IMDEX LIMITED — Interim / Quarterly Report 2013

Feb 17, 2013

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8 Pitino Court, Osborne Park Western Australia 6017

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 February 2013

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

BY ELECTRONIC LODGEMENT

Dear Sirs

ASX APPENDIX 4D AND INTERIM FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2012.

Please find attached Imdex Limite d ’s Appendix 4D and Interim Financial Report f or the Half Year Ended 31 December 2012, inclusiv e of the Auditors Review Report and Independ e nce declaration.

Yours faithfully Imdex Limited

Paul Evans

Company Secretary

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Providing innovative drilling fluids and adv a nced down hole instrumentation worldwide.

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IMDEX LIMITED ABN 78 008 947 813

ASX Appendix 4D “Half Year” Report and Interim Directors’ Report & Financial Report

for the Half Year ended 31 December 2012

The ASX Appendix 4D “Half Year” Report is provided to ASX in accordance with Listing Rule 4.2A for announcement to the market. Current Reporting Period: 31 December 2012 Previous Corresponding Reporting Period: 31 December 2011 The Financial Report had been subject to review and is not subject to dispute or qualification. The auditors review report is included herein. The interim Financial Report has been prepared in accordance with International Financial Reporting Standards (“IFRS”). The interim Financial Report does not include all the notes of the type normally included in an annual Financial Report and hence should be read in conjunction with the latest annual report of Imdex Limited, being for the financial year ended 30 June 2012. In addition, reference should be made to any public announcements made by Imdex Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001 (Cth).

and its controlled entities

IMDEX LIMITED

APPENDIX 4D HALF YEAR REPORT 31 DECEMBER 2012

Consolidated

			**Half Year Ended **	Half Year Ended
		% Change	31 Dec 2012	31 Dec 2011
	**Notes **	up / (down)	$ 000's	$ 000's
Revenue from ordinary activities	(i),(iv)	(8%)	127,612	138,574
Profit from ordinary activities after tax attributable to members	(i),(iv)	(27%)	16,573	22,665
Net profit for the period attributable to members	(i),(iv)	(27%)	16,573	22,665
Interim dividend (cents per share)	(ii)		2.50	3.25
Final dividend (cents per share)	(iii)		4.00	2.75
Net tangible assets per ordinary security (cents)	(iv)		56.40	40.43

(i) The announcement made to ASX on 18 February 2013 by the Chairman of Imdex Limited provides an explanation of the Group's financial results and operating performance for the half year ended 31 December 2012.

(ii) TheFY13interimfully franked dividendwas declared on 15 February 2013with arecord dateof 8March2013and apayment date of 22 March 2013. There are no dividend reinvestment plans in operation.

(iii)The FY12 final fully franked dividend was declared on17 August 2012 with a record dateof 12October 2012 and apayment date of 26 October 2012.

(iv) Includes the results of ioGlobal Pty Ltd and ioAnalytics Pty Ltd (ioGlobal) acquired 1 November 2012 - (Refer to note 9(a)).

and its controlled entities

IMDEX LIMITED

DIRECTORS’ REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2012

The Directors of Imdex Limited submit herewith the financial report of Imdex Limited and its subsidiaries (the Group) for the half year ended 31 December 2012. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:

Directors

The Directors of the Company during or since the end of the Half Year are:

Name

Period of Directorship

Mr Ross Kelly AM, Non Executive Chairman

Appointed as Non Executive Director on 14 January 2004 and appointed as Non Executive Chairman on 15 October 2009

Mr Bernie Ridgeway, Managing Director

Appointed 23 May 2000

Mr Magnus Lemmel, Non Executive Director Mr Kevin Dundo, Non Executive Director

Ms Elizabeth Donaghey, Non Executive Director

Appointed 19 October 2006

Appointed 14 January 2004 Appointed 28 October 2009

Review of Operations

	Consolidated	Consolidated
	Half Year Ended	Half	Year Ended
	31 Dec 2012	31	Dec 2011
	$’000		$’000
Total Revenue	127,612		138,574
Profit after tax for the halfyear	16,573		22,665
Basic earnings per share - continuing operations	7.93 ¢		11.14 ¢

The Consolidated Entity’s profit after tax was $16.6 million for the half year ended 31 December 2012 (prior period: $22.7 million). The result was achieved on total revenue of $127.6 million (prior period: $138.6 million).

Earnings per share from total operations was 7.93 cents per share (prior period: 11.14 cents per share)

Further details on the operations and overall results are contained in the Financial Report and the announcement made to the ASX on 18 February 2013 by the Chairman of Imdex Limited regarding the Group’s financial results and operating performance for the half year ended 31 December 2012.

