Intra Energy Corporation Limited
(ABN 65 124 408 751)
Annual Financial Report
For the year ended 30 June 2016
Contents
Corporate Directory
Chairman’s Report
Review of Operations
Directors’ Report
Remuneration Report
Auditor’s Independence Declaration
Directors’ Declaration
Independent Auditor’s Report
Consolidated Statement of Profit or Loss and Other 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
Page 2
Page
3
4
6
11
16
26
27
28
30
31
32
33
34
74
Corporate Directory
DIRECTORS
Graeme Robertson (Chairman)
David Mason
Mark McAndrew (appointed 7 October 2015)
Jonathan Warrand (resigned 8 August 2016)
William Paterson (resigned 7 October 2015)
Simon Harvey (Alternate Director for Jonathan Warrand) (resigned 20 June 2016)
COMPANY SECRETARY
Rozanna Lee
ACTING CHIEF OPERATING OFFICER
Mark McAndrew
REGISTERED OFFICE - AUSTRALIA
Level 40, 2 Park Street
Sydney NSW 2000
Email: info@intraenergycorp.com.au
REGISTERED OFFICE - TANZANIA
Amverton Tower
Plot No 1127
Chole Road, Masaki
PO Box 23059
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
Hall Chadwick
Level 40, 2 Park Street
Sydney NSW 2000
Telephone: (02) 9263 2600
Facsimile: (02) 9263 2800
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 Directors of Intra Energy Corporation Limited ("IEC", "Intra Energy" or "the Company"),
it is my pleasure to present this summary of operations for this Annual Financial Report for 2016.
Intra Energy remains the major producer and supplier of thermal coal in East Africa through its 70% ownership
of Tancoal Energy Limited ("Tancoal") which operates the Ngaka coal mine in south west Tanzania. The full year
production was 248,468 tonnes and sales were 246,197 tonnes, approximately 10% less than sales in the
previous year. Sales revenue for 2016 was A$14,408 million. This was due to the import of coal at below market
price from South Africa which has had an adverse impact on both sales, price and consequently financial
results. Approximately 150,000 tonnes were imported into Tanzania from December 2015 through to April 2016,
causing a decrease in sales in the first half of the year from 137,055 tonnes to 109,142 tonnes in the second half
instead of an anticipated increase. This resulted in the profit in Tancoal of A$432,000 at 31 December 2015
turning into a loss of A$2,120,000 for the second half of the year. Management raised this matter with the
Ministry of Energy and Mines and a decision was taken in August 2016 to ban the import of coal into Tanzania as
long as domestic coal can fulfil the requirements of local industries.
The domestic and regional market for coal remains robust with Eastern Africa continuing to be one of the highest
growth regions internationally. This is evidenced by sales, with 65% to cement, 11% to paper and 8% to textile
industries. Sales were mainly to customers in Tanzania (87%), with the remainder to customers in Rwanda (9%),
Kenya (2.8%) and Malawi (1.5%). During 2016, expansions of two cement producers and one new large cement
plant were completed and which had used imported coal. This has now changed and sales tonnages from Tancoal
will increase as imported coal stockpiles are depleted over the first quarter of the 2017 year. It is estimated that
at full capacity, the cement industry will require up to 500,000 tonnes per year and Tancoal is in an excellent
position to supply this tonnage.
During the year, IEC closed its loss-making Malawi operations which increased its losses from A$1,134,000 in
2015 to A$2,583,000 in 2016, a majority of which comprised one-off closure costs. The Malawi Government was
not prepared to defend the Malcoal mine from imported coal from Mozambique. Discussions were held during
the year leading to an agreement for the sale of the Malawi assets, subject to conditions precedent. The
agreement has not completed due to delays in gaining clearances from the Malawi Government and a court case
brought forward by an equipment leasing company claiming what is believed by IEC to be unreasonable and
irrational costs. IEC is strenuously defending this claim. The acquisition is still proceeding and the buyer has
commenced buying coal from Tancoal to assist servicing markets while waiting settlement for Malcoal.
While operating cash flow has been extremely tight with the decline in sales, the Company has significantly
reduced costs with the closure of Malawi mining and the reduction in Australian costs from A$2,426,000 in 2015
to A$1,129,000 in 2016. Total trading losses for the year totalled A$8,197,000 for the Group which includes the
closure costs of Malawi and provisions for the impairment of the Malawi assets and the closure of drilling
operations.
In the power development projects promoted by the Company, the 120MW "Pamodzi" coal-fired power station
in Malawi reached preliminary approval by the Malawi Government with the signing of the Term Sheet for the
Power Purchase Agreement ("PPA"). This project is on hold until a suitable power station developer is found. On
the other hand, the 270MW "Ngaka" minemouth coal-fired power station project in Tanzania has developed into
a partnership with Sinohydro Corporation Limited (“Sinohydro”) from China, one of China's largest international
power developers. Sinohydro has recently completed a Feasibility Study for the power station. Sinohydro will be
responsible for the engineering, procurement and construction of the power station and IEC will be responsible
for the North Ngaka Coal Mine which will supply coal at the rate of approximately 1,200,000 tonnes per year to
the power station. Discussions with Government will commence in the first half of the next FY with the aim of
signing a PPA in the second half of next year. The Ngaka Power Station will take approximately 36 months to
complete after the signing of the PPA.
IEC maintained its active presence through the Tancoal partnership in significant community development with
the local Women's Group which grows food products on reclaimed mining land and caters to Tancoal
IEC provided a briquetting machine from China to the Women's Group who are developing a briquette
workers.
from coal fines and clay to replace charcoal in cooking fires and hence saving Tanzanian forests from the harmful
effects of the charcoal industry.
Page 4
Chairman’s Report
IEC and NDC are both pleased to see the development of the Tancoal Mine to be entirely managed by Tanzanians,
one of very few mining operations in Tanzania to be run by Tanzanians for Tanzania.
IEC regrets to advise the death from natural causes of its CEO, Tarn Brereton, aged 44, in Dar es Salaam in July
2016. The Company expresses its sincere condolences to his wife and family. Mark McAndrew, IEC Director and
COO has taken over the role of Acting CEO in Dar es Salaam.
Sincerely
Graeme Robertson
Chairman – Intra Energy Corporation Limited
Page 5
Review of Operations
MINING OPERATIONS
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, with a particular
focus on Tanzanian industrial users.
IEC’s flagship project, the Tancoal Mine, is a project of national significance, and remains the major operating
coal mine in Tanzania.
Overburden Stripped (BCM)
Coal mined (tonnes)
Coal Sold (tonnes)
FY16
1,129,918
248,468
246,197
FY15
1,111,670
271,848
257,946
FY14
461,043
203,264
189,597
In the second half of the year to June 2016, Tancoal suffered from intense competition from imported coal from
South Africa. This greatly restricted tonnes sold from the mine during the six-month period to 30 June 2016.
The Tanzanian Government issued a Directive in August 2016 to all Tanzanian coal suppliers and customers,
whereby all imported coal from outside Tanzania would cease immediately. It is expected that as a result of this
Directive, Tancoal’s sales will double in the second quarter of FY17. Coal sales are projected to increase from a
current level of around 20,000 tonnes per month to a level above of 30,000 tonnes per month in the second
quarter of FY17. Measures have already been undertaken to double production at the mine including the
introduction of a new contractor fleet of equipment and increased availability of Tancoal’s mining equipment
through improved maintenance facilities and enhanced efficiency systems.
Tancoal produces a high quality thermal with an energy of 6000Kcals/kg which consistently meets client
specifications.
Product coal is sold and distributed from a stockpile at Kitai, some 50 kilometres from the mine pit. It is trucked
by Tancoal to this location along an existing public road maintained by the Company. Significant road upgrades
and village bypasses, and an alternative dedicated haul road, have been investigated by the Company, and the
former option will be constructed when funds allow.
As a result of the blanket ban on imported coal, management has entered into discussions with the major cement
and ceramic companies regarding long term contracts and increased coal sales. Tancoal is now starting to see
the fruits of these changes.
MALCOAL (MALAWI)
Malcoal Mining Limited (“Malcoal”) is a joint venture between IEC (90%) and its local partner, Consolidated
Mining Industries Limited (“CMI”, 10%). Malcoal was an important part of IEC’s Eastern African strategy to be
the dominant coal supplier in the region however, Malcoal suffered from intense competition from cheap
imported coal throughout the year and the decision was made to halt operations early in the year.
Discussions were entered into with a potential buyer Malcoal and a Share Purchase Agreement was signed.
Malcoal is in the process of obtaining the necessary government approvals for the share transaction to occur.
Coal mining operations for the current and previous financial years are as follow:
Overburden Stripped (BCM)
Coal mined (tonnes)
Coal Sold (tonnes)
FY15
91,126
18,996
13,947
FY14
67,529
27,539
10,780
Page 6
Review of Operations
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.
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. Initiatives
undertaken included improvement of storm water management systems at both Tancoal and Malcoal by
construction of trenches and ponds, which eliminated stream water pollution, and tree transplanting
surrounding the Tancoal mine, Kitai stockpile and surrounding villages.
PROJECTS
POWER STATION DEVELOPMENT
IEC continues to sponsor two major coal-fired energy projects, Project Pamodzi and Project Ngaka. The sponsor’s
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.
PROJECT NGAKA (TANZANIA) – 270 MW
In November 2015, IEC announced that it had executed a memorandum of understanding (“MOU”) with
Sinohydro Corporation Limited (“Sinohydro”) to assess the potential joint development of its 270 MW Ngaka
coal-fired power mine mouth project, located near the Tancoal Mine in Tanzania. The MOU sets out the intention
of IEC and Sinohydro to complete a feasibility study and a financing proposal for the project, and to negotiate a
Joint Venture Agreement for the development of the project. Sinohydro will be the major shareholder with IEC
holding a minor share.
Project Ngaka will use high quality, low sulphur thermal coal from the Tancoal Mine located in south western
It is proposed to site the generating facilities adjacent to Tancoal's northern coal deposit while the
Tanzania.
southern coal deposit will continue to meet the growing industrial and cement requirements of Tanzania and its
neighbours.
Sinohydro is a driving force behind China’s industrial development. It has 130,000 employees and provides one-
stop services for financing, engineering, purchasing, implementation and operation of projects for power, water
conservation, transport infrastructure and civil works such as public and private buildings.
IEC believes that Sinohydro will be an excellent strategic co-developer for Project Ngaka.
Technical and Commercial Proposals for the development of the power station will be submitted to the
Tanzanian Government during September 2016.
PROJECT PAMODZI (MALAWI) – 120 MW
Execution of the PPA term sheet for Project Pamodzi Power Station in Malawi was completed in April 2016 after
long deliberation by the Government of Malawi. This term sheet will form part of the sale of the Malawian
entities, with Tancoal securing an option to supply coal to the power station in Malawi, located across Lake Nyasa
from Tancoal. As the sale of the Malawi assets has not settled, IEC may consider alternative options for the power
project.
Mott MacDonald, the Consultants engaged by the Malawi Energy Ministry responsible to review all unsolicited
Independent Power Projects, are submitting their findings and recommendations to the Ministry during August
2016. It is expected that the Pamodzi Project will be on the shortlist of recommended projects for further
investigation.
DRILLING
IEC and JV partner GPOT elected to wind up AAA Drilling as market conditions for drilling services in Eastern
Africa continue to be depressed. Discussions were taking place with several potential buyers at year end and
the Company expects the sale to be concluded in the near future.
Page 7
Review of Operations
EXPLORATION
Limited exploration was undertaken for the financial year, with expenditure controlled so as to preserve cash
whilst still maintaining the Company’s portfolio of tenements in good standing.
In line with IEC’s diversification plans, three lithium tenements were acquired in July 2016 and applications were
submitted for three graphite tenements,
IEC’s total resources were unchanged for the financial year and remain as outlined in Table 1.
Project
Tanzania
Tancoal – North
Tancoal – South
Tanzania Total
Malawi
Kopakopa
Nkhachira
Malawi Total
Total JORC resources
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
Page 8
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 a Non-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, Non-Executive Director 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 a Non-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.
CORPORATE
There was a decline in sales that restricted operating cash flow during the year. The Company has reduced costs
by closing the Malawi operations and reducing costs in Australia.
