Icon Energy Limited Annual Report 2017

ICON ENERGY LIMITED AND ITS CONTROLLED ENTITIES FOR THE YEAR ENDED 30 JUNE 2017 (q) Exploration and evaluation expenditure Restoration provision Useful life of property, plant and equipment (r) Share buy‐back (s) Share based payments Critical accounting estimates and judgments (Continued) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 25 - STATEMENT OF ACCOUNTING POLICIES (Continued) 1. Our cash position is sufficient to meet our near term exploration and administrative commitments and we retain the ability to pursue valuable growth opportunities that may arise in the near future. The timing and actual number of shares purchased under the buy-back will depend on the prevailing share price, market conditions and other considerations. The Company reserves the right to suspend or terminate the buy- back at any time and to buy-back less than 10% shares. All shares purchased are cancelled. There are two conditions set by Icon Board: 2. The fund for Share buy-back should come from our income such as interest. Share based payment benefits are provided to employees through the Icon's Employee Performance Rights Plan. Information relating to this scheme is set out in Note 12. The fair value of performance rights granted under the Icon's Employee Performance Rights Plan is recognised as an employee benefits expense with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the rights granted, which includes any market performance conditions and the impact of any non-vesting conditions but excludes the impact of any service and non-market performance vesting conditions. Non-market vesting conditions are included in assumptions about the number of rights that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of rights that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity. The application of entity's policy for exploration and evaluation discussed in Note 25(f) requires management to make certain estimates and assumptions as to future events and circumstances. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised exploration and evaluation expenditure, a judgement is made that the capitalised expenditure is unlikely to be recovered, the relevant capitalised amount will be impaired through the consolidated statement of profit and loss and other comprehensive income. The buy-back provides Icon with an opportunity to strengthen the Company’s capital position at a cyclical low point in the resources market and also demonstrates the Board’s strong belief in the underlying value of the Company’s assets. From March 2015, on-market share buy-back will be undertaken from market over the 12 months of up to 10% of Icon ordinary shares on issue. In accordance with ASX listing rules, the price paid for shares purchased under the buy-back is no more than 5% above the volume weighted average share price of Icon shares over the 5 days of trading before the share purchase is made. The consolidated entity assesses its future liabilities in relation to the restoration costs which include the removal of facilities, abandonment of wells and restoration of affected areas. The estimate of future restoration costs is done at the time of installation of the assets. In most instances, removal of assets occurs many years into the future. Therefore, management is required to make judgments regarding the removal date, future environmental legislation, the extent of restoraion activities and future removal technologies. Refer to note 10 for key assumptions. In preparation of the financial statements, estimates and assumptions have been made by the management regarding the estimated useful lives of property, plant and equipment.The management estimates that the useful life of these assets, being the period of time during which the assets can be utilised without any significant modifications, repairs or replacements, is noted in 25(e). However, the actual useful life may be shorter or longer. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2017 FINANCIAL REPORT 66 ICON ENERGY ANNUAL REPORT 2017