REG - Star Phoenix Group - Audited Annual Report for Year Ended 30 June 2021
23/12/2021 10:55
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RNS Number : 6403W Star Phoenix Group Ltd 23 December 2021
Star Phoenix Group Ltd
("Star Phoenix" or the "Company")
23 December 2021
AUDITED ANNUAL REPORT FOR THE 12 MONTHS ENDED 30 JUNE 2021
Star Phoenix (AIM: STA), an international company with an oilfield services
business in Trinidad and an oil and gas interest in Indonesia, today
releases its audited Annual Report for the 12 months ended 30 June 2021. A
copy of the full Annual Report is available on the Company's website by
clicking the link
https://www.starphoenixgroup.com/investors/reports-presentations/
(https://www.starphoenixgroup.com/investors/reports-presentations/) .
This announcement has been approved by Chairman Kerry Gu on behalf of the
Company.
Contact Details
WH Ireland Limited (Nominated Adviser and Broker)
Star Phoenix Group Ltd James Joyce / Ben Good
Lubing Liu (Company Secretary) t. +44 (0)20 7220 1666
e. admin@starphoenixgroup.com
t. +61 8 6205 3012
The information contained within this announcement is considered to be inside
information prior to its release, as defined in Article 7 of the Market Abuse
Regulation No. 596/2014, and is disclosed in accordance with the Company's
obligations under Article 17 of those Regulations.
The following has been directly extracted from the Audited Annual Report
An electronic version of this report is available on the Company's website
www.starphoenixgroup.com
Contents
Directors' Report
Operational Review
Remuneration Report (Audited)
Auditor's Independence Declaration
Consolidated Statement of Profit or Loss and other Comprehensive Income as at
30 June
2021………………………………………………………………………………………………………….
Consolidated Statement of Financial Position as at 30 June 2021
Consolidated Statement of Changes in Equity as at 30 June 2021
Consolidated Statement of Cash Flows as at 30 June 2021
Notes to Consolidated Financial Statements
Directors' Declaration
Independent Audit Report to the Members
Additional Information
Corporate Directory
Directors' Report
The Directors of Star Phoenix Group Ltd ("SPG" or "the Company") and the
entities it controls (together, the "Group") present the financial report for
the year ended 30 June 2021.
Directors
The names and details of the Company's directors in office during the
financial year and until the date of this report are as follows. The directors
were in office during the entire period unless otherwise stated.
Name Position
Mr Zhiwei Gu Executive Chairman
Mr Lubing Liu Executive Director, Chief Operating Officer
Dr Mu Luo Non-Executive Director
Dr YuFeng Meng Non-Executive Director (Ceased to be a director on 11 December 2020 as per the
results of the votes on 2020 AGM)
Mr Zhiwei Gu: Executive Chairman
Qualifications: LL.B, LL.M., MSc
Interest in shares and options: 5,489,793 ordinary shares
Directorships held in other listed entities during the past three years None
Mr Gu is an experienced corporate lawyer, who has worked with numerous
companies seeking listings on various international stock markets, including
the Toronto Stock Exchange and the Hong Kong Stock Exchange. He is currently
a partner of Dentons, one of the largest global law firms. Mr Gu has
participated in several venture capital and private equity investment cases by
various funds such as London Asia Fund, Warburg Pincus, Korea Development
Bank, China Venture Investment Co., and China Cinda AMC. During his time
with China National Gold Group Corp., Mr Gu was in charge of mineral resources
merger and acquisition activities. Mr Gu holds an LLB from Jilin University
in China, an LLM from Northeast University in China, and Master of Applied
Finance from Macquarie University in Australia. Mr Gu is a qualified lawyer
and securities practitioner in China.
Mr Lubing Liu: Executive Director, Chief Operating Officer and Joint Company
Secretary
Qualifications: BSc
Interest in shares and options: 1,726,077 ordinary shares
Directorships held in other listed entities during the past three years None
Mr Lubing Liu has 25 years of global experience in petroleum exploration,
development, production, joint venture operations and new ventures. Prior to
joining the Company, Mr Liu held various subsurface leader roles, including
Chief Reservoir Engineer with Melbana Energy Limited, Vice President of
Exploration and Petroleum Technology with Sinopec East Puffin Pty Ltd, and
principal petroleum engineering leader roles with other international
exploration and production and energy service companies including
ConocoPhillips, CNOOC, Woodside, RPS and LR. Mr Liu is experienced in
petroleum engineering and has extensive IOR/EOR (waterflood inclusive) and gas
cycling experience having worked at the Xijiang24-3/30-2/24-1 oilfields,
Liuhua 11-1 oilfield and Penglai oilfield in China, the Chinguetti oilfield in
Mauritania, Block 95 in Peru, Goodwyn gas field, Thylacine & Geographe gas
field and Longtom gas field in Australia. Mr Liu holds a BSc in Petroleum
Engineering from the Southwest Petroleum University, China. He is a Member of
the Society of Petroleum Engineers.
Dr Mu Luo: Non-Executive Director
Qualifications: BSc, MSc, PhD
Interest in shares and options: None
Directorships held in other listed entities during the past three years None
Dr Luo is a senior oil and gas professional with over 35 years' experience
working for leading international E&P and oilfield services companies. He
has worked on various giant conventional and unconventional projects across
all levels from research to operations. He is currently a principal
development geophysicist to Inpex Corporation, leading a multi-billion Ichthys
LNG project in Australia. Prior to that, he held principal roles with Sinopec
Oil and Gas, PGS, Japan Petroleum Exploration Company Limited, and Japan Oil,
Gas and Metals National Corporation. Dr Luo holds a PhD in Exploration
Geophysics from the Curtin University, Australia; MSc in Geophysics from the
University of Queensland, Australia; and BSc in Geophysics from the Petroleum
University of China. He is a member of the Australian Society of Exploration
Geophysicists, the European Association of Geoscientists and Engineers, and
the Society of Exploration Geophysicists.
Dr YuFeng Meng: Non-Executive Director (appointed 14 April 2020)
Qualifications: BA, MBA, PhD
Interest in shares and options: None
Directorships held in other listed entities during the past three years None
Dr Meng's career spans over 30 years across the USA, Australia, Hong Kong and
China, where she held various leadership, management and consulting roles in
different sectors including education, aircraft tyre logistics, waste
management, real estate, equity investment, banking and Free Trade Zone
management and marketing. Dr Meng has experience in the public sector, project
management, and finance (particularly in the Build-Operate-Transfer or
Build-Own-Operate-Transfer project financing). More recently, she organised
numerous government trade delegations to promote bilateral business
co-operation between China and Australia. Dr Meng holds a PhD in Business
Administration from InterAmerican University and an MBA in Business
Administration from Southern California University. Dr Meng is a nominee of a
shareholder, Beijing Sibo Investment Management LP.
Company Secretary
The following persons held the position of company secretary during the
financial year:
• Ms Evgenia Bezruchko (Resigned on 27 August 2021)
• Mr Lubing Liu (appointed 1 April 2020)
Ms Evgenia Bezruchko: Joint Company Secretary
Qualifications: BSc, MSc, MBA
Interest in shares and options: 434,326 ordinary shares
Directorships held in other listed entities during the past three years None
Ms Evgenia Bezruchko has 10 years experience in corporate development and
capital markets in natural resources sector. Prior to joining SPG in 2012,
Evgenia worked in corporate broking and equity sales for an independent
merchant bank Brandon Hill Capital (formerly Fox-Davies Capital Limited),
covering a wide range of listed and private oil & gas and mining
companies. Evgenia holds a BSc in Pharmacology from the University of Bristol,
an MSc in Finance from the University of Westminster and an MBA from the
American InterContinental University.
Results of operations
The Company's loss for the year to 30 June 2021 was US$6,086,099 (FY2020:
profit of US$47,491,852). Loss for the year from continuing operations was
US$1,863,582 (FY2020: US$5,249,819 loss) and Loss for the year from
discontinued operations was (US$4,831,074) (FY2020: profit of
US$53,191,671).
Dividends
No dividend was paid or declared by the Company during the year and up to the
date of this report.
Corporate structure
Star Phoenix Group Ltd is a company limited by shares, which is incorporated
and domiciled in Australia.
Nature of operations and principal activities
The principal activity of the Group during the financial year was oilfield
services.
The Company's key focus remains on securing new opportunities to provide
future growth and value for the Company and its shareholders. Over the last
year, the Company has considered, reviewed and evaluated numerous projects and
investment opportunities with a view of securing attractive targets.
The Company is pleased to report that it is currently in advanced discussions
on a selected number of investment and joint venture opportunities and is
focusing its efforts to progress to the next stage. The Board believes these
new opportunities would offer shareholders exposure to significant plays in
the energy sector and looks forward to sharing the details of these
potentially value enhancing opportunities should they progress to binding
deals.
Operational Review
LandOcean litigation
The Company is claiming various sums that it believes are due to it from
LandOcean Energy Services Co. Ltd ("LandOcean") currently estimated
above US$10 million. Despite its efforts, the Company was not able to reach
an acceptable agreement with LandOcean in relation to the outstanding sums. As
a result, the Company and its legal advisers have commenced preparation for
arbitration proceedings against LandOcean in the London Court of
International Arbitration to recover the sums.
Later of this financial year, the company has started arbitration proceedings
against LandOcean.
Oilfield services
Following the sale, in the prior year, of the upstream business (RRTL) which
was by far the largest client of RRDSL, and given the continued challenging
industry conditions, the Company completed an organizational restructure of
RRDSL in order to substantially reduce overheads and the ongoing costs of the
Group.
The Company has also been actively marketing the rigs and equipment. As a
result, the Company sold four production rigs for a total sum of US$0.2
million. The Company continues the sale process of the remaining four
production and four drilling rigs.
The Company is also considering its options with regards to its interests in
Indonesia.
Major Shareholding Notification
One of the Company's shareholders Thesolia Ltd which previously
held 23,561,326 ordinary shares (15.62% shareholding) has completed an
off-market sale of all of its shares to another investor, Preceding Max
Ltd (the "Investor"). As a result, the Investor will now
hold 23,561,326 ordinary shares (15.62% shareholding). There will be no
change to the capital structure of the Company following this change. The
Investor was not a related party to the Company.
Significant changes in the state of affairs
There have been no significant changes in the state of affairs of the Group
during the financial year, other than as set out in this report.
A special general meeting
A special general Meeting was held on 25 September 2020 after the Company
received two separate requests from two separate Shareholders, each of which
holds at least 5% of the votes that may be cast at a general meeting of the
Company. The general meeting was held to consider the following resolutions:
1. Removal of Director - Dr. YuFeng Meng;
2. Election of Director - Dr. Yang Chong Yi;
3. Election of Director - Mr. Paul Norris;
4. Election of Director - Mr. Omar C.S. Stanford IV;
5. Election of Director - Mr. Li Jun;
6. Removal of Director - Mr. Zhiwei (Kerry) Gu; and
7. Removal of Director - Mr. Lubing Liu.
The Company called, arranged and held the Meeting to consider all the
resolutions proposed pursuant to these requests and in accordance with the
provisions of section 249D(5) of the Corporations Act. Following the
Extraordinary General Meeting, only one of the resolutions relating to the
removal of Dr YuFeng Meng as a Director was duly passed.
In accordance with the results of the votes on AGM, Dr YuFeng Meng ceased to
be a Non-Independent Non-Executive Director, effective 11 December 2020. Dr
Meng's appointment was made pursuant to Beijing Sibo Investment Management LP
("Sibo") contractual right to appoint up to three Non-Executive Directors to
the Board of the Company above 10% shareholding.
Likely developments and expected results of operations
The Company continues its search of new attractive acquisition opportunities
to provide future growth and value for the Company and its shareholders. The
Company is also seeking to complete the sale of its rigs and equipment in
Trinidad to provide additional cashflow and strengthen the Company's financial
position.
Events after the reporting date
Arbitration commences against LandOcean
On 14 July 2021, the Company announced that its legal
advisers Dentons UK and Middle East LLP have now filed an arbitration
request in the London Court of International Arbitration, which officially
marks commencement of arbitration proceedings against LandOcean.
Pursuant to the Request, the Group is claiming various sums from LandOcean
currently estimated in excess of US$8.4 million. There are additional claims
of US$1.8 million that fall outside of the Request, and the Company is
exploring options of bringing these claims separately in the courts
of Trinidad and Tobago. These sums are owed to the Group by LandOcean
pursuant to the sale and purchase agreement of Range Resources Trinidad
Limited. In accordance with the Australian Accounting Standards these amounts
have not been recognised in the financial statements as contingent assets.
Management changes
On 27 August 2021, the company announced that the Directors made a decision to
implement changes to the management team. As a result, a mutual agreement was
reached for Mr Theo Eleftheriades, the Chief Financial Officer and
Ms Evgenia Bezruchko, the Group Corporate Development Manager and Joint
Company Secretary to cease their employment in their current roles. The Board
of Directors have approved the non-Board appointment of Mr Harry Liu as
Chief Financial Officer. All of the management changes came into effect on 1
September 2021.
Director's Salaries and payments
On 07 September 2021, the company announced that the Board of Directors has
approved delaying all directors' salaries and payments from 1 September
2021 subject to further review at the beginning of 2022 in accordance with
the cash position of the Company at that particular time.
