Intra Energy Corporation Limited
(ABN 65 124 408 751)
Annual Financial Report
For the year ended 30 June 2019
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
10
15
23
24
25
31
32
33
34
35
73
Corporate Directory
DIRECTORS
Graeme Robertson (Chairman)
Troy Wilson (appointed 4 October 2017)
Alan Fraser (appointed 24 August 2018)
Marc Schwartz (appointed 31 July 2019)
David Nolan (resigned 24 August 2018)
James Shedd (Managing Director appointed 7 November 2018)
COMPANY SECRETARY
Rozanna Lee
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
Room number 15
Africana Complex
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 2019.
Intra Energy Corporation (“IEC”) is the dominant coal supplier to industrial energy users in the Eastern African
region through its 70% ownership of Tancoal Energy Limited (“Tancoal”) which operates the Ngaka coal mine in
south west Tanzania which is also 30% owned by the National Development Corporation of Tanzania (NDC), the
mine is the largest operational coal mine in Tanzania and East Africa, and is manned exclusively by Tanzanians.
IEC recorded a profit after tax of A$4,535,000 (2018: loss of A$1,921,000).
Tancoal’s 2019 production was 748,874 (2018: 579,108) tonnes and sales were 788,702 (2018: 540,937) tonnes,
approximately 46% more than sales in the previous year. Sales revenue for 2019 was A$52.277 million (2018:
A$33.079 million). Sales were mainly to customers in Tanzania (67%), with the remainder to customers in Kenya
(15%) and Rwanda and Uganda (18%). 56% of sales were made to the cement industry, 32% to the ceramic
industry and 12% to textile manufacturers and other industries.
As in 2018, the increase in sales during 2019 was mainly due to the further increase in export sales to Kenya,
Rwanda and Uganda and growth in the ceramics industry. As announced on 3 September 2019, the Ministry of
Minerals has formally demanded the implementation of the payment of royalty on freight to customers plants
both domestic and internationally. The increased cost is being passed on to customers and is expected to
negatively impact the demand from export customers as the coal will no longer be competitive with Richards
Bay, South Africa like most other countries exporting coal does not charge a royalty on the gross invoice value of
transport to customers plants.
IEC purchased the 50% of the drilling operations held by the joint venture partner at the end of May 2019. AAA
Drilling is now owned 100% by IEC.
IEC’s wholly owned subsidiary, AAA Drilling Limited, a Mauritian incorporated company, has invested in a newly
discovered gold property near Pemba in Mozambique. The initial investment will be used to fund survey and
trenching work on the gold concession. If initial work demonstrates the potential investors will have an option
to fund a drilling program for equity to target early production. This is a fast track project not dependent on
JORC and is designed to produce early cash flow for the investors.
The closed Malawi operations continued to be held for sale, there have been no serious buyers at this stage. The
coal-fired power station project in Malawi is still on hold until a suitable power station developer is found.
Operating cash flow improved during the year but then tightened after the settlement with the contractor
Caspian and the payment to the tax office to object to an assessment for the years from the start of the mine in
to 2015, the cashflow is expected to improve after the payment plan with Caspian is completed in December
2019.
There has been no response from the Tanzanian Electricity Company "TANESCO" to the proposed 270MW
"Ngaka" minemouth coal-fired power station project. IEC is continuing to promote partnership arrangements
with other parties but without success as yet.
IEC continued to maintain its active presence in community development through the Government approved
Local Content Plan and Tancoal’s partnership with the local Women's Group and various other projects and
support given to the local communities.
Tancoal’s motto has always been “Tanzanian Coal for Tanzanian Development” and is proud to be supporting
the Government’s industrialisation agenda both through domestic supply and also the creation of export markets
to benefit Tanzania with foreign sourced revenue. However, with new royalty on road transport, Tanzania is
likely to lose its export revenue. A substantial stockpile of coal has been stored to cater for any demand spikes.
IEC is 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.
Page 4
Chairman’s Report
IEC has been a substantial contributor to sustainable development of the Tanzanian economy and the following
chart shows. The taxes, royalties and imposts paid in Tanzania for FY 2019 total A$9.3 million, which was 58% of
Tancoal’s gross profit.
The conditions being imposed on Tancoal have dampened a hitherto successful year and management is
adjusting accordingly.
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, Rwanda, Zambia and Malawi.
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)
FY19
3,344,676
748,874
788,702
FY18
3,027,299
579,108
540,937
Tancoal’s sales have grown year on year from 246,197 tonnes in FY 2016 to 788,702 tonnes in FY 2019. Export
sales contributed to the sales growth increasing from 27,662 tonnes in FY 2016 to 184,646 tonnes (23.2% of total
sales) in FY 2019. Domestic sales increased after the Tanzanian Government issued a Directive in August 2016
banning the import of coal. This directive increased sales to the domestic market customers that were previously
importing coal from South Africa.
Tancoal produces a high quality thermal coal with an energy of 6,000K~6,300Kcals/kg which consistently meets
client specifications. The increase in export sales has been a result of the availability of high quality coal and the
purchase in FY 2018 of the crushing plant and matching screen plant that can produce the sized coal mostly
required by export customers.
Tancoal Sales Tonnes per Year
showing growth in Export and Domestic sales
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
-
2012
2013
2014
2015
2016
2017
2018
2019
Domestic
Export
Total tpa
Tancoal has been producing and selling coal in Tanzania since 2011. Coal from the mine is transported on a 52
kilometre haul road to the Sales Point at Kitai where the coal undergoes final processing and is then sold and
distributed from the stockpile.
The haul road can only take trucks up to 20 tonnes so there would be a significant cost saving if the existing road
could be upgraded or a new road built that could take the larger 30 tonne trucks the customers send to collect
their coal. Tancoal has investigated both options and the upgrade to the current road including village bypasses
Page 6
Review of Operations
is the preferred option that will be constructed when funds allow or when Tanroads agree to upgrade the existing
road. Tancoal continues to lobby the government on this issue.
From the stockpile at the Kitai Sales Point the coal is loaded on to customers trucks Free On Transport (FOT),
which is where change of ownership takes place. Royalties have always been paid at the Sales Point where the
Government calculates the royalty and issues an invoice for payment. The Tanzania Mining Commission has
demanded that Tancoal charge Royalty on the Transportation of the coal to the customers final destination,
wherever that may be, both domestically and internationally. The Mining Commission has set a standard cost of
transport to the customers plant at a rate per tonne per kilometre of $0.06 for domestic customers and $0.08
for export customers. It is understood that not all operating mines are not paying this levy which is being applied
to coal in the same format as gold. The Company continues to discuss this matter with Government and
customers to find a solution.
During the past year, Tancoal has purchased two new L566 Wheel loaders and three new Bell B50E ADT trucks
to improve the efficiency of the mine and to increase capacity to more than 80,000 tonnes per month.
At the end of April 2019, Tancoal settled the dispute with the Caspian contractor. Under the settlement, Caspian
dropped the court case filed against Tancoal and receives 75% of the value of their invoices to be paid by Tancoal
in monthly instalments till 31 December 2019, and a reduction in the length of the contract by one year.
AAA DRILLING
IEC has purchased 50% of the shares in AAA Drilling Limited (Mauritius) (“AAA”) for US$75,000, this makes AAA
Drilling Limited (Tanzania) a wholly-owned subsidiary of IEC with a Hanjin Drilling rig that is ideal for multiple
drilling purposes in Coal Bed Methane, Geothermal, Coal and Minerals exploration.
AAA has invested in an exciting gold development in Mozambique, which, if successful will provide IEC
shareholders with a more diversified portfolio in a business-friendly environment.
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 and the decision was made in 2016 to halt operations.
The Company continues working to progress a sale of the Malawi assets. In the meantime, the assets are being
held for sale and have been fully impaired in the accounts.
OCCUPATIONAL HEALTH, SAFETY AND ENVIRONMENT (“OHSE”)
OHSE is an important priority for IEC. The mine operations are 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. Improvements to the storm water drainage systems at the Ngaka mine
continued with the upgrading of the available trenches and ponds and the construction of new trenches and
ponds to the new mine development areas. In-pit toilets were also provided in the year as well as additional
lighting for night shifts. The addition of Speed Detector (Gun) has also provided Tancoal with better control of
the haulage between the mine site and Sales Point reducing roll-overs and other speed related accidents.
At the mine site, we are currently building settling ponds around the mining areas to capture water that needs
treatment before being released into the rivers. We have liners on the way to complete the program and will
continue at our sales point with fresh liners as well.
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. IEC will be the exclusive coal supplier to the proposed power stations.
Page 7
Review of Operations
PROJECT NGAKA (TANZANIA) – 270 MW
In November 2015 IEC entered into a Memorandum of Understanding (MOU) with SINOHYDRO Corporation
Limited (a subsidiary of Power China) to jointly develop the feasibility for the 270MW Ngaka coal-fired
minemouth power station project in the Tancoal mine area. The Feasibility Study was delivered to the Tanzanian
Government in October 2016. No action has resulted and the MOU lapsed in December 2018. IEC continues
promoting partnership arrangements with other parties.
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
assets.
EXPLORATION
Some low-level exploration was undertaken on the lithium and graphite tenements in Tanzania but expenditure
remained controlled so as to preserve cash whilst still maintaining the Company’s portfolio of tenements in good
standing.
Due to uncertainty of the Mining Industry in Tanzania at the current time, Intra Energy Tanzania has halted all
exploration projects until further notice.
IEC’s total resources no longer include the resource for Malawi.
Project
Tanzania
Tancoal – North
Tancoal – South
Total JORC resources
Table 1 - Intra Energy JORC resources
Measured (Mt)
Indicated (Mt)
Inferred (Mt)
Total (Mt)
51.00
25.53
76.53
73.70
71.80
145.50
71.73
63.00
134.73
196.43
160.33
356.76
COMPETENT PERSON STATEMENT
MBALAWALA/MBUYURA-MKAPA
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, the Resource Model Assessment and
Review, Ngaka Project Area as at 20 July 2010 and the Updated Raw Coal Resource Estimate provided by JB
Mining Services Pty Ltd dated 30 September 2017 and 30 November 2017 and have been reviewed by Mr Phillip
Sides. 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”. Mr Sides is a consultant to JB Mining Services Pty Ltd and has
sufficient experience to qualify as a Competent Person as defined in The JORC Code. Mr Sides consents to the
inclusion of the matters based on his information in the form and context in which it appears.
Page 8
Review of Operations
CORPORATE
Operating cash flow improved in FY 2019 but it has been restricted sine the settlement with the Caspian
contractor at the end of April 2019 but it is expected to improve after the final payment is made in December
2019. Tancoal’s banking facilities with KCB Bank of Tanzania were extended to April 2020.
Alan Fraser joined the Board on 24 August 2018 replacing David Nolan who retired on the same day.
Marc Schwartz joined the Board on 31 July 2019.
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.
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 Tanzania is 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.
