IMDEX LIMITED — Annual Report 2014

Aug 17, 2014

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216 Balcatta Road Balcatta Western Australia 6021 PO Box 1262, Osborne Park Western Australia 6916

Tel: +61 (0) 8 9445 4010 Fax: +61 (0) 8 9445 4055 imdex@imdexlimited.com

www.imdexlimited.com ABN 78 008 947 813

18 August 2014

ASX Limited Company Announcements Office Exchange Centre 20 Bridge Street SYDNEY NSW 2001

BY ELECTRONIC LODGEMENT

Dear Sir/Madam

ASX APPENDIX 4E AND FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2014

Please find attached Imdex Limited’s Appendix 4E and audited Financial Report for the Year Ended 30 June 2014.

The audited Annual Report, which will include the Financial Report, for the Year Ended 30 June 2014 together with the Notice of Annual General Meeting is expected to be mailed to those shareholders who have requested a hardcopy in September 2014.

Yours faithfully

Imdex Limited

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Paul Evans

Company Secretary

Providing innovative drilling fluids and advanced down hole instrumentation worldwide.

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IMDEX LIMITED and its controlled entities

DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2014

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 2014.

In order to comply with the provisions of the Corporations Act 2001, the Directors’ report as follows:

(a) Directors

The names and particulars of the Directors of the Company during or since the end of the financial year are:

Name	Role	Age	Particulars
Mr R W Kelly AM	Non Executive Chairman	76	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.
Mr B W Ridgeway	Managing Director	60	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
Mr K A Dundo	Independent, Non Executive Director	61	Lawyer Chairman of the Audit and Compliance Committee Member of the Remuneration Committee Director since 14 January 2004 Director of Red 5 Limited and Synergy Plus Limited
Mr M Lemmel	Independent, Non Executive Director	75	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
Ms E Donaghey	Independent, Non Executive Director	56	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 Australian Renewable Energy Agency Previously held a range of commercial and senior management positions in Woodside Petroleum and BHP Petroleum

Page 1 of 79

IMDEX LIMITED and its controlled entities

DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2014

(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	2010 – Current 2008 – Current 2013 – 2014
Ms E Donaghey	St Barbara Limited	Non Executive Director	2011 – 2014

(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) Directors’ Meetings

The following table sets out the number of Directors’ meetings (including meetings of committees of Directors) held during the financial year and the number of meetings attended by each Director (while they were a Director or committee member). During the financial year, eight Board meetings, four Audit and Compliance Committee meetings and four Remuneration Committee meetings were held.

	Board of Directors (Number)	Board of Directors (Number)	Audit and Compliance Committee (Number)	Audit and Compliance Committee (Number)	Audit and Compliance Committee (Number)	Remuneration Committee (Number)	Remuneration Committee (Number)	Remuneration Committee (Number)
	Held	Attended	Held	Attended		Held		Attended
R W Kelly	8	8	4		4	-		-
B W Ridgeway	8	8	-		-	-		-
K A Dundo	8	7	4		4	4		4
M Lemmel	8	7	-		-	4		2
E Donaghey	8	8	4		4	4		4
(e) Directors’ Shareholdings At the date of this report the Directors held		the following interests in shares, options i
Directors		Shares Held Directly (#)	Shares Held Indirectly (#)		Options Held Directly (#)		Performance Rights Held Directly ^ (#)
R W Kelly		-	380,000		-		-
B W Ridgeway		128,876	2,214,630		-		718,136
K A Dundo		-	150,000		-		-
M Lemmel		562,000	-		-		-
E Donaghey		210,000	-		-		-

^ - 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 performance rights on issue at the end of the financial year are disclosed in note 33.

Page 2 of 79

IMDEX LIMITED and its controlled entities

DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2014

(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 Directors’ 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 Company’s 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 $434,138, including statutory superannuation. The Board determines the apportionment of directors’ fees between each Director.

Managing Director

The Managing Director’s remuneration is determined by the Remuneration Committee with due regard to current market rates.

The Managing Director has a short term incentive bonus up 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 Imdex’s 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 Group’s performance.

From time to time performance rights may be issued to the Managing Director as a long term performance incentive. The portion of the Managing Director’s compensation package that comprises performance rights is linked to the Company’s performance. The number of performance rights granted is determined with regard to current market trends. The issue of any such 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 Imdex’s 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 performance rights may be issued to the Executives and staff as a long term performance incentive. The portion of remuneration package that comprises performance rights is linked to the Company’s performance. The number of performance rights granted is determined with regard to current market trends. The issue of any such performance rights requires the approval of Shareholders in General Meeting.

All Executives are employed under permanent contracts. Mr D J Loughlin’s and Mr P A Evan’s contracts provide a six month notice period upon termination and a six month termination pay out. Mr S Maikranz’s contract specifies a 12 week notice period in the event that the contract is terminated. If the employment is terminated by Imdex after the probation period and prior to completion of 1 (one) year employment, Imdex will pay as compensation the monthly base salary times the number of months remaining to complete 12 months. Mr M Parsons’s contract specifies a 12 week notice period in the event that the contract is terminated.

No additional benefits above those already entitled to will become payable on termination.

Page 3 of 79

and its controlled entities

IMDEX LIMITED

DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2014

(f) Remuneration Report (audited) (continued)

Director and Key Management Personnel details

The Directors of Imdex Limited during the year were:

• (i) Mr R W Kelly (Non Executive Chairman);

• (ii) Mr B W Ridgeway (Managing Director);

• (iii) Mr K A Dundo (Non Executive Director);

• (iv) Mr M Lemmel (Non Executive Director); and

• (v) Ms E Donaghey (Non Executive Director).

The term ‘Key Person Management’ is used in this remuneration report to refer to the following persons:

• (i) Mr D J Loughlin (Chief Executive Reflex);

• (iii) Mr P A Evans (Company Secretary and Chief Financial Officer).

• (iii) Mr M Parsons (Chief Executive AMC Minerals); commenced 1 October 2013

• (iv) Mr S Maikranz (Chief Executive AMC Oil & Gas); commenced 17 March 2014

• (v) Mr G E Weston (Project General Manager; General Manager: Oil & Gas Division); resigned 31 December 2013

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:

• (i) Short-term benefits – salary/fees, bonuses and non monetary benefits including principally motor vehicles;

• (ii) Post-employment benefits – superannuation;

• (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 Entity’s earnings and movements in shareholder wealth for the five years to June 2014:

five years to June 2014:
	30 June 2014	30 June 2013	30 June 2012	30 June 2011	30 June 2010
Revenue – continuing and discontinued operations ($000s)	183,557	232,921	269,652	205,334	135,625
Net (loss) / profit before tax from continuing operations ($000s)	(7,062)	28,510	67,500	38,593	(21,071)
Net (loss ) / profit after tax from continuing operations ($000s)	(5,277)	19,383	45,777	29,002	(21,548)
Share price at start of year (cents)	62.0	176.0	215.0	73.0	64.5
Share price at end of year (cents)	63.0	62.0	176.0	215.0	73.0
Interim dividend (cents) – fully franked	-	2.50	3.25	1.75	-
Final dividend (cents) – fully franked	-	0.40	4.00	2.75	-
Basic (loss) / earnings per share (cents) – continuing operations	(2.50)	9.24	22.34	14.69	(11.05)
Diluted (loss) / earnings per share (cents) – continuing operations	(2.50)	9.14	21.85	14.25	(11.05)

Page 4 of 79

IMDEX LIMITED

and its controlled entities

DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2014

(f) Remuneration Report (audited) (continued)

Year ended 30 June 2014

Executive Director B W Ridgeway, Managing Director Non Executive Directors R W Kelly, Chairman K A Dundo M Lemmel E Donaghey Group Executives D Loughlin, Chief Executive Reflex P Evans, Chief Financial Officer / Company Secretary M Parsons, Chief Executive AMC Minerals1 S Maikranz, Chief Executive, AMC Oil & Gas2 G W eston, General Manager: Oil & Gas Division3	Short-term employee benefits	Short-term employee benefits	Short-term employee benefits	Short-term employee benefits	Post Employm ent	Post Employm ent	Other long- term em ployee benefits	Term ination Benefits	Share-basedpaym ent	Share-basedpaym ent	Share-basedpaym ent	Share-basedpaym ent	Total
	Salary & fees	Bonus	Non- monetary	Other	Super- annuation	Other			Equity-settled ^		Cash settled	Other
									Shares & Units	Options & Rights
	$ $ $ $ $ $ $ $ 904,272 - 14,434 - 25,694 - 20,561 - 135,000 - - - 12,488 - - - 90,000 - - - 8,325 - - - 90,000 - - - - - - 90,000 - - - 8,325 - - -								$ $ $ $ $ - 20,218 - - 985,179 - - - - 147,488 - - - - 98,325 - - - - 90,000 - - - - 98,325
	1,309,272 - 14,434 - 54,832 - 20,561 -								- 20,218 - - 1,419,317
	Short-term employee benefits				Post Employm ent		Other long- term em ployee benefits	Term ination Benefits	Share-basedpaym ent				Total
	Salary & fees	Bonus	Non- monetary	Other	Super- annuation	Other			Equity-settled ^		Cash settled	Other
									Shares & Units	Options & Rights
	$ $ $ $ $ $ $ $ 455,982 - - 19,665 25,694 - 13,623 - 445,033 - - - 25,694 - 13,168 - 271,975 - - - 19,271 - - - 114,563 - - - - - - - 645,467 - - - 12,847 - 235,088 -								$ $ $ $ $ - 6,150 - - 521,114 - 6,150 - - 490,045 - - - - 291,246 - - - - 114,563 - 7,077 - - 900,479
	1,933,020 - - 19,665 83,506 - 261,879 -								- 19,377 - - 2,317,447

1 Commenced 01/10/2013

• 2 Commenced 17/03/2014

• 3 Resigned 31/12/2013

• ^ - 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 5 of 79

IMDEX LIMITED

and its controlled entities

DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2014

(f) Remuneration Report (audited) (continued)

Year ended 30 June 2013

Executive Director B W Ridgeway, Managing Director Non Executive Directors R W Kelly, Chairman K A Dundo M Lemmel E Donaghey Group Executives G E Weston, General Manager: Oil & Gas Division D J Loughlin, General Manager: Minerals Division P A Evans, Chief Financial Officer / Company Secretary	Short-term employee benefits	Short-term employee benefits	Short-term employee benefits	Short-term employee benefits	Post Employment	Post Employment	Other long- term employee benefits	Termination Benefits	Share-based payment	Share-based payment	Share-based payment	Share-based payment	Total
	Salary & fees	Bonus *	Non- monetary	Other	Super- annuation	Other			Equity-settled ^		Cash settled	Other
									Shares & Units	Options & Rights
	$ $ $ $ $ $ $ $ 901,500 - 16,325 - 25,000 - 51,140 - 135,000 - - - 12,150 - - - 90,000 - - - 8,100 - - - 90,000 - - - - - - - 90,000 - - - 8,100 - - -								$ $ $ $ $ - 242,458 - - 1,236,423 - - - - 147,150 - - - - 98,100 - - - - 90,000 - - - - 98,100
	1,306,500 - 16,325 - 53,350 - 51,140 -								- 242,458 - - 1,669,773
	Short-term employee benefits				Post Employment		Other long- term employee benefits	Termination Benefits	Share-based payment				Total
	Salary & fees	Bonus *	Non- monetary	Other	Super- annuation	Other			Equity-settled ^		Cash settled	Other
									Shares & Units	Options & Rights
	$ $ $ $ $ $ $ $ 503,650 - - - 25,000 - 29,759 - 454,600 - - - 25,000 - 21,356 - 443,700 - - - 25,000 - 20,687 -								$ $ $ $ $ - 44,365 - - 602,774 - 41,431 - - 542,387 - 39,520 - - 528,907
	1,401,950 - - - 75,000 - 71,802 -								- 125,316 - - 1,674,068

• ^ - These non-cash entitlements reflect the value of options and 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.

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IMDEX LIMITED and its controlled entities

DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2014

(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 Director’s 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 $280,000 could have been earned by Mr Ridgeway had the targets been met. Mr Ridgeway did not earn a cash bonus in the prior year as specified targets were not met. A bonus of $320,000 could have been earned by Mr Ridgeway had the targets been met.

No options were granted to Mr Ridgeway in the current year or in the prior year.

The grant of 300,000 performance rights to Mr Ridgeway in the current year was approved by the shareholders at the Annual General Meeting on 17 October 2013. 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 FY16 financial statements on or about August 2016, which will determine the number of performance rights to be issued. Refer note 33 for further details.

The grant of 264,818 performance rights to Mr Ridgeway in the prior 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, which will determine the number of performance rights to be issued. Refer note 33 for further details.

196,579 Performance Rights were issued to Mr Ridgeway for nil consideration after approval at the FY 10 AGM. These performance rights were subject to performance hurdles being met. Following the successful satisfaction of the majority of the performance hurdles over the 3 year measurement period, 128,876 shares were issued in October 2013 to Mr Ridgeway.

(ii) 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 $100,000 could have been earned by Mr Loughlin had the targets been met. Mr Loughlin did not earn a cash bonus in the prior year as specified targets were not met. A bonus of $176,000 could have been earned by Mr Loughlin had the targets been met.

No options were granted to Mr Loughlin in the current or prior year.

Mr Loughlin was granted 174,603 performance rights in the current period under the Performance Rights Plan. As the hurdles applicable to these performance rights were not achieved all of the performance rights expired.

Mr Loughlin was granted 58,239 performance rights in 2013 under the Performance Rights Plan. As the hurdles applicable to these performance rights were not achieved all of the performance rights expired.

During the year Mr Loughlin was allocated 53,982 shares upon the successful achievement of hurdles relating to performance rights granted prior to 2013.

During the prior year Mr Loughlin was allocated 53,981 shares upon the successful achievement of hurdles relating to performance rights granted prior to 2013.

(iii) 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 $97,850 could have been earned by Mr Evans had the targets been met. Mr Evans did not earn a cash bonus in the prior year as specified targets were not met. A bonus of $172,000 could have been earned by Mr Evans had the targets been met.

No options were granted to Mr Evans in the current or prior year.

Mr Evans was granted 170,635 performance rights in the current period under the Performance Rights Plan. As the hurdles applicable to these performance rights were not achieved all of the performance rights expired.

Mr Evans was granted 56,818 performance rights in 2013 under the Performance Rights Plan. As the hurdles applicable to these performance rights were not achieved all of the performance rights expired.

Page 7 of 79

IMDEX LIMITED and its controlled entities

DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2014

(f) Remuneration Report (audited) (continued)

During the year Mr Evans was allocated 49,387 shares upon the successful achievement of hurdles relating to performance rights granted prior to 2013.

During the prior year Mr Evans was allocated 49,388 shares upon the successful achievement of hurdles relating to performance rights granted prior to 2013.

