Half Year Accounts
Released
Released
Announcement PDF
LITHIUM AUSTRALIA NL
(FORMERLY COBRE MONTANA NL)
ABN 29 126 129 413
FINANCIAL REPORT
FOR THE HALF-YEAR ENDED 31 DECEMBER 2015
CONTENTS PAGE
CORPORATE DIRECTORY .......................................................................................................................................... 1
DIRECTORS’ REPORT ................................................................................................................................................. 2
AUDITORS’ INDEPENDENCE DECLARATION .............................................................................................................. 7
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ............... 8
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION ....................................................................... 9
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ...................................................................... 10
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS ................................................................................. 11
NOTES TO THE FINANCIAL STATEMENTS ................................................................................................................ 12
DIRECTORS’ DECLARATION .................................................................................................................................... 21
INDEPENDENT AUDITOR’S REVIEW REPORT .......................................................................................................... 22
CORPORATE DIRECTORY
DIRECTORS
AUDITORS
George Bauk (Non-executive Chairman)
Adrian Griffin (Managing Director)
Bryan Dixon (Non-executive Director)
Bentleys
London House Level 3
216 St Georges Terrace
PERTH WA 6000
COMPANY SECRETARY
SHARE REGISTRY
Barry Woodhouse (appointed 21 August 2015)
Amanda Wilton-Heald (appointed 10 November 2014)
and resigned 21 August 2015)
Advanced Share Registry Services
110 Stirling Highway
NEDLANDS WA 6009
Telephone:
Facsimile:
+618 9389 8033
+618 9389 7871
REGISTERED OFFICE & PRINCIPAL PLACE OF BUSINESS
STOCK EXCHANGE LISTING
Suite 3
23 Belgravia Street
BELMONT WA 6104
The Company is listed on the Australian
Securities Exchange Limited.
Home Exchange:
Perth
ASX Codes:
LIT and LITCC
Phone:
Facsimile:
Email:
Website:
+618 6145 0288
+618 9475 0847
info@lithium-au.com
www. lithium-au.com
Page 1
DIRECTORS’ REPORT
The Directors present their report on Lithium Australia NL (formerly Cobre Montana NL) and its controlled
entities (“Consolidated Entity”) for the half-year ended 31 December 2015.
BOARD OF DIRECTORS
The names and details of the Consolidated Entity directors in office during the financial period and until the date
of this report are as follows. Directors were in office for this entire period unless otherwise stated.
George Bauk
Adrian Griffin
Bryan Dixon
Eduardo Valenzuela
Non-executive Chairman (appointed 15 July 2015)
Managing Director
Non-executive Director
Non-executive Chairman (retired 15 July 2015)
COMPANY SECRETARY
Barry Woodhouse (appointed 21 August 2015)
Amanda Wilton-Heald (appointed 10 November 2014 and resigned 21 August 2015)
REVIEW OF OPERATIONS
RECOGNISING AND ADDRESSING AN UNPARALLELED OPPORTUNITY
Early in the 2014/15 year, Lithium Australia NL (LIT) noticed an important change in the dynamics of lithium
supply – a broadening supply gap and a potential shortage of available lithium. The dynamics on the supply side
are complex and controlled by only a handful of producers. LIT saw an unparalleled opportunity to develop an
independent supply stream.
Lithium micas, long considered waste by the lithium chemical industry, comprise the most abundant group of
lithium minerals worldwide. Recognising this, LIT sought to develop a metallurgical process that could well create
a supply-stream solution; that is, producing lithium carbonate from the waste from mining operations to fill the
widening supply gap projected for the battery market. Initial laboratory tests confirmed the efficacy of a process
that permits what was previously 'waste' to be labelled 'ore'. The test work was undertaken by Strategic
Metallurgy Pty Ltd and the process named “L-Max”.
The L-Max process has a very low energy footprint, and unlike other processes investigated in the past, requires
no roasting. Significant by-product credits enhance the economics and estimated operating costs suggest the LMax process will be competitive with the world’s most efficient producers provided the feed to the carbonate
plant incurs a low mining cost. LIT has identified a number of projects where this waste feed is available.
