SCIDEV LTD — Annual Report 2012

Sep 27, 2012

Annual Report 2012 ASX Code: INL ABN: 25 001 150 849

Intec Ltd Annual Report 2012

Contents	Page
Letter from the Chairman and Managing Director	1
Review of Operations	2
Directors' Report	7
Auditor's Independence Declaration	17
Consolidated Statement of Comprehensive Income	18
Consolidated Statement of Financial Position	19
Consolidated Statement of Changes in Equity	20
Consolidated Statement of Cash Flows	21
Notes to the Financial Statements	22
Directors' Declaration	59
Audit Report	60
Schedule of Tenements	62
Shareholder Information	62
Corporate Governance Statement	64

Letter from the Chairman and Managing Director

Dear Intec Shareholder 28 September 2012

This is Intec Ltd's (Intec's or the Company's) eleventh Annual Report since listing on the Australian Securities Exchange (ASX) and includes the financial statements for the financial year ending 30 June 2012.

The 2011-2012 year commenced with the Company bearing a high cost base relative to its financial position and revenue generating capabilities. The Company was progressing with a number of technology development projects; however, revenue generated from these projects was not sufficient to cover Intec's operating costs. Consequently, in February 2012 the Company was required to raise further equity capital. A number of changes occurred at this time including the following:

• the appointment of a new Managing Director;
• a review of all existing projects and the Company's technology portfolio; and
• a focus on reducing the operating costs of the Company.

In the 11 years since listing on the ASX, the Company has been unable to establish a value creating business based on the commercialisation of the Intec Process, across any of the applications considered. It is notable that the original Intec Process patent was lodged in 1993 and will expire in 2013 without any commercial applications. Notwithstanding that additional Intec Process patents have been granted, the commercialisation of an Intec Process related application, within a reasonable timeframe and the financial capacity of the Company, cannot be identified at this time.

An asset base comprising a patent portfolio, a research facility and human resources has not been sufficient to build a sustainable business in the public company space. The Company, when it owned the Hellyer Assets, did have the potential to build a sustainable business based on conventional technology, but was unable to maintain ownership of these assets.

A key achievement during the year was the disposal of the Company's legacy stockpiles of electric arc furnace dust (EAF Dust). The continued ownership of these stockpiles hindered the Company's financial position and operating flexibility, particularly following the disposal of the Hellyer Assets. Removal of the EAF Dust stockpiles allowed the release to the Company of approximately $4.4 million in cash backed security bonds. Consequently, the Company is currently in a secure financial position relative to its operating costs and market value.

The focus of management during 2012-2013 will be as follows:

• continuance of the IRC Project, subject to on-going Federal Government approvals and the receipt of pre-payments from the client, as it represents a significant body of paid commercial work and covers the cost of employees assigned to the project;
• continued investigation of alternative value realisation strategies for certain components of its technology portfolio;
• preservation of its financial position to all extents possible, without resort to shareholders; and
• the investigation of corporate and asset acquisition opportunities preferably with an Intec Process application.

In summary, the intention of management is to seek to grow the tangible asset base of the Company in order to provide a proper foundation for a listed company.

Yours sincerely

Trevor A Jones Kieran G Rodgers Chairman Managing Director

Review of Operations

Disposal of EAF Dust Stockpiles

A significant achievement during the year was the removal of the Company's legacy stockpiles of EAF Dust. The Company's original ownership of EAF Dust commenced in 2006, when it acquired a 22,000 tonne stockpile located in a warehouse in Footscray from the then Smorgon Steel Group (Smorgon Steel). In July 2007 a further agreement was entered into with Smorgon Steel for the on-going supply of EAF Dust to both the Footscray storage facility and a new purpose built facility at the Company's then owned Hellyer minesite. The EAF Dust was intended as a co-feedstock for the proposed Hellyer Residues Project at the same site.

Subsequent events in the second half of 2008 saw the Company lose ownership of the Hellyer minesite resulting in the inability to proceed with the Hellyer Residues Project, and the consequent cessation of receipt of EAF Dust deliveries from Smorgon Steel. At the end of 2008, the Company's stockpiles of EAF Dust amounted to 36,000 tonnes being 28,000 tonnes at the Footscray facility and 8,000 tonnes at the Hellyer minesite. The Company was required to provide security bonds to EPA Victoria and EPA Tasmania in relation to these stockpiles. The security bonds amounted to $4.4 million, being $3.468 million for Footscray and $0.756 million for Hellyer. The security bonds were cash-backed and in addition the full amount of the security bonds was provisioned against on the Company's balance sheet.

The quantum and condition of the two EAF Dust stockpiles at the end of 2008 are shown in Photos 1 and 2 below.

Photo 1 – Hellyer EAF Dust stockpile Photo 2 – Footscray EAF Dust stockpile

During the period, 2008 to 2010, the Company investigated a range of processing and/or removal options for the EAF Dust, a controlled waste, but was unsuccessful in identifying a viable option. The inability to dispose of the EAF Dust hindered the Company's financial position and operating flexibility.

In the first half of 2011, the Company implemented a project to produce a zinc-bearing product for export, being a blend of EAF Dust and slag material from the Group's wholly-owned Zeehan slag dump on the west coast of Tasmania.

Commencing initially with the Hellyer stockpile and subsequently moving to the Footscray stockpile, by May 2012 the Group had blended and exported its aggregate 36,000 tonnes of EAF Dust. Photos 3 and 4 show the Hellyer and Footscray stockpile sites following the removal of EAF Dust.

With the exception of a residual amount of $40,000 retained by EPA Tasmania, all other security bond amounts have been returned to the Company. The residual $40,000 will be returned following the completion of minor remediation works at the former Hellyer stockpile site.

Photo 3– Former Hellyer EAF Dust stockpile Photo 4 – Former Footscray EAF Dust stockpile

IRC Project

Following the completion of a successful laboratory assessment and Conceptual Study in early 2011 and a subsequent site visit, Intec's 50/50 joint venture subsidiary, Intec International Projects Pty Ltd (IIP), signed an agreement for a comprehensive testwork and engineering programme for the 'IRC Project' in the Islamic Republic of Iran.

The IRC Project, Stage 1, will combine the Intec Process and existing technology to extract and recover zinc, lead and silver from 25,000tpa of minerals processing waste. The waste has been stockpiled for over 20 years, with over 2,000,000 tonnes now awaiting a suitable environmental and economic technology for future processing (see Photo 5).

The feedstock for the IRC Project is a complex mixture of zinc and lead minerals offering a total of 12-20% Zn + Pb, in a silicon/aluminium host matrix. Testwork has shown that over 90% of the zinc can be selectively extracted, leaving the other target metals in an intermediate residue for separate leaching in a conventional Intec Process brine circuit. From these two leach streams, the IRC Project will produce LME special high grade zinc metal and high purity lead metal, as well as suitable by-products.

During the course of 2012, Intec conducted and completed an extensive laboratory testwork and optimisation programme on representative feedstock samples provided by the client. The proposed flowsheet was adapted to suit the particular parameters of the project and the feedstock, and the full suite of results was reported to the client in July and August 2012.

The next component of the engineering programme involves pilot plant testwork and engineering, which will be mostly conducted close to the project site using local resources.

Prior to commencing work, and via ongoing consultation, Intec has sought and received approval from the Australian Department of Foreign

Photo 5 - A view of part of the large stockpile of ~20% Zn+Pb residue feedstock for the IRC Project

Photo 6 - A bank of filter presses, part of the existing zinc/lead ore processing operation that produces as a residue the 20% Zn+Pb feedstock to be recovered in the IRC Project

Affairs and Trade for the work conducted, ensuring that the Project is at all times compliant with Intec's domestic and international obligations.

The deliverable for the contracted programme is a comprehensive plant design package, enabling the project client to engage its own contractors for the construction of the project, following the completion of the technology and engineering programme. As such, the total project engineering, construction and commissioning is expected to take approximately 3 years.

The estimated revenues for IIP's services (inclusive of the services of sub-contractors) and the provision of a technology licence over the course of the programme are approximately A$6 million. Of this amount, if the IRC Project was to successfully achieve all Milestones, Intec's estimated revenues for its direct services to IIP are approximately A$2 million (less certain specified subcontractor costs).

Intec Gold Process

During the year, the Company was involved in a mutual technology assessment process in order to assess the applicability of the Intec Gold Process (IGP) to three types of refractory gold ores – arsenopyrite, arsenopyrite-pyrite, and pyrite-carbon. The independent phase of the technology assessment was completed in Denver, Colorado in February 2012. The independent laboratory finalised its evaluation report in May 2012.

Notwithstanding the success of the Denver laboratory trials, in July 2012, the other party involved in the mutual technology assessment advised the Company that it was withdrawing from further involvement in the possible commercialisation of the IGP. The other party sought involvement in the IGP as a means of generating sales of reagents, which is its principal business activity. Subsequent industry and market analysis by the party did not support the original investment proposition leading to its withdrawal. The Company is currently considering alternative commercialisation strategies.

Spent Pickle Liquor Recycling Project

During the year, the Company finalised the reporting from Phase 2 of the project (demonstration plant operations at Burnie). The Phase 2 report was delivered to GB Galvanizing (GBG) in November 2011, following which GBG, under the terms of the agreement between the two companies, had a period of six months in which to commit to the funding of a commercial scale facility (Phase 3).

GBG advised the Company in May 2012 that it would not be committing to Phase 3 of the Spent Pickle Liquor Recycling Project, due to inadequate financial returns.

The result of this advice was that the Company did not receive the final $200,000 amount due under the project's Hazwaste Funding agreement. The final payment would have been payable following the treatment of a defined quantity of spent pickle liquor in the Phase 3 facility. The Company maintains ownership of the relevant technology and will consider alternative value-realisation strategies.

Rare Earth Metals Testwork

The REcycling Project technical programme was advanced during the year. The CSIRO completed its development work on the purification, separation and recovery of the target rare earth metal products. This yielded two small samples of neodymium carbonate and dysprosium carbonate, which were then proposed to be heat treated to produce neodymium oxide and dysprosium oxide. The expectation was that both products would achieve >99% purity.

Intec's engineering team completed the basic engineering for the potential REcycling Project: process flow diagrams, mass and energy balance, equipment list, capital cost estimate, operating cost estimate, process design criteria and pilot plant programme design (including PFDs, equipment list and basic operations programme). This data was used to generate a basic economic model.

The Company also examined the possibility of converting the underutilised components of the Burnie Research Facility for the recycling of a Japanese sourced industrial waste containing appreciable levels of neodymium and dysprosium. However, investigations revealed that:

• The Burnie Research Facility could not be reconfigured to a sufficient scale to handle the monthly quantities of waste generated; and
• The regulatory hurdles for importation into Australia of the industrial waste were significant.

Consequently, the Company investigated alternative mechanisms for realising value from this technology. Subsequent to the year end the Company executed a non-binding Memorandum of Understanding (MOU) that provides for a third party to undertake an exclusive period of due diligence for the remainder of 2012. The commercial terms of the MOU provides that the third party, should a formal agreement be entered into, would acquire the technology rights in return for the payment of a small upfront fee, an ongoing royalty payable to Intec and the implementation of a technical services agreement with Intec.

Hellyer Royalty

When the Company divested the Hellyer Assets to Bass Metals Ltd (BSM) in 2009 it received as part of the sale consideration a throughput-based royalty of $2.50 per tonne for ore processed through the Hellyer Mill (the Royalty). The Royalty was capped at an aggregate payment of $5 million. During 2011, BSM recommissioned the Hellyer Mill and the Company received its first royalty payment in August 2011.

In November 2011, the Company reached agreement with BSM to forego cash royalty payments in relation to completed and anticipated minerals processing at the Hellyer Mill until the end of calendar 2011, in exchange for receiving 3.1 million Bass shares at $0.15 per share (each with a free attached 3 year listed option exercisable at $0.20). The nominal face value of these foregone 2011 royalty payments was discounted to the $465,000 investment amount, with ensuing royalties of $3.50 per tonne of ore processed, to a $5.725 million maximum (inclusive of foregone royalties).

In May 2012, Intec received payment of $345,056 under the Royalty from processing activities at the Hellyer Mill during the March 2012 quarter. In July 2012, the Company received $453,737 for ore processed at the Hellyer Mill during the June 2012 quarter.

Having regard to announcements during 2012 by BSM in relation to activities at Hellyer (including placing the Hellyer Mill on care and maintenance and investigating a sale of the Mill) and its financial position, it became apparent that the residual value of the Royalty was increasingly imperilled and an agreement was reached with BSM in July 2012 to re-structure the Royalty as follows:

• Intec was granted a 2.5% Net Smelter Return Royalty (NSR Royalty) in relation to base metals extracted by BSM from the following tenements:
  • o RL11/1997: Mt Charter Retention Licence;
  • o EL24/2004: Mt Block Exploration Licence;
  • o EL48/2003: Bulgobac River Exploration Licence;
  • o CML103M/1987: Hellyer Mine Lease; and
  • o ML68M/1984: Que River Mine Lease (the Tenements);
• The NSR Royalty is uncapped and BSM has no first right of refusal (or pre-emptive rights) over the NSR Royalty as was previously the case with the Royalty; and
• Intec was issued 15 million shares in BSM for nil consideration in total, Intec holds 18.1 million BSM shares, which represents a 5.85% shareholding at the date of this report.

The re-structuring of the Royalty resulted in Intec receiving a potentially valuable NSR Royalty over the Hellyer-Que River mineral field in North-West Tasmania. Polymetallic deposits, as defined under the JORC Code, on the Tenements as most recently announced by Bass (30 June 2011) are detailed in Table 1.

The NSR Royalty would apply to these deposits when and if they are developed and also to any as yet un-discovered base metal deposit on the Tenements. The NSR Royalty does not apply to gold and silver deposits on the Tenements and also excludes the Hellyer tailings dam.

Table 1: Combined Polymetallic Massive Sulphide Mineral Resources (as at 30 June 2011 – 5% Pb+Zn cut-off)*

Location	JORCClassification	Tonnes'000	Copper%	Lead%	Zinc%	Silverg/t	Goldg/t
	Measured	286	0.6	7.4	14.2	137	2.9
Fossey**	Indicated	108	0.4	6.8	11	120	1.8
	Inferred	66	0.3	4.7	8.4	94	2.1
	Total	460	0.5	6.9	12.6	127	2.5
	Indicated	140	0.5	5.2	11	83	1.9
Fossey East	Inferred	110	0.3	3.3	6.6	60	1.7
	Total	250	0.4	4.4	9.1	73	1.8
	Indicated	640	0.4	4	6.8	83	1.3
Hellyer	Inferred	110	0.2	4.9	8.1	107	1.5
Remnants	Total	750	0.3	4.1	7	87	1.3
	Indicated	160	0.2	3.8	6.5	96	1.2
Que River	Inferred	140	0.3	4.2	7.4	104	1.2
base metals	Total	300	0.2	4	6.9	100	1.2
	Measured	60	1.7	0.7	2.1	69	0.3
Que River	Indicated	260	1.9	1.6	4.3	68	0.3
S-lens	Inferred	60	2.5	0.2	0.6	33	0.15
	Total	380	2	1.3	3.4	63	0.3
	Measured	346	0.8	6.4	12.4	127	2.5
	Indicated	1,308	0.7	3.9	7.2	86	1.2
Total	Inferred	486	0.5	3.7	6.6	85	1.4
	Total	2,140	0.6	4.2	7.8	92	1.4

* Source: Bass Metals Ltd 2011 Annual Report for the year ended 30 June 2011, Section 2.4.2, page 9. Also refer to Competent Persons Statement: Section 2.5.3, page 15.

** Fossey resource depleted by mining activities since 30 June 2011.

Corporate and Other Matters

On 7 February 2012, the Company announced a share placement of 83.333 million fully paid ordinary shares to raise $1.25 million at a placement price of 1.5 cents per share ("the Placement').

Of the Placement shares, 32.473 million shares ($487,092) were allotted immediately under the Company's available 15% placement capacity pursuant to ASX Listing Rule 7.1. The allotment of the remaining 50.861 million Placement shares ($762,908) was subject to the receipt of shareholder approval at an Extraordinary General Meeting held on 19 March 2012 including a separate approval for the participation in the Placement in the amount of $220,000 by Mr Kieran Rodgers, a director of the Company.

The purpose of the Placement was to provide working capital for the Company in relation to:

• the on-going zinc blending project in Victoria until the anticipated return of environmental bonds (in respect of EAF Dust) later in 2012;
• a delay in the receipt of a final environmental bond (in respect of EAF Dust) from the Tasmanian EPA;
• the payment of a contractual employee entitlement; and
• the on-going activities and contingencies of the Company.

Concurrently with the announcement of the Placement, Mr Kieran Rodgers, previously the Finance Director & Chief Financial Officer replaced Mr Philip Wood as Managing Director of the Company.

Extraordinary General Meeting

An Extraordinary General Meeting of Intec was held on 19 March 2012 to seek approval for the following resolutions:

• Ratification of Previous Issue of Shares under Placement;
• Approval of Proposed Issue of Shares under Placement; and
• Approval of Issue of Shares to a Director Mr Kieran Rodgers.

All resolutions were passed.