This has been taken as a cash conservation measure to preserve the Company's
cash reserves whilst it seeks the collection of the monies owed to it by
LandOcean, as updated in the Company's announcement of 14 July 2021.
Environmental regulations and performance
The Group's operations are not regulated by any significant environmental
regulation under a law of the Commonwealth or of a state or territory.
The Directors have considered compliance with the National Greenhouse and
Energy Reporting Act 2007 which requires entities to report annual greenhouse
gas emissions and energy use. The directors have assessed that there are no
current reporting requirements, but may be required to do so in the future.
Share options
As at 30 June 2021, the Company had no unissued ordinary shares of Star
Phoenix under option. During the year ended 30 June 2021 no ordinary shares of
the Company were issued on the exercise of options (2020: nil).
Indemnifying directors and officers
In accordance with the constitution, except where prohibited by the
Corporations Act 2001, every director, principal executive officer and
secretary of the Company shall be indemnified out of the property of the
Company against any liability incurred by him/her in his/her capacity as
director, principal executive officer or secretary of the Company or any
related corporation in respect of any act or omission whatsoever and howsoever
occurring or in defending any proceedings whether civil or criminal.
During the financial year, the Company has paid premiums of US$12,431 to
insure the Directors and Officers against certain liabilities arising out of
the conduct of acting as an officer of the Company. Under the terms and
conditions of the insurance contract, the nature of liabilities insured
against and the premium paid cannot be disclosed.
Meetings of Directors
During the financial year, eight meetings of the board of directors were held.
Attendances by each director during the year were as follows:
Director Board Meetings
Eligible to attend Attended
Zhiwei Gu 8 8
Lubing Liu 8 8
Mu Luo 8 8
YuFeng Meng (ceased to be a director on 11 December 2020) 5 3
Proceedings on behalf of the company
No person has applied for leave of Court 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 any
part of those proceedings.
The Company was not a party to any such proceedings during the year.
Corporate governance
In recognising the need for the highest standards of corporate behaviour and
accountability, the Board has adhered to the principles of sound corporate
governance. The Board of the Company and its subsidiaries are committed to
achieving and demonstrating robust corporate governance practices which are
appropriate for the Group's size and stage of development and which facilitate
the long-term performance and sustainability of the Company as well as
protecting and enhancing the interests of its shareholders and other
stakeholders.
During the year, the Directors adopted the UK's QCA Corporate Governance Code
for Small and Mid-Size Quoted Companies (the "QCA Code"), in replacement of
the ASX's Corporate Governance Council's Corporate Governance Principles and
Recommendations 3rd Edition, as the basis for its corporate governance. The
Corporate Governance Statement and Corporate Governance Plan are available on
the Company's website www.starphoenixgroup.com.
Non-audit services
The total value of non-audit services provided by a related practice of BDO
Audit (WA) Pty Ltd in respect to the Company's tax compliance is US$36,338
(2020: US$29,910).
The board of directors has considered the position and is satisfied that the
provision of the non-audit services is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001. The
directors are satisfied that the provision of non-audit services by the
auditor did not compromise the auditor independence requirements of the
Corporations Act 2001 for the following reasons:
1. all non-audit services have been reviewed by the Board to ensure they
do not impact the impartiality and objectivity of the auditor; and
2. none of the services undermine the general principles relating to
auditor independence as set out in APES 110 Code of Ethics for Professional
Accountants.
Remuneration Report (Audited)
Remuneration policy
The remuneration policy of Star Phoenix Group has been designed to align
director and executive objectives with shareholder and business objectives by
providing a fixed remuneration component and offering specific long-term
incentives based on key performance areas affecting the Group's financial
results. The Board of Star Phoenix Group Limited believes the remuneration
policy to be appropriate and effective in its ability to attract and retain
the best executives and directors to run and manage the Group, as well as
create alignment of goals between directors, executives and shareholders.
The Board's policy for determining the nature and amount of remuneration for
Board members and senior executives of the Company is as follows:
The remuneration policy, setting the terms and conditions for the executive
directors and other senior executives, was developed and approved by the
Board.
Non-executive directors, executive directors and senior executives receive a
base salary (which is based on factors such as length of service and
experience), which is calculated on a total cost basis and includes any FBT
charges related to employee benefits including motor vehicles, as well as
employer contributions to superannuation funds where applicable.
Executive and non-executive directors can be employed by the Company on a
consultancy basis on Board approval, with remuneration and terms stipulated in
individual consultancy agreements.
The Company does not currently have a Remuneration Committee. In its absence,
the full Board is responsible for the determination of the remuneration of
Directors and senior executives and ensuring that such remuneration is
appropriate and not excessive. Where considered necessary, the Board may
engage a remuneration consultant to assist with setting and reviewing the
Company's executive and non-executive remuneration policies to ensure the
Company attracts and retains executives and Directors who will create value
for shareholders. As the Company grows in size, it is planned that the Company
will establish a separate remuneration committee with its own remuneration
committee charter. No remuneration consultant has been used during the year.
The Board is also responsible for evaluating the performance of Directors and
the senior executives. It is envisaged that once the Company is of a
sufficient size to establish a Nomination Committee, that committee will be
responsible for arranging the performance evaluation of the Board, its
committees, and individual Directors on behalf of the Board. This evaluation
will be based on specific criteria, including the business performance of the
Company and its subsidiaries, whether strategic objectives are being achieved
and the development of management and personnel. A formal performance
evaluation was not undertaken during the financial year; however the Company
intends to undertake such review during the following financial year.
All remuneration paid to directors and executives is valued at the cost to the
Company and expensed. Shares given to directors and executives are valued as
the difference between the market price of those shares and the amount paid by
the director or executive. Unlisted options are valued using the
Black-Scholes methodology.
The Board policy is to remunerate non-executive directors at market rates for
comparable companies taking into consideration time, commitment, and level of
responsibility. Fees for non-executive directors are not linked to the
performance of the Group. The directors are not required to hold any shares in
the Company under the Constitution of the Company; however, to align
directors' interests with shareholder interests, the directors are encouraged
to hold shares in the Company.
Under the Company's share trading policy, all employees and directors of the
Company and its related companies are prohibited from trading in the Company's
shares or other securities if they are in possession of inside information.
The Board believes that it has implemented suitable practices and procedures
that are appropriate for an organisation of this size and maturity.
Cash preservation initiative
On November 2020, the company announced that the Executive Directors and
senior management of the Company have agreed to accept ordinary shares in the
Company ("Shares") in lieu of the accrued salaries in order to preserve cash
resources of the Company during the current economic environment created by
the impact of COVID-19 pandemic. This cash preservation initiative is resulted
in total cash saving of US$201,652 to the Company, and further align the
interests of the Directors and key managers with the interests of
shareholders.
ISSUE OF SHARES TO DIRECTORS
Further to its shareholder approval received at the Annual General Meeting
held on 11 December 2020, the Company issued 7,195,036 ordinary shares of the
Company to Executive Directors (the "Shares") on 4 January 2021 in lieu of the
accrued salaries in order to preserve cash resources of the Company during the
current economic environment created by the impact of COVID-19 pandemic.
These Shares were issued at a price of 1.68 pence on the day. A volume
weighted average price of Shares over the 30 trading days immediately
preceding the date of issue was used to extinguish the liability. The details
of the issued Shares are as follows:
1. Mr Zhiwei Gu, Executive Chairman, was issued 5,468,959 Shares, for a
subscription value of US$125,000. Following this issue, Mr Gu's total
holding in the Company's shares will be 5,489,793 shares, representing 3.64%
of the enlarged issued share capital; and
2. Mr Lubing Liu, Executive Director and Chief Operating Officer, was
issued 1,726,077 Shares, for a subscription value of US$39,452. Following
this issue, Mr Liu's total holding in the Company's shares will be 1,726,077
shares, representing 1.14% of the enlarged issued share capital.
The Shares are subject to trading restrictions of 12 months from the date of
issue. Full details relating to the issue of Shares are available in the
Notice of Meeting published on 13 November 2020.
Company performance, shareholder wealth and directors and executive's
remuneration
No relationship exists between shareholder wealth, director and executive
remuneration and Company performance.
Key Management Personnel
Name Position Appointed/Resigned
Mr Zhiwei Gu Executive Chairman Appointed on 10 December 2018
Mr Lubing Liu Executive Director, Chief Operating Officer and Joint Company Secretary
Appointed as an Executive Director on 1 March 2018 and as Joint Company
Secretary 01 April 2020
Dr Mu Luo Non-Executive Director Appointed 11 January 2019
Dr YuFeng Meng Non-Executive Director Appointed 14 April 2020 and Ceased 11 December 2020
Details of remuneration
The remuneration for the Key Management Personnel of the Group during the year
was as follows:
2021 Short Term Benefits Post-employment benefits Other Fees (iv) Total
Cash salary & fees One-off payment Termination benefits Super annuation / pensions
Currency US$ US$ US$ US$ US$ US$
Directors & Officers
Mr Gu (i) 254,251 - - - 125,000 379,251
Mr L Liu (ii) 199,463 - - 29,397 39,452 268,312
Dr Luo 55,222 - - - - 55,222
Dr Meng (iii) - - - - - -
Total 508,936 - - 29,397 164,452 702,785
(i) Fees paid to Mr Gu comprised US$254,251 received in his capacity as
Executive Chairman, and 5,468,959 ordinary shares, for a subscription value of
US$125,000, were issued to him for additional consulting work. During the
year, no incentives were in place for Mr Gu.
(ii) Fees paid to Mr L Liu comprised US$29,397 superannuation contributions
(part of the contributions was for prior year) and salary of US$199,463 in his
capacity as Chief Operating Officer and Trinidad General Manager. Mr Liu was
issued 1,726,077 shares, for a subscription value of US$39,452, for his
consulting work. During the year, no incentives were in place for Mr Liu.
(iii) Dr Meng did not receive any remuneration in the year.
(iv) Other fees were directors fees settled with the issue of shares. Please
see notes above.
2020 Short Term Benefits Post-employment benefits Share based payments Total
Cash salary & fees One-off payment Termination benefits Super annuation / pensions Options
Currency US$ US$ US$ US$ US$ US$
Directors & Officers
Mr Gu (i) 385,416 531,250 - - - 916,666
Mr L Liu (ii) 207,229 222,255 - 29,054 - 458,538
Dr Luo 52,500 - - - - 52,500
Ms Wang (iv) 1,546 - - - - 1,546
Dr Meng (iii) - - - - - -
Total 646,691 753,505 - 29,054 - 1,429,250
(i) Fees paid to Mr Gu comprised US$30,000 received in his capacity as
Executive Chairman, US$25,000 in his role as Executive Director and US$330,416
for additional consulting work, as well as one-off payments of US$531,250.
Consulting fees were paid to Kegrace Consulting Limited, a company owned by Mr
Gu.
(ii) Fees paid to Mr L Liu comprised US$29,054 superannuation contributions,
US$222,255 one-off payments and salary of US$207,229 in his capacity as Chief
Operating Officer and Trinidad General Manager.
(iii) Dr Meng was appointed 14 April 2020. Dr Meng did not receive any
remuneration in the year
(iv)Ms Wang resigned 22 July 2019
Equity instrument disclosures relating to Key Management Personnel
Share-based payments (year ended 30 June 2021)
No options were issued to key management personnel. All existing options
expired in the financial year and there has not been an expense reversal.
Fully paid share holdings
The numbers of shares in the Company held during the financial year or at time
of resignation by Key Management Personnel of the Company, including their
personally related parties, are set out below.
2021 Balance at the start of the year Granted as Compensation Other Changes Balance at the end of the year Balance held indirectly
Mr Gu 20,834 - 5,468,959 5,489,793 -
Mr L Liu - - 1,726,077 1,726,077 -
Dr Luo - - - - -
Dr Meng - - - - -
Total: 20,834 - 7,195,036 7,215,870 -
Options held by Key Management Personnel
The numbers of options in the company held during the financial year or at
time of resignation by Key Management Personnel of the Company, including
their personally related parties, are set out below:
2021 Balance at the start of the year Granted as Compensation Other Changes Balance at the end of the year Vested and exercisable
Mr Gu 30,000,000 - (30,000,000) - -
Mr L Liu - - - - -
Dr Luo - - - - -
Dr Meng - - - - -
Total: 30,000,000 - (30,000,000) - -
Loans to Key Management Personnel
There were no loans made to directors of SPG and other Key Management
Personnel of the Group, including their personally related parties during the
2020 or 2021 financial years.
Employment contracts of Directors and other Key Management Personnel
On appointment, Executive Directors and Other Key Management Personnel enter
into an employment contract with the Company (or another company within the
Group). This contract sets out their duties, remuneration and other terms of
employment. These contracts may be terminated by either the Company or the
employee as detailed below.
All non-executive directors are eligible to receive consulting fees for
services provided to the Company over and above the services expected from a
non-executive director.
