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SCIDEV LTD Interim / Quarterly Report 2009
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Interim / Quarterly Report
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ABN 25 001 150 849
Level 3 2 Elizabeth Plaza North Sydney NSW 2060 Australia PO Box 1507 North Sydney NSW 2059 Australia
Phone: 02-9925 8170 Fax: 02-9925 8110 Email: [email protected] Website: www.intec.com.au ASX code: INL
Companies Announcements Office 27 February 2009 Australian Securities Exchange
Half-Yearly Report
Please see attached the 31 December 2008 Half-Yearly Report for Intec Ltd (ASX code: INL).
Yours faithfully, Intec Ltd
Philip R. Wood Managing Director & Chief Executive Officer
ABN 25 001 150 849
P.O. Box 1507 North Sydney NSW 2059 Level 3, 2 Elizabeth Plaza North Sydney NSW 2060 Australia
Phone: 02-9925-8170 Fax: 02-9925-8110 Email: [email protected] Website: www.intec.com.au ASX code: INL
HALF-YEARLY REPORT
31 DECEMBER 2008
ABN 25 001 150 849
Corporate directory
Directors
Trevor A Jones (Non-executive Chairman) Philip R Wood (Managing Director & Chief Executive Officer) James R G Bell (Non-executive Director) A John Moyes (Technical Director) Kieran G Rodgers (Finance Director & Chief Financial Officer) Kenneth J Severs (Non-executive Director)
Group Company Secretaries
Robert J Waring David W Clark
Senior Management
Brian A Banister (Chief Operating Officer) David W Clark (Financial Controller) Dave L Sammut (Corporate Development Manager) Andrew R Tong (Senior Research Metallurgist & Laboratory Manager)
Principal Registered Office in Australia
P.O. Box 1507 Level 3, 2 Elizabeth Plaza North Sydney NSW 2060 Telephone: (+61 2) 9925 8170 Facsimile: (+61 2) 9925 8110 Email: [email protected] Website: www.intec.com.au
Sydney City Office
Level 13, Macquarie House 167 Macquarie Street Sydney NSW 2000 Australia Telephone: (+61 2) 8667 3038
Tasmanian Office
P.O. Box 666 10-12 River Road Burnie TAS 7320 Australia Telephone: (+61 3) 6431 9867 Facsimile: (+61 3) 6431 3629
Burnie Research Facility
20 River Road Burnie TAS 7320 Australia Telephone: (+61 3) 6431 9867 Facsimile: (+61 3) 6431 3629
North American Representative Office
Mr Phil Evans 32 Charles Street Georgetown, Ontario Canada L7G 2Z3 Telephone and Facsimile: (+1 905) 873 4985
European Representative Office
Mr Ken Severs 'Appletree' Frith Road, Aldington Frith Kent TN25 7HJ United Kingdom Telephone and Facsimile: (+44 1233) 721 328
Chinese Representative Office
Mr Joe Lam Suite 1310, The Hub 1068 East XingGang Road Guangzhou, China Telephone: (+86 (0) 20) 8923-6813 Facsimile: (+86 (0) 20) 8923-6040
ABN 25 001 150 849
Corporate directory
Share Registry
Registries Limited Level 7, 207 Kent Street Sydney NSW 2000 Australia
PO Box 3993 Sydney NSW 2001 Australia
Telephone: (+61 2) 9290 9600 Facsimile: (+61 2) 9279 0664 Email: [email protected] Website: www.registriesltd.com.au
Patent Attorney
Griffith Hack 100 Miller Street North Sydney NSW 2060 Australia
Stock Exchange Listings
Intec Ltd shares are listed on the Australian Securities Exchange (Code: INL), the Deutsche Börse (Code: INF) and the OTCQX/Pink Sheets LLC (Code ICLYJ).
Auditor
PricewaterhouseCoopers Darling Park Tower 2 201 Sussex Street Sydney NSW 1171 Australia
Legal Adviser
Allens Arthur Robinson Level 28, Deutsche Bank Place Corner of Hunter and Phillip Streets Sydney NSW 2000 Australia
ABN 25 001 150 849
Contents
| Directors' report | 1 |
|---|---|
| Consolidated income statement | 4 |
| Consolidated balance sheet | 5 |
| Consolidated statement of changes in equity | 6 |
| Consolidated cash flow statement | 7 |
| Notes to the financial statements | 8 |
| Directors' declaration | 16 |
| Independent review report | 17 |
| Auditor's independence declaration | 19 |
| Additional shareholder information | 20 |
Intec Ltd Directors' report
Your Directors present their report on the consolidated entity consisting of Intec Ltd (Intec, INL or the Company) and the entities it controlled (the Group) for the half-year ended 31 December 2008.
