition costs in respect of that area are written off in the financial period the decision is made. Each
area of interest is also reviewed at the end of each accounting period and accumulated acquisition costs written off to
the extent that they will not be recoverable in the future. Amortisation is not charged on acquisition costs carried
forward in respect of areas of interest in the development phase until production commences.
G.
Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on average
costs over the relevant period of production and includes expenditure in accumulating the inventories, production
costs and other costs incurred in bringing them to their existing location and condition. Stockpile tonnages are verified
by periodic surveys.
H. Overburden removal costs
Overburden and other mine waste materials are often removed during the initial development of a mine site in order
to access the mineral deposit. This activity is referred to as development stripping. The directly attributable costs are
initially capitalised as mine development costs. Capitalising of development stripping costs ceases at the time that
saleable mineral rights begin to be extracted from the mine.
Production stripping commences at the time that saleable materials begin to be extracted from the mine and normally
continues through the life of a mine. The costs of production stripping are capitalised to the cost of inventory, and
charged to the income statement upon sale of inventory in cost of goods sold.
I.
Development expenditure
When a mining project has been established as commercially viable and technically feasible, expenditure other than
that on land, buildings and plant equipment is capitalised under development expenditure. Development expenditure
costs include previously capitalised exploration and evaluation costs, pre-production development costs, development
excavation, development studies and other subsurface expenditure pertaining to that area of interest.
Costs related to surface plant and equipment and any associated land and buildings are accounted for as property,
plant and equipment. Development costs are accumulated in respect of each separate area of interest. Costs
associated with commissioning new assets in the period before they are capable of operating in the manner intended
by management, are capitalised. Development costs incurred after the commencement of production are capitalised
to the extent they are expected to give rise to a future economic benefit. Amortisation of carried forward exploration
and development costs is charged on a unit of production basis over the life of economically recoverable reserves.
Page 44
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
When an area of interest is abandoned or the Directors decide it is not commercial or technically feasible, any
accumulated cost in respect of that area is written off in the financial period the decision is made. Each area of
interest is reviewed at the end of each accounting period and accumulated cost written off to the Statement of
Comprehensive Income to the extent that they will not be recoverable in the future.
Development assets are assessed for impairment if facts and circumstances suggest that the carrying amount exceeds
the recoverable amount. For the purpose of impairment testing, development assets are allocated to cash generating
units to which the development activity relates. The cash generating unit shall not be larger than the area of interest.
J.
Rehabilitation expenditure
The mining, extraction and processing activities of the Company give rise to obligations for site rehabilitation.
Rehabilitation obligations can include facility decommissioning and dismantling, removal or treatment of waste
materials, land rehabilitation and site restoration. The extent of work required and the associated costs are estimated
based on feasibility and engineering studies using current restoration standards and techniques. Provisions for the
cost of each rehabilitation programme are recognised at the time that environmental disturbance occurs.
Rehabilitation provisions are initially measured at the expected value of future cash flows required to rehabilitate the
relevant site, discounted to their present value. The value of the provision is progressively increased over time as the
effect of discounting unwinds. When provisions for rehabilitation are initially recognised, the corresponding cost is
capitalised as an asset, representing part of the cost of acquiring the future economic benefits of the operation. The
capitalised cost of rehabilitation activities is recognised in ‘Development Expenditure’ as rehabilitation assets and
amortised accordingly.
Where rehabilitation is expected to be conducted systematically over the life of the operation, rather than at the time
of closure, provision is made for the present obligation or estimated outstanding continuous rehabilitation work at
each Consolidated Statement of Financial Performance date and the costs charged to the Consolidated Statement of
Comprehensive Income in line with remaining future cash flows.
K.
Segment Reporting
Segment results are reported to the Board of Directors (chief operating decision maker) and include items directly
attributable to a segment as well as those that can be allocated on a reasonable basis. Unless stated otherwise, all
amounts reported to the Board of Directors as the chief decision maker with respect to operating segments are
determined in accordance with accounting policies that are consistent with those adopted in the Annual Financial
Statements of the Company.
L.
Financial Instruments
l.i Recognition
Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the related
contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out
below.
l.ii Financial assets at fair value through Profit and Loss
A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so
designated by management and within the requirements of AASB 139: Recognition and Measurement of Financial
Instruments. Realised and unrealised gains and losses arising from changes in the fair value of these assets are
included in the Consolidated Statement of Comprehensive Income in the year which they arise.
l.iii Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in
an active market and are stated at amortised cost using the effective interest rate method.
l.iv Fair value
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for
disclosure purposes.
In the Consolidated Statement of Comprehensive Income, the fair value of financial instruments traded in active
Page 45
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
markets (such as publicly traded derivatives, and trading and available-for-sale securities) is based on quoted market
prices. The quoted market price used for financial assets held by the Group is the current bid price.
The carrying value less impairment provision of trade receivables and payables is assumed to approximate their fair
values due to their short-term nature. The fair value of financial liabilities for disclosure purposes is estimated by
discounting the future contractual cash follows at the current market interest rate that is available to the Group for
similar financial instruments.
l.v
Impairment of assets
At each reporting date, the Group assesses whether there is objective evidence that a financial instrument has been
impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is
considered to determine whether impairment has arisen. Impairment losses are recognised in the Consolidated
Statement of Comprehensive Income.
At each reporting date, the Group reviews the carrying values of its tangible and intangible assets to determine
whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable
amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the
asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the
Consolidated Statement of Comprehensive Income.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives. Where it is not
possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of
the cash-generating unit to which the asset belongs.
M. Foreign Currency Transactions and Balances
m.i. Functional and Presentation Currency
The functional currency of each of the Company’s entities is measured using 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.
m.ii. Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of
the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items
measured at historical cost continue to be carried at the 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 Consolidated Statement of
Comprehensive Income, except where deferred in equity as a qualifying cash flow or net investment hedge. 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 Consolidated
Statement of Comprehensive Income.
m.iii.Group Companies
The financial results and position of foreign operations whose functional currency is different from the Company’s
presentation currency are translated as follows:
assets and liabilities are translated at year-end exchange rates prevailing at that reporting date; and
income and expenses are translated at average exchange rates for the year.
Exchange differences arising on translation of foreign operations are transferred directly to the group’s foreign
currency translation reserve in the Statement of Financial Position. These differences are recognised in the
Consolidated Statement of Comprehensive Income in the year in which the operation is disposed.
N. Employee Benefits
Provision is made for the Company’s liability for employee benefits arising from services rendered by employees to
reporting 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
Page 46
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
one year have been measured at the present value of the estimated future cash outflows to be made for those
benefits.
n.i Equity settled compensation
The bonus element over the exercise price of the employee services rendered in exchange for the grant of options is
recognised as an expense in the Consolidated Statement of Comprehensive Income. The total amount to be expensed
over the vesting year is determined by reference to the fair value of the options granted.
n.ii Share-based payments
The Company provides benefits to employees (including Directors) of the Company in the form of share-based
payment transactions, whereby employees render services in exchange for shares or rights over shares (“equity-
settled transactions”). The cost of these equity settled transactions with employees is measured by reference to the
fair value at the date at which they are granted. The fair value is determined by an internal valuation and an external
valuation using the Black-Scholes model.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the year
in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully
entitled to the award (“vesting date”). The cumulative expense recognised for equity-settled transactions at each
reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the number of
awards that, in the opinion of the Directors of the Company, will ultimately vest.
This opinion is formed based on the best available information at reporting date. No adjustment is made for the
likelihood of market performance conditions being met as the effect of these conditions is included in the
determination of fair value at grant date. No expense is recognised for awards that do not ultimately vest, except for
awards where vesting is conditional upon market condition. Where an equity-settled award is cancelled, it is treated
as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised
immediately. However, if a new award is substituted for the cancelled award, and designated as a replacement award
on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original
award.
O. Provisions
Provisions are recognised when the Company 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.
P. 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 Statement of Financial Position.
Q. Revenue recognition
Revenue is measured at the fair value of gross consideration received or receivable. IEC recognises revenue when the
amount of revenue can be reliably measured and it is probable that future economic benefits will flow to the entity.
The amount of revenue is not considered to be reliably measured until all contingencies relating to the sale have been
resolved.
q.i. Sale of coal
Revenue from the sale of goods and disposal of other assets is recognised when persuasive evidence, usually in the
form of an executed sales agreement, or an arrangement exists, indicating there has been a transfer of risks and
rewards to the customer, no further work or processing is required by the Company, the quantity and quality of the
goods has been determined with reasonable accuracy, the price can be reasonably estimated, and collectability is
reasonably assured.
IEC recognises revenue when the risks and rewards transfer to the buyer which is typically defined in the customer
contract.
q.ii. Drilling services
The Group recognises revenue from rendering of drilling services in proportion to the stage of completion of the
transaction at the reporting date. The stage of completion is assessed based on surveys of the work performed.
Page 47
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
1.
