SCIDEV LTD — Annual Report 2011

Aug 29, 2011

ABN 25 001 150 849

Level 3 2 Elizabeth Plaza North Sydney NSW 2060 Australia PO Box 1507 North Sydney NSW 2059 Australia

Phone: 02-9954 7888 Fax: 02-8904 0334 Email: mail@intec.com.au Website: www.intec.com.au ASX code: INL

Companies Announcements Office 30 August 2011 Australian Securities Exchange

Preliminary 2011 Financial Report (Appendix 4E)

In its 2011 Annual Report to be lodged with the ASX in September, Intec Ltd (ASX code: INL) will be providing a comprehensive description of all its activities up to that time.

In the meantime, I attach INL's Preliminary Final Report in accordance with Appendix 4E for the financial year ended 30 June 2011.

Yours faithfully Intec Ltd

Philip R. Wood Managing Director and Chief Executive Officer

Intec Ltd

ABN 25 001 150 849

Preliminary Final Report in accordance with Appendix 4E

Financial year ended 30 June 2011

Results for announcement to the market			30 June2011		30 June2010
			$'000		$'000
Revenues and other income from continuingoperations	Up 1,055%	to	8,004	from	759
Profit (loss) from continuing operations	Up	to	1,524	from	(4,439)
Profit(loss) from discontinued operations	Down100%	to	0	from	2,659
Net profit(loss)for period attributable tomembers	Up	to	1,524	from	(1,780)
Dividends			Amount persecurity		Franked amountper security
Final dividend			Nil cents		Nil cents

Previous corresponding period Nil cents Nil cents

Record date for determining entitlements to the dividend Not applicable

Brief explanation of any of the figures reported above:

The Company and controlled entities (the Group) generated an operating profit after income tax of $1.524 million and net cash inflows from operations of $1.509 million in the year ended 30 June 2011. As of balance date, the Group had net assets of $8.437 million and cash balances of $2.557 million.

The operating profit after tax of $1.524 million represents an improvement when compared to the loss recorded at 30 June 2010 of $1.780 million.

The profit was principally due to monies received as a result of the agreement concluded with JX Nippon Mining & Metals Corporation ("JX Nippon") on 17 November 2010. Both Intec and JX Nippon have patent portfolios in the field of halide-based hydrometallurgy for the processing of base and precious metals. Under the Agreement, Intec and JX Nippon have cross-licensed each other with certain patents, inclusive of a $5.0 million payment by JX Nippon to Intec. Payment was received on 30 November 2010.

Revenues from continuing operations were generated from fees received from clients in respect of ongoing hydrometallurgical process development testwork, the ongoing recycling operations at Burnie, production and shipping of low-grade zinc concentrate blended from the Group's stockpiles of Zeehan feedstock and Tasmanian EAF dust, interest from the Group's environmental bonds for the EAF dust stockpiles and other minor sources.

The provision raised against the environmental bond lodged with the Tasmanian Government was reversed, resulting in a credit to profit and loss of $0.778 million. The Tasmanian EAF dust stockpile was blended with the Group's stockpile of Zeehan feedstock and shipped to offshore customers as a low-grade zinc concentrate. As there will be no further need for an environmental bond following the removal of the Tasmanian EAF dust stockpile, the Tasmanian Government has refunded, in part, the environmental bond with the remaining bond monies expected to be refunded in full by December 2011.

Strategic Review

The Group's Board and senior management commenced a full review of the operations and strategies of the Group in early 2011, with the external assistance of the AFG Venture Group.

Among the outcomes of the review, the Group has decided to narrow its focus for the short to medium-term, concentrating the Group's technical and financial resources on a core set of opportunities that are intended to deliver key immediate economic outcomes and a solid platform for growth. The five key areas for the remainder of the financial year are:

• Continuation of the low-grade zinc concentrate project.
• Implementation of the spent pickle liquor (SPL) recycling project, with pipeline development of subsequent SPL recycling projects at the appropriate juncture.
• Investigation and a decision concerning the Burnie rare earth recycling opportunity.
• Pursuit of the Middle Eastern zinc/lead project implementation contract, and if successful, the delivery on the resulting engineering contract.
• Pursuit of opportunities for the Intec Gold Process via pipeline development and paid testwork, particularly for arsenic-bearing gold feedstocks.

