Intra Energy Corporation Limited
(ABN 65 124 408 751)
Annual Financial Report
For the year ended 30 June 2020
For personal use only 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
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For personal use only Corporate Directory
DIRECTORS
Graeme Robertson (Chairman)
Troy Wilson
Alan Fraser
Marc Schwartz (appointed 31 July 2019)
James Shedd (Managing Director)
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)
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For personal use only 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 my comments on the operations and the future directions of the Company for this
Annual Financial Report for 2020.
Intra Energy Corporation Limited has established Intrafrican Resources Limited (Intrafrican) as a wholly-owned
subsidiary of IEC, registered in Mauritius, to diversify the Company’s activities away from the production of coal
in Tanzania and into the development of gold resources in Mozambique. The reasons for this strategic move are
manifold.
Thermal coal as a fuel is becoming increasingly unpopular in the world and prices are very low and funding very
difficult. The ability to return anything to shareholders has become impossible in Tanzania due to declining
markets and to Government imposts considered by the Company to be arbitrary and unfair, and a partner intent
on increasing its equity in Tancoal Energy Limited (Tancoal), the 70% owned subsidiary of IEC Tanzania, without
payment or any meaningful contribution. On the other hand, Intrafrican has invested in an attractive gold
concession in Mozambique, a nation mainly unexplored but with huge mineral resources and a regulatory
framework conducive to the realities of mining. Intrafrican currently owns 15% of Intra Minerals Limited (IML),
a company registered in Mauritius which owns 95% of the exciting Minas Do Lurio Gold Project in
central/northern Mozambique.
Intrafrican has entered into an Investment Agreement with IML to buy an additional 30% of shares in IML for the
investment of US$1.3 Million, all of which will be used for exploration to determine the best areas for
development. This is in addition to US$700,000 spent over the Financial Year 2020 by IML to establish proof of
concept which is referred to in the following Directors Report. Intrafrican has the right of first refusal over a
further 15% of shares.
IML has engaged an Operations Consultant with “hands on” experience in establishing gold mining operations in
Southern Africa in conditions similar to the Minas Do Lurio project to assist Winston Theler, the COO.
Intrafrican
has mandated Bellhouse Capital, an UK-based Financial Advisor to prepare a Presentation and advise on a capital
raising route for Intrafrican. A Listing Advisor has been engaged to handle the potential IPO of Intrafrican on the
Second Board (DEM) of the Stock Exchange of Mauritius (SEM). A format is being researched to allow IEC
Shareholders to participate in the IPO of Intrafrican at a discounted rate.
IEC’s 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”) is the dominant
coal supplier to industrial energy users in the Eastern African region, the mine is the largest operational coal mine
in Tanzania and East Africa, and is manned exclusively by Tanzanians.
Tancoal’s Sales were down by 34% in 2020 due to the effect of Covid-19 on the business of both domestic and
export customers and competition from small miners as sales were 532,057 (2019: 788,702) tonnes. Sales
revenue for 2020 was A$37.770 million (2019: A$52.277 million). Sales were mainly to customers in Tanzania
(69%), with the remainder to customers in Kenya (19%) and Rwanda and Uganda (12%). 51% of sales were made
to the cement industry, 36% to the ceramic industry and 13% to textile manufacturers and other industries.
Tancoal’s 2020 production was 496,393 tonnes (2019: 748,874) tonnes. Stocks were maintained sufficiently for
the demand during the year.
The closed Malawi operations were held for sale during the year but there were no serious buyers and when the
mining licence was up for renewal it was relinquished with the companies holding these assets expected to be
wound up.
IEC recorded a loss after tax and before minorities of (A$17,186,000 (2019: profit of A$4,535,000). The loss
included A$15,484,000 for the assessment by the Ministry of Minerals in Tanzania of US$10.4 million (US$6.93m
royalty and inspection fee and US$3.47m penalty) for past charges for royalty on transport to customers' business
premises from 2011 to 2019 to be paid over four years. As Tancoal does not transport any coal as it is sold and
taken by customers at the Tancoal stockpile using their own trucking contractors, this can only be a mechanism
to receive royalties from mining companies. Discussions continue with the Ministry of Minerals for a moratorium
on the assessment until cash flow improves. The loss also included A$877,000 for other tax assessments for prior
years and A$457,000 for doubtful debts. The remaining loss for the 2020 year of A$368,000 reflects the difficult
operating conditions during the year and includes A$2,658,000 (US$1,783,000) for the cost of royalty and
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For personal use only Chairman’s Report
clearance fees which were paid on behalf of customers for their cost of transportation during the year. Operating
cash flow was very tight during the year. The final three payments to the former contractor Caspian are under
discussion to extend the payment plan due to the tight cash flow.
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. IEC is pleased to see the development of the Tancoal Mine to be entirely
managed by Tanzanians, one of very few mining operations in Tanzania to be run by Tanzanians for Tanzania.
IEC 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 2020 A$7.0m (FY 2019: A$9.3 m).
The conditions being imposed on Tancoal and the impact of covid-19 have contributed to a difficult year for
Tancoal. The development of Intrafrican and gold exploration interest through IML promises to be the
sustainable future for IEC.
Sincerely
Graeme Robertson
Chairman – Intra Energy Corporation Limited
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MOZAMBIQUE GOLD
IEC’s fully owned subsidiary Intrafrican Resources Limited (“Intrafrican”), registered in Mauritius, has
invested in Intra Minerals Limited (“IML“), a company registered in Mauritius. Intrafrican currently
owns 15% of IML which is the 95% owner of the Minas Do Lurio Gold Project in Mozambique.
The exploration project currently comprises a 168.56 km2 large prospecting license (8416L) in the
historically underexplored Lúrio Belt, an initial trenching and sampling program has been completed
at Savane, a prospective area within the prospecting license. A new gold bearing area has been located
approximately 2.5 kilometres from the original Savanne Area. Samples of quartz and soil have been
taken, crushed, washed and processed indicating grades between 4 and 6 g/t. Samples from Savanne
are being collected to be sent to SGS in South Africa for analysis.
An independent expert, Benedikt Steiner (CGeol EurGeol), has been retained by IML to advise on the
project and has completed a non-JORC technical report summarising and evaluating the exploration
activities on the project from 2016 to 2020. Mr Steiner’s initial observations confirmed the validity of
the exploration project, which is currently considered to be a potential open-cut mining target, and
represents an encouraging first-mover opportunity into a much larger prospective area.
IEC has engaged Mr Kim Stanton-Cook, an exploration/development geologist with 45 years’
experience in mineral exploration industry. Mr Stanton-Cook expertise covered a wide region from
Australia to the Americas, Asia to Africa and carried the responsibility for the development of well-
known Australian mining operations as a Chief Geologist and Exploration Manager. His upcoming role
is to act as its consultant in the development of the Lurio Gold Project. Mr Stanton-Cook has reviewed
work done to date and has advised that the Project has merit and should move into the drilling
stage which gives solid reason why the area should be considered as highly prospective.
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)
FY20
2,297,569
496,393
523,057
FY19
3,344,676
748,874
788,702
Tancoal produces a high quality thermal coal with an energy of 6,000K~6,300Kcals/kg which consistently meets
client specifications.
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
loaded into trucks provided by the respective consumers.
From the stockpile at the Kitai Sales Point the coal is loaded onto 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 set a standard cost of
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transport to the customers plant at a rate per tonne per kilometre of $0.065 for domestic customers and $0.083
for export customers for the 2020 year. The cost of the royalty and clearance fees on transport cost for the 2020
year was A$2.66m (US$1.78m).
MALCOAL (MALAWI)
Operations and expenditure have ceased and rehabilitation of the site is in its final stage. The mining
licence has been relinquished.
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. Tancoal continued
upgrading facilities at the mine site and no major issues were identified for the financial year.
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 the mine
site, the haul road and stockpile area at the Kitai sales point and others were given to the Kitai Prison which is
close to the Kitai sales point.