Page 1 of 22

IMDEX LIMITED

and its controlled entities

DIRECTORS’ REPORT FOR THE HALF YEAR ENDED 31 DECEM B ER 2012

Auditor’s Independence Declaration

Section 307C of the Corporations Act 200 1 requires the auditor, Deloitte Touche Tohmatsu, to pro v ide the Directors of Imdex Limited with an Independence Declaration in relation to the review of the Half Year Fi n ancial Report. The Independence Declaration is on the next p a ge.

Rounding of Amounts

The Company is of a kind referred to in Class Order 98/100 issued by the Australian Investments and Exchange Commission dated 10 July 1998 and in a ccordance with that Class Order, amounts in the Fina n cial Report and the Directors’ Report have been rounded off to the nearest thousand dollars, unless otherwise stated.

Signed in accordance with a resolution of t h e Directors pursuant to s.306(3) of the Corporations Act 2 001.

Dated at Perth, 15 February 2013

Ross Kelly AM Chairman

Page 2 of 22

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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

The Board of Directors Imdex Limited 8 Pitino Court Osborne Park WA 6017

DX 206 Tel: +61 (0) 8 9365 7000 Fax: +61 (0) 8 9365 7001 www.deloitte.com.au

15 February 2013

Dear Directors

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 review partner for the audit of the financial statements of Imdex Limited for the half year ended 31 December 2012, 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 review; and

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

Yours sincerely

DELOITTE TOUCHE TOHMATSU

AT 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

DX 206 Tel: +61 (0) 8 9365 7000 Fax: +61 (0) 8 9365 7001 www.deloitte.com.au

Independent Auditor’s Review Report to the members of Imdex Limited

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Imdex Limited, which comprises the condensed statement of financial position as at 31 December 2012, and the condensed consolidated statement of comprehensive income, the condensed consolidated statement of cash flows and the condensed consolidated statement of changes in equity for the half-year ended on that date, selected explanatory notes and the directors’ declaration of the consolidated entity, comprising the company and the entities it controlled at the end of the half-year or from time to time during the half-year as set out on pages 6 to 22

Directors’ Responsibility for the Half-Year Financial Report

The directors of the company are responsible for the preparation of the half-year 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 half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2012 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of Imdex Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

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

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A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Auditor’s Independence Declaration

In conducting our review, 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 review report.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Imdex Limited is not in accordance with the Corporations Act 2001 , including:

• (a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2012 and of its performance for the half-year ended on that date; and

• (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

DELOITTE TOUCHE TOHMATSU

AT Richards Partner Chartered Accountants Perth, 15 February 2013

IMDEX LIMITED and its controlled entities

DIRECTORS’ DECLARATIO N

The Directors declare that:

• (a) in the Directors’ opinion, there are rea s onable grounds to believe that the Company will be abl e to pay its debts as and when they become due and paya b le; and

• (b) in the Directors’ opinion, the attached Financial Report and notes thereto are in accordance w ith the Corporations Act 2001, including compliance with a ccounting standards and giving a true and fair view of the financial position and performance of the Consolidated E ntity.

Signed in accordance with a resolution of t h e Directors made pursuant to s. 303(5) of the Corporatio n s Act 2001.

Dated at Perth, 15 February 2013

Ross Kelly AM Chairman

Page 6 of 22

and its controlled entities

IMDEX LIMITED

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 31 DECEMBER 2012

Notes Continuing operations Revenue from sale of goods and operating lease rental Other revenue from operations Total revenue Other income 2 Raw materials and consumables used Employee benefit expense Depreciation expense Amortisation expense Finance costs Share of profit/(loss) of associate 5 Other expenses 2 Profit before tax Income tax expense Profit for the period Other comprehensive income Items that may be reclassified subsequently to profit or loss Fair value adjustment on investment in Sino Gas and Energy Holdings Ltd (SEH) Exchange differences arising on the translation of foreign operations Income tax relating to items that may be reclassified subsequently Other comprehensive income for the period, net of income tax Total comprehensive income for the period Profit attributable to: Owners of the parent Non-controlling interests Total comprehensive income attributable to: Owners of the parent Non-controlling interests Earnings per share Basic earings per share (cents) Diluted earnings per share (cents)	Half Year Ended Half Year Ended 31 Dec 2012 31 Dec 2011 $’000 $’000 127,583 138,516 29 58
	127,612 138,574
	83 49 (53,789) (54,112) (26,417) (21,729) (3,447) (3,274) (1,510) (2,940) (1,849) (769) 1,389 (1,238) (19,209) (19,930)
	22,863 34,631 (6,290) (11,966)
	16,573 22,665
	11,337 (7,304) (1,999) (6,081) (3,401) 2,191
	5,937 (11,194)
	22,510 11,471
	16,573 22,665 - -
	22,510 11,471 - -
	7.93 11.14 7.79 10.86