The Group's strategy will remain flexible, inclusive of considering corporate opportunities, and will be adjusted based on near-term outcomes, market conditions and forward expectations.

La Jolla Cove Investors Inc. Funding Agreement Concluded

The La Jolla Cove Investors Inc. convertible note facility was discharged in full following monies received from the placement of 25,000,000 fully paid ordinary shares at a price of 3.0 cents per share to clients of Taylor Collison Limited on 19 November 2010. On 22 November 2010, the Company made full payment to La Jolla Cove Investors, Inc. in satisfaction of all outstanding debt and other obligations under the US$1.5 million convertible note facility dated 1 July 2010.

Hellyer Royalty

The Group holds a 100% interest in the Hellyer processing royalty, which is a unit-based royalty payable at the rate of $2.50 per tonne of ore processed through the Hellyer Mill to a cumulative maximum payment amount of $5.0 million. The non-current assets of the Group include an amount of $2.756 million representing a valuation of the contingent Hellyer royalty.

The processing royalty is payable quarterly in arrears based on the reconciled Hellyer Mill production figures. Bass Metals announced on 2 February 2011 that production had commenced at the Hellyer Mill. After allowing for ramp-up of the Hellyer Mill during the March and June quarters, Intec received its first royalty payment for an amount of $75,325 (excluding GST) from Bass Metals in August 2011.

Operational Activities

During the year, the Group continued to generate revenue from the provision of recycling services for heavy metals from inorganic industrial wastes at its Burnie Research Facility.

Victorian Spent Pickle Liquor Recycling Project

Throughout 2010 and 2011, the Group continued the development of the application of the Intec Process for the zero-waste recycling of SPL, which contains zinc, iron, and hydrochloric acid.

Commencing in November 2010, the Burnie plant modifications for the Phase 2 trial programme were fully commissioned, and stable operations were achieved in December, 2010. The trials successfully produced specified iron oxide, zinc metal, gypsum, and regenerated hydrochloric acid products from SPL waste.

The participation of the Group's project partner in this technology optimisation and implementation project, GB Galvanizing Service Pty Ltd (GBG), has been supported by EPA Victoria with the provision of $0.780 million from the HazWaste Fund for the (estimated) $2.85 million project.

The Phase 2 Burnie demonstration plant operations were completed in April 2011, with the remainder of the Phase 2 programme then initiated immediately. Following submission of the internal operations report, it is expected that GBG and EPA Victoria will take several weeks to consider results, with a further period of time associated with GBG's internal corporate and project financing decision processes. Commencement of the Phase 3 commercial project is therefore expected during the December 2011 quarter.

Zeehan Feedstock/ EAF Dust Stockpiles

During the year, the Group commenced a project to recover a portion of the stockpile of zincbearing feedstock at Zeehan. A mining lease for the extraction of 100,000 tonnes was granted in January 2011, together with the necessary ancillary local and state approvals for the recovery, transport and handling of the project materials.

The Zeehan feedstock is being crushed at a dedicated site near the Port of Burnie, and then

blended at the appropriate ratio with EAF dust from the Group's Tasmanian stockpile, to create a specified low-grade zinc concentrate for export. Given the low-grade of the product, the contracted sales terms and cash revenues are expected to be commensurately limited. The project offers the opportunity of dealing productively with the Group's various zinc-bearing stockpiles.

The final shipment of product generated from the Tasmanian EAF dust stockpile has now been completed and all EAF dust removed from the Hellyer site, with final demobilisation from the site initiated.