Mr Zhiwei Gu as Executive Chairman
Executive Chairman contract (commenced 10 December 2018)
Contract date: 10 December 2018 to 29 February 2020
Base Payment: US$55,000 per annum
Superannuation: No superannuation entitlement
Notice period: 3 months
Termination benefits: Payment in lieu of notice at Company option for termination without cause
Consulting services: Mr Gu provided additional executive and consulting services over and above
services rendered to the Company at a rate of US$16,250 per month
Mr Zhiwei Gu as Executive Chairman
Executive Chairman contract
Contract start date: 1 March 2020
Base Payment: US$55,000 per annum
Superannuation: No superannuation entitlement
Notice period: 6 months
Termination benefits: Payment in lieu of notice at Company option for termination without cause
Consulting services: Mr Gu provided additional executive and consulting services over and above
services rendered to the Company at a rate of US$26,667 per month
Mr Lubing Liu as Chief Operating Officer, Trinidad General Manager and
Executive Director
Chief Operating Officer and Trinidad General Manger contract
Contract date: 1 March 2018 to 23 December 2019
Base Payment: US$140,110 per annum
Superannuation: 10% of base
Notice period: 3 months
Termination benefits: 3 months' salary
Mr Lubing Liu as Chief Operating Officer, Trinidad General Manager, Executive
Director and Joint Company Secretary (appointed as Joint Company Secretary on
1 April 2020)
Chief Operating Officer and Trinidad General Manager contract
Contract start date: 24 December 2019
Base Payment: US$236,712 per annum
Superannuation: US$22,488 per annum
Notice period: 6 months
Termination benefits: Payment in lieu of notice at Company option for termination without cause
Dr Mu Luo as Non-Executive Director (appointed 11 January 2019)
Non-Executive Director contract
Contract start date: 11January 2019 (amended on 1 August 2019)
Base Payment: US$25,000 per annum (US$50,000 from 1 August 2019)
Superannuation: No superannuation entitlement
Termination benefits: None
Dr YuFeng Meng as Non-Executive Director (appointed 14 April 2020 and ceased
on 11 December 2020)
Non-Executive Director, no remuneration
Contract start date: N/A
Base Payment: N/A
Superannuation: N/A
Termination benefits: N/A
Additional information
The earnings of the consolidated entity for the five years to 30 June 2021 are
summarised below:
2021 2020 2019 2018 2017
$'000 $'000 $'000 $'000 $'000
Revenue 99 8,539 12,357 13,059 8,435
EBITDA (1,443) (19,073) (39,044) (6,000) (7,900)
EBIT (6,413) (20,542) (43,002) (10,951) (14,189)
(Loss)/profit after income tax (6,086) 47,942 (49,461) (17,530) (54,363)
The factors that are considered to affect total shareholders return ('TSR')
are summarised below:
2021 2020 2019 2018 2017
$'000 $'000 $'000 $'000 $'000
Share price at financial year end (US$) 0.0187 0.02 0.0004 0.002 0.004
Basic earnings per share (US$) (0.040) 0.397 (0.552) (0.231) (0.699)
Voting and comments made at the company's 2020 Annual General Meeting
Star Phoenix Group Ltd received 99.7% of "yes" votes on its remuneration
report for the
2020 financial year. The Board believes that this reflects the conservative
remuneration
practices of the company.
This is the end of the audited remuneration report.
Auditor's Independence Declaration
The auditor's independence declaration, as required under Section 307C of the
Corporations Act 2001, for the year ended 30 June 2021 has been received and
can be found on the following page.
This report is signed in accordance with a resolution of the Board of
Directors.
Zhiwei Gu: Chairman
22 December 2021
Tel: +61 8 6382 4600
38 Station Street
Fax: +61 8382
4601 Subiaco, WA
6008
www.bdo.com.au
PO Box 700 West Perth WA 8972
AUS
DECLARATION OF INDEPENDENCE BY ASHLEIGH WOODLEY TO THE DIRECTORS OF STAR
PHOENIX GROUP LTD
As lead auditor of Star Phoenix Group Ltd for the year ended 30 June 2021, I
declare that, to the best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the
Corporations Act 2001 in relation to the audit; and
2. No contraventions of any
applicable code of professional conduct in relation to the audit.
This declaration is in respect of Star Phoenix
Group Ltd and the entities it controlled during the period.
Ashleigh Woodley
Director
BDO Audit (WA) Pty Ltd
Perth
22 December 2021
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national
association of independent entities which are all members
of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members
of BDO International Ltd, a UK company limited by guarantee, and form part of
the international BDO network
of independent member firms. Liability limited by a scheme
approved under Professional Standards Legislation.
Consolidated Statement of Profit or Loss and other Comprehensive Income for
the year ended 30 June 2021
The below consolidated statement of profit or loss and other comprehensive
income should be read in conjunction with the accompanying notes.
Note Consolidated
2021 (US$) 2020 (US$)
Revenue from continuing operations 3 - -
Operating expenses - -
Depreciation, depletion and amortisation - -
Cost of sales - -
Gross loss - -
Other income and expenses from continuing operations
Other income 3 87,899 -
Finance Income/(costs) 4b 4,602 (2,810,225)
Foreign exchange gain 3 6,226 -
General and administration expenses 4c (1,809,084) (3,930,281)
Impairment of assets 4d (153,225) (14,336)
Loss before income tax expense from continuing operations (1,863,582) (6,754,842)
Income tax credit/(expense) - 1,505,023
Loss after income tax expense from continuing operations (1,863,582) (5,249,819)
Gain/(loss) from discontinued operations, net of tax 6 (4,222,517) 53,191,671
(Loss)/profit for the year attributable to equity holders of Star Phoenix (6,086,099) 47,941,852
Group Limited
Other comprehensive income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations 19c 11,322 576,677
Other comprehensive (loss)/income for year, net of tax 11,322 576,677
Total comprehensive (loss)/profit attributable to equity holders of Star (6,074,777) 48,518,529
Phoenix Group Limited
Loss per share from continuing operations attributable to the ordinary equity
holders of the Company:
Basic and diluted (loss) per share (cents per share) 9a (0.012) (0.193)
Earnings/(Loss) per share from attributable to the ordinary equity holders of
the Company:
Basic and diluted earnings/(loss) per share (cents per share) 9a (0.040) 0.397
Consolidated Statement of Financial Position as at 30 June 2021
The below consolidated statement of financial position should be read in
conjunction with the accompanying notes.
Note Consolidated
2021 (US$) 2020 (US$)
Assets
Current Assets
Cash and cash equivalents 10 1,911,072 3,164,752
Trade and other receivables 11 103,864 2,248,359
Assets of disposal group classified as held for sale 7a 4,249,038 7,922,861
Total current assets 6,263,974 13,335,972
Non-Current Assets
Right of use asset 12 63,333 183,333
Property, plant and equipment 14 83,624 100,349
Total non-current assets 146,957 283,682
Total assets 6,410,933 13,619,654
Current liabilities
Trade and other payables 15 3,563,659 3,688,347
Liabilities directly associated with assets classified as held for sale 7b 450,653 1,154,300
Provisions 17 5,796,048 5,991,944
Total current liabilities 9,810,360 10,834,591
Non-current liabilities
Trade and other payables 15 - 296,245
Total non-current liabilities - 296,245
Total liabilities 9,810,360 11,130,836
Net assets/(liabilities) (3,399,429) 2,488,818
Equity
Contributed equity 18 388,570,504 388,383,974
Reserves 19 23,400,370 23,389,048
Accumulated losses (415,370,303) (409,284,204)
Total equity/deficit (3,399,429) 2,488,818
Consolidated Statement of Changes in Equity for the year ended 30 June 2021
The below consolidated statement of changes in equity should be read in
conjunction with the accompanying notes.
Note Contributed equity Accumulated losses Foreign currency translation reserve Share-based payment reserve Option premium reserve Non-controlling interests Total equity
(US$) (US$) (US$) (US$) (US$) (US$)
Balance at 1 July 2019 386,726,067 (457,226,056) 7,432,461 8,316,464 12,057,362 - (42,693,702)
Other comprehensive income - - 576,677 - - - 576,677
Loss attributable to members of the company - (5,249,819) - - - - (5,249,819)
Gain/(Loss) from discontinued operations - 53,191,671 - - - - 53,191,671
Total comprehensive loss for the year - 47,941,852 576,677 - - - 48,518,529
Transactions with owners in their capacity as owners:
Issue of share capital 18 1,657,907 - - - - - 1,657,907
Realisation of FCTR on disposal of foreign operation 19 - - (4,993,916) - - - (4,993,916)
Non-controlling interests - - - - - - -
Balance at 30 June 2020 388,383,974 (409,284,204) 3,015,222 8,316,464 12,057,362 - 2,488,818
Balance at 1 July 2020 388,383,974 (409,284,204) 3,015,222 8,316,464 12,057,362 - 2,488,818
Exchange difference on translation of foreign operations - - 11,322 - - - 11,322
Loss from continuing operations of the company - (1,863,582) - - - - (1,863,582)
Profit/(loss) from discontinued operations - (4,222,517) - - - - (4,222,517)
Total comprehensive loss for the year - (6,086,099) 11,322 - - - (6,074,777)
Transactions with owners in their capacity as owners:
Issue of share capital 18 186,530 - - - - - 186,530
Balance at 30 June 2021 388,570,504 (415,370,303) 3,026,544 8,316,464 12,057,362 - (3,399,429)
Consolidated Statement of Cash Flows for the year ended 30 June 2021
The below consolidated statement of cashflows should be read in conjunction
with the accompanying notes.
Note Consolidated
2021 (US$) 2020 (US$)
Cash flows from operating activities
Receipts from customers 218,088 8,425,563
Other Receipts 72,763 (3,892)
Payments to suppliers and employees (1,841,025) (9,485,806)
Income taxes (paid)/received (90,795) (248,673)
Payment for exploration expenditure (175,448) -
Net cash outflow from operating activities 22 (1,816,417) (1,312,808)
Cash flows from investing activities
Payment for property, plant & equipment - (146,862)
Proceeds from disposal of property, plant and equipment 330,065 40,507
Net cash inflow/(outflow) on disposal of subsidiary - 1,666,481
Net cash inflow from investing activities 330,065 1,560,126
Cash flows from financing activities
Receipts from share issue - 1,657,907
Interest and other finance income 191
Provision of short-term loan - (334,985)
Payments for principal element of leases - (280,000)
Proceeds received from related company 277,328 -
Net cash inflow from financing activities 277,519 1,042,922
Net (decrease)/increase in cash and cash equivalents (1,208,833) 1,290,240
Net foreign exchange differences (44,847) 26,691
Cash and cash equivalents at beginning of financial year 3,164,752 1,847,821
Cash and cash equivalents at end of financial year 10 1,911,072 3,164,752
Notes to Consolidated Financial Statements
Note 1: Significant accounting policies
These financial statements are general purpose financial statements that have
been prepared in accordance with Australian Accounting Standards, Australian
Accounting Interpretations, other authoritative pronouncements of the
Australian Accounting Standards Board and the Corporations Act 2001. Star
Phoenix Group Ltd is a for-profit entity for the purpose of preparing the
financial statements.
The financial statements cover the Group consisting of Star Phoenix Group Ltd
and its controlled entities. Financial information for Star Phoenix Group Ltd
as an individual entity is disclosed in Note 25. Star Phoenix Group Ltd is a
listed public company, incorporated and domiciled in Australia.
The following is a summary of the material accounting policies adopted by the
Group in the preparation of the financial statements. The accounting policies
have been consistently applied, unless otherwise stated. The financial report
was authorised for issue by the Directors on 21 December 2021.
Basis of preparation
Historical cost convention
The financial statements have been prepared under the historical cost
convention, except for, where applicable, the revaluation of financial assets
and liabilities at fair value through profit or loss, financial assets at fair
value through other comprehensive income, certain classes of property, plant
and equipment.
Compliance with IFRS
The financial statements of Star Phoenix Group Ltd also comply with
International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board (IASB). The financial statements were
approved by the Board of Directors on 21 December 2021.
Functional and presentation currency
Items included in the financial statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates (the "Functional Currency"). The consolidated financial
statements are presented in United States Dollars (USD), which is Star Phoenix
Group Ltd's functional and presentation currency.
Going concern
This report has been prepared on the going concern basis, which contemplates
the continuity of normal business activity and the realisation of assets and
settlement of liabilities in the normal course of business.
For the year ended 30 June 2021 the Group recorded a loss of US$6,086,099
(2020: a profit of US$47,941,852), had net cash outflows of US$1,208,834
(2020: cash inflows of US$1,290,240) and had a cash balance of US$1,911,072
(2020: cash balance of US$3,164,752).
The ability of the Group to continue as a going concern is dependent on
securing additional funding through the issue of shares and/or debt to fund
its activities as well as favourable outcomes being reached with the relevant
taxation authorities.
These conditions indicate a material uncertainty that may cast a significant
doubt about the Group's ability to continue as a going concern and, therefore,
it may be unable to realise its assets and discharge its liabilities in the
normal course of business.
The Company is currently seeking other opportunities to expand its operations
in other geographic locations and a successful investment in a new project can
be used to raise additional capital and subsequently generate positive cash
flows. The Company is also focusing on managing its existing cash
reserves.
Management believe there are sufficient funds to meet the Group's working
capital requirements as at the date of this report. The Company is currently
seeking other opportunities to further expand its operations in other
geographic locations.
Should the Company not be able to continue as a going concern, it may be
required to realise its assets and discharge its liabilities other than in the
ordinary course of business, and at amounts that differ from those stated in
the financial statements. The financial report does not include any
adjustments relating to the recoverability and classification of recorded
asset amounts or liabilities that might be necessary should the Company not
continue as a going concern.
