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20-2 1 A N
HEALTH TECHNOLOGY RESOURCES
TABLE OF
CONTEN TS
BPH ENERGY LIMITED
AND IT’S CONTROLLED ENTITIES
Chairman’s Letter
Review of Operations
Directors’ Report
Auditor’s Independence
Declaration
Corporate Governance
Statement
Consolidated Statement
of Profit or Loss and Other
Comprehensive Income
Consolidated Statement
of Financial Position
Consolidated Statement
of Changes in Equity
Consolidated Statement
of Cash Flows
Notes to the Consolidated
Financial Statements
Directors’ Declaration
Independent Auditor’s
Report
Additional Securities
Exchange Information
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COMPANY INFORMATION
Directors
David Breeze – Chairman/Managing Director
Charles Maling – Non Executive Director
Anthony Huston - Non Executive Director
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.bphenergy.com.au
E-mail: admin@bphenergy.com.au
Auditor
HLB Mann Judd (WA) Partnership
Level 4
130 Stirling Street
PERTH WA 6000
Share Registry
Advanced Share Registry Limited
110 Stirling Highway
NEDLANDS WA 6009
Telephone: (08) 9389 8033
Australian Securities Exchange Listing
ASX Limited
(Home Exchange: Perth, Western Australia)
ASX Codes: BPH, BPHAO
Australian Business Number
41 095 912 002
Photographis and images used throughout this report do
not depict assets of the company unless expressly indicated.
CHAI RMAN’S
LETTE R
Dear Shareholder
BPH investee Advent Energy’s PEP 11 Gas and proposed carbon storage project at Baleen (Seablue1 well)
offshore Newcastle NSW has potential national significance. It addresses both forecast gas shortages and the
objective of Net Zero Emissions. Advent has committed all gas from the project to Australia domestic supply.
Advent is a strong supporter of plans for Net Zero by 2050 and sees the company playing a direct role in
achieving that target, especially for New South Wales.
The NSW Business Chamber 2019 report “Running On Empty “confirmed :-NSW imports 98 % its gas
requirements from other states ,a constrained national gas market will see further price rises for every household
and business in NSW and inaction on gas and energy security are now holding the future of businesses in
NSW to ransom, threatening employment losses and reduced investment.In NSW an est. 300,000 jobs rely on
gas supply with gas supplying around 1.3 million households and 33,000 businesses. NSW’s manufacturing
sector, which is approximately 84% of the state’s Industrial gas load adds $33 billion in industry value. Without
addressing NSW’s looming gas shortfall these could be at risk.
The latest gas report from the ACCC has revealed that a supply shortfall in Australia’s east coast gas market is
increasingly likely and indicates a finely balanced supply outlook for 2022. However, as AEMO (Australian Energy
Market Operator) has indicated in its 2021 Gas Statement of Opportunities (GSOO), Victorian gas fields are rapidly
depleting. AEMO is forecasting an overall decline in Victoria’s production of 43 per cent between 2021 to 2025.
The NSW Government ‘Future of Gas Statement’ released in 2021 recognizes that as part of the energy transition,
gas from a mix of sources will play a role in supporting access to affordable energy and business growth within
NSW and notes the east coast gas market could face a supply shortage as early as 2023.
The PEP11 gas project offshore Newcastle, if successful, could play a key role in meeting that supply shortfall.
The gas price spikes and shortages in the east Australian gas market occur when there is high demand during
the Australian winter. This period coincides with summer demand in the northern hemisphere also spiking
driven by increased power needs related to summer heatwaves. The converse applies in the northern winter.
World economies are now facing an energy supply crisis as current efforts are underway to move to a low carbon
future with rapidly rising energy costs and supply shortages impacting households and economies across the globe.
International energy prices are increasingly setting east coast domestic prices, increasing the volatility in
domestic gas prices. This has forced some manufacturers exposed to spot prices to the brink.
The importance of these factors was illustrated when the NSW and Australian Governments signed a 2020 MOU
to jointly fund $2 Billion to increase energy supply and reduce emissions in NSW. This includes a specific target
to bring an additional 70 PJ a year of gas into the NSW market by 2022.
Preventing power blackouts is becoming more difficult as weather dependent renewables replace coal powered
generation. This is forcing AEMO to intervene more often (250 times in 2019 -20 compared to 20 three years
earlier) and ordering other sources typically gas power to come online. The 2020 report ranked electricity supply
security as “critical “status. (“Power fix urgent as grid teeters AFR 050121”).
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Carbon Capture, Usage and Storage (CCUS) technology is one of the priority technologies in Australia’s Technology
Investment Roadmap. It has been identified by the IEA as the only large-scale mitigation option available that can
deliver the additional CO2 emissions reductions that would be required to meet the climate goals in 2050.The
PEP11 project is the closest potential carbon storage area to the major Australian carbon sources which are in the
order of 30% of the entire Australian CO2 output. Location is a key factor in carbon disposal with synergies greatest
where industrial point sources are both near each other and a viable storage site.
Advent has submitted to the National Offshore Petroleum Titles Administrator (NOPTA) an application to enable
the drilling of Seablue-1 approx.26 km SSE of Newcastle offshore NSW. The PEP11 Joint Venture proposes to
proceed with the drilling of Seablue subject to approvals from NOPTA and other regulatory authorities, and
financing. The current permit expiry date is Feb. 2021. The permit remains in place and in good standing during
the NOPTA review period. In preparation Advent has commenced rig tender and associated services tendering.
Advent also announced the appointment of Professor Peter Cook as an advisor on geosequestration for its
project in the Offshore Sydney Basin. Professor Cook is an eminent Australian and international earth scientist
and leader in the development and application of carbon capture and storage (CCS) technologies. Advent also
made other key appointments including Mr. Andrew Hogan as Contracts Manager.
In Dec. 2020 Advent lodged an OIS with ASIC to raise up to $6.5 million.In Feb. 2021 BPH completed a $9m
placement . The funds proposed to be invested by BPH will be used by Advent to progress well planning,
engineering and environmental approvals for drilling of Seablue-1. It is planned that approx.$5.75 million of the
capital raised will be used for this purpose. In addition, BPH confirmed intent for $0.5 million to increase its
shareholding in Cortical Dynamics Ltd.
Considerable progress has been made in terms of further technical and corporate development of the Brain
Anesthesia Response Monitor (BARM™) and Cortical including pilot sales, personnel recruitment, regulatory
approvals, industry recognition, clinical trials, potential strategic partnerships, and engagement with global key
opinion leaders as outlined below.
Cortical 2020/2021 Milestones included the aappointments of Mr. Ashley Zimpel as CEO and Mr. Jamie
Stanistreet to the Cortical Dynamics Industry Expert Advisory Committee. Jamie has over 40 years’ experience in
the Medical Device industry and was Vice President of Medtronic Australia.
In late 2020 BARM™ was awarded regulatory approval by the KFDA enabling Cortical to start pilot sales of
BARM™ in South Korea.
Cortical also achieved a major milestone in its pathway to commercialisation in the USA when it filed an FDA
510(K) submission for BARM™.
In 2020 Cortical announced a Licence and Cooperation Agreement with Philips North America Corporation Inc
(Philips). Cortical has now completed all the technical work to interface BARM™ with the Philips IntelliBridge
and IntelliVue multi parameter monitors via its new data acquisition module (“DAM”).The Philips Systems are
widely used in operating theatres globally.
We look forward to a successful 2021 year.
Yours Sincerely
David Breeze
Chairman
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REV IEW OF
OPERATIONS
BPH ENERGY LIMITED
AND IT’S CONTROLLED ENTITIES
INVESTMENTS
Advent Energy Ltd (“Advent”), BPH 22.3%
Advent Energy Ltd (“Advent”) is an unlisted oil and
gas exploration and development company with
onshore and offshore exploration and near-term
development assets around Australia. Advent’s assets
include PEP11 (85%) in the offshore Sydney Basin
and RL1 (100%) in the onshore Bonaparte Basin in
the Northern territory.
PEP 11 Oil and Gas Permit
Advent, through wholly owned subsidiary Asset
Energy Pty Ltd “(Asset”), holds 85% of Petroleum
Exploration Permit PEP 11 – an exploration permit
prospective for natural gas located in the Offshore
Sydney Basin.
PEP 11 is a significant offshore exploration area with
large scale structuring and potentially multi-Trillion
cubic feet (Tcf) gas charged Permo-Triassic reservoirs.
Mapped prospects and leads within the Offshore
Sydney Basin are generally located less than 50km
from the Sydney-Wollongong-Newcastle greater
metropolitan area and gas pipeline network.
The offshore Sydney Basin has been lightly explored
to date, including a multi-vintage 2D seismic
data coverage and a single exploration well, New
Seaclem-1 (2010). Its position as the only petroleum
title offshore New South Wales provides a significant
opportunity should natural gas be discovered in
commercial quantities in this petroleum title. It lies
adjacent to the Sydney-Newcastle region and the
existing natural gas network servicing the east coast
gas market. The total P50 Prospective Resource
calculated for the PEP11 prospect inventory is 5.9 Tcf
with a net 5 Tcf to Advent (85%WI). The two largest
prospects in the inventory are Fish and Baleen.
Advent has previously interpreted significant
seismically indicated gas features in PEP11. Key
indicators of hydrocarbon accumulation features
have been interpreted following review of the 2004
seismic data (reprocessed in 2010). The seismic
features include apparent Hydrocarbon Related
Diagenetic Zones (HRDZ), Amplitude Versus Offset
(AVO) anomalies and potential flat spots.
In addition, a geochemical report has provided
support for a potential exploration well in PEP11. The
report reviewed the hydrocarbon analysis performed
on sediment samples obtained in PEP11 during
2010. The 2010 geochemical investigation utilised
a proprietary commercial hydrocarbon adsorption
and laboratory analysis technique to assess the levels
of naturally occurring hydrocarbons in the seabed
sediment samples.
The report supports that the Baleen prospect
appears best for hydrocarbon influence relative to
background samples. In addition, the report found
that the Baleen prospect appears to hold a higher
probability of success than other prospects.
Importantly, “a recent review of more than 850
wildcat wells – all drilled after geochemical surveys –
finds that 79% of wells drilled in positive anomalies
resulted in commercial oil and gas discoveries.”
(Surface geochemical exploration for oil and gas:
New life for an old technology, D. Schumacher, 2000,
The Leading Edge).
Advent has demonstrated considerable gas
generation and migration within PEP11, with the
mapped prospects and leads highly prospective for
the discovery of gas.
Advent has conducted a focused seismic campaign
around a key drilling prospect in PEP11 at Baleen,
in the offshore Sydney Basin. The high resolution
2D seismic survey covering approximately 200-line
km was performed to assist in the drilling of the
Baleen target approximately 30 km south east of
Newcastle, New South Wales. A drilling target on the
Baleen prospect at a depth of 2150 metres subsea
has been identified in a review of previous seismic
data. Intersecting 2D lines suggest an extrapolated
6000 acre (24.3 km2) seismic amplitude anomaly
area at that drilling target. The report on this drilling
target noted previous 2D seismic data showed that
the Permian aged section of the Bowen Basin has
producing conventional gas fields at a similar time
and depth to PEP11 at the Triassic/Permian age
boundary.
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Advent’s prior presentation ‘Strategic Summary:
Tactics to Success ‘ confirmed the strategy of
“Complete current 2D seismic commitment to
deliver shallow hazard survey work …to deliver ‘drill
ready’ gas prospect ....for early drilling ,capturing
near-term rig availability off Australia’s coast.”
The high resolution 2D seismic data over the
Baleen prospect designed to evaluate (amongst
other things) shallow geohazard indications
including shallow gas accumulations that can affect
future potential drilling operations. It is a drilling
prerequisite that a site survey is made prior to drilling
at the Baleen location. On 31 December 2018 MEC
Resources Limited (ASX: MMR) announced that there
were “no ‘seismically defined shallow gas hazards “at
the proposed well location on the Baleen Prospect.
Onshore Bonaparte Basin
Advent, through wholly owned subsidiary Onshore
Energy Pty Ltd (“Onshore”), holds 100% of RL 1 in the
onshore Bonaparte Basin in northern Australia. The
Bonaparte Basin is a highly prospective petroliferous
basin, with significant reserves of oil and gas. Most
of the basin is located offshore, covering 250,000
square kilometres, compared to just over 20,000
square kilometres onshore.
In the Northern Territory, Advent holds Retention
Licence RL1 (166 square kilometres in area), which
covers the Weaber Gas Field, originally discovered
in 1985. Advent has previously advised that the 2C
Contingent Resources for the Weaber Gas Field in
RL1 are 11.5 billion cubic feet (Bcf) of natural gas
following an independent audit by RISC. Significant
upside 3C Contingent Resources of 45.8 Bcf have
also been assessed by RISC.
The current rapid development of the Kununurra
region in northern Western Australia, including the
Ord River Irrigation Area phase 2, the township of
Kununurra, and numerous regional resource projects
provides an exceptional opportunity for Advent to
potentially develop its nearby gas resources. Market
studies have identified a current market demand of
up to 30.8 TJ per day of power generation capacity
across the Kimberley region that could potentially
be supplied by Advent Energy’s conventional gas
project RL1.
The prospectivity of the Bonaparte Basin is evident
from the known oil and gas fields in both the
offshore and onshore portions of the basin. Advent
has identified significant shale areas in RL1.
Significant Changes in State Of Affairs
Advent has submitted to the National Offshore
Petroleum Titles Administrator (NOPTA) an
application to enable the drilling of the Baleen
drill target in the PEP11 permit offshore NSW.
The PEP11 Joint Venture has reviewed the work
program and now proposes to proceed with the
drilling of a well at Baleen (to be called Seablue-1)
subject to approvals from NOPTA and other
regulatory authorities, and financing, and has made
an application to NOPTA to change the current
Permit conditions. The current permit expiry date
is in February 2021. The permit remains in place
during this review period. The application to NOPTA
includes the extension of the permit title for up
to two years to enable the drilling and includes
an application for the removal of the requirement
for a 500 sq. km 3D seismic program. NOPTA has
confirmed that this application is now in the final
decision phase.