The Tanzania government implemented new rules in FY 2019 requiring a Corporate Social Responsibility (“CSR”)
plan to be submiteed and approved for each year. Tancoal’s CSR plan for 2019 was approved by the Government
and a new plan for FY 2020 is being submitted for approval.
The Mbalawala Women’s Organisation (“MWO”) in Tanzania that has been supported by the company for many
years continues to go from strength to strength as their operations expand with the growth of the mine.
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 of
Tancoal and its contractors and is making coal briquettes certified by the Tanzanian Bureau of Standards. These
coal briquettes are an alternative to charcoal. The Group was supported and funded from 2011 by the company
and has been able to expand its operation with the growth of the mine, during 2019 it became self-funded. IEC
congratulates MWO on its achievement and confirms its commitment to support the Group as needed into the
future.
ENVIRONMENTAL
The annual tree planting programme again saw Tancoal transplant a total of 10,000 tree seedlings of indigenous
species. Trees were planted around the mine site and stockpile area at the mine, villages surrounding mine site,
the haul road and stockpile area at the Kitai sales point.
Tancoal has submitted the Mine Closure Plan to the Ministry of Minerals. The Minister appointed the National
Mine Closure Committee which visited the mine site and conduct the mine closure meeting with Tancoal and
they gave some recommendations to work on the plan document before the approval.
Storm water trenches have been continually upgraded for the rainy season in accordance with the mine
development plan, Tancoal is continuing construction of a huge pond with liner that can hold acid water from
south pit in order to comply with legal requirement. The monitoring of acid water and suppression of mine dust
continues. Blasting is controlled by monitoring sound level, vibration and dust emission during blasting to ensure
they do not exceed required standard set by Tanzania Bureau of Standard (TBS).
Page 9
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 2019 (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
Troy Wilson
Non-Executive Director
(appointed 4 October
2017)
Graeme joined the Board in November 2010 as Non-Executive
Chairman and was appointed Executive Chairman in January 2011
and Non-Executive Chairman in October 2014. He has over thirty
years’ experience
infrastructure and power
development industries. Graeme transitioned to Non-Executive
Chairman on 1 November 2014.
the coal,
in
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.
Troy is the Managing Director and owner of Gigajule Energy Pty Ltd
and is widely recognized in Australia and internationally as a Coal
Bed Methane (CBM) completion and production expert with over
16 years’ experience in this field. Troy’s most recent experience
includes the development of CBM in Africa, flowing gas from the
first Surface to Inseam Wells in Botswana, being the lead in the
production enhancement team taking the gas field from 8tjs to
17tjs in 6months for Westside Corporation. He has previously been
Operations Manager with Mitchell Drilling Corporation, developing
the production for Peabody (North Goonyella) and A.J. Lucas.
Troy currently sits on the Board of Nu Africa Gas and is advising
several CBM development companies in South Africa, Botswana,
Zimbabwe and in Australia.
Alan Fraser
Non-Executive Director
(appointed 24
August 2018)
Mr Fraser has over 30 years’ experience in greenfield mineral
exploration, project management and mine construction. He has
managed base metal and gold exploration projects through the
stages of tenement acquisition, joint venture negotiation, obtaining
regulatory approvals and the management of field exploration
Page 10
Directors Report
Marc Schwartz
Non-Executive Director
(appointed 31 July 2019)
programs, at times in remote locations. He has worked extensively
across the Asis -Pacific region especially in Australia and Indonesia.
in NuEnergy's acquisition of
Alan served as CEO of New Holland Mining Limited, an ASX listed
gold and base metal exploration and production company, now
NuEnergy Gas Limited, having been a director since 1992. Alan was
the coal and
instrumental
unconventional gas assets in Indonesia. He stepped down as CEO
to ensure new leadership could move the company forward with its
focused gas strategy. Alan was engaged in the IPO and listing and
served as MD and Chairman of Resource Base Limited another ASX
listed company engaged in gold exploration and production with
activities in Australia, retiring in 2016. He currently serves as a Non-
Executive Director of Jack-In Group Limited another ASX listed
company, a service provider to the construction and real estate
industries in Malaysia. Mr Fraser has a vast knowledge of working
with ASX listed companies and helping to create value for the
Australian investment community.
Marc has had a very successful business career from being Manager
of Structured Finance Products at Macquarie Bank in 2007 to being
Managing Director of Pascoes Pty Ltd from 2008 to 2018, which
employed 150 people across two manufacturing sites and
manufactured or distributed over 400 items to retailers. He is
currently a Director of Gelflex Laboratories which is the largest
manufacturer of contact lenses in the Southern Hemisphere.
in operational and financial
Marc’s specialisation has been
efficiency, investment and strategy.
James (Jim)
Shedd
Managing Director
(appointed 7 November
2018), CEO appointed 27
December 2016)
Jim has been CEO of the Company since December 2016 and has
been pivotal in the development of IEC’s mining operations in
Tanzania. He has developed a strong Tanzanian team and improved
mine efficiency under challenging conditions.
Jim graduated in business from the University of Maryland, USA,
and after serving as a combat engineer and productivity analyst in
the US Armed Forces, has over 20 years’ experience in the mining
industry specialising in general mine, turnaround and productivity
management. Jim also holds an MBA from Regis University,
Colorado, USA. He has lived and worked in over 14 countries
worldwide including Tanzania, Indonesia and Australia. He has held
positions in Indonesia, Senegal and Western Australia as a
performance improver in mines on behalf of McKinsey Consultants.
David’s career has spanned 22 years as a commercial lawyer and
company director. David holds a Bachelor of Laws (Hons) and
Bachelor of Arts from Bond University, Queensland.
David has been a partner at a number of leading Sydney law firms
advising Australian and international clients on all aspects of
corporate law and was previously a senior adviser at the London
Stock Exchange. David’s legal expertise includes mergers and
acquisitions, IPOs and capital raisings, venture capital and private
equity, restructurings and takeovers, corporate finance, joint
ventures, commercial agreements and regulatory and corporate
David Nolan
Non-Executive Director
(resigned 24 August
2018)
Page 11
Directors Report
COMPANY SECRETARY
Company Secretary
Rozanna Lee
B. Com (Hons),
LLB, GradDipACG,
AGIA, AGIS
CORPORATE STRUCTURE
governance advice. David has extensive experience advising on
acquisitions and divestments, capital raisings and financings for
mining companies and has been a director of a number of ASX listed
companies in the resources sector. David has valuable relationships
in the advisory and regulatory community and brings a depth of
corporate governance expertise.
David currently holds the position of Non-Executive Director of
Property Connect Holdings Limited (ASX:PCH) and Camilla Australia
Pty Ltd and is Chairman of LUXit Pty Ltd.
Rozanna has acted as Company Secretary of IEC since October
2011. She holds both commerce and law degrees from the
University of Queensland and is an Associate Member of the
Governance Institute of Australia.
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
T Wilson
A Fraser
Special Responsibilities
Non-Executive Chairman
Non-Executive Director
Non-Executive Director1
Ordinary
Shares
131,306,585
−
−
M Schwartz
Non-Executive Director2
9,058,309
Performance
rights
−
−
−
−
−
Managing Director/CEO3
J Shedd
1Mr Alan Fraser was appointed 24 August 2018
2Mr Marc Schwartz was appointed 31 July 2019
3Mr James Shedd was appointed Managing Director 7 November 2018, CEO since 27 December 2016
−
Profit/(loss) Per Share
Basic Profit/(loss) per share (cents)
2019
0.80
2018
(0.38)
Page 12
Directors Report
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.
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 profit after income tax $4.535m (2018 Loss: $1.921m). Income
tax benefit for the year is $nil (2018: $nil).
CAPITAL STRUCTURE
As at the date of signing this report, the Company had 387,724,030 fully paid ordinary shares on issue.
DIVIDEND
No dividend was paid or declared during the year ended 30 June 2019.
CASH FROM OPERATIONS
The net cash inflow from operations of $2.928m (2018: $1.636m). The net cash inflow from operations was
funded by a US$0.9m working capital facility. The Group had a net overdraft of $0.243m at year end with
$0.724m cash at bank and a bank overdraft facility of $0.967m.
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 31 July 2019, Mr Marc Schwartz was appointed as a Non-Executive Director.
On 14 August 2019, IEC’s wholly owned subsidiary, AAA Drilling Limited, a Mauritian incorporated company,
invested in a potentially exceptional newly discovered gold property in Mozambique.
On 3 September 2019, IEC advised that the Mining Commission in Tanzania has demanded that royalty on
transport be implemented by 15 September 2019. A sixty day extension was later granted and discussions are
continuing with the Ministry.
On 16 September 2019, the Ministry of Minerals, Mining Commission send Tancoal a note of demand for US$10.4
million (US$6.939 royalty and inspection fee and US$3.470 penalty) for a royalty that it has deemed payable on
the transport portion of sales to customers to their final domestic and international destinations for sales
between August 2011 and June 2019. The company does not charge customers for transport and is working with
the Ministry to resolve the matter, the issue was still pending at 30 June 2019.
On 24 September 2019, the Tanzania Revenue Authority (TRA) advised that a fuel exemption paid to Tancoal in
2015 and 2016 was contrary to the purpose of the Performance Contract under which it was paid and Tancoal
must refund the amount of TZS 1,020,838,410 (A$634,000). Tancoal does not agree with the assessment and
will begin discussions with the TRA.
Other than those events outlined above, there has not arisen in the interval between the end of the financial
year and the date of this report any item, transaction or event of a material and unusual nature likely, in the
opinion of the Directors of the Company, to affect significantly the operations of the Company, the results of
those operations, or the state of affairs of the Company, in future financial years.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Company is subject to environmental regulations and is compliant with all aspects of environmental
regulation in its exploration and mining activities, including provision for environmental rehabilitation costs. The
Directors are not aware of any environmental law that is not being complied with.
Page 13
Directors Report
SHARES UNDER OPTION
As at 30 June 2019, there were no unissued ordinary shares under option.
MEETINGS OF DIRECTORS
Directors
Mr G Robertson
Mr T Wilson
Mr A Fraser¹
Mr M Schwartz2
Mr J Shedd3
¹ Appointed 24 August 2018
2 Appointed 31 July 2019
3 Appointed 7 November 2018
Attended
Available to attend
6
6
5
0
3
6
6
5
0
3
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 $122,075
(2018: $73,358) 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 2019, 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 14
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 2019.
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 2019, 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 Non-Executive Directors, 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.
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.
Executive Directors’ and Senior Management 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.
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
Page 15
Remuneration Report
• 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.
