2006 Annual General Meeting
Meeting Documents
Notice of Annual General Meeting & Explanatory Memorandum
Proxy Form for Annual General Meeting
Corporate Representative Certificate for Annual General Meeting
To be held on Thursday
19 October 2006 at the Celtic Club
48 Ord Street
West Perth, Western Australia
commencing at 11.00am WST
2006 Notice of Annual General Meeting
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2006 Notice of Annual General Meeting
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2006 Notice of Annual General Meeting
Explanatory Memorandum
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2006 Notice of Annual General Meeting
Explanatory Memorandum
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2006 Notice of Annual General Meeting
Explanatory Memorandum
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2006 Notice of Annual General Meeting
Explanatory Memorandum
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www.imdex.com.au
Contents
Imdex at a glance
Imdex 2006 Snapshot
Chairman’s Report
Managing Director’s Report
Director Profi les
Financial Report 2006
1
3
6
9
14
17
Registered Offi ce
Imdex Limited, ABN 78 008 947 813
Level 3, Redgum House
18 Richardson Street
West Perth, Western Australia, 6005
PO Box 1325
West Perth WA 6872
Telephone: (+61 8) 9481 5777
Facsimile: (+61 8) 9481 6527
Email:
Website: www.imdex.com.au
imdex@imdex.com.au
Imdex is listed on the
Australian Stock Exchange
under the ASX code IMD
Group Head Office
& Registered Office
Imdex Limited
Level 3, Redgum House
18 Richardson Street
WEST PERTH WA 6005
PO Box 1325
WEST PERTH WA 6872
Telephone: +61 8 9481 5777
Facsimile: +61 8 9481 6527
Email: imdex@imdex.com.au
Divisions/subsidiaries
Australian Mud Company Pty Ltd
5 Pitino Court
OSBORNE PARK WA 6017
PO Box 1141
OSBORNE PARK WA 6916
Telephone: +61 8 9445 4000
Facsimile: +61 8 9445 4040
Email: gweston@imdex.com.au
Samchem Drilling Fluids
& Chemicals Pty Ltd
31 Basalt Street
Alrode Ext 7
PO Box 167671
BRACKENDOWNS 1456
South Africa
Telephone: +2711 908 5595
Facsimile: +2711 908 5887
Email: samchem@acenet.co.za
Surtron Technologies Pty Ltd
5 Pitino Court
OSBORNE PARK WA 6017
PO Box 1130
OSBORNE PARK WA 6916
Telephone: +61 8 9445 4050
Facsimile: +61 8 9445 4060
Email: smunyard@imdex.com.au
Ace Drilling Products & Rentals
5 Pitino Court
OSBORNE PARK WA 6017
PO Box 1148
OSBORNE PARK WA 6916
Telephone: +61 8 9445 4020
Facsimile: +61 8 9445 4040
Email: mgregg@imdex.com.au
Reflex Instrument North America Ltd
70-C Mountjoy Street North,
Suite 510
Timmins, Ontario, Canada
P4N 4V7
Telephone: +1 877 235 2169
Facsimile: +1 705 235 2165
Email: reflexca@ntl.sympatico.ca
Reflex Instrument South America Ltda
Av, del Parque 4265, Piso 1
Huechuraba, Santiago, Chile
Telephone: +56 9 0783 593
Facsimile: +56 2 247 9504
Email:pvazquez@reflexsouthamerica.cl
Surtron Technologies Pty Ltd
5 Close Way
KALGOORLIE WA 6430
Telephone: +61 8 9091 9511
Facsimile: +61 8 9091 9522
Email: jsmith@imdex.com.au
Drillhole Surveying Instruments Pty Ltd T/A
Reflex Africa
P.O. Box 802, Sundowner, 2161
Unit F2, Metropolitan Park,
Wakis Ave, Strijdompark
Johannesburg, South Africa
Telephone: +27 11 792 0452
Facsimile: +27 11 792 5927
Email:jannie.leeuwner@reflexafrica.co.za
Reflex Instruments AB
P.O. Box 118
SE-Vallentuna, Sweden
Telephone: +46 8 511 80 610
Facsimile: +46 8 511 80 610
Email: info@reflex.se
Chardec Consultants Ltd
3 Hyde Close, The Street
Lewes
BN7 3PA
East Sussex
Telephone: +44 1273 483 800
Facsimile: +44 1273 483 900
Email: rich@chardec.co.uk
Surtron Technologies (UK) Ltd
22a Snowdon Place
Stirling
Scotland
FK8 2JN
Telephone: +44 1786 449 890
Email: jhunter@imdex.com.au
Representative Offices
Western Australia
Australian Mud Company Pty Ltd
5 Close Way
KALGOORLIE WA 6430
Telephone: +61 8 9021 2925
Facsimile: +61 8 9091 5925
Email: tmcwhinney@imdex.com.au
Ace Drilling Products & Rentals
5 Close Way
KALGOORLIE WA 6430
Telephone: +61 8 9021 2925
Facsimile: +61 8 9091 5925
Email: dmunro@imdex.com.au
Surtron Technologies Pty Ltd
Lot 1598 Willis Street
NEWMAN WA 6753
PO Box 681
NEWMAN WA 6753
Tel/Facsimile: +61 8 9175 1230
New South Wales
Australian Mud Company Pty Ltd
21 Illawarra Avenue
CARDIFF NSW 2285
Telephone: +61 2 4953 6165
Facsimile: +61 2 4953 6448
Email: tfuller@imdex.com.au
South Australia
Australian Mud Company Pty Ltd
20 Alexandra Place
ROSE PARK SA 5067
Telephone: +61 8 8364 4110
Facsimile: +61 8 8364 4151
Email: kbooth@imdex.com.au
Queensland
Australian Mud Company Pty Ltd
1/26 Neon Street
SUMNER PARK QLD 4074
PO Box 110
SUMNER PARK QLD 4074
Telephone: +61 7 3279 3199
Facsimile: +61 7 3279 3538
Email: amcbrisbane@imdex.com.au
Surtron Technologies Pty Ltd
1/26 Neon Street
SUMNER PARK QLD 4074
PO Box 110
SUMNER PARK QLD 4074
Telephone: +61 7 3279 2331
Facsimile: +61 7 3279 3495
Email: surtronec@imdex.com.au
International Sales
Australian Mud Company Pty Ltd
31 Koala Court, Little Mountain
CALOUNDRA QLD 4551
Telephone: +61 7 5437 0373
Facsimile: +61 7 5437 0886
Email: mskull@imdex.com.au
Imdex at a glance
Imdex Limited is Australia’s leading supplier of
drilling products and services to the mining, water
well and horizontal directional drilling industries
and is expanding its presence in the oil and
gas industry.
The Board’s continuing strategy is to transform a
diverse Australian company into a focused global
group providing drilling products and services
to the oil and gas, mining, water well and civil
industries.
The Board remains committed to its plan to build
value for Shareholders:
•
•
•
•
Continue operational earnings improvement
within Australia;
Move toward an increasing global presence;
Achieve an overall improvement in Group
fi nancial performance to make Imdex a
competitive investment in the Australian market;
and
Continue to translate the improved
performance into dividend income for our
Shareholders.
Global
operations
Eastern Europe
Sweden
Ghana
Tanzania
Zambia
China
Laos
Thailand
Philippines
Indonesia
South Africa
PNG
Australia
New Zealand
Chile
Peru
Canada
USA
Imdex 2006 Snapshot
Financial Performance
• Revenue from continuing operations increased by 67% to
$66.8 million in FY06 from $40.0 million in FY05;
• Earnings before Interest and Tax (EBIT) increased to $12.0 million
in FY06, from $5.5 million in FY05;
• Net profi t after tax (NPAT) increased by 91% to $8.0 million,
from $4.2 million in FY05.
Divisional Highlights
• The Australian Mud Company (AMC) traded strongly in FY06, delivering
47% of the Group’s revenue and an EBIT contribution of $5.2 million;
• Surtron Technologies (Surtron) off the back of its logging and Coal Bed
Methane (CBM) steering activities recorded 43% revenue and 27% EBIT
growth in FY06;
• Ace Drilling Supplies (Ace) benefi ted from the strong increases in the
resources sector and the introduction of the new electronic core orientation
tool, lifting revenue by 51% and EBIT by 162% in FY06;
• Samchem Drilling Fluids & Chemicals (Samchem) recorded turnover of
$10.4 million and EBIT of $0.6 million since its acquisition on 1 August
2005.
Delivering on its Strategy
• Operational and earnings improvement across all businesses in
FY06 with further strong growth forecast for FY07;
• Fully Franked Dividend of 1 cent per share paid on 30 March 2006
with a further 1 cent per share dividend due to be paid in October 2006;
• The purchase of Swedish-based Refl ex Group and United Kingdom-
based Chardec Consultants, effective 1 August 2006;
• The non-core Imdex Minerals was sold on 1 July 2005 for $6.3
million; and
• The business of Samchem, the South African muds and chemicals
company, was acquired effective from 1 August 2005.
2
Revenue from continuing operations
Revenue from Imdex Minerals: sold 1 July 2005
Total Revenue
Change in percentage - Total Revenue
Change in percentage - Revenue from continuing operations
Operating profi t before interest, tax,
depreciation & amortisation
Depreciation & amortisation
Earnings before Interest & Tax (normal operations only)
EBIT margin
Change in percentage - Total EBIT
Net interest expense
Operating profi t before tax
Income tax benefi t/(expense)
Net Profi t after Tax (normal operations only)
Change in percentage
Non-operational items
Sino Gas & Energy Limited value uplift
RTE/Imdex Joint Venture impairment
Tax effect of non-operational items
Net Profi t after Tax from Continuing Operations
Change in percentage
Profi t from discontinuing operations
Net Profi t for the Year
Change in percentage
Total Group EBIT
Change in percentage
FY06
($m)
66.8
-
66.8
43%
67%
12.2
(2.4)
9.8
15%
77%
(0.2)
9.6
(2.6)
7.0
114%
4.5
(2.3)
(1.2)
8.0
143%
-
8.0
91%
12.0
118%
FY05
($m)
40.0
6.8
46.8
FY04
($m)
33.4
6.4
39.8
6.9
(1.3)
(1.4)
5.5
12%
(0.5)
5.0
(1.7)
3.3
-
-
-
3.3
0.9
4.2
(1.9)
(3.2)
(0.6)
(3.8)
0.1
(3.7)
-
-
-
(3.7)
-
(3.7)
5.5
(3.2)
Basic Earnings per Share (cents)
6.07
3.66
(3.07)
Change in percentage
Net Assets
Change in percentage
66%
32.7
72%
19.0
18.1
Net Tangible Assets per Share (cents)
21.10
16.78
14.59
Change in percentage
26%
3
Imdex 2006 Snapshot continued
The Group is delivering strong revenue and earnings growth in all Divisions
Normalised* Group Revenue and EBIT
Three Year Trend
Normalised* Divisional Revenue
Three Year trend
$80
$70
$60
$50
$40
$30
$20
$10
$0
$35
$30
$25
$20
$15
$10
$5
)
S
N
O
I
L
L
I
M
(
E
U
N
E
V
E
R
)
S
N
O
I
L
L
I
M
(
S
T
E
S
S
A
T
E
N
$14
$12
$10
$8
$6
$4
$2
$0
($2)
($4)
)
S
N
O
I
L
L
I
M
(
T
I
B
E
)
S
N
O
I
L
L
I
M
(
E
U
N
E
V
E
R
$80
$70
$60
$50
$40
$30
$20
$10
$0
$41.8
$25.0
$23.2
$6.8
$16.9
FY05
FY06
$21.6
$6.4
$11.8
FY04
FY04
FY05
FY06
NORMALISED REVENUE
EBIT
DRILLING PRODUCTS & SERVICES
MINERALS PROCESSING
DRILLING FLUIDS & CHEMICALS
Strong growth in Net Assets
has enabled the Group to continue
its international expansion
Continued earnings growth
has enabled the commencement of a fully
franked dividend payment program
E
R
A
H
S
R
E
P
S
T
N
E
C
8
6
4
2
0
(2)
(4)
FY04
FY05
FY06
FY04
FY05
FY06
DIVIDENDS PER SHARE
EARNINGS PER SHARE
* Normalised revenue includes revenue from discontinued operations separately disclosed in FY05
4
“We have
delivered on
our strategy in
FY06”
The Imdex Group is Australia’s leading supplier of drilling products and services
to the mining, water well and horizontal drilling industries and is expanding it’s
presence in the oil and gas industry.
5
Chairman’s Report
It gives me great pleasure to report to you that the year ended
30 June 2006 (FY06) has been another very positive one for the
Imdex Group. The Imdex Group has delivered on the strategy
outlined at the 2005 Annual General Meeting and has taken
valuable steps to position itself as a successful global drilling
products and services company.
During the year, the Board implemented a strategy to build value
for you, our Shareholders, through:
•
•
•
Continued operational earnings improvement within Australia;
Moving toward an increasing global presence;
Achieving an overall improvement in Group fi nancial
performance to make Imdex a competitive investment in the
Australian market; and
•
Translating the improved performance into dividend income.
The Imdex Group was able to take advantage of continuing
strong conditions in the global resources and energy markets and
achieved a 67% increase in revenue from continuing operations
and a 91% increase in net profi t for the year, taking it to $8.0
million in FY06. This delivered earnings per share of 6.07 cents
(FY05: 3.66 cents per share) with a net tangible asset backing per
share of 21.10 cents (FY05: 16.78 cents per share).
The aim of focusing on our core businesses while establishing
a global presence has progressed well during the current year.
Notable milestones include the integration of the South African
drilling fl uids and chemicals company, Samchem, acquired with
effect from 1 August 2005 and fi nalisation of the sale of Imdex
Minerals on 1 July 2005.
The acquisition of Samchem has contributed positively to the
Imdex Group earnings during the eleven months and is very
strategic given the continuing uplift in exploration expenditure in the
resources and energy sectors in Africa generally. It also provides
some interesting diversifi cation through the development and sale
of environmental management products and chemicals used in the
clay brick manufacturing process.
As announced to the market, the Imdex Group has recently
acquired the Swedish-based Refl ex Group (Refl ex) and the United
Kingdom-based Chardec Consultants Limited (Chardec). Refl ex and
Chardec are leading developers and suppliers of borehole survey
equipment to the exploration, mining/quarrying and construction
industries globally. Their innovative technology offers cost saving
solutions through the use of electronic instruments to deliver survey
data accurately and in a timely fashion.
6
The Board decided to pay a
1 cent per share fully franked
interim dividend in respect
of the half year ended 31
December 2005 and is
pleased to be able to pay
a further 1 cent per share
fully franked fi nal dividend in
October 2006. The Board’s
goal of delivering a sustainable
and increasing dividend
stream, consistent with the
capital needs of the Company,
remains a high priority.
I would like to thank all our
employees, fellow Board
members and consultants for
their special efforts during
the year as it has taken much
hard work and dedication to
deliver the revenue and profi ts
achieved in FY06.
I would also like to thank all
Shareholders for their support
during the current year and
trust that this support will
continue as the Imdex Group
progresses toward establishing
a substantial global drilling
products and services
company.
I look forward to seeing many
of you at the forthcoming
Annual General Meeting to be
held in Perth on 19 October
2006.
Ian Burston
CHAIRMAN
Operational synergies and
access to cross sell product
and service opportunities
among international clients
are expected through the
acquisitions of Refl ex
and Chardec.
During the year, Directors
reappraised the role of the
Rashid Trading Establishment/
Imdex Saudi Arabian Joint
Venture in the light of other
business opportunities available
to the Group. The Directors
have decided, in accordance
with the introduction of
Australian Equivalents of
International Accounting
Standards (A-IFRS), to adopt
a conservative view of this
investment. Accordingly, the
balance of the investment and
the outstanding receivable
were written off. Nevertheless,
Imdex will pursue RTE for
the outstanding amount due
under the re-structure and any
recovered amounts will be
recorded as credits through the
income statement.
These acquisitions are
signifi cant in both their size
and nature. Following the
acquisition in August 2006,
the Imdex Group will have
a much expanded global
presence with access to new
clients and markets in North
America, South America and
South Africa. The acquisitions
are expected to generate
signifi cant additional EBIT in
FY07.
The Australian Mud Company
has continued to expand
its sales profi le both locally
and internationally and has
delivered record revenue
and profi t for the year.
Further expansion and
growth is expected in FY07
as the identifi cation and
implementation of synergies
with Samchem builds
momentum. The aim for
FY07 is to take advantage
of the signifi cant increase
in exploration expenditure
throughout Africa, Mexico,
Central and South America
by aggressively pursuing
opportunities in these countries
and regions.
Surtron Technologies has
continued to be a solid
performer for the year with
healthy increases in revenue.
All divisions within Surtron have
performed well with additional
growth forecast for FY07.
Ace Drilling Supplies has
experienced signifi cant growth
in FY06 in both the products
and rentals divisions. Ace is
aiming for increased global
growth with the international
roll-out of its patented electronic
core orientation tool.
7
header report cont’
“Our focus is to
continue to grow
internationally”
8
Managing Director’s Report
In a very active year, the Company made great progress at three
levels:
•
•
•
fi nancially, we raised net profi t from the ongoing business units by
143%;
operationally, we expanded all core businesses; and
strategically, we continued the global repositioning of the
Company.
As we commence the new fi nancial year, the business is stronger,
more profi table and has more growth potential.
Importantly, as we have extended our offshore presence, we have
added greatly to our skills and, as we have expanded our team of
people, we have improved our ability to deliver the high standards of
service demanded by our customers.
There were several highlights in the past year, including:
•
•
•
•
•
•
•
•
strong growth across all core businesses;
a rise in group sales from continuing operations of 67% to $66.8 million;
growth in earnings before interest and tax of 118% to $12.0 million;
an interim dividend payment of 1 cent per share and a 1 cent per share fi nal dividend to be paid in
October 2006;
agreements to acquire the Swedish-based Refl ex Group and the United Kingdom-based Chardec
Consultants;
integration of South African-based Samchem, acquired with effect from 1 August 2005;
fi nalisation of the sale of Imdex Minerals on 1 July 2005; and
repayment of all bank debt.
Refl ex and Chardec
The acquisitions of Refl ex and Chardec usher in a new phase in the development of the Imdex Group.
These acquisitions have furthered the Imdex strategy of establishing a global presence in its core
business of drilling products and services. They signifi cantly increase Imdex’s international reach.
The direct benefi ts of the acquisitions include access to new markets, technology and skills across a
range of geographic locations including Canada, Chile and South Africa. Additional synergies are also
expected as these acquisitions complement the existing Imdex businesses.
The direct and indirect benefi ts of these acquisitions are expected to add signifi cantly to the Company’s
EBIT in FY07.
The acquisition of Chardec was completed on 4 August 2006, with an effective date of 1 August
2006. The purchase price for Chardec of GBP6.8 million ($17 million) comprised a payment of
9
Managing Director’s Report continued
GBP2.5 million in cash at settlement and a further
GBP4.3 million to be paid over the following
three years.
The acquisition of Refl ex was completed on 10
August 2006 with an effective date of 1 August
2006. The purchase price of $25.4 million was
made up of a Convertible Note with a value
of $10.4 million and two cash payments, one
of $13 million at settlement and another of $2
million to be paid on 31 January 2007. The
Convertible Note bears interest at 8% per annum
and is convertible into 20.8 million Imdex shares
at 50 cents each at any time within two years
of the issue of the Note. Under the terms of the
Note, conversion will automatically occur upon
the Imdex share price reaching $1.00.
DRILLING FLUIDS and CHEMICALS
The Australian Mud Company Pty Ltd
(AMC)
AMC, accounting for 47% of total Imdex sales
and around half its operating profi t, provides
drilling products and services to the mining, oil
and gas, water well and horizontal directional
drilling industries. It traded strongly during the
year generating record sales and EBIT of $5.2
million.
AMC’s record trading results refl ect the continued
strength of the worldwide resources and energy
markets in FY06 which has led to strong growth
in exploration and development expenditure,
particularly in Africa and Asia.
Also important in AMC’s business outcome has
been the commitment of its management to
provide a superior service to its clients helping to
create a strong brand identity within the industry
in Australia and overseas.
While maintaining its high standards of service
to existing clients, AMC management will
provide an additional focus on a broader range
of international markets including Mexico and
Central and South America in the coming year.
A further priority in FY07 will be the ongoing
integration and growth of Samchem in Africa.
Samchem Drilling Fluids and Chemicals
(Pty) Ltd
The business of Samchem was acquired with
effect from 1 August 2005 and has been
progressively integrated into the Imdex Group
over the past year.
In its fi rst 11 months, Samchem’s turnover of
$10.4 million exceeded its budgeted revenue
by 16% offering encouraging signs for its future
growth prospects in the African exploration
drilling and oilfi eld markets. However, the
integration process has been more costly than
expected and Samchem’s EBIT of $0.6 million
was sharply lower than originally expected due to
higher than anticipated one-off integration costs.
Samchem has some outstanding business
prospects. Its share of the clay brick chemicals
market in South Africa has been rising. It has
the potential to export into other markets once
the business has achieved satisfactory market
penetration locally. The development and
introduction to the market of its environmental
management products continues and should
gain pace in FY07. These products are a natural
diversifi cation for Samchem as protection of the
environment is accorded a higher priority by its
customers.
10
DRILLING PRODUCTS and SERVICES
Surtron Technologies Pty Ltd (Surtron)
Surtron built on its improved FY05 trading performance with a further 43% increase in revenue and a
27% increase in EBIT in FY06.
Surtron provides geophysical logging, downhole surveying and directional drilling services. Geophysical
logging services are provided to BHP Billiton and Rio Tinto, Australia’s major iron ore producers.
Surtron also provides downhole survey services to the major gold producers operating in Australia and
directional drilling services to coal seam gas explorers and producers in Australia, the United States and
Europe.
Surtron’s results in FY06 refl ect the expanding output of these commodities driven by the strong demand
for metal and energy products in China, India and Japan and increases in global raw material prices.
Higher energy prices and new technologies are contributing to the viability of the coal seam gas
industry which is likely to play an increasingly important role in meeting future energy needs. Surtron has
provided directional drilling services to the Moranbah gas project in Queensland as well as a number of
emerging projects elsewhere in Australia. Early in FY07 Surtron successfully provided directional drilling
services to a new coal seam gas project in Scotland which should lead to further work. Additional work
in the United States is also expected.
Gold producers have been very active due to the strong gold price which has also fuelled increased
activity among the junior exploration companies. With capital markets more readily funding these
explorers, there has been increased demand for Surtron’s downhole surveying expertise.
Ace Drilling Supplies (Ace)
Ace markets drilling consumables and downhole motors and cameras to the drilling industry in Australia
and internationally. The introduction of its patented electronic core orientation tool as well as a general
upsurge in local and international drilling activity resulted in signifi cant increases in revenue and profi t for
Ace. Revenue grew by 51% to $11.2 million and EBIT grew impressively by 162% to $3.0 million.
Further increases in sales and profi t are expected as a result of broadening recognition of the quality
products in the Ace portfolio, wider geographic coverage and continuation of favourable trading
conditions in the resources sector.
11
Managing Director’s Report continued
In adjusting the value, Imdex has taken into account
factors which might have a bearing on the value
of SGE. An adjustment of $4.5 million was taken
through the income statement to refl ect the enhanced
value of this investment.
Company Outlook
Strong global natural resources and energy markets
are supporting continuing growth in all core business
units. A strong start to the new fi nancial year
among the ongoing business units is already being
enhanced by the acquisition of Refl ex and Chardec.
As the Chairman announced when he released our
fi nancial results in August, we are expecting growth
in operating revenue of approximately 45% in FY07
as well as further improvement in EBIT margins.
While these results would partly refl ect the strength
of international raw material and energy markets,
they could not be achieved without the commitment
of our highly skilled and growing team of people to
technological excellence and customer service as
they extend the global reach of the Company.
Bernie Ridgeway
MANAGING DIRECTOR
STRATEGIC INVESTMENTS
RTE/Imdex Joint Venture
The role of the Company’s Saudi Arabian Joint
Venture and the priority being accorded the business
changed during the year in the light of other
opportunities. The Board has therefore reviewed the
value of the Company’s investment.
Directors have decided to take a conservative
approach and write off the joint venture investment
balance and remaining amounts due from Rashid
Trading Establishment under the re-structure approved
by shareholders in 2004. Imdex will pursue
collection of the remaining US$650,000 due under
the re-structure agreement. Any amounts recovered
will be accounted for as a credit to the income
statement.
Sino Gas & Energy Limited (SGE)
Imdex holds an investment of 15 million shares in
SGE, an unlisted public company, engaged in the
Chinese energy and gas industry through three
Production Sharing Contracts (PSC’s) in the highly
prospective Ordos Basin in northern China.
Field operations involving drilling, fraccing and fl ow
testing predominantly tight gas sands are continuing
in the 5,500 square kilometre area of the PSC’s.
SGE currently intends to list on the Alternative
Investment Market of the UK Stock Exchange in
February 2007.
