Appendix 4E – Preliminary Final Report
Results for announcement to the market
Name of Entity
ABN
Financial Year Ended
Previous Corresponding Reporting Period
BPH Energy Limited
41 095 912 002
30 June 2013
30 June 2012
$A'000
Revenues and other income from ordinary activities
Up
0.44%
Loss from ordinary activities after tax attributable to members
Down
Net loss for the financial year attributable to members
Down
23%
23%
to
to
to
187
568
568
Dividends (distributions)
Final dividend
Interim dividend
Previous corresponding period
Amount per
security
Franked amount
per security
nil
n/a
nil
n/a
Other notes to the condensed financial statements
Ratios
Profit before tax / revenue
Consolidated loss from ordinary activities before tax as a
percentage of revenue
Profit after tax / equity interests
Consolidated net loss from ordinary activities after tax
attributable to members as a percentage of equity (similarly
attributable) at the end of the period
NTA Backing
Net tangible asset backing per ordinary security
Current period
Previous
corresponding
Period
(547.00)%
(557.78)%
(1.18)%
(1.51)%
Current period
Previous
corresponding
Period
30.19 cps
30.78 cps
Statement of Retained Earnings
Balance at beginning of the year
Net loss attributable to members of the parent entity
Total available for appropriation
Dividends paid
Balance at year end
Details of Associates and Joint Venture Entities
Current period
Previous
corresponding
period
(8,074,395)
(7,335,230)
(568,454)
(739,165)
-
-
(8,642,849)
(8,074,395)
Name of Entity
Percentage Held
Share of Net Profit
Advent Energy Ltd
Molecular Discovery
Systems Limited
Aggregate Share of Net Profits
Current Period
27.4
Previous Period
27.4
Current Period
(523,231)
Previous Period
(232,310)
20
20
(39,716)
(562,947)
(65,727)
(298,037)
Please refer to Note 13 of the attached accounts for further details on associate companies.
Commentary on Results
The net assets of the economic entity decreased by $591,852 to $48,197,297 at 30 June 2013. This has
largely resulted from cash balances decreasing as BPH Energy continued to provide financial support
to its investee companies MDSystems and Cortical Dynamics Ltd.
The consolidated entity has incurred losses for the year ended 30 June 2013 of $594,908 (2012:
losses of $764,478) and has a net cash outflow from operating activities of $412,426 (2012:
$497,739).
Significant Changes in State Of Affairs
The major activities throughout the period were:
During the period BPH investee Cortical Dynamics (“Cortical”) completed recruitment of
patients in its current clinical trial. The study employed the Brain Anaesthesia Response (BAR)
monitor to detect varying levels of anaesthetic agents in an operating room environment
where the presence of multiple artifacts are known to complicate the EEG assessment of
anaesthetic action.
During the period BPH investee Cortical received confirmation that a key patent relating to its
BAR monitor had been granted in the People’s Republic of China. The issued patent entitled
“EEG Analysis System” is valid until June 2027.
During the period BPH
investee Molecular Discovery Systems Ltd ( “MDS”) signed a
collaboration agreement with the Peter MacCallum Centre. The collaborative research
program will focus on the discovery and development of new cancer drugs that normalise the
function of the key tumour suppressor p53.
During the period BPH investee Advent Energy Limited entered into a data sharing and land
access agreement with Beach Energy Ltd. The agreement was reached in relation to Beach’s
intended acquisition of airborne gravity and aeromagnetic data, and the resultant sharing of
that data, in the onshore Bonaparte Basin.
BPH investee Advent Energy Ltd confirmed the renewal of key offshore Sydney Basin permit
Petroleum Exploration Permit 11 for a further 5 year term. The renewal was formally granted on
13 August 2012.
BPH investee Advent Energy re-entered Waggon Creek-1 located within EP386, and 10km from
Vienta-1, for the purpose of recompletion and production testing in 2011. The well was flowed
for 6 hours before operations were suspended for the northern wet season. Advent Energy
concluded the production testing program on Waggon Creek-1 during 2012. The testing
produced gas flows of up to 26,370m3 (0.96 MMscf) per day without production of formation
water. Comparison of gas compositions of samples obtained from the 2011 perforated zones
and the recent 2012 perforated zones indicates a potential single gas column of over 217
metres between the top and bottom perforated zones. This provides a significant gas resource
upside in this stratigraphic trap should Advent Energy successfully identify areas within the
interpreted Waggon Creek gas accumulation of thicker reservoir development. Further
investigative work could refine this upside potential.
In September 2012, Advent Energy advised that, following an extensive review of all available
data, it had increased the volumetric estimates of conventional prospective recoverable
resources in EP386 in the onshore Bonaparte Basin, northern Western Australia. New
prospective recoverable resources of between 53.3 Billion Cubic Feet (Bcf) (Low Estimate) and
1,326.3 Bcf (High Estimate) were assessed for the conventional hydrocarbon prospectivity within
EP386. This is in addition to the considerable unconventional (shale) gas resources previously
identified in EP386 and RL1 where studies indicate potential prospective shale gas resources
with an estimated (P50) prospective recoverable resources of 9.8 Tcf.
Appendix 4E - Preliminary Final Report
BPH ENERGY LIMITED and its controlled subsidiaries
For the year ended 30 June 2013
Compliance Statement
1.
2.
3.
4.
This report has been prepared under accounting policies, which comply with
in the Corporations Act or other standards
accounting standards as defined
acceptable to the ASX.
This report, and the accounts upon which the report is based (if separate), use the same
accounting policies.
This report does give a true and fair view of the matters disclosed.
This report is based on accounts to which one of the following applies.
The accounts have been audited
The accounts are in the process of being audited or subject to
review.
The accounts have been subject to review.
The accounts have not yet been audited.
Sign here:
............................................................ Date: 26th August 2013
Company secretary
Print name: Deborah Ambrosini
BBPPHH EENNEERRGGYY LLIIMMIITTEEDD
ACN 095 912 002
AAnnnnuuaall RReeppoorrtt 22001133
Contents
BPH Energy Limited and its controlled entities
Page Number
Directors’ Report .................................................................................................................................... 1
Auditor’s Independence Declaration .............................................................................................. 12
Corporate Governance Statement ................................................................................................. 13
Consolidated Statement of Profit or Loss and Other Comprehensive Income .......................... 21
Consolidated Statement of Financial Position ................................................................................ 22
Consolidated Statement of Changes in Equity ............................................................................... 23
Consolidated Statement of Cash Flows ........................................................................................... 24
Notes to the Consolidated Financial Statements ........................................................................... 25
Directors’ Declaration ......................................................................................................................... 54
Independent Auditor’s Report ........................................................................................................... 55
Additional Securities Exchange Information ................................................................................... 57
Company Information
Directors
David Breeze – Chairman/Managing Director
Greg Gilbert – Non Executive Director
Hock Goh – Non Executive Director
Deborah Ambrosini - Director and Company
Secretary
Scientific Advisors
Professor Peter Klinken
Dr Robin Scaife
Associate Professor David Liley
Registered Office
14 View Street, NORTH PERTH WA 6006
Principal Business Address
14 View Street, NORTH PERTH WA 6006
Telephone: (08) 9328 8366
Facsimile: (08) 9328 8733
Website: www.bphcorporate.com.au
E-mail: admin@bphcorporate.com.au
Auditor
Nexia Perth Audit Services Pty Ltd
Level 3, 88 William Street
PERTH WA 6000
Share Registry
Security Transfer Registrars Pty Limited
770 Canning Highway
APPLECROSS WA 6153
Australian Securities
Exchange Listing
Australian Securities Exchange Limited
(Home Exchange: Perth, Western Australia)
ASX Code: BPH
Australian Business Number
41 095 912 002
Directors’ Report
BPH Energy Limited and its controlled entities
The directors of BPH Energy Ltd (”BPH Energy” or the “Company”) present their report on the company
and its controlled entities for the financial year ended 30 June 2013.
Directors
The names of directors in office at any time during or since the end of the year are:
D L Breeze
G Gilbert
H Goh
D Ambrosini
Company Secretary
Ms Deborah Ambrosini continues in her role of Company Secretary. She also holds the position of Chief
Financial Officer of the Company and has over 15 years experience in Corporate accounting roles.
Principal Activities
The principal activities of the consolidated entity during the financial year were investments in
biotechnology entities and an oil and gas exploration entity.
Operating Results
The consolidated loss of the economic entity after providing for income tax was $594,908 (2012: loss
$764,478).
Dividends
The directors recommend that no dividend be paid in respect of the current period and no dividends
have been paid or declared since the commencement of the period.
Review of Operations
Investment in Oil and Gas Exploration Company
Advent Energy Ltd (“Advent”):
BPH Energy currently holds an interest of 27.4% in unlisted Australian exploration company Advent
Energy (“Advent”).
Advent has assembled a range of hydrocarbon permits which contain near term production
opportunities with pre-existing infrastructure and exploration upside.
Advent’s assets include EP 386 and RL 1 (100%) in the onshore Bonaparte Basin in the north of Western
Australia and Northern Territory, PEP11 (85%) in the offshore Sydney Basin and EP325 (8.3%) in the
Exmouth Sub-basin of the Carnarvon Basin near Exmouth in WA. Advent’s portfolio of assets has an
estimated AUD $156m invested historically on exploration.
Advent is investigating a considerable potential shale gas resource within EP386 and RL1. Studies
indicate significant potential upside in prospective shale gas resources with an estimated (P50)
prospective recoverable resource of 9.8 Tcf.
1
Directors’ Report
BPH Energy Limited and its controlled entities
A mean contingent Resource of 18.4 Bcf for the Weaber Gas Field (RL1) has been assessed by an
independent third party as a component of Advent’s drive to commercialise its 100% owned onshore
Bonaparte Basin assets. The current rapid development of the Kununurra region in northern Western
Australia, including the Ord Irrigation Expansion Project and numerous resource projects, provides an
exceptional opportunity for Advent to potentially develop its nearby gas resources for the benefit of
the region along with Advent and its shareholders.
The Sydney Basin is a proven petroleum basin with excellent potential for the discovery of gas and oil.
The demonstration of an active hydrocarbon system with seeps reported in the offshore area and
sampling indicated the presence of thermogenic hydrocarbon gas is considered to occur in basins
actively generating hydrocarbons and /or that contain excellent migration pathways. Previous drilling
has shown that the early Permian geological sequence is mature for hydrocarbons.
Undiscovered prospective recoverable gas resources for structural targets within the PEP 11 offshore
permit have been estimated at 5.7 trillion cubic feet (at the P50 level) or up to 22.7 Tcf on a
probabilistic mean calculation. PEP 11 lies adjacent to the most populous region of Australia and the
major industrial hub and port of Newcastle.
Investment in Biotechnology Companies
BPH Energy’s existing Biotechnology investments include its 3.89% interest in Cortical Dynamics Limited;
51.82% interest in Diagnostic Array Systems Pty Ltd and its 20% interest in Molecular Discovery Systems
Limited.
Molecular Discovery Systems Limited (”MDSystems”)
Drug Discovery:
MDSystems has core expertise in high-content imaging and analysis. MDSystems owned IN Cell
Analyser 1000 (GE Healthcare) is a semi-automated cellular imaging and analysis platform that
combines high-resolution imaging and high-content analysis and is ideally suited for screening
compounds that modulate complex cellular responses. MDSystems is currently utilising the IN Cell
Analyser 1000 for the discovery and development of new cancer drugs.
MDSystems will continue to focus on oncology drug discovery and develop additional screening
methods to identify modulators of key cancer targets.
HLS5 Project:
MDSystems is working with the Western Australian Institute for Medical Research (“WAIMR”) to develop
and validate HLS5 as a novel tumour suppressor gene. A concerted research effort by leading
Australian scientists has revealed that HLS5 works through multiple pathways that may target cancer as
well as a range of other diseases such as Huntington’s, Parkinson’s and HIV infection.
MDSystems has an extensive patent portfolio encapsulating the tumour suppressor gene HLS5 both as
a potential therapeutic target and also underpinning its involvement in a variety of disease pathways.
Cortical Dynamics Limited (“Cortical Dynamics”):
Cortical Dynamics is working with BPH Energy and the Swinburne University of Technology (”SUT”) to
develop and commercialise a unique depth of anaesthesia monitoring system for use during major
surgery. The core technology is based on real time analysis of the patients electroencephalograph
(EEG) using a proprietary algorithm based on a mathematically and physiologically detailed
understanding of the brain’s rhythmic electrical activity.
