ANNUAL REPORT 2013
Innovative Technologies
Integrated Solutions
Global Support
imdexlimited.com
Imdex Limited (Imdex)
ABN 78 008 947 813
Australian Securities Exchange (ASX)
Listing Date 24 September 1987
ASX Code: IMD
Registered Offi ce
8 Pitino Court
Osborne Park
Western Australia 6017
Head Offi ce
8 Pitino Court
Osborne Park
Western Australia 6017
Directors
Mr Ross Kelly (Chairman)
Mr Bernie Ridgeway (Managing Director)
Mr Kevin Dundo (Non-Executive Director)
Mr Magnus Lemmel (Non-Executive Director)
Ms Betsy Donaghey (Non-Executive Director)
Company Secretary
Mr Paul Evans
2013 Annual General Meeting
Imdex’s AGM will be held at
The Celtic Club, 48 Ord Street, West Perth,
Western Australia commencing at
11am on Thursday 17 October 2013.
For further information please contact Paul Evans
on 08 9445 4010 or visit the investor section of
Imdex’s website at:
www.imdexlimited.com
“FY13 was a challenging year due
largely to a cyclical slowdown in
the global minerals industry. The
challenges, although signifi cant,
are being addressed as the
company continues to pursue its
diversifi cation strategy, strengthen
its technologies, and expand its
global presence.”
fY2013 Snapshot
Imdex Group at a Glance
Company Profi le
The Imdex Way
key data as at 30 June 2013
Company structure
Innovative Technologies
Minerals Products Used by stage
What are Drilling Fluids?
What are solids removal Units?
3
3
3
4
5
6
7
8
8
What are Downhole survey and
Core orientation Instruments?
10
What are Data Management solutions? 11
Global support
fY13 Snapshot
12
14
Proven Growth & Diversifi cation strategy 14
Fy13 Growth Initiatives & Performance 15
operational Highlights & Challenges
Market review
Group Financial Performance
summary Financial Highlights
16
16
17
21
Contents
Board of Directors
Chairman’s Report
Managing Director’s Report
Operational Overview
Executive Management Team
Global Team
Community Involvement
stakeholder Communication
22
26
30
34
34
35
39
39
Quality, Health, safety and Environment 40
risk Management
ongoing Product Development
focus for fY14
43
49
55
strategy for Increasing shareholder value 55
Growth Initiatives & Areas of Focus
55
2013 financial Report
Company History
57
142
Throughout this document, unless otherwise stated, all
monetary amounts are recorded in Australian currency.
2013 IMDEX LIMITED AnnUAL rEPorT
1
Imdex Group at a glance
Imdex Mission
“We deliver leading innovative
technologies to the global
minerals industry and niche
oil and gas markets, focusing
on integrated solutions that
enhance our customers’
operations and deliver value for
shareholders. We achieve this
through our extensive industry
knowledge and commitment to
product development, ensuring
innovative, simple to use and
fi t-for-purpose technologies.”
Pilbara, Western Australia
2
2013 IMDEX LIMITED AnnUAL rEPorT
Imdex Group at a glance
Company Profile
Imdex is a leading provider of drilling fluid products,
advanced downhole instrumentation, data management
solutions and geo-analytical services to exploration,
development, production and mining services
companies within the minerals and oil and gas sectors
worldwide.
The company’s strength is derived from its global
operations, superior customer service and leading
technologies.
Imdex supports a diverse range of customers at all
stages of the mining cycle, from junior explorers to
major producers across a wide range of commodities.
To provide optimal service to these customers, the
company has operational centres in key mining regions
of the world, including: Asia-Pacific, Africa, Europe
and the Americas (for further details regarding global
support refer to pages 12 and 13).
Imdex’s substantial commitment to ongoing product
development has enabled the company to achieve
market leader status in its fields of operation. The
company is continuously refining its integrated range
of fluid products, unrivalled instrumentation and data
management solutions to ensure customers have the
most advanced operational technology available.
The Imdex Way
The Imdex Way sets out the key principles and expected behaviours that govern the company’s
decision making, business practices and employee reward programs.
Integrity - Communicating openly and honestly.
Avoiding activities or organisations that are unethical,
harm people or the environment.
Teamwork - Working collaboratively, safely and with
respect for diversity within Imdex’s Group to achieve
the best results for the company, customers and
colleagues.
Accountability - Taking responsibility for and
delivering on Imdex’s commitments to the company,
customers and colleagues.
Being Dynamic - Maintaining an efficient global
company with the flexibility to provide localised
customer solutions and the adaptability to react quickly
to new opportunities and change.
Innovation - Leveraging Imdex’s advanced
technologies, research and development capabilities to
deliver innovative, leading edge products and services
that optimise customer operations.
Continuous Improvement - Pursuing Imdex’s
strategy of ongoing growth and reward for
shareholders, customers and employees through
continuous improvement of the company’s products,
services and work practices.
3
2013 Imdex LImIted AnnuAL RepoRt Imdex Group at a glance
Key data
As AT 30 JUnE 2012
As AT 30 JUnE 2013
Market capitalisation:
$366 million
shares on issue:
208 million
share price at 30 June 2012:
$1.76
number of shareholders:
3,853
number of employees:
543
Market capitalisation:
$130.5 million
shares on issue:
210.5 million
share price at 30 June 2013:
$0.62
number of shareholders:
3,897
number of employees:
604
Banking institutions:
HSBC and Westpac
Legal advisors:
QLegal
Auditors:
Deloitte Touche Tohmatsu
share registry:
Computershare
Banking institutions:
HSBC and Westpac
Legal advisors:
Hopgoodganim (formerly QLegal)
Auditors:
Deloitte Touche Tohmatsu
share registry:
Computershare
REFLEX ACT III
4
2013 IMDEX LIMITED AnnUAL rEPorT
Imdex Group at a glance
Company Structure
Imdex has two operational divisions, Minerals and oil
& Gas. Imdex’s Minerals Division consists of the AMC
and rEFLEX (including ioGlobal) businesses. These
businesses market innovative drilling fl uids, chemicals,
solids removal technologies, downhole instrumentation
and data management solutions, together with geo-
analytical consulting services and software, to the global
minerals industry.
AMC is a leading provider of drilling fl uids to the global
industry, and rEFLEX is the number one global supplier
of downhole instrumentation to that industry.
Imdex’s oil & Gas Division comprises AMC oil & Gas
and a 30% share of vEs International (formerly DHs
Energy services). The vEs joint venture is the third
largest provider of downhole survey services to the oil
and gas markets, primarily in the UsA and Middle East.
The AMC oil & Gas and vEs International businesses
provide drilling fl uids, production and completion
chemicals, and downhole survey services to the global
oil and gas market.
IMDEX
LIMITED
MINERALS
DIVISION
PRODUCT
DEVELOPMENT
IMDEX
TECH
UK
IMDEX
TECH
AUS
IMDEX
TECH
USA
OIL & GAS
DIVISION
30% JOINT VENTURE
2013 IMDEX LIMITED AnnUAL rEPorT
5
Imdex Group at a glance
Innovative Technologies
MInErALs DIvIsIon
Brands
Reflex
Product Range
Market
rEFLEX ACT III: digital core orientation
rEFLEX HT ACT: digital core orientation
rEFLEX EZ-shot: single-shot magnetic survey
rEFLEX EZ-Trac: multi-shot magnetic survey
rEFLEX HT EZ-Trac: multi-shot magnetic survey
rEFLEX Maxibor II: optical survey
rEFLEX Gyro: gyroscopic survey
rEFLEX HT Gyro: gyroscopic survey
Customised downhole motors
rEFLEX HUB
ioGAs
ioGlobal Consulting
Global mining
/ mineral
exploration
market
AMC
Drilling fluids and chemicals
Fluid containment and transfer equipment
Waste management equipment
solids removal units (surface and underground srUs)
oIL & GAs DIvIsIon
Brands
Product Range
Market
VeS INTeRNATIONAl
Target Ins
Gyroflex survey tool
AMC OIl & GAS
Drilling fluids and production chemicals
Fluid containment and transfer equipment
Waste management equipment
solids control units (sCUs)
Global oil & gas
market
6
2013 Imdex LImIted AnnuAL RepoRt
Imdex Group at a glance
Minerals Products Used by Stage
AMC
SOLIDS REMOVAL UNITS
AMC
FLUIDS
REFLEX
CORE ORIENTATION
INTEGRATED SaaS / DATA MANAGEMENT SOLUTIONS
GYRO DOWN HOLE SURVEY
MAGNETIC DOWN HOLE SURVEY
REFLEX
REFLEX
REFLEX
REFLEX
DIRECTIONAL EQUIPMENT
NON-MINING
7% REVENUE
EXPLORATION
22% REVENUE
DEVELOPMENT
51% REVENUE
PRODUCTION
20% REVENUE
non-mining includes waterwell drilling, civil and tunnelling operations
2013 IMDEX LIMITED AnnUAL rEPorT
7
AMC Drilling Fluids & REFLEX instrumentation, Pilbara Western Australia
Imdex Group at a glance
What are Drilling
fluids?
What are Solids
Removal Units?
Drilling fl uids, or mud as they are known in the
industry, are a key part of the drilling process for
mining, oil and gas, water-well, horizontal directional-
drilling and tunnelling applications.
There is a broad range of drilling fl uids, all with
unique properties and uses, however, their principal
role is to clean, cool and lubricate the drill-bit, return
chips of rocks known as cuttings to the surface, and
keep the borehole stabilised and open.
During the drilling process a continuous circulation of
drilling fl uid is used. Fluid is pumped down the drill-
pipe, through the drill-bit and returned to the surface
via the aperture between the drill-pipe and borehole.
The fl uid then circulates through a shale shaker, mud
tanks, or Imdex’s new solids removal units to remove
the cuttings from the fl uid for re-use.
Drilling fl uids also help keep the borehole stabilised
by forming a thin membrane on the interior surface
known as a fi lter-cake. The pressure of the drilling
fl uid at depth keeps the borehole from collapsing.
solids removal units (srUs) are used to eliminate
cuttings in the drilling mud fl ow cycle. Drilling fl uid is
circulated directly from the drill collar to the srU’s
shaker or centrifuge feed tube, where drill solids are
removed via a centrifuge. Cleaned drilling fl uids are
then returned to the drill hole.
The highly mobile units also incorporate a mixing
chamber and weir system, which enables drilling fl uids
to be added accurately and effi ciently.
The srUs provide signifi cant economic and
environmental advantages as they eliminate the need
to dig and rehabilitate traditional mud pits. The units
also reduce water consumption, mud usage and wear
and tear to drilling components, while enhancing
drilling productivity.
Fluid is pumped down the drill pipe lubricating the drill bit and returning
cuttings to the surface
Drilling Fluid
8
2013 IMDEX LIMITED AnnUAL rEPorT
Imdex Group at a glance
“We will continue to integrate
our fl uids, equipment,
instrumentation and data
collection offerings, thereby
presenting to our customers
a unique total solution that
enhances the effi ciency of
their operations.”
2013 IMDEX LIMITED AnnUAL rEPorT
Solids Removal Unit, Montana, USA
9
Imdex Group at a glance
What are Downhole Survey and Core
Orientation Instruments?
sUrvEy
InsTrUMEnTATIon
CorE orIEnTATIon
InsTrUMEnTs
Core orientation instruments
are used to determine the exact
position of a core sample in the
ground prior to extraction. This
process allows geoscientists to
accurately assess the sample
to determine the structural
geology, which often controls
a mineralised ore system. By
understanding the structural
geology, wasted time and
money caused by drilling in the
wrong location or direction are
avoided. Core orientation is also
particularly important during
mine planning and development
to avoid potential problem areas
such as faults or slip zones.
Downhole survey instruments
provide geologists and drillers
with comprehensive data,
including azimuth and dip, which
allows the exact trajectory of
boreholes to be determined,
even at thousands of metres
below the surface.
Borehole deviations, where the
actual path is different to the
planned path, are common and
costly. Geological variations,
drilling parameters, including
excessive or irregular thrust and
hole design, are just some of the
reasons why a borehole may
deviate. A two degree deviation
at the surface can lead to a 35
metre lateral displacement at
a hole depth of 1000 metres,
resulting in signifi cant additional
drilling costs and loss of
opportunity if zones of economic
mineralisation are missed.
By surveying the borehole
throughout the drilling process,
deviations can be corrected and
the likelihood of intercepting
desired targets is signifi cantly
enhanced.
GyrosCoPIC sUrvEy AnD
DIrECTIonAL sTEErInG
InsTrUMEnTs
Drilling is becoming increasingly
complex and challenging due to
diminishing accessible reserves,
high exploration costs and
environmental impact concerns.
As a result, energy companies
are drilling deeper, for smaller
targets, re-entering existing
wells, and drilling multiple wells
from a single platform. In such
an environment, advanced
technology and accurate data
are crucial to locate reserves
effi ciently and to avoid collision
with existing wells which can be
catastrophic and cost millions of
dollars to remediate.
Imdex has developed a range
of advanced gyroscopic survey
and directional steering
instruments specifi cally designed
for challenging multiple well
environments, in areas of high
magnetic interference, to allow
directional drillers to accurately
control the path of the wells.
REFLEX EZ-Trac
10
Core sample
2013 IMDEX LIMITED AnnUAL rEPorT
Imdex Group at a glance
What are Data Management Solutions?
rEFLEX HUB
rEFLEX HUB delivers a new, smarter way of
operating for the drilling, exploration, production
and mining services sectors. It provides a
complete solution for the collection, storage
and reporting of data and critical operational
information – directly from site to the offi ce, with
real time visibility.
Data is automatically transmitted, whenever an
internet connection is available, directly to rEFLEX
HUB’s secure, central database. Customers can
then access their data via a web browser from
any location worldwide. Customised dashboards
provide real time information and critical statistics
for a single site or an entire business.
The unique paperless system makes collecting fi eld data
easy and accurate using any iPad, Android or Windows
Mobile device to digitally record and validate data as it is
entered. It also delivers signifi cant operational effi ciencies
through highly effi cient workfl ows and reduces the cost
and time associated with managing valuable and complex
data sets.
2013 IMDEX LIMITED AnnUAL rEPorT
11
Imdex Group at a glance
Global Support
Imdex is a global business operating in diversifi ed geographical markets.
The company has successfully established operations in all key mining and exploration regions throughout
Asia Pacifi c, Africa, Europe and the Americas. Imdex is also growing its business in the principal oil and gas
regions within Africa, Asia Pacifi c, Europe, the Middle East and United states of America.
Imdex’s global presence and comprehensive distribution network allows it to provide a unique service to
customers and allows greater access to international mineral exploration and oil and gas markets.
Vancouver, Canada
Calgary, Canada
Timmins, Canada
San Luis Obispo, USA
Salt Lake City, USA
Torreon, Mexico
North America
Corpus Christi, USA
Ecuador, Peru & Colombia
Lima, Peru
Europe
East Sussex, UK
Amsterdam, Netherlands
Bremen, Germany
Rastede, Germany
Aktau, Kazakstan
Almaty, Kazakstan
New Delhi, India
Dubai (DMCC), UAE
Asia Pacific
Accra, Ghana
Africa
Singapore
Belo Horizonte, Brazil
Itajai S.C., Brazil
Johannesburg,
South Africa
Santiago, Chile
Mendoza, Argentina
South America
Jakarta
Newman, WA
Kalgoorlie, WA
Perth, WA
Adelaide, SA
Townsville, QLD
Roma, QLD
Brisbane, QLD
Mudgee, NSW
Imdex’s Regional Offices
VES JV Office
12
2013 IMDEX LIMITED AnnUAL rEPorT
Imdex Group at a glance
During Fy13 additional operational bases or manufacturing facilities were established in Brisbane
(Australia), Calgary (Canada), Mendoza (Argentina), Accra (Ghana), Bremen (Germany),
Amsterdam (netherlands) and san Luis obispo (California). The acquisition of ioGlobal also
brought additional support facilities in vancouver (Canada), Melbourne and Perth (Australia).
Imdex Technology Germany was relocated to California.
Vancouver, Canada
Calgary, Canada
Timmins, Canada
San Luis Obispo, USA
Salt Lake City, USA
North America
Corpus Christi, USA
Torreon, Mexico
Ecuador, Peru & Colombia
Lima, Peru
Santiago, Chile
Mendoza, Argentina
South America
Europe
Vancouver, Canada
Calgary, Canada
Timmins, Canada
East Sussex, UK
Amsterdam, Netherlands
Bremen, Germany
Rastede, Germany
Aktau, Kazakstan
Salt Lake City, USA
Almaty, Kazakstan
San Luis Obispo, USA
North America
Corpus Christi, USA
Torreon, Mexico
New Delhi, India
Europe
East Sussex, UK
Amsterdam, Netherlands
Bremen, Germany
Rastede, Germany
Aktau, Kazakstan
Almaty, Kazakstan
New Delhi, India
Dubai (DMCC), UAE
Asia Pacific
Dubai (DMCC), UAE
Ecuador, Peru & Colombia
Asia Pacific
Accra, Ghana
Africa
Singapore
Accra, Ghana
Africa
Singapore
Belo Horizonte, Brazil
Itajai S.C., Brazil
Johannesburg,
South Africa
Jakarta
Lima, Peru
Newman, WA
Kalgoorlie, WA
Perth, WA
Santiago, Chile
Adelaide, SA
South America
Belo Horizonte, Brazil
Itajai S.C., Brazil
Townsville, QLD
Roma, QLD
Brisbane, QLD
Mendoza, Argentina
Mudgee, NSW
Jakarta
Newman, WA
Kalgoorlie, WA
Perth, WA
Adelaide, SA
Townsville, QLD
Roma, QLD
Brisbane, QLD
Mudgee, NSW
Johannesburg,
South Africa
Imdex’s Regional Offices
VES JV Office
2013 IMDEX LIMITED AnnUAL rEPorT
13
Imdex’s Regional Offices
VES JV Office
fY13 Snapshot
Proven Growth & Diversification Strategy
sTrATEGy For InCrEAsInG sHArEHoLDEr vALUE
Expanding into new markets, particularly oil and gas
• Growing Imdex’s global business
•
• Maintaining product leadership through investment in product development
•
Increasing rental based revenue
• Achieving operational efficiencies.
IMDEX sTrATEGy on TrACk
PAsT
Fy13
MEDIUM TErM
oIL & GAs
MInErALs
100%
27%
73%
AsIA PACIFIC
oTHEr
100%
46%
54%
sALEs
rEnTALs
100%
29%
71%
Note: All numbers based on actual or anticipated combined revenue
T
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r
A
M
D
n
E
I
C
H
P
A
r
G
o
E
G
H
C
A
E
r
L
L
E
s
/
T
n
E
r
I
X
M
14
2013 Imdex LImIted AnnuAL RepoRt
fY2013 Snapshot
fY13 Snapshot
fY13 Growth Initiatives & Performance
Fy13 GroWTH InITIATIvEs
Fy13 PErForMAnCE
Manufacturing and marketing the company’s
srUs via Imdex’s global distribution channels.
srUs were successfully deployed to all principle
mining regions globally, however internal
utilisation targets not achieved.
Commercialising Imdex’s rEFLEX EZ-Gyro
survey instrument for the minerals industry.
Imdex did not meet this internal target.
signifi cant progress was made towards
commercialisation, yet additional work is
required to meet the company’s stringent
performance standards.
Increasing Imdex’s geographical market share in
under-penetrated regions such as Canada, Latin
America, Africa, the United states and Europe.
During 1H13, rEFLEX achieved revenue growth
in Africa and Brazil, while AMC increased revenue
in UsA, Chile and Peru.
Utilising Imdex’s specialist technical expertise
and product development laboratories to
enhance existing, and develop new, drilling fl uid
products and downhole instrumentation for the
minerals and oil and gas markets.
Imdex developed and commercialised new
drilling fl uid products, refi ned its solids removal
technologies, and commenced new projects
utilising AMC, rEFLEX and ioGlobal technologies.
Further expansion of Imdex’s capabilities
and presence in the global conventional and
unconventional oil and gas markets.
Imdex signifi cantly enhanced its capabilities,
presence and customer base within the global oil
and gas markets.
strategic, bolt-on acquisitions, which are
earnings accretive and provide excellent growth
opportunities when combined with the Imdex
Group.
Imdex acquired ioGlobal Pty Ltd and ioAnalytics
Pty Ltd (together ioGlobal). Although its
performance is impacted by the cyclical
slowdown of the minerals sector, this acquisition
provides the company with a range of signifi cant
growth opportunities, expertise, enhanced
technologies and product offerings.
2013 IMDEX LIMITED AnnUAL rEPorT
AMC Drilling Fluids, Canada
15
fY13 Snapshot
Operational Highlights & Challenges
HIGHLIGHTs
• Acquisition of ioGlobal;
• Deployment of Imdex’s srUs to all principle
mining regions globally;
•
Imdex became one of the two industry service
providers to join the Australian-based Deep
Exploration Technologies Cooperative research
Centre (see page 49);
• ongoing development of Imdex’s underground
srUs and heli-portable srUs;
• Continued integration of ioGlobal, including
the rebranding of the company’s products and
services under the rEFLEX banner;
•
•
strong oil and gas growth within Europe and Asia
Pacific;
strong oil and gas growth within the Australian
coal bed methane market;
• The first explosion proof srU placed into
the coal bed methane industry in Queensland
(Australia);
• Continuing strong revenues and EBITDA
performance by Imdex’s vEs International joint
venture; and
• The expansion of vEs International’s presence in
Latin America with the acquisition of a downhole
survey business in Ecuador.
• Marketing of rEFLEX HUB (formerly ioHUB)
CHALLEnGEs
and subsequent commissioning by a major global
resource company and drilling services’ company
(see pages 51 - 54);
•
Increased market share in previously under-
penetrated regions;
•
Further business geographic diversification;
•
Extension of some development projects into
Fy14;
• Cyclical slowdown of the minerals market
deflated the sectors interest in adopting new
technologies; and
• Managing down working capital, particularly stock
• Continued investment in product development of
levels, in a slowing minerals market.
Imdex’s instrumentation;
• reduced inventory levels reflecting the cyclical
slowdown in the minerals sector;
•
•
•
successful relocation of Imdex Technology
Germany to California;
Investment in AMC UsA, where significant
potential for market share growth has been
identified;
Establishment of new manufacturing facilities in
Brisbane (Australia), Calgary (Canada), Mendoza
(Argentina) and Bremen (Germany);
• Continuing development of innovative drilling
fluid products (see page 50);
Market Review
•
Fall in commodity prices;
• A cyclical slowdown of the global minerals
industry, particularly evident 2H13;
• Growth available in under-penetrated mining
regions;
• Month on month reduction to instrumentation
rental fleet utilisation in line with cyclical
slowdown of the minerals industry;
• Hiring of key oil and gas personnel to support
the delivery of the Division’s growth potential;
• Minerals sector rig utilisation rates of
approximately 30%; and
• record Fy13 revenue generated by the oil &
Gas Division, which represents year on year
growth since Fy10 (see page 19);
• Continuing strong long-term growth potential
within the conventional and unconventional oil and
gas industries globally.
16
2013 Imdex LImIted AnnuAL RepoRt fY13 Snapshot
Group financial Performance
•
statutory revenue down 14% to $232.8 million (Fy12: $269.6 million)
• Combined revenue (excluding interest) down 11% to $249.4 million (Fy12: $278.9 million)
•
Earnings before interest, tax and amortisation (EBITA) down 53% to $35.2 million (Fy12: $75.2 million), including
$3.0 million of one off restructuring costs, with the majority of these costs incurred in 4Q13
• net profit after tax (nPAT) down 58% to $19.4 million (Fy12: $45.8 million)
• net assets $188.5 million (30 June 2012: $168.1 million)
• operating cash-flow up 44% to $39.0 million (Fy12: $27.1 million)
• Comfortable gearing levels with net debt/capital of 22.3% (Fy12: 22.3%)
•
Final fully franked dividend of 0.4 cents per share, total Fy13 dividend of 2.90 cents per share fully franked (Fy12:
7.25 cents per share fully franked).
CoMBInED rEvEnUE $249.4M
EBITA oF $35.2M
Minerals
Oil & Gas
Combined revenue*
($m)
142.1
137.0
134.3
278.9
249.4
205.3
EBITA*
($m)
38.8
75.2
48.1
35.2
24.5
20.7
Fy08
Fy09
Fy10
Fy11
Fy12
Fy13
Fy08
Fy09
Fy10
Fy11
Fy12
Fy13
*Includes Imdex share of vEs Joint venture revenue
*Includes equity accounted vEs Joint venture result
17
2013 Imdex LImIted AnnuAL RepoRt fY13 Snapshot
Minerals Division
• Minerals revenue down 24% to $182.7 million (Fy12: $241.7 million)
• operational EBITA down 50% to $43.2 million (Fy12: $85.7 million)
DIvIsIonAL rEvEnUE
revenue
($m)
europe 5%
Africa 19%
Americas 31%
Asia Pacific 45%
125.0
108.8
111.3
241.7
177.7
182.7
Fy08^
Fy09^
Fy10^
Fy11
Fy12
Fy13
^Comparative
purposes only.
regional structure
adopted 1 July 10
DIvErsIFIED rEvEnUE BAsE
(Minerals revenue)
Junior
15%
Non
Mining
7%
Production
20%
Exploration
22%
Major / Intermediate 85%
Development
51%
Others
27%
Iron
12%
Gold
41%
Copper
20%
Customer Type
Drilling Phase
Commodity
18
2013 Imdex LImIted AnnuAL RepoRt fY13 Snapshot
Oil & Gas Division
• oil & Gas revenue up 79% to $66.7 million (Fy12: $37.2 million)
• operational EBITA loss improved by 47% to $4.1 million (Fy12: loss of $7.7 million)
DIvIsIonAL rEvEnUE
Combined revenue*
($m)
VeS International
JV revenue
66.7
37.2
28.0
27.4
23.0
17.0
Fy08
Fy09
Fy10
Fy11
Fy12
Fy13
*Includes 30% of vEs
International Jv revenue
2013 IMDEX LIMITED AnnUAL rEPorT
Geothermal rig, South Australia
19
fY2013 Snapshot
“In recent years we have
focused on growing our
rental revenue through the
introduction of new products
and technologies.”
REFLEX development laboratory
20
2013 IMDEX LIMITED AnnUAL rEPorT
fY13 Snapshot
Summary financial Highlights for the Year
ended 30 June 2013 (Audited Results)
Consolidated
2011
$’000
2012
$’000
2013
$’000
12-13 var
%
revenue from continuing operations (excluding interest income)
205,163
269,563
232,791
operating Profi t before Interest, Tax, Depreciation & Amortisation
Depreciation
53,867
(5,721)
81,960
(6,761)
42,910
(7,728)
Earnings before Interest, Tax & Amortisation (EBITA)
48,146
75,199
35,182
(14%)
(48%)
14%
(53%)
23.5%
27.9%
15.1%
(45.9%)
EBITA margin
Amortisation
Earnings before Interest & Tax (EBIT)
net interest expense
net profi t before tax
Income tax expense
net Profi t after Tax
Basic earnings per share (cents)
net Cash provided by operating Activities
Cash on hand
net Assets
(6,778)
(5,957)
(3,364)
41,368
69,242
31,818
(2,775)
(1,742)
(3,308)
38,593
67,500
28,510
(9,591)
(21,723)
(9,127)
29,002
45,777
19,383
14.69 ¢
22.34 ¢
9.24 ¢
35,893
27,056
38,970
18,388
11,232
9,979
125,409
168,066
188,452
(44%)
(54%)
90%
(58%)
(58%)
(58%)
-
(32%)
(11%)
12%
8%
12%
Total Borrowings (incl deferred acquisition payments)
37,860
59,429
63,986
net Tangible Assets per share
34.83 ¢
51.35 ¢
57.52 ¢
2013 IMDEX LIMITED AnnUAL rEPorT
21
Board of Directors
Imdex’s Board of Directors has extensive professional
expertise, business experience and technical knowledge
of the mineral exploration, mining and oil and gas
industries.
Members of the Board are well respected in these
sectors and play an active role in the generation and
management of the company’s strategic planning.
Further information relating to the Board of Directors,
including details of meetings and remuneration can be
found on pages 58 to 76.
22
2013 IMDEX LIMITED AnnUAL rEPorT
Board of Directors
Mr Ross Kelly
AM Be (HONS) fAICD
Non-executive Chairman
Age 75 years
Mr Bernard Ridgeway
B.Bus (ACCTG) ACA
Managing Director
Age 59 years
• Appointed to the Board 14 January 2004
• Appointed to the Board 23 May 2000
• Appointed as Chairman 15 october
2009
•
Bachelor of Business and Qualified
Chartered Accountant
• Member of the Institute of Chartered
Accountants Australia and the Australian
Institute of Company Directors
• non-Executive Director of sino Gas and
Energy Holdings Limited
• over 27 years’ experience with public
and private companies as a business
owner, Director and Manager.
•
•
Bachelor of Electrical Engineering with
Honours
Fellow of the Australian Institute of
Company Directors
• Consultant to a number of major
Australian companies in the mining,
offshore gas, oil refining, steel,
construction and heavy process
industries
•
•
•
Previously advisor to the Western
Australian Government on water policy
and reform
Previously Councillor of the Australian
Institute of Company Directors and
member of the Advisory Board of the
Curtin University Graduate school of
Business
Previously Chairman and non-Executive
Director of Clough Limited, sumich
Group Limited, orbital Corporation
Limited, Beltreco Limited, Fraser range
Granite nL and Director of Aurora
Gold Limited, PA Consulting services
Ltd and the Fremantle Football Club Ltd.
23
2013 Imdex LImIted AnnuAL RepoRt Board of Directors
Mr Magnus lemmel B.A.
Non-executive Director
Mr Kevin Dundo B.Com, llB
Non-executive Director
Age 74 years
Age 61 years
• Appointed to the Board 19
• Appointed to the Board 14
october 2006
January 2004
• Management consultant
•
based in Brussels, Belgium,
involved in small business
development in sweden.
Former Chairman of
Fiberformvindic Holding AB,
previously the largest Imdex
shareholder
Previously senior vice-
President of Ericsson
Telecommunications, Chief
Executive officer of the
Federation of swedish
Industries and Director
General for Enterprise
Policy of the European
Commission.
•
Bachelor of Commerce and
Bachelor of Laws
• Member of the Law society
of Western Australia, Law
Council of Western Australia,
Australian Institute of
Company Directors and
a Fellow of the Australian
society of Certified
Practicing Accountants
•
Practising lawyer, specialising
in commercial and corporate
law and in particular,
mergers and acquisitions,
with experience in the
mining services and financial
services industries
• Director of red 5 Limited,
synergy Plus Limited and
orH Limited
•
Previously a Director of
Intrepid Mines Limited.
Ms Betsy Donaghey,
B.S. Civil engineering, M.S.
Operations Research
Non-executive Director
Age 55 years
• Appointed to the Board 28
october 2009
•
•
Bachelor of Civil Engineering
A & M University, Texas,
and Master in operations
research University of
Houston
Extensive experience within
the energy sector, including
19 years with BHP Billiton
and 9 years with Woodside
Energy
• non-Executive Director of
st Barbara Limited
• non-Executive Director of
Australian renewable Energy
Agency.
24
2013 Imdex LImIted AnnuAL RepoRt fY2013 Snapshot
“Our commitment to
ongoing investment
throughout industry
slowdowns will ensure we
retain market leadership and
remain a leading provider
of innovative products and
technologies to the global
minerals industry.”
2013 IMDEX LIMITED AnnUAL rEPorT
Drilling Fluid
25
Chairman’s Report
Dear shareholders,
on behalf of the Board, it is my pleasure to present
the Imdex Group 2013 (Fy13) Annual report. Fy13
was a challenging year, due largely to a cyclical
slowdown in the global minerals industry. The
challenges, although significant, are being addressed as
the company continues to pursue its diversification
strategy, strengthen its technologies, and expand its
global presence.
Fy13 PErForMAnCE sUMMAry
The Company achieved total combined revenue for
the 12 months ended 30 June 2013 (Fy13) of $249.4
million – 11% less than last year’s record result.
EBITA decreased by 53% to $35.2 million.
It is significant that 27% of this year’s revenue was
generated from oil and gas (Fy12: 13%). our oil
& Gas Division’s year on year revenue growth is
encouraging and given the people and infrastructure
needed to support an expanded business are now
in place, oil and gas is poised to make a positive and
growing contribution to future profits.