Due to the Director’s belief in the Company's ability to reach profitability the Non-Executive Directors have
elected not to be paid until there is an improvement in operating cash flow. At the end of the year A$554k was
owing to current and past Directors of the Company.
Page 9
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 the
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.
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.
Significant progress was made in having a coal briquette certified by the Tanzanian Bureau of Standards. These
coal briquettes are an alternative to charcoal. Production of briquettes commenced in late June 2016 and
production is expected to double over the next six months. Charcoal production is one of the major contributors
to deforestation in Tanzania.
ENVIRONMENTAL
A total of 8000 tree seedlings of indigenous species in our Tree Nursery Project were transplanted to the mine
site areas, the camp site, stockpile areas, villages (schools, health centre) surrounding the mine and around the
truck haul road. The launch of the tree transplanting was covered in the local media and involved district and
village leaders.
Construction of trenches and ponds at Ndumbi port stockpile site and the upgrading of the storm water
drainage system at the mine site and Amani Makolo stockpile were also undertaken during the year.
Page 10
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 2016 (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
Non-Executive Chairman
David Mason
BSc (Hons), MBA
Non-Executive Director
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. Graeme transitioned to Non-
Executive Chairman on 1 November 2014. Graeme is a member of
the Remuneration Committee.
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 Director of
NuEnergy Gas Limited (ASX:NGY).
David joined the Board in January 2011. He has over thirty years’
exploration,
throughout
Australasia.
and mining experience
resource
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.
David currently holds the position of Executive Director of Dark
Horse Resources Limited (ASX:DHR)
Mark McAndrew Executive Director and
Acting Chief Operating
Officer
Mark is a Mining Engineer with over 38 years of experience in
delivering strategic results in mining operations across the globe.
He has held numerous senior management positions in the mining
Page 11
Directors Report
(appointed 7 October
2015) Acting Chief
Executive Officer
(appointed 18 July 2016)
Non-Executive Director
(resigned 8 August 2016)
Jonathan
Warrand
MBA (Exec), CA,
FINSIA, IPAA,
BCom
(Accounting)
William Paterson
BE (Civil) Hons
Non-Executive Director
(resigned 7 October
2015)
Simon Harvey
CA BCom
(Non-Executive Alternate
Director for Jonathan
Warrand) (resigned 20
June 2016)
COMPANY SECRETARY
Company Secretary
Rozanna Lee
B. Com (Hons),
LLB, GradDipACG,
AGIA, AGIS
Page 12
industry prior to establishing Optimine Pty Ltd, which has operated
successfully since 1996.
Mark has extensive technical, operational and managerial
experience in mining enterprises throughout Australia and offshore
in Indonesia, Venezuela, New Caledonia, New Zealand and
Tanzania, working in both contract and owner-managed projects
and operations. He has experience in setting up new mines and
targeting existing mines with efficiency standards that match
world’s best practice.
Jonathan was a Director from January 2011 to August 2016.
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,
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
Smoke Alarm Holdings Limited, Non-Executive Director of
NobleOak Life Limited, Managing Director of Greenwich Capital
Partners Pty Ltd and Non-Executive Chairman of Intrasia Oxley
Managed Investments Limited.
Bill was on the IEC Board as Non-Executive Director from March
2012 to October 2015. 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.
Simon held the position of CFO of an ASX listed company, NuEnergy
Gas Limited (ASX: NGY) until 30 April 2015 and is now CFO of Smoke
Alarm Holdings Limited.
Rozanna is a Chartered Company Secretary and has acted as
Company Secretary of IEC since October 2011. Rozanna’s career has
spanned numerous industry sectors and includes a period of over 8
years working for an
in the
Netherlands, which provided company secretarial, tax and
administration services to private and corporate clients. Rozanna
recently completed the Graduate Diploma of Applied Corporate
Governance with the Governance Institute of Australia.
international trust company
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 20 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:
G Robertson
Special Responsibilities
Non-Executive Chairman1
D Mason
Non-Executive Director1
Ordinary
Shares
118,806,585
7,950,228
M McAndrew Executive Director, Chief Operating Officer
and Acting Chief Executive Officer2
J Warrand
Non-Executive Director3
W Paterson
Non-Executive Director4
S Harvey
Alternate Director to J Warrand5
7,680,237
34,179,370
59,000
Performance
rights
1. Mr Graeme Robertson and Mr David Mason were parties to a convertible note issued in April 2016. The note
can be converted to shares if approved by shareholders at the AGM.
2. Mr Mark McAndrew was appointed on 7 October 2015, appointed as Acting Chief Executive Officer on 18 July
2016
3. Mr Jonathon Warrand resigned on 8 August 2016
4. Mr William Paterson resigned on 7 October 2015
5. Mr Simon Harvey resigned 20 June 2016
During the 2015 financial year, a private placement was completed whereby 59,648,102 ordinary shares in IEC
were issued at $0.027 per share raising $1.6m before transaction costs. Each shareholder participating in the
placement received two unlisted options for nil consideration for every five ordinary shares. The options were
exercisable at any time prior to 31 August 2015 at an exercise price of $0.05 and as no options were exercised
before 31 August 2015, all options lapsed. Directors who participated in the placement received shareholder
approval at the meeting of IEC shareholders held on 30 October 2014. 1,295,698 Performance rights vested
during the 2015 financial year.
Loss Per Share
Basic loss per share (cents)
2016
(2.07)
2015
(0.05)
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
The principal activities of the entities within the Consolidated Entity during the year were coal exploration,
production and power generation in Eastern Africa.
Page 13
Directors Report
OPERATING REVIEW
The Consolidated Entity’s operations are discussed in detail in the Review of Operations which can be found on
pages 6 to 10 of this Annual Financial Report.
REVIEW OF FINANCIAL POSITION
The Consolidated Entity recorded an operating loss after income tax $8.20m (2015 Loss: $1.39m). Income tax
benefit for the year is $nil (2015: $0.07m).
CAPITAL STRUCTURE
As at the date of signing this report, the Company had 356,474,030 fully paid ordinary shares on issue.
DIVIDEND
No dividend was paid or declared during the year ended 30 June 2016.
CASH FROM OPERATIONS
The net cash inflow from operations of $0.181m (2015: $0.944m) The net cash inflow from operations was
funded by a US$1.0m working capital facility, and a loan from related parties of A$125k. The Group had a net
overdraft of $1.29m at year end with $0.065m cash at bank and a bank overdraft facility of $1.355m.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There are no further significant changes to the state of affairs of the Company.
SIGNIFICANT EVENT AFTER THE BALANCE DATE
On 18 July 2016, the Company advised that the CEO Mr Tarn Brereton had passed away suddenly and that Mr
Mark McAndrew, Executive Director and Chief Operating Officer would take over the duties as Acting CEO until
a suitable replacement was found.
On 19 July 2016, the Company advised that it had commenced an energy diversification strategy.
On 25 July 2016, the Company advised that the technical proposal for the Ngaka Power Station had been
completed.
On 29 September 2016, the Company advised that Kenya Commercial Bank “KCB” had approved an increase of
US$800,000 to the working capital facility for Tancoal energy Limited “Tancoal” a subsidiary company for the
expansion of production capacity at the Ngaka coal mine in Tanzania.
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.
SHARES UNDER OPTION
AS at 30 June 2016, there were no unissued ordinary shares under option.
Page 14
Directors Report
MEETINGS OF DIRECTORS
Directors
Mr G Robertson
Mr D Mason
Mr M McAndrewᶺ
Mr J Warrandᶺᶺ
Mr W Patersonᶺᶺᶺ
Mr S Harvey (Alternate)ᶺᶺᶺᶺ
ᶺAppointed 7 October 2015
ᶺᶺResigned 8 August 2016
ᶺᶺᶺResigned 7 October 2015
ᶺᶺᶺᶺResigned 20 June 2016
Attended
Available to attend
8
8
7
7
1
-
8
8
7
8
1
-
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company has entered into Directors’ Access Indemnity and Insurance Deeds (“Deed”) with each Director.
Under the Deed, the Company indemnifies the Directors 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 Directors in connection with
the Directors 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 Deed.
Also pursuant to the Deed, the Company must insure the Directors against liability and provide access to all board
papers relevant to defending any claim brought against the Directors in their capacity as officers of the Company.
Amounts disclosed for remuneration of directors and specified officers exclude insurance premiums of $27,187
(2015: $18,568) paid by the Company in respect of liability for any current and former Directors, executive
officers and secretaries of the Company and its controlled entities. This amount has not been allocated to the
individuals covered by the insurance policy as, based on all available information, the Directors believe that no
reasonable basis for such allocation exists.
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.
The Company is committed to ensuring that its systems, procedures and practices reflect a high standard of
corporate governance. The Directors believe that the corporate governance framework is critical in maintaining
high standards of corporate governance and fostering a culture that values ethical behaviour, integrity and
respect to protect security holders’ and other stakeholders’ interests at all times.
During the year ended 30 June 2016, the Company’s corporate governance framework was consistent with the
third edition of the Corporate Governance Principles and Recommendations released by the ASX Corporate
Governance Council.
The Company publishes its Corporate Governance statement on its website rather than in its Annual Report. The
Corporate Governance statement may be viewed or downloaded at: www.intraenergycorp.com.au. Copies of
the Group policies referred to in the Corporate Governance Statement are also posted on the website.
Page 15
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 2016.
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
At 30 June 2016, the function of the Remuneration Committee (“the Committee”) was carried out by the Board.
The function of the Board in fulfilling its corporate governance responsibilities with respect to remuneration is
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
August 2013 (when the Board resolved that the employee incentive scheme would be suspended), 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.
In August 2013, the Board resolved that the employee incentive scheme would be suspended for an indefinite
period.
Page 16
Remuneration Report
On 22 January 2014, Shareholders approved the issue of performance rights to the Executive Directors (as at this
date) 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. The Executive Directors at the time 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. These Executive Directors
and Senior Management were granted a fixed number of IEC performance rights based on their remuneration
deferral. The 1,295,698 performance rights issued to the Senior Management and these Executive Directors (now
Non-Executive Directors) vested in January 2015, no shares were issued and the performance rights lapsed on
30 September 2015.
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.
In August 2013, the Board resolved that the employee incentive scheme would be suspended for an indefinite
period.
Executive Management
For 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.
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.
Page 17
Remuneration Report
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)
< 100%
> 100% but < 107%
> 107% but < 114%
> 114% but < 120%
> 120%
Nil
25%
50%
75%
100%
Page 18
Remuneration Report
KEY MANAGEMENT PERSONNEL
During the year ended 30 June 2016 the Key Management Personnel (“KMP”) of IEC were:
Name
Position Held
Mr Graeme Robertson
Non-Executive Chairman
Mr David Mason
Non-Executive Director
Mr Mark McAndrew1
Mr William Paterson2
Mr Jonathan Warrand3
Mr Tarn Brereton4
Mr Simon Harvey5
Ms Kerry Angel6
Executive Director and Chief Operating Officer
Non-Executive Director and Chair of Remuneration Committee
Non-Executive Director
CEO (Appointed 7 October 2015, was Acting CEO from 31
October 2014 and Chief Operating Officer until 31 October
2014)
Non-Executive Alternate Director for Jonathan Warrand
Group Financial Controller
1Mr Mark McAndrew was appointed on 7 October 2015, appointed as Acting Chief Executive Officer 18 July
2016
2Mr William Paterson resigned on 7 October 2015
3Mr Jonathan Warrand resigned on 8 August 2016
4Mr Tarn Brereton ceased on 18 July 2016
5Mr Simon Harvey resigned 20 June 2016
6Ms Kerry Angel was appointed on 24 April 2015
Page 19
Remuneration Report
B. DETAILS OF REMUNERATION
2016
Salary and
fees
$
NON-EXECUTIVE DIRECTORS
Mr W Paterson^
Mr G Robertson
Mr D Mason
Mr J Warrand^^
Mr S Harvey^^^
17,473
109,716
109,716
85,000
–
EXECUTIVE DIRECTOR
Mr M McAndrew^^^^
107,154
KEY MANAGEMENT PERSONNEL
Mr T Brereton^^^^^
409,194
Ms Kerry Angel^^^^^^
228,446
Total
1,066,699
Short-term
Post-Employment
Long-term
Share-based Payment
Cash bonus
$
Non-monetary benefits
$
Superannuation
$
Retirement Benefits
$
Long service leave
$
Shares
$
Options
$
Incentive plans
$
TOTAL
$
% of Remuneration
granted as options
%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
10,179
–
–
10,179
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
-
–
–
–
17,473
109,716
109,716
85,000
–
117,333
409,194
228,446
1,076,878
–
–
–
–
–
–
–
–
–
^Resigned on 7 October 2015 ^^Resigned 8 August 2016 ^^^Resigned 20 June 2016 ^^^^Appointed 7 October 2015 ^^^^^Ceased 18 July 2016 ^^^^^^Appointed 24 April 2015
Short-term
Post-Employment
Long-term
Share-based Payment
2015
Salary and
fees
$
NON-EXECUTIVE DIRECTORS
Mr G Nasari^
Mr W Paterson
Mr G Robertson*
Mr D Mason*
Mr J Warrand*
Mr S Harvey
3,500
65,000
123,334
114,772
148,609
–
KEY MANAGEMENT PERSONNEL
Mr T Brereton
Total
299,222
754,437
Cash bonus
$
Non-monetary benefits
$
Superannuation
$
Retirement Benefits
$
Long service leave
$
Shares
$
Options
$
Incentive plans
$
TOTAL
$
% of Remuneration
granted as options
%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,917
7,953
–
–
–
–
33,750
62,785
62,785
–
–
10,870
159,320
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
62,180
49,466
44,701
–
3,500
65,000
219,264
229,940
264,048
–
15,582
171,929
314,804
1,096,556
–
–
–
–
–
–
–
–
^Resigned on 31 July 2014. *Mr David Mason resigned as an Executive Director on 31 July 2014. Mr Graeme Robertson resigned as Executive Chairman on 31 October 2014. Mr Jonathan Warrand resigned as Executive Director and Chief Financial
Officer on 31 October 2014. Mr Mason and Mr Warrand continue as Non-Executive Directors. Mr Robertson continues as a Non-Executive Chairman.
