REG - Star Phoenix Group - Half-Year Report Ended 31 December 2021
28/04/2022 16:15
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RNS Number : 7598J Star Phoenix Group Ltd 28 April 2022
Star Phoenix Group Ltd
("Star Phoenix" or "the Company")
HALF-YEAR REPORT FOR THE 6 MONTHS ENDED 31 DECEMBER 2021
Star Phoenix, an AIM listed company (AIM: STA) focused on growth through
attractive opportunities, today releases its unaudited half-year report for
the 6 months ending 31 December 2021.
Contact Details
Star Phoenix Group Ltd WH Ireland Limited (Nominated Adviser and Broker)
Lubing Liu (Company Secretary) James Joyce / Ben Good
e. admin@starphoenixgroup.com t. +44 (0)20 7220 1666
t. +44 (0)20 3865 8430
This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.
About this Report
This unaudited half-year report is a summary of Star Phoenix Group Ltd ("Star
Phoenix") operations, activities and financial position for the half-year
ended 31 December 2021. It complies with Australian reporting requirements.
Star Phoenix (ABN 88 002 522 009) is a company limited by shares and is
incorporated and domiciled in Australia.
Unless otherwise stated in this report, all references to Star Phoenix, the
Group, the Company, we, us and our, refer to its controlled entities as a
whole. References to the half-year or period are to the half-year ended 31
December 2021. All dollar figures are expressed in United States currency
unless otherwise stated.
Directors' Report
The Directors of Star Phoenix and the entities it controls (together, the
"Group") present the financial report for the half-year ended 31 December
2021.
Directors
The persons who were Directors at any time during or since the end of the
half-year are:
Name Position
Mr Zhiwei (Kerry) Gu Executive Chairman
Mr Lubing Liu Executive Director and Chief Operating Officer
Dr Mu (Robin) Luo Non-Executive Director
The Directors were in office for the entire period unless otherwise stated.
Principal activities
During the half-year, the Company's main focus was on securing new attractive
acquisition and investment opportunities to provide future growth and value
for the Company and its shareholders. In addition, the Company's efforts were
aimed at divesting rigs and equipment under Range Resources Drilling Services
Limited and resolving matters in relation to its legacy assets and
transactions.
Dividends
No dividends have been declared, provided for or paid in respect of the
half-year ended 31 December 2021 (half-year ended 31 December 2020: Nil).
Financial position
The loss for the financial half-year ended 31 December 2021 amounted to
US$124,732 (loss for half-year ended 31 December 2020: US$2,221,335).
At 31 December 2021, the Group had net liabilities of US$5,143,286 (30 June
2021: net liabilities of US$4,685,676) and cash of US$1,517,581 (30 June 2021:
US$1,911,072).
Operational and Corporate Review
New acquisition opportunities
The Company's key focus remains on securing new attractive acquisition
opportunities to provide future growth and value for the Company and its
shareholders. During the previous 12 months, the Company had reviewed
significant number of new projects and investment opportunities in the energy
sector including renewable energy, in addition to oil & gas. Currently, a
potential hydrogen opportunity is under a non-binding agreement and some other
technical and commercial discussions are ongoing with several parties in
relation to new projects in the energy sector. The Directors are confident
that these discussions will eventuate in securing a new project for the
Company on attractive terms as long as new funds are available.
Oilfield services business
During the half-year, the Company took necessary steps to further cut the
ongoing costs of its oilfield services business in Trinidad ("Range Resources
Drilling Services Limited" or "RRDSL") in light of the COVID-19 pandemic.
To provide additional cashflow and to strengthen the financial position, the
Company achieved a dry lease agreement at a rate of approximately US$15,000
per month commencing July 2021 until March 2022 and also completed the sale of
four smaller production rigs and equipment for a total sum of US$211,517.