R.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Finance income and finance expense
r.i. Finance Income and finance expense
Finance income and expenses are recognised using the effective interest rate method, which, for floating rate financial
assets and liabilities is the rate inherent in the instrument. Dividend revenue is recognised when the right to receive a
dividend has been established.
All finance income and expenses are stated net of the amount of goods and services tax (GST) and local value added
tax (VAT).
S. Goods and Service Tax (GST) and Value Added Tax (VAT)
Revenues, expenses and assets are recognised net of the amount of respective GST or VAT, except where the amount
of GST or VAT incurred is not recoverable from the relevant Tax Office. In these circumstances the GST or VAT is
recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and
payables in the Consolidated Statement of Financial Position are shown inclusive of GST or VAT.
Cash flows are presented in the Consolidated Cash Flow Statement on a gross basis, except for the GST or VAT
component of investing and financing activities, which are disclosed as operating cash flows.
T.
Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year
which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
U.
Leases
u.i. Determining whether an arrangement contains a lease
At inception of an arrangement, the Group determines whether the arrangement is or contains a lease.
At inception or on reassessment of an arrangement that contains a lease, the Group separates payments and other
considerations required by the arrangement into those for the lease and those for other elements on the basis of their
relative fair values. If the Group concludes for a finance lease that it is impracticable to separate the payments
reliably, then an asset and a liability are recognised at an amount equal to the fair value of the underlying asset;
subsequently, the liability is reduced as payments are made and an imputed finance cost on the liability is recognised
using the Group’s incremental borrowing rate.
u.ii. Leased assets
Assets held by the Group under lease, that transfer to the Group substantially all of the risks and rewards of
ownership are classified as finance leases. The leased assets are measured initially at an amount equal to the lower of
fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the assets are
accounted for in accordance with the accounting policy applicable to that asset.
Assets held under other leases are classified as operating leases and are not recognised in the Group’s Consolidated
Statement of Financial Position.
u.iii. Leased payments
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the
lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the
lease.
Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction
of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a
constant periodic rate of interest on the remaining balance of the liability.
V. Earnings per share
v.i. Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, excluding
any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.
Page 48
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
v.ii. Diluted earnings per share
Diluted earnings per share adjust 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.
W. Assets held for sale
Non-current assets, or disposal groups comprising assets and liabilities, are classified as held for sale if it is highly
probable that they will be recovered primarily through sale rather than through continuing use.
Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less costs
to sell. Any impairment loss on a disposal group is allocated first to goodwill, and then to the remaining assets and
liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets,
employee benefits assets which continue to be measured in accordance with the Group’s other accounting policies.
Once classified as held for sale, intangible assets and property, plant and equipment are no longer amortised or
depreciated, and any equity accounted investee is no longer equity accounted.
X. Critical accounting judgments and key sources of estimation uncertainty
In the application of the Company’s accounting policies, which are described in Note 1, management is required to
make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily
apparent from other sources. The estimates and associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the circumstances, the results of which form the basis
of making the judgments. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period or, in the period of the
revision and future periods if the revision affects both current and future periods.
x.i. Key Sources of estimation uncertainty
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the
reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year:
Recoverability of exploration and evaluation expenditure
The recoverability of the capitalised acquisition expenditure recognised as a non-current asset is dependent
upon the successful development, or alternatively sale, of the respective tenements which comprise the
assets.
Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on
average costs over the relevant period of production and includes expenditure in accumulating the
inventories, production costs and other costs incurred in bringing them to their existing location and
condition. Stockpile tonnages are verified by periodic surveys.
Rehabilitation
The extent of work required and the associated costs are estimated based on feasibility and engineering
studies using current restoration standards and techniques. Provisions for the cost of each rehabilitation
programme are recognised at the time that environmental disturbance occurs.
Page 49
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
2. REVENUES
From continuing operations
Coal sales
Drilling revenue
TOTAL
3. EXPENSES
Loss before income tax includes the following specific expenses:
Depreciation and amortisation
Depreciation
Plant and equipment
Less depreciation capitalised
Amortisation
TOTAL
CONSOLIDATED
2014
$’000S
10,572
295
10,867
CONSOLIDATED
2014
$’000S
(1,374)
119
(1,255)
(137)
(1,392)
CONSOLIDATED
2014
$’000S
4.
INCOME TAX EXPENSE
(a) Numerical reconciliation of income tax expense to prima facie tax payable
Loss from ordinary activities before income tax expense
Prima facie tax benefit on loss from ordinary activities at 30%
Non-deductible expenditure
Movement in unrecognised temporary differences
Tax effect of current year tax losses for which no deferred tax asset has
been recognised
Foreign income tax payable
Under provision of tax from prior year
Research & Development Grant
Income tax (Benefit)/ Expense
Page 50
(20,884)
(6,265)
185
(435)
7,549
26
(1,033)
(134)
(107)
2013
$’000S
7,982
568
8,550
2013
$’000S
(828)
131
(697)
(88)
(785)
2013
$’000S
(8,728)
(2,618)
(189)
781
2,127
-
-
(218)
(117)
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
4. INCOME TAX EXPENSE (CONT’D)
(b) Unrecognised temporary differences
Deferred Tax Assets (at 30%)
Other temporary differences
Carry forward revenue tax losses
Carry forward capital tax losses
Carry forward foreign tax losses
TOTAL
1,164
5,399
8
12,194
18,765
1,599
4,639
–
5,389
11,625
The deferred tax asset and deferred tax liability relating to carry forward losses and other temporary differences
have not been bought to account as it is unlikely they will arise unless the Company generates sufficient revenue
to utilise them.
5. KEY MANAGEMENT PERSONNEL COMPENSATION
The following persons were Directors of the Company during the financial year:
Executive Directors
Mr G Robertson (Executive Chairman) Mr W Paterson
Mr D Mason
Mr J Warrand
Mr G Nasari
Mr S Harvey*
Non-Executive Directors
Chief Operating Officer
Mr T Brereton
* Mr Simon Harvey was appointed as an Alternate Director for Mr Jonathan Warrand on 10 December 2013. Mr Harvey does not
receive any remuneration for acting in his capacity as Alternate Director.
KEY MANAGEMENT PERSONNEL COMPENSATION
Short-term employee benefits
Superannuation
Other benefits*
Performance rights
TOTAL COMPENSATION
2014
$
993,606
46,568
23,105
221,349
1,284,628
2013
$
877,829
46,941
20,270
140,452
1,085,492
* Other benefits relates to the payment of Directors’ and Officers’ Liability Insurance. The Company has transferred
the detailed remuneration disclosures to the Directors’ Report in accordance with the Corporations Amendment
Regulations 2006 (No. 4).
EQUITY INSTRUMENT DISCLOSURES RELATING TO KEY MANAGEMENT PERSONNEL
Options provided as remuneration and shares issued on exercise of such options
Details of options provided as remuneration and shares issued on the exercise of such options, together with terms
and conditions of the options, can be found in the Remuneration Report forming part of the Directors’ Report on page
25.
Option holdings
The numbers of options over ordinary shares in the Company held during the financial year or at time of resignation
by each Director and Key Management Personnel of IEC, including their personally related parties, are set out below:
Page 51
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
5.
KEY MANAGEMENT PERSONNEL COMPENSATION (CONT’D)
BALANCE AT THE
GRANTED DURING
BEGINNING OF
YEAR
THE YEAR AS
COMPENSATION
EXERCISED DURING
THE YEAR
LAPSED /
CANCELLED DURING
THE YEAR
BALANCE AT THE
END OF THE YEAR
VESTED AND
EXERCISABLE
3,000,000
1,000,000
1,500,000
800,000
–
–
–
6,300,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(3,000,000)
(1,000,000)
(1,500,000)
(800,000)
–
–
–
(6,300,000)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
BALANCE AT THE
GRANTED DURING
BEGINNING OF
THE YEAR AS
EXERCISED DURING
LAPSED /
CANCELLED DURING
BALANCE AT THE
YEAR
COMPENSATION
THE YEAR
THE YEAR
END OF THE YEAR
VESTED AND
EXERCISABLE
3,000,000
1,000,000
1,500,000
800,000
–
–
–
6,300,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
3,000,000
3,000,000
1,000,000
1,000,000
1,500,000
1,500,000
800,000
800,000
–
–
–
–
–
–
6,300,000
6,300,000
2014
Key Management Personnel
Mr G Robertson
Mr J Warrand
Mr D Mason
Mr G Nasari
Mr W Paterson
Mr T Brereton
Mr S Harvey
Total
2013
Key Management Personnel
Mr G Robertson
Mr J Warrand
Mr D Mason
Mr G Nasari
Mr C Hartz
Dr F Lung
Mr W Paterson
Total
Performance rights
The numbers of performance rights in the Company held during the financial year or at time of resignation by each
Director and Key Management Personnel of IEC, including their personally related parties, are set out below:
2014
Key Management Personnel
Mr G Robertson
Mr J Warrand
Mr D Mason
Mr G Nasari
Mr W Paterson
Mr T Brereton*
Mr S Harvey
Total
BALANCE AT THE
GRANTED DURING THE
VESTED DURING
BEGINNING OF YEAR
YEAR AS COMPENSATION
THE YEAR
LAPSED / CANCELLED
DURING THE YEAR
BALANCE AT THE END
OF THE YEAR
2,697,240
1,638,068
1,753,206
–
–
392,063
–
6,480,577
135,000
251,716
251,716
–
–
140,242
–
778,674
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,832,240
1,889,784
2,004,922
–
–
532,305
–
7,259,251
* At time of appointment as Chief Operating Officer
Page 52
BALANCE AT THE
GRANTED DURING THE
VESTED DURING
BEGINNING OF YEAR
YEAR AS COMPENSATION
THE YEAR
LAPSED / CANCELLED
DURING THE YEAR
BALANCE AT THE END
OF THE YEAR
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
5.