Page 20
Remuneration Report
C. CASH BONUSES
There were no cash bonuses paid during the year.
D. SHARE BASED PAYMENT BONUSES
There were no share-based payment bonuses paid during the year.
E. OPTIONS ISSUED AS PART OF REMUNERATION
2,500,000 options were issued on 7 October 2015 to Mr Tarn Brereton upon his appointment as Chief Executive
In 2012 the Committee adopted
Officer. The options were not exercised and they expired on 30 June 2016.
Performance Rights as the incentive scheme for the Executive Directors and Senior Management. In August
2013, the Board resolved that the employee incentive scheme would be suspended for an indefinite period.
EMPLOYMENT CONTRACTS OF DIRECTORS AND EXECUTIVES
Until 31 October 2014, Mr Graeme Robertson was employed by the Company as Executive Chairman. Mr
Robertson transferred to a non-executive role on 31 October 2014 and continued on the Board as Non-Executive
Chairman. He was entitled to receive three months’ termination payment. His Non-Executive Chairman’s fees
are $85,000 per annum. Mr Robertson is also a non-executive director of Tancoal Energy Limited (Tancoal), a
70% owned subsidiary of IEC, during the year he received director’s fees of US$18,000 from Tancoal.
Mr Jonathan Warrand was employed by the Company as Executive Director and Chief Financial Officer until 31
October 2014 when he transferred to a non-executive role and continued on the Board as Non-Executive
Director. His Non-Executive Director’s fees are $85,000 per annum. Mr Warrand resigned on 8 August 2016.
Intrasia Capital Pty Ltd, a related entity of Mr Warrand and Mr Robertson, received monthly management
services fees (representing administration, investor relations, accounting and general office support) from IEC
until 30 November 2015. Fees of $57,500 were paid to Intrasia Capital Pty Ltd during the year ended 30 June
2016. Until the arrangement ended, the fees were reviewed at least quarterly and approved by Directors of IEC
not related to Mr Warrand and Mr Robertson.
Mr David Mason was employed as Executive Director – Exploration and Business Development until 31 August
2014. Mr Mason transferred to a non-executive role on 31 August 2014 and continued on the Board as Non-
Executive Director. His Non-Executive Director’s fees are $85,000 per annum. Mr Mason is also a non-executive
director of Tancoal Energy Limited (Tancoal), a 70% owned subsidiary of IEC, during the year he received
director’s fees of US$18,000 from Tancoal.
Mr Mark McAndrew was employed as Executive Director and Chief Operating Officer on 7 October 2015 for an
indefinite period until terminated by either party by giving not less than three months’ notice. His salary is
$160,000 per annum including superannuation. Mr McAndrew was also appointed Acting Chief Executive Officer
on 18 July 2016.
Mr Tarn Brereton was employed as Chief Executive Officer for an indefinite period until terminated by either
party by giving not less than three months’ notice. Mr Brereton was paid US$280,000 in total as an employee.
Mr Brereton passed away and his employment ceased on 18 July 2016.
The key terms of Mr Brereton’s remuneration package are as follows:
Total Fixed Remuneration (TFR) of US$280,000 (including superannuation contributions), subject to
annual review;
Eligibility to participate in the Company’s incentive scheme as approved by the Board from time to time;
Mr Brereton was also a non-executive director of Tancoal Energy Limited (Tancoal), a 70% owned subsidiary of
IEC, during the year he received director’s fees of US$18,000 from Tancoal.
Ms Kerry Angel was employed as Group Financial Controller on 24 April 2015 for an indefinite period until
terminated by either party by giving not less than one months’ notice. Ms Angel’s salary is US$170,000 per annum
including superannuation.
Page 21
Remuneration Report
Each employment contract of Executive Directors and Executives includes:
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
Provision made for the award of performance share rights (“LTI”), subject to shareholder approval.
No payments were made under an LTI or STI scheme for the year ended 30 June 2015.
F. KEY MANAGEMENT PERSONNEL COMPENSATION – OPTIONS
2016
Mr G Robertson
Mr D Mason
Mr J Warrand^
Mr W Paterson^^
Mr M McAndrewᶺᶺᶺ
Mr T Breretonᶺᶺᶺᶺ
Mr S Harveyᶺᶺᶺᶺᶺ
Ms Kerry Angelᶺᶺᶺᶺᶺᶺ
Total
Granted
during the
year as
compensati
on
Balance at
beginning of
year
Exercised
during the
year
Lapsed /
cancelled
during the
year
Balance at
the end of
the year
Vested and
exercisable
–
–
–
–
–
–
–
–
-
–
–
–
–
–
2,500,000
–
–
2,500,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(2,500,000)
–
–
(2,500,000)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
^Resigned on 8 August 2016
^^Resigned on 7 October 2015
ᶺᶺᶺAppointed Executive Director and Chief Operating Officer on 7 October 2015, appointed Acting Chief Executive Officer
on 18 July 2106
ᶺᶺᶺᶺ Appointed Chief Executive Officer on 7 October 2015, ceased 18 July 2016
ᶺᶺᶺᶺᶺResigned 20 June 2016
ᶺᶺᶺᶺᶺAppointed Group Financial Controller 24 April 2015
2015
Mr G Robertson
Mr J Warrand
Mr D Mason
Mr G Nasari^
Mr W Paterson
Mr T Brereton
Mr S Harvey
Total
Granted
during the
year as
compensati
on
Balance at
beginning of
year
Exercised
during the
year
Lapsed /
cancelled
during the
year
Balance at
the end of
the year
Vested and
exercisable
–
–
–
–
–
–
–
-
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
-
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
^Resigned on 31 July 2014
Page 22
Remuneration Report
G. KEY MANAGEMENT PERSONNEL COMPENSATION – FULLY PAID SHARES
The numbers of shares in the Company held during the financial year or at time of resignation by each Director
or KMP of IEC are set out below:
2016
Balance at
beginning of
year
Granted
during the
year as
compensation
Received
during the year
on exercise of
options
Mr G Robertson
83,118,517
Mr D Mason
Mr J Warrand^
7,950,228
7,680,237
Mr W Paterson^^
34,179,370
Mr M McAndrewᶺᶺᶺ
Mr T Breretonᶺᶺᶺᶺ
Mr S Harveyᶺᶺᶺᶺᶺ
Ms K Angelᶺᶺᶺᶺᶺᶺ
–
–
59,000
–
Total
132,987,352
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Changes during
the year*
Balance at the
end of the year
35,688,068
118,806,585
–
–
–
–
–
–
–
7,950,228
7,680,237
34,179,370
–
–
59,000
–
35,688,068
168,675,420
^Resigned on 8 August 2016
^^Resigned on 7 October 2015
ᶺᶺᶺAppointed Executive Director and Chief Operating Officer on 7 October 2015, appointed Acting Chief Executive Officer
on 18 July 2106
ᶺᶺᶺᶺ Appointed Chief Executive Officer on 7 October 2015, ceased 18 July 2016
ᶺᶺᶺᶺᶺResigned 20 June 2016
ᶺᶺᶺᶺᶺAppointed Group Financial Controller 24 April 2015
2015
Balance at
beginning of
year
Granted during
the year as
compensation
Received
during the year
on exercise of
options
Mr G Robertson
70,345,741
Mr J Warrand
Mr D Mason
2,835,930
6,421,923
Mr W Paterson
29,000,000
Mr G Nasari^
Mr T Brereton
Mr S Harvey
–
–
59,000
Total
108,662,594
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Changes during
the year*
Balance at the
end of the year
12,772,776
83,118,517
4,844,307
1,528,305
7,680,237
7,950,228
5,179,370
34,179,370
–
–
–
–
–
59,000
24,324,758
132,987,352
*Changes during the year represent shares acquired or sold by Directors or their associates
^Resigned on 31 July 2014
Page 23
Remuneration Report
H. 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:
2016
Balance at
beginning of
year
Granted during
the year as
compensation
Vested during
the year
Mr G Robertson
Mr D Mason
Mr J Warrand^
Mr W Paterson^^
Mr M McAndrewᶺᶺᶺ
1,666,666
1,083,333
916,666
–
–
Mr T Breretonᶺᶺᶺᶺ
392,063
Mr S Harveyᶺᶺᶺᶺᶺ
Ms K Angelᶺᶺᶺᶺᶺᶺ
–
–
Total
4,058,728
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Lapsed/cancell
ed during the
year
(1,666,666)
(1,083,333)
(916,666)
–
–
(392,063)
–
–
(4,058,728)
Balance at the
end of the year
–
–
–
–
–
–
–
–
–
^Resigned on 8 August 2016
^^Resigned on 7 October 2015
ᶺᶺᶺAppointed Executive Director and Chief Operating Officer on 7 October 2015, appointed Acting Chief Executive Officer
on 18 July 2106
ᶺᶺᶺᶺ Appointed Chief Executive Officer on 7 October 2015, ceased 18 July 2016
ᶺᶺᶺᶺᶺResigned 20 June 2016
ᶺᶺᶺᶺᶺAppointed Group Financial Controller 24 April 2015
2015
Mr G Robertson
Mr J Warrand
Mr D Mason
Mr W Paterson
Mr G Nasariᶺ
Mr T Brereton
Mr S Harvey
Total
Balance at
beginning of
year
Granted during
the year as
compensation
Vested during
the year
Lapsed/cancell
ed during the
year
Balance at the
end of the year
2,832,240
1,889,784
2,004,922
-
-
532,305
-
7,259,251
-
-
-
-
-
-
-
-
135,000
251,716
251,716
–
–
140,242
–
(1,030,574)
1,666,666
(721,402)
(669,873)
916,666
1,083,333
–
–
–
–
–
–
392,063
–
778,674
(2,421,849)
4,058,728
ᶺResigned on 31 July 2014
I.
LOANS TO DIRECTORS AND EXECUTIVES
No loans were made to any Directors or Executives during the financial year.
J. PAYMENTS TO DIRECTORS
Due to the Director’s belief in the Company's ability to reach profitability the Non-Executive Directors have
elected not to be paid until there is an improvement in operating cash flow. At the end of the year A$554k was
owing to current and past Directors of the Company.
End of Remuneration Report
Page 24
Directors’ Report
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.
There were no fees for non-audit services were paid to an affiliated entity of the external auditors during the
year ended 30 June 2016.
LEAD AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration is set out on page 26 and forms part of the Directors’ Report for the
financial year ended 30 June 2016.