Directors
The names of the Company's Directors in office during the half-year and until the date of this report are set out below. Directors were in office for this entire period unless otherwise stated.
Trevor A Jones (Chairman and Non-Executive Director) Philip R Wood (Managing Director and Chief Executive Officer) James R G Bell (Non-Executive Director) A John Moyes (Technical Director) Kieran G Rodgers (Finance Director and Chief Financial Officer) Kenneth J Severs (Non-Executive Director)
Review of operations
The Group incurred a loss after providing for income tax for the half year to 31 December 2008 in the sum of $19,229,000 (2007 – profit $1,169,000).
This loss was due in substantial part to an assets impairment expense of $8,223,000 and a provisions expense of $4,643,000. Total write-downs expensed to the Income Statement were thus $12,866,000. The assets impairment expense includes write-downs of $2,709,000 and $4,524,000 which reduced the carrying amount of the Bass Metals Ltd investment asset and the Hellyer mine and infrastructure assets respectively to their recoverable values. The provisions expense is for a provision for environmental bonds of $4,404,000 and doubtful debts of $239,000. The assets impairment expense also includes an impairment of the rehabilitation asset of $990,000 following the write-down of the Hellyer mine and infrastructure assets to their recoverable values.
The half year to 31 December 2008 saw the Group assume full ownership and operational control of Hellyer Zinc Concentrate Project (the HZCP). However, a continued weakening in zinc and lead prices and significant increases in operating costs led to the forced closure of the HZCP in September 2008. A loss from the discontinued HZCP operations of $9,013,000 was incurred, including the Hellyer assets impairment expense of $4,524,000 and the rehabilitation asset impairment expense of $990,000. Before these impairment expenses, the net loss from discontinued operations was therefore $3,499,000. The decision to close down the HZCP was reluctantly (but correctly) made in the context of a very adverse economic background in the world-wide and local resources sector.
The Group incurred net cash outflows from operations of $4,715,000 for the half year ended 31 December 2008. As of balance date, the Group had net assets of $4,406,000 and cash balances of $718,000.
Sale of Investment in Bass Metals Ltd and Sale of Hellyer Assets
After putting the HZCP on care and maintenance, and as presaged in the 2008 Annual Report, the Company began an orderly realisation of non-core assets to obtain sufficient funds to repay the Macquarie Bank facility and provide additional short-term working capital.
In November 2008 the Company sold a 19.9% interest in Bass Metals Ltd (ASX Code: BSM) for proceeds of A$1,850,000. An impairment expense of $2,709,000 was raised to reduce the carrying amount of the BSM investment to its recoverable value at the date of sale.
In December 2008 Intec also reached agreement with BSM (in which INL retains a 3.3% interest) for the sale of the Hellyer assets, including the Hellyer Mill, associated facilities and infrastructure, the partially-reworked Hellyer tailings dam and associated dredge, the mining lease and associated rights to water and power for the site. The agreement incorporates a conditionally
Intec Ltd Directors' report (continued)
refundable $500,000 deposit which was received on 19 December 2008, payment by BSM of the site care and maintenance costs during the period until settlement, a settlement payment of $3,510,000 and replacement by BSM of INL's existing $990,000 security bond. In addition, there is a unitbased mill throughput royalty capped at $5,000,000.
An impairment expense of $4,524,000 reduced the carrying amount of the Hellyer assets to their recoverable value, $4,010,000, at the date of sale. Completion of the sale of the Hellyer Assets will provide for the full repayment of the outstanding principal under the Macquarie Bank facility.
Research and Development Activities
During the half year, Intec generated revenue from the provision of testwork and engineering services for third parties. The Burnie Research Facility successfully completed its first commercialscale trials of the use of calcium sulphide for heavy metal removal from inorganic wastewaters. In addition, the Company continues to seek to reach agreement on a substantial pilot plant program for the Browns Sulphide Project, a joint venture between Compass Resources Limited (Administrators Appointed) (Receivers and Managers Appointed) and HNC (Australia) Resources Pty Limited.