KEY MANAGEMENT PERSONNEL COMPENSATION (CONT’D)
2013
Key Management Personnel
Mr G Robertson
Mr J Warrand
Mr D Mason
Mr C Hartzˆ
Mr W Paterson
Mr G Nasari
Mr F Lungˆ
Total
–
–
–
–
–
–
–
–
2,697,240
1,638,068
1,753,206
–
–
–
–
6,088,514
–
–
–
–
–
–
–
–
ˆ At me of resigna on
6. AUDITOR’S REMUNERATION
Audit services
Auditors of the Group – KPMG
Audit and review of financial reports
Other auditors – non-KPMG firms
Audit and review of financial reports
Non-Audit services
Services provided other than statutory audit – KPMG
Tax advisory services
Other advisory services
7. EARNINGS PER SHARE
Basic and diluted loss per share
–
–
–
–
–
–
–
–
2,697,240
1,638,068
1,753,206
–
–
–
–
6,088,514
CONSOLIDATED
2014
$’000S
2013
$’000S
218
3
221
53
–
53
199
3
202
62
3
65
2014
2013
Loss from continuing operations attributable to the ordinary equity holders of the
Company
$18,845,000
$7,296,000
Weighted average number of ordinary shares outstanding during the year used in
calculating basic EPS
Loss per share (cents) - basic
281,904,708
246,646,655
(6.68)
(2.96)
Page 53
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
8. CASH
Cash at bank
9.
INVENTORIES
Consumables, fuel and other equipment
Coal stock
10. TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Other receivables
Related party receivables
Taxation receivables
Prepayments
CONSOLIDATED
2014
$’000S
88
CONSOLIDATED
2014
$’000S
117
1,584
1,701
CONSOLIDATED
2014
$’000S
1,777
261
34
37
409
2,518
2013
$’000S
4,437
2013
$’000S
644
1,992
2,636
2013
$’000S
2,124
694
3
27
506
3,354
11. DISPOSAL GROUP HELD FOR SALE
In April 2014, management committed to joint venture part of its subsidiary AAA Drilling Limited (“AAA Mauritius”)
which owns 100% of AAA Drilling Limited (“AAA Tanzania”), a an operating drilling company in Tanzania that was
established to undertake drilling and logging for IEC entities and third party customers in Eastern Africa. Accordingly,
AAA Drilling Limited Group is presented as a disposal group held for sale.
Subsequent to 30 June 2014, IEC completed the transaction of the joint venture with General Petroleum Oils and
Tools Pty Limited (“GPOT”), a leading Queensland based provider of drilling supplies and consulting services to the oil
and gas industry. GPOT has acquired a 50% interest in AAA Mauritius. As part of the joint venture, GPOT is lending
A$700,000 to AAA Tanzania to be paid in three cash instalments, A$400,000 on completion, A$150,000 on or before
30 November 2014 and A$150,000 on or before 31 March 2015 for working capital.
IEC and GPOT will each provide an additional A$125,000 working capital and provide significant technical and
operational capabilities to AAA Tanzania. Both joint venture partners will have equal representation on the board and
appoint a Joint Operating Officer to the company.
(a)
Impairment loss relating to the disposal group
Impairment losses of A$204,000 for write downs of the assets held in the disposal group to the lower of its carrying
amount and its fair value less costs to sell have been recorded as an impairment of fixed assets.
Page 54
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
11. DISPOSAL GROUP HELD FOR SALE (CONT’D)
(b) Assets and liabilities of disposal group held for sale
As at 30 June 2014, the disposal group was stated at fair value less costs to sell and comprised the following assets
and liabilities:
Property, plant and equipment^
Inventories
Trade and other receivables
Assets held for sale
Trade and other payables
Interest bearing liabilities^^
Provisions
Liabilities held for sale
Net assets held for sale
$’000S
1,821
612
25
2,458
182
835
39
1,056
1,402
^ $0.84m of Property, Plant and Equipment is held as collateral by the National Bank of Commerce in relation to loan facilities.
^^ Interest bearing liabilities are subject to terms disclosed in Note 16.
Page 55
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
12. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLES
30 June 2014
Year ended 30 June 2014
At 1 July 2013, net of accumulated depreciation
Additions
Disposals (net)
Impairment
Transfers
Depreciation charge
Effect of exchange rates (net)
Reclassified as held for sale*
At 30 June 2014, net of accumulated depreciation
At 30 June 2014
At cost
Accumulated depreciation and impairment
Net carrying amount
Office and
Computer
Equipment
$’000
Property, Plant
and Equipment^
$’000
Motor Vehicles
$’000
Leasehold
$’000
Capital Work in
Progress
$’000
509
61
(3)
130
(150)
(24)
(2)
521
742
(221)
521
7,117
2,614
(204)
132
(828)
(556)
(1,633)
6,642
7,821
(1,179)
6,642
2,139
234
(378)
(113)
(186)
1,696
2,376
(680)
1,696
528
13
22
(18)
(31)
514
546
(32)
514
220
563
(284)
(1)
498
498
-
498
Total
$’000
10,513
3,485
(3)
(204)
(1,374)
(725)
(1,821)
9,871
11,983
(2,112)
9,871
Intangibles
$’000
252
72
(134)
(2)
188
442
(254)
188
^ $2.568m of Property, Plant and Equipment is held as collateral by the National Bank of Commerce in relation to loan facilities.
* Refer to Note 11.
Page 56
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
12. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLES (CONT’D)
30 June 2013
Year ended 30 June 2013
At 1 July 2012, net of accumulated depreciation
Additions
Disposals (net)
Transfers
Depreciation charge
Effect of exchange rates (net)
At 30 June 2013, net of accumulated depreciation
At 30 June 2013
At cost
Accumulated depreciation
Office and
Computer
Equipment
$’000
Property, Plant
and Equipment^
$’000
Motor Vehicles
$’000
Leasehold
$’000
Capital Work in
Progress
$’000
338
406
(1)
(203)
(64)
33
509
612
(103)
4,928
1,980
67
(446)
588
7,117
7,911
(794)
1,804
556
(90)
(307)
176
2,139
2,659
(520)
275
244
(11)
20
528
542
(14)
528
20
200
220
220
220
Total
$’000
7,365
3,386
(91)
(136)
(828)
817
10,513
11,944
(1,431)
10,513
Intangibles*
$’000
200
136
(88)
4
252
386
(134)
252
Net carrying amount
* Software items were re-classified as intangibles during the period.
^ $3.369m of Property, Plant and Equipment is held as collateral by the National Bank of Commerce in relation to loan facilities.
509
7,117
2,139
Page 57
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
13. CAPITALISED MINE DEVELOPMENT COSTS
Tancoal Mine
Opening balance
Mine development expenditure
Transferred from exploration expenditure
Amortisation
Effect of exchange rates
Malcoal Mine
Opening balance
Acquisition cost
Mine development expenditure
Amortisation
Effect of exchange rates
TOTAL
CONSOLIDATED
2014
$’000s
2013
$’000s
4,688
153
(2)
(309)
4,530
1,611
590
(1)
(288)
1,912
6,442
2,041
1,850
458
(2)
341
4,688
878
454
279
1,611
6,299
Page 58
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
14. EXPLORATION EXPENDITURE
Uaroo tenements
Opening balance
Exploration expenditure
Tanzacoal tenements
Opening balance
Exploration expenditure
Effect of exchange rates
Impairment
Intra Energy Tanzania Limited tenements
Opening balance
Acquisition expenditure
Exploration expenditure transferred to capitalised mine development
Effect of exchange rates
Exploration expenditure transferred to Tancoal Energy Limited
Tancoal Energy Limited tenements
Opening balance
Exploration expenditure transferred from Intra Energy Tanzania
Effect of exchange rates
Intra Energy Trading (Malawi) Limited tenements
Opening balance
Acquisition expenditure
Effect of exchange rates
TOTAL
CONSOLIDATED
2014
$’000s
126
126
14,276
22
(885)
(13,413)
255
(6)
(249)
249
(10)
239
11
(1)
10
375
2013
$’000s
126
126
13,141
78
1,057
14,276
458
253
(458)
2
2
255
11
11
14,668
The recoverability of the carrying amount of exploration assets is dependent on the successful development and
commercial exploitation or sale of the respective mining permits. Amortisation of the costs carried forward for the
development phase is not being charged pending the commencement of production.