(iv) Mr M Parsons is a party to a service contract with Imdex Limited, which sets out a fixed compensation package reviewable annually. The service contract specifies a 12 week notice period in the event that the contract is terminated.

In the current year Mr Parsons did not earn a cash bonus as specified targets were not met. A bonus of $55,000 could have been earned by Mr Parsons had the targets been met.

No options or performance rights were granted to Mr Parsons in the current year.

(v) Mr S Maikranz is a party to a service contract with Imdex Limited, which sets out a fixed compensation package reviewable annually. The service contract specifies a 12 week notice period in the event that the contract is terminated. If the employment is terminated by Imdex after the probation period and prior to completion of 1 (one) year employment, Imdex will pay as compensation the monthly base salary times the number of months remaining to complete 12 months.

In the current year Mr Maikranz did not earn a cash bonus as specified targets were not met. A bonus of $16,500 could have been earned by Mr Maikranz had the targets been met.

No options or performance rights were granted to Mr Maikranz in the current year.

(vi) Mr G E Weston ceased to be Project General Manager; General Manager: Oil & Gas Division on 31 December 2013 upon the termination of his contract with Imdex Limited. Per his service contract, Mr Weston received a twelve month pay out upon his termination of employment.

No cash bonus was earned in the current or prior year.

No options were granted to Mr Weston in the current or prior year.

Mr Weston was granted 192,460 performance rights in the current period under the Performance Rights Plan. As the hurdles applicable to these performance rights were not achieved due to his employment tenure ceasing all of the performance rights expired.

Mr Weston was granted 65,341 performance rights in 2013 under the Performance Rights Plan. As the hurdles applicable to these performance rights were not achieved all of the performance rights expired.

During the year Mr Weston was allocated 54,245 shares upon the successful achievement of hurdles relating to performance rights granted prior to 2013.

During the prior year Mr Weston was allocated 54,245 shares upon the successful achievement of hurdles relating to performance rights granted prior to 2013.

Bonuses granted to Directors and Key Management Personnel

During the current year there were no bonuses earned by Directors and Key Management Personnel. Bonuses are paid on the achievement of performance criteria specific to the individual and as performance hurdles were not met in the current year then no bonus was 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.

Imdex Loyalty Programme

Imdex Limited has 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 months’ salary for employees who remain with the business for 20 and 25 years respectively.

Page 8 of 79

IMDEX LIMITED and its controlled entities

DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2014

(f) Remuneration Report (audited) (continued)

Key Management Personnel Equity Holdings

Key management personnel equity holdings

2014 Mr B W Ridgeway Mr R W Kelly Mr K A Dundo Mr M Lemmel Ms E Donaghey Mr D J Loughlin Mr P A Evans Mr M Parsons1 Mr S Maikranz2 Mr G E W eston3 2013 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	Balance at 1 July 2013 Granted as compensation Received on exercise of options Net other change # Balance at 30 June 2014 Balance held nominally No. No. No. No. No. No. 2,214,630 128,876 - - 2,343,506 - 380,000 - - - 380,000 - 150,000 - - - 150,000 - 648,000 - - (86,000) 562,000 - 210,000 - - - 210,000 - 207,343 53,982 - (261,325) - - 346,657 49,387 - - 396,044 - - - - - - - - - - - - - 499,151 54,245 - (553,396) - -
	4,655,781 286,490 - (900,721) 4,041,550 -
	Balance at 1 July 2012 Granted as compensation Received on exercise of options Net other change # Balance at 30 June 2013 Balance held nominally No. No. No. No. No. No. 2,214,630 - - - 2,214,630 - 380,000 - - - 380,000 - 150,000 - - - 150,000 - 730,921 - - (82,921) 648,000 - 210,000 - - - 210,000 - 1,040,299 54,245 - (595,393) 499,151 - 253,362 53,981 - (100,000) 207,343 - 382,269 49,388 - (85,000) 346,657 -
	5,361,481 157,614 - (863,314) 4,655,781 -

- represent on market transactions

1 Commenced 01/10/2013

2 Commenced 17/03/2014

3 Resigned 31/12/2013

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 performance hurdles be met. The following table discloses the value of performance rights granted and allocated as shares during the year:

	Granted	Granted	Satisfied by the allocation/allotment of shares	Satisfied by the allocation/allotment of shares	Percentage of remuneration for the year that consisted of performance rights
		Value at grant date		Value at allocation/ allotment date
	Number	$	Number	$	%
B W Ridgeway (i)	300,000 (MD Tranche)	232,890	128,876	90,213	2%
G E Weston (ii)	192,460 (Tranche 11)	121,250	54,245	37,972	1%
D J Loughlin (ii)	174,603 (Tranche 11)	110,000	53,982	37,787	1%
P A Evans (ii)	170,635 (Tranche 11)	107,500	49,387	34,572	1%

(i) Approved by the shareholders at the Annual General Meeting on 17 October 2013.

(ii) Granted per the Performance Rights Plan.

Page 9 of 79

IMDEX LIMITED and its controlled entities

DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2014

(f) Remuneration Report (audited) (continued)

Key Management Personnel Performance Rights Holdings

2014 Mr B W Ridgeway Mr R W Kelly Mr K A Dundo Mr M Lemmel Ms E Donaghey Mr D J Loughlin Mr P A Evans Mr M Parsons1 Mr S Maikranz2 Mr G E Weston3	Balance at 1 July 2013 Granted as compensation Satisfied by the allocation/ allotment of shares Expired Closing balance at 30 June 2014 No. No. No. No.# No. 614,715 300,000 (128,876) (67,703) 718,136 - - - - - - - - - - - - - - - - - - - - 77,394 174,603 (53,982) (185,895) 12,120 72,586 170,635 (49,387) (181,714) 12,120 - - - - - - - - - - 80,933 192,460 (54,245) (219,148) -
	845,628 837,698 (286,490) (654,460) 742,376

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	Balance at 1 July 2012 Granted as compensation Satisfied by the allocation/ allotment of shares Expired Closing balance at 30 June 2013 No. No. No. No.# No. 349,897 264,818 - - 614,715 - - - - - - - - - - - - - - - - - - - - 125,377 65,341 (54,245) (55,540) 80,933 122,639 58,239 (53,981) (49,503) 77,394 113,451 56,818 (49,388) (48,295) 72,586
	711,364 445,216 (157,614) (153,338) 845,628

1 Commenced 01/10/2013

2 Commenced 17/03/2014

3 Resigned 31/12/2013

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.

Share options held by Directors and Key Management Personnel

No options were issued to, granted to or exercised by Key Management Personnel in the current or prior year.

There were no share options held by Directors and Key Management Personnel at the end of the current financial year or prior financial year.

Page 10 of 79

IMDEX LIMITED and its controlled entities

DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2014

(f) Remuneration Report (audited) (continued)

Other transactions with key management personnel (and their related parties) of Imdex Limited

Mr K A Dundo is a Partner of the legal firm HopgoodGanim, that provided legal services to the Imdex Group on normal commercial terms and conditions. Total legal costs arising from HopgoodGanim were $506,857 (2013: $116,619).

Transactions with Directors 2014 2013 $ $ Profit from ordinary activities before income tax includes the following items of income and expenses relating to transactions, other than compensation, with Directors or their related entities: Legal services expense 506,857 116,619 Total assets and liabilities arising from transactions, other than compensation, with Directors or their related entities: Current Liabilities 70,680 5,731

(g) Performance Rights

Performance Rights in existence during the current year

Tranche 2 3-Dec-10 Aug-15 - 1.395 Tranche 4 10-Jun-11 Aug-16 - 2.160 MD Tranche 14-Oct-10 Oct-15 - 1.140 MD Tranche 20-Oct-11 Oct-16 - 1.910 Tranche 7 5-Sep-11 Aug-15 - 2.100 Tranche 9 7-Oct-11 Aug-16 - 1.790 Tranche 10 28-Sep-12 Aug-17 - 1.620 MD Tranche 18-Oct-12 Oct-17 - 1.440 MD Tranche 17-Oct-13 Oct-18 - 0.780 Tranche 11 4-Oct-13 Oct-18 - 0.810 2014 Grant Date Expiry Date Exercise Price $ Estimated Fair Value at Grant Date $

Estimated Number of Performance Rights

Opening balance Granted Satisfied by the allocation/ allotment of shares Expired ^ Closing balance 580,117 - (536,534) (43,583) - 66,666 - (66,666) - - 196,579 - (128,876) (67,703) - 153,318 - - - 153,318 665,000 - - (25,000) 640,000 437,811 - (204,713) (22,502) 210,596 38,463 - - (38,463) - 264,818 - - - 264,818 - 300,000 - - 300,000 - 5,124,070 - (5,124,070) -

^ - Performance rights expire either on failure to maintain employment tenure or on failure to satisfy performance hurdles.

Refer below for vesting details.

Page 11 of 79

and its controlled entities

IMDEX LIMITED

DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2014

(g) Performance Rights (continued)

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 (Managing Directors’ Tranche 2)	Ordinary	Nil	20 Oct 2011	Oct 2016	(aa)	153,318
Imdex Limited	Performance Rights (Tranche 7)	Ordinary	Nil	5 Sept 2011	Aug 2016	(bb)	640,000
Imdex Limited	Performance Rights (Tranche 9)	Ordinary	Nil	7 Oct 2011	Aug 2016	(cc)	210,596
Imdex Limited	Performance Rights (Managing Directors’ Tranche 3)	Ordinary	Nil	18 Oct 2012	Oct 2017	(dd)	264,818
Imdex Limited	Performance Rights (Managing Directors’ Tranche 4)	Ordinary	Nil	17 Oct 2013	Oct 2018	(ee)	300,000

(aa) 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.

(bb) 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.

(cc) 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.

(dd) 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.

(ee) To be satisfied by the issue of fully paid ordinary shares in Imdex Limited on or about October 2018. Subject to the achievement of specified performance hurdles and ongoing employment tenure.

(h) Share options

There are no share options on issue at the date of this report and there were no share options exercised during or since the end of the financial year.

(i) Principal Activities

The Group’s 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.

Page 12 of 79

IMDEX LIMITED and its controlled entities

DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2014

(j) Review of Operations

Imdex’s FY14 results reflected the subdued activity levels within the minerals industry due to the cyclical downturn. Positive signs of improvement, however, were evident during 4Q14 including:

• Month-on-month increases in Minerals revenue from 3Q14;

• A 21% increase in the number of REFLEX rental instruments on hire (a key leading indicator for Imdex’s Minerals business and sector activity) from 3Q14;

• Increasing throughput and revenue generated by REFLEX HUB, a trend that is expected to continue in FY15 and beyond providing a growing and sustainable annuity revenue stream; and

• A growing number of solids removal units (SRUs) on hire with further increases forecast in early FY15.

Notwithstanding the challenging market conditions, Imdex’s Minerals Division made significant progress with its technology development, successfully strengthened its operations and diversified its customer base. Strong activity levels continued within the oil and gas sector with substantial opportunities for long-term growth. Imdex continued to invest in the development of this business and the Company’s Oil & Gas Division achieved record revenue levels for the year.

Financial results for FY14:

• Statutory revenue down 21% to $183.5 million (FY13: $232.8 million);

• Combined revenue (excluding interest) down 18% to $204.6 million (FY13: $249.4 million);

• EBITA loss of $2.8 million (FY13: $35.2 million profit) including: $24.1 million profit on sale of SEH; $18.2 million of asset write-downs and closure costs; and $9.1 million of costs and provisions relating to the product containment incident;

• EBITA profit of $0.5 million prior to the profit on sale of SEH and product containment, asset write-downs and closure costs;

• Gross margins were largely maintained;

• Net profit after tax (NPAT) a loss of $5.3 million (FY13: $19.4 million profit);

• Net assets of $176.9 million (30 June 2013: $188.5 million);

• Positive operating cash-flow of $2.9 million (FY13: $39.0 million); and

• Reduced gearing with net debt / capital of 18.5% (30 June 2013: 22%).

Key operational highlights for the year included:

• Continued product development during the minerals sector downturn producing an exciting pipeline of AMC Fluids and REFLEX technologies;

• Growing industry demand and continued positive momentum with our solids removal units (SRUs) – particularly in the Americas;

• Development of underground and heli-portable SRUs and positive customer feedback from field trials;

• An AMEC Environmental Award for our SRUs;

• Increased throughput and continuing positive feedback with the marketing of REFLEX HUB;

• Expansion of our customer base, together with greater exposure to resource companies and the production phase of the mining cycle;

• Commercialization of four new REFLEX technologies – further enhancing REFLEX’s leading product range;

• Adoption of REFLEX HUB by blue chip resource companies for their drilling programs and maintenance management;

• Increasing exposure and capabilities within non-mining applications, including HDD and waterwell markets;

• Year-on-year revenue growth reported since FY10;

• Further investment in equipment, working capital and talented personnel to support ongoing growth of the Company’s oil and gas business;

• Continuing strong revenues and EBITDA performance by VES International (VES); and

• Continuing growth from the coal bed methane industry in Australia with an increased demand for equipment solutions to ensure environmental disturbance by drilling activities is minimised.

Key operational challenges for the year included:

• The subdued minerals market deflated the sector’s interest in adopting new technologies;

• Managing equipment utilisation levels and managing down working capital, particularly stock levels and increasing pressure on customer collections, in a slow minerals market;

• Managing costs ahead of revenue growth in AMC Oil & Gas – Germany; and

• A product containment incident – as announced to the market on 13 March 2014.

(k) Dividends

No dividend was paid during the current year.

In the prior 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, and a fully franked final dividend of 0.40 cents per ordinary share was paid on 25 October 2013 to shareholders registered on 11 October 2013.

Page 13 of 79

IMDEX LIMITED and its controlled entities

DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2014

(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 Group sold the remaining 91.9 million shares of its Sino Gas and Energy Holdings Ltd shareholdings at a share price of 18.5 cents per share to realise gross cash proceeds of $17.0 million at a book profit before tax of $14.2 million. Amounts shown within the Investment Revaluation Reserve at 30 June 2014 will be recycled to the Income Statement as a result of this sale.

(n) Future Developments

In support of our mission to deliver leading innovative technologies and solutions to the global minerals and oil and gas industry, we continue to focus 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 fit-forpurpose technologies.

The outlook for Imdex’s minerals markets in FY15 is encouraging. There is evidence of increasing activity and growing optimism that the current cycle has bottomed and is forecast to improve over the next twelve months.

This expected increase in activity levels is largely due to the return of some brown field expenditure and recent capital raisings by junior exploration companies. The juniors have not been a factor over the last two years or so, however, they are raising funds and are now converting some of these funds into metres drilled. Assets divested by the major companies are also being acquired by smaller companies who are working those assets.

There is also growing interest in the Company’s new technologies, which provide an attractive platform for further revenue growth through FY15 and beyond. Customers are focused on maximising the efficiency and productivity of their operations – Imdex’s technologies enable them to achieve this and provide Imdex with a growing and sustainable annuity revenue stream.