KEY MANAGEMENT PERSONNEL
During the year ended 30 June 2019 the Key Management Personnel (“KMP”) of IEC were:
Name
Position Held
Mr Graeme Robertson
Non-Executive Chairman
Mr Troy Wilson
Mr Alan Fraser1
Mr David Nolan2
Mr James Shedd3
Ms Kerry Angel
Non-Executive Director
Non-Executive Director
Non-Executive Director
Managing Director and Chief Executive Officer
Chief Financial Officer
1Mr Alan Fraser was appointed 24 August 2018
2Mr David Nolan resigned 24 August 2018
3Mr James Shedd was appointed 7 November 2018, CEO since 27 December 2016
Page 16
Remuneration Report
B. DETAILS OF REMUNERATION
2019
Salary and
fees
$
NON-EXECUTIVE DIRECTORS
Mr G Robertson
114,608
Mr T Wilson
Mr A Fraser1
Mr D Nolan2
40,000
33,333
6,667
KEY MANAGEMENT PERSONNEL
Mr J Shedd
Ms K Angel
Total
454,096
257,683
906,387
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
%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
114,608
40,000
33,333
6,667
454,096
257,683
906,387
–
–
–
–
–
–
–
1Appointed 24 August 2018 2 Resigned 24 August 2018
2018
Salary and
fees
$
NON-EXECUTIVE DIRECTORS
Mr G Robertson
113,233
Mr D Nolan1
Mr T Wilson2
Mr M Addison3
40,000
30,000
10,000
KEY MANAGEMENT PERSONNEL
Mr J Shedd
Ms K Angel
Total
407,581
226,646
827,460
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
%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
-
–
–
–
113,233
40,000
30,000
10,000
407,581
226,646
827,460
–
–
–
–
–
–
–
1Resigned 24 August 2018 2 Appointed 4 October 2017 2Resigned 28 September 2017
Page 17
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
No options were issued as part of remuneration during the year (2018: Nil)
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 the Non-Executive Chairman of Tancoal Energy Limited (Tancoal),
a 70% owned subsidiary of IEC. During the year he received director’s fees of US$21,176 from Tancoal.
Mr Troy Wilson was employed as Non-Executive Director on 4 October 2017, his Non-Executive Director’s fees
are $40,000 per annum.
Mr Alan Fraser was employed as Non-Executive Director on 24 August 2018, his Non-Executive Director’s fees
are $40,000 per annum.
Mr Marc Schwartz was employed as Non-Executive Director on 31 July 2019, his Non-Executive Director’s fees
are $40,000 per annum.
Mr David Nolan was employed as Non-Executive Director from 3 April 2017 till 24 August 2018, his Non-Executive
Director’s fees were $40,000 per annum.
Mr James (Jim) Shedd was appointed Managing Director of IEC from 7 November 2018 and has been employed
as Chief Executive Officer from 27 December 2016 for an indefinite period until terminated by either party by
giving not less than three months’ notice. Mr Shedd’s salary is US$280,000 and A$40,000 per annum. Mr Shedd
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$25,714 from Tancoal.
The key terms of Mr Shedd’s remuneration package are as follows:
•
•
Total Fixed Remuneration (TFR) of US$280,000 and A$40,000 (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;
Ms Kerry Angel is employed as the Chief Financial Officer. Ms Angel’s salary is US$170,000 and A$40,000 per
annum including superannuation.
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 2019.
Page 18
Remuneration Report
F. KEY MANAGEMENT PERSONNEL COMPENSATION – OPTIONS
2019
Mr G Robertson
Mr T Wilson
Mr A Fraser1
Mr D Nolan2
Mr J Shedd
Ms K Angel
Total
Balance at
beginning of
year
Granted
during the
year as
compensation
Exercised
during the
year
Lapsed /
cancelled
during the
year
Balance at
the end of
the year
Vested and
exercisable
–
–
–
–
–
–
-
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1Mr Alan Fraser was appointed 24 August 2018
2Mr David Nolan resigned 24 August 2018
2018
Mr G Robertson
Mr T Wilson1
Mr D Nolan2
Mr M Addison3
Mr J Shedd
Ms K Angel
Total
Balance at
beginning of
year
Granted
during the
year as
compensation
Exercised
during the
year
Lapsed /
cancelled
during the
year
Balance at
the end of
the year
Vested and
exercisable
–
–
–
–
–
–
-
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1Mr Troy Wilson was appointed 4 October 2017
2Mr David Nolan resigned 24 August 2018
3Mr Michael Addison resigned 28 September 2017
Page 19
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:
2019
Balance at
beginning of
year
Granted
during the
year as
compensation
Received
during the year
on exercise of
options
Mr G Robertson
131,306,585
Mr T Wilson
Mr A Fraser1
Mr D Nolan2
Mr J Shedd
Ms K Angel
–
–
–
–
–
Total
131,306,585
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Changes during
the year*
Balance at the
end of the year
250,000
131,556,585
–
–
–
–
–
–
–
–
–
–
250,000
131,556,585
1Mr Alan Fraser was appointed 24 August 2018
2Mr David Nolan resigned 24 August 2018
*Changes during the year represent shares acquired or sold by KMP or their associates
2018
Balance at
beginning of
year
Granted
during the
year as
compensation
Received
during the year
on exercise of
options
Changes during
the year*
Balance at the
end of the year
Mr G Robertson
131,306,585
Mr T Wilson1
Mr D Nolan2
Mr M Addison3
Mr J Shedd
Ms K Angel
–
–
–
–
–
Total
131,306,585
1Mr Troy Wilson was appointed 4 October 2017
2Mr David Nolan resigned 24 August 2018
3Mr Michael Addison resigned 28 September 2017
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
131,306,585
–
–
–
–
–
131,306,585
*Changes during the year represent shares acquired or sold by KMP or their associates
Page 20
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:
2019
Mr G Robertson
Mr T Wilson
Mr A Fraser1
Mr D Nolan2
Mr J Shedd
Ms K Angel
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
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1Mr Troy Wilson was appointed 4 October 2017
2Mr David Nolan resigned 24 August 2018
2018
Mr G Robertson
Mr T Wilson1
Mr D Nolan2
Mr M Addison3
Mr J Shedd
Ms K Angel
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
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1Mr Troy Wilson was appointed 4 October 2017
2Mr David Nolan resigned 24 August 2018
3Mr Michael Addison resigned 28 September 2017
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$880k was
owing to current and past Directors of the Company.
End of Remuneration Report
Page 21
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 paid to an affiliated entity of the external auditors during the year
ended 30 June 2019.
LEAD AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration is set out on page 27 and forms part of the Directors’ Report for the
financial year ended 30 June 2019.
ROUNDING OFF
The Group is of a kind referred to in ASIC Legislative Instrument 2016/191 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 2019
Page 22
INTRA ENERGY CORPORATION LIMITED
ABN 65 124 408 751
AND ITS CONTROLLED ENTITIES
AUDITOR’S INDEPENDENCE DECLARATION
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF INTRA ENERGY CORPORATION LIMITED
In accordance with section 307C of the Corporations Act 2001, I am pleased to
provide the following declaration of independence to the directors of Intra Energy
Corporation Limited. As the lead audit partner for the audit of the financial report of
Intra Energy Corporation Limited for the year ended 30 June 2019, I declare that, to
the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements as set out in the Corporations Act 2001
in relation to the audit; and
(ii)
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 2019
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 2019 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 2019.
The declaration is signed in accordance with a resolution of the Board of Directors.
GRAEME ROBERTSON
Chairman
Dated this 30 September 2019
Page 24
INTRA ENERGY CORPORATION LIMITED
ABN 65 124 408 751
AND ITS CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
INTRA ENERGY CORPORATION LIMITED
AND ITS CONTROLLED ENTITIES
Opinion
We have audited the financial report of Intra Energy Corporation Limited and its controlled
entities (the Group), which comprises the consolidated statement of financial position as
at 30 June 2019, 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, and notes to the consolidated financial statements,
including a summary of significant accounting policies and other explanatory information,
and the directors’ declaration.
In our opinion the accompanying financial report of the Intra Energy Corporation Limited
and its controlled entities is in accordance with the Corporations Act 2001, including:
(a)
(b)
giving a true and fair view of the Group’s financial position as at 30 June 2019 and
of its performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations
2001.
Basis of Opinion
We conducted our audit in accordance with Australian Auditing Standards. Those
standards require that we comply with relevant ethical requirements relating to audit
engagements and plan and perform the audit to obtain reasonable assurance about
whether the financial report is free from material misstatement. Our responsibilities under
those standards are further described in the Auditor’s responsibility section of our report.
We are independent of the Company in accordance with the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to
our audit of the financial report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporation Act 2001 has
been given to the directors of the company at the time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1(a) in the financial report, which indicates that the Group’s
current liabilities exceeded its current assets by $12,219,000. As stated in Note 1(a), this
event or condition, notwithstanding an improvement in the Group’s profitability and an
improvement in net asset position from net liabilities of $3,870,000 (2018) to net assets of
$1,050,000, along with other matters as set forth in Note 1(a), indicate that a material
uncertainty exists that may cast significant doubt on the Group’s ability to continue as a
going concern. Our opinion is not modified in respect of this matter.
INTRA ENERGY CORPORATION LIMITED
ABN 65 124 408 751
AND ITS CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
INTRA ENERGY CORPORATION LIMITED
AND ITS CONTROLLED ENTITIES
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial report of the year ended 30 June 2019. These
matters were addressed in the context of our audit of the financial report as a whole, and
in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
Key Audit Matter
How Our Audit Addressed
the Key Audit Matter
Carrying Value of Non-Current Assets
Refer to Note 12 Property, plant and equipment; Note 13 Mine development costs; Note 14
Exploration expenditure; and Note 1(y) Critical accounting judgments and key sources of
estimation and uncertainty.
A significant proportion (64%) of the Group’s
total assets relate to property, plant and
equipment, mine development costs and
totalling
exploration
$14,072,000 as at 30 June 2019 which are
subject to an impairment assessment in
accordance with AASB 136 “Impairment of
Assets”.
expenditures
the valuation
The group's
impairment assessment of
these non-current assets are considered a
is
key audit matter as
judgemental and based on a number of
prices,
assumptions,
specifically
operating/capital costs, discount
rates,
inflation rates and foreign exchange rates,
which are affected by future events and
economic conditions.
coal
Our procedures included, amongst others:
• We
assessed
management's
the Group's Cash-
determination of
Generating Units ("CGUs").
• We reviewed and analysed
including growth
the key
assumptions
rates,
discount rate, projected coal sales and
gross margin used in the cash flow
forecasts
the
reasonableness of these assumptions.
considered
and
• We
assessed
the sensitivity
management’s
to a
consideration of
change in key assumptions that either
individually or collectively would be
required for assets to be impaired and
likelihood of such a
considered
movement in those key assumptions
arising.
the
• We involved Hall Chadwick’s valuation
experts to:
- evaluate
-
the
key
and
estimates
valuation
assumptions
to
determine the recoverable amount of
the non-current assets.
review the mathematical accuracy of
flow model and agreed
the cash
relevant
supporting
data
information.