DIvIDEnDs
The Board, through its dividend policy, seeks to strike
a balance between the need invest in Imdex’s growth
and diversification strategy and the desire to deliver a
sustainable and growing dividend stream to you, our
shareholders. Accordingly, an interim dividend of 2.50
cents per share and a final dividend of 0.40 cents per
share, both fully franked, were declared in Fy13.
sTrATEGy
Despite reduced activity within the minerals sector,
the strength of our company allowed us to continue
to pursue our strategy, which has been in place since
2007. This strategy involves:
• Growing our global business;
•
Expanding into new market segments, particularly
oil and gas;
26
• Maintaining product leadership through
investment in product development;
•
•
Increasing revenue from rentals and;
Pursuing operational efficiencies.
The acquisition of ioGlobal; the continued
development of our products and technologies; and
the global deployment of our solids removal units, are
noteworthy examples of the pursuit of this strategy
throughout the year.
GroWInG oUr GLoBAL BUsInEss &
EXPAnDInG InTo nEW MArkETs
The acquisition of ioGlobal, (effective 1 november
2012,) has enhanced our product offering, and
broadened our resource company and mining
service provider customer bases. IoGlobal’s highly
differentiated technology also enhances reflex’s
value proposition through the integration of the two
companies’ technologies and development capabilities.
The implementation of the diversification strategy,
has delivered significant growth while transforming
the company. no longer is Imdex principally a drilling
fluids, chemicals and downhole instrumentation
business. It is now a truly global organisation that
also provides leading data collection / management
software and unique geochemical consulting services
to its customers world-wide.
In addition, our expansion into oil and gas continues
to gain momentum and we are well placed to achieve
our goal of generating 30-40% of the Group’s revenue
from this sector. Given the potential for further
substantial growth, we are also confident that we will
improve margins and hence contribution to profit,
as we continue to build scale into this part of our
business.
ProDUCT LEADErsHIP
our range of innovative products and services are all
designed to enhance the efficiency and productivity
of our customers’ operations – a factor which is
2013 Imdex LImIted AnnuAL RepoRt
Chairman’s Report
becoming increasingly important as resource and drilling
companies focus on their margins.
our commitment to ongoing investment throughout
industry slowdowns will ensure we retain market
leadership and remain a leading provider of innovative
products and technologies to the global minerals industry.
oPErATIonAL EFFICIEnCIEs
We remain a dynamic company, continuously looking for
ways to improve our operational efficiencies. During
Fy13 further and ongoing gains were realised by a number
of measures taken by the company, which are outlined in
Bernie’s Managing Director’s report.
rEnTAL BAsED rEvEnUE
BALAnCE sHEET sTrEnGTH
In recent years we have focused on growing our rental
revenue through the introduction of new products and
technologies. In Fy13 total revenue generated by rentals
decreased to 29% from the record level in Fy12 (32%).
This decrease reflects the cyclical slowdown of the
minerals market and lower rig utilisation rates and does
not detract from the validity of this strategy.
We will continue to pursue this strategy and remain
confident that once normal levels of activity return to the
minerals sector, our range of srUs together with new
products and technologies for our minerals and oil and
gas customers, will make additional contributions to our
total percentage of rental revenue in the future.
Imdex continues to maintain a solid balance sheet. As
at 30 June 2013 net assets were $188.5 million (30 June
2012: $168.1 million); operating cash-flow had increased
44% to $39.0 million (Fy12: $27.1 million); and our gearing
levels were comfortable with net debt / (net debt +
capital) of 22.3% (Fy12: 22.3%).
our strong balance sheet supports our growth and
diversification strategies and allows us to respond quickly
to opportunities that arise. It also allows us to continue
to invest in technology and product development through
market downturns and obtain the benefits when the
market rebounds.
rEnTAL FLEET
number of instruments on rent
May
08
Jul
08
nav
08
Mar
09
Jul
09
nov
09
Mar
10
Jul
10
nov
10
Mar
11
Jul
11
nov
11
Mar
12
Jul
12
nov
12
Mar
13
Jul
13
27
2013 Imdex LImIted AnnuAL RepoRt
Chairman’s Report
sUsTAInABLE rEPorTInG & CorPorATE
GovErnAnCE
your Board not only strives to achieve best practice in
all aspects of corporate governance, but also to bring
industry experience insight and commercial acumen
to its deliberations. Further information relating to
Imdex’s corporate governance can be found in the
Directors’ report on page 77 of the financial report.
LookInG ForWArD To Fy14
The fundamentals affecting our markets suggest the
coming year will again be challenging for Imdex, yet we
remain optimistic about the medium and long-term. As
a strong and highly diversified company with leading
products and technologies to enhance the efficiency
of our customers operations, we are well placed to
capitalise on future opportunities.
At the macro level, global economic conditions are
expected to improve slightly overall in the coming
financial year. This positive outlook is a result of
anticipated improvement in the economies of the
United states, Japan and a stable and improving Europe.
While lower than recent years, China is still expected
to maintain solid growth of circa 7.8% during Fy14.
Asia generally experienced lower rates of growth
during the 2Hy13, however lower inflationary
pressures and a general weakening of exchange rates
across the region are expected to result in relatively
strong growth over the year ahead.
Australia appears to be in a transition from a booming
mining investment cycle to other sources of growth,
which is likely to reduce growth in the short-term.
Consensus within the minerals industry supports this
view with capital and exploration expenditure forecast
to reduce over the next 2 – 3 years.
Commodity markets are now operating in a much
more difficult pricing environment. The period of
excess demand, with prices running well ahead of cost
is ending with demand in emerging markets slowing and
new supply entering the market. China remains the key
driver of commodity prices, which in the short-term
may see some negative sentiment, however no further
significant weakening in prices is expected as Chinese
and emerging market growth stabilises.
Cyclical slowdowns are characteristic of the minerals
industry and, as has occurred previously, conditions
will improve as is suggested by the forecasts referred
28
to above; although the coming year again promises to
be tough. For our part, we are continuing to focus
on providing the very best service to our customers,
advancing our product development, and managing
costs to capitalise on and maintain our strong position.
Conversely the oil and gas sector remains strong.
This sector is less cyclical in nature than the minerals
industry and represents a significant opportunity
for long-term growth. As mentioned previously,
we are continuing to make solid progress with the
development of our oil & Gas Division. While we
are still in the early stages of growing this side of our
business, it will, over time, offset the impact of future
slowdowns that will continue to be part of the minerals
industry.
sTronG MAnAGEMEnT TEAM
The sudden downturn in the minerals industry has
underlined how fortunate we are to have a dedicated
capable workforce led by a strong management team.
In particular, I would like to recognise our Managing
Director, Bernie ridgeway, Divisional Managers Gary
Weston and Derek Loughlin, and CFo and Company
secretary Paul Evans and thank them for their hard
work and leadership throughout a particularly
challenging year.
A sincere thankyou is also due to the rest of our
employees and management team across the world –
not only for their dedication, initiative and hard work
but also for contributing to the unique team spirit that
the company is privileged to enjoy.
To my fellow Board Members I say thank you for your
significant contributions – I look forward to working
with you again in the coming year.
Finally, on behalf of Imdex’s Board of Directors and its
employees, I thank all of our valued customers for their
loyalty and you, our shareholders, for your ongoing
support.
Ross Kelly AM Be (HONS) fAICD
Chairman
2013 Imdex LImIted AnnuAL RepoRt Managing Director’s Report
“Our strong balance sheet
supports our growth and
diversifi cation strategies and
allows us to respond quickly
to opportunities that arise.”
2013 IMDEX LIMITED AnnUAL rEPorT
REFLEX ACT III
29
Managing Director’s Report
Dear shareholders,
It is my pleasure to present Imdex’s full year report
for the 2013 financial year (Fy13).
Imdex’s performance throughout Fy13 was negatively
affected by:
• The cyclical slowdown in the minerals sector;
• Continued investment in the development of
•
innovative products and technologies;
Positioning for substantial growth in the oil and
gas sector; and
• The extension of some development projects
into Fy14.
Due to the cyclical nature of the minerals industry,
in recent years Imdex has adopted diversification
strategies including plans to grow its business globally,
expanding into new markets – specifically oil and gas.
The company has successfully advanced these
strategies. Imdex is now a business which is
increasingly diversified by geography, customer
and commodity base, with high exposure to major
and intermediate companies engaging in long-term
projects, as well as a growing presence in the oil and
gas sector offering material growth opportunities.
A good example of the benefits flowing from these
diversification strategies is the strong revenue
performance by Imdex’s oil & Gas Division. The
Division achieved record revenue for Fy13 and
continued its trend of year-on-year revenue growth
since Fy10. It delivered 27% of Fy13 Group revenue,
representing significant progress towards Imdex’s
long-term goal of generating 30–40% of Group
revenue from the oil & Gas Division.
such diversification strategies do not offset cyclical
lows in the short-term, however the company’s
innovative products and technologies position it well,
as customers increasingly look to reduce costs and
improve productivity in their businesses.
other important operational achievements in
Fy13 include the acquisition of ioGlobal, the global
deployment of the company’s solids removal units
(srUs) and the continued investment in people and
equipment to support the growth of Imdex’s oil &
Gas Division.
30
The following is a summary of Imdex’s Fy13
performance:
•
statutory revenue down 14% to $232.8 million
(Fy12: $269.6 million);
•
• Combined revenue (excluding interest) down
11% to $249.4 million (Fy12: $278.9 million);
EBITA down 53% to $35.2 million (Fy12:
$75.2 million), including $3.0 million of one off
restructuring costs, with the majority of these
costs incurred in 4Q13;
• net profit after tax (nPAT) down 58% to $19.4
million (Fy12: $45.8 million);
• net assets $188.5 million (30 June 2012: $168.1
million);
• operating cash-flow up 44% to $39.0 million
(Fy12: $27.1 million);
• Comfortable gearing levels with net debt/capital
•
•
of 22.3% (Fy12: 22.3%);
Increased investment in product development;
and
Final fully franked dividend of 0.40 cents per
share, total Fy13 dividend of 2.90 cents per
share fully franked (Fy12: 7.25 cents per share
fully franked).
MInErALs DIvIsIon
Imdex’s Minerals Division generated revenue of
$182.7 million, contributing 73% of the company’s
combined full year revenue. This represents a
24% decrease on the record result achieved in the
previous corresponding period (Fy12: $241.7 million).
operational EBITA was down 50% to $43.2 million
(Fy12: $85.7 million). The decline in both revenue and
EBITA reflects subdued activity in the minerals sector
as already noted.
While the introduction of some of Imdex’s
development projects was behind internal
expectations, significant progress was made towards
their commercialisation. The company continues
to pursue market share growth in principle and
under-penetrated mining markets, driven by Imdex’s
innovative products and leading technologies. such
2013 Imdex LImIted AnnuAL RepoRt Managing Director’s Report
products and technologies are assisting Imdex’s direct
and indirect customers reduce costs and increase
operational efficiencies, helping them respond to
increasingly challenging market conditions.
Key operating highlights and achievements
Highlights and achievements for Imdex’s Minerals
Division during Fy13 included:
• The acquisition of ioGlobal effective 1 november
2012. This acquisition provides Imdex with a
range of new and significant growth opportunities,
enhanced technologies and product offerings;
- The integration, including the rebranding of the
company’s products and services under the
rEFLEX banner is proceeding well;
• Deployment of Imdex’s solids removal Units
(srUs) to all principal mining regions globally;
-
Imdex continues to receive positive feedback
from customers, however, the slowdown in the
minerals sector resulted in customers being
more cautious than anticipated about adopting
new technologies in the short-term;
• Marketing of rEFLEX HUB (formerly ioHUB)
and subsequent commissioning by a major global
resource company and drilling services’ company.
Positive customer feedback was received regarding
the efficiency of the paperless reporting system;
oIL & GAs DIvIsIon
Imdex’s oil & Gas Division contributed 27% of
the company’s combined revenue for the full year,
generating $66.7 million. This result represents a 79%
increase on the previous corresponding period (Fy12:
$37.2 million). operational EBITA improved by 47% to
a loss of $4.1 million (Fy12: loss of $7.7 million) with
AMC oil & Gas incurring only a small component of
this (less than $1.0 million). This EBITA loss reflected
high non-cash depreciation, amortisation and taxation
charges in the vEs International businesses and
additional acquisition accounting adjustments.
With year-on-year revenue growth reported since
Fy10, Imdex will continue to achieve growth through
improved performance in the vEs joint venture and
increased fluids and equipment sales/rentals in Europe,
the Middle East and Asia Pacific.
Key operating highlights and achievements
Highlights and achievements for Imdex’s oil & Gas
Division during Fy13 included:
• record Fy13 revenue, reflecting investment
committed to the development of the Division in
prior years driving growth;
• ongoing development of Imdex’s underground
• Continuing strong revenues and EBITDA
srUs;
• Commenced development of heli-portable srUs to
cater for geographically or logistically challenging
sites and to meet industry demand;
•
•
Increased market share in previously under-
penetrated regions;
Establishment of new manufacturing facilities
in Brisbane, Calgary and Argentina, enhancing
operational efficiencies by reducing lead times and
overcoming import restrictions; and
• reduced inventory levels reflecting the cyclical
slowdown in the minerals sector.
•
•
performance by Imdex’s vEs International joint
venture;
Investment in equipment, working capital, and
personnel with extensive oil and gas industry
experience to support ongoing growth in the
business;
Establishment of a new mud plant in Bremen,
north-western Germany. The facility has the
capacity to mix and manufacture oil and water
based muds. It can also be used for settling as part
of the waste management recycling process;
• Continuing growth from the coal bed methane
industry in Australia with an increased demand
for sump-less drilling solutions to ensure
environmental disturbance by drilling activities is
minimised;
• The first explosion proof srU placed into the coal
31
2013 Imdex LImIted AnnuAL RepoRt
Managing Director’s Report
bed methane industry in Queensland, Australia;
previously under-penetrated regions;
• Relocation of Imdex Technology Germany to
• utilising Imdex’s specialist technical expertise and
California; and
product development capabilities;
•
•
Expanding Imdex’s data solution offerings to new
and existing customers globally;
Investing further and growing Imdex’s oil and gas
market presence to increase return on investment
in this Division;
• Continued support of customers as they seek to
increase efficiencies and reduce costs; and
• Capitalising on investment in Imdex’s oil and gas
equipment and SRus.
Imdex is becoming a stronger, more diversified business
to better meet the challenges presented by downturns
in the minerals sector. At the same time, the company
is growing its business in the oil and gas sector and
is continuing to develop its innovative products and
leading technologies. Imdex aims to become the
industry standard in providing innovative, simple to
use technologies, which improve the effectiveness and
efficiency of customers’ day to day operations.
In summary I would like to thank our Executive
Management Team, Gary Weston, Derek Loughlin and
Paul Evans for their ongoing leadership and dedication
to our company. I would also like to extend my thanks
to all of our global team for their hard work, innovation
and expertise – it is a pleasure working with you all
and I look forward with enthusiasm for what we can
achieve during FY14. I would also like to thank Imdex’s
valued customers and shareholders for their ongoing
support of our company.
Yours Faithfully
Bernie Ridgeway
Managing Director
• The expansion of VES International’s presence in
Latin America with the acquisition of a downhole
survey business in Ecuador.
OuTLOOk
Imdex has been working diligently in recent years to
diversify the business by geography, product, customer
and commodity base. This will enable the company
to drive growth and also reduce its exposure to
slowdowns, which are characteristic of the minerals
sector. The Oil & Gas Division delivered 27% of FY13
revenue, representing significant progress towards
the long term goal of generating 30-40% of combined
revenue from oil and gas.
While the company anticipates activity in the mining
sector will remain subdued throughout FY14, Imdex
is well placed to grow market share in previously
under-penetrated regions and to benefit from the
commercialisation of new products and technologies.
The company has historically continued to invest in its
growth and diversification strategies through previous
cycles, which has positioned the business well for long-
term growth.
The company is managing inventory and working capital
with care and will continue to look for opportunities
to manage costs in a measured and disciplined manner.
Imdex is also maintaining a disciplined approach to
investments in new products and technologies.
The oil and gas sector remains robust with significant
opportunities for long-term growth. The investments
made to date in equipment, working capital and
qualified personnel have driven strong revenue growth
and Imdex’s Oil & Gas Division is well positioned
to continue to deliver top line growth and will be
profitable in FY14.
kEY AREAS OF FOCuS AnD GROWTh
InITIATIVES FOR FY14
•
Strong cost discipline and prudent working capital
management;
• Continuing to increase Imdex’s market share in
32
2013 Imdex LImIted AnnuAL RepoRt Managing Directors Report
“Imdex is now a business
which is increasingly diversifi ed
by geography, customer
and commodity base, with
high exposure to major and
intermediate companies
engaging in long-term projects,
as well as a growing presence
in the oil and gas sector
offering material growth
opportunities.”
2013 IMDEX LIMITED AnnUAL rEPorT
Kalgoorlie, Western Australia
33
Operational Overview
executive Management Team
Mr. Gary Weston
Divisional General
Manager, Oil and Gas
Mr. Derek loughlin
Divisional General
Manager, Minerals
•
•
•
•
•
•
42 years in the drilling
industry, in both the oil
and gas and minerals
sectors
1987, co-founder of Imdex
Limited
1988, co-founder of
Australian Mud Company
40 years management
experience
strong international
marketing experience
Pivotal role identifying
and negotiating Imdex’s
strategic acquisitions.
•
•
•
26 years’ experience
within the drilling industry
7 years in executive
management positions at
Imdex
17 years with leading
drilling company Boart
Longyear in engineering,
operations, sales and
global exports, working
in Ireland, Australia and
Germany
• Honours Degree in
Mining Engineering from
the Camborne school of
Mines, Uk
• Diploma of Executive
Development at the
International Institute
for Management and
Development in Lausanne.
34
Mr. Paul evans
Chief financial Officer and
Company Secretary
• Chartered Accountant
•
Fellow of the Institute of
Chartered Accountants in
Australia
•
• Chief Financial officer and
Company secretary since
17 october 2006
Extensive experience
in commercial, general
management and financial
roles
Industry experience
covering the media,
manufacturing,
mining services and
telecommunications
industries.
•
2013 Imdex LImIted AnnuAL RepoRt Operational Overview
Global Team
Imdex values talented people who are committed to the Company’s guiding principles and expected behaviours.
Imdex’s Recruitment & Selection Policy also ensures suitably qualifi ed and experienced employees are engaged to
meet business needs. key principles of the Policy include:
• recruitment of the person whose competencies best match requirements of the role;
• Compliance with Equal Employment opportunity Legislation;
• Development of existing employees and where possible, provide employees with career opportunities; and
•
support of local industry, communities and talent through the recruitment of local nationals in the fi rst
instance, wherever possible.
Imdex also adheres to its Equal Employment Opportunity Policy, whereby all decisions affecting employment and
career development, including those associated with hiring, training, promotion, transfer and general working
conditions are based on the principle of merit. Discrimination in any form is considered an unacceptable practice,
which is contrary to the spirit and intent of this policy.
2013 IMDEX LIMITED AnnUAL rEPorT
AMC Mud Testing, Chile
35
Operational Overview
Employees by Region FY2012
Africa (66)
Asia Pacific (48)
Australia (291)
North America (43)
South America (95)
Total Employees 543
EMPLoyEEs By rEGIon Fy12
Employees by Region FY2012
EMPLoyEEs By rEGIon Fy13
Employees by Region FY2013
Africa (66)
Asia Pacific (48)
Australia (291)
North America (43)
South America (95)
Total Employees 543
Employees by Region FY2013
Gender Diversity FY12
GEnDEr DIvErsITy
Africa (60)
Asia Pacific (21)
Australia (234)
Central Asia (46)
Europe (102)
Middle East (8)
North America (66)
South America (67)
Total Employees 604
Female (22.9)
Male (77.1)
Total Employees 524
Africa (60)
Asia Pacific (21)
Australia (234)
Central Asia (46)
Europe (102)
Middle East (8)
North America (66)
South America (67)
Total Employees 604
Gender Diversity FY12
Gender Diversity FY13
Female (23%)
Male (77%)
FY12
Female (24%)
Male (76%)
FY13
Female (22.9)
Male (77.1)
Total Employees 524
Female (23.3)
Male (76.7)
Total Employees 607
Total Number of Contractors
Gender Diversity FY13
Female (23.3)
Male (76.7)
Total Employees 607
Total Number of Contractors
FY2012 (28)
FY2013 (31)
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
31.5
31
30.5
30
29.5
29
28.5
28
27.5
27
26.5
REFLEX ACT customer training, Chile
FY12
FY13
FY2012 (28)
FY2013 (31)
36
Total Number of Contractors
2013 IMDEX LIMITED AnnUAL rEPorT
FY2012 (28)
FY2013 (31)
Operational Overview
“Our expansion into oil
and gas continues to gain
momentum and we are well
placed to achieve our goal
of generating 30-40% of the
Group’s revenue from this
sector.”
2013 IMDEX LIMITED AnnUAL rEPorT
Onshore oil & gas rig
37
Operational Overview
Throughout Fy13 Imdex carried out the following initiatives to strengthen, support and engage its diverse global
team:
• revised the company’s short term incentive program, Key Performance Indicators (KPIs) Policy and link to
employee performance;
• revised the performance and development review process and associated materials;
•
•
set cascading company goals and kPIs;
Formalised Imdex values and expected behaviours;
• Developed a gender diversity plan;
•
Established a total reward framework and re-defi ned position levels;
• Developed a human resources induction and on-boarding program;
• Conducted a leadership and development workshop; and
•
Established an Australian Parental Leave Policy and introduced paid maternity leave for senior female employees.
LEADErsHIP WorksHoP
Imdex’s management team participated in
a leadership workshop during the annual
group strategy planning session as part of
the company’s commitment to ongoing skills
development.
The workshop was facilitated by James McMahon
from Chauvel Group. Mr McMahon was a
compelling speaker who drew on his vocational
education, diverse business consulting experience
and leadership skills as a former commanding
offi cer of the special Air service regiment.
A key theme from the workshop was every
Imdex employee has a voice and should feel
confi dent to contribute to decision making, share
ideas for innovation and improvement, and speak
up if they feel something is not right.
Time was also allocated to discuss the results of
an internal survey, which identifi ed Imdex’s values
and expected behaviours. The session highlighted
the consensus within the management team in
relation to the way things are done at Imdex
and complemented the key messages from the
leadership workshop.
Conducting mud checks, South Australia
38
2013 IMDEX LIMITED AnnUAL rEPorT
Operational Overview
Community Involvement
Imdex supports events and initiatives undertaken by its regional operations to assist their local communities and
charity fundraisers.
Food collection initiative supporting Epworth Children’s Village, South Africa
Stakeholder Communications
Imdex provides a range of external and internal communications to keep its stakeholders informed of the
company’s performance, principal activities, product development, long-term strategies, growth initiatives, and areas
of focus. It also encourages questions and feedback from all stakeholders and seeks to foster an internal culture
where everyone has a voice and the confi dence to contribute to innovation and continuous improvement.
Principal communications for shareholders include:
• Quarterly AsX releases;
• Quarterly Presentations – the presentations are made via a live teleconference and webcast followed by a
question and answer session;
•
shareholder newsletters – Imdex News is published quarterly to keep Imdex’s valued shareholders informed
of the company’s performance and operational highlights;
•
Broker road shows – road shows are undertaken twice a year in March and october; and
• The Annual General Meeting – Imdex’s Fy13 AGM will be held at The Celtic Club, 48 ord street West Perth,
Western Australia commencing at 11am on Thursday 17 october 2013.
Copies of all shareholder communications, together with the company’s corporate calendar, are available on
Imdex’s website under its dedicated investor section.
In additional to regular operational communications, Imdex produces a quarterly employee e-newsletter for its
global team. The Hole Story focuses on growth initiatives, company achievements, updates from support functions,
product development, case studies and fi eld reports, expos and events, and employee profi les and celebrations.
In Fy14 Imdex’s Marketing and Communications department will undertake a review of its communications and
digital marketing communication tools to ensure stakeholders have convenient and timely access to company
information.
Further information regarding Imdex’s monthly Board meetings can be found in the Directors’ report on page 59.
2013 IMDEX LIMITED AnnUAL rEPorT
39
Operational Overview
Quality, Health, Safety and environment
During the year Imdex performed an oH&s due-diligence
review of its Group QHsE Documents, now known as Global
QHsE standards. The new QHsE standards have been divided
into the following four categories to align with international
standards and the Plan-Do-Check-Act Approach.
• Plan
•
Implement
• Review; and
•
Improve.
The new standards apply to Imdex’s global operations and
will reduce the risk of injury, establish controls in response
to emergencies and further develop the company’s policy of
continual improvement.
Plan
e
v
o
pr
Im
Im
ple
m
e
n
t
Review
CoMPLIAnCE, rEvIEW AnD ConTInUAL IMProvEMEnT
regular risk assessments are carried out at all
of Imdex’s global operational facilities. These
assessments then underpin site specifi c systems,
schedules, registers, controls and procedures.
To ensure the company’s high level of system
compliance is maintained, Imdex Global QHsE
representatives perform scheduled audits against
established processes and their associated
procedures or standards. Audit reports are validated
by the Global QHsE Manager before release and
action assignment within the Company’s global
continual improvement database, the Quality Alert
system.
To close the system review cycle, additional regular
QHsE Management reviews are performed at all
operational facilities to ensure system effectiveness
and to monitor performance.
REFLEX GYRO Training, Brazil
40
2013 IMDEX LIMITED AnnUAL rEPorT
Operational Overview
HEALTH AnD sAFETy
Imdex’s workplace health and safety for its global operations is measured against the Western Australian Worksafe
benchmark for services to the mining industry and the stringent Worksafe benchmark for oil and gas.
Globally, the Imdex Group Lost Time Injury Frequency rate (LTIFr) was well below these benchmarks and the
graph below illustrates the company’s declining trend of workplace injuries.
During Fy13, three LTIs occurred. (Worksafe Mining Benchmark – 11.1 and Worksafe oil & Gas Benchmark – 5.8).
Imdex’s LTIFr, the number of lost time injuries and diseases for each one million hours worked was 2.96 for its
global operations.
12
10
8
6
4
2
0
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0
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3
1
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3
1
y
a
M
Imdex Group Lost Time Injury Frequency Rate July 2010 - June 2013
O & G Benchmark
Worksafe Benchmark
LTIFR
Linear (LTIFR)
nEW sAFETy DATA sHEETs
EnvIronMEnT
During Fy13, Imdex’s safety Data sheet system
(sDs) was upgraded. The powerful sDs database
and interface is provided by Chemwatch and now
includes European rEACH regulatory requirements
and Global Harmonisation (GHs) regulatory
requirements for 67 countries in their native
language.
Product data sheets can also be generated from a live
system in the language and regulation selected by the
user.
Imdex’s sDs is located on the AMC website
www.amcmud.com to ensure easy access for all
customers globally.
Imdex’s production of emissions and consumption
of energy do not meet the reporting thresholds of
the national Greenhouse and Energy reporting
(nGEr) Act, so it is not required to provide a formal
environmental report. The company, however,
is integrating environmental requirements into
its day-to-day operational procedures to ensure
environmental considerations are standard practice.
no signifi cant environmental short fallings were
reported during Fy13. similarly no fi eld notices or
fi nes were received by Imdex for environmental
pollution.
2013 IMDEX LIMITED AnnUAL rEPorT
41
Operational Overview
nEW Iso EnvIronMEnTAL
CErTIFICATIons
During the year, Imdex’s Head offi ce; AMC, rEFLEX,
AMC Equipment and AMC oil & Gas Australia all
achieved Environmental certifi cation to Iso14001.
This certifi cation enables these entities to use the
sGs Iso14001 environmental certifi cation mark.
These successful environment certifi cations
achieved two of fi ve strategic targets for supporting
Imdex’s oil & Gas and Equipment Divisions. AMC
Germany and Brisbane operations are scheduled for
certifi cation during Fy14.
Iso CErTIFICATIons
Throughout Fy13, Imdex achieved the following
global QHsE certifi cations from sGs:
• ADs (Perth) certifi ed to Iso 9001
• AMC Equipment (Perth) certifi ed to Iso 9001
and Iso 18001
•
suay Energy (kazakhstan) certifi ed to Iso 9001
• AMC & rEFLEX (Brisbane) certifi ed to Iso 9001
and Iso 18001
• rEFLEX-Imdex Europe (Uk) certifi ed to Iso
9001
• rEFLEX (south Africa) certifi ed to Iso 9001
•
Imdex Head offi ce, AMC & rEFLEX (Perth)
certifi ed to Iso 14001
• AMC Equipment (Perth) certifi ed to Iso 14001.
Imdex now proudly hold sGs integrated
certifi cations for Quality (Iso9001), Health & safety
(oHsAs18001) and the Environment (Iso14001).
Drill site, Western Australia
42
2013 IMDEX LIMITED AnnUAL rEPorT
Operational Overview
Employees are also requested to promptly
communicate signifi cant issues to their line manager
in accordance with the risk management framework.
Each business unit is responsible for incorporating
risk management activities and controls into their
daily operations and to monitor risks relating to the
unit. The risk management framework incorporates
the following factors:
• Consideration of other AsX principles on
corporate governance as they relate to risk
management;
• Consultation with the Board, senior management
and the leadership group in identifying the
business risk areas;
• Consideration of the Imdex quality assurance
risk assessment system to ensure a common
language is used across both operational and
commercial environments;
• Assurance mapping of key risks across all areas
of the organisation;
• Development of a Corporate risk register to
record and manage risks by assigning an owner,
designing mitigating treatments and then applying
the treatment; and
•
Identifi cation of areas where additional work is
required by an internal audit and/or business unit
to reduce risk exposure.
Risk Management
MAnAGInG rIsks To DELIvEr LonG-TErM
sHArEHoLDEr vALUE
The identifi cation and management of risk is central
to delivering long-term value to Imdex’s shareholders.
Each year, as part of the company’s annual strategic
planning cycle, the Board reviews and considers the
risk profi le for the entire organisation.
Imdex has also established a formal framework for
governance of managing risk. The principal aim of
Imdex’s risk management governance structure is to
enhance the system of internal control to create a
culture of risk-informed decision making to manage
business risks, enhance the value of shareholder
investments, and safeguard assets.
The company is committed to an effective risk
management process, which enables management to
operate a risk-based approach in establishing internal
control systems to effectively identify, mitigate and/or
control signifi cant risks.
The risk management framework is used to provide
governance for the identifi cation, assessment
and management of risks. risks are rated using a
methodology outlined in Iso 31000:2009 – risk
Management – Principles and Guidelines. When a risk
is assessed as material, it is reported to the senior
management group on a monthly basis until it is
satisfactorily mitigated.
All employees globally are responsible for being
aware of potential business and operational risks
and the supporting risk management frame work
established by the Audit, risk and Compliance
Committee (ArCC).
2013 IMDEX LIMITED AnnUAL rEPorT
43
Operational Overview
rIsk MAnAGEMEnT FrAMEWork
Imdex’s ability to integrate risk management contributes to the achievement of business objectives,
partnership arrangements and safeguards shareholder investment.
IMDEX rIsk MAnAGEMEnT FrAMEWork
Accountability
risk - Identification,
Assessment and
Treatment
Communication
of issues (Collective
ownership)
responsibilities for
identifying, assessing,
treating monitoring
and reporting on
risks at all levels of
business operation
Top down bottom up
approach of periodical
review, identification
and assessment.
Timely effective
treatment of risks
facing Imdex.
operational risk
Assessment
Compliance and Legal
Governance
strategic Goals and
objectives
Imdex Managers
are expected to
communicate risk
issues promptly,
including causes,
corrective action or
risk mitigation
-
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s
u
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o
g
i
r
Audit risk and Compliance Committee (ArCC) -
Governance, oversight and ownership
44
2013 Imdex LImIted AnnuAL RepoRt
Operational Overview
CorPorATE GovErnAnCE sTrUCTUrE
The Imdex Board delegated the oversight of
Assurance, risk Management and Compliance to the
Audit risk and Compliance Committee (ArCC). The
objective of Imdex’s ArCC is to assist the Board with
the following activities:
• Complying with applicable fi nancial regulatory
requirements;
• Considering the integrity of Imdex’s accounting
systems and their associated internal control
frameworks;
• Considering the reliability, punctuality and
accuracy of Imdex’s fi nancial reporting;
Liaising with and monitoring the independence of
the external auditor;
•
• overseeing and monitoring the Internal Audit,
risk and Compliance process; and
• Complying with the requirements of the
Corporations Act and the Australian security
Investments Commission (AsIC).