Tancoal has worked with a consultant to meet the requirements for the Mine Closure Plan as directed by the
Mining Commission including topographic survey and aerial mapping, waste dump design, ROM pad design and
mine plan review. In the new Mining License Area (ML 610/2020) Tancoal has conducted an environmental audit
and the granting of the environmental certificate is in process.
Storm water trenches and ponds have been continually upgraded for the rainy season in accordance with the
mine development plan. 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
the required standard set by Tanzania Bureau of Standard (TBS).
The addition of the Speed Detector (Gun) has provided Tancoal with better control of the haulage between the
mine site and Sales Point reducing roll-overs and other speed related accidents.
EXPLORATION
Coal exploration is concentrated on tenements being maintained in good standing and supporting mine
development work. Gold exploration continues through an associated company, Intra Minerals Limited
(Mauritius) in the Cabo Delgado and Nampula Provinces of Mozambique. The initial gold exploration programme
ended with the advent of the wet season in December/January. Gold and other minerals are being explored by
Intrafrican Resources Limited, formerly known as AAA Drilling Limited (Mauritius) which will host the
diversification of IEC into mineral exploration and services.
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
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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.
CORPORATE
Operating cash flow was restricted in FY 2020 due to the difficult operating conditions and the implementation
of royalty and clearance fees on the cost of transport to customers’ premises. The last three payments on the
settlement to the Caspian contractor have been delayed and a new payment plan is being discussed. Tancoal’s
banking facilities with KCB Bank of Tanzania were extended to September 2020.
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 submitted and approved for each year. Tancoal’s CSR plan for 2020 has been submitted.
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.
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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 2 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 forty
years’ experience
infrastructure and power
development industries. Graeme is currently Chairman of the
Intrasia Capital Pte Ltd in Singapore with corporate and financial
services operating from Mauritius into Africa.
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 developments
including directorships with the Port of Brisbane Authority and
Washington H. Soul Pattinson & Co Ltd, one of Australia’s oldest
listed companies as well as AfrAsia Bank Ltd in Mauritius where he
is currently Chairman of the AfrAsia Foundation for education to
the underprivileged.
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 Intrasia Securities limited 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
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Marc Schwartz
Non-Executive Director
(appointed 31 July 2019)
James (Jim)
Shedd
Managing Director
(appointed 7 November
2018), CEO appointed 27
December 2016)
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. 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 starting at
Macquarie Bank to being Managing Director of Pascoes Pty Ltd
from 2008 to 2018, which employed approximately 150 people
across multiple manufacturing sites and manufactured or
distributed over 400 items to retailers and brand owners. Amongst
other varied business interests, he is currently a Director of Gelflex
Laboratories which is the largest manufacturer of contact lenses in
the Southern Hemisphere. Marc holds a Bachelor of Computer
Science and Financial Mathematics from the University of Western
Australia.
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 is also the
Managing Director of Intra African Resources (IRL) which is a 100%
owned subsidiary of IEC in Mauritius which currently holds 15%
of Intra Minerals (IML), which Jim is also a director, that owns 95%
of Minas Do Lurio (MDL) Gold project in Mozambique.
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.
COMPANY SECRETARY
Company Secretary
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.
Rozanna Lee
B. Com (Hons),
LLB, GradDipACG,
AGIA, AGIS
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CORPORATE STRUCTURE
IEC is a public company domiciled in Australia and listed on the Australian Stock Exchange (ASX:IEC). The
Company has prepared a consolidated financial report incorporating the entities that it controlled during the
financial year, which are outlined in Note 21 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 Director
M Schwartz
Non-Executive Director1
J Shedd
1Mr Marc Schwartz was appointed 31 July 2019
Managing Director/CEO
Ordinary
Shares
131,306,585
9,058,309
Performance
rights
Profit/(loss) Per Share
Basic Profit/(loss) per share (cents)
2020
(3.04)
2019
0.80
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
The principal activities of the entities within the Consolidated Entity during the year were coal production and
gold exploration in South 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 8 of this Annual Financial Report.
REVIEW OF FINANCIAL POSITION
The Consolidated Entity recorded an operating loss after income tax $17.19m (2019 Profit: $4.54m). Income tax
benefit for the year is $nil (2019: $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 2020.
CASH FROM OPERATIONS
The net cash inflow from operations of $1.96m (2019: $2.9286m). The Group had a net overdraft of $0.965m at
year end with $0.322m cash at bank and a bank overdraft facility of $1.287m.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There are no further significant changes to the state of affairs of the Company.
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SIGNIFICANT EVENT AFTER THE BALANCE DATE
There has not arisen in the interval between the end of the financial year and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to
affect significantly the operations of the Company, the results of those operations, or the state of affairs of the
Company, in future financial years.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Company is subject to environmental regulations and is compliant with all aspects of environmental
regulation in its exploration and mining activities, including provision for environmental rehabilitation costs. The
Directors are not aware of any environmental law that is not being complied with.
SHARES UNDER OPTION
As at 30 June 2020, there were no unissued ordinary shares under option.
MEETINGS OF DIRECTORS
Directors
Mr G Robertson
Mr T Wilson
Mr A Fraser
Mr M Schwartz1
Mr J Shedd
¹ Appointed 31 July 2019
Attended
Available to attend
7
6
7
7
7
7
7
7
7
7
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 $110,557
(2019: $122,075) 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.
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During the year ended 30 June 2020, 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.
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For personal use only 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 2020.
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 2020 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 14
For personal use only 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 2020 the Key Management Personnel (“KMP”) of IEC were:
Name
Position Held
Mr Graeme Robertson
Non-Executive Chairman
Mr Troy Wilson
Mr Alan Fraser
Mr Marc Schwarz1
Mr James Shedd
Ms Kerry Angel
Non-Executive Director
Non-Executive Director
Non-Executive Director
Managing Director and Chief Executive Officer
Chief Financial Officer
1Mr Marc Schwarz was appointed 31 July 2019
Page 15
For personal use only Remuneration Report
B. DETAILS OF REMUNERATION
2020
Salary and
fees
$
NON-EXECUTIVE DIRECTORS
Mr G Robertson
Mr T Wilson
Mr A Fraser
Mr M Schwartz1
116,597
40,000
40,000
36,667
KEY MANAGEMENT PERSONNEL
Mr J Shedd
Ms K Angel
Total
1Appointed 31 July 2019
2019
496,154
293,656
1,023,073
Salary and
fees
$
NON-EXECUTIVE DIRECTORS
Mr G Robertson
Mr T Wilson
Mr A Fraser1
Mr D Nolan2
114,608
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
%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Short-term
Post-Employment
Long-term
Cash bonus
$
Non-monetary benefits
$
Superannuation
$
Retirement Benefits
$
Long service leave
$
Shares
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
116,597
40,000
40,000
36,667
496,154
293,656
1,023,073
–
–
–
–
–
–
–
Share-based Payment
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
Page 16
For personal use only 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
Mr Graeme Robertson‘s 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 and his Non-Executive Director’s
fees are $40,000 per annum.
Mr Alan Fraser was employed as Non-Executive Director on 24 August 2018 and his Non-Executive Director’s fees
are $40,000 per annum.
Mr Marc Schwartz was employed as Non-Executive Director on 31 July 2019 and his Non-Executive Director’s
fees are $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 for which
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 2020.
Page 17
For personal use only Remuneration Report
F. KEY MANAGEMENT PERSONNEL COMPENSATION – OPTIONS
2020
Mr G Robertson
Mr T Wilson
Mr A Fraser
Mr M Schwarz1
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 Marc Schwarz was appointed 31 July 2019
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
Page 18
For personal use only 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
Changes during
the year*
Balance at the
end of the year
Mr G Robertson
131,556,585
Mr T Wilson
Mr A Fraser
–
–
Mr M Schwarz1
9,058,389
Mr J Shedd
Ms K Angel
Total
–
–
140,614,974
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1Mr Marc Schwarz was appointed 31 July 2019
*Changes during the year represent shares acquired or sold by KMP or their associates
–
–
–
–
–
–
–
131,556,585
–
–
9,058,389
–
–
140,614,974
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
Page 19
For personal use only 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:
2020
Mr G Robertson
Mr T Wilson
Mr A Fraser
Mr M Schwarz1
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 Marc Schwarz was appointed 31 July 2019
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 Alan Fraser was appointed 24 August 2018
2Mr David Nolan resigned 24 August 2018
I.