Outstanding payable from 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 ("LCIA"), which officially marks commencement of arbitration
proceedings against LandOcean. The final court hearing is scheduled for May
2022 by LCIA and the decision of Stage 1 of the Arbitration will be most
likely made by LCIA during the final court hearing if no other circumstances
change in the following months.
During the half-year, the Group has been dealing with LandOcean with this
case. At the time of this report, an agreement has not been reached between
the parties. Although the receivable amount was fully impaired, the Company
remains confident that at least part of these sums will be recovered after the
final court hearing in May 2022.
COVID-19 impact
The impact of the COVID-19 pandemic is ongoing and it has impacted the Group
financially. It is not practicable to estimate the potential impact as the
situation is continuously developing and is dependent on measures imposed by
the governments of different countries, such as maintaining social distancing
requirements, quarantine, travel restrictions and any economic stimulus that
may be provided.
Termination of consultancy agreement
On 28 July 2021, the company advised that it has terminated the consultancy
agreement with Fire Phoenix Ltd (the "Consultant"), by serving a 30-day
written notice to the Consultant.
Full terms of the consultancy agreement were provided in the Company's
announcement of 10 November 2020.
Management Changes
On 27 August 2021, the Company announced that, pursuant to the Company's
restructuring, 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 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.
Result of special general meeting
The Board is pleased to advise that following the General Meeting held on 10
December 2021, all of the resolutions relating to the proposed appointments of
director nominees were lost, therefore the composition of the Board remains
unchanged.
Events subsequent to reporting date
Oilfield services business
The Company engaged an independent specialist broker to assist with the sale
of the remaining seven rigs and related equipment. Whilst the marketing
campaign is currently underway (there being no guarantee that it will
eventuate in sale agreements being reached), RRDSL has just completed a dry
lease agreement of Rig 6 with a lessee and are discussing potential dry lease
agreements with several parties for some of the rigs which the Directors
expect will generate additional revenue for the Company in next 12 months.
Georgia litigation
The Company and Strait Oil and Gas Limited ("SOG"), a private company
incorporated in Gibraltar, in which Star Phoenix holds a 65% interest had been
working with their legal advisers (the "Advisers")on progressing an
arbitration claim against the government of Georgia.
Further to the Company's announcements, negotiations with parties for securing
funds to commence the Georgia litigation process are still in progress.
However, progress in respect of the arbitration claim is taking longer than
originally anticipated due to the disruption resulting from the COVID-19
pandemic. The Company continues to be advised by Enyo Law LLP in relation to
this process.
Zhiwei Gu
Chairman
Dated this 28 day of April 2022
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Note Consolidated
6 months ended 31 December 6 months ended 31 December 2020 (US$)
2021 (US$) (Restated)*
Revenue from continuing operations - -
Other income and expenses from continuing operations
Other income 3/4b - 54,630
Net finance income/(costs) 3/4b 1,541 8,332
Foreign exchange (loss)/gain 3 (7,372) 251,528
General and administration expenses 4c (585,637) (1,307,664)
Impairment of current assets 4d - (1,722,462)
Loss before income tax expense from continuing operations (591,468) (2,715,636)
Income tax (expense)/credit - -
Loss after income tax from continuing operations (591,468) (2,715,636)
Gain from discontinued operations, net of tax 6 466,736 494,301
Loss for the period attributable to equity holders of Star Phoenix Group Ltd (124,732) (2,221,335)
Other comprehensive income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations (332,878) (121,313)
Other comprehensive (loss)/income for period, net of tax (332,878) (121,313)
Total comprehensive loss attributable to equity holders of Star Phoenix Group (457,610) (2,342,648)
Ltd
Loss per share from continuing operations attributable to the ordinary equity
holders of the Company
Basic loss per share (0.004) (0.02)
Diluted loss per share N/A N/A
Loss per share from discontinued operations attributable to the ordinary
equity holders of the Company
Basic gain/(loss) per share 0.003 0.003
Diluted loss per share N/A N/A
*Refer to note 2a for detailed information on restatement of comparatives
The above consolidated statement of profit or loss and other comprehensive
income should be read in conjunction with the accompanying notes.