CoMPLIAnCE
InTErnAL AUDIT
CorPorATE
GovErnAnCE
rIsk MAnAGEMEnT
Imdex’s ArCC is required to undertake the functions of an Audit Committee as set out in the AsX Corporate
Governance Council’s Corporate Governance Principles and recommendations with 2010 Amendments 2nd
Edition (AsX Principles).
The company’s ArCC is supported by the Group Audit risk and Compliance (ArC) function, which is managed by
the Group risk Manager, who provides assurance activities and advice on matters related to Internal Audit, risk
Management and Compliance.
In April of 2013 Imdex’s ArCC Charter and ArC function mandate was reviewed and updated to align the
activities performed with the requirements of Institute of Internal Auditor standards and the AsX principles on
Corporate Governance. The review also included strategic and operational alignment of accountabilities.
AUDIT rIsk AnD CoMPLIAnCE FUnCTIon
The mission of Audit risk and Compliance (ArC) function is:
To provide the Board, Audit Risk and Compliance Committee (ARCC), Managing Director, management and other key
stakeholders with a high quality and value adding function to assist Imdex to meet its objectives, consider its risks and
safeguard group assets by monitoring and evaluating group compliance requirements.
The ArC function works with Imdex’s management team to identify threats to the achievement of the Company’s
objectives and assesses the appropriateness of management’s responses to these risks. Activities of the ArC
function include:
• reviewing processes in place to identify, assess and manage risk within the organisation;
• reviewing the reliability and integrity of fi nancial and operating information and the means used to identify,
measure, classify and report such information;
2013 IMDEX LIMITED AnnUAL rEPorT
45
Operational Overview
•
Examining and evaluating the adequacy and effectiveness of internal control mechanisms, appraising
information technology systems and related risk areas and assessing the quality of performance in carrying out
assigned responsibilities;
• Assisting the Audit risk and Compliance Committee in fulfilling its roles and objectives;
• reviewing the effectiveness of functions against stated objectives and strategies;
• reviewing the systems and procedures established by management to ensure compliance with those policies,
plans, procedures, laws and regulations, which could have a significant impact on operations and reports;
• reviewing operations or programs to ascertain whether results are consistent with established objectives and
goals and whether the operations or programs are being carried out as planned;
• Co-ordinating operational activities with those of the external auditors to ensure optimal coverage of
significant risks; and
• Completion of the annual Global Audit risk and Compliance plan and reporting of results to the committee.
The work of the ArC function is derived from a risk based global plan, which is developed considering the
strategic objectives of Imdex, present and emerging risks and strategic initiatives.
A K E H O L D ER COLLABORATIO
N
T
S
Understand
the Business
Internal Audit
Framework
1 2
3
5
4
Internal Audit
Governance &
Reporting
Assess Risk &
Develop Strategic
Audit Plan
E
C
N
A
R
U
S
S
A
Y
T
I
L
A
U
Q
Audit Execution
MUNIC
A
TIO
N
AUDIT AnD AssUrAnCE ACTIvITIEs
Imdex has established an Internal Audit
function. Internal activities determined by
the annual plan are managed in line with the
internal audit management framework.
C
O
N
T
I
N
U
O
S C
O
M
During Fy13, the Internal Audit function focused on the establishment of baseline operating procedures globally.
This review was completed with Imdex’s Group Finance, Human resources and Information Communication and
Technology teams and focused on:
• Control application - Continued review of the efficiency and effectiveness of application of Imdex current
process and controls as a baseline - standard operating Procedure (soP) for global operations;
• Control Design - Improvements to current Imdex baseline controls and process and assistance with
development of new control frameworks for Imdex; and
• Audit program that focuses on risk assessment against the baseline of operations.
46
2013 Imdex LImIted AnnuAL RepoRt
Operational Overview
CoMPLIAnCE MAnAGEMEnT
similar to Internal Audit and risk
Management, the global compliance
management is given governance
under the Global Compliance
Management framework. Imdex
manages compliance in line with the
standard for compliance Australian
standard for Compliance Programs
(As 3806-2006).
Imdex embeds compliance
management as an organisational
behaviour.
The company is committed to:
• Developing an appropriate corporate culture through policy
development, training and adaptive learning;
•
Establishing appropriate, simple yet effective systems and processes
and communicating procedures required to employees;
• Developing effective third party, risk based due diligence to control
and minimise successor liability and counterparty liability;
•
Establishing effective internal business reporting line and investigation
procedures; and
• Using an ethical corporate c ulture to develop a competitive
advantage; to attract funds and to attract and keep the best
employees.
Compliance Management is fully devolved to Imdex’s regional managers
and compliance obligations are assigned to a relevant compliance
owner through the Imdex compliance matrix. The compliance owner is
responsible for management and accountability of compliance obligations.
on matters of compliance such as anti-bribery and corruption, Imdex
provides the necessary training to employees on operating in their
environment and being aware of compliance obligations.
mittee & Senior Management
Reporting - Audit Com
Forms and
Templates
Framework
& Policy
Compliance
Owner
C
o
m
m
u
n
i
c
a
t
i
o
n
Compliance Matrix
Compliance Management Framework
Compliance Policy
Compliance Matrix & Obligations
- Global Development
- Local Ownership
-
A
w
a
r
e
n
e
s
s
&
T
r
a
i
n
i
n
g
Identify Compliance Risks
Develop Compliance Risk Management
Criteria and
Process Flows
Systems
- Monitoring & Evaluation
- Continuous, Preventative &
Detective Control Environment
Assurance over Internal & External Compliance Requirements
47
2013 Imdex LImIted AnnuAL RepoRt
Operational Overview
“The company has
historically continued to
invest in its growth and
diversifi cation strategies
through previous cycles,
which has positioned the
business well for long-term
growth.”
AMC Fluids R&D Laboratory
48
2013 IMDEX LIMITED AnnUAL rEPorT
Operational Overview
Ongoing Product Development
In Fy13 Imdex increased its investment in product development. The company is committed to ongoing product
development to ensure customers receive innovative products and smarter technologies to enhance the
efficiency and productivity of their operations.
Imdex’s investment in its business throughout industry cycles ensures it maintains its market position as a
provider of innovative products and leading technologies and is well positioned for long-term growth.
IMDEX WELCoMED By InDUsTry rEsEArCH CooPErATIvE
Imdex recently became one of the two industry
services providers to join the Australian-based
Deep Exploration Technologies Cooperative
research Centre (DET CrC).
The DET CrC was founded in 2010 following
an industry roadmap developed by AMIrA
International Ltd, an independent association of
minerals companies, which develops, brokers and
facilitates collaborative research projects.
The principal focus of the DET CrC is to address
diminishing mineral resources brought about
by high production rates and fewer mineral
exploration successes in recent years. Based on
a statement released by the DET CrC, mineral
resources constitute approximately 50% of
Australia’s exports and 80% of production is from
mines discovered more than 30 years ago. The DET
CrC statement also noted:
The vast majority of Australia’s existing mines
are located where basement is outcropping or
shallow. In order to ensure the future of mining
in Australia, and indeed in all the more heavily
explored countries of the ‘western world’, new
technologies must be developed to explore to
greater depths, and under cover, in the vast,
prospective areas of deep, covered basement.
Imdex’s advanced research and development
capabilities, together with its driving philosophy to
increase the effectiveness of drilling programmes to
meet the world’s future demands for minerals and
oil and gas, align with the DET CrC’s needs and
objectives.
Imdex welcomes the opportunity to work
collaboratively with like-minded individuals and
organisations to develop innovative solutions to
these industry challenges. similarly, DET CrC CEo
Professor richard Hillis was enthusiastic about
Imdex’s participation.
“Imdex’s expertise, for example in downhole
navigation, downhole motors and drilling muds, will
provide significant extra horsepower towards our
next Generation Drilling Technologies Project,”
said Professor Hillis.
With $120 million of cash and in-kind funding
from the Commonwealth Government of Australia
and its participants, the DET CrC is the world’s
best-supported independent research initiative in
mineral exploration.
Imdex is contributing support through one of its
innovative srUs installed permanently at the DET
CrC’s test drilling site located in south Australia,
use of its laboratory facilities, researcher hours for
specific projects, and the supervision of two PhD
students.
other industry participants supporting DET CrC
include: Anglo American, Barrick Australia, BHP
Billliton, Boart Longyear, Goldfields, newcrest, vale
and the Department of Primary Industries and
regions, south Australia.
49
2013 Imdex LImIted AnnuAL RepoRt Operational Overview
AMC rEsIDrILL
AMC oil and Gas’ unique rEsIDrILL product is
providing signifi cant benefi ts to customers within
the oil and gas and coal seam gas industries.
rEsIDrILL is a revolutionary and environmentally
friendly product created by AMC’s research and
development team. It is designed to give drilling
fl uids non-invasive properties which reduce dynamic
fi ltration loss, stabilises well bores and protects
reservoirs from damage.
Commenting on rEsIDrILL’s performance, AMC
oil & Gas’ Manager nick santerelli said, “The
results have been exceptional for zonal isolation
in both oil and gas and CsG industries in diverse
drilling environments. “
“The zonal isolation imparted by rEsIDrILL saved a
casing string for a customer in Papua new Guinea,
and in south East Asia another customer has seen
zero break-out in deep pressured wells, enabling
drilling to continue without excessive mud weight
ups and stuck pipe.”
other examples of rEsIDrILL’s success include
reducing skin damage from a factor of +50 to single
and negative values for a customer in Queensland,
and at a site in south Australia, isolating a deep
coal seam that previously caused mud weight to be
increased in order to control break-out.
Mr santarelli said he was delighted with the
enhanced effi ciencies and the environmental
solutions delivered by rEsIDrILL which were key
drivers for AMC oil & Gas.
“Providing workable solutions is what we aim to do
best – from developing site-specifi c HTHP drilling
fl uid systems to assisting customers with recycling
equipment to reduce their site footprint,” said Mr
santarelli.
AMC Fluids R&D Laboratory
50
2013 IMDEX LIMITED AnnUAL rEPorT
Operational Overview
rEFLEX HUB - InCrEAsEs ProDUCTIvITy, CLIEnT rELATIonsHIP AnD
EMPLoyEE sATIsFACTIon
Background
Implementation
The rEFLEX HUB solution was implemented on a
signifi cant Deep Core Drilling project in Australia
to address some considerable shortcomings
with the existing electronic shift report system
being used on the project. A considerable loss in
productivity was being experienced through report
duplication and completion times and a high level of
dissatisfaction was expressed by the system users.
Scope
rEFLEX HUB replaced the existing electronic shift
report system, including the delivery of;
• Customised Daily Drill reports (DDr) and
safety reporting forms for use on mobile
devices
• Customised management reports on key kPI’s,
for eg Consumables used by rig/shift/hole
• Training for drilling and offi ce employees
•
Integration with existing corporate systems.
rEFLEX HUB was implemented in a very short time
frame, with minimal interruption to the Client’s
personnel or operations. The implementation
consisted of;
1. Customised DDR form and Management
Reports design
Input time required by customer: 4 hours
2. Corporate Management System
Integration
Input time required by customer: 30 minutes
providing appropriate format
3. Training
refl ex completed on-site and offi ce based
training.
Time required by customer:
20 minutes to complete on-site Driller training
prior to fi rst shift commencing
1 hour to complete offi ce training
“I get an extra 4-5 hours each day that I
can use to keep the rigs turning, that’s my
real job.”
Drilling Supervisor
2013 IMDEX LIMITED AnnUAL rEPorT
Mineral drilling rig
51
Operational Overview
rEFLEX HUB (ConTInUED)
Workflow productivity improvement with Reflex HUB
rEFLEX HUB has simplified the workflow for the Client considerably, resulting in significant
productivity gains.
The workflow is now highly automated, includes all required sign-off procedures and provides secure
data storage and automatic report generation, with seamless data upload into the client’s ErP systems.
rEFLEX HUB offers many workflow options which can be easily tailored for customer and site specific
requirements.
rEFLEX HUB
WorkFLoW
List of Drill Holes agreed between
Client and supervisor, automatically
synchronised to the Driller’s iPads.
Driller completes DDr, automatically
sends to supervisor’s iPad.
supervisor reviews DDr,
automatically submits read-only copy
to Client’s iPad.
The Client approves the DDr and
automatically submits it to rEFLEX
HUB.
rEFLEX HUB automatically compiles
and despatches shift report PDF’s and
throughput reports as appropriate.
PrEvIoUs
WorkFLoW
List of Holes agreed between
Client and supervisor, hardcopy
provided to Drilling supervisor.
Drives hard copy to rigs.
Provide hardcopy list to driller.
Driller hand writes shift
information on hardcopy form.
Driller locates supervisor and
provides hardcopy report.
supervisor reviews hardcopy and
re-writes information on report.
supervisor locates client to
provide hard copy report.
Client emails approval to the
supervisor.
supervisor despatches hard
copies to Head office.
office staff clarify information
they are unable to read.
office staff manually compile
and distribute reports to
management.
I
I
N
A
G
Y
T
V
T
C
U
D
O
R
P
I
52
2013 Imdex LImIted AnnuAL RepoRt
rEFLEX HUB ProDUCTIvITy For DrILLErs
Drillers report that the system is easy to use, saves time and
increases accuracy, for example, depth intervals are calculated
automatically.
• easy to read - the large, coloured iPad screens were practical and
easy for drillers to see on-site
• easy to operate - completion and navigation of reports was
quicker and easier using iPad keypads than the existing system which
uses a curser to scroll through options
• Accurate data - system design, including drop down options and
automatic calculation of hole depths, made it easier to ensure data is
submitted correctly, no time required to double check information
• No paperwork transfer - all DDr’s were automatically transmitted
to Drilling supervisors at the end of each shift, meaning less time
spent by Drillers in face to face transfer of data via UsB and no
paperwork transfer required.
Reported time saving: 0.5 hours per shift
fY2013 Snapshot
“Basically, it just makes it easier for me to
focus on drilling and it does all the work,
like calculating depth intervals. Also, being
able to copy from the previous shift is
great, saves me more time.”
Driller
rEFLEX HUB ProDUCTIvITy For DrILLInG sUPErvIsors
Signifi cant productivity savings were experienced by Drilling
Supervisors, where time spent managing drilling reports
reduced over 40%.
• Accurate Data – minimal time required by supervisors to
confi rm reporting errors or anomalies with Drilling crew as the
DDr validates data as it was entered
• No paperwork – signifi cant reduction in time required to collect
and review paper shift reports and transfer reports to clients
• effi cient client meetings – reports were automatically
submitted to clients iPads saving time physically delivering daily
reports, data was more accurate and time spent on data queries
was signifi cantly reduced. Client relationships improved as a
result.
Reported time saving: 5 hours per shift
“I now have more time to actually do
my job, 4-5 hours a day not fi lling out
paperwork makes a big difference.”
Drilling Supervisor
“The shift reports we now receive don’t have
any mistakes. Even the guys who aren’t very
good at using computers get it right, the drop
down lists make it so simple to use.”
Offi ce Support employee
rEFLEX HUB ProDUCTIvITy For oFFICE sUPPorT
sTAFF
Offi ce personnel also reported very signifi cant increases
in productivity due to increased accuracy and the radically
streamlined workfl ow.
• Timely delivery of shift reports – reports were submitted
automatically and were available immediately for processing,
minimising delays in physical transfer of paperwork (fax or mail)
and follow up of reports not received from previous shifts
• Signifi cantly reduced manual processing – reports were
recorded and submitted digitally, saving up to 80% in processing
time for shift reports
•
Improved readability – digital reports meant offi ce
personnel no longer spent time following up reports where
hand writing could not be read
Reported time savings: 80% less time processing shift reports.
2013 IMDEX LIMITED AnnUAL rEPorT
53
Operational Overview
rEFLEX HUB (ConTInUED)
Project outcomes
resource client representatives, supervisors, offi ce staff and Drilling Managers all report signifi cant
productivity gains and extremely high levels of satisfaction since the introduction of rEFLEX HUB.
• Signifi cant productivity improvements - time savings of over 40% for drilling managers, and up to
80% for offi ce employees in managing and processing drilling report data.
• Potential to improve cash fl ow - removed obstacles to facilitate reduced time between drilling
activity and invoicing.
•
Improved visibility of all drilling operations - Drilling Managers had immediate visibility of
key statistics across all drilling operations, accessed via a web browser, in any location, to enhance
management and decision making.
• ease of implementation - rEFLEX HUB was fully operational within 2 weeks without interruptions
to drilling operations.
• No proprietary hardware or software - rEFLEX HUB did not require a rollout of proprietary
software or hardware. The use of iPad’s provided a familiar platform to users with minimal training
requirements.
• Widespread acceptance and support - rEFLEX HUB has been widely accepted by drillers,
support staff and drilling managers with extremely positive feedback.
• lower client invoice query rate - validation and approvals at site is more tightly controlled
(validated at site - at the time of the shift) and has reduced the invoicing query rate by the client.
• Paperless system - minimises the risk of data loss and reduces printing costs.
• easy to amend - addition of information, for example adding new components, was quickly and easily
completed and synchronised to all iPad’s in the fl eet.
• Support - on-site and phone support provided 24/7 was recognised as exceptional by Customer’s
employees. This can be provided in a global capacity by rEFLEX.
54
2013 IMDEX LIMITED AnnUAL rEPorT
focus for FY14
Fy14 sTrATEGy For InCrEAsInG sHArEHoLDEr vALUE
• Continue growth of Imdex’s global business;
•
Expand into new markets, with particular focus on the oil and
gas sector;
• Maintain product leadership through investment in product
development;
•
Increase rental based revenue; and
• Achieve operational effi ciencies.
Fy14 GroWTH InITIATIvEs & kEy ArEAs oF FoCUs
•
strong cost discipline and prudent working capital management;
• Marketing srUs via Imdex’s global distribution channels;
• Continuing to increase Imdex’s market share in under
penetrated regions such as Canada, Latin America, Africa, the
United states and Europe;
• Utilising Imdex’s specialist technical expertise and product
development capabilities to enhance existing and develop new
drilling fl uid products and downhole instrumentation for the
minerals and oil and gas markets, and prepare new products and
technologies for release in Fy14;
•
Expanding Imdex’s data solution offerings to new and existing
customers globally; and
• Growing Imdex’s oil and gas market presence to increase return
on investment in this Division.
2013 IMDEX LIMITED AnnUAL rEPorT
AMC equipment on oil rig, Romania
55
fY2013 Snapshot
“Imdex aims to become
the industry standard in
providing innovative, simple
to use technologies, which
improve the effectiveness and
effi ciency of customers’ day
to day operations.”
Mixing drilling fl uids
56
2013 IMDEX LIMITED AnnUAL rEPorT
FY13
fi nancial report
Directors’ Report
Auditor’s Independence Declaration
Independent Auditor’s Report
Directors’ Declaration
Corporate Governance Statement
Consolidated Statement of Profi t or Loss and
Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Report
58
73
74
76
77
82
83
84
85
86
Additional Securities Exchange Information
140
2013 IMDEX LIMITED ANNUAL REPORT
57
IMDEX LIMITED
and its controlled entities
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2013
The Directors of Imdex Limited (“Imdex” or “the Company”) present their report together with the annual Financial Report of the
Company and its Subsidiaries (“the Group”) for the financial year ended 30 June 2013.
In order to comply with the provisions of the Corporations Act 2001, the Directorsʼ 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 R W Kelly AM
Non Executive
Chairman
75
Mr B W Ridgeway
Managing Director
59
Mr K A Dundo
Independent, Non
Executive Director
60
Mr M Lemmel
Independent, Non
Executive Director
74
Ms E Donaghey
Independent, Non
Executive Director
55
Engineer
Director since 14 January 2004
Appointed as Chairman on 15 October 2009
Member of the Audit and Compliance Committee
Chairman of the Remuneration Committee until 14 December 2009
Previously Chairman and Non Executive Director of Clough Limited, Sumich
Group Limited, Orbital Corporation Limited, Beltreco Limited and Director of
Aurora Gold Limited, PA Consulting Services Ltd and the Fremantle Football
Club.
Chartered Accountant
Director since 23 May 2000
Over 25 years experience with public and private companies as owner,
director and manager
Member of the Institute of Chartered Accountants in Australia and Australian
Institute of Company Directors.
Director of Sino Gas and Energy Holdings Ltd
Lawyer
Chairman of the Audit and Compliance Committee
Member of the Remuneration Committee
Director since 14 January 2004
Director of Red 5 Limited, Synergy Plus Limited and ORH Limited
Management Consultant
Director since 19 October 2006
Chairman of the Remuneration Committee from 14 December 2009
Chairman of Fiberform Vindic AB
Previously Senior Vice President of Ericsson Telecommunications, Chief
Executive Officer of the Federation of Swedish Industries and Director
General for Enterprise Policy of the European Commission
Civil Engineer
Director since 28 October 2009
Member of the Audit and Compliance Committee from 14 December 2009
Member of the Remuneration Committee from 14 December 2009
Non Executive Director of St Barbara Limited and Australian Renewable
Energy Agency
Previously held a range of commercial and senior management positions in
Woodside Petroleum and BHP Petroleum
58
Page 1 of 84
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2013
(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:
Name
Company
Position
Period of Directorship
Mr B W Ridgeway
Sino Gas and Energy
Holdings Limited
Non Executive Director
2007 – Current
Mr K A Dundo
Red 5 Limited
Synergy Plus Limited
ORH Limited
Non Executive Director
Non Executive Director
Non Executive Director
Ms E Donaghey
St Barbara Limited
Non Executive Director
2010 – Current
2008 – Current
2013 – Current
2011 – Current
(c) Company Secretary
Mr P A Evans
Mr Evans, a Chartered Accountant, joined Imdex Limited on 17 October 2006. After leaving professional practice he worked in a range
of commercial and financial roles in the media, manufacturing and telecommunications industries. Mr Evans is a Fellow of the Institute
of Chartered Accountants in Australia.
(d) Directorsʼ Meetings
The following table sets out the number of Directorsʼ 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, nine Board meetings, four Audit and Compliance Committee meetings and five Remuneration Committee meetings were held.
Board of Directors
Audit and Compliance
Committee
Remuneration Committee
Held
Attended
Held
Attended
Held
Attended
R W Kelly
B W Ridgeway
K A Dundo
M Lemmel
E Donaghey
9
9
9
9
9
9
9
9
7
9
4
-
4
-
4
4
-
4
-
4
-
-
5
5
5
-
-
5
4
5
(e) Directorsʼ Shareholdings
At the date of this report the Directors held the following interests in shares, options in shares and performance rights of the Company:
Directors
R W Kelly
B W Ridgeway
K A Dundo
M Lemmel
E Donaghey
Shares Held
Directly
Shares Held
Indirectly
Options Held
Directly
Performance Rights
Held Directly ^
-
-
-
648,000
210,000
380,000
2,214,630
150,000
-
-
-
-
-
-
-
-
614,715
-
-
-
^ - Performance rights expire either on failure to maintain employment tenure or on failure to satisfy performance hurdles. Refer to note
33 for further details.
Details of options on issue at the date of this report are disclosed at (g) below. Details of options on issue at the end of the financial year
are disclosed in note 32. Details of performance rights on issue at the end of the financial year are disclosed in note 33.
Page 2 of 84
59
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2013
(f)
Remuneration Report (audited)
Remuneration policy for Directors and Executives
Non Executive Directors
The Board seeks the approval of Shareholders in relation to the aggregate of Non Executive Directorsʼ remuneration and any options
and performance rights 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 cash remuneration of Non Executive Directors is not linked to the Companyʼs performance
in order to preserve independence. Other than statutory superannuation, no Non Executive Director is entitled to any additional benefits
on retirement from the Company.
Management of the Company believes that in order to retain quality Non Executive Directors on the Board, some incentive to maintain
their future involvement, commitment and loyalty to the Company is required on certain occasions over and above nominal Directors'
fees. No Director received a payment during the current or prior years as consideration for agreeing to hold the relevant position.
The maximum total remuneration payable to Non Executive Directors was approved by Shareholders at the 2006 Annual General
Meeting and is currently $500,000. In the current year remuneration to Non Executive Directors totalled $433,350, including statutory
superannuation. The Board determines the apportionment of directorsʼ fees between each Director.
Managing Director
The Managing Directorʼs 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 35% of his base remuneration package. Each year the
Remuneration Committee sets key performance indicators (KPIs) for the Managing Director to earn this short term incentive bonus.
These KPIs typically include financial, strategic and risk based measures. The Remuneration Committee set these performance hurdles
as they are significant profit and cash flow drivers which are linked to Imdexʼs increased growth and profitability and hence shareholder
value. Performance is measured relative to budget and forecast results as these are the most accurate measures available against
which to assess the achievement of set hurdles. The balance of his cash compensation package for the current year is not linked to the
Groupʼs performance.
From time to time options or performance rights may be issued to the Managing Director as a long term performance incentive. The
portion of the Managing Directorʼs compensation package that comprises options or performance rights is linked to the Companyʼs
performance. The number of options or performance rights granted are determined with regard to current market trends. The issue of
any such options or performance rights requires the approval of Shareholders in General Meeting.
The Managing Director is employed under a permanent contract that provides for a 12 month termination period. No additional benefits
above those already entitled to will become payable on termination.
Executives and Staff
All Executives and staff of the Company are subject to a formal annual performance review. The remuneration of Executives comprises
a fixed monetary total, which is 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. The base component of Executive salaries is
benchmarked against current market trends and is not linked to Company performance as it serves to attract and retain suitably
qualified and experienced staff. Performance incentives that are linked to Company performance are used to reward Executives for
exceptional performance that benefits the Company and Shareholders.
Each year the Remuneration Committee sets the KPIs for each key management person. These KPIs typically include people,
customer, system, financial, strategic and risk based measures. The Remuneration Committee set these performance hurdles as they
are significant profit and cash flow drivers which are linked to Imdexʼs increased growth and profitability and hence shareholder value.
Performance is measured relative to budget and forecast results as these are the most accurate measures available against which to
assess the achievement of set hurdles. No bonus is awarded where hurdles are not met.
From time to time options or performance rights may be issued to the Executives and staff as a long term performance incentive. The
portion of remuneration package that comprises options or performance rights is linked to the Companyʼs performance. The number of
options or performance rights granted are determined with regard to current market trends. The issue of any such options or
performance rights requires the approval of Shareholders in General Meeting.
All Executives are employed under permanent contracts. Mr G E Westonʼs contract provides a twelve month notice period upon
termination and a twelve month termination pay out. Mr D J Loughlinʼs and Mr P A Evanʼs contracts provide a six month notice period
upon termination and a six month termination pay out. No additional benefits above those already entitled to will become payable on
termination.
60
Page 3 of 84
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2013
(f)
Remuneration Report (audited) (continued)
Director and Key Management Personnel details
The Directors of Imdex Limited during the year were:
Mr R W Kelly (Non Executive Chairman);
Mr B W Ridgeway (Managing Director);
Mr K A Dundo (Non Executive Director);
Mr M Lemmel (Non Executive Director); and
(i)
(ii)
(iii)
(iv)
(v) Ms E Donaghey (Non Executive Director).
The term ʻKey Person Managementʼ is used in this remuneration report to refer to the following persons:
Mr G E Weston (Project General Manager; General Manager: Oil & Gas Division);
Mr D J Loughlin (General Manager: Minerals and Mining Division);
(i)
(ii)
(iii) Mr P A Evans (Company Secretary and Chief Financial Officer).
Except as noted above Directors and Key Management Personnel held their current position for the whole of the financial year and
since the end of the financial year.
Elements of Director and Key Management Personnel Remuneration
Remuneration packages contain the following key elements:
Short-term benefits – salary/fees, bonuses and non monetary benefits including principally motor vehicles;
Post-employment benefits – superannuation;
(i)
(ii)
(iii) Equity – share options granted under the Staff Option Scheme (note 32) or performance rights granted under the Performance
Rights Plan (note 33) or any other equity related benefits granted as approved by Shareholders in General Meeting; and
(iv) Other benefits – comprise payments made under the Imdex Loyalty Programme rewarding long term service with the Imdex
Group.
Earnings and Movements in Shareholder Wealth
The table below sets out summary information about the Consolidated Entityʼs earnings and movements in shareholder wealth for the
five years to June 2013:
30 June 2013
30 June 2012
30 June 2011
30 June 2010
30 June 2009
Revenue – continuing and
discontinued operations ($000s)
Net profit / (loss) before tax from
continuing operations ($000s)
Net profit / (loss) after tax from
continuing operations ($000s)
Share price at start of year (cents)
Share price at end of year (cents)
Interim dividend (cents) – fully
franked
Final dividend (cents) – fully
franked
Basic earnings / (loss) per share
(cents) – continuing operations
Diluted earnings / (loss) per share
(cents) – continuing operations
232,921
269,652
205,334
135,625
138,992
28,510
67,500
38,593
(21,071)
18,195
19,383
45,777
29,002
(21,548)
12,067
176.0
62.0
2.50
0.40 *
9.24
9.14
215.0
176.0
3.25
4.00
22.34
21.85
73.0
215.0
1.75
2.75
14.69
14.25
64.5
73.0
-
-
(11.05)
(11.05)
165
64.5
1.00
-
6.37
6.23
* - Declared post year end on 16 August 2013 hence the financial effect of this dividend has not been recognised in the financial
statements at 30 June 2013.
Page 4 of 84
61
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
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63
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2013
(f)
Remuneration Report (audited) (continued)
(i) Mr B W Ridgeway is a party to a service contract with Imdex Limited, which sets out a fixed compensation package, reviewable
annually. The service contract specifies a twelve month notice period in the event that the contract is terminated. If the contract is
terminated without notice, the notice period will become payable in cash. There are no termination benefits specified in this contract.
Additional performance incentives may be agreed between Mr Ridgeway and Imdex Limited from time to time. The Managing Directorʼs
compensation is reviewed and determined annually by the Remuneration Committee.
In the current year Mr Ridgeway did not earn a cash bonus as specified targets were not met. A bonus of $320,000 could have been
earned by Mr Ridgeway had the targets been met. Mr Ridgeway earned a short term cash bonus of $110,000 in the prior year upon
achievement of specified targets. An additional $40,000 could have been earned by Mr Ridgeway had the remaining targets been met.
Mr Ridgeway also received a loyalty bonus of $2,000 last year for 10 years of service.
No options were granted to Mr Ridgeway in the current year or in the prior year.
The grant of 264,818 performance rights to Mr Ridgeway in the current year was approved by the shareholders at the Annual General
Meeting on 20 October 2012. The Managing Director is subject to two hurdles each with equal weighting. The first is that the Total
Shareholder Return (TSR) of Imdex Limited must exceed the average TSR of the ASX300 over the 3 year measurement period. The
second is that the Earnings Per Share of Imdex Limited must exceed the average EPS of the ASX300 over the 3 year measurement
period. The performance hurdle in relation to these performance rights will be measured after the audit sign off of the FY15 financial
statements on or about August 2015. No value has therefore been received by Mr Ridgeway in the current year. Refer note 33 for
further details.
The grant of 153,318 performance rights to Mr Ridgeway in the prior year was approved by the shareholders at the Annual General
Meeting on 20 October 2011. The Managing Director is subject to two hurdles each with equal weighting. The first is that the Total
Shareholder Return (TSR) of Imdex Limited must exceed the average TSR of the ASX300 over the 3 year measurement period. The
second is that the Earnings Per Share of Imdex Limited must exceed the average EPS of the ASX300 over the 3 year measurement
period. The performance hurdle in relation to these performance rights will be measured after the audit sign off of the FY14 financial
statements on or about August 2014. No value was therefore received by Mr Ridgeway in the prior year. Refer note 33 for further
details.
(ii) Mr G E Weston is party to a service contract with Imdex Limited, which sets out a fixed compensation package, reviewable annually.
The service contract stipulates a twelve month notice period in the event that the contract is terminated and a twelve month pay out
upon termination. Performance incentives may be agreed between Mr Weston and Imdex Limited from time to time. Additionally, Mr
Weston is party to a deed with Imdex Limited, granting Mr Weston the right of first refusal of Australian Mud Company Pty Ltd, a 100%
held subsidiary of Imdex Limited, in the event that an offer is received by the directors of Imdex Limited to purchase 100% of the Imdex
Limited shares on issue. This ʻrightʼ lapses automatically should Mr Weston no longer be employed by Imdex Limited.