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
Chairman
Dated this 30 September 2016
Page 25
INTRA ENERGY CORPORATION LIMITED
ABN 65 124 408 751
AND CONTROLLED ENTITIES
AUDITOR’S INDEPENDENCE DECLARATION
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF INTRA ENERGY CORPORATION LIMITED
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2016
there have been no contraventions of:
i.
ii.
the auditor independence requirements as set out in the Corporations Act 2001 in
relation to the audit; and
any applicable code of professional conduct in relation to the audit.
HALL CHADWICK
Level 40, 2 Park Street
Sydney NSW 2000
DREW TOWNSEND
Partner
Dated: 30 September 2016
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 2016 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) as disclosed in note 1(A) 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 2016.
The declaration is signed in accordance with a resolution of the Board of Directors.
GRAEME ROBERTSON
Chairman
Dated this 30 September 2016
Page 27
INTRA ENERGY CORPORATION LIMITED
ABN 65 124 408 751
AND CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
INTRA ENERGY CORPORATION LIMITED
Report on the Financial Report
We have audited the accompanying financial report of Intra Energy Corporation Limited
which comprises the consolidated statement of financial position as at 30 June 2016, the
consolidated statement of profit or loss and other comprehensive income, the consolidated
statement of changes in equity and the consolidated statement of cash flows for the year
then ended, notes comprising a summary of significant accounting policies and other
explanatory information and the directors’ declaration of the consolidated entity comprising
the company and the entities it controlled at the year’s end or from time to time during the
financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that
gives a true and fair view in accordance with Australian Accounting Standards and the
Corporations Act 2001 and for such internal control as the directors determine is necessary
to enable the preparation of the financial report that is free from material misstatement,
whether due to fraud or error. In Note 1(B), the directors also state, in accordance with
Accounting Standard AASB 101: Presentation of Financial Statements, that the financial
statements comply with International Financial Reporting Standards (IFRS).
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We
conducted our audit in accordance with Australian Auditing Standards. Those standards
require that we comply with relevant ethical requirements relating to audit engagements
and plan and perform the audit to obtain reasonable assurance whether the financial report
is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the financial
report, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation and fair presentation of the
financial report in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the
directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirement of the
Corporation Act 2001.
INTRA ENERGY CORPORATION LIMITED
ABN 65 124 408 751
AND CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
INTRA ENERGY CORPORATION LIMITED
Auditor’s Opinion
In our opinion:
a. the financial report of Intra Energy Corporation Limited is in accordance with the
Corporations Act 2001 including:
i.
giving a true and fair view of the consolidated entity’s financial position as at 30
June 2016 and of its performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations
2001; and
ii.
b. the financial report also complies with International Financial Reporting Standards as
disclosed in Note 1(B).
Emphasis of Matter
Without modifying our opinion, we draw attention to Note 1(A) in the financial report,
which indicates that the Group has incurred a net loss after tax of $8,197,000 during the
year ended 30 June 2016 and, as of that date, the Group’s total current liabilities
exceeded its total current assets by $8,748,000. These conditions, along with other
matters as set forth in Note 1(A), indicate the existence of a material uncertainty that may
cast significant doubt about the Group’s ability to continue as a going concern and
therefore, the Group may be unable to realise its assets and discharge its liabilities in the
normal course of business and at the amounts stated in the financial report.
Report on the Remuneration Report
We have audited the remuneration report included in pages 16 to 24 of the Directors’
Report for the year ended 30 June 2016. The directors of the company are responsible for
the preparation and presentation of the remuneration report in accordance with Section
300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
remuneration report, based on our audit conducted in accordance with Australian Auditing
Standards.
Auditor’s Opinion
In our opinion the remuneration report of Intra Energy Corporation Limited for the year
ended 30 June 2016 complies with Section 300A of the Corporations Act 2001.
HALL CHADWICK
Level 40, 2 Park Street
Sydney NSW 2000
Drew Townsend
Partner
Dated: 30 September 2016
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2016
CONSOLIDATED
2016
*RE-STATED 2015
Sales revenue
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 expense
Project expenditure
Impairment of tenements
Share based payments
Other expenses
Share of loss of equity-accounted investees
Finance income
Finance expenses
Loss on sale and write-off of asset
Impairment of assets
Loss Before Income Tax
Income tax benefit
Loss from continuing operations
Loss from discontinued operations
Loss from impairment of assets of discontinued operations
Loss for the Year
Other Comprehensive Income
Foreign currency translation (loss)/gainᶺ
Total Comprehensive Loss for the Year
Net Loss for the Year Attributable to:
Shareholders of IEC
Non-controlling interest
Total Comprehensive Loss for the Year Attributable to:
Shareholders of IEC
Non-controlling interest
Loss per share
Loss per share (cents per share, basic and diluted)
Loss per share (cents per share, basic and diluted) on continuing
operations
Loss per share (cents per share, basic and diluted) on discontinued
operations
NOTES
2
3
11
4
10
10
7
7
7
$’000S
14,408
(8,911)
5,497
-
(188)
(248)
(527)
(1,052)
(3,984)
(28)
-
-
-
(1,540)
(257)
-
(300)
(481)
(759)
(3,867)
-
(3,867)
(2,583)
(1,747)
(8,197)
(430)
(8,627)
(7,370)
(827)
(8,197)
(7,985)
(642)
(8,627)
(2.07)
(1.09)
(0.98)
$’000S
14,393
(8,219)
6,174
1,031
231
(295)
(929)
(1,052)
(2193)
(175)
(173)
(126)
(206)
(2,135)
(77)
2
(259)
(142)
-
(324)
71
(253)
(1,134)
-
(1,387)
(1,457)
(2,844)
(1,745)
358
(1,387)
(3,119)
275
(2,844)
(0.05)
(0.01)
(0.04)
ᶺ Item that may be classified or disclosed subsequently to Statement of Comprehensive Income
*Loss on discontinued operations has been re-stated in 2015
The Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes to the Financial Statements.
Page 30
Consolidated Statement of Financial Position
AS AT 30 JUNE 2016
CONSOLIDATED
2016
$’000S
NOTES
Assets
Current Assets
Cash and cash equivalents
Inventories
Trade and other receivables
Assets held for sale
Total Current Assets
Non-Current Assets
Trade and other receivables
Equity accounted investments
Property, plant and equipment
Mine development costs
Exploration expenditure
Total Non-Current Assets
Total Assets
Liabilities
Current Liabilities
Bank overdraft
Trade and other payables
Employee benefits
Interest bearing liabilities
Liabilities held for sale
Total Current Liabilities
Non-Current Liabilities
Trade and other payables
Provisions
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
13
14
16(b)
15
16
10
17
16
18
19
21
2015
$’000S
40
2,185
2,529
-
4,754
196
989
9,859
7,071
513
18,628
23,382
644
7,260
87
2,429
-
65
1,285
1,775
-
3,125
-
-
6,632
4,917
652
12,201
15,326
1,355
7,263
59
1,967
1,229
11,873
10,420
-
591
-
591
12,464
2,862
69,465
2,364
(63,445)
8,384
(5,522)
2,862
196
550
805
1,551
11,971
11,411
69,387
2,979
(56,075)
16,291
(4,880)
11,411
The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes to the Financial
Statements.
Page 31
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2016
CONSOLIDATED
NOTES
Cash Flows from Operating Activities
Receipts from customers
Payments to creditors and suppliers
Interest received
Interest paid
Tax received
Net cash provided in operating activities
25
Cash Flows from Investing Activities
Mine development and capitalised exploration costs
Purchase of property, plant and equipment
Contribution to equity accounted investment
Net cash (used)/provided 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
Proceeds from related party borrowings
Net cash (used)/provided in financing activities
Net (decrease) 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
Bank overdrafts used for cash management purposes
Cash and Cash equivalents/(Net Overdraft) in the Statement of
Cash Flows
2016
$’000S
14,778
(14,099)
-
(498)
-
181
(145)
(404)
-
(549)
-
-
1,865
(2,291)
125
(301)
(669)
(604)
(17)
(1,290)
65
(1,355)
(1,290)
2015
$’000S
17,389
(16,076)
2
(532)
161
944
(578)
(767)
(125)
(1,470)
1,610
(81)
5,723
(6,796)
-
456
(70)
(434)
(100)
(604)
40
(644)
(604)
The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes to the Financial
Statements.
Page 32
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2016
CONSOLIDATED
At 1 July 2016
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
Loss for the year
Other Comprehensive Income
Foreign currency translation differences
Total Comprehensive Income
ISSUED
CAPITAL
$’000S
69,387
TRANSACTIONS WITH OWNERS RECORDED DIRECTLY INTO EQUITY
Shares issued during the year
Share raising cost (net of tax)
Performance rights granted
Total transactions with owners
78
78
LOSSES
$’000S
(56,075)
(7,370)
(7,370)
ACCUMULATED
PERFORMANCE
OPTION
RESERVE
$’000S
FOREIGN CURRENCY
TRANSLATION
RESERVE
$’000S
TOTAL
$’000S
RIGHTS
$’000S
795
2,216
(32)
16,291
NON-CONTROLLING
INTEREST
$’000S
(4,880)
TOTAL EQUITY
$’000S
11,411
(7,370)
(827)
(8,197)
(615)
(615)
(615)
(7,985)
185
(642)
(430)
(8,627)
78
78
78
78
Balance at 30 June 2016
69,465
(63,445)
795
2,216
(647)
8,384
(5,522)
2,862
At 1 July 2015
67,858
(54,330)
589
2,216
1,342
17,675
(5,155)
12,520
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
Loss for the year
Other Comprehensive Income
Foreign currency translation differences
Total Comprehensive Income
TRANSACTIONS WITH OWNERS RECORDED DIRECTLY INTO EQUITY
Shares issued during the year
Share raising cost (net of tax)
Performance rights granted
Total transactions with owners
Balance at 30 June 2015
1,610
(81)
1,529
69,387
(1,745)
(1,745)
(56,075)
206
206
795
2,216
(1,745)
(1,374)
(1,374)
(32)
(1,374)
(3,119)
1,610
(81)
206
1,735
16,291
358
(83)
275
(4,880)
(1,387)
(1,457)
(2,844)
1,610
(81)
206
1,735
11,411
The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes to the Financial Statements.
Page 33
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Intra Energy Corporation Limited (“IEC” or “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 2016 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 authorised for issue on 30 September 2016.
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 $8.197m (2015: $1.387m) primarily as a result of impairments
and losses from discontinued operations of $5.346m, non-cash depreciation and amortisation charges of $1.052m
together with operating losses due to difficult market conditions; and
As at balance date, the Group's current liabilities exceeded its current assets by $8.748m. The deficit in net current
assets includes a $1.355m overdraft payable to KCB Bank of Tanzania (“KCB”) and $1.554m payable to the KCB
Bank under loan facilities which expire in November 2017 although these facilities can be called at any time.
In assessing the appropriateness of using the going concern assumption, the Directors have:
Secured additional working capital from KCB of US$800,000. KCB has shown support for the improved operating
environment now that the Government of Tanzania has banned the import of coal under the directive advised to
the market on 12 August 2016.
Considered the improved market conditions for coal supply and coal sales are expected to increase as the Group
continues to respond to growing demand in the East African cement and industrial markets segment. The ban on
the importation of coal has resulted in increased sales orders and this trend is expected to continue. As Tancoal
continues to implement productivity improvements and further initiatives to expand equipment capacity to
produce more coal, the working capital position of the Company is expected to improve in the longer term.
Continued to implement 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 Tanzania. Eastern Africa is one of the
fastest growing regions in the world with national growth rates between 5% and 8%. In 2016, IEC supplied 87% of
its production to Tanzania and 13% to Kenya, Rwanda and Malawi. Approximately 65% was supplied to the cement
industry, 8% to textile manufacturers, 11% to paper and ceramics industries and the remainder to processing
plants.
Commenced the sale of assets in the Malawi business and the AAA Drilling joint venture.
Recognised that the interest bearing liabilities relating to the loans from the KCB 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.
After considering the above factors, the Directors have concluded that the use of the going concern assumption is
appropriate. However if improved coal sales, cost saving initiatives or working capital improvements are not achieved
or if the KCB Bank of Tanzania demands repayment of their combined $2.909m debt facility, 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 in the Group’s ability to access further working capital through debt, equity or
asset sales if required, there remains material uncertainty as to whether the Group will continue as a going concern.