Consolidated Statement of Financial Position
Note Consolidated
31 December 30 June 2021 30 June 2020
2021 (Restated US$)* (Restated
(US$) US $)*
Assets
Current assets
Cash and cash equivalents 1,517,581 1,911,072 3,164,752
Trade and other receivables 8 119,087 103,864 2,248,359
Assets classified as held for sale 7a 4,193,706 4,249,038 7,922,861
Total current assets 5,830,374 6,263,974 13,335,972
Non-current assets
Right of use asset - 63,333 183,333
Property, plant and equipment 9 75,262 83,624 100,349
Total non-current assets 75,262 146,957 283,682
Total assets 5,905,636 6,410,931 13,619,654
Liabilities
Current liabilities
Trade and other payables 10 4,803,720 4,849,906 4,791,791
Liabilities directly associated with assets classified as held for sale 7b 449,154 450,653 1,154,300
Provisions 11 5,796,048 5,796,048 5,991,944
Total current liabilities 11,048,922 11,096,607 11,938,035
Non-current liabilities
Trade and other payables - - 296,245
Total non-current liabilities - - 296,245
Total liabilities 11,048,922 11,096,607 11,234,280
Net (liabilities)/assets (5,143,286) (4,685,676) 1,385,374
Equity
Contributed equity 12 388,570,504 388,570,504 388,383,974
Reserves 2,693,666 23,400,370 23,389,048
Accumulated losses (396,407,456) (416,656,550) (410,387,648)
Total equity (5,143,286) (4,685,676) 1,385,374
The above consolidated statement of financial position should be read in
conjunction with the accompanying notes.
*Refer to note 2a for detailed information on restatement of comparatives
Consolidated Statement of Changes in Equity
Contributed equity (US$) Accumulated losses (US$) Foreign currency translation reserve (US$) Share-based payment reserve (US$) Option premium reserve (US$) Total equity (US$)
Balance at 1 July 2020-originally reported 388,383,974 (409,284,204) 3,015,222 8,316,464 12,057,362 2,488,818
Adjustment due to prior period error ( refer note 2a) - (1,103,444) - - - (1,103,444)
Balance at 1 July 2020-restated 388,383,974 (410,387,648) 3,015,222 8,316,464 12,057,362 1,385,374
Exchange difference on translation of foreign operations - - (121,313) - - (121,313)
Loss attributable to the members of the company - (2,715,636) - - - (2,715,636)
Profit from discontinued operations-originally reported - 585,702 - - - 585,702
Adjustment due to prior period error ( refer note 2a) - (91,401) - - - (91,401)
Transactions with owners in their capacity as owners
Issue of share capital 37,200 - - - - 37,200
Balance at 31 December 2020 388,421,174 (412,608,983) 2,893,909 8,316,464 12,057,362 (920,074)
Balance at 1 July 2021-originally reported 388,570,504 (415,370,303) 3,026,544 8,316,464 12,057,362 (3,399,429)
Adjustment due to prior period error ( refer note 2a) - (1,286,247) - - - (1,286,247)
Balance at 1 July 2021-restated 388,570,504 (416,656,550) 3,026,544 8,316,464 12,057,362 (4,685,676)
Exchange difference on translation of foreign operations - - (332,878) - - (332,878)
Loss from contiuing operations - (591,468) - - - (591,468)
Profit from discontinued operations - 466,736 - - - 466,736
Transfer reserves to accumlated loss - 20,373,826 - (8,316,464) (12,057,362) -
Transactions with owners in their capacity as owners
Issue of share capital - - - - - -
Balance at 31 December 2021 388,570,504 (396,407,456) 2,693,666 - - (5,143,286)
The above consolidated statement of changes in equity should be read in
conjunction with the accompanying notes.