Proposed Acquisition of Hydrometallurgical Plant
Following the announcement to the ASX in November 2008 of the proposed acquisition from Delta EMD Australia Pty Ltd of an extensive hydrometallurgical plant in Newcastle, NSW, the Company has been actively engaged with numerous potential stakeholders to advance the Intec Metals Recycling Project at Newcastle. This has included engineering and cost studies, discussions with potential feed stock suppliers and progress towards acquiring the necessary environmental and regulatory approvals for the Intec Metals Recycling Project at Newcastle.
These activities are continuing positively, though in the current adverse climate of economic uncertainty, low metals prices and difficult debt and equity markets there can be no guarantee that funding will be available to complete the acquisition of the Newcastle site.
Events occurring after the reporting date
On 29 January 2009, Compass Resources Limited announced the appointment of Voluntary Administrators and on 18 February 2009, Receivers and Managers were appointed to Compass by HNC (Australia) Resources Pty Limited. The Company is an unsecured creditor for an amount of $138,000 in relation to hydrometallurgical testwork conducted in relation to the Browns Sulphide Project. Although Intec's Directors cannot yet be certain that the hydrometallurgical pilot plant programs at the Burnie Research Facility will take place as scheduled, they have reasonable grounds for anticipating that the program will be commenced in due course as previously scheduled.
The Group divested its investment in Intec Exploration Pty Ltd on 18 February 2009 at book value.
No other events have occurred subsequent to 31 December 2008 requiring disclosure in, or amendment to, these interim financial statements.
Intec Ltd Directors' report (continued)
Auditor's Independence Declaration
An independence declaration from INL's auditor, PricewaterhouseCoopers, is included on page 19 of the financial report.
This report is made in accordance with a resolution of the Company's Directors.
Philip R. Wood Managing Director Chief Executive Officer
Sydney 27 February 2009
Intec Ltd Consolidated income statement For the half year ended 31 December 2008
| Half-year | ||
|---|---|---|
| 31 December2008 | 31 December2007 | |
| $'000 | $'000 | |
| Revenue from continuing operations | 620 | 359 |
| Administration expense | (535) | (672) |
| Demonstration plant expenses | (77) | (1,171) |
| Depreciation and amortisation expense | (296) | (23) |
| Diminution in Value of Environmental Bonds | (4,404) | - |
| Doubtful Debts | (239) | - |
| Employee benefits expense | (1,723) | (2,069) |
| Engineering and other consultants expenses | (154) | - |
| Finance costs | (135) | (80) |
| Impairments expense | (2,856) | - |
| Occupancy expense | (442) | (230) |
| Prepayments expense | (300) | - |
| Research and development expenses | (51) | (148) |
| Other expenses | (437) | (354) |
| Share of net profits/(losses) of associates accountedfor using the equity method | 813 | (99) |
| (Loss) before income tax | (10,216) | (4,487) |
| Income tax benefit/(expense) | - | - |
| (Loss) from continuing operations | (10,216) | (4,487) |
| (Loss)/Profit from discontinued operations | (9,013) | 5,656 |
| (Loss)/Profit for the half year attributable to themembers of Intec Ltd as above | (19,229) | 1,169 |
| Basic (Loss)/earnings per share (cents per share) | (2.86) | 0.21 |
| Diluted (Loss)/earnings per share (cents per share) | (2.31) | 0.19 |
The above consolidated income statement should be read in conjunction with the accompanying notes.
