INDEPENDENCE GROUP NL ANNUAL REPORT 2017

Notes to the consolidated financial statements 30 June 2017 (continued) Group structure This section of the notes provides information which will help users understand how the group structure affects the financial position and performance of the Group. 22 Acquisition of Windward Resources (a) Summary of acquisition On 22 December 2016, Independence Group NL acquired 100% of the issued share capital of Windward Resources Ltd (Windward) by way of an off-market takeover. Windward was a listed public Australian company holding a number of tenements within the Fraser Range region. The assets and liabilities recognised as a result of the acquisition are as follows: Fair value $'000 Cash 4,507 Trade and other receivables 141 Plant and equipment 164 Exploration and evaluation expenditure 17,823 Deferred tax assets 300 Trade and other payables (848) Net identifiable assets acquired 22,087 The Company gained control of Windward on 27 October 2016, with a shareholding of 53.94%. Following the completion of the off-market and compulsory acquisition of the remaining shares, the Company held 100% of Windward as at 22 December 2016. Total cash outflows relating to the acquisition of Windward for the period, including acquisition-related costs, were $22,081,000. Cash received on the acquisition of Windward was $4,507,000, resulting in a net cash outflow in investing activities in the statement of cash flows of $17,574,000. (b) Recognition and measurement When an asset acquisition does not constitute a business combination, the assets and liabilities are assigned a carrying amount based on their relative fair values in an asset purchase transaction. No goodwill will arise on the acquisition and transaction costs of the acquisition will be included in the capitalised cost of the asset. 23 Assets held for sale On 14 June 2017, the Company announced its intention to divest of the Stockman Project, which is owned by the Group's wholly owned subsidiary Independence Stockman Project Pty Ltd. The associated assets were consequently presented as held for sale in the 2017 financial statements. (a) Assets and liabilities classified as held for sale The following assets were reclassified as held for sale as at 30 June 2017: 2017 $'000 2016 $'000 Assets classified as held for sale Exploration and evaluation expenditure 43,784 - Property, plant and equipment 1,013 - Total assets 44,797 - The carrying amounts of the assets included as held for sale reflect the recoverable amount as determined with reference to an executed sale agreement between Independence Stockman Project Pty Ltd and CopperChem Limited, a wholly owned subsidiary of Washington H Soul Pattinson and Company Limited. Independence Group NL 77 IGO ANNUAL REPORT 2017— 107 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017