2
Directors’ Report
BPH Energy Limited and its controlled entities
The Cortical Dynamics’ team lead by Professor David Liley had previously analysed a comprehensive
data set obtained from Europe using the Brain Anaesthesia Response (“BAR”) methodology. The
detailed
international Journal of
Anesthesiology, 2010. The paper indicated the potential of the BAR’s methodology to separately
monitor hypnotic and analgesic state.
the prestigious peer-reviewed
results were published
in
Cortical Dynamics has now completed its first clinical trial utilising the BAR monitor. The trial is a
significant event in the BAR monitor’s development program as it is the first time the complete
monitoring system has been used in the operating room. A detailed analysis of the clinical trial data
indicated that the BAR monitor’s Cortical Input (CI) index can discriminate between two doses of
fentanyl, a commonly used analgesic agent. The study also concluded that the BAR monitor’s CS
index was highly correlated with the BISTM index, a generally accepted measure of sedation. The
trial’s findings in combination with the results of the 2010 publication suggest that the BAR monitor may
find significant utility in the delivery of optimal and balanced surgical anaesthesia.
Diagnostic Array Systems (“DAS”)
DAS is working to develop and commercialise BacTrak™, a diagnostic tool that will enable pathology
laboratories and the emergency departments of hospitals to provide patients with fast and accurate
identification of disease causing bacteria from a single sputum sample. The test has important
implications for the clinical management of infectious diseases by identifying the specific bacteria
responsible for a disease. Utilisation of the novel test is intended to provide more information, more
quickly, than alternative methods. It has the potential to accelerate therapeutic treatment, lead to a
reduction in hospitalisations and help reduce the overuse of antibiotics.
Financial Position
The net assets of the economic entity decreased by $591,852 to $48,197,297 at 30 June 2013. This has
largely resulted from cash balances decreasing as BPH Energy continued to provide financial support
to its investee companies MDSystems and Cortical Dynamics Ltd.
The consolidated entity incurred losses for the year ended 30 June 2013 of $594,908 (2012: losses of
$764,478) and reported a net cash outflow from operating activities of $412,426 (2012: $497,739).
The directors have reviewed their expenditure and their commitments for the consolidated entity.
The directors as a part of their cash monitoring, may voluntarily suspend cash payments for
director’s fees to conserve cash.
The directors have prepared cash flow forecasts that indicate that the consolidated entity will
have sufficient cash flows for a period of at least 12 months from the date of this report.
Based on the cash flow forecasts and the monitoring of operational costs, the directors are
satisfied that, the going concern basis of preparation is appropriate. The financial report has
therefore been prepared on a going concern basis, which assumes continuity of normal business
activities and the realisation of assets and the settlement of liabilities in the ordinary course of
business.
3
Directors’ Report
BPH Energy Limited and its controlled entities
Significant Changes in State Of Affairs
The major activities throughout the period were:
During the period BPH investee Cortical Dynamics (“Cortical”) completed recruitment of
patients in its current clinical trial. The study employed the Brain Anaesthesia Response (BAR)
monitor to detect varying levels of anaesthetic agents in an operating room environment
where the presence of multiple artifacts are known to complicate the EEG assessment of
anaesthetic action.
During the period BPH investee Cortical received confirmation that a key patent relating to its
BAR monitor had been granted in the People’s Republic of China. The issued patent entitled
“EEG Analysis System” is valid until June 2027.
During the period BPH investee Molecular Discovery Systems Ltd (“MDS”) signed a collaboration
agreement with the Peter MacCallum Centre. The collaborative research program will focus on
the discovery and development of new cancer drugs that normalise the function of the key
tumour suppressor p53.
During the period BPH investee Advent Energy Limited entered into a data sharing and land
access agreement with Beach Energy Ltd. The agreement was reached in relation to Beach’s
intended acquisition of airborne gravity and aeromagnetic data, and the resultant sharing of
that data, in the onshore Bonaparte Basin.
BPH investee Advent Energy Ltd confirmed the renewal of key offshore Sydney Basin permit
Petroleum Exploration Permit 11 for a further 5 year term. The renewal was formally granted on
13 August 2012.
BPH investee Advent Energy re-entered Waggon Creek-1 located within EP386, and 10km from
Vienta-1, for the purpose of recompletion and production testing in 2011. The well was flowed
for 6 hours before operations were suspended for the northern wet season. Advent Energy
concluded the production testing program on Waggon Creek-1 during 2012. The testing
produced gas flows of up to 26,370m3 (0.96 MMscf) per day without production of formation
water. Comparison of gas compositions of samples obtained from the 2011 perforated zones
and the recent 2012 perforated zones indicates a potential single gas column of over 217
metres between the top and bottom perforated zones. This provides a significant gas resource
upside in this stratigraphic trap should Advent Energy successfully identify areas within the
interpreted Waggon Creek gas accumulation of thicker reservoir development. Further
investigative work could refine this upside potential.
In September 2012, Advent Energy advised that, following an extensive review of all available
data, it had increased the volumetric estimates of conventional prospective recoverable
resources in EP386 in the onshore Bonaparte Basin, northern Western Australia. New
prospective recoverable resources of between 53.3 Billion Cubic Feet (Bcf) (Low Estimate) and
1,326.3 Bcf (High Estimate) were assessed for the conventional hydrocarbon prospectivity within
EP386. This is in addition to the considerable unconventional (shale) gas resources previously
identified in EP386 and RL1 where studies indicate potential prospective shale gas resources
with an estimated (P50) prospective recoverable resources of 9.8 Tcf.
After Balance Date Events
There have not been any matters or circumstances that have arisen since the end of the financial
year, that have significantly affected, or may significantly affect, the operations of the company, the
results of those operations, or the state of affairs of the company in future financial years.
4
Directors’ Report
BPH Energy Limited and its controlled entities
Environmental Issues
The consolidated group’s operations are not regulated by any significant environmental regulation
under law of the Commonwealth or of a state or territory.
Future Developments
The entity will continue its investment in energy resources and to assist its investee companies to
commercialise breakthrough biomedical research developed in universities, medical institutes and
hospitals.
Information on Directors
D L Breeze
Managing Director and Executive Chairman – Age 59
Shares held – 6,509,811
Unlisted Options held – 1,000,000
David is a Corporate Finance Specialist with extensive experience in the stock broking industry and
capital markets. He has been a corporate consultant to Daiwa Securities; was formerly Manager of
Corporate Services for Eyres Reed McIntosh and the State Manager and Associate Director for the
stock broking firm BNZ North’s.
David has a Bachelor of Economics and a Masters of Business Administration, and is a Fellow of the
Financial Services Institute of Australasia, and a Fellow of the Institute of Company Directors of
Australia. He has published in the Journal of Securities Institute of Australia and has also acted as an
Independent Expert under the Corporations Act. He has worked on the structuring, capital raising and
public listing of over 70 companies involving in excess of $250M. These capital raisings covered a
diverse range of areas including oil and gas, gold, food, manufacturing and technology.
David is Chairman of Grandbridge Limited, a publicly listed investment and advisory company and an
Executive Director of MEC Resources Ltd, Advent Energy Ltd and Cortical Dynamics Limited.
G Gilbert
Non-Executive Director – Age 65
Shares held – 480,769
Unlisted Options held – nil
Greg is a specialist in strategy and planning and works in the health and aged care sector. He has a
Masters in Science from Cranfield University in the UK and, in addition, has a Masters in Health
Administration from La Trobe University, an MBA from Deakin University, a BA from the University of
Queensland, and a Dip.App Sc from the Royal Military College Duntroon.
Greg has an extensive background in merchant banking and banking, having held the positions of
Global Head of Strategy and Finance and Project Director Global Credit Review with the National
Australia Bank, as well as having worked in executive roles with Capel Court Investment Bank, CIBC
Australia Limited and Bentley and Chau.
Greg has also worked with the National Australia Bank as an Internal Consultant on strategic
operational reviews with Mckinsey and Company and Booz Allen and Hamilton consultants.
A former Lieutenant Colonel in the Australian Defence Force, he has extensive senior management
experience in strategic planning, financial management, change management and project
5
Directors’ Report
BPH Energy Limited and its controlled entities
management as well as merchant banking and corporate advisory experience in mergers and
acquisitions and valuations.
H Goh
Non-Executive Director – Age 58
Shares held – 480,769
Unlisted Options held – nil
Hock was formerly President of Network and Infrastructure Solutions, a division of Schlumberger Limited,
based in London with revenue in excess of US$1.5 billion. He had global responsibility of Schlumberger’s
outsourcing services, security, business continuity and networked related business units.
Prior to that, Hock was President of Schlumberger Asia based in Beijing, China where he managed their
Asian operations consisting of a broad range of services including oil field services, outsourcing,
financial software and smartcards. Hock was responsible for US$800 million in revenue and more than
2,000 employees spread across 17 countries.
In his 25 year career with Schlumberger, Hock held several other field and management responsibilities
in the oil and gas industry spanning more than ten countries in Asia, the Middle East and Europe. Hock
started as an oil field service engineer in Indonesia in 1980 before moving to Australia where he worked
on rigs in Roma, Queensland, Bass Strait in Victoria and the Northwest Shelf, offshore Western Australia.
Hock is also an operating partner with Baird Capital Partners, the U.S. based buyout fund of Baird
Private Equity, providing change-of-control and growth capital to middle-market companies. Baird
Private Equity has raised and managed $1.7 billion in capital.
Hock is the Chairman of Netgain Systems, a network monitoring software provider. He also serves on
the Board of Xaloy Holdings, a US based steel components manufacturer for the plastic industry, as well
as an independent director of THISS Technologies Pte Limited, a Singapore based satellite
communication provider. He received his B Eng (Hons) in Mechanical Engineering from Monash
University, Australia. He also completed an Advanced Management Program at INSEAD/ France in
2004.
Hock is Chairman of ASX listed company MEC Resources Ltd.
D Ambrosini
Executive Director – Age 39
Shares held – nil
Unlisted Options held – 1,000,000
Deborah is a chartered accountant with over 15 years’ experience in accounting and business
development spanning the biotechnology, mining, IT communications and financial services sectors.
She has extensive experience both nationally and internationally in financial and business planning,
compliance and taxation.
Deborah is a member of the Institute of Chartered Accountants and was a state finalist in the 2009
Telstra Business Woman Awards. Deborah was also a recipient of the highly regarded 40 under 40
award held by the WA Business News.
Deborah is also a Director of ASX listed MEC Resources Ltd and Grandbridge Limited and unlisted
entities Advent Energy Ltd and Cortical Dynamics Limited.
6
Directors’ Report
BPH Energy Limited and its controlled entities
Remuneration Report (Audited)
This report details the nature and amount of remuneration for key management personnel of BPH
Energy.
D L Breeze - Executive Chairman and Managing Director
H Goh – Non Executive Director
G Gilbert – Non Executive Director
D Ambrosini – Executive Director and Company Secretary
All the parties have held their current position for the whole of the financial year and since the end of
the financial year.
Remuneration Policy
The remuneration policy of BPH Energy Limited 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 as determined by the board and/or shareholders. The
remuneration report as contained in the 2012 financial accounts was adopted at the Company’s 2012
annual general meeting. The board 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 economic
entity, as well as create goal congruence 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 economic entity 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.
All executives receive a base salary (which is based on factors such as length of service and
experience), superannuation, fringe benefits and options.
The board reviews executive packages annually by reference to the economic entity’s
performance, executive performance and comparable information from industry sectors and
other listed companies in similar industries.
The performance of executives is measured against criteria agreed biannually with each executive
and is based predominantly on the amount of their workloads and responsibilities for the company. The
board may, however, exercise its discretion in relation to approving incentives, bonuses and options,
and can recommend changes to recommendations. Any changes must be justified by reference to
measurable performance criteria. The policy is designed to attract the highest calibre of executives
and reward them for performance that results in long-term growth in shareholder wealth.
Executives are also entitled to participate in the employee share and option arrangements.
The executive directors and executives which receive salaries receive a superannuation guarantee
contribution required by the government, which is currently 9.25%, and do not receive any other
retirement benefits.
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. Options are valued using the Black-
Scholes methodology.
7
Directors’ Report
BPH Energy Limited and its controlled entities
The board policy is to remunerate non executive directors at market rates for comparable companies
for time, commitment and responsibilities. Payments to non-executive directors are based on market
practice, duties and accountability. Independent external advice is sought when required on
payments to non-executive directors. The maximum aggregate amount of fees that can be paid to
non executive directors is subject to approval by shareholders at the Annual General Meeting. Fees for
non executive directors are not linked to the performance of the economic entity. However, to align
directors’ interests with shareholder interests, the directors are encouraged to hold shares in the
company and are able to participate in the employee option plan.
The board does not have a policy in relation to the limiting of risk to directors and executives in relation
to the shares and options provided.