Intec Ltd Consolidated balance sheet As at 31 December 2008
| 20082008Current assets$'000$'000Cash and cash equivalents7185,2151,238Trade and other receivables1,394Available for sale financial assets362-Inventories5013,23081Other current assets-2,9009,839Non current assets classified as held for sale4,010-Total current assets6,9109,839Non-current assetsReceivables167378Exploration expenditure-146Investments in associates accounted for using theequity method4,069-Plant and equipment4,61833,825 |
|---|
| Environmental Bonds756756 |
| Intangible assets1010 |
| Total non-current assets5,55139,184 |
| Total assets12,46149,023 |
| Current liabilities |
| 943Trade and other payables4,023 |
| Interest bearing liabilities9201,350 |
| Refundable deposit500- |
| -Deferred revenue2,520 |
| Provisions3,922- |
| 6,2857,893 |
| Liability directly associated with non current assets |
| as held for sale990- |
| Total current liabilities7,2757,893 |
| Non-current liabilities |
| Deferred revenue-2,090 |
| 780Provisions1,990 |
| Total non-current liabilities7804,080 |
| Total liabilities8,05511,973 |
| Net assets4,40637,050 |
| Equity |
| Contributed equity64,61264,475 |
| Reserves2,63816,190Accumulated losses(62,844)(43,615) |
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
Intec Ltd Consolidated statement of changes in equity For the half year ended 31 December 2008
| Half-year | ||
|---|---|---|
| 31 December2008 | 31 December2007 | |
| $'000 | $'000 | |
| Total equity at the beginning of the half-year | 37,050 | 34,230 |
| Current year expenses recognised directly in equity | ||
| Employee share options granted | - | 286 |
| Transfer to asset revaluation reserve on revaluation ofassets available for sale | 61 | - |
| Transfer from asset revaluation reserve on recognitionof impairment expense of assets available for sale | (13,639) | - |
| Transfer to equity of value of employee share optionsexercised | - | - |
| Share of associates reserves accounted for using theequity method | 25 | 22 |
| Options issued on acquisition of controlled entity | - | - |
| Net expenses recognised directly in equity | (13,553) | 308 |
| (Loss)/Profit for the half-year | (19,229) | 1,169 |
| Total recognised (expense) and income for the year | (32,782) | 1,477 |
| Transactions with equity holders in their capacity asequity holders | ||
| Contributions of equity, net of transaction costs | 138 | - |
| Share of associates capital raising costs reported | ||
| directly in equity | - | (63) |
| 138 | (63) | |
| Total equity at the end of the half-year | 4,406 | 35,644 |
| Total recognised (expense) and income for the half | ||
| year is attributable to members of Intec Ltd | (32,782) | 1,477 |
| (32,782) | 1,477 |
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Intec Ltd Cash flow statement For the half year ended 31 December 2008
| Half-year | ||
|---|---|---|
| 31 December | 31 December | |
| 2008 | 2007 | |
| Cash flows from operating activities | $'000 | $'000 |
| Receipts from customers | 5,727 | 10,741 |
| Payment to suppliers and employees | (11,192) | (8,594) |
| Interest paid | (196) | - |
| Interest received | 102 | 125 |
| Sale of inventory | 248 | - |
| Other income | 596 | 39 |
| Net cash (outflows)/inflows from operating activities | (4,715) | 2,311 |
| Cash flows from investing activities | ||
| Acquisition of plant and equipment | (301) | (2,903) |
| Proceeds from the disposal of plant & equipment | 14 | - |
| Proceeds from the sale of plant & equipment | 500 | - |
| Proceeds from the sale of investment in associate | 1,846 | (1,717) |
| Non refundable deposit paid | (300) | - |
| Loans to other entities | (22) | - |
| Security deposits paid | (756) | - |
| Security deposits refunded | 20 | 95 |
| Net cash inflow/(outflows) from investing activities | 1,001 | (4,525) |
| Cash flows from financing activities | ||
| Proceeds from issue of shares | 81 | - |
| Repayment of borrowings | (523) | 1,000 |
| Share issue costs | (341) | - |
| Net cash (outflows)/inflows from financing activities | (783) | 1,000 |
| Net increase (decrease) in cash held | (4,497) | (1,214) |
| Cash at the beginning of the financial period | 5,215 | 2,971 |
| Cash at the end of the financial period | 718 | 1,757 |
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Notes to the financial statements (continued)
Note 1. Basis of preparation of the half-year financial report
This half-year financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, Accounting Standard AASB 134 "Interim Financial Reporting" and other mandatory professional reporting requirements.
For the purpose of preparing the half-year financial report, the half-year has been treated as a discrete reporting period.
The half-year financial report does not include all 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 financing and investing activities of the Company as the full financial report.
The half-year financial report should be read in conjunction with the Annual Financial Report of Intec as at 30 June 2008. It is also recommended that the half-year financial report be considered together with any public announcements made by Intec during the half-year ended 31 December 2008 in accordance with the continuous disclosure obligations arising under the Corporations Act 2001.
Loss for the Half Year to 31 December, 2008
The Group incurred a loss after providing for income tax for the half year to 31 December 2008 in the sum of $19,229,000 (2007 – profit $1,169,000).