The newly adopted A-IFRS accounting standards
require Imdex to write up its investment in SGE from
cost to refl ect current market value as this investment
is classifi ed as being ‘held for trading’.
12
“Our Products
and Services
are exported
to the world”
13
Director Profi les
Mr Ian Burston
AM
Non Executive Chairman
Age: 71 years
Mr Burston holds a Diploma in Aeronautical Engineering and a Bachelor of Engineering
(Mechanical). He is a Fellow of the Institution of Engineers, Australia, a Fellow of the
Australasian Institute of Mining and Metallurgy and he is a Fellow of the Australian
Institute of Company Directors.
Mr Burston was appointed Chairman at the Annual General Meeting held on 22
November 2000.
Mr Burston has been the Managing Director of Hamersley Iron, the Chief Executive
Offi cer for Kalgoorlie Consolidated Gold Mines, the Managing Director and Chief
Executive Offi cer of Aurora Gold Ltd and the Managing Director of Portman Limited. Mr
Burston’s vast experience at the helm of public companies, both listed and unlisted, makes
him well qualifi ed to lead Imdex during this important growth phase of the Company.
Mr Bernard Ridgeway
B.Bus (ACCTG) ACA
Managing Director
Age: 52 years
Mr Ridgeway was appointed to the Board on 23 May 2000 and appointed Managing
Director effective from 3 July 2000.
He is a qualifi ed Chartered Accountant and a Member of the Institute of Chartered
Accountants in Australia and a Member of the Australian Institute of Company Directors.
Mr Ridgeway has been involved with a number of public and private companies for the
last 20 years as an Owner, Director or Manager. He embraces a hands-on management
style and has extensive experience and expertise in fi nance, administration, marketing
and business development.
Mr Ross Kelly
BE(Hons) FAICD
Non Executive Director
Age: 68 years
Mr Kelly graduated as an engineer from the University of Western Australia and has
worked in Australia and many overseas countries.
Mr Kelly was appointed to the Board on 14 January 2004.
Mr Kelly is a qualifi ed engineer, a fellow of the Institute of Company Directors, a Director
of Clough Limited and a commissioner with the Western Australian Football Commission.
He has previously been Chairman of Clough Limited, Sumich Group Limited, Orbital
Corporation Limited, Beltreco Limited and a Director of Aurora Gold Limited, PA
Consulting Services Ltd and the Fremantle Football Club.
He has specialised in the mining and heavy process industries and has consulted to many
of Australia’s major mining companies and the Western Australian Government. He has
also worked in the offshore gas, oil refi ning and steel industries.
Mr Kelly was previously a Councillor of the Australian Institute of Company Directors, and
a Member of the Advisory Board, Curtin Graduate School of Business.
14
Mr Kevin Dundo
B. Com, LLB
Non Executive Director
Age: 55 years
Mr Dundo practises as a lawyer in Perth. He was appointed to the Board on 14 January 2004.
He is also a Director of Intrepid Mines Ltd ASX: IAU (formerly NuStar Mining Corporation Limited).
Previous directorships include St Barbara Mines Limited (ASX: SBM) and Defi ance Mining
Corporation (listed on the Toronto Stock Exchange).
Mr Dundo gained a Bachelor of Commerce from the University of Western Australia and a Bachelor
of Laws from the Australian National University.
Mr Dundo specialises in the commercial and corporate areas (in particular mergers and acquisitions)
with experience in the mining sector, the service industry and the fi nancial services industry.
Mr Dundo is a Member of the Law Society of Western Australia, a Member of the Law Council
of Western Australia, a Fellow of the Australian Society of Certifi ed Practising Accountants and a
Member of the Australian Institute of Company Directors.
Mr Ivan Freeman
N.Dip Chem Tech, N.Dip Prod Eng
Non Executive Director
Age: 64 years
Mr Freeman is the Executive Chairman of the Iscosa group of companies and is based in
Johannesburg, South Africa.
Mr Freeman was appointed to the Board on 23 August 2005.
He holds advanced Diplomas in Chemical Technology and Production Engineering and has
completed several courses in business administration, supervisory management, marketing
and fi nance.
His career has focused mainly on mining and oil exploration related projects and he is well versed in
the use of chemical additives that improve the clay brick making process.
He is an Associate Member of the South African Clay Brick Association. Administrative and fi scal
disciplines form the corner stone of his management style.
Mr Stephen Lyons
B.Bus (ACCTG) ACA
Company Secretary
Age: 37 years
Mr Lyons is a qualifi ed Chartered Accountant and a Member of the Institute of Chartered Accountants
in Australia. He has an audit, corporate services and banking background.
He was previously the Company Secretary for the Australian operations of the Swiss based, Société
Générale de Surveillance (SGS) Group and has consulted to other private and public companies.
He was appointed Company Secretary on 19 November 2001.
15
A
“The Group is
well positioned
to benefi t from strong growth
in the global resources
market”
16
Financial Report 2006
Directors’ Report
Independent Audit Report
Directors’ Declaration
Auditors’ Independence Declaration
Corporate Governance Statement
Income Statement
Balance Sheet
Statement of Changes in Equity
Cash Flow Satement
Notes to the Financial Report
18
26
28
29
30
35
36
37
38
39
Additional Stock Exchange Information
82
17
Directors’ Report
The Directors of Imdex Limited (“Imdex” or “the Company”) present their report together with the annual Financial Report of the
Company and its Controlled Entities for the financial year ended 30 June 2006.
In order to comply with the provisions of the Corporations Act 2001, the Directors’ report as follows:
(a) Directors
The names and particulars of the Directors of the Company during or since the end of the financial year are:
Name
Role
Age
Particulars
Mr I F Burston
Independent, Non Executive Chairman
71
Mr B W Ridgeway
Managing Director
Mr R W Kelly
Independent, Non Executive Director
52
68
Mr K A Dundo
Independent, Non Executive Director
55
Mechanical Engineer
Member of the Audit and Compliance &
Remuneration Committees.
Director since November 2000.
Chartered Accountant
Director since May 2000.
Engineer
Member of the Audit and Compliance &
Remuneration Committees.
Director since 14 January 2004.
Practicing Lawyer
Chairman of the Audit and Compliance &
Remuneration Committees.
Director since 14 January 2004.
Mr H H Al-Merry
Non Executive Director
Mr I R Freeman
Non Executive Director
Mr J P O’Neil
Non Executive Director – Alternate Director
to Mr I R Freeman
44
64
59
President of Rashid Trading Establishment
(involved in a Joint Venture with Imdex, known
as the RTE/Imdex Joint Venture)
Director since April 2002.
Office vacated 18 August 2006.
Chemical Technology and Production Engineer
Director since 23 August 2005.
Muds and Drilling Fluids Engineer
Alternate Director since 23 August 2005.
Additional information on the Director’s experience and qualifications is set out under Director Profiles.
(b) Directorships of other listed companies
Directorships of other listed companies held by the Directors in the 3 years immediately before the end of the financial year are as
follows:
Name
Company
Position
Period of Directorship
Mr I F Burston
Aztec Resources Ltd
Mincor Resources NL
Aviva Corporation Ltd
Chairman and Chief Executive Officer
Non Executive Director
Non Executive Director
2004 – Current
2003 – Current
2003 – Current
Mr R W Kelly
Mr K A Dundo
Clough Limited
Clough Limited
Orbital Corp Ltd
Aurora Gold Limited
Non Executive Director
Chairman
Chairman and Non Executive Director
Non Executive Director
Since 1996
During 2002 – 2003
Resigned 21 August 2003
Resigned 5 February 2003
Intrepid Mines Ltd (formerly
NuStar Mining Corp Ltd)
St Barbara Mines Limited
Defiance Mining Corporation
Non Executive Director
2002 – Current
Non Executive Director
Non Executive Director
2002 – 2004
2003 – 2004
(c) Company Secretary
Mr S J Lyons
Chartered Accountant aged 37. Mr Lyons was appointed Company Secretary of Imdex Limited on 19 November 2001. He has an
audit, corporate services and banking background. Previously, he was the Company Secretary for the Australian operations of the
Swiss based, Société Générale de Surveillance (SGS) Group and has consulted to other private and public companies. Mr Lyons is a
Member of the Institute of Chartered Accountants in Australia.
18
Directors’ Report
(d) Directors’ Meetings
The following table sets out the number of Directors’ meetings (including meetings of committees of Directors) held during the financial
year and the number of meetings attended by each Director (while they were a Director or committee member). During the financial
year, seven Board meetings, three Audit and Compliance Committee and two Remuneration Committee meetings were held.
Board of Directors
Audit and Compliance
Committee
Remuneration Committee
Held
Attended
Held
Attended
Held
Attended
I F Burston
B W Ridgeway
H H Al-Merry
R W Kelly
K A Dundo
I R Freeman
7
7
7
7
7
6
6
7
-
7
7
5
3
-
-
3
3
-
2
-
-
3
3
-
2
-
-
2
2
-
2
-
-
2
2
-
(e) Directors’ Shareholdings
At the date of this report the Directors held the following interests in shares and options of the Company:
Directors
I F Burston
B W Ridgeway
H H Al-Merry
R W Kelly
K A Dundo
I R Freeman
J P O’Neil – alternate Director to Mr I R Freeman
Shares Held
Directly
Shares Held
Indirectly
Options Held
Directly
-
-
200,000
-
5,000,000
2,000,000
755,000
-
200,000
65,000
300,000
-
-
-
16,059,002
12,847,202
-
-
-
-
-
At the date of this report, the options on issue by the Company are disclosed at (g) below and in Note 31.
(f)
Remuneration Report
Remuneration policy for Directors and Executives
The Board seeks the approval of Shareholders in relation to the aggregate of Non Executive Directors’ remuneration and any options
that may be granted to Directors. The remuneration for Non Executive Directors is reviewed from time to time, with due regard to
current market rates. The remuneration for Non Executive Directors is not linked to the Company’s performance. Other than statutory
superannuation, no Non Executive Director is entitled to any additional benefits on retirement from the Company.
The Managing Director’s remuneration is determined by the Remuneration Committee with due regard to current market rates. The
Managing Director has a short term incentive bonus amounting to 20% of his cash remuneration package that is linked to the EBIT
performance of the Company. The balance of his remuneration package is not linked to the Company’s performance.
All specified Executives, and all staff of the Company, are subject to formal annual reviews of their performance. The remuneration of
specified Executives comprises a fixed monetary total, not linked to the performance of the Company, although bonuses related to the
performance of the Company may be agreed between that Executive and the Company from time to time. Refer table on page 21 for
further details.
19
Directors’ Report
Director and Executives details
The Directors of Imdex Limited during the year were:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Mr I F Burston (Non Executive Chairman);
Mr B W Ridgeway (Managing Director);
Mr R W Kelly (Non Executive Director);
Mr K A Dundo (Non Executive Director);
Mr H H Al-Merry (Non Executive Director), office vacated 18 August 2006;
Mr I R Freeman (Non Executive Director), appointed 23 August 2005; and
(vii) Mr J P O’Neil (Non Executive Director), Alternate to Mr I R Freeman, appointed 23 August 2005.
The Group Executives of Imdex Limited during the year were:
(i)
(ii)
Mr S J Lyons (Company Secretary);
Mr D L Kinley (Group Financial Controller);
(iii)
Mr G E Weston (General Manager: Australian Mud Company Pty Ltd, Surtron Technologies Pty Ltd and Ace
Drilling Supplies); and
(iv) Mr C S Munyard (Manager Surtron: Technologies Pty Ltd).
Elements of Director and Executive Remuneration
Remuneration packages contain the following key elements:
(i)
Short-term benefits – salary/fees, bonuses and non monetary benefits including the provision of motor vehicles and health
benefits;
(ii)
Post-employment benefits – including superannuation and prescribed retirement benefits;
(iii) Equity – share options granted under the Staff Option Scheme as disclosed in Note 31; and
(iv) Other benefits.
20
Directors’ Report
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21
Directors’ Report
Elements of remuneration related to performance
(i)
(ii)
(iii)
Managing Director: Of the cash remuneration package of the Managing Director, 20% is linked to the performance of the
Company by way of short term cash incentives. In addition options have been the method by which Imdex has sought to reward
key executives in a manner linked to the performance of the Company. Any such options to the Managing Director, or any
Director, require the approval by Shareholders in General Meeting.
Non Executive Directors: The remuneration of Non Executive Directors is not linked to the performance of the Company. The
maximum total remuneration payable to Non Executive Directors was approved by Shareholders at the 2003 Annual General
Meeting and is currently $300,000. In the current year remuneration to Non Executive Directors totalled $235,163, including
statutory superannuation. The Board determines the apportionment of directors’ fees between each Director.
Group Executives: The remuneration of specified Executives generally comprises a fixed monetary total that is not linked to the
performance of the Company. Bonuses related to the performance of the Company may, however, be agreed between that
Executive and the Company from time to time. In addition, subject to a qualifying period, Group Executives may be issued
options in the Staff Option Plan at the discretion of the Board. The percentage of the value of remuneration that consisted of
options for each Executive is set out below.
Value of options issued to Directors and Executives
The following table discloses the value of options granted, exercised or lapsed during the year:
Options
Granted(i)
Options
Exercised
Options Lapsed
Value at grant
date
Value at
exercise date
Value at time of
lapse
Total value of
options
granted,
exercised and
lapsed
Value of
options
included in
remuneration
during the
year(ii)
Percentage of
remuneration
for the year
that consisted
of options
$
$
$
$
$
%
B W Ridgeway
25,760
S J Lyons
D L Kinley
3,600
2,400
G E Weston
24,000
-
-
-
-
C S Munyard
1,800
6,167
-
-
-
-
-
25,760
25,760
3,600
2,400
3,600
2,400
24,000
24,000
7,967
1,800
7.5%
2.5%
1.7%
7.6%
0.8%
(i)
(ii)
The total value of options granted during the year is calculated based on the fair value of the option at grant date multiplied by
the number of options issued during the year;
The total value of options included in remuneration for the year is calculated in accordance with Accounting Standard AASB
1046 “Director and Executive Disclosures by Disclosing Entities”, as amended by Accounting Standard AASB 1046A. As the
options immediately vest the full value of the option is recognised in remuneration in the current year.
(g) Share options
(i)
Share options granted to Directors and Executives
During or since the end of the financial year an aggregate of 3,325,000 options were granted to the following directors and executives of
the Group. No options were granted during or since the end of the financial year to Non-Executive Directors.
22
Directors’ Report
Name
B W Ridgeway
S J Lyons
D L Kinley
G E Weston
C S Munyard
Number of
options granted
Issuing entity
Number of ordinary
shares under option
2,000,000
Imdex Limited
2,000,000
150,000
Imdex Limited
100,000
Imdex Limited
150,000
100,000
1,000,000
Imdex Limited
1,000,000
75,000
Imdex Limited
75,000
(ii)
Share options on issue at year end
Details of unissued shares or interests under option are:
Issuing
Entity
Imdex
Limited
Imdex
Limited
Class of option
Class of
shares
Exercise
price of
option
Issue date of
option
Expiry date of
option
Key terms
of option
Number of
shares under
option
Staff Share
Options
Staff Share
Options
Ordinary
35 cents
1 Feb 2006
31 Jan 2011
(aa)
2,660,000
Ordinary
20 cents
1 Aug 2004
31 Jul 2009
(aa)
3,048,333
Imdex
Limited
Corporate
Advisor Options
Imdex
Limited
Corporate
Advisor Options
Imdex
Limited
Corporate
Advisor Options
Imdex
Limited
Managing
Director Options
Ordinary
20 cents
23 Dec 2004
31 Jul 2009
(bb)
100,000
Ordinary
20 cents
23 Dec 2004
31 Oct 2007
(cc)
2,000,000
Ordinary
35 cents
23 Dec 2004
31 Oct 2007
(dd)
1,000,000
Ordinary
30 cents
15 Sep 2005
14 Sep 2010
(ee)
2,000,000
(aa) exercisable one year after the date of issue, in one-third lots each year thereafter;
(bb) exercisable at any point prior to expiry;
(cc) exercisable at any point prior to expiry. The condition that Imdex shares trade at 30 cents for 5 consecutive trading days has
now been achieved;
(dd) exercisable at any point prior to expiry; and
(ee) exercisable at any point from 2 years after date of issue until expiry.
(iii) Share options exercised during the year
C S Munyard exercised 25,000 options during the year and received 25,000 ordinary shares. The exercise price was 20c per option. No
unpaid amounts remain on these shares.
(h) Principal Activities
The Consolidated Entity’s principal continuing activities during the course of the financial year were the manufacturing and sale of a
range of drilling products and services.
23
Directors’ Report
(i)
Review of Operations
A review of the operations for the financial year together with future prospects is contained in the Chairman’s Report, the Managing
Director’s Review and the Financial Report.
(j)
Dividends
A fully franked interim dividend of 1 cent per ordinary share was paid on 30 March 2006 to shareholders registered on 23 March 2006.
In the prior year no dividends were declared or paid. Since 30 June 2006 the Directors have declared a fully franked final dividend of 1
cent per ordinary share, the financial effect of which has not been reflected in the Financial Report.
(k) Changes in State Of Affairs
During the financial year, there were no significant changes in the state of affairs of the Consolidated Entity other than referred to in the
Financial Statements or notes thereto.
(l)
Subsequent Events
Effective 1 August 2006 the Company acquired 100% of the shares of the Swedish-based Reflex Group (Reflex) and the United
Kingdom-based Chardec Consultants Limited (Chardec).
The purchase price for Reflex is $25.4 million to be settled $15 million in cash at settlement and the issue of a convertible note with a
face value of $10.4 million. The convertible note carries the right to convert into 20.8 million Imdex shares at a price of 50 cents per
share at any time until 30 June 2008. The coupon rate will be 8% per annum. Under the terms of the agreement, conversion will be
triggered automatically by the Imdex share price reaching $1 per share. Any Imdex shares issued under this note prior to 30 June 2008
will be held in voluntary escrow until 30 June 2008.
The purchase price for Chardec is GBP6.8 million (approximately $17 million) to be satisfied through the payment of GBP2.5 million in
cash at settlement and a further GBP4.3 million over three years from date of settlement.
Apart from these matters, no other matter or circumstance has arisen since the end of the financial year that has significantly affected or
may significantly affect the operation of the Consolidated Entity, the results of those operations, the financial position or the state of
affairs of the Consolidated Entity in future financial years.
Additional disclosures with respect to these acquisitions are impracticable at this stage as the fair value at acquisition balance sheet and
other matters relating to the acquisitions are still being finalised.
Subsequent to year end the Directors declared a 1 cent per share fully franked dividend with a record date of 10 October 2006 and a
payment date of 13 October 2006. The effect of this dividend has not been reflected in this financial report.
(m) Future Developments
Disclosure of information regarding likely developments in the operations of the Consolidated Entity in future financial years and the
expected results of those operations is likely to result in unreasonable prejudice to the Consolidated Entity. Accordingly, this information
has not been disclosed in this report.
(n) Environmental Regulations
In prior years the Company, through Imdex Minerals, was subject to onerous environmental regulations. As described in this Financial
Report, Imdex Minerals was sold on 1 July 2005.
(o) Non-audit services
The Directors are satisfied that the provision of non-audit services, during the year, by the auditor (or by another person or firm on the
auditor’s behalf) is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in Note 4 to
the Financial Report.
(p) Auditor’s Independence Declaration
The auditor’s independence declaration is included on page 29 of the Financial Report.
24
Directors’ Report
(q)
Indemnification of Officers and Auditors
During the financial year, the Company paid a premium in respect of a contract insuring the Directors of the Company, the Company
Secretary, and all Executive Officers of the Company and of any related body corporate against a liability incurred as such a Director,
Secretary or Executive Officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of
the nature of the liability and the amount of the premium.
The Company has not otherwise, during or since the end of the financial year, indemnified or agreed to indemnify an officer or auditor of
the Company or of any related body corporate against a liability incurred as such an officer or auditor.
(r)
Rounding Off of Amounts
The Company is a Company of the kind referred to in ASIC Class Order 98/0100, dated 10 July 1998, and in accordance with that Class
Order amounts in the Directors’ report and the financial report are rounded off to the nearest thousand dollars.
Signed in accordance with a resolution of the Directors made pursuant to S.298(2) of the Corporations Act 2001.
On behalf of the Directors
Mr I F Burston
Chairman
Mr Ian Burston
Chairman
PERTH, Western Australia, 25 August 2006.
25
Independent Audit Report
Independent audit report to the members
of Imdex Ltd
Scope
t t
I d
The financial report and directors’ responsibility
d t
dit
th
b
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Woodside Plaza
Level 14
www.deloitte.com.au
240 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
DX 206
Tel: +61 (0) 8 9365 7000
Fax: +61 (0) 8 9365 7001
www.deloitte.com.au
The financial report comprises the balance sheet, income statement, cash flow statement, statement of
changes in equity, a summary of significant accounting policies and other explanatory notes and the
directors’ declaration for both Imdex Ltd (the company) and the consolidated entity, for the financial
year ended 30 June 2006 as set out on page 28 and pages 35 to 81. The consolidated entity comprises
the company and the entities it controlled at the year’s end or from time to time during the financial
year.
The directors of the company are responsible for the preparation and true and fair presentation of the
financial report in accordance with Accounting Standards in Australia and the Corporations Act 2001.
This includes responsibility for the maintenance of adequate financial records and internal controls
that are designed to prevent and detect fraud and error, and for the accounting policies and accounting
estimates inherent in the financial report.
Audit approach
We have conducted an independent audit of the financial report in order to express an opinion on it to
the members of the company. Our audit has been conducted in accordance with Australian Auditing
Standards to provide reasonable assurance whether the financial report is free of material
misstatement. The nature of an audit is influenced by factors such as the use of professional
judgement, selective testing, the inherent limitations of internal controls, and the availability of
persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material
misstatements have been detected.
We performed procedures to form an opinion whether, in all material respects, the financial report is
presented fairly in accordance with Accounting Standards in Australia and the Corporations Act 2001
so as to present a view which is consistent with our understanding of the company’s and the
consolidated entity’s financial position, and performance as represented by the results of their
operations, their changes in equity and their cash flows.
Our procedures included examination, on a test basis, of evidence supporting the amounts and other
disclosures in the financial report, and the evaluation of accounting policies and significant accounting
estimates made by the directors.
While we considered the effectiveness of management’s internal controls over financial reporting
when determining the nature and extent of our procedures, our audit was not designed to provide
assurance on internal controls.
Liability limited by a scheme approved under Professional Standards Legislation.
26
Independent Audit Report
The audit opinion expressed in this report has been formed on the above basis.
Audit Opinion
In our opinion, the financial report of Imdex Ltd is in accordance with the Corporations Act 2001,
including:
(a)
giving a true and fair view of the company’s and consolidated entity’s financial position as at 30
June 2006 and of their performance for the year ended on that date; and
(b)
complying with Accounting Standards in Australia and the Corporations Regulations 2001.
DELOITTE TOUCHE TOHMATSU
Keith Jones
Partner
Chartered Accountants
Perth, 25 August 2006
27
Directors’ Declaration
The Directors declare that:
(a)
(b)
in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable;
in the Directors’ opinion, the attached Financial Report and notes thereto are in accordance with the Corporations Act 2001,
including compliance with accounting standards and giving a true and fair view of the financial position and performance of the
Consolidated Entity; and
(c)
the Directors have been given the declarations required by s.295A of the Corporations Act 2001.
At the date of this declaration, the Company is within the class of companies affected by ASIC Class Order 98/1418. The nature of the
deed of cross guarantee is such that each company which is party to the deed guarantees to each creditor payment in full of any debt in
accordance with the deed of cross guarantee.
In the Directors’ opinion, there are reasonable grounds to believe that the Company and the companies to which the ASIC Class Order
applies, as detailed in note 23 to the Financial Report will, as a group, be able to meet any obligations or liabilities to which they are, or
may become, subject by virtue of the deed of cross guarantee.
Signed in accordance with a resolution of the Directors made pursuant to s. 303(5) for the Corporations Act 2001.
Dated at Perth, 25 August 2006.
Ian F Burston
Chairman
28
Auditors’ Independence Declaration
The Board of Directors
Imdex Ltd
Level 3 Redgum House
18 Richardson Street
WEST PERTH WA 6005
25 August 2006
Dear Board Members
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Woodside Plaza
Level 14
240 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
DX 206
Tel: +61 (0) 8 9365 7000
Fax: +61 (0) 8 9365 7001
www.deloitte.com.au
Imdex 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 Imdex Limited.
As lead audit partner for the audit of the financial statements of Imdex Limited for the
financial year ended 30 June 2006, I declare that to the best of my knowledge and belief,
there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation
to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
Keith Jones
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
29
Corporate Governance Statement
(a) ASX Governance Principles and ASX Recommendations
The Australian Stock Exchange Corporate Governance Council sets out best practice recommendations, including corporate
governance practices and suggested disclosures. ASX Listing Rule 4.10.3 requires companies to disclose the extent to which they
have complied with the ASX recommendations and to give reasons for not following them.