Contracts for the second phase of operations at the Group's Victorian EAF dust stockpile are pending, and site mobilisation is expected to commence in September 2011. Subject to continued acceptable market conditions, the operations in Victoria and Tasmania are expected to continue throughout the remainder of the 2011/2012 financial year with shipment schedules to be arranged on the basis of continuing to achieve nominated production rates and product specification.

Green Resources (Asia Pacific) Holding Limited

The Subscription Agreement between the Group and Green Resources expired on 31 December 2010, and the concurrent technology licence agreement was replaced by a non-exclusive projectbased licence for Green Resources. The Group retains its minority shareholding in Green Resources, but has written down the carrying value of this investment to nil. This resulted in an impairments expense of $0.325 million.

International Waste Technology Marketing

The Group has signed a Memorandum of Understanding with an international specialist in the commercialisation of new technologies, EBOO Development (EBOO, www.eboo-dev.com). Under this agreement, EBOO is actively investigating and pursuing opportunities to apply the Group's technologies in Europe, North America, East Asia and elsewhere. Following a meeting at EBOO's offices in June 2011, the Group and EBOO have agreed a strategy for project investigation over coming months which is expected to yield testwork programme revenues during the first half of calendar 2012.

Rare Earth Metal Testwork

The Group has received multiple enquiries in relation to the possible application of the Intec Process to the recovery of various rare earth elements from both mineral and industrial feedstocks. Preliminary testwork on a neodymium (Nd) and dysprosium (Dy) rare earth-bearing waste feedstock identified by EBOO has so far been successful. Testwork to date suggests that the target elements might be selectively extracted from the feedstock to leave a benign solid residue. The initial quantity of waste available for recycling is similar to the capacity of the Group's research facility at Burnie, with larger quantities of waste available should extra plant capacity be made available. The Group is therefore examining the possibility of a minor capital investment to convert a portion of the Burnie plant for this new field of recycling. In doing so, the Group notes that there are a range of known or potential technical, economic and commercial hurdles that may impede or prevent this concept from being implemented.

Middle Eastern Project

Following the submission of the Conceptual Study for the Middle Eastern zinc/lead project in February 2011, a delegation from Intec and GHD Australia, (the selected international subcontractor for the basic project engineering) visited the project site at the end of May 2011.

The visit concluded with the signing of a non-binding Letter of Intent in relation to the project, under the terms of which the Group's 50% owned associate, Intec International Projects Pty Ltd, has submitted a proposal for the testwork and engineering programme for the implementation of the first stage of the zinc/lead project.

Other projects

The AngloGold Ashanti gold concentrate test programme was completed during the June 2011 Quarter, with comparable outcomes to conventional processes for this challenging ore. The Intec Gold Process has also been the subject of considerable enquiry during this period. An independent verification programme of the Intec Gold Process will be conducted in Denver, Colorado with the assistance of Group technical personnel during the December 2011 Quarter. An associated MOU in relation to the verification programme and subsequent project opportunity development is currently under negotiation with a separate Middle Eastern party.

Consolidated statement of comprehensive income

	30 June 2011$'000	30 June 2010$'000
Revenue from continuing operations	1,775	549
Other income	6,229	210
Treatment expense	(1,457)	-
Administration expense	(654)	(781)
Bad and Doubtful Debts expense	(1)	(218)
Burnie Research Facility expenses	(81)	(128)
Depreciation and amortisation expense	(815)	(807)
Engineering and other consultants expenses	(437)	(297)
Employee benefits expense	(2,553)	(2,344)
Finance costs	(5)	(97)
Impairments expense	(325)	(143)
Occupancy expense	(393)	(377)
Research and development expenses	(102)	(67)
Interest expense	(53)	(117)
Other expenses	(11)	(28)
Profit (loss) before income tax	1,117	(4,645)
Income tax benefit (expense)	407	206
Profit (loss) from continuing operations	1,524	(4,439)
Profit (loss) from discontinued operations	-	2,659
Profit (loss) for the year	1,524	(1,780)
Other comprehensive income	-	-
Income tax relating to components of othercomprehensive income	-	-
Other comprehensive income for the yearnet of income tax	-	-
Total comprehensive income (loss) for the year	1,524	(1,780)
Profit (loss)per share from continuing operationsattributable to ordinary equity holders of the company:
Basic earnings (loss)per share (cents per share)	0.83	(4.90)
Diluted earnings (loss) per share(cents per share)Profit (loss)per shareattributable to ordinary equity holders of the company:	0.82	(4.90)
Basic earnings/(loss) per share (cents per share)	0.83	(2.00)
Diluted earnings/(loss) per share (cents per share)	0.82	(2.00)