This loss was due in substantial part to an assets impairment expense of $8,223,000 and a provisions expense of $4,643,000. Total write-downs expensed to the Income Statement were thus $12,866,000. The assets impairment expense includes write-downs of $2,709,000 and $4,524,000 which reduced the carrying amount of the Bass Metals Ltd investment asset and the Hellyer mine and infrastructure assets respectively to their recoverable values. The provisions expense is for a provision for environmental bonds of $4,404,000 and doubtful debts of $239,000. The assets impairment expense also includes an impairment of the rehabilitation asset of $990,000 following the write-down of the Hellyer mine and infrastructure assets to their recoverable values.
The half year to 31 December 2008 saw the Group assume full ownership and operational control of Hellyer Zinc Concentrate Project (the HZCP). However, a continued weakening in zinc and lead prices and significant increases in operating costs led to the forced closure of the HZCP in September 2008. A loss from the discontinued HZCP operations of $9,013,000 was incurred, including the Hellyer assets impairment expense of $4,524,000 and the rehabilitation asset impairment expense of $990,000. Before these impairment expenses, the net loss from discontinued operations was therefore $3,499,000. The decision to close down the HZCP was reluctantly (but correctly) made in the context of a very adverse economic background in the world-wide and local resources sector.
The Group incurred net cash outflows from operations of $4,715,000 for the half year ended 31 December 2008. As of balance date, the Group had net assets of $4,406,000 and cash balances of $718,000.
Sale of Investment in Bass Metals Ltd and Sale of Hellyer Assets
After putting the HZCP on care and maintenance, and as presaged in the 2008 Annual Report, the Company began an orderly realisation of non-core assets to obtain sufficient funds to repay the Macquarie Bank facility and provide additional short-term working capital.
In November 2008 the Company sold a 19.9% interest in Bass Metals Ltd (ASX Code: BSM) for proceeds of A$1,850,000. An impairment expense of $2,709,000 was raised to reduce the carrying amount of the BSM investment to its recoverable value at the date of sale.
Notes to the financial statements (continued)
In December 2008 Intec also reached agreement with BSM (in which INL retains a 3.3% interest) for the sale of the Hellyer assets, including the Hellyer Mill, associated facilities and infrastructure, the partially-reworked Hellyer tailings dam and associated dredge, the mining lease and associated rights to water and power for the site. The agreement incorporates a conditionally refundable $500,000 deposit which was received on 19 December 2008, payment by BSM of the site care and maintenance costs during the period until settlement, a settlement payment of $3,510,000 and replacement by BSM of INL's existing $990,000 security bond. In addition, there is a unitbased mill throughput royalty capped at $5,000,000.
An impairment expense of $4,524,000 reduced the carrying amount of the Hellyer assets to their recoverable value, $4,010,000, at the date of sale. Completion of the sale of the Hellyer Assets will provide for the full repayment of the outstanding principal under the Macquarie Bank facility.
Research and Development Activities
During the half year, Intec generated revenue from the provision of testwork and engineering services for third parties. The Burnie Research Facility successfully completed its first commercialscale trials of the use of calcium sulphide for heavy metal removal from inorganic wastewaters. In addition, the Company continues to seek to reach agreement on a substantial pilot plant program for the Browns Sulphide Project, a joint venture between Compass Resources Limited (Administrators Appointed) (Receivers and Managers Appointed) and HNC (Australia) Resources Pty Limited.
Proposed Acquisition of Hydrometallurgical Plant
Following the announcement to the ASX in November 2008 of the proposed acquisition from Delta EMD Australia Pty Ltd of an extensive hydrometallurgical plant in Newcastle, NSW, the Company has been actively engaged with numerous potential stakeholders to advance the Intec Metals Recycling Project at Newcastle. This has included engineering and cost studies, discussions with potential feed stock suppliers and progress towards acquiring the necessary environmental and regulatory approvals for the Intec Metals Recycling Project at Newcastle.
These activities are continuing positively, though in the current adverse climate of economic uncertainty, low metals prices and difficult debt and equity markets there can be no guarantee that funding will be available to complete the acquisition of the Newcastle site.