Unless otherwise indicated the best practice recommendations of the ASX corporate Governance Council, including corporate
governance practices and suggested disclosures, have been adopted by the Company for the full year ended 30 June 2006. In addition,
the Company has a Corporate Governance section on its website: www.imdex.com.au (under the “Investor” heading) which includes the
relevant documentation suggested by the ASX Recommendations.
The extent to which Imdex has complied with the ASX Recommendations during the year ended 30 June 2006, and the main corporate
governance practices in place are set out below.
(b) Principle 1: Lay solid foundation for management and oversight
The Board has implemented a Board Charter that formalises the functions and responsibilities of the Board. The Charter is published
on the Company’s website.
(c) Principle 2: Structure the Board to add value
Imdex’s Board structure is consistent with the ASX Recommendations on Principle 2, with the exception that it does not have a separate
nomination committee for the reasons detailed below.
In addition, excluding Mr J P O’Neil who is an alternate Director for Mr I R Freeman, the Board currently has six Directors, three of
whom are considered independent. Despite not having a “majority” of independent Non Executive Directors, the structure of the Board
is considered appropriate and adequate at the current time, for the Company’s operations.
(i) Board Structure
The Board consists of a Non Executive Chairman, four Non Executive Directors and one Executive Director.
In accordance with the Company’s Constitution the minimum number of Directors is three. There is no maximum number, although it
would be expected that the optimal number of Directors would be five or six.
The names of the Directors of the Company in office at the date of this Statement are set out in the Directors’ Report and further details
concerning the skills, experience, expertise and term of office of each Director is set out in the Director’s Profiles in the first section of
the Annual Report.
(ii) Board Independence
Directors are expected to bring independent judgement to bear in the decision making of the Board. To facilitate this, each Director has
the right to seek independent legal advice at the Consolidated Entity’s expense with the prior approval of the Chairman, which may not
be unreasonably withheld.
In assessing Director independence, materiality has been determined from both a quantitative and qualitative perspective. An amount
of over 5% of turnover is considered material. Similarly, a transaction of any amount, or a relationship, is deemed material if knowledge
of it impacts, or may impact, the Shareholders’ understanding of the Director’s performance. The Board has conducted a review of each
Director’s independence and reports as follows:
30
Corporate Governance Statement
Director
Mr I F Burston,
Non Executive Chairman
Mr B W Ridgeway,
Managing Director
Mr H H Al-Merry,
Non Executive Director
Mr R W Kelly,
Non Executive Director
Mr K A Dundo,
Non Executive Director
Mr I R Freeman,
Non Executive Director
Assessment
Existence of any matters contained in
ASX Recommendation 2.1 affecting Independence
Independent
Nil
Not Independent
Managing Director
Not Independent
Mr Al-Merry is the principal of Rashid Trading Establishment
which was involved as a Joint Venture partner with the
Company in the Middle East.
Independent
Independent
Nil
Nil
Not Independent
Mr Freeman is a major shareholder, having an indirect interest
in 16,059,002 shares of the Company.
Mr J P O’Neil,
Alternate Director to Mr I R Freeman
Not Independent
Mr O’Neil is a major shareholder, having an indirect interest in
12,847,202 shares of the Company.
(iii) Board Nomination
The Board does not have a separate nomination committee and, given the Company’s size, does not intend to form such a committee.
However, the composition of the Board is determined using the following principles:
•
•
•
The Board should comprise a majority of independent, Non Executive Directors with a broad range of experience, skills and
expertise;
The Chairman of the Board should be an independent, Non Executive Director; and
The roles of the Chairman and the Managing Director should not be exercised by the same individual.
(iv) Procedure for the selection and appointment of new Directors to the Board
The Company has published on its website, procedures for the selection and appointment of new Directors to the Board. The Company
also has terms and conditions which govern the appointment of Non Executive Directors. These are subject to the Company’s
Constitution and the Corporations Act 2001, and cover: appointment, retirement, Corporate Governance, remuneration, Board meetings,
and Board Committees.
The Board does not impose on Directors an arbitrary time limit on their tenure. Under the Company’s Constitution and the ASX Listing
Rules however, each Director must retire by rotation within a three year period following their appointment. In such cases, the Director’s
nomination for re-election should be based on performance and the needs of the Company.
(d) Principle 3: Promote ethical and responsible decision-making
(i) Code of Conduct
The Company has developed a Code of Conduct that applies to all employees, officers and Directors of the Company. The Code
addresses matters relevant to the Company’s legal and other obligations to its Shareholders and covers: the way in which we must
discharge our duties; compliance with laws; conflicts of interest; confidentiality; insider trading; the use of the Company’s resources and
the environment, health and safety.
The Code is published on the Company’s website.
(ii) Share Trading Policy
The Board has developed a Share Trading Policy that restricts Directors and Senior Management to trading in the Company’s shares
during the one month periods following the annual and half yearly results announcements and the Annual General Meeting.
At all other times the Chairman must be approached, prior to trading, to determine whether trading at that particular time is appropriate.
The Policy also reminds other staff of the laws applying to insider trading and stipulates that employees must not engage in short term
trading of Imdex’s shares.
31
Corporate Governance Statement
B
Each of the Directors has signed an agreement requiring them to provide immediate notification to the Company of any changes in
securities held, or controlled, by the Director. The Company makes an immediate notification to the ASX providing details of any
changes in a Director’s shareholding.
The Policy is published on the Company’s website.
(e) Principle 4: Safeguard integrity in financial reporting
(i) Statement by the Managing Director and Group Financial Controller
The Managing Director and the Group Financial Controller have signed a declaration to the Board attesting to the fact that the 2006
Annual Financial Report presents a true and fair view, in all material respects, of the Company’s financial condition and operational
results and are in accordance with relevant accounting standards.
(ii) The Audit and Compliance Committee
The Audit and Compliance Committee consists of three independent Non Executive Directors and operates under a formal charter
approved by the Board. The Charter is published on the Company’s website.
The Committee is chaired by an independent Chairperson who is not the Chairman of the Board of Directors.
The role of the Committee is to advise on the establishment and maintenance of a framework of internal control, risk management
protocols and appropriate ethical standards for the management of the Company. It also gives the Board assurance regarding the
quality and reliability of financial information prepared for use by the Board in determining policies for inclusion in Financial Statements.
The members of the Audit Committee during the year and at the date of this Statement were:
Mr K A Dundo (Chairman);
Mr I F Burston; and,
Mr R W Kelly.
The experience and qualifications of each committee member is set out in the Directors’ Profiles in the first section of the Annual Report.
The Company Secretary acts as secretary of this Committee.
The external auditors, the Managing Director and the Group Financial Controller are invited to Audit Committee meetings at the
discretion of the Committee. The Audit Committee met three times during the year as set out in the Directors’ Report.
(iii) External Auditors
The Board reviews the performance, skills, cost and other matters when assessing the appointment of external auditors. This review is
generally undertaken at the completion of the preparation of the Annual Financial Report and involves discussions with the auditors and
the Consolidated Entity's senior management. Information concerning the selection and appointment of external auditors is published on
the Company’s website.
The external auditors are invited to attend the Annual General Meeting of the Company and to be available to answer questions from
Shareholders.
(f) Principle 5: Make timely and balanced disclosure
(i) Continuous disclosure policies and procedures
The Company has developed procedures to ensure that it complies with the disclosure requirements of the ASX Listing Rules. The
procedures are published on the Company’s website.
The procedures set out who is responsible for determining whether information is of a type or nature that requires disclosure, the Boards
role in reviewing the information disclosed to ASX and the procedures for ensuring that the information is released to ASX.
All information disclosed to the ASX is published on the Company’s website as soon as practicable.
(g) Principle 6: Respect the rights of Shareholders
Shareholders Communications Strategy: The Board aims to ensure that Shareholders are informed of all major developments affecting
the Consolidated Entity's state of affairs. Information is communicated to Shareholders through:
32
B
Corporate Governance Statement
(i) the Annual Report distributed to all Shareholders (unless a Shareholder has specifically requested not to receive the Report). The
Board ensures that the Annual Report includes relevant information about the operations of the Consolidated Entity during the year,
changes in the state of affairs of the Consolidated Entity and details of future developments, in addition to the other disclosures required
by the Corporations Act 2001;
(ii) the Half-Yearly Report which contains summarised financial information and a review of the operations of the Consolidated Entity
during the period. Half-Year Financial Report prepared in accordance with the requirements of Accounting Standards and the
Corporations Act 2001 are lodged with the Australian Securities & Investments Commission and the Australian Stock Exchange. The
Half-Year Financial Report is sent to any Shareholder who requests them;
(iii) regular reports released through the ASX and the media;
(iv) proposed major changes in the Consolidated Entity, which may impact on share ownership rights are submitted to a vote of
Shareholders; and
(v) the Board encourages full participation by Shareholders at the Annual General Meeting to ensure a high level of accountability and
identification with the Consolidated Entity's strategy and goals. Important issues are presented to the Shareholders as single
resolutions. The Shareholders are responsible for voting on the re-appointment of Non Executive Directors.
Further information concerning the Company and the full text of the various announcements and reports referred to above are available
on the Company’s website: www.imdex.com.au. Further information can also be obtained by emailing the Company at:
imdex@imdex.com.au and Shareholders may register on the Company’s website to receive automatic notification of ASX
announcements.
The auditor is also invited to the Company’s Annual General Meetings and is available to answer Shareholders questions concerning
the conduct of the audit.
The Company’s Shareholder Communications Strategy is published on the Company’s website.
(h) Principle 7: Recognise and manage risk
(i) Risk oversight and management policies
The Board has sought to minimise the business' risks by focusing on the Company's core business, making changes as outlined in the
Chairman’s Report and the Managing Director’s Report. The Board is responsible for ensuring that the Company’s risk management
systems are adequate and operating effectively.
The Company does not have a separate internal audit function and, given the Company’s size, the Board does not intend to implement
such a function.
The Board believes that through the Board itself, the Audit Committee and the external auditors there is adequate oversight of the
Company’s risk management and internal controls.
The risk management policy is published on the Company’s website.
(ii) Statement by the Managing Director and Group Financial Controller
The Managing Director and the Group Financial Controller have signed a declaration to the Board attesting to the fact that the integrity
of Financial Reports are founded on a sound system of risk management and internal compliance and control which implements the
policies adopted by the Board, and that the system is operating efficiently and effectively in all material respects.
(i) Principle 8: Encourage enhanced performance
(i) Performance evaluation of the Board, its Committees, individual Directors and key executives
There is an informal process in place to enable the Chairman to discuss and evaluate with each Director their contribution to the Board
and to enable that Director to comment on all facets of the operation of the Board. A formal performance evaluation of the Board was
not conducted during the year.
Given the Company’s size, the Board considers that this process is adequate and does not envisage forming a Nomination Committee
to perform this function or to formalise the performance evaluation process.
33
Corporate Governance Statement
All other Executives, and all staff of the Company, are subject to formal annual reviews of their performance as set out in the Directors’
Report.
The description of the process for performance evaluation is published on the Company’s website.
(j) Principle 9: Remunerate fairly and responsibly
(i) Company’s remuneration policies
Details on the remuneration of Directors and Executives are set out in Note 30. The Company’s remuneration policies are set out in the
Remuneration Report contained in the Directors Report.
(ii) Remuneration Committee
The Remuneration Committee consists of three Non Executive Directors and assists the Board in determining executive remuneration
policy, determining the remuneration of Executive Directors and reviewing and approving the remuneration of senior management.
The members of the Committee during the year and at the date of this Statement were:
Mr K A Dundo (Chairman);
Mr I F Burston; and,
Mr R W Kelly.
The experience and qualifications of each committee member is set out in the Directors’ Profiles in the first section of the Annual Report.
The Remuneration Committee Charter is published on the Company’s website.
(iii) Non Executive Director’s remuneration
The terms and conditions governing the remuneration of Non Executive Director’s are set out in their appointment letter.
All Non Executive Directors are remunerated by way of fixed cash fees. Non Executive Directors are not provided with retirement
benefits other than statutory superannuation. The maximum total remuneration payable to Non Executive Directors was approved by
Shareholders at the 2003 Annual General Meeting and is currently $300,000.
No Non Executive Director received options in the Company during the year.
(k) Principle 10: Recognise the legitimate interests of stakeholders
(i) Code of Conduct
As set out in Principle 3 above, the Company has developed and published to its website a Code of Conduct.
34
Income Statement for the fi nancial year ended 30 June 2006
Consolidated
Company
Year Ended Year Ended Year Ended Year Ended
30 June 2006 30 June 2005 30 June 2006 30 June 2005
Notes
$’000
$’000
$’000
$’000
Revenue from sale of goods, rendering of services and operating
lease rental
Other revenue from operations
Total revenue
Other income
Share of losses of associates accounted for using the equity
method
Raw materials and consumables used
Employee benefit expense
Depreciation and amortisation expense
Finance costs
Change in fair value of investments held for trading
Impairment adjustment
Other expenses
Profit before income tax expense
Income tax expense relating to ordinary activities
Profit from continuing operations
Profit from discontinued operations
Profit attributable to ordinary equity holders of Imdex Limited
Earnings per share:
Basic earnings per share (cents)
Diluted earnings per share (cents)
Earnings per share from continuing operations:
Basic earnings per share from continuing operations (cents)
Diluted earnings per share from continuing operations (cents)
Dividends per ordinary share:
Interim dividend paid (cents)
Final dividend declared (cents)
2
2
2
7
2
2
2
7
2
2
3
26
18
18
18
18
19
19
The Income Statement should be read in conjunction with the accompanying notes.
66,614
178
66,792
76
(301)
(32,776)
(11,086)
(2,431)
(216)
4,500
(2,275)
(10,419)
11,864
40,051
-
40,051
466
-
(19,602)
(6,859)
(1,390)
(494)
-
-
(7,167)
5,005
11,379
82
11,461
1,402
-
(4,415)
(2,179)
(1,268)
(40)
4,199
(3,460)
(3,193)
2,507
7,202
-
7,202
1,752
-
(4,068)
(1,368)
(481)
(324)
-
-
(1,737)
976
(3,880)
(1,723)
(1,329)
(909)
7,984
-
3,282
890
1,178
-
7,984
4,172
1,178
67
890
957
6.07
5.95
6.07
5.95
1.00
1.00
3.66
3.66
2.88
2.88
-
-
35
Balance Sheet as at 30 June 2006
Consolidated
Company
Notes
30 June 2006
$’000
30 June 2005
$’000
30 June 2006
$’000
30 June 2005
$’000
Current Assets
Cash and Cash Equivalents
Trade and Other Receivables
Inventories
Other Financial Assets
Non Current Assets classified as held for sale
Total Current Assets
Non Current Assets
Other Financial Assets
Property, Plant and Equipment
Goodwill
Other Intangible Assets
Deferred Tax Assets
Total Non Current Assets
Total Assets
Current Liabilities
Trade and Other Payables
Borrowings
Current Tax Payables
Provisions
Liabilities directly associated with Non Current Assets classified
as held for sale
Total Current Liabilities
Non Current Liabilities
Borrowings
Deferred Tax Liabilities
Provisions
Total Non Current Liabilities
Total Liabilities
Net Assets
Equity
Issued Capital
Asset Revaluation Reserve
Foreign Currency Translation Reserve
Employee Equity-Settled Benefits Reserve
Retained Profits/(Accumulated Losses)
Total Equity
28
5
6
7
26
8
9
10
11
3
12
13
3
14
26
13
3
14
15
16
16
16
17
The Balance Sheet should be read in conjunction with the accompanying notes.
6,421
18,798
9,707
4,512
-
39,438
124
9,967
1,906
1,313
-
13,310
52,748
13,629
1,391
2,058
830
-
17,908
1,503
458
226
2,187
20,095
32,653
26,490
-
(494)
105
6,552
32,653
103
13,918
7,030
18
6,453
27,522
1,475
5,890
-
12
515
7,892
35,414
7,972
3,965
530
569
182
13,218
2,883
-
293
3,176
16,394
19,020
19,008
-
-
48
(36)
19,020
2,003
5,502
1,081
4,504
-
13,090
2,296
4,088
-
-
-
6,384
19,474
3,111
498
1,973
189
-
5,771
220
1,038
40
1,298
7,069
12,405
96
4,554
923
3
6,453
12,029
2,984
2,047
-
12
224
5,267
17,296
2,526
4,616
531
107
182
7,962
4,172
-
78
4,250
12,212
5,084
26,490
-
-
105
(14,190)
12,405
19,008
-
-
48
(13,972)
5,084
36
Statement of Changes in Equity for the fi nancial year ended 30 June 2006
Ordinary
Shares
Foreign
Currency
Translation
Reserve
Employee
Equity-Settled
Benefits
Reserve
Asset
Revaluation
Reserve
Retained
Earnings /
(Accumulated
Losses)
Total
Attributable
to Equity
Holders of
the Entity
CONSOLIDATED
Notes
$'000
$'000
$'000
$'000
$'000
$'000
Balance at 1 July 2004
Revaluation adjustment
Net income recognised directly in equity
Profit for the period
Total recognised income and expense for
the period
Share based payments
Cancellation of shares held by Mr H H Al-
Merry on restructure of the RTE/Imdex
Joint Venture
Balance at 30 June 2005
Exchange differences on translation of
foreign operations after taxation
Net income recognised directly in equity
Profit for the period
Total recognised income and expense for
the period
Dividend paid
Share based payments
Issue of shares as part consideration for the
acquisition of Samchem
Issue of equity securities for working capital
Share issue costs (net of tax)
Options expired
Issue of shares under staff option plan
Balance at 30 June 2006
16
16
15
16
16
15
15
15
15
15
21,058
-
-
-
-
-
(2,050)
19,008
-
-
-
-
-
-
3,592
3,990
(112)
1
11
26,490
-
-
-
-
-
-
-
-
(494)
(494)
-
-
-
-
-
-
-
-
-
(494)
-
-
-
-
-
48
-
48
-
-
-
-
-
59
-
-
-
(1)
(1)
105
8
(8)
(8)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(4,208)
-
-
4,172
4,172
-
-
(36)
-
-
7,984
7,984
(1,396)
-
16,858
(8)
(8)
4,172
4,172
48
(2,050)
19,020
(494)
(494)
7,984
7,984
(1,396)
59
-
3,592
-
-
-
-
6,552
3,990
(112)
-
10
32,653
Ordinary
Shares
Foreign
Currency
Translation
Reserve
Employee
Equity-Settled
Benefits
Reserve
Asset
Revaluation
Reserve
Retained
Earnings /
(Accumulated
Losses)
Total
Attributable
to Equity
Holders of
the Entity
COMPANY
Notes
$'000
$'000
$'000
$'000
$'000
$'000
Balance at 1 July 2004
Revaluation adjustment
Net income recognised directly in equity
Profit for the period
Total recognised income and expense for
the period
Share based payments
Cancellation of shares held by Mr H H Al-
Merry on restructure of the RTE/Imdex
Joint Venture
Balance at 30 June 2005
Profit for the period
Total recognised income and expense for
the period
Dividend paid
Share based payments
Issue of shares as part consideration for the
acquisition of Samchem
Issue of equity securities for working capital
Share issue costs (net of tax)
Options expired
Issue of shares under staff option plan
Balance at 30 June 2006
16
16
15
16
15
15
15
15
15
21,058
-
-
-
-
-
(2,050)
19,008
-
-
-
-
3,592
3,990
(112)
1
11
26,490
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
48
-
48
-
-
-
59
-
-
-
(1)
(1)
105
8
(8)
(8)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(14,929)
-
-
957
957
-
-
(13,972)
1,178
1,178
(1,396)
-
6,137
(8)
(8)
957
957
48
(2,050)
5,084
1,178
1,178
(1,396)
59
-
3,592
-
-
-
-
(14,190)
3,990
(112)
-
10
12,405
The Statement of Changes in Equity should be read in conjunction with the accompanying notes.
37
Cash Flow Statement for the fi nancial year ended 30 June 2006
Consolidated
Company
Year Ended Year Ended Year Ended Year Ended
30 June 2006 30 June 2005 30 June 2006 30 June 2005
Notes
$’000
$’000
$’000
$’000
Cash Flows From Operating Activities
Receipts from customers
Payments to suppliers and employees
Other income
Dividend received
Interest and other costs of finance paid
Income tax paid
Net cash provided by Operating Activities
Cash Flows From Investing Activities
Interest and bill discounts received
Payment for property, plant and equipment
Proceeds from sale of property, plant and equipment
Payments for intangible assets
Proceeds from receivable - RTE/Imdex Joint Venture
Proceeds from sale of Imdex Minerals
Payment for the acquisition of the business of Samchem
Payment of deferred acquisition costs
Net cash provided by/(used in) Investing Activities
Cash Flows From Financing Activities
Advances from Controlled Entities
Proceeds from issue of equity securities
Payment for share issue costs
Cash received on exercise of options
Dividend paid
Hire purchase and lease payments
Proceeds from borrowings
Repayment of borrowings
Net cash (used in)/provided by Financing Activities
26
24
15
15
19
13
67,509
(55,633)
-
-
(6)
(1,796)
10,074
97
(6,730)
652
-
928
6,271
(3,011)
(350)
(2,143)
-
3,990
(112)
10
(1,396)
(1,507)
1,435
(3,625)
(1,205)
48,767
(44,975)
-
-
(351)
(286)
3,155
16
(2,791)
639
(11)
189
-
-
(216)
(2,174)
-
-
-
-
-
(1,296)
2,479
(1,075)
108
10,568
(10,207)
1,020
344
-
-
1,725
82
(3,393)
122
-
928
6,271
(3,011)
(350)
649
2,435
3,990
(112)
10
(1,396)
(506)
546
(3,625)
1,342
Net Increase in Cash and Cash Equivalents Held
6,726
1,089
3,716
15,135
(16,027)
1,020
688
(351)
-
465
18
(1,719)
251
(11)
189
-
-
(216)
(1,488)
657
-
-
-
-
(387)
1,682
(1,075)
877
(146)
Cash and Cash Equivalents At The Beginning Of The Financial
Year
Effects of exchange rate changes on the balance of cash and
cash equivalents held in foreign currencies
Cash and Cash Equivalents At The End Of The Financial
Year
28 (a)
(364)
(1,453)
(1,713)
(1,567)
28 (a)
59
6,421
-
-
-
(364)
2,003
(1,713)
The Cash Flow Statement should be read in conjunction with the accompanying notes.
38
Notes to the Financial Report
(cid:54)(cid:88)(cid:80)(cid:80)(cid:68)(cid:85)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:54)(cid:76)(cid:74)(cid:81)(cid:76)(cid:73)(cid:76)(cid:70)(cid:68)(cid:81)(cid:87)(cid:3)(cid:36)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:51)(cid:82)(cid:79)(cid:76)(cid:70)(cid:76)(cid:72)(cid:86)(cid:3)
(cid:20)
The financial report is a general purpose financial report which has been prepared in accordance with the Corporations Act 2001,
Accounting Standards and Urgent Issues Group Interpretations, and complies with other requirements of the law. Accounting Standards
include Australian equivalents to International Financial Reporting Standards (‘A-IFRS’).
Compliance with the A-IFRS ensures that the consolidated financial statements and notes of the Consolidated Entity comply with
International Financial Reporting Standards (‘IFRS’). The parent entity financial statements and notes also comply with IFRS except for
the disclosure requirements in IAS 32 ‘Financial Instruments: Disclosure and Presentation’ as the Australian equivalent Accounting
Standard, AASB 132 ‘Financial Instruments: Disclosure and Presentation’ does not require such disclosures to be presented by the
parent entity where its separate financial statements are presented together with the consolidated financial statements of the
Consolidated Entity.
The financial statements were authorised for issue by the directors on 25 August 2006.
(a)
Basis of preparation
The Financial Report has been prepared on the basis of historical cost except for the revaluation of certain non-current assets and
financial instruments. Cost is based on the fair values of the consideration given in exchange for assets.
In the application of A-IFRS 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 circumstance, 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
ongoing 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.
Judgments made by management in the application of A-IFRS that have significant effects on the financial statements and estimates
with a significant risk of material adjustments in the next year are disclosed, where applicable, in the relevant notes to the financial
statements.
Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of
relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.
The Consolidated Entity changed its accounting policies on 1 July 2005 to comply with A-IFRS. The transition to A-IFRS is accounted
for in accordance with Accounting Standard AASB 1 ‘First-time Adoption of Australian Equivalents to International Financial Reporting
Standards’, with 1 July 2004 as the date of transition. An explanation of how the transition from superseded policies to A-IFRS has
affected the Company’s and Consolidated Entity’s financial position, financial performance and cash flows is discussed in note 33.
The Directors have also elected under s.334(5) of the Corporations Act 2001 to apply Accounting Standard AASB 119 ‘Employee
Benefits’ (December 2004), even though the Standard is not required to be applied until annual reporting periods beginning on or after 1
January 2006.
The accounting policies set out below have been applied in preparing the financial statements for the year ended 30 June 2006, the
comparative information presented in these financial statements for the year ended 30 June 2005, and in the preparation of the opening
A-IFRS balance sheet at 1 July 2004 (as disclosed in note 33), the Consolidated Entity’s date of transition, except for the accounting
policies in respect of financial instruments. The Consolidated Entity has not restated comparative information for financial instruments,
including derivatives, as permitted under the first-time adoption transitional provisions. Refer note 1 (x) and (y).