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

Consolidated statement of financial position
	30 June 2011$'000	30 June 2010$'000
ASSETS
Current assets
Cash and cash equivalents	2,557	192
Trade and other receivables	911	56
Environmental Bonds	567	-
Inventories	43	38
Total current assets	4,078	286
Non-current assets
Trade and other receivables	2,919	2,878
Investments	28	1,163
Plant & Equipment	2,701	3,448
Environmental Bonds	3,660	4,425
Intangible Assets	10	10
Total non-current assets	9,318	11,924
Total assets	13,396	12,210
LIABILITIES
Current liabilities
Trade and other payables	873	700
Borrowings	-	594
Provisions	4,065	4,547
Total current liabilities	4,938	5,841
Non-current liabilities
Provisions	21	81
Deferred revenue	-	813
Total non-current liabilities	21	894
Total liabilities	4,959	6,735
Net assets	8,437	5,475
EQUITY
Contributed equity	70,416	68,978
Reserves	2,577	2,577
Accumulated losses	(64,556)	(66,080)
Total equity	8,437	5,475

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

	30 June2011	30 June2010
	$'000	$'000
Total equity at the beginning of the financial year	5,475	5,030
Current year expenses recognised directly in equity
Share of associates reserves accounted for using theequity method	-	-
Net expenses recognised directly in equity	-	-
Net profit (loss) recognised directly in equity	-	-
Comprehensive profit (loss)for the year	1,524	(1,780)
Total recognised income (expense) for the year	1,524	(1,780)
Transactions with equity holders in their capacity asequity holders
Contributions of equity, net of transaction costs	1,438	2,218
Amount transferred to equity on exercise of options	-	7
Transfer from asset revaluation reserve on recognition ofassets available for sale	-	-
	1,438	2,225
Total equity at the end of the financial year	8,437	5,475

Consolidated statement of changes in equity

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

Consolidated statement of cash flow
-------------------------------------	--	--	--	--

	30 June2011	30 June2010
	$'000	$'000
Cash flows from operating activities
Receipts from customers	1,108	707
Payments to suppliers and employees	(5,264)	(4,286)
Interest paid	(52)	(97)
Interest received	297	187
Income tax R&D tax offset received	407	-
Other income	5,013	-
Net cash inflows (outflows) from operating activities	1,509	(3,489)
Cash flows from investing activities
Payments for plant & equipment	(91)	(56)
Proceeds from sale of property, plant & equipment	-	3,215
Payments for security deposits	(45)	(3,669)
Proceeds from security deposits refunded	95	-
Payment for shares in unlisted companies	(1)	-
Net cash inflows (outflows) from investing activities	(42)	( 510)
Cash flows from financing activities
Proceeds from issue of shares and options	898	1,766
Proceeds from borrowings	-	462
Repayment of borrowings	-	(27)
Net cash inflows (outflows) from financing activities	898	2,201
Net increase (decrease) in cash held	2,365	(1,798)
Cash at the beginning of the financial period	192	1,990
Cash at the end of the financial period	2,557	192

The above consolidated statement of cash flow should be read in conjunction with the accompanying notes.