The abundance and availability of lithium micas not historically assessed for resource potential have provided LIT
with scope for establishing a project portfolio of significance in the lithium industry and reaping the rewards of
first-mover advantage. LIT has now made significant progress towards its goal of controlling the world’s largest
lithium inventory. This has been achieved by strengthening strategic relationships, which has provided
immediate access to mineralised material, and targeting areas of high prospectivity for lithium micas, until now
a 'forgotten resource'.
Identifying the opportunity
In July 2014, a projected long-term supply deficit in the lithium market prompted LIT to review lithium
occurrences in Western Australia. It soon became apparent that much of the State's lithium was locked in the
micas, lepidolite and zinnwaldite, neither of which has previously been mined to produce lithium chemicals. The
materials themselves were not a 'Resource' or 'Ore' under the JORC 2012 Code as there was no way of
economically recovering the lithium from them. As a consequence, there was little point in undertaking field
programs to quantify their abundance in any locality, as by JORC definition, this would not result in defining a
“resource” as there could be no commercial outcome without an expectation of being able to profitably recover
Page 2
DIRECTORS’ REPORT (Continued)
lithium without first having a viable process to do so. Therefore, a metallurgical breakthrough was needed prior
to detailed deposit evaluation.
The first successful leach tests were conducted upon a lepidolite specimen purchased on the internet. Larger
samples were subsequently required for bulk testing, which necessitated access to identified mineralisation.
Negotiations to acquire the first of LIT's identified lithium mica deposits commenced in July 2014.
First access to lepidolite deposits – September 2014
A number of areas of abundant lepidolite were targeted for evaluation, not only to supply the bulk test material
needed to prove the veracity of the leach process but also to recover enough leach solutions to investigate
downstream processing and the production of lithium chemicals.
LIT's first project, Ravensthorpe, was procured by way of an option to purchase from Dempsey Minerals Ltd (ASX:
DMI). Located near Ravensthorpe in Western Australia, the project covers the Cocanarup Pegmatite Field, which
in the past has produced various commodities hosted by the pegmatites.
The second project, the Coolgardie Rare Metals Venture, also in Western Australia, is an initiative with Focus
Minerals Limited (ASX: FML). It includes the historic lithium production centre of Lepidolite Hill. Under the terms
of its agreement with FML, LIT has the rights to all metals derived from pegmatites on the property and will freecarry a 20% FML interest to the point at which a decision is made to commit to feasibility.
Production of battery-grade lithium carbonate – October 2014
Bulk samples from Lepidolite Hill were subjected to flotation, producing a high-grade lepidolite concentrate that
was subsequently leached. Further processing of the leach liquor removed unwanted impurities and precipitated
battery-grade lithium carbonate. This result was achieved less than three months after obtaining access to the
first of the Western Australian deposits.
Lithium process breakthrough delivers 25-year license agreement
In recognition of LIT’s collaboration in developing the lithium mica extraction technology, the owners of L-Max
granted LIT an exclusive licence to use the technology in Western Australia for more than 25 years, plus two
other licences that can be used anywhere in the world. One of these licences has been assigned to the Cinovec
Project for which LIT has a Memorandum of Understanding with European Metals Holdings Limited (ASX: EMH).
Access to more deposits in Western Australia
LIT's success in producing battery-grade lithium carbonate from lithium mica has prompted global interest and
led to a number of collaborative agreements. Those agreements include the Seabrook Rare Metals Venture with
Tungsten Mining NL (ASX: TGN), where LIT has the rights to all metals except tungsten. A 20% TGN interest will
be free-carried to the point at which a decision is made to commit to feasibility.
LIT has extended an agreement with Pilbara Minerals Limited (ASX: PLS) to assess PLS’s Pilgangoora project in
the north-west of Western Australia, with a view to presenting PLS with a commercial development proposal by
December 2016. Material from Pilgangoora is presently the subject of metallurgical testing.
Subsequent to the period end, LIT entered into an agreement with Venus Metals Corporation Limited (ASX:VMC)
to assess VMC’s Pilgangoora project in the north-west of Western Australia, with a view to presenting VMC with
a commercial development proposal.
LIT’s strategy is to create a processing hub in or around Port Hedland and process material currently considered
to be uneconomic.
From a focus on tin to a major lithium resource in two months
In December 2014, LIT announced an agreement with European Metals Holdings Ltd (ASX: EMH). Under the
terms of that agreement, LIT agreed to assess the lithium potential of the 100% EMH-owned Cinovec tin/tungsten
deposit in the Czech Republic.