Directors' Report

Your Directors present their report on the Intec Group of Companies (referred to hereafter as the Group) consisting of Intec Ltd (Intec or the Company) and the entities it controlled at the end of, or during, the year ended 30 June 2012.

Directors

The following persons were Directors of the Company during the whole of the financial year and up to the date of this report. No Intec Director has been a director of any other ASX-listed company in the last 3 years.

Trevor A Jones B.Comm. (Melb) Chairman

Mr Jones has spent over 30 years working in the finance industry in Australia, United Kingdom and the USA. During this time he has held senior executive positions in investment funds management, stockbroking and corporate finance, and gained a broad experience of capital structuring and capital raising, particularly in the mining sector. Mr Jones was manager of equity portfolios for Shell Australia and National Employers Mutual in the United Kingdom. He was a Director of County NatWest Securities Australia Limited in London and then Director of Corporate Finance with Westpac Institutional Bank in Sydney. More recently Mr Jones was the Sydney Chief Executive for Melbourne-based Austock Group and was Chairman of both its Corporate Finance and Investment Management divisions. He was appointed as a Nonexecutive Director of Intec on 28 February 2007. Mr Jones is the Chairman of the Corporate Governance Committee and a member of the Audit Committee and the Nomination and Remuneration Committee.

Kieran G Rodgers B.E. (Hons.) Min. (UNSW), M.B.A. (IMD) Managing Director

Mr Rodgers joined Intec in March 2001 after 13 years of experience in merchant banking and financial consulting, principally at Resource Finance Corporation Ltd, which specifically focused on the Australian and international resources industry. He was appointed as an Executive Director of Intec on 28 February 2007. Mr Rodgers was appointed Managing Director on 6 February 2012. Mr Rodgers is a member of the Corporate Governance Committee.

James R G Bell B.A. (Syd), Ll.B. (Syd) Non-executive Director

Mr Bell is an Australian barrister and solicitor who has practised as a commercial lawyer for 30 years, including 10 years as a partner in the national law firm of Blake Dawson Waldron and 3 years as head of the Banking and Finance division of that firm in Sydney. In 1995, he established his own law firm and has advised some of Australia's major companies and professional firms across a broad spectrum of endeavour. He was appointed as a Non-executive Director of Intec on 1 May 2007. Mr Bell is the Chairman of both the Audit Committee and the Nomination and Remuneration Committee and a member of the Corporate Governance Committee.

Philip R Wood B.A. (Syd), Ll.B. (Syd), A.S.I.A., Dip. L.C.F. (Sorbonne) Managing Director and Chief Executive Officer

Mr Wood was a Director of the Company since 1993 and was appointed Managing Director and Chief Executive Officer on 26 March 2001. Mr Wood resigned as Managing Director & Chief Executive Officer on 6 February 2012.

A John Moyes B.A. (Chem) (Macquarie) Non-executive Director

Mr Moyes was a Director of the Company since 1995. Mr Moyes resigned as a Director on 21 November 2011.

Company Secretary

Robert J Waring B.Ec., C.A., F.C.I.S., F.Fin., F.A.I.C.D. Company Secretary

Mr Waring was appointed to the position of Company Secretary of Intec in December 1998 and has 39 years' experience in financial and corporate roles including 20 years in company secretarial roles for ASX-listed companies and 15 years as a director of ASX-listed companies. He is a director of the companies in the Oakhill Hamilton Group, which provides secretarial and corporate advisory services to a range of listed and unlisted companies.

Meetings of Directors

The numbers of meetings of the Company's Board of Directors and of each board committee held during the year ended 30 June 2012, and the numbers of meetings attended by each director were:

	Full	meetings of			Meetings of committees		Nomination
	Directors		Audit		CorporateGovernance		andRemuneration
	A	B	A	B	A	B	A	B
T A Jones	6	6	2	2	1	1	1	1
K G Rodgers	6	6	*	*	*	*	*	*
J R G Bell	6	6	2	2	1	1	1	1
P R Wood	5	5	*	*	1	1	*	*
A J Moyes	3	3	*	*	*	*	*	*

A = Number of meetings attended

B = Number of meetings held during the time the Director held office or was a member of the committee during the year

* Not a member of the relevant committee during the period.

Retirement, Election and Continuation in Office of Directors

Mr Trevor Jones is the Director retiring by rotation, and being eligible, offers himself for re-election to the Board.

Principal Activities

During the year to 30 June 2012, the Group continued the commercialisation of the Intec Processes, including the operation of its Research Facility at Burnie and associated activities. The Group completed sales of a low-grade zinc

product from its stockpiles of Zeehan feedstock and EAF dust.

There were no significant changes in the nature of the activities of the Group during the year.

Review of Operations

The Review of Operations are disclosed and discussed on pages 2 to 6 of the Annual Report.

Dividends

No dividends have been paid to members during the financial year and no recommendation is made as to the payment of dividends.

Significant Changes in the State of Affairs

Significant changes in the state of affairs of the Company during the financial year were as follows:

Low-Grade Zinc Blending Project

During the financial year, the Group completed the disposal of its legacy stockpiles of EAF Dust in both Tasmania and Victoria. The disposal of the stockpiles involved the blending of EAF Dust with zinc-bearing slag material sourced from the Group's Zeehan slag dump to produce a low-grade zinc-bearing product for export.

In relation to the Tasmanian stockpile, a cash-backed bond amounting to $756,000 was originally lodged with EPA Tasmania. At 30 June 2012, the remaining amount of the bond held by EPA Tasmania was $354,000, including accrued interest. Subsequent to year-end, $314,000 of the remaining bond amount has been returned to the Group. The Group has been advised that the remaining amount of $40,000 will be returned following the completion of minor remediation works at the Hellyer stockpile site.

The Group had previously lodged a cash-backed $3.648 million environmental bond with EPA Victoria in relation to the Victorian EAF Dust stockpile site. During the financial year, $1.260 million of the bond was returned to the Group. Since the end of the financial year, the Group delivered to EPA Victoria an environmental audit report as required by relevant legislation. This report has now been assessed by EPA Victoria and the remaining bond amount, $2.387 million, has been returned to the Group. Accordingly, the provision raised against the environmental bond lodged with the EPA Victoria was reversed resulting in a credit to the profit and loss account of $3.648 million at 30 June 2012.

Hellyer Royalty

The Group held a 100% interest in the Hellyer Royalty, which was a unit-based royalty payable by BSM determined on tonnes of ore processed through the Hellyer Mill. As a result of participating in the 2011 BSM rights issue, Intec exchanged cash royalty payments in relation to completed and anticipated minerals processing for the September and December quarters of 2011/12 for 3.1 million BSM shares at $0.15 per share (each with a free attached 3-year listed option exercisable at $0.20).

The closing market price at 30 June 2012 of BSM shares and BSM options was 1.3 cents and 0.001 cents respectively, valuing the Group's holding at $43,400 (3.1 million shares at 1.3 cents/share and 3.1 million options at 0.001 cents/option). An impairment expense of $421,600 was therefore raised against the BSM investment book value of $465,000.

During the 2012 June quarter, the Group received a payment of $345,046 for Hellyer processing activities conducted during the March 2012 quarter. Since the end of the financial year, the Group received a further payment of $453,737 for Hellyer processing activities conducted during the June 2012 quarter.

On 9 July 2012, the Group announced that it had agreed a re-structuring of the Hellyer Royalty with BSM. As a result, the Group has been granted a 2.5% NSR Royalty in relation to base metals extracted from the following tenements:

• o RL11/1997: Mt Charter Retention Licence;
• o EL48/2003: Mt Block Exploration Licence;
• o EL24/2004: Bulgobac River Exploration Licence;
• o CML103M/1987: Hellyer Mine Lease; and
• o ML68M/1984: Que River Mine Lease.

The NSR Royalty is uncapped and BSM has no first right of refusal (or pre-emptive rights) over the NSR Royalty as was previously the case with the Hellyer Royalty. In addition, the Company was issued 15 million shares in BSM for nil consideration. Following, the re-structuring, Intec holds a 5.85% interest in BSM.

The carrying value of the Hellyer Royalty was written down as at 30 June 2012 resulting in an expense to the profit and loss account of $1.184 million. No value has been assigned to the NSR Royalty.

Share Placement

On 7 February 2012, the Group received commitments to raise $1.25 million through a share placement of 83.333 million fully paid ordinary shares in the capital of the Group at 1.5 cents per share. Of the total Placement amount, 32.473 million shares ($487,092) were allotted on 8 February 2012 under the Group's available 15% placement capacity pursuant to ASX Listing Rule 7.1. Shareholder approval was received for the remaining 50.861 million Placement shares ($762,908), including a separate approval for the participation in the Placement in the amount of $220,000 by Mr Kieran Rodgers, a director. The relevant resolutions were approved at an Extraordinary General Meeting of Shareholders held on 19 March 2012.

Board and Management Changes

John Moyes, a Non-executive Director, retired as a director at the 2011 Annual General Meeting. Philip Wood resigned as Managing Director and Chief Executive Officer on 6 February 2012 and was replaced by Kieran Rodgers, formerly the Finance Director and Chief Financial Officer.

Events Subsequent to the End of the Reporting Period

No significant matters occurred after balance date other than those specifically referred to above.

Environmental Regulation

The Group's operations are presently subject to environmental regulation under the laws of the Commonwealth of Australia and the States of New South Wales and Tasmania.

Intec is licensed to operate under Section 55 of the Protection of the Environment Operations Act 1997 (NSW Environment Protection Authority) and the associated Protection of the Environment Operations (General) Regulation 1998.

Intec Envirometals Pty Ltd is licensed to operate premises in Tasmania under Section 25 (5) of the Environmental Management and Pollution Control Act 1994 (Tas).

The Group is at all times in full environmental compliance with the conditions of its licences.

Remuneration Report

The remuneration report is set out under the following main headings:

• A Principles used to determine the nature and amount of remuneration;
• B Details of remuneration;
• C Service agreements and letters of employment;
• D Share based compensation;
• E Shareholdings of directors and key management personnel; and
• F Additional information.

The information provided in this remuneration report has been audited as required by Section 308 (3C) of the Corporations Act 2001.

A Principles Used To Determine the Nature and Amount of Remuneration

The objective of the Group's executive reward framework is to ensure that the reward for performance is competitive and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives and the creation of value for shareholders, and conforms with market best practice for delivery of reward. The Board ensures that executive reward satisfies the following key criteria for good reward governance practices:

• competitiveness and reasonableness;
• acceptability to shareholders;
• performance linkage / alignment of executive compensation;
• transparency; and
• capital management.

The Group has structured an executive remuneration framework that is market competitive and complementary to the reward strategy of the organisation.

Alignment to shareholders' interests:

• has economic profit as a core component of plan design;
• focuses on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering constant return on assets as well as focusing the executive on key non financial drivers of value; and
• attracts and retains high calibre executives.

Alignment to programme participants' interests:

• rewards capability and experience;
• reflects competitive reward for contribution to growth in shareholder wealth;
• provides a clear structure for earning rewards; and
• provides recognition for contribution.

The Board has established a nomination and remuneration committee which provides advice on remuneration and incentive policies and practices and makes specific recommendations on remuneration packages and other terms of employment for executive directors, other senior executives and non-executive directors. The Corporate Governance Statement provides further information on the role of this committee.

Non-executive Directors

Fees and payments to Non-executive Directors reflect the demands which are made on, and the responsibilities of, the Non–executive Directors. The Board reviews Non-executive Directors' fees and payments annually.

Non-executive Directors' fees are determined within an aggregate Non-executive Directors' cash remuneration limit, which is periodically recommended for approval by shareholders. The current limit of $400,000 was approved by shareholders at the 2007 Annual General Meeting held on 14 November 2007. In addition, Non-executive Directors are able to participate in issues of options pursuant to the Intec Option Plan. The values of any options granted to Non-executive Directors are not included in the aggregate cash remuneration limit as they are not cash based payments.

Executive pay

The executive pay and reward framework has three components:

• base pay and benefits;
• long term incentives through participation in the Intec Option Plan; and
• other remuneration.

The combination of these comprises the executive's total remuneration.

Base pay

Base pay is structured as a total employment cost package, which may be delivered as a combination of cash and prescribed non financial benefits at the executive's discretion.

Executives are offered a competitive base pay that comprises the fixed component of pay and rewards. Base pay for each senior executive is reviewed annually to ensure the executive's pay is competitive with the market. An executive's pay is also reviewed on promotion.

B Details of Remuneration

Amounts of remuneration

Details of the remuneration of the Directors and the key management personnel (as defined in AASB 124 Related Party Disclosures) of Intec and the Group are set out in the following tables.

The key management personnel of Intec and the Group include the Directors and the following senior executive officers:

B A Banister – Chief Operating Officer D W Clark – Financial Controller D J Purdie – Senior Process Engineer A J Randall – General Manager D L Sammut – Corporate Development Manager

A R Tong – Head of Technology

2012			Short-term benefits	Terminationbenefits	Postemploymentbenefits	Sharebasedpayment
	Cash	Directors'	Consulting		Super
Name	salary	Fees	Fees		annuation	Options	Total
	$	$	$		$	$	$
Non-executive
Directors
T A Jones
Chairman	-	76,729	-	-	6,906	4,880	88,515
A J Moyes1	-	20,903	9,543	-	1,881	-	32,327
J R G Bell	-	60,703	-	-	5,463	3,660	69,826
Sub-total	-	158,335	9,543	-	14,250	8,540	190,668
Executive
Directors
P R Wood2	348,514	-	-	370,532	19,335	-	738,381
K G Rodgers	209,392	-	-	-	18,034	14,640	242,066
Sub-total	557,906	-	-	370,532	37,369	14,640	980,447
Other key
management
personnel
B A Banister3	100,721	-	-	-	28,312	-	129,033
D W Clark4	68,544	-	10,875	23,820	7,821	4,880	115,940
D J Purdie5	131,352	-	-	-	15,800	-	147,152
A J Randall	115,670	-	-	-	11,286	4,880	131,836
D L Sammut	179,375	-	-	-	16,144	12,200	207,719
A R Tong	175,396	-	-	-	21,019	12,200	208,615
Sub-total	771,058	-	10,875	23,820	100,382	34,160	940,295
Total	1,328,964	158,335	20,418	394,352	152,001	57,340	2,111,410

1. Resigned as an Non-executive Director on 21 November 2011.

2. Ceased employment on 6 February 2012.

3. Ceased employment on 4 November 2011.

4. Ceased employment on 31 March 2012, appointed as a consultant from 1 April 2012.

5. Ceased employment on 30 March 2012.

There is no guaranteed base pay increase included in any senior executive's contract.

Intec Option Plan

Information on the Intec Option Plan is set out in Note 33.

Other Remuneration Other remuneration consists of superannuation.

2011		Short-term benefits		Terminationbenefits	Postemploymentbenefits	Sharebasedpayment
	Cash	Directors'	Consulting		Super
Name	salary	Fees	Fees		annuation	Options	Total
	$	$	$		$	$	$
Non-executive
Directors
T A Jones
Chairman	-	69,162	-	-	6,225	-	75,387
A J Moyes	-	46,675	11,180	-	4,201	-	62,056
J R G Bell	-	55,161	-	-	4,964	-	60,125
Sub-total	-	170,998	11,180	-	15,390	-	197,568
Executive
Directors
P R Wood	314,602	-	-	-	29,138	-	343,740
K G Rodgers	244,615	-	-	-	21,098	-	265,713
Sub-total	559,217	-	-	-	50,236	-	609,453
Other key
management
personnel
B A Banister	189,077	-	-	-	47,900	-	236,977
D W Clark	82,396	-	-	-	7,031	-	89,427
D J Purdie	160,432	-	-	-	13,736	-	174,168
D L Sammut	168,808	-	-	-	14,850	-	183,658
A R Tong	161,259	-	-	-	19,208	-	180,467
Sub-total	761,972	-	-	-	102,725	-	864,697
Total	1,321,189	170,998	11,180	-	168,351	-	1,671,718

An annual performance review of all Executive Directors and key management personnel is undertaken. The result of these reviews forms the basis of remuneration recommendations to the Nomination and Remuneration Committee.

C Service Agreements and Letters of Employment

Remuneration and other terms of employment for the Managing Director and the other specified executives are formalised in either service agreements or letters of employment. Each of these service agreements and letters of employment provides for the provision of long service leave to accrue at a rate of 0.87 weeks per year up to 10 years' service and 2 weeks per year for each additional year of service, and participation in the Intec Option Plan.

Each service agreement and letter of employment provides the remuneration rate to be paid to the employee. All salaries are paid monthly by direct bank deposit. Full details of remuneration paid are included in the table in part B of this note. Other major provisions relating to remuneration are set out below.

	Start Date	Term ofAgreement	Base Salary plusSuperannuationat 30 June 2012$	Noticeperiod fortermination(months)	Redundancypayment
DirectorsK G Rodgers	1 March 2012	3 years	234,350	6	6 months salary
Specified Executives
A J Randall	1 July 2010	3 years	128,510	1	6 months salary
D L Sammut	1 July 2010	3 years	196,200	1	6 months salary
A R Tong	1 July 2010	3 years	196,200	1	6 months salary

D Share Based Compensation

Options

Options are granted under the Intec Option Plan, which was approved by shareholders at the 2001 Annual General Meeting. All directors, employees and consultants are eligible to participate in the plan.