Activity within the energy sector remains robust and continues to offer substantial year-on-year growth opportunities for Imdex’s Oil & Gas Division. The global drilling and completion fluids market is expected to increase by more than 20% to US$13.5 billion during calendar year 2014, and the solids control and waste management market is forecast to grow by more than 15% to US$4.3 billion. Even a fraction of this market will make a significant contribution to the Company’s growth.

Imdex is in a strong position to capitalise on a number of opportunities within its core markets and are forecasting significantly better results in the new financial year.

Key Areas of Focus and Growth Initiatives for FY15

• Strong cost discipline and prudent working capital management;

• Increasing market share in previously under-penetrated regions;

• Increasing exposure and capabilities within non-mining applications, including HDD and waterwell markets;

• Marketing new technologies to new and existing customers globally;

• Increasing annuity revenue streams via REFLEX HUB;

• Leveraging Imdex’s specialist expertise and product development capabilities;

• Investing in Imdex’s Oil & Gas business to accelerate the Division’s growth; and

• Supporting customers to increase the productivity and efficiency of their operations.

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.

(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.

As announced to the market on 13 March 2014, Imdex’s subsidiary the Australian Mud Company Pty Ltd (AMC), undertook precautionary measures for the containment of an imported product used in some drilling operations within Queensland, Australia. The measures were taken following notification that certain batches were contaminated.

Page 14 of 79

IMDEX LIMITED and its controlled entities

DIRECTORS’ REPORT FOR THE YEAR ENDED 30 JUNE 2014

(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 auditor’s 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 auditor’s 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 auditor’s 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) Auditor’s Independence Declaration

The auditor’s independence declaration is included in the Annual Report immediately prior to the Audit Report.

(r) Indemnification of Officers and Auditors

During the financial year, the Company paid a premium in respect of a contract insuring the Directors of the Company, the Company Secretary, and all Executive Officers of the Company and of any related body corporate against a liability incurred as such a Director, Secretary or Executive Officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.

The Company has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred as such an officer or auditor.

(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 Order amounts in the Directors’ report and the financial report are rounded off to the nearest thousand dollars unless otherwise indicated.

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

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Mr Ross Kelly AM

Chairman

PERTH, Western Australia, 15 August 2014.

Page 15 of 79

Deloitte Touche Tohmatsu ABN 74 490 121 060

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The Board of Directors Imdex Limited 216 Balcatta Rd Balcatta WA 6021

Woodside Plaza Level 14 240 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia

Tel: +61 8 9365 7000 Fax: +61 9368 7001 www.deloitte.com.au

15 August 2014

Dear Board Members

Imdex Limited

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Imdex Limited.

As lead audit partner for the audit of the financial statements of Imdex Limited for the financial year ended 30 June 2014, I declare that to the best of my knowledge and belief, there have been no contraventions of:

• (i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

• (ii) any applicable code of professional conduct in relation to the audit.

Yours sincerely

DELOITTE TOUCHE TOHMATSU

A T Richards

Partner Chartered Accountants

Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited

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Deloitte Touche Tohmatsu ABN 74 490 121 060

Woodside Plaza Level 14 240 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia

Tel: +61 8 9365 7000 Fax: +61 (0) 9365 7001 www.deloitte.com.au

Independent Auditor’s Report to the members of Imdex Limited

Report on the Financial Report

We have audited the accompanying financial report of Imdex Limited, which comprises the statement of financial position as at 30 June 2014, the statement of profit or loss and other comprehensive income, the statement of cash flows and the statement of changes in equity for the year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity, comprising the company and the entities it controlled at the year’s end or from time to time during the financial year as set out on pages 19 to 79.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the consolidated financial statements comply with International Financial Reporting Standards.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control, relevant to the company’s preparation of the financial report that gives a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Touche Tohmatsu Limited

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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Auditor’s Independence Declaration

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of Imdex Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.

Opinion

In our opinion:

• (a) the financial report of Imdex Limited is in accordance with the Corporations Act 2001 , including:

• (i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2014 and of its performance for the year ended on that date; and

• (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001 ; and

• (b) the consolidated financial statements also comply with International Financial Reporting Standards as disclosed in Note 2.

Report on the Remuneration Report

We have audited the Remuneration Report included on pages 3 to 11 of the directors’ report for the year ended 30 June 2014. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Opinion

In our opinion the Remuneration Report of Imdex Limited for the year ended 30 June 2014, complies with section 300A of the Corporations Act 2001 .

DELOITTE TOUCHE TOHMATSU

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A T Richards Partner Chartered Accountants Perth, 15/08/2014

IMDEX LIMITED and its controlled entities

DIRECTORS’ DECLARATION

The Directors declare that:

• (a) in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable;

• (b) in the Directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the Group;

• (c) in the Directors’ opinion, the financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board, as stated in note 2 to the financial statements; and

• (d) the Directors have been given the declarations required by s.295A of the Corporations Act 2001.

At the date of this declaration, the Company is within the class of companies affected by ASIC Class Order 98/1418. The nature of the deed of cross guarantee is such that each company which is party to the deed guarantees to each creditor payment in full of any debt in accordance with the deed of cross guarantee.

In the Directors’ opinion, there are reasonable grounds to believe that the Company and the companies to which the ASIC Class Order applies, as detailed in note 24 to the financial 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.

Signed in accordance with a resolution of the Directors made pursuant to s.295(5) of the Corporations Act 2001.

Dated at Perth, 15 August 2014.

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Mr Ross Kelly AM Chairman

Page 19 of 79

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 2014. 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 2014, 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 Company’s 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

Imdex’s Board structure is consistent with the ASX Recommendations on Principle 2, with the exception that it does not have a separate nomination committee for the reasons detailed below.

(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 Company’s Constitution the minimum number of Directors is three. There is no maximum number, although it would be expected that the optimal number of Directors would be five or six.

The names of the Directors of the Company in office at the date of this Statement are set out in the Directors’ Report and further details concerning the skills, experience, expertise and term of office of each Director is set out in the Director’s Profiles in the first section of the Annual Report.

(ii) Board Independence

Directors are expected to bring independent judgement to the decision making of the Board. To facilitate this, each Director has the right to seek independent legal advice at the Group’s expense with the prior approval of the Chairman, which may not be unreasonably withheld.

In assessing Director independence, materiality has been determined from both a quantitative and qualitative perspective. An amount of over 5% of turnover is considered material. Similarly, a transaction of any amount, or a relationship, is deemed material if knowledge of it impacts, or may impact, the Shareholders’ understanding of the Director’s performance. The Board has conducted a review of each Director’s independence and reports as follows:

Director	Assessment	Existence of any matters contained in ASX Recommendation 2.1 affecting Independence
Mr R W Kelly, Non Executive Chairman	Independent	Nil
Mr B W Ridgeway, Managing Director	Not Independent	Managing Director
Mr K A Dundo, Non Executive Director	Independent	Nil
Mr M Lemmel, Non Executive Director	Independent	Nil
Ms E Donaghey, Non Executive Director	Independent	Nil

Page 20 of 79

IMDEX LIMITED and its controlled entities

CORPORATE GOVERNANCE STATEMENT

(iii) Board Nomination

The Board does not have a separate nomination committee and, given the Company’s size, does not intend to form such a committee. However, the composition of the Board is determined using the following principles:

• The Board should comprise a majority of independent, Non Executive Directors with a broad range of experience, skills and expertise;

• The Chairman of the Board should be an independent, Non Executive Director; and

• The roles of the Chairman and the Managing Director should not be exercised by the same individual.

(iv) Procedure for the selection and appointment of new Directors to the Board

The Company has published on its website, procedures for the selection and appointment of new Directors to the Board. The Company also has terms and conditions which govern the appointment of Non Executive Directors. These are subject to the Company’s Constitution and the Corporations Act 2001, and cover: appointment, retirement, Corporate Governance, remuneration, Board meetings, and Board Committees.

The Board does not impose on Directors an arbitrary time limit on their tenure. Under the Company’s Constitution and the ASX Listing Rules however, each Director must retire by rotation within a three year period following their appointment. In such cases, the Director’s nomination for re-election should be based on performance and the needs of the Company.

(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 Company’s 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 2014:

• of five Board positions, four (80%) were held by males, and one (20%) was held by a female.

• of nine senior executive positions, eight (89%) were held by males, and one (11%) was held by a female.

• Of 567 full time employees, 438 (77%) were male and 129 (23%) were female.

Page 21 of 79

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 2014 Annual Financial Report presents a true and fair view, in all material respects, of the Company’s financial condition and operational results and are in accordance with relevant accounting standards.

(ii) The Audit and Compliance Committee

The Audit and Compliance Committee consists of three independent Non Executive Directors and operates under a formal charter approved by the Board. The Charter is published on the Company’s website.

The Committee is chaired by an independent Chairperson who is not the Chairman of the Board of Directors.

The role of the Committee is to advise on the establishment and maintenance of a framework of internal control, risk management protocols, 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 Directors’ 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 Directors’ Report.

(iii) External Auditors

The Board reviews the performance, skills, cost and other matters when assessing the appointment of external auditors. This review is generally undertaken at the completion of the preparation of the Annual Financial Report and involves discussions with the auditors and the Group's senior management. Information concerning the selection and appointment of external auditors is published on the Company’s 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 Company’s website.

The procedures set out who is responsible for determining whether information is of a type or nature that requires disclosure, the Board’s role in reviewing the information disclosed to ASX and the procedures for ensuring that the information is released to ASX.

All information disclosed to the ASX is published on the Company’s website as soon as practicable.

Page 22 of 79

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 which 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 including Quarterly Shareholder newsletters;

• 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 Company’s 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 Company’s Annual General Meetings and is available to answer Shareholders questions concerning the conduct of the audit.

The Company’s Shareholder Communications Strategy is published on the Company’s website.

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 Company’s 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 Company’s and Group’s risk management and internal control processes on a continuous basis.

The risk management policy is published on the Company’s 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.

Page 23 of 79

IMDEX LIMITED and its controlled entities

CORPORATE GOVERNANCE STATEMENT

Principle 8: Remunerate fairly and responsibly

(i) Company’s remuneration policies

Details on the remuneration of Directors and Executives as well as the Company’s 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 Directors’ Profiles in the first section of the Annual Report.

The Remuneration Committee operates under a written Charter that is published on the Company’s website.

(iii) Structure of Non Executive Director’s remuneration

The terms and conditions governing the remuneration of Non Executive Director’s are set out in their appointment letter. All Non Executive Directors are remunerated by way of fixed cash fees. Non Executive Directors are not provided with retirement benefits other than statutory superannuation. The maximum total remuneration payable to Non Executive Directors was approved by Shareholders at the 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 79

IMDEX LIMITED and its controlled entities

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2014

Notes Revenue from sale of goods and operating lease rental Other revenue from operations Total revenue 4 Other income 4 Gain on the disposal of shares in Sino Gas and Energy Holdings Ltd (SEH) 4 Raw materials and consumables used 4 Employee benefit expense 4 Depreciation expense 4 Amortisation expense 4 Write down of fixed assets 4 Impairment of intangibles and goodwill 4 Finance costs 4 Share of profit of associate 26 Other expenses 4 (Loss)/profit before tax Income tax credit/(expense) 5 (Loss)/profit for the year Other comprehensive income Items that may be reclassified subsequently to profit or loss Fair value adjustment on investment in SEH 18 Income tax relating to components of other comprehensive income 18 Cumulative profit reclassified to profit or loss on sale of SEH shares, net of tax 18 Exchange differences arising on the translation of foreign operations 18 Other comprehensive income for the year, net of income tax Total comprehensive (loss)/income for the year (Loss)/profit attributable to owners of the parent Total comprehensive (loss)/income attributable to owners of the parent (Loss)/earnings per share Basic (loss)/earnings per share (cents) 19 Diluted (loss)/earnings per share (cents) 19	Year Ended Year Ended 30 June 2014 30 June 2013 $’000 $’000 183,485 232,791 72 130
	183,557 232,921
	89 46 24,094 - (86,870) (101,069) (51,448) (51,339) (7,575) (7,728) (1,469) (3,364) (3,803) - (3,746) - (2,883) (3,438) 715 1,300 (57,723) (38,819)
	(7,062) 28,510
	1,785 (9,127)
	(5,277) 19,383
	17,107 5,038 (5,132) (1,511) (17,172) - (595) 6,536
	(5,792) 10,063
	(11,069) 29,446
	(5,277) 19,383
	(11,069) 29,446
	(2.50) 9.24 (2.50) 9.14

The Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

Page 25 of 79

and its controlled entities

IMDEX LIMITED

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014

Notes Current Assets Cash and Cash Equivalents 28 Trade and Other Receivables 7 Inventories 8 Current Tax Assets 5 Other 10 Financial Asset Available for Sale 9 Total Current Assets Non Current Assets Property, Plant and Equipment 11 Investment in Asociates 26 Deferred Tax Assets 5 Goodwill 12 Other Intangible Assets 13 Other Receivables Total Non Current Assets Total Assets Current Liabilities Trade and Other Payables 14 Borrowings 15 Other Financial Liabilities 29 Current Tax Liabilities 5 Provisions 16 Total Current Liabilities Non Current Liabilities Borrowings 15 Provisions 16 Total Non Current Liabilities Total Liabilities Net Assets Equity Issued Capital 17 Shares Reserved for Performance Rights Plan 17 Foreign Currency Translation Reserve 18 Investment Revaulation Reserve 18 Employee Equity-Settled Benefits Reserve 18 Mandatory Issuable Capital 18 Retained Earnings Total Equity	30 June 2014 30 June 2013 $’000 $’000 10,070 9,979 39,744 45,231 42,631 53,356 267 2,661 2,870 5,909
	95,582 117,136 14,705 26,450
	110,287 143,586
	47,180 40,701 26,270 25,555 15,832 8,632 60,377 61,782 1,884 5,610 957 -
	152,500 142,280
	262,787 285,866
	17,306 25,776 6,902 14,738 80 - - 1,900 16,185 4,681
	40,473 47,095
	43,239 49,248 2,153 1,071
	45,392 50,319
	85,865 97,414
	176,922 188,452
	90,259 89,269 - (952) (11,762) (11,167) 8,557 13,754 6,266 6,087 - 990 83,602 90,471
	176,922 188,452