Page 3
DIRECTORS’ REPORT (Continued)
5.
REVIEW OF OPERATIONS (CONTINUED)
Although a published lithium resource existed there, EMH recognised that the proposed techniques for lithium
extraction involved roasting and hence were high-cost processing routes which historically had not been
competitive.
Laboratory tests revealed that the Cinovec zinnwaldite responds well to both concentration by flotation and
further acid leaching.
As a consequence of that metallurgical success and additional drilling, the deposit has been re-modelled, the
result being publication of the following resource statement:
an Inferred Resource of 5.5 Mt LCE*, 514.8 Mt @ 0.43% Li2O (0.1% Li cut-off), and
an additional Exploration Target of 3.4–5.3 Mt LCE, being 350–450 Mt @ 0.39–0.47% Li2O.
*LCE = lithium carbonate equivalent, a common measure for reporting lithium production and demand.
LCE = Li2O % x 2.473.
*Cautionary statement The potential quantity and grade of the Exploration Target, is conceptual in nature, there
has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result
in the estimation of a Mineral Resource.
Both the conversion of an opportunity into reality via the application of new technology to a 'forgotten resource'
and the elevation of an unknown deposit into one of the world's five largest hard-rock lithium deposits are
testament to the potential of LIT to realise its ultimate goal: that of controlling the greatest lithium inventory of
any company.
The rapid progress of developing this processing system is a credit to all involved. The potential to improve
recoveries to the extent demonstrated is the holy grail of hydrometallurgical processing. But that isn’t where it
ends – the ability to recover value added products from every major metal in the solution suggests LIT is on the
verge of unveiling a lithium extraction process commercially unrivalled by anything else presently in production….
…Introducing the Sileach™ process – the Company applied for provisional patent in early February 2016. Further
comments in relation to the Sileach™ process are listed below.
Looking ahead
Subsequent to year end, LIT patented its own process, the Sileach™ process, to extract lithium from spodumene
and other lithium silicates. This currently provisional patent will reduce LIT’s reliance on third party technologies.
LIT intends to refine and commercialise the Sileach™ process in the coming months by pilot plant testing of a
variety of material types. It is currently expected to commence pilot plant testing in June 2016.
LIT continues to pursue the production of battery-grade lithium carbonate from micas, and now spodumene,
with cost competitive processing techniques. This gives it significant 'first mover' advantage, as does the exclusive
nature of its wholly owned Sileach™ process and other extraction technology licences.
LIT will assess the Electra Project in Sonora Mexico in joint venture with Alix Resources Corporation (TSXV: AIX).
LIT is reviewing other opportunities in Africa, Europe, the Americas and Australia.
RESULTS OF OPERATIONS
The operating loss after income tax of the Consolidated Entity for the half-year ended 31 December 2015 was
$1,759,795 (31 December 2014: $522,601).
No dividend has been paid during or is recommended for the financial period ended 31 December 2015.
Page 4
DIRECTORS’ REPORT (Continued)
FINANCIAL POSITION
The Consolidated Entity’s working capital, being current assets less current liabilities was $526,558 at 31
December 2015 (30 June 2015: working capital of $527,523). There has been a marked improvement in the
working capital position since LIT changed its strategy to pursue lithium opportunities. LIT continues to receive
keen interest from partly-paid shareholders in relation to the conversion of the five cent partly paid shares that
are currently paid to $0.021. Subsequent to year end the Company was successful in raising $6.5m which has
secured its ability to progress its medium term business objectives. Further information on this is listed in After
Balance Date events.
In the Directors’ opinion, there are reasonable grounds to believe that the Consolidated Entity will be able to pay
its debts as and when they become due and payable.
SUBSEQUENT EVENTS
On 11 January 2016, the Company issued 2,780,750 ordinary fully paid shares on conversion of the five cent
partly paid shares paid to $0.021 (LITCC) to fully paid ordinary shares (LIT) at an issue price $0.029 to raise
$80,642 before costs.
On 15 January 2016, the Company issued 855,000 ordinary fully paid shares on conversion of LITCC to LIT, at an
issue price $0.029 to raise $24,795 before costs.