Employment contracts of key management personnel
The employment conditions of the managing director, all of the key management personnel are
formalised in contracts of employment. The employment contracts stipulate a six month resignation
period. The company may terminate an employment contract without cause by providing six months
written notice or making payment in lieu of notice, based on the individual’s annual salary component
together with a redundancy payment of six months of the individual’s fixed salary component.
Termination payments are generally not payable on resignation or dismissal for serious misconduct. In
the instance of serious misconduct the company can terminate employment at any time. Any options
not exercised before or on the date of termination will not lapse.
The remaining directors are consultants to BPH Energy and each party can terminate their services by
written notice.
Details of Remuneration for the year ended 30 June 2013
The remuneration for each key management personnel of the consolidated entity during the year was
as follows:
2013
Key Management Person
Short-term Benefits
Post-employment
Benefits
D L Breeze
G Gilbert
H Goh
D Ambrosini
2013 (cont’d)
Salary and
fees
Bonus
Non-cash
benefit
Other
Superannuation
148,000
25,000
25,000
25,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Key
Person
Management
Long-term
Benefits
Share-based payment
Total
Performance
Related
Compensation
Relating to
Options
D L Breeze
G Gilbert
H Goh
D Ambrosini
Other
Equity
Options
$
-
-
-
-
-
-
-
-
-
-
-
-
148,000
25,000
25,000
25,000
%
-
-
-
-
%
-
-
-
-
8
Directors’ Report
BPH Energy Limited and its controlled entities
2012
Key Management Person
Short-term Benefits
Post-employment
Benefits
D L Breeze
G Gilbert
H Goh
D Ambrosini
2012 (cont’d)
Salary and
fees
Bonus
Non-cash
benefit
Other
Superannuation
148,000
25,000
25,000
25,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Key
Person
Management
Long-term
Benefits
Share-based payment
Total
Performance
Related
Compensation
Relating to
Options
D L Breeze
G Gilbert
H Goh
D Ambrosini
Other
Equity
Options
$
-
-
-
-
-
-
-
-
-
-
-
-
148,000
25,000
25,000
25,000
%
-
-
-
-
%
-
-
-
-
Company performance, shareholder wealth and director and executive remuneration
The following table shows the gross revenue and the operating result for the last 5 years for the listed
entity, as well as the share price at the end of the respective financial years. Analysis of the actual
figures shows a slight decrease in the revenue from the previous year accompanied by a decrease in
the loss in the current year which can be attributed to the tax credit calculated for the current year.
Actions have been taken by the Board to ensure that expenses remained constant or were reduced
during the last 12 months.
Revenue and other income
162,940
339,253
604,748
300,978
301,808
2009
2010
2011
2012
2013
Operating
members of the company
loss attributable
Share price at Year end
Earnings per shares (cents)
Share based payments:
to
(2,215,717)
(208,785)
(220,903)
(739,165)
(568,454)
$0.02
(2.63)
$0.068
(0.80)
$0.03
(0.13)
$0.017
(0.41)
$0.01
(0.33)
The following are the share payments payment arrangement in existence during the year:
Grant Date
Date of Expiry
Fair Value at
Grant Date
Exercise Price
Vesting Date
1 June 2008
30 June 2013
$0.0232
$0.294
1/3 on each
anniversary date
24 December 2009
31 December 2014
$0.0266
$0.894
At grant date
There were no grants of share based payment compensation to directors and senior management
during the year.
9
Directors’ Report
BPH Energy Limited and its controlled entities
There are no further service or performance criteria that need to be met in relation to options granted.
No options were granted or exercised during the year however, 1,125,000 million options expired at
year end .
End of remuneration report.
Additional Information
Meetings of Directors
During the financial year, one meeting of directors was held. Attendances by each director during the
year were:
Directors’ Meetings
Number eligible to
attend
Number attended
1
1
1
1
1
1
1
1
D L Breeze
D Ambrosini
G Gilbert
H Goh
Indemnifying Officers or Auditors
During or since the end of the financial year the company has given an indemnity or entered an
agreement to indemnify, or paid or agreed to pay insurance premiums as follows:
The company has paid premiums to insure each of the following directors against liabilities for costs
and expenses incurred by them in defending any legal proceedings arising out of their conduct while
acting in the capacity of director of the company, other than conduct involving a wilful breach of
duty in relation to the company. The amount of the premium was $23,560.
D Breeze
D Ambrosini
G Gilbert
H Goh
The company has not indemnified the current or former auditor of the Company.
Non-audit Services
The board of directors is satisfied that the provision of non-audit services during the year is compatible
with the general standard of independence for auditors imposed by the Corporations Act 2001. The
directors are satisfied that the services disclosed below did not compromise the external auditor’s
independence for the following reasons:
all non-audit services are reviewed and approved by the board prior to commencement to
ensure they do not adversely affect the integrity and objectivity of the auditor; and
the nature of the services provided do not compromise the general principles relating to
auditor independence in accordance with APES 110: Code of Ethics for Professional
Accountants set by the Accounting Professional and Ethical Standards Board.
10
Directors’ Report
BPH Energy Limited and its controlled entities
No fees for non-audit services were paid/payable to the external auditors during the year ended 30
June 2013 (2012: Nil).
Options
At the date of this report, the unissued ordinary shares of BPH Energy Ltd under option are as follows:
Unlisted Options
Grant Date
Date of Expiry
Exercise Price
Number Under Option
16 December 2008
16 December 2013
25 September 2009
30 September 2014
24 December 2009
31 December 2014
21 January 2011
21 January 2016
$0.294
$0.594
$0.894
$0.16
500,000
75,000
1,500,000
325,000
During the year ended 30 June 2013 nil ordinary shares of BPH Energy Ltd were issued on the exercise
of options granted under the BPH Energy Ltd Incentive Option Scheme (2012: Nil). No amounts are
unpaid on any of the shares.
No person entitled to exercise the option had or has any right by virtue of the option to participate in
any share issue of any other body corporate.
No shares or interest have been issued during or since the end of the financial year as a result of
exercise of an option.
Proceedings on Behalf of Company
No person has applied for leave of Court to bring proceedings on behalf of the company or 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.
Auditor’s Independence Declaration
The lead auditor’s independence declaration for the year ended 30 June 2013 has been received and
can be found on page 12.
The directors’ report is signed in accordance with a resolution of directors made pursuant to S298(2) of
the Corporations Act 2001.
David Breeze
Dated this 26th August 2013
11
Corporate Governance
BPH Energy Limited and its controlled entities
The Board of Directors of BPH Energy Limited (“BPH Energy” or “the Company”) (“Group”) is responsible
for the corporate governance of the economic entity. The Board guides and monitors the business and
affairs of the Company on behalf of the shareholders by whom they are elected and to whom they
are accountable.
To ensure that the Board is well equipped to discharge its responsibilities, it has established guidelines
and accountability as the basis for the administration of corporate governance.
CORPORATE GOVERNANCE DISCLOSURES
BPH Energy Limited and the board are committed to achieving and demonstrating the highest
standards of corporate governance. The board continues to review the framework and practices to
ensure they meet the interests of shareholders. The company and its controlled entities together are
referred to as the Group in this statement.
COMPOSITION OF THE BOARD
The composition of the Board is determined in accordance with the following principles and
guidelines:
the Board should comprise a majority or at least 50% of the Board will be independent non-
executive directors;
the Board should have at least one director with an appropriate range of qualifications and
expertise; and
the Board shall meet at regular intervals and follow meeting guidelines set down to ensure all
directors are made aware of, and have available all necessary information, to participate in an
informed discussion of all agenda items.
When a vacancy exists, through whatever cause, or where it is considered that the Board would
benefit from the service of a new director with particular skills, the Board selects a candidate or panel
of candidates with the appropriate expertise.
The Board then appoints the most suitable candidate, who must stand for election at the next general
meeting of shareholders. The Company does not have a formal Nomination Committee.
REMUNERATION AND NOMINATION COMMITTEES
The Company does not have a formal Remuneration or Nomination Committee. The full Board attends
to the matters normally attended to by a Remuneration Committee and a Nomination committee.
Remuneration levels are set by the Company in accordance with industry standards to attract suitably
qualified and experienced Directors and senior executives.
AUDIT COMMITTEE
The Company does not have a formal Audit Committee. The full Board carried out the functions of an
Audit Committee. Due to the status of the Company and the relatively straight forward accounts of
the Company anticipated in the financial year, the Directors believe that there presently would be no
additional benefits obtained by establishing such a committee. The Board follows the Audit Committee
Charter, a copy of which is available on request.
13
Corporate Governance
BPH Energy Limited and its controlled entities
BOARD RESPONSIBILITIES
As the Board acts on behalf of and is accountable to the shareholders, it seeks to identify the
expectations of the shareholders, as well as other regulatory and ethical expectations and obligations.
In addition, the Board is responsible for identifying areas of significant business risk and ensuring
arrangements are in place to adequately manage those risks. The Board seeks to discharge these
responsibilities in a number of ways.
The responsibility for the operation and administration of the economic entity is delegated by the
Board to the Managing Director. The Board ensures that the Managing Director is appropriately
qualified and experienced to discharge his responsibilities, and has in place procedures to assess the
performance for the Company’s officers, employees, contractors and consultants.
The Board is responsible for ensuring that management’s objectives and activities are aligned with the
expectations and risks identified by the Board. It has a number of mechanisms in place to ensure this is
achieved, including the following:
Board approval of a strategic plan, designed to meet shareholder needs and manage business
risk;
Implementation of operating plans and budgets by management and Board monitoring progress
against budget; and
Procedures to allow directors, in the furtherance of their duties, to seek independent professional
advice at the Company’s expense.
MONITORING OF THE BOARD’S PERFORMANCE
In order to ensure that the Board continues to discharge its responsibilities in an appropriate manner,
the performance of all directors is to be reviewed annually by the chairperson. Directors whose
performance is unsatisfactory are asked to retire.
BEST PRACTICE RECOMMENDATION
Outlined below are the 8 Essential Corporate Governance Principles as outlined by the ASX and the
Corporate Governance Council. The Company has complied with the Corporate Governance Best
Practice Recommendations except as identified below.
Principle 1: Lay solid foundations for management and oversight
Action taken and reasons
if not adopted
The relationship between the board and senior management is critical to the Group’s long-term
success. The directors are responsible to the shareholders for the performance of the Group in both the
short and the longer term and seek to balance sometimes competing objectives in the best interests of
the Group as a whole. Their focus is to enhance the interests of shareholders and other key
stakeholders and to ensure the Group is properly managed.
The responsibilities of the board include:
• providing strategic guidance to the Group including contributing to the development of and
approving the corporate strategy;
• reviewing and approving business plans, and financial plans including major capital expenditure
14
Corporate Governance
BPH Energy Limited and its controlled entities
initiatives;
• overseeing and monitoring:
Action taken and reasons
if not adopted
• organisational performance and the achievement of the Group’s strategic goals and
objectives; and
• progress of major capital expenditures and other significant corporate projects including any
acquisitions or divestments;
• monitoring financial performance including approval of the annual and half-year financial reports;
• appointment, performance assessment and, if necessary, removal of the Managing Director;
• ratifying the appointment and/or removal and contributing to the performance assessment for the
members of the senior management team including the CFO and the Company Secretary (Deborah
Ambrosini);
• ensuring there are effective management processes in place and approving major corporate
initiatives;
• enhancing and protecting the reputation of the organization; and
• overseeing the operation of the Group’s system for compliance and risk management reporting to
shareholders.
Day to day management of the Group’s affairs and the implementation of the corporate strategy and
policy initiatives are formally delegated by the board to the Managing Director and senior executives.
Principle 2: Structure the board to add value
The board operates in accordance with the broad principles set out in its charter. The charter details
the board’s composition and responsibilities.
The board seeks to ensure that :
at any point in time, its membership represents an appropriate balance between directors
with experience and knowledge of the Group and directors with an external or fresh
perspective; and
the size of the board is conducive to effective discussion and efficient decision-making.
Directors’ independence
The board has adopted specific principles in relation to directors’ independence. These state that
when determining independence, a director must be a non-executive and the board should consider
whether the director:
• is a substantial shareholder of the company or an officer of, or otherwise associated directly with, a
substantial shareholder of the company;
• is or has been employed in an executive capacity by the company or any other Group member
within three years before commencing to serve on the board;
• within the last three years has been a principal of a material professional adviser or a material
consultant to the company or any other Group member, or an employee materially associated with
15
Corporate Governance
BPH Energy Limited and its controlled entities
the service provided;
Action taken and reasons
if not adopted
• has a material contractual relationship with the company or a controlled entity other than as a
director of the Group; and
• is free from any business or other relationship which could, or could reasonably be perceived to,
materially interfere with the director’s independent exercise of their judgement.
Materiality for these purposes is determined on both quantitative and qualitative bases. A transaction
of any amount or a relationship is deemed material if knowledge of it may impact the shareholders’
understanding of the director’s performance.