The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

Page 26 of 79

IMDEX LIMITED and its controlled entities

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014

		Fully Paid		Shares	Foreign		Investment	Employee		Mandatory		Retained	Retained	Total
		Ordinary		reserved for	Currency		Revaluation	Equity-Settled		Issuable		Earnings		Attributable to
		Shares		Performance	Translation		Reserve	Benefits		Capital				Equity Holders
				Rights Plan	Reserve			Reserve						of the Entity
	Notes	$'000		$'000	$'000		$'000	$'000		$'000		$'000		$'000
Balance at 1 July 2012		86,069		(3,740)	(17,703)		10,227	6,385		990		85,838		168,066
Exchange differences on translation of foreign
operations after taxation	18		-	-	6,536		-		-		-		-	6,536
Fair value adjustment on investment in SEH	18		-	-		-	5,038		-		-		-	5,038
Income tax relating to components of other
comprehensive income	18		-	-		-	(1,511)		-		-		-	(1,511)
Profit for the year			-	-		-	-		-		-	19,383		19,383
Total comprehensive income for the period			-	-	6,536		3,527		-		-	19,383		29,446
Issue of shares as part consideration for the
acquisition of ioGlobal	17	3,200		-		-	-		-		-		-	3,200
Dividend paid			-	-		-	-		-		-	(13,591)		(13,591)
Share based payments - performance rights	18		-			-	-	1,331			-		-	1,331
Granting/settlement of performance rights	18		-	2,788		-	-	(1,629)			-	(1,159)		-
Balance at 30 June 2013		89,269		(952)	(11,167)		13,754	6,087		990		90,471		188,452
Exchange differences on translation of foreign
operations after taxation	18		-	-	(595)		-		-		-		-	(595)
Fair value adjustment on investment in SEH	18		-	-		-	17,107		-		-		-	17,107
Income tax relating to components of other
comprehensive income	18		-	-		-	(5,132)		-		-		-	(5,132)
Cumulative profit reclassified to profit or loss on sale
of SEH shares, net of tax	18		-	-		-	(17,172)		-		-		-	(17,172)
Loss for the year			-	-		-	-		-		-	(5,277)		(5,277)
Total comprehensive income for the period			-		(595)		(5,197)		-		-	(5,277)		(11,069)
Issue of shares as part consideration for the
acquisition of System Mud Industria e Comercio Ltda	17,18	990		-		-	-		-	(990)			-	-
Dividend paid			-	-		-	-		-		-		(842)	(842)
Shares purchased on market to satisfy performance
rights			-	(464)		-	-		-		-		-	(464)
Share based payments - performance rights	18		-	-		-	-	845			-		-	845
Granting/settlement of performance rights	18		-	1,416		-	-	(666)			-		(750)	-
Balance at 30 June 2014		90,259		-	(11,762)		8,557	6,266			-	83,602		176,922

The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

Page 27 of 79

and its controlled entities

IMDEX LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014

Notes Cash Flow s From Operating Activities Receipts from customers Payments to suppliers and employees Interest and other costs of finance paid Income tax refund/(paid) Net cash provided by Operating Activities 28(c) Cash Flow s From Investing Activities Interest received Payment for property, plant and equipment Proceeds from sale of SEH shares, net of transaction costs 9 Proceeds from sale of property, plant and equipment Payment for development costs capitalised 13 Payment for shares in ioGlobal net of cash acquired 25(a) Net cash provided by/(used in) Investing Activities Cash Flow s From Financing Activities 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 Net cash used in Financing Activities Net Increase/(Decrease) in Cash and Cash Equivalents Held Cash and Cash Equivalents at the Beginning Of The Financial Year Effects of exchange rate changes on the balance of cash and cash equivalents held in foreign currencies Cash and Cash Equivalents at the End Of The Financial Year 28(a)	Year Ended Year Ended 30 June 2014 30 June 2013 $’000 $’000 201,995 278,526 (197,690) (216,267) (2,850) (3,219) 1,459 (20,070)
	2,914 38,970
	72 130 (16,903) (23,768) 28,414 - 540 180 - (996) - (3,874)
	12,123 (28,328)
	(464) - (842) (13,591) (266) (581) 46,568 13,924 (59,743) (12,314)
	(14,747) (12,562)
	290 (1,920)
	9,979 11,232 (199) 667
	10,070 9,979

The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

Page 28 of 79

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 Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current reporting period.

In the current year, the Group has applied for the first time AASB 10, AASB 11, AASB 12, AASB 13, AASB 119 and AASB 128 (as revised in 2011) together with the amendments to AASB 10, AASB 11 and AASB 12 regarding the transitional guidance. AASB 127 (as revised in 2011) is not applicable to the Group as it deals only with separate financial statements.

The adoption of these amendments has not resulted in any significant changes to the Group’s accounting policies and has no significant affect on the amounts reported for the current or prior periods.

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, based on management’s assessment to date, expected to have any material impact on the financial report of the company:

Standard/Interpretation	Effective for annual reporting periods beginning on or after:	Expected to be initially applied in the financial **year ending: **
AASB9‘Financial Instruments’, and therelevant amending standards1	1January2017	30 June2018
AASB 1031 ‘Materiality’(2013)	1 January 2014	30 June 2015
AASB 2012-3 ‘Amendments to Australian Accounting Standards – Offsetting Financial Assets andFinancial Liabilities’	1 January 2014	30 June 2015
AASB 2013-3 ‘Amendments to AASB 136 – Recoverable Amount Disclosures for Non-Financial Assets’	1 January 2014	30 June 2015
AASB 2013-4 ‘Amendments to Australian Accounting Standards – Novation of Derivatives and Continuationof HedgeAccounting’	1 January 2014	30 June 2015
AASB 2013-9 ‘Amendments to Australian Accounting Standards – Conceptual Framework,Materiality andFinancial Instruments’	1January2014	30 June2015
INT 21 ‘Levies’	1 January 2014	30 June 2015
AASB 2014-1 ‘Amendments to Australian Accounting Standards’ - Part A: ‘Annual Improvements 2010–2012 and 2011–2013 Cycles’ - Part C:‘Materiality’	1 July 2014	30 June 2015
AASB 2014-1 ‘Amendments to Australian Accounting Standards’ – Part E: ‘Financial Instruments’	1 January 2015	30 June 2016
IFRS15‘RevenuefromContractswithCustomers’	1January2017	30 June2018

• 1 The AASB has issued the following versions of AASB 9 and the relevant amending standards:

• AASB 9 ‘Financial Instruments’ (December 2009), AASB 2009-11 ‘Amendments to Australian Accounting Standards arising from AASB 9’, AASB 2012-6 ‘Amendments to Australian Accounting Standards – Mandatory Effective Date of AASB 9 and Transition Disclosures’

• AASB 9 ‘Financial Instruments’ (December 2010), AASB 2010-7 ‘Amendments to Australian Accounting Standards arising from AASB 9 (December 2010)’, AASB 2012-6 ‘Amendments to Australian Accounting Standards – Mandatory Effective Date of AASB 9 and Transition Disclosure’.

• In December 2013 the AASB issued AASB 2013-9 ‘Amendment to Australian Accounting Standards – Conceptual Framework, Materiality and Financial Instruments’, Part C – Financial Instruments. This amending standard has amended the mandatory effective date of AASB 9 to 1 January 2017. For annual reporting periods beginning before 1 January 2017, an entity may early adopt either AASB 9 (December 2009) or AASB 9 (December 2010) and the relevant amending standards.

Page 29 of 79

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.

Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting Standards ensures that the financial statements and notes of the company and the Group comply with International Financial Reporting Standards (‘IFRS’).

The financial statements were authorised for issue by the directors on 15 August 2014.

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) Basis of Consolidation

The financial statements of the Company and entities controlled by the Company (its subsidiaries) (referred to as ‘the Group’ in these financial statements). Control is achieved when the Group has power over an entity and is exposed to, or has rights over, the variable returns of the entity, as well as the ability to use this power to affect the variable returns of the entity.

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.

A change in the ownership interest of a subsidiary that does not result in a loss of control, is accounted for as an equity transaction.

If the Group loses control over a subsidiary, it:

• derecognises the assets (including goodwill) and liabilities of the subsidiary;

• derecognises the carrying amount of any non-controlling interest;

• recognises the fair value of the consideration received;

• recognises the fair value of any investment retained;

• recognises any surplus or deficit in profit or loss, and;

• reclassifies to profit or loss or transfers directly to retained earnings, as appropriate, the parent’s share of components previously recognised in other comprehensive income.

Interest in associates are equity accounted and are not part of the consolidated Group (see 2(j)).

Transactions and balances between the company and its associates were eliminated in the preparation of consolidated financial statements of the Group to the extent of the Group’s share in profits and losses of the associate resulting from these transactions.

Page 30 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

2 Summary of Significant Accounting Policies (continued)

(c) 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.

(d) Goods and services tax

Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:

• (i) 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

• (ii) 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.

(e) 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 acquirer’s 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 Group’s interest in the fair value of the acquiree’s 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 acquirer’s 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 Group’s 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.

(f) Inventories

Inventories are valued at the lower of cost and net realisable value. Costs, including an appropriate portion of fixed and variable overhead expenses, are assigned to inventory on hand by the method most appropriate to each particular class of inventory, with the majority being valued on a first in first out basis. Net realisable value represents the estimated selling price less all estimated costs of completion and costs necessary to make the sale.

(g) 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 Group’s 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.

Page 31 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

2 Summary of Significant Accounting Policies (continued)

(h) Performance rights

Equity-settled performance rights 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 management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.

The fair value determined at the grant date of the performance right is expensed over the vesting period, based on the Group’s estimate of shares that will eventually vest.

At each reporting date, the Group revises its estimate of the number of performance rights 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.

(i) 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 Group’s 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 acquiree’s 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 acquiree’s 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 ‘Non-current Assets Held for Sale and Discontinued Operations’. 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 Group’s share of the profit or loss and other comprehensive income of the associate. When the Group’s share of losses of an associate exceeds the Group’s interest in that associate (which includes any long-term interests that, in substance, form part of the Group’s 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 Group’s 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 Group’s 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.

Page 32 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

2 Summary of Significant Accounting Policies (continued)

(j) Investments in associates (continued)

The requirements of AASB 139 are applied to determine whether it is necessary to recognise any impairment loss with respect to the Group’s investment in an associate. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with AASB 136 ‘Impairment of Assets’ 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.

(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 entity’s 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 Group’s 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 Group’s 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.

Page 33 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

2 Summary of Significant Accounting Policies (continued)

(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 ‘at fair value through the profit or loss’ which are initially measured at fair value.

Financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’, ‘held-tomaturity’ investments, ‘current assets held for sale’, ‘available-for-sale’ financial assets, and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

(i) 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 ‘at fair value through profit or loss’.

(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 ‘loans and receivables’. 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 asset’s 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.

Page 34 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

2 Summary of Significant Accounting Policies (continued)

(n) Financial assets (continued)

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.

(o) Financial liabilities and equity instruments issued by the Group

(i) 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 ‘at fair value through profit or loss’ 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 ‘at fair value through profit or loss’ 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 Group’s 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 ‘Financial Instruments: Recognition and Measurement’ permits the entire combined contract (asset or liability) to be designated as ‘at fair value through profit or loss’.

• (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.

Page 35 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

2 Summary of Significant Accounting Policies (continued)

(p) Intangible assets

• (i) 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:

ul lives are as follows:
Intellectual property	10 years
Technology	5-7 years
Contracts	1-5 years (term of contract)
Customers	5-6 years
Trade Names and Patents	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).

(ii) 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 Group’s 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.

Page 36 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

2 Summary of Significant Accounting Policies (continued)

(q) Taxation (continued)

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.

(iv) Tax consolidation

The Company and all its wholly-owned Australian resident entities are part of a tax-consolidated group under Australian taxation law. Imdex Limited is the head entity in the tax-consolidated group. Tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary differences 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 ‘separate taxpayer within group’ 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 taxconsolidated 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. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

(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 Group’s general policy on borrowing costs.

Finance leased assets are amortised on a straight line basis over the estimated useful life of the asset.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

(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.

Page 37 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

2 Summary of Significant Accounting Policies (continued)

(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) Rental income

The Group’s policy for recognition of revenue from operating leases is described in note 2 (r)(i).

(iv) Royalties

Royalty revenue is recognised on an accrual basis in accordance with the substance of the relevant agreement.

(v) 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 asset’s net carrying amount.

(t) Employee benefits

(i) 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.

(iii) Termination benefit A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognises any related restructuring costs.

(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 cashgenerating 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.

Page 38 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

2 Summary of Significant Accounting Policies (continued)

(u) Impairment of other tangible and intangible assets (other than goodwill) (continued)

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.

(w) Contingent Liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or nonoccurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Group does not recognise a contingent liability but discloses its existence in the financial statements.

(x) Contingent Assets

A contingent asset is a possible asset that arises from past events whose existence will be confirmed by the occurrence or nonoccurrence of one or more uncertain future events beyond the control of the Group. The Group does not recognise contingent assets but discloses its existence where inflows of economic benefits are probable, but not virtually certain.

Page 39 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

3 Critical Accounting Judgements and Key Sources of Estimation Uncertainty

In the application of the Group’s 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 entity’s accounting policies

Management has not made any significant critical judgements in the process of applying the Group’s 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:

Use of forecasts

The directors have considered a number of factors in regard to any forward looking estimates. Imdex’s results for the year ended 30 June 2014 reflected the subdued activity levels within the minerals industry due to the cyclical downturn. Positive signs of improvement were evident during 4Q14, as outlined within the Directors’ report. The use of estimates is inherently uncertain and requires a significant level of judgement. Forward looking estimates have been used in the preparation of the financial report in respect of impairment of assets, recognition of deferred tax assets, the appropriate level of provisions and preparation of the financial report on a going concern basis. Management and the Directors have concluded that appropriate assessments have been made with respect to the use of forecasts in the preparation of the financial report.

• Impairment of Goodwill and Intangibles

• Determining whether goodwill and intangibles are impaired requires an estimation of the value in use of the cashgenerating 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). An impairment loss of $3.7 million was booked in the current year (2013: nil). A goodwill amount of $60.3 million and intangible assets of $1.9 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 $15.8 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 performance rights

Performance rights as detailed in note 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.

Provisions and contingent liabilities

The Group exercises judgement in measuring and recognising provisions and the exposures to contingent liabilities related to pending litigation or other outstanding claims subject to negotiated settlement, mediation, arbitration or government regulation. Judgement is necessary in assessing the likelihood that a pending claim will succeed, or a liability will arise and to quantify the possible range of the financial settlement. Because of the inherent uncertainty in this evaluation process, actual losses may be different from the originally estimated provision.

As announced to the market on 13 March 2014, Imdex’s subsidiary the Australian Mud Company Pty Ltd (AMC), undertook precautionary measures for the containment of an imported product used in some drilling operations within Queensland, Australia. The measures were taken following notification that certain batches were contaminated. Costs relating to the product containment incident are unlikely to be recoverable. As a result, management have made an estimate of the costs to remediate and have provided for these costs in FY14 based on this best estimate. In making this assessment a forward looking estimate has been made of future cash flows and the likely outcome of remediation negotiations.