On 4 April 2014 Intra Energy’s subsidiary company Tanzacoal East Africa Mining Limited received notice from the
Tanzanian Minister for Energy that Special Mining Licence SML235/2005 had been cancelled without consultation.
An impairment charge has been recognised for the full carrying value of the licence. The Company believes the
cancellation has been made in error and is seeking legal remedy to have the licence reinstated or compensation from
the Tanzanian Government.
Page 59
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
15. CURRENT LIABILITIES
15(a) Trade and other payables
Trade payables
Related party payables
Accruals
15(b) Provisions
Employee and other provisions
Rehabilitation provision
16. INTEREST BEARING LIABILITIES
Current
Secured loan facility
Hire purchase equipment
Non-current
Hire purchase equipment
CONSOLIDATED
2014
$’000s
4,617
106
663
5,386
CONSOLIDATED
2014
$’000s
47
444
491
2013
$’000s
2,831
11
2,009
4,851
2013
$’000s
91
294
385
CONSOLIDATED
2014
$’000s
2013
$’000s
1,733
414
2,147
1,486
1,486
3,633
3,369
3,369
3,369
On 23 October 2012, two subsidiaries, Tancoal Energy Limited and AAA Drilling Limited secured loan facilities of
US$2.5m and US$1.4m respectively, with the National Bank of Commerce in Tanzania (“NBC”) (ultimately controlled
by Barclays Bank Plc).
On 26 September 2013, NBC approved an increase in the Tancoal loan facility of US$1m to US$3.5m
Each facility is secured against plant and equipment. At 30 June 2014, A$1,733,000 has been drawn against the
Tancoal facility and A$835,000 has been drawn against the AAA Drilling facility (disclosed in liabilities held for sale in
Note 11). The facilities are amortised over a three year term and principal and interest repayments are made monthly.
The Tancoal loan facility requires compliance with the following financial covenants:
1.
Interest cover: EBITDA shall not fall below 2.0 times finance charges; and
2. Debt service cover: EBITDA to debt service (being principal and interest payments) shall not fall below 1.5 to 1.
Page 60
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
16.
INTEREST BEARING LIABILITIES (CONT’D)
The AAA Drilling loan facility requires compliance with the following financial covenants:
Interest cover: EBITDA shall not fall below 3.5 times finance charges;
1.
2. Debt service cover: EBITDA to debt service (being principal and interest payments) shall not fall below 2.5 to 1;
and
3. Net debt gearing: Gross borrowings less cash shall not exceed 100% of net tangible assets in 2012 and 125%
thereafter.
These covenants are to be determined for each 12 month period ending 30 June. As at 30 June 2014, the Company
was in breach of covenants 1 and 2 on the Tancoal loan facility and in breach of covenants 1, 2 and 3 of the AAA loan
facility. The Company has satisfied all agreed repayments for both loan facilities to 30 June 2014.
Subsequent to balance date, the Company received from the NBC, formal acknowledgment of the pre-notification of
the expected covenant breaches in Tancoal and AAA Drilling. The NBC has provided a waiver against immediately
recalling the loans based on the expected breaches subject to the companies meeting their on-going compliance
obligations under the original payment schedule as specified in the facility agreements. The NBC has reserved its right
to perform its annual review following receipt of the audited accounts of the companies, in which the bank will
perform a holistic assessment of the financial health of the companies and, despite the current waiver, reserves its
right to further action.
The loan amount is secured against the Company’s mining assets and drilling rigs. These loans mature in December
2015.
Bank overdraft facility
On 26 September 2013, NBC approved a US$0.5m working capital facility to support the monthly working capital cycle
of Tancoal. Interest is charged on the facility at a rate of 8% per annum. The overdraft is not subject to any covenant
requirements.
Hire purchase
On 28 August 2013, IEC’s subsidiary Malcoal Mining Limited entered into a hire purchase arrangement to finance
mining equipment at the Malcoal Mine in Malawi. The agreement term is 5 years with an option to purchase the
equipment at the conclusion of the term.
17. ISSUED CAPITAL
2014
No.
2014
$’000s
2013
No.
Balance at the beginning of the year:
275,012,492
66,391
242,657,709
Shares issued as part of non-renounceable rights issue
32,354,783
Shares issued as part of Share Purchase Plan
Share issue costs
15,312,433
1,531
(64)
Balance at the end of the year
290,324,925
67,858
275,012,492
Fully paid ordinary shares carry one vote per share and carry the rights to dividends
18. RESERVES
18(a) Options reserve
Balance at the beginning of the year:
Options exercised during year
Options expired during year
Issued during the year
Balance at the end of the year
No options were granted during the 2014 or 2013 years.
Page 61
2014
No.
9,400,000
(8,800,000)
2014
$’000s
2,216
2013
No.
9,400,000
600,000
2,216
9,400,000
2,216
2013
$’000s
62,060
4,530
(199)
66,391
2013
$’000s
2,216
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
18. RESERVES (CONT’D)
18(b) Performance Rights reserve
Total Performance Rights reserve
19. SUBSIDIARIES AND JOINTLY CONTROLLED ENTITIES
CONSOLIDATED
2014
$’000s
589
2013
$’000s
267
The Consolidated Financial Statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with accounting policy described in Note 1.
Name of Entity
Country of
Incorporation
Class of Share
Equity (%)*
2014
Equity (%)*
2013
Atomic Resources Pty Ltd
Australia
Ordinary
Intra Energy (Tanzania) Limited
Tanzania
Ordinary
Tancoal Energy Limited
Tanzania
Ordinary
Tanzacoal East Africa Mining Limitedᶺ
Tanzania
Ordinary
AAA Drilling Limited
AAA Drilling Limited
Intra Energy Limited
Mauritius
Ordinary
Tanzania
Ordinary
Mauritius
Ordinary
East Africa Mining Limited
Mauritius
Ordinary
Intra Energy Trading (Malawi) Limited
Malcoal Mining Limited
Malawi
Malawi
Ordinary
Ordinary
Intra Energy (Sarawak) Sdn. Bhd.
Malaysia
Ordinary
Intra Energy Corporation (Singapore) Pte Ltd
Singapore
Ordinary
Intra Energy Laos Pte. Ltd
Singapore
Ordinary
Intra Energy Vietnam Pte. Ltd
Singapore
Ordinary
Intra Energy EST Managers Pty Ltd
Australia
Ordinary
Pamodzi Power Limitedᶺᶺ
Malawi
Ordinary
100%
100%
70%
85%
100%
100%
100%
100%
100%
90%
100%
100%
100%
100%
100%
* Percentage of voting power is in proportion to ownership.
ᶺ In December 2013 Intra Energy increased its ownership in the Tanzacoal joint venture from 70% to 85%. The
increase was triggered under terms in the Joint Venture Agreement by the minority shareholder not satisfying its
share of the development and holding costs of the concessions.
ᶺᶺ Entity incorporated in financial year ending 30 June 2014.
100%
100%
70%
70%
100%
100%
100%
100%
100%
90%
100%
100%
100%
100%
100%
Page 62
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
20. NON-CONTROLLING INTEREST
Total non-controlling interest
CONSOLIDATED
2014
$’000s
(5,155)
2013
$’000s
(1,738)
The Company’s subsidiary Intra Energy (Tanzania) Limited (“IETL”) owns 70% of Tancoal and 30% is owned by
Tancoal’s joint venture partner, the National Development Corporation of Tanzania, a Tanzanian government entity.
IETL owns 85% of Tanzacoal and 15% is owned by IETL’s Tanzacoal joint venture partner, Olympic Exploration Limited,
a private Tanzanian entity. In December 2013 Intra Energy increased its ownership in the Tanzacoal joint venture from
70% to 85%. The increase was triggered under terms in the Joint Venture Agreement by the minority shareholder not
satisfying its share of the development and holding costs of the concessions.
The Company’s subsidiary East Africa Mining Limited owns 90% of Malcoal and 10% is owned by East Africa Mining
Limited’s joint venture partner, Consolidated Mining Industries Limited, a private Malawian entity.
21. COMMITMENTS
21(a) Operating Commitments
Operating expenditure contracted for at the reporting date but not recognised as liabilities is as follows:
Rental and Lease Payments
Less than 1 year
Between 2 and 5 years
Greater than 5 years
Tenement Leases Expenditure Payable
Less than 1 year
Between 2 and 5 years
Greater than 5 years
TOTAL
21(b) Lease Commitments
Lease liability committed to at the reporting date, recorded as liabilities, is as follows:
Finance Lease Expenditure Commitments Payable
Less than 1 year
Between 2 and 5 years
Greater than 5 years
TOTAL
21(c) Remuneration Commitments
2014
$’000s
159
382
541
487
1,857
65
2,409
2,950
2014
$’000s
608
1,371
1,979
2013
$’000s
185
601
786
265
929
2,234
3,428
4,214
2013
$’000s
714
1,863
23
2,600
There were no other contractor or remuneration commitments in place at 30 June 2014.