On 5 February 2021 BPH Energy Limited (ASX:
BPH) advised that investee Advent has on behalf of
the PEP11 joint venture submitted to the National
Offshore Petroleum Titles Administrator (NOPTA)
a further application to suspend and extend the
PEP11 permit offshore NSW. The application
has been made under the COVID-19 -Work Bid
Exploration Permits announcement released by
the Federal Government on 20 April 2020. In that
release the Government recognised the that the
COVID-19 pandemic was having a significant impact
on the offshore petroleum sector and that additional
flexibility would be required to assist titleholders to
manage the COVID -19 crisis. The Joint Authority
confirmed in that release that it regarded the
COVID-19 pandemic as a force majeure event.
The application for a 24 month suspension of the
Permit Year 4 work program commitments, with a
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corresponding 24 month extension of the permit
term and was accepted for processing by NOPTA on
4 Feb 2021. BPH does not foresee this application
interfering with the NOPTA application to extend the
permit terms for PEP11.
The PEP 11 permit is in good standing as Advent’s
subsidiary, Asset Energy Pty Ltd (as the operator),
continues preparations to drill the Baleen Gas
Prospect including booking a semisubmersible drill
rig for the program with the call for tender.
On 8 March 2021 BPH advised that it had appointed
a Drilling Manager to facilitate the Preliminary Well
Services Agreement with Add Energy relating to
the preparation for drilling of the Baleen well to
undertake a phased approach to provide technical
support in the following areas: -
• Review of current well design documentation
• Develop a suitable well design and cost estimates
• Develop drilling schedule and define a ready to
drill tentative window
The scope of work to be conducted included review
of existing data and latest geological prognoses
for the well, documentation of the subsurface well
design envelope and compilation of a preliminary
well design, project costs and schedule to complete
the Seablue–1 Exploration well. The report received
from Add Energy documents the Basis of Well
Design (BOWD) and rationale for design of the well,
the well cost compilation and the project schedule.
The report addresses the revised drill target on the
Baleen prospect initially announced with total depth
of 2150 metres on seismic data line B4-18. Advent
now intends, subject to approvals and funding,
to undertake deeper drilling to also undertake
evaluation of the Offshore Sydney Basin for carbon
sequestration (storage). This has resulted in a revised
specification of a well to target early Permian
sandstones for both hydrocarbon and carbon
sequestration potential with a revised total depth
being set at 3150 metres.
Advent is proposing with its Joint Venture partner
Bounty to use the drilling program at Baleen to
investigate the potential for CCS - Carbon Capture
and Storage (geo-sequestration of CO2 emissions)
in PEP11. CCS can capture CO2 fossil fuel emissions.
Both the International Energy agency and the
Intergovernmental Panel on Climate change believe
that CCS can play an important role in helping to
meet global emission reduction targets. CCS is part
of a suit of solutions with the potential to mitigate
greenhouse gas emissions and help address climate
change. The Sydney Basin is a major contributor to
Australia’s greenhouse gas emissions and contributes
up to 34% of the total national emissions.
Independent Government published research has
indicated at least 2 TCF (Trillion Cubic Ft) of CO2
storage may be feasible in the offshore Sydney Basin.
Advent is a strong supporter of plans for Net Zero
by 2050 and sees the company playing a direct
role in achieving that target, especially in New
South Wales. It aims to do this in two ways. First, by
finding gas closest to Australia’s biggest domestic
energy market, gas which can be used to provide
reliable back-up for increased uptake of renewable
energy in NSW. Second, through its plans to explore
for opportunities in offshore NSW for CCS, a key
clean energy technology. The significance of the
carbon storage objective in addition to gas has
been highlighted by the report from The Australian
Financial Review (7 April 2021) “Carbon prices
tipped to surge” which references dramatic action in
Europe’s carbon markets with “carbon prices almost
doubling in the last four months from Euro 23
(A$35) a tonne in November 2020 to Euro 41 (A$62)
in March 2021 as more ambitious (carbon) markets
aligned with net zero emissions goals to drive prices
higher.”
Advent has signed a Preliminary Well Services
Agreement (Agreement) with Add Energy (https://
addenergy.no). Under the Agreement Add
Energy will initiate a review of rig availability and
engagement terms for the Baleen well program.
Add Energy will also develop a scope of supply for
regulatory and environmental compliance and
review the drilling campaign schedule including
a review of the program for geosequestration
drilling research as part of the Baleen drill project.
Add Energy provides drilling and well engineering
specialized consultancy services and solutions to
the energy industry on a global scale, including well
design and environmental services. Add Energy is
headquartered in Stavanger, Norway and operates in
every region of the world from 15 locations including
Europe, the Middle East, the Americas and Australia.
Add Energy will deliver phased approach services to
Advent Energy for the preparation and drilling of the
Baleen Well PEP11. In the first stage of the phased
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REVIEW OF OPERATIONS BPH ENERGY LIMITED AND IT’S CONTROLLED ENTITIES
approach, Add Energy will provide technical support
in the following areas:
2. Produce a detailed summary of required
environmental inputs;
• Review of current well design documentation.
• Develop a suitable well design and cost
estimates.
• Develop drilling schedule and define a ready to
drill tentative window.
The initial report received from Add Energy
documents the Basis of Well Design (BOWD)
and rationale for design of the well, the well cost
compilation and the project schedule. The report
addresses the revised drill target on the Baleen
prospect initially announced with total depth
of 2,150 metres on seismic data line B4-18. As
advised Advent now intends, subject to approvals
and funding, to undertake deeper drilling to also
undertake evaluation of the Offshore Sydney Basin
for carbon sequestration (storage). This has resulted
in a revised specification of a well to target early
Permian sandstones for both hydrocarbon and
carbon sequestration potential with a revised total
depth being set at 3,150 m.
On 26 February 2021 BPH advised that Advent
had confirmed the engagement with Add Energy
for the Xodus Group to undertake a preliminary
environmental screening assessment of the proposed
Seablue-1 well in preparation for drilling of the Baleen
well in offshore licence PEP11. Xodus Group are a
leading global energy environmental consultancy
with a strong track record in the Australian offshore
sector where they are subject matter experts in
environmental impact assessment and regulatory
approvals. The report was facilitated by the pre-existing
environmental information from the prior technical
work in the licence including the Environmental
Plan which was accepted by the authorities for a 2D
Seismic survey which was commissioned by Advent
and carried out in 2018. The report has confirmed the
program required to undertake an environmental
impact assessment to support the required approvals
for the Seablue-1 well. The aims of the preliminary
environmental impact assessment were to:
1. Produce a detailed summary of required
technical inputs;
3. Outline a proposed approach for stakeholder
consultation; and
4. Identify key controls potentially required to
manage the activity.
Advent subsequently appointed Xodus under a lump
sum contract to prepare the Environmental Plan for
first submission to NOPSEMA. Xodus’s appointment
was based on their high quality of engagement,
willingness to provide a staged lump sum proposal,
and recent experience by their Principal Consultant
in working for NOPSEMA.
Advent announced the appointment of Professor
Peter Cook as an advisor on geosequestration for its
project in the Offshore Sydney Basin. Professor Peter
Cook is an eminent Australian and international
earth scientist. He is a leader in the development
and application of carbon capture and storage
(CCS) technologies and has published more than 30
papers and articles on greenhouse gas technologies,
including the books “Clean Energy Climate and
Carbon” and “Geologically Storing Carbon”, and was
an IPCC Co-ordinating Lead Author. He first drew
attention to Australia’s CCS opportunity more than
20 years ago, then going on to establish national
CCS programs and research facilities through the
Petroleum CRC and the Cooperative Research
Centre for Greenhouse Gas Technologies (CO2CRC).
In 2011, the University of Melbourne established the
Peter Cook Centre for CCS Research.
Advent has appointed Mr Andrew Hogan as
Contracts Manager for its PEP 11 Baleen well project
in the Offshore Sydney Basin. Mr Hogan holds
geoscience degrees from Trinity College Dublin and
National University of Ireland, Galway and comes
with over 30 years of Operational and Commercial
experience in the upstream sector of the Energy
industry. Prior to relocating to Perth in 2009 he spent
18 years based in Aberdeen working in the UK sector
of the North Sea. He is well known in the Drilling and
Completion community across Australia and New
Zealand, having spent 24 years with one of the major
oilfield Service Companies and 5 years with a major
global offshore Drilling Contractor and will bring his
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experience to bear to assist and advise the board of
Advent Energy in the procurement of key equipment
and services for the safe and efficient drilling of the
Baleen well in PEP11.
353) (AFSL 517246) and sub-underwritten up to
$2,271,450. Grandbridge Securities Pty Ltd is also
Lead Manager to the Offer.
Advent’s 100% owned subsidiary, Asset, has issued a
Call for Tender for the provision of subsea wellhead
equipment, materials and associated services for the
Baleen drilling program. This equipment provides
the ‘foundation’ for the Seablue-1 well and is the first
stage of well construction. This is an important step
in the preparation and planning for the Seablue--1
well ensures that Asset will be ready to commence
drilling after relevant approvals have been received.
When the well has reached total depth and been
fully evaluated, the well will be plugged and
abandoned in line with pre-drill planning as an
exploration well, and the well head and associated
equipment well be removed from the seabed.
A Call for Tender for the provision of drilling rig
services the Seablue-1 exploration well has also
been issued. The tender has been issued to multiple
drilling contractors who have semi-submersible
drilling units in the region. The Seablue-1
well is planned to be drilled in 125m of water
approximately 26 km offshore and approximately
30 km SSE of the City of Newcastle. The drilling
of the well is subject to regulatory approvals and
is expected to take around 40 days to reach total
depth. The Seablue-1 well has two objectives: (i) a
gas target and (ii) evaluation for Carbon Capture
Storage, subject to funding.
Advent’s 100% subsidiary Onshore made an
application for suspension and extension of the
permit conditions in EP386 which was not accepted
by the Department (DMIRS). Onshore sought a
review of the decision by the Minister of Resources
who responded setting out a course of action in
relation to that decision which Onshore is following.
Onshore has lodged an appeal against this decision
with the State Administrative Tribunal (SAT). The
appeal process is ongoing.
On 30 December 2020 Advent lodged an Offer
Information Statement with ASIC for a non-
renounceable entitlement issue of two (2) Shares
for every three (3) shares held at an issue price of
$0.05 (5 cents) per Share to raise up to $6,525,108.
The Offer is partially underwritten by related party
Grandbridge Securities Pty Ltd (ABN 84 087 432
The Directors of MEC announced during the year
that it had entered into a settlement agreement
with both Advent and its subsidiary, Asset Energy
Pty Ltd (Asset) in relation to writs and demands
issued by both Advent and Asset. On 2 October
2020 MEC had announced entering into a Standstill
Agreement the effect of which was to allow the
parties time to negotiate a resolution of the pending
claims. Following legal and audit consultation by
MEC directors Douglas Verley and Andrew Jones,
and further negotiations with Advent and Asset, a
resolution and settlement has been reached.
Key points to note are as follows;
• MEC holds a 47.6% interest in its investee
company Advent, which is owed a total of
$242,155 by MEC. Further, Advent owns 100% of
Asset which is owed a total $593,343 plus interest
and costs of $36,790 by MEC giving a total of
$872,288 arising for outstanding loans owing
(together knows as the Advent Debt). Advent has
informed MEC of its intension to withdraw its
prior request for an in-specie distribution subject
to settlement of its claim total of $872,288.
• Following advice from its legal advisor and the
company’s auditors MEC has acknowledged the
Advent Debt.
• MEC, Advent and Asset have agreed a debt for
equity conversion for the Advent Debt pursuant
to which the total $872,288 of the Advent Debt
will convert to equity in the company, subject to
Shareholder approval (Advent Debt Conversion).
• Under the Advent Debt Conversion, MEC has
agreed (subject to Shareholder approval) to issue
198,237,045 Shares at a deemed issue price of
$0.0044 per Share to Advent to settle $872,288 of
the Advent Debt as a full and final settlement in
the following manner (i) by issue of 124,708,409
Shares (subject to Shareholder approval) at a
deemed issue price of $0.0044 per Share to clear
$511,972 plus interest and costs of $36,790 of
the Advent Debt; and (ii) by allowing Advent to
participate in a future rights issue to the extent
of 73,528,636 Shares at a deemed issue price
of $0.0044 per Share to settle the remaining
balance of the Advent Debt being $323,526.
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MEC is currently in discussions with the ASX and
concurrently working on a Notice of Meeting. MEC
will release the Notice of Meeting once it is approved
by the ASX.
During the year Advent issued 3,464,997 shares at
$0.05 for $173,250 cash.
Cortical Dynamics Ltd (“Cortical”), BPH 16.7%
Cortical is an Australian based medical device
technology company that has developed an industry
disruptive brain function monitor independently
described as “a paradigm busting technology from
an Australian based device house that really gives a
significant advantage in this space”. Its competitive
advantage has been recognised by leading world
experts in anesthesia. Cortical has received both TGA
approval and the CE mark and has now commenced
its sales campaign.
The core product, the Brain Anaesthesia Response
Monitor (BARM), was developed to better detect
the effect of anaesthetic agents on brain activity,
aiding anaesthetists in keeping patients optimally
anaesthetised. The product is focused on integrated
distribution with the leading global brands in
operation theatre monitoring equipment.
The approach used is fundamentally different from
all other devices currently available in the market in
that its underlying algorithm produces EEG indexes
which are directly related to the physiological state
of the patient’s brain. Such monitoring is gaining
significant use during surgery, however even with the
use of EEG monitors, it is not uncommon for there
to be a critical imbalance between the patient’s
anaesthetic requirements and the anaesthetic drugs
administered. While a number of EEG monitors
are commercially available, one that is reliably able
to quantify the patient’s anaesthetic state is still
desperately needed.
To date, all of the existing EEG based depth of
anaesthesia (“D o A”) monitors operate in the context
of a number of well documented limitations: (i)
inability to monitor the analgesic effects; and (ii)
reliably measure certain hypnotic agents.
The above limitations highlight the inadequacies in
current EEG based depth of anaesthesia monitors,
particularly given surgical anaesthesia requires both
hypnotic and analgesic agents (and muscle relaxants).
The global brain monitoring market is poised to grow
to reach $1.6 billion by 2020. Around 312 million
major surgical procedures requiring anaesthesia are
undertaken every year worldwide (WHO 2012.) The
pain monitoring market is valued at over $8.6 billion
per annum by 2022. (www.grandviewresearch.com/
industry-analysis/pain-management-devices-market-
April 2016).