Options are granted under the plan for no additional consideration. Options are granted for a five year period, and vest and are exercisable immediately, unless otherwise stated.

Options are granted to directors, employees and consultants after a review of performances during the preceding year which is carried out in conjunction with the annual salary review. The granting of options is at the Board's discretion and no individual has a contractual right to receive options.

The terms and conditions of each grant of options affecting remuneration in the previous, this or future reporting periods are as follows:

Grant date	Expiry date	Exercise price	Value per optionat grant date	Date exercisable
21 November 2011	21 November 2016	$0.03	$0.0122	21 November 2011

Options granted under the plan carry no dividend or voting rights.

The exercise price of the options is based on the current market price on the date the options are granted as determined by the Board.

Details of options over ordinary shares in the Company provided as remuneration to each Director of Intec and each of the key management personnel of the Group are set out below. When exercisable, each option is convertible into one ordinary share of Intec. Further information on the options is set out in Notes 21 and 33.

2012Name	Balance atthe start ofthe year	Grantedduring theyear ascompensation	Exercisedduring theyear	Lapsedduringthe year	Balanceat theend ofthe year	Vested andexercisableat the endof the year
Directors of Intec Ltd
P R Wood	370,000	1,400,000	-	1,770,000	-	-
A J Moyes	190,000	500,000	-	690,000	-	-
T A Jones	15,000	400,000	-	-	415,000	415,000
K G Rodgers	210,000	1,200,000	-	90,000	1,320,000	1,320,000
J R G Bell	30,000	300,000	-	-	330,000	330,000
Other key management personnel of the Group
B A Banister	-	1,000,000	-	1,000,000	-	-
D W Clark	-	400,000	-	-	400,000	400,000
D J Purdie	-	400,000	-	400,000	-	-
A J Randall	60,000	400,000	-	30,000	430,000	430,000
D L Sammut	50,000	1,000,000	-	-	1,050,000	1,050,000
A R Tong	110,000	1,000,000	-	60,000	1,050,000	1,050,000

2011				Other	Balance	Vested and
Name	Balance at thestart of theyear	Granted duringthe year ascompensation	Exercisedduring theyear	changesduringthe year	at theend ofthe year	exercisableat the endof the year
Directors of Intec Ltd
P R Wood	370,000	-	-	-	370,000	370,000
A J Moyes	190,000	-	-	-	190,000	190,000
T A Jones	15,000	-	-	-	15,000	15,000
K G Rodgers	210,000	-	-	-	210,000	210,000
J R G Bell	30,000	-	-	-	30,000	30,000
	Other key management personnel of the Group
B A Banister	-	-	-	-	-	-
D W Clark	-	-	-	-	-	-
D J Purdie	-	-	-	-	-	-
D L Sammut	50,000	-	-	-	50,000	50,000
A R Tong	110,000	-	-	-	110,000	110,000

The assessed fair value at grant date of options granted to individuals is allocated equally over the period from grant date to vesting date, and the amount is included in the remuneration tables above. Fair values at grant date are determined using share option valuation models that take into account the exercise price, the term of the option, the impact of dilution, the share price at grant date, the expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.

There were 9.0 million options granted in the twelve (12) months to 30 June 2012 (Nil – 2011).

Shares provided on exercise of remuneration options

No ordinary shares in the Company were provided as a result of the exercise of remuneration options by a Director of Intec. No other options were exercised by any key management personnel of the Group.

Shares under option

Unissued ordinary shares of Intec under option at the date of this report are shown in Note 21.

Shares issued on the exercise of options

No ordinary shares of Intec were issued during the year ended 30 June 2012 on the exercise of options granted under the Intec Option Plan. No further shares have been issued on the exercise of options since that date. No amounts are unpaid on any of the shares.

E Shareholdings of Directors and Key Management Personnel

The number of shares in the company held at the end of the financial year by each Director of the Company and other key management personnel of the Group, including their personally related parties, are set out below. There were no shares granted during the reporting period as compensation.

2012	Balance at the	Received duringthe year on theexercise of	Otherchangesduring the	Balance atthe end ofthe
Name	start of the year	options	year	year
Ordinary shares
Directors of Intec Ltd
P R Wood	1,449,115	-	-	1,449,115
A J Moyes	286,004	-	-	286,004
T A Jones	268,954	-	-	268,954
K G Rodgers	112,956	-	14,666,667	14,779,623
J R G Bell	112,892	-	-	112,892
Other key management personnel of the Group
B A Banister	167,800	-	-	167,800
D W Clark	10,000	-	-	10,000
D J Purdie	20,000	-	-	20,000
A J Randall	-	-	-	-
D L Sammut	49,561	-	-	49,561
A R Tong	5,400	-	-	5,400

2011	Balance at the	Received duringthe year on theexercise of	Otherchangesduring the	Balance atthe end ofthe
Name	start of the year	options	year	year
Ordinary shares
Directors of Intec Ltd
P R Wood	449,115	-	1,000,000	1,449,115
A J Moyes	286,004	-	-	286,004
T A Jones	268,954	-	-	268,954
K G Rodgers	112,956	-	-	112,956
J R G Bell	112,892	-	-	112,892
Other key management personnel of the Group
B A Banister	167,800	-	-	167,800
D W Clark	10,000	-	-	10,000
D J Purdie	20,000	-	-	20,000
D L Sammut	49,561	-	-	49,561
A R Tong	5,400	-	-	5,400

F Additional Information

During the last five years Directors' total remuneration has decreased by an average of 7.5% per annum.

The main principles of the Group's Remuneration Policy are to link executive reward with the strategic goals and performance of the Group; align the interests of executives with those of shareholders; reward individual performance against appropriate benchmarks and targets; and ensure total remuneration is competitive by market standards.

Insurance of officers

The Company has, by Deed of Access, Indemnity and Insurance, paid a premium to insure the Directors and Officers of the Group in respect of certain legal liabilities, including costs and expenses in successfully defending legal proceedings, whilst they remain as Directors and Officers and for seven years thereafter. The insurance contract prohibits the disclosure of the total amount of the premiums and a summary of the nature of the liabilities covered.

Proceedings on behalf of the Company

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.

No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001.

Non audit services

The Group may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor's expertise and experience with the Company and/or the Group are important.

Details of the amounts paid or payable to the auditor (Crowe Horwath Sydney) for audit and nonaudit services provided during the year are set out below.

During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and non-related audit firms:

		Consolidated
		2012	2011
		$	$
	Assurance Services
1.	Audit services
	Audit and review of financial reports and other audit work under theCorporations Act 2001
	Crowe Horwath Sydney	69,200	67,000
	Total remuneration for audit services	69,200	67,000
2.	Non audit servicesTax compliance services, including review of company income tax
	returns	-	-
	Total remuneration for non audit services	-	-

Auditor's Independence Declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 17.

Rounding of Amounts

The Company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission, relating to the "rounding off" of amounts in the Directors' report. Amounts in the Directors' report have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.

Authorisation

This report is made in accordance with a resolution of Directors. The financial report was authorised for issue by the Directors on 28 September 2012. The Company has the power to amend and revise the financial report.

Kieran Rodgers Managing Director

Sydney 28 September 2012 Intec Ltd 2012 Annual Report Auditor's Independence Declaration

Consolidated Statement of Comprehensive Income

For the year ended 30 June 2012

			Consolidated
		2012	2011
	Notes	$'000	$'000
Revenue from continuing operations	5	2,825	8,038
Administration expense		(571)	(803)
Burnie Research Facility expenses		(136)	(156)
Depreciation and amortisation expense	6	(859)	(815)
Engineering and other consultants expenses		(761)	(374)
Employee benefits expense		(2,493)	(2,553)
Finance costs	6	(41)	(42)
Recouped environmental bond	6	3,648	778
Impairments expense	6	(492)	(325)
Occupancy expense	6	(323)	(343)
Research and development expenses	6	(271)	(32)
Treatment expense		(2,327)	(2,256)
Other expenses		(54)	-
(Loss)/Profit before income tax		(1,855)	1,117
Income tax benefit/(expense)	7	-	407
(Loss)/Profit from continuing operations		(1,855)	1,524
(Loss)/Profit from discontinued operations
after income tax	4	(1,184)	-
Net (Loss)/Profit for the year		(3,039)	1,524
Other comprehensive (loss)/incomeIncome tax relating to components		-	-
of other comprehensive income		-	-
Other comprehensive (loss)/income for the year,
net of income tax		-	-
Total comprehensive (loss)/income for the year		(3,039)	1,524
(Loss)/Profit attributable to:
Owners of Intec Ltd		(3,098)	1,524
Non-controlling interests		59	-
		(3,039)	1,524
Total comprehensive (loss)/income attributable to:
Owners of Intec Ltd		(3,098)	1,524
Non-controlling interests		59	-
		(3,039)	1,524
		Cents	Cents
(Loss)/Profit per share from continuing operations attributable
to the ordinary equity holders of the Company:
Basic profit/(loss) per share	32	(0.79)	0.83
Diluted profit/(loss) per share	32	(0.79)	0.82
(Loss)/Profit per share from discontinued operationsattributable to the ordinary equity holders of the Company:
Basic profit/(loss) per share	32	(0.49)	-
Diluted profit/(loss) per share	32	(0.49)	-
(Loss)/Profit per share attributable to the ordinary equity
holders of the Company:
Basic (loss)/profit per share	32	(1.28)	0.83
Diluted (loss)/profit per share	32	(1.28)	0.82

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

Consolidated Statement of Financial Position

As at 30 June 2012

			Consolidated
		2012	2011
	Notes	$'000	$'000
ASSETS
Current assets
Cash and cash equivalents	8	1,400	2,557
Trade and other receivables	9	544	911
Cash on Deposit - Environmental bonds	10	2,740	567
Inventories	11	33	43
Total current assets		4,717	4,078
Non current assets
Trade and other receivables	12	386	2,919
Other financial assets	13	46	28
Plant and equipment	14	2,041	2,701
Environmental bonds	15	-	3,660
Intangible assets	16	10	10
Total non current assets		2,483	9,318
Total assets		7,200	13,396
LIABILITIES
Current liabilities
Trade and other payables	17	407	1,169
Provisions	18	121	3,769
Total current liabilities		528	4,938
Non current liabilities
Provisions	19	1	21
Total non current liabilities		1	21
Total liabilities		529	4,959
Net assets		6,671	8,437
EQUITY
Contributed equity	20	71,642	70,416
Reserves	22	2,624	2,577
Accumulated losses	23	(67,654)	(64,556)
Total equity attributable to equity holders of the Company		6,612	8,437
Non-controlling interest		59	-
Total equity		6,671	8,437

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

Consolidated Statement of Changes in Equity

For the year ended 30 June 2012

Consolidated	ShareCapital	Reserves	AccumulatedLosses	NonControllingInterest	Total
	$'000	$'000	$'000	$'000	$'000
Balance at 1 July 2010	68,978	2,577	(66,080)	-	5,475
Comprehensive income
Profit after income tax expense for the year	-	-	1,524	-	1,524
Other comprehensive income for the year	-	-	-	-	-
Total comprehensive income for theyear	-	-	1,524	-	1,524
Transactions with owners in theircapacity as owners
Issue of shares, net of transaction costs	1,438	-	-	-	1,438
Total transactions with owners in theircapacity as owners	1,438	-	-	-	1,438
Balance at 30 June 2011	70,416	2,577	(64,556)	-	8,437
Balance at 1 July 2011	70,416	2,577	(64,556)	-	8,437
Comprehensive income
Loss after income tax expense for the year	-	-	(3,098)	59	(3,039)
Other comprehensive income for the year	-	-	-	-	-
Total comprehensive income for theyearTransactions with owners in theircapacity as owners	-	-	(3,098)	59	(3,039)
Issue of shares, net of transaction costs	1,226	-	-	-	1,226
Employee options granted	-	47	-	-	47
Total transactions with owners in theircapacity as owners	1,226	47	-	-	1,273
Balance at 30 June 2012	71,642	2,624	(67,654)	59	6,671

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

Consolidated Statement of Cash Flows

For the year ended 30 June 2012

			Consolidated
		2012	2011
	Notes	$'000	$'000
Cash flows from operating activities
Receipts from customers		3,075	1,108
Payments to suppliers and employees		(7,744)	(5,264)
Interest paid		(38)	(52)
Interest received		242	297
R&D tax offset received		-	407
Other receipts		1,135	5,013
Net cash (outflows)/inflows from operating activities	35	(3,330)	1,509
Cash flows from investing activities
Payments for plant and equipment		(280)	(91)
Payments for security deposits		-	(45)
Proceeds from security deposits refunded		1,643	95
Proceeds from sale or disposal
of property, plant & equipment		49	-
Payment for shares in listed companies		(465)	-
Payment for shares in unlisted companies		-	(1)
Net cash inflows/(outflows) from investing activities		947	(42)
Cash flows from financing activities
Proceeds from issues of shares		1,250	1,483
Proceeds from borrowings		-	-
Repayment of borrowings		-	(540)
Share issue costs		(24)	(45)
Net cash inflows from financing activities		1,226	898
Net (decrease)/(increase) in cash and cash equivalents		(1,157)	2,365
Cash and cash equivalents at the beginning of the financial year		2,557	192
Cash and cash equivalents at end of year	8	1,400	2,557
Financing arrangements	34
Non-cash financing and investing activities	34

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

Notes to the Financial Statements 30 June 2012

Contents

• 1 Summary of significant accounting policies
• 2 Financial risk management
• 3 Critical accounting estimates and judgements
• 4 Segment information
• 5 Revenue from continuing operations
• 6 Expenses
• 7 Income tax (benefit)/expense
• 8 Current assets Cash and cash equivalents
• 9 Current assets Trade and other receivables
• 10 Current assets Cash on Deposit Environmental bonds
• 11 Current assets Inventories at cost
• 12 Non current assets Trade and other receivables
• 13 Non current assets Other financial assets
• 14 Non current assets Plant and equipment
• 15 Non current assets Environmental bonds
• 16 Non current assets Intangible assets
• 17 Current liabilities Trade and other payables
• 18 Current liabilities Provisions
• 19 Non current liabilities Provisions
• 20 Contributed equity
• 21 Options
• 22 Reserves
• 23 Accumulated losses
• 24 Key management personnel disclosures
• 25 Contingencies
• 26 Commitments
• 27 Financial instruments
• 28 Related party transactions
• 29 Parent entity disclosures
• 30 Subsidiaries
• 31 Events occurring after the reporting date
• 32 Profit/(loss) per share
• 33 Share based payments
• 34 Non cash investing and financing activities
• 35 Reconciliation of profit/(loss) after income tax to net cash flows from operating activities
• 36 Auditor's remuneration
• 37 Company details

Notes to the Financial Statements 30 June 2012

1 Summary of significant accounting policies

These consolidated financial statements and notes represent those of Intec Ltd and controlled entities ('Consolidated Group' or 'Group'). The separate financial statements of the parent entity, Intec Ltd, have not been presented within this financial report as permitted by amendments made to the Corporations Act 2001 effective from 28 June 2010.

Basis of preparation

These general purpose financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001.

Compliance with International Financial Reporting Standards (IFRS)

The consolidated financial statements comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

Historical cost convention

The financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

Critical accounting estimates

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving either a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed below and in note 3.

Going concern statements

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 the carrying value of non-current assets, in particular the Burnie Research Facility, would not exceed the realisable value of such

Significant accounting policies

Accounting policies are selected and applied in a manner which ensures that the resultant financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of assets in an orderly sale process. The carrying value of the Burnie Research Facility is $1.713 million at 30 June 2012. 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 2012 and will continue to do so in the short to medium term 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 2012.

Hellyer Royalty

On 9 July 2012, the Group announced that it had agreed a re-structuring of the Hellyer Royalty with BSM. As a result, the Group has been granted a 2.5% Net Smelter Return Royalty (NSR Royalty) in relation to base metals extracted from the following tenements:

• RL11/1997: Mt Charter Retention Licence;
• EL48/2003: Mt Block Exploration Licence;
• EL24/2004: Bulgobac River Exploration Licence;
• CML103M/1987: Hellyer Mine Lease; and
• ML68M/1984: Que River Mine Lease.

The NSR Royalty is uncapped and Bass will have no first right of refusal (or pre-emptive rights) over the NSR Royalty as was previously the case with the Hellyer Royalty. In addition, the Group was issued 15 million shares in BSM for nil consideration. The Group previously held 3.1 million BSM shares and 3.1 million BSM options exercisable at $0.20. Following, the re-structuring, the Group holds a 5.85% interest in BSM.

The carrying value of the Hellyer Royalty was written down as at 30 June 2012 resulting in an expense to the profit and loss account of $1.184 million. The Group's carrying value of the Hellyer Royalty was based on the carrying value contained in the financial statements of BSM less royalty payments received. The Directors believe that this represented an appropriate valuation of the Hellyer Royalty and the subsequent impairment measure. No value has been assigned to the NSR Royalty.

the underlying transactions and other events is reported.

The Company has adopted relevant new and revised accounting standards and pronouncements with no material impact.

(a) Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the statement of comprehensive income over the

(b) Borrowing costs

Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed.