(a) Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities
of all subsidiaries of Star Phoenix Group Ltd ("Parent Entity" or "Company")
as at 30 June 2021 and the results of all subsidiaries for the year then
ended. Star Phoenix Group Ltd and its subsidiaries together are referred to as
the "Group".
Subsidiaries are all those entities (including special purpose entities) over
which the Group has control. The Group controls an entity when the Group is
exposed to, or has rights to, variable returns from its investment with the
entity and has the ability to affect those returns through its power to direct
the activities of the entity.
Where controlled entities have entered or left the Group during the year,
their operating results have been included/excluded from the date control was
obtained or until the date control ceased. A list of controlled entities is
contained in Note 13 to the financial statements. All controlled entities have
a 30 June financial year-end.
All inter-company balances and transactions between entities in the Group,
including any unrealised profits or losses have been eliminated on
consolidation. Accounting policies of subsidiaries have been changed where
necessary to ensure consistencies with those policies applied by the Group.
Associates are all entities over which the Group has significant influence but
not control or joint control, generally accompanying a shareholding of between
20-50% 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.
(b) Income tax
The charge for current income tax expense is based on the profit for the year
adjusted for any non-assessable or disallowed items. It is calculated using
tax rates that have been enacted or are substantively enacted by the reporting
date within each jurisdiction.
Deferred tax is accounted for using the liability method in respect of
temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the financial statements. No deferred income tax
will be recognised from the initial recognition of an asset or liability,
excluding a business combination, where there is no effect on accounting or
taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the
period when the asset is realised or the liability is settled. Deferred tax is
credited in profit or loss except where it relates to items that may be
credited directly to equity, in which case the deferred tax is adjusted
directly against equity.
Deferred income tax assets are recognised to the extent that it is probable
that future tax profits will be available against which deductible temporary
differences can be utilised.
Deferred tax liabilities and assets are not recognised for temporary
differences between the carrying amount and tax bases of investments in
foreign operations where the company 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.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets and liabilities and when the
deferred tax balances relate to the same taxation authority. Current tax
assets and liabilities are offset where the entity has a legally enforceable
right to offset and intends either to settle on a net basis, or to realise the
asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent
that it relates to items recognised in other comprehensive income or directly
in equity. In this case, the tax is also recognised in other comprehensive
income or directly in equity, respectively.
The amount of benefits brought to account or which may be realised in the
future is based on the assumption that no adverse change will occur in income
taxation legislation and the anticipation that the Group will derive
sufficient future assessable income to enable the benefit to be realised and
comply with the conditions of deductibility imposed by the law.
(c) Property, plant and equipment
Owned assets
Plant and equipment are measured on the historical cost basis less accumulated
depreciation and impairment losses.
The cost of fixed assets constructed within the Group includes the cost of
materials, direct labour, borrowing costs and an appropriate proportion of
fixed and variable overheads.
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 profit or loss during the financial period in which they are
incurred.
Depreciation
The depreciable amount of all fixed assets including capitalised lease assets
is depreciated on a straight-line basis over their useful lives to the Group
commencing from the time the asset is held ready for use. Leasehold
improvements are depreciated over the shorter of either the unexpired period
of the lease or the estimated useful lives of the improvements.
The depreciation rates used for each class of depreciable asset are:
Class of fixed Asset Depreciation Rate
Plant & equipment 11.25% - 33%
Production equipment 10 - 20%
Motor vehicles, furniture & fixtures 25 - 33%
Leasehold improvements 10 - 12.50%
The residual values of the assets and their useful lives are reviewed and
adjusted if appropriate at each reporting date.
The carrying amount of plant and equipment is reviewed annually by the
directors to ensure it is not in excess of the recoverable amount from these
assets. The recoverable amount is assessed on the basis of the expected net
cash flows which will be received from the employment of the assets and
subsequent disposal. The expected net cash flows have been discounted to their
present values in determining recoverable amounts.
The carrying amount of the asset is written down to its recoverable amount if
its carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the
carrying amount. These gains or losses are included in profit or loss. When
revalued assets are sold, amounts included in the revaluation reserve relating
to that asset are transferred to accumulated losses.
(d) Exploration and evaluation expenditure and the recognition of assets
Acquisition costs for exploration and evaluation projects are accumulated in
respect of each identifiable area of interest. These costs are only carried
forward to the extent that they are expected to be recouped through the
successful development of the area or where activities in the area have not
yet reached a stage that permits reasonable assessment of the existence of
economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full
against profit in the year in which the decision to abandon the area is made.
A regular review is undertaken of each area of interest to determine the
appropriateness of continuing to carry forward costs in relation to that area
of interest.
The recoverability of the carrying amount of the exploration and evaluation
assets is dependent on the successful development and commercial exploitation,
or alternatively, sale of the respective areas of interest.
The carrying values of expenditures carried forward are reviewed for
impairment at each reporting date when the facts, events or changes in
circumstances indicate that the carrying value may be impaired.
Accumulated expenditures are written off to profit or loss to the extent to
which they are considered to be impaired.
The group applies AASB 6 Exploration and Evaluation of Mineral Resources which
is equivalent to IFRS 6. The carrying value of exploration and evaluation
expenditure is historical cost less impairment.
(e) Financial instruments
The Group's financial instruments include cash and cash equivalents and trade
and other receivables.
A financial asset shall be measured at amortised cost if it is held within a
business model whose objective is to hold assets in order to collect
contractual cash flows which arise on specified dates and that are solely
principal and interest.
A debt investment shall be measured at fair value through other comprehensive
income if it is held within a business model whose objective is to both hold
assets in order to collect contractual cash flows which arise on specified
dates that are solely principal and interest as well as selling the asset on
the basis of its fair value.
All other financial assets are classified and measured at fair value through
profit or loss unless the entity makes an irrevocable election on initial
recognition to present gains and losses on equity instruments (that are not
held-for-trading or contingent consideration recognised in a business
combination) in other comprehensive income ('OCI').
Despite these requirements, a financial asset may be irrevocably designated as
measured at fair value through profit or loss to reduce the effect of, or
eliminate, an accounting mismatch. For financial liabilities designated at
fair value through profit or loss, the standard requires the portion of the
change in fair value that relates to the entity's own credit risk to be
presented in OCI (unless it would create an accounting mismatch).
Simpler hedge accounting requirements are intended to more closely align the
accounting treatment with the risk management activities of the entity.
Impairment requirements use an 'expected credit loss' ('ECL') model to
recognise an allowance. Impairment is measured using a 12-month ECL method
unless the credit risk on a financial instrument has increased significantly
since initial recognition in which case the lifetime ECL method is adopted.
For receivables, a simplified approach to measuring expected credit losses
using a lifetime expected loss allowance is available.
(f) Foreign currency transactions and balances
Functional and presentation currency
The functional currency of each entity within the Group is determined using
the currency of the primary economic environment in which that entity
operates.
Transaction and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the date of the transaction. Foreign
currency monetary items are translated at the year-end exchange rate.
Non-monetary items measured at historical cost continue to be carried at the
exchange rate at the date of the transaction.
Non-monetary items measured at fair value are reported at the exchange rate at
the date when fair values were determined.
Exchange differences arising on the translation of monetary items are
recognised in profit or loss
Exchange differences arising on the translation of non-monetary items are
recognised directly in equity to the extent that the gain or loss is directly
recognised in equity; otherwise the exchange difference is recognised in
profit or loss.
(h) Provisions
Provisions for legal claims, service warranties and make good obligations are
recognised when the Group has a present legal or constructive obligation as a
result of past events, it is probable 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.
Where there are a number of similar obligations, the likelihood that an
outflow will be required in settlement is determined by considering the class
of obligations as a whole. A provision is recognised even if the likelihood
of an outflow with respect to any one item included in the same class of
obligations may be small.
Provisions are measured at the present value of management's best estimate of
the expenditure required to settle the present obligation at the reporting
date. The discount rate used to determine the present value reflects the
current market assessments of the time value of money and the risk specific to
the liability. The increase in the provision due to the passage of time is
recognised as interest expense.
(i) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with
banks, other short-term highly liquid investments with original maturities of
three months or less that are readily convertible to known amounts of cash and
which are subject to insignificant risk of changes in value, and bank
overdrafts. Bank overdrafts are shown within short-term borrowings in
current liabilities on the statement of financial position.
(j) Trade receivables
Trade receivables are initially recognised at fair value and subsequently
measured at amortised cost using the effective interest method, less any
allowance for expected credit losses. Trade receivables are generally due for
settlement within 30 days.
The consolidated entity has applied the simplified approach to measuring
expected credit losses, which uses a lifetime expected loss allowance. To
measure the expected credit losses, trade receivables have been grouped based
on days overdue.
Other receivables are recognised at amortised cost, less any allowance for
expected credit losses.
(k) Revenue recognition
Revenue is recognised at an amount that reflects the consideration to which
the consolidated entity is expected to be entitled in exchange for
transferring goods or services to a customer. For each contract with a
customer, the Group identifies the contract with a customer; identifies the
performance obligations in the contract; determines the transaction price
which takes into account estimates of variable consideration and the time
value of money; allocates the transaction price to the separate performance
obligations on the basis of the relative stand-alone selling price of each
distinct good or service to be delivered; and recognises revenue when or as
each performance obligation is satisfied in a manner that depicts the transfer
to the customer of the goods or services promised.
Revenue from a contract to provide services is recognised over time as the
services are rendered based on either a fixed price or an hourly rate.
Revenue from the sale of oil and gas and related products was recognised when
the Group had transferred to the buyer control of the product. In the case of
oil, this usually occurs at the time of lifting. Other revenue is recognised
when control has passed.
(l) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except
where the amount of GST incurred is not recoverable from the Australian Tax
Office. In these circumstances the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense. Receivables
and payables in the statement of financial position are shown inclusive of
GST.
Cash flows are presented in the consolidated statement of cash flows on a
gross basis, except for the GST component of investing and financing
activities, which are disclosed as operating cash flows.
(m) Comparative figures
When required by Accounting Standards, comparative figures have been adjusted
to conform to changes in presentation for the current financial year.
(n) Fair value estimation
The fair value of financial assets and financial liabilities must be estimated
for recognition and measurement for disclosure purposes.
The fair value of financial instruments traded in active markets (such as
publicly traded derivatives, and trading and available-for-sale securities) is
based on quoted market prices at the reporting date. The quoted market price
used for financial assets held by the Group is the current bid price.
The fair value of financial instruments that are not traded in an active
market (for example over-the-counter derivatives) is determined using
valuation techniques. The Group uses a variety of methods and makes
assumptions that are based on market conditions existing at each reporting
date.
The carrying value less impairment provision of trade receivables and payables
are assumed to approximate their fair values due to their short-term nature.
The fair value of financial liabilities for disclosure purposes is estimated
by discounting the future contractual cash follows at the current market
interest rate that is available to the Group for similar financial
instruments.
(o) Investments in associates
Investments in associates are accounted for using the equity method of
accounting in the consolidated financial statements.
Under the equity method, the investment in the associate is carried in the
consolidated statement of financial position at cost plus post-acquisition
changes in the Group's share of net assets of the associate.
After application of the equity method, the Group determines whether it is
necessary to recognise any additional impairment loss with respect to the
Group's net investment in the associate.
The Group's share of the associate post-acquisition profits or losses is
recognised in the statement of profit or loss and other comprehensive income.
The cumulative post-acquisition movements are adjusted against the carrying
amount of the investment. When the Group's share of losses in the associate
equals or exceeds its interest in the associate, including any unsecured
long-term receivables and loans, the Group does not recognise further losses,
unless it has incurred obligations or made payments on behalf of the
associate.
The reporting dates of the associate and the Group are identical and the
associate's accounting policies conform to those used by the Group for like
transactions and events in similar circumstances.
(p) 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 unless
alternative terms are agreed.
(q) 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 the financial year but not distributed at reporting date.
(r) 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.
(s) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit or loss
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.
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.
(t) Segment reporting
Operating segments are reported in a manner consistent with the internal
reporting 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 Chief Executive Officer.
(u) Impairment of assets
Goodwill and 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 tested 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 they 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
suffered an impairment are reviewed for possible reversal of the impairment at
the end of each reporting period.
(v) Share-based payments
The fair value of options granted is recognised as an expense with a
corresponding increase in equity. The total amount to be expensed is
determined by reference to the fair value of the options 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.
(w) Employee benefits
Wages and salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits are
recognised in current liabilities 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.
Long service benefit
The liability for long service benefit is recognised in current and
non-current liabilities, depending on the unconditional right to defer
settlement of the liability for at least 12 months after the reporting date.
The liability is measured as the present value of expected future payments to
be made in respect of services provided by employees up to the reporting date
using the projected unit credit method. Consideration is given to expected
future wage and salary levels, experience of employee departures and periods
of service.
(x) Leases
Except for short-term leases and leases of low-value assets, right-of-use
assets and corresponding lease liabilities are recognised in the statement of
financial position. Straight-line operating lease expense recognition is
replaced with a depreciation charge for the right-of-use assets (included in
operating costs) and an interest expense on the recognised lease liabilities
(included in finance costs). In the earlier periods of the lease, the expenses
associated with the lease under AASB 16 will be higher when compared to lease
expenses under AASB 117. However, EBITDA (Earnings Before Interest, Tax,
Depreciation and Amortisation) results improve as the operating expense is now
replaced by interest expense and depreciation in profit or loss. For
classification within the statement of cash flows, the interest portion is
disclosed in operating activities and the principal portion of the lease
payments are separately disclosed in financing activities.