• We assessed
the
Group’s disclosures in relation to the
carrying value of non-current assets.
the adequacy of
to
INTRA ENERGY CORPORATION LIMITED
ABN 65 124 408 751
AND ITS CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
INTRA ENERGY CORPORATION LIMITED
AND ITS CONTROLLED ENTITIES
Rehabilitation Provision
Refer to Note 17 Provisions and Note 1(y) Critical accounting judgments and key sources
of estimation and uncertainty.
The group had a mine restoration provision
of $803,000 as at 30 June 2019 relating to
its mine sites.
The extent of work required, and
the
associated costs are estimated based on
feasibility and engineering studies using
current
and
techniques. Provisions for the cost of each
rehabilitation programme are recognised at
the
that environmental disturbance
occurs.
restoration
standards
time
This area was considered a key audit matter
as the calculation of this provision requires
judgement in estimating the future costs, the
timing as to when the future costs will be
incurred and
the determination of an
appropriate rate to discount the future costs
to their net present value.
Contingent Liabilities
Refer to Note 23 Contingent liabilities.
The group is a party to numerous ongoing
litigation and legal matters, of which the
most significant are disclosed in Note 23 to
the financial statements.
to a significant
We focused on this area as a key audit
level of
matter due
in
judgement and estimation
determining whether liabilities existed in
accordance with AASB 137 “Provisions,
Contingent
and Contingent
Assets”.
Liabilities
involved
Our procedures included, amongst others:
• We assessed the Group’s process for
determining the restoration provision and
enquired about material movements in
the provision during the year.
• We
legal
evaluated
and/or
the
constructive obligations with respect to
the restoration for the mine sites, the
intended method of restoration and the
associated cost estimates.
• We assessed
the accuracy of
the
calculations and accounting treatment
restoration
used
provision
the discount rate
applied.
to determine
including
the
• We assessed
Group’s disclosures
provisions.
the adequacy of
relation
in
the
to
Our procedures included, amongst others:
reviewed
• We held discussions with management
correspondence and
and
legal
confirmations
advisors regarding the status of litigation
matters.
the external
from
• We read the minutes of the Board of
Directors and reviewed the related legal
documents
latest
correspondence with the claimants.
and
the
• We assessed if the status of the claim
in
the definition of a
meets
accordance with AASB 137 Provisions,
Contingent Liabilities and Contingent
Assets.
liability
• We assessed the adequacy of group's
to contingent
relation
in
disclosures
liabilities.
INTRA ENERGY CORPORATION LIMITED
ABN 65 124 408 751
AND ITS CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
INTRA ENERGY CORPORATION LIMITED
AND ITS CONTROLLED ENTITIES
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises
the information included in the Group’s annual report for the year ended 30 June 2019 but
does not include the financial report and our auditor’s report thereon. Our opinion on the
financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon. In connection with our audit of the financial
report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If, based
on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this
regard.
Responsibilities of the Directors 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 gives a true and fair view
and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of
the Group to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the directors
either intend to liquidate the Group or to cease operations, or have no realistic alternative
but to do so.
Auditor’s Responsibility for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a
whole is free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance but is not a guarantee that an audit conducted in accordance with Australian
Auditing Standards will always detect a material misstatement when
it exists.
Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise
professional judgement and maintain professional scepticism throughout the audit. We
also:
-
Identify and assess the risks of material misstatement of the financial report, whether
due to fraud or error, design and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit 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 Group’s internal control.
INTRA ENERGY CORPORATION LIMITED
ABN 65 124 408 751
AND ITS CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
INTRA ENERGY CORPORATION LIMITED
AND ITS CONTROLLED ENTITIES
- Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
- Conclude on the appropriateness of the director’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on
the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the
related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the
Group to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the financial report,
including the disclosures, and whether the financial report represents the underlying
transactions and events in a manner that achieves fair presentation.
- Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on the financial
report. We are responsible for the direction, supervision and performance of the
Group audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, amongst other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were
of most significance in the audit of the financial report of the current period and are
therefore key audit matters. We describe these matters in our auditor’s report unless law
or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Report on the Remuneration Report
We have audited the remuneration report included in pages 15 to 21 of the directors’
report for the year ended 30 June 2019.
In our opinion, the remuneration report of Intra Energy Corporation Limited, for the year
ended 30 June 2019, complies with s 300A of the Corporations Act 2001.
INTRA ENERGY CORPORATION LIMITED
ABN 65 124 408 751
AND ITS CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
INTRA ENERGY CORPORATION LIMITED
AND ITS CONTROLLED ENTITIES
Responsibilities
The directors of the company are responsible for the preparation and presentation of the
remuneration report in accordance with s 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.
HALL CHADWICK
Level 40, 2 Park Street
Sydney NSW 2000
DREW TOWNSEND
Partner
Dated: 30 September 2019
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2019
CONSOLIDATED
NOTES
2
3
4
10
11
10,11
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
Impairment of tenements
Impairment on financial assets
Write-off goodwill
Other expenses
Finance income
Finance expenses
Loss on sale and write-off of asset
Profit/(loss) Before Income Tax
Income tax benefit
Profit/(loss) from continuing operations
Loss from discontinued operations
Loss from discontinued operations – share of equity-accounted
investees
(Reversal of)/Loss from impairment of assets of discontinued
operations
Profit/(loss) for the Year
Other Comprehensive Income
Foreign currency translation gain/(loss)
Total Comprehensive Loss for the Year
Net Profit/(loss) for the Year Attributable to:
Shareholders of IEC
Non-controlling interest
Total Comprehensive Profit/(loss) for the Year Attributable to:
Shareholders of IEC
Non-controlling interest
Loss per share
Profit/(loss) per share (cents per share, basic and diluted)
Profit/(loss) per share (cents per share, basic and diluted) on
continuing operations
Loss per share (cents per share, basic and diluted) on discontinued
operations
7
7
7
2019
$’000S
52,277
(38,581)
13,696
-
(232)
(221)
(263)
(1,001)
(1,844)
-
(949)
(73)
(3,920)
10
(325)
(153)
4,725
-
4,725
(97)
(87)
(6)
4,535
385
4,920
3,280
1,255
4,535
3,965
955
4,920
0.80
0.85
(0.05)
2018
$’000S
33,079
(29,265)
3,814
-
(126)
(282)
(278)
(855)
(1,943)
(59)
-
-
(1,575)
-
(412)
(11)
(1,727)
-
(1,727)
(130)
(430)
366
(1,921)
(640)
(2,561)
(1,484)
(437)
(1,921)
(1,830)
(731)
(2,561)
(0.38)
(0.33)
(0.05)
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 31
Consolidated Statement of Financial Position
AS AT 30 JUNE 2019
CONSOLIDATED
2019
$’000S
NOTES
Assets
Current Assets
Cash and cash equivalents
Inventories
Trade and other receivables
Total Current Assets
Non-Current Assets
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
Provisions
Total Non-Current Liabilities
Total Liabilities
Net Assets/(liabilities)
Equity
Issued capital
Reserves
Accumulated losses
Total equity attributed to equity holders of the Company
Non-controlling interest
Total Equity
8
9
12
13
14
16(b)
15
16
10
17
18
19
21
724
2,204
5,060
7,988
8,271
5,079
722
14,072
22,060
967
15,254
89
2,715
1,182
20,207
803
803
21,010
1,050
69,590
2,112
(64,913)
6,789
(5,739)
1,050
2018
$’000S
411
2,935
2,332
5,678
6,640
4,823
636
12,099
17,777
2,268
15,963
60
1,539
1,155
20,985
662
662
21,647
(3,870)
69,590
1,427
(68,193)
2,824
(6,694)
(3,870)
The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes to the Financial
Statements.
Page 32
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2019
Cash Flows from Operating Activities
Receipts from customers
Payments to creditors and suppliers
Interest received
Interest paid
Net cash provided in operating activities
25
Cash Flows from Investing Activities
Mine development and capitalised exploration costs
Purchase of property, plant and equipment
Payment for acquisition of AAA Drilling, net of cash acquired
Net cash (used) in investing activities
Cash Flows from Financing Activities
Proceeds from borrowings
Repayment of borrowings
Transfer of overdraft to term loan
Net cash provided in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effects of exchange rate changes on cash
Cash and Cash Equivalents/(Net Overdraft) at end of year
Cash and cash equivalents
Bank overdrafts used for cash management purposes
Cash and Cash equivalents/(Net Overdraft) in the Statement of
Cash Flows
CONSOLIDATED
2019
$’000S
2018
$’000S
NOTES
48,148
(44,905)
10
(325)
2,928
(59)
(1,876)
(101)
(2,036)
1,073
(1,439)
1,187
821
1,713
(1,857)
(99)
(243)
724
(967)
(243)
32,531
(30,483)
-
(412)
1,636
(131)
(1,497)
-
(1,628)
1,948
(1,448)
-
500
508
(2,279)
(86)
(1,857)
411
(2,268)
(1,857)
The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes to the Financial
Statements.
Page 33
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2019
Balance at 30 June 2019
69,590
(64,913)
795
2,216
(899)
6,789
(5,739)
1,050
CONSOLIDATED
At 1 July 2018
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
Profit 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
Total transactions with owners
CONSOLIDATED
At 1 July 2017
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
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
Total transactions with owners
ISSUED
CAPITAL
$’000S
ACCUMULATED
LOSSES
PERFORMANCE
RIGHTS
$’000S
$’000S
OPTION
RESERVE
$’000S
FOREIGN CURRENCY
TRANSLATION
RESERVE
TOTAL
NON-CONTROLLING
INTEREST
$’000S
$’000S
69,590
(68,193)
795
2,216
(1,584)
2,824
$’000S
(6,694)
TOTAL EQUITY
$’000S
(3,870)
−
−
−
−
−
3,280
−
3,280
−
−
−
−
−
−
−
−
−
−
−
−
−
3,280
1,255
4,535
685
685
−
−
685
3,965
−
−
(300)
955
−
−
385
4,920
−
−
ISSUED
CAPITAL
$’000S
ACCUMULATED
LOSSES
PERFORMANCE
RIGHTS
$’000S
$’000S
OPTION
RESERVE
$’000S
FOREIGN CURRENCY
TRANSLATION
RESERVE
TOTAL
NON-CONTROLLING
INTEREST
$’000S
$’000S
69,590
(66,709)
795
2,216
(1,238)
4,654
$’000S
(5,963)
TOTAL EQUITY
$’000S
(1,309)
−
−
−
−
−
(1,484)
−
(1,484)
−
−
−
−
−
−
−
−
−
−
−
−
−
(1,484)
(437)
(1,921)
(346)
(346)
(346)
(1,830)
−
−
−
−
(294)
(731)
−
−
(640)
(2,561)
−
−
Balance at 30 June 2018
69,590
(68,193)
795
2,216
(1,584)
2,824
(6,694)
(3,870)
The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes to the Financial Statements.
Page 34
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
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 publicly traded on the Australian Stock Exchange. The
consolidated financial statements for the year ended 30 June 2018 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 2019.