Page 34
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
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 (“IEC” or “the Company”) and controlled entities (“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 have not been presented within this financial report.
Financial information for IEC Parent as an individual entity is included in Note 31 as permitted by the Corporations Act
2001.
b.ii New Accounting Standards and Interpretations that are not yet mandatory
A number of new accounting standards and interpretations have been published that are not mandatory for 30 June
2016 reporting periods and have not been early adopted by the Group.
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2016
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 and associated amending standards, replaces the existing guidance in AASB 139 Financial
Instruments: Recognition and Measurement. AASB 9 includes revised guidance on the classification and measurement
of financial instruments, including a new expected credit loss model for calculating impairment on financial assets, and
the new general hedge accounting requirements. It also carries forward the guidance on recognition and derecognition
of financial instruments from AASB 139. AASB 9 is effective for annual reporting periods beginning on or after 1 January
2018, with early adoption permitted. As the Group does not have hedging arrangements, this will not have a significant
impact to the Group or its results.
AASB 15 Revenue from Contracts with Customers, AASB 15 establishes a comprehensive framework for determining
whether, how much and when revenue is recognised. It replaces existing revenue recognition guidance, including AASB
118 Revenue and AASB 111 Construction Contracts. AASB 15 is effective for annual reporting periods beginning on or
after 1 January 2018, with early adoption permitted. The Group does not consider that this will have a significant impact
to the Group or its results.
AASB 16 Leases, AASB 16 replaces the current accounting requirements applicable to leases in AASB 117: Leases and
related Interpretations. AASB 16 introduces a single lessee accounting model that eliminates the requirement for leases
to be classified as operating or finance leases. The transitional provisions of AASB 16 allow a lessee to either
retrospectively apply the standard to comparatives in line with AASB 108 or recognise the cumulative effect of
retrospective application as an adjustment to opening equity on the date of initial application. Although the directors
anticipate that the adoption of AASB 16 will impact the Group's financial statements, it is impracticable at this stage to
provide a reasonable estimate of such impact.
There are no other standards that are not yet effective and that are expected to have a material impact on the entity
in the current or future reporting periods and on foreseeable future transactions.
Page 35
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
C.
Principles of consolidation
The consolidated financial statements incorporate all assets, liabilities and results of the parent (Intra Energy
Corporation Limited) and all of the subsidiaries.
c.i Business combinations
Business combinations occur where an acquirer obtains control over one or more businesses.
The purchase method of accounting is used to account for all business combinations, unless it is a combination involving
entities or businesses under common control.
Cost is measured as the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at the
date of exchange. All transaction costs incurred in relation to business combinations, other than those associated with
the issue of a financial instrument, are recognised as expenses in profit or loss when incurred. 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 Profit or Loss and Other
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.
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 parent controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through its power over the entity. A list of the subsidiaries is provided
in Note 20.
Intercompany transactions, balances and unrealised gains or losses on transactions between group entities are fully
eliminated on consolidation.
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
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as “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.
c.v Equity accounted investments
A joint venture is an arrangement in which the Group has joint control whereby the Group has rights to the net assets
of the arrangement, rather than rights to its assets and obligations for its liabilities. The financial statements include
the Group’s share of the total recognised gains and losses on an equity accounted basis subsequent to initial recognition
at cost, which includes transaction costs.
Page 36
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
When the Group’s share of losses exceeds its interest in a joint venture, the Group’s carrying amount is reduced to $nil
and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive
obligations or made payments on behalf of a joint venture.
Unrealised gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s
interest in the joint ventures. Unrealised losses are also eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Accounting policies of joint ventures have been changed where necessary to
ensure consistency with the policies adopted by the Group.
Associates are all entities over which the group has significant influence but not control or joint control, generally
accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted
for using the equity method of accounting, after initially being recognised at cost.
D.
Income tax
Tax expense comprises current and deferred tax and is recognised in the statement of profit or loss or the statement of
comprehensive income according to the accounting treatment of the related transaction.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to
tax in respect of previous years.
Deferred tax expense represents the tax expense in respect of the future tax consequences of recovering or settling the
carrying amount of an asset or liability. Both are calculated using tax rates for each jurisdiction, enacted or substantially
enacted at the reporting date, and for deferred tax those that are expected to apply when the asset is realised or the
liability is settled.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:
arising on the initial recognition or assets or liabilities, other than on a business combination, that affect neither
accounting or taxable profit;
arising from the recognition of goodwill; and
relating to investments in subsidiaries to the extent that they will not reverse in the foreseeable future.
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:
Class of fixed asset
Mining 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.
Page 37
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
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.
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 Group 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
Page 38
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
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
balance date and the costs are recognised based on a consideration of the period which the rehabilitation is expected
to occur.
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 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.iii Financial Liabilities
Financial liabilities other than financial guarantees are subsequently measured at amortised cost. Gains or losses are
recognised in profit or loss through the amortisation process and when the financial liability is derecognised.
l.iv Impairment of financial assets
A financial asset (or a group of financial assets) is deemed to be impaired if, and only if, there is objective evidence of
impairment as a result of one or more events (a “loss event”) having occurred, which has an impact on the estimated
future cash flows of the financial asset(s).
In the case of financial assets carried at amortised cost, loss events may include: indications that the debtors or a group
of debtors are experiencing significant financial difficulty, default or delinquency in interest or principal payments;
indications that they will enter bankruptcy or other financial reorganisation; and changes in arrears or economic
conditions that correlate with defaults.
For financial assets carried at amortised cost (including loans and receivables), a separate allowance account is used to
reduce the carrying amount of financial assets impaired by credit losses. After having taken all possible measures of
recovery, if Directors establish that the carrying amount cannot be recovered by any means, at that point the written-
off amounts are charged to the allowance account or the carrying amount of impaired financial assets is reduced directly
if no impairment amount was previously recognised in the allowance account.
When the terms of financial assets that would otherwise have been past due or impaired have been renegotiated, the
Group recognises the impairment for such financial assets by taking into account the original terms as if the terms have
not been renegotiated so that the loss events that have occurred are duly considered.
Page 39
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
M. Foreign Currency Transactions and Balances
m.i. Functional and Presentation Currency
The functional currency of each of the Group’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
Profit or Loss and Other Comprehensive Income, except where deferred in Other Comprehensive Income as a qualifying
cash flow or net investment hedge. Exchange differences arising on the translation of non-monetary items are
recognised directly in Other Comprehensive Income to the extent that the gain or loss is directly recognised in other
comprehensive income; otherwise the exchange difference is recognised in the Consolidated Statement of Profit or
Loss and Other 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 Profit or Loss and Other Comprehensive Income in the year in which the operation is disposed.
N. Employee Benefits
Provision is made for the Group’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 one year
have been measured at the present value of the estimated future cash outflows to be made for those benefits.
n.i Short-term employee benefits
Provision is made for the Group’s obligation for short-term employee benefits. Short-term employee benefits are
benefits (other than termination benefits) that are expected to be settled wholly before 12 months after the end of the
annual reporting period in which the employees render the related service, including wages, salaries and sick leave.
Short-term employee benefits are measured at the (undiscounted) amounts expected to be paid when the obligation
is settled.
The Group’s obligations for short-term employee benefits such as wages, salaries and sick leave are recognised as part
of current trade and other payables in the statement of financial position. The Group’s obligations for employees’
annual leave and long service leave entitlements are recognised as provisions in the statement of financial position.
Page 40
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
n.ii Share-based payments
The Group 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 Group has a legal or constructive obligation, as a result of past events, for which it
is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the
reporting date.
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.
IEC recognises revenue when the risks and rewards transfer to the customer which is defined in the customer contract.
R.
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.
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 Statement of Cash Flows a gross basis, except for the GST or VAT
component of investing and financing activities, which are disclosed as operating cash flows.
Page 41
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
1.
T.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group 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.
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 and disposal groups are classified as held for sale and measured at the lower of carrying amount
and fair value less costs to sell, where the carrying amount will be recovered principally through sale as opposed to
continued use. No depreciation or amortisation is charged against assets classified as held for sale.
Classification as “held for sale” occurs when: management has committed to a plan for immediate sale; the sale is
expected to occur within one year from the date of classification; and active marketing of the asset has commenced.
Such assets are classified as current assets.
A discontinued operation is a component of an entity, being a cash-generating unit (or a group of cash generating units),
that either has been disposed of, or is classified as held for sale, and: represents a separate major line of business or
geographical area of operations; is part of a single coordinated plan to dispose of a separate major line of business or
geographical area of operations; or is a subsidiary acquired exclusively with the view to resale.
Impairment losses are recognised for any initial or subsequent write-down of an asset (or disposal group) classified as
held for sale to fair value less costs to sell. Any reversal of impairment recognised on classification as held for sale or
Page 42
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
prior to such classification is recognised as a gain in Consolidated Profit or Loss and Other Comprehensive Income in
the period in which it occurs.
X.
Impairment of non-financial assets
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 Profit or Loss and Other 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.
Y. Critical accounting judgments and key sources of estimation uncertainty
In the application of the Group’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.
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
asets.
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.
Impairment of non-financial assets
The Group assesses impairment at the end of each reporting period by evaluating conditions and events
specific to the Group that may be indicative of impairment triggers. Recoverable amounts of relevant assets
are reassessed using value-in-use calculations which incorporate various key assumptions. In light of lengthy
negotiations with the Malawi government and ongoing logistical issues with the operation of the mine, the
Group recognised an impairment charge of $1,747,000 on the carrying value of its Malawian subsidiaries.
Page 43
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
2. REVENUES
From continuing operations
Coal sales
3. DEPRECIATION AND AMORTISATION
Loss before income tax includes the following specific expenses:
Depreciation and amortisation
Depreciation
Plant and equipment
Less depreciation capitalised
Total depreciation
Amortisation
Total
CONSOLIDATED
2016
$’000S
2015
$’000S
14,408
16,555
CONSOLIDATED
2016
$’000S
(1,021)
-
(1,021)
(31)
(1,052)
2015
$’000S
(1,261)
-
(1,261)
(27)
(1,288)
Page 44
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
4.
INCOME TAX BENEFIT
(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
Tax effect of temporary differences not recognised
Tax effect of current year tax losses for which no deferred tax asset has
been recognised
Foreign tax losses utilised
Foreign income tax payable
Research & development grant
Income tax (Benefit)/ Expense
(b) Unrecognised temporary differences
Deferred Tax Assets (at 30%)
Temporary differences
Carry forward revenue tax losses
Carry forward capital tax losses
Carry forward foreign tax losses
Total
CONSOLIDATED
2016
$’000S
2015
$’000S
(8,197)
(2,459)
594
671
1,194
-
-
-
-
1,639
5,931
8
13,816
21,394
(1,458)
(437)
178
487
537
(719)
43
(160)
(71)
1,314
5,749
8
12,769
19,840
The deferred tax asset relating to carry forward losses and temporary differences have not been brought to account
as it is unlikely they will arise until such a point that 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:
Non-Executive Directors
Non-Executive Directors
Mr G Robertson (Chairman)
Mr D Mason
Mr J Warrand
Mr W Paterson1
Mr S Harvey2
Chief Executive Officer/Executive
Directors
Mr T Brereton3
Mr Mark McAndrew4
1Mr William Paterson resigned as a Non-Executive Director on 7 October 2015.
2Mr Simon Harvey was appointed as an Alternate Director for Mr Jonathan Warrand on 10 December 2013. Mr Harvey
did not receive any remuneration for acting in his capacity as Alternate Director. Mr Harvey resigned on 20 June
2016.
3Mr Tarn Brereton was appointed Chief Executive Officer on 7 October 2015, previously Mr Brereton held the position of Acting
Chief Executive Officer from 31 October 2014 and previously held the position of Chief Operating Officer. Mr Brereton ceased 18
July 2016.
Page 45
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
5.
KEY MANAGEMENT PERSONNEL COMPENSATION (CONT’D)
4Mr Mark McAndrew was appointed as Executive Director and Chief Operating Officer on 7 October 2015. Mr McAndrew was
appointed Acting Chief Executive Officer on 18 July 2016.