Going Concern Basis
The accounts have been prepared on a going concern basis. Based on the Group's current position, the Group will require further additional capital in the short-term in order to continue meeting its obligations as they become due and payable. The Company's Directors are considering a number of alternatives, including raising further equity, selling further assets and seeking entities to partner with the Group in its core business activities relating to the Intec Process. Based on these facts, significant uncertainty exists as to whether or not the Group will be able to continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the ordinary course of business and at the amounts stated in the financial report. The Directors consider it likely that the Group will be successful in its pursuit of these alternatives, and based on this, no adjustments have been made to the financial report that might be necessary should the Group not continue as a going concern. Should the additional capital that may be required to pursue the Group's objectives not be secured, the Group may adopt a modified strategy involving rationalization of any non-current assets. While there is significant uncertainty, the Directors consider that it is unlikely that the carrying values of non-current assets would exceed the realisable value of such assets in an orderly sales process. Accordingly, no adjustment (apart from the Hellyer Mill and the Bass Metals Ltd investment noted above) has been made to their carrying value.
Notes to the financial statements (continued)
Significant accounting policies adopted during the half-year
No significant accounting policies have been adopted in the current half year.
The accounting policies are consistent with those of the previous financial year.
Note 2. Equity securities issued
| Half-year | Half-year | |||
|---|---|---|---|---|
| 2008 | 2007 | 2008 | 2007 | |
| Shares | Shares | $'000 | $'000 | |
| Issue of ordinary shares during thehalf-year: | ||||
| Payment of Consulting Services toCarling Capital Partners | 2,767,000 | - | 55,340 | - |
| Exercise of options | - | - | - | - |
| Transfer from option expense reserveon exercise of options | - | - | - | - |
| Transaction costs relating to shareissues | - | - | - | - |
| 2,767,000 | - | 55,340 | - |
Note 3. Segment information
(a) Business segments
The Group operates in the following industries:
(i) Metal in concentrate – Discontinued Operations
Production of metal in concentrate from tailings at the Hellyer minesite. These operations were carried out by the Hellyer Zinc Concentrate Project (HZCP) Joint Venture in which the Group had a 50% interest and commenced on 1 December 2006. Intec assumed full ownership and operational control of HZCP from 1 August 2008. Due to a considerable weakening in zinc and lead prices and significant increases in sea freight, power, fuel, reagents and smelter costs, the HZCP had become unprofitable and was put onto care and maintenance in September 2008 and was subsequently sold.
(ii) Research and Development
During the half year, Intec continued to generate revenue from the provision of testwork and engineering services for third parties at the Burnie Research Facility. This facility successfully completed its first commercial-scale trials of the use of calcium sulphide for heavy metal removal from inorganic wastewaters. The Company also commenced a laboratory optimization work program for the Browns Sulphide Project, a joint venture between Compass Resources Limited (Administrators Appointed) (Receivers and Managers Appointed) and HNC (Australia) Resources Pty Limited (HNC).
(b) Geographical segments
The Group operates in one geographical segment, namely Australia.
(a) Segment reporting – business segments
2008
(i) Segment Revenue
| DiscontinuedOperations$'000 | R & D$'000 | Consolidated$'000 | |
|---|---|---|---|
| Sales to external customers | 7,572 | 394 | 7,966 |
| Intersegment sales | - | - | - |
| Total sales revenue | 7,572 | 394 | 7,966 |
| Other revenue | - | - | - |
| Total segment revenue | 7,572 | 394 | 7,966 |
| Intersegment eliminationUnallocated revenue | -1,039 | ||
| Consolidated revenue | 9,005 | ||
| (ii) Segment Result | |||
| Segment (loss) | (9,013) | (5,936) | (14,949) |
| Intersegment elimination | - | ||
| Unallocated (loss) | (4,280) | ||
| Loss before income tax | (19,229) | ||
| Income tax benefit | - | ||
| Loss for the year | (19,229) | ||
| (iii) Segment assets and liabilities | |||