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 profit after tax for the year of $4.535m (2018: loss $1.921m), including losses and
impairments from discontinued operations of $0.19m (2018: $0.19m), non-cash depreciation and amortisation
charges of $1.0m (2018: $0.855m); and
As at balance date, the Group's current liabilities exceeded its current assets by $12.219m (2018: $15.307m). The
deficit in net current assets included $0.967m (2018: $2.268m) overdraft payable to KCB Bank of Tanzania (“KCB”)
and $1.821m (2018: $1.086m) payable to KCB Bank under loan facilities which expire in September 2020.
Equipment finance of $0.376 (2018: Nil) for the purchase of two wheel loaders over twelve months was also
included in current liabilities.
In assessing the appropriateness of using the going concern assumption, the Directors have:
•
•
KCB has continued to show support for Tancoal.
Sales increased by 58% in FY 2019 following on from the 46% increase recorded in FY 2018 in response to the
continued improved market conditions for coal supply demand in the East African cement and industrial markets
segment. Tancoal continues to implement productivity improvements replacing the Caspian contractor with new
and more efficient equipment, the working capital position of the Company is expected to improve in the longer
term.
Continued to implement a number of cost saving initiatives and enter into repayment arrangements with creditors
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%.
Continues to seek buyers for the sale of assets in the Malawi business that has a JORC compliant resource of 63
million tonnes.
Recognised that the interest-bearing liabilities relating to the loans from KCB are secured against the Group’s
mining equipment.
Noted JORC compliant resources of 357 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 KCB Bank of Tanzania demands repayment of their combined $2.788m debt facility ($3.354m at 30 June 2018), 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 35
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
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
2019 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 2019
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 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 not have material impact to the Group's financial statements as the Group’s
non-cancellable operating lease commitments at 30 June 2019 are $127,000.
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.
b.iii New and Amended Accounting Policies Adopted by the Group
Initial application of AASB 9: Financial Instruments
AASB 9 replaces the "incurred loss" impairment model in AASB 139 Financial Instruments: Recognition and
Measurement with a forward-looking expected credit loss (ECL) model. It is no longer necessary for a loss event to occur
before an impairment loss is recognised under the new model. Under the ECL model, the Group assesses on a forward-
looking basis the expected credit loss associated with its financial assets. The impairment methodology applied depends
on whether there has been a significant increase in credit risk. The new impairment model applies to financial assets at
amortised cost and contract assets under AASB 15: Revenue from Contracts with Customers. The application of the new
standard results in a change in accounting policy.
The Group applies the simplified approach as permitted by AASB 9, which requires the recognition of lifetime expected
losses for accounts receivable and contract assets from initial recognition of such assets. At every reporting date, the
Group reviews and adjusts its historically observed default rates based on current conditions and changes in the future
forecasts. As regards to other receivables, the Group applies the general approach as permitted by AASB 9, which
Page 36
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
requires impairment to be measured using the 12-month expected credit loss method unless the credit risk on a
financial instrument has increased significantly since initial recognition in which case the lifetime expected credit loss is
adopted.
The adoption of AASB 9 has had no material impact on the results and financial position of the Group for the current
and prior years.
The measurement categories for all financial liabilities remain the same, the carrying amount for all financial liabilities
at 1 July 2018 have not been impacted by the initial application of AASB 9.
The Group did not designate or re-designate any financial asset or financial liability at fair value through profit or loss
at 1 July 2018.
Initial application of AASB 15: Revenue from Contracts with Customers
AASB 15 provides a single comprehensive model for revenue recognition. The core principle of the standard is that an
entity shall recognise revenue to depict the transfer of promised goods or services to customers at an amount that
reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
The Group has selected to use modified retrospective approach in adopting AASB 15 which recognises the cumulative
effect of initial application through opening retained earnings as at 1 July 2018. No adjustment was applied to the
opening retained earnings as the cumulative effect is not material.
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.i
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.
Page 37
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by
the Group.
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.ii 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.iii
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.iv 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.
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.
Page 38
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
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
5 to 15 years
4 to 10 years
4 to 8 years
3 years
25 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses
are included in the profit or loss.
F. Exploration, evaluation and acquisition expenditure
Acquisition costs are accumulated in respect of each separate area of interest. Acquisition costs are carried forward
where right of tenure of the area of interest is current and they are expected to be recouped through sale or successful
development and exploitation of the area of interest or, where exploration and evaluation activities in the area of
interest have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable
reserves. Where an area of interest is abandoned or the Directors decide that it is not commercial, any accumulated
acquisition costs in respect of that area are written off in the financial period the decision is made. Each area of interest
is also reviewed at the end of each accounting period and accumulated acquisition costs written off to the extent that
they will not be recoverable in the future. Amortisation is not charged on acquisition costs carried forward in respect
of areas of interest in the development phase until production commences.
G.
Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on average costs
over the relevant period of production and includes expenditure in accumulating the inventories, production costs and
other costs incurred in bringing them to their existing location and condition. Stockpile tonnages are verified by periodic
surveys.
H. Overburden removal costs
Overburden and other mine waste materials are often removed during the initial development of a mine site in order
to access the mineral deposit. This activity is referred to as development stripping. The directly attributable costs are
initially capitalised as mine development costs. Capitalising of development stripping costs ceases at the time that
saleable mineral rights begin to be extracted from the mine.
Page 39
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
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
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.
Page 40
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
L. Financial Instruments
l.i Recognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions
to the instrument. For financial assets, this is the date that the Group commits itself to either the purchase or sale of
the asset.
Financial instruments (except for trade receivables) are initially measured at fair value plus transaction costs, except
where the instrument is classified "at fair value through profit or loss", in which case transaction costs are expensed to
profit or loss immediately.
Trade receivables are initially measured at the transaction price if the trade receivables do not contain a significant
financing component or if the practical expedient was applied as specified in AASB 15.63.
l.ii Financial liabilities
All financial liabilities are subsequently measured at amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating
interest expense in profit or loss over the relevant period. The effective interest rate is the internal rate of return of the
financial asset or liability. That is, it is the rate that exactly discounts the estimated future cash flows through the
expected life of the instrument to the net carrying amount at initial recognition.
A financial liability cannot be reclassified.
l.iii Financial assets
Financial assets are subsequently measured at:
•
•
•
amortised cost;
fair value through other comprehensive income; or
fair value through profit or loss.
Measurement is on the basis of two primary criteria:
•
•
the contractual cash flow characteristics of the financial asset; and
the business model for managing the financial assets.
A financial asset that meets the following conditions is subsequently measured at amortised cost:
•
•
the financial asset is managed solely to collect contractual cash flows; and
the contractual terms within the financial asset give rise to cash flows that are solely payments of principal and
interest on the principal amount outstanding on specified dates.
A financial asset that meets the following conditions is subsequently measured at fair value through other
comprehensive income:
•
the contractual terms within the financial asset give rise to cash flows that are solely payments of principal and
interest on the principal amount outstanding on specified dates;
the business model for managing the financial assets comprises both contractual cash flows collection and the
selling of the financial asset.
•
By default, all other financial assets that do not meet the measurement conditions of amortised cost and fair value
through other comprehensive income are subsequently measured at fair value through profit or loss.
The initial designation of the financial instruments to measure at fair value through profit or loss is a one-time option
on initial classification and is irrevocable until the financial asset is derecognised.
l.iv Derecognition
Derecognition refers to the removal of a previously recognised financial asset or financial liability from the statement
of financial position.
A liability is derecognised when it is extinguished (ie when the obligation in the contract is discharged, cancelled or
expires). An exchange of an existing financial liability for a new one with substantially modified terms, or a substantial
modification to the terms of a financial liability is treated as an extinguishment of the existing liability and recognition
of a new financial liability.
The difference between the carrying amount of the financial liability derecognised and the consideration paid and
payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
Page 41
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
A financial asset is derecognised when the holder's contractual rights to its cash flows expires, or the asset is transferred
in such a way that all the risks and rewards of ownership are substantially transferred.
All of the following criteria need to be satisfied for derecognition of financial asset:
•
the right to receive cash flows from the asset has expired or been transferred;
•
all risk and rewards of ownership of the asset have been substantially transferred; and
•
the Group no longer controls the asset.
On derecognition of a financial asset measured at amortised cost, the difference between the asset's carrying amount
and the sum of the consideration received and receivable is recognised in profit or loss.
l.vii Impairment
The Group recognises a loss allowance for expected credit losses on financial assets that are measured at amortised
cost or fair value through other comprehensive income.
Loss allowance is not recognised for:
•
•
financial assets measured at fair value through profit or loss; or
equity instruments measured at fair value through other comprehensive income.
Expected credit losses are the probability-weighted estimate of credit losses over the expected life of a financial
instrument. A credit loss is the difference between all contractual cash flows that are due, and all cash flows expected
to be received, all discounted at the original effective interest rate of the financial instrument.
The Group uses the following approaches to impairment, as applicable under AASB 9: Financial Instruments:
•
•
the general approach
the simplified approach
General approach
Under the general approach, at each reporting period, the Group assesses whether the financial instruments are credit-
impaired, and if:
•
the credit risk of the financial instrument has increased significantly since initial recognition, the Group measures
the loss allowance of the financial instruments at an amount equal to the lifetime expected credit losses; or
there is no significant increase in credit risk since initial recognition, the Group measures the loss allowance for that
financial instrument at an amount equal to 12-month expected credit losses.
•
Simplified approach
The simplified approach does not require tracking of changes in credit risk at every reporting period, but instead
requires the recognition of lifetime expected credit loss at all times. This approach is applicable to trade receivables
which do not contain a significant financing component.
In measuring the expected credit loss, a provision matrix for trade receivables was used taking into consideration
various data to get to an expected credit loss (ie diversity of customer base, appropriate groupings of historical loss
experience, etc).
Recognition of expected credit losses in financial statements
At each reporting date, the Group recognises the movement in the loss allowance as an impairment gain or loss in the
statement of profit or loss and other comprehensive income.
The carrying amount of financial assets measured at amortised cost includes the loss allowance relating to that asset.
For financial assets that are unrecognised (eg loan commitments yet to be drawn, financial guarantees), a provision for
loss allowance is created in the statement of financial position to recognise the loss allowance.
Page 42
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
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.
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
Page 43
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
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
The Group produces and sells a range of thermal coal products. Revenue from the sale of coal is recognised when
control of the product has transferred to the customer. Control of the product is considered transferred to the customer
at the time of delivery, usually on Free on Board ("FOB") basis or a Cost and Freight ("CFR") basis. For CFR contracts the
performance obligation relating to freight services is accounted for as a separate performance obligation.
A receivable is recognised when control of the products is delivered as this is the point in time that the consideration is
unconditional and when control of the product is transferred to the customer. From time to time, the Group receives
prepayment before control of the product has transferred to the customer. Such prepayments are recognised as
contract liabilities.
