Ann: R&D Tax Incentive Refund, page-10

I am not sure you understand what the R & D grants are. I am not talking about a normal tax audit I am talking about an audit of the R & D grant scheme which is a special programme set up by the federal government that is policed by the ATO and that MRD has claimed close to $2 million dollars of the last few years.

The vast majority of exploration companies have not made R & D claims for a reason, they have read the guidelines. There are only a handful that have and MRD is not just one of those companies that have but has made some of the largest claims, so it is a prime candidate for an audit.

MRD have decided to take the risk that they can convince a public servant who works for the ATO that they have been doing R & D and not exploration with the grant money. Given that the guidelines are quite clear on this and MRD have on put it public record that they spent the money on exploration and not research the odds of that are not great.

I am not being negative just pointing out a potential liability that the company has incurred. It's only going to be an issue if the company is audited.