Page 40 of 79

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 incom e Interest incom e - bank deposits (b) (Loss)/profit be fore incom e ta x Other than as disclosed on the face of the incom e statem ent, profit before incom e tax has been arrived at after crediting / (charging) the following gains and losses: Loss on disposal of property, plant and equipm ent Othe r incom e Gain on the disposal of shares in S E H (note 9) Other De pre cia tion, a m ortisa tion a nd im pa irm e nt of Non Curre nt Asse ts Depreciation of P roperty, P lant and E quipm ent (note 11) A m ortisation of Intangible A ssets (note 13) Im pairm ent of Goodwill (note 12) Im pairm ent of Intangibles (note 13) W rite down of fixed assets (note 11) Fina nce costs Interest on hire purchase liabilities Interest on com m ercial bills/bank loans Interest on overdraft Other interest Othe r e x pe nse s Com m issions Consultancy fees Legal and professional expenses (i) Foreign exchange loss Rent and prem ises costs Travel and accom m odation Freight M otor vehicle costs Obsolete stock Doubtful debts (note 7) K azakhstan business closure costs Office closure costs P roduct containm ent Other expenses Em ploye e be ne fits e x pe nse P ost-em ploym ent benefits: Defined contribution superannuation costs S hare based paym ents: E quity-settled share based paym ents - perform ance rights (note 18) Term ination benefits Other em ployee benefits Cost of sa le s M ove m e nt in provision for doubtful de bts (note 7) Ope ra ting le a se re nta l (m inim um le a se pa ym e nts) (i) Includes legal, audit, accounting, share registry and corporate secretarial fees

Page 41 of 79 2014 2013 $’000 $’000 137,765 165,827 45,720 66,964 72 130 183,557 232,921 (206) (58) 24,094 - 89 46 24,183 46 (7,575) (7,728) (1,469) (3,364) (1,500) - (2,246) - (3,803) - (16,593) (11,092) (33) (68) (2,717) (3,016) (103) (88) (30) (266) (2,883) (3,438) (1,416) (2,120) (2,297) (2,783) (7,261) (6,435) (859) (1,061) (6,913) (5,354) (5,458) (5,512) (1,106) (1,973) (2,700) (2,514) (2,568) (593) (4,199) (1,098) (2,437) - (1,400) - (9,080) - (10,029) (9,376) (57,723) (38,819) (2,649) (2,549) (845) (1,331) (547) - (47,407) (47,459) (51,448) (51,339) (86,870) (101,069) 4,199 1,098 (7,045) (6,174) .

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

5 Income Taxes

(a) Income credit/(tax) recognised in the income statement Tax (credit)/expense comprises: Current tax expense Deferred tax (credit)/expense relating to the origination and reversal of temporary differences (Over)/Under provision per prior year Total tax (credit)/expense	2014 2013 $’000 $’000 2,757 7,853 (3,728) 884 (814) 390
	(1,785) 9,127

(Loss)/profit from operations Income tax (credit)/expense calculated at 30% Impairment of Goodwill Non-assessable share of profit of Associate Current year losses not recognised for deferred tax purposes Other non-deductible and non-assessable items (Over)/Under provision of prior year income tax Prima facie income tax expense on pre-tax accounting (loss)/profit from operations reconciles to income (credit)/tax in the financial statements as follows:	(7,062) 28,510
	(2,119) 8,553 450 - (215) (390) 638 - 275 573 (814) 390
	(1,785) 9,127

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 OCI

The following current and deferred amounts were charged directly to equity during the year:

(c) Current tax assets and liabilities Current tax receivable Current tax payable Deferred tax: SEH fair value uplift taken directly to reserve	(5,132) (1,511)
	267 2,661
	- 1,900

Page 42 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

5 Income Taxes (continued)

(d) Deferred tax balances 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 Net deferred tax balances Unrecognised deferred tax assets: The following have not been brought to account as assets: Temporary differences relating to the translation of investments in subsidiary undertakings Deferred Tax Assets in respect of unrecognised tax losses	2014 2013 $’000 $’000 7,391 1,464 1,820 488 3,041 7,067 5,220 2,434 469 874 1,638 1,634 548 1,373
	20,127 15,334
	(280) (1,693) (3,667) (4,584) (348) (425)
	(4,295) (6,702)
	15,832 8,632
	2,018 2,802
	761 -

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 43 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

6 Remuneration of Auditors

6 Remuneration of Auditors
Deloitte Touche Tohmatsu (Australia) Audit or review of the financial report Other audit related services 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 Audit or review of the financial report Total Auditor Remuneration	2014 2013 $ $ 345,500 326,550 9,000 - 47,176 762,501
	401,676 1,089,051
	56,300 81,601 47,919 68,131 22,750 -
	126,969 149,732
	28,534 25,583
	557,179 1,264,366

Page 44 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

7 Trade and Other Receivables

Note s Curre nt Trade receivables (i) Allowance for doubtful debts (ii) Other receivables	2014 2013 $’000 $’000 42,650 45,071 (4,771) (1,269)
	37,879 43,802 1,865 1,429
	39,744 45,231

(i) The average credit period on sales of goods is around 60 days. Trade receivables are interest free.	(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
Ageing of past due but not impaired debtors
0 - 30 days past due	1,719 2,034
31 - 60 days past due	7,493 8,629
61 + days past due	2,498 2,876
	11,710 13,539

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 Increase in allowance recognised in profit or loss Balance at the end of the year	1,269 1,463 (697) (1,292) 4,199 1,098
	4,771 1,269

All impaired debtors are in excess of 90 days overdue.

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

Current Raw materials Work in progress Finished goods	2014 2013 $’000 $’000 7,597 7,989 1,321 4,331 33,713 41,036
	42,631 53,356

A provision for diminution of stock of $2,762,530 existed at 30 June 2014 (2013: $722,000).

Page 45 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

9 Financial Assets Available for Sale

Notes Current Financial Asset Available for Sale Investment in Sino Gas and Energy Holdings Ltd (i)	2014 2013 $’000 $’000 14,705 26,450

( i) Comprises 91,908,446 fully paid ordinary shares in Sino Gas and Energy Holdings Ltd (SEH) held at fair value (2013: 251,908,446 shares). This amounts to 6.01% of the issued share capital of SEH (30 June 2013: 20.11%).

This asset is non-core and accordingly, this investment has been classified as a Financial Asset Available for Sale and is carried at fair value.

During the year Imdex disposed of 160,000,000 SEH shares resulting in cash proceeds (net of selling expenses) of $28.4m, and resulting in a gain on disposal of $24.1m recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income.

SEH shares have previously been accounted for as a financial asset held for sale, with revaluation gains/losses recorded within other comprehensive income (net of tax). Historical revaluation gains up to the date of disposal of $17.2m (net of tax), have been reclassified at the date of disposal from Other Comprehensive Income to the Statement of profit or loss.

Subsequent to year end, the Group sold the remaining 91.9 million shares of its Sino Gas and Energy Holdings Ltd shareholdings at a share price of 18.5 cents per share to realise gross cash proceeds of $17.0 million at a book profit before tax of $14.2 million. Amounts shown within the Investment Revaluation Reserve at 30 June 2014 will be recycled to the Income Statement as a result of this sale.

Investment in Sino Gas and Energy Holdings Ltd

Investment in Sino Gas and Energy Holdings Ltd
Balance at beginning of the financial year Part disposal of shares held in Sino Gas and Energy Holdings Ltd Fair value adjustment taken directly to equity (pre-tax) Balance at the end of the period	Shares $’000 251,908,446 26,450 (160,000,000) (28,852) - 17,107 2014
	91,908,446 14,705

During the current year the carrying value of this investment was written up to its market value of $0.16 per share or $14.7 million in total at 30 June 2014.

10 Other Assets

10 Other Assets
	2014	2013
	$’000	$’000
Current
Prepayments	2,870	5,909

Page 46 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

11 Property, Plant and Equipment

Plant and Equipment at cost Leasehold Improvements at cost Capital Works in Progress at cost TOTAL $’000 $’000 $’000 $’000 Gross Carrying Value Balance at 30 June 2012 26,597 3,339 2,720 32,656 Additions 21,597 680 2,043 24,320 Acquisitions through business combinations 175 - - 175 Disposals (1,596) - (292) (1,888) Net foreign currency exchange differences 5,334 104 188 5,626 Balance at 30 June 2013 52,107 4,123 4,659 60,889 Additions 8,102 4,366 4,523 16,991 Disposals (370) (340) - (710) Write down of fixed assets - - (3,803) (3,803) Net foreign currency exchange differences 1,595 17(140) 1,472 Balance at 30 June 2014 61,434 8,166 5,239 74,839 Accumulated Depreciation Balance at 30 June 2012 11,451 1,475 - 12,926 Disposals (1,650) - - (1,650) Depreciation expense 7,083 645 - 7,728 Net foreign currency exchange differences 1,171 13 - 1,184 Balance at 30 June 2013 18,055 2,133 - 20,188 Disposals (67) (247) - (314) Depreciation expense 6,818 757 - 7,575 Net foreign currency exchange differences 206 4 - 210 Balance at 30 June 2014 25,012 2,647 - 27,659 Net Book Value As at 30 June 2013 34,052 1,990 4,659 40,701 As at 30 June 2014 36,422 5,519 5,239 47,180 2014 2013 $’000 $’000 6,818 7,083 757 645 7,575 7,728 Plant and equipment Aggregate depreciation allocated, whether recognised as an expense or capitalised as part of the carrying amount of other assets during the year: Leasehold improvements	Plant and Equipment at cost Leasehold Improvements at cost Capital Works in Progress at cost TOTAL $’000 $’000 $’000 $’000 26,597 3,339 2,720 32,656 21,597 680 2,043 24,320 175 - - 175 (1,596) - (292) (1,888) 5,334 104 188 5,626	Plant and Equipment at cost Leasehold Improvements at cost Capital Works in Progress at cost TOTAL $’000 $’000 $’000 $’000 26,597 3,339 2,720 32,656 21,597 680 2,043 24,320 175 - - 175 (1,596) - (292) (1,888) 5,334 104 188 5,626
	52,107 4,123 4,659 60,889 8,102 4,366 4,523 16,991 (370) (340) - (710) - - (3,803) (3,803) 1,595 17(140) 1,472
	61,434 8,166 5,239 74,839
	11,451 1,475 - 12,926 (1,650) - - (1,650) 7,083 645 - 7,728 1,171 13 - 1,184
	18,055 2,133 - 20,188 (67) (247) - (314) 6,818 757 - 7,575 206 4 - 210
	25,012 2,647	- 27,659
	34,052 1,990	4,659 40,701
	36,422 5,519	5,239 47,180
		2014 2013 $’000 $’000 6,818 7,083 757 645
		7,575 7,728

Page 47 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

12 Goodwill

Notes Gross Carrying Amount Balance at beginning of the financial year Recognised on acquisition of ioGlobal Recognised on acquisition of System Mud Industria e Comercio Ltda (System Mud) Effect of foreign exchange movements (i) Balance at end of the financial year Accumulated Impairment Losses Balance at beginning of the financial year Impairment losses for the year (ii) Balance at end of the financial year Net Book Value At the beginning of the financial year At the end of the financial year Goodwill is allocated to cash-generating units as follows: Reflex AMC Minerals Asia Pacific AMC Minerals South America AMC Oil & Gas Europe	2014 2013 $’000 $’000 84,280 77,075 - 6,357 - 338 95 510
	84,375 84,280
	(22,498) (22,498) (1,500) -
	(23,998) (22,498)
	61,782 54,577
	60,377 61,782
	35,909 35,979 18,360 18,360 5,811 7,146 297 297
	60,377 61,782

(i) Foreign currency conversion of goodwill

Some goodwill balances are denominated in currencies other than Australian Dollars. In particular a portion of goodwill associated with the Reflex CGU is denominated in Swedish Kroner and a portion of the AMC Minerals South America CGU is denominated in Brazilian Real. These non-Australian Dollar balances are translated into Australian Dollars and fluctuate in line with foreign exchange movements.

(ii) Impairment losses recognised by cash-generating units:

AMC Minerals South America (1,500) -

AMC Minerals South America

Imdex has performed a value in use calculation, using a post tax discount rate of 13.47%, for the AMC Minerals South America CGU and has determined that the recoverable value is $5.8m (FY13: $7.1m). $1.5m of goodwill recognised on the acquisition of AMC Minerals South America is not recoverable, and a goodwill impairment charge of $1.5m has been recognised as at 30 June 2014.

Page 48 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

12 Goodwill (continued)

(iii) Value in use calculations for AMC Minerals Asia Pacific, Reflex and AMC Oil and Gas Europe

The recoverable amount of AMC Minerals Asia Pacific, Reflex, and AMC Oil and Gas CGU’s have been determined based on a value in use calculation using cash flow projections covering a five year period, based on financial forecast models prepared by management and approved by the Imdex Limited Board.

The following describes each key assumption on which management has based its value in use calculation for the above CGU’s:

• The discount rate applied to post tax cash flow projections is 11.47% (2013: 7.26%);

• Revenue growth over the five year plan period for AMC Minerals Asia Pacific and Reflex has been forecast in line with the expected rate of recovery of the mining and mineral exploration markets, while revenue growth for AMC Oil and Gas in Europe has been projected to be in line with forecast growth in the Oil and Gas sector in the region. Projections are based on a five year forecast model prepared by management and approved by the Board of Directors;

• Cash flows beyond the five year period are estimated using a terminal value calculated under standard valuation principles incorporating a long term growth rate of 2.5% (2013: nil);

• The impact of working capital has been assumed to increase in line with revenue growth;

• Capital investment required to run the business has been assumed based on a five year forecast model prepared by management and approved by the Board of Directors.

Management has considered the possibility that discount rates, long-term growth rates and forecast EBITDA growth could vary and have concluded that there are no reasonably possible changes in key assumptions that would result in a material impairment of goodwill for these CGU’s.

(iv) Value in use calculations for AMC Minerals South America

The recoverable amount of AMC Minerals South America has been determined based on a value in use calculation using cash flow projections covering a five year period, based on financial forecast models prepared by management and approved by the Imdex Limited Board.

The following describes each key assumption on which management has based its value in use calculation for AMC Minerals South America:

• The discount rate applied to post tax cash flow projections is 13.47% (2013: 11.62%);

• Revenue growth over the five year plan period for AMC Minerals South America has been forecast in line with the expected rate of recovery of the mining and mineral exploration market within South and Latin America. Projections are based on a five year forecast model prepared by management and approved by the Board of Directors;

• Cash flows beyond the five year period are estimated using a terminal value calculated under standard valuation principles incorporating a long term growth rate of 2.5% (2013: nil);

• The impact of working capital has been assumed to increase in line with revenue growth;

• Capital investment required to run the business has been assumed based on a five year forecast model prepared by management and approved by the Board of Directors.