Some of the Group's coal sales contracts are long-term supply agreement which stipulate the nominal annual quantity
and price negotiation mechanism. For those contracts, the actual quantity and transaction price applicable for future
shipments are only negotiated or determined prior to the beginning of, or a date which is after, each contract year or
delivery period. The transaction price for a future shipment is based on, or derived from, a market price prevailing at
the time of the future shipment. As the future market price for coal is highly susceptible to factors outside the Group's
influence, the transaction price for a shipment is not readily determinable until or nearing the time of the shipment. As
a result, the Group has concluded that a contract with the customer does not exist for those shipments for which the
actual delivery quantity and transaction price have not yet been negotiated or determined.
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.
Page 44
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
1.
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.
T. 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.
Page 45
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
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
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
assets.
•
Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on
average costs over the relevant period of production and includes expenditure in accumulating the inventories,
production costs and other costs incurred in bringing them to their existing location and condition. Stockpile
tonnages are verified by periodic surveys.
• Rehabilitation
•
The extent of work required and the associated costs are estimated based on feasibility and engineering studies
using current restoration standards and techniques. Provisions for the cost of each rehabilitation programme
are recognised at the time that environmental disturbance occurs.
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 a full impairment on the carrying value of its Malawian subsidiaries.
Z. Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
Page 46
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
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
2019
$’000S
2018
$’000S
52,277
33,079
CONSOLIDATED
2019
$’000S
2018
$’000S
(925)
-
(925)
(76)
(1,001)
(795)
-
(795)
(60)
(855)
Page 47
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
4. INCOME TAX BENEFIT
(a) Numerical reconciliation of income tax expense to prima facie tax payable
Profit/(loss) from ordinary activities before income tax expense
Prima facie tax/(benefit) on profit/(loss) from ordinary activities at 30%
Non-deductible expenditure
Tax effect of temporary differences not recognised
Tax effect of current year tax profits/(losses) for which no deferred tax
asset has been recognised
Foreign tax losses utilised
Foreign income tax payable
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
2019
$’000S
2018
$’000S
4,535
1,361
38
1,299
(2,698)
-
-
-
3,611
6,043
8
12,202
21,864
(1,921)
(576)
34
446
96
-
-
-
2,312
6,043
8
14,900
23,263
The deferred tax assets 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 profit to utilise them.
5. KEY MANAGEMENT PERSONNEL COMPENSATION
The following persons were Key Management Personnel of the Company during the financial year:
Non-Executive Directors
Mr G Robertson (Chairman)
Executive Directors
Mr J Shedd3 (Managing Director/CEO) Ms K Angel (Chief Financial Officer)
Senior Management
Mr T Wilson
Mr A Fraser1
Mr D Nolan2
1Mr Alan Fraser was appointed 24 August 2018
2Mr David Nolan resigned 24 August 2018
3Mr James Shedd was appointed Managing Director 7 November 2018, CEO since 27 December 2016
Page 48
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
5.
KEY MANAGEMENT PERSONNEL COMPENSATION (CONT’D)
KEY MANAGEMENT PERSONNEL COMPENSATION
Short-term employee benefits
Superannuation
Post-employment benefits
Performance rights
Total Compensation
2019
$
906,387
-
-
-
2018
$
827,460
-
-
-
906,387
827,460
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
Audit services
Auditors of the Group
Audit and review of financial reports – Hall Chadwick
Non-Audit services
Tax advisory services
Other advisory services
CONSOLIDATED
2019
$’000S
2018
$’000S
195
195
-
-
-
195
195
-
-
-
Page 49
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
7. EARNINGS PER SHARE
Basic and diluted loss per share
2019
2018
Profit/(loss) from continuing operations attributable to the ordinary equity
holders of the Company
$3,461,000
($1,266,000)
Profit/(loss) from discontinued operations attributable to the ordinary equity
holders of the Company
(181,000)
(218,000)
Profit/(loss) attributable to the ordinary equity holders of the Company
$3,280,000
($1,484,000)
Weighted average number of ordinary shares outstanding during the year used
in calculating basic EPS
387,724,030
387,724,030
Profit/(loss) per share (cents) – basic and diluted from continuing operations
0.85
(0.33)
Profit/(loss) per share (cents) – basic and diluted from discontinued
operations
Profit/(loss) per share (cents) – basic and diluted
(0.05)
0.80
(0.05)
(0.38)
8. INVENTORIES
Consumables, fuel and other equipment
Coal stock
9. TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Less: Provision for doubtful debts
Other receivables
Related party receivables
Prepayments
Non-current
Other receivables
Less: Provision for impairment
Page 50
CONSOLIDATED
2019
$’000S
926
1,278
2,204
CONSOLIDATED
2019
$’000S
5,077
(1,410)
370
138
885
2018
$’000S
880
2,055
2,935
2018
$’000S
1,812
(425)
376
130
439
5,060
2,332
214
(214)
-
203
(203)
-
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
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. The sale did not proceed and
the Malawi Group remains presented as a disposal group held for sale on the basis that the Directors are committed to
recover these assets principally through sale. The carrying value of the assets had 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 2019, the disposal group was stated at lower of carrying value and fair value and comprised the following
assets and liabilities:
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
CONSOLIDATED
2019
$’000S
244
1,277
1
9
2018
$’000S
245
1,270
1
9
(1,531)
(1,525)
1,182
-
1,182
1,155
-
1,155
^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 no revenue and recorded a loss after tax of $97,000 for the year ended 30 June
2019, and an additional provision of impairment amounting to $6,000.
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 a full impairment to the carrying value of the investment following a review of the market
conditions that have effect to the AAA Drilling Joint Venture business and operations. On 28 May 2019, IEC acquired
GPOT’s 50% of the joint venture for a cash consideration of US$75,000 (A$110,000), excluding of cash acquired A$9,000,
thereby obtaining control of AAA Drilling Limited. The Group recorded goodwill of $73,000 on the acquisition and that
was written off to the profit and loss during the year.
Page 51
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
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
2019
$’000S
-
-
-
2018
$’000S
28
(28)
-
IEC’s share of loss after tax in its equity accounted investee before impairment was $87,000 loss (2018: $430,000).
Summary financial information for equity accounted investees, not adjusted for the percentage ownership held by IEC,
is as follows:
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
Group’s share of (reversal of)/loss from impairment of assets of discontinued
operations
On 28 May 2019, IEC acquired GPOT’s 50% of the joint venture.
AAA DRILLING LIMITED
2019
$’000S
2018
$’000S
-
-
-
-
-
-
-
-
9
332
400
(677)
55
50%
28
426
Page 52
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
11. EQUITY ACCOUNTED INVESTMENTS (cont’d)
Summarised Financial Performance
Revenue
Depreciation and amortisation
Interest expense
Loss on sale of assets
Impairment of assets held for sale
Other expenses
Loss from continuing operations
Income tax expense
Loss after tax from continuing operations
Other Comprehensive Income
Total comprehensive income
Group’s share of Loss after tax from continuing operations
Group’s share of total comprehensive income
AAA DRILLING LIMITED
2019
$’000S
2018
$’000S
-
-
-
-
-
(174)
(174)
-
(174)
-
(174)
(87)
(87)
-
-
-
(260)
(491)
(108)
(859)
-
(859)
7
(852)
(430)
(426)
In 2018, AAA Drilling sold two drills with a loss on sale of $260,000 and the remaining drill and inventory was impaired
a further $491,000 due to a lowering of realisable value. IEC had impaired total assets of AAA Drilling in a prior year so
the loss on sale of assets and further impairment in the accounts of AAA Drilling resulted in a reversal of the previous
impairment in IEC’s accounts.
Page 53
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
12. PROPERTY, PLANT AND EQUIPMENT
30 June 2019
Year ended 30 June 2019
At 1 July 2018, net of accumulated
depreciation
Additions
Acquisition of AAA Drilling
Disposals (net)
Transfers
Depreciation charge
Effect of exchange rates (net)
At 30 June 2019, net of accumulated
depreciation
At 30 June 2019
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
330
78
-
(48)
94
(102)
16
368
1,168
(800)
368
5,250
706
417
-
699
(658)
375
6,789
11,020
(4,648)
6372
275
351
-
(105)
-
(112)
9
418
1,230
(812)
418
400
74
-
-
-
(53)
16
437
688
(251)
437
375
667
-
-
(793)
-
-
249
666
-
666
Total
$’000
6,640
1,876
417
(153)
-
(925)
416
8,271
10
-
-
-
-
-
-
10
486
(476)
10
15,258
(6,987)
8,271
$8.271m of Property, Plant and Equipment is held as collateral by KCB Bank of Tanzania in relation to loan facilities.
Page 54
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
12. PROPERTY, PLANT AND EQUIPMENT (CONT’D)
30 June 2018
Year ended 30 June 2018
At 1 July 2017, net of accumulated
depreciation
Additions
Disposals (net)
Transfers
Depreciation charge
Effect of exchange rates (net)
At 30 June 2018, net of accumulated
depreciation
At 30 June 2018
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
311
126
(11)
-
(98)
2
330
1,019
(689)
330
4,212
1,371
-
202
(573)
38
5250
8,081
(2,831)
5,250
327
444
-
-
-
(55)
3
275
1,040
(765)
275
-
-
-
(48)
4
400
589
(189)
400
571
-
-
(202)
-
6
375
375
-
375
31
-
-
(21)
-
10
472
(462)
10
Total
$’000
5,896
1,497
(11)
-
(795)
53
6640
11,576
(4,936)
6,640
$6.640m of Property, Plant and Equipment is held as collateral by KCB Bank of Tanzania in relation to loan facilities.
Page 55
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
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
2019
$’000s
2018
$’000s
4,823
-
114
(76)
218
5,079
-
-
-
-
-
-
4,782
19
26
(60)
56
4,823
-
-
-
-
-
-
5,079
4,823
The recoverable amounts of the Group’s mine development costs and property, plant and equipment have been
determined by a value-in-use calculations using a discounted cash flow model, based on a 12-month projection period
approved by the Board and extrapolated for a further 4 years by using key assumptions.
The key assumptions in the calculations include:
Long-term thermal coal prices of US$44 – US$48 per tonne
Long-term exchange rate of US$1:00: AUD$0.72
•
•
• Discount rate of 20%
• Revenue and cost growth rate of 5%
• Coal reserves and resources
Based on the above assumptions at 30 June 2019 the recoverable amount is determined to be above the carrying value
of mining assets resulting in no further impairment.
The most sensitive input in the value in use calculations is forecast revenue, which is primarily dependent on estimated
future coal prices and the AUD/USD forecast exchange rate. If the long-term coal prices had been 10% lower than
management’s estimates, the recoverable amount would still exceed the carrying value of mining assets. If the AUD/USD
long-term exchange rate was $0.80, the recoverable amount would still exceed the carrying value of mining assets.