(c) Cash and cash equivalents

For statement of cash flow presentation purposes, cash and cash equivalents includes cash on hand and deposits held at call with financial institutions.

(d) Contributed equity

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(e) Employee benefits

(i) Wages and salaries and annual leave Liabilities for wages and salaries, including non monetary benefits and annual leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees' services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled.

(ii) Long service leave

The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

(iii) Share based payments

Share based compensation benefits are provided to employees via the Intec Option Plan. Information relating to the plan is set out in Note 33.

The fair value of options granted under the Intec Option Plan is recognised as an employee benefit expense with a corresponding increase in equity.

(f) Exploration expenditure

Exploration and evaluation expenditure comprises costs which are directly attributable to:

• researching and analysing existing exploration data;

The following significant accounting policies have been adopted in the preparation and presentation of the financial statements:

period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities, which are not an incremental cost relating to the actual draw down of the facility, are recognised as prepayments and amortised on a straight line basis over the term of the facility.

The fair value is measured at grant date and recognised over the period during which the employees become unconditionally entitled to the options.

The fair value at grant date is determined using share option valuation models that take into account the exercise price, the term of the option, the impact of dilution, the share price at grant date, the expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.

The fair value of the options granted is adjusted to reflect market vesting conditions, but excludes the impact of any non market vesting conditions (for example, profitability and sales growth targets). Non market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. At each reporting date, the entity revises its estimate of the number of options that are expected to become exercisable. The employee benefit expense recognised each period takes into account the most recent estimate.

Upon the exercise of options, the balance of the share based payments reserve relating to those options is transferred to share capital and the proceeds received, net of any directly attributable transaction costs, are credited to share capital.

• conducting geological studies, exploratory drilling and sampling;
• examining and testing extraction and treatment methods; and/or

• compiling pre-feasibility and feasibility studies.

Exploration and evaluation expenditure also includes costs incurred in acquiring mineral rights, the entry premiums paid to gain access to areas of interest and amounts payable to third parties to acquire interests in existing projects.

Exploration and evaluation expenditures in relation to separate areas of interest are capitalised in the year in which they are incurred and are carried at cost less accumulated impairment losses where the following conditions are satisfied:

(i) the rights to tenure of the area of interest are current; and

• (ii) at least one of the following conditions is also met:
  • the exploration and evaluation expenditures are expected to be recouped through successful development and production from the area of interest, or alternatively, by its sale, or
  • exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a

(g) Fair value estimation

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement and for disclosure purposes.

The nominal value less estimated credit adjustments of trade receivables and payables are assumed to

(h) Financial instruments

(i) Recognition and initial measurement Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the company commits itself to either the purchase or sale of the asset (ie trade date accounting is adopted).

Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified "at fair value through profit or loss", in which case transaction costs are expensed to profit or loss immediately.

(ii) Classification and subsequent measurement Finance instruments are subsequently measured at fair value, amortised cost using the effective interest rate method, or cost.

Amortised cost is the amount at which the financial asset or financial liability is measured at initial recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative amortisation of the difference between that initial amount and the maturity amount calculated using the effective interest method.

Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to the area of interest are continuing.

Capitalised exploration and evaluation expenditure is reviewed for impairment at each reporting date.

Subsequent recovery of the resulting carrying value depends on successful development of the area of interest or sale of the project. If a project does not prove viable, all irrecoverable costs associated with the project and any related impairment provisions are written off.

Where a decision is made to proceed with development, accumulated expenditure is tested for impairment, and transferred to development properties, and then amortised over the life of the reserves associated with the area of interest once mining operations have commenced.

approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments.

securities, including recent arm's length transactions, reference to similar instruments and option pricing models.

The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense item in profit or loss.

The Group does not designate any interests in subsidiaries, associates or joint venture entities as being subject to the requirements of Accounting Standards specifically applicable to financial instruments.

(iii) Financial assets at fair value through profit or loss

Financial assets are classified at "fair value through profit or loss" when they are held for trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a Group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss.

(iv) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost.

Loans and receivables are included in current assets, where they are expected to mature within 12 months after the end of the reporting period.

(v) Financial liabilities

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost.

(vi) Impairment

At the end of each reporting period, the Group assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in profit or loss. Also, any cumulative decline in fair value previously recognised in other comprehensive income is reclassified to profit or loss at this point.

vii) Financial guarantees

Where material, financial guarantees issued that require the issuer to make specified payments to

(i) Foreign currency translation

(i) Functional and presentation currency

Items included in the financial statements of each of the Group's entities are measured in Australian dollars and the consolidated financial statements are presented in Australian dollars, which is the Group's functional and presentation currency.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates

(j) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net

(k) Impairment of assets

In respect of non-current assets, each asset or cash generating unit is evaluated every reporting period reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due are recognised as a financial liability at fair value on initial recognition.

The guarantee is subsequently measured at the higher of the best estimate of the obligation and the amount initially recognised less, when appropriate, cumulative amortisation in accordance with AASB 118: Revenue. Where the entity gives guarantees in exchange for a fee, revenue is recognised under AASB 118.

The fair value of financial guarantee contracts has been assessed using a probability-weighted discounted cash flow approach. The probability has been based on:

• the likelihood of the guaranteed party defaulting in a year period;
• the proportion of the exposure that is not expected to be recovered due to the guaranteed party defaulting; and
• the maximum loss exposed if the guaranteed party were to default.

(viii) De-recognition

Financial assets are de-recognised where the contractual rights to receipt of cash flows expire or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are discharged, cancelled or expired. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of noncash assets or liabilities assumed, is recognised in profit or loss.

prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.

amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement of financial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.

to determine whether there are any indications of impairment. If any such indication exists, a formal estimate of recoverable amount is performed and an impairment loss is recognised to the extent that carrying amounts exceed recoverable amount. The recoverable amount of an asset or cash-generating group of assets is measured at the higher of fair value less costs to sell and value in use.

Fair value is determined as the amount that would be obtained from the sale of the asset in an arm's length transaction between knowledgeable and willing parties, and is generally determined as the present value of the estimated future cash flows expected to arise from the continued use of the asset and its eventual disposal. Value in use is also generally determined as the present value of the estimated future cash flows, but only those expected to arise from the continued use of the asset in its present form and its eventual disposal. Present values are determined using a risk-adjusted pre-tax discount rate appropriate to the risks inherent in the asset. Future cash flow estimates are based on expected production and sales volumes, commodity prices (considering current and historical prices, price trends and related factors), reserves, operating costs, restoration and rehabilitation costs and future capital expenditure. This policy requires management to make these estimates and assumptions, which are subject to

(l) Income tax

The income tax expense or revenue for the period is the tax payable on the current period's taxable income based on the Australian income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses or to the extent that they will be offset by deferred income tax liabilities which will reverse in the same periods.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in risk and uncertainty; hence there is a possibility that changes in circumstances will alter these projections, which may impact the recoverable amount of the assets. In such circumstances, some or all of the carrying value of the assets may be impaired and the impairment would be charged against the statement of comprehensive income.

Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash generating units). Non financial assets other than goodwill that suffer impairment are reviewed for possible reversal of the impairment at each reporting date.

subsidiaries where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.

Tax consolidation legislation

Intec Ltd and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under tax consolidation legislation. Each entity in the Group recognises its own current and deferred tax assets and liabilities. Such taxes are measured using the 'stand-alone taxpayer' approach to allocation. Current tax liabilities (assets) and deferred tax assets arising from unused tax losses and tax credits in the subsidiaries are immediately transferred to the head entity. The Group notified the Australian Taxation Office that it had formed an income tax consolidated group to apply from 1 July 2008. The tax consolidated group has entered a tax funding arrangement whereby each company in the Group contributes to the income tax payable by the Group in proportion to their contribution to the Group's taxable income. Differences between the amounts of net tax assets and liabilities derecognised and the net amounts recognised pursuant to the funding arrangement are recognised as either a contribution by, or distribution to the head entity.

(m) Intangible assets

Costs incurred in respect of intellectual property are capitalised to the extent that it is expected that the asset may be realised in the future. Intellectual property has an indefinite useful life and is not subject to amortisation and is tested for impairment annually.

(n) Inventories

Inventories are valued at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

The methods used to assign costs to inventories are actual invoiced costs.

(o) Investments

Non-current investments in subsidiaries are measured on the cost basis. The carrying amount of non current investments is reviewed annually by Directors to ensure it is not in excess of the recoverable amount of these investments.

(p) Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases (Note 26). Payments made under operating leases (net of any incentives received from the lessor) are charged to the statement of comprehensive income on a straight line basis over the period of the lease.

(q) Earnings per share

(i) Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.

(r) Plant and equipment

All plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred.

Increases in the carrying amounts arising on revaluation of items of plant and equipment are credited, net of tax, to the asset revaluation reserve in shareholders' equity. To the extent that the increase reverses a decrease previously recognised in the statement of comprehensive income, the increase is first recognised in the statement of comprehensive income. Decreases that reverse previous increases of the same asset are first charged against revaluation reserves directly in equity to the extent of the remaining reserve attributable to the asset; all other

(s) Principles of consolidation

(i) Subsidiaries

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Intec

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

decreases are charged to the statement of comprehensive income.

Depreciation on assets is calculated using the straight line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives, as follows:

• Burnie Research Facility 3-10 years
• Office equipment 2-8 years
• Plant and equipment 4-7 years

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount (note 1(k)).

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the statement of comprehensive income. When revalued assets are sold, it is Group policy to transfer the amounts included in other reserves in respect of those assets to retained earnings.

Ltd as at 30 June 2012 and the results of all subsidiaries for the year then ended. Intec Ltd and its subsidiaries together are referred to in these financial statements as the Group.

Subsidiaries are all those entities over which the Group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group.

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Investments in subsidiaries are accounted for at cost in the individual financial statements of the Company.

(ii) Associates

Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting, after initially being recognised at cost.

The Group's share of its associates' post acquisition profits or losses is recognised in the statement of

(t) Business combinations

Business combinations occur where an acquirer obtains control over one or more businesses.

A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The business combination will be accounted for from the date that control is attained, whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities) assumed is recognised (subject to certain limited exemptions).

When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent consideration arrangement is also included. Subsequent to initial comprehensive income, and its share of post acquisition movements in reserves is recognised in reserves. The cumulative post acquisition movements are adjusted against the carrying amount of the investment.

When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured long term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.

(iii) Joint Ventures

A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control. Joint control is the contractually agreed sharing of control such that significant operational and financial decisions require the unanimous consent of the parties sharing control.

Jointly controlled operations ('JCO's): a JCO is a joint venture in which the venturers have joint control over the operations of the joint venture. JCO's do not involve the establishment of a corporation, partnership or other entity. Each participant derives benefit from the joint activity through a share of production, rather than by receiving a share of the results of trading. The Group's proportionate interest in the assets, liabilities, revenues, expenses and cash flows of JCO's are incorporated into the Group's financial statements under the appropriate headings.

Where necessary, adjustments are made to the results of subsidiaries, joint ventures and associates to bring their accounting policies into line with those used by the Group.

recognition, contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability is remeasured each reporting period to fair value, recognising any change to fair value in profit or loss, unless the change in value can be identified as existing at acquisition date.

All transaction costs incurred in relation to the business combination are expensed to the statement of comprehensive income.

The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.

(u) Provisions

(i) General

Provisions for legal claims are recognised when:

• the Group has a present legal or constructive obligation as a result of past events;
• it is more likely than not that an outflow of resources will be required to settle the obligation; and
• the amount has been reliably estimated.

Provisions are not recognised for future operating losses.

(ii) Provisions for close down and restoration and for environmental clean up costs

Close down and restoration costs include the dismantling and demolition of infrastructure and the removal of residual materials and remediation of disturbed areas. Estimated close down and restoration costs are provided for in the accounting period when the obligation arising from the related disturbances occurs, whether this occurs during the mine development or during the production phase, based on the net present value of estimated future costs. Provisions for close down and restoration costs do not include any additional obligations which are expected to arise on the basis of a closure plan. The cost estimates are calculated annually during the life of the operation to reflect known developments e.g. updated cost estimates and revisions to the estimated lives of operations, and are subject to formal review at regular intervals.

Close down and restoration costs are a normal consequence of mining, and the majority of close down and restoration expenditure is incurred at the

(v) Revenue and other income recognition

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of treatment charges, trade allowances, rebates and amounts collected on behalf of third parties.

The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the Group and specific criteria have been met for each of the Group's activities described below. The amount of revenue is not considered to be reliably measurable until all contingencies relating to the sale have been resolved. The Group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and specifics of each arrangement.

Revenue is recognised for the major business activities as follows:

(i) Sales of goods and disposal of assets Income from sales of goods and disposal of other assets is recognised when the Group has passed control of the goods or other assets to the buyer.

end of the life of the mine. Although the actual cost to be incurred is uncertain, the Group's management has estimated these respective costs based on feasibility studies, relevant government assessments and engineering studies using current restoration standards and techniques.

The amortisation or 'unwinding' of the discount applied in establishing the net present value is charged to the statement of comprehensive income in each accounting period. The amortisation of the discount is shown as a financing cost, rather than as an operating cost.

The initial closure provision together with other movements in the provisions for close down and restoration costs, including those resulting from new disturbance, updated cost estimates, changes to the estimated lives of operations and revisions to discount rates are capitalised within plant and equipment. These costs are then depreciated over the lives of the assets to which they relate.

As noted above, the ultimate cost of environmental remediation is uncertain and cost estimates can vary in response to many factors including changes to the relevant legal requirements, the emergence of new restoration techniques or experience at other mine sites. The expected timing of expenditure can also change, for example, in response to changes in ore reserves or production rates. As a result there could be significant adjustments to the provision for close down and restoration and environmental clean up, which would affect future financial results.

(ii) Interest revenue

Interest revenue is recognised on an accrual basis, taking into account the interest rates applicable to financial assets.

(iii) Management fees

Management fees are charged to subsidiaries on a cost basis for services provided and recognised as revenue in the statement of comprehensive income of the Company.

(iv) Consulting services and treatment fees

Revenue from consulting services and treatment fees are recognised using the percentage-of-completion method for fixed-fee arrangements or as the services are provided for time-and-materials arrangements.

(v) Other income

Other income, which includes government grants and any other forms of government assistance, is recognised on receipt or when reasonable assurance that income will be earned is established.

(vi) General

All revenue is stated net of goods and services tax (GST).

(w) Rounding of amounts

The Group is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission, relating to the "rounding off" of amounts in the financial statements. Amounts in the financial statements have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.

(x) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Managing Director.

(y) Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Trade receivables are generally due for settlement within 30 days.

(z) Trade and other payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

(aa) Dividends

Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of reporting period but not distributed at the end of the reporting period.

(ab) New Accounting Standards and interpretations

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the Group for the annual reporting period ended 30 June 2012. A discussion of those future requirements and their impact on the Group is as follows:

• AASB 9 Financial Instruments, 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 and 2010-7 Amendments to Australian Accounting Standards arising from AASB 9.

This standard and its consequential amendments are applicable to annual reporting periods beginning on or after 1 January 2013 and completes phase I of the IASB's project to replace IAS 39 (being the international equivalent to AASB 139 'Financial Instruments: Recognition and Measurement'). This standard introduces new classification and measurement models for financial assets, using a single approach to determine whether a financial asset is measured at amortised cost or fair value. To be classified and measured at amortised cost, assets must satisfy the business model test for managing the financial assets and have certain contractual cash flow characteristics. All other financial instrument assets are to be classified and measured at fair value. This standard allows an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not held-for-trading) in other comprehensive income, with dividends as a return on these investments being recognised in profit or loss. In addition, those equity instruments measured at fair value through other comprehensive income would no longer have to apply any impairment requirements nor would there be any 'recycling' of gains or losses through profit or loss on disposal. The accounting for financial liabilities continues to be classified and measured in accordance with AASB 139, with one exception, being that the portion of a change of fair value relating to the entity's own credit risk is to be presented in other comprehensive income unless it would create an accounting mismatch. The consolidated entity will adopt this standard from 1 July 2013 but the impact of its adoption is yet to be assessed by the consolidated entity.

• AASB 2010-8 Amendments to Australian Accounting Standards- Deferred Tax: Recovery of Underlying Assets

These amendments are applicable to annual reporting periods beginning on or after 1 January 2012 and a practical approach for the measurement of deferred tax relating to investment properties measured at fair value, property, plant and equipment and intangible assets measured using the revaluation model. The measurement of deferred tax for these specified assets is based on the presumption that the carrying amount of the underlying asset will be recovered entirely through sale, unless the entity has clear evidence that economic benefits of the underlying asset will be consumed during its economic life. The consolidated entity is yet to quantify the tax effect of adopting these amendments from 1 July 2012.

- AASB 10 Consolidated Financial Statements

This standard is applicable to annual reporting periods beginning on or after 1 January 2013. The standard has a new definition of 'control'. Control exists when the reporting entity is exposed, or has the rights, to variable returns (e.g. dividends, remuneration, returns that are not available to other interest holders including losses) from its involvement with another entity and has the ability to affect those returns through its 'power' over that other entity. A reporting entity has power when it has rights (e.g. voting rights, potential voting rights, rights to appoint key management, decision making rights, kick out rights) that give it the current ability to direct the activities that significantly affect the investee's returns (e.g. operating policies, capital decisions, appointment of key management). The consolidated entity will not only have to consider its holdings and rights but also the holdings and rights of other shareholders in order to determine whether it has the necessary power for consolidation purposes. The adoption of this standard from 1 July 2013 may have an impact where the consolidated entity has a holding of less than 50% in an entity, has de facto control, and is not currently consolidating that entity.