In the current year Mr Weston did not earn a cash bonus as specified targets were not met. A bonus of $194,000 could have been
earned by Mr Weston had the targets been met. In the prior year, Mr Weston earned a short term cash bonus of $62,100 on
achievement of specified targets. An additional $144,900 could have been earned by Mr Weston had the remaining targets been met.
Mr Weston also received a loyalty bonus of $230,000 last year for 25 years of service.
No options were granted to Mr Weston in the current or prior year.
Mr Weston was granted 65,341 performance rights in the current period under the Performance Rights Plan. It is expected that the
hurdles applicable to 9,801 of these performance rights will be achieved in the current year. These 9,801 performance rights will be
settled via the issue of 9,801 fully paid ordinary shares in Imdex Limited in equal one third tranches annually on or about August each
year starting in August 2013 on condition that Mr Weston remains employed by Imdex Limited at that time. Refer note 33 for further
details.
Mr Weston was granted 48,611 performance rights in the prior period under the Performance Rights Plan. These 48,611 performance
rights will be settled via the issue of 48,611 fully paid ordinary shares in Imdex Limited in equal one third tranches annually on or about
August each year starting in August 2012 on condition that Mr Weston remains employed by Imdex Limited at that time. Refer note 33
for further details.
(iii) Mr D J Loughlin is a party to a service contract with Imdex Limited, which sets out a fixed compensation package reviewable
annually. The service contract specifies a six month notice period in the event that the contract is terminated and a six month pay out
upon termination. Additional performance incentives may be agreed between Mr Loughlin and Imdex Limited from time to time.
In the current year Mr Loughlin did not earn a cash bonus as specified targets were not met. A bonus of $176,000 could have been
earned by Mr Loughlin had the targets been met. In the prior year, Mr Loughlin earned a short term cash bonus of $143,500 on
achievement of specified targets. An additional $28,700 could have been earned by Mr Loughlin had the remaining targets been met. Mr
Loughlin also received a loyalty bonus of $500 last year for 5 years of service.
No options were granted to Mr Loughlin in the current or prior year.
Mr Loughlin was granted 58,239 performance rights in the current period under the Performance Rights Plan. It is expected that the
hurdles applicable to 8,736 of these performance rights will be achieved in the current year. These 8,736 performance rights will be
settled via the issue of 8,736 fully paid ordinary shares in Imdex Limited in equal one third tranches annually on or about August each
year starting in August 2013 on condition that Mr Loughlin remains employed by Imdex Limited at that time. Refer note 33 for further
details.
Page 7 of 84
64
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2013
(f)
Remuneration Report (audited) (continued)
Mr Loughlin was granted 42,245 performance rights in the prior period under the Performance Rights Plan. These 42,245 performance
rights will be settled via the issue of 42,245 fully paid ordinary shares in Imdex Limited in equal one third tranches annually on or about
August each year starting in August 2012 on condition that Mr Loughlin remains employed by Imdex Limited at that time. Refer note 33
for further details.
(iv) Mr P A Evans is a party to a service contract with Imdex Limited, which sets out a fixed compensation package reviewable annually.
The service contract specifies a six month notice period in the event that the contract is terminated and a six month pay out upon
termination. Additional performance incentives may be agreed between Mr Evans and Imdex Limited from time to time.
In the current year Mr Evans did not earn a cash bonus as specified targets were not met. A bonus of $172,000 could have been earned
by Mr Evans had the targets been met. In the prior year, Mr Evans earned a short term cash bonus of $92,000 on achievement of
specified targets. An additional $76,000 could have been earned by Mr Evans had the remaining targets been met. Mr Evans also
received a loyalty bonus of $500 last year for 5 years of service.
No options were granted to Mr Evans in the current or prior year.
Mr Evans was granted 56,818 performance rights in the current period under the Performance Rights Plan. It is expected that the
hurdles applicable to 8,523 of these performance rights will be achieved in the current year. These 8,523 performance rights will be
settled via the issue of 8,523 fully paid ordinary shares in Imdex Limited in equal one third tranches annually on or about August each
year starting in August 2013 on condition that Mr Evans remains employed by Imdex Limited at that time. Refer note 33 for further
details.
Mr Evans was granted 42,245 performance rights in the prior period under the Performance Rights Plan. These 42,245 performance
rights will be settled via the issue of 42,245 fully paid ordinary shares in Imdex Limited in equal one third tranches annually on or about
August each year starting in August 2012 on condition that Mr Evans remains employed by Imdex Limited at that time. Refer note 33 for
further details.
Bonuses granted to Directors and Key Management Personnel
The table below sets out the bonuses earned by Directors and Key Management Personnel in the current year and includes a long
service bonus. Bonuses are paid on the achievement of performance criteria specific to the individual. Where performance hurdles are
not met, no bonus is paid. The performance criteria used are chosen by the Remuneration Committee annually and are linked to the
financial performance of the company and hence shareholder value. Performance criteria typically revolve around areas of risk
management, people development, systems improvement and EBITA performance. Performance criteria are reviewed by the
Remuneration Committee against budgeted outcomes before granting bonuses.
Performance
based bonus
$
Loyalty
bonus $
% of possible
bonus earned
% of possible
bonus forfeited
% of compensation for the year
consisting of performance
based bonuses
B W Ridgeway
G E Weston
D J Loughlin
P A Evans
-
-
-
-
Imdex Loyalty Programme
-
-
-
-
-
-
-
-
100%
100%
100%
100%
-
-
-
-
In the prior year Imdex Limited introduced a new global Loyalty Programme in recognition of employees with long standing years of
service.
Employees with 5, 10, 15, 20 or 25 years employment with Imdex will be entitled to rewards for their years of service. Rewards range
from a $500 voucher for 5 years' service through to a cash equivalent of 3 and 6 monthsʼ salary for employees who remain with the
business for 20 and 25 years respectively.
Page 8 of 84
65
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report IMDEX LIMITED
and its controlled entities
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2013
(f)
Remuneration Report (audited) (continued)
Value of options issued to Directors and Key Management Personnel
The following table discloses the value of options granted, exercised or lapsed during the year:
Options
Granted
Value at
grant date
Options Exercised
Value at
exercise
date
Number of
shares
Issued
Value paid
for shares
issued upon
exercise of
options
Options
Lapsed
Value at
lapsing date
Number
of options
vested in
the
current
year
Options
granted
that
have
vested
in
current
year
Value of
options
included in
remuneration
during the
year
Percentage of
remuneration
for the year
that
consisted of
options
$
$
Number
$
$
Number
%
$
%
B W Ridgeway
G E Weston
D J Loughlin
P A Evans
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
625,000
-
250,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
No share options were granted to Directors or Key Management Personnel during or since the end of the financial year.
Share based payment arrangements in existence during the current year
2013
Issue Date
Expiry
Date
Exercise
Price
$
Fair
Value at
Grant
Date
$
Opening
balance
Number of Options
Exercised
current year
Lapsed
current year
Issued
current
year
Closing
balance
Staff Options
Tranche 6
Tranche 7
18-Oct-07
17-Oct-12 1.80
28-Mar-08 27-Mar-13 3.00
0.81
0.42
200,000
3,693,333
-
-
- (200,000)
- (3,693,333)
-
-
3,893,333
-
- (3,893,333)
-
All staff options exercisable one year after the date of issue, in one-third lots each year thereafter.
Page 9 of 84
66
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2013
(f)
Remuneration Report (audited) (continued)
Share options held by Directors and Key Management Personnel
2013
Balance at
1 July 2012
Granted as
compensation
Exercised
Expired
Balance at 30
June 2013
Vested but
not
exercisable
Vested and
exercisable
Options
vested
during year
Mr B W Ridgeway
Mr R W Kelly
Mr K A Dundo
Mr M Lemmel
Ms E Donaghey
Mr G E Weston
Mr D J Loughlin
Mr P A Evans
No.
-
-
-
-
-
500,000
-
200,000
700,000
No.
No.
No.
No.
No.
No.
No.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(500,000)
-
(200,000)
(700,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2012
Balance at
1 July 2011
Granted as
compensation
Exercised
Expired
Balance at 30
June 2012
Vested but
not
exercisable
Vested and
exercisable
Options
vested
during year
Mr B W Ridgeway
Mr R W Kelly
Mr K A Dundo
Mr M Lemmel
Ms E Donaghey
Mr G E Weston
Mr D J Loughlin
Mr P A Evans
No.
-
-
-
-
-
500,000
500,000
500,000
1,500,000
No.
-
-
-
-
-
-
-
-
-
No.
-
-
-
-
-
-
(500,000)
(300,000)
(800,000)
No.
No.
No.
No.
No.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
500,000
-
200,000
700,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
500,000
-
200,000
700,000
-
-
-
-
-
-
-
-
-
Value of performance rights granted to Directors and Key Management Personnel
Performance rights are granted to Key Management Personnel at a fixed percentage of their base salaries depending on seniority.
Percentages range from 7.5% to 25%. Each performance right is to be satisfied by the allocation/allotment of one fully paid Imdex
Limited ordinary share for nil consideration should specified profitability targets be met. Shares allocated/allotted in satisfaction of
performance rights are done so in 1/3 lots on the anniversary date of the satisfaction of the specified hurdles should employment tenure
be ongoing. The following table discloses the value of performance rights granted and expired during the year:
Granted
Satisfied by the
allocation/allotment of shares
Expired
(iii)
Value at
grant date
Value at
allocation/
allotment date
Value
included in
remuneration
during the
year (iv)
Percentage of
remuneration for
the year that
consisted of
performance rights
Number
$
Number
$
Number
$
%
B W Ridgeway (i)
G E Weston (ii)
D J Loughlin (ii)
P A Evans (ii)
264,818
(MD Tranche)
65,341
(Tranche 10)
58,239
(Tranche 10)
56,818
(Tranche 10)
382,500
-
-
-
263,206
86,925
54,245
78,113
55,540
44,365
77,478
53,981
77,733
49,503
41,431
75,587
49,388
71,119
48,295
39,520
21%
8%
7%
7%
(i)
Approved by the shareholders at the Annual General Meeting on 18 October 2012.
(ii)
Granted per the Performance Rights Plan.
(iii) Where performance rights expire due to specified targets not being met, no value is received by the performance rights holder.
(iv)
These non-cash entitlements reflect the value of performance rights that are being expensed in the current period to recognise
progressive vesting conditions. The issue of shares relating to these performance rights will only occur in future periods if the
vesting conditions are met.
Page 10 of 84
67
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2013
(f)
Remuneration Report (audited) (continued)
No performance rights were granted to Directors or Key Management Personnel since the end of the financial year. More details on the
Performance Rights Plan can be found at note 33.
Performance Rights in existence during the current year
2013
Grant Date Expiry Date Exercise
$
-
-
-
-
-
-
-
-
-
-
Tranche 1
Tranche 2
Tranche 4
MD Tranche
MD Tranche
Tranche 7
Tranche 8
Tranche 9
Tranche 10
MD Tranche
19-Feb-10
3-Dec-10
10-Jun-11
14-Oct-10
20-Oct-11
5-Sep-11
29-Aug-11
7-Oct-11
28-Sep-12
18-Oct-12
Aug-14
Aug-15
Aug-16
Oct-15
Oct-16
Aug-15
Aug-16
Aug-16
Aug-17
Oct-17
Price
Estimated
Fair Value
at Grant
Opening
balance
Date
$
Granted
Estimated Number of Performance Rights
Satisfied by
the allocation/
allotment of
shares
Expired ^
Closing
balance
0.685
1.395
2.160
1.140
1.910
2.100
2.080
1.790
1.620
1.440
121,199
1,294,474
133,333
196,579
153,318
615,000 50,000
15,000
813,347
- 1,261,991
- 264,818
- -
- (121,199)
- (661,179) (53,178)
580,117
- (66,667)
- 66,666
- - - 196,579
- - - 153,318
- - 665,000
- (15,000)
- (256,667) (118,869)
437,811
- (1,223,528)
38,463
- - 264,818
- -
^ - Performance rights expire either on failure to maintain employment tenure or on failure to satisfy performance hurdles.
Refer to (h) Performance Rights in the Directors Report for vesting details.
Page 11 of 84
68
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2013
(g) Share options
(i)
There are no share options on issue at the date of this report.
(ii)
There were no share options exercised during or since the end of the financial year.
(h) Performance Rights
(i)
Performance rights on issue at the date of this report
Issuing
Entity
Class
Class of
shares
Exercise
price
Grant date
Expiry date
Key
terms
Number of
shares under
performance
right
Imdex
Limited
Performance Rights
(Tranche 2)
Imdex
Limited
Performance Rights
(Tranche 4)
Imdex
Limited
Performance Rights
(Managing Directorsʼ
Tranche 1)
Imdex
Limited
Imdex
Limited
Imdex
Limited
Imdex
Limited
Imdex
Limited
Performance Rights
(Managing Directorsʼ
Tranche 2)
Performance Rights
(Tranche 7)
Performance Rights
(Tranche 9)
Performance Rights
(Tranche 10)
Performance Rights
(Managing Directorsʼ
Tranche 3)
Ordinary
Nil
3 Dec 2010
Aug 2015
(aa)
580,117
Ordinary
Nil
10 Jun 2011
Aug 2016
(bb)
66,667
Ordinary
Nil
14 Oct 2010
Oct 2015
(cc)
196,579
Ordinary
Nil
20 Oct 2011
Oct 2016
(dd)
153,318
Ordinary
Nil
5 Sept 2011
Aug 2016
(ee)
665,000
Ordinary
Nil
7 Oct 2011
Aug 2016
(ff)
813,347
Ordinary
Nil
28 Sept 2012
Aug 2017
(gg)
38,463
Ordinary
Nil
18 Oct 2012
Oct 2017
(hh)
264,818
(aa) To be satisfied by the issue of fully paid ordinary shares in Imdex Limited in equal 1/3 lots annually with the anniversary date being
the day after signature of the FY11 independent audit report. Subject to ongoing employment tenure.
(bb) To be satisfied by the issue of fully paid ordinary shares in Imdex Limited in equal 1/3 lots annually with the anniversary date being
the day after signature of the FY12 independent audit report. Subject to ongoing employment tenure.
(cc) To be satisfied by the issue of fully paid ordinary shares in Imdex Limited on or about October 2015. Subject to the achievement of
specified performance hurdles and ongoing employment tenure.
(dd) To be satisfied by the issue of fully paid ordinary shares in Imdex Limited on or about October 2016. Subject to the achievement of
specified performance hurdles and ongoing employment tenure.
(ee) To be satisfied by the issue of fully paid ordinary shares in Imdex Limited with 1/4 allotted August 2014 and the remaining 3/4
allotted August 2015 with the anniversary date being the day after signature of the FY14 independent audit report. Subject to ongoing
employment tenure.
(ff) To be satisfied by the issue of fully paid ordinary shares in Imdex Limited in equal 1/3 lots annually with the anniversary date being
the day after signature of the FY12 independent audit report. Subject to ongoing employment tenure.
(gg) To be satisfied by the issue of fully paid ordinary shares in Imdex Limited in equal 1/3 lots annually with the anniversary date being
the day after signature of the FY13 independent audit report. Subject to ongoing employment tenure.
(hh) To be satisfied by the issue of fully paid ordinary shares in Imdex Limited on or about October 2017. Subject to the achievement of
specified performance hurdles and ongoing employment tenure.
Page 12 of 84
69
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report IMDEX LIMITED
and its controlled entities
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2013
(i)
Principal Activities
The Groupʼs principal continuing activities during the course of the financial year were providing drilling fluid products, advanced
downhole instrumentation, data solutions and geo-analytics services to exploration, development and production companies in the
minerals and oil and gas sectors worldwide.
(j)
Review of Operations
Imdexʼs performance throughout FY13 was negatively affected by:
•
•
•
•
The cyclical slowdown in the minerals sector;
Continued investment in the development of innovative products and technologies;
Positioning for substantial growth in the oil and gas sector; and
The extension of some development projects into FY14.
Due to this cyclical nature of the minerals industry, in recent years Imdex has adopted diversification strategies including plans to grow
its business globally, expanding into new markets – specifically oil and gas.
The company has successfully advanced these strategies. As reported in the 3Q13 shareholder newsletter, Imdex is now a business
which is increasingly diversified by geography, customer and commodity base, with high exposure to major and intermediate companies
engaging in long-term projects as well as a growing presence in the oil and gas sector offering material growth opportunities.
An example of the benefits flowing from these diversification strategies is the strong revenue performance by Imdexʼs Oil & Gas
Division. The Division (inclusive of share of associateʼs revenue) achieved record revenue for FY13 and continued its trend of year-on-
year revenue growth since FY10. It delivered 27% of FY13 Group revenue, representing significant progress towards Imdexʼs long-term
goal of generating 30–40% of revenue from the Oil & Gas Division.
Such diversification strategies do not completely offset cyclical lows in the short-term, however the companyʼs innovative products and
technologies position it well as customers increasingly look to reduce costs and improve productivity.
Other important operational achievements in FY13 include the acquisition of ioGlobal, the global deployment of the companyʼs solids
removal units (SRUs) and the continued investment in people and equipment to support the growth of Imdexʼs Oil & Gas Division.
The following is a summary of Imdexʼs FY13 performance:
•
•
Statutory revenue down 14% to $232.8 million (FY12: $269.6 million);
EBITA down 53% to $35.2 million (FY12: $75.2 million), including $3.0 million of one off restructuring costs, the majority of
which were incurred in 4Q13;
Net profit after tax (NPAT) down 58% to $19.4 million (FY12: $45.8 million);
Net assets $188.5 million (30 June 2012: $168.1 million);
•
•
• Operating cash-flow up 44% to $39.0 million (FY12: $27.1 million);
•
•
•
Increased investment in product development; and
Comfortable gearing levels with net debt/equity of 22.3% (FY12: 22.3%);
Final fully franked dividend of 0.40 cents per share, total FY13 dividend of 2.90 cents per share fully franked (FY12: 7.25
cents per share fully franked).
(k) Dividends
In the current year a fully franked interim dividend of 2.50 cents per ordinary share was paid on 22 March 2013 to shareholders
registered on 8 March 2013. Since 30 June 2013 the Directors have declared a fully franked final dividend of 0.40 cents per ordinary
share, the financial effect of which has not been reflected in this Financial Report.
In the prior year a fully franked interim dividend of 3.25 cents per ordinary share was paid on 23 March 2012 to shareholders registered
on 9 March 2012, and a fully franked final dividend of 4.00 cents per ordinary share was paid on 26 October 2012 to shareholders
registered on 12 October 2012.
(l)
Changes in State Of Affairs
There were no significant changes in the state of affairs of the Group.
(m) Subsequent Events
Subsequent to year end the Directors declared a 0.40 cent per share fully franked dividend with a record date of 11 October 2013 and a
payment date of 25 October 2013. The effect of this dividend has not been reflected in this financial report.
Page 13 of 84
70
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report IMDEX LIMITED
and its controlled entities
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2013
(n)
Future Developments
Imdex has been working diligently in recently years to diversify the business by geography, product, customer and commodity base.
This has enabled the company to drive growth and also reduce its exposure to slowdowns which are characteristic of the minerals
sector. The Oil & Gas Division (inclusive of share of associateʼs revenue) delivered 27% of FY13 revenue, representing significant
progress towards the long term goal of generating 30-40% of combined revenue from oil and gas.
While the company anticipates activity in the mining sector will remain subdued throughout FY14, Imdex is well placed to grow market
share in underpenetrated regions and to benefit from the commercialisation of new products and technologies.
The company has historically continued to invest in its growth and diversification strategies through previous cycles, which has
positioned the business well for long-term growth.
The company is managing inventory and working capital with care and will continue to look for opportunities to manage costs in a
measured and cautious manner. Imdex is also maintaining a disciplined approach to investments in new products and technologies.
The oil and gas sector remains robust with significant opportunities for long-term growth. The investments made to date in equipment,
working capital and qualified personnel have driven strong revenue growth and Imdexʼs Oil & Gas Division is well positioned to continue
to deliver top line growth and will be profitable in FY14.
Key Areas of Focus and Growth Initiatives for FY14
•
•
•
•
•
•
•
Strong cost discipline and prudent working capital management;
Continuing to increase Imdexʼs market share in previously underpenetrated regions;
Utilising Imdexʼs specialist technical expertise and product development capabilities;
Expanding Imdexʼs data solution offerings to new and existing customers globally;
Investing further and growing Imdexʼs oil and gas market presence to increase return on investment in this Division;
Continued support of customers as they seek to increase efficiencies and reduce costs; and
Capitalise on the continued investment in oil and gas and SRUs.
Imdex is becoming a stronger, more diversified business to better meet the challenges presented by downturns in the
minerals sector. At the same time, the company is growing its business in the oil and gas sector and is continuing to
develop its innovative products and leading technologies. Imdex aims to become the industry standard in providing
innovative, simple to use technologies, which improve the effectiveness and efficiency of customersʼ day to day
operations.
(o) Environmental Regulations
The only entity in the Group that is subject to environmental regulations is Samchem Drilling Fluids and Chemicals (Pty) Ltd. They are
required to comply with the South African National Water Act, Act No 36 of 1998 which requires the management of effluent discharge.
This is controlled through an effluent system. No known environmental breaches have occurred in relation to the Groupʼs operations.
(p) Non-audit services
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in note 6 to
the Financial Report.
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
auditorʼs behalf) is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the fees paid for services provided as disclosed in note 6 to the financial statements do not
compromise the external auditorʼs independence, based on advice received from the Audit and Compliance Committee, for the following
reasons:
•
•
All non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the
auditor, and
None of the services undermine the general principles relating to auditor independence as set out in Code of Conduct APES
110 Code of Ethics for Professional Accountants issued by the Accounting Professional & Ethical Standards Board, including
reviewing or auditing the auditorʼs own work, acting in a management or decision-making capacity for the Company, acting as
advocate for the Company or jointly sharing economic risks and rewards.
(q) Auditorʼs Independence Declaration
The auditorʼs independence declaration is included in the Annual Report immediately prior to the Audit Report.
Page 14 of 84
71
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report IMDEX LIMITED
and its controlled entities
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2013
DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2013
(r)
Indemnification of Officers and Auditors
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
During the financial year, the Company paid a premium in respect of a contract insuring the Directors of the Company, the Com
During the financial year, the Company paid a premium in respect of a contract insuring the Directors of the Company, the Com
Secretary, and all Executive Officers of the Company and of any relate
d body corporate against a liability incurred as such a Director,
fficers 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
Secretary or Executive Officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits dis
Secretary or Executive Officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits dis
the nature of the liability and the amount of the premium.
the nature of the liability and the amount of the prem
, except to the extent permitted by law, indemnified or
The Company has not otherwise, during or since the end of the financial year, except to the extent permitted by law
The Company has not otherwise, during or since the end of the financial year
agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred as such an officer
agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurre
agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurre
or auditor.
(s) 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
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
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
Order amounts in the Directorsʼ report and the financial report are rounded off to the nearest thousand dollars unless otherwise
to the nearest thousand dollars unless otherwise
Order amounts in the Directorsʼ report and the financial report ar
indicated.
Signed in accordance with a resolution of the Directors made pursuant to S.298(2) of the Corporations Act 2001.
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 Ross Kelly AM
Chairman
PERTH, Western Australia, 16 August 2013.
Page 15 of 84
72
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report FY13 Financial Report
2013 IMDEX LIMITED ANNUAL REPORT
73
FY13 Financial Report
74
2013 IMDEX LIMITED ANNUAL REPORT
FY13 Financial Report
2013 IMDEX LIMITED ANNUAL REPORT
75
IMDEX LIMITED
and its controlled entities
DIRECTORS’ DECLARATION
DIRECTORS’ DECLARATION
The Directors declare that:
(a)
(b)
in the Directorsʼ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when
in the Directorsʼ opinion, there are reasonable grounds to believe that the
become due and payable;
will be able to pay its debts as and when they
inancial statements and notes thereto are in accordance with the Corporations Act 2001,
notes thereto are in accordance with the Corporations Act 2001,
in the Directorsʼ opinion, the attached financial
including compliance with accounting standards and giving a true and fair view of the financial position and performance of the
including compliance with accounting standards and giving a true and fair view of the financial position and perfor
including compliance with accounting standards and giving a true and fair view of the financial position and perfor
Group;
(c)
in the Directorsʼ opinion, the financial statements and notes thereto are in accordance with International Financial Reporting
in the Directorsʼ opinion, the financial statements and notes thereto are in accordance with International Financial Reportin
in the Directorsʼ opinion, the financial statements and notes thereto are in accordance with International Financial Reportin
Standards issued by the International Accounting Standards Board, as stated in note 2 to the financial statements
Standards issued by the International Accounting Standards Board
ments; and
(d)
the Directors have been given the declarations required by s.295A of the Corporations Act 2001.
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
At the date of this declaration, the Company is within the class of companies affected by ASIC Class Order 98/1418. The natur
At the date of this declaration, the Company is within the class of companies affected by ASIC Class Order 98/1418. The natur
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
guarantee is such that each company which is party to the deed guarantees to each creditor payment in full of any debt in
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 Directorsʼ opinion, there are reasonable grounds to believe that the Company and the companies to which the ASIC Class Order
he companies to which the ASIC Class Order
In the Directorsʼ opinion, there are reasonable grounds to believe that the Company and t
applies, as detailed in note 24 to the financial statements
will, as a group, be able to meet any obligations or liabilities to which they are,
statements 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.
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.
ned in accordance with a resolution of the Directors made pursuant to s.295(5) of the Corporations Act 2001.
Dated at Perth, 16 August 2013.
Mr Ross Kelly AM
Chairman
Page 19 of 84
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2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report IMDEX LIMITED
and its controlled entities
CORPORATE GOVERNANCE STATEMENT
ASX Governance Principles and ASX Recommendations
The Australian Securities 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 2013. In addition,
the Company has a Corporate Governance section on its website: www.imdexlimited.com (under the “Investors” 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 2013, and the main corporate
governance practices in place are set out below.
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 Companyʼs website.
The performance of Senior Executives is measured against prescribed criteria as set by the Remuneration Committee. These criteria
are set annually and individual performance is assessed annually.
Principle 2: Structure the Board to add value
Imdexʼs 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.
(i) Board Structure
The Board consists of a Non Executive Chairman, three Non Executive Directors and one Executive Director. Of the five Board
members, four are considered independent.
In accordance with the Companyʼs 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 Directorsʼ Report and further details
concerning the skills, experience, expertise and term of office of each Director is set out in the Directorʼs Profiles in the first section of
the Annual Report.
(ii) Board Independence
Directors are expected to bring independent judgement to the decision making of the Board. To facilitate this, each Director has the
right to seek independent legal advice at the Groupʼs 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 Shareholdersʼ understanding of the Directorʼs performance. The Board has conducted a review of each
Directorʼs independence and reports as follows:
Director
Mr R W Kelly,
Non Executive Chairman
Mr B W Ridgeway,
Managing Director
Mr K A Dundo,
Non Executive Director
Mr M Lemmel,
Non Executive Director
Ms E Donaghey,
Non Executive Director
Assessment
Existence of any matters contained in
ASX Recommendation 2.1 affecting Independence
Independent
Nil
Not Independent
Managing Director
Independent
Independent
Independent
Nil
Nil
Nil
Page 20 of 84
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2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report IMDEX LIMITED
and its controlled entities
CORPORATE GOVERNANCE STATEMENT
(iii) Board Nomination
The Board does not have a separate nomination committee and, given the Companyʼs 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 Companyʼs
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 Companyʼs 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 Directorʼs
nomination for re-election should be based on performance and the needs of the Company.
(v) Process for evaluating the performance of the Board, its committees and individual Directors
Board performance is measured primarily by means of monitoring Group profitability and share price performance in the market.
Individual Director performance is also measured by way of monitoring meeting attendance and individual contributions made at these
meetings.
Principle 3: Promote ethical and responsible decision-making
Diversity
The Company has adopted a diversity policy to guide the Companyʼs employees and Board in developing and achieving its diversity
objectives. The Company values diversity among its workforce and seeks to employ, retain and develop employees for the long term,
assisting in their development and the development of the culture and values of the Company. This is done by promoting the value of
different perspectives, ideas and benefits brought by engaging employees from all available talent.
The Company seeks to develop a culture of diversity within the Company whereby a mix of skills and diverse backgrounds are
employed by the Company at all levels. This is achieved by:
•
•
•
•
•
developing and maintaining a diverse and skilled workforce through transparent recruitment processes
promoting an inclusive workplace culture that values and utilises the contributions of all employees backgrounds, experiences
and perspective through improved awareness of the benefits of workforce diversity
facilitating diversity in the workplace by developing programs that promote growth for all employees, so each employee may
reach their full potential, and providing maximum benefit for the Company
reviewing the demographic profile at all levels of the Company (considering any patterns or gaps that are apparent); and
setting measurable objectives to encourage diversity within the Company.
The Board continues to work on objectives that will work towards achieving these goals. The objectives will be reviewed and analysed
regularly to assist the Company to benefit from a diverse workplace.
At 30 June 2013:
•
•
of five Board positions, four (80%) were held by males, and one (20%) was held by a female.
of seven senior executive positions, six (86%) were held by males, and one (14%) was held by a female.
• Of 604 full time employees, 462 (76%) were male and 142 (24%) were female.
78
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2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report IMDEX LIMITED
and its controlled entities
CORPORATE GOVERNANCE STATEMENT
Principle 4: Safeguard integrity in financial reporting
(i) Statement by the Managing Director and Chief Financial Officer
The Managing Director and the Chief Financial Officer have signed a declaration to the Board attesting to the fact that the 2013 Annual
Financial Report presents a true and fair view, in all material respects, of the Companyʼs 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 Companyʼs 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, appropriate ethical standards for the management of the Company and to approve the annual internal audit plan. 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 and Compliance Committee during the year and at the date of this Statement were:
Mr K A Dundo (Chairman);
Mr R W Kelly; and
Ms E Donaghey.
The experience and qualifications of each committee member is set out in the Directorsʼ Profiles in the first section of the Annual Report.
The Company Secretary acts as secretary of this Committee.
The external auditors, the Risk and Compliance Manager, the Managing Director and the Chief Financial Officer are invited to Audit and
Compliance Committee meetings at the discretion of the Committee. Details of meetings held by the Audit and Compliance Committee
during the year are set out in the Directorsʼ 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 Group's senior management. Information concerning the selection and appointment of external auditors is published on the
Companyʼs website.
The external auditors are required to attend the Annual General Meeting of the Company and be available to answer questions from
Shareholders.
(iv) Internal Audit
The Group has an internal audit function that reports directly to the Audit and Compliance Committee. The conduct and independence
of the internal audit function are governed by the Internal Audit Charter which is approved by the Audit and Compliance Committee. The
annual work plan of the internal audit function is approved annually by the Audit and Compliance Committee.
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 Companyʼs website.
The procedures set out who is responsible for determining whether information is of a type or nature that requires disclosure, the
Boardʼs 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 Companyʼs website as soon as practicable.
Page 22 of 84
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2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report IMDEX LIMITED
and its controlled entities
CORPORATE GOVERNANCE STATEMENT
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 Group 's state of affairs. Information is communicated to Shareholders through:
•
•
•
•
•
the Annual Report is made available to all Shareholders. The Board ensures that the Annual Report includes relevant
information about the operations of the Group during the year, changes in the state of affairs of the Group and details of future
developments, in addition to the other disclosures required by the Corporations Act 2001;
the Half-Yearly Report which contains summarised financial information and a review of the operations of the Group during
the period. The Half-Year Financial Report is prepared in accordance with the requirements of Accounting Standards and the
Corporations Act 2001 and is lodged with the Australian Securities & Investments Commission and the Australian Securities
Exchange. The Half-Year Financial Report is made available to all Shareholders;
regular reports released through the ASX and the media;
proposed major changes in the Group, which may impact on share ownership rights are submitted to a vote of Shareholders;
and
the Board encourages full participation by Shareholders at the Annual General Meeting to ensure a high level of accountability
and identification with the Group'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 Companyʼs website: www.imdexlimited.com. Further information can also be obtained by emailing the Company at:
imdex@imdexlimited.com.