Initial marketing will focus on Total Intravenous
Anaesthesia (TIVA), a method of inducing and
maintaining general anaesthesia without the use of
any inhalation agent. This is becoming more widely
accepted, particularly in Europe. Approximately 29
million major general surgery general anaesthesias
are conducted in the European Union each year,
of which 55% (circa 16 million) are balanced
anaesthesia (using a combination of intravenous
agents such as propofol and volatile gases) and 20%
are total intravenous anaesthesia using propofol. This
creates a market opportunity of between $83m to
$229m to Cortical in the European Union alone.
“The use of EEG-based depth of anaesthesia
monitors has been recommended in patients
receiving total intravenous anaesthesia because it
is cost effective and because it is not possible to
measure end-tidal anaesthetic concentration in this
group” (source: nice.org.uk).
Cortical’s technology has a versatility that goes
beyond depth of anaesthesia and may be applied to
other EEG based markets, such as neuro-diagnostic,
drug discovery, drug evaluation and the emerging
Brain computer Interface (BCI) market.
There are considerable opportunities offered by
subsequent expansion of the company’s core
technology through developing the product to carry
out additional functions including neuro-diagnostics
of changes in brain and memory functions to
provide early warning of degenerative diseases, pain
response and tranquiliser monitoring for trauma
patients in intensive care units.
88
BPH Energy I Annual Report 2021
While the current array of bedside monitoring and
imaging systems in the critical care environment
has led to dramatic reductions in mortality, they
do not as yet involve the continuous monitoring of
brain function. This is widely acknowledged to be a
major problem, as the care and management of the
critically ill patient is ultimately all about the brain.
The continuous monitoring of a patients’ brain
state is not only necessary to diagnose and manage
acute deteriorations in brain function that may have
long lasting effects, but also to aid in the optimal
administration of sedation and analgesia. Sedation
and analgesia in the critically ill patient play a pivotal
role in their care and is necessary to minimize
patient distress and agitation, being essential to
facilitate the utility of a wide variety of life support
equipment and procedures, the most important of
which is mechanical ventilation.
Study after study has shown that too deep sedation
increases the time on mechanical ventilation, which
leads to increases in mortality, the incidence of
complications and treatment costs. Given these
acknowledged advantages to brain function
monitoring in the ICU why then is continuous
monitoring of brain function not currently available?
There are two main reasons for this:
1. Firstly, the size and the complexity of
configuration of most approaches to monitoring
brain function are simply not capable of being
adapted for use in the busy and crowded ICU
environment.
2. Secondly, in those monitoring approaches that
could be potentially deployed at the bedside,
they depend on physiologically uncertain
principles of operation that are not relevant, or
meaningfully interpretable, in the context of the
critically ill patient.
Cortical aims to address both these limitations
by the further development and trialling of
the novel bedside and remotely deployable
Australian manufactured and designed,
electroencephalographically based (EEG-based),
BARM system. The BARM is configured to efficiently
image and display complex information related to
the clinically relevant state of the brain.
The BARM is not only expected to address the
shortcomings of these EEG-based DoA approaches,
and thus realise their documented promise, but to
extend the functionality of bedside EEG monitoring
to the objective monitoring of pain, a measure
also vital to the management of the sedated
mechanically ventilated critically ill patient.
In Australia between 2015 and 2016 there were
approximately 149,000 admissions to ICU of which
48,000 required continuous ventilatory support
(CVS) and thus required sedation, pain relief and
who would have potentially benefited from an
instrumental approach to imaging brain activity.
Given that the average patient time on CVS was
96 hours in Australia, this equates to potentially
4.5 million hours of instrumental monitoring and
approximately a quantity of 188,000 of 24-hour
single patient-use sensors to image brain activity. In
the USA, based on 1.5 million ICU patients (30% CVS)
requiring CVS, and given that the first episode of an
average patient time on CVS is 96 hours, this equates
to 144 million hours of instrumental monitoring and
approximately 6 million of 24-hour single patient use
sensors to image brain activity. For the European
Union (EU), based on similar statistics to USA, there
would be an estimated 5 million single patient use
sensors, used per annum. Total market opportunity
per annum of the US, Western Europe and Australian
markets only, would be approximately 11.188 million
24-hour single-use patient sensors per annum,
which with an average cost of $AU20 per single
patient use sensor, would represent a total revenue
stream conservatively estimated to be of the order of
$AU223.8 million per annum.
The BARM system is protected by five patent families
in multiple jurisdictions worldwide consisting of
22 granted patents. Cortical will continue to drive
the development of the BAR monitor, maintain its
intellectual property and concentrate on obtaining
regulatory approval for the BAR monitor.
Cortical has now commenced preparations for a
sales program of the device in Europe, Australia,
New Zealand and further development is also
underway in Korea and Singapore. A USA based
distributorship is expected to follow once Cortical
attains the FDA certification.
Cortical’s Brain Anesthesia Response Monitor (‘BARM”)
has now been used in further successful trials at
Strathfield Private Hospital in Sydney. Strathfield is
part of the Ramsay private hospital group.
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BPH Energy I Annual Report 2021
HEALTH TECHNOLOGY RESOURCES
REVIEW OF OPERATIONS BPH ENERGY LIMITED AND IT’S CONTROLLED ENTITIES
Cortical announced a number of developments
during the period which included:-
- Cortical confirmed the appointment of Jamie
Stanistreet to the Cortical Dynamics Advisory
Committee. From 2001-2018 Jamie was the
Managing Director and Vice President of
Medtronic Aust/NZ. Medtronic is currently ranked
as the world’s largest medical device company.
Under his tenure Medtronic revenue grew 10-
fold, and he managed over 950 employees.
Medtronic’s focus on Medical devices includes
Cardiology, Spine, Surgery, Brain Modulation,
ENT, Pain, Stroke & Diabetes. He was a member
of the APAC Leadership Team. Jamie also served
as Vice Chairman with the Medical Technology
Association of Australia for several years. Jamie
has over 40 years’ experience in the Medical
Device industry and is an accountant by trade.
He was finalist in the CEO Magazine Executive of
the year award 2014 - 2015 and won the Medical
Technology Association of Australia inaugural
Outstanding Achievement Award 2013. Jamie’s
experience, connections and knowledge will be
invaluable to the commercial development of
Cortical Dynamics.
- Cortical announced that its “Project Analgesia
Investigation” BARM has been accepted by the
Medical Device Partnering Program (MDPP)
of Flinders University. Led by Professor Karen
Reynolds. The MDPP has a strong track record
of research excellence and commercialisation
experience. The MDPP leverages the capacity
of their research organisation, the Medical
Device Research Institute (MDRI), and facilitates
partnerships across industry and government
connecting the MedTech ecosystem and turning
ideas into proven concepts. It is supported
by the Marshall Liberal Government through
the Department for Innovation and Skills, and
nationally through MTPConnect’s $32 million
Researcher Exchange and Development within
Industry (REDI) initiative made possible by
the Medical Research Future Fund. The Ideas
Incubator provides successful applicants with 250
hours of research and development assistance, as
well as 30 hours market intelligence, furthering
products in medical device development
pipeline. At the end of the project, all results,
data, prototypes and any generated intellectual
property are released unencumbered to
the applicant with future steps required to
commercialise the device. The focus of the
collaboration will be further investigation of the
Cortical Input component (CI or pain) of the
BARM technology.
- Cortical has also entered into a nonexclusive
Licence and Co-operation Agreement with
Philips Healthcare North America Corp (“Philips”),
which will enable Cortical to interface its Brain
Anaesthesia Response Monitor (“BARM”) into
the Philips IntelliVue and Patient Information
Center (PIC iX) Monitoring Systems using the
IntelliBridge integration product line.
- Cortical has begun the FDA 510K filing process
for BARM in the USA assisted by its strategic
investor Intuitive X (“IX”). The Food and Drug
Administration (“FDA”) is the federal agency of the
United States Department of Health and Human
Services which regulates the sale of medical
device products (including diagnostic tests) in
the U.S. and monitors the safety of all regulated
medical products. FDA approval is a necessary
precursor for sales of BARM to commence in
the USA. Cortical already has achieved both CE
(Europe) and TGA (Australian) registration.
- Cortical has developed an extensive patent
portfolio encapsulating the BARM, providing
critical patent protection across a number of key
brain monitoring markets. Cortical’s competitive
advantage is underpinned by a strong patent
position covered by five patent families and
22 granted patents. Currently, Cortical has
patents awarded in Australia, New Zealand,
Japan, the People’s Republic of China, Europe
and the United States. During the year Cortical
announced the issuance of European Patent
Number 2088924 “Neurodiagnostic Monitoring
and display System” in Belgium, France, Germany
and United Kingdom. The patent application
for “Apparatus and process for measuring brain
activity “has been given International (PCT) Patent
Application No. PCT/AU2020/050535.
1010
BPH Energy I Annual Report 2021
Perkins Institute has shown that HLS5 has significant
tumour suppressor properties. The Perkins findings
are supported by the two independent peer
reviewed scientific publications, identifying a role
for HLS5 in cancer, demonstrating that the loss
of HLS5 expression may be a critical event in the
development and progression of liver cancer.
The publications — a collaboration between Fudan
University Shanghai Cancer Centre and other
Chinese Institutes, including Shanghai Cancer
Institute, Liver Cancer Institute, Second Military
Medical University and Qi Dong Liver Cancer Institute
—focused on identifying the role of HLS5 in liver
cancer. The first article demonstrated that HLS5
binds a key enzyme involved in the production of
energy for cancer cells (Pyruvate Kinase isoform
M2 (PKM2)). They showed that HLS5 binds PKM2
to form a complex which inhibits the activation of
PKM2. The formation of this HLS5/PKM2 complex
ultimately limits the cancer cell’s means of energy
production and its ability to proliferate. In the second
publication the expression levels of HLS5 and PKM2
were assessed for potential use as a prognostic
marker for hepatocellular carcinoma (HCC) - (liver
cancer) .The study analysed liver samples of 688
patients who had HCC. The study found that patients
who were positive for PKM2 expression and negative
for HLS5 expression had poorer overall survival and
shorter time to recurrence. Taken together, the
findings of both papers further support the research
into HLS5 by MDS and the Harry Perkins Institute of
Medical Research.
- The BARM next generation medical brain
monitor was exhibited at the 2020 Spring
Development seminar and Council of the Korean
Association of Anaesthesia. Cortical’s Korean
distributor, Globaluck, presented the BARM at
this conference at the BEXCO Convention Hall
in Busan South Korea on July 24th to 25th.
During the year Cortical secured approval by
the South Korean regulator, The Korean Ministry
for Food and Drug Safety (KMFDS), to sell its
BARM in the South Korean Market. The BARM
and Cortical Dynamics met the stringent KMFDS
requirements both for the BARM technology and
for medical device manufacturers, including the
requirements related to the Quality Management
System (QMS). In particular, the QMS established
by the manufacturer should comply with the
national requirements based on the international
standard ISO 13485. South Korea’s medical
device market ranks as the ninth largest in the
world at an estimated US$6.8 billion 2019,
showing continuous grow with 8.1% annual
increase. Cortical will now work with its South
Korean distributor, Global Luck, to introduce
BARM to the Korean market. This approval by
KMFDS complements the existing CE and TGA
approvals already in place.
- Cortical has entered into a non-exclusive Licence
and Co-operation Agreement with Philips
Healthcare North America Corp (“Philips”),
which will enable Cortical to interface its Brain
Anaesthesia Response Monitor (“BARM”) into
the Philips IntelliVue and Patient Information
Center (PIC iX) Monitoring Systems using the
IntelliBridge integration product line.
Molecular Discovery Systems Limited, BPH 20%
Molecular Discovery Systems Limited (“MDSystems”),
launched in 2006 and spun off from BPH in 2010, is
an associate of BPH. MDSystems has been working
with the Molecular Cancer Research Group at
the Harry Perkins Institute of Medical Research to
validate HLS5 as a novel tumour suppressor gene,
particularly for liver cancer.
The Molecular Cancer Research Group has
developed a pre-clinical model of liver cancer where
the expression of HLS5 is ablated i.e. it mimics, in
part, patients that have low HLS5 (TRIM35) and
develop liver cancer. Research conducted at the
1111
BPH Energy I Annual Report 2021
HEALTH TECHNOLOGY RESOURCES
DIR ECTORS’
REP ORT
BPH ENERGY LIMITED
AND IT’S CONTROLLED ENTITIES
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.
The directors of BPH Energy Ltd (”BPH Energy” or
“the Company”) present their report on the Company
and its controlled entities (“consolidated entity” or
“Group”) for the financial year ended 30 June 2021.
Review of Operations
A Review of Operations is set out on pages 3 to 11
and forms part of this Directors’ Report.
Directors
Environmental Issues
The names of directors in office at any time during or
since the end of the year are:
D L Breeze
A Huston
C Maling
Company Secretary
Mr David Breeze was appointed Company Secretary
on 23 November 2016. He has many years’
experience in the management of listed entities.
Principal Activities
The principal activities of the consolidated entity
during the financial year were investments in
biotechnology entities, an oil and gas exploration
entity, and a medical cannabis entity.
Operating Results
The consolidated entity has reported a net loss after
tax for the year ended 30 June 2021 of $1,612,424
(2020: profit of $1,121,263) and has a net cash
outflow from operating activities of $703,808 (2020:
outflow of $504,295).
The net loss from ordinary activities after tax is after
recognising (i) a fair value loss of $Nil (2020: loss of
$734,542) (ii) consulting and legal costs of $259,264
(2020: $357,291), (iii) share of associates losses of
$112,264 (2020: $30,793), (iv) an expected credit loss
provision of $91,216 (2020: reversal of $2,929,199) (v)
an impairment reversal of $17,733 (2020: expense of
$420,731) and (vi) share-based payments expense of
$802,997 (2020: $171,425).
The consolidated entity’s operations are not
regulated by any significant environmental
regulation under law of the Commonwealth or of a
state or territory.
Non-Audit Services
No fees for non-audit services were paid/payable to
the external auditors during the year ended 30 June
2021 (2020: $Nil).
Future Developments
The Company 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 and in medicinal cannabis.
Financial Position
The consolidated entity has a working capital surplus
of $9,632,833 (2020: deficit $1,324,846). The net assets
of the consolidated entity increased by $11,093,149 to
$15,376,985 over the year to 30 June 2021.
Included in trade creditors and payables is current
director fee accruals of $517,215 (2020: $849,987).