Reconciliation of cash

	30 June2011	30 June2010
	$'000	$'000
Reconciliation of cash at the end of the year (as shown inthe consolidated statement of cash flows) to the relateditems in the accounts is as follows:
Cash on hand and at bank	2,557	192
Total cash at end of financial year	2,557	192
Reconciliation of operating profit (loss)inflows (outflows)from operating activities	after income tax to net cash
Operating profit (loss)after income tax	1,524	(1,780)
Non cash items and non operating cash flows
included in profit and loss:
Bad and doubtful debts expense	1	218
Administration expense	70	135
Depreciation and amortisation	815	807
Interest expense –convertible note	-	117
Impairments expense	325	121
Interest income	-	-
Options income	(98)	-
Royalty as part of profit from discontinued operations	-	(2,756)
Unrealised foreign exchange loss	-	-
Diminution in value of environmental bonds	-	22
	2,637	(3,116)
Changes in assets and liabilities:
Decrease/(increase) in receivables and prepayments	(814)	52
Decrease/(increase) in inventories	(5)	(15)
Increase/(decrease) in creditors	173	(445)
Increase/(decrease) in provisions	(482)	35
	(1,128)	( 373)
Net cash inflows (outflows) from operating activities	1,509	(3,489)

Control gained or loss of control over entities having material effect

Accumulated losses at the end of the financial year	(64,556)	(66,080)
Net profit (loss)attributable to members	1,524	(1,780)
Accumulated losses at the beginning of the financial year	(66,080)	(64,300)
	$A'000	$A'000
Consolidated Accumulated Losses	30 June2011	30 June2010
No final dividend has been declared
Record date to determine entitlements to the dividend	Not applicable
Date the dividend is payable	Not applicable
Dividends
Contribution to consolidated profit(loss) from ordinaryactivities and extraordinary items from the sale of theinterest leading to the loss of control	Not applicable
Consolidated profit(loss) from ordinary activities andextraordinary items after tax of the controlled entity (orgroup of entities) while controlled during the whole ofthe previous corresponding period	Not applicable
Date to which such profit(loss) has been calculated	Not applicable
Consolidated profit(loss) from ordinary activities andextraordinary items after tax of the controlled entity (orgroup of entities) to the date of loss of control	Not applicable
Name of entity (or group of entities)	Not applicable
Loss of control of entities having material effect
Profit (loss) from ordinary activities and extraordinaryitems after tax of the controlled entity (or group ofentities) for the whole of the previous correspondingperiod.	Not applicable
Date from which such profit(loss) has been calculated	Not applicable
Consolidatedprofit(loss) from ordinary activities andextraordinary items after tax of the controlled entity (orgroup of entities) since the date in the current period onwhich control was acquired	Not applicable
Name of entity (or group of entities)	Not applicable

30 June 2010 30 June 2009 Ratios Profit (loss) before tax/revenue and other income Consolidated profit (loss) from continuing operations before tax as a percentage of revenue and other income 13.96 (567.06) Profit (loss) after tax/equity interests Consolidated net profit (loss) after tax attributable to members as a percentage of equity (similarly attributable) at the end of the year 19.04 (30.05) NTA Backing Net tangible assets per ordinary share 3.90 cents 5.10 cents Earnings per security (EPS) Profit (loss) per share from continuing operations attributable to ordinary equity holders of the company: Basic earnings (loss) per share (cents per share) 0.83 (4.90) Diluted earnings (loss) per share (cents per share) 0.82 (4.90) Diluted earnings (loss) per share: For the 2010 year, potential ordinary shares being the options granted at balance date were not considered dilutive as the conversion of these components to equity would have resulted in a decrease in the net loss per share. Profit (loss) per share attributable to ordinary equity holders of the company: Basic earnings (loss) per share (cents per share) 0.83 (2.00) Diluted earnings (loss) per share (cents per share) 0.82 (2.00) Weighted average number of ordinary shares outstanding during the period used in calculating the basic earnings (loss) per share 184,085,091 897,212,630 Weighted average number of ordinary shares outstanding during the period used in calculating the diluted earnings (loss) per share 185,911,091 897,212,630 Share consolidation An extraordinary general meeting held on 30 June 2010 approved a share consolidation reducing the number of shares on issue by a factor of 10:1. Post consolidation shares resumed trading on the ASX on 16 July 2010. The net tangible assets and EPS calculation for the