The following significant accounting policies have been adopted in the preparation and presentation of the Financial Report:
(b)
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, cash in banks and investments in money market instruments, net of outstanding
bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
(c)
Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:
(i)
(ii)
where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of
acquisition of an asset or as part of an item of expense; or
for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables. Cash
flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from investing and financing
activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows.
39
Notes to the Financial Report
(d)
Goodwill
Goodwill, representing the excess of the cost of acquisition over the fair value of the identifiable assets, liabilities and contingent
liabilities acquired, is recognised as an asset and not amortised, but tested for impairment annually and whenever there is an indication
that the goodwill may be impaired. Any impairment is recognised immediately in profit or loss and is not subsequently reversed. Refer to
note 1 (v).
(e)
Non-current assets held for sale
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of carrying amount and fair value less
costs to sell. Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered through a
sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable, the asset
(or disposal group) is available for immediate sale in its present condition and the sale of the asset (or disposal group) is expected to be
completed within one year from the date of classification.
(f)
Inventories
Inventories are valued at the lower of cost and net realisable value. Costs, including an appropriate portion of fixed and variable
overhead expenses, are assigned to inventory on hand by the method most appropriate to each particular class of inventory, with the
majority being valued on a first in first out basis. Net realisable value represents the estimated selling price less all estimated costs of
completion and costs to be incurred in marketing, selling and distribution.
(g)
Payables
Trade payables and other accounts payable are recognised when the Consolidated Entity becomes obliged to make future payments
resulting from the purchase of goods and services.
(h)
Borrowings
Borrowings are recorded initially at fair value, net of transaction costs.
Subsequent to initial recognition, borrowings are measured at amortised cost with any difference between the initial recognised amount
and the redemption value being recognised in profit and loss over the period of the borrowing using the effective interest rate method.
(i)
Property, plant and equipment
Land and buildings are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly
attributable to the acquisition of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is
determined by discounting the amounts payable in the future to their present value as at the date of acquisition.
Plant and equipment, leasehold improvements and equipment under finance lease are stated at cost less accumulated depreciation and
impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part
of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as
at the date of acquisition.
Depreciation is provided on property, plant and equipment. Depreciation is calculated on a straight line basis so as to write off the net
cost or other revalued amount of each asset over its expected useful life to its estimated residual value. Leasehold improvements are
depreciated over the period of the lease or estimated useful life, whichever is the shorter, using the straight line method. The estimated
useful lives, residual values and depreciation method is reviewed at the end of each annual reporting period.
The annual depreciation rates used for each class of assets are as follows:
Freehold land:
Freehold buildings:
nil
5%
Plant and equipment:
10% to 40%
Equipment rented to third parties:
10% to 40%
Equipment under finance lease:
13% to 22.5%
(j)
Share-based payments
Equity-settled share-based payments granted after 7 November 2002 that were unvested as of 1 January 2005, are measured at fair
value at the date of grant. Fair value is measured by use of the Black-Scholes Model. The expected life used in the model has been
adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural
considerations. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line
basis over the vesting period, based on the Consolidated Entity’s estimate of shares that will eventually vest.
40
Notes to the Financial Report
(k)
Principles of consolidation
The consolidated Financial Report is prepared by combining the financial statements of all the entities that comprise the Consolidated
Entity, being the company (the parent entity) and its subsidiaries as defined in Accounting Standard AASB 127 ‘Consolidated and
Separate Financial Statements’. Consistent accounting policies are employed in the preparation and presentation of the consolidated
financial statements.
On acquisition, the assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition.
Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. If, after
reassessment, the fair values of the identifiable net assets acquired exceeds the cost of acquisition, the deficiency is credited to profit
and loss in the period of acquisition. The interest of minority shareholders is stated at the minority’s proportion of the fair values of the
assets and liabilities recognised. The consolidated Financial Report includes the information and results of each subsidiary from the
date on which the company obtains control and until such time as the company ceases to control such entity. In preparing the
consolidated Financial Report, all intercompany balances and transactions, and unrealised profits arising within the Consolidated Entity
are eliminated in full.
(l)
Borrowing costs
Borrowing costs are expensed as incurred.
(m)
(i)
Foreign currency
Foreign currency transactions
All foreign currency transactions during the financial year are brought to account using the exchange rate in effect at the date of the
transaction. Foreign currency monetary items at reporting date are translated at the exchange rate existing at reporting date. Non-
monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the
date when the fair value was determined. Exchange differences are recognised in profit or loss in the period in which they arise except
that: exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned
or likely to occur, which form part of the net investment in a foreign operation, are recognised in the consolidated financial statements in
the foreign currency translation reserve and recognised in profit or loss on disposal of the net investment.
(ii)
Foreign operations
On consolidation, the assets and liabilities of the Consolidated Entity’s overseas operations are translated at exchange rates prevailing
at the reporting date. Income and expense items are translated at the average exchange rates for the period unless exchange rates
fluctuate significantly. Exchange differences arising, if any, are recognised in the foreign currency translation reserve, and recognised in
profit or loss on disposal of the foreign operation. The financial statements of foreign subsidiaries, associates and jointly controlled
entities that report in the currency of a hyperinflationary economy are restated in terms of the measuring unit current at the reporting
date before they are translated into Australian dollars. Goodwill and fair value adjustments arising on the acquisition of a foreign entity
on or after the date of transition to A-IFRS are treated as assets and liabilities of the foreign entity and translated at exchange rates
prevailing at the reporting date.
(n)
Financial assets
Investments are recognised and derecognised on trade date where purchase or sale of an investment is under a contract whose terms
require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net
of transaction costs.
Subsequent to initial recognition, investments in subsidiaries are measured at cost. Subsequent to initial recognition, investments in
associates are accounted for under the equity method in the consolidated financial statements and the cost method in the Company
financial statements.
Other financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’, ‘held-to-
maturity’ investments, ‘available-for-sale’ financial assets, and ‘loans and receivables’. The classification depends on the nature and
purpose of the financial assets and is determined at the time of initial recognition.
(i)
Financial assets at fair value through profit or loss
Financial assets held for trading purposes are classified as current assets and are stated at fair value, with any resultant gain or loss
recognised in profit or loss.
(ii)
Held-to-maturity investments
Bills of exchange and debentures are recorded at amortised cost using the effective interest method less impairment, with revenue
recognised on an effective yield basis. The effective interest method is a method of calculating the amortised cost of a financial asset
and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future
cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period.
41
Notes to the Financial Report
(iii)
Available-for-sale financial assets
Certain shares held by the Consolidated Entity are classified as being available-for-sale and are stated at fair value less impairment.
Gains and losses arising from changes in fair value are recognised directly in the available-for-sale revaluation reserve, until the
investment is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in the
available-for-sale revaluation reserve is included in profit or loss for the period.
(iv)
Loans and receivables
Trade receivables, loans, and other receivables are recorded at amortised cost less impairment.
(o)
(i)
Financial instruments issued by the company
Debt and equity instruments
Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractual
arrangement.
(ii)
Transaction costs on the issue of equity instruments
Transaction costs arising on the issue of equity instruments are recognised directly in equity as a reduction of the proceeds of the equity
instruments to which the costs relate. Transaction costs are the costs that are incurred directly in connection with the issue of those
equity instruments and which would not have been incurred had those instruments not been issued.
(iii)
Interest and dividends
Interest and dividends are classified as expenses or as distributions of profit consistent with the balance sheet classification of the
related debt or equity instruments or component parts of compound instruments.
(p)
(i)
Intangible assets
Patents
Patents are recorded at cost less accumulated amortisation and impairment. Amortisation is charged on a straight line basis over their
estimated useful lives of 20 years. The estimated useful life and amortisation method is reviewed at the end of each annual reporting
period.
(ii)
Intangible assets acquired in a business combination
All potential intangible assets acquired in a business combination are identified and recognised separately from goodwill where they
satisfy the definition of an intangible asset and their fair value can be measured reliably.
(q)
(i)
Taxation
Current tax
Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or tax loss
for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date. Current
tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).
(ii)
Deferred tax
Deferred tax is accounted for using the comprehensive balance sheet liability method in respect of temporary differences arising from
differences between the carrying amount of assets and liabilities in the Financial Report and the corresponding tax base of those items.
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent
that it is probable that sufficient taxable amounts will be available against which deductible temporary differences or unused tax losses
and tax offsets can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to
them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) that affects neither
taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences
arising from goodwill.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, branches, associates and
joint ventures except where the Consolidated Entity is able to control the reversal of the temporary differences and it is probable that the
temporary differences will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences
associated with these investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable
profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when the asset and liability
giving rise to them are realised or settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by
reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner
in which the Consolidated Entity expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the
Company/Consolidated Entity intends to settle its current tax assets and liabilities on a net basis.
42
Notes to the Financial Report
(iii)
Current and deferred tax for the period.
Current and deferred tax is recognised as an expense or income in the income statement, except when it relates to items credited or
debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from the initial accounting
for a business combination, in which case it is taken into account in the determination of goodwill or excess.
(iv)
Tax consolidation
The Company and all its wholly-owned Australian resident entities are part of a tax consolidated group under Australian taxation law.
Imdex Limited is the head entity in the tax-consolidated group. Tax expense/income, deferred tax liabilities and deferred tax assets
arising from temporary differences of the members of the tax consolidated group are recognised in the separate financial statements of
the members of the tax-consolidated group using the ‘separate taxpayer within group’ approach. Current tax liabilities and assets and
deferred tax assets arising from unused tax losses and tax credits of the members of the tax-consolidated group are recognised by the
Company (as head entity in the tax-consolidated group).
(r)
Leased assets
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to
the lessee. All other leases are classified as operating leases.
(i)
Consolidated Entity as Lessor
Amounts due from lessees under finance leases are recorded as receivables. Finance lease receivables are initially recognised at
amounts equal to the present value of the minimum lease payments receivable plus the present value of any unguaranteed residual
value expected to accrue at the end of the lease term. Finance lease payments are allocated between interest revenue and reduction of
the lease receivable over the term of the lease in order to reflect a constant periodic rate of return on the net investment outstanding in
respect of the lease.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease.
(ii)
Consolidated Entity as Lessee
Assets held under finance leases are initially recognised at their fair value or, if lower, at amounts equal to the present value of the
minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the
balance sheet as a finance lease obligation.
Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of
interest on the remaining balance of the liability. Finance charges are charged directly against income, unless they are directly
attributable to qualifying assets, in which case they are capitalised in accordance with the Consolidated Entity’s general policy on
borrowing costs.
Finance leased assets are amortised on a straight line basis over the estimated useful life of the asset.
Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic
basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The
aggregate benefits of incentives are recognised as a reduction of rental expense on a straight-line basis, except where another
systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
(s)
(i)
Revenue
Sale of goods
Revenue from the sale of goods is recognised when the Consolidated Entity has transferred to the buyer the significant risks and
rewards of ownership of the goods.
(ii)
Rendering of services
Revenue from a contract to provide services is recognised by reference to the stage of completion of the contract.
(iii)
Royalties
Royalty revenue is recognised on an accrual basis in accordance with the substance of the relevant agreement.
(iv)
Dividend and interest revenue
Dividend revenue is recognised on a receivable basis. Interest revenue is recognised on a time proportionate basis that takes into
account the effective yield on the financial asset.
43
Notes to the Financial Report
(t)
(i)
Employee benefits
Provisions
Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave, and sick leave
when it is probable that settlement will be required and they are capable of being measured reliably.
Provisions made in respect of employee benefits expected to be settled within 12 months, are measured at their nominal values using
the remuneration rate expected to apply at the time of settlement.
Provisions made in respect of employee benefits which are not expected to be settled within 12 months are measured as the present
value of the estimated future cash outflows to be made by the Consolidated Entity in respect of services provided by employees up to
reporting date.
(ii)
Defined contribution plans
Contributions to defined contribution superannuation plans are expensed when incurred.
(u)
Government grants
Government grants are assistance by the government in the form of transfers of resources to the Consolidated Entity in return for past
compliance with certain conditions relating to the operating activities of the entity. Government grants include government assistance
where there are no conditions specifically relating to the operating activities of the Consolidated Entity other than the requirement to
operate in certain regions or industry sectors.
Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate
financial support to the Consolidated Entity with no future related costs are recognised as income of the period in which it becomes
receivable.
(v)
Impairment of assets
At each reporting date, the Consolidated Entity reviews the carrying amounts of its tangible and intangible assets to determine whether
there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the
asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that
are independent from other assets, the Consolidated Entity estimates the recoverable amount of the cash-generating unit to which the
asset belongs.
Goodwill, intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually
and whenever there is an indication that the asset may be impaired. An impairment of goodwill is not subsequently reversed.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable
amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-
generating unit) is reduced to its recoverable amount.
An impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the
impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised
estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of
an impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the
reversal of the impairment loss is treated as a revaluation increase.
(w)
Provisions
Provisions are recognised when the Consolidated Entity has a present obligation, the future sacrifice of economic benefits is probable,
and the amount of the provision can be measured reliably.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting
date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cashflows
estimated to settle the present obligation, its carrying amount is the present value of those cashflows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable
is recognised as an asset if it is virtually certain that recovery will be received and the amount of the receivable can be measured
reliably.
44
Notes to the Financial Report
(x)
Comparative information – financial instruments
The consolidated entity has elected not to restate comparative information for financial instruments within the scope of Accounting
Standards AASB 132 ‘Financial Instruments: Disclosure and Presentation’ and AASB 139 ‘Financial Instruments: Recognition and
Measurement’, as permitted on the first-time adoption of A-IFRS.
The accounting policies applied to accounting for financial instruments in the current financial year are detailed in notes 1(a) to (w). The
following accounting policies were applied to accounting for financial instruments in the comparative financial year:
(i) Accounts payable
Trade payables and other accounts payable are recognised when the Consolidated Entity becomes obliged to make future payments
resulting from the purchase of goods and services.
(ii) Financial instruments issued by the company
Debt and equity instruments
Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractual
arrangement.
Transaction costs on the issue of equity instruments
Transaction costs arising on the issue of equity instruments are recognised directly in equity as a reduction of the proceeds of the equity
instruments to which the costs relate. Transaction costs are the costs that are incurred directly in connection with the issue of those
equity instruments and which would not have been incurred had those instruments not been issued.
Interest and dividends
Interest and dividends are classified as expenses or as distributions of profit consistent with the balance sheet classification of the
related debt or equity instruments or component parts of compound instruments.
(iii) Borrowings
Debentures, bank loans and other loans are recorded at an amount equal to the net proceeds received. Interest expense is recognised
on an accrual basis.
Ancillary costs incurred in connection with the arrangement of borrowings are deferred and amortised over the period of the borrowing.
(iv) Investments
Investments other than investments in subsidiaries, associates and joint venture entities are recorded at cost.
Dividend revenue is recognised on a receivable basis. Interest revenue is recognised on a time proportionate basis that takes into
account the effective yield on the financial asset.
(v) Receivables
Trade receivables and other receivables are recorded at amounts due less any allowance for doubtful debts.
(y)
Effect of changing the accounting policies for financial instruments
The effect of changes in the accounting policies for financial instruments on the balance sheet as at 1 January 2005 as detailed in note
1(x) is nil.
45
Notes to the Financial Report
(z)
Australian Accounting Standards not yet effective
Australian Accounting Standards that have recently been issued or amended but are not yet effective have not been adopted for the
annual reporting period ended 30 June 2006:
Affected Standards
Nature of change to
accounting policy
Application date
of standard*
Application date
AASB 1: First time adoption of AIFRS
AASB139: Financial instruments: Recognition and
Measurement
AASB 3: Business Combinations
AASB 132: Financial Instruments: Disclosure and
Presentation
AASB101: Presentation of Financial Statements
AASB114: Segment reporting
AASB117: Leases
AASB133: Earnings per Share
AASB139: Financial instruments: Recognition and
Measurement
UIG 4 Determining whether an Arrangement
contains a lease
UIG 8 Scope of AASB 2
AASB7 Financial Instruments: Disclosures
* - reporting period commences on or after
A project team has been formed
to assess the impact of these
new standards. A final
assessment has not been made
on the expected impact of these
standards, however, it is
expected that that there will be
no significant changes in the
Group’s accounting policies.
1 January 2006
1 July 2006
1 January 2007
1 July 2007
The following amendments are not applicable to the Group and therefore have no impact:
Affected Standards
Comment
AASB1023: General Insurance Contracts
AASB1028: Life Insurance Contracts
AASB4: Insurance Contracts
UIG 5 Rights to Interests arising from Decommissioning,
Restoration and Environmental Rehabilitation Funds
UIG 7 Applying the Restatement Approach under AASB129
Financial Reporting in Hyperinflationary Economies
These standards are not applicable to the Consolidated Entity.
46
Notes to the Financial Report
(cid:21)
(cid:51)(cid:85)(cid:82)(cid:73)(cid:76)(cid:87)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:50)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)
(a) Revenue from operations
Revenue from continuing and discontinued operations consisted of the following items:
Consolidated
2006
$’000
2005
$’000
Company
2006
$’000
2005
$’000
Revenue from continuing operations
Revenue from the sale of goods
Revenue from the rendering of services
Operating lease rental revenue
Other operating revenue
Revenue from discontinued operations
Revenue from the sale of goods
(b) Profit before income tax
47,251
13,843
5,520
178
66,792
30,372
9,679
-
-
40,051
5,859
-
5,520
82
11,461
7,202
-
-
-
7,202
-
6,784
-
6,784
66,792
46,835
11,461
13,986
Other than as disclosed on the face of the income statement, profit before income tax has been arrived at after crediting / (charging) the following
gains and losses from continuing and discontinued operations:
Grants received for the development of export markets
Gain/(loss) on disposal of property, plant and equipment
Foreign exchange gain/(loss)
Gains attributable to:
Continuing operations
Discontinued operations
Losses attributable to:
Continuing operations
Discontinued operations
-
76
(15)
61
76
-
76
(15)
-
(15)
61
77
384
(84)
377
461
-
461
(72)
(12)
(84)
377
-
38
533
571
571
-
571
-
-
-
571
-
44
(6)
38
50
-
50
-
(12)
(12)
38
Profit before income tax has been arrived at after charging the following items of income and expense. The line items below combine amounts
attributable to both continuing and discontinued operations:
Other income
Grants received for the development of export markets
Gain/(loss) on disposal of property, plant and equipment
Management fees from Controlled Entities
Dividends from Controlled Entities
Other revenue
-
76
-
-
-
76
77
384
-
-
5
466
-
38
1,020
344
-
1,402
Depreciation and amortisation of Non Current Assets
Depreciation of property, plant and equipment
2,431
1,646
1,268
Finance costs
Hire purchase liabilities
Interest on loans
Other
210
-
6
216
194
335
-
529
40
-
-
40
-
44
1,020
688
-
1,752
737
26
333
-
359
47
Notes to the Financial Report
(cid:21)
(cid:51)(cid:85)(cid:82)(cid:73)(cid:76)(cid:87)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:50)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:11)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:12)(cid:3)
(b) Profit before income tax (continued)
Profit before income tax has been arrived at after charging the following items of income and expense. The line items below combine amounts
attributable to both continuing and discontinued operations:
Consolidated
2006
$’000
2005
$’000
Company
2006
$’000
2005
$’000
C
Other expenses
Commissions
Communication
Consultancy fees
Electricity
Foreign exchange (gain)/loss
Freight
Hire of plant and equipment
Insurance
Other expenses
Legal and professional fees
Rent and premises costs
Repairs and maintenance
Travel and accommodation
Vehicle expenses
Employee benefits expense
Defined contribution superannuation costs
Post-employment benefits other than superannuation
Equity-settled Share Based Payments
Employee benefit expense
Consultancy expenses
1,243
503
626
51
(15)
661
168
265
1,957
316
1,275
1,097
1,215
1,057
10,419
2,488
-
2,488
59
-
59
726
320
659
377
(84)
518
811
280
2,192
304
1,013
964
989
748
9,817
612
-
612
23
25
48
24
136
141
13
533
227
7
66
560
246
306
553
216
165
3,193
59
-
59
59
-
59
Cost of sales
32,776
23,180
4,415
Bad debts written off - trade debtors
Operating lease rental expense (minimum lease payments)
Impairment adjustment
Receivable due from Rashid Trading Enterprise
Investment in RTE/Imdex Joint Venture
(cid:22)
(cid:44)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3)(cid:55)(cid:68)(cid:91)(cid:72)(cid:86)(cid:3)
2
1,443
875
1,400
2,275
9
715
-
-
-
2
312
875
2,585
3,460
120
122
304
362
(6)
305
168
99
714
287
331
586
122
211
3,725
224
-
224
23
25
48
-
7,832
9
278
-
-
-
Consolidated
2006
$’000
2005
$’000
Company
2006
$’000
2005
$’000
2,835
1,430
(385)
3,880
3,880
-
3,880
1,034
52
(211)
875
1,723
(848)
875
153
1,564
(388)
1,329
1,329
-
1,329
(8)
53
16
61
909
(848)
61
(a) Income tax recognised in the income statement
Tax expense comprises:
Current tax expense
Deferred tax expense relating to the origination and reversal
of temporary differences
(Over)/under provision per prior year
Total tax expense
Attributable to:
Continuing operations
Discontinued operations
48
Notes to the Financial Report
C
(cid:22)
(cid:44)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3)(cid:55)(cid:68)(cid:91)(cid:72)(cid:86)(cid:3)(cid:11)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:12)(cid:3)
The prima facie income tax expense on pre-tax accounting
profit from operations reconciles to the income tax expense in
the financial statements as follows:
Profit from continuing operations
Profit from discontinued operations
Profit from operations
Income tax expense calculated at 30%
Tax benefit of losses transferred to a controlled entity
Non-deductible expenses and capital proceeds relating to the
investment in the RTE/Imdex Joint Venture
Impairment of investment in RTE/Imdex Joint Venture
Intercompany dividends received
Bad debts
Recoverable amount adjustment - property, plant and
equipment
Deductible share raising costs
Non-deductible expenses
Temporary differences not previously brought to account
Tax rate differential arising from foreign entities
(Over) / under provision of prior year income tax
Consolidated
2006
$’000
2005
$’000
Company
2006
$’000
2005
$’000
11,864
-
11,864
3,559
-
9
420
-
263
-
-
20
-
(6)
(385)
3,880
5,005
42
5,047
1,514
-
-
-
-
(876)
379
(13)
58
24
-
(211)
875
2,507
-
2,507
752
-
9
776
(103)
263
-
-
20
-
-
(388)
1,329
976
42
1,018
305
389
379
-
(206)
(876)
-
(13)
43
24
-
16
61
The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate entities on taxable profits under
Australian law. There has been no change in the corporate tax rate when compared with the previous reporting period.
(b) Income tax recognised directly in equity
The following current and deferred amounts were charged directly to equity during the period:
Current tax: Share issue expenses
Deferred tax: Translation of foreign operations
48
212
260
-
-
-
48
-
48
-
-
-
(c) Current tax assets and liabilities
Current tax payable
(d) Deferred tax balances
Deferred tax assets comprise:
Provisions
Property, plant and equipment
Accruals
Foreign currency translation reserves
Share issue expenses
Deferred tax liabilities comprise:
Property, plant and equipment
Intellectual property
Held for trading financial assets
Net deferred tax balances
There are no unrecognised deferred tax balances.
Tax Consolidation
2,058
530
1,973
531
455
-
262
212
38
967
(146)
(19)
(1,260)
(1,425)
(458)
460
-
99
-
-
559
(44)
-
-
(44)
515
153
-
90
-
38
281
(59)
-
(1,260)
(1,319)
(1,038)
71
119
34
-
-
224
-
-
-
-
224
Relevance of tax consolidation to the consolidated entity
Legislation to allow groups, comprising a parent entity and its Australian resident wholly-owned entities, to elect to consolidate and be treated as
a single entity for income tax purposes was substantively enacted on 21 October 2002. The Company and its wholly-owned Australian resident
entities are eligible to consolidate for tax purposes under this legislation and have elected to be taxed as a single entity from 1 July 2003. The
head entity in the tax consolidated group for the purposes of the tax consolidation system is Imdex Limited.
Nature of tax funding arrangements and tax sharing agreements
Entities within the tax-consolidated group have entered into a tax-sharing agreement with the head entity. Under the terms of this agreement,
Imdex Limited and each of the entities in the tax consolidated group has agreed to pay a tax equivalent payment to or from the head entity,
based on the net accounting profit or loss of the entity and the current tax rate. Such amounts are reflected in amounts receivable from or
payable to other entities in the tax consolidated group.