• AASB 11 Joint Arrangements

This standard is applicable to annual reporting periods beginning on or after 1 January 2013. The standard defines which entities qualify as joint ventures and removes the option to account for joint ventures using proportional consolidation. Joint ventures, where the parties to the agreement have the rights to the net assets will use equity accounting. Joint operations, where the parties to the agreements have the rights to the assets and obligations for the liabilities will account for the assets, liabilities, revenues and expenses separately, using proportionate consolidation. The adoption of this standard from 1 July 2013 will not have a material impact on the consolidated entity.

• AASB 12 Disclosure of Interests in Other Entities

This standard is applicable to annual reporting periods beginning on or after 1 January 2013. It contains the entire disclosure requirement associated with other entities, being subsidiaries, associates and joint ventures. The disclosure requirements have been significantly enhanced when compared to the disclosures previously located in AASB 127 'Consolidated and Separate Financial Statements', AASB 128 'Investments in Associates', AASB 131 'Interests in Joint Ventures' and Interpretation 112 'Consolidation – Special Purpose Entities'. The adoption of this standard from 1 July 2013 will significantly increase the amount of disclosures required to be given by the consolidated entity such as significant judgements and assumptions made in determining whether it has a controlling or non-controlling interest in another entity and the type of non-controlling interest and the nature and risks involved.

• AASB 13 Fair Value Measurement and AASB 2011-8 Amendments to Australian Accounting Standards arising from AASB 13

This standard and its consequential amendments are applicable to annual reporting periods beginning on or after 1 January 2013. The standard provides a single robust measurement framework, with clear measurement objectives, for measuring fair value using the 'exit price' and it provides guidance on measuring fair value when a market becomes less active. The 'highest and best use' approach would be used to measure assets whereas liabilities would be based on transfer value. As the standard does not introduce any new requirements for the use of fair value, its impact on adoption by the consolidated entity from 1 July 2013 should be minimal, although there will be increased disclosures where fair value is used.

• AASB 127 Separate Financial Statements (Revised) and AASB 128 Investments in Associates and Joint Ventures (Reissued)

These standards are applicable to annual reporting periods beginning on or after 1 January 2013. They have been modified to remove specific guidance that is now contained in AASB 10, AASB 11 and AASB 12. The adoption of these revised standards from 1 July 2013 will not have a material impact on the consolidated entity.

• AASB 119 Employee Benefits (September 2011)

This revised standard is applicable to annual reporting periods beginning on or after 1 January 2013. The amendments eliminate the corridor approach for the deferral of gains and losses; streamlines the presentation of changes in assets and liabilities arising from defined benefit plans, including requiring remeasurements to be presented in other comprehensive income; and enhances the disclosure requirements for defined benefit plans. The adoption of the revised standard from 1 July 2013 will require increased disclosures by the consolidated entity.

• AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirement

These amendments are applicable to annual reporting periods beginning on or after 1 July 2013, with early adoption not permitted. They amend AASB 124 'Related Party Disclosures' by removing the disclosure requirements for individual key management personnel ('KMP'). The adoption of these amendments from 1 July 2013 will remove the duplication of information relating to individual KMP in the notes to the financial statements and the directors report. As the aggregate disclosures are still required by AASB 124 and during the transitional period the requirements may be included in the Corporations Act or other legislation, it is expected that the amendments will not have a material impact on the consolidated entity.

• AASB 2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards

The amendments are applicable to annual reporting periods beginning on or after 1 January 2013. The amendments make numerous consequential changes to a range of Australian Accounting Standards and Interpretations, following the issuance of AASB 10, AASB 11, AASB 12 and revised AASB 127 and AASB 128. The adoption of these amendments from 1 July 2013 will not have a material impact on the consolidated entity.

• AASB 2011-9 Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income

These amendments are applicable to annual reporting periods beginning on or after 1 July 2012. The amendments requires grouping together of items within other comprehensive income on the basis of whether they will eventually be 'recycled' to the profit or loss (reclassification adjustments). The change provides clarity about the nature of items presented as other comprehensive income and the related tax presentation. The adoption of the revised standard from 1 July 2012 will impact the consolidated entity's presentation of its statement of comprehensive income.

The Group does not anticipate the early adoption of any of the above Australian Accounting Standards.

2 Financial risk management

The Group's activities expose it to a variety of financial risks: market risk (including currency risk, cash flow and fair value interest rate risk and price risk), credit risk, liquidity risk and commodity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. Risk management is carried out by company management and the Board of Directors. Financial risks are identified and evaluated and, where considered necessary, strategies are put in place to investigate and/or minimise such risks. For additional discussion of the Group's financial risks, refer to Note 27.

(a) Foreign exchange risk

Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the entity's functional currency. Currency protection measures may be deemed appropriate in specific commercial circumstances and are subject to strict limits laid down by the Board. The Group has not entered into any foreign currency hedging contracts during the year.

(b) Credit risk

Credit risk arises from the potential failure of counterparties to meet their obligations under the respective contracts at maturity. The Group has policies in place to ensure that sales of product are made to customers with an appropriate credit history. There is limited credit risk on financial assets of the Group since there is limited exposure

short term deposits and receivables which have been recognised in the statement of financial position. Deposits and financial arrangements are

held in high rated financial institutions.

(c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed finance facilities. (Refer notes 27(c)(ii) and 34).

(d) Cash flow and fair value interest rate risk

The Group's interest rate risk arises from borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk.

(e) Commodity price risk

The Group's normal policy is to sell its products at prevailing market prices. Exceptions to this rule are subject to strict limits laid down by the Board and to rigid internal controls. The Group has not entered into any commodity price hedging contracts during the year.

3 Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results.

The carrying value of the Hellyer Royalty was written down as at June 20 2012 resulting in an expense to the profit and loss account of $1.184

Provision for restoration and rehabilitation

The Group's accounting policy requires the recognition of provisions for the restoration and rehabilitation of relevant operating sites. The provision recognised represents management's best estimate of the present value of the future costs required. Significant estimates and assumptions are made in determining the amount of restoration and rehabilitation provisions. Those estimates and assumptions deal with uncertainties such as: changes to the relevant legal and regulatory framework; the magnitude of possible contamination and the timing, extent and costs of required restoration and rehabilitation activity.

The provision recognised for each site is periodically reviewed and updated based on the facts and circumstances available at the time. Changes to the estimated future costs for operating sites are recognised in the statement of financial position by

Income taxes

The Group is subject to income taxes in Australia. Significant judgement is required in determining the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary million. The Group's carrying value of the Hellyer Royalty was based on the carrying value contained in the financial statements of BSM less royalty payments received. The Directors believe that this represented an appropriate valuation of the Hellyer Royalty and the subsequent impairment measure.

The Group has identified the following critical accounting policies under which significant judgements, estimates and assumptions are made and where actual results may differ from these estimates under different assumptions and conditions and may materially affect financial results or the financial position reported in future periods.

adjusting both the restoration and rehabilitation asset and provision. Such changes give rise to change in future depreciation and interest charges. For closed sites, changes to estimated costs are recognised immediately in the statement of comprehensive income.

During the year, the Group completed the disposal of its legacy stockpiles of electric arc furnace ("EAF") dust in both Tasmania and Victoria. The complete disposal of the EAF dust stockpiles allowed the Group to obtain the return of cash-backed environmental bonds. As a result, the provision raised against the environmental bond lodged with the EPA Victoria was reversed in full resulting in a credit to profit and loss of $3.648 million at 30 June 2012 (Refer to Note 18.) The Tasmanian provision was written back in full in the 2011 financial year.

course of business. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such

differences will impact the current and deferred tax provisions in the period in which such determination is made. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable

Hellyer Royalty

The carrying value of the Hellyer Royalty was written down as at 30 June 2012 resulting in an expense to the profit and loss account of $1.184 million. The Group's carrying value of the Hellyer Royalty was based on the carrying value contained in the financial statements of BSM less royalty payments received. The 2011 non-current assets of the Group included an amount of $2.756 million representing a valuation of the Hellyer royalty. In its 30 June 2010 financial amounts will be available to utilise those temporary differences and losses or to the extent that they will be offset by deferred income tax liabilities which will reverse in the same periods.

statements, BSM adopted a valuation of $2.794 million (2009: $2.756 million) for the Hellyer royalty. BSM's 2009 valuation of the Hellyer royalty was adopted by the Directors and accounted for as a profit from discontinued operations and a non-current asset. The Directors believe that this represented an appropriate valuation of the Hellyer Royalty and the subsequent impairment measure.

4 Segment information

(a) Geographical segments The Group operates in primarily one geographical segment, namely Australia.

(b) Business segments

The Group operates in the following industries:

(i) Metal in concentrate

Production of metal in concentrate from tailings at the Hellyer mine site. These operations were carried out until 31 July 2008 by the Hellyer Zinc Concentrate Project Joint Venture in which the Group had a 50% interest. The Joint Venture commenced on 1 December 2006 and ended on 31 July 2008. From 1 August 2008 until 8 September 2008 operations at Hellyer were fully owned and operated by the Group.

(ii) Research and Development

The Group continues to undertake research and development activities with respect to the commercialisation of the Intec Process technology including operation of the Burnie Research Facility and provision of testwork and engineering services to third parties.

(c) Segment reporting – business segments, 2012

(i) Segment Revenue

	Discontinued operations(Metal in concentrate)$'000	R & D$'000	Consolidated$'000
Sales to external customers	-	2,450	2,450
Total sales revenue	-	2,450	2,450
Other revenue	-	14	14
Total segment revenue	-	2,464	2,464
Intersegment elimination			-
Unallocated revenue	-	-	361
Consolidated revenue			2,825
(ii)Segment Result
Segment profit/(loss) before tax	(1,184)*	923	(261)
Intersegment elimination	-	-	-
Unallocated profit/(loss)	-	-	(2,778)
Profit/(loss) before income tax	(1,184)	923	(3,039)
Income tax benefit/(expense)	-	-	-
Profit/(loss) for the year	(1,184)	923	(3,039)

*Refer to Note 3

(iii)	Segment assets and liabilities	Discontinued operations(Metal in concentrate)$'000	R & D$'000	Consolidated$'000
	Segment assets	-	4,942	4,942
	Intersegment elimination			-
	Unallocated assets			2,253
	Total assets			7,200
	Segment liabilities	-	323	323
	Intersegment elimination			-
	Unallocated liabilities			201
	Total liabilities			528
(iv)	Other segment information
	Acquisition of plant & equipment	-	(280)	(280)
	Unallocated			-
	Total acquisition			(280)
	Depreciation expense	-	708	708
	Unallocated			151
	Total depreciation expense			859
(v)	Cash flow information
	Net cash flow from operating activities	-	(1,826)	(1,826)
	Unallocated			(1,504)
	Total cash flow from operating activities			(3,330)
	Net cash flow from investing activities	-	1,643	1,643
	Unallocated			(696)
	Total cash flow from investing activities			947
	Net cash flow from financing activities	-	-	-
	Unallocated			1,226
	Total cash flow from financing activities			1,226
(c)(i)	Segment reporting – business segments, 2011Segment Revenue
		Discontinued operations(Metal in concentrate)$'000	R & D$'000	Consolidated$'000
	Sales to external customers	-	1,775	1,775
	Total sales revenue	-	1,775	1,775
	Other revenue	-	-	-
	Total segment revenue	-	1,775	1,775
	Intersegment elimination			-
	Unallocated revenue			6,263
	Consolidated revenue			8,038

(ii)	Segment Result	Discontinued operations(Metal in concentrate)$'000	R & D$'000	Consolidated$'000
	Segment profit/(loss) before tax	-	(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
(iii)	Segment assets and 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
(iv)	Other segment information
	Acquisition of plant & equipment	-	-	-
	Unallocated			91
	Total acquisition			91
	Depreciation expense	-	707	707
	Unallocated			108
	Total depreciation expense			815
(v)	Cash flow information
	Net cash flow from operating activities	-	(282)	(282)
	Unallocated			1,791
	Total cash flow from operating activities			1,509
	Net cash flow from investing activities	-	95	95
	Unallocated			(137)
	Total cash flow from investing activities			(42)
	Net cash flow from financing activities	-	-	-
	Unallocated			898
	Total cash flow from financing activities			898

(e) Basis of accounting for purposes of reporting by operating segments

(i) Accounting policies adopted

Unless stated otherwise as detailed in Note 1.

(ii) Intersegment transactions

There are no intersegment transactions.

(iii) Segment assets

Where an asset is used across multiple segments, the asset is allocated to that segment that receives majority economic value from that asset. In the majority of instances, segment assets are clearly identifiable on the basis of their nature and physical location.

(iv) Segment liabilities

Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the operations of the segment. Borrowings and tax liabilities are generally considered to relate to the Group as a whole and are not allocated. Segment liabilities include trade and other payables.

(v) Unallocated items

The following items of revenue, expenses, assets and liabilities are not allocated to operating segments as they are not considered part of the core operations of any segment:

• impairment of assets and other non-recurring items of revenue or expense;
• income tax expense;
• current tax liabilities;
• other financial liabilities; and
• intangible assets.

(f) Major customers

The Group has a number of customers to whom it provides both products and services. The Group has a contract for a technology development and engineering program for a project in the Islamic Republic of Iran (2012: $1.4 million) (2011: $0.440 million) The Group has a contract for the sale of low-grade zinc-bearing product with the Victorian-based Kanins Group (2012: $0.867 million) (2011: $0.717 million). The Group had an agreement with GB Galvanising to develop a spent pickle liquor recycling technology (2012: $0.158 million) (2011: $0.290 million).

5 Revenue from continuing operations

		Consolidated
	2012	2011
	$'000	$'000
Sales revenue
Consulting fees	1,583	1,058
Product sales	867	717
	2,450	1,775
Other revenue
Interest received	249	347
Other income	-	5,000
Recognition of deferred income	-	812
Options income	-	98
Government subsidies	111	-
Sundry income	15	6
	375	6,263
Total revenue	2,825	8,038

6 Expenses

Profit/(loss) before income tax includes the following specific expenses

		Consolidated
	2012	2011
Depreciation
Plant and equipment	140	94
Office furniture and equipment	11	7
Burnie Research Facility	708	714
Total depreciation recognised in statement of comprehensive income
	859	815
Finance costs
Interest and finance charges paid/payable – others	41	42
Foreign exchange (gains)/losses	(5)	(11)
Occupancy expense	323	343
(Recouped) environmental bond	(3,648)	(778)
Impairments expense	492	325
Research and development	271	32

7 Income tax (benefit)/expense Consolidated 2012 2011 $'000 $'000 (a) The components of income tax (benefit)/expense comprise Current tax - - Deferred tax (1,560) 452 Tax losses (recouped)/not recognised 1,560 (452) Under/over provision of income tax - (407) Income tax (benefit)/expense - (407) (b) Reconciliation of income tax (benefit)/expense to prima facie tax payable Profit/(loss) from operations before income tax (benefit)/expense (3,039) 1,117 Tax at the Australian tax rate of 30% (2011 - 30%) (912) 335 Tax effect of amounts which are not deductible (taxable) in calculating taxable income: Non allowable items 13 117 Tax losses not recognised/(recouped) 1,560 (452) Temporary differences not recognised (661) - Under/over provision of income tax - (407) Income tax (benefit)/expense - (407) (c) Unrecognised tax losses Unused tax losses for which no deferred tax asset has been recognised 61,949 56,747 Potential tax benefit @ 30% (2011 – 30%) 18,585 17,024

All unused tax losses were incurred by Australian entities.

Temporary differences of $649,000 were recouped during the year following the reversal of impairment expenses.

The benefit for tax losses will only be obtained if:

• (i) the Group derives future assessable income of a nature and an amount sufficient to enable the benefit from the deductions for the losses and temporary difference to be realised;
• (ii) the Group complies with the conditions for deductibility imposed by the tax legislation; and
• (iii) no changes in tax legislation adversely affect the Group in realising the benefit from deductions for the losses and temporary differences.

In addition, the availability of certain tax losses is subject to the Group successfully establishing deductibility, and in particular, satisfying the continuity of ownership test and the same business test.

(d) Tax consolidation legislation

The Company and its wholly-owned Australian subsidiaries have implemented the tax consolidation legislation with effect from 1 July 2008.

(e) Dividends

	Consolidated
	2012	2011
	$'000	$'000
Final Dividend	-	-
Franking account credits	-	-
8Current assets - cash and cash equivalents
	Consolidated
	2012	2011
	$'000	$'000
Cash at bank and on hand	1,400	2,557
	1,400	2,557

(a) Reconciliation to cash at the end of the year

The above figures are reconciled to cash at the end of the financial year as shown in the statement of cash flows.

(b) Cash at bank and on hand

These are interest bearing at interest rates between 3.45% and 5.10% (2011 – 2.9 % and 6.00%).