Consolidated Statement of Cash Flows
Consolidated
6 months ended 31 December 6 months ended 31 December 2020 (US$)
2021 (US$)
Receipts from customers 130,524 119,862
Payments to suppliers and employees (869,743) (971,781)
Income taxes (paid)/received (22,889) (75,521)
Payments to related companies (17,893) (174,142)
Other receipts 32 54,630
Net cash outflow from operating activities (779,969) (1,046,952)
Proceeds from disposal of property, plant and equipment 211,517 248,585
Receipts from related companies - 278,010
Net cash inflow/(outflow) from investing activities 211,517 526,595
Receipts from share issue - -
Interest (paid)/received and other finance costs received/(paid) (1,584) (993)
Net cash inflow/(outflow) from financing activities (1,584) (993)
Net decrease in cash and cash equivalents (570,036) (521,350)
Net foreign exchange differences 176,545 89,069
Cash and cash equivalents at beginning of period 1,911,072 3,164,752
Cash and cash equivalents at end of period 1,517,581 2,732,471
The above consolidated statement of cash flows should be read in conjunction
with the accompanying notes.
Notes to Consolidated Financial Statements
Note 1: Significant accounting policies
These general purpose financial statements for the interim half-year reporting
period ended 31 December 2021 have been prepared in accordance with Australian
Accounting Standard AASB 134 'Interim Financial Reporting' and the
Corporations Act 2001, as appropriate for for-profit oriented entities.
Compliance with AASB 134 ensures compliance with International Financial
Reporting Standard IAS 34 'Interim Financial Reporting'.
These general purpose financial statements do not include all the notes of the
type normally included in annual financial statements. Accordingly, these
financial statements are to be read in conjunction with the annual report for
the year ended 30 June 2021 and any public announcements made by the company
during the interim reporting period in accordance with the continuous
disclosure requirements of the Corporations Act 2001.
The principal accounting policies adopted are consistent with those of the
previous financial year and corresponding interim reporting period, unless
otherwise stated.
New and amended accounting standards and Interpretations adopted
The consolidated entity has adopted all of the new or amended Accounting
Standards and Interpretations issued by the Australian Accounting Standards
Board ('AASB') that are mandatory for the current reporting period. Any new or
amended Accounting Standards or Interpretations that are not yet mandatory
have not been early adopted.
Going concern
The Group's net loss after taxation attributable to the members of Star
Phoenix Group Ltd for the period end to 31 December 2021 was US$124,732 (loss
for half-year ended 31 December 2020: US$2,221,335). The Group also reports a
net liability position of US$4,400,572 (30 June 2021: net liability of
US$3,942,962) and cash of US$1,517,581 (30 June 2021: US$1,911,072).
These conditions indicate a material uncertainty that may cast significant
doubt about the Group's ability to continue as a going concern and, therefore,
that it may be unable to realise its assets and discharge its liabilities in
the normal course of business.
The ability of the group to continue as a going concern is principally
dependent upon:
- The Group receiving funds from the disposal of the remaining assets
classified as held for sale;
The Group's ability to raise additional funds through equity or debt
financing;
- The Group achieving a favourable outcome in regards to the Landocean
Arbitration and/or being ableto negotiate a repayment plan with the tax
authorities both in Australia and Trinidad in regards to settlement of the
outstanding withholding tax balances.
The financial statements have been prepared on the basis that the group is a
going concern, which contemplates the continuity of normal business activity,
realisation of assets and settlement of liabilities in the normal course of
business.
The Directors believe that sufficient funds will be available to meet the
Group's working capital requirements and to continue operations in the normal
course of business as at the date of this report, due to the following
factors:
- Expecation to raise funds through the disposal of assets held for
sale at period end;
- The ability to raise additional capital through equity or debt
financing;
- Achieve a favourable outcome in relation to ongoing litigation for
amounts the Group intends to recover from Land Ocean(also refer Note 14
Subsequent events) which will be used to settle the witholding tax
liabilities as disclosed in Note 10 Other liabilities $3,693,416 . Should the
case outcome with Landocean be not in favour of the group, the Directors
expect to be able to negotiate with the tax authorities both in Australia and
Trinidad to a repayment plan to settle these liabilities.