49
Notes to the Financial Report
(cid:23)
(cid:53)(cid:72)(cid:80)(cid:88)(cid:81)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:36)(cid:88)(cid:71)(cid:76)(cid:87)(cid:82)(cid:85)(cid:86)(cid:3)
Auditor of the parent entity - Deloitte Touche Tohmatsu
Audit or review of the financial report
Taxation services
Other non-audit services: Other consulting services
Other non-audit services: A-IFRS assistance
Other auditors - Moore Stephens
Audit or review of the financial report
Other non-audit services: Accounting assistance and taxation
advice
(cid:24)
(cid:55)(cid:85)(cid:68)(cid:71)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:50)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:53)(cid:72)(cid:70)(cid:72)(cid:76)(cid:89)(cid:68)(cid:69)(cid:79)(cid:72)(cid:86)(cid:3)
Consolidated
2006
$
2005
$
Company
2006
$
2005
$
122,190
24,182
9,850
35,439
191,661
27,501
14,462
83,206
82,326
27,300
12,500
205,332
-
-
122,190
24,182
9,850
35,439
191,661
-
-
83,206
82,326
27,300
12,500
205,332
-
-
233,624
205,332
191,661
205,332
Current
Trade receivables
Allowance for doubtful debts
Loans to Controlled Entities
Due from Quadripart Investment Holdings (Pty) Ltd
Due from Rashid Trading Establishment
Other receivables
Imdex Minerals receivables classified as held for sale
Consolidated
Company
Notes
2006
$’000
2005
$’000
2006
$’000
2005
$’000
(i)
(ii)
27
8
26
18,660
(306)
18,354
-
444
-
-
-
18,798
11,871
(383)
11,488
-
-
1,769
663
(2)
13,918
3,267
(114)
3,153
2,349
-
-
-
-
5,502
2,744
(113)
2,631
-
-
1,769
156
(2)
4,554
(i) The average credit period on sales of goods is 60 days. Trade receivables are interest free. An allowance has been made for estimated
irrecoverable amounts from the sale of goods, determined by reference to past default experience. The movement in the allowance was
recognised in the income statement for the current year.
(ii) Loans to Controlled Entities have no specific terms or conditions.
(cid:3)
Consolidated
Company
2006
$’000
2005
$’000
2006
$’000
2005
$’000
421
9,287
9,707
-
9,707
1,070
7,286
8,356
(1,326)
7,030
-
1,081
1,081
-
1,081
1,070
1,179
2,249
(1,326)
923
(cid:25)
(cid:44)(cid:81)(cid:89)(cid:72)(cid:81)(cid:87)(cid:82)(cid:85)(cid:76)(cid:72)(cid:86)(cid:3)
Current
Raw materials - at cost
Finished goods - at cost
Imdex Minerals classified as held for sale
50
Notes to the Financial Report
(cid:26)
(cid:50)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:38)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:36)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3)
At fair value
Held for Trading: Shares
At amortised cost (2005: cost)
Prepayments
Consolidated
Company
Notes
2006
$’000
2005
$’000
2006
$’000
2005
$’000
(i)
4,500
12
4,512
-
18
18
4,500
4
4,504
-
3
3
(i) The Consolidated Entity holds an investment of 15 million shares (2005: nil) in Sino Gas & Energy Limited, an energy company operating in
China. The difference between the previous carrying value (consolidated: nil under the equity method; company: $301k) and fair value
(consolidated and company: $4.5million) at year end has been recognised as a change in fair value on the face of the income statement. These
shares are classified as held for trading as it is the intention of the Company to dispose of this investment as soon as it is practicable.
The fair value of this non-listed investment has been determined using the Directors' best estimate. The Directors have estimated the fair market
value by having regard to share placements previously made by Sino Gas and Energy Limited, the results of exploration activity to date,
discussions with potential investors and having regard to the fact that Sino is an unlisted entity and the shares held in Sino can not be readily
traded on any share market.
(cid:27)
(cid:50)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:49)(cid:82)(cid:81)(cid:16)(cid:38)(cid:88)(cid:85)(cid:85)(cid:72)(cid:81)(cid:87)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:36)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3)
At amortised cost (2005: cost)
Investments in Controlled Entities
Investment in other entities - RTE / Imdex Joint Venture
Deferred acquisition costs
Notes
(i)
Consolidated
2006
$’000
2005
$’000
Company
2006
$’000
2005
$’000
-
-
124
124
-
1,400
75
1,475
2,172
-
124
2,296
324
2,585
75
2,984
(i) At the Annual General Meeting on 8 November 2004, Shareholders approved the re-structure of the investment in Imdex Arabia and the RTE
/ Imdex Joint Venture. The main outcomes of the re-structure were:
- The cancellation of 10,000,000 shares in Imdex Limited held by Mr H H Al-Merry on 23 November 2004. Refer Note 15;
- That RTE pay to Imdex Limited, $US 1.5 million net; and
- That, on the completion of the re-structure, the Company’s interest in Imdex Arabia and the RTE / Imdex Joint Venture would be reduced from
49% to 20%.
In relation to the US$1.5 million due from Rashid Trading Establishment (RTE), in February 2005, a further binding agreement, including a
promissory note and personal guarantee from Mr H H Al-Merry (the principal of RTE and a Director of Imdex) was reached with RTE which
required RTE to pay US$100,000 per month to Imdex with the entire amount to be paid by 31 December 2005. As at 30 June 2006, RTE has
paid US$850,000 of
the total of US$1.5million due to Imdex. Accordingly, the amount due from RTE at 30 June 2006 is US$650,000
(AUD$875,654).
The Directors have determined that due to ongoing recovery difficulties, the balance of the receivable (consolidated and company: $875k) and
the investment in the Joint Venture (consolidated: $1.4million; company: $2.585million) have become impaired. The impairment adjustment is
shown on the face of the income statement. Refer also note 2.
51
Notes to the Financial Report
(cid:28)
(cid:51)(cid:85)(cid:82)(cid:83)(cid:72)(cid:85)(cid:87)(cid:92)(cid:15)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:40)(cid:84)(cid:88)(cid:76)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)
Freehold Land
at cost (i)
Freehold
Buildings at
cost (i)
Plant and
Equipment at
cost
$’000
$’000
$’000
Equipment
Rented to
Third Parties
at cost
$’000
Equipment
under hire
purchase at
cost
$’000
Capital works
in progress at
cost
TOTAL
$’000
$’000
875 3,278 11,293 622 5,093 - 21,161
- - 874 666 899 353 2,792
- - (584) (43) (1,112) - (1,739)
- - 426 - (443) - (17)
(875) (3,278) (5,755) - - - (9,908)
- - (32) - - - (32)
- - 6,222 1,245 4,437 353 12,257
- - 3,006 3,150 574 - 6,730
- - 416 - - - 416
- - (54) - (1,052) - (1,106)
- - (71) - - - (71)
- - 966 1,245 (2,022) (189) -
- - 10,485 5,640 1,937 164 18,226
- 744 7,532 370 1,744 - 10,390
- - (190) (5) (674) - (869)
- 98 654 207 687 - 1,646
- (842) (3,941) - - - (4,783)
- - 888 (38) (867) - (17)
- - 4,943 534 890 - 6,367
- - (9) - (521) - (530)
- - - - - - -
- - 746 1,058 627 - 2,431
- - (9) - - - (9)
- - (612) 533 79 - -
- - 5,059 2,125 1,075 - 8,259
- - 1,279 711 3,547 353 5,890
- - 5,426 3,515 862 164 9,967
875 3,278 5,766 622 1,597 - 12,138
- - 451 666 304 298 1,719
- - (384) (43) (99) - (526)
- - 431 - (441) - (10)
(875) (3,278) (5,755) - - - (9,908)
- - (32) - - - (32)
- - 477 1,245 1,361 298 3,381
- - 96 3,150 147 - 3,393
- - - - (84) - (84)
- - 613 1,245 (1,376) (300) 182
- - 1,186 5,640 48 (2) 6,872
- 744 4,076 370 519 - 5,709
- - - (5) (314) - (319)
- 98 225 207 207 - 737
- (842) (3,941) - - - (4,783)
- - 36 (38) (8) - (10)
- - 396 534 404 - 1,334
- - - - - - -
- - 104 1,058 106 - 1,268
- - 138 533 (489) - 182
- - 638 2,125 21 - 2,784
- - 81 711 957 298 2,047
- - 548 3,515 27 (2) 4,088
Consolidated
Gross Carrying Value
Balance at 30 June 2004
Additions
Disposals
Transfer
Classified as held for sale
Other
Balance at 30 June 2005
Additions
Purchase of business
Disposals
Impact of exchange rate changes
Transfer
Balance at 30 June 2006
Accumulated Depreciation
Balance at 30 June 2004
Disposals
Depreciation expense
Classified as held for sale
Transfer
Balance at 30 June 2005
Disposals
Purchase of business
Depreciation expense
Impact of exchange rate changes
Transfer
Balance at 30 June 2006
Net Book Value
As at 30 June 2005
As at 30 June 2006
Company
Gross Carrying Value
Balance at 30 June 2004
Additions
Disposals
Transfer
Classified as held for sale
Other
Balance at 30 June 2005
Additions
Disposals
Transfer
Balance at 30 June 2006
Accumulated Depreciation
Balance at 30 June 2004
Disposals
Depreciation expense
Classified as held for sale
Transfer
Balance at 30 June 2005
Disposals
Depreciation expense
Transfer
Balance at 30 June 2006
Net Book Value
As at 30 June 2005
As at 30 June 2006
52
Notes to the Financial Report
(cid:28)
(cid:51)(cid:85)(cid:82)(cid:83)(cid:72)(cid:85)(cid:87)(cid:92)(cid:15)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:40)(cid:84)(cid:88)(cid:76)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:11)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:12)(cid:3)
(i) Land and buildings located at 7-15 Spencer Street, Jandakot, Western Australia and 1 Tichbourne Street, Jandakot, Western Australia, were
independently valued in January 2005 by T D Anderson FAPI (Certified Practising Valuer – Reg No.471), of Jones Lang LaSalle, on the basis of
existing use at $3,900,000. Land and buildings were sold on 1 July 2005. Refer note 26.
Aggregate depreciation allocated, whether
expense or capitalised as part of
assets during the year:
recognised as an
the carrying amount of other
Freehold Buildings
Plant and Equipment
Equipment under hire purchase
(cid:20)(cid:19)
(cid:42)(cid:82)(cid:82)(cid:71)(cid:90)(cid:76)(cid:79)(cid:79)(cid:3)
Gross Carrying Amount
Balance at beginning of the financial year
Recognised from acquisitions during the year
Effect of foreign exchange movements
Balance at end of the financial year
Accumulated Impairment Losses
Balance at beginning of the financial year
Impairment losses for the year
Balance at end of the financial year
Net Book Value
At the beginning of the financial year
At the end of the financial year
Consolidated
Company
2006
$’000
2005
$’000
2006
$’000
2005
$’000
- 98
- 98
1,804 861 1,162 432
627 687 106 207
2,431 1,646 1,268 737
(cid:3)
Notes
(i)
Consolidated
2006
$’000
2005
$’000
Company
2006
$’000
2005
$’000
-
2,492
(586)
1,906
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- - - -
- - -
1,906
(i) Goodwill arose during the year on the acquisition by Samchem Drilling Fluids & Chemicals (Pty) Ltd, a wholly owned subsidiary of Imdex
Limited, of the business of SA Mud Services (Pty) Ltd and a range of clay and cement chemical additive inventory items effective 1 August 2005.
Refer note 24.
Samchem Drilling Fluids & Chemcials (Pty) Ltd is considered to be a separate cash generating unit since it operates independently from other
Imdex operations in a separate geographical area.
The recoverable amount of this goodwill has been determined based on a value in use calculation which uses a 5 year discounted cash flow
projection based on the 2007 budget. The projection assumes no additional growth in the business. A discount rate of 8.25% has been used.
Management believe that any reasonably possible change in the key assumptions on which recoverable amount is based would not cause the
carrying amount to exceed its recoverable amount.
53
Notes to the Financial Report
(cid:20)(cid:20)
(cid:50)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:44)(cid:81)(cid:87)(cid:68)(cid:81)(cid:74)(cid:76)(cid:69)(cid:79)(cid:72)(cid:86)(cid:3)
Patent Costs
Balance at beginning of the financial year
Additions
Written off
Balance at end of the financial year
Intellectual Property
Balance at beginning of the financial year
Recognised from acquisitions during the year
Effect of foreign exchange movements
Balance at end of the financial year
Accumulated Impairment Losses
Balance at beginning of the financial year
Impairment losses for the year
Balance at end of the financial year
Net Book Value
At the beginning of the financial year
At the end of the financial year
Consolidated
2006
$’000
2005
$’000
Company
2006
$’000
2005
$’000
(i)
12
-
(12)
-
-
1,437
(124)
1,313
-
-
-
-
12
-
12
-
-
-
-
-
-
12
-
(12)
-
-
-
-
-
-
-
-
12
-
12
-
-
-
-
-
-
12 - 12 -
12
1,313
12
-
(i) Intellectual Property arose during the year on the acquisition by Samchem Drilling Fluids & Chemicals (Pty) Ltd, a wholly owned subsidiary of
Imdex Limited, of the business of SA Mud Services (Pty) Ltd and a range of clay and cement chemical additive inventory items effective 1
August 2005. Refer note 24.
Intellectual Property has an indefinite life due to the uniqueness of the manufacturing processes and products, high cost barriers to entry and the
dominant market share held. Intellectual Property is therefore subjected to annual impairment testing.
The recoverable amount has been determined based on a value in use calculation which uses a 5 year discounted cash flow projection based on
the 2007 budget. The projection assumes no additional growth in the business. A discount rate of 8.25% has been used. Management believe
that any reasonably possible change in the key assumptions on which recoverable amount is based would not cause the carrying amount to
exceed its recoverable amount.
(cid:20)(cid:21)
(cid:55)(cid:85)(cid:68)(cid:71)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:50)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:51)(cid:68)(cid:92)(cid:68)(cid:69)(cid:79)(cid:72)(cid:86)(cid:3)
Trade payables
Accruals and other payables
Notes
(i)
Consolidated
2006
$’000
2005
$’000
Company
2006
$’000
2005
$’000
11,280
2,349
13,629
6,795
1,177
7,972
2,202
909
3,111
2,208
318
2,526
(i) Trade payables are interest free for periods ranging from 30 to 180 days. Thereafter interest is charged at commercial rates. The consolidated
entity has financial risk management policies in place to ensure that all payables are paid within the credit timeframe.
54
Notes to the Financial Report
(cid:20)(cid:22)
(cid:37)(cid:82)(cid:85)(cid:85)(cid:82)(cid:90)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)
Current borrowings
Secured
At amortised cost
Bank overdraft
Bank loan
Hire purchase liabilities
Imdex Minerals hire purchase liabilities reclassified as
discontinued operations
Non-current borrowings
Unsecured
At amortised cost
Consolidated
2006
$’000
2005
$’000
Company
2006
$’000
2005
$’000
Notes
(i)
(ii) 22
26
-
-
1,391
1,391
-
1,391
467
2,500
1,080
4,047
(82)
3,965
-
-
498
498
-
498
1,809
2,500
389
4,698
(82)
4,616
Loans from Controlled Entities
(iii)
-
-
-
2,716
Secured
At amortised cost
Bank loan
Hire purchase liabilities
(i)
(ii) 22
-
1,503
1,503
1,125
1,758
2,883
-
220
220
1,125
331
4,172
(i) Bank Loans comprised fixed and floating rate Commercial Bills. The Company retired all bank loans in December 2005.
(ii) The hire purchase liabilities are secured over the assets to which they relate, the current market value of which exceeds the value of the hire
purchase liability. The Consolidated Entity does not hold title to the equipment under hire purchase pledged as security.
(iii) Loans from Controlled Entities have no specific terms or conditions.
(cid:20)(cid:23)
(cid:51)(cid:85)(cid:82)(cid:89)(cid:76)(cid:86)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)
Consolidated
2006
$’000
2005
$’000
Company
2006
$’000
2005
$’000
Notes
Current provisions
Employee entitlements
Imdex Minerals employee entitlements reclassified as
discontinued operations
26
Non-current provisions
Employee entitlements
830
-
830
669
(100)
569
189
-
189
207
(100)
107
226
293
40
78
55
Notes to the Financial Report
(cid:20)(cid:24)
(cid:44)(cid:86)(cid:86)(cid:88)(cid:72)(cid:71)(cid:3)(cid:38)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3)
Issued and Paid Up Capital
Consolidated
2006
$’000
2005
$’000
Company
2006
$’000
2005
$’000
Notes
Fully paid ordinary shares
(i)
26,490
19,008
26,490
19,008
(i) Fully paid ordinary shares carry one vote per share and the right to dividends.
Consolidated and Company
2006
2005
Notes
Number
$'000
Number
$'000
Ordinary shares
Balance at beginning of the financial year
110,055,368
19,008
120,055,368
21,058
Cancellation of shares held by Mr H H Al-Merry on restructure
of the RTE/Imdex Joint Venture
Issue of shares as part consideration for the acquisition of
Samchem
Issue of equity securities as part of working capital raising
Share issue costs (net of tax)
Options expired
Issue of shares under staff option plan
8
24
-
-
(10,000,000)
(2,050)
16,059,002
13,300,000
-
-
51,667
3,592
3,990
(112)
1
11
-
-
-
-
-
-
-
-
-
-
Closing balance at end of the financial year
139,466,037
26,490
110,055,368
19,008
Issuances of other equity securities
Details of the Staff Option Plan can be found in note 31.
(cid:20)(cid:25)
(cid:53)(cid:72)(cid:86)(cid:72)(cid:85)(cid:89)(cid:72)(cid:86)(cid:3)
Asset Revaluation Reserve
Foreign Currency Translation Reserve
Employee Equity-Settled Benefits Reserve
Asset Revaluation Reserve
Balance at beginning of the financial year
Revaluation adjustment
Balance at the end of the financial year
Consolidated
Company
2006
$’000
2005
$’000
2006
$’000
2005
$’000
-
(494)
105
(389)
-
-
-
-
-
48
48
8
(8)
-
-
-
105
105
-
-
-
-
-
48
48
8
(8)
-
The asset revaluation reserve arose on the revaluation of land and buildings in prior periods.
56
Notes to the Financial Report
(cid:20)(cid:25)
(cid:53)(cid:72)(cid:86)(cid:72)(cid:85)(cid:89)(cid:72)(cid:86)(cid:3)(cid:11)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:12)(cid:3)
Foreign Currency Translation Reserve
Balance at beginning of the financial year
Translation of foreign operations after taxation
Balance at the end of the financial year
Consolidated
Company
Notes
2006
$’000
2005
$’000
2006
$’000
2005
$’000
-
(494)
(494)
-
-
-
-
-
-
-
-
-
Exchange differences relating to the translation from South African Rand, being the functional currency of the Consolidated Entity's foreign
controlled entity in South Africa, into Australian dollars are brought to account by entries made directly to the foreign currency translation reserve.
Employee Equity-Settled Benefits Reserve
Balance at beginning of the financial year
Options issued during the financial year
Options exercised during the financial year
Options expired during the financial year
Balance at the end of the financial year
2
15
15
48
59
(1)
(1)
105
-
48
-
-
48
48
59
(1)
(1)
105
-
48
-
-
48
The employee equity-settled benefits reserve arises on the grant of share options to Directors and employees. Amounts are transferred out of the
reserve and into issued capital when the options are exercised or expire. Further information regarding the Staff Option Plan is contained in note
31.
(cid:20)(cid:26)
(cid:53)(cid:72)(cid:87)(cid:68)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)(cid:51)(cid:85)(cid:82)(cid:73)(cid:76)(cid:87)(cid:86)(cid:3)
Consolidated
Company
Notes
2006
$’000
2005
$’000
2006
$’000
2005
$’000
Balance at beginning of the financial year
Net profit attributable to members of the parent entity
Dividends provided for or paid
Balance at end of the financial year
19
(36)
7,984
(1,396)
6,552
(4,208)
4,172
-
(36)
(13,972)
1,178
(1,396)
(14,190)
(14,929)
957
-
(13,972)
(cid:20)(cid:27)
(cid:40)(cid:68)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:51)(cid:72)(cid:85)(cid:3)(cid:54)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)
Basic earnings per share
From continuing operations
From discontinued operations
Total basic earnings per share
Diluted earnings per share
From continuing operations
From discontinued operations
Total diluted earnings per share
(a) Basic earnings per share
Consolidated
2006
Cents per share
2005
Cents per share
6.07
-
6.07
5.95
-
5.95
2.88
0.78
3.66
2.88
0.78
3.66
The earnings and weighted average number of ordinary shares used in the
calculation of basic earnings per share are as follows:
Earnings (i)
Earnings from continuing operations (i)
$'000s
$'000s
7,984
7,984
4,172
3,282
57
Notes to the Financial Report
(cid:20)(cid:27)
(cid:40)(cid:68)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:51)(cid:72)(cid:85)(cid:3)(cid:54)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:11)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:12)(cid:3)
(a) Basic earnings per share (continued)
Consolidated
2006
Shares
2005
Shares
Weighted average number of ordinary shares for the purposes of basic
earnings per share
131,472,906
114,055,368
(i) Earnings used in the calculation of total basic earnings per share and
basic earnings per share from continuing operations reconciles to net
profit in the income statement as follows:
Net profit
Earnings used in the calculation of basic EPS
Adjustments to exclude profit for the period from discontinued operations
Earnings used in the calculation of basic EPS from continuing operations
(b) Diluted earnings per share
2006
$'000s
2005
$'000s
7,984
7,984
-
7,984
4,172
4,172
(890)
3,282
The earnings and weighted average number of ordinary shares used in the calculation of diluted earnings per share are as
follows:
Earnings (ii)
Earnings from continuing operations (ii)
Consolidated
2006
$'000s
2005
$'000s
7,984
7,984
4,172
3,282
Shares
Shares
Weighted average number of ordinary shares for the purposes of diluted
earnings per share (iii)
134,096,984
114,086,252
(ii) Earnings used in the calculation of total diluted earnings per share and
diluted earnings per share from continuing operations reconciles to net
profit in the income statement as follows:
Net profit
Earnings used in the calculation of diluted EPS
Adjustments to exclude profit for the period from discontinued operations
Earnings used in the calculation of diluted EPS from continuing operations
(iii) The weighted average number of ordinary shares for the purposes of
diluted earnings per share reconciles to the weighted average number of
ordinary shares used in the calculation of basic earnings per share as
follows:
Weighted average number of ordinary shares used in the calculation of
basic EPS
Shares deemed to be issued for no consideration in respect of employee
and Director options
Weighted average number of ordinary shares used in the calculation of
diluted EPS
(iv) The following potential ordinary shares are not dilutive and are
therefore excluded from the weighted average number of ordinary shares
for the purposes of diluted earnings per share:
Employees and Consultants share options
Corporate Advisors share options
58
2006
$'000s
2005
$'000s
7,984
7,984
-
7,984
4,172
4,172
(890)
3,282
2006
Shares
2005
Shares
131,472,906
114,055,368
2,624,078
30,884
134,096,984
114,086,252
2006
Shares
2005
Shares
-
-
-
3,160,000
3,100,000
6,260,000
Notes to the Financial Report
(cid:20)(cid:28)
(cid:39)(cid:76)(cid:89)(cid:76)(cid:71)(cid:72)(cid:81)(cid:71)(cid:86)(cid:3)
Recognised amounts
Notes
2006
Cents per
share
2006
Total
$’000
2005
Cents per
share
2005
Total
$’000
Fully paid ordinary shares - interim dividend franked to 30%
(i)
1.00
1,396
Unrecognised amounts
Fully paid ordinary shares - final dividend franked to 30%
(ii)
1.00
1,396
-
-
-
-
(i) The interim, fully franked dividend was paid on 30 March 2006. The record date for determining the entitlement to the interim dividend was 23
March 2006. There are no dividend reinvestment plans in operation.
(ii) The final, fully franked dividend was declared on 18 August 2006 with an entitlement date of 10 October 2006. The financial effect of the
dividend has not been recognised in the financial statements at 30 June 2006.
Consolidated
2006
$'000s
2005
$'000s
5,060
(598)
4,529
-
Adjusted franking account balance
Impact on franking account of dividends not recognised
(cid:21)(cid:19)
(cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:87)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:40)(cid:91)(cid:83)(cid:72)(cid:81)(cid:71)(cid:76)(cid:87)(cid:88)(cid:85)(cid:72)(cid:3)
(a) Capital expenditure commitments
At 30 June 2006 capital expenditure commitments were nil (2005: nil).
(b) Lease commitments
Hire purchase liabilities and non-cancellable operating lease commitments are disclosed in note 22.
(c) Superannuation commitments
The Company and its Controlled Entities contribute to various defined contribution employee superannuation funds in accordance with the
requirements of the Superannuation Guarantee Administration Act 1992. The contributions are based on a percentage of employee gross
salaries. All employees are entitled to benefit on retirement, disability or death. The Company and its Controlled Entities are under no legal
obligation to make up any shortfall in the funds assets to meet payments due to employees.