Page 56
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
14. EXPLORATION EXPENDITURE
Tancoal Energy Limited tenements
Opening balance
Exploration expenditure
Impairment
Effect of exchange rates
Intra Energy Trading (Malawi) Limited tenements
Opening balance
Effect of exchange rates
Transfer to assets held for sale
CONSOLIDATED
2019
$’000s
2018
$’000s
636
59
-
27
722
-
-
-
-
514
112
(59)
69
636
-
-
-
-
Total
722
636
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.
15. TRADE AND OTHER PAYABLES
Trade payables
Related party payables
Accruals and other payables
Total
16. INTEREST BEARING LIABILITIES
Current
Secured loan facilities
Hire purchase equipment
Total
CONSOLIDATED
2019
$’000s
5,623
220
9,411
15,254
CONSOLIDATED
2019
$’000s
2,381
334
2,715
2018
$’000s
9,523
1,315
5,125
15,963
2018
$’000s
1,215
324
1,539
16(a) Secured loan facility
In July 2017 KCB approved a facility of US$936,000 to be repaid over five years at a rate of 8% per annum for the
purchase of a new crushing and screening plant, the balance payable at 30 June 2019 was US$629,000 (2018:
US$802,000).
In July 2018, US$0.9m of the overdraft facility with KCB was converted to a term loan to be repaid over three years at a
Page 57
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
16. INTEREST BEARING LIABILITIES (cont’d)
rate of 8% per annum, the balance payable at 30 June 2019 was US$648,000 (2018: nil).
16(b) Bank overdraft facility
The bank overdraft facility was US$0.9m, the balance payable at 30 June 2018 was A$967,000. Interest is charged on
the facility at a rate of 8% per annum. The overdraft is not subject to any covenant requirements and is repayable on
demand.
16(c) Insurance Premium facility
During the year Commercial Bank of Africa Limited (CBA) provided an insurance premium facility, the balance payable
at 30 June 2019 was $184,000 (2018: $129,000).
16(d) 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 notes were converted to shares on the 11 and
12 April 2017. Interest of A$28,500 was paid during FY 2019.
16(e) 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 was 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.
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. The full amount under the contract of $334,000 (2018:
$324,000) was outstanding at 30 June 2019.
17. PROVISIONS
Non-current
Rehabilitation provision
Total
The movement in provisions during the year are as follows:
2019
$000’s
Opening balance
Addition
Effect of exchange rates
Closing balance
Represented by
Current
Non-current
Closing balance
Page 58
CONSOLIDATED
2019
$’000s
803
803
Rehabilitation
662
114
27
803
-
803
803
2018
$’000s
662
662
Total
628
26
8
662
-
662
662
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
17. PROVISIONS (cont’d)
2018
$000’s
Opening balance
Addition
Effect of exchange rates
Closing balance
Represented by
Current
Non-current
Closing balance
Rehabilitation
Rehabilitation
628
26
8
662
-
662
662
Total
628
26
8
662
-
662
662
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.
18. ISSUED CAPITAL
Balance at the
beginning of the year:
Shares issued
Share issue costs
Balance at the end of
the year
2019
Issue price
No.
$ per share
2019
$’000s
2018
Issue price
No.
$ per share
387,724,030
69,590
387,724,030
-
-
-
-
-
-
-
-
-
-
2018
$’000s
69,590
-
-
387,724,030
69,590
387,724,030
69,590
Fully paid ordinary shares carry one vote per share and carry the rights to dividends
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
1. Options reserve recognises the fair value of options issued
2. No options were issued during the year ended 30 June 2019
Page 59
2019
No.
−
−
−
−
−
2019
$’000s
2,216
−
−
−
2,216
2018
No.
−
−
−
−
−
2018
$’000s
2,216
−
−
−
2,216
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
19. RESERVES (CONT’D)
19(b) Performance Rights reserve
Total Performance Rights reserve
CONSOLIDATED
2019
$’000s
795
2018
$’000s
795
1. The performance rights reserve recognises the fair value of performance rights issued as compensation to
employees
2. No performance rights were issued during the year ended 30 June 2019
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
2019
$’000s
(1,584)
685
(899)
2018
$’000s
(1,238)
(346)
(1,584)
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 investment is disposed of.
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
Incorporation
Class of
Share
Equity (%)*
2019
Equity (%)*
2018
Intra Energy (Tanzania) Limited
Tanzania
Ordinary
100%
100%
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
Pamodzi Power Limited
Malawi
Ordinary
70%
85%
100%
100%
100%
100%
100%
90%
100%
100%
70%
85%
50%
50%
100%
100%
100%
90%
100%
100%
* Percentage of voting power is in proportion to ownership
** Entity is dormant and in the process of winding up.
Page 60
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
21. NON-CONTROLLING INTEREST
Total non-controlling interest
CONSOLIDATED
2019
$’000s
(5,739)
2018
$’000s
(6,694)
The Company’s subsidiary Intra Energy (Tanzania) Limited (“IETL”) owns 70% of Tancoal and 30% is owned by Tancoal’s
joint venture partner, the National Development Corporation of Tanzania, a Tanzanian government entity.
IETL owns 85% of Tanzacoal and 15% is owned by IETL’s Tanzacoal joint 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.
22. COMMITMENTS
22(a) Operating Commitments
Operating expenditure contracted for at the reporting date but not recognised as liabilities is as follows:
2019
$’000s
127
-
-
127
550
1,182
-
1,732
1,859
2018
$’000s
330
269
-
599
517
1,321
-
1,838
2,437
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
Page 61
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
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
2019
$’000s
334
-
-
334
2018
$’000s
324
-
-
324
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. The full amount under the contract of $334,000 (2018:
$324,000) was outstanding at 30 June 2019.
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 potential liability may be up to $500,000 in addition to costs accounted for in the accounts. The claim was still
pending at 30 June 2019.
Tancoal Energy Limited in Tanzania won a legal claim brought by NBC bank for recovery of money paid under a letter of
credit arrangement in 2013 for a potential liability up to US$470,000 and also won a claim against NBC for the return of
US$230,000 it withdrew without authority from Tancoal’s bank account, NBC has advised that it is lodging an appeal.
The Ministry of Energy and Minerals has made a claim to Tancoal for US$10.4 million (US$6.939 royalty and inspection
fee and US$3.470 penalty) for a royalty that it has deemed payable on the transport portion of sales to customers to
their final domestic and international destinations for sales between September 2011 and June 2019, this royalty on
transport had never invoiced until 2019. The company does not charge customers for transport and is working with the
Ministry to resolve the matter, the issue was still pending at 30 June 2019.
The Tanzanian Revenue Authority (TRA) issued Tancoal a VAT assessment for the years 2011 to 2015 for TZS 6 billion
(A$3.7 million), the amount of TZS 3.9 billion (A$2.4 million) has been provided for in the FY 2019 accounts. Tancoal
has not provided the full amount as it has proof of payments that were not included in the TRA’s assessment. Tancoal
has lodged an objection to the assessment and paid the one third required for the objection to be administered.
On 24 September 2019, the Tanzania Revenue Authority (TRA) advised that a fuel exemption paid to Tancoal in 2015
and 2016 was contrary to the purpose of the Performance Contract under which it was paid and Tancoal must refund
the amount of TZS 1,020,838,410 (A$634,000). Tancoal does not agree with the assessment and will begin discussions
with the TRA.
Other than the above, the Directors are not aware of any other contingent liabilities or contingent assets at 30 June
2019.
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.
Page 62
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
24. SEGMENT REPORTING (CONT)
Basis of Accounting for purposes of reporting by operating segments
Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors as the chief decision maker with respect to
operating segments are determined in accordance with accounting policies that are consistent with those adopted in
the annual Financial Statements of the Group.
Inter-segment loans payable and receivable are initially recognised at the consideration received net of transaction
costs. If inter-segment loans receivable and payable are not on commercial terms, these are not adjusted to fair value
based on market interest rates.
Segment assets
Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of
economic value from the asset. In the majority of instances, segment assets are clearly identifiable on the basis of their
nature and physical location. Unless indicated otherwise in the segment assets note, investments in financial assets,
deferred tax assets and intangible assets have not been allocated to operating segments.
Segment liabilities
Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the
operations of the segment. Borrowings and tax liabilities are generally considered to relate to the Group as a whole and
are not allocated. Segment liabilities include trade and other payables.
Notes to and forming part of the segment information
The consolidation adjustments represent the elimination of inter-segment loan balances and transactions.
Accounting policies
Segment information is prepared in conformity with the accounting policies of the entity as per Accounting Standard
AASB 8 Operating Segments.
Page 63
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
24. SEGMENT REPORTING (CONT’D)
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
Write-off goodwill
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
Profit/(loss) for the year
Total Assets
Total Liabilities
Page 64
Australia Period
Ended
30 June 19
$’000
Australia Period
Ended
30 June 18
$’000
Africa
Period Ended
30 June 19
$’000
Africa
Period Ended
30 June 18
$’000
Elimination
Period Ended
30 June 19
$’000
Elimination
Period Ended
30 June 18
$’000
Consolidated
Period Ended
30 June 19
$’000
Consolidated
Period Ended
30 June 18
$’000
–
2,654
2,654
–
2,654
(1,909)
745
–
–
(73)
–
672
–
1,086
1,086
–
1,086
–
(1,704)
(618)
–
(23)
–
–
(641)
52,277
–
52,277
(38,581)
13,696
(5,673)
8,023
–
(925)
–
(76)
7,022
33,079
–
33,079
(29,265)
3,814
–
(2,511)
1,303
(59)
(772)
–
(60)
412
–
(2,654)
(2,654)
(2,654)
–
–
(2,654)
–
–
–
–
–
(1,086)
(1,086)
–
(1,086)
–
–
(1,086)
–
–
–
–
(2,654)
(1,086)
52,277
–
52,277
(38,581)
13,696
–
(7,582)
6,114
–
(925)
(73)
(76)
5,040
10
(325)
4,725
–
4,725
(190)
4,535
4,684
(142)
4,153
(1,097)
22,124
(60,651)
17,627
(58,545)
(4,748)
39,783
(4,003)
37,995
22,060
(21,010)
33,079
–
33,079
(29,265)
3,814
–
(4,215)
(401)
(59)
(795)
–
(60)
(1,315)
–
(412)
(1,727)
–
(1,727)
(194)
(1,921)
17,777
(21,647)
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
25. CASH FLOW INFORMATION
Profit/(loss) before income tax
Non-cash flows in profit
Depreciation and amortisation
Loss on sale and impairment of non-current assets
Foreign exchange
(Reversal)/impairment of assets
Share of loss of equity-accounted investees
Transfer of overdraft to term loan
Write-off goodwill
Change in inventories
Change in receivables
Change in provisions
Change in trade payables and employee benefits
Change in current assets and liabilities held for sale
Net cash provided in operating activities
26. SHARE BASED PAYMENTS
26(a) Shares and options
2019
$’000s
4,535
1,001
153
769
6
87
(1,187)
73
731
(2,728)
141
(680)
27
2,928
2018
$’000s
(1,921)
855
11
(456)
(307)
430
-
-
(1,030)
280
34
3,690
50
1,636
No shares or options were granted by the Company during the 2019 or 2018 years.