Capital raisings
During the year BPH issued 161,289,728 shares
under a 2 for 5 Entitlement Issue at an issue price of
$0.015 per share, of which $1,927,292 was received
in cash and $482,054 satisfied by debt set-off. The
Entitlement Issue included one free attaching
option for each share issued, resulting in the issue of
80,644,864 free listed options with an exercise price
of $0.05 per share and an expiry date of 29 July 2022.
1212
BPH Energy I Annual Report 2021
In July 2020 and December 2020 the Company
raised $691,812 cash from the issue of 46,120,833
placement shares at $0.015 per share. The
placements included one free attaching option for
each share issued, resulting in the issue of 23,060,417
free listed options with an exercise price of $0.05 per
share and an expiry date of 29 July 2022. Another
2,000,000 listed options with same terms were issued
to the Lead Manager of one of the placements.
On 3 February 2021 the Company announced a
significant share placement of 69,230,769 fully paid
ordinary shares at an issue price of $0.13 per share to
sophisticated and professional investors to raise $9
million. $7 million of the placement was managed
by Everblu Capital (Lead Manager) who received a
fee of 6% of the funds raised together with 6 million
share options with an exercise price of $0.26 per
share and an expiry date of 8 February 2023. A
further $1.5 million was placed by 62 Capital who
received a fee of 6% of the funds raised together
with 1,285,714 share options with an exercise
price of $0.26 per share and an expiry date of 8
February 2023. An amount of $500,000 was placed
by Grandbridge Securities Pty Ltd who received
a fee of 6% of the funds raised. An additional 500
shares were issued at $0.13 per share under a
compliance Prospectus. The funds proposed to be
invested by BPH will be used by Advent to progress
well planning, engineering and environmental
approvals for drilling at the Baleen drill target in
the PEP11 offshore permit in NSW. It is planned
that approximately $5.75 million of the capital
raised will be used for this purpose. In addition, the
Company expects to use $0.5 million of the proceeds
to increase its shareholding in Cortical Dynamics
Limited (Cortical) from 16% to 18% to enable it
to further develop its Brain Anesthesia Response
Monitor (BARM).
In addition 5,600,000 unlisted share options with an
exercise price of $0.02 per share have been exercised
for cash proceeds of $112,000, together with
9,440,741 listed share options with an exercise price
of $0.05 per share for cash proceeds of $472,037. In
addition 200,000 unlisted options with an exercise
price of $0.20 per share expired unexercised.
There are no other matters or circumstances that
have arisen since the end of the financial year other
than outlined elsewhere in this financial report that
have significantly affected, or may significantly affect,
the operations of the consolidated entity, the results
of those operations, or the state of affairs of the
consolidated entity in future financial years.
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.
Information on Directors
D L Breeze
Managing Director, Executive Chairman, and
Company Secretary – Age 67
Shares held – 57,452,695 / Options held –12,121,452
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; and held executive
and director positions in the stock broking industry.
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. During the last
3 years David has held the following listed company
directorships:
Grandbridge Limited (November 2016 until its de-
listing in February 2020)
MEC Resources Limited (from April 2005)
Subsequent Events
In August 2021 the Company reached a legal
settlement with two former directors in respect of
their outstanding director fees.
David is also a director of Cortical Dynamics Limited,
Molecular Discovery Systems Limited, Diagnostic
Array Systems Limited, Advent Energy Limited,
Onshore Energy Pty Ltd, and Asset Energy Pty Ltd.
1313
BPH Energy I Annual Report 2021
HEALTH TECHNOLOGY RESOURCES
DIRECTORS’ REPORT BPH ENERGY LIMITED AND IT’S CONTROLLED ENTITIES
A Huston
Non-Executive Director – Age 66
Shares held – 9,055,067 / Options held – 1,666,534
Tony Huston has been involved for over 40 years in
engineering and hydrocarbon industries for both on
and off shore exploration/development. Early career
experience commenced with Fitzroy Engineering
Ltd, primarily working on development of onshore
oil fields. During the 1990’s Tony managed JFP NZ
International, a Texas based exploration company
that included a Jack Up rig operating in NZ waters.
In 1994 Tony oversaw the environmental consent
process required to drill a near inshore well that was
drilled from “land” into the offshore basin during
1995. In 1996 Tony formed his own E&P Company to
focus re-entry of onshore wells, primarily targeting
shallow pay that had been passed or ignored from
previous operations. This was successful and the two
plays opened up 20 years ago are still in operation.
Recent focus (12 years) has been to utilise new
technology for enhanced resource recovery and
has been demonstrated in various fields, including
US, Mexico, Oman, Italy and Turkmenistan. During
the last 3 years Tony has held the following listed
company directorships:
MEC Resources Limited (from October 2020 to
present)
Tony is also a non-executive director of Advent
Energy Limited.
C Maling
Non-Executive Director – Age 67
Shares held – 5,072,253 / Options held – 2,862,900
Mr Charles Maling was formerly the Communications
Officer for the Office of the Western Australian
State Government Environmental Protection
Authority (“EPA”) with a responsibility for advising
the Chairman of the EPA on media issues. He has
a Bachelor of Sociology and Anthropology with
a Media minor. Charles worked with the Western
Australian State Government Department of the
Environment for 14 years and further 8 years
for the EPA. His administrative roles included
environmental research (including a major study
on Perth Metropolitan coastal waters and Western
Australian estuaries) environmental regulation and
enforcement and media management. In the past
three years Charles has held the following listed
company directorships:
Grandbridge Limited (November 2016 until its de-
listing in February 2020)
Meetings of Directors
The board consults regularly by phone on matters
relating to the Company’s operations. Resolutions
are passed by circulatory resolution. The Company
held one meeting of directors during the financial
year. Attendance by each director during the year
were:
Name
Number
eligible to
attend
Number
attended
D Breeze
A Huston
C Maling
1
1
1
1
1
1
Significant Changes in State Of Affairs
During the period there were no significant changes
in the state of affairs of the consolidated entity other
than those referred to in the financial statements or
notes thereto.
Indemnifying Officers or Auditors
During or since the end of the financial year the
Company has not given an indemnity or entered an
agreement to indemnify, or paid or agreed to pay
directors and officers insurance premiums.
The Company has not indemnified the current or
former auditors of the Company.
Remuneration Report (Audited)
This report details the nature and amount of
remuneration for key management personnel of
BPH Energy Limited. The Remuneration Report
details the remuneration arrangements for KMP who
are defined as those persons having authority and
1414
BPH Energy I Annual Report 2021
responsibility for planning, directing and controlling
the major activities of the companies in the
consolidated entity, directly or indirectly, including
any Director (whether executive or otherwise)
of companies in the consolidated entity. The
information provided in the Remuneration Report
has been audited as a required by Section 308(3C) of
the Corporations Act 2001.
Key Management Personnel
The Directors of the Group during or since the end of
the financial year were as follows:
D L Breeze - Executive Chairman, Managing
Director and Company Secretary
A Huston - Non-Executive Director
Non-Executive Director
C Maling -
All the parties have held their current position for the
whole of the financial year and since the end of the
financial year unless otherwise stated.
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 June 2020 financial report
was adopted at the Company’s 2020 Annual General
Meeting held on 10 December 2020. 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 Company, 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 Company is as follows:
• The remuneration policy, setting the terms and
conditions for the executive directors and other
senior executives, was developed and approved
by the board.
• 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 Company’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 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 Company did not
engage remuneration consultants during the period.
The executive directors and executives which
receive salaries receive a superannuation guarantee
contribution required by the government, which
is currently 10%, 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 an appropriate
valuation methodology.
The board policy is to remunerate non-executive
directors at market rates for comparable companies
for time, commitment and responsibilities. The
maximum pool of non-executive director fees
approved by shareholders is $250,000. 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 Company. 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.
1515
BPH Energy I Annual Report 2021
HEALTH TECHNOLOGY RESOURCES
DIRECTORS’ REPORT BPH ENERGY LIMITED AND IT’S CONTROLLED ENTITIES
Employment Contracts of Directors and Senior
Executives
The employment conditions of the Managing
Director, David Breeze, is formalised in a Product
Development Agreement. The engagement is
automatically extended for a period of 2 years
at each anniversary date unless the Managing
Director or the Company give notice of termination
prior to the expiry of each term. The agreement
stipulates the Managing Director may terminate the
engagement with a six month notice period. The
company may terminate the agreement 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 up to twelve 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.
Key Management Personnel Remuneration
The remuneration for each key management personnel of the consolidated entity during the year was as follows:
2021
Key Management Person
Short-term Benefits
Post-employment Benefits
Salary and
fees
Bonus
Non-cash
benefit
Other
Superannuation
D L Breeze
C Maling
A Huston
Total
148,000
25,000
30,000
203,000
-
-
-
-
-
-
-
-
-
-
-
-
Key Management
Person
Long-term
Benefits
Share-based payment
Total
Performance
Related
Compensation
Relating to
Securities
D L Breeze
C Maling
A Huston
Total
Other
Shares2
Options3
$
-
-
-
431,7221
157,4521
737,174
55,082
48,834
19,402
18,593
99,484
97,427
535,638
195,447
934,085
%
-
-
-
%
79.9%
74.9%
69.2%
78.3%
1 These include securities issued to Grandbridge Limited, a Company of which Mr Breeze is Managing Director
2 The issue of these shares included one free attaching option for every two shares issued with an exercise price
of $0.05 per share and an expiry date of 29 July 2022
3 Given the securities were issued in settlement of debt, the accounting standards require an expense to be
recognised with respect to the fair value of shares and options. The fair value of options granted is estimated
using a Black-Scholes model taking into account the terms and conditions upon which the options were
granted. These securities were issued under a non-renounceable Rights Issue on the same terms as issued to
other shareholders.
1616
BPH Energy I Annual Report 2021
2020
Key Management Person
Short-term Benefits
Post-employment Benefits
Salary and
fees
Bonus
Non-cash
benefit
Other
Superannuation
D L Breeze
C Maling
A Huston
Total
148,000
25,000
35,000
208,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Key Management
Person
Long-term
Benefits
Share-based payment
Total
Performance
Related
Compensation
Compensation
Relating to
Options
D L Breeze
C Maling
A Huston
Total
Other
Shares
Options
$
-
-
-
-
-
-
20,000
20,000
-
5,771
-
148,000
30,771
55,000
5,771
233,771
%
-
-
-
%
-
18.8%
36.4%
11.0%
Interest in the shares and options of the Company and related bodies corporate
The following relevant interests in shares and options of the Company or a related body corporate were held by
key management personnel as at the date of this report.
Shareholdings
D L Breeze
A Huston
C Maling
Option holdings
Balance
1.7.2020
33,209,795
6,142,000
2,146,454
Granted as
Compensation
Acquired
Balance
30.6.2020
-
-
-
24,242,900
57,452,6951
2,933,067
2,925,799
9,075,067
5,072,253
Balance
1.7.2020
Aquired
Balance
30.6.2021
Total Vested
30.6.2021
Total
Exercisable
and Vested
30.6.2021
Total
Unexercisable
30.6.2021
D L Breeze
A Huston
C Maling
-
12,121,452
12,121,452
12,121,452
12,121,4521
200,000
1,466,534
1,666,534
1,666,534
1,666,534
1,400,000
1,462,900
2,862,900
2,862,900
2,862,900
-
-
-
1 These include securities held by Grandbridge Limited, a Company of which Mr Breeze is Managing Director
1717
BPH Energy I Annual Report 2021
HEALTH TECHNOLOGY RESOURCES
DIRECTORS’ REPORT BPH ENERGY LIMITED AND IT’S CONTROLLED ENTITIES
Share Based Payments
The following are the share based payment arrangements in existence for those key management personnel at
year end:
Grant Date
Date of Expiry
Fair Value at
Grant Date2
Exercise Price
Number of
options
Vesting Date
29 November
30 November
$0.00041
$0.20
400,000
At grant date
2017
2022
29 November
2019
30 November
2024
$0.00051
$0.02
1,200,000
At grant date
28 August 2020
29 July 2022
21 December
29 July 2022
$0.013
$0.014
$0.05
$0.05
8,299,651
At grant date
6,751,235
At grant date
2020
1. Pre April 2020 consolidation
2. Fair value of options granted during the period has been determined using the valuation method and
assumptions as set out in Note 22
There are no further service or performance criteria that need to be met in relation to options granted. No
options attributable to key management personnel were exercised or lapsed during the year.
Company performance, shareholder wealth and director and executive remuneration
The following table shows the gross revenue and the operating result for the last 5 years for the listed entity, as
well as the share price at the end of the respective financial years.
Revenue from ordinary activities ($)
216,925
235,824
278,227
240,243
2017
2018
2019
2020
2021
65,506
Net (loss) / profit ($)
(2,544,301)
(1,506,758)
(3,013,043)
1,121,263
(1,612,424)
Share price at year end (cents per share)
Earnings per share (cents)
1.9
(5.9)
0.8
(2.0)
1.0
(1.7)
2.3
0.35
7.2
(0.28)
The 2016 to 2019 share prices and earnings per share have been adjusted for the 1 for 10 share consolidation
completed in April 2020.
Options
At the date of this report, the unissued ordinary shares of BPH Energy Ltd under option are as follows:
Date of Expiry
Exercise Price
Number Under Option
Grant Date
November 2016
November 2017
November 2019
30 November 2021
30 November 2022
30 November 2024
August / September 2020
29 July 2022
January 2021
8 February 2023
$0.20
$0.20
$0.02
$0.05
$0.26
200,000
400,000
1,200,000
96,264,540
7,285,714
1818
BPH Energy I Annual Report 2021
During the year ended 30 June 2021 15,040,741 ordinary shares of the Company were issued on the exercise of
options (2020: Nil). There were 200,000 options with an exercise price of $0.20 per share that lapsed unexercised
during the period.
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.
Auditor’s Independence Declaration
The lead auditor’s independence declaration for the year ended 30 June 2021 has been received and can be
found on page 20.
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 31st day of August 2021
1919
BPH Energy I Annual Report 2021
HEALTH TECHNOLOGY RESOURCES
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of BPH Energy Limited for the
year ended 30 June 2021, I declare that to the best of my knowledge and belief, there have been
no contraventions of:
AUD I TOR ’S
IND EPENDENCE
DECL ARATION
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
b)
any applicable code of professional conduct in relation to the audit.