(y) Borrowings
Loans and borrowings are initially recognised at the fair value of the
consideration received, net of transaction costs. They are subsequently
measured at amortised cost using the effective interest method.
Where there is an unconditional right to defer settlement of the liability for
at least 12 months after the reporting date, the loans or borrowings are
classified as non-current.
(z) Inventories
Inventories include consumable supplies and maintenance spares and are valued
at the lower of cost and net realisable value. Cost is determined on a
weighted average basis and includes direct costs and an appropriate portion of
fixed and variable production overheads where applicable. Inventories
determined to be obsolete or damaged are written down to net realisable value,
being the estimated selling price less selling costs.
The directors evaluate estimates and judgements incorporated into the
financial statements based on historical knowledge and best available current
information. Estimates assume a reasonable expectation of future events and
are based on current trends and economic data, obtained both externally and
within the Group. Areas involving a higher degree of judgement or
complexity, or areas where estimations and assumptions are significant to the
financial statements are disclosed here.
(aa) Non-current assets classified as held for sale and discontinued
operations
Non-current assets are classified as held for sale if their carrying amount
will be recovered principally through a sale transaction rather than through
continuing use. They are measured at the lower of their carrying amount and
fair value less costs to sell. For non-current assets to be classified as
held for sale, they must be available for immediate sale in their present
condition and their sale must be highly probable.
An impairment loss is recognised for any initial or subsequent write down of
the non-current assets to fair value less costs to sell. A gain is
recognised for any subsequent increases in fair value less costs to sell of a
non-current asset, but not in excess of any cumulative impairment loss
previously recognised.
Non-current assets are not depreciated or amortised while they are classified
as held for sale. Interest and other expenses attributable to the
liabilities of assets held for sale continue to be recognised.
Non-current assets classified as held for sale are presented separately on the
face of the consolidated statement of financial position, in current assets.
The liabilities of disposal groups classified as held for sale are presented
separately on the face of the statement of financial position, in current
liabilities.
Discontinued operations
A discontinued operation is a component of the Group's business, the
operations and cash flows of which can be clearly distinguished from the rest
of the Group and which:
· represents a separate major line of business or geographical area
of operations;
· is part of a single co-ordinated plan to dispose of a separate
major line of business or geographical are of operations; and
· is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs at the earlier of disposal
or when the operation meets the criteria to be classified as held-for-sale.
When an operation is classified as a discontinued operation, the comparative
consolidated statement of profit or loss and other comprehensive income is
re-presented as if the operation had been discontinued from the start of the
comparative year.
(bb) Right-of-use asset
A right-of-use asset is recognised at the commencement date of a lease. The
right-of-use asset is measured at cost, which comprises the initial amount of
the lease liability, adjusted for, as applicable, any lease payments made at
or before the commencement date net of any lease incentives received, any
initial direct costs incurred, and, except where included in the cost of
inventories, an estimate of costs expected to be incurred for dismantling and
removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the
unexpired period of the lease or the estimated useful life of the asset,
whichever is the shorter. Where the Group expects to obtain ownership of the
leased asset at the end of the lease term, the depreciation is over its
estimated useful life. Right-of use assets are subject to impairment or
adjusted for any remeasurement of lease liabilities.
Note 2: Significant estimates and judgements
Impairment of rigs and related equipment
The Company sold four production rigs for a total gain of US$83,543. The
Company continues the sale process of the remaining four production and four
drilling rigs.
Impairment was calculated on an individual rig basis base on best information
available. The recoverable amount of these assets was estimated based on an
indicative conditional offer received minus any significant costs involved in
selling of the assets.
For the rest of workover/swabbing rigs, based on rigs sold to date the
evidence suggests that a lower impairment percentage should apply. However,
Management is of the opinion that given that negotiations for those are still
at a premature stage, the same impairment percentage should apply.
Classification of assets held for sale
In accordance with AASB 5 Assets held for sale and discontinued operations, an
entity shall classify a non-current assets as held for sale if its carrying
amount will be recovered principally through a sale transaction rather than
through continuing use. For this to be the case, the asset must be available
for immediate sale in its present condition and that the sale must be highly
probable. AASB 5 notes that the sale should be expected to qualify as a
completed sale within 12 months from the date of classification.
Management note that the sales process has extended beyond the 12 months as a
result of the impact of COVID-19 and the travel restrictions imposed by
various governments meaning that potential vendors have not been able to
physically inspect the relevant assets and that as a result the sales process
has lasted longer than 12 months.
Management have judged that the impact of COVID-19 meets the criteria noted in
AASB 5 regarding delays caused by events or circumstances beyond management's
control and that they remain committed to completing the sales process as soon
as practicable.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus
(COVID-19) pandemic has had, or may have, on the Group based on known
information. This consideration extends to the nature of services offered,
customers, supply chain, staffing and geographic regions in which the Group
operates. Other than as addressed in specific notes, there does not currently
appear to be either any significant impact upon the financial statements or
any significant uncertainties with respect to events or conditions which may
impact the consolidated entity unfavourably as at the reporting date or
subsequently as a result of the Coronavirus (COVID-19) pandemic.
Accounting for Strait Oil & Gas Limited
Range owns 65% of the issued share capital of Strait Oil & Gas Limited
("SOG"). This is achieved by interest through a 45% shareholding held by Range
itself plus a 20% shareholding through its full ownership of Georgian Oil Pty
Ltd. Despite owning a majority of the issued share capital, management do
not view this as control and the principal rationale for that view is as
follows:
1. Range has no appointed directors of SOG so exercises no effective
control over the company. The sole director of SOG is a different corporate
entity;
2. All shareholders must agree to any termination of the management
agreement which governs the role of the appointed director;
3. The Articles of Association of SOG are silent on the ability of
shareholders to appoint directors. To appoint a director, management believe
that the articles would need to be amended. To amend the articles requires a
special resolution which needs 75% votes (Range only controls 65%) and
management do not believe they would get support from the other shareholders
to do this;
In practice all decision making and corporate activities require consent of
all the shareholders resulting in Range have no demonstrable control over SOG.
ll previous costs incurred by Range in relation to SOG have been impaired and
the Company will continue to expense any ongoing expenses which are incurred.
Note 3: Revenue
Note Consolidated
2021 (US$) 2020 (US$)
From discontinued operations
Revenue from services to third parties recognised over time 129,928 1,320,785
Total revenue from discontinued operations 129,928 1,320,785
Other income from continuing operations
Foreign exchange gain 6,226 -
Government grant 72,763 -
Other income 15,136 -
Total other income 87,899 -
Other income from discontinued operations
Other income 450,089 1,158,624
Total other income from discontinued operations 450,089 1,158,624
Revenue from third party services and sale of oil is solely generated in the
Republic of Trinidad and Tobago.
Government grant relates to "cash flow boost" which is a support from the
Australian government to eligible entities during the period associated with
COVID-19.
Other income from continuing operations relates to gain on settlement of
employee liabilities.
Other income from discontinued operations relates to gain from disposal of
assets and oil field services.
Note 4: Expenses
Note Consolidated
2021 (US$) 2020 (US$)
a: Cost of sales - continuing operations
Costs of operations - -
Depreciation and amortisation - -
Total cost of sales from continuing operations - -
a: Cost of sales - discontinued operations
Costs of production 45,794 2,209,161
Staff Costs 254,598 -
Depreciation and amortisation - 368,069
Impairment of Receivables 1,615,572 -
Impairment of Rigs and related equipment 5 3,437,053 15,671,514
Total cost of sales from discontinued operations 5,353,017 18,248,744
b: Finance costs - continuing operations
Foreign exchange loss /(Gain) - (44,605)
Interest (income)/expense (4,602) 2,854,830
Interest on convertible note - -
Total finance costs from continuing operations (4,602) 2,810,225
b: Finance (income)/costs - discontinued operations
Interest expense - -
Foreign exchange (gain)/loss 275,309 -
Total finance (income)/costs from discontinued operations 275,309 -
c: General and administration expenses - continuing operations
Directors' and officers' fees and benefits 702,785 1,429,250
Legal fees 102,872 361,042
Business development, financial and other consulting fees 361,066 1,336,145
Listing fees 146,216 246,028
Other expenses 496,145 557,816
Total general and administration expenses from continuing operations 1,809,084 3,930,281
d: Asset values written down- continuing operations
Impairment of assets 11 153,225 14,336
Total Assets written down 153,225 14,336
Note 5: Impairment of non-current assets held for sale
During the year ended 30 June 2021, there has been a continued deterioration
in the operating and economic performance of the Group, which created an
impairment indicator of the assets included in this amount. The Directors have
undertaken an impairment assessment as at 30 June 2021 and have estimated the
recoverable amount of these assets based on sales prices achieved for four
specific rigs. As a result, an impairment of US$3,437,053 was recorded in
relation to the rigs and related equipment. Refer to Impairment of rigs and
related equipment in Note 4 and note 7a.
Note 6: Discontinued operations
In the prior year financial statements, discontinued operations presented
related only the results of Range Resources Trinidad Limited ("RRTL")
following the disposal of that entity on 31 March 2020. In the current
reporting period, the company has classified its remaining business in
Trinidad as discontinued. Therefore, the first table below presents the
information relating only to RRTL as presented in the 2020 financial report.
The second table presents the financial information for the remainder of the
group's operations in Trinidad.
The financial performance and cash flows of RRTL is shown below.
Note Consolidated
2021 (US$) 2020 (US$)
Revenue from sale of oil - 7,217,906
Operating expenses - (656,528)
Royalities - (2,629,896)
Staff costs - (302,941)
Repairs and maintenance - (140,537)
Utilities - (314,962)
Administrative expenses - (580,794)
Impairment reversal/(expense) - 51,320,529
Finance income/(expense) - 360,115
Loss on disposal of assets - (206,927)
Land fees - (525,647)
Withholding tax charge - (3,107,646)
Gain on disposal of subsidiary (RRTL) - 36,087,762
Taxation (charge)/benefits - (15,254,197)
Gain from discontinued operations - 71,266,237
Net cash (outflow)/inflow from operating activities - 2,219,789
Net cash outflow from investing activities - 1,666,481
Net cash inflow from financing activities - -
Net cash (decrease)/increase in cash generated by the subsidiary - 3,886,270
The financial performance and cash flows of the remaining Trinidad operations
are shown below.
Note Consolidated
2021 (US$) 2020 (US$)
Revenue from third party services 3 129,928 1,320,785
Other income 450,089 1,158,624
Operating expenses 4a (45,794) (2,209,161)
Depreciation, depletion and amortisation - (368,069)
Staff costs 4a (254,598) -
Administrative expenses (86,052) (357,347)
Insurance expense (57,990) -
Impairment of Rigs and related equipment 7a (3,437,053) (15,671,514)
Impairment of Receivables (1,615,572) -
Finance income/(expense) 275,309 (1,947,884)
Legal fees (272,884) -
Gain from disposal of assets 83,543 -
Taxation benefit 608,557 -
Loss from discontinued operations (4,222,517) (18,074,566)
Net cash (outflow)/inflow from operating activities (746,051) 1,997,667
Net cash Inflow/(outflow) from investing activities 154,617 (2,455,944)
Net cash inflow from financing activities 277,328 -
Net cash (decrease)/increase in cash generated by the subsidiary (314,106) (458,277)
Current period discontinued operations relate to Range Resources Drilling
Service Ltd.
Gain/(loss) from discontinued operations, net of tax
Gain/(loss) from RRTL - 71,266,237
Gain/(loss) from RRDSL (4,222,517) (18,074,566)
Total Gain/(loss) from discontinued operations, net of tax (4,222,517) 53,191,671
Note 7a: Assets of disposal group classified as held for sale
Note Consolidated
2021 (US$) 2020 (US$)
Current assets
Rigs and related inventory 3,635,878 7,211,928
Property, plant and equipment 613,160 710,933
Total current assets 4,249,038 7,922,861
Total held for sale assets 4,249,038 7,922,861
Disposal of rigs and related inventory held by Range Resources Drilling
Services
The Company has also been actively marketing the rigs and equipment. As a
result, the Company sold production rigs for a total gain of US$83,543. The
Company continues the sale process of the remaining four production and four
drilling rigs.
During the period, the rigs were impaired by US$3,437,053 (2020:
US$15,671,514).