KEY MANAGEMENT PERSONNEL COMPENSATION
Short-term employee benefits
Superannuation
Post-employment benefits
Performance rights
Total Compensation
2016
$
1,066,699
10,179
-
-
2015
$
754,437
10,870
159,320
171,929
1,076,878
1,096,556
Details on the remuneration paid to the non-executive directors and executive directors who at any point during the
year had authority and responsibility for planning, directing and controlling the activities of Intra energy Corporation
Limited are provided under Section B of the Remuneration Report.
EQUITY INSTRUMENT DISCLOSURES RELATING TO KEY MANAGEMENT PERSONNEL
Options provided as remuneration and shares issued on exercise of such options
Details of options and performance rights 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.
6. AUDITOR’S REMUNERATION
CONSOLIDATED
2016
$’000S
2015
$’000S
195
-
–
195
7
-
7
-
312
–
312
23
18
41
Audit services
Auditors of the Group
Audit and review of financial reports – Hall Chadwick*
Audit and review of financial reports - KPMG
Other auditors – non-Hall Chadwick or KPMG firms
Audit and review of financial reports
Non-Audit services
Services provided other than statutory audit – KPMG
Tax advisory services
Other advisory services
*Hall Chadwick were appointed auditors on 24 November 2015
Page 46
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
7. EARNINGS PER SHARE
Basic and diluted loss per share
Loss from continuing operations attributable to the ordinary equity
holders of the Company
Loss from discontinued operations attributable to the ordinary equity
holders of the Company
2016
2015
$3,867,000
$253,000
$3,503,000
$1,492,000
Loss attributable to the ordinary equity holders of the Company
$7,370,000
$1,745,000
Weighted average number of ordinary shares outstanding during the year
used in calculating basic EPS
354,391,908
336,264,875
Loss per share (cents) – basic and diluted from continuing operations
Loss per share (cents) – basic and diluted from discontinued operations
Loss per share (cents) – basic and diluted
8.
INVENTORIES
Consumables, fuel and other equipment
Coal stock
9. TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Other receivables
Related party receivables
Taxation receivables
Prepayments
Non-current
Other receivables
Less: Provision for impairment
Page 47
(1.09)
(0.98)
(2.07)
CONSOLIDATED
2016
$’000S
802
483
1,285
(0.08)
(0.44)
(0.52)
2015
$’000S
435
1,750
2,185
CONSOLIDATED
2016
$’000S
2015
$’000S
779
438
65
-
493
1,775
202
(202)
-
924
946
63
91
505
2,529
196
-
196
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
10. DISPOSAL GROUP HELD FOR SALE AND DISCONTINUED OPERATIONS
On 1 March 2016 the Group advised that transaction documents had been exchanged for the sale of its Malawian
subsidiaries and that further announcements would be made when the sale is finalised. Accordingly the Malawi Group
is presented as a disposal group held for sale. The sale of the disposal group is expected to be completed in the next
financial year. The carrying value of the assets has been fully impaired in light of lengthy negotiations with the Malawi
government and ongoing logistical issues with the operation of the mine.
As at 30 June 2016, the disposal group was stated at lower of carrying value and fair value and comprised the following
assets and liabilities:
CONSOLIDATED
Assets and Liabilities held for sale
Current Assets
Property, plant and equipment
Mine development and exploration expenditure
Inventories
Trade and other receivables
Less: Provision for impairment
Assets held for sale
Current Liabilities
Trade and other payables
Employee benefits
Liabilities held for sale
2016
$’000S
280
1,335
117
15
(1,747)
-
1,225
4
1,229
^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. On 31 March 2016, the arrangement was terminated and the assets returned
to the supplier. A contingent liability has been recognised for a legal claim that the supplier has brought to the company,
see note 23.
The Malawian subsidiaries incurred minimal revenue and recorded a loss after tax of $2,583,000 and an impairment
charge of $1,747,000 for the year ended 30 June 2016.
11. EQUITY ACCOUNTED INVESTMENTS
On 9 September 2014, the Group completed a joint venture arrangement with General Petroleum Oils and Tools Pty
Limited (“GPOT”), whereby each party undertook a 50% economic interest in AAA Drilling Limited, an operating drilling
company in Tanzania that was established to undertake drilling and logging for the IEC entities and third party customers
in Eastern Africa.
In 2016, the Group recognised an impairment charge of $558,000 following a review of the market conditions that have
effect to the AAA Drilling Joint Venture business and operations.
Page 48
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
11. EQUITY ACCOUNTED INVESTMENTS (cont’d)
Information on the interest in the AAA Drilling Joint Venture is as follows:
Equity accounted investments
Less: impairment of equity accounted investments
Carrying amount
CONSOLIDATED
2016
$’000S
558
(558)
-
2015
$’000S
989
-
989
IEC’s share of loss after tax in its equity accounted investee before impairment was $257,000 loss (2015: $77,000 loss)1
Summary financial information for equity accounted investees, not adjusted for the percentage ownership held by IEC,
is as follows:
AAA DRILLING LIMITED
Summarised Financial Position
Current Assets
Cash and cash equivalents
Total current assets
Total non-current assets
Total current liabilities
Net Assets
Group’s share (%)
Group’s share of joint venture’s net assets
2016
$’000S
4
511
1,186
(581)
1,116
50%
558
2015
$’000S
8
992
1,464
(477)
1,979
50%
989
Page 49
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
11. EQUITY ACCOUNTED INVESTMENTS (cont’d)
Summarised Financial Performance
Revenue
Depreciation and amortisation
Interest expense
Other expenses
Loss from continuing operations
Income tax expense
Loss after tax from continuing operations
Other Comprehensive Income
Total comprehensive income
AAA DRILLING LIMITED
2016
$’000S
-
(284)
(4)
(226)
(514)
-
(514)
(349)
(863)
2015
$’000S
196
(308)
(54)
(86)
(252)
-
(252)
-
(252)
Group’s share of total comprehensive income1
(175)
1AAA Drilling has been equity accounted from 9 September 2014. AAA Drilling Limited was a fully owned subsidiary of
the Group until 9 September 2014. The loss to the Group before AAA Drilling was equity accounted in 2015 was
$98,000.
(431)
The Group has an obligation under the JV agreement to commit $0.2m per year by the provision of drilling work or by
contribution.
Page 50
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2015
12. PROPERTY, PLANT AND EQUIPMENT
30 June 2016
Year ended 30 June 2015
At 1 July 2015, net of accumulated
depreciation
Additions
Disposals (net)
Impairment and write-off
Transfers
Depreciation charge
Effect of exchange rates (net)
At 30 June 2016, net of accumulated
depreciation
At 30 June 2016
At cost
Accumulated depreciation and impairment
Net carrying amount
Office
Equipment
$’000
Mining Plant
and Equipment^
$’000
Motor Vehicles
$’000
Leasehold
$’000
Capital Work in
Progress
$’000
Software*
$’000
563
28
-
(55)
-
(144)
(30)
362
851
(489)
362
6,979
570
(1,077)
(391)
95
(494)
(789)
4,893
6,734
(1,841)
4,893
1,416
-
(467)
-
-
(257)
(48)
644
1,462
(818)
644
564
34
-
-
-
(51)
(24)
523
620
(97)
523
191
39
-
-
(95)
-
4
139
139
-
139
146
-
-
-
-
(75)
-
71
502
(431)
71
Total
$’000
9,859
671
(1,544)
(446)
-
(1,021)
(887)
6,632
10,308
(3,676)
6,632
^ $1.554m of Property, Plant and Equipment is held as collateral by KCB Bank of Tanzania in relation to loan facilities.
Page 51
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2015
12. PROPERTY, PLANT AND EQUIPMENT (CONT’D)
30 June 2015
Year ended 30 June 2015
At 1 July 2014, net of accumulated
depreciation
Additions
Disposals (net)
Impairment and write-off
Transfers
Depreciation charge
Effect of exchange rates (net)
At 30 June 2015, net of accumulated
depreciation
At 30 June 2015
At cost
Accumulated depreciation and impairment
Net carrying amount
Office
Equipment
$’000
Mining Plant
and Equipment^
$’000
Motor Vehicles
$’000
Leasehold
$’000
Capital Work in
Progress
$’000
Software*
$’000
521
126
(10)
-
65
(167)
28
563
949
(386)
563
6,642
531
-
-
242
(660)
224
6,979
8,844
(1,865)
6,979
1,696
-
-
-
-
(326)
46
1,416
2,410
(994)
1,416
514
64
-
-
-
(19)
5
564
613
(49)
564
498
-
-
-
(307)
-
-
191
191
-
191
188
46
-
-
-
(89)
1
146
490
(344)
146
Total
$’000
10,059
767
(10)
-
-
(1,261)
304
9,859
13,497
(3,638)
9,859
^ $1.6m of Property, Plant and Equipment is held as collateral by KCB Bank of Tanzania in relation to loan facilities.
* Intangible items were re-classified as software in financial year 2015.
Page 52
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2015
13. MINE DEVELOPMENT COSTS
Tancoal Mine
Opening balance
Mine development expenditure
Rehabilitation asset
Amortisation
Effect of exchange rates
Malcoal Mine
Opening balance
Mine development expenditure
Amortisation
Effect of exchange rates
Transfer to assets held for sale
Total
CONSOLIDATED
2016
$’000s
2015
$’000s
4,918
45
-
(31)
(15)
4,917
2,153
-
(8)
(814)
(1,331)
-
4,917
4,530
242
106
(26)
66
4,918
1,912
74
(1)
168
-
2,153
7,071
Page 53
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2015
14. EXPLORATION EXPENDITURE
Uaroo tenements
Opening balance
Impairment
Tancoal Energy Limited tenements
Opening balance
Exploration expenditure
Effect of exchange rates
Intra Energy Trading (Malawi) Limited tenements
Opening balance
Effect of exchange rates
Transfer to assets held for sale
Total
CONSOLIDATED
2016
$’000s
-
-
503
190
(41)
652
10
(6)
(4)
-
652
2015
$’000s
126
(126)
-
239
262
2
503
10
-
10
513
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.
On 20 August 2015, the Company advised the market that its Uaroo tenements in Australia lapsed on 2 July 2015. An
impairment charge was recognised for the full carrying value of the licence in the previous financial year.
CONSOLIDATED
2016
$’000s
3,757
614
2,892
7,263
2015
$’000s
5,802
358
1,100
7,260
15. TRADE AND OTHER PAYABLES
Trade payables
Related party payables
Accruals
Total
Page 54
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2015
16. INTEREST BEARING LIABILITIES
Current
Secured loan facility
Hire purchase equipment
Related party convertible note
Non-current
Hire purchase equipment
Total
16(a) Secured loan facility
CONSOLIDATED
2016
$’000s
2015
$’000s
1,554
288
125
1,967
-
-
1,967
1,739
690
-
2,429
805
805
3,234
On 1 December 2014 Tancoal re-financed its debt with KCB Bank Tanzania Limited (KCB). The loan facility is repaid over
a three year term and principal and interest repayments are made monthly. Full repayment is expected in November
2017. The loan does not have any covenants but is repayable on demand and is secured against plant and equipment.
Interest is charged on the facility at a rate of 8% per annum.
16(b) Bank overdraft facility
On 28 July 2015, KCB approved an increase in the working capital facility from US$0.5m to US$1.0m 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.
16(c) Convertible Note
On 2 May 2016, IEC raised A$125,000 under loan and convertible note agreements with three parties, two of whom are
related to directors of the company, Mr Robertson and Mr Mason. The moneys initially constitute simple short-term
unsecured loans. The loan moneys may be applied as subscription moneys for convertible notes at a face value of
$0.004, subject to shareholder approval. Interest is 2% per month payable monthly.
16(d) 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. At 31 March 2016, the arrangement was terminated, the assets were returned to the
supplier and the hire purchase arrangement ceased. A contingent liability has been recognised for a legal claim that the
supplier has brought against the Company for penalties and other costs, see note 23.