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

Page 7 of 22

IMDEX LIMITED

and its controlled entities

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2012

Note s Curre nt Asse ts Cash and Cash Equivalents Trade and Other Receivables Inventories Other Tota l Curre nt Asse ts Non Curre nt Asse ts Property, Plant and Equipm ent Deferred Tax Assets Goodwill 3 Other Intangible Assets 4 Investm ents in Associates 5 Other Financial Assets Tota l Non Curre nt Asse ts Tota l Asse ts Curre nt Lia bilitie s Trade and Other Payables Borrowings 6 Current Tax Liabilities Provisions Tota l Curre nt Lia bilitie s Non Curre nt Lia bilitie s Borrowings 6 Provisions Tota l Non Curre nt Lia bilitie s Tota l Lia bilitie s Ne t Asse ts Equity Issued Capital 7 Shares Reserved for Perform ance Rights Plan 7 Foreign Currency Translation Reserve Investm ent Revaluation Reserve Em ployee Equity-Settled Benefits Reserve M andatory Issuable Capital Retained Earnings Tota l Equity	31 De c 2012 30 Jun 2012 $’000 $’000 10,048 11,232 51,758 59,689 49,550 52,106 8,460 11,295
	119,816 134,322
	34,057 19,730 11,334 13,700 61,016 54,577 6,997 6,556 25,644 24,255 32,748 21,412
	171,796 140,230
	291,612 274,552
	32,410 33,349 17,360 12,880 1,466 9,547 3,335 2,896
	54,571 58,672
	48,882 46,549 1,442 1,265
	50,324 47,814
	104,895 106,486
	186,717 168,066
	89,269 86,069 (1,117) (3,740) (19,702) (17,703) 18,163 10,227 6,136 6,385 990 990 92,978 85,838
	186,717 168,066

The Condensed Consolidated Statem ent of Financial Position should b e read in conjunction with the accom panying notes.

Page 8 of 22

IMDEX LIMITED

and its controlled entities

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2012

		Fully Paid	Shares	Foreign	Investment	Employee	Mandatory	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 Parent
	Notes	$'000	$'000	$'000	$'000	$'000	$'000	$'000		$'000
Balance at 1 July 2011		70,059	-	(11,441)	6,524	7,158	-	53,109		125,409
Exchange differences on translation of
foreign operations after taxation		-	-	(6,081)	-	-	-		-	(6,081)
Fair value adjustment on available for sale
financial instrument net of taxation		-	-	-	(5,113)	-	-		-	(5,113)
Profit for the period		-	-	-	-	-	-	22,665		22,665
Total comprehensive income for the period		-	-	(6,081)	(5,113)	-	-	22,665		11,471
Issue of shares as part consideration for the
acquisition of Australian Drilling Specialties	7	6,000	-	-	-	-	-		-	6,000
Share based payments - performance rights		-	-	-	-	1,397	-		-	1,397
Shares purchased on market to satisfy
performance rights		-	-	-	-	(1,850)	-		-	(1,850)
Issue of shares under staff option plan		1,900	-	-	-	-	-		-	1,900
Dividend Paid	8	-	-	-	-	-	-	(5,622)		(5,622)
Balance at 31 December 2011		77,959	-	(17,522)	1,411	6,705	-	70,152		138,705
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		-	-	(1,999)	-	-	-		-	(1,999)
Fair value adjustment on available for sale
financial instrument net of taxation		-	-	-	7,936	-	-		-	7,936
Profit for the period		-	-	-	-	-	-	16,573		16,573
Total comprehensive (expense)/income for
the period		-	-	(1,999)	7,936	-	-	16,573		22,510
Issue of shares as part consideration for the
acquisition of ioGlobal	7	3,200	-	-	-	-	-		-	3,200
Share based payments - performance rights		-	-	-	-	1,270	-		-	1,270
Granting/settlement of performance rights		-	2,623	-	-	(1,519)	-	(1,104)		-
Dividend Paid	8	-	-	-	-	-	-	(8,329)		(8,329)
Balance at 31 December 2012		89,269	(1,117)	(19,702)	18,163	6,136	990	92,978		186,717

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

Page 9 of 22

IMDEX LIMITED

and its controlled entities

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF YEAR ENDED 31 DECEMBER 2012