Page 63
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
22. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
On 4 April 2014 the Company received notice from the Tanzanian Minister of Energy and Minerals that licence SML
235/2005, held by IEC subsidiary company Tanzacoal East Africa Mining Limited, had been cancelled. As a result an
impairment of $13,413,000 was recorded during the period. The Company has sought legal recourse to have the
licence re-instated and should the Company be successful then any re-instatement or recompense would result in
benefit to the Group.
The Directors are not aware of any further contingent liabilities or contingent assets at 30 June 2014.
23. SEGMENT REPORTING
The Company operates in two geographical segments being Australia and Africa.
Segment information
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 maker) in assessing performance and determining the allocation of
resources. The Company’s business is the exploration, evaluation, marketing, production and sale of coal in Africa.
‘Other’ recognises the non-operating entities incorporated in Singapore and Malaysia.
Basis of Accounting for purposes of reporting by operating segments
Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors as the chief decision maker with respect to
operating segments are determined in accordance with accounting policies that are consistent with those adopted in
the annual Financial Statements of the Group.
Inter-segment loans payable and receivable are initially recognised at the consideration received net of transaction
costs. If inter-segment loans receivable and payable are not on commercial terms, these are not adjusted to fair value
based on market interest rates.
Segment assets
Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of
economic value from the asset. In the majority of instances, segment assets are clearly identifiable on the basis of
their nature and physical location. Unless indicated otherwise in the segment assets note, investments in financial
assets, deferred tax assets and intangible assets have not been allocated to operating segments.
Segment liabilities
Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the
operations of the segment. Borrowings and tax liabilities are generally considered to relate to the Group as a whole
and are not allocated. Segment liabilities include trade and other payables.
Notes to and forming part of the segment information
The consolidation adjustments represent the elimination of inter-segment loan balances and transactions.
Accounting policies
Segment information is prepared in conformity with the accounting policies of the entity as per Accounting Standard
AASB 8 Operating Segments.
Page 64
Australia
Period Ended
30 June 14
$’000
Australia
Period Ended
30 June 13
$’000
Africa
Period Ended
30 June 14
$’000
Africa
Period Ended
30 June 13
$’000
Other
Period Ended
30 June 14
$’000
Other
Period Ended
30 June 13
$’000
Eliminations
Period Ended
30 June 14
$’000
Eliminations
Period Ended
30 June 13
$’000
Consolidated
Period Ended
30 June 14
$’000
Consolidated
Period Ended
30 June 13
$’000
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
23. SEGMENT REPORTING (CONT’D)
Geographical Segment
Revenue
Sales revenue
Inter-segment revenue
Net costs of production
Gross Profit
Impairment
Results from operating
activities
Finance income
Finance expenses
Segment result
Income tax
benefit/(expense)
–
625
–
625
–
–
976
–
976
–
10,867
–
(8,978)
1,889
8,550
–
(7,474)
1,076
(13,617)
–
(4,957)
(37,413)
(16,837)
(6,091)
15
–
91
–
–
(503)
25
(136)
(4,942)
(36,346)
(17,340)
(5,126)
134
218
(27)
(101)
Net Loss
(4,808)
(36,128)
(17,367)
(5,227)
Balance per statutory accounts
Total Assets
Total Liabilities
4,704
(276)
7,761
(313)
19,423
56,296
46,677
(56,507)
Page 65
–
–
–
–
–
773
–
–
773
–
773
–
–
–
–
–
–
–
(152)
–
–
(152)
–
(152)
–
–
–
(625)
–
(625)
–
625
–
–
625
–
625
–
10,867
8,550
(976)
–
(976)
–
(8,978)
1,889
–
(7,474)
1,076
–
(13,617)
–
33,872
(20,396)
(9,784)
–
–
15
(503)
116
(136)
32,896
(20,884)
(8,728)
–
107
117
32,896
(20,777)
(8,611)
(326)
(12,115)
23,801
45,291
48,010
(11,281)
42,323
(8,810)
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
24. CASH FLOW INFORMATION
Loss before income tax
Non-cash flows in profit
Depreciation and amortisation
Share based payments
Provision for doubtful debts
Impairment and other provisions
Loss on sale of non-current assets
Foreign exchange
Change in inventories
Change in receivables
Change in other current assets
Change in provisions
Change in trade payables
TOTAL
25. SHARE BASED PAYMENTS
25(a) Shares and options
2014
$’000s
(20,884)
1,392
322
257
13,617
3
56
323
714
97
(4)
717
(3,390)
2013
$’000s
(8,728)
785
189
(42)
92
705
(178)
(1,014)
(357)
3,324
(5,224)
No shares or options were granted by the Company during the 2014 or 2013 years.
25(b) Performance rights
2014
The Board of Intra Energy Corporation resolved that the Company would not adopt an employee incentive
scheme for the 2014 financial year. As such, no performance rights were granted as part of the incentive
scheme.
On 22 January 2014 Shareholders approved the issue of performance rights to the Executive Directors and
Senior Management of IEC in exchange for a voluntarily reduction in their cash remuneration for the six month
period from 1 January to 30 June 2014. Executive Directors voluntarily elected a 20% reduction in base
remuneration (excluding superannuation) and the Senior Management elected a 10% reduction in exchange
for performance rights as a short term cash saving measure. The Executive Directors and Senior Management
were granted a fixed number of IEC performance rights based on their remuneration deferral. The performance
rights will only vest after 12 months providing the employee remains in service with the Company. On 22
January 2014, 1,381,025 performance rights were issued as a result.
The performance rights issued to Executive Directors are not subject to market based performance conditions
and were valued using the Black-Scholes method. Performance rights issued to Senior Management were
issued in two tranches. Tranche 1 will only vest after 12 months providing the employee remains in service with
the Company. Tranche 2 will vest if one of the following occurs:
An increase of at least 50% between the closing IEC share price on the date of the 2013 AGM Notice of
Meeting and the 30 day VWAP calculated on the date of the release of the audited financial statements for
the year ended 30 June 2014; or
The audited financial statements for the year ending 30 June 2014 show the Company has made a profit.
An expense of $74,813 was recognised in the year relating to 2014 performance rights issued to both
Executive Directors and Senior Management.
Page 66
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
25. SHARE BASED PAYMENTS (CONT’D)
Performance Rights for the 2013 and 2012 incentive schemes were provisionally expensed in the period. As
stated in the Remuneration Report there are two measures of performance for Directors and three measures
for senior management who participate in the incentive scheme. It is not considered likely that the internal
measure (EPS) will be met over the vesting period and no provision has been made. The vesting of the external
measured rights will be subject to IEC’s TSR outperforming the S&P/ASX300 Energy Index (ASX: XEK) over the
vesting period. A valuation methodology was constructed using a Monte Carlo simulation to generate a fair
value at grant date. The fair value was deemed to be 0.17 cents per performance right share. This will be
expensed over the vesting period of three years.
The market based performance incentive was valued as at grant date using a Monte Carlo simulation model
resulting in a fair value of 17 cents per share of the performance rights issued. This resulted in $246,768 being
expensed in the year.
2013
A total of 5,987,061 performance rights were granted to the Company’s key personnel during the year.
Performance Rights were provisionally expensed in the period. As stated in the Remuneration Report there are
two measures of performance for Directors and three measures for senior management who participate in the
incentive scheme. It is not considered likely that the internal measure (EPS) will be met over the vesting period
and no provision has been made. The vesting of the external measured rights will be subject to IEC’s TSR
outperforming the S&P/ASX300 Energy Index (ASX: XEK) over the vesting period. A valuation methodology was
constructed using a Monte Carlo simulation to generate a fair value at grant date. The fair value was deemed to
be 0.17 cents per performance right share. This will be expensed over the vesting period of three years.
The market based performance incentive was valued as at grant date using a Monte Carlo simulation model
resulting in a fair value of 17 cents per share of the performance rights issued. This resulted in $189,022 being
expensed in the year.
26. SUBSEQUENT EVENTS
On 31 July 2014, Mr Gideon Nasari resigned as a Non-Executive Director of the Company. On the same date
David Mason transitioned to a Non-Executive Director.
On 14 August 2014 the Company announced completion of a private placement to sophisticated investors of
51,852,851 shares in IEC at a share price of $0.027 per share, raising $1.4 million before transaction costs. Each
shareholder participating in the private placement will receive two unlisted options for nil consideration for
every five ordinary shares. The options will be exercisable at any time prior to 31 August 2015 at an exercise
price of $0.05. 27,777,778 ordinary shares and 11,111,107 options were issued on 15 August 2014 with the
remainder being 24,074,074 shares and 9,629,628 options to be issued to IEC Directors, subject to shareholder
approval at the Company’s AGM.
AAA Drilling has recently completed the transaction to enter into a joint venture agreement with General
Petroleum Oils and Tools Pty Limited (“GPOT”), a Queensland based provider of drilling supplies and consulting
services to the oil and gas industry. GPOT has acquired a 50% interest in AAA Drilling Limited (“AAA Mauritius”),
a wholly owned Mauritian subsidiary of IEC.