26(b) Performance rights
No Performance rights were issued in the 2019 or 2018 years.
27. SUBSEQUENT EVENTS
On 31 July 2019, Mr Marc Schwartz was appointed as a Non-Executive Director.
On 14 August 2019, IEC’s wholly owned subsidiary, AAA Drilling Limited, a Mauritian incorporated company,
invested in a potentially exceptional newly discovered gold property in Mozambique.
On 3 September 2019, IEC advised that the Mining Commission in Tanzania has demanded that royalty on
transport be implemented by 15 September 2019. A sixty day extension was later granted and discussions are
continuing with the Ministry.
On 16 September 2019, the Ministry of Minerals, Mining Commission send Tancoal a note of demand for US$10.4
million (US$6.939 royalty and inspection fee and US$3.470 penalty) for a royalty that it has deemed payable on
the transport portion of sales to customers to their final domestic and international destinations for sales
between August 2011 and June 2019. The company does not charge customers for transport and is working with
the Ministry to resolve the matter, the issue was still pending at 30 June 2019.
On 24 September 2019, the Tanzania Revenue Authority (TRA) advised that a fuel exemption paid to Tancoal in
2015 and 2016 was contrary to the purpose of the Performance Contract under which it was paid and Tancoal
must refund the amount of TZS 1,020,838,410 (A$634,000). Tancoal does not agree with the assessment and
will begin discussions with the TRA.
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.
Page 65
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
28. RELATED PARTY TRANSACTIONS
Details relating to Key Management Personnel are disclosed in Note 5 and remuneration report contained in the
directors’ report.
2019
At 30 June 2019 a loan of US$150,000 (A$214,000) 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 was fully
impaired at 30 June 2016 and remained unpaid at 30 June 2019.
At 30 June 2019, $112,000 was receivable from Geothermal Power Tanzania Limited and NuEnergy Gas
(Tanzania) Limited, $13,000 was receivable from NuAfrica Limited and $13,000 was receivable from 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 $334,000 was outstanding at 30
June 2019.
2018
At 30 June 2018 a loan of US$150,000 (A$203,000) to Malcoal joint venture partner Consolidated Mining
Industries Limited, a private Malawian entity remained outstanding. The loan was to be repaid from first
dividends from Malcoal and interest is charged on the loan at the rate of 5% per annum. The loan was fully
impaired at 30 June 2016 and was still unpaid at 30 June 2018.
In June 2013, IEC subsidiary Tancoal Mining Limited received a loan of TZS300,000,000 from joint venture partner
the National Development Corporation of Tanzania. The balance of this loan at 30 June 2018 was TZS170,000,000
(A$ 101,000).
At 30 June 2018, $105,000 was receivable from Geothermal Power Tanzania Limited and NuEnergy Gas
(Tanzania) Limited, $12,000 was receivable from NuAfrica Limited and $12,000 was receivable from 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 $324,000 was outstanding at 30
June 2018.
30. FINANCIAL RISK MANAGEMENT
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
•
• Market risk i) Interest rate risk, ii) Foreign currency risk
Liquidity 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.
Page 66
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
30. FINANCIAL RISK MANAGEMENT (CONT’D)
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.
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
2019
$’000s
5,060
724
5,784
2018
$’000s
2,332
411
2,743
The Group’s receivables relate to GST and other taxation (including VAT) due from the Australian and Tanzanian
taxation offices and 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.
The following are the contractual maturities of financial liabilities, including estimated interest payments and
excluding the impact of netting agreements:
30 June 2019
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
967
967
967
Trade and other payables
15,254
15,254
15,254
Interest bearing liabilities
2,715
2,715
872
Total
18,936
18,936
17,093
–
–
712
712
–
–
750
750
–
–
381
381
–
–
–
–
Page 67
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
30. FINANCIAL RISK MANAGEMENT (CONT’D)
30 June 2018
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
2,268
2,268
2,268
Trade and other payables
15,963
15,963
15,963
Interest bearing liabilities
1,539
1,539
388
Total
19,770
19,770
18,619
–
–
299
299
–
–
253
253
–
–
599
599
–
–
–
–
Cash and receivables
The following are the contractual maturities of financial assets including receivables.
30 June 2019
Financial assets
Cash
Trade and other receivables
Total
30 June 2018
Financial assets
Cash
Trade and other receivables
Total
30(c) Market risk
CARRYING
AMOUNT
$’000S
724
5,060
5,784
CARRYING
AMOUNT
$’000S
411
2,332
2,743
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
724
724
5,060
5,060
5,784
5,784
–
–
–
–
–
–
–
–
–
–
–
–
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
411
411
2,332
2,332
2,743
2,743
–
–
–
–
–
–
–
–
–
–
–
–
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.
Page 68
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
30. FINANCIAL RISK MANAGEMENT (CONT’D)
(i) Interest rate risk
Profile
At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:
30 June 2019
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 2018
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%
0%
–
–
–
–
–
–
–
–
–
–
8%
–
8%
–
–
–
AVERAGE INTEREST RATE
%
FLOATING INTEREST
RATE %
0%
0%
–
–
–
–
–
–
–
–
–
–
8%
–
8%
–
–
–
TOTAL
$’000S
724
5,060
5,784
967
15,254
2,715
–
18,936
(13,152)
TOTAL
$’000S
411
2,332
2,743
2,268
15,963
1,539
–
19,770
(17,027)
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.
Page 69
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
30. FINANCIAL RISK MANAGEMENT (CONT’D)
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 2019
Financial assets
Cash and cash equivalents
Interest bearing liabilities
Total
30 June 2018
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
–
(22)
(22)
–
22
22
–
(22)
(22)
–
22
22
PROFIT OR LOSS
EQUITY
10% INCREASE
$’000S
10% DECREASE
$’000S
10% INCREASE
$’000S
10% DECREASE
$’000S
–
(12)
(12)
–
12
12
–
(12)
(12)
–
12
12
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 70
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
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
2019 would have increased the net liabilities of the Tanzanian and Malawian subsidiaries by A$0.15m (2018:
decrease $0.67m). A 10% weakening of the Australian dollar against the Tanzanian Shilling and Malawian Kwacha
at 30 June 2019 would have decreased the net liabilities of the Tanzanian and Malawian subsidiaries by A$0.18m
(2018: increased $0.82m).
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 2019 would have
decreased net interest bearing liabilities of the KCB loans and hire purchases by A$0.30m (2018: $0.14m). A 10%
weakening of the Australian dollar against the United States dollar at 30 June 2019 would have increased net
interest bearing liabilities of the KCB loans and hire purchases by A$0.30m (2018: $0.14m).
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 71
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2019
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
Investment in subsidiaries1
Property, plant and equipment
Loans to subsidiaries1
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
2019
$’000S
2018
$’000S
480
68
-
548
3
14
-
17
4,136
4,136
-
-
4,136
4,684
142
-
-
142
4,542
69,590
3,011
(68,059)
4,542
-
-
4,136
4,153
1,097
-
-
1,097
3,056
69,590
3,011
(69,545)
3,056
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 net current assets of $0.41m deficiency of $1.080m (2018: net current asset deficiency of $1.08m)
Financial Performance of Intra Energy Corporation Limited
Profit/(loss) for the year
Total Comprehensive Income
2019
$’000S
1,486
1,486
2018
$’000S
(105)
(105)
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 72
ASX Additional Information
FOR THE YEAR ENDED 30 JUNE 2019
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 5 September 2019.
(a)
Distribution of Equity Securities
The numbers of shareholders, by size of holding, in each class of share are:
LISTED ORDINARY SHARES
NUMBER OF
HOLDERS
NUMBER OF SHARES
77
75
101
297
185
735
472
8,232
222,044
832,940
12,477,885
374,182,929
387,724,030
7,429,835
LISTED ORDINARY SHARES
NUMBER OF
SHARES
PERCENTAGE OF
SHARES
115,762,065
29.86
21,732,226
19,097,855
12,714,982
11,362,194
10,064,230
9,312,303
9,058,389
8,835,770
8,731,766
8,474,297
7,975,390
6,850,625
6,269,000
6,250,000
6,245,368
5,205,305
4,399,702
3,500,000
3,079,303
5.61
4.93
3.28
2.93
2.60
2.40
2.34
2.28
2.25
2.19
2.06
1.77
1.62
1.61
1.61
1.34
1.13
0.90
0.87
285,225,645
73.56
1
1,001
5,001
10,001
100,001
−
−
−
−
−
1,000
5,000
10,000
100,000
and over
The number of shareholders holding less than a marketable parcel of shares
are:
(b)
Twenty Largest Shareholders
The names of the twenty largest holders of quoted shares are:
1. ASPAC MINING LIMITED
2.
J P MORGAN NOMINEES AUSTRALIA LIMITED
3. MR DAVID SCHWARTZ
4. MR DAVID JACOB SCHWARTZ & MRS MELANIE ANN SCHWARTZ
5. ROTHSTEIN PTY LTD
6.
7.
SPRINGTIDE CAPITAL PTY LTD
LUJETA PTY LTD
8. MR MARC ARIEL SCHWARTZ
9. NUVOLARI CAPITAL LIMITED
10. MR PETER TSEGAS
11. MR GRAEME LANCE ROBERTSON
12. MARA SUPERANNUATION PTY LTD
13. MARA SUPERANNUATION PTY LTD
14. JAYANA SUPER PTY LTD
15. MR JOSHUA SAMUEL ALTIT
16. ROTHSTEIN PTY LTD
17. INTRASIA CAPITAL PTE LTD
18. OZEA PTY LTD
19. MR DAVID WILLIAM MC KAY & MRS DONNA MICHELLE MC KAY
20. ANTARCTIC HOLDINGS PTY LTD
TOTAL
Page 73
ASX Additional Information
FOR THE YEAR ENDED 30 JUNE 2019
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
DAVID SCHWARTZ AND MELANIE SCHWARTZ
(d)
Schedule of Mining Tenements
NUMBER OF SHARES
131,556,585
25,870,786
PERCENTAGE OF
ORDINARY SHARES
33.93%
6.67%
AREA OF INTEREST
TENEMENTS
% INTEREST
Tanzania
Tancoal Energy Limited
Intra Energy Limited
ML439/2011, PL7391/2011, PL7620/2012,
PL7713/2012, PL8999/2013, PL9807/2014,
ML608/2019, ML609/2019 ML610/2019,
PL10417/2014, PL11156/2007
PL10975/2016, PL10976/2016,
PL10977/2016, PL10979/2016, PL10950/16,
PL 10980/16, PL 10981/16
Tanzacoal East Africa Mining Limited
PL10058/2014, & L10116/2014
Malawi
Malcoal Mining Limited
ML0143/2005
70%
100%
85%
90%
Page 74