The auditor is also invited to the Companyʼs Annual General Meetings and is available to answer Shareholders questions concerning
the conduct of the audit.
The Companyʼs Shareholder Communications Strategy is published on the Companyʼs website.
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. The Board is responsible for
ensuring that the Companyʼs risk management systems are adequate and operating effectively.
The Company has an independent internal audit function that operates under a Charter approved by the Audit and Compliance
Committee. One of the tasks of the internal audit function is to review and evaluate the Companyʼs and Groupʼs risk management and
internal control processes on a continuous basis.
The risk management policy is published on the Companyʼs website.
In addition to receiving Internal Audit Reports, the Audit and Compliance Committee also receives regular reports from the External
Audit function.
(ii) Statement by the Managing Director and Chief Financial Officer
The Managing Director and the Chief Financial Officer 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.
80
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2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report IMDEX LIMITED
and its controlled entities
CORPORATE GOVERNANCE STATEMENT
Principle 8: Remunerate fairly and responsibly
(i) Companyʼs remuneration policies
Details on the remuneration of Directors and Executives as well as the Companyʼs remuneration policies are set out in the
Remuneration Report that is 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 M Lemmel (Chairman);
Mr K Dundo; and
Ms E Donaghey.
The experience and qualifications of each committee member is set out in the Directorsʼ Profiles in the first section of the Annual Report.
The Remuneration Committee operates under a written Charter that is published on the Companyʼs website.
(iii) Structure of Non Executive Directorʼs remuneration
The terms and conditions governing the remuneration of Non Executive Directorʼs 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 2006 Annual General Meeting and is currently $500,000. From time to time additional benefits may be agreed with Directors with
due regard to market conditions.
Page 24 of 84
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2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report IMDEX LIMITED
and its controlled entities
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2013
Revenue from s ale of goods and operating leas e rental
Other revenue from operations
Tota l re ve nue
Other inc om e
Raw m aterials and c ons um ables us ed
E m ploy ee benefit ex pens e
Deprec iation ex pens e
A m ortis ation ex pens e
Financ e c os ts
S hare of profit/(los s ) of as s oc iate
Other ex pens es
P rofit be fore ta x
Inc om e tax ex pens e
P rofit for the ye a r
Othe r com pre he nsive incom e
Item s that m ay be reclassified subsequently to profit or loss
Fair value adjus tm ent on inves tm ent in S ino Gas and E nergy Holdings
Ltd (S E H), (net of inc om e tax )
E x c hange differenc es aris ing on the trans lation of foreign operations
Othe r com pre he nsive incom e for the ye a r, ne t of incom e ta x
Tota l com pre he nsive incom e for the ye a r
Ye a r Ende d Ye a r Ende d
30 June 2013 30 June 2012
Note s
$ʼ000
$ʼ000
4
4
4
4
4
4
4
26
4
5
18
18
232,791
130
232,921
269,563
89
269,652
46
478
(101,069)
(51,339)
(7,728)
(3,364)
(3,438)
1,300
(38,819)
28,510
(9,127)
19,383
(104,985)
(44,010)
(6,761)
(5,957)
(1,831)
(1,460)
(37,626)
67,500
(21,723)
45,777
3,527
6,536
10,063
3,703
(6,262)
(2,559)
29,446
43,218
P rofit a ttributa ble to ow ne rs of the pa re nt
19,383
45,777
Tota l com pre he nsive incom e a ttributa ble to ow ne rs of the pa re nt
29,446
43,218
Ea rnings pe r sha re
B as ic earnings per s hare (c ents )
Diluted earnings per s hare (c ents )
19
19
9.24
9.14
22.34
21.85
The Cons olidated S tatem ent of P rofit or Los s and Other Com prehens ive Inc om e s hould b e read in c onjunc tion with
the ac c om pany ing notes .
82
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2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2013
30 June 2013 30 June 2012
Note s
$ʼ000
$ʼ000
Curre nt Asse ts
Cas h and Cas h E quivalents
Trade and Other Rec eivables
Inventories
Current Tax A s s ets
Other
Financ ial A s s et Held for S ale
Tota l Curre nt Asse ts
Non Curre nt Asse ts
Other Financ ial A s s ets
P roperty , P lant and E quipm ent
Inves tm ent in A s oc iates
Deferred Tax A s s ets
Goodwill
Other Intangible A s s ets
Tota l Non Curre nt Asse ts
Tota l Asse ts
Curre nt Lia bilitie s
Trade and Other P ay ables
B orrowings
Current Tax Liabilities
P rovis ions
Tota l Curre nt Lia bilitie s
Non Curre nt Lia bilitie s
B orrowings
P rovis ions
Tota l Non Curre nt Lia bilitie s
Tota l Lia bilitie s
Ne t Asse ts
Equity
Is s ued Capital
S hares Res erved for P erform anc e Rights P lan
Foreign Currenc y Trans lation Res erve
Inves tm ent Revaulation Res erve
E m ploy ee E quity -S ettled B enefits Res erve
M andatory Is s uable Capital
Retained E arnings
Tota l Equity
28
7
8
5
10
9
9
11
26
5
12
13
14
15
5
16
15
16
17
17
18
18
18
18
9,979
45,231
53,356
2,661
5,909
117,136
26,450
143,586
-
40,701
25,555
8,632
61,782
5,610
142,280
285,866
25,776
14,738
1,900
4,681
47,095
49,248
1,071
50,319
97,414
188,452
89,269
(952)
(11,167)
13,754
6,087
990
90,471
188,452
11,232
59,689
52,106
-
11,295
134,322
-
134,322
21,412
19,730
24,255
13,700
54,577
6,556
140,230
274,552
33,349
12,880
9,547
2,896
58,672
46,549
1,265
47,814
106,486
168,066
86,069
(3,740)
(17,703)
10,227
6,385
990
85,838
168,066
The Cons olidated S tatem ent of Financ ial P os ition s hould b e read in c onjunc tion with the ac c om panying notes .
Page 26 of 84
83
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
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M
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2013
Ye a r Ende d Ye a r Ende d
30 June 2013 30 June 2012
Note s
$ʼ000
$ʼ000
Ca sh Flow s From Ope ra ting Activitie s
Receipts from customers
Payments to suppliers and employees
Interest and other costs of finance paid
Income tax paid
Ne t ca sh provide d by Ope ra ting Activitie s
Ca sh Flow s From Inve sting Activitie s
Interest received
Payment for property, plant and equipment
Proceeds from sale of property, plant and equipment
Payment for development costs capitalised
Payment for shares in ioGlobal net of cash acquired
Payment for shares in Australian Drilling Specialties Pty Ltd
net of cash acquired
Payment for shares in System Mud net of cash acquired
Investment in Associate
Ne t ca sh use d in Inve sting Activitie s
Ca sh Flow s From Fina ncing Activitie s
Cash received on exercise of options
Shares purchased on market to satisfy performance rights
Dividend paid to owners of the Company
Hire purchase and lease payments
Proceeds from borrowings
Repayment of borrowings
Ne t ca sh (use d in)/ provide d by Fina ncing Activitie s
28(c)
13
25(a)
25(b)
25(c)
26
278,526
(216,267)
(3,219)
(20,070)
38,970
130
(23,768)
180
(996)
(3,874)
-
-
-
(28,328)
-
-
(13,591)
(581)
13,924
(12,314)
(12,562)
288,004
(229,320)
(1,745)
(29,883)
27,056
89
(11,065)
366
(1,254)
-
(7,077)
(2,726)
(21,415)
(43,082)
3,283
(5,769)
(12,327)
(930)
67,112
(42,252)
9,117
Ne t De cre a se in Ca sh a nd Ca sh Equiva le nts He ld
(1,920)
(6,909)
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
Ca sh a nd Ca sh Equiva le nts a t the End Of The Fina ncia l
Ye a r
28(a)
11,232
18,388
667
9,979
(247)
11,232
The Consolidated Statement of Cash Flows should b e read in conjunction with the accompanying notes.
Page 28 of 84
85
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
1
Adoption of New and Revised Accounting Standards
Adoption of new and revised Accounting Standards
The following new and revised Standards and Interpretations have been adopted in these financial statements. Their adoption has not
had any significant impact on the amounts reported in these financial statements but may affect the accounting for future transactions or
arrangements.
Standard/Interpretation
for
Effective
reporting
beginning on or after:
annual
periods
Initially applied in the
financial year:
AASB 2010-8 ʻAmendments to Australian Accounting Standards – Deferred Tax:
Recovery of Underlying Assets
1 January 2012
30 June 2013
AASB 2011-9 ʻAmendments to Australian Accounting Standards – Presentation of
Items of Other Comprehensive Income
1 July 2012
30 June 2013
Accounting Standards and Interpretations issued but not yet effective
At the date of authorisation of the financial report, a number of Standards and Interpretations were in issue but not yet effective.
Initial application of the following Standards/Interpretations is not expected to have any material impact on the financial report of the
company:
Standard/Interpretation
for
Effective
reporting
beginning on or after:
annual
periods
Expected to be initially
applied in the financial
year ending:
AASB 9 ʻFinancial Instrumentsʼ, and the relevant amending standards1
1 January 2015
30 June 2016
AASB 10 “Consolidated Financial Statements”, AASB 2011-7 ʻAmendments to
Australian Accounting Standards arising from the Consolidation and Joint
Arrangements Standardsʼ.
AASB 127 Separate Financial Statements (2011), AASB 2011-7 ʻAmendments to
Australian Accounting Standards arising from the Consolidation and Joint
Arrangements Standardsʼ.
1 January 2013
30 June 2014
1 January 2013
30 June 2014
AASB 11 ʻJoint Arrangementsʼ, AASB 2011-7 ʻAmendments to Australian Accounting
Standards arising from the Consolidation and Joint Arrangements Standardsʼ.
1 January 2013
30 June 2014
AASB 12 ʻDisclosure of Interests in Other Entitiesʼ AASB 2011-7 ʻAmendments to
Australian Accounting Standards arising from the Consolidation and Joint
Arrangements Standardsʼ.
1 January 2013
30 June 2014
AASB 128 ʻInvestments in Associates and Joint Venturesʼ (2011)
1 January 2013
30 June 2014
AASB 13 ʻFair Value Measurementʼ and AASB 2011-8 ʻAmendments to Australian
Accounting Standards arising from AASB 13
1 January 2013
30 June 2014
AASB 119 ʻEmployee Benefitsʼ (2011) and AASB 2011-10 ʻAmendments to Australian
Accounting Standards arising from AASB 119 (2011)ʼ
1 January 2013
30 June 2014
AASB 2011-4 ʻAmendments to Australian Accounting Standards to Remove
Individual Key Management Personnel Disclosure Requirements
1 July 2013
30 June 2014
AASB 2011-7 ʻAmendments to Australian Accounting Standards arising from the
Consolidation and Joint Arrangements Standards
1 January 2013
30 June 2014
AASB 2012-3 ʻAmendments to Australian Accounting Standards-Offsetting Financial
Assets and Financial Liabilities
1 January 2014
30 June2015
AASB 2012-2 ʻAmendments to Australian Accounting Standards-Disclosures –
Offsetting Financial Assets and Financial Liabilities
1 January 2013
30 June 2014
AASB 2012-10 ʻAmendments to Australian Accounting Standards- Transition
Guidance and Other Amendmentsʼ
1 January 2013
30 June 2014
1: The AASB has issued the following versions of AASB 9 and the relevant amending standards:
• AASB 9 ʻFinancial Instrumentsʼ (December 2009), AASB 2009-11 ʻAmendments to Australian Accounting Standards arising
from AASB 9ʼ, AASB 2012-6 ʻAmendments to Australian Accounting Standards – Mandatory Effective Date of AASB 9 and
Transition Disclosuresʼ
• AASB 9 ʻFinancial Instrumentsʼ (December 2010), AASB 2010-7 ʻAmendments to Australian Accounting Standards arising from
AASB 9ʼ (December 2010)ʼ, AASB 2012-6 ʻAmendments to Australian Accounting Standards – Mandatory Effective Date of
AASB 9 and Transition Disclosuresʼ
Page 29 of 84
86
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
2
Summary of Significant Accounting Policies
The financial report is a general purpose financial report which has been prepared in accordance with the requirements of the
Corporations Act 2001 and Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting
Standards Board.
The financial statements comprise the consolidated financial statements of the Group. For the purposes of preparing the consolidated
financial statements, the Group is a for-profit entity.
The financial statements were authorised for issue by the directors on 16 August 2013.
Where applicable comparative numbers have been reclassified to ensure consistent disclosure.
(a)
Basis of preparation
The Financial Report has been prepared on the basis of historical cost except for the revaluation of current assets held for sale and
financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in
Australian dollars, unless otherwise noted.
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 financial report are rounded off to the nearest thousand dollars, unless otherwise indicated.
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 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 consolidated statement of financial position.
(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 consolidated statement of cash flows 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.
(d)
Goodwill
Goodwill arising in a business combination is recognised as an asset at the date that control is acquired (the acquisition date). Goodwill
is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and
the fair value of the acquirerʼs previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the
identifiable assets acquired and the liabilities assumed.
If, after reassessment, the Groupʼs interest in the fair value of the acquireeʼs identifiable net assets exceeds the sum of the
consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirerʼs previously held
equity interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.
Goodwill is not amortised but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill is allocated to
each of the Groupʼs cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which
goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be
impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to
reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the
carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
(e)
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 necessary to make the sale.
Page 30 of 84
87
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
2
(f)
Summary of Significant Accounting Policies (continued)
Property, plant and equipment
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 calculated on a straight line basis in order to write off the net cost of each asset over its expected useful life to its
estimated residual value. Leasehold improvements and assets held under finance lease 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, with the effect of any changes recognised on a prospective
basis.
The gain or loss arising on disposal or retirement of an item of property, plant and equipment is determined as the difference between
the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.
The annual depreciation rates used for each class of assets are as follows:
Plant and equipment:
10% to 50%
Equipment rented to third parties:
10% to 50%
Equipment under finance lease:
10% to 50%
Capital works in progress in the course of construction for production or supply purposes, or for purposes not yet determined, are
carried at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs
capitalised in accordance with the Groupʼs accounting policy. Depreciation of these assets, on the same basis as other property, plant
and equipment assets, commences when the assets are ready for their intended use.
(g)
Share-based payments
Equity-settled share-based payments with employees and others providing similar services are measured at the fair value of the equity
instrument at the grant date. Fair value is measured by the use of the Black-Scholes Model, Binomial Tree Method and Monte-Carlo
Simulation as appropriate. The expected life used in the model has been adjusted, based on managementʼs 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 over the vesting period, based on
the Groupʼs estimate of shares that will eventually vest.
At each reporting date, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision
of the original estimates, if any, is recognised in profit or loss over the remaining vesting period, with a corresponding adjustment to the
employee equity-settled benefits reserve.
(h)
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its
subsidiaries) (referred to as ʻthe Groupʼ in these financial statements). Control is achieved where the Company has the power to govern
the financial and operating policies of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective
date of acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those
used by other members of the Group.
All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.
88
Page 31 of 84
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
2
(i)
Summary of Significant Accounting Policies (continued)
Business combinations
Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration for each acquisition is
measured at the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity
instruments issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as
incurred.
Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent consideration
arrangement, measured at its acquisition-date fair value. Subsequent changes in such fair values are adjusted against the cost of
acquisition where they qualify as measurement period adjustments (see below). All other subsequent changes in the fair value of
contingent consideration classified as an asset or liability are accounted for in accordance with relevant Standards. Changes in the fair
value of contingent consideration classified as equity are not recognised.
Where a business combination is achieved in stages, the Groupʼs previously held interests in the acquired entity are remeasured to fair
value at the acquisition date (i.e. the date the Group attains control) and the resulting gain or loss, if any, is recognised in profit or loss.
Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive
income are reclassified to profit or loss, where such treatment would be appropriate if that interest were disposed of.
The acquireeʼs identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under AASB 3(2008) are
recognised at their fair value at the acquisition date, except that:
•
•
•
deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and
measured in accordance with AASB 112 Income Taxes and AASB 119 Employee Benefits respectively;
liabilities or equity instruments related to the replacement by the Group of an acquireeʼs share based payment awards are
measured in accordance with AASB 2 Share-based Payment; and
assets (or disposal groups) that are classified as held for sale in accordance with AASB 5 Noncurrent Assets Held for Sale
and Discontinued Operations are measured in accordance with that Standard.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the
Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during
the measurement period (see below), or additional assets or liabilities are recognised, to reflect new information obtained about facts
and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognised as of that date.
The measurement period is the period from the date of acquisition to the date the Group obtains complete information about facts and
circumstances that existed as of the acquisition date – and is subject to a maximum of one year.
(j)
Investments in associates
An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture.
Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint
control over those policies.
The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting,
except when the investment is classified as held for sale, in which case it is accounted for in accordance with AASB 5 ʻNon-current
Assets Held for Sale and Discontinued Operationsʼ. Under the equity method, an investment in an associate is initially recognised in the
consolidated statement of financial position at cost and adjusted thereafter to recognise the Groupʼs share of the profit or loss and other
comprehensive income of the associate. When the Groupʼs share of losses of an associate exceeds the Groupʼs interest in that
associate (which includes any long-term interests that, in substance, form part of the Groupʼs net investment in the associate), the
Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group has
incurred legal or constructive obligations or made payments on behalf of the associate.
Any excess of the cost of acquisition over the Groupʼs share of the net fair value of the identifiable assets, liabilities and contingent
liabilities of the associate recognised at the date of acquisition is recognised as goodwill, which is included within the carrying amount of
the investment. Any excess of the Groupʼs share of the net fair value of the identifiable assets, liabilities and contingent liabilities over
the cost of acquisition, after reassessment, is recognised immediately in profit or loss.
The requirements of AASB 139 are applied to determine whether it is necessary to recognise any impairment loss with respect to the
Groupʼs investment in an associate. When necessary, the entire carrying amount of the investment (including goodwill) is tested for
impairment in accordance with AASB 136 ʻImpairment of Assetsʼ as a single asset by comparing its recoverable amount (higher of value
in use and fair value less costs to sell) with its carrying amount. Any impairment loss recognised forms part of the carrying amount of the
investment. Any reversal of that impairment loss is recognised in accordance with AASB 136 to the extent that the recoverable amount
of the investment subsequently increases.
When a group entity transacts with its associate, profits and losses resulting from the transactions with the associate are recognised in
the Group's consolidated financial statements only to the extent of interests in the associate that are not related to the Group.
Page 32 of 84
89
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
2
Summary of Significant Accounting Policies (continued)
(k)
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily
take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the
assets are substantially ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is
deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
(l)
Foreign currency
The individual financial statements of each group entity are presented in the currency of the primary economic environment in which the
entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of
each entity are expressed in Australian dollars, which is the functional currency of Imdex Limited, and the presentation currency for the
consolidated financial statements.
In preparing the financial statements of the individual entities, transactions in currencies other than the entityʼs functional currency
(foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date,
monetary items denominated in foreign currencies are retranslated at the rates prevailing at the balance sheet date. Non-monetary
items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair
value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences are recognised in profit or loss in the period in which they arise except for 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, and which are recognised in the foreign currency translation reserve and recognised in profit or
loss on disposal of the net investment.
On consolidation, the assets and liabilities of the Groupʼs foreign operations are translated into Australian dollars at exchange rates
prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates for the period, unless
exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used.
Exchange differences arising, if any, are classified as equity and transferred to the Groupʼs translation reserve. Such exchange
differences are recognised in profit or loss in the period in which the foreign operation is disposed.
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. Goodwill arising on
acquisitions before the date of transition to A-IFRS is treated as an Australian dollar denominated asset.
(m)
Derivative financial instruments
The Group enters into derivative financial instruments to manage its exposure to interest rate risk. This risk is primarily managed
through the use of an interest rate cap. Further details of derivative financial instruments are disclosed in the financial instruments note
in the financial statements.
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their
fair value at each reporting date. The resulting gain or loss is recognised in the profit or loss immediately. The Group has not designated
any financial instruments as being hedge accounted.
(i)
Embedded derivatives
Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and
characteristics are not closely related to those of host contracts and the host contracts are not measured at fair value with changes in
fair value recognised in profit or loss.
(n)
Financial assets
All financial assets are recognised and derecognised on trade date where purchase or sale of a financial asset is under a contract
whose terms require delivery of the financial asset within the timeframe established by the market concerned, and are initially measured
at fair value, net of transaction costs except for those financial assets classified as ʻat fair value through the profit or lossʼ which are
initially measured at fair value.
Financial assets are classified into the following specified categories: financial assets ʻat fair value through profit or lossʼ, ʻheld-to-
maturityʼ investments, ʻcurrent assets held for saleʼ, ʻavailable-for-saleʼ financial assets, and ʻloans and receivablesʼ. The classification
depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
(i)
Effective interest method
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.
Income is recognised on an effective interest rate basis for debt instruments other than those financial assets ʻat fair value through profit
or lossʼ.
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and its controlled entities
NOTES TO THE FINANCIAL REPORT
2
Summary of Significant Accounting Policies (continued)
(n)
Financial assets (continued)
(ii)
Held-to-maturity investments
Bills of exchange and debentures with fixed or determinable payments and fixed maturity dates where the Group has the positive intent
and ability to hold to maturity are classified as held-to-maturity investments. Held-to-maturity investments are recorded at amortised cost
using the effective interest method less impairment, with revenue recognised on an effective yield basis.
(iii)
Financial assets at fair value through profit or loss
Financial assets are classified as financial assets at fair value through profit or loss where the financial asset:
•
•
•
Has been acquired principally for the purpose of selling in the near future;
Is a part of an identified portfolio of financial instruments that the Group manages together and has a recent actual pattern
of short-term profit-taking; or
Is a derivative that is not designated and effective as a hedging instrument.
Financial assets at fair value through profit or loss are stated at fair value, with any resultant gain or loss recognised in profit or loss. The
net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset.
(iv)
Available-for-sale financial assets
Available-for-sale assets are stated at fair value. Gains and losses arising from changes in fair value are recognised directly in the
investments revaluation reserve with the exception of impairment losses, interest calculated using the effective interest rate method and
foreign exchange gains and losses on monetary assets which are recognised directly in profit or loss. Where the investment is disposed
of or is determined to be impaired, the cumulative gain or loss previously recognised in the investments revaluation reserve is included
in profit or loss for the period. The fair value of available-for-sale monetary assets held in a foreign currency is determined in that foreign
currency and translated at the spot rate at reporting date. The change in fair value attributable to translation differences that results from
a change in amortised cost of the asset is recognised in profit or loss, and other changes are recognised in equity. Available-for-sale
financial assets include investments where shareholding is greater than 20% but significant influence is not exerted over the invested
company.
(v)
Loans and receivables
Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are
classified as ʻloans and receivablesʼ. Loans and receivables are measured at amortised cost using the effective interest rate method
less impairment. Interest is recognised by applying the effective interest rate.
(vi)
Impairment of financial assets
Financial assets other than those at fair value through profit or loss, are assessed for indicators of impairment at each balance sheet
date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the
initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted. For financial assets
carried at amortised cost, the amount of the impairment is the difference between the assetʼs carrying amount and the present value of
estimated future cash flows, discounted at the original effective interest rate.
The carrying value of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade
receivables where the carrying value is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is
written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance
account. Changes in the carrying amount of the allowance account are recognised in profit or loss.
With the exception of available-for-sale equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and
the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised
impairment loss is reversed through profit or loss to the extent the carrying amount of the investment at the date the impairment is
reversed does not exceed what the amortised cost would have been had the impairment not been recognised.
In respect of available-for-sale instruments, any subsequent increase in fair value after an impairment loss is recognised directly in
equity.
(vii)
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the
financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor
retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its
retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risk and
rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a
collateralised borrowing for the proceeds received.
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and its controlled entities
NOTES TO THE FINANCIAL REPORT
2
(o)
(i)
Summary of Significant Accounting Policies (continued)
Financial liabilities and equity instruments issued by the Group
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. An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its
liabilities. Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.
(ii)
Financial liabilities
Financial liabilities are classified as either financial liabilities ʻat fair value through profit or lossʼ or other financial liabilities.
(iii)
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss are stated at fair value, with any resultant gain or loss recognised in profit or loss.
The net gain or loss recognised through profit or loss incorporates any interest paid on the financial liability.
A financial liability is held for trading if:
•
•
•
it has been incurred principally for the purpose of repurchasing in the near future; or
it is a part of an identified portfolio of financial instruments that the Group manages together and has a recent actual pattern
of short-term profit-taking; or
it is a derivative that is not designated and effective as a hedging instrument.
A financial liability other than a financial liability held for trading is designated as ʻat fair value through profit or lossʼ upon initial
recognition if:
•
•
•
such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise;
or
the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its
performance evaluated on a fair value basis, in accordance with the Groupʼs documented risk management or investment
strategy, and information about the grouping is provided internally or on that basis; or
it forms part of a contract containing one or more embedded derivatives, and AASB139 ʻFinancial Instruments: Recognition
and Measurementʼ permits the entire combined contract (asset or liability) to be designated as ʻat fair value through profit or
lossʼ.
(iv)
Other financial liabilities
Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs.
Other financial liabilities are subsequently measured at amortised cost using the effective interest rate method, with interest expense
recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest income over
the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected
life of the financial liability, or, where appropriate, a shorter period.
(p)
(i)
Intangible assets
Intangible assets acquired in a business combination
All 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 value can be measured reliably. Identifiable intangible assets comprise intellectual property,
technology, contracts, customers, development costs and trade marks. These are recorded at cost less accumulated amortisation and
impairment. Amortisation is charged on a straight line basis over their estimated useful lives. The estimated useful life and amortisation
method is reviewed at the end of each annual reporting period.
Estimated useful lives are as follows:
Intellectual property
Technology
Contracts
Customers
Trade Names and Patents
10 years
5-7 years
1-5 years (term of contract)
5-6 years
1-6 years
Each period, the useful life of this asset is reviewed to determine whether events and circumstances continue to support an indefinite
useful life assessment for the asset. Such assets are tested for impairment in accordance with the policy stated in note 2(u).
92
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IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
2
(p)
(ii)
Summary of Significant Accounting Policies (continued)
Intangible assets (continued)
Research and development costs
Expenditure on research activities is recognised as an expense in the period in which it is incurred. Where no internally-generated
intangible asset can be recognised, development expenditure is recognised as an expense in the period as incurred. An intangible asset
arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following are
demonstrated:
•
•
•
•
•
•
the technical feasibility of completing the intangible asset so that it will be available for use or sale;
the intention to complete the intangible asset and use or sell it;
the ability to use or sell the intangible asset;
how the intangible asset will generate probable future economic benefits;
the availability of adequate technical, financial and other resources to complete the development and to use or sell the
intangible asset; and
the ability to measure reliably the expenditure attributable to the intangible asset during its development.
Capitalised development costs are stated at cost less accumulated amortisation and impairment, and are amortised on a straight-line
basis over their useful life of between 3 and 5 years, commencing on commercialisation of the underlying projects.
(q)
Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
(i)
Current tax
The tax currently payable is based on taxable profit for the period. Taxable profit differs from profit as reported in the income statement
because of items of income or expense that are taxable or deductible in other periods and items that are never taxable or deductible.
The Company and the Groupʼs liability for current tax is calculated using tax rates that have been enacted or substantively enacted by
the end of the reporting period.
(ii)
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements
and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable
temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is
probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax
assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a
business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and
interests in joint ventures, except where the Company and the Group is able to control the reversal of the temporary difference and it is
probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary
differences associated with such 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.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or
the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the
Company and the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation authority and the Company and the Group intends to settle
its current tax assets and liabilities on a net basis.
(iii)
Current and deferred tax for the period
Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items that are recognised
outside profit or loss (whether in other comprehensive income or directly in equity), in which case the tax is also recognised outside
profit or loss, or where they arise from the initial accounting for a business combination. In the case of a business combination, the tax
effect is included in the accounting for the business combination.
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and its controlled entities
NOTES TO THE FINANCIAL REPORT
2
(q)
(iv)
Summary of Significant Accounting Policies (continued)
Taxation (continued)
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 in the members of the tax-consolidated group are recognised in the separate financial statements of
the members of the tax-consolidated group using the ʻseparate taxpayer within groupʼ approach by reference to the carrying amounts in
the separate financial statements of each entity and the tax values applying under tax consolidation. Current tax liabilities and assets
and deferred tax assets arising from unused tax losses and relevant tax credits of the members of the tax-consolidated group are
recognised by the Company (as head entity in the tax-consolidated group). Due to the existence of a tax funding arrangement between
the entities in the tax-consolidated group, amounts are recognised as payable to or receivable by the Company and each member of the
group in relation to the tax contribution amounts paid or payable between the parent entity and the other members of the tax-
consolidated group in accordance with the arrangement. Further information about the tax funding arrangement is detailed in note 5 to
the financial statements. Where the tax contribution amount recognised by each member of the tax-consolidated group for a particular
period is different to the aggregate of the current tax liability or asset and any deferred tax asset arising from unused tax losses and tax
credit in respect of that period, the difference is recognised as a contribution from (or distribution to) equity participants.
(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)
Group as Lessor
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease.
(ii)
Group 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
consolidated statement of financial position 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 Groupʼs 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.
(iii)
Lease incentives
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)
Revenue
Revenue is measured at the fair value of the consideration received or receivable.
(i)
Sale of goods
Revenue from the sale of goods is recognised when all the following conditions are satisfied:
•
•
•
•
•
the Group has transferred to the buyer the significant risks and rewards of ownerships of the goods;
the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective
control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the economic benefits associated with the transaction will flow to the entity; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.
(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 from investments is recognised when the shareholders right to receive payment has been established. Interest
revenue is accrued on a time basis, by reference to the principle outstanding and at the effective interest rate applicable, which is the
rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that assetʼs net carrying
amount.
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IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
2
(t)
(i)
Summary of Significant Accounting Policies (continued)
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 Group 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)
Impairment of other tangible and intangible assets (other than goodwill)
At each reporting date, the Group 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 Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-
generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent
allocation basis can be identified.
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.
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.
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.
(v)
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive), as a result of a past event, it is probable that
the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
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.
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and its controlled entities
NOTES TO THE FINANCIAL REPORT
3
Critical Accounting Judgements and Key Sources of Estimation Uncertainty
In the application of the Groupʼs accounting policies, which are described in note 2, management is required to make judgements,
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 judgements. 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.
Critical judgements in applying the entityʼs accounting policies
Management have not made any significant critical judgements in the process of applying the Groupʼs accounting policies.
Key sources of estimation uncertainty
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date,
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
year:
Impairment of Goodwill and Intangibles
Determining whether goodwill and intangibles are impaired requires an estimation of the value in use of the cash-generating
units to which goodwill and intangibles are attributable. The value in use calculation requires the entity to estimate the future
cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. A
forward looking estimation of this nature is inherently uncertain. Details of the key assumptions made are contained in note 12
(Goodwill) and note 13 (Intangibles). No impairment losses were booked in the current or prior year. A goodwill amount of
$61.8 million and intangible assets of $5.6 million have been recognised on the face of the consolidated statement of financial
position.
Recognition of net deferred tax asset
A net deferred tax asset of $8.6 million has been recognised on the face of the consolidated statement of financial position.
The largest component of this asset is the future tax benefit of depreciation of unrealised profits in property, plant and
equipment items. This tax benefit will be realised progressively over the next 3-5 years as these assets are depreciated or
sold. This net asset has been raised as it is considered more likely than not that it will be realised. In making this assessment
of likelihood a forward looking estimation of cash flows and the likelihood of business success needs to be made up to 5 years
into the future. A forward looking estimation of this nature over 5 years is inherently uncertain. Details of deferred tax balances
are contained in note 5.
Fair value of options and performance rights
Options and performance rights as detailed in notes 32 and 33 are inherently complex to value due to their nature and
relationship to the share market and its uncertainties. The Imdex Group therefore engaged valuation professionals to perform
a valuation. The models used by the valuation professionals, although they are industry standard models, are subject to
limitations and uncertainties.