On 20 January 2016, the Company issued 30,000,000 ordinary fully paid shares at an issue price $0.14 per share
following completion of a $4.2m funding package before costs. LIT initially received $600,000 of the Lanstead
investment upfront with the remainder of the investment to be distributed under the terms of an equity sharing
agreement between the two parties. Under the agreement, LIT will receive 18 monthly cash settlements for the
remaining $3.4m of the investment by Lanstead. This sharing agreement allows LIT to secure much of the
potential upside arising from future news flow and any share price appreciation of LIT.
The value of further advances subject of the equity sharing agreement will be determined by LIT’s share price
each month based on a volume weighted average price for 5 trading days prior to each settlement date
measured against a benchmark price of $0.1867 per share. If the LIT share price exceeds the benchmark price
for that month, LIT will receive more than 100% of the monthly settlement due on a pro rata basis. Importantly,
there is no upper limit placed on the additional funds receivable by the Company as part of the monthly
settlements. Should the LIT share price dip below the benchmark price for the month, LIT will receive less than
100% of the expected monthly settlement due, on a pro rata basis (so the total cash received may exceed or fall
below $4m). In addition, LIT has agreed to make a value payment to Lanstead of 1,428,571 ordinary shares as
consideration for the sharing agreement. The future performance of the LIT share price will not result in any
increase to the number of shares issued to Lanstead.
On 20 January 2016, the Company issued 150,000 ordinary fully paid shares on conversion of LITCC to LIT at an
issue price $0.029 to raise $4,350.
On 20 January 2016, the Company issued 1,485,403 ordinary fully paid shares at various deemed issue prices per
share as part of the Director and Senior Management Fee & Remuneration Sacrifice Share Plan.
On 22 January 2016, the Company issued 1,028,285 ordinary fully paid shares on conversion of LITCC to LIT at an
issue price $0.029 to raise $29,821.
On 29 January 2016, the Company issued 1,563,462 ordinary fully paid shares on conversion of LITCC to LIT at an
issue price $0.029 to raise $45,340.
On 5 February 2016, the Company issued 79,735 ordinary fully paid shares on conversion of LITCC to LIT at an
issue price $0.029 to raise $2,312.
Page 5
DIRECTORS’ REPORT (Continued)
On 26 February 2016, the Company issued 2,160,445 ordinary fully paid shares on conversion of LITCC to LIT at
an issue price $0.029 to raise $62,653.
On 4 March 2016, the Company issued 2,927,639 ordinary fully paid shares on conversion of LITCC to LIT at an
issue price $0.029 to raise $84,902.
On 11 March 2016, the Company issued 1,242,004 ordinary fully paid shares on conversion of LITCC to LIT at an
issue price $0.029 to raise $36,018.
Other than as listed above, there have not been any other material events subsequent to the end of the reporting
date and the date of this report that have not been included in this financial report.
AUDITOR’S INDEPENDENCE DECLARATION
Section 307C of the Corporations Act 2001 requires our auditors, Bentleys, to provide the directors of the
Consolidated Entity with an Independence Declaration in relation to the review of the interim financial report.
This Independence Declaration is set out on page 6 and forms part of this directors’ report for the half-year ended
31 December 2015.
This report has been made in accordance with a resolution of the Board of Directors.
Adrian Griffin
Managing Director
Dated at Perth this 15th day of March 2016
Competent Person’s Statement
The information contained in the report relates to Exploration Results of projects owned by Lithium Australia NL and is based on information
compiled or reviewed by Mr Adrian Griffin, an employee of the Company and a Member of the Australasian Institute of Mining and Metallurgy.
Mr Griffin has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity
being undertaken to qualify as a Competent Person, as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) ‘Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr. Griffin has given consent to the inclusion in the report of
the matters based on his information in the form and context in which it appears.
Page 6
To the Board of Directors
Auditor’s Independence Declaration under Section 307C of the
Corporations Act 2001
As lead audit director for the review of the financial statements of Lithium Australia NL for
the half year ended 31 December 2015, I declare that to the best of my knowledge and
belief, there have been no contraventions of:
the auditor independence requirements of the Corporations Act 2001 in relation to
the review; and
any applicable code of professional conduct in relation to the review.