17. PROVISIONS
Non-current
Rehabilitation provision
Total
Page 55
CONSOLIDATED
2016
$’000s
591
591
2015
$’000s
550
550
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2015
17. PROVISIONS (CONT’D)
The movement in provisions during the year are as follows:
2016
$000’s
Opening balance
Amortisation
Effect of exchange rates
Closing balance
Represented by;
Current
Non-current
Closing balance
2015
$000’s
Opening balance
Amortisation
Effect of exchange rates
Closing balance
Represented by;
Current
Non-current
Closing balance
Rehabilitation
Rehabilitation
550
31
10
591
-
591
591
Rehabilitation
444
26
80
550
-
550
550
Total
550
31
10
591
-
591
591
Total
444
26
80
550
-
550
550
The mining, extraction and processing activities of the Group 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.
Page 56
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2015
18. ISSUED CAPITAL
Balance at the
beginning of the year:
Shares issued as part of
the vesting of
performance rights3
Shares issued for cash as
part of Share Purchase
Plan
Shares issued for
payment of loan2
Share issue costs
Balance at the end of
the year
2016
Issue price
No.
$ per share
2016
$’000s
2015
No.
Issue price
$ per share
351,268,725
69,387
290,324,925
2015
$’000s
67,858
5,205,305
$0.015
78
-
1,295,698
59,648,102
$0.027
1,610
(81)
356,474,030
69,465
351,268,725
69,387
1.
Fully paid ordinary shares carry one vote per share and carry the rights to dividends
2. On 24 November 2015, Shareholders approved the issue of shares as payment for a loan.
3. On 22 January 2014, Shareholders approved the issue of performance rights to the Executive Directors (as at this
date) 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. The Executive Directors at the time 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. These Executive Directors and Senior
Management were granted a fixed number of IEC performance rights based on their remuneration deferral. The
1,295,698 performance rights issued to the Senior Management and these Executive Directors (now Non-Executive
Directors) vested in January 2015.
19 RESERVES
19(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
2016
No.
(2,500,000)
2,500,000
2016
$’000s
2,216
2,216
2015
No.
600,000
(600,000)
2015
$’000s
2,216
2,216
1. Options were issued during the year to the Chief Executive Officer, they were not exercised and expired on 30 June
2016. The options were issued above market price and for a short period. The value of the options was not
material. No options were granted during the 2015 year.
2. Options reserve recognises the fair value of options issued.
Page 57
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2015
19. RESERVES (CONT’D)
19(b) Performance Rights reserve
Total Performance Rights reserve
CONSOLIDATED
2016
$’000s
795
2015
$’000s
795
1.
2.
The performance rights reserve recognises the fair value of performance rights issued as compensation to
employees.
These Executive Directors and Senior Management were granted a fixed number of IEC performance rights based on
their remuneration deferral. The 1,295,698 performance rights issued to the Senior Management and these
Executive Directors (now Non-Executive Directors) in FY 2014 vested over the period January 2014 to January 2015.
19(c) Foreign currency translation reserve
Non-current
Balance at the beginning of the year
Foreign currency translation differences
Balance at the end of the year
CONSOLIDATED
2016
$’000s
(32)
(615)
(647)
2015
$’000s
(1,342)
(1,374)
(32)
1.
Foreign currency translation reserve recognises exchange differences arising on translation of the foreign controlled
entities. The cumulative amount is reclassified to profit or loss when the net is investment is disposed of.
Page 58
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2015
20. SUBSIDIARIES AND JOINTLY CONTROLLED ENTITIES
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
Incorporati
on
Class of
Share
Equity (%)*
2016
Equity (%)*
2015
Atomic Resources Pty Ltd
Australia
Ordinary
Intra Energy (Tanzania) Limited
Tanzania
Ordinary
Tancoal Energy Limited
Tanzania
Ordinary
Tanzacoal East Africa Mining Limited
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
Malawi
Ordinary
Malcoal Mining Limited
Malawi
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
100%
100%
70%
85%
50%
50%
100%
100%
100%
90%
100%
0%
0%
0%
Pamodzi Power Limited
Malawi
Ordinary
100%
100%
100%
70%
85%
50%
50%
100%
100%
100%
90%
100%
100%
100%
100%
100%
* Percentage of voting power is in proportion to ownership.
**
Entity is dormant and in the process of winding up.
*** Entity has been wound up.
21. NON-CONTROLLING INTEREST
Total non-controlling interest
CONSOLIDATED
2016
$’000s
(5,522)
2015
$’000s
(4,880)
The Company’s subsidiary Intra Energy (Tanzania) Limited (“IETL”) owns 70% of Tancoal and 30% is owned by Tancoal’s
joint 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 partner, Olympic Exploration Limited, a private
Tanzanian entity.
The Company’s subsidiary East Africa Mining Limited owns 90% of Malcoal and 10% is owned by Consolidated Mining
Industries Limited, a private Malawian entity.
Page 59
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2015
22. COMMITMENTS
22(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
Total Rental and Lease Payments
Tenement Leases Expenditure Payable
Less than 1 year
Between 2 and 5 years
Greater than 5 years
Total Tenement Leases Expenditure Payable
Total
2016
$’000s
341
698
1,039
720
713
1,432
2,471
2015
$’000s
216
440
656
873
1,884
39
2,796
3,452
Page 60
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2015
22. COMMITMENTS (CONT)
22(b) Finance Lease Commitments
Finance lease liabilities committed to at the reporting date, recorded as liabilities, are as follows:
Finance Lease Expenditure Commitments Payable
Less than 1 year
Between 2 and 5 years
Greater than 5 years
TOTAL
2016
$’000s
288
-
-
288
2015
$’000s
857
1,024
-
1,881
The Group also has an obligation under the JV agreement with AAA Drilling to commit $0.2m per year by the provision
of drilling work or by contribution.
23. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
The supplier of the hire purchase contracts in Malawi has brought a legal claim for penalties as part of the cancellation
of the arrangement against the subsidiary company Malcoal Mining Limited. The company is defending the claim but
the contingent liability may be up to $500,000 in addition to costs accounted for in the accounts.
Tancoal Energy Limited in Tanzania is defending a legal claim brought by NBC bank for recovery of money paid under a
letter of credit arrangement in 2013, the company is defending the claim but the contingent liability may be up to
US$470,000.
Other than the above, the Directors are not aware of any contingent liabilities or contingent assets at 30 June 2016.
24. SEGMENT REPORTING
The Group operates in two geographical segments being Australia and Africa.
Segment information
The Group 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
Group’s business is the exploration, evaluation, marketing, production and sale of coal in Africa.
‘Other’ recognises the non-operating entities incorporated in Malaysia, which were nil in FY 2016.
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.
Page 61
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2015
24. SEGMENT REPORTING (CONT)
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 62
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
24. SEGMENT REPORTING (CONT’D)
Australia
Period Ended
30 June 16
$’000
Australia
Period Ended
30 June 15
$’000
Africa
Period Ended
30 June 16
$’000
Africa
Period Ended
30 June 15
$’000
Other
Period Ended
30 June 16
$’000
Other
Period Ended
30 June 15
$’000
Elimination
Period Ended
30 June 16
$’000
Elimination
Period Ended
30 June 15
$’000
Consolidated
Period Ended
30 June 16
$’000
Consolidated
Period Ended
30 June 15
$’000
14,408
16,555
–
716
716
–
716
–
–
691
691
–
691
161
–
14,408
(8,911)
5,497
–
(1,034)
(2,199)
(6,214)
(318)
–
(90)
–
(408)
(1,347)
(126)
(97)
–
(717)
(759)
(931)
(31)
(1,570)
(2,438)
–
16,555
(9,752)
6,803
870
(5,149)
2,524
–
(1,164)
(27)
1,333
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(716)
(716)
–
(716)
–
–
–
(691)
(691)
–
(691)
–
–
(716)
(691)
–
–
–
–
–
–
(716)
(691)
14,408
16,555
–
14,408
(8,911)
5,497
–
(7,248)
(1,751)
(759)
(1,021)
(31)
(3,562)
–
(305)
(3,867)
–
(3,867)
(4,330)
(8,197)
–
16,555
(9,752)
6,803
1,031
(7,348)
486
(126)
(1,261)
(27)
(928)
2
(532)
(1,458)
71
(1,387)
–
(1,387)
Geographical Segment
Revenue
Sales revenue
Inter-segment revenue
Total revenue
Net costs of production
Gross Profit
Other income
Other operating expenses
Profit/(loss) before
impairment, depreciation,
amortisation, net finance costs
and tax
Impairment
Depreciation
Amortisation
Results from operating
activities
Finance income
Finance expenses
Profit/(loss) before tax
Income tax benefit/(expense)
Net Loss from continuing
operations
Loss from discontinued
operations and impairments on
those operations
Loss for the year
Page 63
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
24. SEGMENT REPORTING (CONT’D)
Balance per statutory accounts
Total Assets
Total Liabilities
4,318
(1,145)
5,538
(695)
16,477
(52,641)
22,128
(55,940)
–
–
–
–
(5,469)
41,322
(4,284)
44,664
15,326
(12,464)
23,382
(11,971)
Page 64
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
25. CASH FLOW INFORMATION
Loss before income tax
Non-cash flows in profit
Depreciation and amortisation
Share based payments
Share of loss of equity-accounted investees
Loss on sale and impairment of non-current assets
Foreign exchange
Impairment of assets
Loss from discontinued operations – non-cash items
Change in inventories
Change in receivables
Change in provisions
Change in trade payables
Change in current assets and liabilities held for sale
Net cash provided/(used) in operating activities
26. SHARE BASED PAYMENTS
26(a) Shares and options
2016
$’000s
(8,197)
1,052
–
257
481
188
2,506
1,470
900
754
(28)
(431)
1,229
181
2015
$’000s
(1,458)
1,289
206
77
142
(229)
126
-
(484)
(11)
39
1,247
–
944
On 9 October 2015, 2,500,000 unlisted options were issued to the Chief Executive Officer, Mr Tarn Brereton. The
options had an exercise price of $0.02 and an expiry date of 30 June 2016, the options were not exercised and
lapsed on 30 June 2016. The value of the options was not material and not brought to account.
No shares or options were granted by the Company during the 2015 year.
26(b) Performance rights
No Performance rights were issued in the 2016 or 2015 years.
Performance Rights for the 2014, 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 of the market based performance incentives was deemed to be 17 cents per
performance right share. This will be expensed over the vesting period of three years.
Vesting periods:
Performance rights issued in FY 2012 vested over the period 12 August 2011 to 29 August 2014.
Performance rights issued in FY 2013 vested over the period 31 October 2012 to 31 August 2015.
Performance rights issued in FY 2014 vested over the period 22 January 2014 to 31 January 2015.
Page 65
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
27. SUBSEQUENT EVENTS
On 18 July 2016, the Company advised that the CEO Mr Tarn Brereton had passed away suddenly and that Mr
Mark McAndrew, Executive Director and Chief Operating Officer would take over the duties as Acting CEO until
a suitable replacement was found.
On 19 July 2016, the Company advised that it had commenced an energy diversification strategy.
On 25 July 2016, the Company advised that the technical proposal for the Ngaka Power Station had been
completed.
On 29 September 2016, the Company advised that Kenya Commercial Bank “KCB” had approved a working capital
loan of US$800,000 Tancoal energy Limited “Tancoal” a subsidiary company for the expansion of production
capacity at the Ngaka coal mine in Tanzania.
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.
28. RELATED PARTY TRANSACTIONS
Details relating to Key Management Personnel are disclosed in Note 5 and remuneration report contained in the
directors’ report.
2016
During the year the Company paid 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, the fee was
reviewed regularly and the arrangement was terminated in November 2015. An amount of $57,500 (plus GST)
was paid during the year. At 30 June 2016 an amount of $21,411 including GST remained outstanding.
At 30 June 2016 a loan of US$150,000 (A$202,000) to Malcoal joint venture partner Consolidated Mining
Industries Limited, a private Malawian entity remained outstanding. The loan was to be repaid from first
dividends from Malcoal and interest is charged on the loan at the rate of 5% per annum. The loan has been fully
impaired at 30 June 2016.
In June 2013, IEC subsidiary Tancoal Mining Limited received a loan of TZS300,000,000 from joint venture partner
the National Development Corporation of Tanzania. The balance of this loan at 30 June 2016 was TZS170,000,000
(A$ 101,000).
At 30 June 2016, $40,000 was receivable from Geothermal Power Tanzania Limited and NuEnergy Gas (Tanzania)
Limited for services provided in a prior year, a related party to Graeme Robertson.