AUDITOR’S INDEPENDENCE DECLARATION
Perth, Western Australia
31 August 2021
L Di Giallonardo
Partner
As lead auditor for the audit of the consolidated financial report of BPH Energy Limited for the
year ended 30 June 2021, I declare that to the best of my knowledge and belief, there have been
no contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
31 August 2021
L Di Giallonardo
Partner
18
2020
BPH Energy I Annual Report 2021
18
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of BPH Energy Limited for the
year ended 30 June 2021, I declare that to the best of my knowledge and belief, there have been
no contraventions of:
audit; and
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the
b)
any applicable code of professional conduct in relation to the audit.
COR PORATE
GOVERNANCE
BPH ENERGY LIMITED
AND IT’S CONTROLLED ENTITIES
The Board of Directors of BPH Energy Limited 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.
A copy of the Company’s Corporate Governance Statement can be found on the Company’s website at www.
bphenergy.com.au
AUDITOR’S INDEPENDENCE DECLARATION
Perth, Western Australia
L Di Giallonardo
31 August 2021
Partner
As lead auditor for the audit of the consolidated financial report of BPH Energy Limited for the
year ended 30 June 2021, I declare that to the best of my knowledge and belief, there have been
no contraventions of:
audit; and
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
31 August 2021
L Di Giallonardo
Partner
18
18
2121
BPH Energy I Annual Report 2021
HEALTH TECHNOLOGY RESOURCES
STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME for the year ended 30 June 2021
BPH ENERGY LIMITED AND IT’S CONTROLLED ENTITIES
Revenue from ordinary activities
Other income
Share of associates losses
Fair value loss
Impairment reversed / (expense)
Interest expense
Administration expenses
Expected credit loss (expense) / reversed
Consulting and legal
Directors fees
Service expenses
Share-based payments
Other expenses
(Loss) / profit before income tax
Income tax expense
(Loss) / profit for the year
Other comprehensive income:
Items that will not be reclassified subsequently to profit or loss
Other comprehensive income (net of tax)
Total comprehensive (loss) / income for the period
(Loss) attributable to non-controlling interests
(Loss) / profit attributable to members of the parent entity
Total comprehensive (loss) / income attributable to owners of the
Company
Note
2
2
10
3
3
22
11
Consolidated
2021
$
65,506
-
2010
$
240,243
6,210
(112,264)
(30,793)
-
(734,542)
17,733
(222)
(420,731)
(359)
(201,060)
(97,182)
(91,216)
2,929,199
(259,264)
(357,291)
(100,000)
(100,000)
(128,640)
(128,640)
(802,997)
(171,425)
-
(13,426)
(1,612,424)
1,121,263
-
-
(1,612,424)
1,121,263
-
-
(1,612,424)
1,121,263
(565)
(538)
(1,611,859)
1,121,801
(1,611,859)
1,121,801
Total comprehensive (loss) attributable to non-controlling interests
(565)
(538)
Earnings per share
Basic and diluted (loss) / earnings per share (cents per share)
4
(0.28)
0.35
The accompanying notes form part of, and should be read in conjunction with, these financial statements.
2222
BPH Energy I Annual Report 2021
STATEMENT OF FINANCIAL POSITION
for the year ended 30 June 2021
BPH ENERGY LIMITED AND IT’S CONTROLLED ENTITIES
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
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Financial liabilities
Total Current Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Equity attributable to owners of the parent
Non-controlling interest
Total Equity
Note
Consolidated
2021
$
2020
$
7
8
9
9
10
12
13
14
15
10,173,232
257,739
16,287
578,704
-
32,675
43,563
360
10,768,223
334,337
3,685,379
3,455,379
2,058,773
2,153,304
5,744,152
5,608,683
16,512,375
5,943,020
1,030,573
1,538,098
104,817
121,086
1,135,390
1,659,184
15,376,985
4,283,836
58,843,159
46,716,896
1,105,671
526,361
(44,410,922)
(42,799,063)
15,537,908
4,444,194
(160,923)
(160,358)
15,376,985
4,283,836
The accompanying notes form part of, and should be read in conjunction with, these financial statements.
2323
BPH Energy I Annual Report 2021
HEALTH TECHNOLOGY RESOURCES
STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2021
BPH ENERGY LIMITED AND IT’S CONTROLLED ENTITIES
Ordinary Share
Capital
$
Accumulated
Losses
Option reserve
$
Total
attributable to
owners of the
parent entity
$
Non-controlling
Interest
$
Total
$
45,574,507
(43,920,864)
508,436
2,162,079
(159,820)
2,002,259
-
-
1,121,801
1,121,801
1,121,801
1,121,801
(538)
(538)
1,121,263
1,121,263
Balance as at 30 June 2019
Profit for the period
Total comprehensive profitfor the
year
Transactions with owners in
their capacity as owners
Shares issued for cash
Share issue costs
Shares issued as partial
acquisition for investment
Shares issued as introductory fee
for business transaction
Shares issued in lieu of
consulting fees
827,547
(96,762)
150,000
15,000
136,604
(Loss) for the period
Total comprehensive (loss) for the
year
-
-
(1,611,859)
(1,611,859)
Transactions with owners in
their capacity as owners
Shares issued for cash
Share issue costs
Shares issued as set-off against
amounts payable
12,203,207
(1,158,263)
492,054
Share based payments expense
589,265
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
827,547
(96,762)
150,000
15,000
136,604
90,000
-
-
-
-
-
-
-
827,547
(96,762)
150,000
15,000
136,604
90,000
37,925
(1,611,859)
(565)
(1,612,424)
(1,611,859)
(565)
(1,612,424)
12,203,207
365,578
(792,685)
-
492,054
213,732
802,997
-
-
-
-
12,203,207
(792,685)
492,054
802,997
Shares issued as set-off against
90,000
amounts payable
Share-based payments expense
20,000
17,925
37,925
Balance at 30 June 2020
46,716,896
(42,799,063)
526,361
4,444,194
(160,358)
4,328,836
Balance at 30 June 2021
58,843,159
(44,410,922)
1,105,671
15,537,908
(180,923)
15,376,985
The accompanying notes form part of, and should be read in conjunction with, these financial statements.
2424
BPH Energy I Annual Report 2021
STATEMENT OF CASH FLOWS
for the year ended 30 June 2021
BPH ENERGY LIMITED AND IT’S CONTROLLED ENTITIES
Cash flows from operating activities
Payments to suppliers and employees
Interest received
Interest paid
Note
Consolidated
2021
$
2020
$
(704,319)
(504,105)
733
(222)
169
(359)
Net cash used in operating activities
17(a)
(703,808)
(504,295)
Cash flows from investing activities
Payment for unlisted investments
Loans to other entities
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of securities (net of share issue
costs)
Repayment of borrowings
17(c)
Net cash provided by financing activities
Net increase / (decrease) in cash held
Cash and cash equivalents at the beginning of the
financial year
Cash and cash equivalents at the end of the
financial year
(230,000)
(561,222)
(791,222)
(100,000)
(245,170)
(345,170)
11,410,523
748,888
-
11,410,523
(79,000)
669,888
9,915,493
257,739
(179,577)
437,316
17(b)
10,173,232
257,739
The accompanying notes form part of, and should be read in conjunction with, these financial statements.
2525
BPH Energy I Annual Report 2021
HEALTH TECHNOLOGY RESOURCES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2021
BPH ENERGY LIMITED AND IT’S 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 its
controlled entities (‘consolidated entity’ 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 31 August 2021 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 other authoritative pronouncements of the Australian Accounting Standards Board
(“AASB”) and the Corporations Act 2001. BPH Energy Ltd is a for-profit entity for the purpose of preparing the
financial statements.
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.
Financial Position
The consolidated entity has reported a net loss after tax for the year ended 30 June 2021 of $1,612,424 (2020:
profit of $1,121,263) and has a net cash outflow from operating activities of $703,808 (2020: outflow of $504,295).
The net loss from ordinary activities after tax is after recognising (i) a fair value loss of $Nil (2020: loss of $734,542)
(ii) consulting and legal costs of $259,264 (2020: $357,291), (iii) share of associates losses of $112,264 (2020:
$30,793), (iv) a doubtful debt provision of $91,216 (2020: reversal of $2,929,199) (v) an impairment reversal of
$17,733 (2020: expense of $420,731) and (vi) share-based payments expense of $802,997 (2020: $171,425).
The consolidated entity has a working capital surplus of $9,632,833 (2020: deficit $1,324,846). The net assets of
the consolidated entity increased by $11,093,149 to $15,376,985 over the year to 30 June 2021. Included in trade
creditors and payables is current director fee accruals of $517,215 (2020: $849,987).
The financial report has 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.
Compliance with IFRS
The consolidated financial statements of BPH Energy Limited Group comply with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
2626
BPH Energy I Annual Report 2021
Accounting Policies
(a)
Principles of Consolidation
(i) Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group
controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through its power to direct the activities of the
entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group.
They are deconsolidated from the date that control ceases.
A list of controlled entities is contained in Note 16 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. The acquisition method of accounting is used to
account for business combinations by the Group.
Intercompany transactions, balances and unrealised gains on transactions between Group companies
are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an
impairment of the transferred asset. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the
consolidated statement of profit or loss and other comprehensive income, statement of changes in
equity and statement of financial position respectively.
(ii) Changes in ownership interests
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.
(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.
2727
BPH Energy I Annual Report 2021
HEALTH TECHNOLOGY RESOURCES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2020
BPH ENERGY LIMITED AND IT’S 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 profit or loss and other 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.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and
tax liabilities are offset where the Company has a legally enforceable right to offset and intends either to settle
on a net basis, or to realise the asset and settle the liability simultaneously.
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 Company will
derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of
deductibility imposed by the law.
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)
Financial Instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions of the financial instrument. Financial assets are derecognised when the contractual rights to the cash
flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are
transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at
the transaction price in accordance with AASB 15, all financial assets are initially measured at fair value adjusted
for transaction costs (where applicable). For the purpose of subsequent measurement, financial assets, other
than those designated and effective as hedging instruments, are classified into the following categories:
2828
BPH Energy I Annual Report 2021
fair value through profit or loss (FVTPL)
• amortised cost
•
• equity instruments at fair value through other comprehensive income (FVOCI)
• debt instruments at fair value through other comprehensive income (FVOCI).
All income and expenses relating to financial assets that are recognised in profit or loss are presented within
finance costs, finance income or other financial items, except for impairment of trade receivables which is
presented within other expenses.
The classification is determined by both:
-
-
the entity’s business model for managing the financial asset, and
the contractual cash flow characteristics of the financial asset.
Subsequent measurement of financial assets
(i) Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not
designated as FVTPL):
• they are held within a business model whose objective is to hold the financial assets to collect its contractual
cash flows
• the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting
is omitted where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and most
other receivables fall into this category of financial instruments.
(ii) Financial assets at fair value through profit or loss (FVTPL)
Financial assets that are held within a different business model other than ‘hold to collect’ or ‘hold to collect
and sell’ are categorised at fair value through profit and loss. Further, irrespective of business model financial
assets whose contractual cash flows are not solely payments of principal and interest are accounted for at
FVTPL. All derivative financial instruments fall into this category, except for those designated and effective
as hedging instruments, for which the hedge accounting requirements apply. The category also contains an
equity investment. The Group accounts for the investment at FVTPL and did not make the irrevocable election
to account for the investment in unlisted and listed equity securities at fair value through other comprehensive
income (FVOCI). The fair value was determined in line with the requirements of AASB 9, which does not allow
for measurement at cost. Assets in this category are measured at fair value with gains or losses recognised in
profit or loss. The fair values of financial assets in this category are determined by reference to active market
transactions or using a valuation technique where no active market exists.
(iii) Equity instruments at fair value through other comprehensive income (Equity FVOCI)
Investments in equity instruments that are not held for trading are eligible for an irrevocable election at
inception to be measured at FVOCI. Under Equity FVOCI, subsequent movements in fair value are recognised
in other comprehensive income and are never reclassified to profit or loss. Dividends from these investments
continue to be recorded as other income within the profit or loss unless the dividend clearly represents return
of capital. This category includes unlisted equity securities that were previously classified as ‘available-for-sale’
under AASB 139. Any gains or losses recognised in other comprehensive income (OCI) are not recycled upon
derecognition of the asset.
2929
BPH Energy I Annual Report 2021
HEALTH TECHNOLOGY RESOURCES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2021
BPH ENERGY LIMITED AND IT’S CONTROLLED ENTITIES
(iv) Debt instruments at fair value through other comprehensive income (Debt FVOCI)
Financial assets with contractual cash flows representing solely payments of principal and interest and held
within a business model of collecting the contractual cash flows and selling the assets are accounted for at debt
FVOCI. The Group accounts for financial assets at FVOCI if the assets meet the following conditions:
• they are held under a business model whose objective it is to “hold to collect” the associated cash flows and
sell financial assets; and
• the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
Any gains or losses recognised in other comprehensive income (OCI) will be recycled upon derecognition of the
asset.
Impairment of financial assets
AASB 9’s impairment requirements use more forward-looking information to recognise expected credit losses
– the ‘expected credit loss (ECL) model’. Instruments within the scope of the requirements included loans
and other debt-type financial assets measured at amortised cost and FVOCI, trade receivables, contract assets
recognised and measured under AASB 15 and loan commitments and some financial guarantee contracts (for
the issuer) that are not measured at fair value through profit or loss. Recognition of credit losses is no longer
dependent on the Group first identifying a credit loss event. Instead the Group considers a broader range of
information when assessing credit risk and measuring expected credit losses, including past events, current
conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows
of the instrument.
In applying this forward-looking approach, a distinction is made between:
• financial instruments that have not deteriorated significantly in credit quality since initial recognition or that
have low credit risk (‘Level 1’) and
• financial instruments that have deteriorated significantly in credit quality since initial recognition and whose
credit risk is not low (‘Level 2’).
• ‘ Level 3’ would cover financial assets that have objective evidence of impairment at the reporting date.
‘
12-month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are
recognised for the second category. Measurement of the expected credit losses is determined by a probability-
weighted estimate of credit losses over the expected life of the financial instrument.
Trade and other receivables and contract assets
The Group makes use of a simplified approach in accounting for trade and other receivables as well as contract
assets and records the loss allowance as lifetime expected credit losses. These are the expected shortfalls
in contractual cash flows, considering the potential for default at any point during the life of the financial
instrument. In calculating, the Group uses its historical experience, external indicators and forward-looking
information to calculate the expected credit losses using a provision matrix. The Group assess impairment of
trade receivables on a collective basis as they possess shared credit risk characteristics they have been grouped
based on the days past due.