Note 7b: Liabilities directly associated with assets classified as held for
sale
Note Consolidated
2021 (US$) 2020 (US$)
Current liabilities
Trade and other payables - -
Deferred tax liabilities 450,653 1,154,300
Accrued expenditure - -
Total current liabilities 450,653 1,154,300
Total held for sale liabilities 450,653 1,154,300
Note 8: Auditor's remuneration
Note Consolidated
2021 (US$) 2020 (US$)
Remuneration of the auditor of the Parent Entity for:
Auditing or reviewing the financial report by BDO Audit (WA) Pty Ltd 80,750 74,000
Non-audit services provided by a related entity of BDO Audit (WA) Pty Ltd in 36,338 29,910
respect to Parent Entity's tax compliance
Total remuneration for the Parent Entity 117,088 103,910
Remuneration of the auditors of the subsidiaries
Auditing or reviewing the financial report 9,072 9,072
by MHA Macintyre Hudson
Auditing or reviewing the financial report by BDO Barbados 7,500 7,500
Auditing or reviewing the financial report by BDO Trinidad 11,142 32,985
Total remuneration for the subsidiaries 27,714 49,557
Note 9: Earnings/(Loss) per share
Note Consolidated
2021 (US$) 2020 (US$)
a: Basic loss per share
Loss per share from continuing operations attributable to the ordinary equity (0.012) (0.193)
holders of the company
Loss per share attributable to the ordinary equity holders of the company (0.040) 0.397
Loss per share from discontinued operations attributable to the ordinary (0.028) 0.590
equity holders of the company
b: Diluted loss per share
Loss per share from continuing operations attributable to the ordinary equity n/a n/a
holders of the company
Loss per share attributable to the ordinary equity holders of the company n/a n/a
Loss per share from discontinued operations attributable to the ordinary n/a n/a
equity holders of the company
c: Reconciliation of gain/(loss) used in calculating earnings per share
Basic/ Diluted loss per share
Loss from continuing operations attributable to the ordinary equity holders of (1,863,582) (23,324,385)
the company
Gain/(loss) attributable to the ordinary equity holders of the company (6,086,099) 47,941,852
Loss from discontinued operations attributable to the ordinary equity holders (4,222,517) 71,266,237
of the company
d: Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in 146,267,513 120,700,101
calculating basic EPS
Note 10: Cash and cash equivalents
Note Consolidated
2021 (US$) 2020 (US$)
Cash at bank and on hand 1,911,072 3,164,752
Risk exposure
Information about the Group's exposure to credit risk, foreign exchange risk
and price risk is provided in Note 26.
Note 11: Trade and other receivables
Note Consolidated
2021 (US$) 2020 (US$)
Current
Trade receivables (i) - 1,124,429
Taxes receivable 39,342 70,049
Other receivables (ii) 13,182 784,572
Prepayments 20,847 20,864
Other taxes receivable 30,493 111,945
Other assets - 136,500
Total trade and other receivables 103,864 2,248,359
(i) Trade receivables are generally due for settlement within 30 days. They
are presented as current assets unless collection is not expected for more
than 12 months after the reporting date.
(ii) Other receivables in prior year relates to the Beach Marcelle performance
bond which was left in place after 31 March 2020. The balance was fully
impaired in the current period.
The consolidated entity has increased its monitoring of debt recovery as there
is an increased probability of customers delaying payment, due to the
Coronavirus (COVID-19) pandemic. An impairment of US$1,752,072 has been
recognised in the year to 30 June 2021 (30 June 2020: Nil), of which, $153,225
(30 June 2020: Nil) relates to continuing operations and $1,598,847 (30 June
2020: Nil) relates to non-continuing operations.
Fair value approximates the carrying value of trade and other receivables at
30 June 2021 and 30 June 2020.
Risk exposure
Information about the Group's exposure to credit risk, foreign exchange risk
and price risk is provided in Note 26.
Allowance for expected credit losses
The consolidated entity has recognised a loss in profit or loss in respect of
the expected credit losses for the year ended 30 June 2021 as described above.
Note 12: Right-of-Use Asset
Note Consolidated
2021 (US$) 2020 (US$)
Non-current
Right-of-use asset 63,333 183,333
Total trade and other receivables 63,333 183,333
The amount relates to the office lease in Beijing, People's Republic of China,
expiring on 31 August 2021. Amortisation of US$120,000 was recognised in the
Income Statement with regards to the asset.
Note 13: Controlled entities
The consolidated financial statements incorporate the assets, liabilities and
results of the following subsidiaries in accordance with accounting policy
described in Note 1(a).
Controlled Entities Consolidated Country of Incorporation Percentage Owned (%)
30 June 2021 30 June 2020
Subsidiaries of Star Phoenix Group Limited:
Range Resources (Barbados) Limited Barbados 100 100
SOCA Petroleum Limited Barbados 100 100
Range Resources Drilling Services Limited Trinidad 100 100
West Indies Exploration Company Limited Trinidad 100 100
Range Resources Trinidad Limited (disposed of) Trinidad - 100
Range Resources West Coast Limited Trinidad 100 100
Range Resources (Barbados) GY Limited Barbados 100 100
Range Resources GY Shallow Limited Trinidad 100 100
Range Resources GY Deep Limited Trinidad 100 100
Star Phoenix Group UK Limited United Kingdom 100 100
Range Resources HK Limited Hong Kong 100 100
PT Hengtai Weiye Oil and Gas Indonesia 60 60
PT Jasmine Oil and Gas Services Indonesia 60 60
PT Lubuk Kawai Raya (i) Indonesia 46.8 46.8
PT Aceh Timur Kawai Energi (i) Indonesia 42.1 42.1
Georgian Oil Pty Ltd Australia 100 100
Shanghai AusQuality International Trading Co. Ltd China 100 100
Junior Star Tec Limited China 100 100
(i) Indirect control of these entities was obtained with
the acquisition of 60% of the share capital in PT Hengtai Weiye Oil and Gas
(ii) In the subsidiaries, only Star Phoenix Group Uk
Limited and the Chinese entities are continuing entities. The rest of the
entities are discontinued.
Note 14: Property, Plant & Equipment
Consolidated Production equipment and access roads Gathering station and field office Leasehold improvement Motor vehicle, furniture, fixtures & fittings
Total
US$ US$ US$ US$ US$
Year ended 30 June 2020
Opening net book amount 22,297,641 - - 712,063 23,009,704
Foreign currency movement 32,178 - - (1,130) 31,048
Additions - - - 114,685 114,685
Disposals (344,590) - - - (344,590)
Impairment (15,453,686) (15,453,686)
Depreciation charge (263,537) - - (14,335) (368,069)
Classified as held for sale (6,177,809) - - 710,934 (6,888,743)
Closing net book amount - - - 100,349 100,349
At 30 June 2020
Cost 2,072,722 - - 323,402 2,396,124
Accumulated depreciation (2,072,722) - - (237,389) (2,295,775)
Net book amount - - - 100,349 100,349
Year ended 30 June 2021
Opening net book amount - - - 100,349 100,349
Depreciation charge - - - (16,725) (16,725)
Closing net book amount - - - 83,624 83,624
At 30 June 2021
Cost 2,072,722 - - 323,402 2,396,124
Accumulated depreciation (2,072,722) - - (239,778) (2,312,500)
Net book amount - - - 83,624 83,624
Note 15: Trade and other payables
Note Consolidated
2021 (US$) 2020 (US$)
a: Current
Trade payables 304,455 222,789
Sundry payables and accrued expenses (i) 155,268 313,784
Other payables (ii) 3,103,936 3,151,774
Total 3,563,659 3,688,347
b: Non-Current
Other payables - interest bearing - -
Other payables - non-interest bearing - 296,245
Total 3,563,659 3,984,592
(i) Amount mainly relates to accrued expenditure from
operations in Trinidad.
(ii) Amount relates to withholding taxes payable as a result
of debt eliminations. The group has made a significant estimate that an amount
of withholding tax may be payable in Australia and Trinidad. The group is
intending to apply for private rulings in both jurisdictions, the outcome of
which may materially change the liability balance.
Note 16: Deferred taxes
Accrued interest Total
Other
Deferred tax US$ US$
asset
Movements: Year ended 30 June 2021
Opening balance 55,706 56,241 111,947
Charged/(credited) - to profit or loss (55,706) (25,748) (81,454)
Closing net book amount (i) - 30,493 30,493
(i) Deferred tax asset is included in the asset held for sale
(note 7a)
Fair value uplift on business combination Accelerated depreciation Total
Deferred tax
liability
US$
US$ US$
Movements: Year ended 30 June 2020
Opening balance 30,046,205 10,044,127 40,090,332
Foreign currency movement - 58,610 58,610
Transferred on disposal of subsidiary (29,582,812) (4,136,714) (33,719,526)
Charged/(credited) - to profit or loss (463,393) (4,811,723) (5,275,116)
Closing net book amount - 1,154,300 1,154,300
Movements: Year ended 30 June 2021
Opening balance - 1,154,300 1,154,300
Foreign currency movement - - -
Charged/(credited) - to profit or loss - (703,647) (703,647)
Closing net book amount (i) - 450,653 450,653
(i) Deferred tax liability is included in liabilities directly associated with
assets held for sale (note 7b)
Note 17: Provisions
Note Consolidated
2021 (US$) 2020 (US$)
Employee service benefits - 195,896
Provision (i) 5,796,048 5,796,048
Total 5,796,048 5,991,944
(i) Provision relates to an estimate of the potential land taxes that may be
payable by the Company on expired exploration licences in Trinidad. The
determination of provisions involves management judgements about the
probability of outcomes of future events and estimates on timing and amount of
expected future cash flows.
The amount and timing of settlement in respect of land taxes are uncertain and
dependent on factors that are not within management control as payment dates
are uncertain
Note 18: Contributed equity
Note Consolidated
2021 (US$) 2020 (US$)
150,876,970 (2020: 141,367,955) fully paid ordinary shares 409,614,904 409,428,374
Share issue costs (21,044,400) (21,044,400)
Total contributed equity 388,570,504 388,383,974
Consolidated
2021 No. 2021 (US$) 2020 No. 2020 (US$)
a: Fully paid ordinary shares
At the beginning of reporting period 141,367,955 409,428,374 10,243,998,615 407,770,469
Shares issued to directors during year 9,509,015 186,530 1,536,599,792 999,176
Consolidation - (11,662,791,778) -
Shares issued during year - 23,561,326 658,729
Total contributed equity 150,876,970 409,614,904 141,367,955 409,428,374
At the date of this report, the Company's issued capital comprises 150,876,970
ordinary fully paid 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 and
amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting of the
Company, in person or by proxy, is entitled to one vote and upon a poll each
share is entitled to one vote.
On 4 January 2021, the Group announced to issue 7,195,036 shares to directors.
During the year, the Group also issued announced a subscription of 2,313,979
new ordinary shares to management.
Consolidated
2021 No. 2020 No.
b: Options
At the beginning of reporting period - 404,643,137
Options expired - (404,643,137)
Options exercised during year - -
Total options - -
The holders of these options did not have any rights under the options to
participate in any share issues of the company.
During the year ended 30 June 2021, no ordinary shares of Star Phoenix Group
were issued on the exercise of options (2020: nil).
Note 19: Reserves
Note Consolidated
2021 (US$) 2020 (US$)
a: Share-based payment reserve
Balance 1 July 2020 8,316,464 8,316,464
Share based payment expenses - -
Balance 30 June 2021 8,316,464 8,316,464
The share-based payment reserve records items recognised as expenses on the
fair valuation of shares and options issued as remuneration to employees,
directors and consultants. For the year ended 30 June 2021 the amount was nil
reflecting the fact that all options vested during the year.
Note Consolidated
2021 (US$) 2020 (US$)
b: Option premium reserve
Balance 1 July 2020 12,057,362 12,057,362
Fair value movement of exercised options that were originally classified as a - -
derivative liability
Balance 30 June 2021 12,057,362 12,057,362
The option premium reserve is used to recognise the grant date fair value of
options.
Note Consolidated
2021 (US$) 2020 (US$)
c: Foreign currency translation reserve
Balance 1 July 2020 3,015,222 7,432,461
Currency translation differences arising during the year 11,322 576,677
Currency translation differences arising due to disposal of subsidiary - (4,993,916)
Balance 30 June 2021 3,026,544 3,015,222
The foreign currency translation reserve is used to record exchange
differences arising from the translation balances of foreign subsidiaries.
Total reserves at 30 June 2021 23,400,370 23,389,048
Note 20: Contingent liabilities and contingent assets
The Directors are not aware of any contingent liabilities or contingent assets
as at 30 June 2021.