The Mauritian subsidiary has itself a subsidiary, AAA Drilling Limited (“AAA Tanzania”), an operating drilling
company in Tanzania. GPOT is seeking to expand AAA Tanzania’s operations in Eastern Africa and will apply its
capabilities to offer the equipment of AAA to new contracts in the region after satisfying the exploration and
development program of IEC.
As part of the joint venture, GPOT is lending A$700,000 to AAA Tanzania to be paid in three cash instalments,
A$400,000 on completion, A$150,000 on or before 30 November 2014 and A$150,000 on or before 31 March
2015 for working capital.
IEC and GPOT will each provide an additional A$125,000 working capital and provide significant technical and
operational capabilities to AAA Tanzania. Both joint venture partners will have equal representation on the
board and appoint a Joint Operating Officer to the company.
Subsequent to balance date, the Group received from the National Bank of Commerce in Tanzania (“NBC”),
formal acknowledgment of the pre-notification of the expected covenant breaches in Tancoal and AAA Drilling.
Page 67
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
26. SUBSEQUENT EVENTS (CONT’D)
The NBC has provided a waiver against immediately recalling the loans based on the expected breaches subject
to the companies meeting their on-going compliance obligations under the original payment schedule as
specified in the facility agreements. The NBC has reserved its right to perform its annual review following
receipt of the audited accounts of the companies, in which the bank will perform a holistic assessment of the
financial health of the companies and, despite the current waiver, reserves its right to further action. The loan
amount is secured against the Company’s mining assets and drilling rigs.
Other than those events outlined above, there has not arisen in the interval between the end of the financial
year and the date of this report any item, transaction or event of a material and unusual nature likely, in the
opinion of the Directors of the Company, to affect significantly the operations of the Company, the results of
those operations, or the state of affairs of the Company, in future financial years.
27. RELATED PARTY TRANSACTIONS
Details relating to Key Management Personnel are disclosed in Note 5.
2014
During the year the Company resolved to pay Intrasia Capital Pty Limited, a related party of Graeme Robertson
and Jonathan Warrand, for accounting, administration, investor relations and back office support services to
IEC a monthly fee of $40,000 (plus GST). This fee has been reviewed following the end of the period.
During the year the Company paid $64,257 in fees to Intrasia Mining Pte Ltd (a wholly owned subsidiary of
Intrasia Capital Pte Limited), a related party of Graeme Robertson, for the provision of legal services by a
qualified lawyer employed by Intrasia Capital Pte Ltd.
In January 2014 the Company raised A$1.5m by way of a partially underwritten Share Purchase Plan. The Plan
was partially underwritten by IEC Directors and their related parties, who received underwriting fees of 3% on
their portion of the shortfall:
Director
Related Party
Mr G Robertson
Aspac Mining Limited
Mr J Warrand
Cobblyn Investments Pty Ltd
Mr D Mason
D&H Investments Pty Ltd and Rothstein Pty Ltd
Mr W Paterson
Lujeta Pty Ltd
Shares
underwritten
$’000
Underwriting fees
$’000
6,717,632
672
246,751
608,849
25
61
2,744,407
274
20
1
2
8
During the year, IEC subsidiary Intra Energy Tanzania Limited received administration fees of $19,039 for
administration services provided to Geothermal Power Tanzania Limited, a related party of Graeme Robertson,
David Mason and Jonathan Warrand.
During the year, IEC subsidiary Intra Energy Tanzania Limited received administration fees of $10,872 for
administration services provided to NuEnergy (Tanzania) Limited, a related party of Graeme Robertson and
Jonathan Warrand.
During the year, IEC subsidiary Intra Energy Tanzania Limited received administration fees of $2,082 for
administration services provided to Tanzagrain Limited, a related party of Graeme Robertson and Jonathan
Warrand.
At 30 June 2014 a loan of US$150,000 (A$160,000) to Malcoal joint venture partner Consolidated Mining
Industries Limited, a private Malawian entity remained outstanding. The loan is to be repaid from first
dividends from Malcoal and interest is charged on the loan at the rate of 5% per annum.
In June 2013, IEC subsidiary Tancoal Mining Limited received a loan of TZS300,000,000 (A$193,000) from joint
venture partner the National Development Corporation of Tanzania. This loan remained outstanding at 30 June
2014.
At 30 June 2014 $34,083 was receivable from Geothermal Power Tanzania Limited and NuEnergy Gas
(Tanzania) Limited.
Page 68
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
27. RELATED PARTY TRANSACTIONS (CONT’D)
At 30 June 2014 $97,174 was payable to Intrasia Mining Pte Ltd (a wholly owned subsidiary of Intrasia Capital
Pte Limited), a related party of Graeme Robertson and Jonathan Warrand relating to legal services and expense
reimbursement. $9,250 was payable to William Paterson for Directors fees.
2013
During the year the Company resolved to pay Intrasia Capital Pty Limited, a related party of Graeme Robertson
and Jonathan Warrand, for accounting, administration, investor relations and back office support services to
IEC a monthly fee of $40,000 (plus GST). The terms are to be reviewed annually.
During the year the Company paid $140,692 in fees to Intrasia Mining Pte Ltd (a wholly owned subsidiary of
Intrasia Capital Pte Limited), a related party of Graeme Robertson, for the provision of legal services by a
qualified lawyer employed by Intrasia Capital Pte Ltd. $11,021 was outstanding at 30 June 2013.
In April 2013 the Company raised A$4.5m by way of a non-renounceable rights issue of 2 shares for every 15
shares held at 24 April 2013. The issue was underwritten by IEC Directors, who received underwriting fees of
3% on their portion of the shortfall:
Director
Related Party
Shares
underwritten
$’000
Underwriting fees
$’000
Mr G Robertson
Aspac Mining Limited
9,405,103
1,317
50
Mr J Warrand
Cobblyn Investments Pty Ltd
715,767
Mr D Mason
D&H Investments Pty Ltd and Rothstein Pty Ltd
2,204,785
Mr W Paterson
Lujeta Pty Ltd
4,964,011
100
309
695
4
12
26
During the year, IEC subsidiary AAA Drilling Limited received drilling revenue of $454,000 for services provided
to Geothermal Power Tanzania Limited, a related party of Graeme Robertson, Jonathan Warrand and David
Mason.
During the year, IEC subsidiary AAA Drilling Limited received drilling revenue of $114,000 for services provided
to NuEnergy (Tanzania) Limited, a related party of Graeme Robertson and Jonathan Warrand.
During the year, IEC subsidiary Intra Energy Tanzania Limited received administration fees of $46,000 for
administration services provided to Geothermal Power Tanzania Limited, a related party of Graeme Robertson
and Jonathan Warrand.
During the year, IEC subsidiary Intra Energy Tanzania Limited received administration fees of $36,000 for
administration services provided to NuEnergy (Tanzania) Limited, a related party of Graeme Robertson and
Jonathan Warrand.
In October 2012, the Company provided a loan of US$150,000 (A$164,000) to Malcoal joint venture partner
Consolidated Mining Industries Limited, a private Malawian entity. The loan is to be repaid from first dividends
from Malcoal and interest is charged on the loan at the rate of 5% per annum.
In June 2013, IEC subsidiary Tancoal Mining Limited received a loan of TZS300,000,000 (A$205,000) from joint
venture partner the National Development Corporation of Tanzania.
28. FINANCIAL RISK MANAGEMENT
Exposure to credit and interest rate risks arises in the normal course of the Consolidated Entity’s businesses.
The Company has exposure to the following risks from their use of financial instruments:
Credit Risk
Liquidity Risk
Market risk i) Interest rate risk, ii) Foreign currency risk
This note presents information about the Company’s exposure to each of the above risks, their objectives,
policies and processes for measuring and managing risk, and the management of capital. Further quantitative
disclosures are included throughout this financial report.
Page 69
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
28. FINANCIAL RISK MANAGEMENT (CONT’D)
The Board of Directors has overall responsibility for the establishment and oversight of the risk management
framework.
Risk management policies are established to identify and analyse the risks faced by the Company, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies
and systems are reviewed to reflect changes in market conditions and the Company’s activities. The Company,
through their training and management standards and procedures, aim to develop a disciplined and
constructive control environment in which all employees understand their roles and obligations.
Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers
and investment securities.
Exposure to credit risk
The carrying amount of the Company’s financial assets represents the maximum credit exposure. The
Company’s maximum exposure to credit risk at the reporting date was:
Trade and Other Receivables
Cash
TOTAL
Trade and other receivables
2014
$’000s
2,678
88
2,766
2013
$’000s
3,518
4,437
7,955
The Company’s receivables relate to GST and other taxation (including VAT and WHT receivables) due from the
Australian and Tanzanian taxation offices and trade receivables from coal sales.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The
Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Company’s reputation. The Board monitors liquidity risk on a
monthly basis.
Sensitivity analysis
The Consolidated Entity’s policy is to ensure that it will always have sufficient cash to allow it to meet its
liabilities when they become due. To achieve this aim, it seeks to maintain cash balances to meet expected
requirements for a period of at least twelve months.