Notes Cash Flows From Operating Activities Receipts from customers Payments to suppliers and employees Interest and other costs of finance paid Income tax paid Net cash provided by Operating Activities Cash Flows From Investing Activities Interest received Payment for property, plant and equipment Payment for development costs capitalised 4 Investment in Associate Payment for shares in ioGlobal net of cash acquired 9(a)(ii) Payment for shares in Australian Drilling Specialties Pty Ltd net of cash acquired 9(b)(ii) Net cash used in Investing Activities Cash Flows From Financing Activities Cash received on exercise of options Shares purchased on market to satisfy performance rights Hire purchase and lease payments Proceeds from borrowings Repayment of borrowings Dividend paid to owners of the Company 8 Net cash used in Financing Activities Net (decrease)/increase in Cash and Cash Equivalents Held Cash and Cash Equivalents At The Beginning Of The Period 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 Period	Half Year Ended Half Year Ended 31 Dec 2012 31 Dec 2011 $’000 $’000 148,755 151,003 (110,985) (116,967) (1,849) (870) (14,214) (15,144)
	21,707 18,022
	29 58 (17,191) (4,340) (758) (595) - (1,283) (3,874) - - (7,077)
	(21,794) (13,237)
	- 1,900 - (1,850) (290) (345) 13,924 37,854 (6,146) (34,696) (8,329) (5,622)
	(841) (2,759)
	(928) 2,026
	11,232 18,388 (256) (131)
	10,048 20,283

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

Page 10 of 22

IMDEX LIMITED and its controlled entities NOTES TO THE FINANCIAL REPORT

1. Summary of Significant Accounting Policies

Statement of Compliance

The half year report is a general purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134 “Interim Financial Reporting”. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 “Interim Financial Reporting”. The half year financial report does not include notes of the type normally included in an annual financial report and should be read in conjunction with the most recent annual financial report.

Basis of Preparation

The condensed consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.

This financial report comprises the consolidated financial report of Imdex Limited (“Company”) and the entities it controlled at the end of, or during, the period (together, “the Group”).

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 half year financial report are rounded off to the nearest thousand dollars, unless otherwise indicated.

The accounting policies and methods of computation adopted in the preparation of the half year financial report are consistent with those adopted and disclosed in the Company’s 2012 annual financial report for the financial year ended 30 June 2012, other than as detailed below. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting 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 (“AASB”) that are relevant to their operations and effective for the current half-year.

New and revised Standards and amendments thereof and interpretations effective for the current half-year that are relevant to the Group include:

• Amendments to AASB 1, 5, 7, 101, 112, 120, 121, 132, 133 and 134 as a consequence of AASB 2011-9 ‘Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income’.

The adoption of new and revised Standards and Interpretations has not affected the amounts reported for the current or prior year. However the application of AASB 2011-9 has resulted in a change to the Group’s presentation of, or disclosure in, its half year report.

Page 11 of 22

IMDEX LIMITED and its controlled entities

NOTES TO THE FINANCIAL REPORT

2. Other Income and Other Expenses

2. Other Income and Other Expenses
Other Income Other income Other Expenses Auditors and other accounting fees Commissions Communication Consultancy fees Electricity Freight Foreign exchange gain Hire of plant and equipment Insurance Legal and professional fees Rent and premises costs Repairs and maintenance Travel and accommodation Vehicle expenses Other expenses	Half Year Ended Half Year Ended 31 Dec 2012 31 Dec 2011 $’000 $’000 83 49
	1,017 575 1,302 1,824 801 620 1,119 2,055 227 262 1,156 1,501 (292) (411) 271 176 698 445 2,834 2,697 2,531 2,075 363 295 2,672 2,184 1,226 904 3,284 4,728
	19,209 19,930

Page 12 of 22

IMDEX LIMITED and its controlled entities NOTES TO THE FINANCIAL REPORT

3. Goodwill

3. Goodwill
N o te s G ro ss C a rryin g Am o u n t B alanc e at beginning of the financ ial y ear R ec ognis ed on ac quis ition of ioG lobal P ty Ltd and ioA naly tic s P ty Ltd (ioG lobal) (i) R ec ognis ed on ac quis ition of A us tralian D rilling S pec ialties P ty Ltd (ii) R ec ognis ed on ac quis ition of S y s tem M ud Indus tria e C om erc io Ltda (S y s tem M ud) (iii) R ec las s ified to Inves tm ent in A s s oc iate R eas s es s m ent of A M C G erm any G m bH (iv) E ffec t of foreign ex c hange m ovem ents B alanc e at end of the period A ccu m u la te d Im p a irm e n t L o sse s B alanc e at beginning of the financ ial y ear Im pairm ent los s es for the period B alanc e at end of the period N e t Bo o k V a lu e A t the beginning of the financ ial y ear A t the end of the period G o o d w ill is a llo ca te d to ca sh -g e n e ra tin g u n its (C G U ) a s fo llo w s: R eflex /Im dex Tec hnology UK A M C /A D S /F luids tar/E c os pin (ii) S y s tem M ud (iii) ioG lobal (i) A M C G erm any (iv)	31 D e c 2012 30 Ju n 2012 $’000 $’000 77,075 61,203 6,357 - - 10,513 - 6,808 - (1,416) - 152 82 (185)
	83,514 77,075
	(22,498) (22,498) - -
	(22,498) (22,498)
	54,577 38,705
	61,016 54,577
	29,194 29,112 18,360 18,360 6,808 6,808 6,357 - 297 297
	61,016 54,577

(i) Goodwill arose during the period on the acquisition of ioGlobal by Imdex Limited effective 1 November 2012 - (Refer note 9(a)). The goodwill of ioGlobal is considered to be a separate cash generating unit since it operates independently from other Imdex operations providing innovative cloud-based data management solutions for the mining and mineral exploration industries.