3030
BPH Energy I Annual Report 2021
Classification and measurement of financial liabilities
The Group’s financial liabilities include borrowings, trade and other payables and derivative financial instruments.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless
the Group designated a financial liability at fair value through profit or loss. Subsequently, financial liabilities are
measured at amortised cost using the effective interest method except for derivatives and financial liabilities
designated at FVTPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss
(other than derivative financial instruments that are designated and effective as hedging instruments).
(d)
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 using the corporate bond rate.
(e)
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.
(f)
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.
(g)
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”).
(h)
Goods and Services Tax
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.
(i)
Trade and other payables
Liabilities are recognised 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 90 days. Trade and
other payables are recognised at amortised cost.
(j)
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
3131
BPH Energy I Annual Report 2021
HEALTH TECHNOLOGY RESOURCES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2021
BPH ENERGY LIMITED AND IT’S CONTROLLED ENTITIES
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.
(k)
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 9, 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 9.
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.
The consolidated entity discontinues the use of the equity method from the date when the investment ceases to
be an associate or a joint venture, or when the investment is classified as held for sale. When the a consolidated
entity retains an interest in the former associate or joint venture and the retained interest is a financial asset, the
consolidated entity measures the retained interest at fair value at that date and the fair value is regarded as its
fair value on initial recognition in accordance with AASB 9. The difference between the carrying amount of the
associate or joint venture at the date the equity method was discontinued, and the fair value of any retained
interest and any proceeds from disposing of a part interest in the associate or joint venture is included in the
determination of the gains or loss on disposal of the associate or joint venture. In addition, the consolidated
3232
BPH Energy I Annual Report 2021
entity accounts for all amounts previously recognised other comprehensive income in relation to that associate
or joint venture on the same basis as would be required if that associate or joint venture had directly disposed
of the related assets or liabilities. Therefore, if a gain or loss recognised in other comprehensive income by that
associate or joint venture would be reclassified to profit or loss on the disposal of the related assets or liabilities,
the consolidated entity reclassifies the gain or loss from equity to profit or loss (as a reclassification adjustment)
when the equity method is discontinued.
(l)
Share-based payments
The fair value of options granted under the Company’s Employee Option Plan is recognised as an employee
benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognised
over the period during which the employees become unconditionally entitled to the options and the fair value
of shares and options issued to consultants is measured at the fair value of services received.
The fair value at grant date is independently determined using an appropriate 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 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.
(m)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker, the directors (see Note 23).
(n)
Application of New and Revised Accounting Standards
Standards and Interpretations in issue not yet adopted
The Directors have reviewed new accounting standards and interpretations that have been published that are
not mandatory for 30 June 2021 reporting periods. As a result of this review, the Directors have determined
that there is no material impact of the new and revised Standards and Interpretations on the Company and,
therefore, no material change is likely to company accounting policies.
Standards and Interpretations applicable to 30 June 2021
In the 12 month period ended 30 June 2021, the Directors have reviewed all of the new and revised Standards
and Interpretations issued by the AASB that are relevant to the Company and effective for the current annual
reporting period.
Conceptual Framework for Financial Reporting (Conceptual Framework)
The consolidated entity has adopted the revised Conceptual Framework from 1 July 2020. The Conceptual
Framework contains new definition and recognition criteria as well as new guidance on measurement that
affects several Accounting Standards, but it has not had a material impact on the consolidated entity’s financial
statements.
3333
BPH Energy I Annual Report 2021
HEALTH TECHNOLOGY RESOURCES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2021
BPH ENERGY LIMITED AND IT’S CONTROLLED ENTITIES
(o)
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 loan receivables
Included in the accounts of the consolidated entity are loan receivables of $578,704 (2020: $43,564) net of
expected credit loss provisions of $1,450,168 (2020: $1,358,895). The Company recognized an expected credit
loss of $91,216 in the reporting period (2020: reversal of $2,929,199).
Key judgements — Investment in Advent Energy Ltd (“Advent”)
The investment in Advent Energy Limited is equity accounted, refer to Note 10. During the period the Company
recognised a loss of the associate of $95,531 (2020: $14,983).
Key estimates - Investment in Molecular Discovery Systems
The investment in Molecular Discovery Systems Limited is equity accounted, refer to Note 10. During the period
the Company recognised a loss of the associate of $17,733 (2020: $15,810). The Company also recognized an
impairment reversal of $17,733 (2020: charge of $420,731) such that the investment in Molecular Discovery
Systems is fully impaired at period end.
Key estimates - Investment in Patagonia Genetics Pty Ltd
In a prior period the Company recognized an impairment expense of $250,000 to fully impair the carrying value
of the investment in Patagonia Genetics Pty Ltd.
Key estimates - Investment in Cortical
The investment in Cortical is carried at fair value, refer to Note 9.
3434
BPH Energy I Annual Report 2021
2. Revenue
Revenue
Interest revenue: other entities
Interest revenue : cash accounts
Other Income
Loan establishment fees
3. Expenses Included in (Loss) / Profit for the Year
Fair value (loss)
Fair value (loss) on listed investments
Fair value (loss) / gain on unlisted investments
Impairment (reversal) / expense
Molecular Discovery Systems Limited
Consolidated
2021
$
2020
$
64,773
733
65,506
-
-
-
-
-
(17,733)
(17,733)
240,074
169
240,243
6,210
6,210
(5,556)
(728,986)
(734,542)
420,731
420,731
4. (Loss) / Earnings per Share
Total (loss) / earnings attributable to ordinary equity holders of the
Company
(Loss) / earnings used in the calculation of basic (loss) / earnings per
share and diluted (loss) / earnings per share
(1,611,859)
1,121,801
(1,611,859)
1,121,801
(Loss) / earnings per share (cents per share)
From continuing operations
Total basic (loss) / earnings per share and diluted (loss) / earnings per
share
(0.28)
(0.28)
0.35
0.35
Number
Number
Weighted average number of ordinary shares outstanding during the
year used in calculating EPS
197,837,919
345,889,360
3535
BPH Energy I Annual Report 2021
HEALTH TECHNOLOGY RESOURCES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2021
BPH ENERGY LIMITED AND IT’S CONTROLLED ENTITIES
5. 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:
D L Breeze - Executive Chairman, Managing Director and Company Director
C Maling -
A Huston -
Non Executive Director
Non Executive Director
Short term employee benefits
Consulting fee
Share based payments
Consolidated
2021
$
100,000
103,000
731,085
934,085
2020
$
100,000
108,000
25,771
233,771
Included in trade and other payables is current and former director and consulting fee accruals of $973,961 (30
June 2020: $1,347,259).
Director
David Breeze
Charles Maling
Tony Huston
Directors who have previously resigned
Balance owing at 30 June 2021
Amount owing
30 June 2021 $
504,432
12,450
333
456,746
973,961
Key management personnel remuneration has been included in the Remuneration Report section of the
Directors Report.
6. Auditors’ Remuneration
Remuneration of the auditor of the parent entity for:
- auditing or reviewing the financial report
HLB Mann Judd
41,825
30,420
Consolidated
2021
$
2020
$
3636
BPH Energy I Annual Report 2021
7. Cash and Cash Equivalents
Cash at Bank and in hand
Cash at bank earns interest at floating rates based on daily bank deposit rates
8. Trade and other Receivables
Current
Other receivables
9. Financial Assets
Current
Secured loans to other entities (interest free):
Advent Energy Ltd (refer Note 10)
Cortical Dynamics Limited
Investments in listed entities
MEC Resources Ltd (Level 1)
Non - current
Consolidated
2021
$
2020
$
10,173,232
10,173,232
257,739
257,739
16,287
16,287
32,675
32,675
556,482
-
22,222
578,704
6,760
14,581
22,222
43,563
Investments in unlisted entities - Cortical Dynamics Limited (Level 2)
3,685,379
3,455,379
Loan receivables are stated net of the following provisions:
Cortical Dynamics Limited
Gross receivable – secured
Molecular Discovery Systems Limited (a)
Gross receivable
Less provision for impairment
3,685,379
3,455,379
-
-
-
14,581
14,581
1,450,168
1,358,895
(1,450,168)
(1,358,895)
-
-
(a) The Company has an unsecured loan with MDS for $677,200 as well as a convertible loan agreement with
MDS at an interest rate of 7.69% per annum. The convertible loan is for a maximum capital amount of
$500,000 and is to be used for short term working capital requirements. Subject to MDS being admitted to
the Official List of ASX (“Official List”), BPH Energy has a right of conversion to satisfy the debt on or before the
termination date, being 26 January 2023. As at reporting date this loan had been drawn down by an amount
of $772,968, including capitalised interest (2020: $708,195). Interest charged on the loan for the period was
$64,773 (2020: $58,378).
3737
BPH Energy I Annual Report 2021
HEALTH TECHNOLOGY RESOURCES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2021
BPH ENERGY LIMITED AND IT’S CONTROLLED ENTITIES
10. Investments Accounted for Using Equity Method
Investments in associates are accounted for in the consolidated financial statements using the equity method of
accounting.
Name of Entity
Country of
Incorporation
Molecular Discovery
Systems Limited
Australia
Ownership Interest
Principal Activity
%
2021
20%
2020
20%
Biomedical Research
Advent Energy Limited
Australia
21.9%
22.6%
Oil and Gas Exploration
Shares in Associates
Advent Energy Limited (i)
Molecular Discovery Systems Limited (ii)
Molecular Discovery Systems Limited
Impairment provision (ii)
Consolidated
2021
$
2020
$
2,058,773
2,153,304
402,998
420,731
(402,998)
(420,731)
2,058,773
2,153,304
Consolidated
Advent
MDS
30 June 2021
$
30 June 2020
$
30 June 2021
$
30 June 2020
$
Revenue
37,060
32
-
-
(Loss) / profit for the period
(426,659)
3,901,465
(88,664)
(79,047)
Other comprehensive income for
the period
Total comprehensive (loss) /
income for the period
Advent 2020 numbers are from
6th August 2019
-
-
-
-
(426,659)
3,901,465
(88,664)
(79,047)
3838
BPH Energy I Annual Report 2021
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Consolidated
Advent
MDS
30 June 2021
$
30 June 2020
$
30 June 2021
$
30 June 2020
$
1,130,822
847,611
14,385,995
14,060,190
917,238
4,963,302
9,636,277
184,641
4,824,343
9,898,817
979
-
928,177
782,433
1,009
-
908,747
717,660
(1,709,631)
(1,625,398)
Advent
MDS
30 June 2021
$
30 June 2020
$
30 June 2021
$
30 June 2020
$
Share of the group’s ownership
interest in associate
2,058,773
2,153,304
Other adjustments
-
-
Carrying value of the group’s
interest in associate
2,058,773
2,153,304
(341,926)
(341,926)
(325,080)
(325,080)
-
-
-
-
436,541
-
Opening balance
2,153,304
Reclassification of fair value of
investment
Impairment reversal / (expense)
Conversion of debt to equity
-
-
-
Share of associates loss
(94,531)
-
2,006,000
-
17,733
(420,731)
162,287
(14,983)
-
-
(17,733)
(15,810)
Closing balance
2,058,773
2,153,304
-
-
(i) On 5 February 2021 BPH Energy Limited (ASX: BPH) advised that investee Advent has on behalf of the
PEP11 joint venture submitted to the National Offshore Petroleum Titles Administrator (NOPTA) a further
application to suspend and extend the PEP11 permit offshore NSW. The application has been made under
the COVID-19 -Work Bid Exploration Permits announcement released by the Federal Government on 20 April
2020.
In that release the Government recognised the that the COVID-19 pandemic was having a significant impact
on the offshore petroleum sector and that additional flexibility would be required to assist titleholders to
manage the COVID -19 crisis. The Joint Authority confirmed in that release that it regarded the COVID-19
pandemic as a force majeure event. The application for a 24 month suspension of the Permit Year 4 work
program commitments, with a corresponding 24 month extension of the permit term and was accepted
for processing by NOPTA on 4 Feb 2021. BPH does not foresee this application interfering with the NOPTA
application to extend the permit terms for PEP11.
The PEP 11 permit is in good standing as Advent’s subsidiary, Asset Energy Pty Ltd (as the operator),
continues preparations to drill the Baleen Gas Prospect including booking a semisubmersible drill rig for the
program with the call for tender.
3939
BPH Energy I Annual Report 2021
HEALTH TECHNOLOGY RESOURCES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2021
BPH ENERGY LIMITED AND IT’S CONTROLLED ENTITIES
On 30 December 2020 Advent lodged an Offer Information Statement with ASIC for a non-renounceable
entitlement issue of two (2) Shares for every three (3) shares held at an issue price of $0.05 (5 cents) per Share
to raise up to $6,525,108. The Offer is partially underwritten by related party Grandbridge Securities Pty Ltd
(ABN 84 087 432 353) (AFSL 517246) and sub-underwritten up to $2,271,450. Grandbridge Securities Pty Ltd
is also Lead Manager to the Offer.
In February 2021 BPH raised $9 million in a share placement. BPH advised ASX that approximately $5.75
million of the proceeds of the placement will be used by BPH primarily to invest in Advent to progress
well planning, engineering and environmental approvals for drilling at the Baleen drill target in the PEP11
offshore permit in NSW.
The directors have confidence that a suitable outcome will be achieved however there is no certainty at this
stage of further funding being made available. Asset Energy Pty Ltd has invested over $25 million in the
PEP11 title and, along with its JV partner Bounty Oil and Gas NL, is committed to continuing to explore for
and ultimately exploit any petroleum accumulations which may be identified in this title area. If Advent is
unable to source further funding for each of PEP11 and RL1 each of these permits are at risk.
The above conditions indicate a material uncertainty that may affect the ability of Advent to realise the carrying
value of the exploration assets in the ordinary course of business and may affect the ability of the Company
to realise the carrying value of its loan receivables and its investment in Advent in the ordinary course of
business.
(ii) The carrying value of Molecular Discovery Systems Limited has been fully impaired during the period. The
Molecular Discovery Systems Limited 30 June 2020 financial statements are still in the process of being audited.