The Board receives cash flow projections on a monthly basis as well as information regarding cash balances. At
the balance sheet date, these projections indicated that the Group expected to have sufficient liquid resources
to meet its obligations, and forward expenditure commitments, under all reasonably expected circumstances
The following are the contractual maturities of financial liabilities, including estimated interest payments and
excluding the impact of netting agreements:
Page 70
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
28. FINANCIAL RISK MANAGEMENT (CONT’D)
30 June 2014
CARRYING
AMOUNT
CONTRACTUAL
CASH FLOWS
6 MONTHS
OR LESS
6 – 12
MONTHS
1 – 2
YEARS
2 – 5
YEARS
MORE THAN
5 YEARS
$’000S
$’000S
$’000S
$’000S
$’000S
$’000S
$’000S
Non-derivative financial liabilities
Bank overdraft
Trade and other payables
Interest bearing liabilities
Other liabilities
TOTAL
30 June 2013
522
5,386
3,633
193
9,734
CARRYING
AMOUNT
$’000S
Non-derivative financial liabilities
Trade and other payables
Interest bearing liabilities
Other liabilities
TOTAL
4,851
3,369
205
8,425
Cash and receivables
–
–
–
–
–
522
5,386
1,902
–
7,810
–
–
245
–
245
–
–
–
–
415
1,071
193
–
608
1,071
–
–
–
–
–
CONTRACTUAL
CASH FLOWS
6 MONTHS
OR LESS
6 – 12
MONTHS
1 – 2
YEARS
2 – 5
YEARS
MORE THAN
5 YEARS
$’000S
$’000S
$’000S
$’000S
$’000S
$’000S
–
–
–
–
4,851
3,369
–
8,220
–
–
–
–
–
–
205
205
–
–
–
–
–
–
–
–
The following are the contractual maturities of financial assets including receivables.
30 June 2014
CARRYING
AMOUNT
CONTRACTUAL
CASH FLOWS
6 MONTHS
OR LESS
6 – 12
MONTHS
1 – 2
YEARS
2 – 5
YEARS
MORE THAN
5 YEARS
$’000S
$’000S
$’000S
$’000S
$’000S
$’000S
$’000S
Financial assets
Cash
Trade & other receivables
TOTAL
88
2,678
2,766
–
–
–
88
2,518
2,606
–
–
–
–
160
160
–
–
–
–
–
–
Page 71
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
28.FINANCIAL RISK MANAGEMENT (CONT’D)
30 June 2013
Financial assets
Cash
Trade & other receivables
TOTAL
30 June 2014
Financial assets
Cash and cash equivalents
Trade and other receivables
TOTAL
Financial liabilities
Bank overdraft
Trade and other payables
Interest bearing liabilities
Other liabilities
TOTAL
NET FINANCIAL ASSETS/ (LIABILITIES)
30 June 2013
Financial assets
CARRYING
AMOUNT
$’000S
CONTRACTUAL
CASH FLOWS
$’000S
6 MONTHS
OR LESS
$’000S
6 – 12
MONTHS
$’000S
1 – 2
YEARS
$’000S
2 – 5
YEARS
$’000S
MORE THAN
5 YEARS
$’000S
4,437
3,518
7,955
–
–
–
4,437
3,354
7,791
–
–
–
–
164
164
–
–
–
–
–
–
AVERAGE
INTEREST RATE %
FLOATING
INTEREST RATE %
< 1 YEAR
$’000S
1 – 5 YEARS
$’000S
TOTAL
$’000S
0%
–
–
–
–
–
–
–
–
–
–
8.0%
–
8.0%
–
–
–
88
2,518
2,606
522
5,386
2,147
–
8,055
(5,449)
–
160
160
–
–
1,486
193
88
2,678
2,766
522
5,386
3,633
193
1,679
9,734
(1,519)
(6,968)
AVERAGE
INTEREST RATE %
FLOATING
INTEREST RATE %
< 1 YEAR
$’000S
1 – 5 YEARS
$’000S
TOTAL
$’000S
Cash and cash equivalents
2.2%
Trade and other receivables
TOTAL
Financial liabilities
Trade and other payables
Interest bearing liabilities
Other liabilities
TOTAL
NET FINANCIAL ASSETS/ (LIABILITIES)
Page 72
–
–
–
–
–
–
–
–
–
–
8.0%
–
–
–
4,437
3,354
7,791
4,851
3,369
–
8,220
(429)
–
164
164
–
–
205
205
(41)
4,437
3,518
7,955
4,851
3,369
205
8,425
(470)
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
28. FINANCIAL RISK MANAGEMENT (CONT’D)
Market risk
Market risk is the risk that changes in market prices, such as interest rates and equity prices will affect the
Company’s income or the value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while
optimising the return.
(i) Interest rate risk
Profile
At the reporting date the interest rate profile of the Company’s interest-bearing financial instruments was:
Financial assets
Financial liabilities
TOTAL
2014
$’000S
88
(4,155)
(4,067)
2013
$’000S
4,437
(3,369)
1,068
The Company’s cash at bank and on hand and short term deposits had a weighted average floating interest
rate at year end of 0%. The Company currently does not engage in any hedging or derivative transactions to
manage interest rate risk.
Interest rate sensitivity
A sensitivity of 10% has been selected as this is considered reasonable given the current level of both short
term and long term interest rates. A 10% movement in interest rates at the reporting date would have
increased (decreased) equity and profit and loss by the amounts shown below. This analysis assumes that
all other variables, in particular foreign currency rates, remain constant.
PROFIT OR LOSS
EQUITY
10% INCREASE
$’000S
10% DECREASE
$’000S
10% INCREASE
$’000S
10% INCREASE
$’000S
–
(33)
(33)
–
33
33
–
(33)
(33)
–
33
33
PROFIT OR LOSS
EQUITY
10% INCREASE
$’000S
10% DECREASE
$’000S
10% INCREASE
$’000S
10% INCREASE
$’000S
10
(27)
(17)
(10)
27
17
10
(27)
(17)
(10)
27
17
30 June 2014
Financial assets
Cash and cash equivalents
Interest bearing liabilities
Total
30 June 2013
Financial assets
Cash and cash equivalents
Interest bearing liabilities
Total
Page 73
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
28. FINANCIAL RISK MANAGEMENT (CONT’D)
Fair values versus Carrying amounts
The Group’s accounting policies and disclosures may require the measurement of fair values for both
financial and non-financial assets and liabilities. The Group has an established framework for fair value
measurement. When measuring the fair value of an asset or a liability, the Group uses market observable
data where available.
Fair values are categorised into different levels in a fair value hierarchy based on the following valuation
techniques:
Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
If the inputs used to measure the fair value of an asset or liability can be categorised in different levels of
the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of
the fair value hierarchy as the lowest level input that is significant to the entire measurement.
The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting
period during which the change has occurred.
Fair values of recognised financial assets and liabilities with their carrying amounts shown in the balance
sheet are as follows:
30 June 2014
CARRYING
AMOUNT
FAIR VALUE
TOTAL
QUOTED MARKET
PRICE (LEVEL 1)
OBSERVABLE INPUTS
(LEVEL 2)
NON-MARKET OBSERVABLE
INPUTS (LEVEL 3)
Cash and cash equivalents
88
88
Loans and receivables(1)
2,484
2,484
Trade and other payables(1)
(5,386)
(5,386)
Interest bearing liabilities(2)
(3,633)
(3,627)
Other payables
(193)
(193)
TOTAL
(6,640)
(6,634)
88
–
–
–
–
88
–
2,484
(5,386)
(3,627)
(193)
(6,722)
–
–
–
–
–
–
30 June 2013
CARRYING
AMOUNT
FAIR VALUE
TOTAL
QUOTED MARKET
PRICE (LEVEL 1)
OBSERVABLE INPUTS
(LEVEL 2)
NON-MARKET OBSERVABLE
INPUTS (LEVEL 3)
Cash and cash equivalents
Loans and receivables(1)
4,437
3,518
4,437
3,518
Trade and other payables(1)
(4,851)
(4,851)
Interest bearing liabilities(2)
(3,369)
(3,381)
Other payables
TOTAL
(205)
(470)
(205)
(482)
4,437
–
–
–
–
4,437
–
3,518
(4,851)
(3,381)
(205)
(4,919)
–
–
–
–
–
–
Page 74
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
28. FINANCIAL RISK MANAGEMENT (CONT’D)
Estimation of fair values
Due to the introduction of AASB 13 in 2013, the framework for measuring fair value has changed. The following
summarises the major methods and assumptions used in estimating fair values of financial instruments:
(1)
Receivables/payables
For receivables/payables with a remaining life of less than six months, the notional amount is deemed to
reflect the fair value. All other receivables/payables are discounted to determine the fair value, if the effect of
discounting is material.
(2)
Interest bearing liabilities
The fair value is estimated at the present value of future cash outflows. Future cash flows are discounted using
appropriate market rates.
(ii)
Foreign currency risk
As a result of activities overseas, the Company’s Consolidated Statement of Financial Position can be affected
by movements in exchange rates.