(ii) Goodwill arose in the prior period on the acquisition of Australian Drilling Specialties Pty Ltd (ADS) by Imdex Limited effective 1 July 2011 - (Refer note 9(b)). The goodwill of ADS has been absorbed into the AMC/ADS/Fluidstar/Ecospin CGU and has been assessed for impairment as part of that CGU.

(iii) Goodwill arose in the prior year on the acquisition of System Mud Industria e Comercio Ltda (System Mud) by Imdex Limited. System Mud is considered to be a separate cash generating unit since it operates independently from other Imdex operations in a separate geographical area being the Latin America region concentrating on the supply of drilling fluids and chemical supplies.

(iv) A true up of AMC Germany (AMC Germany GmbH) goodwill of $0.2m occurred in the prior period on finalisation of the acquisition accounting. AMC Germany is considered to be a separate cash generating unit since it operates independently from other Imdex operations in a separate geographical area being the greater European region and in a separate market, being the oil & gas and geothermal markets.

Page 13 of 22

IMDEX LIMITED

and its controlled entities NOTES TO THE FINANCIAL REPORT

4. Intangibles

Notes Gross Carrying Value Balance at 30 June 2011 Capitalised during the year Reclassified to Investment in Associate Amounts derecognised (i) Impact of exchange rate changes Balance at 30 June 2012 Capitalised during the period Recognition on acquisition of ioGlobal 9(a) Impact of exchange rate changes Balance at 31 December 2012 Accumulated Amortisation and Impairment Balance at 30 June 2011 Amortisation expense/(writeback) Impact of exchange rate changes Balance at 30 June 2012 Amortisation expense Impact of exchange rate changes Balance at 31 December 2012 Net Book Value As at 30 June 2012 As at 31 December 2012	Patents Intellectual Property Technology Based Contract Based Customer Based Development Costs Trade Name TOTAL $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 761 1,505 14,080 5,229 10,945 8,092 3,895 44,507 - - - 943 - 1,254 - 2,197 - (904) - - - (1,980) - (2,884) - - - (3,914) - - - (3,914) - - - - (52) - (8) (60)
	761 601 14,080 2,258 10,893 7,366 3,887 39,846 - - - - - 758 - 758 - 1,300 - - - - - 1,300 - - - - - (126) - (126)
	761 1,901 14,080 2,258 10,893 7,998 3,887 41,778
	634 526 10,389 1,569 8,611 2,362 3,270 27,361 127 75 2,102 (254) 1,901 1,403 603 5,957 - - - - (24) - (4) (28)
	761 601 12,491 1,315 10,488 3,765 3,869 33,290 - 43 733 - 405 311 18 1,510 - - - - - (19) - (19)
	761 644 13,224 1,315 10,893 4,057 3,887 34,781
	- - 1,589 943 405 3,601 18 6,556
	- 1,257 856 943 - 3,941 - 6,997

(i) Intangible assets previously provisionally recognised during the 30 June 2011 financial year in connection with the AMC Germany acquisition were reassessed and derecognised during the prior period and the associated amortisation reversed.

Page 14 of 22

IMDEX LIMITED and its controlled entities NOTES TO THE FINANCIAL REPORT

5. Investment in Associate

On 1 July 2011, Imdex Limited acquired 50% of the issued share capital of DHS Services (DHS) in exchange for granting an exclusive global licence over its oil and gas surveying instruments and technology. DHS 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. Imdex Limited accounted for its investment in DHS as an associate as it was deemed to have a significant influence over but not control of DHS since it held 50% of the issued capital but only 2 out of 5 board positions.

Effective 1 January 2012, DHS shares were rolled over into a newly created entity, DHS Energy Services (DHSES). On 23 January 2012 Imdex Limited announced that, effective 1 January 2012, DHSES purchased the business of Vaughn Energy Services (VES), a US based oil & gas services provider, for US$100 million. To fund the purchase DHSES increased its share capital. On 19 January 2012 Imdex Limited raised additional debt of $25 million from its banking club facility and applied approximately USD$22.5 million of this debt to purchase additional shares in DHSES. Following this transaction Imdex Limited’s shareholding in DHSES decreased from 50% to 30%. The numbers presented below in relation to the acquisition of VES have been accounted for using the acquisition method of accounting and as at 31 December 2012 the acquisition accounting remains provisional, pending finalisation of a detailed valuation report. Accordingly certain assumptions have been made in recording Imdex's share of DHSES's result.