(cid:21)(cid:20)
(cid:38)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:74)(cid:72)(cid:81)(cid:87)(cid:3)(cid:47)(cid:76)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:74)(cid:72)(cid:81)(cid:87)(cid:3)(cid:36)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3)
Contingent Liabilities
Indemnity to power transmission utility
Rental bond
Department of Mines
Minister of State Development
Contingent Assets
Notes
(i) (ii)
(i)
(i) (ii)
(ii)
Consolidated
2006
$’000
2005
$’000
Company
2006
$’000
2005
$’000
-
100
-
-
100
-
16
100
27
12
155
-
-
100
-
-
100
-
16
100
27
12
155
-
(i) Comprise bank guarantees supporting the extension of credit or the performance of the Consolidated Entity in respect of its operations. The
Directors are not aware of any circumstance or information which would lead them to believe that these liabilities will crystallise. Consequently no
provisions have been made in the Financial Report in respect of these matters. No material losses are expected to arise in respect of these
guarantees.
(ii) These Contingent Liabilities related to the business of Imdex Minerals which was disposed of during the current year.
59
Notes to the Financial Report
(cid:21)(cid:21)
(cid:47)(cid:72)(cid:68)(cid:86)(cid:72)(cid:86)(cid:3)
(a) Hire Purchases
Hire purchase arrangements
Hire purchase arrangements relate to plant and equipment with terms of up to 5 years. The Consolidated Entity has options to purchase the
equipment for a nominal amount at the conclusion of the arrangements.
Hire purchase commitments
Hire purchase commitments are payable as follows.
Due:
Within one year
Between one and five years
Later than five years
Minimum lease payments
Less: future finance charges
Imdex Minerals hire purchase liabilities reclassified
as discontinued operations
Minimum future lease payments
Present value of minimum future lease
payments
Consolidated
2006
2005
$’000
$’000
Company
2006
$’000
2005
$’000
Consolidated
2006
2005
$’000
$’000
Company
2006
$’000
2005
$’000
1,569 1,261 534 425 1,391 1,216 498 396
1,591 1,907 226 347 1,503 1,622 220 324
- - - - - - - -
3,160 3,168 760 772 2,894 2,838 718 720
(266) (330) (42) (52) - - - -
- (82) - (82) - (82) - (82)
2,894 2,756 718 638 2,894 2,756 718 638
Hire purchase liabilities provided for in the Financial Report
Current – Note 13
Non current - Note 13
(b) Operating Leases
Operating leasing arrangements
1,391 998 498 307
1,503 1,758 220 331
2,894 2,756 718 638
Operating leases relate to premises and the lease of motor vehicles used by the Consolidated Entity in its operations, generally with terms
between 2 and 5 years. Some of the operating leases contain options to extend for further periods and an adjustment to bring the lease payments
into line with market rates prevailing at that time. The leases do not contain an option to purchase the leased property.
Non-cancellable operating lease payments
Within one year
Between one and five years
Later than five years
(cid:21)(cid:22)
(cid:54)(cid:88)(cid:69)(cid:86)(cid:76)(cid:71)(cid:76)(cid:68)(cid:85)(cid:76)(cid:72)(cid:86)(cid:3)
Parent Entity
Imdex Limited
Controlled Entities
Australian Mud Company Pty Ltd
Surtron Technologies Pty Ltd
Australian Mud Company Chile SA
Samchem Drilling Fluids & Chemicals (Pty) Ltd
Consolidated
2006
2005
$’000
$’000
Company
2006
$’000
2005
$’000
791
1,478
851
3,120
537
675
300
1,512
86
11
-
97
251
102
-
353
Notes
Country of
Incorporation
2006
%
2005
%
Ownership Interest
(i)
Australia
(iii), (iv)
(iii), (iv)
(ii)
24
Australia
Australia
Chile
South Africa
100
100
100
100
100
100
100
-
(i) Imdex Limited is the ultimate parent company and is the head entity within the tax consolidated group.
(ii) Under Chilean law an audit of this company is not required.
(iii) These companies are part of the tax consolidated group.
(iv) These wholly-owned subsidiaries have entered into a deed of cross guarantee with Imdex Limited pursuant to ASIC Class Order
98/1418 and are relieved from the requirement to prepare and lodge an audited financial report. These companies became a party to the
deed of cross guarantee on 30 June 2006.
60
Notes to the Financial Report
(cid:21)(cid:22)
(cid:54)(cid:88)(cid:69)(cid:86)(cid:76)(cid:71)(cid:76)(cid:68)(cid:85)(cid:76)(cid:72)(cid:86)(cid:3)(cid:11)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:12)(cid:3)
The consolidated income statement and balance sheet of entities which are party to the deed of cross guarantee are:
Income Statement
2006
$’000
Revenue from sale of goods, rendering of services and operating lease
rental
Other revenue from operations
Total revenue
Other income
Raw materials and consumables used
Other expenses
Employee expenses
Depreciation and amortisation expense
Finance costs
Profit before income tax expense
Income tax expense relating to ordinary activities
Profit for the year
Balance Sheet
Current Assets
Cash and Cash Equivalents
Trade and Other Receivables
Inventories
Other
Total Current Assets
Non Current Assets
Property, Plant and Equipment
Deferred Tax Assets
Total Non Current Assets
Total Assets
Current Liabilities
Trade and Other Payables
Borrowings
Provisions
Total Current Liabilities
Non Current Liabilities
Borrowings
Total Non Current Liabilities
Total Liabilities
Net Assets
Equity
Issued Capital
Retained Profits *
Total Equity
* Retained Profit at the beginning of the financial year
Net Profit
Dividend provided for or paid
Retained Profit at the end of the financial year
44,861
87
44,948
30
(22,162)
(7,190)
(6,967)
(1,054)
(171)
7,434
(2,239)
5,195
3,814
16,428
7,457
7
27,706
5,294
480
5,774
33,480
10,261
893
848
12,002
1,282
1,282
13,284
20,196
260
19,936
20,196
15,085
5,195
(344)
19,936
61
Notes to the Financial Report
(cid:21)(cid:23)
(cid:36)(cid:70)(cid:84)(cid:88)(cid:76)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:37)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:72)(cid:86)(cid:3)
With effect from 1 August 2005, Samchem Drilling Fluids & Chemicals (Pty) Ltd ("Samchem"), Imdex’s 100% owned South African subsidiary,
acquired the business of SA Mud Services (Pty) Ltd and a range of clay and cement chemical additive inventory items. SA Mud Services (Pty)
Ltd was the largest supplier of drilling fluids and chemicals to the mining industry in Africa. Samchem operates a manufacturing facility in
Johannesburg, South Africa from which it manufactures and markets a wide range of chemicals primarily for the drilling industry. At the General
Meeting held on 5 August 2005, the shareholders of Imdex Limited approved this acquisition and the associated share issue.
Details of the assets and liabilities and goodwill are as follows:
Book value
Notes
$’000
Fair value
adjustments
$’000
Fair value on
acquisition
$’000
Trade and other receivables
Inventory
Property, plant and equipment
Intellectual property associated with clay chemical and mud brick
manufacture
Trade and other payables
Provision for employee entitlements
Deferred tax liabilities
Fair value of net identifiable assets acquired
Goodwill on acquisition
Total purchase consideration
Total purchase consideration
Consideration in cash and cash equivalents
Less cash and cash equivalents acquired
Direct costs relating to the acquisition
Shares issued: 16,059,002 ordinary shares of Imdex Limited
Operating results of the business of Samchem included in the
Consolidated Income Statement of Imdex Limited from acquisition on 1
August 2005:
Revenue from the sale of goods
Total expenses
Profit for the period
(i)
(i)
(iv)
(iv)
(ii) 15
(iii)
1,735
1,507
373
-
(523)
(44)
-
3,048
-
-
43
1,437
-
-
(417)
1,063
1,735
1,507
416
1,437
(523)
(44)
(417)
4,111
2,492
6,603
2,901
-
110
3,592
6,603
Results since
acquisition
$’000
10,391
(9,969)
422
(i) Imdex acquired the business of Samchem, and paid the premium (goodwill) over identifiable assets, due to the fact that Samchem is expected
to complement the business of the Australian Mud Company (AMC) (Imdex's wholly owned drilling fluids subsidiary). There were no acquisition
provisions created, nor were there any contingent liabilities assumed in the acquisition. The balances of goodwill and intellectual property, noted
above, do not tie to the Balance Sheet at 30 June 2006. As set out in Note 1(m)(ii), this is due to the fact that these balances are translated at the
exchange rates prevailing at the reporting date, rather than the acquisition date as above.
In determining the value attributed to identifiable intangibles and goodwill, the following additional possible intangible assets were identified:
customer relationships, brands and unpatented technology. In all cases these intangibles did not meet the “identifiability” criteria and therefore
were not recognised.
The intellectual property associated with the clay chemical and mud brick manufacture has been assessed as having an indefinite useful life and
therefore has not been amortised. This estimated useful life of these assets will be reviewed annually.
(ii) The fair value of the ordinary shares issued were 22.37 cents each which was based on the weighted average share price of Imdex's ordinary
shares in the 10 trading days prior to the completion of the acquisition.
(iii) Had the acquisition of Samchem been effected on 1 July 2005,
the Groups revenue would be
approximately $67,737k and the profit would be approximately $8,022k. The results of Samchem are included in the Drilling Fluids & Chemicals
segment in Note 25.
the current year,
the beginning of
(iv) The Consolidated Cash Flow Statement for the year ended 30 June 2006 records the payment for the acquisition of the business of
Samchem as $3,011k.
62
Notes to the Financial Report
(cid:21)(cid:24)
(cid:54)(cid:72)(cid:74)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:44)(cid:81)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable
basis. Unallocated items mainly comprise income earning assets and revenue, interest bearing loans, borrowings and expenses, and corporate
assets and expenses. Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be
used for more than one period.
Business Segments
The Consolidated Entity comprises the following main business segments, based on the Consolidated Entity's management reporting system:
(i) Drilling products and services: Down hole surveying, geophysical
products;
(ii) Minerals Processing: Milling and processing of industrial minerals; and
(iii) Drilling fluids and chemicals: Manufacture and supply of drilling fluids and chemicals to the mining, mineral exploration, oil and gas and water
well drilling industries.
logging and directional drilling; down hole motors, cameras and drilling
Geographical Segments
In presenting information on the basis of geographical segments, segment revenue is based on geographical location of customers. Segment
assets are based on the geographical location of the assets.
The Consolidated Entity's business segments operate geographically as follows:
(i) Australia: Drilling services; milling and processing of industrial minerals; manufacture and supply of drilling fluids and chemicals; down hole
motors, cameras and drilling products;
(ii) Saudi Arabia: Supply of drilling fluids and chemicals to the oil and gas industry;
(iii) Africa: Drilling services, supply of drilling fluids and chemicals;
(iv) South East Asia: Manufacture and supply of drilling fluids and chemicals to the mining and mineral exploration industries.
Primary reporting: Business Segments
(a) Segment Revenues
External revenue
2006
2005
$'000
$'000
Inter-segment
Other
Total
2006
$'000
2005
$'000
2006
$'000
2005
$'000
2006
$'000
2005
$'000
Drilling fluids and chemicals
Drilling products and services
Minerals processing
Total of all segments
Minerals processing revenue reclassified as discontinued operations
Unallocated
Total revenue - continuing operations
41,593
25,021
-
66,614
23,171
16,880
6,784
46,835
-
-
-
-
-
-
-
-
96
2
-
98
-
-
-
-
(b) Segment Results
Continuing operations
Drilling fluids and chemicals *
Drilling products and services
Total of all segments
Eliminations
Unallocated
Profit before income tax expense
Income tax expense
Profit for the year - continuing operations
Discontinued operations
Minerals processing
Total of all segments
Eliminations
Unallocated
Profit before income tax expense
Income tax expense
Profit for the year - discontinued operations
Profit for the year
* - Includes the impairment adjustment of $2.275k for the RTE/Imdex Joint Venture
41,689
25,023
-
66,712
-
80
66,792
23,171
16,880
6,784
46,835
(6,784)
-
40,051
3,462
5,253
8,715
-
3,149
11,864
(3,880)
7,984
-
-
-
-
-
-
-
3,006
2,872
5,878
-
(1,365)
4,513
(1,231)
3,282
42
42
-
-
42
848
890
7,984
4,172
63
Notes to the Financial Report
(cid:21)(cid:24)
(cid:54)(cid:72)(cid:74)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:44)(cid:81)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:11)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:12)(cid:3)
(c) Segment Assets and Liabilities
Drilling fluids and chemicals
Drilling products and services
Minerals processing
Total of all segments
Receivable and investment in the RTE/Imdex Joint Venture
Eliminations
Unallocated
Consolidated
(d) Other segment information
D
Assets
2006
$'000
2005
$'000
Liabilities
2006
$'000
2005
$'000
37,808
16,255
-
54,063
-
(2,393)
1,078
52,748
13,383
12,474
7,344
33,201
3,169
(2,077)
1,121
35,414
9,492
8,588
-
18,080
-
(443)
2,458
20,095
4,600
6,051
900
11,551
-
(2,077)
6,920
16,394
Depreciation
Acquisition of segment
assets
Non cash expenses
other than depreciation
2006
$'000
2005
$'000
2006
$'000
2005
$'000
2006
$'000
2005
$'000
Drilling fluids and chemicals
Drilling products and services
Minerals processing
Total of all segments
Minerals processing reclassified as discountinued operations
Unallocated
Consolidated
237
2,108
-
2,345
-
86
2,431
147
1,166
256
1,569
(256)
77
1,390
467
6,159
-
6,626
-
104
6,730
250
2,198
65
2,513
(65)
279
2,727
2,305
30
-
2,335
-
301
2,636
41
87
1,101
1,229
(1,101)
-
128
Drilling fluids and chemicals
Drilling products and services
Minerals processing
Total of all segments
Minerals processing reclassified as discountinued operations
Unallocated
Consolidated
Secondary Reporting: Geographical Segments
Australia
Saudi Arabia
Africa
South East Asia
China
Other
Minerals processing revenue reclassified as discontinued
operations
Total
Carrying amounts of
associates / joint
ventures
Impairment losses
Share of profits/(losses)
of associates / joint
ventures
2006
$'000
2005
$'000
2006
$'000
2005
$'000
2006
$'000
2005
$'000
-
-
-
-
-
-
-
3,169
-
-
3,169
-
-
3,169
(2,275)
-
-
(2,275)
-
-
(2,275)
-
-
-
-
-
-
-
-
-
-
-
-
(301)
(301)
-
-
-
-
-
-
-
Revenue from external
customers
Segment assets
Acquisition of segment
assets
2006
$'000
2005
$'000
2006
$'000
2005
$'000
2006
$'000
2005
$'000
43,312
-
13,014
8,411
112
1,943
66,792
-
66,792
37,389
-
1,217
4,808
543
2,878
46,835
(6,784)
40,051
43,453
-
5,411
1,470
658
1,756
52,748
-
52,748
29,736
3,169
335
1,264
316
594
35,414
-
35,414
6,351
-
379
-
-
-
6,730
-
6,730
2,792
-
-
-
-
-
2,792
(65)
2,727
64
Notes to the Financial Report
D
(cid:21)(cid:25)
(cid:39)(cid:76)(cid:86)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:3)(cid:50)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)
On 1 February 2005, Imdex Limited initiated an active program to dispose of the Imdex Minerals Division, its industrial minerals processing
business. The sale was one part of the Company’s strategy to focus on its core business as a global provider of “drilling products and services”.
As announced to the Australian Stock Exchange on 9 June 2005, Imdex Limited entered into a definitive agreement for the sale of the Imdex
Minerals Division with the sale being completed on 1 July 2005.
Financial information relating to the discontinued operation for the period to the date of disposal is set out below.
Consolidated
2006
$’000
2005
$’000
Notes
Profit from discontinued operations
Revenue
Expenses
Profit before income tax
Income tax expense
Profit after income tax of discontinued operations
Gain/(loss) on remeasurement to fair value less costs to sell
Gain/(loss) on sale of the division before income tax
Income tax expense
Gain/(loss) on sale of the division after income tax
Profit from discontinued operations
Cash flows from discontinued operations
Net cash inflow from ordinary activities
Net cash inflow from investing activities (including the proceeds from the
sale of the business)
Net cash inflow from financing
Carrying amounts of assets and liabilities
Property, plant and equipment
Inventories
Prepayments
Total assets classified as held for sale
Hire purchase liabilities
Employee entitlements
Total liabilities associated with assets classified as held for sale
Net assets
Details of the sale of the division
Consideration received:
Cash
Additional deferred consideration
Total disposal consideration
Carrying amount of net assets sold
Gain/(loss) on sale before income tax
Income tax expense
Gain/(loss) on sale after income tax
-
-
-
-
-
-
-
-
-
-
-
6,271
-
6,271
-
-
-
-
-
-
-
-
6,271
-
6,271
(6,271)
-
-
-
6,784
(6,742)
42
848
890
-
-
-
-
890
(1,077)
(65)
(285)
(1,427)
5,125
1,326
2
6,453
(82)
(100)
(182)
6,271
-
-
-
-
-
-
-
(i)
(i) As part of the sale agreement, Imdex Limited is entitled to a further cash payment of $1.5million, subject to the future profitability of certain
agricultural products which, at the time of sale, were still in the early stages of development and commercialisation. This has not been recognised
in the consideration received and the gain on sale of Imdex Minerals as the probability of receiving the deferred consideration cannot be
accurately predicted at this stage. If this consideration is recognised in a future period it will increase the gain on the sale of Imdex Minerals.
65
Notes to the Financial Report
(cid:21)(cid:26)
(cid:53)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:92)(cid:3)(cid:39)(cid:76)(cid:86)(cid:70)(cid:79)(cid:82)(cid:86)(cid:88)(cid:85)(cid:72)(cid:86)(cid:3)
(a) Equity interests in related parties
Details of the percentage ownership of controlled entities and the wholly owned Group is set out in Note 23. The wholly owned Group consists of
Imdex Limited and its wholly owned Controlled Entities.
Details of ownership interests in joint venture entities are set out in Note 8.
(b) Key management personnel compensation
Details of remuneration of key management personnel is set out in Note 30.
(c) Key management personnel equity holdings
(i) Fully paid ordinary shares issued by Imdex Limited
2006
Balance at 1
July 2005
Granted as
compensation
Received on
exercise of
options
Net other
change
Balance at 30
June 2006
Balance held
nominally
Mr I F Burston
Mr B W Ridgeway
Mr H H Al-Merry
Mr R W Kelly
Mr K A Dundo
Mr I R Freeman
Mr J P O'Neil
Mr S J Lyons
Mr D L Kinley
Mr G E Weston
Mr C S Munyard
No.
100,000
6,025,000
755,000
65,000
100,000
-
-
50,000
120,000
-
-
7,215,000
No.
No.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
25,000
25,000
No.
100,000
(1,025,000)
-
200,000
200,000
16,059,002
12,847,202
-
-
-
-
28,381,204
No.
200,000
5,000,000
755,000
265,000
300,000
16,059,002
12,847,202
50,000
120,000
-
25,000
35,621,204
No.
-
-
-
-
-
-
-
-
-
-
-
-
2005
Balance at 1
July 2004
Granted as
compensation
Received on
exercise of
options
Net other
change
Balance at 30
June 2005
Balance held
nominally
Mr I F Burston
Mr B W Ridgeway
Mr H H Al-Merry
Mr R W Kelly
Mr K A Dundo
Mr S J Lyons
Mr D L Kinley
Mr G E Weston
Mr C S Munyard
Mr I Tan
No.
100,000
6,143,993
10,755,000
65,000
-
50,000
120,000
-
-
-
17,233,993
(ii) Share options issued by Imdex Limited
No.
No.
-
-
-
-
-
-
-
-
-
-
-
No.
-
(118,993)
(10,000,000)
-
100,000
-
-
-
-
-
No.
100,000
6,025,000
755,000
65,000
100,000
50,000
120,000
-
-
-
(10,018,993)
7,215,000
-
-
-
-
-
-
-
-
-
-
-
No.
-
-
-
-
-
-
-
-
-
-
-
2006
Balance at 1
July 2005
Granted as
compensation
Exercised Balance at 30
June 2006
Bal. vested at
30 June 2006
No.
-
No.
-
2,000,000
2,000,000
-
-
-
-
-
-
-
-
-
-
200,000
200,000
3,000,000
125,000
5,525,000
200,000
200,000
3,000,000
125,000
5,525,000
150,000
100,000
1,000,000
75,000
1,325,000
Vested but
not
exercisable
No.
-
-
-
-
-
-
-
Vested and
exercisable
No.
-
2,000,000
-
-
-
-
-
50,000
100,000
2,000,000
50,000
4,200,000
Options
vested
during year
No.
-
2,000,000
-
-
-
-
-
50,000
100,000
2,000,000
50,000
4,200,000
Mr I F Burston
Mr B W Ridgeway
MR H H Al-Merry
Mr R W Kelly
Mr K A Dundo
Mr I R Freeman
Mr J P O'Neil
Mr S J Lyons
Mr D L Kinley
Mr G E Weston
Mr C S Munyard
No.
-
-
-
-
-
-
-
50,000
100,000
2,000,000
75,000
2,225,000
No.
-
2,000,000
-
-
-
-
-
150,000
100,000
1,000,000
75,000
3,325,000
No.
-
-
-
-
-
-
-
-
-
-
(25,000)
(25,000)
66
Notes to the Financial Report
(cid:21)(cid:26)
2005
(cid:53)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:92)(cid:3)(cid:39)(cid:76)(cid:86)(cid:70)(cid:79)(cid:82)(cid:86)(cid:88)(cid:85)(cid:72)(cid:86)(cid:3)(cid:11)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:12)(cid:3)
Balance at 1
July 2004
Granted as
compensation
Expired
Balance at 30
June 2005
Bal. vested at
30 June 2005
Mr I F Burston
Mr B W Ridgeway
MR H H Al-Merry
Mr R W Kelly
Mr K A Dundo
Mr S J Lyons
Mr D L Kinley
Mr G E Weston
Mr C S Munyard
Mr I Tan
No.
2,000,000
1,000,000
-
-
-
-
-
-
-
-
3,000,000
No.
-
-
-
-
50,000
100,000
2,000,000
75,000
-
2,225,000
No.
(2,000,000)
(1,000,000)
-
-
-
-
-
-
-
-
(3,000,000)
No.
-
-
-
-
-
50,000
100,000
2,000,000
75,000
-
2,225,000
No.
-
-
-
-
-
50,000
100,000
2,000,000
75,000
-
2,225,000
Vested but
not
exercisable
No.
Vested and
exercisable
No.
Options
vested
during year
No.
-
-
-
-
-
50,000
100,000
2,000,000
75,000
-
2,225,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The options granted to key management personnel during the financial year were made in accordance with the Staff Option Plan, as further
described in Note 31. Each share option converts into 1 ordinary share of Imdex Limited. No amounts were paid, or are payable, by the recipient on
receipt of the option. The options are exercisable in one third lots at the end of each of the first three years during their life.
(d) Other transactions with key management personnel (and their related parties) of Imdex Limited
(i) Lot 1598 Willis Street, Newman was rented by Surtron Technologies Pty Ltd from Mr G E Weston on normal commercial terms and conditions for
the period 1 July 2005 to 16 January 2006.
(ii) An amount of R2,364,160 (A$443,516) is owed to Samchem Drilling Fluids & Chemicals (Pty) Ltd, a wholly owned Imdex Limited subsidiary, by
Quadripart Investment Holdings (Pty) Ltd, a company in which Mr I R Freeman has an interest. This loan does not carry interest and has no specific
terms and conditions. Refer Note 5.
(iii) The premises on which the administration and factory buildings of Samchem Drilling Fluids & Chemicals (Pty) Ltd are located in Alrode,
Alberton, South Africa are leased on normal commercial terms and conditions from PTS Investments (Pty) Ltd and Basalt Properties (Pty) Ltd,
companies in which Mr I R Freeman has an interest.
(iv) Mr K A Dundo is a Partner of the legal firm QLegal, that provided legal services to the Imdex Group on normal commercial terms and
conditions.
(v) As described in these financial statements, Imdex Limited was involved in a Joint Venture with Rashid Trading Establishment (RTE), a Company
in which Mr H H Al-Merry is the President and Owner. RTE also acts as the agent of the Joint Venture in some circumstances. There were no
amounts recognised during the year relating to transactions between the Company and RTE as agent. During the current year the investment
balance in the Joint Venture of $1.4 million and the receivable balance due from RTE of $875k were considered to be fully impaired. The
impairment adjustment is shown on the face of the income statement. During the prior year, and as approved by Shareholders at the 2004 Annual
General Meeting, 10,000,000 shares held by Mr H H Al-Merry, in connection with the RTE/Imdex Saudi Arabian Joint Venture, were cancelled.