LOANS TO DIRECTORS AND EXECUTIVES
No loans were made to any Directors or Executives during the financial year.
End of Remuneration Report
Page 20
For personal use only 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 2020.
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 2020.
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 29 September 2020
Page 21
For personal use only 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 2020, 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 (NSW)
Level 40, 2 Park Street
Sydney NSW 2000
DREW TOWNSEND
Partner
Dated: 29 September 2020
For personal use only
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 2020 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 2020.
The declaration is signed in accordance with a resolution of the Board of Directors.
GRAEME ROBERTSON
Chairman
Dated this 29 September 2020
Page 23
For personal use only 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 2020, 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 2020 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 $18,764,000. As stated in Note 1(a), this
event or condition, 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.
For personal use only
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 2020. 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 11 Property, plant and equipment; Note 12 Mine development costs; Note 13
Exploration expenditure; and Note 1(y) Critical accounting judgments and key sources of
estimation and uncertainty.
A significant proportion (70%) of the
Group’s total assets relate to property,
plant
mine
and
equipment,
exploration
costs,
development
expenditures and right of use assets
totalling $14,709,000 as at 30 June
2020 which are subject
to an
impairment assessment in accordance
with AASB 136 “Impairment of Assets”.
The group's impairment assessment of
these non-current assets is considered
a key audit matter as the valuation is
judgemental and based on a number of
assumptions, specifically coal prices,
operating/capital costs, discount rates,
inflation rates and foreign exchange
rates, which are affected by future
events and economic conditions.
• We
Our procedures included, amongst others:
management's
determination of the Group's Cash-
Generating Units ("CGUs").
assessed
• We reviewed and analysed the key
assumptions including growth rates,
discount rate, projected coal sales
and gross margin used in the cash
flow forecasts and considered the
reasonableness
these
assumptions.
of
• We
assessed
management’s
consideration of the sensitivity to a
change in key assumptions that either
individually or collectively would be
required for assets to be impaired and
considered the likelihood of such a
movement in those key assumptions
arising.
• We
involved Hall Chadwick’s
valuation experts to:
- evaluate
the
-
key
valuation
assumptions and estimates
to
assess the discounted cash flows.
reviewed
mathematical
accuracy of the cash flow model
and agreed
to
supporting information.
relevant data
the
• We assessed the adequacy of the
Group’s disclosures in relation to the
carrying value of non-current assets.
For personal use only
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
Contingent Liabilities
Refer to Note 24 Contingent liabilities.
is a party
to numerous
The group
ongoing litigation and legal matters, of
which the most significant are disclosed
in Note 24 to the financial statements.
to a significant
We focused on this area as a key audit
matter due
level of
judgement and estimation involved in
determining whether liabilities existed in
accordance with AASB 137 “Provisions,
Contingent Liabilities and Contingent
Assets”.
Our procedures
others:
included, amongst
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 the status of the claims
and if they met the definition of a liability
in accordance with AASB 137 Provisions,
Contingent Liabilities and Contingent
Assets.
• We assessed the adequacy of group's
to contingent
relation
in
disclosures
liabilities.
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 2020 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.
For personal use only
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
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.
- 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.
For personal use only
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
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 14 to 20 of the directors’
report for the year ended 30 June 2020.
In our opinion, the remuneration report of Intra Energy Corporation Limited, for the year
ended 30 June 2020, complies with s 300A of the Corporations Act 2001.
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 (NSW)
Level 40, 2 Park Street
Sydney NSW 2000
DREW TOWNSEND
Partner
Dated: 29 September 2020
For personal use only
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2020
CONSOLIDATED
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
Prior period expenses for taxes and audits
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
NOTES
2
3
4
10
10
7
7
7
2020
$’000S
37,770
(29,308)
8,462
-
19
(230)
(329)
(1,731)
(2,312)
(230)
(457)
-
(3,378)
(16,361)
-
(471)
-
(17,018)
-
(17,018)
(78)
-
(90)
(17,186)
126
(17,060)
(11,769)
(5,417)
(17,186)
(11,597)
(5,463)
(17,060)
(3.04)
(3.00)
(0.04)
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)
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 29
For personal use only Consolidated Statement of Financial Position
AS AT 30 JUNE 2020
CONSOLIDATED
2020
$’000S
NOTES
Assets
Current Assets
Cash and cash equivalents
Inventories
Trade and other receivables
Total Current Assets
Non-Current Assets
Property, plant and equipment
Right of use assets
Mine development costs
Exploration expenditure
Investments
Total Non-Current Assets
Total Assets
Liabilities
Current Liabilities
Bank overdraft
Trade and other payables
Employee benefits
Interest bearing liabilities
Lease liabilities
Liabilities held for sale
Total Current Liabilities
Non-Current Liabilities
Trade and other payables
Lease 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
11
11
12
13
14
16(b)
15
16
17
10
15
17
18
19
20
22
322
1,731
4,180
6,233
6,888
2,095
5,172
554
226
14,935
21,168
1,287
20,796
130
1,336
1,448
-
24,997
11,209
85
887
12,181
37,178
(16,010)
69,590
2,284
(76,682)
(4,808)
(11,202)
(16,010)
2019
$’000S
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
The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes to the Financial
Statements.
Page 30
For personal use only Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2020
CONSOLIDATED
NOTES
Cash Flows from Operating Activities
Receipts from customers
Payments to creditors and suppliers
Interest received
Interest paid
Net cash provided in operating activities
26
Cash Flows from Investing Activities
Mine development and capitalised exploration costs
Purchase of property, plant and equipment
Payment for investments
Payment for acquisition of AAA Drilling, net of cash acquired
Net cash (used) in investing activities
Cash Flows from Financing Activities
Proceeds from interest bearing liabilities
Repayment of interest bearing liabilities
Repayment of lease liabilities
Transfer of overdraft to term loan
Net cash (used) in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effects of exchange rate changes on cash
Cash and Cash Equivalents/(Net Overdraft) at end of year
Cash and cash equivalents
Bank overdrafts used for cash management purposes
Cash and Cash equivalents/(Net Overdraft) in the Statement of
Cash Flows
2020
$’000S
37,973
(35,719)
-
(293)
1,961
(47)
(76)
(226)
-
(349)
-
(1,125)
(1,205)
-
(2,330)
(718)
(243)
(4)
(965)
322
(1,287)
(965)
2019
$’000S
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)
The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes to the Financial
Statements.
Page 31
For personal use only ISSUED
CAPITAL
$’000S
69,590
ACCUMULATED
PERFORMANCE
OPTION
RESERVE
$’000S
FOREIGN CURRENCY
TRANSLATION
RESERVE
$’000S
TOTAL
$’000S
RIGHTS
$’000S
795
2,216
(899)
6,789
NON-CONTROLLING
INTEREST
$’000S
(5,739)
TOTAL EQUITY
$’000S
1,050
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2020
CONSOLIDATED
At 1 July 2019
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
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
LOSSES
$’000S
(64,913)
(11,769)
(11,769)
LOSSES
$’000S
(68,193)
3,280
3,280
ACCUMULATED
PERFORMANCE
RIGHTS
$’000S
OPTION
RESERVE
$’000S
ISSUED
CAPITAL
$’000S
69,590
(11,769)
(5,417)
(17,186)
172
172
172
(11,597)
(46)
(5,463)
126
(17,060)
FOREIGN CURRENCY
TRANSLATION
RESERVE
$’000S
(1,584)
TOTAL
$’000S
2,824
3,280
685
685
685
3,965
NON-CONTROLLING
INTEREST
$’000S
(6,694)
1,255
(300)
955
TOTAL EQUITY
$’000S
(3,870)
4,535
385
4,920
795
2,216
Balance at 30 June 2020
69,590
(76,682)
795
2,216
(727)
(4,808)
(11,202)
(16,010)
Balance at 30 June 2019
69,590
(64,913)
795
2,216
(899)
6,789
(5,739)
1,050
The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes to the Financial Statements.