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. Management has considered the implications of the key assumptions for the recoverable amount. The two main sensitivities where a reasonably possible change could lead to further impairment are considered further below, demonstrating the impact of the recoverable amount of a 0.25% change in these assumptions. A forward looking estimation of this nature is inherently uncertain and these sensitivities may vary by more or less than this percentage.

• Discount rate: the recoverable amount of the AMC Minerals South America CGU would be negatively impacted by approximately $0.3m if the discount rate increased by 0.25%;

• Long term growth rate: the recoverable amount of the AMC Minerals South America CGU would be negatively impacted by approximately $0.2m if the long term growth rate decreased by 0.25%;

Page 49 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

13 Other Intangible Assets

Notes Gross Carrying Value Balance at 30 June 2012 Capitalised during the year Recognition on acquisition of ioGlobal Impact of exchange rate changes Balance at 30 June 2013 Impact of exchange rate changes Balance at 30 June 2014 Accumulated Amortisation and Impairment Balance at 30 June 2012 Amortisation expense Impact of exchange rate changes Balance at 30 June 2013 Amortisation expense Impact of exchange rate changes Impairment losses for the year (i) Balance at 30 June 2014 Net Book Value As at 30 June 2013 As at 30 June 2014	Intellectual Property $’000 601 - 1,300 -	Technology Based Contract Based Customer Based Development Costs Trade Name TOTAL $’000 $’000 $’000 $’000 $’000 $’000 14,080 2,258 10,893 7,366 3,887 39,085 - - - 996 - 996 - - - - - 1,300 - - - 213 - 213
	1,901 -	14,080 2,258 10,893 8,575 3,887 41,594 - - - (34) - (34)
	1,901	14,080 2,258 10,893 8,541 3,887 41,560
	601 173 -	12,491 1,315 10,488 3,765 3,869 33,290 1,589 472 405 707 18 3,364 - - - 91 - 91
	774 260 - -	14,080 1,787 10,893 4,563 3,887 35,984 - 314 - 895 - 1,469 - - - (23) - (23) - - - 2,246 - 2,246
	1,034	14,080 2,101 10,893 7,681 3,887 39,676
	1,127	- 471 - 4,012 - 5,610
	867	- 157 - 860 - 1,884

Where relevant, these intangible assets have been tested for impairment as part of the testing of CGUs referred to in note 12, and an annual assessment is performed for impairment indicators.

(i) Impairment losses:

	2014	2013
	$’000	$’000
Development costs (Reflex CGU)	2,246		-

The above impairment charge arises as a result of a decision to cease development of a specific product.

14 Trade and Other Payables

Notes Trade payables (i) Accruals and other payables	2014 2013 $’000 $’000 13,791 19,768 3,515 6,008
	17,306 25,776

(i) Trade payables are interest free for periods ranging from 30 to 180 days. Thereafter interest is charged at commercial rates. The consolidated entity has financial risk management policies in place to ensure that all payables are paid within the credit timeframe.

Page 50 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

15 Borrowings

15 Borrowings
Notes Current borrowings Secured At amortised cost Club Facility - AUD Tranche (i,a) Club Facility - USD Tranche (i,b) Club Facility - CAD Tranche (i,c) Hire purchase liabilities (ii),23 Non-current borrowings Secured At amortised cost Club Facility - AUD Tranche (i,a) Club Facility - USD Tranche (i,b) Club Facility - CAD Tranche (i,c) Hire purchase liabilities (ii),23	2014 2013 $’000 $’000 4,476 7,056 255 5,372 1,983 2,065 188 245
	6,902 14,738
	26,004 21,089 14,420 23,082 2,643 4,817 172 260
	43,239 49,248

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. In December 2013, this facility was renewed for a further three years. As at 30 June 2014:

• (i,a) AUD denominated borrowings includes an amortising facility that is repayable in equal monthly installments of $373,000 to 31 December 2016 on which date the balance remaining is payable, and a revolving facility that is fully repayable on 31 December 2016. Both facilities bear interest at floating rates.

• (i,b) USD denominated borrowings includes an amortising facility that is repayable in equal monthly installments of $21,000 to 31 December 2016 on which date the balance remaining is payable, and a revolving facility that is fully repayable on 31 December 2016. Both facilities bear interest at floating rates.

• (i,c) CAD denominated borrowings include an amortising facility that bears interest at a floating rate and is repayable in equal monthly installments of $165,000 to 31 December 2016 on which date the balance remaining is payable.

The club facility is secured by the assets of entities in Australia, Canada, Chile, South Africa and Europe.

At 30 June 2014, the Group had unused banking facilities totalling AUD$3.3 million, comprising AUD$2.5 million and ZAR7.9 million (AUD$0.8 million).

• (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 5.98% (2013: 6.52%).

Page 51 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

16 Provisions

16 Provisions
Current provisions Employee entitlements Other provisions (see below) (ii) Other provisions Balance at 1 July 2013 Provsions recognised Balance at 30 June 2014	Kazakhstan business closure provision (ii) $’000 - 2,434 2,434	Notes (i) Office closure provision (iii) $’000 - 1,240 1,240	2014 $’000 4,011 12,174	2013 $’000 4,681 -
			16,185	4,681
			Origin product containment provision (iv) $’000 - 8,500 8,500	Total $’000
				- 12,174
				12,174

(i) The provision for employee entitlements represents annual leave with the majority of these entitlements expected to be taken during the coming year.

(ii) The Kazakhstan business closure provison relates to the estimated costs of the closure of the Kazakhstan business (Suay Energy Services LLP).

(iii) The office closure provison relates to the estimated costs of the closure of the Osborne Park premises.

(iv) The Origin product containment provison relates to the estimated costs made by Management to settle with affected parties following notification that certain batches of imported product were contaminated.

Non-current provisions Employee entitlements	2014 2013 $’000 $’000 2,153 1,071

Page 52 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

17 Issued Capital and Shares reserved for Performance Rights Plan

Notes Issued and Paid Up Capital - Fully paid ordinary shares (i) (i) Fully paid ordinary shares carry one vote per share and the right to dividends. Notes Number $'000 Ordinary shares Balance at beginning of the financial year 210,473,188 89,269 Issue of shares as part consideration for the acquisition of System Mud Industria e Comercio Ltda 18 1,637,180 990 Issue of shares as part consideration for the acquisition of ioGlobal 25(a) - - 2014	2014 2013 $’000 $’000 90,259 89,269
	Number $'000 208,235,426 86,069 - - 2,237,762 3,200 2013
Closingbalance at end of the financialyear 212,110,368 90,259	210,473,188 89,269

(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 2014 (2013: nil), executives, directors and staff have no options over ordinary shares.

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 Shares reserved for Performance Rights Plan Balance at beginning of the period Net movement of shares Balance at the end of the period	2014 2013 $’000 $’000 (952) (3,740) 952 2,788
	- (952)

At balance date, the Company, through a Trustee, holds nil shares in Trust for employees under the Performance Rights Plan.

Page 53 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

18 Reserves

18 Reserves
Notes Foreign Currency Translation Reserve Balance at beginning of the financial year Translation of foreign operations Balance at the end of the financial year	2014 2013 $’000 $’000 (11,167) (17,703) (595) 6,536
	(11,762) (11,167)

Exchange differences relating to the translation from the functional currencies of the Group's foreign controlled entities into Australian dollars are brought to account by entries made directly to the foreign currency translation reserve. This reserve is shown net of deferred tax.

Investment Revaluation Reserve Balance at beginning of the financial year Net gain arising on revalution of SEH shares to market value Income tax relating to gain arising on revalution of SEH shares to market value 5(b) Cumulative profit reclassified to profit or loss on sale of SEH shares, net of tax Balance at the end of the financial year	13,754 10,227 17,107 5,038 (5,132) (1,511) (17,172) -
	8,557 13,754

The investment revaluation reserve records increases in the market value of the SEH investment net of deferred tax. Refer note 9 for details of the SEH investment.

Employee Equity-Settled Benefits Reserve Balance at beginning of the financial year Performance rights expensed 4 Amounts transferred to shares reserved for performance rights plan Amounts transferred to retained earnings Balance at the end of the financial year	6,087 6,385 845 1,331 (1,416) (2,788) 750 1,159
	6,266 6,087

The employee equity-settled benefits reserve arises on the grant of performance rights to Directors and employees. Amounts transferred to shares reserved for performance rights plan relates to the cost of performance rights issued to Directors and employees during the year. Further information regarding the Performance Rights Plan is contained in note 33.

Mandatory Issuable Capital

Mandatory Issuable Capital 17 - 990

In May 14, a total of 1,637,180 shares were issued as the final payment for the acquisition of System Mud (refer to note 17). The final payment was subject to the issue of 330,000 shares at a guaranteed issued price of $3. As the share price on the two year anniversary date was below the guaranteed price then the previous owners were appropriately compensated with the issue of an extra 1,307,180 shares.

Page 54 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

19 (Loss)/earnings Per Share

Basic (loss)/earnings per share Diluted (loss)/earnings per share (a) Basic (loss)/earnings per share The (loss)/earnings and weighted average number of ordinary shares used in the calculation of basic (loss)/earnings per share are as follows: (Loss)/earnings Weighted average number of ordinary shares for the purposes of basic (loss)/earnings per share (b) Diluted (loss)/earnings per share The (loss)/earnings and weighted average number of ordinary shares used in the calculation of diluted (loss)/earnings per share are as follows: (Loss)/earnings Weighted average number of ordinary shares for the purposes of diluted (loss)/earnings per share (i) (i) The weighted average number of ordinary shares for the purposes of diluted (loss)/earnings per share reconciles to the weighted average number of ordinary shares used in the calculation of basic (loss)/earnings per share as follows: Weighted average number of ordinary shares used in the calculation of basic (loss)/earnings per share Shares deemed to be issued for no consideration in respect of performance rights Weighted average number of ordinary shares used in the calculation of diluted (loss)/earnings per share	2014 2013 Cents per share Cents per share (2.50) 9.24
	(2.50) 9.14
	2014 2013 $'000 $'000 (5,277) 19,383
	Shares Shares 210,751,284 209,712,962
	2014 2013 $'000 $'000 (5,277) 19,383
	Shares Shares 212,320,016 212,115,734
	Shares Shares 210,751,284 209,712,962 1,568,732 2,402,772
	212,320,016 212,115,734

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IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

20 Dividends

20 Dividends
Notes Recognised amounts Fully paid ordinary shares - interim dividend franked to 30% (i) Unrecognised amounts Fully paid ordinary shares - final dividend franked to 30% (ii)	2014 2014 2013 2013 Cents per share Total $’000 Cents per share Total $’000 - - 2.50 5,262
	- - 0.40 842

(i) In the prior year, 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.

(ii) In the prior year, 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 was not recognised in the financial statements at 30 June 2013.

Adjusted franking account balance Impact on franking account of dividends not recognised Income tax consequences of unrecognised dividends	2014 2013 $'000 $'000 52,733 56,112
	- (361)
	- -

21 Commitments for Expenditure

(a) Capital expenditure commitments

At 30 June 2014 the Group had capital expenditure commitments amounting to $2,683,000 (2013: $3,145,000). These commitments relate to the purchase of Minerals and Oil and Gas rental equipment and the final payments of the Balcatta premises.

(b) Lease commitment

Hire purchase liabilities and non-cancellable operating lease commitments are disclosed in note 23.

22 Contingent Liabilities and Contingent Assets

The Group is party to legal proceedings and claims which arise in the normal course of business. Any liabilities may be mitigated by legal defences, insurance, and third party indemnities. Unless recognised as a provision (refer Note 16), management do not consider it to be probable that they will require settlement at the Group’s expense. Whilst the outcome of these claims are, by their nature, uncertain, the directors do not currently anticipate that the outcome of the proceedings either individually, or in aggregate, will have a material adverse effect upon the Group’s financial position.

A provision is recognised related to pending litigation or other outstanding claims where probable and estimable. Actual costs can differ from estimates for many reasons. For instance, settlement costs for claims and litigation can vary from estimates based on differing interpretations of laws, opinions on responsibility and assessments of the amount of damages. Our in-house legal counsel regularly assesses contingent liabilities and in certain circumstances, outside legal counsel is utilised.

As at 30 June 2014, the main contingent liability relates to potential costs associated with the product containment incident which have been provided for based on management’s estimate of the costs to remediate (as detailed in note 16). In making this assessment a forward looking estimate has been made of future cash flows and the likely outcome of remediation negotiations. Because of the inherent uncertainty in this evaluation process, actual losses may be different from the originally estimated provision.

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IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

23 Leases

(a) Hire Purchases

Hire purchase arrangements

Hire purchase arrangements relate to plant and equipment with terms of up to 5 years. The Group has options to purchase the equipment for a nominal amount at the conclusion of the arrangements.

Hire purchase commitments Hire purchase commitments are payable as follows. Due: Within one year Between one and five years Later than five years Minimum lease payments Less: future finance charges Current – Note 15 Non current – Note 15 Hire purchase liabilities provided for in the Financial Report	2014 2013 $’000 $’000 199 252 189 293 - - 388 545 (28) (40) 360 505 Minimum future lease payments	2014 2013 $’000 $’000 188 245 172 260 - - Present value of minimum future lease payments
		360 505 - -
		360 505
		188 245 172 260
		360 505

(b) Operating Leases

Operating leasing arrangements

Operating leases relate to premises and equipment (including motor vehicles) used by the Group in its operations, generally with terms between 2 and 5 years. Some of the operating leases contain options to extend for further periods and an adjustment to bring the lease payments into line with market rates prevailing at that time. The leases do not contain an option to purchase the leased property.