Yours faithfully
BENTLEYS
Chartered Accountants
Dated at Perth this 15th day of March 2016
MARK DELAURENTIS CA
Director
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
For the Half-Year Ended 31 December 2015
Note
31 December
2015
31 December
2014
$
$
Continuing Operations
Revenue
Other revenue
4,690
25
22
-
Occupancy costs
Professional fees
Corporate fees
(35,000)
(44,935)
(120,168)
(16,000)
(109,056)
(41,878)
Employee benefits expense
Share based payment expense
Administration costs
Fair value of investments adjustment
Exploration and evaluation costs written off
Loss on disposal of subsidiary
(369,728)
(792,243)
(48,712)
(256,084)
(97,640)
(304,553)
(8,692)
(15,583)
(1,522)
(25,339)
-
Loss before income tax
Income tax expense
(1,759,795)
-
(522,601)
-
Loss from continuing operations
(1,759,795)
(522,601)
-
-
-
(50,145)
94,304
-
Total comprehensive income for the period
(1,665,491)
(572,746)
Loss for the year attributable to:
Members of the controlling entity
(1,759,795)
(521,776)
-
(835)
(1,759,795)
(572,746)
(1,665,491)
-
(571,911)
(835)
(1,665,491)
(572,746)
1.33
0.62
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operation
Foreign exchange translation of subsidiary disposed of, transferred
to income statement
Non-controlling interest
Total comprehensive income attributable to:
Members of the controlling entity
Non controlling interest
Basic loss per share (cents per share)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying
notes.
Page 8
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2015
Note
Current Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total Current Assets
31 December
2015
30 June 2015
$
$
999,574
103,236
1,102,810
852,685
91,328
9,375
953,388
3,097
22,000
268,552
8,384
302,033
3,322
22,000
3,365
28,687
1,404,843
982,075
Current Liabilities
Trade and other payables
576,252
425,535
Total Current Liabilities
576,252
425,535
TOTAL LIABILITIES
576,252
425,535
NET ASSETS
828,591
556,540
11,710,766
800,935
(11,683,110)
10,565,467
35,583
(10,044,510)
828,591
556,540
Non Current Assets
Financial assets
Exploration Expenditure
Intangibles
Property, plant and equipment
Total Non Current Assets
5
6
TOTAL ASSETS
Equity
Issued capital
Reserves
Accumulated losses
7
TOTAL EQUITY
The above statement of financial position should be read in conjunction with the accompanying notes.
Page 9
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Half-Year Ended 31 December 2015
Share Based
Payment
Reserve
Issued
Capital
Foreign
Currency
Translation
Reserve
$
(41,471)
Accumulated
Losses
Non
Controlling
Interest
$
(8,791,905)
$
(171,073)
(521,766)
(835)
(522,601)
-
Total
$
8,567,085
$
457,094
Loss for the period
-
-
Exchange differences on
translation of foreign
subsidiary
-
-
(50,145)
-
-
(50,145)
Total comprehensive loss for
the period
-
-
(50,145)
(521,766)
(835)
(572,746)
Balance at 1 July 2014
$
19,730
Transaction with owner, directly recorded in equity:
Issue of shares
Capital raising costs
Option valuation reserve
909,371
(88,766)
-
8,692
-
-
-
909,371
(88,766)
8,692
Balance at 31 December 2014
9,387,690
465,786
(91,616)
(9,313,671)
(171,908)
276,281
Balance at 1 July 2015
10,565,467
129,887
(94,304)
(10,044,510)
-
556,540
Loss for the period
-
-
(1,759,795)
-
(1,759,795)
Other comprehensive income
-
-
-
-
-
-
Exchange differences on
translation of foreign
subsidiary
-
-
94,304
-
-
94,304
Total comprehensive loss for
the period
-
-
94,304
(1,759,795)
-
(1,665,491)
1,156,920
(11,621)
-
-
-
-
1,156,931
(11,632)
-
792,243
-
-
-
792,243
11,710,766
(121,195)
800,935
-
121,195
(11,683,110)
-
828,591
Transaction with owner, directly recorded in equity:
Issue of shares
Capital raising costs
Issue of performance rights
and performance option
rights
Options expired
Balance at 31 December 2015
The above statement of changes in equity should be read in conjunction with the accompanying notes.