The board assesses independence each year. To enable this process, the directors must provide all
information that may be relevant to the assessment.
Board members
Details of the members of the board, their experience, expertise, qualifications, term of office,
relationships affecting their independence and their independent status are set out in the directors’
report under the heading ''Information on directors''. At the date of signing the directors’ report, there
are two non-executive directors and two executive directors, three of whom have no relationships
adversely affecting independence and so are deemed independent under the principles set out
above.
• Mr Breeze has business dealings with the Group as disclosed in note 25 to the financial report.
Term of office
The company’s Constitution specifies that all non-executive directors must retire from office no later
than the third annual general meeting (AGM) following their last election. Where eligible, a director
may stand for re-election, subject to the following limitations:
• on attaining the age of 72 years a director will retire, by agreement, at the next AGM and will
not seek re-election.
Chair and Managing Director
The Chair is responsible for leading the board, ensuring directors are properly briefed in all matters
relevant to their role and responsibilities, facilitating board discussions and managing the board’s
relationship with the company’s senior executives. In accepting the position, the Chair has
acknowledged that it will require a significant time commitment and has confirmed that other
positions will not hinder his effective performance in the role of Chair.
The Managing Director is responsible for implementing Group strategies and policies.
The Chairman does not satisfy the Independence test as the role of the Chairman and the Managing
Director is exercised by the same person. The board is of the opinion that the Chairman’s role as
Chairman of the Board is appropriate given his experience and knowledge of the business.
Committees
The number of meetings of the company’s board of directors and of each board committee held
during the year ended 30 June 2013, and the number of meetings attended by each director is
disclosed on page 10.
It is the company’s practice to allow its executive directors to accept appointments outside the
company. No appointments of this nature were accepted during the year ended 30 June 2013.
The Company is not of a size at the moment that justifies having a separate Nomination Committee.
16
Corporate Governance
BPH Energy Limited and its controlled entities
Action taken and reasons
if not adopted
However, matters typically dealt with by such a committee are dealt with by the Board of Directors.
Notices of meetings for the election of directors comply with the ASX Corporate Governance Council’s
best practice recommendations.
Principle 3: Promote ethical and responsible decision making
The company has developed a statement of values which has been fully endorsed by the board and
applies to all directors and employees. The Statement is regularly reviewed and updated as necessary
to ensure it reflects the highest standards of behaviour and professionalism and the practices
necessary to maintain confidence in the Group’s integrity and to take into account legal obligations
and reasonable expectations of the company’s stakeholders.
The Statement requires that at all times all company personnel act with the utmost integrity, objectivity
and in compliance with the letter and the spirit of the law and company policies.
The Company’s share trading policy is set out on the Company’s website.
The purchase and sale of company securities by directors and employees is monitored by the Board.
The Company’s policy regarding diversity is set out on the Company’s website.
The Company’s diversity policy does not include measurable objectives as the Board believes that the
Company will not be able to successfully meet these given the size and stage of development of the
Company. If the Company’s activities increase in size, nature and scope in the future, the suitable
measurable objectives will be agreed and put into place.
The company is committed to Diversity and Equal Opportunity within its workforce placing particular
focus on the level of gender diversity at senior levels of the organisation. The company ensure this is
achieved by :
ensuring recruitment and selection practices enable the availability of a diverse candidate pool for
appointments at senior levels;
development of high potential women;
implementation of flexible working arrangements; and
ensuring remuneration practices are free from gender bias.
Given the size of the Company the Directors do not consider it appropriate to set and include
measurable objectives in relation to diversity within the annual report. Notwithstanding this, the
Company strives to provide the best possible opportunities for current and prospective employees of
all backgrounds in such a manner that best adds to overall shareholder value and which reflects the
values, principles and spirit of the Company’s Diversity Policy.
At conclusion of the reporting year, one of BPH Energy’s four directors is female.
Principle 4: Safeguard integrity in financial reporting
Adopted except as follows:-
The Company does not have a separate Audit Committee. The full Board carries out the functions of
an Audit Committee. The Board has the authority, within the scope of its responsibilities, to seek any
information it requires from any employee or external party.
17
Corporate Governance
BPH Energy Limited and its controlled entities
Action taken and reasons
if not adopted
Due to the status of the Company and the relatively straight forward accounts of the Company, the
Directors at the moment can see no additional benefits to be obtained by establishing such a
committee.
The Board follows the Audit Committee Charter, a copy of which is available on request.
External auditors
The Board’s policy is to appoint external auditors who clearly demonstrate quality and independence.
The performance of the external auditor is reviewed annually and applications for tender of external
audit services are requested as deemed appropriate, taking into consideration assessment of
performance, existing value and tender costs. Nexia was appointed as the external auditor in 2012. It is
the Corporation Act’s policy to rotate audit engagement partners on listed companies at least every
five years. A partner should not be re-assigned to a listed entity audit engagement if this equates to
the partner serving in this role for more than 5 out of 7 successive years.
An analysis of fees paid to the external auditors, including a break-down of fees for non-audit services,
is provided in the directors’ report and in note 5 to the financial statements. It is the policy of the
external auditors to provide an annual declaration of their independence to the Board.
The external auditor will attend the annual general meeting and be available to answer shareholder
questions about the conduct of the audit and the preparation and content of the audit report. The
Company is not of a size at the moment that justifies having a internal audit division.
Principle 5&6: Make timely and balanced disclosures and respect the rights of shareholders
Continuous disclosure and shareholder communication
The company has policies and procedures on information disclosure that focus on continuous
disclosure of any information concerning the Group that a reasonable person would expect to have a
material effect on the price of the company’s securities. These policies and procedures also include
the arrangements the company has in place to promote communication with shareholders and
encourage effective participation at general meetings.
The Company Secretary has been nominated as the person responsible for communications with the
ASX. This role
includes responsibility for ensuring compliance with the continuous disclosure
requirements in the ASX Listing Rules and overseeing and co-ordinating information disclosure to the
ASX, analysts, brokers, shareholders, the media and the public.
All information disclosed to the ASX is posted on the company’s website as soon as it is disclosed to the
ASX. When analysts are briefed on aspects of the Group’s operations, the material used in the
presentation is released to the ASX and posted on the company’s web site. Procedures have also
been established for reviewing whether any price sensitive information has been inadvertently
disclosed and, if so, this information is also immediately released to the market.
All shareholders receive a copy of the company’s annual (full or concise) and half-yearly reports. In
addition, the company seeks to provide opportunities for shareholders to participate through
electronic means. Recent initiatives to facilitate this include making all company announcements,
media briefings, details of company meetings, and financial reports available on the company’s
website.
18
Corporate Governance
BPH Energy Limited and its controlled entities
Principle 7: Recognise and manage risk
Action taken and reasons
if not adopted
The board and senior executives are responsible for ensuring there are adequate policies in relation to
risk management, compliance and internal control systems. In summary, the company policies are
designed to ensure strategic, operational, legal, reputational and financial risks are identified,
assessed, effectively and efficiently managed and monitored to enable achievement of the Group’s
business objectives.
Considerable importance is placed on maintaining a strong control environment. There is an
organisation structure with clearly drawn lines of accountability and delegation of authority. The board
actively promotes a culture of quality and integrity.
The responsibility for the operation and administration of the economic entity is delegated by the
board to the Managing Director. The board ensures that the Managing Director is appropriately
qualified and experienced to discharge his responsibilities, and has in place procedures to assess the
performance for the Company’s officers, employees, contractors and consultants. The board receives
monthly updates as to the effectiveness of the company's management of material risks that may
impede meeting business objectives.
The board is responsible for ensuring that management’s objectives and activities are aligned with the
expectations and risks identified by the Board. It has a number of mechanisms in place to ensure this is
achieved, including the following:
Board approval of a strategic plan, designed to meet shareholder needs and manage business
risk;
Implementation of operating plans and budgets by management and board monitoring progress
against budget; and
Procedures to allow directors, in the furtherance of their duties, to seek independent professional
advice at the Company’s expense.
Control procedures cover management accounting, financial reporting, project appraisal, IT security,
compliance and other risk management issues. The Managing Director is required to ensure that
appropriate controls are in place to effectively manage the identified risks. This is monitored by the
board on a monthly basis.
The environment
Information on compliance with significant environmental regulations is set out in the directors’ report.
Corporate reporting
The Managing Director and CFO have made the following certifications to the board:
• that the company’s financial reports are complete and present a true and fair view, in all
material respects, of the financial condition and operational results of the company and Group
and are in accordance with relevant accounting standards;
• that the above statement is founded on a sound system of risk management and internal
compliance and control which implements the policies adopted by the board; and
• that the company’s risk management and internal compliance and control is operating
efficiently and effectively in all material respects in relation to financial reporting risks.
19
Corporate Governance
BPH Energy Limited and its controlled entities
Principle 8: Remunerate fairly and responsibly
Action taken and reasons
if not adopted
The Company is not of a size at the moment that justifies having a separate Remuneration Committee.
However, matters typically dealt with by such a committee are dealt with by the board.
The board makes specific recommendations on remuneration packages and other terms of
employment for executive directors, other senior executives and non-executive directors. The board
also reviews gender pay equity on an annual basis to ensure equality.
Each member of the senior executive team signs a formal employment contract at the time of their
appointment covering a range of matters including their duties, rights, responsibilities and any
entitlements on termination. The standard contract refers to a specific formal job description.
Further information on directors’ and executives’ remuneration, including principles used to determine
remuneration, is set out in the directors’ report under the heading ''Remuneration report''. In
accordance with Group policy, participants in equity-based remuneration plans are not permitted to
enter into any transactions that would limit the economic risk of options or other unvested entitlements.
The board with the Managing Director also assumes responsibility for overseeing management
succession planning,
implementation of appropriate executive development
programmes and ensuring adequate arrangements are in place, so that appropriate candidates are
recruited for later promotion to senior positions.
including
the
20
Statement of Profit or Loss and Other Comprehensive Income
for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
Revenue from ordinary activities
Other income
Other gains and losses
Share of associates profit/(loss)
Administration expenses
Advertising and Promotion expenses
Consulting and Legal expenses
Research and Development expenses
Depreciation and amortisation expense
Employee expense
Insurance expenses
Service Fees
Other expenses
Operating Loss Before Income Tax
Income tax (expense) /benefit
Operating Loss for the Period
Other Comprehensive Income
Total Other Comprehensive income
Total Comprehensive loss for the period
Operating loss attributable to non-controlling interests
Operating Loss attributable to members of the
parent entity
Total Comprehensive loss attributable to owners of
the Company
Total Comprehensive loss attributable to non-
controlling interests
Earnings Per Share –
Basic and diluted earnings per share (cents per
share)
The accompanying notes form part of these financial statements.
Consolidated
Note
2013
$
2012
$
2
2
2
13
3
3
187,708
114,100
186,878
114,100
-
(131,732)
(562,945)
(298,038)
(34,700)
(178,537)
(1,815)
(1,824)
(159,867)
(185,325)
(49,840)
(32,937)
(800)
(789)
(336,365)
(335,128)
(35,907)
(30,209)
(137,585)
(131,040)
(8,744)
(17,790)
(1,026,760)
(1,042,371)
14
431,852
277,893
(594,908)
(764,478)
-
-
(594,908)
(764,478)
(26,454)
(25,313)
(568,454)
(739,165)
(568,454)
(739,165)
(26,454)
(25,313)
6
(0.33)
(0.41)
21
Statement of Financial Position
as at 30 June 2013
BPH Energy Limited and its controlled entities
Note
Consolidated
2013
$
2012
$
Current Assets
Cash and cash equivalents
Trade and other receivables
Financial Assets
Other current assets
Total Current Assets
Non-Current Assets
Financial assets
Investments in associates
Intangible assets
Property, plant and equipment
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Provisions
Total Current Liabilities
Non-Current Liabilities
Deferred Tax liabilities
Financial liabilities
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserve
Accumulated losses
Non-controlling interest
Total Equity
7
8
10
9
10
13
11
12
15
17
29
16
18
19
The accompanying notes form part of these financial statements.