9 Current assets - trade and other receivables

		Consolidated
	2012	2011
	$'000	$'000
Trade debtors	46	878
GST receivables	11	-
Other receivables	469	11
Prepayments	18	22
	544	911

(a) Provision for impairment of receivables

Current trade and other receivables are generally on 30-day terms. Non-current trade and other receivables are assessed for recoverability based on the underlying terms of the contract. A provision for impairment is recognised when there is objective evidence that an individual trade or other receivable is impaired. These amounts have been included in the other expenses item. There is no provision for impairment of receivables at 30 June 2012 and no movement in the provision during the year.

(b) Credit Risk — trade and other receivables

The Group has no significant concentration of credit risk with respect to any single counterparty or group of counterparties other than those receivables specifically provided for and mentioned within this note.

The class of assets described as trade and other receivables is considered to be the main source of credit risk related to the Group. On a geographical basis, the Group has no significant credit risk exposure. The Group does not hold any financial assets with terms that have been renegotiated, which would otherwise be past due or impaired.

The following table details the Group's trade and other receivables exposed to credit risk (prior to collateral and other credit enhancements) with ageing analysis and impairment provided for thereon. Amounts are considered as 'past due' when the debt has not been settled, with the terms and conditions agreed between the Group and the customer or counterparty to the transaction. Receivables that are past due are assessed for impairment by ascertaining solvency of the debtors and are provided for where there are specific circumstances indicating that the debt may not be fully repaid to the Group.

The balances of receivables that remain within initial trade terms (as detailed in the table) are considered to be of high credit quality.

2012	Grossamount	Past due andimpaired			Past due but not impaired		Within initialtrade terms
			< 30	31-60	61-90	> 90
	$'000	$'000	$'000	$'000	$'000	$'000	$'000
Trade debtors	46	-	-	-	-	-	46
GST receivables	11	-	-	-	-	-	11
Other receivables	469	-	-	-	-	-	469
Prepayments	18	-	-	-	-	-	18
Total	544	-	-	-	-	-	544

2011	Grossamount	Past due andimpaired			Past due but not impaired		Within initialtrade terms
			< 30	31-60	61-90	> 90
	$'000	$'000	$'000	$'000	$'000	$'000	$'000
Trade debtors	878	-	-	-	-	-	878
Other receivables	11	-	-	-	-	-	11
Prepayments	22	-	-	-	-	-	22
Total	911	-	-	-	-	-	911

(c) Collateral held as security and pledged

There is no trade debtor or other receivable amounts where collateral has been received as security or pledged.

(d) Financial assets classified as loans and receivables

	Note	Consolidated
		2012	2011
		$'000	$'000
Trade debtors	9	46	878
GST receivables	9	11	-
Other receivables	9	469	11
		526	889

10 Current assets – Cash on Deposit - Environmental bonds

		Consolidated
	2012	2011
	$'000	$'000
Cash on Deposit - Environmental bonds	2,740	567
	2,740	567

A cash-backed bond of $0.756 million was lodged in 2008 with EPA Tasmania (now $0.354 million at 30 June 2012). Subsequent to year-end, $314,000 of the remaining bond amount has been returned to the Group. The Group has been advised that the remaining bond amount of $40,000 will be returned following the completion of minor remediation works at the Hellyer stockpile site.

A current cash-backed bond $3.648 million was lodged in 2009 with EPA Victoria for the Footscray EAF dust stockpile. The balance of the cash backed bond at 30 June 2012 is $2.387 million following release of an aggregate $1.260 million by EPA Victoria in May and June 2012. Since the end of the financial year, the Group has delivered to EPA Victoria an environmental audit report as required by relevant legislation. This report was assessed by EPA Victoria and the remaining bond amount, $2.387 million has been returned.

11 Current assets - Inventories at cost

		Consolidated
	2012	2011
	$'000	$'000
Spares and reagents – finished goods	33	43
	33	43

12 Non current assets – trade and other receivables

		Consolidated
	2012	2011
	$'000	$'000
Royalty receivable	225	2,756
Lease security deposits	161	163
	386	2,919

(a) Fair values

The fair values of receivables of the Group approximate the carrying values. The Hellyer royalty has been written-down resulting in an expense to profit and loss of $1.184 million.

The Group held a 100% interest in the Hellyer Royalty, which was a unit-based royalty payable by Bass Metals Limited (BSM) determined on tonnes of ore processed through the Hellyer Mill. As a result of participating in the 2011 BSM rights issue, the Group exchanged cash royalty payments in relation to completed and anticipated minerals processing for the September and December quarters of 2011/12 for 3.1 million BSM shares at $0.15 per share (each with a free attached 3-year listed option exercisable at $0.20). In addition, the Group was issued 15 million shares in BSM for nil consideration following re-structuring of the Hellyer Royalty with BSM announced to the market on 9 July 2012. These 15 million shares are valued at 1.5 cents each on 9 July 2012 the date the shares were issued to the Group for a total value of $225,000.

(b) Interest rate risk

The Group is exposed to interest rate risk to the extent that security deposits are interest bearing while receivables are non-interest bearing.

(c) Credit risk

The Group deals with a small number of customers in relation to sales of metal in concentrate. Credit risk is assessed for each customer on an individual basis. Refer to notes 2 and 27 for more information on the risk management policy of the Group.

(d) Security deposits

These deposits are interest bearing at rates between 3.45% and 5% (2011 – 5.9% and 6%).

13 Non current assets - other financial assets

		Consolidated
	2012	2011
Financial assets available for sale	$'000	$'000
Shares in listed companies, at cost	43	-
Shares in unlisted companies, at cost	3	28
	46	28

The closing market price at 30 June 2012 of BSM shares and BSM options was 1.3 cents and 0.001 cents respectively; valuing the Group's BSM holdings at $43,400 (3.1 million shares at 1.3 cents/share and 3.1 million options at 0.001 cents/option). An impairments expense of $421,600 was therefore raised against the BSM investment book value of $465,000.

14 Non current assets - Plant and equipment

Consolidated	Officeequipment$'000	Plant andequipment$'000	BurnieResearchFacility$'000	Total$'000
Year ended 30 June 2011
Movement in carrying amounts
Opening net book amount	13	295	3,140	3,448
Additions	3	53	12	68
Depreciation charge	(7)	(96)	(712)	(815)
Closing net book amount	9	252	2,440	2,701
At 30 June 2011
Cost or fair value	250	666	6,339	7,255
Accumulated depreciation	(240)	(413)	(3,901)	(4,554)
Net book amount	10	253	2,438	2,701
Year ended 30 June 2012
Movement in carrying amounts
Opening net book amount	10	253	2,438	2,701
Additions	1	279	-	280
Disposals	-	(36)	-	(36)
Transfer	-	17	(17)	-
Impairment	-	(45)	-	(45)
Depreciation charge	(5)	(146)	(708)	(859)
Closing net book amount	6	322	1,713	2,041
At 30 June 2012
Cost or fair value	251	881	6,322	7,454

	Accumulated depreciation	(245)	(559)	(4,609)	(5,413)
	Net book amount	6	322	1,713	2,041
15	Non current assets – Environmental bonds
					Consolidated
				2012	2011
				$'000	$'000
	Environmental bonds			-	3,660
				-	3,660
16	Non current assets - Intangible assets
					Consolidated
				2012	2011
	Intellectual property			$'000	$'000
	Year ended 30 June
	Opening net book amount			10	10
	Closing net book amount			10	10
	At 30 June
Cost				10	10
	Net book amount			10	10
17	Current liabilities – Trade and other payables				Consolidated
				2012	2011
				$'000	$'000
	Unsecured liabilities
	Trade payables			174	688
	Other payables			31	185
	Employee entitlements			202	296
				407	1,169
18	Current liabilities – Provisions
					Consolidated
				2012	2011
(a)	Balances			$'000	$'000
	Environmental obligations			-	3,648
	Leasing obligations			121	121
				121	3,769
(b)	Movement in provision
	Provision for environmental obligations
	Balance 1 July 2011Provided for during the year			3,648-	4,42631
	Released during year			(3,648)	(809)
	Balance 30 June 2012			-	3,648
	Provision for leasing obligations
	Balance 1 July 2011			121	121
	Provided during year			-	-
	Balance 30 June 2012			121	121

(c) Nature and purpose of provision

The environmental obligation relates to the Victorian stockpile of EAF dust. This provision was reversed in full resulting in a credit to the 2012 profit & loss of $3.648 million.

19 Non current liabilities – Provisions

	Consolidated
	2012	2011
(a)Balances	$'000	$'000
Long Service Leave	1	21
	1	21
(b)Movements in provisions- long service leave	2012$'000	2011$'000
Balance 1 July 2011Transferred to current provision during year	21(20)	21-
Balance 30 June 2012	1	21

(c) Nature and purpose of provision

The provision for long service leave represents the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

20 Contributed equity

(a)Share capital	Notes	2012Shares	2011Shares
Ordinary sharesFully paid	(b)(c)	299,818,669	216,485,334
Total contributed equity		299,818,669	216,485,334

(b) Movements in ordinary share capital

Date2012	Details	Number ofshares	Issue price(cents)	$'000
30-06-2011	Balance at beginning of year – CompanyIssued pursuant to share placement to	216,485,334		70,723
07-02-2012	sophisticated investorsIssued pursuant to share placement to	32,472,801	0.015	487
22-03-2012	sophisticated investorsTransaction costs pursuant to share placement to	50,860,534	0.015	763
22-03-2012	sophisticated investors			(24)
30-06-2012	Balance at end of year	299,818,669		71,949
Consolidated
	Less share of associates capital raising costs
30-06-2008	expensed directly in equity			(307)
30-06-2012	Balance at end of year – Consolidated	299,818,669		71,642

Date2011	Details	Number ofshares	Issue price(cents)	$'000
1-07-2010	Balance at beginning of year – CompanyIssued pursuant partial conversion of La Jolla Cove	1,065,875,403		69,285
05-07-2010	Investors Convertible Note	25,000,000	0.24	60
08-07-2010	Total issued shares on a pre-consolidation basis	1,090,875,403		69,345
08-07-2010	Post consolidation securities following completionof 10:1 share consolidationIssued pursuant partial conversion of La Jolla Cove	109,087,945		69,345
27-07-2010	Investors Convertible NoteIssued pursuant partial conversion of La Jolla Cove	3,000,000	2.0	60
13-08-2010	Investors Convertible NoteIssued pursuant partial conversion of La Jolla Cove	1,587,302	1.89	30
17-08-2010	Investors Convertible NoteIssued pursuant partial conversion of La Jolla Cove	6,424,581	1.79	115
08-09-2010	Investors Convertible Note	2,061,856	0.97	20
09-09-2010	Issued pursuant partial conversion of La Jolla CoveInvestors Convertible Note	2,577,320	0.97	25
13-09-2010	Issued pursuant partial conversion of La Jolla CoveInvestors Convertible Note	4,255,319	0.94	40
23-09-2010	Issued pursuant partial conversion of La Jolla CoveInvestors Convertible Note	4,054,054	0.74	30
30-09-2010	Issued pursuant partial conversion of La Jolla CoveInvestors Convertible Note	3,676,471	0.68	25
06-10-2010	Issued pursuant partial conversion of La Jolla CoveInvestors Convertible Note	4,411,765	0.68	30
12-10-2010	Issued pursuant partial conversion of La Jolla CoveInvestors Convertible NoteIssued pursuant partial conversion of La Jolla Cove	4,545,455	0.66	30
14-10-2010	Investors Convertible NoteIssued pursuant partial conversion of La Jolla Cove	5,468,750	0.64	35
21-10-2010	Investors Convertible Note	4,687,500	0.64	30
26-10-2010	Issued pursuant partial conversion of La Jolla CoveInvestors Convertible Note	5,161,290	0.62	32
27-10-2010	Issued pursuant partial conversion of La Jolla CoveInvestors Convertible Note	4,237,288	0.59	25
01-11-2010	Issued pursuant partial conversion of La Jolla CoveInvestors Convertible Note	5,263,158	0.57	30
05-11-2010	Issued pursuant partial conversion of La Jolla CoveInvestors Convertible Note	3,846,154	0.52	20
11-11-2010	Issued pursuant partial conversion of La Jolla CoveInvestors Convertible NoteIssued pursuant partial conversion of La Jolla Cove	5,769,231	0.52	30
18-11-2010	Investors Convertible NoteIssued pursuant to share placement to	8,653,846	0.52	45
19-11-2010	sophisticated investorsTransaction costs pursuant to share placement to	25,000,000	3.0	750
19-11-2010	sophisticated investors			(45)
30-6-2011	Balance at end of year	216,485,334		70,723
30-6-2008	Less share of associates capital raising costsexpensed directly in equity			(307)
30-6-2011	Balance at end of year – Consolidated	216,485,334		70,416

(c) Share consolidation

A 10:1 share consolidation of Intec Ltd shares was completed in July 2010. As a result of the share consolidation, the calculation of basic and diluted earnings/(loss) per share has been adjusted retrospectively.

(d) Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held.

On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.

(e) Options

Information relating to the Intec Option Plan, including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of the financial year, is set out in Notes 21 and 33.

(f) Capital Management

Management controls the capital of the Group in order to maintain a good debt to equity ratio and ensure that the Group can fund its operations and continue as a going concern. The Group's debt and capital includes ordinary share capital and financial liabilities supported by financial assets. There are no externally imposed capital requirements.

Management effectively manages the Group's capital by assessing the Group's financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues.

There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year. The quantitative data the Group assesses as capital is $6.671 million which is consistent with the net assets of the Group (2011: $8.437 million).

21 Options

Consolidated 2012

IssueDate	ExpiryDate	ExercisePrice	Balanceat30 June 2011	Grantedduringyear	Lapsedduringyear	Exercisedduringyear	Vested &exercisableas at30 June 2012
25-09-2006	30-08-2011	$0.1013	461,000	-	461,000	-	-
15-11-2006	30-08-2011	$0.1013	260,000	-	260,000	-	-
14-11-2007	25-09-2012	$0.1413	470,000	-	267,500	-	202,500
31-01-2008	25-09-2012	$0.1413	635,000	-	470,000	-	165,000
09-12-2011	21-09-2016	$0.0300	-	9,000,000	2,900,000	-	6,100,000
Total Options on issue			1,826,000	9,000,000	4,358,500	-	6,467,500

Consolidated

2011

IssueDate	ExpiryDate	ExercisePrice	Balanceat30 June 2010	Grantedduringyear	Lapsedduringyear	Exercisedduringyear	Vested &exercisableas at30 June 2011
25-09-2006	30-08-2011	$1.013	461,000	-	-	-	461,000
15-11-2006	30-08-2011	$1.013	260,000	-	-	-	260,000
14-11-2007	25-09-2012	$1.413	470,000	-	-	-	470,000
31-01-2008	25-09-2012	$1.413	635,000	-		-	635,000
Total Options on issue			1,826,000	-	-	-	1,826,000

All options have been issued pursuant to the Intec Option Plan (Refer Note 33).

22 Reserves

		Consolidated
	2012	2011
(a)Reserves	$'000	$'000
Share-based payments reserve	2,624	2,577
	2,624	2,577
(b)Movements
Share-based payments reserve
Balance 1 July	2,577	2,577
Options expense	47	-
Total reserves	2,624	2,577

(c) Nature and purpose of reserves

Share based payments reserve The share based payments reserve records the value of options issued by the Company. In previous years, the value of options issued under the Intec Option Plan to directors, employees and consultants has been recognised as an employment expense in the statement of comprehensive income.

23 Accumulated losses

Movements in accumulated losses were as follows:

		Consolidated
	2012	2011
	$'000	$'000
Balance 1 July	(64,556)	(66,080)
Net (loss)/profit for the year	(3,098)	1,524
Balance 30 June	(67,654)	(64,556)

24 Key management personnel disclosures

(a) Directors

The following persons were Directors of the Company during the financial year: (i) Chairman – Non-executive T A Jones

(ii) Executive Directors P R Wood, Managing Director and Chief Executive Officer - resigned 6 February 2012. K G Rodgers, Chief Financial Officer - appointed Managing Director 6 February 2012

(iii) Non-executive Directors J R G Bell A J Moyes - resigned 21 November 2011

(b) Other key management personnel

The following persons also had authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, during the financial year:

Name	Position
B A Banister1	Chief Operating Officer
D W Clark2	Financial Controller
D J Purdie3	Senior Process Engineer
A J Randall	General Manager
D L Sammut	Corporate Development Manager
A R Tong	Head of Technology

1. Ceased employment on 4 November 2011.

2. Ceased employment on 31 March 2012, appointed as a consultant from 1 April 2012.

3. Ceased employment on 30 March 2012.

(c) Key management personnel compensation

		Consolidated
	2012	2011
	$'000	$'000
Short-term employee benefits	1,507,717	1,503,367
Termination benefits	394,352	-
Post-employment benefits	152,001	168,351
Share-based payments	57,340	-
	2,111,410	1,671,718

(d) Equity instrument disclosures relating to key management personnel

(i) Options provided as remuneration and shares issued on exercise of such options

Details of options provided as remuneration and shares issued on the exercise of such options, together with terms and conditions of the options, can be found in section D of the remuneration report on pages 13 to 14.

(ii) Option holdings

The numbers of options over ordinary shares in the company held during the financial year by each Director of the Company and other key management personnel of the Group, including their personally related parties, are set out below.