Non-cancellable operating lease payments Within one year Between one and five years Later than five years	2014 2013 $’000 $’000 5,946 4,474 12,331 4,966 8,094 1,560
	26,371 11,000

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IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

24 Subsidiaries

24 Subsidiaries
			Ownership	Interest
		Country of	2014	2013
	Notes	Incorporation	%	%
Parent Entity
Imdex Limited	(i),(ii),(iii)	Australia
Controlled Entities
Australian Mud Company Pty Ltd	(ii),(iii)	Australia	100	100
Samchem Drilling Fluids & Chemicals (Pty) Ltd		South Africa	100	100
Imdex International Pty Ltd	(ii),(iii)	Australia	100	100
Imdex Sweden AB		Sweden	100	100
Reflex Instruments Asia Pacific Pty Ltd	(ii),(iii)	Australia	100	100
Reflex Instrument AB		Sweden	100	100
Reflex Instrument North America		Canada	100	100
Reflex Instrument South America Ltda		Chile	100	100
Reflex Instruments Europe Ltd		United Kingdom	100	100
Drillhole Surveying Instruments (Pty) Ltd		South Africa	100	100
Imdex Technology Sweden AB		Sweden	100	100
Flexit Australia Pty Ltd	(ii)	Australia	100	100
Suay Energy Services LLP		Kazakhstan	100	100
AMC North America Ltd		Canada	100	100
Imdex South America S.A.		Chile	100	100
AMC Chile S.A.		Chile	100	100
Wildcat Chemicals Australia Pty Ltd	(ii),(iii)	Australia	100	100
Reflex Technology International Pty Ltd	(ii),(iii)	Australia	100	100
AMC Reflex Argentina S.A.		Argentina	100	100
AMC Reflex Peru S.A.C.		Peru	100	100
Imdex Technology Germany GmbH		Germany	100	100
AMC Reflex Do Brasil Serviços Para Mineração Ltda		Brazil	100	100
AMC Drilling Fluids Pvt Limited		India	100	100
Fluidstar Pty Ltd	(ii)	Australia	-	100
Ecospin Pty Ltd	(ii)	Australia	-	100
Imdex Nominees Pty Ltd	(ii)	Australia	100	100
AMC Germany GmbH		Germany	100	100
AMC Oil & Gas Rom SRL		Romania	100	100
Australian Drilling Specialties Pty Ltd	(ii)	Australia	100	100
Imdex USA Inc		United States of America	100	100
Imdex Technologies USA LLC		United States of America	100	100
AMC USA LLC		United States of America	100	100
Reflex USA LLC		United States of America	100	100
AMC Oilfield Services Pte Ltd (formerly Mud Systems Pte Ltd)		Singapore	100	100
System Mud Industria e Comercio Ltda		Brazil	100	100
Imdex Global Coöperatie U.A		Netherlands	100	100
Imdex Global B.V.		Netherlands	100	100
AMC Oil & Gas International Limited		British Virgin Islands	100	100
ioGlobal Pty Ltd	25(a),(ii)	Australia	100	100
ioGlobal Solutions Inc	25(a)	Canada	-	100
ioAnalytics Pty Ltd	25(a),(ii)	Australia	100	100
AMC Drilling Fluids & Products - Mexico S. de RL de C.V. Mexico		Mexico	100	100
AMC Myanmar Limited	(iv)	Myanmar	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 Wildcat Chemicals Australia Pty Ltd on 7 September 2011. (iv) This entity was incorporated on 10 March 2014.

Page 58 of 79

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:

Other revenue from operations Total revenue Other income Gain on the disposal of shares in SEH Foreign exchange (loss)/gain 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 Product containment Research and Development costs Bad debts Other expenses (Loss)/profit before income tax expense Income tax benefit/(expense) Loss for the year Other comprehensive income Fair value adjustment on investment in SEH Other comprehensive income for the year Total comprehensive income for the year Cumulative profit reclassified to profit or loss on sale of SEH shares, net of tax Revenue from sale of goods and operating lease rental Income Statement Income tax relating to components of other comprehensive income	2014 2013 $’000 $’000 97,003 117,162 398 1,420
	97,401 118,582
	1,459 2,005 24,094 - (473) 882 (52,277) (54,143) (28,044) (31,404) (9,900) (13,680) (2,405) (2,996) (653) (1,039) (909) (1,148) (887) (840) (5,418) (3,422) (2,509) (2,052) (2,550) (2,838) (1,018) (1,082) (9,080) - (4,219) - (1,578) (930) (9,051) (1,605)
	(8,017) 4,290 1,654 (6,840)
	(6,363) (2,550)
	17,107 5,038 (5,132) (1,511) (17,172) -
	(5,197) 3,527
	(11,560) 977

Page 59 of 79

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:

Balance Sheet Current Assets Cash and Cash Equivalents Trade and Other Receivables Inventories Current Tax Assets Other Financial Asset Held for Sale Total Current Assets Non Current Assets Other Financial Assets Property, Plant and Equipment Other Intangible Assets Deferred Tax Assets Other Receivables Total Non Current Assets Total Assets Current Liabilities Trade and Other Payables Other Financial Liabilities Borrowings Current Tax Payables Provisions Total Current Liabilities Non Current Liabilities Borrowings Provisions Deferred Tax Liabilities Total Non Current Liabilities Total Liabilities Net Assets Equity Contributed Capital Shares Reserved for Performance Rights Plan Employee Equity-Settled Benefits Reserve Investment Revaulation Reserve Retained Earnings Total Equity Retained Earnings at the beginning of the financial year Net Loss Dividends Received/(Paid) Amounts transferred from employee equity-settled benefits reserve Retained Earnings at the end of the financial year	2014 2013 $’000 $’000 446 - 51,286 51,507 21,743 35,247 - 1,749 441 732
	73,916 89,235 14,705 26,450
	88,621 115,685
	165,447 164,238 19,124 12,793 875 2,258 9,215 6,061 957 -
	195,618 185,350
	284,239 301,035
	16,867 28,084 80 - 4,664 10,961 1,288 - 12,696 3,586
	35,595 42,631
	39,684 40,972 1,781 699 3,061 7,192
	44,526 48,863
	80,121 91,494
	204,118 209,541
	90,259 89,269 - (952) 6,266 6,087 8,557 13,754 99,036 101,383
	204,118 209,541
	101,383 118,683 (6,363) (2,550) 4,766 (13,591) (750) (1,159)
	99,036 101,383

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IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

25 Acquisition of Businesses

(a) 2013 Acquisition of entity - ioGlobal Pty Ltd and ioAnalytics Pty Ltd

With 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 numbers presented below have been accounted for using the acquisition method of accounting.

Details of the assets, liabilities and goodwill: Notes Trade and other receivables Property, plant and equipment Intangibles (Intellectual Property) (iii) Trade and other payables Deferred tax (iii) Provisions Fair value of net identifiable assets acquired Goodwill on acquisition (i) Total purchase consideration Consideration in cash and cash equivalents (ii) Less: Cash and cash equivalents acquired (ii) Issue of ordinary shares 17 Revenue Total expenses (including income tax) Loss after tax for the period Total purchase consideration comprises Operating results of ioGlobal included in the Consolidated Income Statement of Imdex	Book value Fair value adjustments Fair value on acquisition $’000 $’000 $’000 1,441 - 1,441 175 - 175 - 1,300 1,300 (1,654) - (1,654) - (390) (390) (155) - (155)	Book value Fair value adjustments Fair value on acquisition $’000 $’000 $’000 1,441 - 1,441 175 - 175 - 1,300 1,300 (1,654) - (1,654) - (390) (390) (155) - (155)
	(193) 910	717 6,357
		7,074
		4,800 (926) 3,200
		7,074
		8 months to 30 June 2013 $’000 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. ioGlobal has been assessed for impairment as part of the Reflex CGU.

(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.

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IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

26 Investment in Associates

VES International (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. The shares of VES are not publicly listed on a stcok exchange and hence published priced quotes are not available.

Effective 1 January 2012 VES purchased the business of Vaughn Energy Services, a US based oil & gas services provider. Following this transaction Imdex Limited’s shareholding in VES decreased from 50% to 30%. The investment is accounted for under the equity method and has a reporting date of 31 December 2013.

Financial information in respect of the Associate is set out below:

Note Total Revenue Total profit/(loss) for the Period (i) Total profit/(loss) for the Period includes the following: Depreciation Amortisation Income Tax Expense Current Assets Non Current Assets Total Assets Current Liabilities Non Current Liabilities Total Liabilities Net Assets Share of Net Assets of Associate The Investment in Associate comprises the following: Opening cost of investment in Associate Share of profit of Associate (i) Closing cost of investment in Associate	2014 2013 $’000 $’000
	69,451 55,498
	1,425 (7,114)
	(8,245) (5,912) (8,485) (10,570) (6,483) (6,838) 23,321 21,807 96,968 104,308
	120,289 126,115 (6,269) (5,059) (11,996) (20,457)
	(18,265) (25,516) 102,024 100,599
	31,219 30,180
	25,555 24,255 715 1,300
	26,270 25,555

(i) The prior period share of Associate’s profit reflects 30% of the underlying profit of VES, the effect of adjustments to eliminate unrealised intercompany profits and fair value adjustments related to the acquisition of Vaughn Energy Services, including a $3m gain arising on dilution and an adjustment to the amortisation of intangibles.

(ii) At 30 June 2014, VES had no significant commitments or contingencies (2013: nil).

(iii) VES has no material items of other comprehensive income, and has paid no dividends in the year.

Page 62 of 79

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 (b) Segment Results Minerals Oil & Gas (i) Total of all segments Central administration costs (ii) (Loss)/profit before income tax expense Income tax expense Total revenue (Loss)/profit attributable to ordinary equity holders of Imdex Limited Gain on the disposal of shares in SEH	2014 2013 $'000 $'000 125,317 182,681 58,168 50,110
	183,485 232,791
	72 130
	183,557 232,921
	430 44,314 (21,540) (5,080)
	(21,110) 39,234 (10,046) (10,724) 24,094 -
	(7,062) 28,510 1,785 (9,127)
	(5,277) 19,383

(i) Includes the share of profit 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

Minerals Oil & Gas Total of all segments Unallocated (i) Consolidated	2014 2013 2014 2013 $'000 $'000 $'000 $'000 176,001 182,412 23,464 11,616 72,081 77,004 12,261 21,812 Assets Liabilities
	248,082 259,416 35,725 33,428 14,705 26,450 50,140 63,986
	262,787 285,866 85,865 97,414

(i) Unallocated assets comprise the investment in SEH. Unallocated liabilties comprise commerical bills, bank loans and hire pruchase liabilities.

Page 63 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

27 Segment Information (continued)

	Minerals	Minerals	Oil &	Gas	Unallocated	Unallocated	Total
	2014	2013	2014	2013	2014	2013	2014	2013
	$'000	$'000	$'000	$'000	$'000	$'000	$'000	$'000
Depreciation	4,881	6,171	2,120	1,070	574	487	7,575	7,728
Amortisation	1,155	2,593	314	771	-	-	1,469	3,364
Impairment	2,623	-	1,123	-		-	3,746	-
Acquisition of segment assets	5,138	14,856	7,610	8,936	4,243	528	16,991	24,320
Significant non cash expenses
other than depreciation and
amortisation	676	1,065	169	266	-	-	845	1,331

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/Middle East: 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/Middle East Americas Total	2014 2013 2014 2013 2014 2013 $'000 $'000 $'000 $'000 $'000 $'000 91,377 113,980 130,351 122,428 9,028 9,568 24,865 28,300 9,002 6,825 1,347 2,783 26,263 34,128 2,851 1,505 2,157 1,858 41,052 56,513 10,296 11,522 4,459 10,111 Acquisition of segment assets Segment assets (non-current) Revenue from external customers
	183,557 232,921 152,500 142,280 16,991 24,320

(e) Information about major customers

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 79

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:

Cash and cash equivalents	2014 2013 $’000 $’000 10,070 9,979

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 $10,070,184 (2013: $9,978,758).

(b) Non cash financing and investing activities

During the year the Group provided non cash consideration to complete the acquisition of System Mud. This transaction is disclosed in note 17.

(c) Reconciliation from the (Loss)/profit for the Year to Net Cash Provided by Operating Activities

(Loss)/profit for the year Adjustments for non-cash and non-operational items Gain on the disposal of shares in SEH Depreciation of non-current assets Amortisation of intangible assets Impairment expense Write down of fixed assets Interest received disclosed as investing activities Share options and performance rights expensed Loss on sale of non-current assets Share of profit of Associate Interest on hire purchase liabilities Increase in other provisions (note 16) 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

(5,277) 19,383 (24,094) - 7,575 7,728 1,469 3,364 3,746 - 3,803 - (72) (130) 845 1,331 206 58 (715) (1,300) 33 68 12,174 - - (118) 58 20,368 10,725 (1,250) 3,039 5,386 (10,687) (6,680) 412 1,436 (326) (10,674)

2,914 38,970

Page 65 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

28 Notes to the Cash Flow Statement (continued)

(d) Financing facilities Total facilities available Club Facility - AUD Tranche Club Facility - USD Tranche Club Facility - CAD Tranche ZAR Overdraft Equipment finance facility Facilities utilised at balance sheet date Club Facility - AUD Tranche Club Facility - USD Tranche Club Facility - CAD Tranche ZAR Overdraft Equipment finance facility Facilities not utilised at balance sheet date Club Facility - AUD Tranche Club Facility - USD Tranche Club Facility - CAD Tranche ZAR Overdraft Equipment finance facility	2014 2013 $’000 $’000 34,197 33,395 14,676 33,442 4,626 6,882 1,838 1,951 360 505
	55,697 76,175
	31,719 31,475 14,676 28,454 4,626 6,882 1,038 419 360 505
	52,419 67,735
	2,478 1,920 - 4,988 - - 800 1,532 - -
	3,278 8,440

Page 66 of 79

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 Group’s overall capital management strategy remains unchanged from prior years.

Debt (i) Cash and bank balances Net debt Equity (ii) Net debt divided by debt plus equity	2014 2013 $ 000's $ 000's 50,141 63,986 (10,070) (9,979)
	40,071 54,007
	176,922 188,452
	18.5% 22.3%

(i) Debt includes commercial bills, bank loans 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

Financial Assets Cash and cash equivalents Loans and receivables Financial Asset Held for Sale Financial Liabilities Amortised cost	2014 2013 $ 000s $ 000s 10,070 9,979 39,744 45,231 14,705 26,450
	67,527 89,762

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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 Group’s 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 Group’s treasury policies which are approved by the Board of Directors. These policies describe the Group’s 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 Group’s 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 Group’s 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 Group’s 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.

	Liabilities		Assets
	2014	2013	2014	2013
	$ 000s	$ 000s	$ 000s	$ 000s
United States Dollars	18,298	37,078	14,638	23,233
South African Rand	794	969	771	2,092
Canadian Dollars	5,335	8,642	3,654	1,227
British Pound	539	969	953	1,276
Euro	3,326	2,177	4,088	3,939
Chilean Pesos	1,164	5,792	1,488	2,317
Other	1,793	2,327	6,825	7,217

Page 68 of 79

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 Group’s sensitivity to a 10% (2013: 10%) increase and decrease in the Australian Dollar against the relevant foreign currencies. The sensitivity rate of 10% (2013: 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% (2013: 10%) represents management’s 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% (2013: 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.

	United States Dollar Impact	United States Dollar Impact		South African Rand Impact	South African Rand Impact
	2014	2013		2014	2013
	$ 000's	$ 000's		$ 000's	$ 000's
Profit or (loss)	1,079	1,586	(i)		- 11
Other equity	(713)	(184)	(ii)		2 (121)
	European Dollar Impact			Canadian Dollar Impact
	2014	2013		2014	2013
	$ 000's	$ 000's		$ 000's	$ 000's
Profit or (loss)	60	206	(i)		6 449
Other equity	(136)	(378)	(ii)	163 296

(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.

In the absence of fixed rate debt the Group’s policy allows for the use of interest rate swaps. Where the group enters into fixed rate debt it is understood that this creates a fair value exposure as a by-product of the Group’s attempt to manage its cash flow volatility arising from interest rate changes.