900,599
1,977
1,798,924
2,913
1,637,691
1,707,203
29,660
18,189
2,569,927
3,527,229
995,119
49,690,539
72,454
471
338,373
50,253,484
72,454
1,271
50,758,583
50,665,582
53,328,510
54,192,811
702,147
26,432
728,579
3,899,656
502,978
4,402,634
572,580
20,072
592,652
4,331,508
479,502
4,811,010
5,131,213
5,403,662
48,197,297
48,789,149
41,511,195
41,511,195
15,434,646
15,431,590
(8,642,849)
(8,074,395)
(105,695)
(79,241)
48,197,297
48,789,149
22
Statement of Changes in Equity
for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
Consolidated
Note Ordinary
Share
Capital
$
Accumulated
losses
$
Option
Reserve
$
Fair value
Adjustment
$
Non-
controlling
Interest
$
Total
$
Total
attributable
to owners
of the
parent
entity
$
Balance at 1 July 2011
attributable
Loss
members
consolidated entity
to
of
Other Comprehensive
income (net of tax)
Comprehensive
Total
income for the year
Transactions with owners
in
their capacity as
owners
Shares cancelled
selective buyback
Shares
exercise of options
issued
in
on
Employee
expense
options
Balance at 30 June 2012
Balance at 1 July 2012
attributable
Loss
members
consolidated entity
to
of
Other Comprehensive
income (net of tax)
Comprehensive
Total
income for the year
Transactions with owners
in
their capacity as
owners
Employee
expense
options
Balance at 30 June 2013
42,860,310
(7,335,230)
407,766
15,015,000
50,947,846
(53,928)
50,893,918
-
-
-
(739,165)
-
(739,165)
(1,350,000)
885
-
18
18
-
-
-
-
-
-
-
-
8,824
-
-
-
-
-
-
(739,165)
(25,313)
(764,478)
-
-
-
(739,165)
(25,313)
(764,478)
(1,350,000)
885
8,824
-
-
-
(1,350,000)
885
8,824
41,511,195
(8,074,395)
416,590
15,015,000
48,868,390
(79,241)
48,789,149
41,511,195
(8,074,395)
416,590
15,015,000
48,868,390
(79,241)
48,789,149
-
-
-
-
(568,454)
-
(568,454)
-
-
-
-
3,056
-
-
-
-
(568,454)
(26,454)
(594,908)
-
-
-
(568,454)
(26,454)
(594,908)
3,056
-
3,056
41,511,195
(8,642,849)
419,646
15,015,000
48,302,992
(105,695)
48,197,297
The accompanying notes form part of these financial statements.
23
Statement of Cash Flows
for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
Cash Flows From Operating Activities
Receipts from customers
Payments to suppliers and employees
Interest received
Note
Consolidated
2013
$
2012
$
-
-
(448,802)
(620,224)
36,376
122,485
Net cash used in operating activities
21
(412,426)
(497,739)
Cash Flows From Investing Activities
Amounts (to)/from other entities
Net cash provided by/used in investing
activities
Cash Flows From Financing Activities
Proceeds from capital raising (net of
capital raising costs)
Payment for share buyback
Net cash provided by/used financing
activities
(485,899)
722,948
(485,899)
722,948
-
-
885
(1,350,000)
-
(1,349,115)
Net increase (decrease) in Cash Held
Cash At the Beginning Of The Financial Year
Cash At The End Of The Financial Year
(898,325)
(1,123,906)
1,798,924
2,922,830
7
900,599
1,798,924
The accompanying notes form part of these financial statements.
24
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
1.
Statement of Significant Accounting Policies
Corporate Information
The financial report includes the consolidated financial statements and the notes of BPH Energy
Limited and controlled entities (‘Consolidated Group’ or ‘Group’).
BPH Energy Limited is a company incorporated and domiciled in Australia and listed on the
Australian Securities Exchange.
The financial report was authorised for issue on 26th August 2013 by the board of directors.
Basis of Preparation
The financial report is a general purpose financial report that has been prepared in accordance
with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative
pronouncements of the Australian Accounting Standards Board (“AASB”)and the Corporations Act
2001.
Australian Accounting Standards set out accounting policies that the AASB has concluded would
result in a financial report containing relevant and reliable information about transactions, events
and conditions to which they apply. Material accounting policies adopted in the preparation of this
financial report are presented below. They have been consistently applied unless otherwise stated.
The financial report has been prepared on an accruals basis and is based on historical costs,
modified, where stated below.
Compliance with IFRS
The consolidated financial statements of the BPH Energy Limited group comply with International
Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board
(IASB).
Financial Position
The consolidated entity has incurred losses for the year ended 30 June 2013 of $594,908 (2012: losses of
$764,478) and has a net cash outflow from operating activities of $412,426 (2012: $497,739).
The directors have reviewed their expenditure and their commitments for the consolidated entity. The
directors as a part of cash management may voluntarily suspend cash payments for their director’s
fees.
The directors have prepared cash flow forecasts that indicate that the consolidated entity will have
sufficient cash flows for a period of at least 12 months from the date of this report.
Based on the cash flow forecasts and the monitoring of operational costs, the directors are satisfied
that, the going concern basis of preparation is appropriate. The financial report has therefore been
prepared on a going concern basis, which assumes continuity of normal business activities and the
realisation of assets and the settlement of liabilities in the ordinary course of business.
25
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
Accounting Policies
(a) Principles of Consolidation
A controlled entity is any entity BPH Energy Limited has the power to control the financial and
operating policies of so as to obtain benefits from its activities.
A list of controlled entities is contained in Note 20 to the financial statements. All controlled entities
have a June financial year-end.
As at reporting date, the assets and liabilities of all controlled entities have been incorporated into
the consolidated financial statements as well as their results for the year then ended.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated
statement of profit or loss and other comprehensive income from the effective date of acquisition
and up to the effective date of disposal, as appropriate.
All inter-company balances and transactions between entities in the economic entity, 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 parent entity.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the
statement of profit or loss and other comprehensive income, statement of changes in equity and
statement of financial position respectively.
Changes in the Group’s interests in subsidiaries that do not result in a loss of control are accounted
for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling
interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any
difference between the amount by which the non-controlling interests are adjusted and the fair
value of the consideration paid or received is recognised directly in equity and attributed to
owners of the Company.
When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the
difference between (i) the aggregate of the fair value of the consideration received and the fair
value of any retained interest and (ii) the previous carrying amount of the assets (including
goodwill), and liabilities of the subsidiary and any non-controlling interests. Amounts previously
recognised in other comprehensive income in relation to the subsidiary are accounted for (i.e.
reclassified to profit or loss or transferred directly to retained earnings) in the same manner as
would be required if the relevant assets or liabilities were disposed of. The fair value of any
investment retained in the former subsidiary at the date when control is lost is regarded as the fair
value on initial recognition for subsequent accounting under AASB 139 Financial Instruments:
Recognition and Measurement or, when applicable, the cost on initial recognition of an
investment in an associate or jointly controlled entity.
(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 the tax rates that have been enacted or
are substantially enacted by the statement of financial position date.
26
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
Deferred tax is accounted for using the statement of financial position 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 liability is settled. Deferred tax is recognised in the statement of comprehensive
income except where it relates to items that may be recognised 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 or unused tax losses and tax
credits can be utilised.
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 economic entity will derive sufficient future assessable income to enable the
benefit to be realised and comply with the conditions of deductibility imposed by the law.
BPH Energy Limited and its wholly-owned Australian subsidiaries have formed an income tax
consolidated group under the tax consolidation regime. The group notified the Australian
Taxation Office on 30 June 2006 that it had formed an income tax consolidated group to apply
from 30 June 2006. The tax consolidated group has entered a tax funding agreement whereby
each company in the group contributes to the income tax payable in proportion to their
contribution to the net profit before tax of the tax consolidated group.
Tax incentives
The company may be entitled to claim special tax deductions in relation to qualifying
expenditure. As the company is not in a position to recognise current income tax payable or
current tax expense, a refundable tax offset will be received in cash and recognised as rebate
revenue in the period the underlying expenses have been incurred.
(c) Property, Plant & Equipment
Each class of property, plant and equipment is carried at cost less, where applicable, any
accumulated depreciation and impairment losses.
Plant and equipment
Plant and equipment are measured on the cost basis.
The carrying amount of plant and equipment is reviewed annually by 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 that will be received from the assets employment and
subsequent disposal. The expected net cash flows have been discounted to their present values
in determining recoverable amounts.
The cost of fixed assets constructed within the economic entity includes the cost of materials,
direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads.
27
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
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 the income statement during the financial period in which they are
incurred.
Depreciation
The depreciable amount of fixed assets is depreciated on a straight-line basis over their useful
lives.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Depreciation Rate
Plant and equipment
15 - 33 %
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each
statement of financial position date.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's
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 and losses are included in the income statement. When revalued assets are sold,
amounts included in the revaluation reserve relating to that asset are transferred to retained
earnings.
(d)
Financial Instruments
Recognition and Initial Measurement
Financial instruments, incorporating financial assets and financial liabilities, are recognised when
the entity becomes a party to the contractual provisions of the instrument. Trade date
accounting is adopted for financial assets that are delivered within timeframes established by
marketplace convention.
Financial instruments are initially measured at fair value plus transactions costs where the
instrument is not classified as at fair value through profit or loss. Transaction costs related to
instruments classified as at fair value through profit or loss are expensed to profit or loss
immediately. Financial instruments are classified and measured as set out below.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or
the asset is transferred to another party whereby the entity is no longer has any significant
continuing involvement in the risks and benefits associated with the asset. Financial liabilities are
derecognised where the related obligations are either discharged, cancelled or expire. The
difference between the carrying value of the financial liability extinguished or transferred to
another party and the fair value of consideration paid, including the transfer of non-cash assets
or liabilities assumed, is recognised in profit or loss.
28
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
Classification and Subsequent Measurement
(i) Financial assets at fair value through profit or loss
Financial assets are classified at fair value through profit or loss when they are held for trading for
the purpose of short term profit taking, where they are derivatives not held for hedging purposes,
or designated as such to avoid an accounting mismatch or to enable performance evaluation
where a group of financial assets is managed by key management personnel on a fair value
basis in accordance with a documented risk management or investment strategy. Realised and
unrealised gains and losses arising from changes in fair value are included in profit or loss in the
period in which they arise.
(ii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market and are subsequently measured at amortised cost using the
effective interest rate method.
(iii) Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either designated as
such or that are not classified in any of the other categories.
Listed shares held by the Group that are traded in an active market are classified as AFS and are
stated at fair value. The Group also has investments in unlisted shares that are not traded in an
active market but that are also classified as AFS financial assets and stated at fair value (because
the directors consider that fair value can be reliably measured). Gains and losses arising from
changes in fair value are recognised in other comprehensive income and accumulated in the
investments revaluation reserve, with the exception of impairment losses, interest calculated using
the effective interest method, and foreign exchange gains and losses on monetary assets, which
are recognised in profit or loss.
(iv)
Financial Liabilities
Non-derivative financial liabilities are subsequently measured at amortised cost using the effective
interest rate method.
Fair value
Fair value is determined based on current bid prices for all quoted investments. Valuation
techniques are applied to determine the fair value for all unlisted securities, including recent arm’s
length transactions, reference to similar instruments and option pricing models.
Impairment
At each reporting date, the group assesses whether there is objective evidence that a financial
instrument has been impaired. In the case of available-for-sale equity financial instruments, a
significant or prolonged decline in the value of the instrument below cost is considered to determine
whether an impairment has arisen. Impairment losses are recognised in the profit or loss.
(e)
Impairment of Assets
At each reporting date, the group reviews the carrying values of its tangible and intangible
assets to determine whether there is any indication that those assets have been impaired. If such
an indication exists, the recoverable amount of the asset, being the higher of the asset's fair
value less costs to sell and value in use, is compared to the asset's carrying value. Any excess of
the asset's carrying value over its recoverable amount is expensed to the profit or loss.
29
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
(f)
Investments in Associates
Associates are all entities over which the group has significant influence but not control or joint
control, generally accompanying a shareholding of between 20% and 50% of the voting rights.
Investments in associates are accounted for in the parent entity financial statements using the
cost method and in the consolidated financial statements using the equity method of
accounting, after initially being recognised at cost. The equity method of accounting recognises
the group’s share of post-acquisition reserves of its associates.
The group’s share of its associates’ post-acquisition profits or losses is recognised in the profit or
loss, and its share of post-acquisition movements in reserves is recognised in other comprehensive
income. The cumulative post-acquisition movements are adjusted against the carrying amount
of the investment.
Dividends receivable from associates are recognised in the parent entity’s profit or loss, while in
the consolidated financial statements they reduce the carrying amount of the investment.
When the group’s share of losses in an associate equals or exceeds its interest in the associate,
including any other unsecured long-term receivables, the group does not recognise further
losses, unless it has incurred obligations or made payments on behalf of the associate.
Unrealised gains on transactions between the group and its associates are eliminated to the
extent of the group’s interest in the associates. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset transferred. Accounting policies of
associates have been changed where necessary to ensure consistency with the policies
adopted by the group.
Where an investment is classified as a financial asset in accordance with AASB 139, at the date
significant influence is achieved, the fair value of the investment needs to be assessed. Any fair
value gains are recognised in accordance with the treatment the classification the financial asset
as required by AASB 139.
Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable
assets, liabilities and contingent liabilities of the associate recognised at the date of acquisition is
recognised as goodwill, which is included within the carrying amount of the investment. Any excess
of the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities
over the cost of acquisition, after reassessment, is recognised immediately in profit or loss.
(g)
Intangibles
Research
Expenditure during the research phase of a project is recognised as an expense when incurred.
Patents and Trademarks
Patents and trademarks are recognised at cost of acquisition. Patents and trademarks have a
finite life and are carried at cost less any accumulated amortisation and any impairment losses.
Patents and trademarks are amortised over their useful life of 10 years.
30
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
(h)
Employee Benefits
Provision is made for the company's liability for employee benefits arising from services rendered
by employees to balance date. Short term employee benefits have been measured at the
amounts expected to be paid when the liability is settled, plus related on-costs. Long term
employee benefits have been measured at the present value of the estimated future cash
outflows to be made for those benefits.
(i)
Provisions
Provisions are recognised when the group has a legal or constructive obligation, as a result of
past events, for which it is probable that an outflow of economic benefits will result and that
outflow can be reliably measured.
(j) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-
term highly liquid investments, and bank overdrafts. Bank overdrafts are shown within short-term
borrowings in current liabilities on the statement of financial position.
(k) Revenue and Other Income
Interest revenue is recognised when it is probable that the economic benefits will flow to the
Group and the amount of revenue can be measured reliably. Interest revenue is accrued on a
timely basis, by reference to the principal outstanding and at the effective interest rate
applicable
Dividend revenue is recognised when the right to receive a dividend has been established.
Revenue from the rendering of a service is recognised by reference to the stage of completion
of the contract.
All revenue is stated net of the amount of goods and services tax (GST).
(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 cash flow statement on a gross basis, except for the GST
component of investing and financing activities, which are disclosed as operating cash flows.
(m) Trade and other payables
Liabilities are recognized for amounts to be paid in the future for goods or services received,
whether or not billed to the consolidated entity. The amounts are unsecured and are usually paid
within 30 days.
31
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
(n)
Share based payments
The fair value of options granted under the Company’s Employee Option Plan is recognized as
an employee benefit expense with a corresponding increase in equity. The fair value is measured
at grant date and recognized over the period during which the employees become
unconditionally entitled to the options.
The fair value at grant date is independently determined using a Black and Scholes option
pricing model that takes into account the exercise price, the term of the option, the vesting and
performance criteria, the impact of dilution, the non-tradeable nature of the option, the share
price at grant date and expected volatility of the underlying share, the expected dividend yield
and risk free interest rate for the term of the option.
The fair value of the options granted excludes the impact of any non-market vesting conditions
(for example, profitability and sales growth targets). Non-market vesting conditions are included
in assumptions about the number of options that are expected to vest. At each statement of
financial position date, the entity revises its estimate of the number of options that are expected
to vest. The employee benefit expense recognised each period takes into account the most
recent estimate. Upon the exercise of options, the balance of the share-based payments reserve
relating to those options is transferred to share capital.
(o) Earnings per share
Basic earnings per share (EPS) is calculated as net profit/loss attributable to members, adjusted to
exclude costs of servicing equity (other than dividends) and preference share dividends, divided
by the weighted average number of ordinary shares, adjusted for any bonus element.
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, and the weighted average number of
additional ordinary shares that would have been outstanding assuming the conversion of all
dilutive potential ordinary shares.
(p) Critical accounting estimates and judgments
The directors evaluate estimates and judgments incorporated into the financial report 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.
Key judgements — Provision for Impairment of Loans Receivables
Included in the accounts of Consolidated entity are amounts from current loan receivables of
$1,637,691 (2012: $1,707,203) and non-current loan receivable of $ 941,679 (2012: $289,424). The
directors believe that the full amount of the debt will be recoverable from each entity and that
no provision for impairment of receivables has been made at 30 June 2013.
Key Judgments —Impairment of Intangible Assets
No impairment has been recognised in respect of intangible assets for the year ended 30 June
2013 (2012: $nil). The directors believe that the carrying value of all intangibles is appropriate
after reviewing the status of each entity’s developments. The directors are confident that the
products will provide the necessary returns to the Company.
32
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
Key Judgments —Fair Value of Financial Assets
The fair value of listed shares has been determined by reference to published price quotations in
an active market. The fair values of unlisted securities not traded in an active market are
measured at fair value, using the barrel of oil equivalent and expected monetary value methods.
2. Revenue
Revenue
Interest revenue cash
accounts
Interest revenue : other
entities
Other income
Consultancy fees
Other gains and losses
Net gain/loss arising on
recognition of derivative
3. Expenses Included in Loss for the year
Depreciation and amortisation
- Depreciation
- Amortisation
- Salary
- Superannuation
- Director fees
- Share based payments
- Other payroll costs
Total employee costs
Consolidated
2013
$
2012
$
36,376
100,397
151,332
86,481
187,708
186,878
114,100
114,100
114,100
114,100
-
-
(131,732)
(131,732)
800
-
789
-
187,933
177,339
14,015
13,062
125,000
124,992
3,056
6,361
8,824
10,911
336,365
335,128
33
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
4.
Key Management Personnel Compensation
Names and positions held of economic and parent entity key management personnel in office at
any time during the financial year are:
Key Management Personnel
D L Breeze - Executive Chairman
H Goh – Non Executive Director
G Gilbert – Non Executive Director
D Ambrosini – Executive Director and Company Secretary
Short term employee benefits
Share based payments
Consolidated
2013
$
2012
$
223,000
223,000
-
-
223,000
223,000
Key management personnel remuneration has been included in the Remuneration report section of the
Directors Report.
Options and Rights Holdings
2013 Number of Options Held by Key Management Personnel
Balance
1.7.2012
Granted as
Compensation
Options
Exercised
D L Breeze
1,000,000
G Gilbert
H Goh
-
-
D Ambrosini
1,000,000
-
-
-
-
-
-
-
-
Net
Change
Other
/Expired *
-
-
-
Balance
Total Vested
30.6.2013
30.6.2013
Total
Exercisable
and Vested
30.6.2013
Total
Unexercisable
30.6.2013
1,000,000
1,000,000
1,000,000
-
-
-
-
-
-
(500,000)
500,000
500,000
500,000
-
-
-
-
2012 Number of Options Held by Key Management Personnel
Balance
1.7.2011
Granted as
Compensation
Options
Exercised
Net
Change
Other *
Balance
Total Vested
30.6.2012
30.6.2012
Total
Exercisable
and Vested
30.6.2012
Total
Unexercisable
30.6.2012
D L Breeze
1,000,000
G Gilbert
H Goh
-
-
D Ambrosini
1,000,000
-
-
-
-
-
-
-
-
-
-
-
-
1,000,000
1,000,000
1,000,000
-
-
-
-
-
-
1,000,000
1,000,000
1,000,000
-
-
-
-
*The Net Change Other reflected above includes those options that have been forfeited by holders, directors that have resigned,
options that have expired and recompliance of holdings during the year.
34
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
Shareholdings
2013 Number of Shares Held by Key Management Personnel
D L Breeze
G Gilbert
H Goh
D Ambrosini
Balance
1.7.2012
6,509,811
480,769
480,769
-
Received as
Compensation
Options
Exercised
Net Change
Balance
Other
30.6.2013
-
-
-
-
-
-
-
-
-
-
-
-
6,509,811
480,769
480,769
-
2012 Number of Shares Held by Key Management Personnel
D L Breeze
G Gilbert
H Goh
D Ambrosini
Balance
1.7.2011
6,509,811
480,769
480,769
-
Received as
Compensation
Options
Exercised
Net Change
Balance
Other
30.6.2012
-
-
-
-
-
-
-
-
-
-
-
-
6,509,811
480,769
480,769
-
5.
Auditors’ Remuneration
Remuneration of the auditor of the parent
entity for:
- auditing or reviewing the financial
report
Deloitte Touche Tohmatsu
Nexia Perth Audit Services
Remuneration of the auditor of
subsidiaries for:
- auditing or reviewing the financial
report of subsidiaries
Consolidated
2013
$
2012
$
-
34,914
34,000
-
-
-
34,000
34,914
35
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
6. Earnings per share
Consolidated
2013
$
2012
$
For basic and diluted Earnings Per Share
Total earnings per share attributable to ordinary equity holders of the
company
(568,454)
(739,165)
Earnings used in the calculation of basic earnings per share and
diluted earnings per share
(568,454)
(739,165)
For basic and diluted Earnings Per Share
From continuing operations
Total Basic Earnings per Share and Diluted Earnings per Share
(0.33)
(0.33)
(0.41)
(0.41)
Weighted average number of ordinary shares outstanding during
the year used in calculating basic EPS and diluted EPS
No.
172,562,245
No.
181,628,852
The Company’s potential ordinary shares, being its options granted,
are not considered dilutive as the conversion of these options will
result in a decreased net loss per share
7. Cash and cash equivalents
Cash at Bank and in hand
Short-term bank deposits
Consolidated
2013
$
2012
$
892,836
1,791,506
7,763
7,418
900,599
1,798,924
Reconciliation of cash
Cash at the end of the financial year as shown in the statement of cash flows is reconciled to items in
the statement of financial position as follows:
Cash and cash equivalents
900,599
1,798,924
8.
Trade and other receivables
CURRENT
Other receivables
1,977
2,913
1,977
2,913
36
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
9. Other Assets
CURRENT
Prepaid insurance
10. Financial Assets
Loans and receivables at amortised cost
Current
Unsecured Loans to other entities: (a)
Grandbridge Limited
Cortical Dynamics Limited
Molecular Discovery Systems Limited
MEC Resources Ltd
Advent Energy Ltd
Secured Loans to other entities: (b)
Cortical Dynamics Limited
Molecular Discovery Systems Limited
Non - Current
Loans and receivables at amortised cost
Unsecured Loans to other entities: (a)
Cortical Dynamics Limited
Molecular Discovery Systems Limited
Secured Loans to other entities: (b)
Cortical Dynamics Limited
Available for sale financial assets at fair value
Investments in unlisted entities (c)
Consolidated
2013
$
2012
$
29,660
18,189
29,660
18,189
55,645
55,645
-
-
485,070
345,200
2,494
2,494
39,486
39,486
1,142,376
478,617
397,690
300,691
1,637,691
1,707,203
485,070
461,100
-
-
-
289,424
48,949
48,949
995,119
338,373
(a) Unsecured loans
These loans are unsecured, non-interest bearing and repayable on demand.
(b) Secured loans
These loans are secured by a charge over all of the assets and undertakings of each entity and
interest bearing. Subject to the conditions of the agreement BPH Energy has the right to conversion to
satisfy the debt on or before the termination date.
The company has a convertible loan agreement with MDSystems. The loan is for a maximum amount
of $500,000 and is to be used for short term working capital requirements. Subject to MDSystems being
admitted to the Official list, BPH Energy has a right of conversion to satisfy the debt on or before the
37
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
termination date. As at reporting date the loan had been drawn down by an amount of $397,690
(2012: $300,691).
The company has entered into a convertible loan agreement with Cortical Dynamics. The loan is for
a maximum amount of $500,000 and is to be used for short term working capital requirements.
Subject to Cortical being admitted to the Official list, BPH Energy has a right of conversion to satisfy
the debt on or before the termination date. As at reporting date the loan had been drawn down by
an amount of $479,371 (2012: $478,617).
On 28th February 2012 BPH Energy entered into a convertible loan agreement with Cortical
Dynamics. The facility is for a maximum amount of $1,000,000 and has an annual interest rate of
9.40%. The loan will be used for short term working capital requirements and funding further
development of the BAR monitor. The facility will terminate on the earlier of 24 months from the
execution date and any date on which the facility is terminated in accordance with the agreement.
The loan is convertible at BPH’s election if Cortical is unsuccessful in its application for admission to the
Official List. As at reporting date the loan had been drawn down by an amount of $663,005 (2012:
$289,424).
(c) Available for sale financial assets at fair value
Cortical Dynamics Limited
11.
Intangible assets
Patent costs capitalised
Cost
Accumulated amortisation and
impairment
Net carrying value
Total intangibles
Consolidated
2013
$
2012
$
48,949
48,949
48,949
48,949
72,454
72,454
-
72,454
72,454
-
72,454
72,454
Patent costs include all costs associated with the filing and maintenance of the patents for the
company’s technologies.
12. Property, Plant and Equipment
Plant and Equipment:
At cost
Accumulated depreciation
Total Property, Plant and Equipment
41,486
41,486
(41,015)
(40,215)
471
1,271
38
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
(a) Movements in Carrying Amounts
Movements in the carrying amounts for each class of property, plant and equipment
between the beginning and the end of the current financial year.