2012		Granted				Vested and
		during the	Exercised	Lapsed	Balance at	exercisable
Name	Balance at the	year as	during	during	the end of	at the end
	start of the year	compensation	the year	year	the year	of the year
Directors of Intec Ltd
P R Wood	370,000	1,400,000	-	1,770,000	-	-
A J Moyes	190,000	500,000	-	690,000	-	-
T A Jones	15,000	400,000	-	-	415,000	415,000
K G Rodgers	210,000	1,200,000	-	90,000	1,320,000	1,320,000
J R G Bell	30,000	300,000	-	-	330,000	330,000
Other key management personnel of the Group
B A Banister	-	1,000,000	-	1,000,000	-	-
D W Clark	-	400,000	-	-	400,000	400,000
D J Purdie	-	400,000	-	400,000	-	-
A J Randall	60,000	400,000	-	30,000	430,000	430,000
D L Sammut	50,000	1,000,000	-	-	1,050,000	1,050,000
A R Tong	110,000	1,000,000	-	60,000	1,050,000	1,050,000

2011		Granted		Other		Vested and
		during the	Exercised	changes	Balance at	exercisable
Name	Balance at the	year as	during	during the	the end of	at the end
	start of the year	compensation	the year	year	the year	of the year
Directors of Intec Ltd
P R Wood	370,000	-	-	-	370,000	370,000
A J Moyes	190,000	-	-	-	190,000	190,000
T A Jones	15,000	-	-	-	15,000	15,000
K G Rodgers	210,000	-	-	-	210,000	210,000
J R G Bell	30,000	-	-	-	30,000	30,000
Other key management personnel of the Group
B A Banister	-	-	-	-	-	-
D W Clark	-	-	-	-	-	-
D J Purdie	-	-	-	-	-	-
D L Sammut	50,000	-	-	-	50,000	50,000
A R Tong	110,000	-	-	-	110,000	110,000

(iii) Share holdings

The number of shares in the company held at the end of the financial year by each Director of the Company and other key management personnel of the Group, including their personally related parties, are set out below. There were no shares granted during the reporting period as compensation.

2012	Balance at	Received during the	Other changes	Balance at the
	the start of	year on the	during the	end of the
Name	the year	exercise of options	year	year
Ordinary shares
Directors of Intec Ltd
P R Wood	1,449,115	-	-	1,449,115
A J Moyes	286,004	-	-	286,004
T A Jones	268,954	-	-	268,954
K G Rodgers	112,956	-	14,666,667	14,779,623
J R G Bell	112,892	-	-	112,892
Other key management personnel of the Group
B A Banister	167,800	-	-	167,800
D W Clark	10,000	-	-	10,000
D J Purdie	20,000	-	-	20,000
A J Randall	-	-	-	-
D L Sammut	49,561	-	-	49,561
A R Tong	5,400	-	-	5,400

2011	Balance at	Received during the	Other changes	Balance at the
	the start of	year on the	during the	end of the
Name	the year	exercise of options	year	year
Ordinary shares
Directors of Intec Ltd
P R Wood	449,115	-	1,000,000	1,449,115
A J Moyes	286,004	-	-	286,004
T A Jones	268,954	-	-	268,954
K G Rodgers	112,956	-	-	112,956
J R G Bell	112,892	-	-	112,892
Other key management personnel of the Group
B A Banister	167,800	-	-	167,800
D W Clark	10,000	-	-	10,000
D J Purdie	20,000	-	-	20,000
D L Sammut	49,561	-	-	49,561
A R Tong	5,400	-	-	5,400

25 Contingencies

(a) Contingent liabilities

The parent entity and Group had no contingent liabilities at 30 June 2012, (2011- nil).

R&D Start grant repayable component

The Group received an R&D Start grant from the Federal Government which is partly repayable contingent upon the successful commercialisation of the technology for which the R&D Start grant was made. The original contingent liability that may be repaid was $1,832,085. During the year, the Group has been advised by the Federal Government that no contingent liability remains outstanding.

There were no other contingent liabilities as at 30 June, 2012.

26 Commitments

(a) Capital commitments

There are no commitments for capital expenditure at the reporting date.

(b) Lease commitments

Operating leases

The Group leases office premises and various items of office equipment under non cancellable operating leases expiring within two years. The leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are renegotiated. The Group also leases various items of plant and machinery under cancellable operating leases. The Group is required to give up to six months notice for termination of these leases.

	Consolidated2012	2011
	$'000	$'000
Commitments for minimum lease payments in relation to non-cancellableoperating leases are payable as follows:Within one yearLater than one year but not later than five yearsLater than five years	120240-360	120340-460

(c) Tenement commitments

There are no minimum annual expenditure requirements attached to the tenements held by the Group. Details of tenements held are shown in the Schedule of Tenements.

27 Financial instruments

(a) Significant accounting policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement, and the basis on which income and expenses are recognised, with respect to each class of financial asset, financial liability and equity instrument are disclosed in Note 1 and Note 2 to the financial statements.

(b) Categorisation of financial instruments

The Group and the parent entity hold the following financial instruments:

		Consolidated
	Note	Carrying amount
		2012	2011
Financial assets		$'000	$'000
Cash and cash equivalents	8	1,400	2,557
Receivables	9 & 10	3,652	4,375
Other financial assets	13	46	28
		5,098	6,960
Financial liabilities
Trade and Other Payables	17	407	1,169
		407	1,169

(c) Financial risk management objectives and policies

The main risks arising from the Group's financial instruments are credit risk, liquidity risk, market risk and cash flow and fair value interest rate risk. The Directors review and approve policies for managing each of these risks which are summarised below.

(i) Credit risk

The Group's exposure to credit risk arises from the potential default of counterparties on their contractual obligations resulting in a financial loss to the Group. Credit risk is monitored on a regular basis. Provision for impairment of financial assets is calculated based on past experience, and current and expected changes in client credit ratings. In addition, the Group does not engage in hedging of its financial assets.

The Group has policies in place to ensure that sales of product are made to customers with an appropriate credit history. There is limited credit risk on financial assets, excluding metal in concentrate debtors. Metal in concentrate debtors cause a concentration of credit risk as there is a small number of debtors and a low volume of high value sales. Exposure to individual customers or countries is limited to the amount of cash, short term deposits and receivables recognised at balance date and is minimised by using recognised financial intermediaries as counterparties and established letters of credit.

The Group does not hold either collateral as security or credit enhancements relating to any of its financial assets. As at the reporting date, there is no evidence to indicate that any of the financial assets were impaired. There are no financial assets that have had their terms renegotiated so as to prevent them from being past due or impaired, and they are stated at the carrying amounts as indicated.

(ii) Liquidity risk

Liquidity risk arises when the Group is unable to meet its financial obligations as and when they fall due. The Group generally settles financial obligations within thirty (30) days and in the event of a dispute make payments within thirty (30) days from the date of resolution.

The Group's financing activities are managed centrally by maintaining an adequate level of cash and cash equivalents to finance the Group's operations. The Group's surplus funds are also managed centrally by placing them with reputable financial institutions.

The risk implied from the values shown in the following table, reflects a balanced view of cash inflows and outflows. Trade payables and other financial liabilities originate from the financing of assets used in the Group's ongoing operations such as property, plant and equipment and investments in working capital, inventories and trade receivables.

Interest rate exposure and maturity analysis of financial liabilities

Consolidated				Interest rate exposure				Maturity dates
	Weighted
	average
	effective		Fixed	Variable	Non		Less		3
	interest	Carrying	interest	interest	interest	Nominal	than 1	1-3	months	1-5
	rate	amount	rate	rate	bearing	amount	month	months	– 1 year	years
2012	%
Cash and cash
equivalents	5.1	1,400	-	1,400	-	-	1,400	-	-	-
Receivables	3.5	3,652	2,740	-	912	-	3,266	-	-	386
Available for sale
financial assets at
cost, listed and
unlisted investments	-	46	-	-	46	-	-	-	-	46
	-	5,098	2,740	1,400	958	-	4,666	-	-	432
Payables:
Trade creditors &
accruals	-	376	-	-	376	-	376	-	-	-
Other payables	-	31	-	-	31	-	31	-	-	-
	-	407	-	-	407	-	407	-	-	-

Consolidated				Interest rate exposure				Maturity dates
	Weighted
	average
	effective		Fixed	Variable	Non		Less		3
	interest	Carrying	interest	interest	interest	Nominal	than 1	1-3	months	1-5
	rate	amount	rate	rate	bearing	amount	month	months	– 1 year	years
2011	%
Cash and cash
equivalents	5.79	2,557	-	2,557	-	-	2,557	-	-	-
Receivables	4.1	4,375	567	-	3,808	-	-	1,456	-	2,919
Available for sale
financial assets at
cost, unlisted
investments	-	28	-	-	28	-	-	-	-	28
	-	6,960	567	2,557	3,836	-	2,557	1,456	-	2,947
Payables:
Trade creditors &
accruals	-	984	-	-	984	-	984	-	-	-
Other payables	-	185	-	-	185	-	185	-	-
	-	1,169	-	-	1,169	-	1,169	-	-

(iii) Market risk

Foreign currency risk

The Group is exposed to foreign currency risk in that receivables from the sale of low-grade zinc-bearing product are denominated in US dollars. Hence, the Group's statement of financial position can be affected by movements in the Australian dollar/US dollar exchange rate.

At 30 June 2012, the Group had the following non-material exposure to USD foreign currency:

		Consolidated
	2012	2011
USD	$'000	$'000
Financial assets
Cash and cash equivalents	-	-
Receivables	46	333
Financial liabilities
Trade creditors & other payables	-	-
Convertible note	-	-
Net exposure	46	333

(iv) Cash flow and Fair value interest rate risk The Group's statement of comprehensive income is affected by changes in interest rates due to the impact of such changes on interest income and interest expense from bank balances.

The Group's policy is to obtain the most favourable interest rates available. The Group has not used any derivatives to mitigate its interest rate risk exposure.

The following sensitivity analysis is based on the interest rate risk exposures in existence at the balance sheet date.

At 30 June 2012 if interest rates had moved, as illustrated in the table below, with all other variables held constant, the affect to post tax profit and equity is listed as follows:

Sensitivity disclosure analysis

	Post Tax ProfitHigher/(Lower)		EquityHigher/(Lower)
	2012	2011	2012	2011
	$'000	$'000	$'000	$'000
Consolidated
+1% (100 Basis points)	14	39	14	39
-.5% (50 Basis points)	(7)	(19)	(7)	(19)

(d) Fair value

The fair values of financial assets and financial liabilities are determined as follows:

• the fair value of financial assets and financial liabilities with standard terms and conditions and traded in active liquid markets are determined with reference to quoted market prices; and
• the fair value of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis.

The Group considers that the carrying amount of financial assets and financial liabilities recorded in the financial statements to be a fair approximation of their fair values, because of the short-term nature of the financial instruments and the expectation that they will be paid in full.

Financial Instruments Measured at Fair Value

The financial instruments recognised at fair value in the statement of financial position have been analysed and classified using a fair value hierarchy reflecting the significance of the inputs used in making the measurements.

The fair value hierarchy consists of the following levels:

• quoted prices in active markets for identical assets or liabilities (Level 1);
• inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (Level 2); and
• inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).

Level 1$'000	Level 2$'000	Level 3$'000	Total$'000
268	-	-	268
-	3	-	3
268	3	-	271
Level 1$'000	Level 2$'000	Level 3$'000	Total$'000
-	28	-	28
-	28	-	28

(e) Debt/Equity management

The Group funds its exploration, development and operating activities using both debt and equity. The mix of debt and equity is determined by consideration of regulatory, commercial and risk factors as well as tax efficiencies and the impact on earnings per share. The Group prepares detailed medium to long term cash forecasts and determines funding requirements accordingly. Equity is ordinary shares, not preference capital.

28 Related party transactions

(a) Parent entities

The parent entity within the Group is Intec Ltd.

(b) Subsidiaries

Interests in subsidiaries are set out in Note 30.

(c) Key management personnel

Disclosures relating to key management personnel are set out in note 24. There were no outstanding loans with key management personnel. Mr Reza Maghzian, a director and 50% shareholder of Intec International Projects Pty Ltd was paid a management fee of $627,000.

Mr David Clark through his firm DW Clark & Co., Chartered Accountant provides accounting, taxation and secretarial services to the Group on commercial terms. The Group made payments during the year totalling $10,875.

(d) Transactions with subsidiaries

The following transactions occurred with related parties:

	2012$	2011$
(i)Contract fees
The parent company, Intec Ltd, as subcontractor, charged fees to its 50%
owned subsidiary, Intec International Projects Pty Ltd (IIP), which is the
contractor the IRC Project.	753,000	-
(e)Loans to subsidiaries
Beginning of the year	58,901,864	56,958,244
Loans advanced/(received)	1,096,080	1,943,620
Interest charged	-	-
End of year	59,997,944	58,901,864
Less provision for doubtful debts	(59,997,944)	(58,901,864)
Carrying value at end of year	-	-
Movement in provision for doubtful debts
Beginning of year	58,901,864	56,958,244
Provided during year	1,096,080	1,943,620
End of year	59,997,944	58,901,864

Provisions for doubtful debts have been raised in relation to outstanding balances, and an expense has been recognised in respect of debts due from subsidiaries, which may be considered doubtful based on the net assets of each subsidiary.

(f) Terms and conditions

All transactions were made on normal commercial terms and conditions, except that there are no fixed terms for the repayment of loans between the parties. The Directors determined the loans to be interest free from 1 July 2010. Outstanding balances are unsecured and are repayable in cash.

29 Parent entity disclosures

(a) Financial position

		Consolidated
	2012	2011
	$'000	$'000
Assets
Current assets	1,331	2,575
Non current assets	170	200
Total assets	1,501	2,775
Liabilities
Current liabilities	316	533

Intec Ltd 2012 Annual Report Notes to the Financial Statements

Non current liabilities	1	4
Total liabilities	317	537
EquityIssued capitalAccumulated losses	71,949(73,297)	70,724(70,972)
ReservesOption expense reserve	2,532	2,485
Total equity	1,184	2,237
(b)Financial performance
Profit/(Loss) for the yearOther comprehensive income	(2,325)-	1,348-
Total comprehensive loss	(2,325)	1,348

(c) Guarantees entered into by the parent entity in relation to the debts of its subsidiaries

Guarantee provided under the deed of cross guarantee with each subsidiary. - -

(d) Contingent liabilities of the parent entity

Contingent liabilities

There were no contingent liabilities of the parent entity at 30 June 2012. - -

(e) Commitments for the acquisition of property, plant and equipment by the parent entity

Property, plant and equipment

There were no commitments for the acquisition of property, plant and equipment by the parent entity at 30 June 2012.

30 Subsidiaries

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in Note 1(s).

Name of entity	Country ofincorporation	Class of shares	Equity holding
			2012	2011
Investments held by Intec Ltd			%	%
Intec Copper Pty Ltd	Australia	Ordinary	100	100
Intec Envirometals Pty Ltd	Australia	Ordinary	100	100
Intec International Projects Pty Ltd	Australia	Ordinary	50	50
Intec Metals Recycling Pty Ltd (de-registered
01/08/2012)	Australia	Ordinary	100	100
Investments held by Intec Envirometals Pty LtdIntec Zeehan Residues Pty Ltd (formerly Encore
Metals NL)	Australia	Ordinary	100	100

Intec Ltd has the power to govern the financial and operating policies of Intec International Projects Pty Ltd so as to obtain benefits from its activities.

31 Events occurring after the reporting date

Hellyer Royalty

The Group held a 100% interest in the Hellyer Royalty, which was a unit-based royalty payable by Bass Metals Limited (BSM) determined on tonnes of ore processed through the Hellyer Mill. On 9 July 2012, the Group announced that it had agreed a restructuring of the Hellyer Royalty with BSM. As a result, the Group has been granted a 2.5% Net Smelter Return Royalty (NSR Royalty) in relation to base metals extracted from the following tenements:

• RL11/1997: Mt Charter Retention Licence;
• EL48/2003: Mt Block Exploration Licence;
• EL24/2004: Bulgobac River Exploration Licence;
• CML103M/1987: Hellyer Mine Lease; and
• ML68M/1984: Que River Mine Lease.

32 Profit/(loss) per share

The NSR Royalty is uncapped and BSM has no first right of refusal (or pre-emptive rights) over the NSR Royalty as was previously the case with the Hellyer Royalty. In addition, the Company was issued 15 million shares in BSM for nil consideration. Following, the re-structuring, Intec holds a 5.85% interest in BSM.

Refund of Environmental Bond

The environmental bond lodged with the Victorian Government recorded at balance date of $2,387,500 was returned to the Group in July, 2012.

There are no other matters or circumstances arisen since 30 June 2012 that have 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.

These financial statements are authorised by the Board of Directors on 28 September 2012.