4040
BPH Energy I Annual Report 2021
Consolidated
2021
$
2020
$
11. Income Tax Expenses
(a) The prima facie tax on the (loss) / profit from operations before income tax
is reconciled to the income tax as follows:
Accounting (loss) / profit before tax
(1,612,424)
1,121,263
Prima facie (benefit) / tax on the (loss) / profit from operations before income
tax at 30% (2020: 30%)
(483,727)
336,379
Add tax effect of:
Tax effect of revenue losses and temporary differences not recognised
(35,650)
(523,856)
Income tax benefit not brought to account
Income tax expense recognised
(b) Tax losses
519,377
187,477
-
-
Unused tax losses for which no deferred tax asset has been recognised
12,198,161
10,328,772
Potential tax benefit at 30% (2020: 30%)
3,659,448
3,098,632
12. Trade and Other Payables
Current
Trade payables
Sundry payables and accrued expenses - unrelated
Related party payables
Trade payables are non-interest bearing and normally settled within 90 days
13. Financial Liabilities
Current
Borrowings – unsecured interest free
36,113
477,245
517,215
174,565
513,546
849,987
1,030,573
1,538,098
104,817
104,817
121,086
121,086
4141
BPH Energy I Annual Report 2021
HEALTH TECHNOLOGY RESOURCES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2021
BPH ENERGY LIMITED AND IT’S CONTROLLED ENTITIES
Consolidated
2021
$
2020
$
14. Issued Capital
664,919,389 (2020: 373,236,818) fully paid ordinary shares
58,843,159
46,716,896
(a) Ordinary Shares
At the beginning of reporting period
46,716,896
45,574,507
373,236,818 2,543,277,658
Consolidated
Consolidated
2021
$
2020
$
2021
Number
2020
Number
Shares issued for cash
Share issue costs
Shares issued in lieu of consulting fees
Shares issued as set-off against amounts
payable
Shares issued as partial acquisition of
investment
Shares issued as introductory fee for
business transaction
12,203,207
827,547
258,879,003
470,338,031
(1,158,263)
-
(96,762)
136,604
-
-
-
117,678,247
492,054
90,000
32,803,568
64,260,012
-
-
150,000
15,000
-
-
-
-
150,000,000
15,000,000
20,000,000
(3,007,317,130)
Share-based payments
589,265
20,000
Reduction in shares from a 1 for 10 share
consolidation
-
-
At reporting date
58,843,159
46,716,896
664,919,389
373,236,818
32,803,568 shares and 16,401,610 free attaching options were issued as part of a Rights Issue to settle amounts
owing to directors, their related parties, and a former director with a carrying value of $492,054. The fair value of
the shares granted in settlement of debt is estimated as at the date of issue. The following table lists the inputs:
Issue date
28 August 2020
21 December 2020
Number of shares
16,701,221
16,102,347
Share price at issue
Issue price
Fair value
$0.031
$0.015
$517,737
$0.035
$0.015
$563,582
These shares were issued in settlement of debt under a non-renounceable Rights Issue on the same terms as all
other shareholders.
4242
BPH Energy I Annual Report 2021
Fully paid ordinary shares do not have a par value, have one vote per share, and carry the right to dividends. The
market price of the Company’s ordinary shares at 30 June 2021 on ASX was 7.2 cents per share.
(b)
Options
Refer to Note 22 for the movement of options on issue during the financial year. 15,040,741 options with an
average exercise price of $0.04 per share were exercised during the year (2020: Nil). 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.
(c) 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.
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 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 2021 and 30 June 2020 is as follows:
Cash and cash equivalents
Other current assets
Trade receivables and financial assets
Trade payables and financial liabilities
Net working capital position
Consolidated
2021
$
2020
$
10,173,232
257,739
-
594,991
360
76,239
(1,135,390)
(1,659,184)
9,632,833
(1,324,846)
Refer to Note 1 for further details of the Group’s financial position and plans to manage the working capital deficit at 30 June 2021.
15. Reserves
Options Reserve (a)
(a)
Option Reserve
The option reserve records items recognised as expenses on the
valuation of director and employee share options.
Opening balance
Share based payments
Closing balance
16. Controlled Entities
1,105,671
1,105,671
526,361
526,361
526,361
579,310
508,436
17,925
1,105,671
526,361
Name of Entity
Principal Activity
Country of
Incorporation
Ownership Interest
%
Parent Entity
BPH Energy Ltd
Subsidiaries
Diagnostic Array Systems Pty Ltd
Investment
Australia
2021
2020
BioMedical Research Australia
51.82
51.82
4343
BPH Energy I Annual Report 2021
HEALTH TECHNOLOGY RESOURCES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2021
BPH ENERGY LIMITED AND IT’S CONTROLLED ENTITIES
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company,
have been eliminated on consolidation and not disclosed in this note.
BPH owns 51.82% equity interest in Diagnostic Array Systems Pty Ltd (“DAS”) and consequentially controls more
than half of the voting power of those shares. Mr David Breeze is the Chairman of both entities. BPH therefore
has control over the financial and operating policies of DAS. DAS is controlled by the Group and is consolidated
in these financial statements. DAS’s loss for the year was $1,173 (2020: loss of $1,117) of which $565 (2020:
$538) is attributable to minority interests. DAS’s total assets at year-end were $278 (2020: $251), total liabilities
$366,631 (2020: $365,431), and net equity negative $366,353 (2020: negative net equity $365,180).
17. Cash Flow Information
(a)
Reconciliation of cash flow from operations with loss after income tax:
Consolidated
2021
$
2020
$
Operating (loss) / profit after income tax
(1,612,424)
1,121,263
Non Cash items
Fair value loss
Impairment (reversal) / expense
Interest revenue on loans
Share based payments
Expected credit loss expense / (reversed)
Share of Associates’ losses
Changes in net assets and liabilities,
Decrease in other assets
Decrease / (increase) in trade and other receivables
(Decrease) / increase in trade payables and accruals
Net cash (used in) operating activities
-
(17,733)
(64,773)
802,997
734,542
420,731
(240,074)
171,425
91,216
(2,929,199)
112,264
30,793
360
16,028
(31,743)
33,509
(11,707)
164,422
(703,808)
(504,295)
(b) 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
10,173,232
257,739
(c) Changes in liabilities arising from financing activities – unsecured borrowings
Balance at 1 July
Net cash used in financing activities
Shares issued as set off against loans payable
Balance at 30 June
121,086
-
(16,268)
104,818
200,086
(79,000)
121,086
4444
BPH Energy I Annual Report 2021
18. Subsequent Events
In August 2021 the Company reached a legal settlement with two former directors in respect of their
outstanding director fees.
There are no other matters or circumstances that have arisen since the end of the financial year other than
outlined elsewhere in this financial report that have significantly affected, or may significantly affect, the
operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated
entity in future financial years.
19. Financial Risk Management
a) Financial Risk Management
The Group’s financial instruments consist mainly of deposits with banks, 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.
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 financial assets. The Group’s financial
liabilities are currently not exposed to interest rate risk as the Group has no interest bearing financial
liabilities.
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.
Equity price risk
The Group is exposed to equity price risk through its shareholdings in publicly listed entities. Material
investments are managed on an individual basis.
Foreign currency risk
The Group is not exposed to any material risks in relation to fluctuations in foreign exchange rates.
4545
BPH Energy I Annual Report 2021
HEALTH TECHNOLOGY RESOURCES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2020
BPH ENERGY LIMITED AND IT’S CONTROLLED ENTITIES
b) Financial Instruments
Interest rate risk
The Group’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 with floating rates, based on contractual maturities, is as follows:
Weighted
Effective
Interest
Rate
%
Floating
Interest
Rate
$
Fixed
Interest
Rate
1 Year
or less
Fixed
Interest
Rate
Non-
Interest
Bearing
1 to 5 Years
$
Total
$
2021 Consolidated
Assets
Cash and cash equivalents
0.01
10,173,322
Trade and other
receivables
Financial assets
Liabilities
Trade and other payables
Financial liabilities
-
-
10,173,322
-
-
-
Weighted
Effective
Interest
Rate
%
Floating
Interest
Rate
$
Fixed
Interest
Rate
1 Year
or less
2020 Consolidated
Assets
Cash and cash equivalents
0.05
257,739
Trade and other
receivables
Financial assets
Liabilities
Trade and sundry payables
Financial liabilities
-
-
-
257,739
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,173,322
16,287
16,287
4,264,083
4,264,083
4,280,370
14,453,692
1,030,573
1,030,573
104,817
104,817
1,135,390
1,135,390
Fixed
Interest
Rate
Non-
Interest
Bearing
1 to 5 Years
$
Total
$
-
-
-
-
-
-
-
257,739
32,675
32,675
3,498,943
3,498,943
3,531,618
3,789,357
1,538,098
1,538,098
121,086
121,086
4646
BPH Energy I Annual Report 2021
-
-
-
1,659,184
1,659,184
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
valuation techniques incorporating non-market data.
No financial assets and financial liabilities are readily traded on organised markets in standardised form.
Consolidated 2021
Consolidated 2020
Carrying
Amount
$
Fair Value
$
Carrying
Amount
$
Fair Value
$
Financial Assets
Investment in unlisted entities
3,685,379
3,685,379
3,455,378
3,455,378
Investment in listed entities
22,222
22,222
22,222
22,222
Financial assets and trade and other
receivables
572,769
572,769
54,017
54,017
4,280,370
4,280,370
3,531,618
3,531,618
Financial Liabilities
Other loans and amounts due
104,817
104,817
121,086
121,086
Trade payables
1,030,573
1,030,573
1,538,098
1,538,098
1,135,390
1,135,390
1,659,184
1,659,184
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. The effect on profit and equity as a result of changes in the variable interest rate, with all
other variables remaining constant would be as follows:
Change in profit (loss)
Increase in interest rate 1%
Decrease in interest rate by 0.5%
Consolidated
2021
$
54,533
(733)
2020
$
2,577
(1,289)
4747
BPH Energy I Annual Report 2021
HEALTH TECHNOLOGY RESOURCES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2021
BPH ENERGY LIMITED AND IT’S CONTROLLED ENTITIES
Liquidity risk
The Group manages liquidity risk by maintaining adequate reserves and 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 consolidated financial
liabilities.
Contractual cash flows
Carrying
amount
$
Total
$
2 mths
or less
$
2-12 mths
$
1,030,573
1,030,573
56,113
974,460
30 June 2021
Financial liabilities
Trade and other
payables
Unsecured loans
104,817
104,817
-
104,817
1,135,390
1,135,390
56,113
1,079,227
Contractual cash flows
Carrying
amount
$
Total
$
2 mths
or less
$
2-12 mths
$
1,538,098
1,538,098
174,565
1,363,533
30 June 2020
Financial liabilities
Trade and other
payables
Unsecured loans
121,086
121,086
-
121,086
1,659,184
1,659,184
174,565
1,484,619
(c) Fair value measurements recognised in the statement of financial position
The following table provides an analysis of consolidated financial instruments that are measured subsequent
to initial recognition at fair value, grouped into levels 1 to 3 based on the degree to which the fair value is
observable.
4848
BPH Energy I Annual Report 2021
•
•
•
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for
identical assets or liabilities.
Level 2 fair value measurements are those derived from inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from
prices).
Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset
or liability that are not based on observable market data (unobservable inputs).
There were no transfers between the levels for recurring fair value measurements during the year.
Specific valuation techniques used to value financial instruments include: For unlisted investments where there
is no organised financial market, the fair value has been based on valuation techniques incorporating non-
market data prepared by independent valuers.
30 June 2021
Financial assets at fair value through profit and loss
- Investments in unlisted entities
- Investments in listed entities
Total
30 June 2020
$
Level 1
$
Level 2
$
Level 3
$
Total
-
3,685,379
-
3,685,379
-
-
-
3,685,379
22,222
3,707,601
$
Level 2
$
Level 3
$
Total
22,222
22,222
$
Level 1
Financial assets at fair value through profit and loss
- Investments in unlisted entities
- Investments in listed entities
Total
-
3,455,379
22,222
22,222
-
3,455,379
-
-
-
3,455,378
22,222
3,477,601
Reconciliation of fair value measurements of financial assets:
Opening balance
Acquisition of investments
Closing balance
Opening balance
(Disposal) / acquisition of investments
Conversion of debt to equity
Recognition as an associate
Fair value adjustment
Closing balance
2021 ($)
Level 1
2021 ($)
Level 2
2021 ($)
Level 3
22,222
3,455,379
-
230,000
22,222
3,685,379
-
-
-
2020 ($)
Level 1
2020 ($)
Level 2
27,778
2,507,543
2020 ($)
Level 3
-
-
-
(313,630)
250,000
3,746,452
(2,006,000)
-
-
(5,556)
22,222
(478,986)
(250,000)
3,455,379
-
4949
BPH Energy I Annual Report 2021
HEALTH TECHNOLOGY RESOURCES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2021
BPH ENERGY LIMITED AND IT’S CONTROLLED ENTITIES
20.
Related Party Transactions
(a)
Equity interests in controlled entities
The % of ordinary shares held in controlled entities are disclosed in Note 16 to the financial statements.
(b)
Directors’ remuneration
Details of directors’ remuneration and retirement benefits are located in the Directors Report and Note 5.
Held as at the date of this report by directors and their director-related entities
in BPH Energy Limited
Ordinary Shares
Share options
2021
Number
2020
Number
71,600,015
58,097,550
16,650,886
9,899,651
The Company has an agreement with Trandcorp Pty Limited on normal commercial terms procuring the
services of David Breeze to provide product development services for $98,000 (2020: $98,000), included as part
of his fees in the Remuneration Report.
Refer to the Remuneration Report in the Directors’ Report for shares and options issued to directors.
(c) Receivables, payables and transactions with associates
Molecular Discovery Systems Limited (“MDS”) is a related party of the Company. Refer to Notes 9 and 10 for
the Company’s loan receivable and investment. During the period the Company charged MDS $64,773 (2020:
$58,378) in loan interest on a convertible loan with a balance of $772,968 at year end (2020: $708,195). The
Company has raised a provision against the full amount of this loan. In addition, a loan receivable exists between
the consolidated entity and MDS of $667,200 (2020: $650,700). This amount is unsecured, non-interest bearing
and repayable on demand. The Company has raised a provision against the full amount of this loan. The
Company recognized an impairment reversal of $17,733 (2020: expense of $420,731) in respect the carrying
value of its investment in MDS.
Advent Energy is a related party of the Company. Refer to Notes 9 and 10 for the Company’s investment and
loan receivables. During the year the Company advanced $549,722 to the Advent group.