	ervices (DHS) in exchange for granting an S is registered in the British Virgin Islands y licensed to it by Imdex Limited. Imdex a significant influence over but not control , DHS Energy Services (DHSES). On 23 urchased the business of Vaughn Energy the purchase DHSES increased its share from its banking club facility and applied Following this transaction Imdex Limited’s in relation to the acquisition of VES have er 2012 the acquisition accounting remains ssumptions have been made in recording
Notes Total Revenue (iii) Total Loss for the Period (ii),(iii) Total Assets Total Liabilities Net Assets Share of Net Assets of Associate Cumulative share of loss of Associate (iv) Cost of Investment in Associate (i) Financial information in respect of the Associate is set out below : The Investment in Associate comprises the following:	Half Year Ended 31 Dec 2012 Half Year Ended 31 Dec 2011 $’000 $’000 26,604 2,628
	(5,801) (2,476)
	31 Dec 2012 30 Jun 2012 $’000 $’000 148,760 139,961 (38,376) (20,125)
	110,384 119,836
	33,115 35,951
	(71) (1,460) 25,715 25,715
	25,644 24,255

(i) Cost of investment in associate comprises goodwill and intangible assets transferred to the associate in the prior period totalling $4.3 and $21.4 million of cash paid.

(ii) Includes $6.0 million of amortisation on intangibles expected to arise on the acquisition of VES effective 1 January 2012. This amount is an estimate only and will be trued up once the audit of this transaction is complete.

(iii) The prior period comparative numbers disclosed relate to the financial information for the DHS only, prior to the creation of DHSES and the acquisition of VES.

• (iv) Imdex’s cumulative share of losses includes the effect of adjustments to eliminate unrealised intercompany profits, align the accounting policies of the associate to those of the Group and to reflect the accounting entries related to the acquisition by DHSES of VES.

Page 15 of 22

and its controlled entities

IMDEX LIMITED

NOTES TO THE FINANCIAL REPORT

6. Borrowings

6. Borrowings
Notes Current borrowings Secured At amortised cost Club Facility - AUD Tranche (i) Club Facility - USD Tranche (i) Club Facility - CAD Tranche (i) Hire purchase liabilities (ii) Non-current borrowings Secured At amortised cost Club Facility - AUD Tranche (i) Club Facility - USD Tranche (i) Club Facility - CAD Tranche (i) Hire purchase liabilities (ii)	31 Dec 2012 30 Jun 2012 $’000 $’000 10,380 5,580 4,726 4,961 1,930 1,943 324 396
	17,360 12,880
	20,555 22,595 22,600 17,406 5,467 6,478 260 70
	48,882 46,549

• (i) On 7 October 2011 a clubbed banking facility with Westpac Banking Corporation and HSBC was put in place. This facility replaced commercial bills and Canadian bank loans in existence at that date. At inception this facility allowed the Imdex Group access debt of $50 million split equally between the two club participants. Westpac Banking Corporation provided AUD denominated borrowings in Australia while HSBC provided CAD and USD denominated borrowings in Chile, South Africa, Canada and Australia. This facility was extended from $50 million to $75 million on 19 January 2012 and on 21 September 2012 Westpac Banking Corporation provided an additional capex facility of USD20 million to allow for Imdex’s expansion into the solids removal market.

As at 31 December 2012:

• AUD denominated borrowings bear interest at floating rates (currently 5.61% per annum). A total of $4.8 million of which was repayable on 31 March 2013 with the balance being repayable in equal monthly installments of $0.5 million to 31 October 2014 on which date the remainder is repayable.

• USD denominated borrowings bear interest at floating rates (currently between 2.70% and 4.06% per annum depending on the borrowing country). Included in these borrowings are USD8.8 million drawn under the Westpac Banking Corporation capex facility. This capex facility, originally approved at USD20 million, stepped down in limit by USD1 million on 31 December 2012 and then steps down in limit by USD2 million at the end of each calendar quarter thereafter until 31 October 2014 when the balance of the facility is repayable. Repayments are required on this capex facility to keep borrowing levels below the quarterly reducing limit. No such repayments are expected to be made in the next 12 months. The balance of USD borrowings are repayable in equal monthly installments of USD 0.4 million to 31 October 2014 on which date the balance is repayable.

• CAD denominated borrowings bear interest at floating rates (currently 4.50% per annum). These borrowings are repayable in equal monthly installments of CAD 0.2 million to 31 October 2014 on which date the balance is repayable.

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

• (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 7.47% (30 June 2012: 9.67%).