		Consolidated
	2012	2011
	Cents	Cents
(a)Basic profit/(loss) per share
Profit/(Loss) per share from continuing operations
attributable to the ordinary equity holders of the company	(0.79)	0.83
Profit/(loss) per share from discontinued operations	(0.49)	-
Total profit/(loss) per share
attributable to the ordinary equity holders of the company	(1.28)	0.83
(b)Diluted profit/(loss) per share
Diluted profit/(loss) per share from continuing operations
attributable to the ordinary equity holders of the company	(0.79)	0.82
Diluted profit/(loss) per share from discontinued operations	(0.49)	-
Total Diluted profit/(loss) per share
attributable to the ordinary equity holders of the company	(1.28)	0.82
(c)Reconciliations of profit/(loss) used in calculating earnings per shareBasic profit/(loss) per share	$'000	$'000
Profit/(Loss) attributable to the ordinary equity holders of the company used
in calculating basic profit/(loss) per share
from continuing operations	(1,914)	1,524
from discontinued operations	(1,184)	-
	(3,098)	1,524
Diluted profit/(loss) per share
Diluted profit/(loss) attributable to the ordinary equity holders of the company
used in calculating basic profit/(loss) per share
from continuing operations	(1,914)	1,524
from discontinued operations	(1,184)	-
	(3,098)	1,524
(d)Weighted average number of shares used as the denominator
	2012	2011
	Number	Number
Weighted average number of ordinary shares used as the denominator in
calculating basic profit/(loss) per share	243,002,604	184,085,091
Weighted average number of ordinary shares used as the denominator in
calculating diluted profit/(loss) per share	243,002,604	185,911,091

Options

(e) Information concerning the classification of securities

Diluted profit/(loss) per share

In the 2011 comparative financial year, potential ordinary shares being the balance of options granted at balance date are not considered dilutive as the conversion of these components to equity would result in a decrease in the net loss per share.

Options granted to employees under the Intec Option Plan and to other entities have been included in the determination of diluted profit/(loss) per share. No options have been included in the determination of basic profit/(loss) per share. Details relating to the options are set out in Note 21.

33 Share based payments

Employee option plan

The establishment of the Intec Option Plan was approved by shareholders at the 2001 Annual General Meeting. All Directors, employees and consultants are eligible to participate in the Intec Option Plan.

Options are granted under the Intec Option Plan for no consideration. Options are granted for a five year period and vest immediately unless otherwise stated. Options granted under the Intec Option Plan carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary share. The exercise price of the options is the current market price on the date the options are granted as determined by the Board.

The share based options are equity settled.

Set out below are summaries of options granted under the plan and which have not lapsed:

remuneration tables above. Fair values at grant date are independently determined using option valuation models that take into account the exercise price, the term of the option, the impact of dilution, the share price at grant date, the expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the

9,000,000 employee options were granted during the year ending 30 June 2012 (2011- Nil) as shown

Grant date	Expiry date	Exercise price	Value per optionat grant date	Date exercisable
21 November 2011	21 September 2016	$0.0300	$0.0300	21 November 2011

term of the option.

in Notes 21 and 24.

The weighted average share price at the date of options exercised during the year ended 30 June 2012 was $Nil (2011 – $Nil) as no options were exercised.

The weighted average remaining contractual life of share options outstanding at the end of the period was 2.03 years (2011 – 0.82 years).

The assessed fair value at grant date of options granted under the Intec Option Plan is allocated equally over the period from grant date to vesting date, and the amount is included in the

Shares provided on exercise of remuneration options

No ordinary shares (2010 - Nil) in the Company were provided as a result of the exercise of remuneration options to Directors. Accordingly, there were no expenses arising from share based payment transactions recognised in the statement of comprehensive income.

34 Non cash investing and financing activities

	Consolidated
	2012$'000	2011$'000
Expiry of the Subscription Agreement between Intec and Green Resources:- Impairment of investment- De-recognition of deferred revenue	--	(1,137)812
Discharge of La Jolla Cove Investors Inc. convertible note facility	-	541

35 Reconciliation of profit/(loss) after income tax to net cash flows from operating activities

			Consolidated
		2012	2011
		$'000	$'000
	Operating profit/(loss) after income tax	(3,039)	1,524
	Non cash items and non operating cash flows
	included in statement of comprehensive income
	Bad and doubtful debts expense	-	1
	Administration expenses	786	70
	Depreciation and amortisation	859	815
	(Recouped)/expensed environmental bond	(3,648)	325
	Hellyer royalty written down	1,184	-
	Impairments expense	492	-
	Options expense/(income)	46	(98)
	Unrealised foreign exchange loss	3	-
	Changes in assets and liabilities
	Decrease/(increase) in receivables	2,900	(814)
	Decrease/(increase) in environmental bonds	1,487	-
	Decrease/(increase) in inventories	10	(5)
	Increase/(decrease) in trade creditors	(762)	173
	(Decrease)/increase in provisions	(3,648)	(482)
	Net cash (outflows)/inflows from operating activities	(3,330)	1,509
36	Auditor's remuneration
			Consolidated
		2012	2011
		$	$
	Assurance services
a.	Audit services
	Audit and review of financial reports and other audit work under the
	Corporations Act 2001
	Crowe Horwath Sydney	69,200	67,000
	Total remuneration for audit services	69,200	67,000
b.	Non audit services
	Tax compliance services, including review of company income tax
	returns	-	-

Total remuneration for non audit services - -

37 Company details

The registered office and principal place of business is Level 3, 2 Elizabeth Plaza, North Sydney NSW 2060.

Directors' Declaration

In the directors' opinion:

• (a) the financial statements and notes set out on pages 18 to 58 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 consolidated financial position as at 30 June 2012 and of its performance for the financial 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; and
• (c) the remuneration disclosures set out on pages 10 to 15 of the directors' report comply with Accounting Standard AASB 124 Related Party Disclosures and the Corporations Regulations; and
• (d) The financial statements comply with International Financial Reporting Standards; and
• (e) The directors have been given the declarations by the chief executive officer and chief financial officer required by section 295A of the Corporations Act 2001.

This declaration is made in accordance with a resolution of the directors.

Kieran G. Rodgers Managing Director

Sydney 28 September 2012

Schedule of Tenements

The Group held at 30 June 2012 the following tenements:

Tenementnumber	Tenementname	Expirydate	AreaKm2	Securitydepositsheld$'000	Annualexpenditurecommitments$'000
Tenements held by Intec Zeehan Residues Pty Ltd
Mining Lease6M/2010Retention	Zeehan	5 January 2016	1.00	6	-
LicenceRL 3/1996	Zeehan	28 March 2014	1.00	5	-

Shareholder Information

The shareholder information set out below was applicable as at 27 September 2012.

A. Distribution of equity securities

Analysis of numbers of equity security holders by size of holding:

			Class of equity securityOrdinary shares
			Number of shareholders	Number of shares
1	-	1,000	637	344,694
1,001	-	5,000	859	2,371,922
5,001	-	10,000	449	3,558,375
10,001	-	100,000	839	33,066,254
	100,001 and over		311	260,477,424
			3,095	299,818,669

At the prevailing market price of shares $0.010 there were 2,520 shareholders with less than a marketable parcel of ordinary shares worth $500 (being 19,463,149 shares).

B. Equity security holders

The names of the twenty largest holders of quoted equity securities as at 27 September 2012 are listed below:

Name	Ordinary sharesNumber held	Percentage ofissued shares
MR KIERAN GREGORY RODGERS & MRS PATRICIA MARIE RODGERS	14,779,623	4.930
MR MARTIN EDWARD MEYER	14,666,667	4.892
MR NOEL ALEXANDER ADAM	14,666,667	4.892
MRS KATHLEEN WATT	14,666,667	4.892
LONGWIN CAPITAL FINANCE LTD	14,666,667	4.892
MR MAKRAM HANNA & MRS RITA HANNA <hanna &="" a="" c="" co="" l="" p="" super="">	9,510,000	3.172
MR STUART ANDREW SPITERI	6,997,022	2.334
JP MORGAN NOMINEES AUSTRALIA LIMITED	5,811,257	1.938
MR PAUL MICHAEL BUTCHER	5,574,472	1.859
LIMESTONE ENTERPRISES PTY LTD	4,502,000	1.502
ORIAN HOLDING CORP	4,117,484	1.373
MR JOHN JOSEPH REIDY	4,003,234	1.335
MR DONALD ALEXANDER BELL & MRS LEXIE ANN BELL	4,000,000	1.334
MR ROBERT NEIL CATTERALL	3,900,000	1.301
SYMINGTON PTY LTD	3,500,000	1.167
MR IANAKI SEMERDZIEV	3,500,000	1.167
CORPORATE PROPERTY SERVICES PTY LTD	3,500,000	1.167
MR ZYGMUND WOLSKI & MRS NOLA WOLSKI	3,309,517	1.104
PLATYPUS SUPERANNUATION PTY LTD	3,100,000	1.034
MR FRIEND NOTHERS	2,320,000	0.774
Total of Top 20 shareholdings	141,091,277	47.059
Other Shareholders	158,727,392	52.941
Total Ordinary shares	299,818,669	100.000

C. Substantial holders

There are no substantial holders in the Company.

D. Voting rights

The voting rights attaching to each class of equity securities are set out below:

(a) Ordinary shares

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

(b) Options No voting rights.

E. Summary of options issued

	No ofoptions	No ofHolders	% OptionsIssued
Options expiring 21 November 2016 with an exercise price of $0.03	6,100,000	12
Option holders with more than 20% of above class	-	-	0%

These options are unquoted equity securities

Corporate Governance Statement

The Board of Directors of the Company (the Board) is responsible for the corporate governance of the Company and its controlled entities.

Corporate governance is a matter of high importance in the Company and is undertaken with due regard to all of the Company's stakeholders and its role in the community.

The Board periodically reviews its policies and procedures against the 'Principles of Good Corporate Governance and Best Practice Recommendations' published by the ASX Corporate Governance Council (CGC), and in the current year adopted a Diversity Policy as recommended in the CGC June 2010 changes.

Unless explicitly stated otherwise the Directors believe that the Company complies with the major principles and the underlying guidelines.

The Board has approved and adopted the following policies and charters with which directors and management are required to comply, and which, inter alia, contain the information recommended by the ASX Best Practice Recommendations Guidelines to be made available to shareholders/investors. These policies and Charters can be read on the Company's website www.intec.com.au under 'About Us – Corporate Governance'.

ASX BEST PRACTICE RECOMMENDATIONS

The table below contains each of the ASX Best Practice Principles and Guidelines. Where the Company has complied with the principles and guidelines during the reporting period this is indicated with a tick;. Where the Company has failed to comply with a particular recommendation this is indicated with a cross : and the Company's reasons are set out below the corresponding guideline within the table.

Note		Complied
Principle 1	To lay solid foundations for management and oversight
Guideline 1.1	Formalise and disclose the functions reserved to the Board and thosedelegated to management and disclose those functions.	;
Guideline 1.2	Disclose the process for evaluating the performance of seniormanagement.	;
Guideline 1.3	Provide the information set out in Guide to reporting on Principle 1.	;
Principle 2	Structure the Board to add value
Guideline 2.1	A majority of the Board should be independent directors.	;
Guideline 2.2	The Chairman should be an independent director.	;
Guideline 2.3	The roles of Chairman and Chief Executive Officer/Managing Directorshould not be exercised by the same individual.	;
Guideline 2.4	The Board should establish a nomination committee.	;
Guideline 2.5	Disclose the process for evaluating the performance of the Board, itscommittees and individual directors.	;
Guideline 2.6	Provide the information set out in Guide to reporting in Principle 2.	;
	During the year an executive director retired. The majority of the Boardare now independent non-executive directors. During the year theNomination Committee reviewed the mix of skills and diversity on theBoard and determined they were adequate based on the current size andnature of Intec's business.
Principle 3	Promote ethical and responsible decision making
Guideline 3.1	Establish a code of conduct and disclose the code or a summary of thecode to guide the Directors, the Chief Executive Officer (or equivalent), the	;
	Chief Financial Officer (or equivalent) and any other key executives as to:3.1.1 The practices necessary to maintain confidence in the Company'sintegrity; and	;
	3.1.2 The practices necessary to take into account their legal obligationsand the reasonable expectations of their stakeholders; and	;
	3.1.3 The responsibility and accountability of individuals for reporting andinvestigating reports of unethical practices.	;

Guideline 3.2	Establish a policy concerning trading in company securities by directors,officers and employees and disclose the policy or a summary of that policy.Refer to policy set out below.	;
Guideline 3.3	Disclose the measureable objectives for achieving gender diversity set bythe Board in accordance with the diversity policy and progress towards	;
Guideline 3.4	receiving them.Disclose the proportion of women employees in the whole organisation,women in senior executive positions and women on the Board.	;
Guideline 3.5	Provide the information set out in Guide to reporting on Principle 3.	;
	There are no women on the Board or in senior executive positions andthree of the Company's seven employees are women.
Principle 4	Safeguard integrity in financial reporting
Guideline 4.1	The Board should establish an Audit Committee.	;
Guideline 4.2	Structure the Audit Committee so that it consists of:	;
	non-executive Directors only;•	;
	•a majority of independent directors;	;
	•an independent Chairman who is not the Chairman of the Board; and	;
	•at least 3 members	:
Guideline 4.3	The Audit Committee should have a formal Charter.	;
Guideline 4.4	Provide the information set out in Guide to reporting on Principle 4.	;
	Previously the Company has decided to restrict the number of committee
	members to two because of the small size of the Board.
Principle 5	Make timely and balanced disclosure
Guideline 5.1	Establish written policies and procedures designed to ensure compliancewith ASX Listing Rules disclosure requirements and to ensure	;
Guideline 5.2	accountability at a senior management level for that compliance.Provide the information set out in Guide to reporting on Principle 5.	;
Principle 6	Respect the rights of shareholders	;
Guideline 6.1	Design and disclose a communications strategy to promote effectivecommunication with shareholders and encourage effective participation atgeneral meetings.
Guideline 6.2	Provide the information set out in Guide to reporting on Principle 6.	;
Principle 7	Recognise and manage risk
Guideline 7.1	The Board or appropriate Board committee should establish policies on risk	;
	oversight and management and disclose a summary of those policies.
Guideline 7.2	The Board should require management to design and implement the risk	;
	management and internal control system to manage the company's
	material business risks and report to it on whether those risks are being
	managed effectively. The Board should disclose that management hasreported to it as to the effectiveness of the company's management of its
	material business risks.
Guideline 7.3	The Board should disclose whether it has received assurance from the CEO	;
	(or equivalent) and the CFO (or equivalent) that the declaration provided
	in accordance with s.295A of the Corporations Act 2001 is founded on a
	sound system of risk management and internal control and that the system
	is operating effectively in all material respects in relation to financialreporting risks.
Guideline 7.4	Provide the information indicated in the Guide to reporting on Principle 7.	;
Principle 8	Remunerate fairly and responsibly
Guideline 8.1	The Board should establish a remuneration committee.	;
Guideline 8.2	Clearly distinguish the structure of Non-executive Directors' remuneration	;
	from that of executive directors and senior executives.
Guideline 8.3	Provide the information set out in Guide to reporting on Principle 8.	;

Securities Trading Policy

The Company's Securities Trading Policy is set out on the website www.intec.com.au as below.

Directors, employees and key consultants may only deal in the Company's shares during 'window periods' nominated for this purpose from time to time by the Managing Director, or failing him the Chairman. However, Directors, employees and key consultants are prohibited from buying or selling Intec shares at any time if they are aware of price sensitive information that has not been made public.

Corporate Directory

Directors

Chairman Trevor A Jones Managing Director Kieran G Rodgers Non-executive Director James R G Bell

Company Secretaries

Robert J Waring David W Clark (Financial Controller)

Senior Management

Corporate Development Manager Dave L Sammut Head of Technology Andrew R Tong General Manager—Intec Envirometals Pty Ltd Adam J Randall

Notice of Annual General Meeting

The Annual General Meeting of Intec Ltd will be held at Intec's Registered Office Level 3, 2 Elizabeth Plaza North Sydney NSW on 13 November 2012 at 2:00 p.m.

Registered Office and Principal Place of Business

Level 3, 2 Elizabeth Plaza PO Box 1507 North Sydney NSW 2059 Australia Telephone: (+61 2) 9954 7888 Facsimile: (+61 2) 8904 0334 Email: mail@intec.com.au Website: www.intec.com.au

Intec Envirometals Pty Ltd

PO Box 666 20 River Road Burnie TAS 7320 Australia Telephone: (+61 3) 6431 9867 Facsimile: (+61 3) 6431 3629

Intec Envirometals Research Facility

20 River Road Burnie TAS 7320 Australia

Share Registry

Boardroom Pty Limited Level 7, 207 Kent Street Sydney NSW 2000 Australia GPO Box 3993 Sydney NSW 2001 Telephone: (+61 2) 9290 9600 Facsimile: (+61 2) 9279 0664 Email: enquiries@boardroomlimited.com.au Website: www.boardroomlimited.com.au

Auditors

Crowe Horwath Sydney Level 15, 1 O'Connell Street Sydney NSW 2000 Australia

Legal Advisers

Gadens Lawyers 77 Castlereagh Street Sydney NSW 2000 Australia

Patent Attorneys

Griffith Hack 100 Miller Street North Sydney NSW 2060 Australia

Stock Exchange and Trading Platform Listings

Intec Ltd shares are listed or traded on the Australian Stock Exchange (Code: INL), the Deutsche Boerse (Code: INF), and as American Depository Receipts on: the OTC Markets (Code: ICLJY)