Other notes to the condensed financial statements

consolidation.

comparative period have been adjusted for this share

Segment reporting – business segments, 2011

	Discontinued operations(Metal in concentrate)$'000	R & D$'000	Consolidated$'000
(i) Segment Revenue
Sales to external customers	-	1,775	1,775
Total sales revenue	-	1,775	1,775
Other revenue	-	778	778
Total segment revenue	-	2,553	2,553
Intersegment elimination			-
Unallocated revenue			5,451
Consolidated revenue			8,004
(ii) Segment Result
Segment profit(loss)	-	(1,207)	(1,207)
Intersegment elimination			-
Unallocated profit (loss)			2,324
Profit (loss)before income tax			1,117
Income tax benefit (expense)			407
Profit (loss) for the year			1,524
Segment assets & liabilities
Segment assets	2,756	7,091	9,847
Intersegment elimination			-
Unallocated assets			3,549
Total assets			13,396
Segment liabilities	-	4,115	4,115
Intersegment elimination			-
Unallocated liabilities			844
Total liabilities			4,959
Other segment information
Acquisition of plant & equipment	-	-	-
Unallocated			91
Total acquisition			91
Depreciation expense	-	707	815
Cash flow information
Net cash flow from operating activities	-	(282)	(282)
Unallocated			1,791
Total cash flows from operating activities			1,509
Net cash flow from investing activities	-	95	95
Unallocated			(138)
Total cash flow from investing activities			(43)
Net cash flow from financing activities	-	-	-
Unallocated			899
Total cash flow from financing activities			899

Segment reporting – business segments, 2010

	Discontinued operations(Metal in concentrate)$'000	R & D$'000	Consolidated$'000
(i) Segment Revenue
Sales to external customers	-	549	549
Total sales revenue	-	549	549
Other revenue	2,802	-	2,802
Total segment revenue	2,802	549	3,351
Intersegment elimination			-
Unallocated revenue			210
Consolidated revenue			3,561
(ii) Segment Result
Segment profit(loss)	2,659	(1,281)	1,378
Intersegment elimination			-
Unallocated profit (loss)			(3,229)
Profit (loss)before income taxIncome tax benefit(expense)			(1,851)206
Profit (loss)for the year			(1,645)
(iii) Segment assets & liabilities
Segment assets	2,756	7,675	10,431
Intersegment elimination			-
Unallocated assets			1,778
Total assets			12,209
Segment liabilitiesIntersegment elimination	-	4,547	4,547-
Unallocated liabilities			2,187
Total liabilities			6,734
(iv) Other segment information
Acquisition of plant & equipment	-	-	-
Unallocated			56
Total acquisition			56
Depreciation expense	-	707	100
(v) Cash flow information
Net cash flow from operating activities	-	(146)	(146)
Unallocated			(3,460)
Total cash flows from operating activities			(3,606)
Net cash flow from investing activities	3,215	(3,669)	(454)
Unallocated			(56)
Total cash flow from investing activities			(510)
Net cash flow from financing activities	-	-	-
Unallocated			2,318
Total cash flow from financing activities			2,318

2011 Audit

The financial report is based on accounts which are in the process of being audited. The audit report is expected to contain qualifications in respect of the carrying value of the Burnie Research Facility, the Hellyer royalty and the estimation of the liabilities in relation to the Victorian stockpile of EAF dust. The audit report may also include an emphasis of matter regarding continuation of the Group as a going concern. Please refer below to the Directors' response to the above matters.

Basis of preparation

The financial report has been prepared in accordance with Accounting Standards, Urgent Issues Group Consensus Views and other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

The financial report has been prepared on an accruals basis and is based on historical costs except as modified by revaluation of certain non-current assets and, except where stated, does not take into account either changing money values or current valuations of non-current assets. Cost is based on the fair values of the consideration given in exchange for assets.