In the event that the Company is not able to realise the above factors or
secure additional funds and secure new projects, it casts significant doubt on
the ability of the Group to continue as Going concern.
Should the Group 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 amounts
or classification of recorded assets or liabilities that might be necessary if
the Group does not continue as a going concern.
Non-current assets classified as held for sale
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 area of operations; and
· is a subsidiary acquired exclusively with a view to re-sale.
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.
Note 2: Significant estimates and judgements
Impairment of rigs and related inventory
At 31 December 2021, the Directors did not deem necessary to undertake an
impairment assessment during the reporting period as per AASB 136 as no
impairment indicators were noted. The basis of the recoverable value remains
the same as at 30 June 21 and the Company continues the sale process of the
remaining three production and five drilling rigs.
Deferred tax liability
The carrying value of the deferred tax liability is US$449,153 at 31 December
2021. In the event that the manner by which the carrying value of these assets
is recovered differs from that which is assumed for the purpose of this
estimation, the associated tax charges may be significantly less than this
amount.
Recoverability of deferred tax assets
Deferred tax assets are recognised only if it is probable that future taxable
amounts will be
available to utilise those temporary differences and losses. Management
considers that currently it is not probable that future taxable profits will
be available to utilise those temporary differences. Judgement is required to
determine the amount of deferred tax assets that can be recognised, based upon
the likely timing and the level of future profits.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of
estimation and judgement. It is based on the lifetime expected credit loss,
grouped based on days overdue, and makes assumptions to allocate an overall
expected credit loss rate for each group. These assumptions include recent
experience and historical collection rates, the impact of the Coronavirus
(COVID-19) pandemic and forward-looking information that is available. The
allowance for expected credit losses is calculated based on the information
available at the time of preparation.
IFRIC 23 Uncertain tax position and tax-related contingency
Following the disposal of Range Resources Trinidad Limited and the settlement
of liabilities in multiple jurisdictions which formed part of the
consideration for the disposal, the group has estimated that these
transactions may give rise to the possible payment of withholding tax and late
payment penalties. The group considers it possible that a withholding tax
liability of US$1,341,122 may be payable in Australia and withholding tax
liability of US$3,095,008 payable in Trinidad. As at 31 December 2021, both
amounts have been provided for in full. Also refer note 2a.
COVID-19 pandemic
The impact of the COVID-19 pandemic is ongoing and it has impacted the Group
financially. It is not practicable to estimate the potential impact as the
situation is continuously developing and is dependent on measures imposed by
the governments of different countries, such as maintaining social distancing
requirements, quarantine, travel restrictions and any economic stimulus that
may be provided.
Non-current assets classified as held for sale and discontinued operations
2022 and 2021: Rigs and related inventory
The Group has been marketing the rigs and equipment in the financial year,
therefore all rigs and related equipment were classified as held for sale
assets as it is highly probable that these assets will be sold within 12
months.