Page 16 of 22

and its controlled entities NOTES TO THE FINANCIAL REPORT

IMDEX LIMITED

7. Issued Capital and Shares reserved for Performance Rights Plan

Notes Issued and Paid Up Capital - Fully paid ordinary shares (i)	31 Dec 2012 30 Jun 2012 $’000 $’000 89,269 86,069
Notes Number $'000 Ordinary shares Balance at beginning of the period 208,235,426 86,069 Issue of shares as part consideration for the acquisition of ioGlobal Pty Ltd and ioAnalytics Pty Ltd 9(a) 2,237,762 3,200 Issue of shares as part consideration for the acquisition of Australian Drilling Specialties Pty Ltd 9(b) - - Issue of shares as part consideration for the acquisition of System Mud Industria e Comercio Ltda - - Issue of shares as part consideration for the acquisition of Mud Systems Pte Ltd - - Issue of shares under Staff Option Plan - - 31 Dec 2012	Number $'000 199,699,165 70,059 - - 3,206,770 6,000 1,306,324 3,840 500,000 1,200 3,523,167 4,970 30 Jun 2012
Closingbalance at end of theperiod 210,473,188 89,269	208,235,426 86,069
(i) Fully paid ordinary shares carry one vote per share and the right to dividends.
(ii) 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.
31 Dec 2012 30 Jun 2012 $’000 $’000 Shares reserved for Performance Rights Plan Balance at beginning of the period (3,740) - Allocation/(purchase) of shares 2,623 (3,740) Balance at the end of the period (1,117) (3,740) Through a corporate trustee, the Company holds certain shares in Trust for employees under the Performance Rights Plan (PRP or Plan).	31 Dec 2012 30 Jun 2012 $’000 $’000 (3,740) - 2,623 (3,740)
	(1,117) (3,740)

	31 Dec 2012 30 Jun 2012	31 Dec 2012 30 Jun 2012
	$’000	$’000
Shares reserved for Performance Rights Plan
Balance at beginning of the period	(3,740)	-
Allocation/(purchase) of shares	2,623	(3,740)
Balance at the end of the period	(1,117)	(3,740)
Through a corporate trustee, the Company holds certain shares in Trust for employees under the Performance Rights Plan (PRP or Plan).

Page 17 of 22

IMDEX LIMITED and its controlled entities NOTES TO THE FINANCIAL REPORT

8. Dividends

8. Dividends
		Half Year	Ended	Half Year	Ended
		31 Dec	2012	31 Dec	2011
	Notes	Cents per	Total	Cents per	Total
		share	$’000	share	$’000
Recognised amounts
Fully paid ordinary shares - final dividend franked to 30%	(i)	4.00	8,329	2.75	5,622
Unrecognised amounts
Fully paid ordinary shares - interim dividend franked to 30%	(ii)	2.50	5,262	3.25	6,664

(i) The FY12 final fully franked dividend was declared on 17 August 2012 with a record date of 12 October 2012 and a payment date of 26 October 2012.

(ii) The FY13 interim fully franked dividend was declared on 15 February 2012 with a record date of 8 March 2013. The financial effect of the dividend has not been recognised in the financial statements at 31 December 2012.

Adjusted franking account balance Impact on franking account of dividends not recognised	Half Year Ended Half Year Ended 31 Dec 2012 $’000 41,672 $’000 55,381 31 Dec 2011
	2,255 2,856

Page 18 of 22

IMDEX LIMITED and its controlled entities NOTES TO THE FINANCIAL REPORT

9. Acquisitions

(a) 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 provisional numbers presented below have been accounted for using the acquisition method of accounting.

Details of the assets, liabilities and goodwill:		Book value	Fair value	Fair value on
			adjustments	acquisition
	Notes	$’000	$’000	$’000
Trade and other receivables		1,441	-	1,441
Property, plant and equipment		175	-	175
Intangibles	(iii)	-	1,300	1,300
Trade and other payables		(1,654)	-	(1,654)
Deferred tax	(iii)	-	(390)	(390)
Provisions		(155)	-	(155)
Fair value of net identifiable assets acquired		(193)	910	717
Goodwill on acquisition	(i)			6,357
Total purchase consideration				7,074
Total purchase consideration comprises
Consideration in cash and cash equivalents	(ii)			4,800
Less: Cash and cash equivalents acquired	(ii)			(926)
Issue of ordinary shares	7			3,200
				7,074
				2 months to
				31 Dec 2012
Operating results of ioGlobal included in the Consolidated Income Statement of Imdex				$’000
Limited from acquisition on 1 November 2012 to 31 December 2012:
Revenue				856
Total expenses (including income tax)				(943)
Profit after tax for the period	(iv)			(87)

(i) Goodwill arose in the business combination because the cost of the combination included a control premium paid to acquire ioGlobal. In addition, the consideration paid for the combination effectively included amounts in relation to the benefit of expected synergies, revenue growth, future market development and the assembled workforce of ioGlobal. These benefits are not recognised separately from goodwill as the future economic benefits arising from them cannot be reliably measured. There were no acquisition provisions created, nor were there any contingent liabilities assumed in the acquisition.