96
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IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
4
Profit from Operations
(a ) Re ve nue from ope ra tions
Re ve nue
Revenue from the sale of goods
Operating rental income
Interest income - bank deposits
(b) Profit be fore incom e ta x
2013
$ʼ000
2012
$ʼ000
165,827
66,964
130
232,921
182,416
87,147
89
269,652
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:
Loss on disposal of property, plant and equipm ent
(58)
(27)
Othe r incom e
Foreign exchange gain
Other
De pre cia tion a nd a m ortisa tion of Non Curre nt Asse ts
Depreciation of P roperty, P lant and Equipment (note 11)
A mortisation of Intangible Assets (note 13)
Fina nce costs
Interest on hire purchase liabilities
Interest on deferred acquisition consideration
Interest on comm ercial bills/bank loans
Interest on overdraft
Other interest
Othe r e x pe nse s
Com missions
Consultancy fees
Legal and professional expenses (i)
Foreign exchange loss
Rent and prem ises costs
Travel and accom modation
Freight
M otor vehicle costs
Other expenses
-
46
46
(7,728)
(3,364)
(11,092)
(68)
-
(3,016)
(88)
(266)
(3,438)
(2,120)
(2,783)
(4,811)
(1,061)
(5,354)
(5,512)
(1,973)
(2,514)
(12,691)
(38,819)
275
203
478
(6,761)
(5,957)
(12,718)
(102)
101
(1,489)
(110)
(231)
(1,831)
(3,452)
(3,723)
(4,292)
-
(4,192)
(4,828)
(2,764)
(1,987)
(12,388)
(37,626)
(i) Includes legal, audit, accounting, share registry and corporate secretarial fees.
Em ploye e be ne fits e x pe nse
Post-employment benefits:
Defined contribution superannuation costs
Share based payments:
Equity-settled share based paym ents - perform ance rights (note 18)
Other employee benefits
Cost of sa le s
(2,549)
(2,157)
(1,331)
(47,459)
(51,339)
(2,222)
(39,631)
(44,010)
(101,069)
(104,985)
M ove m e nt in provision for doubtful de bts
472
142
Ope ra ting le a se re nta l (m inim um le a se pa ym e nts)
(6,174)
(4,429)
Page 40 of 84
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IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
5
Income Taxes
(a) Income tax recognised in the income statement
Tax expe nse comprise s:
Current tax expense
Deferred tax expense relating to the origination and reversal
of temporary differences
Under provision per prior year
Total tax expense
Prima facie income tax expense on pre-tax accounting profit
from operations reconciles to income tax in the financial
sta tements as follows:
2013
$ʼ000
2012
$ʼ000
7,853
884
390
9,127
17,229
2,312
2,182
21,723
Profit from operations
28,510
67,500
Income tax expense calculated at 30%
Non-deductible share based payments
Deductible net contribution to share trust
Non-deductible share of loss/(profit) of Associate
Other non-deductible and non-assessable items
Tax rate differential arising from foreign entities
Under provision of prior year income tax
8,553
5
-
(390)
519
50
390
9,127
20,250
667
(1,337)
438
122
(599)
2,182
21,723
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 year.
(b) Income tax recognised directly in equity
The following current and deferred amounts were charged
directly to equity during the year:
Deferred tax: SEH fair value uplift taken directly to reserve
(1,511)
(1,587)
(c) Current tax a ssets a nd liabilities
Current tax receivable
Current tax payable
2,661
1,900
-
9,547
98
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IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
5
Income Taxes (continued)
(d) Deferred tax ba lances
Deferred tax assets comprise:
Provisions
Inventory
Property, plant and equipment
Carry forward tax losses in subsidiary companies
Accruals
Foreign currency movement
Other
Deferred tax liabilities comprise:
Intangible assets
Available-for-sale non-current assets
Untaxed reserves
Share based payments
Net deferred tax balances
Unrecognised deferred tax assets:
The following have not been brought to account as assets:
2013
$ʼ000
2012
$ʼ000
1,464
488
7,067
2,434
874
1,634
1,373
15,334
(1,693)
(4,584)
(425)
-
(6,702)
8,632
1,013
2,312
12,062
791
1,070
1,924
-
19,172
(1,967)
(3,072)
-
(433)
(5,472)
13,700
Temporary differences relating to the translation of
investments in subsidiary undertakings
2,802
3,478
Tax Consolidation
Relevance of tax consolidation to the Group
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 funding and 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.
The tax sharing agreement entered into between members of the tax consolidated group provides for the determination of the allocation
of income tax liabilities between the entities should the head entity default on its tax payment obligations or if an entity should leave the
tax consolidated group. The effect of the tax sharing agreement is that each member's liability for tax payable by the tax consolidated
group is limited to the amount payable by the head entity under the tax funding arrangement.
The amount of contribution or distribution relating to tax consolidation in the current and prior year amounted to nil.
Page 42 of 84
99
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
6
Remuneration of Auditors
Deloitte Touche Tohmatsu (Australia)
Audit or review of the financial report
Taxation services - mainly compliance work, transfer
pricing and global restructuring advice
Deloitte Touche Tohmatsu (overseas affiliates)
Audit or review of the financial report
Taxation services - mainly compliance work, transfer
pricing and global restructuring advice
Other non-audit services: Other consulting services
Other auditors
2013
$
2012
$
326,550
313,110
762,501
1,089,051
490,828
803,938
81,601
74,732
68,131
-
149,732
31,031
69,539
175,302
Audit or review of the financial report
25,583
25,718
Total Auditor Remuneration
1,264,366
1,004,958
100
Page 43 of 84
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
7
Trade and Other Receivables
Curre nt
Trade receivables
Allowance for doubtful debts
Other receivables
Note s
2013
$ʼ000
2012
$ʼ000
(i)
(ii)
45,071
(1,269)
43,802
1,429
45,231
59,509
(1,463)
58,046
1,643
59,689
(i) The average credit period on sales of goods is around 60 days. Trade receivables are interest free.
An allowance has been made for estimated irrecoverable amounts from the sale of goods and
services, determined by reference to past default experience and specific knowledge of individual
debtors circumstances.
Ageing of past due but not impaired debtors
0 - 30 days past due
31 - 60 days past due
61 + days past due
2,034
8,629
2,876
13,539
3,475
8,686
2,895
15,056
The above analysis shows debtors that are past due at
the end of the reporting date where no
provision has been raised as the Group believes that the amounts are still considered recoverable.
The Group does not hold any collateral over these balances.
(ii) Movement in the allowance for doubtful debts
Balance at the beginning of the year
Amounts written off during the year
Decrease in allowance recognised in profit or loss
Balance at the end of the year
All impaired debtors are in excess of 90 days overdue.
1,463
(666)
472
1,269
1,321
-
142
1,463
In determining the recoverability of a trade receivable the Group considers any change in the credit
quality of the trade receivable from the date credit was initially granted up to the reporting date. The
concentration of credit
risk is limited due to the customer base being large and unrelated.
Accordingly, the directors believe that there is no further credit provision required in excess of the
allowance for doubtful debts.
8
Inventories
Curre nt
Raw materials
W ork in progress
Finished goods
2013
$ʼ000
2012
$ʼ000
7,989
4,331
41,036
53,356
6,984
1,581
43,541
52,106
A provision for diminution of stock of $722,000 existed at 30 June 2013 (2012: $717,000).
Page 44 of 84
101
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
9
Other Financial Assets
Note s
2013
$ʼ000
2012
$ʼ000
Curre nt
Fina ncia l Asse t He ld for S a le
Inves tm ent in S ino Gas and E nergy Holdings Ltd
Non-Curre nt
Ava ila ble for sa le fina ncia l a sse t a t fa ir va lue
Inves tm ent in S ino Gas and E nergy Holdings Ltd
(i)
(i)
26,450
-
-
21,412
(i) Comprises 251,908,446 fully paid ordinary shares in Sino Gas and Energy Holdings Ltd (SEH) held at fair value (2012: 251,908,446
shares). This amounts to 20.11% of the issued share capital of SEH (2012: 22.48%). The shareholding percentage dropped in the
current year due to additional shares being issued by SEH to third parties.
Despite holding more than 20% of the issued share capital of SEH, the Company does not have significant influence over SEH in the
current or prior periods due to its limited Board representation and minimal involvement in strategic planning and day to day
management. This asset is non-core and accordingly, this investment has been classified as a Financial Asset Held for Sale and is
carried at fair value.
Investment in Sino Gas and Energy Holdings Ltd
Balance at beginning of financial year
Fair value adjustment taken directly to equity (pre-tax)
Balance at end of financial year
2013
Shares
251,908,446
-
251,908,446
$ʼ000
21,412
5,038
26,450
2012
Shares
251,908,446
-
251,908,446
$ʼ000
16,122
5,290
21,412
During the current year the carrying value of this investment was written up to its market value of $0.105 per share or $26.4 million in
total at 30 June 2013.
During the prior year the carrying value of this investment was written up to its market value of $0.085 per share or $21.4 million in total
at 30 June 2012.
10
Other Assets
C u rre n t
P repay m ents
2013
$ʼ000
2012
$ʼ000
5,909
11,295
102
Page 45 of 84
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
11
Property, Plant and Equipment
Plant and
Equipment at
cost
Equipment
Rented to Third
Parties at cost
Equipment under
Hire Purchase at
cost
Capital W orks in
Progress at cost
TOTAL
$ʼ000
$ʼ000
$ʼ000
$ʼ000
$ʼ000
Gross Ca rrying Value
Balance at 30 June 2011
Additions
Acquisitions through business combinations
Disposals
Net foreign currency exchange differences
Transfer
Balance at 30 June 2012
Additions
Acquisitions through business combinations
Disposals
Net foreign currency exchange differences
16,820
7,203 2,639 911 27,573
5,501 3,716 - 1,848 11,065
1,028 - - - 1,028
(2,267) (689) - - (2,956)
(791) (3,224) - (39) (4,054)
(2,410) 2,410 - - -
9,416 2,639 2,720 32,656
17,881
4,668 14,611
2,998 2,043 24,320
175 - - - 175
(488) (547) (561) (292) (1,888)
651 4,787 - 188 5,626
Balance at 30 June 2013
22,887
28,267
5,076 4,659 60,889
Accumula te d De pre cia tion
Balance at 30 June 2011
Disposals
Depreciation expense
Net foreign currency exchange differences
Balance at 30 June 2012
Disposals
Depreciation expense
Net foreign currency exchange differences
4,920 4,266 1,043 - 10,229
(1,878) (685) - - (2,563)
2,459 3,634 668 - 6,761
(264) (1,237) - - (1,501)
5,237 5,978 1,711 - 12,926
(51) (1,384) (215) - (1,650)
2,757 3,395 1,576 - 7,728
246 938 - - 1,184
Balance at 30 June 2013
8,189 8,927 3,072 - 20,188
Ne t Book Va lue
As at 30 June 2012
As at 30 June 2013
12,644
3,438 928 2,720 19,730
14,698
19,340
2,004 4,659 40,701
Aggregate depreciation allocated, whether recognised as an
expense or capitalised as part of the carrying amount of other
assets during the year:
Plant and equipment
Plant and equipment rented to third parties
Equipment under hire purchase
2013
$ʼ000
2012
$ʼ000
2,757 2,459
3,395 3,634
1,576 668
7,728 6,761
Page 46 of 84
103
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
12
Goodwill
Gross Ca rrying Am ount
Note s
2013
$ʼ000
2012
$ʼ000
B alanc e at beginning of the financ ial y ear
Rec ognis ed on ac quis ition of ioGlobal
Rec ognis ed on ac quis ition of A us tralian Drilling
S pec ialties P ty Ltd (A DS )
Rec ognis ed on ac quis ition of S y s tem M ud Indus tria e
Com erc io Ltda (S y s tem M ud)
Rec las s ified to Inves tm ent in A s s oc iate
Reas s es s m ent of A M C Germ any Gm bH
E ffec t of foreign ex c hange m ovem ents
B alanc e at end of the financ ial y ear
(i)
(ii)
(iii)
Accum ula te d Im pa irm e nt Losse s
B alanc e at beginning of the financ ial y ear
Im pairm ent los s es for the y ear
B alanc e at end of the financ ial y ear
Ne t Book V a lue
A t the beginning of the financ ial y ear
A t the end of the financ ial y ear
Goodw ill is a lloca te d to ca sh-ge ne ra ting units a s follow s:
Reflex / Im dex Tec hnology UK / ioGlobal
A M C / A DS
S outh A m eric a
A M C Germ any
77,075
6,357
-
338
-
-
510
84,280
61,203
-
10,513
6,808
(1,416)
152
(185)
77,075
(22,498)
-
(22,498)
(22,498)
-
(22,498)
54,577
61,782
38,705
54,577
35,979
18,360
7,146
297
61,782
29,112
18,360
6,808
297
54,577
(i) Goodwill arose during the period on the acquisition of ioGlobal by Imdex Limited - (Refer to note 25(a)). The goodwill of ioGlobal
forms part of the Reflex CGU since its products have been rebranded as “Reflex” and are now being sold through the existing
Reflex sales staff and infrastructure. ioGlobal has been assessed for impairment as part of the Reflex CGU.
(ii) Goodwill arose during the prior year on the acquisition of Australian Drilling Specialties Pty Ltd (ADS) by Imdex Limited - (Refer to
note 25(b)). The goodwill of ADS forms part of the AMC CGU since it is a vertical integration with AMC and has been assessed
for impairment as part of the AMC CGU.
(iii) Goodwill arose in the prior year on the acquisition of System Mud Industria e Comercio Ltda (System Mud) by Imdex Limited -
(Refer to note 25(c)). System Mud is considered to be a separate cash generating unit since it operates independently from other
Imdex operations in a separate geographical area being the Latin America region concentrating on the supply of drilling fluids and
chemical supplies. A true up of System Mud goodwill of $0.3 million occurred in the current year.
104
Page 47 of 84
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
12
Goodwill (continued)
At 30 June 2013, the following cash-generating units (CGUs) were identified as requiring a test of impairment of goodwill at balance
date, with no write down required.
The key assumptions used in the value in use calculations for those CGUs tested were as follows:
CGU
Forecasted revenue growth
Discount
Rate (post
tax)
Forecasted net margins
Expected exchange rate
fluctuations
AMC
(including
Fluidstar,
Ecospin, ADS
and Mud
Systems)
AMC
Germany
Reflex /
Imdex
Technology/
ioGlobal
South
America
(formerly
System Mud)
Revenue growth has been forecast in
line with the expected rate of growth
related to the specific growth initiatives
around SRUʼs and equipment, and the
expected rate of recovery of the mining
and mineral exploration market
in
Australia. Projections are based on
financial budgets approved by
the
directors covering a one-year period.
Cash flows beyond FY14 for a period of
four years have been extrapolated
using a steady 5% per annum growth
rate, and a growth rate of 0% per
annum beyond FY18.
Revenue has been
forecast using
contracted and committed revenues as
a base on which a moderate growth
projection has been based. Projections
are based on
financial budgets
approved by the directors covering a
one-year period. Cash flows beyond
FY14 for a period of four years have
been extrapolated using a steady 5%
per annum growth rate, and a growth
rate of 0% per annum beyond FY18.
Revenue growth has been forecast in
line with the expected rate of recovery
of the mining and mineral exploration
industry in Australia. Projections are
based on financial budgets approved by
the directors covering a one-year
period. Cash flows beyond FY14 for a
four years have been
period of
extrapolated using a steady 5% per
annum growth rate, and a growth rate
of 0% per annum beyond FY18.
Revenue growth has been forecast in
line with the expected rate of growth
related to the specific growth initiatives
around SRUʼs, and the expected rate of
recovery of the mining and mineral
exploration markets of South and Latin
America. Projections are based on
financial budgets approved by
the
directors covering a one-year period.
Cash flows beyond FY14 for a period of
four years have been extrapolated
using a steady 5% per annum growth
rate, and a growth rate of 0% per
annum beyond FY18.
7.26%
(2012: 7.42%)
6.38%
(2012: 6.72%)
8.81%
(2012: 9.38%)
Net margins have been
forecasted using current
period actuals as a base
operational
on which
improvements
and
economies of scale are
expected to be gained,
the
particularly
from
of
introduction
a
reporting
regionalised
structure
and
improved/expanded
product offerings.
Exchange rate fluctuation
expectations have been
built into the forecasted
numbers based on FY14
forecasted exchange rates
published by major local
and international lending
institutions. Discounted
cash flow outcomes using
these rates are not
materially different from
having used current spot
rates.
11.62%
(2012:
10.70%)
Page 48 of 84
105
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
13
Other Intangible Assets
Patents
Intellectual
Property
Technology
Based
Contract
Based
Customer
Based
Development
Costs
Trade
Name
TOTAL
Notes
$ʼ000
$ʼ000
$ʼ000
$ʼ000
$ʼ000
$ʼ000
$ʼ000
$ʼ000
25(a)
Gross Carrying Value
Balance at 30 June 2011
Capitalised during the year
Reclassified to Investment in
Associate
Amounts derecognised
Impact of exchange rate changes
Balance at 30 June 2012
Capitalised during the year
Recognition on acquisition of ioGlobal
Impact of exchange rate changes
Balance at 30 June 2013
Accumulated Amortisation and
Impairment
Balance at 30 June 2011
Amortisation expense/ (write back)
Impact of exchange rate changes
Balance at 30 June 2012
Amortisation expense
Impact of exchange rate changes
Balance at 30 June 2013
Net Book Value
As at 30 June 2012
As at 30 June 2013
761
-
-
-
-
761
-
-
-
761
634
127
-
761
-
-
761
-
-
1,505
-
(904)
-
-
601
-
1,300
-
1,901
526
75
-
601
173
-
774
14,080
-
-
-
-
14,080
-
-
-
14,080
10,389
2,102
-
12,491
1,589
-
14,080
5,229
943
-
(3,914)
-
2,258
-
-
-
2,258
1,569
(254)
-
1,315
472
-
1,787
10,945
-
-
-
(52)
10,893
-
-
10,893
8,611
1,901
(24)
10,488
405
-
10,893
-
1,127
1,589
-
943
471
405
-
8,092
1,254
(1,980)
-
-
7,366
996
-
213
8,575
2,362
1,403
-
3,765
707
91
4,563
3,601
4,012
3,895
-
-
-
(8)
3,887
-
-
3,887
3,270
603
(4)
3,869
18
-
3,887
44,507
2,197
(2,884)
(3,914)
(60)
39,846
996
1,300
213
42,355
27,361
5,957
(28)
33,290
3,364
91
36,745
18
-
6,556
5,610
Where relevant, these intangible assets have been tested for impairment as part of the testing of CGUs referred to in note 12.
14
Trade and Other Payables
Trade pay ables
A c c ruals and other pay ables
No te s
(i)
2013
$ʼ000
2012
$ʼ000
19,768
6,008
25,776
17,384
15,965
33,349
(i) Trade pay ables are interes t free for periods ranging from 30 to 180 day s . Thereafter interes t
is c harged at c om m erc ial rates . The c ons olidated entity has financ ial ris k m anagem ent
polic ies in plac e to ens ure that all pay ables are paid within the c redit tim efram e.
106
Page 49 of 84
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
15
Borrowings
Cu rre n t b o rro w in g s
S e cu re d
A t am ortis ed c os t
C lub F ac ility - A U D Tranc he
C lub F ac ility - US D Tranc he
C lub F ac ility - CA D Tranc he
H ire purc has e liabilities
No n -cu rre n t b o rro w in g s
S e cu re d
A t am ortis ed c os t
C lub F ac ility - A U D Tranc he
C lub F ac ility - US D Tranc he
C lub F ac ility - CA D Tranc he
H ire purc has e liabilities
No te s
2013
$ʼ000
2012
$ʼ000
(i)
(i)
(i)
(ii),23
(i)
(i)
(i)
(ii),23
7,056
5,372
2,065
245
5,580
4,961
1,943
396
14,738
12,880
21,089
23,082
4,817
260
49,248
22,595
17,406
6,478
70
46,549
(i) On 7 October 2011 a clubbed banking facility involving Westpac Banking Corporation and HSBC was put in place. This facility replaced
commercial bills and Canadian bank loans in place at that date. At inception this facility allowed the Imdex Group access to debt of $50
million split equally between the two club participants. Westpac Banking Corporation provided AUD denominated borrowings in
Australia while HSBC provided CAD and USD denominated borrowings in Chile, South Africa, Canada and Australia. This facility was
extended from $50 million to $75 million on 19 January 2012 and on 21 September 2012 Westpac Banking Corporation provided an
additional capex facility of US$13.4 million to allow for Imdexʼs expansion into the solids removal market and $4.8 million to assist in the
funding of the ioGlobal acquisition (originally US$20 million).
As at 30 June 2013:
• AUD denominated borrowings bear interest at floating rates (currently 5.46% per annum). These borrowings are repayable in
equal monthly installments of $0.6 million to 31 October 2014 on which date the balance is payable.
• USD denominated borrowings bear interest at floating rates (currently between 2.04% and 4.18% per annum depending on the
borrowing country). Included in these borrowings are US$8.8 million drawn under the Westpac Banking Corporation capex facility
which has a limit of US$13.4 million. The balance of USD borrowings are repayable in equal monthly installments of US$0.4
million to 31 October 2014 on which date the balance is repayable.
• CAD denominated borrowings bear interest at floating rates (currently 4.50% per annum). These borrowings are repayable in
equal monthly installments of CAD$0.2 million to 31 October 2014 on which date the balance is repayable.
The club facility is secured by the assets of entities in Australia, Canada, South Africa and Chile.
(ii) Hire purchase liabilities are secured over the assets to which they relate, the carrying value of which exceeds the value of the hire
purchase liability. The Group does not hold title to the equipment under the hire purchase pledged as security. The weighted average
interest rate applicable to these liabilities is 6.52% (2012: 9.67%).
16
Provisions
Curre nt provisions
Note s
2013
$ʼ000
2012
$ʼ000
E m ploy ee entitlem ents
(i)
4,681
2,896
Non-curre nt provisions
E m ploy ee entitlem ents
1,071
1,265
(i) The m ajority of thes e entitlem ents are ex pec ted to be tak en during the c om ing y ear.
Page 50 of 84
107
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
17
Issued Capital and Shares reserved for Performance Rights Plan
Notes
2013
$ʼ000
2012
$ʼ000
Issued and Paid Up Capital - Fully paid ordinary shares
(i)
89,269
86,069
(i) Fully paid ordinary shares carry one vote per share and the right to dividends.
Ordinary shares
Notes
Number
$'000
Number
$'000
2013
2012
Balance at beginning of the financial year
208,235,426
86,069
199,699,165
70,059
Issue of shares as part consideration for the acquisition of
ioGlobal
25(a)
2,237,762
3,200
-
Issue of shares as part consideration for the acquisition of
Australian Drilling Specialties Pty Ltd
Issue of shares as part consideration for the acquisition of
System Mud Industria e Comercio Ltda
Issue of shares as part consideration for the acquisition of
Mud Systems Pte Ltd
Issue of shares under staff option plan
25(b)
25(c)
25(d)
(ii)
-
-
-
-
-
-
-
-
3,206,770
1,306,324
500,000
3,523,167
Closing balance at end of the financial year
210,473,188
89,269
208,235,426
-
6,000
3,840
1,200
4,970
86,069
Changes to the Corporations Law abolished the authorised capital and par value concept in relation to share capital from 1 July 1998. Therefore, the
Company does not have a limited amount of authorised capital and issued shares do not have a par value.
(ii) Share options granted under the staff option plan
No options were granted under the staff option plan in the current or prior year.
In accordance with the provisions of the staff option plan, as at 30 June 2013, executives, directors and staff have no options over ordinary shares.
As at 30 June 2012, executives, directors and staff had options over 3,893,333 ordinary shares (all of which had vested), in aggregate. These options
expired over a range of dates up to March 2013. Share options granted under the employee share option plan carry no rights to dividends and no
voting rights.
Details of the Staff Option Plan can be found in note 32.
(iii) Shares issued in satisfaction of Performance Rights
No shares were issued in the current or prior years in satisfaction of performance rights. Performance rights obligations were settled by the purchase
of existing shares on market. More information on the performance rights plan can be found in note 33.
Notes
2013
$ʼ000
2012
$ʼ000
Shares reserved for Performance Rights Plan
Balance at beginning of the period
Allocation/(purchase) of shares
Balance at the end of the period
(3,740)
2,788
(952)
-
(3,740)
(3,740)
At balance date, the Company, through a Trustee, holds 384,577 shares in Trust for employees under
the Performance Rights Plan.
108
Page 51 of 84
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
18 Reserves
Fore ign Curre ncy Tra nsla tion Re se rve
B alanc e at beginning of the financ ial y ear
Trans lation of foreign operations
B alanc e at the end of the financ ial y ear
E x c hange differenc es relating to the trans lation from the func tional
c urrenc ies of the Group's foreign c ontrolled entities into A us tralian dollars
are brought to ac c ount by entries m ade direc tly to the foreign c urrenc y
trans lation res erve. This res erve is s hown net of deferred tax .
Note s
2013
$ʼ000
2012
$ʼ000
(17,703)
6,536
(11,167)
(11,441)
(6,262)
(17,703)
Inve stm e nt Re va lua tion Re se rve
B alanc e at beginning of the financ ial y ear
A ris ing on revalution of S E H s hares to m ark et value
Tax thereon
B alanc e at the end of the financ ial y ear
The inves tm ent revaluation res erve rec ords inc reas es in the m ark et value
of the S E H inves tm ent net of deferred tax . Refer note 9 for details of the
S E H inves tm ent.
Em ploye e Equity-S e ttle d Be ne fits Re se rve
B alanc e at beginning of the financ ial y ear
P erform anc e rights ex pens ed
S hares purc has ed on m ark et to s atis fy perform anc e rights
Options ex erc is ed during the financ ial y ear
A m ounts trans ferred to s hares res erved for perform anc e rights plan
A m ounts trans ferred to retained earnings
B alanc e at the end of the financ ial y ear
5(b)
4
10,227
5,038
(1,511)
13,754
6,524
5,290
(1,587)
10,227
6,385
1,331
-
-
(2,788)
1,159
6,087
7,158
2,222
(5,769)
(1,687)
3,740
721
6,385
The em ploy ee equity -s ettled benefits res erve aris es on the grant of s hare options and perform anc e rights to Direc tors
and em ploy ees . A m ounts are trans ferred out of the res erve and into is s ued c apital when options are ex erc is ed. Further
inform ation regarding the S taff Option P lan is c ontained in note 32. Further inform ation regarding the P erform anc e Rights
P lan is c ontained in note 33.
M a nda tory Issua ble Ca pita l
M andatory Is s uable Capital
990
990
M andatory is s uable c apital relates to the future is s ue of 330,000 fully paid ordinary s hares as c ons ideration for the
ac quis ition of S y s tem M ud. Refer to note 25(c )(iv).
Page 52 of 84
109
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IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
19 Earnings Per Share
Basic earnings per share
Diluted earnings per share
2013
2012
Ce nts pe r sha re Ce nts pe r sha re
9.24
9.14
22.34
21.85
(a ) Ba sic e a rnings pe r sha re
2013
2012
The earnings and weighted average number of ordinary shares used in the
calculation of basic earnings per share are as follows:
Earnings
W eighted average number of ordinary shares for the purposes of basic
earnings per share
$'000
$'000
19,383
45,777
Sha re s
Sha re s
209,712,962
204,879,162
(b) Dilute d e a rnings pe r sha re
2013
2012
The earnings and weighted average num ber of ordinary shares used in the
calculation of diluted earnings per share are as follows:
Earnings
W eighted average number of ordinary shares for the purposes of diluted
earnings per share (i)
(i) The weighted average number of ordinary shares for the purposes of diluted
earnings per share reconciles to the weighted average num ber of ordinary
shares used in the calculation of basic earnings per share as follows:
W eighted average number of ordinary shares used in the calculation of basic
earnings per share
Shares deemed to be issued for no consideration in respect of employee and
Director options
Shares deemed to be issued for no consideration in respect of perform ance
rights
W eighted average number of ordinary shares used in the calculation of
diluted earnings per share
(ii) 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:
$'000
$'000
19,383
45,777
Sha re s
Sha re s
212,115,734
209,553,673
Sha re s
Sha re s
209,712,962
204,879,162
-
1,310,518
2,402,772
3,363,993
212,115,734
209,553,673
Sha re s
Sha re s
Em ployees share options (tranche 7)
-
3,693,333
110
Page 53 of 84
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
20 Dividends
Recognised amounts
Notes
2013
Cents per
share
2013
Total
$ʼ000
2012
Cents per
share
2012
Total
$ʼ000
Fully paid ordinary shares - interim dividend franked to 30%
(i)
2.50
5,262
3.25
6,705
Unrecognised amounts
Fully paid ordinary shares - final dividend franked to 30%
(ii)
0.40
842
4.00
8,329
(i) The interim, fully franked dividend was paid on 22 March 2013. The record date for determining the entitlement to the interim dividend was
8 March 2013. There are no dividend reinvestment plans in operation.
In the prior year, the interim fully franked dividend was paid on 23 March 2012. The record date for determining the entitlement to the interim
dividend was 9 March 2012. There were no dividend reinvestment plans in operation.
(ii) The final fully franked dividend was declared on 16 August 2013 with an entitlement date of 11 October 2013 and a payment date of 25
October 2013. The financial effect of this dividend has not been recognised in the financial statements at 30 June 2013.
In the prior year, the final fully franked dividend was declared on 17 August 2012 with an entitlement date of 12 October 2012 and a payment
date of 26 October 2012. The financial effect of this dividend was not recognised in the financial statements at 30 June 2012.
2013
$'000
2012
$'000
56,112
(361)
-
51,607
(3,570)
-
Adjusted franking account balance
Impact on franking account of dividends not recognised
Income tax consequences of unrecognised dividends
21 Commitments for Expenditure
(a) Capital expenditure commitments
At 30 June 2013 the Group had capital expenditure commitments amounting to $3,145,000 (2012: $3,690,000). These commitments
relate to the purchase of Minerals and Oil and Gas rental equipment.
(b) Lease commitment
Hire purchase liabilities and non-cancellable operating lease commitments are disclosed in note 23.
22 Contingent Liabilities and Contingent Assets
There are no contingent liabilities or contingent assets at balance date (2012: nil).
Page 54 of 84
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IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
23 Leases
(a ) Hire P urcha se s
Hire purcha se a rra nge m e nts
Hire purc has e arrangem ents relate to plant and equipm ent with term s of up to 5 y ears . The Group has options to purc has e the
equipm ent for a nom inal am ount at the c onc lus ion of the arrangem ents .
M inim um future
le a se pa ym e nts
2013
$ʼ000
2012
$ʼ000
P re se nt va lue of
m inim um future
le a se pa ym e nts
2013
$ʼ000
2012
$ʼ000
Hire purcha se com m itm e nts
Hire purc has e c om m itm ents are pay able as
follows . Due:
W ithin one y ear
B etween one and five y ears
Later than five y ears
M inim um leas e pay m ents
Les s : future financ e c harges
417
252
83
293
-
-
500
545
(40) (34)
466
505
Hire purc has e liabilities provided for in the Financ ial Report
Current – Note 15
Non c urrent – Note 15
(b) Ope ra ting Le a se s
Ope ra ting le a sing a rra nge m e nts
245
260
-
505
-
505
245
260
505
396
70
-
466
-
466
396
70
466
Operating leas es relate to prem is es and equipm ent (inc luding m otor vehic les ) us ed by the Group in its operations , generally with
term s between 2 and 5 y ears . S om e of the operating leas es c ontain options to ex tend for further periods and an adjus tm ent to bring
the leas e pay m ents into line with m ark et rates prevailing at that tim e. The leas es do not c ontain an option to purc has e the leas ed
property .
Non-ca nce lla ble ope ra ting le a se pa ym e nts
W ithin one y ear
B etween one and five y ears
Later than five y ears
2013
$ʼ000
2012
$ʼ000
4,474
4,966
1,560
11,000
2,685
3,465
-
6,150
112
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2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
24 Subsidiaries
Pa rent Entity
Imdex Limited
Controlled Entitie s
Australian Mud Company Pty Ltd
Samchem Drilling Fluids & Chemicals (Pty) Ltd
Imdex International Pty Ltd
Imdex Sweden AB
Reflex Instruments Asia Pacific Pty Ltd
Reflex Instrument AB
Reflex Instrument North America
Reflex Instrument South America Ltda
Reflex Instruments Europe Ltd
Drillhole Surveying Instruments (Pty) Ltd
Imdex Technology Sweden AB
Flexit Australia Pty Ltd
Suay Energy Services LLP
AMC North America Ltd
Imdex South America S.A.
AMC Chile S.A.