The Group generated an operating profit after income tax of $1.524 million and net cash inflows from operations of $1.509 million in the year ended 30 June 2011. As of balance date, the Group had net assets of $8.437 million and cash balances of $2.557 million.

Going Concern Basis

The financial report has been prepared on a going concern basis. The Directors consider the Group has adequate funding and therefore, no adjustments have been made to the financial report that might be necessary should the Group not continue as a going concern. Accordingly, the Directors have prepared the financial report on a going concern basis.

Burnie Research Facility

While there is significant uncertainty, the Directors consider that it is unlikely that the carrying value of non-current assets, in particular the Burnie Research Facility, would exceed the realisable value of such assets in an orderly sale process. The carrying value of the Burnie Research Facility is $2.421 million at 30 June 2011. The Group generated revenue through the Burnie Research Facility under contracts for the treatment of industrial wastes and the provision of engineering services to third parties for the year to 30 June 2011 and will continue to do so under either existing or new commercial arrangements. Accordingly, the Directors have made no adjustment to the carrying value of the Burnie Research Facility at 30 June 2011.

Victorian EAF Dust Stockpile

The Directors continue to make a provision equivalent to the full amount of the environmental bond lodged in relation to the Victorian EAF dust stockpile. The Directors consider that while there is significant uncertainty, it is unlikely that the amount of the provisions would exceed the amount of the environmental bond lodged.

Hellyer Royalty

The non-current assets of the Group include an amount of $2.756 million representing a valuation of the contingent Hellyer royalty. Bass Metals Ltd, which purchased the Hellyer Assets, restarted processing at the Hellyer Mill during the March 2011 quarter.

In its 30 June 2010 financial statements, Bass Metals adopted a valuation of $2.794 million (2009: $2.756 million) for the Hellyer royalty. Bass Metals' 2009 valuation of the Hellyer royalty has been adopted by the Directors and accounted for as a non-current asset.

Accounting Policies

The Appendix 4E does not include notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and the financing and investing activities of the Group as the full financial report.

The Appendix 4E should be read in conjunction with the Half-year Financial Report of Intec as at 31 December 2010 and the Annual Financial Report of Intec, due to be released in September 2011, for the year ended 30 June 2011. It is also recommended that the Appendix 4E be considered together with any public announcements made by Intec during the year ended 30 June 2011 in accordance with the continuous disclosure obligations arising under the Corporations Act, 2001.

Material factors affecting the revenues and expenses of the economic entity for the current year

Revenue of $5 million was recognised for the year ended 30 June 2011 from monies received as a result of the agreement concluded with JX Nippon Mining & Metals Corporation ("JX Nippon") on 17 November 2010. Both Intec and JX Nippon have patent portfolios in the field of halide-based hydrometallurgy for the processing of base and precious metals. Under the Agreement, Intec and JX Nippon have cross-licensed each other with certain patents, inclusive of a $5.0 million payment by JX Nippon to Intec. Payment was received on 30 November 2010.

The environmental bond lodged with the Tasmanian Government recorded at balance date of $0.567 million is in the final stages of approval for the refund of the entire bond.

No other matters or circumstances have arisen since 30 June 2011 that have either significantly affected or may significantly affect the Group's operations in future financial years, or the results of those operations in future financial years, or the Group's state of affairs in future financial years.

There are no franking credits available.

The Company is not expected to declare a dividend in the short term.

Compliance statement

The financial report is based on accounts which are in the process of being audited. The audit report is expected to contain qualifications in respect of the carrying value of the Burnie Research Facility, the Hellyer royalty and the estimation of the liabilities in relation to the Victorian stockpile of EAF dust. The audit report may also include an emphasis of matter regarding continuation of the Group as a going concern.

The entity has a formally constituted Audit Committee.

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