2013
2012
$
$
Balance at the beginning of the year
1,271
2,060
Additions
Disposals
Depreciation expense
Carrying amount at the end of the year
13.
Investments accounted for using the equity method
Shares in Associates
Advent Energy Limited
Molecular Discovery Systems Limited
-
-
(800)
471
-
-
(789)
1,271
Consolidated
2013
$
2012
$
48,296,464 48,819,692
1,394,075 1,433,792
49,690,539 50,253,484
Investments in associates are accounted for in the consolidated financial statements using the equity
method of accounting.
Name of Entity
Country of
Incorporation
Ownership Interest
%
Principal Activity
Molecular Discovery Systems Limited
Advent Energy Limited
Australia
Australia
2013
20%
27.4%
2012
20%
Biomedical Research
27.4% Oil and Gas Exploration
39
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
(a) Summarised financial information of associates
The results of its associates aggregated assets (including goodwill) and liabilities, including the group’s
share of net assets and net loss for the period are as follows:
Total of Associate
Groups Share of:
Ownership
interest %
Assets
Liabilities
Profits/Losses
Revenues Net Assets
Net Loss for
the Period
2013
Molecular Discovery
Systems Limited
20
684,052
1,150,130
(198,589)
132,495
(93,216)
(39,716)
684,052
1,150,130
(198,589)
132,495
(93,216)
(39,716)
Advent Energy Ltd
27.4
31,639,987
5,123,390
31,639,987
5,123,390
(2,209,604)
(2,209,604)
80,866
7,217,715
(523,231)
80,866
7,217,715
(523,231)
2012
Molecular Discovery
Systems Ltd
20
768,728
937,948
(328,635)
120,042
(33,844)
(65,727)
768,728
937,948
(328,635)
120,042
(33,844)
(65,727)
Advent Energy Ltd
27.4
35,131,919 6,756,044
(847,848)
521,565
7,774,990
(232,310)
35,131,919 6,756,044
(847,848)
521,565
7,774,990
(232,310)
14.
Income Tax Expense
(a) The components of tax expense/(benefit)
comprise:
Current tax
Deferred tax
(b) The prima facie tax on profit from operations
before income tax is reconciled to the income
tax as follows:
Prima facie tax payable on profit from
operations before income tax at 30% (2012:
30%)
Add tax effect of:
Non deductible expenses
Consolidated
2013
$
2012
$
-
-
(431,852)
(277,893)
(431,852)
(277,893)
(308,028)
(312,711)
6,127
7,924
40
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
Tax benefit of revenue losses not recognised
Effect of previously unrecognised and unused
tax losses now recognised as deferred tax
assets
Temporary differences
Income tax expense/(benefit) recognised
(c) Income tax expense recognised in other
comprehensive income
Fair value gain adjustments
(d) Current tax liabilities
Income tax
15. Trade and other payables
Trade payables
Sundry payables and accrued expenses
16. Financial Liabilities
Non - Current
Non - Current borrowings – unsecured
Consolidated
2013
$
2012
$
-
-
-
-
(129,951)
26,894
(431,852)
(277,893)
-
-
-
-
-
-
-
-
32,236
29,212
669,911
543,368
702,147
572,580
502,978
479,502
502,978
479,502
Borrowings are unsecured, non interest bearing and repayable on demand. However the Company has
received letters from the entities confirming that they will not call upon their loans outstanding for at least 12
months from signing the financial report or until such time the company is financially independent.
17. Provisions
Short term employee entitlements:
Opening balance at 1 July 2012
Reduction/addition to provision
Balance at 30 June 2013
Provision for Employee Entitlements
20,072
6,360
26,432
9,161
10,911
20,072
Provisions have been recognised for employee entitlements relating to annual leave. The measurement
and recognition criteria relating to employee benefits has been included in Note 1 to this report.
41
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
18. Issued Capital
172,562,245
ordinary shares
(2012: 172,562,245)
fully paid
The Company has no authorised capital and
the issued shares do not have a par value.
Consolidated
2013
$
2012
$
41,511,195
41,511,195
(a) Ordinary Shares
At the beginning of reporting period
Conversion of quoted options
Shares cancelled – selective buyback
At reporting date
Consolidated
Consolidated
2013
$
2012
$
2013
No.
2012
No.
41,511,195
42,860,310
172,562,245
216,106,207
-
-
885
(1,350,000)
-
-
4,425
(43,548,387)
41,511,195
41,511,195
172,562,245
172,562,245
Capital Raising
There were nil options exercised during the year (2012: 4,425).
Fully Paid Ordinary Share Capital
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Options
There were 2,400,000 employee options on issue at the end of the year:
Total number
500,000
75,000
1,500,000
325,000
2,400,000
Exercise price
$0.294
$0.594
$0.894
$0.160
Expiry date
16 December 2013
30 September 2014
31 December 2014
21 January 2016
The market price of the company's ordinary shares at 30 June 2013 was 0.01 cents.
The holders of options do not have the right, by virtue of the option, to participate in any share issue
or interest issue of any other body corporate or registered scheme.
(b) Capital risk management
The Group’s and the parent entity’s objectives when managing capital are to safeguard their
ability to continue as a going concern, so that they may continue to provide returns for
shareholders and benefits for other stakeholders.
42
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
The focus of the Group’s capital risk management is the current working capital position against
the requirements of the Group to meet corporate overheads. The Group’s strategy is to ensure
appropriate liquidity is maintained to meet anticipated operating requirements, with a view to
initiating appropriate capital raisings as required. The working capital position of the Group at 30
June 2013 and 30 June 2012 are as follows:
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Working capital position
19. Reserves
Options Reserve (a)
Asset Revaluation Reserve (b)
Consolidated
2013
$
2012
$
900,599
1,798,924
1,639,668
1,710,116
(702,147)
(572,580)
1,838,120
2,936,460
419,646
416,590
15,015,000
15,015,000
15,434,646
15,431,590
a. Option Reserve
The option reserve records items recognized as expenses on the valuation of Director and Employee
share options.
Reconciliation of movement
Opening balance
Option charges during the year
Closing balance
Consolidated
2013
$
2012
$
416,590
407,766
3,056
8,824
419,646
416,590
b. Asset Revaluation Reserve
The asset revaluation reserve records the revaluation of available for sale investments to fair value.
Reconciliation of movement
Opening balance
Available for sale asset revalued to fair value
(net of tax)
Closing balance
Consolidated
2013
$
2012
$
15,015,000
15,015,000
-
-
15,015,000
15,015,000
43
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
20. Controlled Entities
Name of Entity
Principal Activity
Country of
Incorporation
Ownership Interest
%
2013 2012
Parent Entity
BPH Energy Limited
Subsidiaries of BPH Energy
Limited
Diagnostic Array Systems Pty
Limited
Investment
Australia
BioMedical Research
Australia
51.82 51.82
21. Cash Flow Information
(a) Reconciliation of Cash Flow from
Operations with Profit after income tax
Operating loss after income tax
Non-cash flows in profit:
Depreciation and amortisation
Interest Revenue
Share based payment expense
Intercompany recharges
Share of Associates Loss
Changes in net assets and liabilities, net of
effects of purchase and disposal of subsidiaries
(Increase)/decrease in trade and other
receivables
(Increase)/decrease in other assets
Increase/(decrease) in provisions
Increase/(decrease) in trade payables and
accruals
Increase/(decrease) in deferred tax liabilities
Cash outflow from operations
(b) Financing Facilities
Credit card facility (limit)
Used credit card facility
Consolidated
2013
$
2012
$
(594,908)
(764,478)
800
789
(151,332)
(64,393)
3,056
8,824
73,496
109,809
562,945
298,037
-
(56)
(11,471)
(9,412)
6,360
10,911
130,480
190,123
(431,852)
(277,893)
(412,426)
(497,739)
20,000
20,000
-
-
44
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
22.
Financial Risk Management
a)
Financial Risk Management
The group’s financial instruments consist mainly of deposits with banks, short-term investments,
accounts receivable and payable, and loans to and from subsidiaries. The main purpose of non-
derivative financial instruments is to raise finance for group operations policies.
i. Financial Risk Exposures and Management
The main risks the group is exposed to through its financial instruments are interest rate risk, liquidity risk,
credit risk and equity price risk.
Interest rate risk
Interest rate risk is managed with a mixture of fixed and floating rate debt.
Liquidity risk
The Group manages liquidity risk by maintaining adequate reserves, by continuously monitoring
forecast and actual cash flows.
Credit risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at
balance date to recognised financial assets, is the carrying amount, net of any provisions for
impairment of those assets, as disclosed in the statement of financial position and notes to the
financial statements.
Credit risk for derivative financial instruments arises from the potential failure by counter-parties to the
contract to meet their obligations.
The economic entity does not have any material credit risk exposure to any single receivable or
group of receivables under financial instruments entered into by the economic entity.
Foreign currency risk
The Group is not exposed to any material risks in relation to fluctuations in foreign exchange rates.
b)
Financial Instruments
i. Interest rate risk
The economic entity’s exposure to interest rate risk, which is the risk that a financial instrument’s value
will fluctuate as a result of changes in market interest rates and the effective weighted average
interest rates on classes of financial assets and financial liabilities, is as follows:
45
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
Consolidated Group
Weight
Effective
Interest Rate
%
Floating
Interest Rate
$
Fixed Interest
Rate
1 Year of less
Fixed
Interest
Rate
1 to 5 Years
Non-Interest
Bearing
$
Total
$
2.5
900,599
8.58
-
-
-
-
1,540,066
900,599
1,540,066
-
-
-
-
-
-
-
-
-
-
-
-
-
-
900,599
1,977
1,977
1,043,795
2,583,861
1,045,772
3,486,437
702,147
702,147
502,978
502,978
1,205,125
1,205,125
Weight
Effective
Interest Rate
%
Floating
Interest Rate
$
Fixed Interest
Rate
1 Year of less
Fixed
Interest
Rate
1 to 5 Years
Non-Interest
Bearing
$
Total
$
3.38
1,798,924
8.41
-
-
-
-
-
-
-
1,798,924
2,913
2,913
779,308
289,424
927,895
1,996,627
1,798,924
779,308
289,424
930,808
3,798,464
-
-
-
-
-
-
-
-
-
572,580
572,580
479,502
479,502
1,052,082
1,052,082
2013
Financial Assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Total Financial Assets
Financial Liabilities
Trade and sundry payables
Financial liabilities
Total Financial Liabilities
2012
Financial Assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Total Financial Assets
Financial Liabilities
Trade and sundry payables
Financial liabilities
Total Financial Liabilities
ii. Fair Values
The fair values of:
Term receivables are determined by discounting the cash flows, at the market interest rates
of similar securities, to their present value.
Other loans and amounts due are determined by discounting the cash flows, at market
interest rates of similar borrowings to their present value.
For unlisted investments where there is no organised financial market, the fair value has been
based on a reasonable estimation of the underlying net assets or discounted cash flows of
the investment.
Other assets and liabilities approximate their carrying value.
No financial assets and financial liabilities are readily traded on organised markets in
standardised form other than listed investments.
46
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
2013
2012
Carrying
Amount
Fair Value
Carrying
Amount
Fair Value
Financial Assets
Available-for-sale financial assets
48,949
48,949
48,949
48,949
Loans and receivables
2,585,838 2,585,838 1,999,540 1,999,540
2,634,787 2,634,787 2,048,489 2,048,489
Financial Liabilities
Other loans and amounts due
502,978
502,978
479,502
479,502
Trade payables
702,147
702,147
572,580
572,580
1,205,125 1,205,125 1,052,082 1,052,082
Reconciliation of fair value measurements of financial assets in Level 3 Hierarchy:
2013
Available for
sale
2012
Available for
sale
Opening balance
Less: reclassifications
Closing balance
48,949
-
48,949
48,949
-
48,949
iii. Sensitivity Analysis
Interest Rate Risk
The group has performed sensitivity analysis relating to its exposure to interest rate risk at balance date.
This sensitivity analysis demonstrates the effect on the current year results and equity which could result
from a change in these risks.
Interest Rate Sensitivity Analysis
The effect on profit and equity as a result of changes in the interest rate, with all
other variables remaining constant would be as follows:
Change in profit
— Increase in interest rate
1%
— Decrease in interest rate
by 0.5%
Consolidated Group
2013
2012
14,412
31,978
(7,206)
(15,989)
47
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
iv. Liquidity risk
The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve
borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the
maturity profiles of financial assets and liabilities.
Liquidity is the risk that the company will encounter difficulty in meeting the obligations associated with
its financial liabilities that are settled by delivering cash or another financial asset.
The following are the contractual maturities at the end of the reporting period of financial liabilities.