Note 2a: Restatement of comparatives
During the half year ended 31 December 2021, an error was discovered in the
recognition of withholding tax payable relating to prior years. Detailed
calculation were carried out in this period and this resulted in an increase
of $360,731 in the withholding tax liability for the year ended 30 June 2020,
an increase of $182,803 in the withholding tax liability for the year ended 30
June 2021, an increase of $91,401 withholding tax expense for the half year
ended 31 December 2020. The impact of the restatement is noted below
31 December 2020 (US$) Correction of prior period error 31 December 2020 (US$)
Reported Restated
Loss for the period attributable to equity holders of Star Phoenix Group Ltd (2,129,934) (91,401) 2,221,335
Total comprehensive loss for the period attributable to equity holders of Star (2,251,247) (91,401) 2,342,648
Phoenix Group Ltd
30 June 2021 (US$) Correction of prior period error 30 June 21 (US$)
Reported Restated
Trade and other payable -(line item affected Other taxes payable)-Refer Note 3,563,659 1,286,247 4,849,906
10
Gain/(loss) from discontinued operations-net of tax (4,222,517) (182,803) (4,405,320)
30 June 2020 (US$) Correction of prior period error 30 June 20 (US$)
Reported Restated
Trade and other payable -(line item affected Other taxes payable) 3,688,347 1,103,444 4,791,791
Gain/(loss) from discontinued operations-net of tax 53,191,671 (1,103,444) 52,088,227
Earning per Share 31 December 2020 (US$) 31 December 2020 (US$)
Reported Adjusted
Basic earning/(loss) per share (0.02) (0.02)
Diluted earning/(loss) per share 0.003 0.003
Note 3: Revenue
Note Consolidated
31 December 2021 (US$) 31 December 2020 (US$)
From discontinued operations
Revenue from services to third parties recognised over time 6 125,336 410,108
Total revenue from discontinued operations 125,336 410,108
Other income from continuing operations
Foreign exchange gain (loss) (7,372) 251,528
Other income - 54,630
Other income from continued operations
Finance income 4 1,541 8,332
Total revenue from continued operations (5,831) 314,490
Revenue from third party services is solely generated in the Republic of
Trinidad and Tobago.
Note 4: Expenses
Note Consolidated
31 December 2021 (US$) 31 December 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 6 (163,323) (28,142)
Royalties - -
Staff costs - -
Depreciation and amortisation - -
Total cost of sales from discontinued operations (163,323) (28,142)
b: Finance costs/(income) - continuing operations
Fair value movement of derivative liability - -
Interest (income)/expense (1,541) (8,332)
Interest on convertible note - -
Total finance (income)/costs from continuing operations (1,541) (8,332)
b: Foreign exchange costs/(income) - discontinued operations
Other expenses - -
Foreign exchange (gain)/loss (318,708) (103,705)
Total foreign exchange costs/(income) from discontinued operations (318,708) (103,705)
c: General and administration expenses - continuing operations
Directors' and officers' fees and benefits 123,145 313,784
Legal fees 91,885 153,664
Business development, financial and other consulting fees 277,267 532,410
Listing fees 27,136 51,251
Other expenses 66,204 256,555
Total general and administration expenses from continuing operations 585,637 1,307,664
d: Asset values written down - continuing operations
Impairment of assets(i) - 1,722,462
Total assets written down - 1,722,462
(i) Impairment
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.
At 31 December 2020, the Board made the decision to fully impair the
receivable from LandOcean to adhere to accounting standards given the
situation and age of the balances, resulting to an impairment of US$1,722,462.
No further payments have been received to date.
In the current year, the group's legal advisers Dentons UK and Middle East LLP
have now filed an arbitration request in the London Court of International
Arbitration against LandOcean. The group remains confident that part of these
sums might be recovered.
Note 5: Contingent liabilities
There are no contingent liabilities as at 31 December 2021.
Note 6: Discontinued operations
The discontinued operations relate to Range Resources Drilling Services Ltd
Note 31 December 2021 31 December 2020
Revenue from third party services 3 125,336 410,108
Revenue from sale of oil - -
Operating expenses 4a (163,323) (28,142)
Royalties - -
Oil and gas properties depreciation, depletion and amortisation - -
Administrative expenses - -
Foreign exchnage gain 318,708 103,705
Gain from disposal of assets 240,890 100,031
Finance cost relating to Withholding tax liability (54,875) (91,401)
Gain from discontinued operations 466,736 494,301
Note 7a: Assets classified as held for sale
Note Consolidated
31 December 2021 (US$) 30 June 2021 (US$)
Non-current assets
Rigs and related inventory 3,530,811 3,635,878
Property, plant and equipment 662,895 613,160
Total non-current assets 4,193,706 4,249,038
Total held for sale assets 4,193,706 4,249,038
During the half year ended 31 December 2021, management have not carried out
any assessment to determine the fair value less costs to sell for these
assets. The Directors have determined the carrying amount of these assets
approximates the fair value less costs to sell.