Page 32
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
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 29 September 2020.
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 made a loss after tax for the year of ($17,186m) (2019: profit $4.535m), including losses and
impairments from discontinued operations of $0.17m (2019: $0.19m), non-cash depreciation and amortisation
charges of $1.73m (2019: $1.00m), past years royalty and clearance fees from 2011 to 2019 of $15.48m (2019: nil)
and taxes from audits of past years of $0.88m (2019: $2.40m); and
As at balance date, the Group's current liabilities exceeded its current assets by $18.764m (2019: $12.219m). The
deficit in net current assets included $1.287m (2019: $0.967m) overdraft payable to KCB Bank of Tanzania (“KCB”),
$1.155m (2019: $1.821m) payable to KCB Bank under loan facilities which expire in September 2020, equipment
finance of $1.022m (2019: $0.380) for the purchase of three ADT trucks over twenty four months and $3.736m for
the current portion of the past royalty and clearance fees on customers’ transport costs from 2011 to 2019 (2019:
nil) which were included in current liabilities.
In assessing the appropriateness of using the going concern assumption, the Directors have noted:
Intra Energy Tanzania Limited (IET) a company registered in Tanzania is the investor in the Tancoal joint venture,
IEC has not given a corporate guarantee to IET or Tancoal.
KCB has continued to show support for Tancoal.
Sales were lower in FY 2020 due to competition from small miners and the impact of Covid-19 but business
conditions are expected to improve during FY 2021. Tancoal remains the dominant coal miner and supplier to
industrial energy users in the Eastern African region and continues to implement productivity improvements.
Continued to implement a number of cost saving initiatives and enter into repayment arrangements with creditors
to preserve working capital. Discussions continue with the Ministry of Minerals for a moratorium on the
assessment for past charges for royalty on transport to customers' business premises and discussions are also
continuing with the former contractor, Caspian, to extend the payment plan for the three final payments due to
tight cash flow from lower sales.
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.
Retained their confidence in the strategic value of the Group as it continues with its coal project in Tanzania and
its focus on the development of the gold resources in Mozambique.
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 $2.442m debt facility ($2.788m at 30 June 2019), 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.
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
Page 33
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
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
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.
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 16
AASB 16 was issued in January 2016 and it replaces AASB 117 Leases, AASB Interpretation 4 Determining whether an
Arrangement contains Lease, AASB Interpretation-115 Operating Lease-Incentives and AASB Interpretation 127
Evaluating the Substance of Transactions Involving the Legal Form of a Lease.
AASB 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires
lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under
AASB 117.
The standard includes two recognition exemptions for lessees – lease of ‘low-value’ assets (e.g., personal computers)
and short term 12 months or less). At the commencement date of a lease, a lessee will recognise a liability to make
lease payments (i.e., the lease liability) and an asset representing the right to sue the underlying asset during the lease
term (i.e., the right-of-use asset). Lessees will be required to be separately recognise the interest expense on the lease
liability and the depreciation expense on the right-of-use asset.
Lessees are also required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the
lease term, a change in future lease payments resulting from a change in an index or rate used to determine those
payments). The lessee will generally recognise the amount of the remeasurement of the lease liability as an adjustment
to the right-of-use asset.
AASB 16, which is effective for annual periods beginning on or after 1 January 2019, requires lessees to make more
extensive disclosure than under AASB 117.
The Group has adopted AASB 16 using the first variation of the modified retrospective approach, where the right-of-
use asset at the date of initial application (1 July 2019) is measured at an amount equal to the lease liability, using an
incremental borrowing rate (IBR). Comparative figures are not restated.
The Group has elected to apply the standard to contracts that were previously identified as leases applying AASB 117
and AASB Interpretation 4.
Page 34
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
The Group has elected to use the exemptions proposed by the standard on lease contracts for which:
the lease terms ends within 12 months as of the date of initial application; and
lease contracts for which the underlying asset is of low value. The Group has leases of certain office equipment
(i.e. personal computers, printing and photocopying machines) that are considered of low value of less than
$10,000.
Adjustments recognised in the balance sheet on 1 July 2019
The following summary indicates the adjustments and reclassifications of financial statement line item in the balance
sheet due to the implementation of AASB 16.
Property, plant and equipment
Right of use assets
Interest bearing liabilities
Lease liabilities
Carrying
amount under
AASB 117
Adjustments
Carrying
amount under
AASB 16
$
$
$
8,271
-
(2,715)
-
-
244
334
(578)
8,271
244
(2,381)
(578)
Measurement of lease liabilities
The following table represents a reconciliation between the lease commitments as of 30 June 2019 and the lease liability
as of 1 July 2019.
Operating lease commitments disclosed as at 30 June 2019
Less: short-term and low value asset leases
Add: Adjustments as a result of a different treatment of extension options
Add: finance lease liabilities recognised as at 30 June 2019
Lease liabilities recognised as at 1 July 2019
$
127
(33)
150
334
578
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
Page 35
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
subsidiary acquired, the difference is recognised directly in the Consolidated Statement of Profit or Loss and Other
Comprehensive Income, but only after a reassessment of the identification and measurement of the net assets required.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to
their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being
the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and
conditions.
c.ii
Subsidiaries
Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control commences until the date that control ceases.
The parent controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through its power over the entity. A list of the subsidiaries is provided
in Note 20.
Intercompany transactions, balances and unrealised gains or losses on transactions between group entities are fully
eliminated on consolidation.
The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by
the Group.
Intercompany transactions, balances and unrealised gains or losses on transactions between group entities are fully
eliminated on consolidation.
The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by
the Group.
c.iii Transactions eliminated on consolidation
All balances and transactions, arising from transactions between entities within the group are eliminated in preparing
the consolidated financial statements.
c.iv Non-controlling interests
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as “non-controlling
interests”. Non-controlling interests are measured at their proportionate share of the acquiree’s identifiable net assets
at the acquisition date. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are
accounted for as equity transactions.
c.v Equity accounted investments
A joint venture is an arrangement in which the Group has joint control whereby the Group has rights to the net assets
of the arrangement, rather than rights to its assets and obligations for its liabilities. The financial statements include
the Group’s share of the total recognised gains and losses on an equity accounted basis subsequent to initial recognition
at cost, which includes transaction costs.
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.
Page 36
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Current tax is the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to
tax in respect of previous years.
Deferred tax expense represents the tax expense in respect of the future tax consequences of recovering or settling the
carrying amount of an asset or liability. Both are calculated using tax rates for each jurisdiction, enacted or substantially
enacted at the reporting date, and for deferred tax those that are expected to apply when the asset is realised or the
liability is settled.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:
arising on the initial recognition or assets or liabilities, other than on a business combination, that affect neither
accounting or taxable profit;
arising from the recognition of goodwill; and
relating to investments in subsidiaries to the extent that they will not reverse in the foreseeable future.
E. Property, Plant and Equipment
Each class of plant and equipment is carried at cost less any accumulated depreciation and impairment losses.
Plant and equipment are measured on the cost basis. The carrying amount of plant and equipment is reviewed annually
by Directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is
assessed on the basis of the expected net cash flows which will be received from the assets’ employment and
subsequent disposal. The expected net cash flows have been discounted to their present values in determining
recoverable amounts.
e.i Depreciation
The depreciable amount of all fixed assets is depreciated on a straight-line basis over the asset’s useful life to the
consolidated group commencing from the time the asset is held ready for use.