Note 21: Segment reporting
30 June 2021 Trinidad - Oil & Gas Production Trinidad - Oilfield Services Indonesia US$ Unallocated US$ Total
US$ US$ US$
Segment revenue
Total segment revenue - 580,017 - 98,728 678,745
Intersegment revenue - - - - -
Revenue from external customers - 129,928 - - 129,928
Other income - 450,089 - 98,728 548,817
Segment result
Depreciation - - - (16,725) (16,725)
Interest Income/(expense) - 226,839 - (222,236) 4,603
Other segment income/(expenses) - (805,348) - (1,586,849) (2,392,197)
Impairment of Receivables - (1,479,072) - (136,500) (1,615,572)
Impairment of Rigs and related equipment - (3,437,053) - - (3,437,053)
Gain on disposal - 83,543 - - 83,543
Profit/(Loss) before income tax - (4,831,074) - (1,863,582) (6,694,656)
Income tax - 608,557 - - 608,557
Profit/(Loss) after income tax - (4,222,517) - (1,863,582) (6,086,099)
Segment assets
Segment assets - 4,586,856 - 1,824,078 6,410,934
Total assets - 4,586,856 - 1,824,078 6,410,934
Segment liabilities
Segment liabilities - 9,676,636 - 133,724 9,810,360
Total liabilities - 9,676,636 - 133,724 9,810,360
30 June 2020 Trinidad - Oil & Gas Production Trinidad - Oilfield Services Indonesia US$ Unallocated US$ Total
US$ US$ US$
Total segment revenue 7,217,906 3,279,275 - - 10,497,181
Intersegment revenue - (1,958,490) - - (1,958,490)
Revenue from external customers 7,217,906 1,320,785 - - 8,538,691
Other income - 1,158,624 - - 1,158,624
Segment result
Depreciation - (353,734) - (14,336) (368,070)
Interest income/(expense) 360,115 (1,903,279) - (2,854,830) (4,397,994)
Other segment expenses (5,358,232) (18,413,616) - (3,769,022) (27,540,529)
Impairment reversal 51,320,529 - - - 51,320,529
Withholding tax (3,107,646) - - - (3,107,646)
Gain on disposal 36,087,762 - - - 36,087,762
Profit/(Loss) before income tax 86,520,434 (18,191,220) - (6,638,188) 61,982,708
Income tax (15,254,197) 1,505,023 - - (13,749,174)
Profit/(Loss) after income tax 71,266,237 (16,686,197) - (6,638,188) 47,941,852
Segment assets
Segment assets - 10,859,099 - 2,760,555 13,619,654
Total assets - 10,859,099 - 2,760,555 13,619,654
Segment liabilities
Segment liabilities - 10,210,766 - 920,070 11,130,836
Total liabilities - 10,210,766 - 920,070 11,130,836
(i) Unallocated assets
30 June 2021 30 June 2020
US$ US$
Segment assets
Cash 1,668,255 2,473,884
Other 155,823 286,671
Total segment assets 1,824,078 2,760,555
Note Consolidated
2021 (US$) 2020 (US$)
Segment result - all other segments
Directors' and officers' fees and benefits 702,785 1,429,250
Finance costs 6,840 2,854,830
Other general and administration expenses 1,378,474 2,354,108
Total unallocated segment expenses 2,088,099 6,638,188
Accounting policies
AASB 8 requires operating segments to be identified on the basis of internal
reports about components of the Group that are regularly reviewed by the chief
operating decision maker in order to allocate resources to the segment and to
assess its performance. The chief operating decision maker is the Executive
Chairman and through this role the Board of Directors.
Information regarding these segments is presented above. The accounting
policies of the reportable segments are the same as those of the Group.
Segment information is prepared in conformity with the accounting policies of
the entity as disclosed in Note 1.
Segment revenues and expenses are those directly attributable to the segments
and include any joint revenue and expenses where a reasonable basis of
allocation exists. Segment assets include all assets used by a segment and
consist principally of cash, receivables, plant and equipment, exploration
expenditure capitalised and development assets net of accumulated depreciation
and amortisation. While most such assets can be directly attributed to
individual segments, the carrying amount of certain assets used jointly by two
or more segments is allocated to the segments on a reasonable basis. Segment
disclosures do not include deferred income taxes.
Note 22 Cash flow information
Note Consolidated
2021 (US$) 2020 (US$)
Reconciliation of cash flow from operations with loss after income tax
Gain/(loss) after income tax (6,086,099) 47,941,852
Non-cash flows in profit (15,136)
Depreciation, depletion and amortisation 120,000 464,736
Share based payment- consultants and 201,654 -
employees
Impairment of non-current assets 16,725 -
Impairment reversal (51,320,529)
Gain on disposal of subsidiary (30,385,017)
Foreign exchange (gain)/loss (44,846) 26,691
Impairments recognised on held for sale 3,437,053 16,250,238
assets
Decrease in other current assets 7,543 -
(Increase)/decrease in trade and other 1,867,165 (1,271,752)
receivables
Decrease in deferred tax asset 15,254,197
Increase/(decrease) in trade and other (420,933) 4,404,590
payables
Increase/(Decrease) in deferred tax liabilities (703,647) (4,569,660)
increase/(Decrease) in provisions (195,896) (128,846)
Items reclassified as investing activities on 2,020,692
gain on disposal of subsidiary
Net cash outflow (from)/to operations (1,816,417) (1,312,808)
Note 23: Share based payments
Employee option plan
No options were issued to key management personnel. All options expired during
the prior year as vesting conditions were not met.
Expenses recognised in the profit or loss
During the year, no share-based payments were recognised in profit/loss
statement. (2020: Nil).
Note 24: Related party transactions
(a) Parent entity
The ultimate Parent Entity and ultimate Australian Parent Entity within the
Group is Star Phoenix Group Ltd.
(b) Subsidiaries
Interests in subsidiaries are set out in Note 13.
(c) Transactions with Key Management Personnel
The following transactions occurred during the year with Key Management
Personnel or their related parties:
2021 2020
US$ US$
Consulting fees paid or payable to Kaiyuan Guosen Management Consulting 379,251 330,416
Limited, a company owned by Mr Gu
Consulting fees paid or payable to Ten Faye Limited, a company owned by Mr L 35,833 42,255
Liu
One payment of CNY210,937 was outstanding for Mr Gu at the year end and was
paid July 2021 (2020: Nil)
Mr Gu incurred company costs through his personal account relating to the
establishment of new subsidiaries within the Group. On 20 October 2020, RMB
67,896 was transferred to Mr Gu as reimbursement of these costs.
Note Consolidated
2021 (US$) 2020 (US$)
d: Key Management Personnel compensation
Short-term benefits 508,936 646,691
One-off payments - 753,505
Post-employment benefits 29,397 29,054
Issue Shares to directors 164,452 -
Total 702,785 1,429,250
Note 25: Parent entity information
The following details information related to the Parent Entity Star Phoenix
Group Limited, at 30 June 2021. The information presented here has been
prepared in accordance using consistent accounting policies as presented in
Note 1.
Note Consolidated
2021 (US$) 2020 (US$)
Current assets 1,648,398 2,473,884
Non-current assets 146,957 5,668,315
Total assets 1,795,355 8,142,199
Current liabilities 133,724 2,330,478
Non-current liabilities - 3,322,903
Total liabilities 133,724 5,653,381
Contributed equity 388,570,480 388,383,974
Accumulated losses (411,246,995) (409,139,032)
Reserves 24,338,146 23,243,876
Total equity 1,661,631 2,488,818
Loss for the year from continuing operations (2,107,963) (5,858,309)
Profit for the year for discontinued operations - 70,230,658
Total comprehensive loss for the year (2,107,963) 64,372,349
No contingent liabilities were recognised as disclosed in Note 20.
Note 26: Financial risk management
The Group has exposure to the following risks from their use of financial
instruments:
· Credit risk
· Liquidity risk
· Market risk
This note presents information about the Group's exposure to each of the above
risks, their objectives, policies and processes for measuring and managing
risk, and the management of capital. Further quantitative disclosures are
included throughout these financial statements. The Board of Directors has
overall responsibility for the establishment and oversight of the risk
management framework.
Risk management policies are established to identify and analyse the risks
faced by the Group, to set appropriate risk limits and controls, and to
monitor risks and adherence to limits. Risk management policies and systems
are reviewed to reflect changes in market conditions and the Group's
activities. The Group, through training and management standards and
procedures, aims to develop a disciplined and constructive control environment
in which all consultants and agents understand their roles and obligations.
Credit risk
Credit risk is the risk of financial loss to the Group if counterparty to a
financial instrument fails to meet its contractual obligations, and arises
principally from the Group's receivables and cash held at financial
institutions.
Credit risk is managed on a group basis. Individual risk limits are set
based on internal or external ratings in accordance with limits set by the
board.
The credit quality of financial assets that are neither past due or impaired
can be assessed by reference to external credit ratings (if available) or to
historical information about counterparty default rates.
Note Consolidated
2021 (US$) 2020 (US$)
Cash at bank, restricted deposits and short-term bank deposits (S&P
ratings)
AAA - 1,648,398 1,489,291
AA- 19,857 984,593
A+ - -
BBB+ 242,817 690,868
BBB- - -
Not rated - -
Total 10 1,911,072 3,164,752
Exposure to credit risk
The carrying amount of the Group's financial assets represents the maximum
credit exposure. The Group's maximum exposure to credit risk at the
reporting date was:
Note Consolidated
2021 (US$) 2020 (US$)
Trade and other receivables - non-current (i) - -
Trade and other receivables - current (i) 11 103,864 2,248,359
Cash and cash equivalents 10 1,911,072 3,164,752
Total 2,014,936 5,413,111
(i) Counterparties without an external credit rating.
Loans and receivables
The Group's exposure to credit risk is influenced mainly by the individual
characteristics of each debtor. No collateral was held in relation to these
receivables.
Impairment losses
Following the sale of Range Resources Trinidad Limited (which held interests
in the upstream assets in Trinidad) to LandOcean Energy Services Co Ltd
(LandOcean), certain sums remain due and payable to the Group.
During this financial year, the Board made the decision to fully impair the
receivable from LandOcean and the performance bond receivable to adhere to
accounting standards given the situation and age of the balances, resulting to
an impairment of US$1,722,462. No further payments have been received to
date.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its
financial obligations as they fall due. The Group's approach to managing
liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage
to the Group's reputation.
The Group uses activity-based costing to cost its activities, which assists in
monitoring cash flow requirements and optimising its cash return on
investments. Typically, the Group ensures that it has sufficient cash on
demand to meet expected operational expenses for a period of 12 months; this
excludes the potential impact of extreme circumstances that cannot reasonably
be predicted, such as natural disasters.
Group 2021
Carrying amount Contractual cash flows Within one year 1-2 years 2-5 years
Financial liabilities at amortised cost
Trade and other payables 3,563,659 3,563,659 3,563,659 - -
Total 3,563,659 3,563,659 3,563,659 - -
Group 2020
Carrying amount Contractual cash flows Within one year 1-2 years 2-5 years
Financial liabilities at amortised cost
Trade and other payables 3,984,592 3,984,592 3,688,347 296,245 -
Total 3,984,592 3,984,592 3,688,347 296,245 -
Market risk
Market risk is the risk that changes in market prices, such as interest rates
and equity prices will affect the Group's income or the value of its holdings
of available for sale assets. The objective of market risk management is to
manage and control market risk exposures within acceptable parameters, while
optimising the return.
Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk
arising from various currency exposures, primarily with respect to the US
dollar, AU dollar, TT Dollar, British pound and Chinese Renminbi. Foreign
exchange risk arises from future commercial transactions and recognised assets
and liabilities denominated in a currency that is not the entity's functional
currency. The risk is measured using sensitivity analysis and cash flow
forecasting.
The Group's treasury risk management policy is to closely monitor exchange
rate fluctuations. To date, the Group has not sought to hedge its exposure to
fluctuations in exchange rates, however this policy will be reviewed on an
ongoing basis.
The Group's exposure to foreign currency risk at the reporting date was as
follows:
Consolidated
2021 AUD 2020 AUD 2021 GBP 2020 GBP
Cash 45,090 143,230 91,056 1,030,708
Amount payable to other entities (20,800) (63,702) (11,250) (19,970)
Total 24,290 79,528 79,806 1,010,738
Consolidated
2021 TTD 2020 TTD 2021 RMB 2020 RMB
Cash 1,636,585 3,765,720 8,449,697 984,593
Amount payable to other entities (184,564) (597,861) - -
Total 1,452,021 3,167,859 8,449,697 984,593
Sensitivity
Based upon the amounts above, had the US dollar strengthened by 10% with all
other variables held constant, there would not have been a material impact on
the profit and equity of the Group. A 10% weakening of the US dollar against
the above currencies at 30 June would have had an equal but opposite effect,
on the basis that all other variables remain constant.
Interest rate risk
There is no material interest rate risk exposure in the Group.
Fair values versus carrying amounts
The fair value of financial assets and liabilities, together with the carrying
amounts shown in the statement of financial position, are as follows:
Group 30 June 2021 30 June 2020
US$ US$
Carrying amount Fair value Carrying amount Fair
value
Trade and other receivables 103,864 103,864 2,248,359 2,248,359
Cash and cash equivalents 1,911,072 1,911,072 3,164,752 3,164,752
Trade and other payables (3,563,659) (3,563,659) (3,984,592) (3,984,592)
Total (1,548,723) (1,548,723) 1,428,519 1,428,519
The basis for determining fair value is disclosed in Note 1(n).
Other price risks
The Group is not exposed to any other price risks.
Capital management
The entity's objectives when managing capital is to safeguard its ability to
continue as a going concern, so that it can continue to provide returns for
shareholders and to maintain an optimal capital structure to reduce the cost
of capital.
The Group is working on identifying new projects in the energy and resources
spectrum.
The capital structure of the group consists of cash and cash equivalents and
equity attributable to equity holders of the Company, comprising issued
capital, reserves and accumulated losses as disclosed in Notes 18 and 19
respectively. None of the entities within the group are subject to
externally imposed capital requirements.
Gearing ratio
The Board reviews the capital structure on an annual basis. As a part of
this review the Board considers the cost of capital and the risks associated
with each class of capital.