(vi) Transactions with Directors
Note
Consolidated
Company
2006
$
2005
$
2006
$
2005
$
Profit from ordinary activities before income tax includes the following
items of expenses relating to transactions, other than compensation,
with Directors or their personally-related entities:
Operating lease rental
Legal services
d(iii)
d(iv)
117,375
- - -
25,604 82,126 25,604 82,126
Total assets arising from transactions, other than compensation, with
Directors or their personally-related entities:
Goodwill and deferred acquisiton costs
Total assets and liabilities arising from transactions, other than
compensation, with Directors or their personally-related entities:
Current Assets
Current Liabilities
d(iv)
85,727
- 85,727
-
d(ii)
d(iii), d(iv)
- - -
443,516
54,554 37,572 34,196 37,572
67
E
Notes to the Financial Report
(cid:21)(cid:26)
(cid:53)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:92)(cid:3)(cid:39)(cid:76)(cid:86)(cid:70)(cid:79)(cid:82)(cid:86)(cid:88)(cid:85)(cid:72)(cid:86)(cid:3)(cid:11)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:12)(cid:3)
(e) Transactions with other related parties
(i) Transactions within the wholly-owned Group
Details of dividend revenue received by the ultimate parent entity is disclosed in Note 2. Amounts receivable from, and payable to entities in the
wholly-owned Group are disclosed in Note 5 and Note 13. During the financial year Imdex Limited provided management services to entities in the
wholly-owned Group as disclosed in Note 2.
During the prior year, the Directors elected for wholly-owned Australian entities within the Group to be taxed as a single entity from 1 July 2003.
Entities within the tax-consolidated group have entered into a tax-sharing agreement with the head entity. Under the terms of this agreement, Imdex
Limited and each of the entities in the tax consolidated group has agreed to pay a tax equivalent payment to or from the head entity, based on the
net accounting profit or loss of the entity and the current tax rate. Such amounts are reflected in amounts receivable from or payable to other
entities in the tax consolidated Group.
(f) Parent entity
The ultimate parent entity in the Consolidated Entity is Imdex Limited, a Company incorporated in Western Australia.
(cid:3)
(cid:3)
(cid:21)(cid:27)
(cid:49)(cid:82)(cid:87)(cid:72)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:68)(cid:86)(cid:75)(cid:3)(cid:41)(cid:79)(cid:82)(cid:90)(cid:3)(cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)
(a) Reconciliation of cash and cash equivalents
For the purposes of the Statement of Cash Flows, cash and cash equivalents includes cash on hand and in banks and investment in money
market instruments, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the year as shown in the Cash Flow Statement
is reconciled to the related items in the balance sheet as follows:
Cash and cash equivalents
Bank overdraft
Consolidated
Company
2006
$’000
2005
$’000
2006
$’000
2005
$’000
6,421
-
6,421
103
(467)
(364)
2,003
-
2,003
96
(1,809)
(1,713)
Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates. The fair value of cash and cash equivalents is
$6,420,802 (2005: $364,000 negative)
(b) Non cash financing and investing activities
During the year the Consolidated Entity converted $300k of funds advanced to an investee into an investment in that entity. This is not reflected
in the cash flow statement.
68
Notes to the Financial Report
(cid:21)(cid:27)
(cid:49)(cid:82)(cid:87)(cid:72)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:68)(cid:86)(cid:75)(cid:3)(cid:41)(cid:79)(cid:82)(cid:90)(cid:3)(cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:11)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:12)(cid:3)
(c) Reconciliation from the Profit for the Year to Net Cash Provided by Operating Activities
E
Consolidated
2006
$’000
2005
$’000
Company
2006
$’000
2005
$’000
7,984
4,172
1,178
2,431
301
(97)
59
(76)
-
210
(4,500)
2,275
1,528
556
(4,851)
(1,284)
18
5,370
150
10,074
1,646
-
(16)
48
(384)
32
194
-
-
535
55
(2,039)
(2,016)
(13)
748
193
3,155
1,268
-
(82)
59
(38)
-
40
(4,199)
3,460
67
1,262
(1,772)
(158)
11
585
44
1,725
1,870
-
1,130
3,000
-
-
-
-
1,870
-
1,130
3,000
3,700
500
1,550
5,750
3,700
257
1,509
5,466
-
243
41
284
1,870
-
1,110
2,980
-
-
-
-
1,870
-
1,110
2,980
957
737
-
(18)
48
(44)
32
26
-
-
(14)
73
(97)
(1,300)
(2)
35
32
465
3,700
500
1,550
5,750
3,700
257
1,509
5,466
-
243
41
284
Profit for the year
Adjustments for
Depreciation of non-current assets
Share of associates losses
Interest received disclosed as investing activities
Share options expensed
Profit on sale of non-current assets
Non-cash items disclosed as profit on discontinued
operations
Interest on hire purchase liabilities
Fair value adjustment: Held for Trading investments
Impairment adjustment
Increase / (decrease) in current tax liability
Increase in deferred tax balances
Changes in assets and liabilities during the financial year
(Increase) / decrease in assets:
Current receivables
Current inventories
Other current assets
Increase / (decrease) in liabilities:
Current payables
Provision for employee entitlements
Net Cash Provided by Operating Activities
(d) Financing facilities
Total facilities available
Bank loan
Equipment finance facility
Multi option facility (including bank overdraft)
Facilities utilised at balance sheet date
Bank loan
Equipment finance facility
Multi option facility (including bank overdraft)
Facilities not utilised at balance sheet date
Bank loan
Equipment finance facility
Multi option facility (including bank overdraft)
(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:44)(cid:81)(cid:86)(cid:87)(cid:85)(cid:88)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)
(cid:21)(cid:28)
(a) Financial risk management objectives
The Consolidated Entity’s head office encompasses a treasury function that provides services to the business, coordinates access to
domestic and international financial markets, and manages the financial risks relating to the operations of the Consolidated Entity. The
Consolidated Entity does not enter into or trade financial instruments, including derivative financial instruments, for speculative
purposes. The Consolidated Entity’s activities expose it primarily to the financial risks of changes in interest rates.
(b) Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and
the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity
instrument are disclosed in note 1 to the financial statements.
69
Notes to the Financial Report
(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:44)(cid:81)(cid:86)(cid:87)(cid:85)(cid:88)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:11)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:12)(cid:3)
(cid:21)(cid:28)
(c) Foreign currency risk management
The group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate fluctuations arise.
Exchange rate exposures are managed within approved policy parameters and are not material to the financial statements. Refer note 2
for quantum of exchange differences arising.
(d) Interest rate risk management
The Consolidated Entity is exposed to interest rate risk as it borrows funds at both fixed and floating interest rates. The risk is managed
by maintaining an appropriate mix between fixed and floating rate borrowings. The following table details the Consolidated Entity’s
exposure to interest rate risk.
Notes Weighted
average
interest rate
Floating
interest rate
Less than 1
year
1 to 5 years More than 5
years
Non-interest
bearing
Total
Fixed Interest Maturing in:
%
$’000
$’000
$’000
$’000
$’000
$’000
2006
Financial Assets
Cash and cash
equivalents
Receivables
Other
Financial Liabilities
Payables
Hire purchase liabilities
Employee entitlements
2005
Financial Assets
Cash
Receivables
Other
Financial Liabilities
Payables
Bank overdraft
Bank loans
Hire purchase liabilities
Employee entitlements
28
5
7 8
12
13
(i) 14
28
5
8
12
13
13
13
(i) 14
4.10%
-
-
-
7.58%
5.97%
0.50%
-
-
-
8.95%
7.12%
7.56%
5.97%
6,421
-
-
6,421
-
-
-
-
95
-
-
95
-
467
2,625
-
-
3,092
-
-
-
-
-
1,391
-
1,391
-
-
-
-
-
-
1,000
1,080
-
2,080
-
-
-
-
-
1,503
-
1,503
-
-
-
-
-
-
-
1,758
-
1,758
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,421
18,798
4,624
23,422
13,629
-
1,056
14,685
8
13,920
1,475
15,403
7,972
-
-
-
962
8,934
18,798
4,624
29,843
13,629
2,894
1,056
17,579
103
13,920
1,475
15,498
7,972
467
3,625
2,838
962
15,864
(i) Employee entitlements to be settled in cash fall under the definition of financial liabilities. The weighted average interest rate is the discount
rate used to calculate Long Service Leave Liability.
(e) Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Consolidated
Entity. The Consolidated Entity has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral
where appropriate, as a means of mitigating the risk of financial loss from defaults. The Consolidated Entity measures credit risk on a
fair value basis.
Trade accounts receivable consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing
credit evaluation is performed on the financial condition of accounts receivable and, where appropriate, credit guarantee insurance
cover is purchased. The Consolidated Entity does not have any significant credit risk exposure to any single counterparty or any group
of counterparties having similar characteristics.
The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the
Consolidated Entity’s maximum exposure to credit risk without taking account of the value of any collateral obtained.
70
Notes to the Financial Report
(cid:21)(cid:28)
(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:44)(cid:81)(cid:86)(cid:87)(cid:85)(cid:88)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:11)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:12)(cid:3)
(f) Fair value of financial instruments
The Directors consider that the carrying amount of financial assets and financial liabilities recorded in the financial statements
approximates their fair values (2005: net fair value). The determination of fair value is outlined in note 7.
(g) Liquidity risk management
The Consolidated Entity manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by
continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
(cid:46)(cid:72)(cid:92)(cid:3)(cid:48)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:51)(cid:72)(cid:85)(cid:86)(cid:82)(cid:81)(cid:81)(cid:72)(cid:79)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)
(cid:22)(cid:19)
(a) Details of key management personnel
The key management personnel of Imdex Limited during the year were:
Mr I F Burston (Independent, Non Executive Chairman)
Mr B W Ridgeway (Managing Director)
Mr H H Al-Merry (Non Executive Director), office vacated 18 August 2006
Mr R W Kelly (Independent, Non Executive Director)
Mr K A Dundo (Independent, Non Executive Director)
Mr I R Freeman (Non Executive Director), appointed 23 August 2005
Mr J P O'Neil (Non Executive Director - Alternate to Mr I R Freeman), appointed 23 August 2005
Mr S J Lyons (Company Secretary, Imdex Limited)
Mr D L Kinley (Group Financial Controller, Imdex Limited)
Mr G E Weston (General Manager: Australian Mud Company Pty Ltd, Surtron Technologies Pty Ltd and Ace Drilling Supplies)
Mr C S Munyard (Manager: Surtron Technologies Pty Ltd)
(b) Key management personnel compensation policy
All key management personnel, and all staff of the Company, are subject to formal annual reviews of their performance. The
compensation of key management personnel generally comprises a fixed monetary total, although bonuses related to the performance
of the Company may be agreed between the individual and the Company from time to time.
The Board seeks the approval of Shareholders, where required, in relation to the aggregate of Non Executive Director compensation
and any options that may be granted to Directors.
Compensation packages are reviewed and determined with due regard to current market rates.
The Managing Director’s compensation is determined by the Remuneration Committee with due regard to current market rates. The
Managing Director has a short term incentive bonus amounting to 20% of his cash compensation package that is linked to the EBIT
performance of the Company. The balance of his compensation package is not linked to the Company’s performance.
Key management personnel compensation
The aggregate compensation of the key management personnel of the Consolidated Entity and the Company is set out below:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payments
Consolidated
2006
2005
Company
2006
2005
1,348,800
99,192
28,075
-
57,560
1,533,627
1,102,654
84,235
24,621
-
26,700
1,238,210
903,391
61,682
4,789
-
31,760
1,001,622
621,044
42,951
13,372
-
1,800
679,167
The compensation of each member of the key management personnel of the Consolidated Entity is set out on the following page:
71
Notes to the Financial Report
5
7
8
2
8
,
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4
5
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,
-
0
0
5
4
5
,
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,
8
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$
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9
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(cid:3)
(cid:12)
(cid:71)
(cid:72)
(cid:88)
(cid:81)
(cid:76)
(cid:87)
(cid:81)
(cid:82)
(cid:70)
(cid:11)
(cid:3)
(cid:81)
(cid:82)
(cid:76)
(cid:87)
(cid:68)
(cid:86)
(cid:81)
(cid:72)
(cid:83)
(cid:80)
(cid:82)
(cid:38)
(cid:3)
(cid:79)
(cid:72)
(cid:81)
(cid:81)
(cid:82)
(cid:86)
(cid:85)
(cid:72)
(cid:51)
(cid:3)
(cid:87)
(cid:81)
(cid:72)
(cid:80)
(cid:72)
(cid:74)
(cid:68)
(cid:81)
(cid:68)
(cid:48)
(cid:3)
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*
Notes to the Financial Report
(cid:22)(cid:19)
(cid:46)(cid:72)(cid:92)(cid:3)(cid:48)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:51)(cid:72)(cid:85)(cid:86)(cid:82)(cid:81)(cid:81)(cid:72)(cid:79)(cid:3)(cid:53)(cid:72)(cid:80)(cid:88)(cid:81)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:11)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:12)(cid:3)
(i) The Managing Director, Mr B W Ridgeway does not, currently, have a service contract with the Company. The Managing Director’s
compensation is reviewed and determined by the Remuneration Committee.
The Managing Director has a short term incentive bonus amounting to 20% of his cash compensation package that is linked to the EBIT
performance of the Company. The balance of his compensation package is not linked to the Company’s performance.
In the current year, following approval by members in General Meeting, Mr Ridgeway was granted 2,000,000 options. The options carry
no rights to dividends and no voting rights. They expire on their expiry date or three calendar months after ceasing to be a Director, and
may be exercised after 2 years and at any time to their expiry date. The percentage of the value of compensation that consisted of
options was 7.5%.
(ii) Mr H H Al-Merry is the President and owner of Rashid Trading Establishment (RTE), which was involved in a Joint Venture with
Imdex Limited in the Middle East. Mr Al-Merry is remunerated directly by the RTE/Imdex Joint Venture.
(iii) Mr S J Lyons was party to a consulting agreement with Imdex Limited until 31 December 2005. This agreement was set out on a
fixed fee basis and prescribed other general terms and conditions. The consulting agreement was terminated and from 1 January 2006
onwards Mr Lyons is party to a service contract with Imdex Limited, which sets out a fixed compensation package, reviewable annually.
The service contract specifies a two month notice period in the event that the contract is terminated. There are no termination benefits
specified in this contract. Additional performance incentives may be agreed between Mr Lyons and the Company from time to time.
In the current year, Mr Lyons was granted 150,000 options, along with other staff of the Group, under the Staff Option Scheme as set
out in Note 31. The percentage of the value of compensation that consisted of options was 2.5%.
(iv) Mr D L Kinley is a party to a service contract with Imdex Limited, which sets out a fixed compensation package, reviewable annually.
The service contract specifies a one month notice period in the event that the contract is terminated. There are no termination benefits
specified in this contract. Additional performance incentives may be agreed between Mr Kinley and the Company from time to time.
In the current year, Mr Kinley was granted 100,000 options, along with other staff of the Group, under the Staff Option Scheme as set
out in Note 31. The percentage of the value of compensation that consisted of options was 1.7%.
(v) Mr G E Weston is party to a service contract with the Australian Mud Company Pty Ltd, which sets out a fixed compensation
package, reviewable annually. The service contract stipulates a 12 month notice period in the event that the contract is terminated.
There are no termination benefits specified in this contract. Performance incentives may be agreed between Mr Weston and the
Australian Mud Company Pty Ltd from time to time. Additionally, Mr Weston is party to a deed with Imdex Limited, in respect of which Mr
Weston has a right of first refusal in the event that Imdex receives an offer to purchase 100% of the shares held by Imdex in the
Australian Mud Company Pty Ltd. This ‘right’ lapses automatically should Mr Weston no longer be employed by the Australian Mud
Company Pty Ltd.
In the current year, Mr Weston was granted 1,000,000 options, along with other staff of the Group, under the Staff Option Scheme as
set out in Note 31. The percentage of the value of compensation that consisted of options was 7.6%.
(vi) Mr C S Munyard is a party to a service contract with Surtron Technologies Pty Ltd, which sets out a fixed compensation package
reviewable annually. The service contract specifies a one month notice period in the event that the contract is terminated. There are no
termination benefits specified in this contract. Additional performance incentives may be agreed between Mr Munyard and Surtron
Technologies Pty Ltd from time to time.
In the current year, Mr Munyard was granted 75,000 options, along with other staff of the Group, under the Staff Option Scheme as set
out in Note 31. The percentage of the value of compensation that consisted of options was 0.8%.
(vii) Mr I Tan is party to a service contract with Imdex Limited, which sets out a fixed compensation package, reviewable annually. The
service contract specifies a one month notice period in the event that the contract is terminated. There are no termination benefits
specified in this contract.
Mr Tan was not granted any options during the prior year due to his limited tenure at the time the Staff options were issued.
73
Notes to the Financial Report
(cid:54)(cid:87)(cid:68)(cid:73)(cid:73)(cid:3)(cid:50)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)
(cid:22)(cid:20)
(a) Share Based Payment Arrangements
Staff Option Plan
The Consolidated Entity has in place a Staff Option Scheme (Scheme) to reward employees (including Key Management Personnel) for
their past services as well as provide an incentive for future efforts. The terms and conditions of the Scheme are set out in the Scheme
Rules with the Board of Directors responsible for the administration of the Scheme. The options carry no rights to dividends and no
voting rights. The options expire on their expiry date. The number of options granted to staff is generally based on an assessment of the
performance of that staff member as determined by the Board of Directors. Staff are only eligible to receive options when they have
been with the Company in excess of 12 months. Generally the options will also be taken to have expired when the option holder ceases
to be employed by the Consolidated Entity. As at 30 June 2006 all of the options had vested.
Non-Executive Directors' Options
In accordance with ASX Principles of Good Corporate Governance, Non-Executive Directors do not receive options.
Managing Directors' Options
The options issued to the Managing Director have been approved by members in General Meeting. The options carry no rights to
dividends and no voting rights. The options expire on their expiry date or three calendar months after ceasing to be a Director, and may
be exercised after 2 years at any time to their expiry date. As at 30 June 2006 all of the options had vested.
Corporate Advisors Options
During the prior year options were issued to Corporate Advisors of the Company as a performance incentive. The options carry no rights
to dividends and no voting rights. As at 30 June 2006 all of the options had vested.
(b) The following share based payment arrangements were in existence during the period:
2006
Issue Date
Vesting
Date
Expiry Date Exercise
Price $
Fair Value
at Grant
Date
$
Opening
balance
Issued
current
year
Number of Options
Exercised
current year
Lapsed
current year
Closing
balance
Staff Options
Tranche 1
Tranche 2
1-Aug-04
1-Feb-06
1-Aug-04
1-Feb-06
31-Jul-09
0.20
31-Jan-11 0.35
0.01
0.02
3,160,000
- 2,680,000
- (51,667) (60,000)
- (20,000)
3,048,333
2,660,000
Managing Directors' Options
Tranche 1
15-Sep-05
15-Sep-05
Corporate Advisors Options
Tranche 1 (i)
Tranche 2 (ii)
Tranche 3 (i)
23-Dec-04
23-Dec-04
23-Dec-04
23-Dec-04
23-Dec-04
23-Dec-04
14-Sep-10 0.30
0.01
- 2,000,000
- - 2,000,000
31-Jul-09
0.20
31-Oct-07 0.20
31-Oct-07 0.35
0.03
0.02
0.01
100,000
2,000,000
1,000,000
- - - 100,000
- - - 2,000,000
- - - 1,000,000
6,260,000 4,680,000 (51,667) (80,000)
10,808,333
2005
Staff Options
Tranche 1
1-Aug-04
1-Aug-04
31-Jul-09
0.20 0.01
- 3,210,000
- (50,000)
3,160,000
Directors' Options
Tranche 1
Tranche 2
Tranche 3
25-Oct-01
25-Oct-01
25-Oct-01
25-Oct-01
25-Oct-01
25-Oct-01
24-Oct-04 0.20 0.03
24-Oct-04 0.35 0.01
24-Oct-04 0.45 0.01
1,000,000
1,000,000
1,000,000
-
-
-
- (1,000,000)
- (1,000,000)
- (1,000,000)
-
-
-
Corporate Advisors Options
Tranche 1 (i)
Tranche 2 (ii)
Tranche 3 (i)
23-Dec-04
23-Dec-04
23-Dec-04
23-Dec-04
23-Dec-04
23-Dec-04
31-Jul-09
0.20 0.03
31-Oct-07 0.20 0.02
31-Oct-07 0.35 0.01
- 100,000
- 2,000,000
- 1,000,000
-
-
-
- 100,000
- 2,000,000
- 1,000,000
3,000,000 6,310,000
- (3,050,000)
6,260,000
(i) Exercisable at any time up to expiry.
(ii) Exercisable at any time after Imdex shares trade at 30 cents for 5 consecutive trading days. This condition has been satisfied.
74
Notes to the Financial Report
(cid:22)(cid:20)
(cid:54)(cid:87)(cid:68)(cid:73)(cid:73)(cid:3)(cid:50)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)(cid:11)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:12)(cid:3)
(c) Fair value of options granted during the financial year
The weighted average fair value of the share options granted during the financial year is $0.02 (2005: $0.02). Options were priced using a Black-
Scholes option pricing model. Where relevant, the expected life used in the model has been adjusted based on management’s best estimate for the
effects of non-transferability, exercise restrictions (including the probability of meeting market conditions attached to the option), and behavioural
considerations. Expected volatility is based on the historical share price volatility for the preceding 12 months.
2006
Inputs into the model
Grant date share price ($)
Exercise price ($)
Expected volatility
Option life (years)
Lack of marketability discount
Risk-free interest rate
Dividend yield
2005
Inputs into the model
Grant date share price ($)
Exercise price ($)
Expected volatility
Option life (years)
Lack of marketability discount
Risk-free interest rate
Dividend yield
Managing Directors
Options
Tranche 1
Staff Options
Tranche 2
0.29
0.35
20%
5.00
40%
5.75%
0.00%
0.20
0.30
9%
5.00
40%
5.75%
0.00%
Staff Options
Tranche 1
Corporate Advisors
Options
Tranche 1
Corporate Advisors
Options
Tranche 2
Corporate Advisors
Options
Tranche 3
0.13
0.20
36%
5.00
40%
5.50%
0.00%
0.19
0.20
36%
4.50
40%
5.50%
0.00%
0.19
0.20
36%
3.85
40%
5.50%
0.00%
0.19
0.35
36%
3.80
40%
5.50%
0.00%
(d) Exercised during the financial year
The following options under the Staff Option Plan were exercised during the financial year:
Option Series
Staff Options Tranche 1
Staff Options Tranche 1
Staff Options Tranche 1
Number
Exercised
Exercise
Date
Share Price at
Exercise Date
16,667
25,000
10,000
51,667
15-Nov-05
1-Feb-06
29-Jun-06
0.30
0.41
0.58
(cid:54)(cid:88)(cid:69)(cid:86)(cid:72)(cid:84)(cid:88)(cid:72)(cid:81)(cid:87)(cid:3)(cid:40)(cid:89)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)
(cid:22)(cid:21)
Effective 1 August 2006 the Company acquired 100% of the shares of the Swedish-based Reflex Group (Reflex) and the United
Kingdom-based Chardec Consultants Limited (Chardec).
The purchase price for Reflex is $25.4 million to be settled $15 million in cash at settlement and the issue of a convertible note with a
face value of $10.4 million. The convertible note carries the right to convert into 20.8 million Imdex shares at a price of 50 cents per
share at any time until 30 June 2008. The coupon rate will be 8% per annum. Under the terms of the agreement, conversion will be
triggered automatically by the Imdex share price reaching $1 per share. Any Imdex shares issued under this note prior to 30 June 2008
will be held in voluntary escrow until 30 June 2008.
The purchase price for Chardec is GBP6.8 million (approximately $17 million) to be satisfied through the payment of GBP2.5 million in
cash at settlement and a further GBP4.3 million over three years from date of settlement.
Additional disclosures with respect to these acquisitions are impracticable at this stage as the acquisition accounting is still being
finalised.
Subsequent to year end the Directors declared a 1 cent per share fully franked dividend with an entitlement date of 10 October 2006
and a payment date of 13 October 2006. The effect of this dividend has not been reflected in this financial report.
75
Notes to the Financial Report
(cid:22)(cid:22)
(cid:44)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:36)(cid:71)(cid:82)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:36)(cid:88)(cid:86)(cid:87)(cid:85)(cid:68)(cid:79)(cid:76)(cid:68)(cid:81)(cid:3)(cid:40)(cid:84)(cid:88)(cid:76)(cid:89)(cid:68)(cid:79)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:44)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)
(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:54)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)
The Consolidated Entity changed its accounting policies on 1 July 2005 to comply with Australian equivalents to International Financial
Reporting Standards (‘A-IFRS’). The transition to A-IFRS is accounted for in accordance with Accounting Standard AASB 1 ‘First time
Adoption of Australian Equivalents to International Financial Reporting Standards’, with 1 July 2004 as the date of transition, except for
financial instruments, including derivatives, where the date of transition is 1 July 2005 (refer note 1(a)). An explanation of how the
transition from superseded policies to A-IFRS has affected the company and Consolidated Entity’s financial position, financial
performance and cash flows is set out in the following tables and the notes that accompany the tables.