The useful lives used for each class of depreciable asset are:
Class of fixed asset
Mining Plant and Equipment
Motor Vehicles
Office Equipment
Computer Equipment and Software
Leasehold Improvements
Useful life
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.
Page 37
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
G.
Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on average costs
over the relevant period of production and includes expenditure in accumulating the inventories, production costs and
other costs incurred in bringing them to their existing location and condition. Stockpile tonnages are verified by periodic
surveys.
H. Overburden removal costs
Overburden and other mine waste materials are often removed during the initial development of a mine site in order
to access the mineral deposit. This activity is referred to as development stripping. The directly attributable costs are
initially capitalised as mine development costs. Capitalising of development stripping costs ceases at the time that
saleable mineral rights begin to be extracted from the mine.
Production stripping commences at the time that saleable materials begin to be extracted from the mine and normally
continues through the life of a mine. The costs of production stripping are capitalised to the cost of inventory, and
charged to the income statement upon sale of inventory in cost of goods sold.
I.
Development expenditure
When a mining project has been established as commercially viable and technically feasible, expenditure other than
that on land, buildings and plant equipment is capitalised under development expenditure. Development expenditure
costs include previously capitalised exploration and evaluation costs, pre-production development costs, development
excavation, development studies and other subsurface expenditure pertaining to that area of interest.
Costs related to surface plant and equipment and any associated land and buildings are accounted for as property, plant
and equipment. Development costs are accumulated in respect of each separate area of interest. Costs associated with
commissioning new assets in the period before they are capable of operating in the manner intended by management,
are capitalised. Development costs incurred after the commencement of production are capitalised to the extent they
are expected to give rise to a future economic benefit. Amortisation of carried forward exploration and development
costs is charged on a unit of production basis over the life of economically recoverable reserves.
When an area of interest is abandoned or the Directors decide it is not commercial or technically feasible, any
accumulated cost in respect of that area is written off in the financial period the decision is made. Each area of interest
is reviewed at the end of each accounting period and accumulated cost written off to the Statement of Comprehensive
Income to the extent that they will not be recoverable in the future.
Development assets are assessed for impairment if facts and circumstances suggest that the carrying amount exceeds
the recoverable amount. For the purpose of impairment testing, development assets are allocated to cash generating
units to which the development activity relates. The cash generating unit shall not be larger than the area of interest.
J.
Rehabilitation expenditure
The mining, extraction and processing activities of the Group give rise to obligations for site rehabilitation.
Rehabilitation obligations can include facility decommissioning and dismantling, removal or treatment of waste
materials, land rehabilitation and site restoration. The extent of work required and the associated costs are estimated
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.
Page 38
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
1.
K.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Segment Reporting
Segment results are reported to the Board of Directors (chief operating decision maker) and include items directly
attributable to a segment as well as those that can be allocated on a reasonable basis. Unless stated otherwise, all
amounts reported to the Board of Directors as the chief decision maker with respect to operating segments are
determined in accordance with accounting policies that are consistent with those adopted in the Annual Financial
Statements of the Company.
L.
Financial Instruments
l.i Recognition
Financial 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.
Page 39
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
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.
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.v 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.
Page 40
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
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.
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.
Page 41
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the year in
which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully
entitled to the award (“vesting date”). The cumulative expense recognised for equity-settled transactions at each
reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the number of
awards that, in the opinion of the Directors of the Company, will ultimately vest.
This opinion is formed based on the best available information at reporting date. No adjustment is made for the
likelihood of market performance conditions being met as the effect of these conditions is included in the determination
of fair value at grant date. No expense is recognised for awards that do not ultimately vest, except for awards where
vesting is conditional upon market condition. Where an equity-settled award is cancelled, it is treated as if it had vested
on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if
a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is
granted, the cancelled and new award are treated as if they were a modification of the original award.
O. Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it
is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the
reporting date.
P. Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within
short-term borrowings in current liabilities on the Statement of Financial Position.
Q. Revenue recognition
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
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
Page 42
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
1.
recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables
in the Consolidated Statement of Financial Position are shown inclusive of GST or VAT.
Cash flows are presented in the Consolidated Statement of Cash Flows a gross basis, except for the GST or VAT
component of investing and financing activities, which are disclosed as operating cash flows.
Trade and other payables
T.
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.
Leases
U.
At inception of a contract, the Group assesses if the contract contains or is a lease. If there is a lease present, a right-of-
use asset and a corresponding lease liability is recognised by the Group where the Group is a lessee. However, all
contracts that are classified as short-term leases (ie a lease with a remaining lease term of 12 months or less) and leases
of low-value assets are recognised as an operating expense on a straight-line basis over the term of the lease.
Initially, the lease liability is measured at the present value of the lease payments still to be paid at commencement
date. The lease payments are discounted at the interest rate implicit in the lease. If this rate cannot be readily
determined, the Group uses the incremental borrowing rate.
Lease payments included in the measurement of the lease liability are as follows:
fixed lease payments less any lease incentives;
variable lease payments that depend on an index or rate, initially measured using the index or rate at the
commencement date;
the amount expected to be payable by the lessee under residual value guarantees;
the exercise price of purchase options, if the lessee is reasonably certain to exercise the options;
lease payments under extension options, if lessee is reasonably certain to exercise the options; and
payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate
the lease.
The right-of-use assets comprise the initial measurement of the corresponding lease liability as mentioned above, any
lease payments made at or before the commencement date, as well as any initial direct costs.
The subsequent measurement of the right-of-use assets is at cost less accumulated depreciation and
impairment losses.
Right-of-use assets are depreciated over the lease term or useful life of the underlying asset, whichever is the shortest.
Where a lease transfers ownership of the underlying asset, or the cost of the right-of-use asset reflects that the Group
anticipates exercising a purchase option, the specific asset is depreciated over the useful life of the underlying asset.
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.
Page 43
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
1.
A discontinued operation is a component of an entity, being a cash-generating unit (or a group of cash generating units),
that either has been disposed of, or is classified as held for sale, and: represents a separate major line of business or
geographical area of operations; is part of a single coordinated plan to dispose of a separate major line of business or
geographical area of operations; or is a subsidiary acquired exclusively with the view to resale.
Impairment losses are recognised for any initial or subsequent write-down of an asset (or disposal group) classified as
held for sale to fair value less costs to sell. Any reversal of impairment recognised on classification as held for sale or
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.
Page 44
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
Z.
Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
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
Right of use assets
Total depreciation
Amortisation
Total
CONSOLIDATED
2020
$’000S
2019
$’000S
37,770
52,277
CONSOLIDATED
2020
$’000S
(1,172)
(502)
(1,674)
(57)
(1,731)
2019
$’000S
(907)
(18)
(925)
(76)
(1,001)
Page 45
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
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
2020
$’000S
2019
$’000S
(17,186)
(5,156)
24
(542)
5,674
-
-
-
4,031
5,806
8
17,151
26,996
4,535
1,361
38
1,299
(2,698)
-
-
-
3,611
6,043
8
12,202
21,864
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
Executive Directors
Senior Management
Mr G Robertson (Chairman)
Mr J Shedd (Managing Director/CEO)
Ms K Angel (Chief Financial Officer)
Mr T Wilson
Mr A Fraser
Mr D Marc Schwarz1
1Mr Marc Schwarz was appointed 31 July 2019
Page 46
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
5.
KEY MANAGEMENT PERSONNEL COMPENSATION (CONT’D)
KEY MANAGEMENT PERSONNEL COMPENSATION
Short-term employee benefits
Superannuation
Post-employment benefits
Performance rights
Total Compensation
2020
$
1,023,073
-
-
-
2019
$
906,387
-
-
-
1,023,073
906,387
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
2020
$’000S
2019
$’000S
195
195
-
-
-
195
195
-
-
-
Page 47
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
7. EARNINGS PER SHARE
2020
2019
Basic and diluted loss per share
Profit/(loss) from continuing operations attributable to the ordinary equity
holders of the Company
($11,615,000)
$3,461,000
Profit/(loss) from discontinued operations attributable to the ordinary equity
holders of the Company
(154,000)
(181,000)
Profit/(loss) attributable to the ordinary equity holders of the Company
($11,769,000)
$3,280,000
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
Profit/(loss) per share (cents) – basic and diluted from discontinued
operations
Profit/(loss) per share (cents) – basic and diluted
(3.00)
(0.04)
(3.04)
8.