(d) Other Interests
Refer to Note 9 for the Company’s investment in and loan receivables with Cortical. During the period the
Company charged Cortical $Nil (2020: $187,906) in loan interest and fees. Cortical repaid BPH a $15,000 loan
during the period.
(e)
Director related entities
Grandbridge Limited (“Grandbridge”) has a common Managing Director, Mr David Breeze, and is therefore a
related party of the Company. During the period Grandbridge charged the Company $128,640 in administration
5050
BPH Energy I Annual Report 2021
and service fees (2020: $128,640). At balance date $104,817 (2020: $121,086) was payable to Grandbridge.
Grandbridge’s 100% subsidiary, Grandbridge Securities Limited, charged the Company $78,386 (2020: $Nil) in
respect of the management of share issues.
(f)
Directors
The consolidated entity issued the following securities to directors or their associated entities under a rights
issue and rights issue shortfall (subsequent to shareholder approval) to settle the following associated debts for
accrued fees:
Director
Number of Shares2
Debt Extinguished
David Breeze1
24,242,902
Charles Maling
Tony Huston
2,925,799
2,933,069
$363,644
$43,887
$43,996
Share-Based
Payment Expense3
$589,174
$74,484
$67,428
1 These include shares issued to Grandbridge Limited, a Company of which Mr Breeze is Managing Director
2 The issue of these shares included one free attaching option for every two shares issued with an exercise price
of $0.05 per share and an expiry date of 29 July 2022
3 Given the securities were issued in settlement of debt, the accounting standards require an expense to be
recognised with respect to the fair value of shares and options. The fair value of options granted is estimated
using a Black-Scholes model taking into account the terms and conditions upon which the options were
granted. These securities were issued under a non-renounceable Rights Issue on the same terms as issued to
other shareholders.
21.
Commitments and Contingencies
At reporting date there are no capital commitments other than those of Advent Energy Limited, an entity in
which the Company currently has a 21.9% direct interest as disclosed in Note 10.
The Company is party to a Writ of summons commenced in the District Court of Western Australia in which
former directors Goh Hock and Deborah Ambrosini are claiming unpaid directors’ fees from the Company. The
Company disputes this position and is defending such claims. This matter was settled subsequent to year end,
refer Note 18.
22. Share-Based Payments
The following share-based payment arrangements existed at 30 June 2021:
Total number
Grant Date
Exercise price
200,000
400,000
23 November 2016
29 November 2017
1,200,000
29 November 2019
18,401,610
28 August 2020 and
18-21 December 2020
$0.20
$0.20
$0.02
$0.05
Fair value at
grant date
$0.0030
$0.0004
$0.0005
Expiry date
30 November 2021
30 November 2022
30 November 2024
$0.013 and $0.014
29 July 2022
7,285,714
27,487,324
9 February 2021
$0.26
$0.048
8 February 2023
5151
BPH Energy I Annual Report 2021
HEALTH TECHNOLOGY RESOURCES
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 30 June 2021
BPH ENERGY LIMITED AND IT’S CONTROLLED ENTITIES
All options granted confer a right of one ordinary share for every option held. The fair value of the options
granted is estimated as at the date of grant using a Black-Scholes model taking into account the terms and
conditions upon which the options were granted. The following table lists the inputs to the valuation model
used:
Issue date
28 August 20201
18 December 20202 21 December 20201
9 February 20213
Number of options
8,350,611
Share price at grant
date
Exercise price
Expected volatility
Expected life
Expected dividends
Risk-free interest rate
$0.031
$0.05
100%
1.9 years
Nil
2.5%
2,000,000
$0.026
$0.05
100%
2 years
Nil
2.5%
8,050,999
$0.035
$0.05
100%
1.6 years
Nil
2.5%
7,285,714
$0.13
$0.26
100%
2 years
Nil
2.5%
Fair value at grant date
$104,418
$19,384
$109,314
$346,195
1 These were free attaching options attaching to shares issued under a non-renounceable Rights Issue in
settlement of debt
2 These options were a fee to the lead manager of a July 2020 share placement and form part of the costs of
equity
3 These options were a fee to the managers of a February 2021 share placement and form part of the costs of
equity
Consolidated Group
2021
2020
Number of
Options
7,600,000
(200,000)
(15,040,741)
94,589,385
18,401,610
-
-
105,350,254
105,350,254
Weighted
Average
Exercise
Price
$
0.04
(0.20)
0.04
0.05
0.13
-
-
0.07
0.07
Number of
Options
47,795,000
(9,795,000)
-
-
32,600,000
(63,000,000)
600,000
7,600,000
7,600,000
Weighted
Average
Exercise
Price
$
0.01
(0.002)
-
-
0.002
(0.002)
0.02
0.04
0.04
Outstanding at the beginning of the year
Expired
Exercised
Issued as free attaching options
Issued as share-based payments
1 for 10 consolidation
Issued as share-based payments
Outstanding at year-end
Exercisable at year-end
5252
BPH Energy I Annual Report 2021
Included under share-based payments in the profit and loss is $802,997 for share-based expense (2020:
$171,425) of which $213,732 (2020: $17,925) relates to share options and $589,265 (2020: $153,500) relates to
fully paid ordinary shares.
23.
Operating Segments
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’s only operating segment is investments. The consolidated entity holds investments in
three principal industries and these are biotechnology, oil and gas exploration and development, and medicinal
cannabis.
Company
2021
$
2020
$
10,767,945
334,088
5,764,060
5,628,563
16,532,005
5,962,651
1,155,020
1,678,815
-
-
1,155,020
1,678,815
58,843,159
46,716,896
(44,571,845)
(42,959,421)
1,105,671
526,361
15,376,985
4,283,836
(1,612,424)
1,121,263
-
-
(1,612,424)
1,121,263
24. Parent Entity Disclosures
Financial Position
Assets
Current assets
Non-current assets
Total asset
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued Capital
Accumulated losses
Option Reserve
Total equity
Financial Performance
(Loss) / profit after tax for the year
Other comprehensive income
Total comprehensive (loss) / income
5353
BPH Energy I Annual Report 2021
DIRE CTOR S
DECL A RATIO N
BPH ENERGY LIMITED
AND IT’S CONTROLLED ENTITIES
The directors of the Company declare that:
1. the financial statements and notes, as set out on pages 22 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 2021 and of the performance for the year
ended on that date of the consolidated entity;
2. 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:
3. the financial statements and notes comply with International Financial Reporting Standards as disclosed in
Note 1.
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 31st August 2021
5454
BPH Energy I Annual Report 2021
INDEPENDENT AUDITOR’S REPORT
To the members of BPH Energy Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of BPH Energy Limited (“the Company”) and its controlled
entities (“the Group”), which comprises the consolidated statement of financial position as at 30
June 2021, the consolidated statement of profit or loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the
year then ended, and notes to the financial statements, including a summary of significant
accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the
Corporations Act 2001, including:
a) giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
financial performance for the year then ended; and
b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance with the
auditor independence requirements of the Corporations Act 2001 and the ethical requirements of
the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (“the Code”) that are relevant to our audit of the financial report in
Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Emphasis of Matter - Material uncertainty related to the carrying value of the loan receivable from,
and investment in, Advent Energy Limited
We draw attention to Note 10 in the financial report, which indicates that a material uncertainty
exists in relation to the Group’s ability to realise the carrying value of its loan receivable from, and
investment in, Advent Energy Limited in the ordinary course of business. Our opinion is not modified
in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report of the current period. These matters were addressed in the context
of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. We have determined the matters described below to
be the key audit matters to be communicated in our report.
52
5555
BPH Energy I Annual Report 2021
Key Audit Matter
How our audit addressed the key audit
matter
Investments accounted for using the equity method
Note 10
As at 30 June 2021, the carrying value of the
investments accounted for using the equity method
was $2,058,773 and the Group’s share of the
associates’ losses net of impairment reversal was
$94,531.
We considered this to be a key audit matter as it is
important to users’ understanding of the financial
statements as a whole and involved significant levels
of judgement.
Our procedures included, but were not
limited to;
- We have agreed the share of
losses to the associates’ audited
financial statements;
- We reviewed the disclosures made
in the financial statements; and
- We included an emphasis of matter
paragraph above in relation to
recoverability of the investment in,
and loan receivable from, Advent
Energy Limited.
Valuation of financial assets
Note 9
As at 30 June 2021, the Group had recorded financial
assets comprising loan receivables with a carrying
value of $556,482 and investments at a fair value of
$3,707,601.
We considered this to be a key audit matter as it is
important to users’ understanding of the financial
statements as a whole and involves judgement in
relation to the determination of fair value and expected
credit losses.
Our procedures included but were not
limited to the following:
- We considered the ability of the
other party to repay its loan to the
Group to determine if any
additional expected credit loss
provisions were required;
- We assessed the Group’s
valuation of individual investment
holdings;
- For investments where there was
less or little observable market
data, including level 2 holdings as
disclosed in note 19, we obtained
and assessed other relevant
valuation data; and
- We reviewed the disclosures made
in the financial statements.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2021, but does not
include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
53
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BPH Energy I Annual Report 2021
of the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group
to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the Group
or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
-
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
-
-
- Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and
events in a manner that achieves fair presentation.
-
We communicate with the directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
54
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BPH Energy I Annual Report 2021
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors’ report for the year ended
30 June 2021.
In our opinion, the Remuneration Report of BPH Energy Limited for the year ended 30 June 2021
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
31 August 2021
L Di Giallonardo
Partner
55
5858
BPH Energy I Annual Report 2021
ADDITIONAL SECURITIES EXCHANGE INFORMATION
for the year ended 30 June 2021
BPH ENERGY LIMITED AND IT’S CONTROLLED ENTITIES
Additional information required by Australian Securities Exchange Limited and not shown elsewhere in this
report as follows.
The information is stated as at 19 October 2021.
1.
Substantial Shareholder
The name of the shareholder who has lodged a substantial shareholder notice with ASX is:
Shareholder
David Breeze, Trandcorp Pty Limited, Grandbridge Limited
Shares
57,452,695
%
8.65%
2.
(a) Distribution of Shareholders
Range of Holding
Shareholders
Number Ordinary Shares
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
1,057
1,660
1,422
3,898
1,018
9,055
330,292
5,356,527
11,121,201
146,613,089
501,498,280
664,919,389
The number of shareholders holding unmarketable parcels was 3,576.
(b) Distribution of Listed Option Holders
Range of Holding
Option Holders
Number of Options
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
196
117
116
333
143
905
41,884
363,582
922,200
13,755,735
81,181,139
96,264,540
(c) Distribution of Unlisted Option Holders
Range of Holding
100,001 and over
Option Holders
Number of Options
5
5
9,085,714
9,085,714
5959
BPH Energy I Annual Report 2021
%
0.05%
0.81%
1.67%
22.05%
75.42%
100%
%
0.04%
0.38%
0.96%
14.29%
84.33%
100%
%
100.00
100.00
ADDITIONAL SECURITIES EXCHANGE INFORMATION
for the year ended 30 June 2021
BPH ENERGY LIMITED AND IT’S CONTROLLED ENTITIES
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 options do not have the right to vote.
5.
Restricted Securities
There are no restricted securities on issue.
6.
Twenty Largest Shareholders
The names of the twenty largest shareholders of the ordinary shares of the Company are:
Name
TRANDCORP PTY LTD
JGM PROPERTY INVESTMENTS PTY LTD
TRANDCORP PTY LTD
MR ANTHONY HUSTON
CITICORP NOMINEES PTY LIMITED
TRANDCORP PTY LTD
PROTAX NOMINEES PTY LTD
MISS SANDRA JOY FEELEY
JLM CORPORATION PTY LTD
MR CHARLES VERDON MALING
THIRTEENTH CINSAUT PTY LTD
MR VICTOR MING-CHING CHANG
ANSTEY SUPERANNUATION FUND PTY LTD
GRANDBRIDGE LIMITED
MR GARTH VINCENT ENSOR
J BARLOW CONSULTANTS PTY LTD
MR TRISTAN EDWIN BONNEFIN
MARKOVIC FAMILY NO 2 PTY LTD
MR MAHER MANSOUR
6060
BPH Energy I Annual Report 2021
Number of
ordinary fully
paid shares
% held of issued
ordinary capital
33,883,149
26,277,948
12,713,939
9,075,067
8,488,573
6,896,983
5,872,718
5,790,000
5,364,657
5,072,253
5,000,000
4,800,000
4,000,000
3,795,792
3,400,000
3,277,141
3,107,928
3,024,077
3,000,000
5.1
3.95
1.91
1.36
1.28
1.04
0.88
0.87
0.81
0.76
0.75
0.72
0.6
0.57
0.51
0.49
0.47
0.45
0.45
155,840,225
23.44
7.
Twenty Largest Listed Optionholders
The names of the twenty largest optionholders of the Company are:
Name
TRANDCORP PTY LTD
TRANDCORP PTY LTD
JGM PROPERTY INVESTMENTS PTY LTD
MR SUFIAN AHMAD
MR BIN LIU CHUNYAN
ARLEWIS PTY LTD
MR BILAL AHMAD
ALINEA GROUP HOLDINGS PTY LTD
MR ANTHONY HUSTON
MR CHARLES VERDON MALING
AVATAR EQUITIES PTY LTD
BNP PARIBAS NOMINEES PTY LTD
MR ZHIFENG CHEN
MR LAZAR ITIN
MS CHUNYAN NIU
MS VIKI WEST + MR ADAM LINDEBERG
MR ANTHONY JAMES CHANDLER
MR BILAL AHMAD
JGM PROPERTY INVESTMENTS
THE HIGH CLUB LTD
Number of listed
options
% held of listed
options
5,730,200
4,840,450
4,233,334
4,130,000
3,833,333
1,918,000
1,600,000
1,515,000
1,466,534
1,462,900
1,350,724
1,318,046
1,237,441
1,200,000
1,200,000
1,100,000
1,003,440
1,000,000
1,000,000
1,000,000
5.95
5.03
4.4
4.29
3.98
1.99
1.66
1.57
1.52
1.52
1.4
1.37
1.29
1.25
1.25
1.14
1.04
1.04
1.04
1.04
42,139,402
43.77
6161
BPH Energy I Annual Report 2021
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BPH Energy I Annual Report 2021
BPHENERGY.COM.AU
14 VIEW STREET, NORTH PERTH
WESTERN AUSTRALIA 6006
08 9328 8366
TEL
FAX
EMAIL ADMIN@BPHENERGY.COM.AU
08 9328 8733