| Segment assets | 6,297 | 5,470 | 11,767 |
| Intersegment elimination | - | ||
| Unallocated assets | 694 | ||
| Total assets | 12,461 | ||
| Segment liabilities | 1,652 | 4,568 | 6,220 |
| Intersegment elimination | - | ||
| Unallocated liabilities | 1,835 | ||
| Total liabilities | 8,055 |
(iv) Other segment information
| DiscontinuedOperations$'000 | R & D$'000 | Consolidated$'000 | |
|---|---|---|---|
| Acquisition of plant and equipment | 299 | - | 299 |
| Unallocated | 2 | ||
| Total acquisition | 301 | ||
| Depreciation expense | 1,309 | 297 | 1,606 |
| Less capitalised into inventory | (420) | - | (420) |
| Less transferred to cost of goods sold | - | - | - |
| Depreciation expense | 889 | 297 | 1,186 |
| (v) Cash flow information | |||
| Net cash ouflows from operating activities | (2,327) | (381) | (2,708) |
| Unallocated | (2,007) | ||
| Total cash outflows from operating activities | (4,715) | ||
| Net cash inflows from investing activities | 213 | - | 213 |
| Unallocated | 788 | ||
| Total cash inflows from investing activities | 1,001 | ||
| Net cash flow from financing activities | - | - | - |
| Unallocated | (783) | ||
| Total cash inflows from financing activities | (783) | ||
| Net cash outflows | (2,114) | (381) | (2,495) |
| Unallocated | (2,002) | ||
| Total net cash outflows | (4,497) |
(a) Segment reporting – business segments (continued)
2007
(i) Segment Revenue
| DiscontinuedOperations$'000 | R & D$'000 | Consolidated$'000 | |
|---|---|---|---|
| Sales to external customers | 12,240 | - | 12,240 |
| Intersegment sales | - | - | - |
| Total sales revenue | 12,240 | - | 12,240 |
| Other revenue | 1,421 | 210 | 1,631 |
| Total segment revenue | 13,661 | 210 | 13,871 |
| Intersegment eliminationUnallocated revenue | -149 | ||
| Consolidated revenue | 14,020 | ||
| (ii) Segment Result | |||
| Segment profit/ (loss) | 5,656 | (3,224) | 2,432 |
| Intersegment elimination | - | ||
| Unallocated profit/ (loss) | (1,263) | ||
| Profit before income tax | 1,169 | ||
| Income tax benefit | - | ||
| Profit for the year | 1,169 | ||
| (iii) Segment assets and liabilities | |||
| Segment assets | 37,706 | 8,012 | 45,718 |
| Intersegment elimination | - | ||
| Unallocated assets | 4,928 | ||
| Total assets | 50,646 | ||
| Segment liabilities | 13,119 | 629 | 13,748 |
| Intersegment elimination | - | ||
| Unallocated liabilities | 1,254 | ||
| Total liabilities | 15,002 | ||
(iv) Other segment information
| DiscontinuedOperations$'000 | R & D$'000 | Consolidated$'000 | |
|---|---|---|---|
| Acquisition of plant and equipment | 2,820 | 83 | 2,903 |
| Unallocated | - | ||
| Total acquisition | 2,903 | ||
| Depreciation expense | 1,342 | 23 | 1,365 |
| Less capitalised into inventory | (786) | - | (786) |
| Less transferred to cost of goods sold | (516) | - | (516) |
| Depreciation expense | 40 | 23 | 63 |
| (v) Cash flow information | |||
| Net cash outflows from operating activities | 6,429 | (2,753) | 3,676 |
| Unallocated | (1,365) | ||
| Total cash outflows from operating activities | 2,311 | ||
| Net cash outflows from investing activities | (2,725) | (83) | (2,808) |
| Unallocated | (1,717) | ||
| Total cash outflows from investing activities | (4,525) | ||
| Net cash inflows from financing activities | - | - | - |
| Unallocated | 1,000 | ||
| Total cash inflows from financing activities | 1,000 | ||
| Net cash inflows/(outflows) | 3,704 | (2,836) | 868 |
| Unallocated | (2,082) | ||
| Total net cash outflows | 1,214 |
Note 4. Contingent liabilities
Since the last annual reporting date, there has been no change of any contingent liabilities or contingent assets.
Note 5. Burnie Research Facility
The carrying value of the Burnie Research Facility is $4,186,000 at 31 December 2008. Intec generated revenue through the Burnie Research Facility from the provision of testwork and engineering services to third parties for the half year to 31 December 2008 and will continue to do so in the short to medium term. The Company is seeking to reach agreement on a substantial pilot plant program for the Browns Sulphide Project and discussions with other third parties are also in progress which, if successful, will generate a significant program of works and return on assets employed. The Directors consider it reasonably likely that the Group will be successful in its pursuit of these and other programs, and based on this assessment, no adjustments have been made to the carrying value of the Burnie Research Facility at 31 December 2008.