Note 7b: Liabilities directly associated with assets classified as held for
sale
Note Consolidated
31 December 2021 (US$) 30 June 2021(US$)
Current liabilities
Net deferred tax liabilities 449,154 450,653
Total current liabilities 449,154 450,653
Total held for sale liabilities 449,154 450,653
Note 8: Trade and other receivables
Note Consolidated
31 December 2021 (US$) 30 June
2021 (US$)
Current
Trade receivables (i) 2,262 -
Taxes receivable 39,333 39,342
Other receivables 13,131 13,182
Prepayments 33,969 20,847
Other taxes receivable 30,392 30,493
Other assets (ii) - -
Total trade and other receivables 119,087 103,864
(i) Trade receivables are generally due for settlement within 30 days. They
are presented as current assets unless collection is not expected for more
than 12 months after the reporting date.
Fair value approximates the carrying value of trade and other receivables at
31 December 2021.
Note 9: Property, plant & equipment
Consolidated Motor vehicle, furniture, fixtures & fittings (US$) Total (US$)
At 31 December 2021
Cost 323,402 323,402
Accumulated depreciation (248,140) (248,140)
Net book amount 75,262 75,262
At 30 June 2021
Cost 323,402 323,402
Accumulated depreciation (239,778) (239,778)
Net book amount 83,624 83,624
Note 10: Trade and other payables
Consolidated
31 December 2021 (US$) 30 June
2021 (US$)
(Restated)
a: Current
Trade payables 269,570 304,455
Sundry payables and accrued expenses 98,020 155,268
Other tax payables (i) 4,436,130 4,390,183
Total current trade and other payables 4,803,720 4,849,906
b: Non-current
Trade payables - -
Total non-current trade and other payables - -
(i) Amount relates to withholding taxes payable as a
result of debt eliminations.
Note 11: Provisions
Consolidated
31 December 2021 (US$) 30 June
2021 (US$)
Provision (i) 5,796,048 5,796,048
Total non-current trade and other payables 5,796,048 5,896,048
(i) Provision relates to an estimate of the potential land taxes that may be
payable by the Company on expired exploration licences in Trinidad.
Note 12: Contributed equity
Consolidated
31 December 2021 (US$) 30 June
2021 (US$)
150,876,970 fully paid ordinary shares (30 June 2021: 150,876,970) 409,614,908 409,614,904
Share issue costs (21,044,404) (21,044,400)
Total contributed equity 388,570,504 388,570,504
Consolidated
31 December 2021 30 June
Number 2021
Number
Fully Paid Ordinary Shares
At the beginning of reporting period 150,876,970 141,367,955
Shares issued during the period 9,509,015
Total contributed equity 150,876,970 150,876,970
Note 13: Segmental reporting
31 December 2021 Trinidad - Oilfield Services (US$) Indonesia (US$) Unallocated (US$) Total (US$)
Segment revenue
Total revenue 684,934 - 1,541 686,475
Other income 559,598 - 1,541 561,139
Revenue from external customers 125,336 - - 125,336
Segment result
Other segment expenses (218,198) - (593,009) (811,207)
Profits/(loss) before income tax 466,736 (591,468) (124,732)
Profit/(loss) after income tax 466,736 (591,468) 124,732
Segment assets
Total assets 4,673,744 - 1,231,892 5,905,636
Segment liabilities
Total liabilities 10,247,868 58,339 10,306,207
31 December 2020- restated Trinidad - Oilfield Services discontinued(US$) Indonesia (US$) Unallocated (US$) Total (US$)
Segment revenue
Total revenue 613,844 - 314,490 928,334
Revenue from external customers 410,108 - - 410,108
Other income 203,736 - 314,490 518,226
Segment result
Other segment (expenses) (119,543) - (3,030,126) (3,149,669)
Profit/(loss) before income tax 494,301 - (2,715,636) (2,221,335)
Profit/(loss) after income tax 494,301 - (2,715,636) (2,221,335)
30 June 2021 Trinidad - Oilfield Services US$ Indonesia US$ Unallocated US$ Total US$
Restated discontinued(US$)
Segment assets
Total assets 4,586,856 - 1,824,076 6,410,931
Segment liabilities
Total liabilities - 10,220,169 - 133,724 10,353,893