W ildcat Chemicals Australia Pty Ltd
Reflex Technology International Pty Ltd
AMC Reflex Argentina S.A.
AMC Reflex Peru S.A.C.
Imdex Technology Germany GmbH
AMC Reflex Do Brasil Serviços Para Mineração Ltda
AMC Drilling Fluids Pvt Limited
Fluidstar Pty Ltd
Ecospin Pty Ltd
Imdex Nominees Pty Ltd
AMC Germany GmbH (formerly Mud-Data GmbH)
AMC Oil & Gas Rom SRL (formerly Mud-Data-Rom SRL)
Australian Drilling Specialties Pty Ltd
Imdex USA Inc
Imdex Technologies USA LLC
AMC USA LLC
Reflex USA LLC
Mud Systems Pte Ltd
System Mud Industria e Comercio Ltda
Imdex Global Coöperatie U.A
Imdex Global B.V.
AMC Oil & Gas International Limited
ioGlobal Pty Ltd
ioGlobal Solutions Inc
ioAnalytics Pty Ltd
Note s
Country of
Incorpora tion
Ow ne rship Intere st
2013
2012
%
%
(i),(ii),(iii)
Australia
(ii),(iii)
(ii),(iii)
(ii),(iii)
(ii)
(ii),(iii)
(ii),(iii)
(ii)
(ii)
(ii)
(ii),25(b)
(iv)
(v)
(v)
(v)
25(d)
25(c)
(vi)
(vi)
(vii)
25(a),(ii)
25(a)
25(a),(ii)
Australia
South Africa
Australia
Sweden
Australia
Sweden
Canada
Chile
United Kingdom
South Africa
Sweden
Australia
Kazakhstan
Canada
Chile
Chile
Australia
Australia
Argentina
Peru
Germany
Brazil
India
Australia
Australia
Australia
Germany
Romania
Australia
United States of America
United States of America
United States of America
United States of America
Singapore
Brazil
Netherlands
Netherlands
British Virgin Islands
Australia
Canada
Australia
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
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) These companies are part of the Australian tax consolidated group.
(iii) 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. Australian Mud Company Pty Ltd became a party to
the deed on 29 June 2006, Imdex International Pty Ltd on 20 October 2006, Reflex Instruments Asia Pacific Pty Ltd on 14 September 2007,
Reflex Technology International Pty Ltd on 28 April 2011 and W ildcat Chemicals Australia Pty Ltd on 7 September 2011.
(iv) This entity was incorporated on 26 July 2011.
(v) These entities were incorporated on 11 August 2011.
(vi) These entities were incorporated on 22 June 2012.
(vii) This entity was incorporated on 20 March 2013.
Page 56 of 84
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IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
24
Subsidiaries (continued)
The consolidated income statement of income of the entities which are party to the deed of cross guarantee are:
Income Sta te m e nt
Revenue from sale of goods and operating lease rental
Other revenue from operations
Tota l re ve nue
Other income
Foreign exchange gain/(loss)
Raw materials and consumables used
Employee benefit expenses
Depreciation and amortisation expense
Finance costs
Auditors and accounting fees
Commissions
Consultancy fees
Legal and professional expenses
Rent and premises costs
Travel and accommodation
Motor vehicle costs
Other expenses
Profit be fore income ta x e x pe nse
Income tax expense
(Loss)/Profit for the ye a r
Othe r compre he nsive income
Fair value adjustment on investment in SEH
Income tax relating to components of other comprehensive income
Othe r compre he nsive income for the ye a r
Tota l compre he nsive income for the ye a r
2013
$ʼ000
2012
$ʼ000
117,162
1,420
118,582
2,005
882
(54,143)
(31,404)
(13,680)
(2,996)
(1,039)
(1,148)
(840)
(3,422)
(2,052)
(2,838)
(1,082)
(2,535)
4,290
(6,840)
(2,550)
5,038
(1,511)
3,527
977
168,256
1,693
169,949
2,563
(2,135)
(62,126)
(25,505)
(13,991)
(1,045)
(938)
(2,006)
(1,323)
(3,745)
(1,607)
(2,384)
(924)
(10,698)
44,085
(14,214)
29,871
5,290
(1,587)
3,703
33,574
114
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2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
24
Subsidiaries (continued)
The consolidated statement of financial position of the entities which are party to the deed of cross guarantee are:
Ba la nce She e t
Curre nt Asse ts
Cash and Cash Equivalents
Trade and Other Receivables
Inventories
Current Tax Assets
Other
Financial Asset Held for Sale
Tota l Curre nt Asse ts
Non Curre nt Asse ts
Other Financial Assets
Property, Plant and Equipment
Other Intangible Assets
Deferred Tax Assets
Tota l Non Curre nt Asse ts
Tota l Asse ts
Curre nt Lia bilitie s
Trade and Other Payables
Borrowings
Current Tax Payables
Provisions
Tota l Curre nt Lia bilitie s
Non Curre nt Lia bilitie s
Borrowings
Provisions
Deferred Tax Liabilities
Tota l Non Curre nt Lia bilitie s
Tota l Lia bilitie s
Ne t Asse ts
Equity
Contributed Capital
Shares Reserved for Performance Rights Plan
Employee Equity-Settled Benefits Reserve
Investment Revaulation Reserve
Retained Earnings *
Tota l Equity
* Retained Earnings at the beginning of the financial year
Net (Loss)/Profit
Dividends Paid
Amounts transferred from employee equity-settled benefits reserve
Retained Earnings at the end of the financial year
2013
$ʼ000
2012
$ʼ000
-
51,507
35,247
1,749
732
89,235
26,450
115,685
164,238
12,793
2,258
6,061
185,350
301,035
28,084
10,961
-
3,586
42,631
40,972
699
7,192
48,863
91,494
209,541
89,269
(952)
6,087
13,754
101,383
209,541
118,683
(2,550)
(13,591)
(1,159)
101,383
3,286
73,294
30,268
-
3,292
110,140
-
110,140
166,842
16,929
1,324
-
185,095
295,235
19,795
9,514
4,020
2,042
35,371
35,346
1,265
5,629
42,240
77,611
217,624
86,069
(3,740)
6,385
10,227
118,683
217,624
101,860
29,871
(12,327)
(721)
118,683
Page 58 of 84
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IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
25
Acquisition of Businesses
(a ) Acquisition of e ntity - ioGloba l Pty Ltd a nd ioAna lytics Pty Ltd
W ith effect from 1 November 2012, Imdex Limited acquired 100% of the issued share capital of ioGlobal Pty Ltd and ioAnalytics Pty Ltd
(together ioGlobal). ioGlobal provides innovative cloud-based data management solutions for the mining and mineral exploration industries. The
provisional numbers presented below have been accounted for using the acquisition method of accounting.
De ta ils of the a sse ts, lia bilitie s a nd goodw ill:
Book va lue
Note s
$ʼ000
Fa ir va lue
a djustme nts
$ʼ000
Fa ir va lue on
a cquisition
$ʼ000
Trade and other receivables
Property, plant and equipment
Intangibles (Intellectual Property)
Trade and other payables
Deferred tax
Provisions
Fair value of net identifiable assets acquired
Goodwill on acquisition
Total purchase consideration
Tota l purcha se conside ra tion comprise s
Consideration in cash and cash equivalents
Less: Cash and cash equivalents acquired
Issue of ordinary shares
1,441
175
-
(1,654)
-
(155)
(193)
-
-
1,300
-
(390)
-
910
(iii)
(iii)
(i)
(ii)
(ii)
17
Operating results of ioGlobal included in the Consolidated Income Statement of Imdex
Revenue
Total expenses (including income tax)
Loss after tax for the period
(iv)
1,441
175
1,300
(1,654)
(390)
(155)
717
6,357
7,074
4,800
(926)
3,200
7,074
8 months to
30 June 2013
$ʼ000
2,826
(3,478)
(652)
(i) Goodwill arose in the business combination because the cost of the combination included a control premium paid to acquire ioGlobal. In
addition, the consideration paid for the combination effectively included amounts in relation to the benefit of expected synergies, revenue
growth, future market development and the assembled workforce of ioGlobal. These benefits are not recognised separately from goodwill as the
future economic benefits arising from them cannot be reliably measured. There were no acquisition provisions created, nor were there any
contingent liabilities assumed in the acquisition.
(ii) The Consolidated Cash Flow Statement for the year ended 30 June 2013 records the payment for the acquisition of ioGlobal as $3.9 million
being the cash purchase consideration of $4.8 million paid net of the $0.9 million of cash acquired.
(iii) Intangible assets of $1.3 million comprise the fair value of the intellectual property and know-how associated with ioGlobal. The discounted
present value of expected future cash flows on a relief from royalty method has been used to determine the fair value of this intangible asset.
This intangible asset is being amortised over its expected useful life of 5 years. Deferred tax of $0.4 million was raised on this asset.
(iv) Had the acquisition of ioGlobal been effected on 1 July 2012, the beginning of the current year, the ioGlobal financial results included in the
Imdex consolidated results would have been revenue of approximately $4.2 million with a loss of $1.0 million. The results of ioGlobal are
included in the Minerals segment. The Board considers these 'pro-forma' numbers to represent an approximate measure of the performance of
the combined group on an annualised basis and to provide a reference point for comparison in future periods.
116
Page 59 of 84
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IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
25
Acquisition of Businesses (continued)
(b) Acquisition of e ntity - Austra lia n Drilling Spe cia ltie s Pty Ltd
from 1 July 2011,
Imdex Limited acquired 100% of the issued share capital of Australian Drilling Specialties Pty Ltd (ADS),
W ith effect
incorporated in Australia and operating out of premises located in W estern Australia. ADS is a drilling fluids and chemical manufacturer that
owns the formulations and intellectual property for the products it manufactures. The numbers presented below have been accounted for using
the acquisition method of accounting.
De ta ils of the a sse ts, lia bilitie s a nd goodw ill:
Book va lue
Note s
$ʼ000
Fa ir va lue
a djustme nts
$ʼ000
Fa ir va lue on
a cquisition
$ʼ000
Trade and other receivables
Inventory
Property, plant and equipment
Trade and other payables
Provisions
Fair value of net identifiable assets acquired
Goodwill on acquisition
Total purchase consideration
Tota l purcha se conside ra tion comprise s
Consideration in cash and cash equivalents
Overdraft acquired
Issue of ordinary shares
(i)
(ii)
(ii)
17
Operating results of ADS included in the Consolidated Income Statement of Imdex Limited
for the following periods:
Revenue
Total expenses (including income tax)
Profit after tax for the period
2,408
352
778
(901)
(73)
2,564
-
-
-
-
-
-
2,408
352
778
(901)
(73)
2,564
10,513
13,077
6,000
1,077
6,000
13,077
12 months to
30 June 2013
$ʼ000
12 months to
30 June 2012
$ʼ000
7,187
(5,010)
2,177
11,382
(9,052)
2,330
(i) Goodwill arose in the business combination because the cost of the combination included a control premium paid to acquire ADS. In
addition, the consideration paid for the combination effectively included amounts in relation to the benefit of expected synergies, revenue
growth, future market development and the assembled workforce of ADS. These benefits are not recognised separately from goodwill as the
future economic benefits arising from them cannot be reliably measured. There were no acquisition provisions created, nor were there any
contingent liabilities assumed in the acquisition.
(ii) The Consolidated Cash Flow Statement for the year ended 30 June 2012 records the payment for the acquisition of ADS as $7.1 million
being the cash purchase consideration of $6.0 million shown above plus $1.1 million overdraft acquired.
Page 60 of 84
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IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
25
Acquisition of Businesses (continued)
(c) Acquisition of entity - System Mud Industria e Comercio Ltda (System Mud)
Imdex Limited acquired 100% of the issued share capital of System Mud Industria e Comercio Ltda (System Mud), a manufacturer and seller of
drilling muds to the mining and mineral exploration market in Brazil. The acquisition was completed on 18 April 2012. The numbers presented
below have been accounted for using the acquisition method of accounting.
Details of the assets, liabilities and goodwill:
Book value
Notes
$ʼ000
Fair value
adjustments
$ʼ000
Fair value on
acquisition
$ʼ000
Inventory
Other debtors
Property, plant and equipment
Trade and other payables
Fair value of net identifiable assets acquired
Goodwill on acquisition
Total purchase consideration
Total purchase consideration comprises
Consideration in cash and cash equivalents
Less cash and cash equivalents acquired
Issue of Ordinary Shares
Deferred consideration - Mandatory Convertible Capital
387
1,068
250
(1,295)
410
-
-
-
-
-
(i)
(ii)
(ii)
(iii),17
(iv)
387
1,068
250
(1,295)
410
7,146
7,556
3,350
(624)
3,840
990
7,556
Operating results of System Mud included in the Consolidated Income Statement of Imdex
Limited for the following periods:
Revenue
Total expenses (including income tax)
Profit after tax for the period
12 months to
30 June 2013
$ʼ000
3 months to 30
June 2012
$ʼ000
5,742
(5,803)
(61)
5,413
(4,481)
932
(i) Goodwill arose in the business combination because the cost of the combination included a control premium paid to acquire System Mud. In
addition, the consideration paid for the combination effectively included amounts in relation to the benefit of expected synergies, revenue
growth, future market development and the assembled workforce of System Mud. These benefits are not recognised separately from goodwill
as the future economic benefits arising from them cannot be reliably measured. There were no acquisition provisions created, nor were there
any contingent liabilities assumed in the acquisition. During the current year the fair value of net assets acquired was adjusted by $0.3 million
causing an equivalent change to the value of goodwill recognised.
(ii) The Consolidated Cash Flow Statement for the year ended 30 June 2012 records the acquisition of System Mud as a net cash outflow of
$2.7 million being the cash consideration of $3.3 million paid net of the $0.6 million of cash acquired.
(iii) Comprises 1,306,324 fully paid Imdex limited ordinary shares issued on settlement to the four vendors in equal proportions. These shares
were issued at the weighted average price of a fully paid Imdex Limited ordinary share for the five days leading up to settlement on 18 April
2012, being $2.94 per share.
(iv) Comprises 330,000 fully paid ordinary shares in Imdex Limited to be issued on the two year anniversary of completion (18 April 2014). The
future issue of these shares is at a guaranteed price of $3.50 per share. That is, if the share price on the two year anniversary date is below
$3.50 there is a cash top up of the difference. However, in the event that the share price reaches $3.50 at any time within that two year period,
the potential cash top up falls away.
(d) Acquisition of entity - Mud Systems Pte Ltd (Mud Systems)
With effect from 1 January 2012, Imdex Limited acquired 100% of the issued share capital of Mud Systems Pte Ltd, a Singapore based
company that is involved in the supply, manufacture and rental of equipment, predominately in the oil and gas industry. The purchase
consideration for the acquisition was 500,000 fully paid ordinary shares of Imdex Limited issued to the vendor on 8 May 2012 at a fair
value of $2.40 per share. The key reason for the purchase of Mud Systems was to access the exclusive supply agreement and ongoing
relationship with the manufacturer of the centrifuges used in Solid Removal Units (SRUʼs). The excess of fair value of consideration paid
over fair value of net assets ($0.9 million) has been allocated in full to intangible assets.
Page 61 of 84
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IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
26
Investment in Associates
On 1 July 2011, Imdex Limited acquired 50% of the issued share capital of the joint venture (JV), VES International (VES)
(formerly DHS Services), in exchange for granting an exclusive global licence over its oil and gas surveying instruments and
technology. VES is registered in the British Virgin Islands and operates an oil and gas services business based in Dubai
using the technology licensed to it by Imdex Limited. At that time Imdex Limited accounted for its investment in VES as an
associate as it was deemed to have a significant influence over but not control of VES since it held 50% of the issued capital
but only 2 out of 5 board positions.
Effective 1 January 2012 the JV purchased the business of Vaughn Energy Services, a US based oil & gas services provider,
for US$100 million. To fund the purchase the JV increased its share capital. On 19 January 2012 Imdex Limited raised
additional debt of $25 million from its club banking facility and applied approximately US$22.5 million of this debt to purchase
additional shares in the JV. Following this transaction Imdex Limitedʼs shareholding in the JV decreased from 50% to 30%.
The numbers presented below in relation to the acquisition of Vaughn Energy Services have been accounted for using the
acquisition method of accounting.
Financial information in respect of the Associate is set out
below:
Total Revenue
Note
(iii)
2013
$ʼ000
2012
$ʼ000
55,498
28,901
Total Loss for the Period
(ii),(iii)
(7,114)
(1,639)
Total Assets
Total Liabilities
Net Assets
Share of Net Assets of Associate
The Investment in Associate comprises the
following:
126,115
(25,516)
100,599
30,180
127,838
(20,125)
107,713
32,314
Opening cost of investment in Associate
Share of profit/(loss) of Associate
Closing cost of investment in Associate
(i)
24,255
1,300
25,555
25,715
(1,460)
24,255
(i)
Imdexʼs share of profit of Associate for the year to 30 June 2013 reflects 30% of the underlying profit of VES International and the effect
of adjustments to eliminate unrealised intercompany profits and the adjustment related to the acquisition of Vaughn Energy Services,
predominantly represented by a gain on dilution and amortisation of intangibles.
(ii) Includes an amount of $9.3 million of amortisation on intangibles arising on the acquisition of Vaughn Energy Services effective 1
January 2012.
(iii) The prior period comparative includes the results of Vaughn Energy Services from 1 January 2012.
Page 62 of 84
119
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IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
27 Segment Information
Reportable Segments
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 interest 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.
The Group comprises the following reportable segments which are based on the Group's internal management reporting system:
(i) Minerals Division: This segment comprises the manufacture, sale and rental of down hole instrumentation, the manufacture and sale
of drilling fluids and chemicals and related equipment and the provision of innovative cloud-based data management solutions to the
mining and mineral exploration industry globally; and
(ii) Oil & Gas Division: This segment comprises the manufacture, sale and rental of down hole instrumentation and manufacture and
sale of drilling fluids and chemicals to the oil & gas and geothermal industries globally;
(a) Segment Revenues
Minerals
Oil & Gas
Total of all segments
Unallocated
Total revenue
(b) Segment Results
Minerals
Oil & Gas (i)
Total of all segments
Eliminations
Central administration costs (ii)
Profit before income tax expense
Income tax expense
Profit attributable to ordinary equity holders of Imdex Limited
(i) Includes the share of profit/(loss) of Associate
(ii) Central administration costs comprise net financing costs for the Group and the
corporate portion of head office costs. Head office costs attributable to operations are
allocated to reportable segments in proportion to the revenues earned from those
segments.
(c) Segment Assets and Liabilities
2013
$'000
2012
$'000
182,681
50,110
232,791
130
232,921
241,655
27,908
269,563
89
269,652
39,755
(4,008)
35,747
-
(7,237)
28,510
(9,127)
19,383
81,234
(7,674)
73,560
-
(6,060)
67,500
(21,723)
45,777
Minerals
Oil & Gas
Total of all segments
Unallocated (i)
Consolidated
Assets
Liabilities
2013
$'000
2012
$'000
2013
$'000
2012
$'000
182,412
77,004
259,416
26,450
285,866
201,185
51,955
253,140
21,412
274,552
11,616
21,812
33,428
63,986
97,414
20,610
26,447
47,057
59,429
106,486
(i) Unallocated assets comprise the investment in Sino Gas & Energy Holdings Ltd. Unallocated liabilties comprise commerical bills, bank
loans, hire pruchase liabilities and deferred acquisition payments.
120
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IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
27
Segment Information (continued)
(d) Other segment information
Minerals
Oil & Gas
Unallocated
Total
2013
$'000
2012
$'000
2013
$'000
2012
$'000
2013
$'000
2012
$'000
2013
$'000
2012
$'000
6,171
2,593
14,856
5,562
4,510
6,652
1,070
771
8,936
800
1,447
3,750
487
-
528
399
-
663
7,728
3,364
24,320
6,761
5,957
11,065
1,065
1,778
266
444
-
(101)
1,331
2,121
Depreciation
Amortisation
Acquisition of segment assets
Significant non cash expenses
other than depreciation and
amortisation
Geographical Segments
The Group operates in the following geographical segments:
(i) Asia Pacific: Manufacture and sale/rental of products to the mining and mineral exploration and oil & gas industries
(ii) Europe: Manufacture and sale/rental of products to the mining and mineral exploration and oil & gas industries
(iii) Africa: Manufacture and sale/rental of products to the mining and mineral exploration and oil & gas industries
(iv) Americas: Manufacture and sale/rental of products to the mining and mineral exploration and oil & gas industries
Asia Pacific
Europe
Africa
Americas
Total
(e) Information about major customers
Revenue from
external customers
2013
$'000
2012
$'000
Segment assets
(non-current)
Acquisition of segment
assets
2013
$'000
2012
$'000
2013
$'000
2012
$'000
113,980
28,300
34,128
56,513
232,921
131,486
16,104
47,971
74,091
269,652
122,428
6,825
1,505
11,522
142,280
106,661
9,606
2,738
21,225
140,230
9,568
2,783
1,858
10,111
24,320
4,097
4,199
858
1,911
11,065
The Group has a broad range of customers across its global operations with no single customer making up more than 10% of revenue.
Page 64 of 84
121
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
28 Notes to the Statement of Cash Flows
(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 Statement of Cash Flows is reconciled to the related items in the balance sheet as follows:
2013
$ʼ000
2012
$ʼ000
Cash and cash equivalents
9,979
11,232
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 $9,978,758 (2012: $11,231,992)
(b) Non cash financing and investing activities
During the year the Group provided non cash consideration to acquire the issued share capital for certain acquisitions.
These transactions are disclosed in note 25.
(c) Reconciliation from the Profit for the Year to Net Cash Provided by Operating Activities
Profit for the year
19,383
45,777
Adjustments for non-cash and non-operational items
Depreciation of non-current assets
Amortisation of intangible assets
Non-cash interest on deferred payments
Interest received disclosed as investing activities
Share options and performance rights expensed
Loss on sale of non-current assets
Share of (profit)/loss of Associate
Interest on hire purchase liabilities
Other
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
Current and deferred tax liability
Net Cash Provided by Operating Activities
7,728
3,364
-
(130)
1,331
58
(1,300)
68
(118)
20,368
(1,250)
5,386
(6,680)
1,436
(10,674)
38,970
122
6,761
5,957
(101)
(89)
2,222
27
1,460
102
(74)
(8,016)
(10,802)
(6,699)
(2,222)
828
(8,075)
27,056
Page 65 of 84
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
28 Notes to the Cash Flow Statement (continued)
(d) Fina ncing fa cilitie s
Total fac ilities available
Club Fac ility - A UD Tranc he
Club Fac ility - US D Tranc he
Club Fac ility - CA D Tranc he
E quipm ent financ e fac ility
Fac ilities utilis ed at balanc e s heet date
Club Fac ility - A UD Tranc he
Club Fac ility - US D Tranc he
Club Fac ility - CA D Tranc he
E quipm ent financ e fac ility
Fac ilities not utilis ed at balanc e s heet date
Club Fac ility - A UD Tranc he
Club Fac ility - US D Tranc he
Club Fac ility - CA D Tranc he
E quipm ent financ e fac ility
2013
$ʼ000
2012
$ʼ000
35,346
33,442
6,882
505
76,175
31,894
28,454
6,882
505
67,735
3,452
4,988
-
-
8,440
34,175
22,367
8,421
466
65,429
28,175
22,367
8,421
466
59,429
6,000
-
-
-
6,000
Page 66 of 84
123
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
29
Financial Instruments
(a) Capital Risk Management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the
return to stakeholders through the optimisation of the debt and equity balance.
The capital structure of the Group consists of debt, which includes the borrowings disclosed in note 15, cash and cash equivalents and
equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings as disclosed in notes 17
and 18. Management and the Board review the capital structure regularly. The treasury function presents regular updates to the Board.
As a part of these reviews management considers the cost of capital and the risks associated with each class of capital. Based on the
outcome of these reviews the Group will balance its overall capital structure through payment of dividends and issue of new shares as
well as the issue of new debt or repayment of existing debt. The Board does not have a specific optimum gearing target other than to
maintain a competitive weighted average cost of capital.
The Groupʼs overall capital management strategy remains unchanged from prior years.
Debt (i)
Cash and bank balances
Net debt
Equity (ii)
2013
$ 000's
2012
$ 000's
63,986
(9,979)
54,007
59,429
(11,232)
48,197
188,452
168,066
Net debt divided by debt plus equity
22.3%
22.3%
(i) Debt includes commercial bills, bank loans, deferred acquisition liabilities and hire purchase liabilities .
(ii) Equity includes all capital and reserves of the Group that are managed as capital.
(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 2 to the financial statements.
(c) Categories of financial instruments
Fina ncia l Asse ts
Cash and cash equivalents
Loans and receivables
Financial Asset Held for Sale
Available-for-sale financial assets
Fina ncia l Liabilities
Amortised cost
2013
$ 000s
2012
$ 000s
9,979
45,231
26,450
-
11,232
59,689
-
21,412
89,762
92,778
124
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IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
29
Financial Instruments (continued)
(d) Financial risk management objectives
The Groupʼs treasury function provides services to the business, co-ordinates access to domestic and international financial markets,
monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyse exposures
by degree and magnitude of risks. These risks include market risk (including currency risk and fair value interest rate risk), credit risk,
liquidity risk and cash flow interest rate risk.
The Group seeks to minimise the effects of these risks by using natural hedges where possible and derivative financial instruments to
hedge remaining risk exposures where the benefit of the hedge outweighs the cost. The use of financial derivatives is governed by the
Groupʼs treasury policies which are approved by the Board of Directors. These policies describe the Groupʼs policies with respect to
foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the
investment of excess liquidity. The Group does not enter into or trade financial instruments, including derivative financial instruments for
speculative purposes. There are no derivative instruments in operation at year end.
(e) Market risk
The Groupʼs activities expose it primarily to the financial risks of changes in foreign currency exchange rates (note (f) below) and
interest rates (note (g) below). The Group monitors its exposure to these risks on a regular basis and enters into derivative financial
instruments to manage these risks where appropriate. There are no derivative financial instruments in operation at year end. At a Group
and at a company level market risk exposures are measured by sensitivity analyses and scenario modelling.
There has been no change to the Groupʼs exposure to market risks or the manner in which it manages and measures the risk.
(f) Foreign currency risk management
The Group undertakes certain transactions denominated in foreign currencies, hence exposures to foreign exchange rate fluctuations
arise. Exchange rate exposures are managed with the use of natural hedges where possible and with the use of financial instruments
where benefit outweighs cost within approved policy parameters. During the current and prior year no financial instruments were used to
manage foreign exchange risk.
The carrying amount in Australian dollars of the Groupʼs monetary assets and liabilities denominated in currencies other than Australian
dollars at the reporting date are as per the table below. Non Australian dollar liabilities include trade creditors, accruals and borrowings
recorded in Australian as well as non-Australian entities. Non Australian dollar assets include cash on hand and debtors recorded in
Australian as well as non-Australian entities. Any fluctuation in exchange rates relative to the Australian dollar will cause the below
assets and liabilities to change in value.
United States Dollars
South African Rand
Canadian Dollars
Swedish Kroner
British Pound
Euro
Chilean Pesos
Other
Liabilities
Assets
2013
$ 000s
2012
$ 000s
2013
$ 000s
2012
$ 000s
37,078
969
8,642
-
969
2,177
5,792
2,327
29,911
3,571
10,211
-
2,815
2,002
6,115
1,601
23,233
2,092
1,227
43
1,276
3,939
2,317
7,217
25,151
2,783
5,916
162
1,311
6,771
4,414
9,593
Page 68 of 84
125
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IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
29
Financial Instruments (continued)
(f) Foreign currency risk management (continued)
Foreign currency sensitivity
The Group is mainly exposed to United States Dollars, Canadian Dollars, European Dollars and South African Rand.
The following table details the Groupʼs sensitivity to a 10% (2012: 10%) increase and decrease in the Australian Dollar against the
relevant foreign currencies. The sensitivity rate of 10% (2012: 10%) is the rate used when performing regular reporting on foreign
currency risk internally. Foreign exchange risk is reported regularly to key management personnel and the Board. The estimated
movement of 10% (2012: 10%) represents managementʼs assessment of the possible change in foreign currency exchange rates which
is based on regular forecasts received from major lending institutions. The sensitivity analysis includes only outstanding foreign currency
denominated monetary items and adjust their translation at the period end for a 10% (2012: 10%) change in foreign currency rates. The
sensitivity analysis includes external loans as well as loans to foreign operations within the Group where the denomination of the loan is
in a currency other than the currency of the lender or the borrower. A positive number indicates an increase in profit or loss and other
equity where the Australian Dollar strengthens against the respective currency. For a weakening of the Australian Dollar against the
respective currency there would be an equal and opposite impact on the profit and other equity, and the balances below would carry the
opposite sign.
Unite d Sta tes Dollar Impa ct
South African Rand Impa ct
2013
$ 000's
2012
$ 000's
2013
$ 000's
2012
$ 000's
Profit or (loss)
Other equity
1,586
(184)
476
-
(i)
(ii)
11
(121)
79
-
(i)
(ii)
Europe an Dolla r Impact
Ca na dia n Dollar Impa ct
2013
$ 000's
2012
$ 000's
2013
$ 000's
2012
$ 000's
Profit or (loss)
Other equity
206
(378)
(477)
-
(i)
(ii)
449
296
430
-
(i)
(ii)
(i) Profit and loss impacts are mainly attributable to exposure on outstanding receivables and payables at year end denominated in the
applicable foreign currency
(ii) Equity movements are attributable to the net investment in a foreign operation denominated in the applicable foreign currency
(g) Interest rate risk management
The Company and the Group are exposed to interest rate risk as entities in the Group borrow funds at floating interest rates. Interest
rate risk is managed within defined treasury policy guidelines. This is achieved by the Group by maintaining an appropriate mix between
fixed and floating rate borrowings.
The Company and the Groupʼs exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk
management section of this note.
Interest rate sensitivity
The sensitivity data presented in the below paragraph is based on the exposure to interest rates for both derivative and non-derivative
instruments at the reporting date and the stipulated change taking place at the beginning of the financial year and held constant
throughout the reporting period. A 100 basis point increase or decrease is used when reporting interest rate risk internally to key
management personnel and represents managementʼs assessment of the possible changes in interest rates based on consultation with
appropriately qualified financial professionals.
Group sensitivity
At reporting date, if interest rates had been 100 basis points higher and all other variables were held constant, the Groupʼs net profit
would decrease by $0.6 million (2012: $0.6 million). There would be a nil impact on equity other than via profit. A 100 basis point
decrease in interest rates, holding all other variables constant would yield an increase in the Groupʼs net profit of $0.6 million (2012:
$0.6 million). This is mainly attributable to the Groupʼs exposure to interest rates on its variable rate borrowings.
126
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2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
29
Financial Instruments (continued)
(h) Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The
Group 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 Groupʼs exposure and the credit ratings of its counterparties are
monitored on a weekly basis and the aggregate value of transactions concluded is spread amongst approved counterparties. Credit
exposure is controlled by counterparty limits that are reviewed regularly by management.
Trade receivables 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.
The Group does not have any significant credit risk exposure to any single counterparty or group of counterparties having similar
characteristics. The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with
high credit-ratings assigned by international credit-rating agencies.
The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the Groupʼs
maximum exposure to credit risk without taking account of the value of collateral obtained. At 30 June 2013 no such collateral had been
obtained (30 June 2012: nil).
(i) Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who monitor short, medium and long term liquidity
requirements through the use of financial models. The treasury function reports regularly to key management personnel and the Board
on matters affecting liquidity risk. The Group 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. Included in note 28(d) is a listing of additional undrawn facilities that the Company/Group has at its disposal to further reduce
liquidity risk.
Liquidity and interest risk tables
The following tables detail the Companyʼs and the Groupʼs remaining contractual maturity for its non–derivative financial liabilities. The
tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group
can be required to pay. The table includes both interest and principal cash flows.