Note Consolidated
2021 (US$) 2020 (US$)
Financial assets
Cash and cash equivalents 10 1,911,072 3,164,752
Financial liabilities
Trade and other payables 15 (3,563,659) (3,984,592)
Net debt (3,563,659) (3,984,592)
Equity (3,399,429) 2,488,818
Net debt to equity ratio N/A 125.9%
Categories of financial instruments
Note Consolidated
2021 (US$) 2020 (US$)
Financial assets
Cash and cash equivalents 10 1,911,072 3,164,752
Trade and other receivables - current 11 103,864 2,248,359
Total 2,014,936 5,413,111
Financial liabilities
Trade and other payables - non-current 15 - 296,245
Trade and other payables - current 3,563,659 3,688,347
Total 3,563,659 3,984,592
The carrying amount reflected above represents the Group's maximum exposure to
credit risk for such loans and receivables.
(a) Fair value hierarchy
AASB 13 requires disclosure of fair value measurements by level of the
following fair value measurement hierarchy:
(a) Quoted prices (unadjusted) in active markets for identical assets or
liabilities (level 1),
(b) Inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly or indirectly (level
2), and
(c) Inputs for the asset or liability that are not based on observable market
data (unobservable inputs (level 3).
The Group's policy is to recognise transfers into and transfers out of fair
value hierarchy levels as at the end of the end of the reporting period. There
were no transfers between the levels of the fair value hierarchy during the
year ended 30 June 2021.
(b) Fair values of other financial instruments
The Group has financial instruments which are measured at amortised cost in
the consolidated statement of financial position.
Due to their short-term nature, the carrying amounts of the current
receivables, current payables, current borrowings, and current other financial
liabilities is assumed to approximate their fair value.
Note 27: Events after the reporting date
Arbitration commences against LandOcean
On 14 July 2021, the Company announced that its legal
advisers Dentons UK and Middle East LLP have now filed an arbitration
request in the London Court of International Arbitration, which officially
marks commencement of arbitration proceedings against LandOcean.
Pursuant to the Request, the Group is claiming various sums from LandOcean
currently estimated in excess of US$8.4 million. There are additional claims
of US$1.8 million that fall outside of the Request, and the Company is
exploring options of bringing these claims separately in the courts
of Trinidad and Tobago. These sums are owed to the Group by LandOcean
pursuant to the sale and purchase agreement of Range Resources Trinidad
Limited. In accordance with the standards these amounts have not been
recognised in the financial statements as contingent assets.
Management changes
On 27 August 2021, the company announced that the Directors made a decision to
implement changes to the management team. As a result, a mutual agreement was
reached for Mr Theo Eleftheriades, the Chief Financial Officer and
Ms Evgenia Bezruchko, the Group Corporate Development Manager and Joint
Company Secretary to cease their employment in their current roles. The Board
of Directors have approved the non-Board appointment of Mr Harry Liu as
Chief Financial Officer. All of the management changes will come into effect
on 1 September 2021.
Director's Salaries and payments
On 07 September 2021, the company announced that the Board of Directors has
approved delaying all directors' salaries and payments from 1 September
2021 subject to further review at the beginning of 2022 in accordance with
the cash position of the Company at that particular time.
This has been taken as a cash conservation measure to preserve the Company's
cash reserves whilst it seeks the collection of the monies owed to it by
LandOcean, as updated in the Company's announcement of 14 July 2021.
Director funding of cash swap arrangement
On 20 August 2021, RMB 600,000 was transferred by Shanghai AusQuality
International Trading Co. Ltd to Mr Gu under a cash swap arrangement under
which he then provided SPG with USD funding. This funding was disclosed to and
approved by the board.
Strait Oil & Gas Limited
On 29 November 2021, SPG took control of Strait Oil & Gas limited. SPG UK
Limited was appointed as director and Mr Lubing Liu was elected as company
secretary of the entity.
Note 28: New accounting Standards and interpretations
Australian accounting Standards/amendments released but not yet effective: 30
June 2021 year end
There are no other standards that are not yet effective and that would be
expected to have a material impact on Star Phoenix Group in the current or
future period and on foreseeable future transactions.
Note 29: Company details
The registered office of the company is:
c/o Edwards Mac Scovell, Level 1, 8 St Georges Terrace, Perth WA 6000
Telephone: +61 8 6205 3012
The principal place of business is:
c/o Edwards Mac Scovell, Level 1, 8 St Georges Terrace, Perth WA 6000
Telephone: +61 8 6205 3012
Directors' Declaration
The directors of the company declare that:
· The financial statements, comprising the consolidated statement
of profit or loss and other comprehensive income, consolidated statement of
financial position, consolidated statement of cash flows, consolidated
statement of changes in equity, accompanying notes, are in accordance with the
Corporations Act 2001 and:
• comply with Accounting Standards and the Corporations Regulations
2001 and other mandatory professional reporting requirements; and
• give a true and fair view of the Group's financial position as at 30
June 2021 and of its performance for the year ended on that date.
• The company has included in the notes to the financial statements an
explicit and unreserved statement of compliance with International Financial
Reporting Standards.
• In the directors' opinion, there are reasonable grounds to believe
that the company will be able to pay its debts as and when they become due and
payable.
• The directors have been given the declarations by the chief
executive officer and chief financial officer required by section 295A.
This declaration is made in accordance with a resolution of the Board of
Directors and is signed for and on behalf of the directors by:
Zhiwei Gu
Chairman
22 December 2021
Tel: +61 8 6382 4600
38 Station Street
Fax: +61 8382
4601 Subiaco, WA
6008
www.bdo.com.au
PO Box 700 West Perth WA 8972
AUS
INDEPENDENT AUDITOR'S REPORT
To the members of Star Phoenix Group Ltd
Report on the Audit of the Financial Report
Disclaimer of opinion
We were engaged to audit the financial report of Star Phoenix Group Ltd (the
Company) and its subsidiaries (the Group), which comprises the consolidated
statement of financial position as at 30 June 2021, the consolidated
statement of profit or loss and other comprehensive income, the consolidated
statement of changes in equity and the consolidated statement of cash flows
for the year then ended, and notes to the financial report, including a
summary of significant accounting policies and the directors' declaration.
We do not express an opinion on the accompanying financial report of the
Group. Because of the significance of the matters described in the Basis for
disclaimer of opinion section of our report, we have not been able to obtain
sufficient appropriate audit evidence to provide a basis for an
audit opinion on this financial report.
Basis for disclaimer of opinion
We have been unable to obtain sufficient appropriate audit evidence on the
books and records of the consolidated entity. Specifically, we have been
unable to satisfy ourselves on the following areas:
i. As disclosed in Note 5 of the financial statements, the
Group's current assets as at 30 June 2021 include an amount classified as
assets held for sale. During the year ended 30 June 2021, there has been a
continued deterioration in the operating and economic performance of the
Group, which created an impairment indicator of the assets included in this
amount. The Directors have undertaken an impairment assessment as at
30 June 2021 and have estimated the recoverable amount of these assets based
on sales price achieved for four specific rigs. This resulted in an
impairment expense being recognised in the current year.
The valuation methodology used to arrive at the recoverable amount was not in
accordance with the requirements of Australian Accounting Standards, and we
were unable to perform alternative procedures to determine whether any
adjustments to the carrying value of the property plant and equipment, rigs
and related inventory included in assets held for sale
as at 30 June 2021 were necessary.
Our audit opinion for the year ended 30 June 2020 was also modified with
respect to this matter.
ii. As disclosed in note 15 of the financial statements, the
Group's current liabilities as at 30 June 2021 include an amount in respect
of potential withholding tax liabilities due on overseas interest payments
from loans which were settled in the financial year ended
30 June 2020. During the current year, management undertook a review of the withholding tax
amounts and as at the date
of this report this reassessment is incomplete as information is
required from an external source. Due to the timing of the audit, we
have been unable to obtain sufficient appropriate audit evidence to confirm
the completeness and accuracy of the withholding tax liability within the
statement of financial position as at 30 June 2021 and 30 June 2020 or of the
related expense in the statement of profit or loss and
other comprehensive income for the 30 June 2020 year end.
As a result of the matters stated above, we were unable to determine whether
any adjustments might have been found necessary in respect of the elements
making up the consolidated statement of financial position, consolidated
statement of profit or loss and other comprehensive
income, consolidated statement of changes in equity and
disclosure thereto.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the
financial report that gives a true and fair view in accordance with
Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the
preparation of the financial report that gives a true and fair view and is
free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing
the ability of the group to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the Group
or to cease operations, or has no realistic alternative but to do so.
Auditor's responsibilities for the audit of the Financial Report
Our responsibility is to conduct an audit of the financial report in
accordance with Australian Auditing Standards and to issue an auditor's
report. However, because of the matter described in the Basis for disclaimer
of opinion section of our report, we were not able to obtain sufficient
appropriate audit evidence to provide a basis for
an audit opinion on the financial report.
We are independent of the Group in accordance with the Corporations Act 2001
and the ethical requirements of the Accounting Professional and Ethical
Standards Board's APES 110 Code of Ethics for Professional Accountants
(including Independence Standards) (the Code) that are relevant to our
audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 10 to 16 of the
directors' report for the year ended 30 June 2021.
In our opinion, the Remuneration Report of Star Phoenix Group Ltd, for the
year ended 30 June
2021, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and
presentation of the Remuneration Report in accordance with section 300A of
the Corporations Act 2001. Our responsibility is to express an opinion on
the Remuneration Report, based on our audit conducted in accordance
with Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Ashleigh Woodley
Director
Perth, 22 December 2021
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national
association of independent entities which are all members of BDO Australia
Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit
(WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK
company limited by guarantee, and form part of the international BDO network
of independent member firms. Liability limited
by a scheme approved under Professional Standards Legislation.
Additional Information
Top 20 shareholders
The 20 largest shareholders of the Company as at 31 August 2021 are listed
below:
Rank Shareholder Number of shares Percentage held (%)
1. Beijing Sibo Investment Management 24,476,210 16.22%
2. Preceding Max Ltd 23,561,326 15.62&
3. Landocean Energy Services 17,390,770 11.53%
4 Sramek Biodynamics Holdings 15,365,998 10.18%
5. Interactive investor services Nominees Limited 10,586,972 7.02%
6. Abraham Limited 7,123,776 4.72%
7. Barclays Direct Investing Nominees Limited 5,489,937 3.64%
8. Mr Zhiwei Gu 5,489,793 3.64%
9. Interactive Investor Services Nominees Limited 4,759,339 3.15%
10. HSDL Nominees Limited 2,744,087 1.82%
11. Hargreaves Lansdown (Nominees)Limited 2,675,016 1.77%
12. Pershing Nominees Limited 2,074,501 1.38%
13. HSDL Nominees Limited MAXI 1,754,090 1.16%
14. Hargreaves Lansdown (Nominees) Limited VRA 1,727,605 1.15%
15. Mr Lubing Liu 1,726,077 1.14%
16. Hargreaves Landsdown (Nominees) Limited Hlnom 1,534,245 1.02%
17. HSBC Client Holdings Nominee (UK) Limited 1,339,867 0.89%
18. Interactive Brokers LLC IBLLCR 933,573 0.62%
19. Vidacos Nominees Limited IGUKCLT 826,609 0.55%
20. Lawshare Nominees Limited SIPP 785,095 0.52%
Total 132,364,886
Substantial shareholders
An extract of the Company's register of substantial shareholders (being those
shareholders who held 5% or more of the issued capital on 31 August 2021) is
below:
Rank Shareholder Number of shares Percentage held (%)
1. Beijing Sibo Investment Management 24,476,210 16.22%
2. Preceding Max Ltd 23,561,326 15.62%
3. Landocean Energy Services 17,390,770 11.53%
4. Sramek Biodynamics Holdings 15,365,998 10.18%
5. Interactive investor services Nominees Limited 10,586,972 7.02%
Distribution of equity securities
The number of shareholders by size of holding is set out below (31 August
2021):
Size of holding Number of holders Number of shares
1 - 1,000 2,202 641,108
1,001 - 5,000 563 1,367,809
5,001 - 10,000 150 1,173,686
10,001 - 100,000 219 5,753,334
100,001 and over 59 141,941,033
Total 3,193 150,876,970
Tenement schedule
The tenement schedule for the Group as at 30 June 2021 is tabulated below:
Tenement Reference Location Percentage held (%) Operator
Perlak(1) Indonesia 23 PT Aceh Timur Kawai Energi
Notes:
1. The Company's indirect interest in the Perlak field is held through its
60% shareholding in Hengtai, which holds a 78% interest in Lukar which in turn
holds a 49% interest in PT Aceh Timur Kawai Energi.
Corporate Directory
Directors Mr Zhiwei Gu Executive Chairman
Mr Lubing Liu Executive Director, COO, Joint Company Secretary
Dr Mu Luo Non-Executive Director
Company Secretary Mr Lubing Liu
Registered office & principal place of business c/o Edwards Mac Scovell, Level 1, 8 St Georges Terrace
Perth WA 6000, Australia
Telephone: +61 8 6245 0222
Share Registry (Australia) Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace, Perth WA 6000
Telephone: +61 3 9415 4000
Share Registry (United Kingdom) Computershare Investor Services plc
PO Box 82, The Pavilions, Bridgwater Road, Bristol, UK BS99 6ZZ
Telephone: +44 370 702 0000
Auditor BDO Audit (WA) Pty Ltd, 38 Station Street;
Subiaco WA 6008, Australia
Stock Exchange Listing Star Phoenix shares are listed on Alternative Investment Market of the London
Stock Exchange (AIM code: STA)
Country of Incorporation Australia
Website www.starphoenixgroup.com
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