Segment revenues and expenses are those directly attributable to the segments
and include any joint revenue and expenses where a reasonable basis of
allocation exists. Segment assets include all assets used by a segment and
consist principally of cash, receivables, plant and equipment. While most
assets can be directly attributed to individual segments, the carrying amount
of certain assets used jointly by two or more segments is allocated to the
segments on a reasonable basis. Segment liabilities consist principally of
payables, employee benefits, accrued expenses, provisions.
(i) Unallocated assets
31 December 2021 30 June
(US$) 2021
(US$)
Cash 1,147,672 1,668,255
Other 84,220 155,821
Total unallocated assets 1,231,892 1,824,076
Note 14: Events after the reporting date
Annual general meeting
On 31 January 2022, the Board of the company advised that its Annual General
Meeting ("AGM") was held earlier that day. The sole resolution proposed
related to the re-election of Dr Mu (Robin) Luo as a director. The
resolution was passed and therefore the composition of the Board remains
unchanged.
Georgia litigation
The Company and Strait Oil and Gas Limited (SOG), a private company
incorporated in Gibraltar, in which Star Phoenix holds a 65% interest had been
working with their legal advisers on progressing an arbitration claim against
the government of Georgia.
Further to the Company's announcements, negotiations with parties for securing
funds to commence the Georgia litigation process are still in progress.
However, progress in respect of the arbitration claim is taking longer than
originally anticipated due to the disruption resulting from the COVID-19
pandemic. The Company continues to be advised by Enyo Law LLP in relation to
this process.
LandOcean outstanding payment
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 ("LCIA"), which officially marks commencement of arbitration
proceedings against LandOcean. The final court hearing is scheduled for May
2022 by LCIA and the decision of Stage 1 of the Arbitration will be most
likely made by LCIA during the final court hearing if no other circumstances
change in the following months.
As detailed in the Company's announcement on 7 September 2021, Star
Phoenix continues to pursue the monies owed to it by LandOcean Energy
Service Co. Limited. A court trial is scheduled by the London Court of
International Arbitration in Q2 2022. At this point in time, the Directors
remain confident that the Stage 1 claims will be recovered in this financial
year, however there can be no guarantee that will be achieved. The cash
preservation measures previously stated remain in place while this process is
ongoing.
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:
a) comply with Accounting Standard AASB 134 Interim Financial Reporting,
the Corporations Regulations 2001 and other mandatory professional reporting
requirements; and
b) give a true and fair view of the consolidated entity's financial
position as at 31 December 2021 and of its performance for the half-year ended
on that date.
In the Directors' opinion that subject to the matters disclosed in Note 1
there are reasonable grounds to believe that the Company will be able to pay
its debts as and when they become due and payable.
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
28 April 2022
Corporate Directory
Directors Zhiwei Gu Executive Chairman
Lubing Liu Executive Director and COO
Mu Luo Non-Executive Director
Company Secretary 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 6205 3012
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 Group Ltd shares are listed on the Alternative Investment Market
(AIM) of the London Stock Exchange (AIM code: STA)
Country of Incorporation Australia
Website www.starphoenixgroup.com
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