Note 6. Electric Arc Furnace Dust (EAF dust)
As indicated in previous reports, the Group has significant stockpiles of EAF dust in two locations; the Hellyer Minesite and the Footscray, Victoria storage facility.
As noted elsewhere, the Group has agreed to sell the Hellyer Assets but the sale agreement does not include the stockpile of EAF dust at Hellyer. The Group has lodged a cash backed environmental bond amounting to $756,000 in relation to this stockpile.
The Group has currently a $3,647,500 environmental bond lodged with the Victorian EPA in relation to the Footscray EAF dust stockpile. This bond is currently secured by a bank guarantee, which will be replaced by a $3,647,500 cash backed bond from the proceeds of the Hellyer Asset sale.
The Directors are investigating a range of options for the treatment and/or disposal of the EAF dust stockpiles, either by the Group itself or by external parties. At the current time the Group has not determined the most advantageous treatment and/or disposal option. In view of this uncertainty, the Directors have provided for a provision equivalent to the full amount of environmental bonds lodged in relation to the EAF dust stockpiles.
Note 7. Events occurring after reporting date
On 29 January 2009, Compass Resources Limited announced the appointment of Voluntary Administrators and on 18 February 2009, Receivers and Managers were appointed to Compass by HNC. The Company is an unsecured creditor for an amount of $138,000 in relation to hydrometallurgical testwork conducted in relation to the Browns Sulphide Project. Although Intec's Directors cannot yet be certain that the hydrometallurgical pilot plant programs at the Burnie Research Facility will take place as scheduled, they have reasonable grounds for anticipating that the program will be commenced in due course as previously scheduled.
The Group divested its investment in Intec Exploration Pty Ltd on 18 February 2009 at book value.
No other events have occurred subsequent to 31 December 2008 requiring disclosure in, or amendment to, these interim financial statements.
Intec Ltd Directors' declaration
In the Directors' opinion:
- (a) the financial statements and notes set out on pages 4 to 15 are in accordance with the Corporations Act 2001, including:
- (i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and
- (ii) giving a true and fair view of the Group's financial position as at 31 December 2008 and of its performance, as represented by the results of their operations and their cash flows, for the half-year ended on that date; and
- (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the Directors of Intec Ltd.
On behalf of the Board
Philip R. Wood Managing Director Chief Executive Officer
Sydney 27 February 2009
Intec Ltd Independent review report
Intec Ltd Independent review report
Intec Ltd Auditor's independence declaration
Intec Ltd Additional shareholder information
The top 20 shareholders as at 25 February 2009 are as follows:
| Name | Shares Held | Percentage |
|---|---|---|
| ORIAN HOLDING CORP | 41,174,840 | 6.106 |
| ANZ NOMINEES LIMITED | 38,629,162 | 5.729 |
| OREGON NOMINEES PTY LTD | 14,235,000 | 2.111 |
| ALLIANCE RESOURCES LIMITED | 9,542,640 | 1.415 |
| NATIONAL NOMINEES LIMITED | 8,473,182 | 1.257 |
| AD CHRISTIE PTY LTD | 8,000,000 | 1.186 |
| MR ROSS BROWN | 6,320,982 | 0.937 |
| BOUTA PTY LIMITED | 6,089,876 | 0.903 |
| MR WILLIAM E CONWAY | 6,055,714 | 0.898 |
| MR MICHAEL JOHN MCKENZIE | 6,045,455 | 0.897 |
| BRYAN WELCH PTY LTD | 6,000,000 | 0.890 |
| REACH OUT PTY LTD | 5,572,460 | 0.826 |
| MACQUARIE BANK LIMITED | 5,116,207 | 0.759 |
| JVH COTTON PTY LTD | 5,109,091 | 0.758 |
| BATROSA CONCRETE PRODUCTS PTY LTD | 4,500,000 | 0.667 |
| MR STEPHEN STONE | 4,182,316 | 0.620 |
| WENDELINI PTY LIMITED | 3,881,500 | 0.576 |
| PLYMOUTH HOLDINGS INC | 3,771,808 | 0.559 |
| SMACER PTY LTD | 3,728,261 | 0.553 |
| NEWVEST PTY LIMITED | 3,600,000 | 0.534 |