(ii) The Consolidated Cash Flow Statement for the half year ended 31 December 2012 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 $2.6 million with breakeven profit. 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.

Page 19 of 22

IMDEX LIMITED and its controlled entities NOTES TO THE FINANCIAL REPORT

9. Acquisitions (continued)

(b) Acquisition of entity - Australian Drilling Specialties Pty Ltd

With effect from 1 July 2011, Imdex Limited acquired 100% of the issued share capital of Australian Drilling Specialties Pty Ltd (ADS), incorporated in Australia and operating out of premises located in Western Australia. ADS is a drilling fluids and chemical manufacturer that owns the formulations and intellectual property for the products it manufactures. The numbers presented below have been accounted for using the acquisition method of accounting.

Details of the assets, liabilities and goodwill:		Book value	Fair value	Fair value	Fair value on
			adjustments		acquisition
	Notes	$’000	$’000		$’000
Trade and other receivables		2,408		-	2,408
Inventory		352		-	352
Property, plant and equipment		778		-	778
Trade and other payables		(901)		-	(901)
Provisions		(73)		-	(73)
Fair value of net identifiable assets acquired		2,564		-	2,564
Goodwill on acquisition	(i)				10,513
Total purchase consideration					13,077
Total purchase consideration comprises
Consideration in cash and cash equivalents	(ii)				6,000
Overdraft acquired	(ii)				1,077
Issue of ordinary shares	7				6,000
					13,077
			6 months to		6 months to
			31 Dec 2012		31 Dec 2011
			$’000		$’000
Operating results of ADS included in the Consolidated Income Statement of Imdex Limited
for the following periods:
Revenue				3,963	6,307
Total expenses (including income tax)				(3,596)	(4,925)
Profit after tax for the period				367	1,382

(i) Goodwill arose in the business combination because the cost of the combination included a control premium paid to acquire ADS. In addition, the consideration paid for the combination effectively included amounts in relation to the benefit of expected synergies, revenue growth, future market development and the assembled workforce of ADS. These benefits are not recognised separately from goodwill as the future economic benefits arising from them cannot be reliably measured. There were no acquisition provisions created, nor were there any contingent liabilities assumed in the acquisition.

(ii) The Consolidated Cash Flow Statement for the half year ended 31 December 2011 records the payment for the acquisition of ADS as $7.1 million being the cash purchase consideration of $6.0 million shown above plus $1.1 million overdraft acquired. (iii) In addition to the above purchase consideration, $0.1 million of direct costs were incurred. These costs comprised primarily of legal costs and were expensed as incurred.

Page 20 of 22

IMDEX LIMITED and its controlled entities NOTES TO THE FINANCIAL REPORT

10. Segment Information

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 and sale of down hole instrumentation and manufacture and sale of drilling fluids and chemicals and related equipment to the oil & gas and geothermal industries globally;

(a) Segment Revenues

	ture and sale of down hole nt to the oil & gas and geoth
Minerals Oil & Gas Total of all segments Eliminations Interest income (b) Segment Profit Minerals Oil & Gas (i) Total of all segments Central administration costs (ii) Profit before income tax expense Income tax expense Profit attributable to ordinary equity holders of Imdex Total revenue	Half Year 31 Dec 12 Half Year 31 Dec 11 $'000 $'000 102,051 124,012 25,532 14,504 Total
	127,583 138,516
	- - 29 58
	127,612 138,574
	25,508 41,126 904 (3,923)
	26,412 37,203 (3,549) (2,572)
	22,863 34,631 (6,290) (11,966)
	16,573 22,665

(i) Includes the share of profit of Associate of $1.6 million (31 December 2011: loss of $1.2 million)

(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.

Segment profit represents the profit earned by each segment without allocation of central administration costs, directors’ salaries, net finance costs and income tax expense. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.

(c) Segment Assets Minerals Oil & Gas Total of all segments Consolidated Unallocated (i)	31 Dec 12 30 Jun 12 $'000 $'000 209,923 201,185 48,941 51,955 Assets
	258,864 253,140 32,748 21,412
	291,612 274,552

(i) Unallocated assets comprise the investment in Sino Gas & Energy Holdings Ltd.

Page 21 of 22

and its controlled entities

IMDEX LIMITED

NOTES TO THE FINANCIAL REPORT

11. Contingent Liabilities and Contingent Assets

There are no contingent assets or liabilities at the current or prior balance dates.

12. Subsequent Events

Subsequent to half year end the Directors declared a 2.5 cent per share fully franked interim dividend with a record date of 8 March 2013 and a payment date of 22 March 2013. The effect of this dividend has not been reflected in this financial report.

Page 22 of 22