For the 2014 financial year the Group entered into an AUD interest swap at 3.01% maturing in December 2016, in order to protect against rising interest rates, under which it has a right to receive interest at a variable rates and to pay interest at a fixed rate. The swap in place has a fair value of $0.08m (liability). This swap covers approximately 40% (2013: nil) of the principal outstanding at reporting date and is timed to expire at the renewal date of the loans.

The interest rate swap requires settlement of net interest receivable or payable each month. The settlement date coincides with the date on which interest is payable on the underlying debt. The swap is measured at fair value and all gains and losses attributable to the hedged risk is taken directly to equity and re-classified into profit or loss when the interest expense is recognised.

Page 69 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

29 Financial Instruments (continued)

(g) Interest rate risk management (continued)

Notes Fair value of interest rate swap contracts - cash flow hedges (i)	2014 2013 $’000 $’000 80 -

(i) The interest rate swap contract is exposed to fair value movement if interest rates change. Under this contract the Group is committed to $0.3m interest expense within 12 months (on $12m of notional debt), $0.2m interest expense between 1 year and 2 years on $8m of notional debt), and $0.1m interest expense between 2 years and 5 years (on $4m of notional debt). The interest expense is calculated at 3.01%.

The Company and the Group’s 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 management’s 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 Group’s net profit would decrease by $0.6 million (2013: $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 Group’s net profit of $0.5 million (2013: $0.6 million). This is mainly attributable to the Group’s exposure to interest rates on its variable rate borrowings.

(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 Group’s 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 Group’s maximum exposure to credit risk without taking account of the value of collateral obtained. At 30 June 2014 no such collateral had been obtained (2013: 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.

Page 70 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

29 Financial Instruments (continued)

Liquidity and interest risk tables

The following tables detail the Company’s and the Group’s 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	0-3 months	3 months to 1	1-5 years	5+ years		Total
	average		year
	effective interest
	rate
	%	$’000	$’000	$’000	$’000		$’000
2014
Non-interest bearing	-	12,980	4,326	-		-	17,306
Finance lease liability	5.98%	50	149	189		-	388
Variable interest rate
instruments	4.74%	1,683	5,049	43,050		-	49,782
		14,713	9,524	43,239		-	67,476
2013
Non-interest bearing	-	19,332	6,444	-		-	25,776
Finance lease liability	6.52%	64	188	293		-	545
Variable interest rate
instruments	4.25%	3,623	10,870	48,988		-	63,481
		23,019	17,502	49,281		-	89,802

The following tables detail the Company’s and the Group’s 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	0-3 months	3 months to 1	1-5 years		5+ years		Total
	average		year
	effective interest
	rate
	%	$’000	$’000	$’000		$’000		$’000
2014
Non-interest bearing	-	54,449	-		-		-	54,449
Variable interest rate
instruments	0.25%	10,070	-		-		-	10,070
		64,519	-		-		-	64,519
2013
Non-interest bearing	-	71,681	-		-		-	71,681
Variable interest rate
instruments	0.25%	9,979	-		-		-	9,979
		81,660	-		-		-	81,660

Page 71 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

29 Financial Instruments (continued)

(j) Fair value of financial instruments

The fair value of the Group’s financial assets and liabilities are determined on the following basis:

Financial Assets and Financial Liabilities that are measured at fair value on a recurring basis

Subsequent to initial recognition, at fair value financial instruments are grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

Levels are defined as follows:

• 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 with 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).

At 30 June 2014, the Group has listed equity securities which are classified as level 1 and level 2 fair value measurements. There were no transfers between levels in the period.

Financial Instruments	Fair value as at	Fair value as at	Fair value hierarchy	Valuation technique and key inputs
	30/06/2014	30/06/2013
Financial asset held for sale	Listed equity securities in Sino Gas and Energy Holdings Ltd (SEH) - $14,705,000	Listed equity securities in Sino Gas and Energy Holdings Ltd (SEH) - $26,450,000	Level 1	Quoted bid prices in an active market
Interest rate swap liability	Interest rate swap - $80,000	nil	Level 2	Valued using discounted cash flow techniques based on forward interest rates from observable yield curves at the end of the reporting period, discounted at a rate that reflects the credit risk of the counterparties

Financial Assets and Financial Liabilities that are measured at fair value on a non-recurring basis

At 30 June 2014, the carrying amount of financial assets and financial liabilities for the Group is considered to approximate their fair values.

Page 72 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

30 Related Party Disclosures

(a ) Eq u ity in te re sts in re la te d p a rtie s

Details of the perc entage owners hip of s ubs idiaries and the wholly owned G roup is s et out in note 24. The wholly owned G roup c ons is ts of Im dex Lim ited and its wholly owned s ubs idiaries .

(b ) T ra 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

(i) Ke y m a n a g e m e n t p e rso n n e l co m p e n sa tio n

Details of k ey m anagem ent pers onnel c om pens ation is s et out in note 31.

(ii) L o a n s to ke y m a n a g e m e n t p e rso n n e l

No loans were m ade during the c urrent or prior y ears to k ey m anagem ent pers onnel or their related parties .

(c) O th e r tra n sa ctio n s w ith re la te d p a rtie s o f Im d e x L im ite d

The G roup rec eives rec harge revenue from V E S relating to work perform ed on the res earc h and developm ent of target tools . S ervic es to V E S are provided on norm al c om m erc ial term s and c onditions . Total revenue aris ing from V E S was $990,220 (2013:$1,625,347)

Trans ac tions with Related P arties

P rofit from ordinary ac tivities before inc om e tax Rec harge Revenue from V E S	2014 2013 $ $ 990,220 1,625,347

There were no as s ets or liabilities aris ing from trans ac tions with V E S as at 30 June 2014 or 2013.

(d ) P a re n t e n tity

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.

31 Key Management Personnel Compensation

Ke y m a na ge m e nt pe rsonne l com pe nsa tion

The aggregate compensation of the key management personnel of the Group and the Company is set out below:

Short-term employee benefits Post-employment benefits Other long-term benefits Termination benefits Share-based payments	2014 2013 $ $ 3,276,391 2,724,775 138,338 128,350 282,440 122,942 - - 39,595 367,774
	3,736,764 3,343,841

Page 73 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

32 Staff Option Scheme

Share Based Payment Arrangements

There were no options issued or exercised during the current or prior year. There were no outstanding options at the end of the financial year.

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) and subsequently renewed at the Annual General Meeting on 18 October 2012. 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 11 comprising 5,124,070 performance rights was issued to employees on 4 October 2013 and were to be allotted in equal 1/3 lots annually beginning in August 2014. These performance rights were subject to profitability related hurdles as well as ongoing employment tenure. All of these performance rights expired due to performance hurdles not being met and no expense was incurred in the current year.

Managing Director’s Performance Rights

300,000 performance rights were granted to the Managing Director on 17 October 2013 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 FY14 to FY16. 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 FY16 independent audit report is signed in August 2016.

For the purposes of the FY14 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 300,000 performance rights issued, all will meet the required performance hurdles and will result in 300,000 fully paid Imdex Limited ordinary shares being issued on or about August 2016 should employment tenure be retained.

The fair value of a performance right at grant date was $0.78 per right. The expected total cost of the estimated 300,000 fully paid ordinary shares to be issued in Imdex Limited will therefore be $0.2 million. This value will be expensed over the vesting period from October 2013 to August 2016, with $0.1 million expensed in the current year.

(c) Performance rights Granted in the prior 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.

Page 74 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

33 Performance Rights Plan (continued)

(c) Performance rights Granted in the prior year (continued)

Managing Director’s 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.

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.

(d) Summary of performance rights outstanding

Tranche 2 3-Dec-10 Aug-15 - 1.395 Tranche 4 10-Jun-11 Aug-16 - 2.160 MD Tranche 14-Oct-10 Oct-15 - 1.140 MD Tranche 20-Oct-11 Oct-16 - 1.910 Tranche 7 5-Sep-11 Aug-15 - 2.100 Tranche 9 7-Oct-11 Aug-16 - 1.790 Tranche 10 28-Sep-12 Aug-17 - 1.620 MD Tranche 18-Oct-12 Oct-17 - 1.440 MD Tranche 17-Oct-13 Oct-18 - 0.790 Tranche 11 4-Oct-13 Oct-18 - 0.810 Tranche 1 19-Feb-10 Aug-14 - 0.685 Tranche 2 3-Dec-10 Aug-15 - 1.395 Tranche 4 10-Jun-11 Aug-16 - 2.160 MD Tranche 14-Oct-10 Oct-15 - 1.140 MD Tranche 20-Oct-11 Oct-16 - 1.910 Tranche 7 5-Sep-11 Aug-15 - 2.100 Tranche 8 29-Aug-11 Aug-16 - 2.080 Tranche 9 7-Oct-11 Aug-16 - 1.790 Tranche 10 28-Sep-12 Aug-17 - 1.620 MD Tranche 18-Oct-12 Oct-17 - 1.440 2013 Grant Date Expiry Date Exercise Price $ Estimated Fair Value at Grant Date $ 2014 Grant Date Expiry Date Exercise Price $ Estimated Fair Value at Grant Date $	Estimated Number of Performance Rights
	Opening balance Granted Satisfied by the allocation/ allotment of shares Expired ^ Closing balance 580,117 - (536,534) (43,583) - 66,666 - (66,666) - - 196,579 - (128,876) (67,703) - 153,318 - - - 153,318 665,000 - - (25,000) 640,000 437,811 - (204,713) (22,502) 210,596 38,463 - - (38,463) - 264,818 - - - 264,818 - 300,000 - - 300,000 - 5,124,070 - (5,124,070) -
	Estimated Number of Performance Rights
	Opening balance Granted Satisfied by the issue of shares Expired ^ Closing balance 121,199 - (121,199) - - 1,294,474 - (661,179) (53,178) 580,117 133,333 - (66,667) - 66,666 196,579 - - - 196,579 153,318 - - - 153,318 615,000 50,000 - - 665,000 15,000 - (15,000) - - 813,347 - (256,667) (118,869) 437,811 - 1,261,991 - (1,223,528) 38,463 - 264,818 - - 264,818

• ^ - 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 75 of 79

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

34 Parent Entity Information

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 relating to the Group.

Financial Position Assets Current Assets Non Current Assets Total Assets Liabilities Current Liabilities Non Current Liabilities Total Liabilities Net Assets Equity Issued Capital Shares Reserved for Performance Rights Plan Investment Revaulation Reserve Employee Equity-Settled Benefits Reserve Retained Earnings Total Equity Financial Performance Loss for the year Other comprehensive income, net of income tax Total comprehensive loss Retained Earnings/(Accumulated Losses) at the beginning of the financial year Loss for the year Amounts transferred from employee equity-settled benefits reserve Dividend received Retained Earnings at the end of the financial year	30 June 2014 30 June 2013 $’000 $’000 73,296 75,014 149,141 165,298
	222,437 240,312
	13,147 11,923 41,292 40,712
	54,439 52,635
	167,998 187,677
	90,259 89,269 - (952) - 396 6,266 6,087 71,473 92,877
	167,998 187,677
	Year Ended Year Ended 30 June 2014 30 June 2013 $’000 $’000 (22,425) (20,672) (396) 102
	(22,821) (20,570)
	92,877 (12,009) (22,425) (20,364) (396) (1,159) 1,417 126,409
	71,473 92,877

Page 76 of 79

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 Contingent liabilities of the parent entity Plant and equipment Within one year Between one and five years Later than five years Commitments for the aquisition of property, plant and equipment by the parent entity	30 June 2014 30 June 2013 $’000 $’000 80,121 91,494
	- -
	1.176 - 4.704 - 5.880 -
	11,760 -

35 Subsequent Events

Subsequent to year end, the Group sold the remaining 91.9 million shares of its Sino Gas and Energy Holdings Ltd shareholdings at a share price of 18.5 cents per share to realise gross cash proceeds of $17.0 million at a book profit before tax of $14.2 million. Amounts shown within the Investment Revaluation Reserve at 30 June 2014 will be recycled to the Income Statement as a result of this sale.

Page 77 of 79

and its controlled entities

IMDEX LIMITED

ADDITIONAL SECURITIES EXCHANGE INFORMATION AS AT 31 JULY 2014

(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 National Nominees Limited Citicorp Nominees Pty Limited Citicorp Nominees Pty Limited (Colonial First State Inv Account) RBC Investor Services Australia Nominees Pty Limited (Pi Pooled Account) BNP Paribas Noms Pty Ltd (DRP) Mr Richard Karl Hill (Icena Account) UBS Nominees Pty Ltd (TP00014 15 Account) ABN Amro Clearing Sydney Nominees Pty Ltd (Custodian Account) Aust Executor Trustees Ltd (Charitable Foundation) Telic Alcatel (Australia) Pty Ltd (Middendorp Directors SF Account) Keeble Nominees Pty Ltd (Ridgeway Super Fund Account) RBC Investor Services Australia Nominees Pty Limited (Picredit)) Wear Services Pty Ltd Mr David Charles Lawie (COG Family Account) SAO Group Pty Ltd (The Springbank Family Account) Warbont Nominees Pty Ltd (Accumulation Entrepot Account) Dimana Holdings Pty Ltd Vanward Investments Limited	Number of Fully Paid Ordinary Shareholders Number of Performance Rights Holders 482 70 1,101 50 661 3 963 20 103 2
	3,310 145
	308 -
	Fully Paid Number Percentage 55,031,600 25.94% 41,698,851 19.66% Fully Paid Number Percentage 55,031,600 25.94% 41,698,851 19.66% 17,807,516 8.40% 8,422,007 3.97% 5,831,742 2.75% 5,594,335 2.64% 3,497,958 1.65% 3,000,000 1.41% 2,202,050 1.04% 2,001,899 0.94% 1,781,067 0.84% 1,514,076 0.71% 1,226,737 0.58% 1,005,000 0.47% 987,893 0.47% 978,042 0.46% 978,042 0.46% 945,542 0.45% 880,000 0.41% 775,958 0.37%
	156,160,315 73.62%

Page 78 of 79

and its controlled entities

IMDEX LIMITED

ADDITIONAL SECURITIES EXCHANGE INFORMATION AS AT 31 JULY 2014

(d) Director and Company Secretary Shareholdings

Name Mr R W Kelly Mr B W Ridgeway Mr K A Dundo Mr M Lemmel Ms E Donaghey Mr P A Evans	Number of Shares Number of Options Number of Performance Rights 380,000 - - 2,343,506 - 718,136 150,000 - - 562,000 - - 210,000 - - 396,044 - 12,120
	4,041,550 - 730,256

(e) Company Secretary

Mr Paul Anthony Evans

(f) Registered Office

216 Balcatta Road Balcatta Western Australia 6021 Phone: (08) 9445 4010

(g) Share Registry

Computershare Investor Services Level 2 45 St Georges Terrace Perth WA 6000 Phone: (08) 9323 2000

Page 79 of 79