30 June 2013
Financial liabilities
Trade and other
payables
Unsecured loan
30 June 2012
Financial liabilities
Trade and other
payables
Unsecured loan
Contractual cash flows
Carrying
amount
Total
2 mths
or less
2-12
mths
1-2 years
2-5
years
More
than 5
years
702,147
(702,147)
502,978
(502,978)
1,205,125
(1,205,125)
-
-
-
(702,147)
-
-
(502,978)
(702,147)
(502,978)
-
-
-
-
-
-
Contractual cash flows
Carrying
amount
Total
2 mths
or less
2-12
mths
1-2 years
2-5
years
More
than 5
years
572,580
(572,580)
479,502
(479,502)
1,052,082
(1,052,082)
-
-
-
(572,580)
-
-
(479,502)
(572,580)
(479,502)
-
-
-
-
-
-
23. Operating Segment
Operating segments have been identified on the basis of internal reports of the Company that are regularly
reviewed by the chief operating decision maker in order to allocate resources to the segments and to assess
their performance. The chief operating decision maker has been identified as the Board of Directors. On a
regular basis, the board receives financial information on the consolidated entity on a basis similar to the
financial statements presented in the financial report, to manage and allocate their resources.
The consolidated entity holds investments in two principal industries and these are biotechnology, and oil
and gas exploration and development, as disclosed in Note 10 (c) and Note 13.
48
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
24. Events after the Statement of financial position Date
There have not been any matters or circumstances that have arisen since the end of the financial year,
that have significantly affected, or may significantly affect, the operations of the company, the results
of those operations, or the state of affairs of the company in future financial years.
25. Related Party Transactions
(a)
Equity interests in controlled entities
Details of the percentage of ordinary shares held in controlled entities are disclosed in note
20 to the financial statements.
(b) Directors’ Remuneration
Details of the directors’ remuneration and retirement benefits are located in the Directors
Report and in note 4.
(c) Directors’ Equity Holdings
Ordinary Shares
Held as at the date of this report by directors
and their director-related entities in:
BPH Energy Limited
Other Equity Instruments
Options
Held as at the date of this report by directors
BPH Energy Limited
(d) Directors
Parent
2013
No.
2012
No.
7,471,349
7,471,349
and their director-related entities in:
2,000,000
2,000,000
The Company has an agreement with Trandcorp Pty Limited on normal commercial terms
procuring the services of David Breeze to provide product development services. $98,000
(2012: $98,000) was paid during the year.
(e) Interest in Associates
A loan receivable exists between BPH Energy and MDSystems $461,100 (2012 :$345,200). This
amount is unsecured, non interest bearing and repayable on demand.
A loan payable exists between BPH Energy and MDSystems $61,310 (2012:$61,310). This
amount is unsecured, non interest bearing and repayable on demand
A convertible loan agreement exists between BPH Energy and MDSystems. The loan is for a
maximum amount of $500,000 and is to be used for short term working capital requirements.
Subject MDSystems being admitted to the Official list, BPH Energy has a right of conversion to
satisfy the debt on or before the termination date. As at reporting date, the loan has been
drawn down by an amount of $397,690 (2012: $300,691). Interest charged on the loan
totalled $46,700(2012: $20,293).
During the year, BPH Energy provided consultancy services to MDSystems of $114,100 (2012:
$114,100).
A loan payable exists between Advent Energy and BPH Energy of $ 39,486 (2012: $ 39,486).
This amount is unsecured, non interest bearing and repayable on demand.
49
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
(f) Other Interests
Cortical Dynamics is a related party of BPH Energy. Refer to Note 10 for the investment and
loan receivables it has with the company.
26. Share-Based Payments
The following share-based payment arrangements existed at 30 June 2013:
Total
number
500,000
75,000
1,500,000
325,000
2,400,000
Grant Date
16 December 2008
25 September 2009
24 December 2009
21 January 2011
Exercise
price
$0.294
$0.594
$0.894
$0.160
Fair value at
grant date
$0.0119
$0.0423
$0.0266
$0.0220
Expiry date
16 December 2013
30 September 2014
31 December 2014
21 January 2016
At balance date, no share option has been exercised (2012: nil).
All options granted to key management personnel are to purchase ordinary shares in BPH Energy
Limited, which confer a right of one ordinary share for every option held.
2013
Number of
Options
Consolidated Group
2012
Weighted
Average Exercise
Price
$
Number of
Options
Weighted
Average
Exercise Price
$
Outstanding at the
beginning of the year
Granted
Forfeited
Expired
Cancelled
Outstanding at year-end
4,075,000
0.25
4,325,000
0.25
-
-
(1,375,000)
(300,000)
2,400,000
-
-
0.24
0.16
0.66
-
-
(250,000)
-
-
-
-
-
4,075,000
0.25
Exercisable at year-end
2,291,667
0.68
3,633,333
0.25
No options were exercised during the year ended 30th June 2013 (2012: nil).
Included under employee benefits expense in the profit and loss is $3,056 (2012: $8,824), and relates, in
full, to equity.
27. Commitments and Contingencies
At reporting date there are no contingent liabilities.
The company has a convertible loan agreement with MDSystems. The loan is for a maximum amount of
$500,000 and is to be used for short term working capital requirements. Subject to MDSystems being admitted
50
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
to the Official list, BPH Energy has a right of conversion to satisfy the debt on or before the termination date.
As at reporting date, the loan has been drawn down by an amount of $397,690 (2012: $300,691).
The company has entered into a convertible loan agreement with Cortical Dynamics. The loan is for a
maximum amount of $500,000 and is to be used for short term working capital requirements. Subject Cortical
being admitted to the Official list BPH Energy has a right of conversion to satisfy the debt on or before the
termination date. As at reporting date, the loan has been drawn down by an amount of $479,371 (2012:
$478,617).
During the year BPH Energy entered into a convertible loan agreement with Cortical Dynamics. The loan is for
a maximum amount of $1,000,000 and is to be used for short term working capital requirements and further
development of the BAR Monitor. The loan is convertible at BPH’s election if Cortical is unsuccessful in its
application for admission to the Official List. As at reporting date the loan been drawn down by an amount
of $663,005 (2012: $289,424).
28. Parent Entity Disclosures
Financial Position
Assets
Current assets
Non-current assets
Total asset
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued Capital
Parent
2013
$
2012
$
3,531,426
4,450,402
50,686,130
50,593,128
54,217,556
55,043,530
714,411
872,278
4,361,115
4,369,581
5,075,526
5,241,859
41,511,195
41,511,195
51
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
Retained earnings
Reserves
Option Reserve
Asset Revaluation Reserve
Total equity
Financial Performance
Profit/Loss for the year
Other comprehensive income
Total comprehensive income
29. Tax
(a) Liabilities
CURRENT
Income tax
NON CURRENT
Deferred tax liabilities comprises:
Prepayments
Fair value gain adjustments
(b) Assets
Deferred tax assets comprise:
Prepayments
Provisions
Accrued expenses
Tax losses
Parent
2013
$
2012
$
(7,803,811)
(7,141,114)
419,646
416,590
15,015,000
15,015,000
49,142,030
49,801,671
(662,697)
(1,602,058)
-
-
(662,697)
(1,602,058)
Consolidated
2013
$
2012
$
-
-
3,442
6,290,673
6,466,039
6,294,115
6,466,039
-
7,229
5,456
6,022
190,953
159,688
2,196,277
1,963,365
2,394,459
2,134,531
52
Notes to the Financial Statements for the year ended 30 June 2013
BPH Energy Limited and its controlled entities
(c) Deferred tax balances are presented
in the statement of financial position as
follows:
Deferred tax assets
Deferred tax liabilities
Closing balance
Consolidated
2013
$
2012
$
2, 394,459
2,134,531
(6,294,115)
(6,466,039)
(3,899,656)
(4,331,508)
30. Application of New and Revised Accounting Standards
A number of new standards, amendments to standards and interpretations are effective for annual periods
beginning after 1 July 2012, and have not been applied in preparing these consolidated financial
statements. Those which may be relevant to the Group are set out below. The Group does not plan to adopt
these standards early.
AASB 10 Consolidated Financial Statements
AASB 10 introduces a single control model to determine whether an investee should be consolidated. As a
result, the Group will need to change its consolidation conclusion in respect of its investees, which may lead
to changes in the current accounting for these investees.
AASB 12 Disclosures of Interests in Other Entities (2011)
AASB 12 brings together into a single standard all the disclosure requirements about an entity’s interests in
subsidiaries, joint arrangements, associates and unconsolidated structured entities. The Group is currently
assessing the disclosure requirements for interests in subsidiaries, interests in joint arrangements and associates
and unconsolidated structured entities in comparison with the existing disclosures. AASB 12 requires the
disclosure of information about the nature, risks and financial effects of these interests.
AASB 9 Financial Instruments (2010), AASB 9 Financial Instruments (2009)AASB 9 (2009) introduces new
requirements for the classification and measurement of financial assets. Under AASB 9 (2009), financial assets
are classified and measured based on the business model in which they are held and the characteristics of
their contractual cash flows. AASB 9 (2010) introduces additions relating to financial liabilities. The IASB
currently has an active project that may result in limited amendments to the classification and measurement
requirements of AASB 9 and add new requirements to address the impairment of financial assets and hedge
accounting. AASB 9 (2010 and 2009) are effective for annual periods beginning on or after 1 January 2015
with early adoption permitted. The adoption of AASB 9 (2010) is not expected to have an impact on the
Group’s financial assets and liabilities.
53
Directors’ Declaration
The directors of the company declare that:
1.
the financial statements and notes, as set out on pages 21 to 53 are in accordance with the
Corporations Act 2001 and:
(a) comply with Accounting Standards and the Corporations Regulations 2001 and other
mandatory professional reporting requirements;
(b) give a true and fair view of the financial position as at 30 June 2013 and of the performance
for the year ended on that date of the consolidated entity;
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 financial statements and notes comply with International Financial Reporting Standards as
disclosed in Note 1.
2.
3.
4.
the directors have been given the declarations required by S295A of the Corporations Act 2001
Signed in accordance with a resolution of the directors made pursuant to S295(5) of the Corporations
Act 2001.
………………………………………………………
David Breeze
Executive Chairman
Dated this 26th day of August 2013
54
Additional Securities Exchange Information
BPH Energy Limited and its controlled entities
Additional information required by Australian Securities Exchange Limited and not shown elsewhere in this
report as follows.
The information is made up to 20th August 2013
1.
Substantial Shareholder
The name of the substantial shareholder listed in the company’s register is:
Shareholder
MEC Resources Ltd
2.
(a) Distribution of Shareholders
Range of Holding
Shareholders
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
416
521
416
1,112
268
2,733
Shares
14,366,095
Number Ordinary
Shares
181,183
1,725,735
3,237,585
40,240,937
127,176,805
172,562,245
%
8.33
%
0.10
1.00
1.88
23.32
73.70
100.00
The number of shareholders with less than a marketable parcel is 2,132, holding in total 21,446,052
shares.
(b) Distribution of Unlisted Optionholders
Range of Holding
Optionholders
Number of Options
%
10,001 to 100,000
100,001 and over
3
7
10
225,000
3,250,000
3,475,000
6.47
93.53
100.00
3.
Voting Rights - Shares
All ordinary shares issued by BPH Energy Limited carry one vote per share without restriction.
4.
Voting Rights - Options
The holders of employee options do not have the right to vote.
5.
Restricted Securities
Shares
Number of Shares free of escrow
172,562,245
57
Additional Securities Exchange Information
BPH Energy Limited and its controlled entities
6.
Twenty Largest Shareholders as at 20th August 2013
The names of the twenty largest shareholders of the ordinary shares of the company are:
Name
MEC Resources Ltd
Trandcorp Pty Ltd
Spinite PL
BT Portfolio Svcs Ltd
JP Morgan Nom Aust Ltd
Lam Terry Luong
Grandbridge Limited
Avatar Equities PL
Pannu PL
Lam Terry L and Chan PS
Jomot PL
Asgard Capital Management
Cottee Enid Ruth
Trandcorp Pty Ltd
Batras One PL
Tre PL
Jamber Inv PL
Mccreed Simon Charles
Yewfong Co Pl
Baruta Mark
Number of ordinary
fully paid shares
% held of issued
ordinary capital
14,366,095
4,772,500
4,596,450
4,501,880
3,799,371
3,600,000
3,389,100
2,192,223
1,958,800
1,931,267
1,929,530
1,800,000
1,789,000
1,591,926
1,549,872
1,460,000
1,350,000
1,300,000
1,250,000
1,200,000
8.33
2.77
2.66
2.61
2.20
2.09
1.96
1.27
1.14
1.12
1.12
1.04
1.04
0.92
0.90
0.85
0.78
0.75
0.72
0.70
60,328,014
34.97
58