Page 10
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Half-Year Ended 31 December 2015
31 December
2015
31 December
2014
$
$
Payments to suppliers and employees
(478,033)
(157,280)
Payments for exploration and evaluation
(219,356)
(125,478)
Cash Flows from Operating Activities
Interest received
Net cash outflow from operating activities
4,690
22
(692,699)
(282,736)
250
-
Cash Flows from Investing Activities
Sale of financial assets
Purchase of property, plant and equipment
(8,123)
-
Payments for intangible assets
(151,511)
-
Net cash outflow from investing activities
(159,384)
-
Proceeds from issue of shares and options
1,010,593
800,000
Payment for capital raising costs
(11,621)
(3,591)
Net cash inflows from financing activities
998,972
796,409
Net increase in cash held
146,889
513,673
Cash and cash equivalents at the beginning of the period
852,685
334,193
Cash and cash equivalents at the end of the period
999,574
847,866
Cash Flows from Financing Activities
The above statement of cash flows should be read in conjunction with the accompanying notes.
Page 11
NOTES TO THE FINANCIAL STATEMENTS
For The half-year ended 31 December 2015 (continued)
1.
CORPORATE INFORMATION
The financial report of Lithium Australia NL and controlled entities (“the Consolidated Entity”) for the half-year ended 31
December 2015 was authorised for issue in accordance with a resolution of the directors on 15 March 2016. Lithium Australia
NL is a no liability company incorporated in Australia and its shares are publicly traded on the Australian Securities Exchange.
The Company changed its name from Cobre Montana NL on 15 July 2015.
The nature of the operations and principal activities of the Consolidated Entity are described in the directors’ report that is
included in this report.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of accounting
The half-year financial report is a general-purpose financial statement, which has been prepared in accordance with the
requirements of the Corporations Act 2001, applicable Accounting Standards including AASB 134 “Interim Financial
Reporting” and other mandatory professional reporting requirements. Compliance with Australian Accounting Standards
ensures that the financial statements and notes also comply with International Financial Reporting Standards.
The half-year financial report has been prepared on a historical cost basis, except where applicable for financial assets that
have been measured at fair value. Cost is based on the fair value of the consideration given in exchange for assets. The
company is domiciled in Australia and all amounts are presented in Australian dollars, unless otherwise noted. For the
purpose of preparing the half-year financial report, the half-year has been treated as a discrete reporting period.
The half year financial report does not include all notes of the type normally included within the annual financial report and
therefore cannot be expected to provide as full an understanding of the financial performance, financial position and
financing and investing activities of the consolidated entity as the full financial report.
It is recommended that this financial report be read in conjunction with the annual financial report of Lithium Australia NL as
at 30 June 2015 and any public announcements made by the Consolidated Entity during the half-year in accordance with
continuous disclosure requirements arising under the Corporations Act 2001 and the ASX Listing Rules.
The half-year financial statements have been prepared in accordance with the accounting policies adopted in the
consolidated entity’s last annual financial statements for the year ended 30 June 2015.
The Consolidated Entity has adopted all of the new and revised Standards and Interpretations issued by the Australian
Accounting Standards Board (AASB) that are relevant to their operations and effective for the current half year.
The Consolidated Entity adopted the following new accounting policies during the half year period:
Intangible assets
Intangible assets acquired separately
Intangible assets with finite lives that are acquired separately are carried at cost less accumulated amortisation and
accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives. The
estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any
changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired
separately are carried at cost less accumulated impairment losses.
The useful live of the intangible asset acquired – Licence fee is 25 years.
Internally-generated intangible assets - research and development expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An internally-generated intangible asset arising from development (or from the development phase of an internal project) is
recognised if, and only if, all of the following have been demonstrated:
• the technical feasibility of completing the intangible asset so that it will be available for use or sale;
• the intention to complete the intangible asset and use or sell it;
• the ability to use or sell the intangible asset;
• how the intangible asset will generate probable future economic benefits;
• the availability of adequate technical, financial and other resources to complete the development and to use or sell the
intangible asset; and
• the ability to measure reliably the expenditure attributable to the intangible asset during its development.
Page 12
NOTES TO THE FINANCIAL STATEMENTS
For The half-year ended 31 December 2015 (continued)
The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the
date when the intangible asset first meets the recognition criter
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