INVENTORIES
Consumables, fuel and other equipment
Coal stock
Total
Less: Provision for impairment
Net carrying amount
CONSOLIDATED
2020
$’000S
624
1,108
1,732
(1)
1,731
0.85
(0.05)
0.80
2019
$’000S
926
1,278
2,204
-
2,204
Page 48
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
9. TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Other receivables
Related party receivables
Prepayments
Total
Less: Provision for impairment
Net carrying amount
Non-current
Other receivables
Less: Provision for impairment
CONSOLIDATED
2020
$’000S
4,321
486
138
735
5,680
(1,500)
4,180
218
(218)
-
2019
$’000S
5,077
370
138
885
6,470
(1,410)
5,060
214
(214)
-
Page 49
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
10. DISPOSAL GROUP HELD FOR SALE AND DISCONTINUED OPERATIONS
The Malawi Group was presented as a disposal group held for sale since the carrying value of the assets were fully
impaired as at 30 June 2016. In 2020 the Company continued to work to progress a sale with potential purchasers but
was not successful and the Malawi Group was no longer considered as available for sale. The mining license was also
relinquished and associated costs were written-off. The Malawi Group will subsequently be wound up.
As at 30 June 2019 the group was presented as a disposal group held for sale. As at 30 June 2020 the discontinued
operations group was stated at lower of carrying value and fair value and comprised the following assets and liabilities
Assets and Liabilities held for sale and discontinued operations
Current Assets
Property, plant and equipment
Mine development expenditure
Exploration expenditure
Inventories
Trade and other receivables
Less: Provision for impairment
Assets held for sale and discontinued operations
Current Liabilities
Trade and other payables
Employee benefits
Liabilities held for sale and discontinued operations
CONSOLIDATED
2020
$’000S
-
-
-
-
-
-
-
-
-
-
2019
$’000S
244
1,273
4
1
9
(1,531)
-
1,182
-
1,182
^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 24.
The Malawian subsidiaries earned no revenue and recorded a loss after tax of $78,000 for the year ended 30 June 2020,
and an additional provision of impairment amounting to $90,000.
Page 50
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
11. PROPERTY, PLANT AND EQUIPMENT
30 June 2020
Year ended 30 June 2020*
At 1 July 2019, net of accumulated
depreciation
Additions
Transfers
Depreciation charge
Effect of exchange rates (net)
At 30 June 2020, net of accumulated
depreciation
At 30 June 2020
At cost
Accumulated depreciation and impairment
Net carrying value
Office
Equipment
$’000
Mining Plant
and Equipment
$’000
Motor
Vehicles
$’000
Leasehold
$’000
Capital Work
in Progress
$’000
Software
$’000
Right of Use
Assets
$’000
368
9
20
(110)
43
330
1,240
(910)
330
6,372
67
-
(999)
315
5,755
11,315
(5,560)
5,755
418
-
-
(174)
11
255
1,241
(986)
255
437
-
72
(78)
18
449
778
(329)
449
666
-
(579)
-
-
87
87
-
87
10
-
-
-
2
12
488
(476)
12
244
1,902
487
(313)
(225)
2,095
2,495
(400)
2,095
Total
$’000
8,515
1,978
-
(1,674)
164
8,983
17,644
(8,661)
8,983
* Refer to Note 1(b) for adjustments recognised on adoption of AASB 16 on 1 July 2020.
$6.88m of Property, Plant and Equipment is held as collateral by KCB Bank of Tanzania in relation to loan facilities.
Page 51
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
11. PROPERTY, PLANT AND EQUIPMENT (CONT’D)
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
Year ended 30 June 2019
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
-
282
(658)
375
6,372
11,020
(4,648)
6,372
275
351
-
(105)
-
(112)
9
418
1,230
(812)
418
400
74
-
-
-
(53)
16
437
688
(251)
437
375
667
-
-
(376)
-
-
666
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 52
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
12. MINE DEVELOPMENT COSTS
Tancoal Mine
Opening balance
Mine development expenditure
Rehabilitation asset
Amortisation
Effect of exchange rates
Net carrying value
CONSOLIDATED
2020
$’000s
2019
$’000s
5,079
4,823
-
135
(57)
15
-
114
(76)
218
5,172
5,079
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$42 – US$45 per tonne
Long-term exchange rate of US$1:00: AUD$0.70
Discount rate of 20%
Revenue and cost growth rate of 5%
Coal reserves and resources
Based on the above assumptions at 30 June 2020 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.
13. EXPLORATION EXPENDITURE
Tancoal Energy Limited tenements
Opening balance
Exploration expenditure
Impairment
Effect of exchange rates
Net carrying value
CONSOLIDATED
2020
$’000s
2019
$’000s
722
47
(230)
15
554
636
59
-
27
722
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.
Page 53
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
14. INVESTMENTS
Investment in unlisted shares
Opening balance
Investment expenditure
Total
CONSOLIDATED
2020
$’000s
2019
$’000s
-
226
226
-
-
-
Investment by Intrafrican Resources Limited, a fully owned subsidiary registered in Mauritius in Intra Minerals Limited,
a company registered in Mauritius, which is the 95% owner of the Minas Do Lurio Gold Project in Mozambique.
Intrafrican Resources Limited owns 15% of the Project.
15. TRADE AND OTHER PAYABLES
Current
Trade payables
Related party payables
Accruals and other payables
Total
Non-current
Trade and other payables
CONSOLIDATED
2020
$’000s
10,034
1,255
9,507
20,796
11,209
2019
$’000s
5,623
220
9,411
15,254
-
Total
15,254
Amount owing by Tancoal energy Limited to Ministry of Mineral Tanzania for royalty and clearance fees on cost of
transport to customers premises for past years 2011 to 2014. Amount to be paid over four years A$15.84m (US$10.4m).
11,209
16. INTEREST BEARING LIABILITIES
Current
Secured loan facilities
Total
CONSOLIDATED
2020
$’000s
1,336
1,336
2019
$’000s
2,005
2,005
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 2020 was US$442,000 (2018:
US$692,000).
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
rate of 8% per annum, the balance payable at 30 June 2020 was US$351,000 (2019: US$648,000).
Page 54
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
16. INTEREST BEARING LIABILITIES (CONT’D)
16(b) Bank overdraft facility
The bank overdraft facility was US$0.9m, the balance payable at 30 June 2020 was A$1,287,000. 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 2020 was A$181,000 (2019: A$184,000).
17. LEASE LIABILITIES
Current
Lease liabilities
Hire purchase
Total
Non-current
Lease liabilities
Total
CONSOLIDATED
2020
$’000s
2019
$’000s
1,107
341
1,448
85
85
-
-
-
-
-
* In the previous year, the group only recognised lease assets and lease liabilities in relation to leases that were
classified as “finance leases” under AASB 117: Leases. The assets were presented in property, plant and
equipment and the liabilities as part of the group’s borrowings.
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 A$341,000 (2019:
A$334,000) was outstanding at 30 June 2019.
18. PROVISIONS
Non-current
Rehabilitation provision
Total
Page 55
CONSOLIDATED
2020
$’000s
887
887
2019
$’000s
803
803
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
18. PROVISIONS (cont’d)
The movement in provisions during the year are as follows:
2020
$000’s
Opening balance
Addition
Effect of exchange rates
Closing balance
Represented by
Current
Non-current
Closing balance
2019
$000’s
Opening balance
Addition
Effect of exchange rates
Closing balance
Represented by
Current
Non-current
Closing balance
Rehabilitation
Total
803
135
(51)
887
-
887
887
803
135
(51)
887
-
887
887
Rehabilitation
Total
662
114
27
803
-
803
803
662
114
27
803
-
803
803
Rehabilitation
The mining, extraction and processing activities of the Group give rise to obligations for site rehabilitation. Rehabilitation
obligations can include facility decommissioning and dismantling, removal or treatment of waste materials, land
rehabilitation and site restoration. The extent of work required and the associated costs are estimated based on
feasibility and engineering studies using current restoration standards and techniques. Provisions for the cost of each
rehabilitation programme are recognised at the time that environmental disturbance occurs.