Weighted
average
effective interest
rate
%
-
6.52%
4.25%
-
9.67%
5.13%
0-3 months
3 months to 1
year
1-5 years
5+ years
Total
$ʼ000
$ʼ000
$ʼ000
$ʼ000
$ʼ000
19,332
64
3,623
23,019
25,012
127
3,118
28,257
6,444
188
10,870
17,502
8,337
290
9,353
17,980
-
293
48,988
49,281
-
83
46,492
46,575
-
-
-
-
-
-
-
-
25,776
545
63,481
89,802
33,349
500
58,963
92,812
2013
Non-interest bearing
Finance lease liability
Variable interest rate
instruments
2012
Non-interest bearing
Finance lease liability
Variable interest rate
instruments
Page 70 of 84
127
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
29 Financial Instruments (continued)
(i) Liquidity risk management (continued)
The following tables detail the Companyʼs and the Groupʼs remaining contractual maturity for its non–derivative financial assets. The
tables have been drawn up based on the undiscounted cash flows of financial assets including interest that will be earned on those
assets except where the Company/Group anticipates that the cash flow will occur in a different period.
Weighted
average
effective interest
rate
%
-
0.25%
-
0.25%
0-3 months
3 months to 1
year
1-5 years
5+ years
Total
$ʼ000
$ʼ000
$ʼ000
$ʼ000
$ʼ000
71,681
9,979
81,660
59,689
11,232
70,921
-
-
-
-
-
-
-
-
-
21,412
-
21,412
-
-
-
-
-
-
71,681
9,979
81,660
81,101
11,232
92,333
2013
Non-interest bearing
Variable interest rate
instruments
2012
Non-interest bearing
Variable interest rate
instruments
(j) Fair value of financial instruments
The fair values of financial assets and financial liabilities are determined as follows:
•
•
•
The fair values of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are
determined with reference to quoted market prices,
The fair values of derivative instruments are calculated using quoted prices. Where such prices are not available, a discounted
cash flow analysis is performed using the applicable yield curve for the duration of the instruments for non-optional derivatives, and
option pricing models for optional derivatives. Foreign currency forward contracts are measured using quoted forward exchange
rates and yield curves derived from quoted interest rates matching maturities of the contracts. Interest rate swaps are measured at
the present value of future cash flows estimated and discounted based on the applicable yield curves derived from quoted interest
rates; and
The fair values of other financial assets and financial liabilities (excluding derivative instruments) are determined in accordance
with generally accepted pricing models based on discounted cash flow analysis.
The financial statements include holdings in “financial assets held for sale” listed shares which are measured at fair value (note 9).
The Directors consider that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the financial
statements approximates their fair values.
Fair value measurements recognised in the statement of financial position
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value,
grouped into Levels 1 to 3 based on the degree to which the fair value is observable.
•
•
•
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or
liabilities.
Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable
for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are
not based on observable market data (unobservable inputs).
Level 1
$ 000's
Level 2
$ 000's
Level 3
$ 000's
Total
$ 000's
Financial Asset Held for Sale
2013 (Current)
Shares in Sino Gas & Energy Holdings Limited
26,450
Available-for-sale financial assets
2012 (Non Current)
Shares in Sino Gas & Energy Holdings Limited
21,412
-
-
-
-
26,450
21,412
Page 71 of 84
128
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
30 Related Party Disclosures
(a ) Equity inte re sts in re la te d pa rties
Details of the percentage ownership of subsidiaries and the wholly owned Group is set out in note 24. The wholly owned Group consists of
Imdex Limited and its wholly owned subsidiaries.
(b) Tra nsa ctions w ith ke y ma na ge me nt pe rsonne l
(i) Ke y ma na ge me nt pe rsonne l compe nsa tion
Details of key management personnel compensation is set out in note 31.
(ii) Loa ns to ke y ma na ge me nt pe rsonne l
No loans were made during the current or prior years to key management personnel or their related parties.
(iii) Ke y ma na ge me nt pe rsonne l e quity holdings
2013
Ba la nce a t
1 July 2012
Gra nte d a s
compe nsa tion
Mr B W Ridgeway
Mr R W Kelly
Mr K A Dundo
Mr M Lemmel
Ms E Donaghey
Mr G E W eston
Mr D J Loughlin
Mr P A Evans
No.
2,214,630
380,000
150,000
730,921
210,000
1,040,299
253,362
382,269
5,361,481
No.
-
-
-
-
-
54,245
53,981
49,388
157,614
Re ce ive d on
e x e rcise of
options
No.
Ne t othe r cha nge
#
Ba la nce a t 30
June 2013
Ba la nce he ld
nomina lly
No.
No.
No.
-
-
-
-
-
-
-
-
-
-
-
-
(82,921)
-
(595,393)
(100,000)
(85,000)
(863,314)
2,214,630
380,000
150,000
648,000
210,000
499,151
207,343
346,657
4,655,781
-
-
-
-
-
-
-
-
-
2012
Ba la nce a t
1 July 2011
Gra nte d a s
compe nsa tion
Re ce ive d on
e x e rcise of
options
Ne t othe r cha nge
#
Ba la nce a t 30
June 2012
Ba la nce he ld
nomina lly
Mr B W Ridgeway
Mr R W Kelly
Mr K A Dundo
Mr M Lemmel
Ms E Donaghey
Mr G E W eston
Mr D J Loughlin
Mr P A Evans
No.
2,435,000
380,000
300,000
903,921
185,000
1,000,000
-
45,000
5,248,921
# - represent on market transactions
No.
No.
No.
No.
No.
-
-
-
-
-
40,299
41,862
37,269
119,430
-
-
-
-
-
-
500,000
300,000
800,000
(220,370)
-
(150,000)
(173,000)
25,000
(288,500)
-
(806,870)
2,214,630
380,000
150,000
730,921
210,000
1,040,299
253,362
382,269
5,361,481
-
-
-
-
-
-
-
-
-
Page 72 of 84
129
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
30 Related Party Disclosures (continued)
(iv) Share options issued by Imdex Limited
2013
Balance at
1 July 2012
Granted as
compensation
Lapsed
No.
No.
No.
Mr B W Ridgeway
Mr R W Kelly
Mr K A Dundo
Mr M Lemmel
Ms E Donaghey
Mr G E Weston
Mr D J Loughlin
Mr P A Evans
-
-
-
-
-
500,000
-
200,000
700,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(500,000)
-
(200,000)
(700,000)
2012
Balance at
1 July 2011
Granted as
compensation
Exercised
Inception /
(cessation) as key
management
person
No.
Balance at
30 June
2013
Vested but
not
exercisable
Vested and
exercisable
Options
vested
during year
No.
No.
No.
No.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Inception /
(cessation) as key
management
person
Balance at
30 June
2012
Vested but
not
exercisable
Vested and
exercisable
Options
vested
during year
No.
No.
No.
No.
No.
No.
No.
No.
Mr B W Ridgeway
Mr R W Kelly
Mr K A Dundo
Mr M Lemmel
Ms E Donaghey
Mr G E Weston
Mr D J Loughlin
Mr P A Evans
-
-
-
-
-
500,000
500,000
500,000
1,500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(500,000)
(300,000)
(800,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
500,000
-
200,000
700,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
500,000
-
200,000
700,000
-
-
-
-
-
-
-
-
-
No options were granted to or exercised by key management personnel in the current year.
130
Page 73 of 84
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
30 Related Party Disclosures (continued)
(v) Pe rformance rights granted by Imdex Limited
2013
Mr B W Ridgeway
Mr R W Kelly
Mr K A Dundo
Mr M Lemmel
Ms E Donaghey
Mr G E Weston
Mr D J Loughlin
Mr P A Evans
2012
Mr B W Ridgeway
Mr R W Kelly
Mr K A Dundo
Mr M Lemmel
Ms E Donaghey
Mr G E Weston
Mr D J Loughlin
Mr P A Evans
Balance at
1 July 2012
No.
349,897
-
-
-
-
125,377
122,639
113,451
711,364
Balance at
1 July 2011
No.
196,579
-
-
-
-
120,897
125,587
111,806
554,869
Granted as
compe nsation
No.
264,818
-
-
-
-
65,341
58,239
56,818
445,216
Granted as
compe nsation
No.
153,318
-
-
-
-
48,611
42,245
42,245
286,419
Satisfied by
the
a llocation/
a llotment of
shares
No.
-
-
-
-
-
54,245
53,981
49,388
157,614
Satisfied by
the
a llocation/
a llotment of
shares
No.
-
-
-
-
-
(40,299)
(41,862)
(37,269)
(119,430)
Closing
balance at
30 June
2013
No.
614,715
-
-
-
-
189,423
185,356
171,362
1,160,856
Closing
balance at
30 June
2012
No.
349,897
-
-
-
-
125,377
122,639
113,451
711,364
Expired
No.
-
-
-
-
-
(55,540)
(49,503)
(48,295)
(153,338)
Expired
No.
-
-
-
-
-
(3,832)
(3,331)
(3,331)
(10,494)
Performance rights expired where performance hurdles were not met. No value was received where
performance rights expired.
More information on the Performance Rights Plan can be found in note 33.
(vi) O th e r tra n sa ctio n s w ith ke y m a n a g e m e n t p e rso n n e l (a n d th e ir re la te d p a rtie s) o f Im d e x L im ite d
(a) M r K A D undo is a P artner of the legal firm HopgoodG anim (form erly Q Legal), that provided legal s ervic es to
the Im dex G roup on norm al c om m erc ial term s and c onditions . Total legal c os ts aris ing from HopgoodG anim
(form erly Q Legal) w ere $116,619 (2012: $549,874).
(b) Trans ac tions w ith Direc tors
P rofit from ordinary ac tivities before inc om e tax
inc ludes the follow ing item s of inc om e and ex pens es
relating to trans ac tions , other than c om pens ation, w ith
D irec tors or their related entities :
Legal s ervic es ex pens e
Total as s ets and liabilities aris ing from trans ac tions ,
other than c om pens ation, w ith D irec tors or their related
entities :
C urrent Liabilities
(c) P a re n t e n tity
N o te
2013
$
2012
$
vi(a)
116,619 549,874
vi(a)
5,731
39,826
The ultim ate parent entity in the G roup is Im dex Lim ited, a Com pany inc orporated in W es tern A us tralia.
Page 74 of 84
131
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
31
Key Management Personnel Compensation
Key management personnel compensation
The aggregate compensation of the key management personnel of the Group and the
Company is set out below:
2013
$
2012
$
2,724,775
128,350
122,942
-
388,522
3,364,589
2,969,289
257,904
97,552
-
381,164
3,705,909
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payments
32
Staff Option Scheme
(a) Share Based Payment Arrangements
Staff Option Plan
The Group has in place a Staff Option Scheme (Scheme) to reward employees (including Key Management Personnel) for their past
services as well as to 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 and at 30 June 2013 all remaining options have expired. Each employee share option
converts to one ordinary share of Imdex Limited on exercise. No amounts are paid or payable by the recipient on receipt of the option.
Options may be exercised at any time from the date of vesting to the date of expiry. 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 normally only
eligible to receive options when they have been with the Company in excess of 6-12 months. Options expire when the option holder
ceases to be employed by the Group.
132
Page 75 of 84
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
$
$
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
32
Staff Option Scheme (continued)
(b) The follow ing share based payment arrangements were in existence during the current and comparative periods:
2013
Issue Date
Expiry
Date
Exercise
Price
Fair
Value at
Grant
Date
$
Opening
balance
Number of Options
Exercised
current year
Lapsed
current year
Issued
current
year
Closing
balance
Staff Options
Tranche 6
Tranche 7
18-Oct-07
17-Oct-12 1.80
28-Mar-08 27-Mar-13 3.00
0.81
0.42
200,000
3,693,333
-
-
- (200,000)
- (3,693,333)
-
-
3,893,333
-
- (3,893,333)
-
2012
Issue Date
Expiry
Date
Exercise
Price
Fair
Value at
Grant
Date
Opening
balance
Number of Options
Exercised
current year
Lapsed
current year
Issued
current
year
Staff Options
Tranche 3 (i)
Tranche 4 (i)
Tranche 5 (i)
Tranche 6 (i)
Tranche 7 (i)
23-Feb-07 22-Feb-12 0.75
23-Feb-07 22-Feb-12 1.00
1.80
11-Jun-12
12-Jun-07
18-Oct-07
17-Oct-12 1.80
28-Mar-08 27-Mar-13 3.00
0.56
0.48
0.51
0.81
0.42
700,000
2,263,167
575,000
200,000
4,279,991
-
- (700,000)
- (2,248,167) (15,000)
- (75,000) (500,000)
-
-
- (586,658)
-
- 200,000
3,693,333
Closing
balance
-
-
-
Former Chairman's Options
Tranche 1 (ii)
19-Oct-06
18-Oct-11 0.75
0.35
500,000
- (500,000)
-
-
8,518,158
- (3,523,167) (1,101,658)
3,893,333
(i) Exercisable in one third lots in each year commencing one year after issue.
(ii) Expire on their expiry date and may be exercised after 2 years at any time to their expiry date.
(c) Fair value of options granted during the financial year
No share options were issued in the current or prior year.
Page 76 of 84
133
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
32
Staff Option Scheme (continued)
(d) Ex e rcise d during the fina ncia l ye a r
2013
There were no options exercised during the year
2012
Option Se rie s
Staff Options Tranche 3
Staff Options Tranche 4
Staff Options Tranche 5
Former Chaiman's Options
Numbe r
Ex e rcise d
Ex e rcise
Da te
700,000
2,248,167
75,000
500,000
3,523,167
Various
Various
16-Apr-12
08-Jul-11
(e) Balance at end of the financial year
W eighte d
Ave ra ge Sha re
Price a t Ex e rcise
Da te ($)
Am ount Pa id
($)
Am ount Unpa id
($)
2.18
2.14
2.93
2.46
525,000
2,218,168
135,000
375,000
-
-
-
-
There were no outstanding options at the the end of the financial year. The share options outstanding at the end of last year had a weighted average exercise
price of $2.94, and a weighted average remaining contractual life of 262 days.
(f) Reconciliation of movements in share options during the year
The following reconciles the outstanding share options granted under the Staff Option Scheme at the beginning and end of the financial year
2013
2012
Balance at beginning of the financial year
Granted during the financial year
Exercised during the financial year
Expired/ forfeited during the financial year
Balance at end of the financial year
Exercisable at end of the financial year
Number of
Options
3,893,333
-
-
(3,893,333)
-
-
Weighted
Average
Exercise
Price ($)
Weighted
Average
Exercise Price
($)
Number of
Options
2.04
8,518,158 2.04
-
- -
- (3,523,167) 0.46
1.60
2.04
-
2.04
(1,101,658)
3,893,333
3,893,333
134
Page 77 of 84
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
33
Performance Rights Plan
(a) Performance Rights Plan
At the Imdex Limited Annual General Meeting on 15 October 2009 the shareholders approved the formation of a Performance Rights
Plan (PRP or Plan). The Plan allows for the issue of performance rights to employees from time to time. The quantum of performance
rights granted to employees is at the discretion of the Directors and is generally based on seniority and level of contribution to the
strategic goals of Imdex Limited. A performance right is the right to receive one fully paid Imdex Limited ordinary share for nil
consideration should set hurdles be achieved and tenure of employment be maintained. The hurdles are set by the Directors when
performance rights are issued and are generally linked to the achievement of financial or other strategic goals of Imdex Limited. If
hurdles are achieved generally shares will be issued evenly over the 3 year period assuming continuity of employment.
(b) Performance rights granted in the current year
Staff Performance Rights
Tranche 10 comprising 1,261,991 performance rights was issued to employees on 28 September 2012 and are to be allotted in equal
1/3 lots annually beginning in August 2013. These performance rights are subject to profitability related hurdles as well as ongoing
employment tenure. 1,223,528 of these performance rights expired due to performance hurdles not being met. The fair value of a
performance right at grant date was $1.62. The expected total cost of the estimated 38,463 fully paid ordinary shares to be issued in
Imdex Limited will therefore be $62,310. This value will be expensed over the vesting period from October 2012 to August 2015, with
$0.03 million expensed in the current year.
An additional 50,000 performance rights were issued under Tranche 7 to Key Management Personnel with 1/4 to be allotted in August
2014 with the remaining 3/4 to be allotted in August 2015. These performance rights are subject to ongoing employment tenure only.
The fair value of a performance right at grant date was $2.10. The expected total cost of the estimated 50,000 fully paid ordinary shares
to be issued in Imdex Limited will therefore be $0.1 million. This value will be expensed over the vesting period to August 2015, with
$0.2 million expensed in the current year.
Since their granting a number of performance rights have expired by virtue of staff leaving the employment of the Imdex Group, details
of which are contained in the table below. One fully paid Imdex Limited ordinary shares will be issued in satisfaction of each
performance right should specified targets be met.
For the purposes of the FY13 financial statements, the Directors have made an estimate of the likelihood of the achievement of FY13
targets and hence the number of fully paid Imdex Limited ordinary shares that are likely to be issued. An adjustment will be made in the
next financial year should the actual number of shares issued be different from those estimated. It is estimated that out of the 1,311,991
performance rights granted, 88,463 will meet the required performance hurdles and will result in 88,463 fully paid Imdex Limited ordinary
shares being issued over three years should employment tenure be retained.
Managing Directorʼs Performance Rights
264,818 performance rights were granted to the Managing Director on 18 October 2012 following approval by the shareholders at the
Annual General Meeting. One fully paid Imdex Limited ordinary share will be issued in satisfaction of each performance right should the
specified earnings per share and total shareholder return targets be met over the 3 year measurement period from FY13 to FY15. The
Managing Director is subject to two hurdles each with equal weighting. The first is that the Total Shareholder Return (TSR) of Imdex
Limited must exceed the average TSR of the ASX300 over the 3 year measurement period. The second is that the Earnings Per Share
of Imdex Limited must exceed the average EPS of the ASX300 over the 3 year measurement period.
Measurement against targets will only be possible once the FY15 independent audit report is signed in August 2015.
For the purposes of the FY13 financial statements, the Directors have made an estimate of the likelihood of the achievement of the
specified targets and hence the number of fully paid Imdex Limited ordinary shares that are likely to be issued. Due to the hurdle being
market related, adjustment will not be made in future periods should the actual number of shares issued be different from those
estimated. It is estimated that out of the 264,818 performance rights issued, all will meet the required performance hurdles and will
result in 264,818 fully paid Imdex Limited ordinary shares being issued on or about August 2015 should employment tenure be retained.
The fair value of a performance right at grant date was $1.44 per right. The expected total cost of the estimated 264,818 fully paid
ordinary shares to be issued in Imdex Limited will therefore be $0.4 million. This value will be expensed over the vesting period from
October 2012 to August 2015, with $0.1 million expensed in the current year.
Page 78 of 84
135
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
33
Performance Rights Plan (continued)
(c) Performance rights Granted in the prior year
Staff Performance Rights
1,465,090 performance rights were granted to employees during the prior year in 3 tranches (Tranches 7, 8 and 9 in the table below):
•
•
•
Tranche 7 – 615,000 performance rights were issued to Key Management Personnel with 1/4 to be allotted in August 2014
with the remaining 3/4 to be allotted in August 2015. These performance rights are subject to ongoing employment tenure
only. The fair value of a performance right at grant date was $2.10. The expected total cost of the estimated 615,000 fully paid
ordinary shares to be issued in Imdex Limited will therefore be $1.3 million. This value will be expensed over the vesting
period from September 2011 to August 2015, with $0.2 million expensed in the prior year.
Tranche 8 – 15,000 performance rights were issued to an employee and all were allotted in August 2013. The fair value of a
performance right at grant date was $2.08. The expected total cost of the estimated 15,000 fully paid ordinary shares to be
issued in Imdex Limited will therefore be $0.03 million and has been fully expensed in the prior year.
Tranche 9 – 835,090 performance rights were issued to employees and are to be allotted in equal 1/3 lots annually beginning
in August 2012. These performance rights are subject to profitability related hurdles as well as ongoing employment tenure.
21,743 of these performance rights expired due to performance hurdles not being met. The fair value of a performance right at
grant date was $1.79. The expected total cost of the estimated 813,347 fully paid ordinary shares to be issued in Imdex
Limited will therefore be $1.5 million. This value will be expensed over the vesting period from October 2011 to August 2014,
with $0.9 million expensed in the prior year.
Since their granting a number of performance rights have expired by virtue of staff leaving the employment of the Imdex Group, details
of which are contained in the table below. One fully paid Imdex Limited ordinary shares will be issued in satisfaction of each
performance right should specified targets be met.
Managing Directorʼs Performance Rights
153,318 performance rights were granted to the Managing Director on 20 October 2011 following approval by the shareholders at the
Annual General Meeting. One fully paid Imdex Limited ordinary shares will be issued in satisfaction of each performance right should
the specified earnings per share and total shareholder return targets be met over the 3 year measurement period from FY12 to FY14.
The Managing Director is subject to two hurdles each with equal weighting. The first is that the Total Shareholder Return (TSR) of Imdex
Limited must exceed the average TSR of the ASX300 over the 3 year measurement period. The second is that the Earnings Per Share
of Imdex Limited must exceed the average EPS of the ASX300 over the 3 year measurement period.
Measurement against targets will only be possible once the FY14 independent audit report is signed in August 2014.
The fair value of a performance right at grant date was $1.91 per right. The expected total cost of the estimated 153,318 fully paid
ordinary shares to be issued in Imdex Limited will therefore be $0.3 million. This value will be expensed over the vesting period from
October 2011 to August 2014, with $0.1 million expensed in the prior year.
136
Page 79 of 84
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
33
Performance Rights Plan (continued)
(d) Summary of performance rights outstanding
2013
Grant Date Expiry Date Exercise
Tranche 1
Tranche 2
Tranche 4
MD Tranche
MD Tranche
Tranche 7
Tranche 8
Tranche 9
Tranche 10
MD Tranche
19-Feb-10
3-Dec-10
10-Jun-11
14-Oct-10
20-Oct-11
5-Sep-11
29-Aug-11
7-Oct-11
28-Sep-12
18-Oct-12
Aug-14
Aug-15
Aug-16
Oct-15
Oct-16
Aug-15
Aug-16
Aug-16
Aug-17
Oct-17
$
-
-
-
-
-
-
-
-
-
-
2012
Grant Date Expiry Date Exercise
Tranche 1
Tranche 2
Tranche 3
Tranche 4
MD Tranche
MD Tranche
Tranche 7
Tranche 8
Tranche 9
19-Feb-10
3-Dec-10
28-Jan-11
10-Jun-11
14-Oct-10
20-Oct-11
5-Sep-11
29-Aug-11
7-Oct-11
Aug-14
Aug-15
Aug-15
Aug-16
Oct-15
Oct-16
Aug-15
Aug-16
Aug-16
$
-
-
-
-
-
-
-
-
-
Price
Estimated
Fair Value
at Grant
Opening
balance
Granted
Date
Satisfied by
the issue of
shares
Expired ^
Closing
balance
Estimated Number of Performance Rights
0.685
1.395
2.160
1.140
1.910
2.100
2.080
1.790
1.620
1.440
121,199
1,294,474
133,333
196,579
153,318
615,000 50,000
15,000
813,347
- 1,261,991
- 264,818
- -
- (121,199)
- (661,179) (53,178)
580,117
- (66,667)
- 66,666
- - - 196,579
- - - 153,318
- - 665,000
- (15,000)
- (256,667) (118,869)
437,811
- (1,223,528)
38,463
- - 264,818
- -
Price
Estimated
Fair Value
at Grant
Opening
balance
Granted
Estimated Number of Performance Rights
Satisfied by
the issue of
shares
Expired ^
Closing
balance
Date
$
0.685
1.395
1.990
2.160
1.140
1.910
2.100
2.080
1.790
121,199
1,294,474
-
253,669
2,072,372
200,000
200,000
196,579
- 153,318
- 615,000
- 15,000
- 835,090
- (126,835) (5,635)
- (677,001) (100,897)
- (66,667) (133,333)
- (66,667)
- 133,333
- - - 196,579
- - 153,318
- - 615,000
- - 15,000
- (21,743)
813,347
^ - Performance rights expire either on failure to maintain employment tenure or on failure to satisfy performance hurdles.
Reinstatements occur from time to time to correct historical errors when noted.
Page 80 of 84
137
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
The accounting policies of the parent entity, which have been applied in determining the financial information shown below, are the
same as those applied in the consolidated financial statements. Refer to note 2 for a summary of the significant accounting policies
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
34
Parent Entity Information
relating to the Group.
Financial Position
Assets
Current Assets
Non Current Assets
Total Assets
Lia bilitie s
Current Liabilities
Non Current Liabilities
Total Liabilities
Ne t Assets
Equity
Issued Capital
Shares Reserved for Performance Rights Plan
Investment Revaulation Reserve
Employee Equity-Settled Benefits Reserve
Retained Earnings/ (Accumulated Losses)
30 June 2013 30 June 2012
$ʼ000
$ʼ000
75,014
2,744
165,298
162,571
240,312
165,315
11,923
64,455
40,712
52,635
187,677
89,269
(952)
396
6,087
92,877
23,860
88,315
77,000
86,069
(3,740)
295
6,385
(12,009)
Tota l Equity
187,677
77,000
Financial Performance
Loss for the year
Other comprehensive income, net of income tax
Total comprehensive income
Ye a r Ende d Ye a r Ende d
30 June 2013 30 June 2012
$ʼ000
$ʼ000
(20,672)
(12,686)
102
107
(20,570)
(12,579)
Accumulated Losses at the beginning of the financial year
(12,009)
(16,275)
Loss for the year
(20,364)
(12,686)
Amounts transferred from employee equity-settled benefits reserve
(1,159)
(721)
Dividend received
126,409
17,673
Retained Earnings/ (Accumulated Losses) at the end of the financial year
92,877
(12,009)
138
Page 81 of 84
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
NOTES TO THE FINANCIAL REPORT
34
Parent Entity Information (continued)
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
Guarantee provided under the deed of cross guarantee
91,494
77,611
30 June 2013 30 June 2012
$ʼ000
$ʼ000
Contingent liabilities of the parent entity
Comm itments for the aquisition of property, plant and equipment by the
parent entity
Pla nt a nd e quipme nt
W ithin one year
Between one and five years
Later than five years
35
Subsequent Events
-
-
-
-
-
-
-
-
-
-
Subsequent to year end the Directors declared a 0.40 cent per share fully franked dividend with a record date of 11 October 2013 and a
payment date of 25 October 2013. The effect of this dividend has not been reflected in this financial report.
Page 82 of 84
139
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
ADDITIONAL SECURITIES EXCHANGE INFORMATION
AS AT 28 AUGUST 2013
(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
HSBC Custody Nominees (Australia) Limited
J P Morgan Nominees Australia Limited
(c)
Twenty Largest Holders of Quoted Equity Securities
Ordinary Shareholders
HSBC Custody Nominees (Australia) Limited
J P Morgan Nominees Australia Limited
JP Morgan Nominees Australia Limited (Cash Income Account)
RBC Investor Services Australia Nominees Pty Limited (Pi Pooled
Account)
National Nominees Limited
Citicorp Nominees Pty Limited
Citicorp Nominees Pty Limited (Colonial First State Inv Account)
BNP Paribas Noms Pty Ltd (DRP)
Telic Alcatel (Australia) Pty Ltd (Middendorp Directors SuperFund Account)
Mr John Andrew Knox + Ms Janice Ann Knox (The JA Family Account)
Aust Executor Trustees Ltd (Charitable Foundation)
Mr Richard Karl Hill (Icena Account)
Mr Petrus Middendorp
Keeble Nominees Pty Ltd (Ridgeway Super Fund Account)
Wear Services Pty Ltd
Mr David Charles Lawie (COG Family Account)
SAO Group Pty Ltd (The Springbank Family Account)
UBS Nominees Pty Ltd (TP00014 15 Account)
Dimana Holdings Pty Ltd
CS Fourth Nominees Pty Ltd
Number of Fully
Paid Ordinary
Shareholders
Number of
Performance
Rights Holders
509
1,312
756
1,130
112
3,819
299
27
80
27
29
2
165
-
Fully Paid
Number
Percentage
53,143,546
28,860,701
25.25%
13.71%
Fully Paid
Number
Percentage
53,143,546
28,860,701
12,028,602
10,856,648
7,123,053
5,550,787
5,262,775
4,298,812
3,028,152
2,928,627
1,781,067
1,500,000
1,495,372
1,226,737
987,893
978,042
978,042
944,050
900,000
887,510
25.25%
13.71%
5.72%
5.16%
3.38%
2.64%
2.50%
2.04%
1.44%
1.39%
0.85%
0.71%
0.71%
0.58%
0.47%
0.46%
0.46%
0.45%
0.43%
0.42%
144,760,416
68.78%
140
Page 83 of 84
2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
IMDEX LIMITED
and its controlled entities
ADDITIONAL SECURITIES EXCHANGE INFORMATION
AS AT 28 AUGUST 2013
(d)
Director and Company Secretary Shareholdings
Number of
Shares
Number of
Options
380,000
2,214,630
150,000
648,000
210,000
346,657
3,949,287
-
-
-
-
-
-
-
Number of
Performance
Rights
-
614,716
-
-
-
179,884
794,600
Name
Mr R W Kelly
Mr B W Ridgeway
Mr K A Dundo
Mr M Lemmel
Ms E Donaghey
Mr P A Evans
(e)
Company Secretary
Mr Paul Anthony Evans
(f)
Registered Office
8 Pitino Court
Osborne Park
Western Australia
6018
Phone: (08) 9445 4010
(g)
Share Registry
Computershare Investor Services
Level 2
45 St Georges Terrace
Perth WA 6000
Phone: (08) 9323 2000
Page 84 of 84
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2013 Imdex LImIted AnnuAL RepoRtFY13 Financial Report
Company History
17 December 1980
Australian company Pilbara Gold NL incorporated
21 July 1985
Pilbara Gold NL changed name to Imdex Limited
24 September 1987
Imdex Limited listed on the ASX
1988
1997
2001
Formation of Australian Mud Company
Acquisition of Surtron Technologies Pty Ltd and
Ace Drilling Supplies
Joint venture formed with Imdex and Rashid
Trading Establishment (RTE) in Saudi Arabia
1 July 2005
Sale of Imdex Minerals
1 August 2005
Acquisition of African based company Samchem
1 August 2006
Acquisition of Swedish based REFLEX Group of
Companies and United Kingdom based company
Chardec
1 May 2007
Acquisition of Swedish based company Flexit
1 July 2007
Ace merged with REFLEX. Imdex finalised the sale
of its interest in Imdex Arabia to RTE. Acquisition
of Canadian based Poly-Drill and a75% interest in
Kazakhstan based Suay Energy Services
31 October 2007
Sale of Surtron Technologies
1 November 2007
Acquisition of Chilean based company
Southernland
142
2013 Imdex LImIted AnnuAL RepoRt 1 January 2008
Acquisition of German based company System
Entwicklungs
1 July 2008
Acquisition of the remaining 25% of Kazakhstan
based Suay Energy Services
1 September 2008
Acquisition of Australian based company Wildcat
Chemicals Australia
1 July 2010
New regional structure implemented and business
reporting streamlined into Minerals and Oil & Gas
Divisions
1 September 2010
Acquisition of Australian based companies
Fluidstar and Ecospin
1 March 2011
Acquisition of German based company Mud-Data
1 July 2011
Formation of DHS Services joint venture
1 July 2011
1 August 2011
1 January 2012
1 November 2012
Acquisition of Australian based company
Australian Drilling Specialties Pty Ltd
Acquisition of Brazilian based company System
Mud Indústria e ComércioLtda
Acquisition of Vaughn Energy Services (VES) by
Imdex’s DHS Services joint venture
Acquisition of ioGlobal Pty Ltd, ioAnalytics
Pty Ltd and ioGlobal Solutions Inc. (together
ioGlobal).
1 December 2012
DHS Services and Vaughn Energy Services
rebranded as VES International
143
2013 Imdex LImIted AnnuAL RepoRt 144
2013 Imdex LImIted AnnuAL RepoRt FY2013 Snapshot
2013 IMDEX LIMITED ANNUAL REPORT
Core sample
3
Innovative Technologies
Integrated Solutions
Global Support
Imdex delivers leading innovative technologies
to the global minerals industry and niche oil and
gas markets, focusing on integrated solutions that
enhance customers’ operations and deliver value for
shareholders. The company achieves this through its
extensive industry knowledge and commitment to
product development, ensuring innovative, simple to
use and fit-for purpose technologies.
Imdex Limited
ABN 78 008 947 813
Head office
8 Pitino Court, Osborne Park,
Western Australia 6017
T: +61 8 9445 4010
F: +61 8 9445 4042
E: imdex@imdexlimited.com
imdexlimited.com
4
2013 Imdex LImIted AnnuAL RepoRtFY2013 Snapshot