At 30 June 2016, $25,000 was receivable from NuAfrica Limited for reimbursement of expenses and Tanzagrain
Limited for services provided in a prior year, related parties to Graeme Robertson.
In January 2014, a hire purchase contract with an option to purchase four trucks was entered into with Extran
Limited, a related party of Graeme Robertson and David Mason. An amount of $288,000 was outstanding at 30
June 2016.
2015
During the year, IEC subsidiary Intra Energy Tanzania Limited received administration fees of $8,287 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 $4,999 for
administration services provided to NuEnergy (Tanzania) Limited, a related party of Graeme Robertson.
At 30 June 2015 a loan of US$150,000 (A$195,940) 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.
Page 66
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
29. RELATED PARTY TRANSACTIONS (CONT’D)
In June 2013, IEC subsidiary Tancoal Mining Limited received a loan of TZS300,000,000 (A$196,000) from joint
venture partner the National Development Corporation of Tanzania. This loan remained outstanding at 30 June
2015.
At 30 June 2015 $39,000 was receivable from Geothermal Power Tanzania Limited and NuEnergy Gas (Tanzania)
Limited.
At 30 June 2015, $24,000 was receivable from NuAfrica Limited for reimbursement of expenses and Tanzagrain
Limited for services provided in a prior year, related parties to Graeme Robertson.
In January 2014, a hire purchase contract with an option to purchase four trucks was entered into with Extran
Limited, a related party of Graeme Robertson and David Mason. An amount of $230,000 was outstanding at 30
June 2015.
The Company paid $64,000 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
30. FINANCIAL RISK MANAGEMENT
Shares
underwritten
$’000
Underwriting fees
$’000
6,717,632
672
246,751
608,849
25
61
2,744,407
274
20
1
2
8
Exposure to credit and interest rate risks arises in the normal course of the Group’s businesses. The Group 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 Group’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.
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 Group, 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 Group’s activities. The Group, 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.
30(a) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to
meet its contractual obligations, and arises principally from the Group’s receivables from customers and
investment securities.
Page 67
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
30. FINANCIAL RISK MANAGEMENT (CONT’D)
Exposure to credit risk
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s
maximum exposure to credit risk at the reporting date was:
Trade and Other Receivables
Cash and cash equivalents
Total
Trade and other receivables
2016
$’000s
1,775
65
1,840
2015
$’000s
2,529
40
2,569
The Group’s receivables relate to GST and other taxation (including VAT, WHT and fuel relief receivables) due
from the Australian and Tanzanian taxation offices, trade receivables from coal sales.
Cash and cash equivalents
Cash and cash equivalents comprise of cash on hand and demand deposits. The Group limits its credit risk by
holding its cash balance and demand deposits with reputable counterparties with acceptable credit ratings.
30(b) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The
Group’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 Group’s reputation. The Board monitors liquidity risk on a monthly basis.
The Group’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:
30 June 2016
CARRYING
AMOUNT
$’000S
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
Non-derivative financial liabilities
Bank overdraft
Trade and other payables
Interest bearing liabilities
Other liabilities
1,355
7,263
1,967
–
1,355
7,263
2,062
–
1,355
7,263
1,230
–
Total
10,585
10,680
9,848
–
–
832
–
832
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Page 68
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
30. FINANCIAL RISK MANAGEMENT (CONT’D)
30 June 2015
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
644
7,260
3,234
–
644
7,260
3,788
–
644
7,260
925
–
–
–
–
–
–
–
798
1,416
649
–
–
–
Total
11,138
11,692
8,829
798
1,416
649
–
–
–
–
–
Cash and receivables
The following are the contractual maturities of financial assets including receivables.
30 June 2016
Financial assets
Cash
Trade and other receivables
Total
CARRYING
AMOUNT
$’000S
65
1,775
1,840
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
65
1,775
1,840
65
1,775
1,840
–
–
–
–
–
–
–
–
–
–
–
–
30 June 2015
Financial assets
Cash
Trade and other receivables
Total
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
40
2,529
2,569
40
2,529
2,569
40
2,529
2,569
–
–
–
–
–
–
–
–
–
–
–
–
Page 69
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
30. FINANCIAL RISK MANAGEMENT (CONT’D)
30(c) Market risk
Market risk is the risk that changes in market prices, such as interest rates and equity prices will affect the
Group’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:
30 June 2016
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 2015
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)
AVERAGE INTEREST
RATE %
FLOATING INTEREST RATE
%
0%
5%
-
–
–
2%
–
–
–
–
–
–
8%
–
8%
–
–
–
AVERAGE INTEREST RATE % FLOATING INTEREST RATE %
0%
5%
-
–
–
–
–
–
–
–
–
–
8%
–
8%
–
–
–
TOTAL
$’000S
65
1,775
1,840
1,355
7,263
1,967
–
10,585
(8,745)
TOTAL
$’000S
40
2,529
2,569
644
7,260
3,234
–
11,138
(8,569)
Page 70
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
30. FINANCIAL RISK MANAGEMENT (CONT’D)
The Group’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.
30 June 2016
Financial assets
Cash and cash equivalents
Interest bearing liabilities
Total
30 June 2015
Financial assets
Cash and cash equivalents
Interest bearing liabilities
Total
Foreign currency risk
PROFIT OR LOSS
EQUITY
10% INCREASE
$’000S
10% DECREASE
$’000S
10% INCREASE
$’000S
10% DECREASE
$’000S
–
(168)
(168)
–
168
168
–
(168)
(168)
–
168
168
PROFIT OR LOSS
EQUITY
10% INCREASE
$’000S
10% DECREASE
$’000S
10% INCREASE
$’000S
10% DECREASE
$’000S
–
(38)
(38)
–
38
38
–
(38)
(38)
–
38
38
As a result of activities overseas, the Group’s Consolidated Statement of Financial Position can be affected by
movements in exchange rates.
The Group also has transactional currency exposures. Such exposure arises from transactions dominated in
currencies other than the functional currency of the entity.
The Group currently does not engage in any hedging or derivative transactions to manage foreign currency risk.
The Group’s exposure to foreign currency risk throughout the current year primarily arose from the Group’s
100% interest in Intra Energy (Tanzania) Limited and its controlling interests in Tancoal and Tanzacoal (collectively
“Tanzanian subsidiaries”), whose functional currencies are Tanzanian Shillings. Additionally the Group 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 Group is additionally exposed to the USD by way of its USD denominated loans to the KCB Bank Tanzania
Limited. The foreign currency gains or losses arising from this risk are recorded in the Statement of Profit or Loss
and Other Comprehensive Income.
Page 71
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
30. FINANCIAL RISK MANAGEMENT (CONT’D)
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 Group. This sensitivity analysis is prepared
at reporting date.
A 10% strengthening of the Australian dollar against the Tanzanian Shilling and Malawian Kwacha at 30 June
2016 would have decreased the net liabilities of the Tanzanian and Malawian subsidiaries by A$3.1m (2015:
$3.5m). A 10% weakening of the Australian dollar against the Tanzanian Shilling and Malawian Kwacha at 30 June
2016 would have increased the net liabilities of the Tanzanian and Malawian subsidiaries by A$3.8m (2015:
$2.9m).
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 2016 would have
decreased net interest bearing liabilities of the KCB loans and hire purchases by A$0.2m (2015: $0.4m). A 10%
weakening of the Australian dollar against the United States dollar at 30 June 2016 would have increased net
interest bearing liabilities of the KCB loans and hire purchases by A$0.2m (2015: $0.3m).
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.
30(d) Fair value versus carrying amounts
The Group’s carrying mounts of fair value assets and liabilities equate to their corresponding fair values.
30(e) 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 Group’s approach to capital management during the year. Neither the Group nor
any of its subsidiaries are subject to externally imposed capital requirements.
Page 72
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2016
31. PARENT ENTITY DISCLOSURES
Financial Position of Intra Energy Corporation Limited
Assets
Current Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total Current Assets
Non-Current Assets
Other receivables
Equity accounted investments
Investment in subsidiaries
Property, plant and equipment1
Loans to subsidiaries
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Interest bearing liabilities
Employee liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
2016
$’000S
2015
$’000S
42
32
-
74
-
-
4,136
108
-
4,244
4,318
1,018
125
2
1,145
3,173
8
10
19
37
196
989
4,136
180
-
5,501
5,538
656
-
39
695
4,843
69,465
3,011
(69,303)
3,173
69,387
3,011
(67,555)
4,843
1. 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.
2. The Parent has a net current asset deficiency of $1.071m (2015: $0.658m)
Financial Performance of Intra Energy Corporation Limited
Loss for the year
Total Comprehensive Income
2016
$’000S
(1,748)
(1,748)
2015
$’000S
(1,457)
(1,457)
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.
Page 73
ASX Additional Information
FOR THE YEAR ENDED 30 JUNE 2016
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 26 September 2016.
(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
LISTED ORDINARY SHARES
NUMBER OF
HOLDERS
8,286
248,445
932,807
15,636,177
339,649,315
356,474,030
NUMBER OF SHARES
71
81
112
376
226
866
The number of shareholders holding less than a marketable parcel of shares
are:
494
6,728,666
(b)
Twenty Largest Shareholders
The names of the twenty largest holders of quoted shares are:
LISTED ORDINARY SHARES
NUMBER OF
SHARES
PERCENTAGE OF
SHARES
103,012,065
32,391,025
13,846,968
8,835,770
8,731,766
8,474,297
6,850,625
6,272,514
6,225,390
6,148,007
5,783,701
5,205,305
4,500,000
3,021,154
2,830,528
2,805,482
2,704,994
2,500,000
2,222,222
2,000,003
28.90%
9.09%
3.88%
2.48%
2.45%
2.38%
1.92%
1.76%
1.75%
1.72%
1.62%
1.46%
1.26%
0.85%
0.79%
0.79%
0.76%
0.70%
0.62%
0.56%
234,361,816
65.74%
1
2
3
4
ASPAC MINING LIMITED
LUJETA PTY LTD
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY
LIMITED
NUVOLARI CAPITAL LIMITED
5 MR PETER TSEGAS
6 MR GRAEME LANCE ROBERTSON
7 MARA SUPERANNUATION PTY LTD
8
J P MORGAN NOMINEES AUSTRALIA LIMITED
9 MARA PTY LTD
10 COBBLYN INVESTMENTS PTY LTD
11 D & H MASON INVESTMENTS PTY LTD
12 INTRASIA CAPITAL PTE LTD
13 LOMACOTT PTY LTD
14 OZEA PTY LTD
15 MR ADAM STRATTON & MRS MELISSA STRATTON
16 MR DAVID JACOB SCHWARTZ & MRS MELANIE ANN SCHWARTZ
17 MR CRAIG IAN BROWN & MRS JENNY LEE BROWN
18 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
19 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 3
20 MS AILEEN ROSAMUND PARIS
Page 74
ASX Additional Information
FOR THE YEAR ENDED 30 JUNE 2016
Substantial Shareholders
(c)
The names of substantial shareholders who have notified the Group in accordance with section 671B of the
Corporations Act 2001 are:
ASPAC MINING LIMITED AND ASSOCIATES
LUJETA PTY LTD
MARA SUPERANNUATION PTY LTD AND ASSOCIATES
(d)
Schedule of Mining Tenements
NUMBER OF SHARES
PERCENTAGE OF
ORDINARY SHARES
118,806,585
34,179,370
18,410,197
33.33%
9.59%
5.16%
AREA OF INTEREST
TENEMENTS
% INTEREST
Tanzania
Tancoal Energy Limited
Intra Energy Limited
Tanzacoal East Africa Mining Limited
Malawi
ML439/2011, PL7391/2011, PL7620/2012,
PL7713/2012, PL5756/2009, PL5903/2009,
PL8999/2013, PL9807/2014,
*MLA0062/2016, *MLA00601/2016,
*MLA00600/2016, PL10417/2014
PL11168/2016, PL11175/2016,
PL11176/2016, PL11333/16, PL 11334/16,
PL 11335/16, PL 11336/16
PL6319/2010, PL7030/2011, PL10058/2014,
Pl10116/2014, PL6111/2009
Malcoal Mining Limited
ML0143/2005, EPL 377/2013
Intra Energy Trading Limited
EPL0392/2013, EPL376/2013
*Mining Licence Application
70%
100%
85%
90%
100%
Page 75