The Company also has transactional currency exposures. Such exposure arises from transactions dominated in
currencies other than the functional currency of the entity.
The Company currently does not engage in any hedging or derivative transactions to manage foreign currency
risk.
The Company’s exposure to foreign currency risk throughout the current year primarily arose from the Group’s
100% interest in Intra Energy (Tanzania) Limited and AAA Drilling, and its controlling interests in Tancoal and
Tanzacoal (collectively “Tanzanian subsidiaries”), whose functional currencies are Tanzanian Shillings.
Additionally the Company has exposure to foreign currency risk through the Group’s 90% interest in Malcoal
Mining Limited and 100% interest in Intra Energy Trading Malawi Limited (collectively “Malawian subsidiaries”),
whose functional currencies are Malawian Kwacha. Foreign currency risk arises on translation of the net assets
of these entities to Australian dollars. The foreign currency gains or losses arising from this risk are recorded
through the foreign currency translation reserve.
The Company is additionally exposed to the USD by way of its USD denominated loans to the National Bank of
Commerce in Tanzania. The foreign currency gains or losses arising from this risk are recorded in the Statement
of Comprehensive Income.
Sensitivity Analysis for Foreign Currency risk
A sensitivity of 10% has been selected as this is considered reasonable given historic and potential future
changes in foreign currency rates. This has been applied to the net assets of the Company. This sensitivity
analysis is prepared at reporting date.
A 10% strengthening of the Australian dollar against the Tanzanian Shilling and Malawian Kwatcha at 30 June
2014 would have decreased the net liabilities of the Tanzanian and Malawian subsidiaries by A$2,982,000.
(2013: $736,000). A 10% weakening of the Australian dollar against the Tanzanian Shilling and Malawian
Kwatcha at 30 June 2014 would have increased the net liabilities of the Tanzanian and Malawian subsidiaries by
A$3,280,000 (2013: $899,000).
There would be no impact on profit or loss arising from these changes in the currency risk variables as all
changes in value are taken to a reserve.
A 10% strengthening of the Australian dollar against the United States dollar at 30 June 2014 would have
increased net interest bearing liabilities of the NBC loan and hire purchases by A$406,000 (2013: $306,000). A
10% weakening of the Australian dollar against the United States dollar at 30 June 2014 would have increased
net interest bearing liabilities of the NBC loan by A$446,000 (2013: $337,000).
Page 75
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
28. FINANCIAL RISK MANAGEMENT (CONT’D)
The impact on profit or loss arising from changes in this currency risk variables would be taken to the
Statement of Comprehensive Income.
The above analysis assumes that all other variables, in particular interest rates and equity prices, remain
constant.
Capital management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market
confidence. There were no changes in the Company’s approach to capital management during the year.
Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.
29. PARENT ENTITY DISCLOSURES
Financial Position of Intra Energy Corporation Limited
2014
$’000S
2013
$’000S
Assets
Current Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total Current Assets
Non-Current Assets
Other receivables
Exploration expenditure
Interest in subsidiaries
Property, plant and equipment
Intangibles
Loans to subsidiaries
Loans to subsidiaries provided for
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Provisions
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity attributed to equity holders of the Company
Total Equity
20
26
16
62
159
126
4,136
42
179
45,760
(45,760)
4,642
4,704
243
33
276
4,428
67,858
2,805
(66,235)
4,428
4,428
3,631
256
35
3,922
164
126
3,316
57
176
47,784
(47,784)
3,839
7,761
293
20
313
7,448
66,391
2,484
(61,427)
7,448
7,448
The ultimate recovery of investments and loans to subsidiaries is dependent on the successful development
and commercial exploitation or sale of the subsidiary’s exploration assets.
Page 76
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
29. PARENT ENTITY DISCLOSURES (CONT’D)
Financial Performance of Intra Energy Corporation Limited
Loss for the year
Other comprehensive income
Total Comprehensive Income
2014
$’000S
(4,808)
(4,808)
2013
$’000S
(36,128)
(36,128)
The parent entity has not entered into any guarantees in relation to debts of its subsidiaries, has no contingent
liabilities and has no commitments for the acquisition of property, plant and equipment. The parent entity will
ensure minimum exploration commitments are maintained by its subsidiary companies – refer Note 21.
30. ACQUISITION OF SUBSIDIARIES
2014
There were no acquisitions of subsidiaries made during the 2014 year.
2013
Malcoal Mining Limited
On 25 January 2013 Intra Energy’s subsidiary East Africa Mining Limited purchased 90% of the issued shares in
Malawian company, Malcoal Mining Limited, for A$790,000 (US$830,000).
The net assets acquired in the acquisition are as follows:
Consideration paid (90%)
Non-controlling interest portion (10%)
TOTAL
FAIR VALUE OF IDENTIFIABLE NET ASSETS
Acquired capitalised mine development
Goodwill/gain on bargain purchase
FAIR VALUE
$’000S
790
88
878
878
As part of this business combination, IEC obtained ownership interest of 90% interest in the Nkhachira Mine in
northern Malawi with associated license ML143/2005, and three EPL’s, 174/2005, 209/2007 and 163/2005.
This acquisition strategically expands IEC’s coal reserves across the East Africa region.
Page 77
ASX Additional Information
FOR THE YEAR ENDED 30 JUNE 2014
Additional information required by the Australian Securities Exchange Limited and not shown elsewhere in this
report is as follows. The information is current as at 3 September 2014.
(a)
Distribution of Equity Securities
The numbers of shareholders, by size of holding, in each class of share are:
1
1,001
5,001
10,001
100,001
1,000
5,000
10,000
100,000
and over
The number of shareholders holding less than a marketable parcel
of shares are:
(b)
Twenty Largest Shareholders
The names of the twenty largest holders of quoted shares are:
1
2
3
4
5
6
7
8
9
ASPAC MINING LIMITED
LUJETA PTY LTD
FARJOY PTY LTD
RBC INVESTOR SERVICES AUST NOMINEES PTY LIMITED
MARA SUPERANNUATION PTY LTD
MR GRAEME LANCE ROBERTSON
NUVOLARI CAPITAL LIMITED
MR PETER TSEGAS
MARA PTY LTD
10 D & H MASON INVESTMENTS PTY LTD
11
12
LOMACOTT PTY LTD
CITICORP NOMINEES PTY LIMITED
13 DRFT MANAGEMENT PTY LTD
14
15
16
IGC RESOURCES INC
COBBLYN INVESTMENTS PTY LTD
LXXXIX PTY LTD
17 OZEA PTY LTD
18 HSBC CUSTODY NOMINEES(AUSTRALIA) LIMITED A/C 3
19
20
JETOSEA PTY LTD
PLATO PROSPECTING PTY LTD
Page 78
LISTED ORDINARY SHARES
NUMBER OF
HOLDERS
NUMBER OF
SHARES
70
93
142
440
234
979
396
6,825
288,079
1,179,974
18,784,974
297,842,912
318,102,703
2,712,214
LISTED ORDINARY SHARES
NUMBER OF
SHARES
PERCENTAGE
OF SHARES
59,947,080
18.85%
29,000,000
25,863,541
13,846,968
12,184,807
9,522,261
8,835,770
8,731,766
5,500,000
4,618,220
4,500,000
4,040,394
3,887,446
2,861,111
2,805,263
2,703,704
2,644,654
2,222,222
2,000,000
2,000,000
9.12%
8.13%
4.35%
3.83%
3.00%
2.78%
2.75%
1.73%
1.45%
1.41%
1.27%
1.22%
0.90%
0.88%
0.85%
0.83%
0.70%
0.63%
0.63%
207,715,207
65.31%
ASX Additional Information
FOR THE YEAR ENDED 30 JUNE 2014
(c)
Substantial Shareholders
The names of substantial shareholders who have notified the Company in accordance with section 671B
of the Corporations Act 2001 are:
ASPAC MINING LIMITED AND ASSOCIATES
LUJETA PTY LTD
MARA SUPERANNUATION AND ASSOCIATES
(d)
Schedule of Mining Tenements
NUMBER OF SHARES
PERCENTAGE OF
ORDINARY SHARES
96,209,282
29,000,000
20,547,418
30.24%
9.12%
6.46%
AREA OF INTEREST
TENEMENTS
% INTEREST
Tanzania
Tancoal Energy Limited
Tanzacoal East Africa Mining Limited
Malawi
Malcoal Mining Limited
ML439/2011, PL6285/2009, PL7391/2011,
PL7392/2011, PL5380/2008, PL5474/2008,
PL7620/2012, PL7713/2012, PL5756/2009,
PL5903/2009, PL5030/2008, PL8999/2013
PL6319/2010, PL7030/2011, PL6111/2009
ML0143/2005, EPL0174/2005, EPL376/2013, EPL
377/2013, EPL0360/2012
Intra Energy Trading Limited
EPL0392/2013
Australia
Intra Energy Corporation Limited
E08/1494, E08/1495
70%
85%
90%
100%
100%
Page 79