(a) Effect of A-IFRS on the balance sheet as at 1 July 2004
Consolidated
Company
Superseded
policies *
Effect of
transition to A-
A-IFRS
Superseded
policies *
Effect of
transition to A-
A-IFRS
Notes
$’000
IFRS
$’000
$’000
$’000
IFRS
$’000
$’000
Current Assets
Cash Assets
Receivables
Inventories
Current Tax Assets
Other
Non Current Assets classified as
held for sale
Total Current Assets
Non Current Assets
Receivables
Other Financial Assets
Property, Plant and Equipment
Exploration, Evaluation and
Development Expenditure
Intangibles
Deferred Tax Assets
Total Non Current Assets
Total Assets
Current Liabilities
Payables
Interest Bearing Liabilities
Current Tax Liabilities
Provisions
Liabilities directly associated with
Non Current Assets classified as
held for sale
Total Current Liabilities
Non Current Liabilities
Interest Bearing Liabilities
Deferred Tax Liabilities
Provisions
Total Non Current Liabilities
Total Liabilities
Net Assets
Equity
Contributed Equity
Asset Revaluation Reserve
Foreign Currency Translation
Reserve
Employee Equity Settled Benefits
Reserve
Retained Profits/(Accumulated
Losses)
Total Equity
(i)
(i)
(i)
(iv)
(ii)
(i)
(ii)
(iii)
(vi)
56
9,355
6,340
-
8
-
15,759
-
5,412
11,771
641
-
594
18,418
34,177
7,220
4,429
38
640
-
12,327
3,238
370
130
3,738
16,065
18,112
21,058
8
-
-
-
-
-
-
-
-
-
-
-
(1,000)
(641)
-
387
(1,254)
(1,254)
-
-
-
(161)
56
9,355
6,340
-
8
-
15,759
-
5,412
10,771
-
-
981
17,164
32,923
7,220
4,429
38
479
-
(161)
-
12,166
-
-
161
161
-
(1,254)
-
-
-
-
3,238
370
291
3,899
16,065
16,858
21,058
8
-
-
35
2,548
947
22
-
-
3,552
-
6,917
7,429
641
-
260
15,247
18,799
2,482
3,898
-
203
-
6,583
4,405
370
50
4,825
11,408
7,391
21,058
8
-
-
-
-
-
-
-
-
-
-
-
(1,000)
(641)
-
387
(1,254)
(1,254)
-
-
-
(50)
-
(50)
-
-
50
50
-
(1,254)
-
-
-
-
35
2,548
947
22
-
-
3,552
-
6,917
6,429
-
-
647
13,993
17,545
2,482
3,898
-
153
-
6,533
4,405
370
100
4,875
11,408
6,137
21,058
8
-
-
(2,954)
18,112
(1,254)
(1,254)
(4,208)
16,858
(13,675)
7,391
(1,254)
(1,254)
(14,929)
6,137
* Reported financial position for the financial year ended 30 June 2004
76
Notes to the Financial Report
(cid:22)(cid:22)
(cid:44)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:36)(cid:71)(cid:82)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:36)(cid:88)(cid:86)(cid:87)(cid:85)(cid:68)(cid:79)(cid:76)(cid:68)(cid:81)(cid:3)(cid:40)(cid:84)(cid:88)(cid:76)(cid:89)(cid:68)(cid:79)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:44)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)
(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:54)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:11)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:12)(cid:3)
(b) Effect of A-IFRS on the income statement for the financial year ended 30 June 2005
Consolidated
Company
Superseded
policies *
Effect of
transition to A-
A-IFRS
Superseded
policies *
Effect of
transition to A-
A-IFRS
Notes
$’000
IFRS
$’000
$’000
$’000
IFRS
$’000
$’000
Revenue from sale of goods and
rendering of services
Other revenue from ordinary
activities
Total revenue
Other income
Write down of property, plant and
equipment of Imdex Minerals to
recoverable amount
Raw Materials and Consumables
Used
Other expenses from ordinary
activities
Employee benefit expenses
Depreciation and amortisation
expense
Borrowing costs
Profit before income tax expense
Income tax expense relating to
ordinary activities
Profit from continuing operations
Profit/(loss) from discontinued
operations
(v) (i)
(v)
(v)
(i)
(i)
(i) (iii)
(i) (iii)
(i)
(i)
(i)
(i)
46,835
1,335
48,170
-
(6,784)
40,051
(1,335)
(8,119)
466
-
40,051
466
(1,370)
1,370
-
(21,637)
2,035
(19,602)
(10,661)
(8,569)
(1,949)
(529)
3,455
3,494
1,710
559
35
(7,167)
(6,859)
(1,390)
(494)
13,986
1,959
15,945
-
(1,370)
(6,103)
(4,569)
(3,078)
(1,040)
(359)
(6,784)
7,202
(1,959)
(8,743)
1,752
-
7,202
1,752
1,370
-
2,035
(4,068)
2,832
1,710
(1,737)
(1,368)
559
35
(481)
(324)
1,550
5,005
(574)
1,550
976
(383)
(1,340)
(1,723)
431
(1,340)
(909)
3,072
210
3,282
(143)
210
67
Profit for the period
3,072
1,100
4,172
Profit attributable to minority interest
-
-
-
-
890
890
-
(143)
-
890
1,100
-
890
957
-
Profit attributable to ordinary
equity holders of Imdex Limited
3,072
1,100
4,172
(143)
1,100
957
* Reported financial results for the financial year ended 30 June 2005
77
Notes to the Financial Report
(cid:22)(cid:22)
(cid:44)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:36)(cid:71)(cid:82)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:36)(cid:88)(cid:86)(cid:87)(cid:85)(cid:68)(cid:79)(cid:76)(cid:68)(cid:81)(cid:3)(cid:40)(cid:84)(cid:88)(cid:76)(cid:89)(cid:68)(cid:79)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:44)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)
(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:54)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:11)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:12)(cid:3)
(c) Effect of A-IFRS on the balance sheet as at 30 June 2005
Consolidated
Company
Superseded
policies *
Effect of
transition to A-
A-IFRS
Superseded
policies *
Effect of
transition to A-
A-IFRS
IFRS
IFRS
Notes
$'000
$'000
$'000
$'000
$'000
$'000
Current Assets
Cash Assets
Receivables
Inventories
Current Tax Assets
Other
Non Current Assets classified as
held for sale
Total Current Assets
Non Current Assets
Receivables
Other Financial Assets
Property, Plant and Equipment
Exploration, Evaluation and
Development Expenditure
Intangibles
Deferred Tax Assets
Total Non Current Assets
Total Assets
Current Liabilities
Payables
Interest Bearing Liabilities
Current Tax Liabilities
Provisions
Liabilities directly associated with
Non Current Assets classified as
held for sale
Total Current Liabilities
Non Current Liabilities
Interest Bearing Liabilities
Deferred Tax Liabilities
Provisions
Total Non Current Liabilities
Total Liabilities
Net Assets
Equity
Contributed Equity
Asset Revaluation Reserve
Foreign Currency Translation
Reserve
Employee Equity Settled Benefits
Reserve
Retained Profits/(Accumulated
Losses)
Total Equity
(i)
(i)
(i)
(iv)
(i)
(ii)
(i)
(ii)
(iii)
(vi)
103
13,920
8,356
-
18
-
22,397
-
1,475
10,414
601
12
664
13,166
35,563
7,972
4,047
574
859
-
13,452
2,883
-
103
2,986
16,438
19,125
19,008
-
-
-
117
19,125
-
-
-
-
-
5,125
5,125
-
-
(4,524)
(601)
-
(105)
(5,230)
(105)
-
(82)
-
(290)
103
13,920
8,356
-
18
5,125
27,522
-
1,475
5,890
-
12
559
7,936
35,458
7,972
3,965
574
569
182
(190)
182
13,262
-
-
190
190
-
(105)
-
-
-
48
2,883
-
293
3,176
16,438
19,020
19,008
-
-
48
96
4,556
2,249
-
3
-
6,904
-
2,984
6,571
601
12
329
10,497
17,401
2,526
4,698
531
247
-
8,002
4,172
-
38
4,210
12,212
5,189
19,008
-
-
-
-
-
-
-
-
96
4,556
2,249
-
3
5,125
5,125
5,125
12,029
-
-
(4,524)
(601)
-
(105)
(5,230)
(105)
-
(82)
-
(140)
-
2,984
2,047
-
12
224
5,267
17,296
2,526
4,616
531
107
182
(40)
182
7,962
-
-
40
40
-
(105)
-
-
-
48
4,172
-
78
4,250
12,212
5,084
19,008
-
-
48
(153)
(105)
(36)
19,020
(13,819)
5,189
(153)
(105)
(13,972)
5,084
* Reported financial position for the financial year ended 30 June 2005
78
Notes to the Financial Report
(cid:22)(cid:22)
(cid:44)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:36)(cid:71)(cid:82)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:36)(cid:88)(cid:86)(cid:87)(cid:85)(cid:68)(cid:79)(cid:76)(cid:68)(cid:81)(cid:3)(cid:40)(cid:84)(cid:88)(cid:76)(cid:89)(cid:68)(cid:79)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:44)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)
(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:54)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:11)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:12)(cid:3)
(d) Effect of A-IFRS on the cash flow statement for the financial year ended 30 June 2005
There are no material differences between the cash flow statement presented under A-IFRS and the cash flow statement presented under the
superseded policies.
(e) Notes to the reconciliations of income and equity
(i) Adjustments arising from the Business of Imdex Minerals
30 June 2004 30 June 2005
Notes
$’000
$’000
Income Statement Adjustments
Revenue
Raw materials
Other expenses from ordinary activities
Employee benefit expenses
Depreciation and amortisation
Borrowing costs
Other
Income tax expense
(Profit) from discontinued operation shown as a separate line item on the Income
Statement
Reversal of depreciation and amortisation on impaired assets
Reversal of depreciation on Imdex Minerals from 1 Feb 2005 when the business
was classified as held for sale
Reversal of AGAAP write down at 30 June 2005
Other
Income tax expense applicable to depreciation and amortisation reversal
Net adjustments to current period profits
Balance Sheet Adjustments
Reclassification of Non Current Assets held for sale
Reclassification of liabilities associated with Non Current Assets held for sale
Specific adjustments relating to the impairment of the Micaceous Iron Oxide
Impairment of Property, Plant & Equipment
Reversal of depreciation on impaired Property, Plant & Equipment
Reversal of depreciation on Imdex Minerals from 1 Feb 2005 when the business
was classified as held for sale
Other
Reversal of AGAAP write down at 30 June 2005
Reclassification of Non Current Assets held for sale
Impairment of Exploration, Evaluation and Development Expenditure
Reversal of associated amortisation on Exploration, Evaluation and
Development Expenditure
Deferred tax asset adjustment relating to the impairment
(aa)
(bb)
(aa), (bb)
(aa)
(aa)
(bb)
(bb)
(aa)
(bb)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,000)
-
-
-
-
-
(1,000)
(641)
-
(641)
387
(6,784)
2,035
2,650
1,734
256
35
32
(848)
(890)
120
183
1,370
(31)
(492)
1,150
5,125
182
(1,000)
79
183
(31)
1,370
(5,125)
(4,524)
(641)
40
(601)
(105)
79
Notes to the Financial Report
(cid:22)(cid:22)
(cid:44)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:36)(cid:71)(cid:82)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:36)(cid:88)(cid:86)(cid:87)(cid:85)(cid:68)(cid:79)(cid:76)(cid:68)(cid:81)(cid:3)(cid:40)(cid:84)(cid:88)(cid:76)(cid:89)(cid:68)(cid:79)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:44)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)
(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:54)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:11)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:12)(cid:3)
The table above sets out the adjustments that arise from the impairment write down and the classification of the Imdex Minerals
business as held for sale. With reference to the table:
(aa) Non Current Assets Held for Sale
Under A-IFRS, when the carrying amount of a group of assets is expected to be recovered principally through a sales transaction, rather
than continuing use, such assets must be classified as held for sale. Assets held for sale are shown separately on the balance sheet
and their results (after tax) as a single amount on the Income Statement. In addition, depreciation for such assets ceases from this
point.
The business of Imdex Minerals met the definition of held for sale from 1 February 2005 and accordingly depreciation has ceased from
this date. This has resulted in a reduction in depreciation expense of $183k in the year ended 30 June 2005.
The profit from discontinued operations for the years ended 30 June 2005, reflect the transfer of Minerals’ revenue, expenses and
income tax into a single amount on the Income Statement.
(bb) Impairment of Assets
Under AGAAP assets are written down to recoverable amount when the asset’s carrying value exceeds its recoverable amount. Under
A-IFRS, both current and non current assets are tested annually for impairment. In addition, A-IFRS has a more prescriptive impairment
test, and requires, for instance, discounted cash flows to be used where value in use is used to assess recoverable amount.
Under A-IFRS, based on a review of discounted cash flows of the Micaceous Iron Oxide business, which is a separate ‘cash generating
unit’ of the business of Imdex Minerals, a write down of $1,000k for plant and equipment and $641k for exploration, evaluation and
development expenditure carried forward is required at 30 June 2004. Under AGAAP at 30 June 2004, the business of Imdex Minerals
was assessed for recoverability, however as the business was assessed as a whole and not at the ‘cash generating unit’ level as
required under A-IFRS no write down was indicated at that time.
As set out in the 2005 Annual Report, the carrying value of Imdex Minerals was written down under AGAAP by $1.37millon at 30 June
2005. Due to the A-IFRS impairment required at 30 June 2004, this write down has been reversed through the income statement for the
year ended 30 June 2005.
The decrease in the carrying value of property, plant and equipment and the carry forward exploration, evaluation and development
expenditure has resulted in a reduction in depreciation and amortisation expense of $303k in the year ended 30 June 2005.
(ii) Non Current Employee Benefits
Under AGAAP, provision for Annual Leave (short-term employee benefit) was measured at nominal amounts and classified as a current
liability.
Under AASB119 "Employee Benefits" liabilities for short-term employee benefits continue to be measured at their nominal amounts,
however employee benefits not expected to be settled within 12 months are measured at their present value.
(iii) Share Based Payments
For the year ended 30 June 2005, share based payments of $48k to employees and consultants were not recognised under AGAAP.
Corresponding entries have been made to shareholders equity at 30 June 2005. There is no tax effect of these payments.
(iv) Income Tax
Under AGAAP, the Consolidated Entity adopted tax effect accounting principles whereby the income tax expense was calculated on
pre-tax accounting profits after adjusting for permanent differences. The tax effect of timing differences, which occur when items were
included or allowed for income tax purposes in a period different to that for accounting were recognised at current taxation rates as
deferred tax assets and deferred tax liabilities, as applicable.
Under A-IFRS, deferred tax is determined using the balance sheet liability method in respect of temporary differences arising from
differences between the carrying amount of assets and liabilities in the Financial Report and their corresponding tax bases.
80
Notes to the Financial Report
(cid:22)(cid:22)
(cid:44)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:36)(cid:71)(cid:82)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:36)(cid:88)(cid:86)(cid:87)(cid:85)(cid:68)(cid:79)(cid:76)(cid:68)(cid:81)(cid:3)(cid:40)(cid:84)(cid:88)(cid:76)(cid:89)(cid:68)(cid:79)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:44)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:68)(cid:79)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)
(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:54)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:86)(cid:3)(cid:11)(cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:88)(cid:72)(cid:71)(cid:12)(cid:3)
Effect of A-IFRS adjustments on deferred tax balances
Deferred tax adjustments resulting from the adjustments required under A-IFRS
Net increase/(decrease) to deferred tax balances
Effect of A-IFRS adjustments on income tax expense
Adjustment required to income tax expense
Net increase/(decrease) in income tax expense
(v) Revenue
Consolidated and Company
30 June 2004 30 June 2005
$’000
$’000
387
387
(105)
(105)
Consolidated and Company
Year ending 30
June 2005
$’000
(575)
(575)
Under AGAAP, the proceeds on sale of non current assets were included in revenue with the cost of sale recorded in expenses. Under
A-IFRS, the net gain or loss from the sale of non current assets is recognised as Other Income in the Income Statement.
Similarly, income from Grants and other non operating income has been recognised in Other Income, rather than included as part of
Other Revenue.
There is no net impact on the profit for the period as a result of these adjustments.
(vi) Retained profits
The effect on retained profits of the adjustments described above is set out below.
Consolidated and Company
30 June 2004 30 June 2005
Notes
$’000
$’000
Retained earnings
Impairment of the business of Imdex Minerals
Adjustment to depreciation and amortisation expense for the business of Imdex
Minerals due to its impairment and classification as held for sale
Reversal of the write down of Imdex Minerals to its recoverable amount
Expensing share based payments
Other
Adjustments to tax balances
Total adjustment to retained earnings
(i)
(i)
(i)
(iii)
(iv)
(1,641)
(1,641)
-
-
-
-
387
(1,254)
303
1,370
(48)
(32)
(105)
(153)
81
Additional Stock Exchange Information as at 21 August 2006
(a)
Distribution of Shareholders
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
Holding less than a marketable parcel
(b)
Substantial Shareholders
Ordinary Shareholders
Souls Private Equity Limited
Quadripart Investment Holdings (Pty) Ltd
J P Morgan Nominees Australia Limited
Fully Paid
Ordinary
Shares
Options
50
344
380
880
144
1,798
26
-
4
18
66
6
94
-
Fully Paid
Number
Percentage
12,889,885
12,847,202
5,603,783
9.24%
9.21%
4.02%
(c)
Twenty Largest Holders of Quoted Equity Securities
Ordinary Shareholders
Souls Private Equity Limited
Quadripart Investment Holdings (Pty) Ltd
J P Morgan Nominees Australia Limited
Mr William Wavish
Wear Services Pty Ltd
Chelverton Dividend Income Fund Limited
Iscosa (Pty) Ltd
Citicorp Nominees Pty Limited
Telic Alcatel (Australia) Pty Ltd
National Nominees Limited
Cogent Nominees Pty Limited
Mr Petrus Cornelius Nicolaas Middendorp
ANZ Nominees Limited
Primbee Investments Pty Ltd
Longo Pty Ltd
Chippell Pty Ltd
Fully Paid
Number
Percentage
12,889,885
12,847,202
5,603,783
5,542,000
5,000,000
3,775,262
3,211,800
3,169,010
2,840,000
2,290,700
1,861,762
1,753,500
1,715,000
1,615,921
1,572,826
1,210,273
9.24%
9.21%
4.02%
3.97%
3.58%
2.71%
2.30%
2.27%
2.04%
1.64%
1.33%
1.26%
1.23%
1.16%
1.13%
0.87%
71,050,424
50.94%
82
Additional Stock Exchange Information as at 21 August 2006
(d)
Director and Company Secretary Shareholdings
Name
Mr B W Ridgeway (indirectly)
Mr I F Burston (indirectly)
Mr H H Al-Merry (directly)
Mr R W Kelly (indirectly)
Mr K A Dundo (directly)
Mr I R Freeman (indirectly)
Mr J P O’Neil (indirectly)
Mr S J Lyons (directly)
Number of
Shares
Number of
Options
5,000,000
200,000
755,000
265,000
300,000
16,059,002
12,847,202
50,000
35,476,204
2,000,000
-
-
-
-
-
-
200,000
2,200,000
(e)
Interests in Mining Tenements
Due to the disposal of Imdex Minerals on 1 July 2005, Imdex no longer holds an interest in any mining tenements at the date of this
report.
(f)
Company Secretary
Mr Stephen John Lyons
(g)
Registered Office
Level 3, Redgum House
18 Richardson House
West Perth
Western Australia
Phone: (08) 9481 5777
(g)
Share Registry
Computershare Investory Services
Level 2
45 St Georges Terrace
Perth WA 6000
Phone: (08) 9323 2000
83
F
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84
Contents
Imdex at a glance
Imdex 2006 Snapshot
Chairman’s Report
Managing Director’s Report
Director Profi les
Financial Report 2006
1
3
6
9
14
17
Registered Offi ce
Imdex Limited, ABN 78 008 947 813
Level 3, Redgum House
18 Richardson Street
West Perth, Western Australia, 6005
PO Box 1325
West Perth WA 6872
Telephone: (+61 8) 9481 5777
Facsimile: (+61 8) 9481 6527
Email:
Website: www.imdex.com.au
imdex@imdex.com.au
Imdex is listed on the
Australian Stock Exchange
under the ASX code IMD
Group Head Office
& Registered Office
Imdex Limited
Level 3, Redgum House
18 Richardson Street
WEST PERTH WA 6005
PO Box 1325
WEST PERTH WA 6872
Telephone: +61 8 9481 5777
Facsimile: +61 8 9481 6527
Email: imdex@imdex.com.au
Divisions/subsidiaries
Australian Mud Company Pty Ltd
5 Pitino Court
OSBORNE PARK WA 6017
PO Box 1141
OSBORNE PARK WA 6916
Telephone: +61 8 9445 4000
Facsimile: +61 8 9445 4040
Email: gweston@imdex.com.au
Samchem Drilling Fluids
& Chemicals Pty Ltd
31 Basalt Street
Alrode Ext 7
PO Box 167671
BRACKENDOWNS 1456
South Africa
Telephone: +2711 908 5595
Facsimile: +2711 908 5887
Email: samchem@acenet.co.za
Surtron Technologies Pty Ltd
5 Pitino Court
OSBORNE PARK WA 6017
PO Box 1130
OSBORNE PARK WA 6916
Telephone: +61 8 9445 4050
Facsimile: +61 8 9445 4060
Email: smunyard@imdex.com.au
Ace Drilling Products & Rentals
5 Pitino Court
OSBORNE PARK WA 6017
PO Box 1148
OSBORNE PARK WA 6916
Telephone: +61 8 9445 4020
Facsimile: +61 8 9445 4040
Email: mgregg@imdex.com.au
Reflex Instrument North America Ltd
70-C Mountjoy Street North,
Suite 510
Timmins, Ontario, Canada
P4N 4V7
Telephone: +1 877 235 2169
Facsimile: +1 705 235 2165
Email: reflexca@ntl.sympatico.ca
Reflex Instrument South America Ltda
Av, del Parque 4265, Piso 1
Huechuraba, Santiago, Chile
Telephone: +56 9 0783 593
Facsimile: +56 2 247 9504
Email:pvazquez@reflexsouthamerica.cl
Surtron Technologies Pty Ltd
5 Close Way
KALGOORLIE WA 6430
Telephone: +61 8 9091 9511
Facsimile: +61 8 9091 9522
Email: jsmith@imdex.com.au
Drillhole Surveying Instruments Pty Ltd T/A
Reflex Africa
P.O. Box 802, Sundowner, 2161
Unit F2, Metropolitan Park,
Wakis Ave, Strijdompark
Johannesburg, South Africa
Telephone: +27 11 792 0452
Facsimile: +27 11 792 5927
Email:jannie.leeuwner@reflexafrica.co.za
Reflex Instruments AB
P.O. Box 118
SE-Vallentuna, Sweden
Telephone: +46 8 511 80 610
Facsimile: +46 8 511 80 610
Email: info@reflex.se
Chardec Consultants Ltd
3 Hyde Close, The Street
Lewes
BN7 3PA
East Sussex
Telephone: +44 1273 483 800
Facsimile: +44 1273 483 900
Email: rich@chardec.co.uk
Surtron Technologies (UK) Ltd
22a Snowdon Place
Stirling
Scotland
FK8 2JN
Telephone: +44 1786 449 890
Email: jhunter@imdex.com.au
Representative Offices
Western Australia
Australian Mud Company Pty Ltd
5 Close Way
KALGOORLIE WA 6430
Telephone: +61 8 9021 2925
Facsimile: +61 8 9091 5925
Email: tmcwhinney@imdex.com.au
Ace Drilling Products & Rentals
5 Close Way
KALGOORLIE WA 6430
Telephone: +61 8 9021 2925
Facsimile: +61 8 9091 5925
Email: dmunro@imdex.com.au
Surtron Technologies Pty Ltd
Lot 1598 Willis Street
NEWMAN WA 6753
PO Box 681
NEWMAN WA 6753
Tel/Facsimile: +61 8 9175 1230
New South Wales
Australian Mud Company Pty Ltd
21 Illawarra Avenue
CARDIFF NSW 2285
Telephone: +61 2 4953 6165
Facsimile: +61 2 4953 6448
Email: tfuller@imdex.com.au
South Australia
Australian Mud Company Pty Ltd
20 Alexandra Place
ROSE PARK SA 5067
Telephone: +61 8 8364 4110
Facsimile: +61 8 8364 4151
Email: kbooth@imdex.com.au
Queensland
Australian Mud Company Pty Ltd
1/26 Neon Street
SUMNER PARK QLD 4074
PO Box 110
SUMNER PARK QLD 4074
Telephone: +61 7 3279 3199
Facsimile: +61 7 3279 3538
Email: amcbrisbane@imdex.com.au
Surtron Technologies Pty Ltd
1/26 Neon Street
SUMNER PARK QLD 4074
PO Box 110
SUMNER PARK QLD 4074
Telephone: +61 7 3279 2331
Facsimile: +61 7 3279 3495
Email: surtronec@imdex.com.au
International Sales
Australian Mud Company Pty Ltd
31 Koala Court, Little Mountain
CALOUNDRA QLD 4551
Telephone: +61 7 5437 0373
Facsimile: +61 7 5437 0886
Email: mskull@imdex.com.au
www.imdex.com.au