Page 56
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
19. ISSUED CAPITAL
Balance at the
beginning of the year:
Shares issued
Share issue costs
Balance at the end of
the year
2020
Issue price
No. $ per share
2020
$’000s
2019
Issue price
No.
$ per share
387,724,030
69,590
387,724,030
-
-
-
-
-
-
-
-
-
-
2019
$’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
20. RESERVES
20(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 2020
20(b) Performance Rights reserve
Total Performance Rights reserve
2020
No.
2020
$’000s
2,216
2,216
2019
No.
2019
$’000s
2,216
2,216
CONSOLIDATED
2020
$’000s
795
2019
$’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 2020
20(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
Page 57
CONSOLIDATED
2020
$’000s
(899)
172
(727)
2019
$’000s
(1,584)
685
(899)
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
20. RESERVES (CONT’D)
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.
21. 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 (%)*
2020
Equity (%)*
2019
Intra Energy (Tanzania) Limited
Tanzania
Ordinary
Tancoal Energy Limited
Tanzania
Ordinary
Intrafrican Resources Limited
Mauritius
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
100%
70%
100%
85%
100%
100%
100%
100%
100%
90%
100%
100%
100%
70%
-
85%
100%
100%
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.
22. NON-CONTROLLING INTEREST
Total non-controlling interest
CONSOLIDATED
2020
$’000s
(11,202)
2019
$’000s
(5,739)
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.
Page 58
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
23. COMMITMENTS
23(a) Operating Commitments
Operating expenditure contracted for at the reporting date but not recognised as liabilities is as follows:
Tenement Leases Expenditure Payable
Less than 1 year
Between 2 and 5 years
Greater than 5 years
Total
2020
$’000s
302
895
-
1,197
2019
$’000s
550
1,182
-
1,732
23(b) Capital and Leasing Commitments
Finance lease liabilities committed to at the reporting date, recorded as liabilities, are as follows:
Lease commitments
Payables – minimum lease payments
Not later than 12 months
Between 12 months and 5 years
Minimum lease payments
Less: future finance charges
Present value of minimum lease payments
Operating lease commitments:
2020
$’000s
2019
$’000s
1,517
88
1,605
(72)
1,533
324
-
324
-
324
Non-cancellable operating leases contracted for but not recognised in financial statements were nil (2019:
$127,000).
Hire Purchase
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 $341,000 (2019:
$334,000) was outstanding at 30 June 2020.
24. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
The supplier of the hire purchase contract 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 2020.
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 lodged an appeal.
Other than the above, the Directors are not aware of any other contingent liabilities or contingent assets at 30 June
2020.
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
Page 59
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
24. CONTINGENT LIABILITIES AND CONTINGENT ASSETS (cont’d)
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.
25. 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.
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 60
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
25. SEGMENT REPORTING (CONT’D)
Australia Period
Ended
30 June 20
$’000
Australia Period
Ended
30 June 19
$’000
Africa
Period Ended
30 June 20
$’000
Africa
Period Ended
30 June 19
$’000
Elimination
Period Ended
30 June 20
$’000
Elimination
Period Ended
30 June 19
$’000
Consolidated
Period Ended
30 June 20
$’000
Consolidated
Period Ended
30 June 19
$’000
Geographical Segment
Revenue
Sales revenue
Inter-segment revenue
Total revenue
Net costs of production
Gross Profit
Other income
–
3,093
3,093
–
3,093
–
2,654
2,654
–
2,654
37,770
37,770
(29,308)
8,462
52,277
–
52,277
(38,581)
13,696
Other operating expenses
(1,725)
(1,909)
(20,866)
(5,673)
Profit/(loss) before impairment,
depreciation, amortisation, net
finance costs and tax
Impairment
Depreciation
Write-off goodwill
Amortisation
1,368
–
–
–
–
Results from operating activities
1,368
745
–
–
(73)
–
672
(12,404)
(687)
(1,674)
–
(57)
(14,822)
8,023
–
(925)
–
(76)
7,022
–
(3,093)
(3,093)
–
(3,093)
–
–
–
(2,654)
(2,654)
–
(2,654)
–
–
(3,093)
(2,654)
–
–
–
–
–
–
–
–
37,770
–
37,770
(29,308)
8,462
–
(22,591)
(14,129)
(687)
(1,674)
–
(57)
(3,093)
(2,654)
(16,547)
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 61
4,466
(159)
4,684
(142)
20,933
(78,432)
22,124
(60,651)
(4,231)
41,413
(4,748)
39,783
–
(471)
(17,018)
–
(17,018)
(168)
(17,186)
21,168
(37,178)
52,277
–
52,277
(38,581)
13,696
–
(7,582)
6,114
–
(925)
(73)
(76)
5,040
10
(325)
4,725
–
4,725
(194)
(1,921)
22,060
(21,010)
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
26. 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
Doubtful debts
Foreign exchange
(Reversal)/impairment of assets
Share of loss of equity-accounted investees
Transfer of overdraft to term loan
Finance costs
Write-off goodwill
Change in inventories
Change in receivables
Change in provisions
Change in trade payables and employee benefits
Change in current assets
Net cash provided in operating activities
27. SHARE BASED PAYMENTS
27(a) Shares and options
2020
$’000s
(17,186)
2019
$’000s
4,535
1,731
1,001
230
457
45
90
-
-
178
-
473
423
41
16,751
(1,272)
1,961
153
-
769
6
87
(1,187)
-
73
731
(2,728)
141
(680)
27
2,928
No shares or options were granted by the Company during the 2020 or 2019 years.
27(b) Performance rights
No Performance rights were issued in the 2020 or 2019 years.
28. SUBSEQUENT EVENTS
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.
29. RELATED PARTY TRANSACTIONS
Details relating to Key Management Personnel are disclosed in Note 5 and remuneration report contained in the
directors’ report.
2020
At 30 June 2020 a loan of US$150,000 (A$218,000) 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 2020.
At 30 June 2020, $115,000 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
Page 62
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
29. RELATED PARTY TRANSACTION (CONT’D)
Limited, for services provided in a prior year, related parties to Graeme Robertson. The companies are no longer
operating so the balances were fully impaired at 30 June 2020.
A company related to Graeme Robertson provides management services for subsidiary companies in Mauritius
and during 2020 the company provided services of US$9,000.
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 $341,000 was outstanding at 30
June 2020.
At 30 June 2020 an amount of $1.255m was owed to National Development Corporation (“NDC”) the 30% joint
venture partner in Tancoal Energy Limited for unpaid management fees.
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.
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
Liquidity Risk
Market risk i) Interest rate risk, ii) Foreign currency risk
This note presents information about the Group’s exposure to each of the above risks, their objectives, policies
and processes for measuring and managing risk, and the management of capital. Further quantitative disclosures
are included throughout this financial report.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management
framework.
Risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate
risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are
reviewed to reflect changes in market conditions and the Group’s activities. The Group, through their training
and management standards and procedures, aim to develop a disciplined and constructive control environment
in which all employees understand their roles and obligations.
30(a) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to
meet its contractual obligations, and arises principally from the Group’s receivables from customers and
investment securities.
Page 63
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
30. FINANCIAL RISK MANAGEMENT (CONT’D)
Exposure to credit risk
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s
maximum exposure to credit risk at the reporting date was:
Trade and other receivables
Cash and cash equivalents
Total
Trade and other receivables
2020
$’000s
4,180
322
4,502
2019
$’000s
5,060
724
5,784
Some of 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 2020
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
Current
Bank overdraft
1,287
1,287
1,287
Trade and other payables
32,005
32,005
20,796
Interest bearing liabilities
Lease liabilities
1,336
1,533
1,336
1,533
529
712
–
–
459
736
–
–
2,802
8,407
320
85
28
–
Total
36,161
36,161
23,324
1,195
3,207
8,435
–
–
–
–
–
Page 64
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
30. FINANCIAL RISK MANAGEMENT (CONT’D)
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
–
–
–
–
Cash and receivables
The following are the contractual maturities of financial assets including receivables.
30 June 2020
Financial assets
Cash
Trade and other receivables
Total
30 June 2019
Financial assets
Cash
Trade and other receivables
Total
CARRYING
AMOUNT
$’000S
322
4,180
4,502
CARRYING
AMOUNT
$’000S
724
5,060
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
322
4,180
4,502
322
4,180
4,502
–
–
–
–
–
–
–
–
–
–
–
–
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
5,060
5,784
724
5,060
5,784
–
–
–
–
–
–
–
–
–
–
–
–
30(c) Market risk
Market risk is the risk that changes in market prices, such as interest rates and equity prices will affect the
Group’s income or the value of its holdings of financial instruments. The objective of market risk management
is to manage and control market risk exposures within acceptable parameters, while optimising the return.
Page 65
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
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 2020
Financial assets
Cash and cash equivalents
Trade and other receivables
Total
Financial liabilities
Current
Bank overdraft
Trade and other payables
Interest bearing liabilities
Lease liabilities
Total
Non-current
Trade and other payables
Lease liabilities
Total
NET FINANCIAL ASSETS/ (LIABILITIES)
AVERAGE INTEREST
RATE %
FLOATING INTEREST
RATE %
0%
0%
–
–
–
–
–
–
–
–
–
–
–
–
–
8%
–
8%
10%
–
–
8%
–
–
TOTAL
$’000S
322
4,180
4,502
1,287
20,796
1,336
1,448
24,867
11,209
85
11,294
(31,659)
Page 66
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
30. FINANCIAL RISK MANAGEMENT (CONT’D)
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
Total
NET FINANCIAL ASSETS/ (LIABILITIES)
30. FINANCIAL RISK MANAGEMENT (CONT’D)
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)
The Group’s cash at bank and on hand and short term deposits had a weighted average floating interest rate
at year end of 0%. The Company currently does not engage in any hedging or derivative transactions to
manage interest rate risk.
Interest rate sensitivity
A sensitivity of 10% has been selected as this is considered reasonable given the current level of both short
term and long term interest rates. A 10% movement in interest rates at the reporting date would have
increased (decreased) equity and profit and loss by the amounts shown below. This analysis assumes that all
other variables, in particular foreign currency rates, remain constant.
30 June 2020
Financial assets
Cash and cash equivalents
Interest bearing liabilities
Lease liabilities
Total
PROFIT OR LOSS
EQUITY
10% INCREASE
$’000S
10% DECREASE
$’000S
10% INCREASE
$’000S
10% DECREASE
$’000S
–
(11)
(15)
(26)
–
11
15
26
–
(11)
(15)
(26)
–
11
15
26
Page 67
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
30. FINANCIAL RISK MANAGEMENT (CONT’D)
30 June 2019
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
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 and leases with Kanu Equipment. The foreign currency gains or losses arising from this risk are recorded
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
2020 would have decreased the net liabilities of the Tanzanian and Malawian subsidiaries by A$1.84m (2019:
decrease $0.15m). A 10% weakening 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$2.25m
(2019: decreased $0.18m).
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 2020 would have
decreased net interest bearing liabilities of the interest bearing loans and lease liabilities by A$0.26m (2019:
$0.30m). A 10% weakening of the Australian dollar against the United States dollar at 30 June 2020 would have
increased net interest bearing liabilities and lease liabilities by A$0.32m (2019: $0.30m).
The impact on profit or loss arising from changes in this currency risk variables would be taken to the Statement
of Comprehensive Income.
Page 68
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
30. FINANCIAL RISK MANAGEMENT (CONT’D)
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 69
For personal use only Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2020
31. PARENT ENTITY DISCLOSURES
Financial Position of Intra Energy Corporation Limited
Assets
Current Assets
Cash and cash equivalents
Trade and other receivables
Total Current Assets
Non-Current Assets
Investment in subsidiaries1
Investments
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
2020
$’000S
2019
$’000S
76
28
104
4,136
226
4,362
4,466
159
159
4,307
480
68
548
4,136
-
4,136
4,684
142
142
4,542
69,590
2,998
(68,281)
4,307
69,590
3,011
(68,059)
4,542
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 liabilities of $0.055m (2019: net current assets of $0.41m)
Financial Performance of Intra Energy Corporation Limited
Profit/(loss) for the year
Total Comprehensive Income
2019
$’000S
(222)
(222)
2019
$’000S
1,486
1,486
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 70
For personal use only ASX Additional Information
FOR THE YEAR ENDED 30 JUNE 2020
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 10 September 2020.
(a)
Distribution of Equity Securities
The numbers of shareholders, by size of holding, in each class of share are:
1
1,001
5,001
10,001
100,001
1,000
5,000
10,000
100,000
and over
LISTED ORDINARY SHARES
NUMBER OF
HOLDERS
9,232
228,114
821,274
13,002,687
373,662,723
10.55
10.42
13.53
40.60
24.90
100.00
387,724,030
78
77
100
300
184
739
NUMBER OF SHARES
0.00
0.06
0.21
3.35
96.37
100.00
The number of shareholders holding less than a marketable parcel of shares
are:
473
7,543,486
(b)
Twenty Largest Shareholders
The names of the twenty largest holders of quoted shares are:
LISTED ORDINARY SHARES
NUMBER OF
SHARES
PERCENTAGE OF
SHARES
115,762,065
29.86
21,576,237
19,097,855
12,314,982
11,362,194
10,064,230
9,312,303
9,058,389
8,835,770
8,731,766
8,474,297
8,319,000
7,975,390
6,850,625
6,250,000
6,245,368
5,205,305
4,399,702
4,135,843
3,500,000
5.56
4.93
3.18
2.93
2.60
2.40
2.34
2.28
2.25
2.19
2.15
2.06
1.77
1.61
1.61
1.34
1.13
1.07
0.90
287,471,321
100,252,709
387,724,030
74.14
25.86
100.00
1.
ASPAC MINING LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
2.
3. MR DAVID SCHWARTZ
4. MR DAVID JACOB SCHWARTZ & MRS MELANIE ANN SCHWARTZ
5.
6.
7.
ROTHSTEIN PTY LTD
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.
JAYANA SUPER PTY LTD
13. MARA SUPERANNUATION PTY LTD
14. MARA SUPERANNUATION PTY LTD
15. MR JOSHUA SAMUEL ALTIT
16. ROTHSTEIN PTY LTD
17.
INTRASIA CAPITAL PTE LTD
18. OZEA PTY LTD
19. MS AILEEN ROSAMUND PARIS
20. MR DAVID WILLIAM MC KAY & MRS DONNA MICHELLE MC KAY
TOTAL
BALANCE OF REGISTER
GRAND TOTAL
Page 71
For personal use only ASX Additional Information
FOR THE YEAR ENDED 30 JUNE 2020
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
30,012,837
PERCENTAGE OF
ORDINARY SHARES
33.93%
7.74%
AREA OF INTEREST
TENEMENTS
% INTEREST
Tanzania
Tancoal Energy Limited
Intra Energy Limited
ML439/2011, PL7391/2011, PL7620/2012,
PL7713/2012, PL8999/2013, ML608/2019,
ML609/2019, ML610/2019, PL11156/2007,
PL 11086/2016, PL 13996/2019
PL 110975/2016, PL10979/2016
Tanzacoal East Africa Mining Limited
PL10116/2014
70%
100%
85%
Page 72
For personal use only